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WTO ANALYTICAL INDEX: DISPUTE SETTLEMENT UNDERSTANDING

Understanding on Rules and Procedures Governing the Settlement of Disputes

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VII. Article 7    back to top

A. Text of Article 7

Article 7: Terms of Reference of Panels

1.     Panels shall have the following terms of reference unless the parties to the dispute agree otherwise within 20 days from the establishment of the panel:

 

     “To examine, in the light of the relevant provisions in (name of the covered agreement(s) cited by the parties to the dispute), the matter referred to the DSB by (name of party) in document … and to make such findings as will assist the DSB in making the recommendations or in giving the rulings provided for in that/those agreement(s).”

 

2.     Panels shall address the relevant provisions in any covered agreement or agreements cited by the parties to the dispute.

 

3.     In establishing a panel, the DSB may authorize its Chairman to draw up the terms of reference of the panel in consultation with the parties to the dispute, subject to the provisions of paragraph 1. The terms of reference thus drawn up shall be circulated to all Members. If other than standard terms of reference are agreed upon, any Member may raise any point relating thereto in the DSB.

 
B. Interpretation and Application of Article 7

1. General

(a) Importance of the terms of reference

360.     The Appellate Body in Brazil — Desiccated Coconut explained the importance of the terms of reference in the following terms:

“A panel’s terms of reference are important for two reasons. First, terms of reference fulfil an important due process objective — they give the parties and third parties sufficient information concerning the claims at issue in the dispute in order to allow them an opportunity to respond to the complainant’s case. Second, they establish the jurisdiction of the panel by defining the precise claims at issue in the dispute.”(578)

361.     In US — Carbon Steel, the Appellate Body emphasized that the terms of reference “define the scope of the dispute”.(579)

362.     In EC and certain member States — Large Civil Aircraft, the Panel observed that the jurisdiction of a panel is established by the panel’s terms of reference, governed by Article 7 of the DSU.(580)

363.     In Australia — Apples, the Panel observed that according to established jurisprudence, it is the panel’s terms of reference that “define the scope of a dispute”.(581) The Panel also emphasized that “a panel’s mandate or terms of reference are determined by the request for the establishment of the panel.(582)” (583)

(b) A panel’s jurisdiction

(i) Duty to address jurisdictional issues

364.     In Mexico — Corn Syrup (Article 21.5 — US), the Appellate Body described two instances where a panel is obliged to address issues that affect its own jurisdiction:

“We believe that a panel comes under a duty to address issues in at least two instances. First, as a matter of due process, and the proper exercise of the judicial function, panels are required to address issues that are put before them by the parties to a dispute. Second, panels have to address and dispose of certain issues of a fundamental nature, even if the parties to the dispute remain silent on those issues. In this regard, we have previously observed that ‘[t]he vesting of jurisdiction in a panel is a fundamental prerequisite for lawful panel proceedings.’(584) For this reason, panels cannot simply ignore issues which go to the root of their jurisdiction — that is, to their authority to deal with and dispose of matters. Rather, panels must deal with such issues — if necessary, on their own motion — in order to satisfy themselves that they have authority to proceed.

 [O]ur task is simply to determine whether the ‘objections’ that Mexico now raises before us are of such a nature that they could have deprived the Panel of its authority to deal with and dispose of the matter. If so, then the Panel was bound to address them on its own motion.”(585)

365.     In EC and certain member States — Large Civil Aircraft, the United States challenged not only individual instances of launch aid / member State financing (LA/MSF), but also the LA/MSF “programme” as a whole. The Panel agreed with the European Communities that the United States failed to demonstrate the existence of an unwritten LA/MSF “programme”. On appeal, the Appellate Body found that the alleged measure was not actually identified in the panel request, and therefore fell outside of the Panel’s terms of reference. The Appellate Body made this finding in the absence of the European Communities having raised this issue, and stated that:

“Although the European Union did not raise procedural objections, under Article 6.2 of the DSU, against the United States’ challenge to an unwritten LA/MSF Programme before the Panel or in its appellee’s submission, “certain issues going to the jurisdiction of a panel are so fundamental that they may be considered at any stage in a proceeding.”(586) In this case, we have deemed it necessary to consider these issues on our own motion.”(587)

366.     In US — Clove Cigarettes, both parties considered that the Panel would not be exceeding its jurisdiction if it included regular cigarettes in the “likeness” analysis under Article 2.1 of the TBT Agreement and Article III:4 of the GATT 1994, notwithstanding that Indonesia’s panel request specified that the imported and domestic “like products” in this case were clove cigarettes and menthol cigarettes. The Panel stated that:

“In spite of the parties’ views, we consider that it is necessary for us to examine this issue as it touches upon our jurisdiction. In this respect, the Appellate Body has cautioned panels that there are certain inherent powers to their adjudicative function and that “panels have the right to determine whether they have jurisdiction in a given case, as well as to determine the scope of their jurisdiction.”(588) The Appellate Body has also clarified that “it is a widely accepted rule that an international tribunal is entitled to consider the issue of its own jurisdiction on its own initiative”.(589) We shall therefore examine whether we would be exceeding our terms of reference if we include regular cigarettes in the likeness analysis.”(590)

(ii) Objections to the panel’s jurisdiction

Timing of objections to the panel’s jurisdiction

367.     In US — 1916 Act, the Appellate Body agreed with the Panel that objections to the Panel’s jurisdiction should not be raised at the interim review stage for the first time although it also agreed with the Panel that certain jurisdictional issues may need to be addressed by the Panel at any time:

“We agree with the Panel that the interim review was not an appropriate stage in the Panel’s proceedings to raise objections to the Panel’s jurisdiction for the first time. An objection to jurisdiction should be raised as early as possible and panels must ensure that the requirements of due process are met. However, we also agree with the Panel’s consideration that ‘some issues of jurisdiction may be of such a nature that they have to be addressed by the Panel at any time.’(591) We do not share the European Communities’ view that objections to the jurisdiction of a panel are appropriately regarded as simply ‘procedural objections’. The vesting of jurisdiction in a panel is a fundamental prerequisite for lawful panel proceedings. We, therefore, see no reason to accept the European Communities’ argument that we must reject the United States’ appeal because the United States did not raise its jurisdictional objection before the Panel in a timely manner.”(592)

368.     In US — Offset Act (Byrd Amendment), the Appellate Body recalled that “[a]n objection to jurisdiction should be raised as early as possible”(593) and clarified that “it would be preferable, in the interests of due process, for the appellant to raise such issues in the Notice of Appeal, so that appellees will be aware that this claim will be advanced on appeal.”(594)

369.     In EC — Fasteners (China), the Appellate Body found that the European Communities’ failure to raise a terms of reference claim before the Panel did not bar it from raising the issue on appeal:

“Regarding the Panel’s terms of reference, the European Union acknowledges that it did not raise its challenge in this respect before the Panel. The Appellate Body has found that parties are required to raise procedural objections “promptly”(595), but also that matters going to the jurisdiction of a panel are “fundamental” and can therefore be raised at any stage in a proceeding, including on appeal.(596) If a claim is not within a panel’s terms of reference, the panel does not have the jurisdiction to hear the claim. Moreover, a party’s failure to raise a timely jurisdictional objection cannot operate to cure such a jurisdictional defect. We therefore find that the European Union’s failure to raise its terms of reference claim promptly before the Panel does not bar it from bringing this challenge on appeal.”(597)

2. Article 7.1

(a) “the matter referred to the DSB”

(i) Concept of the “matter”

370.     In Guatemala — Cement I, the Appellate Body addressed the term “matter” and held that the “matter referred to the DSB” consists of two elements; namely, the specific measures at issue and the legal basis of the complaint (claims):

“The word ‘matter’ appears in Article 7 of the DSU, which provides the standard terms of reference for panels…. when that provision is read together with Article 6.2 of the DSU, the precise meaning of the term ‘matter’ becomes clear. Article 6.2 specifies the requirements under which a complaining Member may refer a ‘matter’ to the DSB: in order to establish a panel to hear its complaint, a Member must make, in writing, a ‘request for the establishment of a panel’ (a ‘panel request’). In addition to being the document which enables the DSB to establish a panel, the panel request is also usually identified in the panel’s terms of reference as the document setting out ‘the matter referred to the DSB’. Thus, ‘the matter referred to the DSB’ for the purposes of Article 7 of the DSU and Article 17.4 of the Anti-Dumping Agreement must be the ‘matter’ identified in the request for the establishment of a panel under Article 6.2 of the DSU. That provision requires the complaining Member, in a panel request, to ‘identify the specific measures at issue and provide a brief summary of the legal basis of the complaint sufficient to present the problem clearly.’ (emphasis added) The ‘matter referred to the DSB’, therefore, consists of two elements: the specific measures at issue and the legal basis of the complaint (or the claims).”(598)

371.     In Brazil — Desiccated Coconut, Brazil argued that the issue of consistency of its countervailing duty measures with Articles I and II of GATT 1994 was not within the special terms of reference of the Panel, and, therefore, should not have been addressed by the Panel. The Appellate Body ultimately found that Articles I and II of GATT 1994 did not apply to the dispute before it, and as a result declined to make a finding on whether claims relating to these provisions were included in the Panel’s terms of reference. However, the Appellate Body made the following general statement concerning this issue:

“We agree, furthermore, with the conclusions expressed by previous panels under the GATT 1947, as well as under the Tokyo Round SCM Code and the Tokyo Round Antidumping Code, that the ‘matter’ referred to a panel for consideration consists of the specific claims stated by the parties to the dispute in the relevant documents specified in the terms of reference. We agree with the approach taken in previous adopted panel reports that a matter, which includes the claims composing that matter, does not fall within a panel’s terms of reference unless the claims are identified in the documents referred to or contained in the terms of reference.”(599)

372.     In Australia — Apples, the Panel stated that the panel request constitutes the “matter referred to the DSB”, which in turn forms the basis of a panel’s terms of reference under Article 17.1 of the DSU.(600)

(ii) Measures not sufficiently identified in the panel request

General

373.     In Indonesia — Autos, the Panel, in a preliminary ruling, considered that the measure at issue was not sufficiently identified in the request for establishment of the Panel and thus it was not within the Panel’s terms of reference:

“We note that this Panel has standard terms of reference. Therefore, in determining whether a measure is before us, we must examine the United States’ request for establishment of a panel, which is found in document WT/DS59/6. Consistent with the findings of the Appellate Body in Bananas III, we have carefully examined that request to ensure its compliance with both the letter and spirit of Article 6.2 of the Dispute Settlement Understanding. We conclude that the $690 million loan was not ‘identified as a specific measure’ in that document as required by Article 6.2 of the DSU. Indeed the United States states that the loan was not identified in the U.S. request, because it had not yet been made. Rather, the United States suggests that the loan is properly before the Panel because it is one aspect of the National Car Programme, which the United States considers to be the subject of its request. In our view, however, the United States in its request has clearly identified the measures to be considered by the Panel, and those measures do not include this loan. Accordingly, we conclude that the loan in question is not within the terms of reference of this Panel.”(601)

374.     In Australia — Automotive Leather II (Article 21.5 — US), Australia argued that a certain loan granted by the Australian Government to a domestic enterprise (the “1999 loan”) was not within the scope of the panel’s terms of reference. Australia argued that the 1999 loan was not part of the implementation of the DSB’s ruling and recommendation in the original case. The Panel stated:

“A ‘matter’ before a panel consists of the ‘measure(s)’ at issue, and the claims relating to those measures, as set out in the request for establishment. In this case, the United States’ request for establishment clearly identifies both the repayment by Howe and the 1999 loan as the measures at issue. For us to rule, as suggested by Australia, that we are precluded from considering the 1999 loan, would allow Australia to establish the scope of our terms of reference by choosing what measure or measures it will notify, or not notify, to the DSB in connection with its implementation of the DSB’s ruling.

 

The 1999 loan is inextricably linked to the steps taken by Australia in response to the DSB’s ruling in this dispute, in view of both its timing and its nature. In our view, the 1999 loan cannot be excluded from our consideration without severely limiting our ability to judge, on the basis of the United States’ request, whether Australia has taken measures to comply with the DSB’s ruling. In the absence of any compelling reason to do so, we decline to conclude that a measure specifically identified in the request for establishment is not within our terms of reference.”(602)

375.     In Brazil — Aircraft (Article 21.5 — Canada II), Canada contended that a financing programme created by the Government of Brazil, PROEX, was a prohibited export subsidy since it appeared to be offered not only in the form of traditional PROEX payments, but also in conjunction with, or as part of, export financing packages provided by Brazil’s development bank. Brazil responded that this was not within the terms of reference of this Panel. The Panel agreed with Brazil that such financing was not identified in Canada’s request for establishment of a panel and was thus outside its terms of reference.(603)

Ambiguous, vague and unclear measures

376.     The Panel in Turkey — Textiles dismissed certain arguments that terms used to identify measures in the panel request were too vague, ambiguous or unclear to fall within a panel’s terms of reference, indicating that its “terms of reference [were] sufficiently clear”:

“On 25 September 1998 the Panel issued the following ruling on this point:

 

‘In assessing Turkey’s claim that India’s request for the establishment of a panel was not sufficiently precise, we consider that it is important that a panel request, which defines the terms of reference, meets this criterion so as to inform the defending party and potential third parties both of the measures at issue, including the products they cover, and of the legal basis of the complaint. This is necessary to ensure due process and the ability of the defendant to defend itself.’

  

We have examined India’s request for establishment of the panel (WT/DS34/2). While not identified by place and date of publication, the measures are specified by type (i.e. quantitative restrictions), by effective date of entry into force (1 January 1996) and by product coverage (textiles and clothing, a well defined class of products in the WTO).(604) In our view the panel request meets the minimum requirements of specificity of Article 6.2 of the DSU as interpreted by the Appellate Body in Bananas III and LAN.(605) Even if we agree that India’s request could have been more detailed, we conclude that Turkey is sufficiently informed of the measures at issue and the products they cover, and that our terms of reference are sufficiently clear. Consequently, we reject Turkey’s claim that the Panel should refuse to accept India’s request in limine litis for its failure to respect the basic requirements of Article 6.2 of the DSU.”(606)

377.     In Canada — Aircraft, the Panel considered Canada’s claim that certain provisions in Brazil’s panel request were too vague. The Panel dismissed such arguments on the basis that whilst the measures may not have been described with sufficient clarity or precision, they had put Canada on notice that, at the very least, such provisions would be an issue in the dispute. The Panel relied on the Appellate Body’s findings on “prejudice” in EC — Computer Equipment to justify this conclusion, indicating that the requirements of Article 6.2 had been met because Canada had not suffered any prejudice during the course of the panel proceedings. The Panel commented as follows when referring to the Appellate Body’s decision in EC — Computer Equipment:

“We consider it appropriate to apply a similar standard in determining whether Brazil’s request for establishment meets the requirements of Article 6.2 of the DSU in the present case. In particular, we shall consider whether any alleged imprecision in Brazil’s request for establishment affected Canada’s due process rights of defence in the course of the Panel proceedings. Indeed, we understand Canada to advocate a similar interpretation of Article 6.2, since Canada asserts that Brazil’s ‘lack of precision prejudices Canada’s due process right to know the case against it. These claims are therefore inconsistent with Article 6.2 of the DSU.’(607) (emphasis supplied). Thus, we understand Canada to argue that Brazil’s request for establishment would not be inconsistent with Article 6.2 of the DSU if the alleged lack of precision did not prejudice Canada’s due process right to know the case against it.”(608)

378.     In contrast, the Panel in Indonesia — Autos indicated that a loan that had not yet been made at the time of the panel request was not covered by the Panel’s terms of reference:

“At the first meeting of the Panel with the parties, on 3 December 1997, Indonesia raised a preliminary objection to the United States’ claim with respect to a $US 690 million loan to PT TPN, on the basis that this loan was not within the Panel’s terms of reference. … After hearing the arguments of the parties, the Chairman announced the following ruling on behalf of the Panel:

 

‘…We note that this Panel has standard terms of reference. Therefore, in determining whether a measure is before us, we must examine the United States’ request for establishment of a panel,…Consistent with the findings of the Appellate Body in Bananas III, we have carefully examined that request to ensure its compliance with both the letter and spirit of Article 6.2 of the Dispute Settlement Understanding. We conclude that the $690 million loan was not ‘identified as a specific measure’ in that document as required by Article 6.2 of the DSU. Indeed the United States states that the loan was not identified in the U.S. request, because it had not yet been made. Rather, the United States suggests that the loan is properly before the Panel because it is one aspect of the National Car Programme, which the United States considers to be the subject of its request. In our view, however, the United States in its request has clearly identified the measures to be considered by the Panel, and those measures do not include this loan. Accordingly, we conclude that the loan in question is not within the terms of reference of this Panel.’

  

Consequently, we do not address any claims related to the said $ 690 million in our findings.”(609)

Temporal limitations of the panel’s terms of reference

General

379.     In EC — Chicken Cuts the Appellate Body that “[t]he term ‘specific measures at issue’ in Article 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.”(610)

380.     In EC — Selected Customs Matters, the Appellate Body further elaborated on this issue and explained the two exceptions to the requirement that measures be in force at the time of the establishment of the panel, as identified in its prior jurisprudence:

“We begin our analysis by recalling the Appellate Body’s statement in EC — Chicken Cuts:

 

The term ‘specific measures at issue’ in Article 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.(611) (footnote omitted)

 

This general rule, however, is qualified by at least two exceptions. First, in Chile — Price Band System, the Appellate Body held that a panel has the authority to examine a legal instrument enacted after the establishment of the panel that amends a measure identified in the panel request, provided that the amendment does not change the essence of the identified measure.(612) Secondly, in US — Upland Cotton, the Appellate Body held that panels are allowed to examine a measure ‘whose legislative basis has expired, but whose effects are alleged to be impairing the benefits accruing to the requesting Member under a covered agreement’ at the time of the establishment of the panel.(613) The summary presented by the Panel in paragraph 7.36 of the Panel Report is in line with what the Appellate Body said in EC — Chicken Cuts, Chile — Price Band System, and US — Upland Cotton.(614) Therefore, we see no error in the Panel’s legal interpretation contained in paragraph 7.36 of the Panel Report.”(615)

381.     In EC — IT Products, the Panel highlighted three key elements that must be present for a panel to find that amendments or revisions to the original measures challenged in a complainant’s panel request are within its terms of reference: (i) the terms of reference must be broad enough; (ii) the new measure does not “change the essence” of the original measures included in the request; and (iii) the inclusion of the amendments within the panel’s terms of reference is necessary to secure a positive resolution to the dispute:

“In light of the Appellate Body’s earlier enunciations in its reports on Chile — Price Band System and EC — Chicken Cuts, we understand that a panel’s terms of reference may be considered to include ‘amendments’ to measures that are listed in the panel request as long as the terms of reference are broad enough and second, the new measure does not ‘change the essence’ of the original measures included in the request or have legal implications overly different from those of the original measures. Moreover, it may be relevant to consider whether the inclusion of any amendments within a panel’s terms of reference is necessary to secure a positive solution to the dispute.”(616)

382. The complainants in EC — IT Products incorporated the phrase “any amendments, or extensions and any related or implementing measures” into their joint Panel request. The Panel addressed the issue of whether measures that came into force after the establishment could properly be considered to have been included in the part of the panel’s terms of reference. In addressing this issue, the Panel noted that while the mere incantation of the phrase “any amendments, or extensions and any related or implementing measures” in a panel request does not permit Members to bring in measures that were clearly not contemplated in the Panel request, the phrase is a useful tool to include certain amendments and prevent the possibility that the procedural requirements of WTO dispute settlement result in a situation where measures could completely evade review. The Panel stated:

“We note that the complainants incorporated the phrase ‘any amendments, or extensions and any related or implementing measures’ into their joint Panel request. We recall that the complainants, in the joint Panel request, identifies as the specific measure at issue Council Regulation No. 2658/87, ‘as amended’ (emphasis added). While we do not consider that the mere incantation of the phrase ‘any amendments, or extensions and any related or implementing measures’ in a panel request will permit Members to bring in measures that were clearly not contemplated in the Panel request, it may be used to refer to measures not yet in force or concluded on the date of the panel request, or measures that the complainants were not yet aware of, such as government procedures not yet published that have the same essential effect as the measures that were specifically identified. This is to prevent the possibility that the procedural requirements of WTO dispute settlement result in a situation where measures could completely evade review.(617) This is especially true with the type of measures we have before us, which are amended annually.”(618),(619)

383.     In China — Raw Materials, the complainants’ panel requests referred, in addition to the measures specifically identified, to “any amendments or extensions; related measures; replacement measures; renewal measures; and implementing measures”. The Panel stated:

“Thus, a priori this Panel has the authority to consider within its terms of reference amendments and replacement measures adopted after the Panel’s establishment. In other words, the Panel is entitled to examine measures that existed at the time of its establishment as well as measures that came into effect after that date if they are of the same essence as the original ones that formed the basis of the Panel’s terms of reference. “(620),(621)

Terminated measures

384.     The Panel in Japan — Film gave the following overview of the treatment of terminated measures in GATT/WTO dispute settlement practice:

“GATT/WTO precedent in other areas, including in respect of virtually all panel cases under Article XXIII:1(a), confirms that it is not the practice of GATT/WTO panels to rule on measures which have expired or which have been repealed or withdrawn.(622) In only a very small number of cases, involving very particular situations, have panels proceeded to adjudicate claims involving measures which no longer exist or which are no longer being applied. In those cases, the measures typically had been applied in the very recent past.”(623),(624)

Before agreement on the panel’s terms of reference

385.     The Panel in US — Gasoline, in a finding not addressed by the Appellate Body, analysed the question of terminated measures with respect to the “agreement on the panel’s terms of reference” and the point in time when the terms of reference had been established. The Panel addressed a particular aspect of the United States’ measure at issue and noted that “the Panel’s terms of reference were established after the 75 per cent rule had ceased to have any effect, and the rule had not been specifically mentioned in the terms of reference.” The Panel also mentioned that the measure was not “likely to be renewed” and also found that its findings on the WTO-inconsistency of other aspects of the measure would in any case have made unnecessary the examination of that specific aspect of the measure:

“The Panel observed that it had not been the usual practice of a panel established under the General Agreement to rule on measures that, at the time the panel’s terms of reference were fixed, were not and would not become effective. In the 1978 Animal Feed Protein case, the Panel ruled on a discontinued measure, but one that had terminated after agreement on the panel’s terms of reference.(625) In the 1980 Chile Apples case, the panel ruled on a measure terminated before agreement on the panel’s terms of reference; however, the terms of reference in that case specifically included the terminated measure and, it being a seasonal measure, there remained the prospect of its reintroduction.(626) In the present case, the Panel’s terms of reference were established after the 75 percent rule had ceased to have any effect, and the rule had not been specifically mentioned in the terms of reference. The Panel further noted that there was no indication by the parties that the 75 percent rule was a measure that, although currently not in force, was likely to be renewed. Finally, the Panel considered that its findings on treatment under the baseline establishment methods under Articles III:4 and XX(b), (d) and (g) would in any case have made unnecessary the examination of the 75 percent rule under Article I:1. The Panel did not therefore proceed to examine this aspect of the Gasoline Rule under Article I:1 of the General Agreement.”(627)

386.     In Argentina — Textiles and Apparel, one of the measures at issue was specific duties on footwear. These duties were included in the Panel’s terms of reference, but were withdrawn by Argentina between the request for consultation and the establishment of the Panel. The Panel declined to make a preliminary determination on this matter and made the respective findings in its final Report.(628) In the final Report, the Panel decided not to examine these specific duties on footwear and stated:

“Panels and their terms of reference are established by the DSB and panels are not authorized to amend unilaterally their mandate. On the other hand, panels have often been required to determine their jurisdiction over a matter (See for instance United States — Standards for Reformulated and Conventional Gasoline,(629) Japan — Taxes on Alcoholic Beverages,(630) Brazil — Measures Affecting Desiccated Coconut,(631) and EC — Regime for the Importation, Sale and Distribution of Bananas(632) (‘Bananas III’)). …

 

On several occasions, panels have considered measures that were no longer in force.(633) It appears that in each of those cases, however, there was no objection raised by either party to the panel’s consideration of the expired measure….

 

[T]he Argentine measure under consideration was revoked before the Panel was established and its terms of reference set, i.e. before the Panel started its adjudication process. The Gasoline panel report would argue in favour of not considering the Argentine specific duties on footwear. Moreover, as noted by the Appellate Body in the Shirts and Blouses(634) case, the aim of dispute settlement is not

 

‘to encourage either panels or the Appellate Body to ‘make law’ by clarifying existing provisions of the WTO Agreement outside the context of resolving a particular dispute. A panel need only address those claims which must be addressed in order to resolve the matter in issue in the dispute’.”(635)

387.     The Panel in Argentina — Textiles and Apparel also held that it would not make a finding on the terminated Argentine measure solely because there might be a possibility of a re-introduction of the terminated measure:

“[T]he United States claims that there is a serious threat of recurrence since Argentina could easily reintroduce the previous import measures, and the United States suggests that Argentina is likely to do so because there is only a weak justification for its safeguard measure on footwear. We cannot evaluate the justification or likely duration of that safeguard measure. Moreover, in the absence of clear evidence to the contrary, we cannot assume that Argentina will withdraw the safeguard measure and reintroduce the specific duties measure in an attempt to evade panel consideration of its measures. We must assume that WTO Members will perform their treaty obligations in good faith, as they are required to do by the WTO Agreement and by international law(636). We consider, therefore, that there is no evidence that the minimum specific import duties on footwear will be reintroduced.”(637)

388.     While it ultimately decided that it would not examine the measure withdrawn by Argentina before the establishment of the Panel, the Panel in Argentina — Textiles and Apparel nevertheless reserved the right to “refer to some examples of transactions” under the terminated measure:

“Consequently, we will not review the WTO compatibility of the specific duties which used to be imposed on footwear and which have, since the establishment of this Panel, been revoked. However, since these specific duties on footwear were in force for a long period until 14 February 1997, and for our understanding of the type of duties used by Argentina, we may, when reviewing the import regime applied to textiles and apparel, refer to some examples of transactions involving footwear because the type of duties used at the time by Argentina for textiles, apparel and footwear was the same.”(638)

389.     In EC — Poultry, Brazil claimed that the allocation by the European Communities of import licences on the basis of export performance was inconsistent with certain provisions of the Licensing Agreement. The European Communities responded, inter alia, that the alleged measure was no longer in place. The Panel, in a statement not addressed by the Appellate Body, noted that “Brazil claims that there are certain lingering effects. Therefore, we do not reject this claim on the grounds of mootness.”(639)

390.     In US — Certain EC Products, the Panel had ruled that the “increased bonding requirements as of 3 March on EC listed products”, which was a measure no longer in existence, infringed WTO rules.(640) However, the Appellate Body considered that “there is an obvious inconsistency between the finding of the Panel that “the 3 March Measure is no longer in existence” and the subsequent recommendation of the Panel that the DSB request that “the United States bring its 3 March Measure into conformity with its WTO obligations.” The Appellate Body accordingly concluded that the Panel had erred in recommending that the DSB request the United States to bring into conformity with its WTO obligations, a measure that the Panel had found no longer existed.(641)

After agreement on the panel’s terms of reference

391.     In US — Wool Shirts and Blouses, the United States withdrew the measure at issue shortly before the Panel’s final report was circulated, but well after the agreement on the Panel’s term of reference. The Panel issued the report and stated:

“We note that the United States stated that the restraint, which is the object of the present dispute, was to be withdrawn ‘due to a steady decline in imports of woven wool shirts and blouses from India and the adjustment of the industry’. … In the absence of an agreement between the parties to terminate the proceedings, we think that it is appropriate to issue our final report regarding the matter set out in the terms of reference of this Panel in order to comply with our mandate, as referred to in paragraph 1.3 of this report, notwithstanding the withdrawal of the US restraint. A number of GATT panels have done so.”(642),(643)

392.     In Indonesia — Autos, the Panel noted that “in previous GATT/WTO cases, where a measure included in the terms of reference was otherwise terminated or amended after the commencement of the panel proceedings, panels have nevertheless made findings in respect of such a measure.(644)”(645)

393.     In Turkey — Rice, the measure at issue, a tariff quota on rice, had expired more than four months after the establishment of the Panel. Turkey had thus requested that the Panel refrain from making findings on the measures related to Turkey’s tariff quota regime or otherwise abstain from making recommendations to the DSB. The Panel, further to considering the possibility that Turkey enforces a similar TRQ, concluded that it was obliged by the DSU to examine the terminated measure:

“The Panel notes the United States’ argument that, given the fact that the TRQs have expired before and then been reopened on previous occasions, a finding on this matter is ‘critical for achieving a definitive resolution’.(646) The Panel also notes that the legislative framework which has allowed for the establishment of the earlier TRQs (Decree No. 2004/7333 of 10 May 2004 on the Administration of Quotas and Tariff Quotas) is still in force.(647)

 Accordingly, and despite the United States’ arguments on the likelihood of Turkey reintroducing a TRQ regime for the importation of rice, and with it a domestic purchase requirement, the Panel must not lightly assume that Turkey will not abide by its stated intentions and its WTO commitments. Indeed, as stated by the Panel on Argentina — Textiles and Apparel, panels ‘must assume that WTO Members will perform their treaty obligations in good faith, as they are required to do by the WTO Agreement and by international law.’(648)

 

Notwithstanding these considerations, and regardless of whether Turkey reintroduces a domestic purchase requirement in the future in the context of a new TRQ, the Panel notes that it is confined to the mandate it has received from the WTO Members, through the DSBand in accordance with the DSU. That mandate consists of performing the tasks defined in Article 11 of the DSU

 …

 In the light of the above, and in particular of its terms of reference as approved by the DSB, the requirements set out in Article 11 of the DSU, and in the absence of an agreement by the parties to terminate the proceedings as regards this contested measure, the Panel concludes that, it would be inappropriate to abstain from making findings with respect to the domestic purchase requirement, a measure that has been properly brought before it. In addition, the Panel notes at this stage that it would be appropriate for it to consider the subsidiary request made by Turkey (i.e., that it abstain from making any recommendation to the DSB regarding this measure), only if the Panel determines that the domestic purchase requirement is inconsistent with any of the provisions cited by the United States.”(649)

394.     In US — Poultry (China), the United States’ measure challenged by China, Section 727, expired two days after the deadline for China’s first written submission. This raised the question of whether the Panel should make findings on a measure that was no longer in force. The Panel noted the circumstances in past cases where the panel had ruled on expired measures and decided to make findings on Section 727, but not recommendations. The Panel stated:

“The Panel will therefore determine whether it should rule on an expired measure. The Appellate Body explained in EC — Bananas III (Article 21.5 — Ecuador II), ‘once a panel has been established and the terms of reference for the panel have been set, the panel has the competence to make findings with respect to the measures covered by its terms of reference.’ The Appellate Body thus concluded that it is ‘within the discretion of the panel to decide how it takes into account… a repeal of the measure at issue.’(650) It is therefore within our discretion to decide whether to make findings on Section 727.

 

We note that, in the past, panels have decided to make rulings on expired measures where the respondent Member had not conceded the WTO inconsistency of the measure and the repealed measure could be easily re-imposed.(651) In our view, this is precisely the case of Section 727 since the United States does not concede the alleged WTO inconsistency of Section 727 and the appropriations legislation in the United States is of an annual nature. As explained in Section II.D above, Section 727 reiterated the language of a previous annual appropriations provision with identical wording, Section 733, and it has now expired and a new provision, Section 743, has been adopted to address FSIS access to appropriated funds for activities regarding China’s equivalence application. Although we acknowledge that Section 743 does not share the same language as Section 727 and its predecessor, Section 733, we consider that if we were to refuse to make findings on the expired measure — Section 727 — the Panel might be depriving China of any meaningful review of the consistency of the United States’ actions with its WTO obligations, while allowing the repetition of the potentially WTO — inconsistent conduct. This would certainly call to mind the ‘moving target’ scenario which the Appellate Body in Chile — Price Band System stated that a complainant should not have to face.

 

The Panel will thus proceed to make findings on the WTO consistency of Section 727 which is within its terms of reference. Nevertheless, the Panel recognizes that it would not be appropriate to make recommendations pursuant to Article 19 of the DSU with respect to a WTO-inconsistent repealed measure that has ceased to have legal effect.(652) Indeed, if the Panel finds that Section 727 was inconsistent with any of the provisions of the covered agreements within its terms of reference, it would be pointless to ask the United States to bring Section 727 into conformity with those covered agreements since the measure is no longer in force.”(653)

Amended measures

Measures amended before the establishment of the Panel

395.     In Brazil — Aircraft, a question arose as to the identity of the measure since regulatory changes relevant to the measure were put in place after consultations were held, but before the panel was established. The Appellate Body determined that the regulatory changes “did not change the essence” of the measure:

“We are confident that the specific measures at issue in this case are the Brazilian export subsidies for regional aircraft under PROEX. Consultations were held by the parties on these subsidies, and it is these same subsidies that were referred to the DSB for the establishment of a panel. We emphasize that the regulatory instruments that came into effect in 1997 and 1998 did not change the essence of the export subsidies for regional aircraft under PROEX.”(654)

Measures amended during the panel proceedings

396.     In Indonesia — Autos, the Panel considered that, according to GATT/WTO practice, in those cases where a measure was amended (or withdrawn) during the Panel proceedings, the Panel had nevertheless continued its work and made findings on the measure. See paragraph 392 above.

397.     The Panel in Argentina — Footwear (EC), in a finding not subsequently reviewed by the Appellate Body, had to address a situation whereby Argentina had imposed a safeguard measure on footwear and subsequently made several modifications to this measure after the request for establishment had been made. The Panel stated that “it is the provisional and definitive measures in their substance rather than the legal acts in their original or modified legal forms that are most relevant for our terms of reference”. The Panel then linked the issue before it to Article 3.3 of the DSU and saw the risk that “Members could always keep one step ahead of any WTO dispute settlement proceeding because in such a situation, the complaining Member would indeed, challenge a “moving target”, and panel and Appellate Body’s findings could already be overtaken by events when they are rendered and adopted by the DSB”:

“[A]n interpretation whereby these subsequent Resolutions are considered to be measures separate and independent from the definitive safeguard measure, and thus outside our terms of reference, could be contrary to Article 3.3 of the DSU. Such an interpretation could allow a situation where a matter brought to the DSB for prompt settlement is not resolved when the defendant changes the legal form of the measure through a separate but closely related instrument, while the measure in dispute remains essentially the same in substance. In this way, Members could always keep one step ahead of any WTO dispute settlement proceeding because in such a situation, the complaining Member would indeed, challenge a ‘moving target’, and panel and Appellate Body’s findings could already be overtaken by events when they are rendered and adopted by the DSB.”(655)

398.     The Panel in Argentina — Footwear (EC) therefore found 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”.(656)

399.     In Chile — Price Band System, the Appellate Body referred to the above finding by the Panel in Argentina — Footwear (EC) and indicated that “[although we were not asked to review that particular finding on appeal, we agree with that panel’s approach, which is based on sound reasoning and is consistent with our reasoning here.”(657) The Appellate Body considered that, as in Argentina — Footwear (EC), Chile’s price band system remained “essentially” the same after the amendment and concluded that the measure before it in this appeal included the Law amending the system because “that law amends Chile’s price band system without changing its essence”.(658) The Appellate Body further referred to Articles 3.7 and 3.4 of the DSU as well as its decision in Australia — Salmon(659) as support for its conclusion and indicated that “[it] considered] it appropriate … to rule on the price band system as currently in force in Chile, …, to ‘secure a positive solution to the dispute’ and to make ‘sufficiently precise recommendations and rulings so as to allow for prompt compliance’.”(660)

400.     In Chile — Price Band System, however, the Appellate Body indicated that it was not condoning the practice of amending measures and turning them into “moving target [s]”:

“We emphasize that we do not mean to condone a practice of amending measures during dispute settlement proceedings if such changes are made with a view to shielding a measure from scrutiny by a panel or by us. We do not suggest that this occurred in this case. However, generally speaking, the demands of due process are such that a complaining party should not have to adjust its pleadings throughout dispute settlement proceedings in order to deal with a disputed measure as a ‘moving target’. If the terms of reference in a dispute are broad enough to include amendments to a measure — as they are in this case — and if it is necessary to consider an amendment in order to secure a positive solution to the dispute — as it is here — then it is appropriate to consider the measure as amended in coming to a decision in a dispute.” (661)

401.     In EC — Chicken Cuts, the complainants had argued that two measures fell within the Panel’s terms of reference, namely, EC Regulations 1871/2003 and 2344/2003. These measures had been adopted after EC Regulation 1223/2002 and EC Decision 2003/97/EC, which were the original measures within the terms of references. Relying on the Appellate Body Report in Chile — Price Band System, the complainants argued that the two subsequent measures would be “in essence the same” as the two original measures and would have the “same effect” as the two original measures in that they result in the same violation as the two original measures.(662) However, while recognizing that subsequently adopted measures may constitute “measures” pursuant to Article 6.2, the Appellate Body found that the requirements set out in Chile — Price Band System would not have been met in this case. In addition, the Appellate Body rejected the complainants’ concept that a subsequent measure having the “same effect” as the original measure would be a valid test for consideration if it falls within the terms of reference:

“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 similar product — namely, frozen boneless chicken cuts with a salt content of 1.9 to 3 per cent. In contrast, 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(663), whereas the two original measures are limited to frozen boneless salted chicken cuts.

 

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.(664)

 

Brazil and Thailand also argue that the two subsequent measures fall within the Panel’s terms of reference, because they have the ‘same effect’ and bring about the same result as the two original measures, namely the (re) classification of the products at issue. Even assuming that Brazil and Thailand are correct that the two subsequent measures have the ‘same effect’ as the two original measures insofar as frozen boneless chicken cuts are 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 specificity and the due process objective enshrined in Article 6.2.”(665),(666)

402.     In Argentina — Textiles and Apparel, one of the Argentine measures at issue, a statistical tax, was amended during the Appellate Body proceedings. The Appellate Body noted the amendment but proceeded on the basis of the tax as it existed at the time of the request for establishment of the panel.(667)

403.     In EC — IT Products, the Panel highlighted the three key elements that must be present for a panel to find that amendments or revisions to the original measures challenged in a complainant’s panel request are within its terms of reference: (i) the terms of reference must be broad enough; (ii) the new measure does not “change the essence” of the original measures included in the request; and (iii) the inclusion of the amendments within the panel’s terms of reference is necessary to secure a positive resolution to the dispute. See paragraph 381 above.

Measures not in existence at the time the matter is referred to the Panel

404.     In Japan — Apples (Article 21.5 — US), the United States requested a preliminary ruling that Japan’s Operational Criteria, which were administrative instructions Japan claimed were part of its actions taken to comply, were not within the Panel’s terms of reference because they had not been adopted at the time of the Panel’s establishment.(668) The Panel stated that it would consider these Operational Criteria to the extent that they informed an objective assessment of the matter. The Panel was of the view that disregarding them would violate the principle of prompt settlement of disputes found in DSU Article 3.3:(669)

“The Panel is not of the view that the binding or non-binding nature of the Operational Criteria should play a role in determining whether they should be reviewed in this proceeding. As soon as the Operational Criteria were brought to the attention of the United States and the Panel, they became an official statement of how Japan intended to implement its legislation on fire blight on which the United States and the Panel could rely.(670) As such, the Operational Criteria are a fact.(671) The duty of the Panel to make an objective assessment of the facts pursuant to Article 11 of the DSU implies that the Operational Criteria, as a fact, be taken into account by the Panel if they are properly before it.

 …[T]otally disregarding the Operational Criteria in this case would go against the principle of prompt settlement of disputes contained in Article 3.3 of the DSU. The Operational Criteria obviously provide a statement of how Japan intends to implement the recommendations and rulings of the DSB at the time this Panel was called upon to review the ‘measures taken to comply’ by Japan.

 

… As a result, the Panel will consider the Operational Criteria to the extent that they inform an objective assessment of the matter”.(672)

405.     In EC — Trademarks and Geographical Indicators, the Panel was called upon to decide if certain individual registrations, which were effected under the contested EC Regulation after the establishment of the Panel, were within the terms of reference. The European Communities had argued that these measures did not exist at the time the Panel was established and were therefore outside the terms of reference.(673) The Panel found it unnecessary to rule on these measures as they were not being challenged by the United States. However, the Panel did find these subsequent registrations to be useful indicators as to how the Regulation was applied and interpreted.

“The Panel begins by noting that Council Regulation (EEC) No. 2081/92 (referred to in this report as the ‘Regulation’) has not been amended in any relevant respects during this panel proceeding. It was last amended in April 2003, prior to the date of the request for establishment of a panel. However, certain individual registrations were effected under the Regulation after the date of establishment of the Panel and prior to the date of the complainant’s first written submission, and registrations continue to be made after that date.

 

The Panel notes that the United States does not challenge any individual registrations in this dispute. It is therefore unnecessary to rule on these measures. It suffices to note that individual registrations made after the date of the request for establishment of a panel can be among the best evidence of the way in which certain provisions of the Regulation itself, which are at issue, are interpreted and applied.(674) The Panel may therefore refer to them, as factual evidence, in the course of its assessment of the matter before it.”(675),(676)

406.     In EC and certain member States — Large Civil Aircraft, the Panel stated that “we do not understand there to be a dispute over the question whether measures included in a panel’s terms of reference must be in existence at the time of the establishment of the panel.(677) What the parties do dispute is the factual issue of whether or not LA/MSF for the A350 was in existence at the time of the establishment of this Panel.”(678)

(iii) Claims not included in the panel request

General

407.     As regards the concept of claim, its scope, and the requirement to identify the claims in the request for establishment of a panel pursuant to Article 6.2 of the DSU, see the Section of this Chapter on Article 6.2.

Claims not included in the terms of reference

408.     When considering the United States’ claim under Article 63 of the TRIPS Agreement which had not been included in the request for the establishment of the panel, the Appellate Body in India — Patents (US) stated:

“The jurisdiction of a panel is established by that panel’s terms of reference, which are governed by Article 7 of the DSU. A panel may consider only those claims that it has the authority to consider under its terms of reference. A panel cannot assume jurisdiction that it does not have. In this case, Article 63 was not within the Panel’s jurisdiction, as defined by its terms of reference. Therefore, the Panel had no authority to consider the alternative claim by the United States under Article 63.

 

The United States argues that, in the consultations between the parties to this dispute in this case, India had not disclosed the existence of any administrative instructions’ for the filing of mailbox applications for pharmaceutical and agricultural chemical products. Therefore the United States asserts that it had no way of knowing that India would rely on this argument before the Panel. The United States maintains that, for this reason, it had not included a claim under Article 63 in its request for the establishment of a panel. All that said, there is, nevertheless, no basis in the DSU for a complaining party to make an additional claim, outside of the scope of a panel’s terms of reference, at the first substantive meeting of the panel with the parties. A panel is bound by its terms of reference.”(679)

409.     In India — Patents (US), the Appellate Body found the Panel’s ruling that “all legal claims would be considered if they were made prior to the end of [the first substantive] meeting” inconsistent with the letter and spirit of the DSU. The Appellate Body stated:

“Although panels enjoy some discretion in establishing their own working procedures, this discretion does not extend to modifying the substantive provisions of the DSU. To be sure, Article 12.1 of the DSU says: ‘Panels shall follow the Working Procedures in Appendix 3 unless the panel decides otherwise after consulting the parties to the dispute’. Yet that is all that it says. Nothing in the DSU gives a panel the authority either to disregard or to modify other explicit provisions of the DSU. The jurisdiction of a panel is established by that panel’s terms of reference, which are governed by Article 7 of the DSU. A panel may consider only those claims that it has the authority to consider under its terms of reference. A panel cannot assume jurisdiction that it does not have.”(680)

410.     In India — Quantitative Restrictions, India raised before the Panel the issue of the extent to which the Panel should consider the provisions of Article XVIII:B and the 1994 Understanding on Balance-of-payments Provisions in its analysis of the US claims since the United States had not raised any claim regarding violations of those provisions. The Panel decided that although it would not address any claims of the United States based on those provisions, it considered that they were “part of the context of those provisions alleged by the United States to have been violated”. The Panel also considered that India had referred to various provisions of Article XVIII:B in its defence. The Panel concluded that:(681)

“However, the provisions of Article XVIII:B (other than Article XVIII:11) and the 1994 Understanding are part of the context of those provisions alleged by the United States to have been violated. In addition, India also refers to various provisions of Article XVIII:B in its defence. In our view, the defending party is not restricted in the provisions of the Marrakesh Agreement Establishing the World Trade Organization (hereinafter ‘WTO Agreement’) that it can invoke in its defence. In these circumstances, we find it relevant to consider the provisions of Article XVIII:B and the 1994 Understanding as part of the context in deciding on the claims of the United States and to examine them in relation to the defence raised by India.”(682)

Claims included in terms of reference

Claims not elaborated in the parties’ first written submissions

411.     In EC — Bananas III, the Panel held that certain claims under GATS made by Guatemala, Honduras and Mexico were not to be included within the scope of the case. While these claims had been included in the panel request, the Panel decided not to address them because they had not been elaborated in the three parties’ first written submission.(683) The Appellate Body reversed the Panel’s conclusion, holding that nothing in the DSU or GATT practice suggested that all claims must be set out in a complaining parly’s first written submission:

“There is no requirement in the DSU or in GATT practice for arguments on all claims relating to the matter referred to the DSB to be set out in a complaining party’s first written submission to the panel. It is the panel’s terms of reference, governed by Article 7 of the DSU, which set out the claims of the complaining parties relating to the matter referred to the DSB.

 We do not agree with the Panel’s statement that a ‘failure to make a claim in the first written submission cannot be remedied by later submissions or by incorporating the claims and arguments of other complainants’. Pursuant to Articles 6.2 and 7.1 of the DSU, the terms of reference of the Panel in this case were established in the request for the establishment of the panel, WT/DS27/6, in which the claims specified under the GATS were made by all five Complaining Parties jointly.”(684)

412.     The Panel in Japan — Apples, referred to the findings of the Appellate Body in EC — Bananas III, and observed that “it is well established that a complainant is not prevented, as a matter of principle, from developing in its second submission arguments relating to a claim that is within the terms of reference of the panel, even if it did not do so in its first written submission.” However, in this particular case, the complainant, the United States only made arguments with respect to certain claims during the Panel’s substantive hearings with the parties. The Panel noted the dangers of permitting such presentation of claims, warning that it could significantly limit the possibility for the defending party to argue in response:(685)

“In the present case, the United States made arguments in relation to its claims under Article XI GATT 1994 and Article 4.2 of the Agreement on Agriculture only during our two substantive hearings with the parties. Such a tactic may seem questionable since nothing prevented the United States from presenting arguments on these claims in its first submission, and such an approach may significantly limit the possibility for the defending party to argue in response, depending on the circumstances of the case, or at least could unduly delay the proceedings.

 

Taking into account the established practice on issues such as this, and having given due consideration to Japan’s request, we decided that the most appropriate way to deal with this issue was to give Japan sufficient opportunity to reply.”(686)

Abandoned claims

413.     In US — Steel Plate, India indicated in its first written submission that it would not pursue several claims that had been set out in its request for establishment of the Panel. However, India changed its view later on and informed the Panel of its intention to pursue one of these claims during the first substantive meeting of the Panel with the parties and in its rebuttal submission. In spite of the lack of specific objection by the United States which had noted that the claim was within the Panel’s terms of reference, the Panel decided that it was not going to rule on India’s abandoned and later recovered claim:

“This situation is not explicitly addressed in either the DSU or any previous panel or Appellate Body report. We do note, however, the ruling of the Appellate Body in Bananas to the effect that a claim may not be raised for the first time in a first written submission, if it was not in the request for establishment.(687) One element of the Appellate Body’s decision in that regard was the notice aspect of the request for establishment. The request for establishment is relied upon by Members in deciding whether to participate in the dispute as third parties. To allow a claim to be introduced in a first written submission would deprive Members who did not choose to participate as third parties from presenting their views with respect to such a new claim.

 

The situation here is, in our view, analogous. That is, to allow a party to resurrect a claim it had explicitly stated, in its first written submission, that it would not pursue would, in the absence of significant adjustments in the Panel’s procedures, deprive other Members participating in the dispute settlement proceeding of their full opportunities to defend their interest with respect to that claim. Paragraphs 4 and 7 of Appendix 3 to the DSU provide that parties shall ‘present the facts of the case and their arguments’ in the first written submission, and that written rebuttals shall be submitted prior to the second meeting. These procedures, in our view, envision that initial arguments regarding a claim should be presented for the first time in the first written submission, and not at the meeting of the panel with the parties or in rebuttal submissions.

 

With respect to the interests of third parties, the unfairness of allowing a claim to be argued for the first time at the meeting of the panel with the parties, or in rebuttal submissions, is even more pronounced. In such a circumstance, third parties would be entirely precluded from responding to arguments with respect to such a resurrected claim, as they would not have access to those arguments under the normal panel procedures set out in paragraph 6 of Appendix 3 to the DSU. Further, India has identified no extenuating circumstances to justify the reversal of its abandonment of this claim.(688) Thus, in our view, it would be inappropriate in these circumstances to allow India to resurrect its claim in this manner. Therefore, we will not rule on India’s claim under AD Agreement Articles 6.6 and 6.8 and Annex II, paragraph 7 regarding failure to exercise special circumspection in using information supplied in the petition.”(689),(690)

414.     In China — Raw Materials, the complainants abandoned claims in respect of certain measures. The Panel observed that:

“As noted above, a complainant’s Panel Request determines the scope of a panel’s terms of reference. It is for complainants to decide what claims they present to a panel. By the same logic, a complainant can unilaterally withdraw a claim, or the complaint in its entirety, or seek to settle a particular dispute. On numerous occasions, panels have not examined claims abandoned by complainants in the course of panel proceedings.”(691)

Whether a party has made a specific claim

415.     In US — Certain EC Products, the United States asked the Appellate Body to reverse the Panel’s finding under Article 23.2(a) on the basis that, inter alia, the European Communities had never requested or argued for” findings under Article 23.2(a). The Appellate Body considered that the fact that a claim of inconsistency with a given provision may be within the Panel’s terms of reference does not necessarily mean that the complainant has actually made arguments in support of that claim. The Appellate Body further ruled that in the absence of specific arguments of inconsistency by the complainant, the burden to present a prima facie case of violation would not be met:

“[A]s the request for the establishment of a panel of the European Communities included a claim of inconsistency with Article 23, a claim of inconsistency with Article 23.2(a) is within the Panel’s terms of reference.

 

However, the fact that a claim of inconsistency with Article 23.2(a) of the DSU can be considered to be within the Panel’s terms of reference does not mean that the European Communities actually made such a claim. An analysis of the Panel record shows that, with the exception of two instances during the Panel proceedings, the European Communities did not refer specifically to Article 23.2(a) of the DSU. Furthermore, in response to a request from the United States to clarify the scope of its claim under Article 23, the European Communities asserted only claims of violation of Articles 23.1 and 23.2(c) of the DSU; no mention was made of Article 23.2(a). Our reading of the Panel record shows us that, throughout the Panel proceedings in this case, the European Communities made arguments relating only to its claims that the United States acted inconsistently with Article 23.1 and Article 23.2(c) of the DSU.

 … As the European Communities did not make a specific claim of inconsistency with Article 23.2(a), it did not adduce any evidence or arguments to demonstrate that the United States made a ‘determination as to the effect that a violation has occurred’ in breach of Article 23.2(a) of the DSU. And, as the European Communities did not adduce any evidence or arguments in support of a claim of violation of Article 23.2(a) of the DSU, the European Communities could not have established, and did not establish, a prima facie case of violation of Article 23.2(a) of the DSU.”(692),(693)

416.     In Chile — Price Band System, Chile asked the Appellate Body to reverse the Panel’s finding on inconsistency of Chile’s price band system with Article II:1(b) second sentence on the ground that Argentina had not actually made a claim under that second sentence. The Appellate Body concluded that, although Argentina’s request for the establishment of a panel was phrased broadly enough to include a claim under both sentences of Article II:1(b) of the GATT 1994, a close examination of Argentina’s submissions revealed that the only claim made by Argentina was under the first sentence of that Article.(694) The Appellate Body considered that, in this case, the Panel “had neither a “right” nor a “duty” to develop its own legal reasoning to support a claim under the second sentence” and stressed that “the Panel was not entitled to make a claim for Argentina, or to develop its own legal reasoning on a provision that was not at issue”:

“In EC — Hormones,(695) and in US — Certain EC Products,(696) we affirmed the capacity of panels to develop their own legal reasoning in a context in which it was clear that the complaining party had made a claim on the matter before the panel. It was also clear, in both those cases, that the complainant had advanced arguments in support of the finding made by the panel-even though the arguments in support of the claim were not the same as the interpretation eventually adopted by the Panel. The situation in this appeal is altogether different. No claim was properly made by Argentina under the second sentence of Article II:1(b). No legal arguments were advanced by Argentina under the second sentence of Article II:1(b). Therefore, those rulings have no relevance to the situation here.

 

Contrary to what Argentina argues, given our finding that Argentina has not made a claim under the second sentence of Article II:1(b), the Panel in this case had neither a ‘right’ nor a ‘duty’ to develop its own legal reasoning to support a claim under the second sentence. The Panel was not entitled to make a claim for Argentina,(697) or to develop its own legal reasoning on a provision that was not at issue.”(698),(699)

417.     In Korea — Commercial Vessels, Korea asked the Panel to issue a preliminary ruling that the European Communities had extended the scope of the dispute settlement proceedings by arguing beyond the measures specified in the request for consultations.(700) The Panel rejected Korea’s request, stating:

“We do not consider that the scope of the request for establishment need be identical to the scope of the request for consultations. Rather, the scope of the request for establishment is governed by, and may not exceed, the scope of the consultations that actually took place between the parties. Provided the request for establishment concerns a dispute on which consultations had been requested, there is no need for the matter(701) identified in the request for establishment to be identical to the matter on which consultations were requested.

 Since consultations took place in respect of all of the abovementioned measures [Article 5/ serious prejudice claims regarding assistance given under the KEXIM APRG and PSL programs and Article 3/ prohibited export subsidy claims regarding restructuring assistance and tax programs], in the context of the dispute concerning the application to those measures of certain disciplines under the SCM Agreement, we consider that the European Communities was entitled to formulate its request for establishment on the basis of any combination of those measures and legal provisions”.(702)

418.     In EC — Commercial Vessels, Korea requested the Panel to make a preliminary ruling on whether “disbursements of funds” were within the Panel’s terms of reference.(703) The Panel declined to make a ruling on this issue, stating:

“In order to decide on Korea’s request, we would have to determine whether’ individual instances of application’ or ‘disbursements of funds’ were somehow implicitly identified in the request for establishment, and if not, whether the request otherwise covers such disbursements either because they are ‘application’ of the cited measures or because they are ‘directly related’ to those measures.(704) The Panel is not persuaded, however, that it is necessary or appropriate for it to pronounce on these questions.

 … even if we agreed that disbursements of funds are applications of the measures identified in Korea’s request for the establishment of a panel, Article 19.1 of the DSU would preclude us from making the kind of specific recommendation requested by Korea [that the EC cease further disbursements of funding].

 

… the Panel … decides that it is neither necessary nor appropriate to clarify the status of disbursements of funds in the manner requested by Korea.”(705)

3. Article 7.2

(a) “covered agreement or agreements”

419.     In EC — Hormones (US) (Article 22.6 — EC), the Arbitrators stated that:

“The autonomous quota rights claimed by the US — irrespective of their legal status and consistency with WTO rules — are not rights under any of the WTO agreements covered by the DSU. The rights thus alleged are derived from bilateral agreements that cannot be properly enforced on their own in WTO dispute settlement.”(706)

420.     In EC and certain member States — Large Civil Aircraft, the Panel noted that Article 7.2 of the DSU requires panels to “address the relevant provisions in any covered agreement or agreements cited by the parties to the dispute”. The Panel proceeded to rule that it did not have the jurisdiction to make findings with respect to a bilateral Agreement between the United States and the European Communities signed in 1992, as it was not a covered agreement:

Article 7.2 of the DSU requires panels to ‘address the relevant provisions in any covered Agreement or Agreements cited by the parties to the dispute.’ The ‘covered Agreements’ cited by the United States in document WT/DS316/2 [the panel request] include the DSU, the GATT 1994 and the SCM Agreement. As the 1992 Agreement is not a covered Agreement cited by the United States in document WT/DS316/2, or contained in the list of covered Agreements in Appendix 1 to the DSU, or one of the instruments included in the GATT 1994, we do not have jurisdiction to determine the rights and obligations of the parties under the 1992 Agreement. “(707)

421.     The Panel in EC and certain member States — Large Civil Aircraft also considered the meaning of the expression “covered agreement or agreements” in Article 7.2:

“[I]t is clear to us that the word “agreements” in Article 7.2, which is joined to the words “covered agreement” that immediately precede it by the conjunction “or”, refers to the plural of a “covered agreement”.

 

Therefore, it should not, as the European Communities suggests, be understood as referring to international agreements that are not WTO covered agreements. As we have already noted in our preliminary ruling, Article 7.2 does not give us jurisdiction to determine the rights and obligations of the parties under non-covered agreements for the purpose of the recommendations or rulings envisaged under Article 11 of the DSU. Such recommendations or rulings must relate to the parties’ rights and obligations under the WTO covered agreements, not the rights and obligations of parties under international agreements that are not WTO covered agreements.”(708)

(b) “The panel shall address …”

422.     In Mexico — Corn Syrup (Article 21.5 — US), the Appellate Body implied that expressly exercising judicial economy amounted “addressing” a claim (or objection):

“[H]ad we been satisfied that Mexico did, in fact, explicitly raise its objections before the Panel, then the Panel may well have been required to “address” those objections, whether by virtue of Articles 7.2 and 12.7 of the DSU, or the requirements of due process.(44)

 

44 (footnote original) We recall that, in a different context involving judicial economy, we said that:

 

         … for purposes of transparency and fairness to the parties, a panel should, … in all cases, address expressly [even] those claims which it declines to examine and rule upon … Silence does not suffice for these purposes.

 

         Appellate Body Report, Canada — Certain Measures Affecting the Automotive Industry WT/DS139/AB/R, WT/DS142/AB/R, adopted 19 June 2000, para. 117.”

423.     In Mexico — Taxes on Soft Drinks, Mexico requested that the Panel decline to exercise its jurisdiction in the circumstances of the dispute. The Panel declined Mexico’s request, and the Appellate Body upheld the Panel’s decision. In the course of its analysis, the Appellate Body stated that:

“The second paragraph of Article 7 further stipulates that “[p]anels shall address the relevant provisions in any covered agreement or agreements cited by the parties to the dispute.” The use of the words “shall address” in Article 7.2 indicates, in our view, that panels are required to address the relevant provisions in any covered agreement or agreements cited by the parties to the dispute.”(709),(710)

(c) “the relevant provisions”

424.     In Argentina — Footwear (EC), Argentina had claimed that the Panel had violated Article 7.2 of the DSU and exceeded its terms of reference, because it had relied on alleged violations of Article 3 of the Agreement on Safeguards even though the request for the establishment of a Panel only alleged violations of Articles 2 and 4 of the Agreement on Safeguards.”(711) In this case, the Appellate Body did not consider that the Panel was wrong to rule on Article 3 of the Agreemenkt on Safeguards and stated that it “fail[ed] to see how any panel could be expected to make an ‘objective assessment of the matter’, as required by Article 11 of the DSU, if it could only refer in its reasoning to the specific provisions cited by the parties in their claims”:

“We note that the very terms of Article 4.2(c) of the Agreement on Safeguards expressly incorporate the provisions of Article 3. Thus, we find it difficult to see how a panel could examine whether a Member had complied with Article 4.2(c) without also referring to the provisions of Article 3 of the Agreement on Safeguards. More particularly, given the express language of Article 4.2(c), we do not see how a panel could ignore the publication requirement set out in Article 3.1 when examining the publication requirement in Article 4.2(c) of the Agreement on Safeguards. And, generally, we fail to see how the Panel could have interpreted the requirements of Article 4.2(c) without taking into account in some way the provisions of Article 3. What is more, we fail to see how any panel could be expected to make an ‘objective assessment of the matter’, as required by Article 11 of the DSU, if it could only refer in its reasoning to the specific provisions cited by the parties in their claims.”(712)

4. Article 7.3

(a) Special terms of reference

425.     In Brazil — Desiccated Coconut, upon a request from Brazil for consultations on the terms of reference, the DSB authorized the DSB Chairman to “draw up terms of reference in consultation with the parties, in accordance with Article 7.3 of the DSU”. The Philippines and Brazil agreed on the following special terms of reference:

“To examine, in the light of the relevant provisions in GATT 1994 and the Agreement on Agriculture, the matter referred to the DSB by the Philippines in document WT/DS22/5, taking into account the submission made by Brazil in document WT/DS22/3 and the record of discussions at the meeting of the DSB on 21 February 1996, and to make such findings as will assist the DSB in making the recommendations or in giving the rulings provided for in those agreements.”(713)

C. Relationship with other Articles

1. Article 3.3

426.     The Panel in Argentina — Footwear, in discussing the concept of a “moving target” with respect to a panel’s terms of reference, linked this issue with the principle of prompt settlement of disputes set out in Article 3.3. See paragraph 397 above.

2. Article 4

427.     In Korea — Commercial Vessels, Korea asked the Panel to issue a preliminary ruling that the European Communities had extended the scope of the dispute settlement proceedings by arguing beyond the measures specified in the request for consultations. See the Panel’s ruling on Korea’s request at paragraph 417 above.

3. Article 6.2

428.     See the Section of this Chapter on Article 6.2.

D. Relationship with other WTO Agreements

1. Anti-Dumping Agreement

(a) Article 17.4

429.     In Guatemala — Cement I, the Appellate Body discussed the phrase “the matter referred to the DSB, noting that it bears the same meaning in Article 7 of the DSU and Article 17.4 of the Anti-Dumping Agreement.(714)

 

VIII. Article 8    back to top

A. Text of Article 8

Article 8: Composition of Panels

1.     Panels shall be composed of well-qualified governmental and/or non-governmental individuals, including persons who have served on or presented a case to a panel, served as a representative of a Member or of a contracting party to GATT 1947 or as a representative to the Council or Committee of any covered agreement or its predecessor agreement, or in the Secretariat, taught or published on international trade law or policy, or served as a senior trade policy official of a Member.

 

2.     Panel members should be selected with a view to ensuring the independence of the members, a sufficiently diverse background and a wide spectrum of experience.

 

3.     Citizens of Members whose governments(6) are parties to the dispute or third parties as defined in paragraph 2 of Article 10 shall not serve on a panel concerned with that dispute, unless the parties to the dispute agree otherwise.

 

(footnote original) 6 In the case where customs unions or common markets are parties to a dispute, this provision applies to citizens of all member countries of the customs unions or common markets.

 

4.     To assist in the selection of panelists, the Secretariat shall maintain an indicative list of governmental and nongovernmental individuals possessing the qualifications outlined in paragraph 1, from which panelists may be drawn as appropriate. That list shall include the roster of non-governmental panelists established on 30 November 1984 (BISD 31S/9), and other rosters and indicative lists established under any of the covered agreements, and shall retain the names of persons on those rosters and indicative lists at the time of entry into force of the WTO Agreement. Members may periodically suggest names of governmental and non-governmental individuals for inclusion on the indicative list, providing relevant information on their knowledge of international trade and of the sectors or subject matter of the covered agreements, and those names shall be added to the list upon approval by the DSB. For each of the individuals on the list, the list shall indicate specific areas of experience or expertise of the individuals in the sectors or subject matter of the covered agreements.

 

5.     Panels shall be composed of three panelists unless the parties to the dispute agree, within 10 days from the establishment of the panel, to a panel composed of five panelists. Members shall be informed promptly of the composition of the panel.

 

6.     The Secretariat shall propose nominations for the panel to the parties to the dispute. The parties to the dispute shall not oppose nominations except for compelling reasons.

 

7.     If there is no agreement on the panelists within 20 days after the date of the establishment of a panel, at the request of either party, the Director-General, in consultation with the Chairman of the DSB and the Chairman of the relevant Council or Committee, shall determine the composition of the panel by appointing the panelists whom the Director-General considers most appropriate in accordance with any relevant special or additional rules or procedures of the covered agreement or covered agreements which are at issue in the dispute, after consulting with the parties to the dispute. The Chairman of the DSB shall inform the Members of the composition of the panel thus formed no later than 10 days after the date the Chairman receives such a request.

 

8.     Members shall undertake, as a general rule, to permit their officials to serve as panelists.

 

9.     Panelists shall serve in their individual capacities and not as government representatives, nor as representatives of any organization. Members shall therefore not give them instructions nor seek to influence them as individuals with regard to matters before a panel.

 

10.     When a dispute is between a developing country Member and a developed country Member the panel shall, if the developing country Member so requests, include at least one panelist from a developing country Member.

 

11.     Panelists’ expenses, including travel and subsistence allowance, shall be met from the WTO budget in accordance with criteria to be adopted by the General Council, based on recommendations of the Committee on Budget, Finance and Administration.

B. Interpretation and Application of Article 8

1. Article 8.1: individuals eligible to serve as panellists

430.     In Chile — Price Band System, the Panel noted that:

“Regarding the use of teleconference, this was not the first time this has been used in panel proceedings and is related to the constraints imposed by Article 8.1 of the DSU as regards the individuals eligible to serve as panelists, who, given their required seniority or expertise, may be expected to face scheduling conflicts more than once.”(715)

2. Article 8.2: sufficiently diverse background

431.     In Mexico — Telecoms, the Panel noted that “the diverse backgrounds of the panellists” and the assistance granted by the Secretariat pursuant to Article 27.1 of the DSU ensured that it was fully aware of the legal and technical complexity of the regulation of telecommunications services, including their rapid technological evolution, and the drafting history of GATS provisions to which the disputing parties had referred extensively.(716)

432.     As regards the impartiality and independence of panellists, see the Section of this Chapter on the Rules of Conduct for the DSU.

3. Article 8.3: citizens of Members who are parties or third parties

(a) General

433.     In US — Wool Shirts and Blouses, the Panel contrasted the role and function of the Textiles Monitoring Board (TMB), under the Agreement on Textiles and Clothing, with the role and function of DSU panels. In that context, the Panel noted that:

“[A] TMB member appointed by a WTO Member involved in a dispute before the TMB, participates in the TMB’s deliberations, although such TMB member cannot block a consensus (Article 8.2 of the ATC). On the contrary, panelists under the DSU are not selected on the basis of constituencies and the citizens of any party to a dispute under the DSU cannot participate as panelists, absent agreement of the parties (Article 8.3 of the DSU).”(717)

(b) Whether original agreement under Article 8.3 can be revoked

434.     See interpretation and application of Article 8.7 below.

4. Article 8.4: indicative list of panelists

435.     In accordance with the proposals for the administration of the indicative list of panelists approved by the DSB on 31 May 1995, the list is completely updated every two years. At its meeting on 27 September 1995, the DSB approved the list of governmental and nongovernmental panelists which contained names of individuals and an indication of their sectoral experience. The DSB also agreed that at each of its regular meetings new names may be proposed by delegations for inclusion in the indicative list.(718) To this end the Secretariat regularly circulates details of either the consolidated list or new names of potential panelists to be added to that list as approved by the DSB.(719)

5. Article 8.4: a panel composed of five panelists

436.     As of 30 September 2011, no panel has been composed of five panelists.

6. Article 8.7: panel composition by the Director-General

(a) Challenges to the Director-General’s composition

437.     In Guatemala — Cement II, the Panel was composed by the Director-General pursuant to Article 8.7 of the DSU. Guatemala requested the Panel to rule that its composition was inconsistent with WTO and international law principles, and that therefore the Panel lacked competence to review the matter before it. Specifically, Guatemala considered that the presence on this Panel of a member who served on Guatemala — Cement I detracted from the objectivity and independence that a panel should have when reviewing a matter brought before it. Mexico disagreed arguing that the Panel was composed in conformity with the DSU. The Panel issued the following preliminary ruling rejecting Guatemala’s preliminary objection as follows:

“In order to determine whether the substance of Guatemala’s preliminary objection is an issue that is susceptible of a ruling by the Panel, we have carefully analysed the provisions of the DSU governing panel composition. It is clear that Article 8.6 of the DSU imposes primary responsibility for panel composition on the parties to the dispute. In cases where the parties are unable to agree on the composition of a panel, such as this one, Article 8.7 of the DSU imposes responsibility for panel composition on the Director General. According to Article 8 of the DSU, therefore, the composition of a panel is determined by the parties to the dispute and, in certain circumstances, by the Director General. Neither Article 8 nor any other provision of the DSU prescribes any role for the panel in the panel composition process. For this reason, we find that we are unable to rule on the substance of the issue raised by Guatemala.

 

Should Guatemala persist with its substantive concerns regarding the composition of the Panel, Guatemala may avail itself of the procedure provided for in the Rules of Conduct for the Understanding on Rules and Procedures Governing the Settlement of Disputes.”(720)

438.     In US — Upland Cotton (Article 21.5 — Brazil), Brazil made a request under Article 8.7 of the DSU for the composition of a compliance panel. In its request, Brazil asked the Director-General to nominate the three members of the panel in the original proceedings. In a letter to the Director-General following Brazil’s request for composition under Article 8.7 of the DSU, the United States objected to the re-nomination of two of the original panellists, on the basis that they were nationals of third parties to the dispute. The Director-General elected to call only one of the panellists back to service, and to nominate two new panellists. The European Communities, a third party in the proceeding, raised this issue before the Panel. Specifically, the European Communities argued that the Director-General was obliged to reject the United States’ attempt to withdraw its agreement under Article 8.3 of the DSU solely on the grounds that an existing panellist is a national of a third party. The Panel considered that:

“[I]t is not within its authority under the DSU to make a “finding or ruling” on an issue that has not been raised by any of the parties to the dispute and which concerns the application by the WTO Director-General of the DSU provisions regarding panel composition.(721) The Panel fails to see how the “finding or ruling” requested by the European Communities would contribute to a positive solution to this dispute within the meaning of Article 3.7 of the DSU.”(722)

439.     A very similar issue arose in US — Zeroing (EC) (Article 21.5 — EC). In that case, and with the agreement of the parties pursuant to Article 8.3 of the DSU, the original panel included citizens of the Members whose governments were parties the dispute. In the composition of the Article 21.5 panel, the United States withdrew its agreement to the service of citizens of Members whose governments were parties to the dispute. The European Communities argued that the original agreement under Article 8.3 DSU cannot be revoked at any stage of the dispute proceedings, including the compliance panel stage, and that the panel had therefore been improperly composed. The Panel concluded that it had no authority to rule on the propriety of its own composition:

“The EC claims and arguments raise the question whether a panel may rule on the propriety or consistency with the DSU of its own composition. It is surprising that it is the complaining party in this dispute that raises this issue. But in any event, we do not believe that we need to address this question comprehensively.

 

We note that this Panel was composed by the Director-General of the WTO pursuant to the provisions of Article 8.7 of the DSU. That paragraph provides:

 

“If there is no agreement on the panelists within 20 days after the date of the establishment of a panel, at the request of either party, the Director-General, in consultation with the Chairman of the DSB and the Chairman of the relevant Council or Committee, shall determine the composition of the panel by appointing the panelists whom the Director-General considers most appropriate in accordance with any relevant special or additional rules or procedures of the covered agreement or covered agreements which are at issue in the dispute, after consulting with the parties to the dispute. The Chairman of the DSB shall inform the Members of the composition of the panel thus formed no later than 10 days after the date the Chairman receives such a request.” (emphasis added)

 

The European Communities has failed to point to any provision of the DSU, and we know of none, that would give us authority to make a finding or ruling with respect to the application, by the Director-General of the WTO, of the provisions of the DSU regarding panel composition contained in Article 8.7.(723)

 

Article 8.7 is clear that whenever there is no agreement between the parties, the ultimate power to compose the panel rests with the Director-General of the WTO. Consequently, we refrain from ruling on the substance of the EC claim with respect to the composition of this panel by the Director-General.”(724),(725)

440.     The Appellate Body ruled that the Panel did not err in refraining from making a finding on whether the Panel was properly composed:

“On the substance of the European Communities’ appeal, we note that, on 28 November 2007, the Director-General was requested to determine the composition of the compliance panel under Article 8.7 of the DSU. In our view, Article 8.7 confers on the Director-General the discretion to compose panels, which was properly exercised in this case. We therefore find that the Panel did not err in refraining, in paragraphs 8.17 and 9.1(a) of the Panel Report, from making a finding on whether it was improperly composed. In the light of this conclusion, we do not consider it necessary to address the other arguments made by the parties on this matter.”(726)

(b) Deputy Director-General acting in place of the Director-General

441.     In both EC and certain member States — Large Civil Aircraft and US — Large Civil Aircraft (2nd complaint), the respective panels were composed by a Deputy Director-General acting in place of the Director-General.(727)

(c) Appointment of replacement panellist in the course of a panel proceeding

442.     Article 8.7 of the DSU does not expressly provide for the resignation of a panellist or the appointment of a replacement panelist in the course of a panel proceeding. The Director-General has appointed replacement panellists pursuant to Article 8.7 in several cases, including EC — Countervailing Measures on DRAM Chips(728) and US — Softwood Lumber V (Article 21.5 — Canada).(729) In US — Tuna II (Mexico), the parties agreed on a new member of the Panel following the death of a panellist.(730)

(d)     Table showing length of time taken in WTO proceedings to date

443.     The following table provides information on the length of time taken in WTO proceedings to date from the date of the establishment of a panel to the date of composition (Article 8.7 of the DSU).(731) It is updated to 30 September 2011.

Prescribed Time-Period in Article 8.7 30 days
Average to Date 73 days
Longest to Date 234 days
Shortest to Date 12 days(732)
WT/DS No. Dispute Short Title Days from Establishment to Composition
WT/DS2, WT/DS4 US — Gasoline 16 days
WT/DS8, WT/DS10, WT/DS11 Japan — Alcoholic Beverages II 33 days
WT/DS 18 Australia — Salmon 48 days
WT/DS22 Brazil — Desiccated Coconut 42 days
WT/DS24 US — Underwear 30 days
WT/DS26 EC — Hormones 43 days
WT/DS27 EC — Bananas III 30 days
WT/DS31 Canada — Periodicals 36 days
WT/DS33 US — Wool Shirts and Blouses 68 days
WT/DS34 Turkey — Textiles 90 days
WT/DS44 Japan — Film 62 days
WT/DS46 Brazil — Aircraft 91 days
WT/DS48 EC — Hormones 19 days
WT/DS50 India — Patents (US) 70 days
WT/DS54, WT/DS55, WT/DS59, WT/DS64 Indonesia — Autos 47 days
WT/DS56 Argentina — Textiles and Apparel 38 days
WT/DS58 US — Shrimp 49 days
WT/DS60 Guatemala — Cement I 42 days
WT/DS62, WT/DS67, WT/DS68 EC — Computer Equipment 52 days
WT/DS69 EC — Poultry 12 days
WT/DS70 Canada — Aircraft 91 days
WT/DS75, WT/DS84 Korea — Alcoholic Beverages 50 days
WT/DS76 Japan — Agricultural Products II 30 days
WT/DS79 India — Patents (EC) 42 days
WT/DS87, WT/DS110 Chile — Alcoholic Beverages 92 days
WT/DS90 India — Quantitative Restrictions 94 days
WT/DS98 Korea — Dairy 28 days
WT/DS99 US — DRAMS 62 days
WT/DS103, WT/DS113 Canada — Dairy 140 days
WT/DS 108 US — FSC 48 days
WT/DS 114 Canada — Pharmaceutical Patents 52 days
WT/DS 121 Argentina — Footwear (EC) 54 days
WT/DS 122 Thailand — H-Beams 31 days
WT/DS 126 Australia — Automotive Leather II 133 days
WT/DS 132 Mexico — Corn Syrup 49 days
WT/DS 135 EC — Asbestos 124 days
WT/DS 136 US — 1916 Act 59 days
WT/DS 138 US — Lead and Bismuth II 27 days
WT/DS 139, 142 Canada — Autos 52 days
WT/DS 141 EC — Bed Linen 89 days
WT/DS 146, 175 India — Autos 120 days
WT/DS 152 US — Section 301 Trade Act 29 days
WT/DS 155 Argentina — Hides and Leather 189 days
WT/DS 156 Guatemala — Cement II 41 days
WT/DS 160 US — Section 110(5) Copyright Act 72 days
WT/DS 161, WT/DS 169 Korea — Various Measures on Beef 70 days
WT/DS 162 US — Anti-Dumping Act of 1916 16 days
WT/DS 163 Korea — Procurement 75 days
WT/DS 165 US — Certain EC Products 114 days
WT/DS 166 US — Wheat Gluten 77 days
WT/DS 170 Canada — Patent Term 30 days
WT/DS 174, WT/DS290 EC — Trademarks and Geographical Indications 144 days
WT/DS 176 US — Section 211 Appropriations Act 30 days
WT/DS 177, WT/DS 178 US — Lamb 123 days
WT/DS 179 US — Stainless Steel 126 days
WT/DS 184 US — Hot-Rolled Steel 65 days
WT/DS 189 Argentina — Ceramic Tiles 56 days
WT/DS 192 US — Cotton Yarn 72 days
WT/DS 194 US — Export Restraints 42 days
WT/DS202 US — Line Pipe 91 days
WT/DS204 Mexico — Telecoms 131 days
WT/DS206 US-Steel Plate 94 days
WT/DS207 Chile — Price Band System
Egypt — Definitive Anti-Dumping Measures on Rebar
66 days
WT/DS211 from Turkey 28 days
WT/DS212 US — Countervailing Measures on Certain EC Products 56 days
WT/DS213 US — Carbon Steel 46 days
WT/DS217, WT/DS234 US — Offset Act (Byrd Amendment) 63 days
WT/DS219 EC — Tube or Pipe Fittings 43 days
WT/DS221 US — Section 129(c)(1) URAA 68 days
WT/DS222 Canada — Aircraft Credits and Guarantees 60 days
WT/DS231 EC — Sardines 49 days
WT/DS236 US — Softwood Lumber III 58 days
WT/DS238 Argentina — Preserved Peaches 88 days
WT/DS241 Argentina — Poultry Anti-Dumping Duties 71 days
WT/DS243 US — Textiles Rules of Origin 108 days
WT/DS244 US — Corrosion-Resistant Steel Sunset Review 56 days
WT/DS245 Japan — Apples 43 days
WT/DS246 EC — Tariff Preferences 38 days
WT/DS248, WT/DS249, WT/DS251, WT/DS252, WT/DS253, WT/DS254, WT/DS258, WT/DS259 US — Steel Safeguards 52 days
WT/DS257 US — Softwood Lumber TV 38 days
WT/DS264 US — Softwood Lumber V 48 days
WT/DS265, WT/DS266, WT/DS283 EC — Export Subsidies on Sugar 116 days
WT/DS267 US — Upland Cotton 62 days
WT/DS268 US — Oil Country Tubular Goods Sunset Review 108 days
WT/DS269, WT/DS286 EC — Chicken Cuts 234 days
WT/DS273 Korea — Commercial Vesseb 30 days
WT/DS276 Canada — Wheat Exports and Grain Imports 42 days
WT/DS277 US — Softwood Lumber VI
US — Anti-Dumping Measures on Oil Country Tubular
43 days
WT/DS282 Goods 166 days
WT/DS285 US — Gambling 35 days
WT/DS291, WT/DS292, WT/DS293 EC — Approval and Marketing of Biotech Products 188 days
WT/DS294 US — Zeroing (EC) 222 days
WT/DS295 Mexico — Anti-Dumping Measures on Rice 98 days
WT/DS296 US — Countervailing Duty Investigation on DRAMs 42 days
WT/DS299 EC — Countervailing Measures on DRAM Chips 61 days
WT/DS301 EC — Commercial Vesseb 55 days
WT/DS302 Dominican Republic — Import and Sale of Cigarettes 39 days
WT/DS308 Mexico — Taxes on Soft Drinks 43 days
WT/DS312 Korea — Certain Paper 28 days
WT/DS315 EC — Selected Customs Matters 67 days
WT/DS316 EC and certain member States — Large Civil Aircraft 89 days
WT/DS320, WT/DS321 US/Canada — Continued Suspension 109 days
WT/DS322 US — Zeroing (Japan) 46 days
WT/DS323 Japan — Quotas on Laver 70 days
WT/DS331 Mexico — Steel Pipes and Tubes 48 days
WT/DS332 Brazil — Retreaded Tyres 55 days
WT/DS334 Turkey — Rice 136 days
WT/DS335 US — Shrimp (Ecuador) 69 days
WT/DS336 Japan — DRAMS (Korea) 66 days
WT/DS337 EC — Salmon (Norway) 41 days
339, 340, 342 China — Auto Parts 95 days
WT/DS341 Mexico — Olive Oil 29 days
WT/DS343 US — Shrimp (Thailand) 92 days
WT/DS344 US — Stainless Steel (Mexico) 55 days
WT/DS345 US — Customs Bond Directive 66 days
WT/DS350 US — Continued Zeroing 32 days
WT/DS360 India — Additional Import Duties 13 days
WT/DS362 China — Intellectual Property Rights 79 days
WT/DS363 China — Publications and Audiovisual Products 169 days
WT/DS366 Colombia — Ports of Entry 109 days
WT/DS367 Australia — Apples 51 days
WT/DS371 Thailand — Cigarettes (Philippines) 91 days
WT/DS375, WT/DS376, WT/DS377 EC and its member States — IT Products 121 days
WT/DS379 US — Anti-Dumping and Countervailing Duties (China) 43 days
WT/DS382 US — Orange Juice (Brazil) 227 days
WT/DS383 US — Anti-Dumping Measures on PET Bags 153 days
WT/DS392 US — Poultry (China) 55 days
WT/DS397 EC — Fasteners (China) 47 days
WT/DS399 US — Tyres (China) 52 days
WT/DS402 US — Zeroing (Korea) 51 days

 

IX. Article 9    back to top

A. Text of Article 9

Article 9: Procedures for Multiple Complainants

1.     Where more than one Member requests the establishment of a panel related to the same matter, a single panel may be established to examine these complaints taking into account the rights of all Members concerned. A single panel should be established to examine such complaints whenever feasible.

 

2.     The single panel shall organize its examination and present its findings to the DSB in such a manner that the rights which the parties to the dispute would have enjoyed had separate panels examined the complaints are in noway impaired. If one of the parties to the dispute so requests, the panel shall submit separate reports on the dispute concerned. The written submissions by each of the complainants shall be made available to the other complainants, and each complainant shall have the right to be present when any one of the other complainants presents its views to the panel.

 

3.     If more than one panel is established to examine the complaints related to the same matter, to the greatest extent possible the same persons shall serve as panelists on each of the separate panels and the timetable for the panel process in such disputes shall be harmonized.

 
B. Interpretation and Application of Article 9

1. Article 9.1: “a single panel should be established … whenever feasible”

(a) General

444.     In India — Patents (EC), India requested the Panel to dismiss the European Communities’ complaint as inadmissible on procedural grounds. India argued that since it was “feasible” for the European Communities to have brought its complaint simultaneously with the United States’ complaint (WT/DS50), the European Communities was required to do so. India contended that this was supported by a strict interpretation of Articles 9.1 and 10.4 of the DSU. The Panel considered that the terms of Article 9.1 are directory or recommendatory, not mandatory. Further to concluding that it was not feasible for the DSB to establish a single panel, the Panel found that there was no violation of Article 9.1:

“In order to assess India’s argument, we need to consider: (i) the nature of the requirement contained in Article 9.1; (ii) the rights generally of Members under the DSU; and (iii) whether it was feasible to establish a single panel in this particular case.

 

Given their ordinary meaning, the terms of Article 9.1 are directory or recommendatory, not mandatory. They direct that a single panel should (not “shall”) be established, and that direction is limited to cases where it is feasible. We disagree with India that the addressee of Article 9.1 is not clear. Article 9.1 is clearly a code of conduct for the DSB because its provisions pertain to the establishment of a panel, the authority for which is exclusively reserved for the DSB. As such, Article 9.1 should not affect substantive and procedural rights and obligations of individual Members under the DSU.

 

Indeed, the text of Article 9.1, as well as the text of Article 9.2, which is part of the context of Article 9.1, make it clear that Article 9 is not intended to limit the rights of WTO Members. In our view, one of those rights is the freedom to determine whether and when to pursue a complaint under the DSU. According to Article 3.7 of the DSU, “[t]he aim of dispute settlement mechanism is to secure a positive solution to a dispute. A solution mutually acceptable to the parties to a dispute and consistent with the covered agreements is clearly to be preferred”. It would be inconsistent with this aim of the dispute settlement mechanism to attempt to force Members to take decisions earlier than they wish on whether to request a panel in a dispute, or to continue consultations aimed at securing a mutually acceptable solution.

 

As to feasibility, it is not disputed by the parties that the complaints by the United States (WT/DS50) and the EC (WT/DS79) relate to the same matter, i.e. India’s compliance with Article 70.8 and 70.9 of the TRIPS Agreement. Was it then “feasible” for the DSB to establish a single panel at the time of the United States’ panel request in November 1996? The answer is no, because at that time the EC had not requested the establishment of a panel. Indeed, the EC was not even entitled to make such a request as it was not until 28 April 1997 that the EC requested consultations with India on this matter.”(733)

(b) Table of disputes in which a single panel was established pursuant to Article 9.1 of the DSU

445.     The following table provides information on disputes in which a single panel was established pursuant to Article 9.1 of the DSU. It is updated to cover disputes in which a report was circulated prior to 30 September 2011.

DS No. Complainant(s) Case Panel established
DS2 Venezuela US — Gasoline 10.4.1995
DS4 Brazil 31.5.1995
DS8 EC Japan — Alcoholic Beverages II 27.9.1995
DS10 Canada
DS11 US
DS27 Ecuador, Guatemala, Honduras, Mexico, US EC — Bananas III 8.5.1996
DS54 EC Indonesia — Autos 12.6.1997
DS55 Japan 12.6.1997
DS59 US 30.7.1997
DS64 Japan 12.6.1997
DS58 India, Malaysia, Pakistan, Thailand US — Shrimp 25.2.1997
DS62 US EC — Computer Equipment 25.2.1997
DS67 US
DS68 US
DS75 EC Korea — Alcoholic Beverages 16.10.1997
DS84 US
DS87 EC Chile — Alcoholic Beverages 18.11.1997
DS110 EC 25.3.1998
DS103 US Canada — Dairy 25.3.1998
DS113 New Zealand
DS139 Japan Canada — Autos 1.2.1999
DS142 EC
DS146 EC India — Autos 17.11.2000
DS175 US 27.7.2000
DS161 US Korea — Various Measures on Beef 26.5.1999
DS169 Australia 26.7.1999
DS177 New Zealand US — Lamb 19.11.1999
DS178 Australia
DS217 Australia, Brazil, Chile, EC, India, Indonesia, US — Offset Act (Byrd Amendment) 23.8.2001
DS234 Japan, Korea, Thailand Canada, Mexico 10.9.2001
DS248 EC US — Steel Safeguards 3.6.2002
DS249 Japan 14.6.2002
DS251 Korea 14.6.2002
DS252 China 24.6.2002
DS253 Switzerland 24.6.2002
DS254 Norway 24.6.2002
DS258 New Zealand 8.7.2002
DS259 Brazil 29.7.2002
DS174 US EC — Trademarks and Geographical Indications 2.10.2003
DS290 Australia
DS265 Australia EC — Export Subsidies on Sugar 29.8.2003
DS266 Brazil
DS283 Thailand
DS269 Brazil EC — Chicken Cuts 7.11.2003
DS286 Thailand 21.11.2003
DS291 US EC — Approval and Marketing of Biotech Products 29.8.2003
DS292 Canada
DS293 Argentina
DS339 EC China — Auto Parts 26.10.2007
DS340 US
DS341 Canada
DS375 US EC — IT Products 23.9.2008
DS376 Japan
DS377 Chinese Taipei
DS394 US China — Raw Materials 21.12.2009
DS395 EC 21.12.2009
DS398 Mexico 21.12.2009
DS396 EU Philippines — Taxes on Distilled Spirits 19.1.2010
DS403 US 20.4.2010

2. Article 9.2: separate reports

(a) General

446.     In EC — Bananas III, the European Communities requested the Panel, pursuant to Article 9 of the DSU, to prepare four panel reports in this case — one each for the claims of Ecuador, Guatemala and Honduras (who filed a joint first submission), Mexico and the United States. The Panel interpreted Article 9 as requiring it to grant the request and considered that one of the objectives of Article 9 was to ensure that a respondent is not later faced with a demand for compensation or threatened by retaliation under Article 22 of the DSU in respect of uncured inconsistencies with WTO rules that were not challenged by one of the complaining parties participating in a panel proceeding:

“We interpret the terms of Article 9 to require us to grant the EC request. However, in light of the fact that the Complainants presented joint oral submissions to the Panel, joint responses to questions and a joint rebuttal submission, as well as the fact that they have collectively endorsed the arguments made in each other’s first submissions, we must also take account of the close interrelationship of the Complainants’ arguments.

 

In our view, one of the objectives of Article 9 is to ensure that a respondent is not later faced with a demand for compensation or threatened by retaliation under Article 22 of the DSU in respect of uncured inconsistencies with WTO rules that were not complained of by one of the complaining parties participating in a panel proceeding. Our reports must bear this objective in mind.

 

For purposes of determining whether a Complainant in this matter has made a claim, we have examined its first written submission, as we consider that document determines the claims made by a complaining party. To allow the assertion of additional claims after that point would be unfair to the respondent, as it would have little or no time to prepare a response to such claims. In this regard, we note that paragraph 12(c) of the Appendix 3 to the DSU on “Working Procedures” foresees the simultaneous submission of the written rebuttals by complaining and respondent parties, a procedure that was followed in this case. To allow claims to be presented in the rebuttal submissions would mean that the respondent would have an opportunity to rebut the claims only in its oral presentation during the second meeting. In our view, the failure to make a claim in the first written submission cannot be remedied by later submissions or by incorporating the claims and arguments of other complainants.”(734)

447.     In EC — Chicken Cuts, the Panel, although having issued a single interim report to the complainants (Brazil and Thailand), decided to issue separate final reports following a request from the European Communities. The Panel noted that the European Communities had reserved its right to separate reports under Article 9.2 early in the proceedings, and that neither of the complainants had objected to the European Communities’ request.(735)

(b) Timing of the request for separate reports

448.     In US — Offset Act (Byrd Amendment), the Panel rejected a request by the United States for a separate report for the dispute brought by Mexico on the grounds that the request had been filed too late in the process (two months after the issuance of the descriptive part) and no explanation had been provided on why it was not filed earlier. The Panel considered that requests made under Article 9.2 “should be made in a timely manner, since any need to prepare separate reports may affect the manner in which a panel organises its proceedings.” On appeal, the Appellate Body found that the Panel did not err in denying the United States’ request:

“By its terms, Article 9.2 accords to the requesting party a broad right to request a separate report. The text of Article 9.2 does not make this right dependent on any conditions. Rather, Article 9.2 explicitly provides that a panel “shall” submit separate reports “if one of the parties to the dispute so requests”. Thus the text of Article 9.2 of the DSU contains no requirement for the request for a separate panel report to be made by a certain time. We observe, however, that the text does not explicitly provide that such requests may be made at any time.

 

Having made these observations, we note that Article 9.2 must not be read in isolation from other provisions of the DSU, and without taking into account the overall object and purpose of that Agreement. The overall object and purpose of the DSU is expressed in Article 3.3 of that Agreement which provides, relevantly, that the “prompt settlement” of disputes is “essential to the effective functioning of the WTO.” If the right to a separate panel report under Article 9.2 were “unqualified”, this would mean that a panel would have the obligation to submit a separate panel report, pursuant to the request of a party to the dispute, at any time during the pane! proceedings. Moreover, a request for such a report could be made for whatever reason — or indeed, without any reason — even on the day that immediately precedes the day the panel report is due to be circulated to WTO Members at large. Such an interpretation would clearly undermine the overall object and purpose of the DSU to ensure the “prompt settlement” of disputes.”(736)

449.     Recalling its conclusions in EC — Hormones on panels’ discretion in dealing with procedural issues, the Appellate Body considered that the Panel had acted within its discretion when rejecting the late request for separate reports:

“[W]e note that the first sentence in Article 9.2 provides that it is for the panel to ‘organize its examination and present its findings in such a manner that the rights which the parties to the dispute would have enjoyed had separate panels examined the complaints are in no way impaired’. Our comments in EC — Hormones about panels’ discretion in dealing with procedural issues are pertinent here:

 

‘… the DSU and in particular its Appendix 3, leave panels a margin of discretion to deal, always in accordance with due process, with specific situations that may arise in a particular case and that are not explicitly regulated. Within this context, an appellant requesting the Appellate Body to reverse a panel’s ruling on matters of procedure must demonstrate the prejudice generated by such legal ruling. (737) (emphasis added)’

 

In our view, the Panel acted within its ‘margin of discretion’ by denying the United States’ request for a separate panel report. We do not believe that we should lightly disturb panels’ decisions on their procedure, particularly in cases such as the one at hand, in which the Panel’s decision appears to have been reasonable and in accordance with due process. We observe that, on appeal, the United States is not claiming that it suffered any prejudice from the denial of its request for a separate panel report. (738) We also note that the first sentence of Article 9.2 refers to the rights of all the parties to the dispute. The Panel correctly based its decision on an assessment of the rights of all the parties, and not of one alone.(739)

450.     In US — Steel Safeguards, the United States requested the issuance of separate reports three days before the issuance of the descriptive part to the parties. The Panel considered that the United States’ request for separate panel reports “was not necessarily made in an untimely fashion”. The Panel used the word “necessarily” because it considered that despite the fact that the request was made when the Panel’s process was quite advanced, this “did not necessarily prevent the Panel from settling the dispute in a prompt fashion”.(740)

(c) Structure of separate reports

451.     In EC — Bananas III, the European Communities requested the Panel, pursuant to Article 9 of the DSU, to prepare four panel reports in this case — one each for the claims of Ecuador, Guatemala and Honduras (who filed a joint first submission), Mexico and the United States. The Panel agreed and issued four separate reports with identical descriptive parts but with findings sections that differed according to the claims of the various complainants:

“[W]e have decided that the description of the Panel’s proceedings, the factual aspects and the parties’ arguments should be identical in the four reports. In the ‘Findings’ section, however, the reports differ to the extent that the Complainants’ initial written submissions to the Panel differ in respect of alleging inconsistencies with the requirements of specific provisions of specific agreements …”(741)

452.     In US — Steel Safeguards, further to the request by the United States to issue separate reports, the Panel issued its Reports in the form of one document constituting eight panel reports. The document included a common cover page, descriptive part and findings but individualized conclusions:

“In exercising our ‘margin of discretion’ under Article 9.2 of the DSU, and taking into account the particularities of this dispute, the Panel decides to issue its Reports in the form of one document constituting eight Panel Reports. For WTO purposes, this document is deemed to be eight separate reports, each of the reports relating to each one of the eight complainants in this dispute. The document comprises a common cover page and a common Descriptive Part. This reflects the fact that the eight steel safeguard disputes were reviewed through a single panel process. This single document also contains a common set of Findings in relation to each of the claims that the Panel has decided to address. In our exercise of judicial economy, we have mainly addressed the complainants’ common claims and on that basis, we were able to issue a common set of Findings which, we believed, resolved the dispute. Finally, this document also contains Conclusions and Recommendations that are particularised for each of the complainants, with a separate number (symbol) for each individual complainant.” (742)

453.     In Canada — Wheat Exports and Grain Imports, the DSB had successively established two panels to resolve the dispute (the “March Panel” and the “July Panel”). See paragraph 462 below in this regard. In response to a question posed by the Panel, the parties indicated that they did not wish the two Panels to issue separate reports in separate documents. The two Panels saw no compelling reason to proceed differently and therefore decided to issue their separate reports in the form of a single document.(743)

454.     The Panel in EC — Chicken Cuts noted that the complainants to the dispute, Brazil and Thailand, endorsed each other’s respective arguments in the proceeding and also that at the European Communities’ request, the parties’ arguments were contained in the findings section of its report. Thus, the only material difference between the separate Panel reports in respect of Brazil’s and Thailand’s complaints was the cover page and the conclusions; the descriptive part and the findings were common to both Reports.(744)

455.     In EC — Approval and Marketing of Biotech Products, all parties agreed that the Panel could issue a single document constituting three reports; that the introductory and descriptive parts could be common to all reports; that the findings could be common to the three reports, except where the claims presented and the evidence submitted by the Complaining Parties were different; and that the conclusions and recommendations should be different for each report. The Panel explained that:

“The Panel saw no reason to disagree with the approach suggested by the Parties. Accordingly, we decided to prepare and issue one single document constituting three separate panel reports. This is why the present document bears the symbols and DS numbers of all three complaints, i.e., DS291 for the complaint by the United States, DS292 for the complaint by Canada and DS293forthe complaint by Argentina. The present document comprises a common introductory part and some common annexes. The descriptive part and certain annexes contain separate sections for each Party. Thus, the description of, e.g., the United States’ arguments is part of the report concerning the United States’ complaint. The description of the European Communities’ arguments is basically relevant to all three reports, as the European Communities has provided an integrated defence in this case. However, some portions of the European Communities’ arguments are relevant to only one report.

 

Regarding the findings section of the three reports, we have particularized the findings for each of the Complaining Parties only where we found it necessary to do so. Thus, many (although not all) of the legal interpretations developed by the Panel are common to all three reports. On the other hand, we have particularized the conclusions for each claim made by a Complaining Party. To distinguish the complaint-specific conclusions, we use the appropriate DS numbers. Hence, a conclusion which is part of the report concerning the United States’ complaint is preceded by the reference “DS291 (United States)”. Where we have made findings, or relied on materials submitted as evidence219, which are specific to one of the three complaints, we have indicated this by using the relevant DS number, if it was not otherwise clear from the relevant context. Also, in summarizing the Complaining Parties’ arguments, we have provided separate summaries for each Complaining Party where the arguments were different; where the Complaining Parties’ arguments were identical or very similar, we have generally prepared an integrated argument summary for all Complaining Parties. With regard to the final section of this document, entitled “Conclusions and Recommendations”, we note that the conclusions we reached and the recommendations we made have been particularized for each Complaining Party. Accordingly, this document contains three independent sets of conclusions and recommendations.

 

In our view, the approach outlined above satisfies the requirement contained in Article 9.2 that a single panel present its findings to the DSB in such a manner that the rights which the parties to the dispute would have enjoyed had separate panels examined the complaints are in no way impaired. We also consider that this approach is consistent with the approach followed in a similar situation by the panel in US — Steel Safeguards.”(745)

456.     Similarly, the Panel in EC — IT Products issued the report as a single document with “the conclusions and recommendation for each of the disputes be set out on separate pages with each page bearing only the Report Symbol relating to that dispute”.(746)

457.     In Philippines — Taxes on Distilled Spirits, the Panel explained that its findings were “issued in the form of a single document, containing two separate reports. The Panel’s conclusions and recommendations for each of the disputes are set out on separate pages, with each page bearing only the report symbol relating to that dispute.”(747)

(d) Separate Appellate Body reports

458.     In US — Shrimp (Thailand) / US — Customs Bond Directive, the Appellate Body issued a single document with separate Findings and Conclusions in respect of each dispute.(748)

459.     In US/Canada — Continued Suspension, the United States and Canada confirmed their preference for two separate Appellate Body reports. The Appellate Body issued separate reports, which are identical except for the Findings and Conclusions section.(749)

460.     In China — Auto Parts, the United States requested the Appellate Body to issue three separate reports in this appeal, setting out its conclusions and recommendations separately for each panel report under appeal. The other participants and the third participants were afforded an opportunity to comment on this request at the oral hearing. They made no objection to the United States’ request.(750) The Appellate Body issued the report as a single document, with separate Findings and Conclusions sections for each report.

3. Article 9.3: multiple panels established to examine complaints relating to the same matter

(a) “to the greatest extent possible the same persons shall serve as panelists on each of the separate panels”

461.     The following table provides information on disputes in which the same persons were appointed as panelists in separate panels. It covers disputes in which a panel report was circulated by 30 September 2011.(751)

DS No. Complainant(s) Short Name Panel established Panel composition
DS26 US EC — Hormones 20.5.1996 Same panelists as WT/DS48
DS48 Canada EC — Hormones 16.10.1996 Same panelists as WT/DS26
DS50 US India — Patents (US) 20.11.1996 Same panelists as WT/DS79
DS79 EC India — Patents (EC) 16.10.1997 Same panelists as WT/DS50
DS56 US Argentina — Textiles and Apparel 25.2.1997 Same panelists as WT/DS77
DS77 EC Argentina — Textiles and Clothing 16.10.1997 Same panelists at WT/DS56
DS136 EC US — 1916 Act 1.2.1999 Same panelists as WT/DS162.
DS162 Japan US — 1916 Act 26.7.1999 Same panelists as WT/DS162.
DS276 US Canada — Wheat Exports and Grain Imports 31.3.2003 Same panelists as “July Panel”
DS276 US Canada — Wheat Exports and Grain Imports 11.7.2003 Same panelists as “March Panel”
DS320 EC US — Continued Suspension 17.2.2005 Same panelists as WT/DS321
DS321 EC Canada — Continued Suspension 17.2.2005 Same panelists as WT/DS320
DS343 Thailand US — Shrimp (Thailand) 26.10.2007 Same panelists as WT/DS345
DS345 India US — Customs Bond Directive 21.11.2006 Same panelists as WT/DS343
DS352 EC India — Wines and Spirits 24.2.2007 Same panelists as WT/DS360
DS360 US India — Additional Import Duties 20.6.2007 Same panelists as WT/DS352

462.     In Canada — Wheat Exports and Grain Imports, the Panel, in a preliminary ruling, found that certain portions of the United States’ panel request which dealt with Article XVII of the GATT 1994 claim failed to satisfy the requirements of Article 6.2 of the DSU insofar as they did not identify the specific measures at issue.(752) In response to this preliminary ruling, the United States asked for the suspension of the Panel’s work. During that suspension, the United States filed a second request for establishment of a panel remedying the insufficiencies of its first request in respect of its claims under Article XVII. The DSB established a second panel to resolve the dispute. It was agreed that both Panels would be composed of the same three persons and that the panels’ proceedings would be harmonized pursuant to Article 9.3 of the DSU.

(b) “to the greatest extent possible … the timetable for the panel process in such disputes shall be harmonized”

463.     In US — Shrimp (Thailand) and US — Customs Bond Directive, the DSB established two different Panels, which later on were composed of the same panellists. At the DSB, Thailand had stated that it had expected the establishment of a single Panel for both proceedings in accordance with Article 9.1 of the DSU and that, in the absence of that single Panel, it expected that the same persons would be appointed as panelists in the two disputes and that the timetables would be harmonized, pursuant to Article 9.3 of the DSU. The representative of the United States responded that, although the Panel in DS343 had already been established, the same persons could be appointed to serve as panelists in the two proceedings and the timetables of the separate Panels could be harmonized. On 23 February 2007, the Panel sent to the parties a joint Timetable as well as separate, albeit similarly worded, Working Procedures. In this joint communication, the Panel informed the parties that it had decided the following:

“[The Panel] intends to conduct both proceedings so as to ensure that the parties who are also third parties in each other’s proceedings, have adequate opportunity and ability to participate to the fullest extent in a manner which is compatible with the provisions of the DSU. To this end, after having heard the parties’ views, the Panel intends to take the following steps:

 

(i)     holding consolidated substantive meetings with the parties (Thailand, India and US);

 

 (ii)     allowing the complainants during the joint meetings to comment on each others’ argumentation, provided they limit themselves to those claims they have in common;

 

(iii)     holding separate Third-Party Sessions, starting with DS343 and asking the Members which are not third-parties to DS345 (i.e., Chile, Mexico, Korea and Viet Nam) to leave the meeting room once the Third-Party Session for DS343 is over. Note that since Thailand and India are third parties to each other’s cases, and parties in their own, they would be in the room during the entirety of the joint meetings, including third party sessions;

 

(iv)     not allowing submissions in one case to be deemed to be submitted in the other case. The parties could however attach to their third party submissions, their submissions made as parties in the case in which they are complaining party;

 

(v)     issuing separate reports;

 

(vi)     allowing all parties to respond to all questions posed by the Panel in writing.”(753)

464.     In EC — Bananas III (Article 21.5 — Ecuador II) I EC — Bananas III (Article 21.5 — US), the European Communities claimed that, by maintaining different timetables for the Article 21.5 proceedings between the European Communities and Ecuador and between the European Communities and the United States, the Panel had acted inconsistently with Article 9.3 of the DSU. The Appellate Body found that the Panel did not act inconsistently with Article 9.3 of the DSU by maintaining different timetables in the two Article 21.5 proceedings initiated by Ecuador and the United States. The Appellate Body stated that:

Article 9.3 may appear to be cast in the way of an obligation, but the word “harmony” is defined as the combination or adaptation of parts, so as to form a “consistent and orderly whole”.(754) Quite distinct from “synchrony”, “harmony” does not require that elements coincide exactly in time. Therefore, we consider that the use of the word “harmonized” rather than “synchronized” in Article 9.3 confers to panels a judgement of degree and practicality. It rests with panels to organize the steps of the proceedings in a way that will ensure that they form a consistent and orderly whole. Whereas the use of the word “shall” ordinarily connotes an obligation, here, while the panel must seek to harmonize, the extent to which that is possible lies within its power. We do not consider that “harmonization” requires adoption of identical timetables in multiple proceedings. As we see it, this provision addresses a practical concern that each timetable must be framed in the light of the other.

 

The phrase “to the greatest extent possible” in Article 9.3 lends further support to our interpretation. This phrase introduces the main clause of the sentence. The phrase “to the greatest extent possible” qualifies both elements of the main clause — the selection of the same persons as panelists and the harmonization of the panel processes — and thus qualifies what the panel must do to harmonize the timetables. We therefore disagree with the European Communities’ reading that Article 9.3 “does not allow panels any discretion in deciding whether the timetables should be harmonized”.”(755),(756)

465.     The Appellate Body in EC — Bananas III (Article 21.5 — Ecuador II) / EC — Bananas III (Article 21.5 — US) further noted the margin of discretion that panels have in drawing up their own working procedures as per Articles 12.1 and 12.2 of the DSU. Given the fact that the panel in question was a compliance panel, the Appellate Body also referred to Article 21.5 of the DSU to confirm its understanding of the panels’ discretion not to harmonise the timetables in these parallel proceedings:

“Furthermore, we note that Articles 12.1 and 12.2 of the DSU confer a margin of discretion on panels to draw up their working procedures. Article 12.1 authorizes panels to establish their own working procedures in the event that the panel decides, after consulting the parties, not to follow the Working Procedures for panels set out in Appendix 3 to the DSU. Pursuant to Article 12.2, panel procedures should provide “sufficient flexibility so as to ensure high-quality panel reports, while not unduly delaying the panel process”. By virtue of this provision, panels are vested with a degree of discretion and flexibility to take the necessary procedural decisions to strike a balance between providing “high-quality panel reports” and avoiding delays in the panel process. The panel’s margin of discretion, in turn, informs our standard of review of the panels’ application of its obligations under Article 9.3.

 

As this Panel was established pursuant to Article 21.5 of the DSU, we consider that the obligations of Article 9.3 must be read in the context of Article 21.5, which requires a compressed timeframe. Article 21.5 provides that a panel shall circulate its report within 90 days after the date of referral of the matter to it. If an Article 21.5 panel considers that it cannot provide its report within that timeframe, it must notify the DSB, specifying the reasons for the delay together with an estimate of the period within which it will issue its report. By contrast, Articles 12.8 and 12.9 of the DSU prescribe that original panel proceedings “shall, as a general rule, not exceed six months” and “should” in no case exceed nine months. We therefore consider that Article 21.5 and, in particular, the obligation to circulate the compliance panel report within 90 days after the date of referral of the matter to it, frames a compliance panel’s discretion.”(757)

 

X. Article 10    back to top

A. Text of Article 10

Article 10: Third Parties

1.     The interests of the parties to a dispute and those of other Members under a covered agreement at issue in the dispute shall be fully taken into account during the panel process.

 

2.     Any Member having a substantial interest in a matter before a panel and having notified its interest to the DSB (referred to in this Understanding as a “third party”) shall have an opportunity to be heard by the panel and to make written submissions to the panel. These submissions shall also be given to the parties to the dispute and shall be reflected in the panel report.

 

3.     Third parties shall receive the submissions of the parties to the dispute to the first meeting of the panel.

 

4.     If a third party considers that a measure already the subject of a panel proceeding nullifies or impairs benefits accruing to it under any covered agreement, that Member may have recourse to normal dispute settlement procedures under this Understanding. Such a dispute shall be referred to the original panel wherever possible.

 
B. Interpretation and Application of Article 10

1. Article 10.1

466.     In US — FSC (Article 21.5 — EC), Appellate Body found that Article 10.3 requires that third parties are provided with all of the submissions made by the parties up to the time of the first panel meeting, regardless of whether that meeting is the first of two panel meetings, or the first and only panel meeting. In the course of its analysis, the Appellate Body discussed Article 10.1:

“Our interpretation of Article 10.3 is also consistent with the context of that provision. Article 10.1 directs panels “fully” to take into account the interests of Members other than the parties to the dispute, and Article 10.2 requires panels to grant to third parties “an opportunity to be heard”. Article 10.3 ensures that, up to a defined stage in the panel proceedings, third parties can participate fully in the proceedings, on the basis of the same written submissions as the parties themselves. Article 10.3 thereby seeks to guarantee that the third parties can participate at a session of the first meeting with the panel in a full and meaningful fashion that would not be possible if the third parties were denied written submissions made to the panel before that meeting. Moreover, panels themselves will thereby benefit more from the contributions made by third parties and will, therefore, be better able “fully” to take into account the interests of Members, as directed by Article 10.1 of the DSU.”(758)

467.     In US — Upland Cotton, the Panel concluded that, in the context of examining Brazil’s claim of “serious prejudice to the interests of another Member” under Article 5(c) of the SCM Agreement, the serious prejudice under examination by a WTO panel is the serious prejudice allegedly suffered by the complaining Member only; the Panel indicated that it would take into account the serious prejudice allegations of other Members only to the extent these constitute evidence of the serious prejudice suffered by Brazil. In the course of its reasoning, the Panel stated that:

“As we have already observed, by the terms of Article 10.1 of the DSU, we are already bound to take the interest of all WTO Members — naturally including least-developed country Members — fully into account in our substantive examination under Part III of the SCM Agreement. In taking such full account of all Members’ interests, we do not view it as conceptually or practically possible to take certain Members’ interests more fully into account than those of other Members.”(759)

2. Article 10.2

(a) “Substantial interest”

468.     In EC — Bananas III, the European Communities argued that a complaining party must normally have a legal right or interest in the claim it is pursuing. The Appellate Body stated that no provision of the DSU contains any such explicit requirement:

“We agree with the Panel that’ neither Article 3.3 nor 3.7 of the DSU nor any other provision of the DSU contain any explicit requirement that a Member must have a ‘legal interest’ as a prerequisite for requesting a panel’. We do not accept that the need for a ‘legal interest’ is implied in the DSU or in any other provision of the WTO Agreement. It is true that under Article 4.11 of the DSU, a Member wishing to join in multiple consultations must have ‘a substantial trade interest’, and that under Article 10.2 of the DSU, a third party must have ‘a substantial interest’ in the matter before a panel. But neither of these provisions in the DSU, nor anything else in the WTO Agreement, provides a basis for asserting that parties to the dispute have to meet any similar standard.”(760)

469.     In US — Shrimp, the Appellate Body recalled that “only Members “having a substantial interest in a matter before a panel” may become third parties in the proceedings before that panel”.(761)

(b) “having notified its interest to the DSB”: timing of request to participate as a third party

470.     At the June 1994 GATT General Council meeting, the Chairman of the GATT General Council made the following statement:

“At the February 1994 Council meeting, the United States raised the question of third-party participation in panels. The late notification by a contracting party of its intention to participate in a panel may create difficulties, for example in relation to the determination of the panel’s composition. Another problem that has occurred relates to the reception by third parties, in good time, of the submissions of the parties to the dispute to the first meeting of a panel.

 

After consultations, and in order to avoid such difficulties, I propose that the Council agree to the following practices in future, without prejudice to the rights of contracting parties under established dispute settlement procedures:

 

1.     Delegations in a position to do so, should indicate their intention to participate as a third party in a panel proceeding at the Council session which establishes the panel. Others who wish to indicate a third party interest should do so within the next ten days.

 

2.     Further to paragraph F(e) (3) of the Decision of 12 April 1989 (BISD 36S/61) and to the Decision of 22 February 1994 (L/7416), it is the understanding of the Council that third parties shall receive the submissions of the parties to the dispute to the first meeting of a panel established by the Council.”(762)

471.     In EC — Export Subsidies on Sugar, Kenya and Cote d‘lvoire made requests to participate as third parties 28 days and 68 days (respectively) after the establishment of the Panel, but before the Director-General was asked by the parties to compose the Panel. The complaining parties raised objections to the participation of Cote d’lvoire. The Panel, in a preliminary ruling, authorized the two Members to take part to the panel proceedings as third parties, noting its discretion to deal with situations not specifically regulated and the fact that the Panel’s selection and composition had not been adversely affected and that the Panel process had not been hampered:

Article 10 of the DSU is silent on when Members need to notify to the DSB their interest in participating in any specific dispute as third parties.…

 

The Panel recalled, inter alia, the Appellate Body’s decision in EC — Hormones, which stated that ‘the DSU leaves panels a margin of discretion to deal, always in accordance with due process, with specific situations that may arise in a particular case and that are not explicitly regulated.’(763) In addition, with regard to the two requests at issue, the Panel noted that in this particular dispute:

 

(a)     the selection and composition of the Panel did not appear to have been adversely affected; and

 

(b)     the Panel process had not been hampered.

 

On the basis of these considerations, the Panel therefore decided… to accept as third parties all Members that had expressed a third-party interest and saw no reason to treat them differently”.(764)

472.     In Turkey — Rice, Pakistan notified its interest to participate as a third party to the dispute 151 days after the establishment of the Panel, and after the Panel had been composed. When the Panel raised the issue of this third party request with the parties at the organizational meeting, the complainant was in favour of Pakistan’s request to be included, while the respondent opposed it.(765) The Panel decided to accept Pakistan’s third-party request. Referring to the text of the DSU, the Panel noted that Members are not specifically required to notify to the DSB their interest in participating in any specific dispute as third parties:

Article 10 of the DSU is silent on when Members need to notify to the DSB their interest in participating in any specific dispute as third parties. The Panel is aware, however, of the GATT Council Chairman’s Statement of June 1994, which provided for a ten days notification period:

 

‘Delegations in a position to do so, should indicate their intention to participate as a third party in a panel proceeding at the Council session which establishes the panel. Others who wish to indicate a third party interest should do so within the next ten days.’(766)

 

As noted by the Panel in EC — Export Subsidies on Sugar (Australia):

 

‘[T]he status of that Chairman’s Statement [has] been discussed on several occasions at the DSB and the timing of third-party notifications [has been] the subject of proposals in the context of the DSU negotiations.’(767)

 

In the same case, the Panel further noted that:

 

‘[T]he Appellate Body’s decision in EC — Hormones… stated that ‘the DSU leaves panels a margin of discretion to deal, always in accordance with due process, with specific situations that may arise in a particular case and that are not explicitly regulated.’(768,(769)

 

The Panel in EC — Export Subsidies on Sugar (Australia) additionally noted, with regard to the requests to participate as third parties in that particular dispute, that:

 

‘(a)     the selection and composition of the Panel did not appear to have been adversely affected; and

 

(b)     the Panel process had not been hampered.’(770)

 

The relevant third party requests in EC — Export Subsidies on Sugar were submitted “before the Director-General was asked by the parties to compose the Panel pursuant to Article 8.7 of the DSU.”(268) In the present case, Pakistan’s third party request was made after this Panel had been composed. Nevertheless, similarly to the relevant third party requests in EC — Export Subsidies on Sugar, as a result of Pakistan’s request, the Panel process has not been hampered. In addition, although the Panel had already been composed when Pakistan formulated its third party request, we see no reason to believe that accepting Pakistan’s request would affect the “independence of the members” of this Panel, as stipulated by Article 8.2 of the DSU, nor does it seem to prejudice in any way the manner in which this Panel fulfil its functions specified in Article 11 of the DSU:

 

“[T]o assist the DSB in discharging its responsibilities under this Understanding and the covered agreements. Accordingly, a panel should make an objective assessment of the matter before it, including an objective assessment of the facts of the case and the applicability of and conformity with the relevant covered agreements, and make such other findings as will assist the DSB in making the recommendations or in giving the rulings provided for in the covered agreements …”

 

Similar to the Panel in EC — Export Subsidies on Sugar(269), we emphasize that this decision is specific to this dispute and is not intended to offer a legal interpretation of the ten-day notification period referred to in the GATT Council Chairman’s Statement of June 1994.

 

In the light of the above, as communicated on 30 August 2006 to the parties and third parties in these proceedings, we decided to accept as third parties all Members that had expressed a third-party interest and saw no reason to treat them differently. Similar to the Panel in EC — Export Subsidies on Sugar (Australia)269, we emphasize that this decision is specific to this dispute and is not intended to offer a legal interpretation of the ten-day notification period referred to in the GATT Council Chairman’s Statement of June 1994.”(771)

473.     In EC — IT Products, the United States, Japan and Chinese Taipei notified their interest to participate as third parties in each other’s complaints. The notifications were made 122 days after the establishment of the Panel, and one day after the composition of the Panel. The Panel allowed these main parties to also participate as third parties. After noting that Article 10 is silent on the period of time Members have to notify their interest to participate as third parties in a given dispute, the GATT Council Chairman’s Statement of June 1994, and the prior panel reports in EC — Export Subsidies on Sugar and Turkey — Rice, the Panel decided that:

“Despite the length of delay and the fact that this Panel had already been composed, we see no reason why accepting the complainants’ requests would affect the “independence of the members” of this Panel or otherwise hamper the Panel process. The members of this Panel had been selected taking into consideration the participation of the complainants as main parties. We do not see how the additional participation of the complainants as third parties would have compromised the initial selection of these panellists; nor has the European Communities made any such allegation. Given the foregoing, we confirm our acceptance of the complainants’ request to participate as third parties to this dispute.”(772)

(c) Whether a Member that has not notified its interest pursuant to Article 10.2 may submit a brief

474.     In EC — Sardines, Morocco did not notify its interest pursuant to Article 10.2. However, during the appeal proceedings, Morocco submitted an amicus curiae brief. Peru objected to the Appellate Body accepting Morocco’s brief, arguing that such acceptance would circumvent the rules in the DSU setting out the conditions under which WTO Members can participate as third parties in dispute settlement proceedings. The Appellate Body disagreed:

“None of the participants in this appeal has pointed to any provision of the DSU that can be understood as prohibiting WTO Members from participating in panel or appellate proceedings as an amicus curiae. Nor has any participant in this appeal demonstrated how such participation would contravene the DSU. Peru states only that the DSU provides that participation as a third party is governed by Articles 10.2 and 17.4, and appears to draw from this a negative inference such that Members may participate pursuant to those rules, or not at all. We have examined Articles 10.2 and 17.4, and we do not share Peru’s view. Just because those provisions stipulate when a Member may participate in a dispute settlement proceeding as a third party or third participant, does not, in our view, lead inevitably to the conclusion that participation by a Member as an amicus curiae is prohibited.”(773)

3. Article 10.4

475.     In India — Patents (EC), India claimed that since the European Communities was a third party in the previous India — Patents (US) dispute, and since it was “possible” to do so, it was required by Article 10.4 to submit its complaint to the Panel which examined the United States’ claims on this matter. India’s claim that the European Communities did not meet the requirement of Article 10.4 was based on the premise that the term “original panel” in Article 10.4 is limited to a panel which has not yet issued its final report. The Panel disagreed:

“We do not see that this limitation flows from the ordinary meaning of the text. We also note that, the phrase “original panel” is used elsewhere in the DSU (Article 21.5 and Article 22.6), where it is clear that the reference is to a panel the final report of which has already been issued and adopted. The text of Article 10.4, read in this context, does not support the Indian view.

 

Thus, in our view, the terms of Article 10.4 have been complied with in the present case. The EC, which was a third party in the proceeding initiated by the United States in respect of the same Indian measures, decided to have recourse to a panel under the DSU. This is precisely what Article 10.4 permits. The two members of the Panel in WT/DS50 were reappointed, while the Panel chairman, who was no longer available, was replaced. We therefore find that India’s claim regarding a violation of Article 10.4 lacks both factual and legal basis.”(774)

4. Enhanced third-party rights

(a) General

476.     In US — 1916 Act, the Appellate Body confirmed that “[u]nder the DSU, as it currently stands, third parties are only entitled to the participatory rights provided for in Articles 10.2 and 10.3 and paragraph 6 of Appendix 3”.(775)

477.     In US — FSC (Article 21.5 — EC), the Appellate Body confirmed the above statement and summarized its prior Reports as follows:

“In respect of the provisions of the DSU governing third party rights, we have already observed that, as the DSU currently stands, the rights of third parties in panel proceedings are limited to the rights granted under Article 10 and Appendix 3 to the DSU.(776) Beyond those minimum guarantees, panels enjoy a discretion to grant additional participatory rights to third parties in particular cases, as long as such “enhanced” rights are consistent with the provisions of the DSU and the principles of due process.(777) However, panels have no discretion to circumscribe the rights guaranteed to third parties by the provisions of the DSU.”(778)

(b) For Members that are not complainants in parallel panel proceedings

478.     The Panel in EC — Bananas III considered requests by several Members to be allowed to participate more broadly in the Panel proceedings than provided for under the relevant provisions of the DSU. More specifically, these Members requested that they be granted the right of presence at all meetings of the Panel with the parties and the right to make statements at all such meetings. Furthermore, these Members also demanded the right to receive copies of all submissions and other materials and to be granted permission to make written submissions to both meetings of the Panel. While the DSB took note of these statements, there was no consensus on such participation.(779) Several of these countries later confirmed their requests in letters addressed to the Chairman of the DSB. The Panel began by considering the provisions of the DSU and GATT practice:

“The rights of third parties are dealt with in Article 10 and Appendix 3 of the Dispute Settlement Understanding. Article 10 provides that third parties “shall have an opportunity to be heard by the panel and to make written submissions to the panel”. It also provides that third parties are entitled to receive the submissions of the parties made to the first substantive panel meeting. Paragraph 6 of Appendix 3 specifies that third parties shall be invited “to present their views during a session of the first substantive meeting of the panel set aside for that purpose. All such third parties may be present during the entirety of this session”. Under prior GATT practice, more expansive rights were granted to third parties in several disputes, including the two prior disputes involving bananas and in the Semiconductors case.(780) In those cases, however, the extension of such rights had been the subject of agreement between the parties at that time. No such agreement existed between the parties in the present dispute.”(781)

479.     After the first substantive meeting, the Panel in EC — Bananas III agreed to grant enhanced third-party rights as follows:

“We thereafter ruled as follows:

 

(a)     The Panel has decided, after consultations with the parties in conformity with DSU Article 12.1, that members of governments of third parties will be permitted to observe the second substantive meeting of the Panel with the parties. The Panel envisages that the observers will have the opportunity also to make a brief statement at a suitable moment during the second meeting. The Panel does not expect them to submit additional written material beyond responses to the questions already posed during the first meeting.

 

(b)     The Panel based its decision, inter alia, on the following considerations:

 

(i)     the economic effect of the disputed EC banana regime on certain third parties appeared to be very large;

 

(ii)     the economic benefits to certain third parties from the EC banana regime were claimed to derive from an international treaty between them and the EC;

 

(iii)     past practice in panel proceedings involving the banana regimes of the EC and its member States; and

 

(iv)     the parties to the dispute could not agree on the issue.

 

As a consequence of our ruling, the third parties in these proceedings enjoyed broader participatory rights than are granted to third parties under the DSU.”(782)

480.     After granting certain enhanced third-party rights, the Panel in EC — Bananas III declined to further such rights, including participation in the interim review process:

“Following the second substantive meeting of the Panel with the parties, several of the third parties asked for further participatory rights, including participation in the interim review process. We consulted the parties and found that, as before, they had diverging views on the appropriateness of granting this request. We decided that no further participatory rights should be extended to third parties, except, in accord with normal practice, to permit them to review the draft of the summary of their arguments in the Descriptive Part. In this regard, we noted that Article 15 of the DSU, which deals with the interim review process, refers only to parties as participants in that process. In our view, to give third parties all of the rights of parties would inappropriately blur the distinction drawn in the DSU between parties and third parties.”(783)

481.     Along the same lines, the compliance panels in EC — Bananas III (Article 21.5 — US) and EC — Bananas III (Article 21.5 — Ecuador II) granted third parties (i) the right to be present during entirety of meeting with parties and be able to ask questions of parties at meeting; and (ii) the right to receive all submissions, including responses to questions.(784)

482.     In EC — Tariff Preferences, certain third parties requested the Panel to extend enhanced third party rights to them; other third parties requested the Panel to grant the same rights to all third parties. The Panel decided to grant enhanced rights to all third parties on the following grounds:

“Having carefully considered the arguments of the parties and third parties in this case, the Panel considers as follows:

 

(a)     There are significant similarities between this case and that of EC — Bananas III (WTIDS27) in terms of economic impact of the preference programmes on third party developing countries. Both those third parties that are beneficiaries under the EC’s Drug Arrangements and those that are excluded have a significant economic interest in the matter before this Panel.

 

(b)     The outcome of this case could have a significant trade-policy impact on the US as a preference-giving country.

 

(c)     Asa matter of due process, it is appropriate to provide the same procedural rights to all third parties in this dispute.

 

(d)     In granting any additional rights to third parties, it is important to guard against an inappropriate blurring of the distinction drawn in the DSU between parties and third parties.”(785)

483.     In US — Upland Cotton, the European Communities requested the following additional third party rights: (a) access to the oral statements of the parties to the dispute at the first session of the first substantive meeting, and (b) the opportunity to comment on their responses to the Panel’s questions, or questions that they have posed to each other. The Panel denied the EC request. Among other things, the Panel considered that:

“In our view, written versions of the parties’ oral statements and the parties’ responses to the Panel’s questions do not form part of “the submissions of the parties to the dispute to the first meeting of the Panel”, as provided for in Article 10.3 of the DSU. Articles 10.2 and 12.6 and the working procedure in paragraph 3 of Appendix 3 use the terms “written submissions” and “submissions” interchangeably. Appendix 3 distinguishes between “written submissions” in paragraphs 3, 4 and 10 and “a written version of… oral statements” in paragraph 9. Under the standard panel working procedures set out in Appendix 3 of the DSU, third parties may only attend the third party session and are not present during the rest of the panel’s meetings. The granting of access by the Panel to written versions of the parties’ oral statements would run counter to the standard practice under the DSU of holding the sessions at which those statements are made in the absence of the third parties.

 [T] the Panel has already taken into account, to a certain extent, the systemic implications of this dispute and the issues now raised by the EC. The Panel has posed a large number of questions to third parties, including 39 questions addressed specifically to the EC. Through the third parties’ responses to these questions, the Panel hopes to receive their views on the merits and systemic considerations presently at issue in this dispute, which it will take into account in its assessment of the matter before it. The questions are detailed precisely to ensure that third parties’ views are fully taken into account in what is a complex case. The Panel believes that, through the questions that it has posed to the parties to the dispute and to third parties, it has ensured that it will benefit from third parties’ input and that nothing prevents them from participating in a full and meaningful fashion.”(786)

484.     In EC — Export Subsidies on Sugar, Mauritius, on behalf of 14 ACP sugar producing countries, requested to be granted enhanced third-party rights in the Panel proceedings. The Panel, in a preliminary ruling, granted the following additional rights which go beyond those provided for in the DSU, to all third parties:

“(a)     ‘the third parties will receive a copy of the written questions to the parties posed in the context of the first substantive meeting of the Panel;

 

(b)     the third parties will receive the written rebuttals of the parties to the second meeting of the Panel and the parties’ replies to the questions mentioned in (i) above;

 

(c)     the third parties may attend the second substantive meeting of the Panel to take place on 11 and 12 May 2004, as observers (but it is not envisaged that the third parties will provide any further written submissions or make an oral statement to the Panel during that second meeting); and

 

(d)     the third parties will review the summary of their respective arguments in the draft descriptive part of the Panel report.’“(787)

485.     In US — Large Civil Aircraft (2nd complaint), the Panel denied a request by Brazil (followed with conditional requests from Canada and Korea) for enhanced third party rights. The Panel ruled as follows:

“On 21 December 2006, Brazil requested the Panel to grant it certain “enhanced” third party rights in this proceeding, including the right: (1) “to attend the entirety of all substantive meetings of the Panel with the parties“; (2)”to present oral statements and oral observations at the substantive meetings of the Panel with the parties“; (3)”to receive copies of all submissions to the Panel, including answers to the questions posed by the Panel or the parties“; and (4) “to review and comment on the interim Panel Report, in particular the summary of Brazil’s arguments in the draft descriptive part of the Panel report”. Brazil submits that it has a significant economic interest in the aircraft sector, and that any findings concerning the relevant provisions of the SCM Agreement in relation to the aircraft sector are necessarily of direct and substantial economic interest to Brazil. According to Brazil, granting its request would not lead to any blurring of the distinction between the rights of parties and those of third parties. On 22 December 2006, Canada requested the Panel to grant it any enhanced third party rights granted to Brazil. On 9 February 2007, the Panel received comments from both parties, opposing the requests for enhanced third party rights.

 

On 23 February 2007, the Panel informed the parties and third parties that it had decided not to grant enhanced third party rights to any third party in this proceeding. The Panel indicated that it would issue its reasons in due course. The Panel’s reasons for declining Brazil’s request, and the conditional request of Canada, are as follows.

 

The DSU establishes the rights of third parties in panel proceedings in paragraphs 2 and 3 of Article 10 of the DSU and paragraph 6 of Appendix 3 to the DSU. Under these provisions, third parties have the right to receive the submissions made by the parties up to the first meeting of the panel, to make submissions to the panel, to present their views during a session of the first substantive meeting of the panel set aside for that purpose, and to be present during the entirety of such a session.(788) It is well-established that panels have the discretion to grant additional rights to third parties, subject to the requirements of due process and the need to guard against an inappropriate blurring of the distinction drawn in the DSU between the rights of parties and those of third parties.(789) However, all third parties in a panel proceeding may be presumed to have a “substantial interest” in the matter before the panel,(790) and additional third party rights have so far been granted in panel proceedings for specific reasons only.(791) Previous panels have granted enhanced third party rights on the basis of, inter alia, the significant economic effect of the measures at issue on certain third parties,(792) the importance of trade in the product at issue to certain third parties,(793) the significant trade policy impact that the outcome of the case could have on third parties maintaining measures similar to the measures at issue,(794) at least one of the parties agreeing that enhanced third party rights should be granted,(795) claims that the measures at issue derived from an international treaty to which certain third parties were parties,(796) third parties having previously been granted enhanced rights in related panel proceedings,(797) and certain practical considerations arising from a third party’s involvement as a party in a parallel panel proceeding.(798)

 

In this case, Brazil has not presented the Panel with any similar reasons in support of its request for enhanced third party rights. While the Panel accepts that Brazil has a substantial interest in the aircraft sector, the Panel considers that Brazil’s interest in “the aircraft sector” as a whole constitutes an insufficient basis for granting Brazil enhanced third party rights.(799) Brazil has not claimed that it produces large civil aircraft, or that it has any trade interests in large civil aircraft, for instance as a supplier to producers of large civil aircraft. Brazil has not claimed that regional aircraft produced in Brazil compete with large civil aircraft. Brazil has not claimed that it maintains any measures similar to those at issue in this dispute; to the contrary, Brazil claims that it does not confer subsidies for the development and production of new aircraft products.(800) While Brazil has been involved as a party in a number of WTO disputes involving the aircraft sector, these disputes involved products (i.e. regional aircraft) and measures (e.g. export credits on the sale of such aircraft) that are not at issue in this dispute. Brazil has not explained how, in the light of the foregoing, the measures at issue have a significant economic or trade policy effect on Brazil. While we accept that Brazil has a general systemic interest in the interpretation of the SCM Agreement, this does not differentiate Brazil from any other WTO Member. Finally, both parties agree that enhanced third party rights are not warranted in this case.

 

We therefore decline Brazil’s request for “enhanced” third party rights in these proceedings.”(801),(802)

486. In US — Poultry (China), the Panel denied a request for enhanced third party rights on the grounds that, in that case, the rights requested were not necessary to fully take into account the views and interests of third parties: Panel Report, US — Poultry (China), para. 7.58.

487.     In China — Raw Materials, the Panel denied a request for enhanced third party rights on the grounds that granting the request would lead to delays in the proceedings requiring amendments to the timetable Panel Report, China — Raw Materials, para. 1.7.

(c) For complainants in parallel panel proceedings

488.     In EC — Hormones, the European Communities argued that the Panel had made decisions that granted certain additional third-party rights to Canada and the United States that were not justifiable under Article 9.3 of the DSU. More specifically, the European Communities appealed the Panel’s decision to hold a joint meeting with scientific experts, to give the United States and Canada access to all information submitted in both proceedings and to invite the United States to participate and make a statement at the second substantive meeting in the proceeding where Canada was the complaining party. The Appellate Body rejected the European Communities’ arguments and upheld each of the Panel’s decisions in this respect. In relation to holding one joint meeting with scientific experts, the Appellate Body stated:

“We consider the explanation of the Panel quite reasonable, and its decision to hold a joint meeting with the scientific experts consistent with the letter and spirit of Article 9.3 of the DSU. Clearly, it would bean uneconomical use of time and resources to force the Panel to hold two successive but separate meetings gathering the same group of experts twice, expressing their views twice regarding the same scientific and technical matters related to the same contested European Communities measures. We do not believe that the Panel has erred by addressing the European Communities procedural objections only where the European Communities could make a precise claim of prejudice. It is evident to us that a procedural objection raised by a party to a dispute should be sufficiently specific to enable the panel to address it.

 Having access to a common pool of information enables the panel and the parties to save time by avoiding duplication of the compilation and analysis of information already presented in the other proceeding. Article 3.3 of the DSU recognizes the importance of avoiding unnecessary delays in the dispute settlement process and states that the prompt settlement of a dispute is essential to the effective functioning of the WTO. In this particular case, the Panel tried to avoid unnecessary delays, making an effort to comply with the letter and spirit of Article 9.3 of the DSU.”(803)

489.     In EC — Hormones, the Appellate Body also considered reasonable the Panel’s decision to grant the United States access to all information in the proceedings initiated by Canada and to grant Canada access to all information in the proceedings initiated by the United States and saw a link between granting such access and the attempt to “harmonize” timetables in multiple panel proceedings:

“The decision of the Panel to use and provide all information to the parties in both disputes was taken in view of its previous decision to hold a joint meeting with the experts. The European Communities asserts that it cannot see how providing information in one of the proceedings to a party in the other helps to harmonize timetables. We can see a relation between timetable harmonization within the meaning of Article 9.3 of the DSU and economy of effort. In disputes where the evaluation of scientific data and opinions plays a significant role, the panel that is established later can benefit from the information gathered in the context of the proceedings of the panel established earlier. Having access to a common pool of information enables the panel and the parties to save time by avoiding duplication of the compilation and analysis of information already presented in the other proceeding. Article 3.3 of the DSU recognizes the importance of avoiding unnecessary delays in the dispute settlement process and states that the prompt settlement of a dispute is essential to the effective functioning of the WTO. In this particular case, the Panel tried to avoid unnecessary delays, making an effort to comply with the letter and spirit of Article 9.3 of the DSU. Indeed, as noted earlier, despite the fact that the Canadian proceeding was initiated several months later than that of the United States, the Panel managed to finish both Panel Reports at the same time.”

490.     Regarding the participation of the United States in the second substantive meeting of the Panel, as requested by Canada, the Appellate Body in EC — Hormones recalled the Panel’s findings and agreed:

“[The Panel held:]

 

‘This decision was, inter alia, based on the fact that our second meeting was held the day after our joint meeting with the scientific experts and that the parties to this dispute would, therefore, most likely comment on, and draw conclusions from, the evidence submitted by these experts to be considered in both cases. Since in the panel requested by the United States the second meeting was held before the joint meeting with scientific experts, we considered it appropriate, in order to safeguard the rights of the United States in the proceeding it requested, to grant the United States the opportunity to observe our second meeting in this case and to make a brief statement at the end of that meeting.’(804)

 

The explanation of the Panel appears reasonable to us. If the Panel had not given the United States an opportunity to participate in the second substantive meeting of the proceedings initiated by Canada, the United States would not have had the same degree of opportunity to comment on the views expressed by the scientific experts that the European Communities and Canada enjoyed. Although Article 12.1 and Appendix 3 of the DSU do not specifically require the Panel to grant this opportunity to the United States, we believe that this decision falls within the sound discretion and authority of the Panel, particularly if the Panel considers it necessary for ensuring to all parties due process of law. In this regard, we note that in European Communities — Bananas(805), the panel considered that particular circumstances justified the grant to third parties of rights somewhat broader than those explicitly envisaged in Article 10 and Appendix 3 of the DSU. We conclude that, in the case before us, circumstances justified the Panel’s decision to allow the United States to participate in the second substantive meeting of the proceedings initiated by Canada.”(806)

491.     In contrast to the EC — Hormones dispute, the Panel in US — 1916 Act refused to grant the European Communities and Japan enhanced third-party rights in each other’s case. The Panel, in a finding subsequently upheld by the Appellate Body held:(807)

“We conclude from the reports in the EC — Hormones cases that enhanced third party rights were granted primarily because of the specific circumstances in those cases.

 

We find that no similar circumstances exist in the present matter, which does not involve the consideration of complex facts or scientific evidence. Moreover, none of the parties requested that the panels harmonise their timetables or hold concurrent deliberations in the two procedures (WT/DS136 and WT/DS162). In fact, the European Communities was not in favour of delaying the proceedings in WT/DS136 and the United States objected to concurrent deliberations.”(808)

492.     In US — 1916 Act, the Appellate Body confirmed its finding in the EC — Hormones case that the granting of additional third-party rights is within “the sound discretion” of a Panel and rejected the arguments by the European Communities and Japan:

“The rules relating to the participation of third parties in panel proceedings are set out in Article 10 of the DSU, and, in particular, paragraphs 2 and 3 there of, and in paragraph 6 of Appendix 3 to the DSU.

 Although the European Communities and Japan invoke Article 9 of the DSU, and, in particular, Article 9.3, in support of their position, we note that Article 9 of the DSU, which concerns procedures for multiple complaints related to the same matter, does not address the issue of the rights of third parties in such procedures.

 

Under the DSU, as it currently stands, third parties are only entitled to the participatory rights provided for in Articles 10.2 and 10.3 and paragraph 6 of Appendix 3.

 Pursuant to Article 12.1, a panel is required to follow the Working Procedures in Appendix 3, unless it decides otherwise after consulting the parties to the dispute.

 

In support of their argument that the Panel should have granted them “enhanced” third party rights, the European Communities and Japan refer to the considerations that led the panel in European Communities — Hormones to grant third parties “enhanced” participatory rights, and stress the similarity between European Communities — Hormones and the present cases.

 

In our Report in European Communities — Hormones, we stated:

 

Although Article 12.1 and Appendix 3 of the DSU do not specifically require the Panel to grant … [”enhanced” third party rights] to the United States, we believe that this decision falls within the sound discretion and authority of the Panel, particularly if the Panel considers it necessary for ensuring to all parties due process of law.(809)

 

A panel’s decision whether to grant “enhanced” participatory rights to third parties is thus a matter that falls within the discretionary authority of that panel. Such discretionary authority is, of course, not unlimited and is circumscribed, for example, by the requirements of due process. In the present cases, however, the European Communities and Japan have not shown that the Panel exceeded the limits of its discretionary authority. We, therefore, consider that there is no legal basis for concluding that the Panel erred in refusing to grant “enhanced” third party rights to Japan or the European Communities.”(810)

493.     In US — Shrimp (Thailand) and US — Customs Bond Directive, the DSB established two different Panels, which later on were composed by the same members. On 9 February 2007, Thailand and India sent separate letters to the Chairman of the two Panels requesting enhanced third party rights in each other’s proceedings. On 15 February 2007, the Chairman met with the parties in a joint organisational meeting to hear comments on the proposed Timetable and Panel Working Procedures. At that meeting, as well as in a letter dated 16 February 2007, the United States argued that granting enhanced third party rights to Thailand and India was not necessary in the instant cases. After having heard the parties’ views, the Panel decided not to grant enhanced third party rights to India and Thailand but instead, opted for a practical approach aimed at ensuring that the parties to both disputes enjoyed adequate opportunity to participate in the proceedings where appropriate. Thus, on 23 February 2007, the Panel sent to the parties a joint Timetable as well as separate, albeit similarly worded, Working Procedures. In this joint communication, the Panel informed the parties that it had decided the following:

“[The Panel] intends to conduct both proceedings so as to ensure that the parties who are also third parties in each other’s proceedings, have adequate opportunity and ability to participate to the fullest extent in a manner which is compatible with the provisions of the DSU. To this end, after having heard the parties’ views, the Panel intends to take the following steps:

 

(i)     holding consolidated substantive meetings with the parties (Thailand, India and US);

 

(ii)     allowing the complainants during the joint meetings to comment on each others’ argumentation, provided they limit themselves to those claims they have in common;

 

(iii)     holding separate Third-Party Sessions, starting with DS343 and asking the Members which are not third-parties to DS345 (i.e., Chile, Mexico, Korea and Viet Nam) to leave the meeting room once the Third-Party Session for DS343 is over. Note that since Thailand and India are third parties to each other’s cases, and parties in their own, they would be in the room during the entirety of the joint meetings, including third party sessions;

 

(iv)     not allowing submissions in one case to be deemed to be submitted in the other case. The parties could however attach to their third party submissions, their submissions made as parties in the case in which they are complaining party;

 

(v)     issuing separate reports;

 

(vi)     allowing all parties to respond to all questions posed by the Panel in writing.”(811)

(d) Table showing decisions on enhanced third party rights requests and factors considered

494.     The following table provides information on all WTO proceedings in which enhanced third party rights have been requested. It includes all cases in which reports were circulated prior to 30 September 2011.

DS No. Case / Reference Decision on enhanced third party rights requested Factors considered
DS27 Panel Reports, EC — Bananas III, paras. 7.4—7.9 and 8.2, adopted 25 September 1997 (i) granted right to observe entirety of first and second meeting with parties, and make brief statement at second meeting
(ii) denied request for enhanced participation in interim review process
(i) whether challenged measures have significant economic effect on certain third parties
(ii) whether economic benefits to certain third parties from international treaty between them and respondent
(iii) whether enhanced third party rights granted in prior related proceedings
(iv) whether a disputing party supported request
(v) whether granting request would blur the distinction between parties and third parties
Panel Reports, EC — Bananas III (Article 21.5 — US)/EC — Bananas III (Article 21.5 — Ecuador II), para. 1.5, para. 7.722 (i) granted right to be present during entirety of meeting with parties and be able to ask questions of parties at meeting
(ii) granted right to receive all submissions, including responses to questions
(i) whether challenged measures have economic and social effects on certain third parties
DS26, DS48 Panel Reports, EC — Hormones (US), para. 8.15, and EC — Hormones (Canada), paras. 8.12—8.20, adopted 13 February 1998 (i) granted right to see all submissions of the parties
(ii) granted right to participate in the meeting with scientific experts
(iii) granted right to attend second meeting with parties and make brief statement
(iv) granted access to all of the submissions and information submitted to the panel
(i) whether there were practical reasons for doing so in the light of a parallel case with same measures, same panelists and same scientific experts
Appellate Body Report, EC — Hormones, paras. 150—154, adopted 13 February 1998 Upheld Upheld
Decisions of the Arbitrator, EC — Hormones (Canada) (Article 22.6 — EC)/EC — Hormones (US) (Article 22.6 — EC), para. 7, circulated 12 July 1999 (i) granted right to attend and make a statement at each other’s hearings
(ii) granted right to receive written submissions in each other’s hearings
(i) whether decision would affect rights in parallel case
(ii) whether any prejudice to respondent
DS136, DS162 Panel Reports, US — 1916 Act (EC), paras. 6.29—6.36, and EC — 1916 Act (Japan), paras. 6.29—6.35, adopted 26 September 2000 (i) denied request to receive all submissions and attend all meetings (i) whether granting request would blur the distinction between parties and third parties
(ii) whether circumstances were similar to or distinguishable from those in EC — Hormones
Appellate Body Report, US — 1916 Act, paras. 139—150, adopted 26 September 2000 Upheld Upheld
DS246 Panel Report, EC — Tariff Preferences, para. 7.1 and Annex A, adopted 20 April 2004 (i) granted right to observe first and second meetings with parties and make a brief statement during the second meeting
(ii) granted right to receive second written submissions
(i) whether challenged measures have significant economic effect on certain third parties
(ii) whether certain third parties maintain similar measures that could be affected by outcome of case
(iii) whether granting request would blur the distinction between parties and third parties
DS267 Panel Report, US — Upland Cotton, paras. 7.11—7.13 and Annex L-1.7, adopted 21 March 2005 (i) denied request to receive parties’ oral statements at the first meeting
(ii) denied request to provide comments on parties’ responses to panel questions
(i) whether a disputing party supported request
(ii) whether enhanced rights requested necessary for third parties to express their views in a meaningful fashion
(iii) the timing of the request for enhanced third party rights
DS265, DS266, DS283 Panel Reports, EC — Export Subsidies on Sugar, paras. 2.5—2.9, adopted 19 May 2005 (i) granted right to observe entirety of first and second meetings
(ii) granted right to receive parties’ second written submissions and responses to questions
(iii) denied request to present arguments at the second meeting with the parties
(i) whether economic situation of any third party would be specifically affected by outcome of the dispute
(ii) whether granting request would blur the distinction between parties and third parties
DS343, DS345 Panel Reports, US — Shrimp (Thailand) / US — Customs Bond Directive, adopted 1 August 2008, paras. 7.3—7.4 (i) denied request for “enhanced third party rights” by complainants in each other’s parallel proceedings, but held consolidated meetings, allowing all parties to respond to all questions posed by the Panel (i) most practical way to provide adequate opportunity to participate in parallel proceedings where appropriate
DS392 Panel Report, US — Poultry (China), para. 7.58, adopted 25 October 2010 (i) denied request for enhanced third party rights (i) whether a party supported the request for enhanced third party rights
(ii) whether granting enhanced third party rights necessary to fully take into account the views and interests of third parties
DS316, DS347 Panel Report, EC and certain member States — Large Civil Aircraft (Panel), paras., adopted 1 June 2011 (i) denied request to attend entirety of all meetings
(ii) denied request to present arguments at the meetings with parties
(iii) denied request to receive all submissions including answers to questions
(i) whether third party produces and/ or has trade interests in the products at issue
(ii) whether third party maintains similar measures to those challenged
(iii) whether prior WTO proceedings in which third party was a party involved the same product
(iv) whether measures at issue have significant economic or trade policy effect on third party
(v) whether third party’s systemic interest in the interpretation of provisions at issue differentiates it from other Members
(vi) whether a party supported request for enhanced third party rights
DS353 Panel Report, US — Large Civil Aircraft (2nd complaint), paras. 7.14—7.18, circulated 31 March 2011 (i) denied request to attend entirety of all meetings
(ii) denied request to present arguments at the meetings with parties
(iii) denied request to receive all submissions including answers to questions
(i) whether third party produces and/or has trade interests in the products at issue
(ii) whether third party maintains similar measures to those challenged
(iii) whether prior WTO proceedings in which third party was a party involved the same product
(iv) whether measures at issue have significant economic or trade policy effect on third party
(v) whether third party’s systemic interest in the interpretation of provisions at issue differentiates it from other Members
(vi) whether a party supported request for enhanced third party rights
DS394, DS395, DS398 Panel Report, China — Raw Materials, para. 1.7, circulated 5 July 2011 (i) denied request for participation in second meeting with parties (i) whether granting enhanced rights would lead to delays in the proceedings and amendments to the timetable

5. Extent to which panels may draw upon third party submissions

495.     In Chile — Price Band System, the Appellate Body found that the Panel erred in finding a violation of a provision in respect of which the complainant, Argentina, had made no claim. In the course of its reasoning, the Appellate Body stated that:

“Argentina contends also that two third parties — the United States and the European Communities — “provided argumentation regarding the second sentence of Article II: 1 (b).” In support of this contention, Argentina cites those third parties’ responses to Question 3 posed by the Panel. However, even if these responses could be interpreted in the way Argentina would have us do — an issue which we need not decide in this appeal — these responses could not, in any event, assist Argentina in making a claim under the second sentence of Article II:1 (b). These are the statements of third parties to this dispute. Third parties to a dispute cannot make claims. It was for Argentina, as the claimant, to make its claim; Argentina cannot rely on third parties to do so on its behalf. Moreover, we note that Argentina did not adopt these arguments of the third parties in subsequent proceedings.”(812)

496.     In Argentina — Poultry Anti-Dumping Duties, Argentina asserted that Brazil failed to act in good faith by first challenging Argentina’s antidumping measure before a MERCOSUR Ad Hoc Tribunal and then, having lost that case, initiating WTO dispute settlement proceedings against the same measure. The Panel noted that:

“Argentina has made it clear that it is not invoking the principle of res judicata. Even though Paraguay considers this principle relevant to these proceedings, Paraguay, as a third party, does not have the right to determine the scope of any preliminary issues to be examined by us.”(813)

497.     In EC — Trademarks and Geographical Indications, Mexico requested that the Panel make a suggestion pursuant to Article 19.1, and argued that there is no requirement that a request for such a suggestion must be forwarded by one of the parties. The Panel stated:

“The Panel takes note of Mexico’s request. The issue of the product coverage of the Regulation is not challenged by the claims in this dispute and is therefore outside the Panel’s terms of reference. However, Mexico’s attention is drawn to Article 10.4 of the DSU.”(814)

498.     In US — Upland Cotton, the Panel considered that information provided by a third party cannot alleviate a complainant’s evidentiary burden:

“Neither party suggests that evidence provided by a third party may alleviate the complainant’s burden to establish a prima facie case. We agree entirely. Information supplied by third parties in support of their allegations may constitute evidence, in terms of additional context and support, that we may take into account in conducting an objective assessment of the matter before us.”(815)

499.     In US — Upland Cotton (Article 21.5 — Brazil), the European Communities submitted that the Panel had not been properly composed. The Panel responded that “it is not within [the Panel’s] authority under the DSU to make a ‘finding or ruling’ on an issue that has not been raised by any of the parties to the dispute and which concerns the application by the WTO Director-General of the DSU provisions regarding panel composition.”(816)

500.     In Australia — Apples, Australia objected to the fact that a number of the Panel’s proposed questions to scientific experts addressed issues raised solely in the United States’ third party submission. Australia argued that as third parties are not parties to the dispute, their submissions cannot constitute evidence and argument that can be used by either party to make the case for it. The Panel considered that it was proper to draw on third party submissions in posing questions to the scientific experts, and stated that:

“[O]nce a claim is properly put before a panel and the complaining party has submitted its arguments and articulated its complaint, the panel has broad powers of investigation in order to make an objective assessment of the matter. At that point, a panel is not limited by the arguments made by the parties to a dispute; it may develop its own arguments, and it can certainly consider the arguments made by third parties. Australia’s proposition that a panel is precluded from considering information put forward by a third party is contrary to the panel’s duty to make an objective assessment of the matter. It would also constitute a breach of the rights granted under the DSU to third parties in WTO dispute settlement. Article 10.2 of the DSU provides that third parties “shall have an opportunity to be heard by the panel and to make written submissions to the panel”. The Appellate Body has noted in this respect that, not only have third parties the right to make submissions in a dispute, but panels have the legal obligation to consider them.…

In other words, the rights of a third party to make submissions to a panel and the duty of a panel to take into account relevant information provided by a third party in its submission are two sides of the same coin. If panels were prevented from considering information provided by a third party, including arguments and evidence, then third party rights under the DSU would be illusory.

As noted above, under the Panel’s Working Procedures, the Panel was ultimately responsible for deciding on the questions that it would pose to the experts. Nothing prevented the Panel from using information, including arguments and evidence, provided in the submission of a Third Party. Nothing would subsequently prevent the Panel from using such information for the purpose of performing its objective assessment of the matter. Nor would the Panel be prevented from using information provided by the experts in response to the Panel’s questions, or in response to questions posed by the Parties themselves during the meeting with the experts, as long as this information is relevant to the matter that is within the Panel’s terms of reference.”(817)

6. Third parties rights in different stages of WTO dispute settlement proceedings

(a) Third-party rights in preliminary ruling proceedings

501.     In Canada — Wheat Exports and Grain Imports, the Panel, after consulting the parties to the dispute in accordance with Article 12.1 of the DSU, decided, in a preliminary ruling, that the third parties to this dispute were to be invited to participate in the proceedings up to the time the Panel issued its preliminary rulings on the requests made by Canada concerning the consistency with Article 6.2 of the DSU of the United States’ request for the establishment and certain additional procedures proposed by Canada for the protection of proprietary or commercially sensitive information. As regards the extent of this participation, the Panel decided as follows:

“(a)     third parties shall receive the preliminary written submissions of the parties to the dispute;(818)

 

(b)     third parties shall have an opportunity to make preliminary written submissions to the Panel for purposes of commenting on the parties’ preliminary written submissions; and

 

(c)     third parties shall have an opportunity to be heard by the Panel on the issues raised in the parties’ preliminary written submissions.”(819)

502.     The Panel in US — Upland Cotton also decided that third parties should play a role in the “initial stage” of that proceeding, which concerned the preliminary question of whether Brazil’s claims were precluded by virtue of the “peace clause” in Article 13 of the Agreement on Agriculture:

“With respect to the participation of third parties in these Panel proceedings, we have carefully considered the parties’ comments at this morning’s organizational meeting. In exercise of our discretion to manage these Panel proceedings, we continue to believe that it would be appropriate in this case for the third parties to have access to the parties’ initial written comments (and any written comments the parties may make on each others’ comments) as well as to have the ability to submit any written comments they themselves may have on the issue that we have identified above. The Panel considers that such third party participation in this initial stage of the Panel proceedings is appropriate for the following reasons.

 

The Panel is aware of the provisions of Article 10.3 of the DSU, which states that third parties shall receive the submissions of the parties to the dispute to the first meeting of the Panel. We would also observe that the factual circumstance that presents itself here is not itself specifically addressed by the DSU. In our view, the legal issue that the Panel has asked the parties to address in their initial briefs will necessarily have ramifications for the remainder of the Panel proceedings, including the scope of the first substantive meeting, at which third parties will participate.

 

We therefore invite the parties to serve also on the third parties their initial briefs and any responding comments. The Panel will also invite third parties to submit any written comments they might have concerning the initial phase of these proceedings.”(820)

(b) Third-party rights in Article 21.5 proceedings

503.     In Australia — Automotive Leather II (Article 21.5 — US), the working procedures adopted by the Panel provided, inter alia, for only one meeting with the parties, to be held in conjunction with the third party session. The procedures also provided for third parties to receive only the first submissions, and not the rebuttal submissions, of the parties. The European Communities objected and argued that since in this case there was to be only one meeting of the Panel, at which the Panel would be considering both submissions of each party, the third parties, in accordance with Article 10.3 of the DSU, should receive all of the parties’ submissions. The Panel, in a preliminary ruling, rejected the European Communities’ request as follows:

“[T]he Panel indicated that it had decided not to change the existing working procedures which provide for third parties to receive the first written submissions of the parties, but not the rebuttals. The Panel stated that if it had decided to hold two meetings with the parties, as is the normal situation envisioned in Appendix 3 of the DSU, third parties would have received only the written submissions made prior to the first meeting, but not rebuttals or other submissions made subsequently. Thus, in the more usual case, third parties would be in the same position as they were in this case with respect to their ability to present views to the panel. In the view of the Panel, the procedure it had established conformed more closely with the usual practice than would be the case if third parties received the rebuttals, and was in keeping with Article 10.3 of the DSU in a case where the Panel holds only one meeting.”(821)

504.     In Australia — Salmon (Article 21.5 — Canada), the Panel also followed the approach above and denied the European Communities’ request to allow the third parties access to second written submissions.(822)

505.     In Canada — Dairy (Article 21.5 — New Zealand and US), however, the Panel decided, in a preliminary ruling, to allow third parties access to the second written submissions of the parties on the following grounds:

“In the Panel’s view, the object and purpose of Article 10.3 of the DSU is to allow third parties to participate in an informed and, hence, meaningful, manner in a session of the meeting with the parties specifically set aside for that purpose. Third parties can only do so if they have received all the information exchanged between the parties before that session. Otherwise, third parties might find themselves in a situation where their oral statements at the meeting become partially or totally irrelevant or moot in the light of second submissions by the parties to which third parties did not have access. Without access to all the submissions by the parties to the dispute to the first meeting of the panel, uninformed third party submissions could unduly delay panel proceedings and, as rightly emphasised by the EC and supported by Mexico, could prevent the Panel from receiving ‘the benefit of a useful contribution by third parties which could help the Panel to make the objective assessment that it is required to make under Article 11 of the DSU.”(823)

506.     In US — FSC (Article 21.5 — EC), the Panel, in a preliminary ruling, did not follow the position of the Panel in Canada — Dairy (Article 21.5 — New Zealand and US) and denied access to second written submissions to third parties on the grounds that it was not permitted by Article 10.3 of the DSU. However, the Appellate Body disagreed with the Panel on the grounds that Article 10.3 requires that third parties are provided with all of the submissions made by the parties up to the time of the first panel meeting “whether that meeting is the first of two panel meetings, or the first and only panel meeting“:

Article 10.3 of the DSU is couched in mandatory language. By its terms, third parties ‘shall’ receive ‘the submissions of the parties to the first meeting of the panels’, (emphasis added) Article 10.3 does not say that third parties shall receive ‘the first submissions’ of the parties, but rather that they shall receive ’the submissions’ of the parties, (emphasis added) The number of submissions that third parties are entitled to receive is not stated. Rather, Article 10.3 defines the submissions that third parties are entitled to receive by reference to a specific step in the proceedings — the first meeting of the panel.(824) It follows, in our view, that, under this provision, third parties must be given all of the submissions that have been made by the parties to the panel up to the first meeting of the panel, irrespective of the number of such submissions which are made, including any rebuttal submissions filed in advance of the first meeting.”(825)’(826)

(c) Third-party rights in Article 22.6 arbitrations

507.     In EC — Bananas III (US) (Article 22.6 — EC), Ecuador requested the Arbitrators to accord it third-party status in light of its special interest in the proceedings. The Arbitrators, however, in light of the absence of provisions for third-party status under Article 22 of the DSU and given that they did not believe that Ecuador’s rights would be affected by this proceeding, declined Ecuador’s request.(827)

508.     In EC — Hormones (US) (Article 22.6 — EC) and in EC — Hormones (Canada) (Article 22.6 — EC), the United States and Canada respectively had requested the Arbitrators to accord them third-party rights in each others arbitration procedures. On this occasion, the Arbitrators recalling their discretion to decide on procedural matters under Article 12.1 of the DSU and the absence of a reference to third-party participation in Article 22, did grant the authorization on the grounds that the rights of the United States and Canada may be affected in both arbitration proceedings:

“The US and Canada are allowed to attend both arbitration hearings, to make a statement at the end of each hearing and to receive a copy of the written submissions made in both proceedings.

 

The above ruling was made on the following grounds.

 

  • DSU provisions on panel proceedings, referred to by analogy in the arbitrators’ working procedures, give the arbitrators discretion to decide on procedural matters not regulated in the DSU (Article 12.1 of the DSU) in accordance with due process.(828) The DSU does not address the issue of third-party participation in Article 22 arbitration proceedings.
     
  • US and Canadian rights may be affected in both arbitration proceedings:

 

First, the estimates for high quality beef (‘HQB’) exports, foregone because of the hormone ban, are to be based on a tariff quota that allegedly needs to be shared between Canada and the US. A determination in one proceeding may thus be decisive for the determination in the other.

 

Second, several methodologies are proposed to calculate lost export opportunities. Given the fact that the product scope (HQB and edible bovine offal (‘EBO’)) and relevant trade barriers (hormone ban and HQB tariff quota) are the same in both proceedings, both arbitration panels (composed of the same three individuals) may consider it necessary to adopt the same or very similar methodologies. This is all the more necessary because the arbitrators are called upon to arrive at a specific determination on the amount of nullification and impairment caused by the ban(829). They are therefore not limited, as in most panel proceedings, to ruling only on the consistency of the amounts proposed by the US and Canada with DSU provisions. Due process thus requires that all three parties receive the opportunity to comment on the methodologies proposed by each of the parties.

 

  • In contrast, the EC has not shown how third-party participation would prejudice its rights. No specific arguments were made demonstrating that third party participation would substantially impair the EC’s interests or due process rights.”(830)

 509.     In Brazil — Aircraft (Article 22.6 — Brazil), Australia requested that it be granted the authorization to participate as a third party in the Article 22.6 arbitration in light of its participation in that capacity in the Article 21.5 Panel. The Arbitrator declined this request and noted the absence of a specific provision, in Article 22, on third-party rights:

“[W]e informed Australia that we declined its request. Our decision took into account the views expressed by the parties, the fact that there is no provision in the DSU as regards third party status under Article 22,and the fact that we do not believe that Australia’s rights would be affected by this proceeding.

 

We note in this respect that third party rights were granted in the Article 22.6 arbitrations concerning European Communities — Measures Concerning Meat and Meat Products (Hormones) and rejected in the EC — Bananas (1999) Article 22.6 arbitration. We do not consider that Australia in this case is in the same situation as Canada and the United States in the EC — Hormones arbitrations, nor even in the same situation as Ecuador in the EC — Bananas (1999) arbitration. Indeed, Australia never initiated dispute settlement proceedings against Brazil with respect to the export financing programme at issue. Moreover, Australia did not draw the attention of the Arbitrators to any benefits accruing to it or any rights under the WTO Agreement which might be affected by their decision.”(831)’(832)

510.     In US — Gambling (Article 22.6 — US), the Arbitrators declined a request by the European Communities to participate as a third party:

“The Arbitrator first notes the absence of a specific provision in the DSU on third-party rights in Article 22.6 arbitral proceedings. Like panels, arbitrators acting under Article 22.6 have, under the DSU, ‘a margin of discretion to deal, always in accordance with due process, with specific situations that may arise in a particular case and that are not expressly regulated’. At the same time, the Arbitrator considers that, in such situations, it should pay particular attention to the views of the parties. In this instance, there is no agreement among the parties as to whether the EC request should be accepted, and this consideration should be given appropriate weight.

 

The Arbitrator also notes that in arbitral proceedings under Article 22.6 of the DSU to date, third party rights have only been granted once.(833) This involved very specific circumstances, where the two Members being granted third-party status were both complainants and parties to arbitral proceedings under Article 22.6 in disputes concerning the same matter, and where the Arbitrator found, in the circumstances of that case, that the determination in one arbitral proceeding may be decisive for the determination in the other.(834)

 The Arbitrator sees no basis for assuming that its determination under Article 22.7 of the DSU in respect of Antigua and Barbuda’s request to suspend concessions and other obligations would be such as to adversely affect the EC’s rights in the context of the separate proceeding it is engaged in with other Members concerned under Article XXI:1(b) of the GATS for the modification of US concessions, which has both a distinct legal basis and a distinct object.”(835)

(d) Appellate proceedings

511.     See Rule 24 (”Third Participants“) of the Working Procedures for Appellate Review in this Chapter.

7. Other issues

(a) Absence of authority for panel to direct a Member to be a third party

512.     In Turkey — Textiles, Turkey argued that the European Communities should be a party to the dispute because the measure taken by Turkey was done so pursuant to a regional trade agreement between Turkey and the European Communities. The Panel ruled:

“In the absence of any relevant provision in the DSU, in light of international practice(836), and noting the position of the EC to this point, we consider that we do not have the authority to direct that a WTO Member be made third-party or that it otherwise participate throughout the panel process.”(837)

(b) The concept of “essential parties”

513.     In Turkey — Textiles, Turkey claimed that the Panel should dismiss India’s claims because the measures were taken pursuant to a regional trade agreement between Turkey and the European Communities and the latter therefore should have been a party to the dispute. The Panel addressed the concept of “essential parties” first by referring to the case of law of the International Court of Justice (ICJ), more specifically to the Military and Paramilitary Activities in and Against Nicaragua and the Phosphate Lands in Nauru cases:(838)

“The practice of the ICJ indicates that if a decision between the parties to the case can be reached without an examination of the position of the third state (i.e. in the WTO context, a Member) the ICJ will exercise its jurisdiction as between the parties. In the present dispute, there are no claims against the European Communities before us that would need to be determined in order for the Panel to assess the compatibility of the Turkish measures with the WTO Agreement.”(839)

514.     After analysing the practice of the ICJ with respect to the “essential parties” concept, the Panel in Turkey — Textiles noted:

“[T]here is no WTO concept of ‘essential parties’. Based on our terms of reference and the fact that we have decided (as further discussed hereafter) not to examine the GATT/WTO compatibility of the Turkey-EC customs union, we consider that the European Communities was not an essential party to this dispute; the European Communities, had it so wished, could have availed itself of the provisions of the DSU, which we note have been interpreted with a degree of flexibility by previous panels(840), in order to represent its interests. We recall in this context that Panel and Appellate Body reports are binding on the parties only.(841)

 

Under WTO rules, the European Communities and Turkey are Members with equal and independent rights and obligations. For Turkey, it is not at all inconceivable that it adopted the measures in question in order to have its own policy coincide with that of the European Communities. However, in doing so, it should have been aware, in respect of the measures it has chosen, that its circumstances were different from those of the European Communities in relation to the Agreement on Textiles and Clothing (‘ATC’) and thus could reasonably have been anticipated to give rise to responses which focussed on that distinction.”(842)

(c) Third party rights for co-complainants where a single panel is established pursuant to Article 9.1 of the DSU

515.     In EC — IT Products, a joint panel request was submitted and a single panel was established to examine the complaints of the United States (DS375), Japan (DS376), and Chinese Taipei (DS377). These complainants subsequently notified their interest to participate as third parties in each other’s complaint. After recalling the terms of Articles 9.1 and 9.2 of the DSU, the Panel stated that:

“In the present dispute, we do not consider the fact that multiple complainants have presented a joint panel request should per se prevent parties from seeking to participate as third parties, or that the complainants’ participation as third parties would not serve a “legitimate purpose”. Nothing in the language of Articles 9 or 10 of the DSU limits or regulates the participation of complainants as third parties in disputes where multiple complainants present a panel request jointly.(843) In fact, such participation may prove desirable for a complainant. For instance, a co-complainant that presented a joint panel request may decide to pursue, in subsequent phases of the panel proceedings, only certain claims that it had jointly included in the panel request. It is possible that a co-complainant under these circumstances would have a legitimate interest in commenting, as a third party, on the claim(s) it had decided not to pursue as a joint complainant. We consider; however, that in cases where multiple complainants present a joint panel request, and simultaneously request to participate as third parties, care should be taken to ensure protection of the due process rights of the parties. In this dispute, we have reminded the complainants of the European Communities’ due process concerns, and received no specific complaint from the European Communities.”(844)

(d) Distinction between third parties and amicus curiae

516.     In US — Shrimp, the Appellate Body emphasized that Members participating as third parties under Article 10 enjoy “legal rights” that others do not:

“[A]ccess to the dispute settlement process of the WTO is limited to Members of the WTO. This access is not available, under the WTO Agreement and the covered agreements as they currently exist, to individuals or international organizations, whether governmental or nongovernmental. Only Members may become parties to a dispute of which a panel may be seized, and only Members “having a substantial interest in a matter before a panel” may become third parties in the proceedings before that panel. Thus, under the DSU, only Members who are parties to a dispute, or who have notified their interest in becoming third parties in such a dispute to the DSB, have a legal right to make submissions to, and have a legal right to have those submissions considered by, a panel. Correctively, a panel is obliged in law to accept and give due consideration only to submissions made by the parties and the third parties in a panel proceeding.”(845)

(e) Confidentiality obligations

517.     In Mexico — Corn Syrup, the Panel observed that:

“Third parties are subject to the same requirement to maintain the confidentiality of panel proceedings as are parties. We therefore conclude that the requirement to maintain the confidentiality of consultations is not violated by the inclusion of information obtained during consultations in the written submission of a party provided to a third party in the subsequent panel proceeding even if that third party did not participate in the consultations.”(846)

 

Footnotes:

578. Appellate Body Report, Brazil — Desiccated Coconut, p. 21. back to text
579. Appellate Body Report, US — Carbon Steel, para. 126. back to text
580. Panel Report, EC and certain member States — Large Civil Aircraft, para. 7.88. back to text
581. (footnote original) Appellate Body Report on US — Carbon Steel, para. 126. back to text
582. (footnote original) Panel Report on Japan — Apples, para. 8.32. back to text
583. Panel Report, Australia — Apples, para. 2.244. back to text
584. (footnote original) Appellate Body Report, United States — 1916 Act, supra, footnote 32, para. 54. back to text
585. Appellate Body Report, Mexico — Corn Syrup (Article 21.5 — US), paras. 36 and 53. back to text
586. (footnote original) See Appellate Body Report, US — Carbon Steel, para. 123. (original emphasis). back to text
587. Appellate Body Report, EC and certain member States — Large Civil Aircraft, para. 791. back to text
588. Appellate Body Report, Mexico — Taxes on Soft Drinks, para. 45. back to text
589. Appellate Body Report, US — 1916 Act, footnote 30 to para. 54. back to text
590. Panel Report, US — Clove Cigarettes, para. 134. back to text
591. (footnote original) EC Panel Report, para. 5.17. We note that it is a widely accepted rule that an international tribunal is entitled to consider the issue of its own jurisdiction on its own initiative, and to satisfy itself that it has jurisdiction in any case that comes before it. See, for example, Case Concerning the Administration of the Prince von Pless (Preliminary Objection) (1933) P.C.I.J. Ser. A/B, No. 52, p. 15; Individual Opinion of President Sir A. McNair, Anglo-Iranian Oil Co. Case (Preliminary Objection) (1952) I.C.J. Rep., p. 116; Separate Opinion of Judge Sir H. Lauterpacht in Case of Certain Norwegian Loans (1957) I.C.J. Rep., p. 43; and Dissenting Opinion of Judge Sir H. Lauterpacht in the Interhandel Case (Preliminary Objections) (1959) I.C.J. Rep., p. 104. See also M. O. Hudson, The Permanent Court of International Justice 1920-1942 (MacMillan, 1943), pp. 418-419; G. Fitzmaurice, The Law and Procedure of the International Court of Justice, Vol. 2 (Grotius Publications, 1986), pp. 530, 755-758; S. Rosenne, The Law and Practice of the International Court (Martinus Nijhoff, 1985), pp. 467-468; L. A. Podesta Costa and J. M. Ruda, Derecho Internacional Público, Vol. 2 (Tipográfica, 1985), p. 438; M. Diez de Velasco Vallejo, Instituciones de Derecho International Público (Tecnos, 1997), p. 759. See also the award of the Iran-United States Claims Tribunal in Marks & Umman v. Iran, 8 Iran-United States C.T.R., pp. 296-97 (1985) (Award No. 53-458-3); J.J. van Hof, Commentary on the UNCITRAL Arbitration Rules: The Application by the Iran-U.S. Claims Tribunal (Kluwer, 1991), pp. 149-150; and Rule 41(2) of the rules applicable to ICSID Arbitration Tribunals: International Centre for Settlement of Investment Disputes, Rules of Procedure for Arbitration Proceedings (Arbitration Rules). back to text
592. Appellate Body Report, US — 1916 Act, para. 54. back to text
593. The Appellate Body referred to its Report in US — 1916 Act, para. 54. back to text
594. Appellate Body Report, US — Offset Act (Byrd Amendment), para. 208. back to text
595. (footnote original) Appellate Body Report, US — Carbon Steel, para. 123; Appellate Body Report, Mexico — Corn Syrup (Article 21.5 — US), para. 50; Appellate Body Report, US — FSC, para. 166; Appellate Body Report, US — 1916 Act, para. 54. back to text
596. (footnote original) Appellate Body Report, EC and certain member States — Large Civil Aircraft, para. 791; Appellate Body Report, US — Carbon Steel, para. 123; Appellate Body Report, Mexico — Corn Syrup (Article 21.5 — US), para. 36; Appellate Body Report, US — 1916 Act, para. 54. back to text
597. Appellate Body Report, EC — Fasteners (China), para. 561. back to text
598. Appellate Body Report, Guatemala — Cement I, para. 72. See also Appellate Body Report, Guatemala — Cement I, para. 76 which states “the word ‘matter’ has the same meaning in Article 17 of the Anti-Dumping Agreement as it has in Article 7 of the DSU. It consists of two elements: the specific ‘measure’ and the ‘claims’ relating to it, both of which must be properly identified in a panel request as required by Article 6.2 of the DSU.” back to text
599. Appellate Body Report, Brazil — Desiccated Coconut, p. 22. back to text
600. Panel Report, Australia — Apples, para. 2.244. back to text
601. Panel Report, Indonesia — Autos, para. 14.3. back to text
602. Panel Report, Australia — Automotive Leather II (Article 21.5 — US), paras. 6.4-6.5. back to text
603. Panel Report, Brazil — Aircraft (Article 21.5 — Canada II), para. 5.5, footnote 24. back to text
604. (footnote original) We note also that during the period of consultations Turkey and the EC jointly sent notifications and other communications to the CRTA (WT/REG22/5, WT/REG22/7) and, pursuant to Article 3.3 of the ATC, to the TMB (G/TMB/N/308), in which Turkey lists the new textile import restrictions it adopted following the conclusion of the agreement between the EC and Turkey. In addition, during the meetings of the CRTA (WT/REG22/M1 and M2), and the TMB (meetings of 11-12 December 1997), which preceded the request for the establishment of a panel, the parties discussed the issues relating to this dispute. This confirms to us that Turkey is sufficiently informed of the measures challenged by India in this dispute and the products covered by the measures at issue. Moreover, we note that no comments were made on this issue at any of the meetings of the DSB where the present dispute was discussed (WT/DSB/Ml3, 15, 42 and 43) and that no Member questioned the scope of the terms of reference in this regard. back to text
605. (footnote original) Appellate Body Report on European Communities — Regime for the Importation, Sale and Distribution of Bananas, adopted on 25 September 1997, WT/DS27/AB/R (“EC — Bananas III”) and European Communities — Customs Classification of Certain Equipment adopted on 22 June 1998, WT/ DS62, 67, 68/AB/R, (“EC — Computer Equipment” or “EC — LAN”). back to text
606. Panel Report, Turkey — Textiles, para. 9.3. back to text
607. Canada’s preliminary submission regarding the jurisdiction of the Panel, dated 23 October 1998, para. 37. back to text
608. Panel Report, Canada — Aircraft, para. 9.31. back to text
609. Panel Report, Indonesia — Autos, paras. 14.3 and 14.4. back to text
610. (footnote original) Appellate Body Report, EC — Chicken Cuts, para. 156. back to text
611. (footnote original) Appellate Body Report, EC — Chicken Cuts, para. 156. back to text
612. (footnote original) Appellate Body Report, Chile — Price Band System, para. 139. back to text
613. (footnote original) Appellate Body Report, US — Upland Cotton, para. 263. back to text
614. (footnote original) See Appellate Body Report, Chile — Price Band System, para. 139; Appellate Body Report, EC — Chicken Cuts, para. 156; and Appellate Body Report, US — Upland Cotton, para. 263. back to text
615. Appellate Body Report, EC — Selected Customs matters, para. 184. back to text
616. Panel Report, EC — IT Products, para. 7.139. back to text
617. (footnote original) Appellate Body Report on Chile — Price Band System, paras. 139 (also para. 7.175 below) and 144. back to text
618. (footnote original) Appellate Body Report on US — Zeroing (21.5 — Japan), para. 116. In that dispute, the Appellate Body concluded that a periodic review could be identified for purposes of Article 6.2 of the DSU through the use of the phrase “subsequent closely connected measures”. The Appellate Body explained that the phrase “subsequent closely connected measures” in the complainant’s panel request was sufficiently precise to identify the review in question, which “formed part of a continuum of events” (Appellate Body Report on US — Zeroing (21.5 — Japan), para. 116). back to text
619. Panel Report, EC — IT Products, para. 7.140. back to text
620. (footnote original) The panels in EC — Bananas III and Japan — Film explained that the inclusion of such a phrase in a panel request can serve to adequately identify measures for the purposes of Article 6.2, even if a measure is not explicitly listed in the panel request (Panel Report, EC — Bananas III, paras. 7.22-7.27 and Panel Report, Japan — Film, paras. 10.8-10.9). The Appellate Body also ruled that broad terms of reference could include replacement or amended measures so long as they were sufficiently linked and discernable in the complainants’ panel request and fall within the “gist” of what is at issue (Appellate Body Report, Chile — Price Band System, para. 139 and US — Continued Zeroing, paras. 235 and 236). back to text
621. Panel Report, China — Raw Materials, para. 7.15. back to text
622. (footnote original) See US — Gasoline WT/DS2/R, para. 6.19, where the panel observed that “it had not been the usual practice of a panel established under the General Agreement to rule on measures that, at the time the panel’s terms of reference were fixed, were not and would not become effective”. See also Panel Report on Argentina — Measures Affecting Imports of Footwear, Textiles, Apparel and Other Items, WT/DS56/R, circulated on 25 November 1997, pp. 84-86. back to text
623. (footnote original) See, e.g., Panel Report on US — Wool Shirts and Blouses, WT/DS33/R, upheld by the Appellate Body, WT/DS33/AB/R, where the panel ruled on a measure that was revoked after the interim review but before issuance of the final report to the parties; Panel Report on EEC — Measure on Animal Feed Proteins, adopted on 14 March 1992, BISD 25S/49, where the panel ruled on a discontinued measure, but one that had terminated after the terms of reference of the panel had already been agreed; Panel Report on United States — Prohibitions on Imports of Tuna and Tuna Products from Canada, adopted on 22 February 1982, BISD 29S/91, 106, para. 4.3, where the panel ruled on the GATT consistency of a withdrawn measure but only in light of the two parties’ agreement to this procedure; Panel Report on EEC — Restrictions on Imports of Apples from Chile, adopted on 10 November 1980, BISD 27S/98, where the panel ruled on a measure which had terminated before agreement on the panel’s terms of reference but where the terms of reference specifically included the terminated measure and, given its seasonal nature, there remained the prospect of its reintroduction. back to text
624. Panel Report, Japan — Film, para. 10.58. back to text
625. (footnote original) “EEC — Measures on Animal Feed Proteins”, L/ 4599, BISD 25S/49 (adopted on 14 March 1978). See also the Report of the Panel on “United States — Prohibitions of Imports of Tuna and Tuna Products from Canada”, BISD 29S/91, 106, para. 4.3 (adopted on 22 February 1982). back to text
626. (footnote original) “EEC — Restrictions on Imports of Apples from Chile”, BISD 27S/98, (adopted on 10 November 1980). back to text
627. Panel Report, US — Gasoline, para. 6.19. back to text
628. Panel Report, Argentina — Textiles and Apparel, para. 6.7. back to text
629. (footnote original) Panel and Appellate Body Reports adopted on 20 May 1996, WT/DS2/R and WT/DS2/AB/R. back to text
630. (footnote original) Panel and Appellate Body Reports adopted on 1 November 1996, WT/DS/8, 10, 11/R and WT/DS8, 10, 11/AB/R. back to text
631. (footnote original) Panel and Appellate Body Reports adopted on 20 March 1997, WT/DS22/R and WT/DS22/AB/R. back to text
632. (footnote original) Panel and Appellate Body Reports adopted on 25 September 1997, WT/DS27/R and WT/DS27/AB/R. back to text
633. (footnote original) See for instance, the Gasoline Panel Report at para. 6.19; Panel and Appellate Body Reports on United States — Measures Affecting Imports of Woven Wool Shirts and Blouses from India, adopted on 23 May 1997, WT/DS33/R and WT/DS33/AB/R; Panel Report on EEC — Measures on Animal Feed Proteins, adopted on 14 March 1978, BISD 25S/49; and Panel Report on United States — Prohibition on Imports of Tuna and Tuna Products from Canada, adopted on 22 February 1982, BISD 29S/91. back to text
634. (footnote original) See Appellate Body Report on United States — Measures Affecting Imports of Woven Wool Shirts and Blouses from India, adopted on 23 May 1997, WT/DS33/AB/R, p. 19. back to text
635. Panel Report, Argentina — Textiles and Apparel, paras. 6.11-6.13. back to text
636. (footnote original) See Article 3.10 of the DSU and Article 26 of the Vienna Convention on the Law of Treaties (Pacta Sunt Servanda). back to text
637. Panel Report, Argentina — Textiles and Apparel, para. 6.14. back to text
638. Panel Report, Argentina — Textiles and Apparel, para. 6.15. back to text
639. Panel Report, EC — Poultry, paras. 250-252. back to text
640. Panel Report, US — Certain EC Products, para. 7.1. back to text
641. Appellate Body Report, US — Certain EC Products, para. 81. back to text
642. (footnote original) See for instance the Panel Report on “EEC — Restrictions on Imports of Dessert Apples, Complaint by Chile” (adopted on 22 June 1989, BISD 36S/93), the Panel Report on “EEC — Restrictions on Imports of Apples, Complaint by the United States” (adopted on 22 June 1989, BISD 36S/135), the Panel Report on “United States — Prohibition of Imports of Tuna and Tuna Products from Canada” (adopted on 22 February 1982, BISD 29S/91) or the Panel Report on “EEC — Measures on Animal Feed Proteins” (adopted on 14 March 1978, BISD 25S/49). back to text
643. Panel Report, US — Wool Shirts and Blouses, para. 6.2. back to text
644. (footnote original) See, e.g. Panel Report on United States — Measures Affecting Imports of Wool Shirts and Blouses from India, WT/DS33, adopted on 23 May 1997, (hereafter called “Shirts and Blouses”), the US restriction was withdrawn shortly before the issuance of the panel report; Panel Report on EEC — Restrictions on Imports of Dessert Apples, Complaint by Chile, adopted on 22 June 1989, BISD 36S/93; Panel Report on EEC-Restrictions on Imports of Apples, Complaint by the United States, adopted on 22 June 1989, BISD/36S/135; Panel Report on United States — Prohibition of Imports of Tuna and Tuna Products from Canada, adopted on 22 February 1982, BISD 29S/91; Panel Report on EEC — Restrictions on Imports of Apples from Chile, adopted on 10 November 1980, BISD 27S/98; and Panel Report on EEC — Measures on Animal Feed Proteins, adopted on 14 March 1978, BISD 25S/49. In the Panel Report on United States — Section 337 of the Tariff Act of 1930, BISD 36S/345, adopted on 7 November 1989 (hereafter called ““Section 337”), the challenged measure was amended during the panel process but the panel refused to take into account such amendment. We note that this is also the line taken by the Appellate Body in Argentina — Measures Affecting Imports of Footwear, Textiles, Apparels and Other Items, WT/DS56, adopted on 22 April 1998, para. 64. back to text
645. Panel Report, Indonesia — Autos, para. 14.9. back to text
646. United States’ response to question 18, paras. 37 and 47. back to text
647. Turkey’s response to question 148(e). back to text
648. Panel Report, Argentina — Textiles and Apparel, para. 6.14. back to text
649. Panel Report, Turkey — Rice, paras. 7.165-7.180. back to text
650. (footnote original) Appellate Body Report, EC — Bananas III (Article 21.5 — Ecuador II), para. 270. back to text
651. (footnote original) Panel Report, India — Additional Import Duties, paras. 7.69-7.70. back to text
652. (footnote original) Appellate Body Report, US — Certain EC Products, para. 81; Appellate Body Report, US — Upland Cotton, para. 272; and Appellate Body Report, EC — Bananas III (Article 21.5 — Ecuador II), para. 271. back to text
653. Panel Report, US — Poultry (China), paras. 7.54-7.56. back to text
654. Appellate Body Report, Brazil — Aircraft, para. 132. back to text
655. Panel Report, Argentina — Footwear (EC), para. 8.41. back to text
656. Panel Report, Argentina — Footwear (EC), para. 8.45. back to text
657. Appellate Body Report, Chile — Price Band System, para. 138. back to text
658. Appellate Body Report, Chile — Price Band System, para. 139. back to text
659. Appellate Body Report, Australia — Salmon, para. 223. back to text
660. Appellate Body Report, Chile — Price Band System, paras. 140-143. back to text
661. Appellate Body Report, Chile — Price Band System, para. 144. back to text
662. Appellate Body Report, EC — Chicken Cuts, para. 154. back to text
663. (footnote original) Moreover, one of two original measures is a “Decision” directed at one individual Member State of the European Communities, namely the Federal Republic of Germany, whereas the two subsequent measures are “Regulations” that have a general application. back to text
664. (footnote original) Nor 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 paras. VII.B.2(a)(ii)395 and VII.B.2(a)(ii)396 above. back to text
665. (footnote original) Indeed, the Appellate Body has stated that:
     [t]o the extent that a Member’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) (emphasis original) back to text
666. Appellate Body Report, EC — Chicken Cuts, paras. 158-160. back to text
667. Appellate Body Report, Argentina — Textiles and Apparel, Section V. back to text
668. Panel Report, Japan — Apples (Article 21.5 — US), para. 8.13 and 8.18. back to text
669. Panel Report, Japan — Apples (Article 21.5 — US), para. 8.25. back to text
670. (footnote original) See Panel Report on US — Section 301 Trade Act, para. 7.124. back to text
671.     (footnote original) See Appellate Body Report on India — Patents (US), para. 65, quoting the judgement of the Permanent Court of International Justice in Certain German Interests in Polish Upper Silesia. back to text
672. Panel Report, Japan — Apples (Article 21.5 — US), paras. 8.19-8.26. back to text
673. Panel Report, EC — Trademarks and Geographical Indications (US), para. 7.17. back to text
674. (footnote original) In fact, the European Communities itself has included one of these GIs in its exhibits: the 2002 publication of the application to register “Thuringer Leberwurst” is Exhibit EC-54. back to text
675. (footnote original) The Panel refers to the registration of the three Czech beer GIs submitted in an exhibit by the complainants (see para. 7.15 above) as evidence of the operation of Article 14(3) of the Regulation in paras. 7.573 and 7.669 below. back to text
676. Panel Report, EC — Trademarks and Geographical Indications (US), paras. 7.19-7.20. back to text
677. (footnote original) We recall that the Appellate Body has indicated that the term “specific measures at issue” in para. 156. back to text
678. Panel Report, EC and certain member States — Large Civil Aircraft, para. 7.116. back to text
679. Appellate Body Report, India — Patents (US), paras. 92-93. back to text
680. Appellate Body Report, India — Patents (US), paras. 92-93. In US — Hot-Rolled Steel, the issue arose of whether the “general” practice of the US investigating authorities regarding best facts available was within the terms of reference of the Panel. The Panel, which did not rule on whether a general practice could be challenged separately from the statutory measure on which it is based, concluded that Japan’s claim in this regard was outside its terms of reference because there was no mention of such claim in Japan’s request for the establishment of a panel. Panel Report, US — Hot-Rolled Steel, para. 7.22. back to text
681. Panel Report, India — Quantitative Restrictions, paras. 5.18-5.19. back to text
682. Panel Report, India — Quantitative Restrictions, para. 5.19. back to text
683. Panel Report, EC — Bananas III, paras. 7.57-7.58. back to text
684. Appellate Body Report, EC — Bananas III, para. 158. back to text
685. Panel Report, Japan — Apples, paras. 8.63-8.66. back to text
686. Panel Report, Japan — Apples, paras. 8.65 and 8.66. back to text
687. (footnote original) Appellate Body Report, European Communities — Regime for the Importation, Sale and Distribution of Bananas (“EC — Bananas III”), WT/DS27/AB/R, adopted 25 September 1997, DSR 1997:11, 591, at para. 143. back to text
688. (footnote original) This is not, for example, a case where a complainant obtained, through the dispute settlement process, information in support of a claim to which it did not otherwise have access. back to text
689. (footnote original) We note that, since we do not reach India’s alternative claims in this dispute, as discussed below in para. 7.80, we also would not have reached this claim in any event. back to text
690. Panel Report, US — Steel Plate, paras. 7.27-7.29. back to text
691. Panel Report, China — Raw Materials, para. 7.23. back to text
692. (footnote original) We recall that in our Report in EC Measures Concerning Meat and Meat Products (Hormones) (“European Communities — Hormones”), we held that:
     … a prima facie case is one which, in the absence of effective refutation by the defending party, requires a panel, as a matter of law, to rule in favour of the complaining party presenting the prima facie case.
     See WT/DS26/AB/R, WT/DS44/AB/R, adopted 13 February 1998, para. 104. back to text
693. Appellate Body Report, US — Certain EC Products, paras. Ill, 112 and 114. back to text
694. Appellate Body Report, Chile — Price Band System, para. 165. back to text
695. (footnote original) Appellate Body Report, para. 156. back to text
696. (footnote original) Appellate Body Report, para. 123. We note that the discussion above referring to our finding in US — Certain EC Products that a claim had not been made refers to the alleged claim under Article 23.2 of the DSU. The finding regarding a panels ability to develop its own legal reasoning referred to a claim under Article 21.5 of the DSU, which had been made. back to text
697. (footnote original) Appellate Body Report, Japan — Measures Affecting Agricultural Products, WT/DS76/AB/R, adopted 19 March 1999, DSR 1999:1, 277, paras. 129-130. back to text
698. (footnote original) Argentina also seeks to rely on our reasoning in Canada — Periodicals, where we said that the relationship between the first and second sentences of Article III:2 of the GATT 1994 was such that we could move from an examination of the first sentence of that Article to an examination of the second sentence as “part of a logical continuum.” Argentina’s appellee’s submission, para. 154. We do not agree with Argentina that our reasoning in Canada — Periodicals is relevant in this regard. In our view, the first and second sentences of Article II:1(b) prescribe distinct obligations, and do not form part of a logical continuum. back to text
699. Appellate Body Report, Chile — Price Band System, paras. 167-168. back to text
700. Panel Report, Korea — Commercial Vessels, para. 7.2. back to text
701. (footnote original) We recall that the term “matter” was declined by the Appellate Body in Guatemala — Cement I to mean the specific measures at issue and the legal basis of the complaint ( WT/DS60/AB/R. para. 72). Accordingly, there is no need for the measures and legal claims identified in the request for establishment to be identical to the measures and legal claims identified in the request for consultations. back to text
702. Panel Report, Korea — Commercial Vessels, para. 7.2. back to text
703. Panel Report, EC — Commercial Vessels, paras. 7.13 and 7.15. back to text
704. (footnote original) See cases discussed in WTO Analytical Index, at 1305-1308. back to text
705. Panel Report, EC — Commercial Vessels, para. 7.20-7.25. back to text
706. Decision by the Arbitrators, EC — Hormones (US) (Article 22.6 — EC), para. 50. back to text
707. Panel Report, EC and certain member States — Large Civil Aircraft, para. 7.89. back to text
708. Panel Report, EC and certain member States — Large Civil Aircraft, para. 7.324. back to text
709. (footnote original) In this regard, we further note the Appellate Body’s statement that, “as a matter of due process, and the proper exercise of the judicial function, panels are required to address issues that are put before them by the parties to a dispute.” (Appellate Body Report, Mexico — Corn Syrup (Article 21.5 — US), para. 36). back to text
710. Appellate Body Report, Mexico — Taxes on Soft Drinks, para. 49. back to text
711. Appellate Body Report, Argentina — Footwear (EC), para. 71. back to text
712. Appellate Body Report, Argentina — Footwear (EC), para. 74. back to text
713. WT/DS22/6. back to text
714. Appellate Body Report, Guatemala — Cement I, para. 72. See also Appellate Body Report, Guatemala — Cement I, para. 76 which states “the word ‘matter’ has the same meaning in Article 17 of the Anti-Dumping Agreement as it has in Article 7 of the DSU. It consists of two elements: the specific ‘measure’ and the ‘claims’ relating to it, both of which must be properly identified in a panel request as required by Article 6.2 of the DSU.” back to text
715. Panel Report, Chile — Price Band System, footnote 559. back to text
716. Panel Report, Mexico — Telecoms, para. 7.2. back to text
717. Panel Report, US — Wool Shirts and Blouses, para. 7.19. back to text
718. WT/DSB/2. back to text
719. As of 30 September 2011, the most recent consolidated list is WT/DSB/44/Rev.l5, dated 27 July 2011. back to text
720. Panel Report, Guatemala — Cement II, para. 8.11. back to text
721. (footnote original) While the European Communities asserts that there is precedent in WTO dispute settlement practice that supports its position that the Panel has the authority to rule on the propriety of its own composition, and that the Panel is under a duty to address this issue because “it is of fundamental importance for the correct interpretation of the DSU and for the smooth and equitable operation of the WTO dispute settlement system” (EC Third Party Submission, paras. 28-29), the Panel finds the arguments of the European Communities in this regard unpersuasive. back to text
722. Panel Report, US — Upland Cotton (Article 21.5 — Brazil), para. 8.28. back to text
723. (footnote original) At least two prior WTO panels have taken a similar view. See Panel Report, United States — Subsidies on Upland Cotton — Recourse to Article 21.5 of the DSU by Brazil (“US — Upland Cotton (Article 21.5 — Brazil)”), WT/DS267/RW and Corr.l, adopted 20 June 2008, as modified by Appellate Body Report, WT/DS267/AB/RW, para. 8.28; Panel Report, Guatemala — Definitive Anti-Dumping Measures on Grey Portland Cement from Mexico (“Guatemala — Cement II”), WT/DS156/R, adopted 17 November 2000, DSR 2000:XI, 5295, para. 8.11. back to text
724. (footnote original) In light of our conclusion that the DSU provides no legal basis for us to make any ruling on the exercise, by the Director-General, of his authority under Article 8.7 of the DSU, we do not consider it necessary to examine further the US argument that the EC claims with respect to our composition are not within our terms of reference. back to text
725. Panel Report, US — Zeroing (EC) (Article 21.5 — EC), paras. 8.14-8.17. back to text
726. Appellate Body Report, US — Zeroing (EC) (Article 21.5 — EC), para. 172. back to text
727. Panel Reports, EC and certain member States — Large Civil Aircraft, para. 1.5, and US — Large Civil Aircraft (2nd complaint), para. 1.5. back to text
728. Panel Report, EC — Countervailing Measures on DRAM Chips, para. 1.8. back to text
729. Panel Report, US — Softwood Lumber V (Article 21.5 — Canada), para. 1.5. back to text
730. Panel Report, US — Tuna II (Mexico), para. 1.8. back to text
731. This table covers only those disputes in which a panel report was adopted by 30 September 2011. It excludes cases in which a mutually agreed solution was reached prior to the circulation of the panel report. It does not cover Article 21.5 proceedings. back to text
732. In one instance, the period between establishment and composition was one day. That figure was not retained as the shortest, however, because it involved a case where it was understood upon the establishment of the panel that it would, if possible, have the same composition as a panel established previously in relation to the same matter (WT/DS12 and WT/ DS14). back to text
733. Panel Report, India — Patents (EC), paras. 7.13-7.16. back to text
734. Panel Report, EC — Bananas III, paras. 7.55-7.57. back to text
735. Panel Report, EC — Chicken Cuts, paras. 6.19-6.21. See also Panel Report, EC — Sugar Subsidies (Brazil), para. 1.13 and Panel Report, EC — Trademarks and Geographical Indications (US), para. 2.13. back to text
736. Appellate Body Report, US — Offset Act (Byrd Amendment), paras. 310-311 and 315-316. back to text
737. (footnote original) Appellate Body Report, EC — Hormones, footnote 138 to para. 152. back to text
738. (footnote original) The United States submits that a showing of prejudice is not required by the text of Article 9.2. In response to questioning at the oral hearing, the United States added that, although it was not aware of any prejudice that it would have suffered in this case, prejudice could have resulted if, for example, Mexico had chosen to cross-appeal the claim related to Article 5 of the SCM Agreement, which only Mexico raised before the Panel. back to text
739. Appellate Body Report, US — Offset Act (Byrd Amendment), paras. 315-316. back to text
740. Panel Reports, US — Steel Safeguards, para. 7.724. back to text
741. Panel Reports, EC — Bananas III, para. 7.58. See also Panel Report, China — Auto Parts, paras. 2.7 and 8.1. back to text
742. Panel Reports, US — Steel Safeguards, para. 7.725. back to text
743. Panel Report, Canada — Wheat Exports and Grain Imports, paras. 6.1-6.2. back to text
744. Panel Report, EC — Chicken Cuts, para. 6.21. back to text
745. Panel Report, EC — Approval and Marketing of Biotech Products, paras. 7.5-7.9. back to text
746. Panel Report, EC — IT Products, para. 2.4. back to text
747. Panel Report, Philippines — Taxes on Distilled Spirits, footnote 10. back to text
748. Appellate Body Report, US — Shrimp (Thailand) / US — Customs Bond Directive, paras. 320-325. back to text
749. Appellate Body Report, US/Canada — Continued Suspension, footnote 62. back to text
750. Appellate Body Report, China — Auto Parts, para. 12. back to text
751. This table excludes Article 21.5 proceedings as well as disputes in which a mutually agreed solution was reached prior to the circulation of the panel report. back to text
752. Panel Report, Canada — Wheat Exports and Grain Imports, para. 6.10. back to text
753. Panel Reports, US — Shrimp (Thailand) / US — Customs Bond Directive, paras. 7.3-7.4. back to text
754. (footnote original) Shorter Oxford English Dictionary, 5th edn, W. R. Trumble, A. Stevenson (eds) (Oxford University Press, 2002), Vol. 1, p. 1200. back to text
755. (footnote original) European Communities’ appellant’s submissions, para. 21 (Ecuador), para. 20 (US). back to text
756. Appellate Body Report, EC — Bananas III (Article 21.5 — Ecuador II) I EC — Bananas III (Article 21.5 — US), paras. 192-193. back to text
757. Appellate Body Report, EC — Bananas III (Article 21.5 — US), paras. 194-195. back to text
758. Appellate Body Report, US — FSC (Article 21.5 — EC), para. 249. back to text
759. Panel Report, US — Upland Cotton, para. 7.1411. back to text
760 Appellate Body Report, EC — Bananas III, para. 132. back to text
761 Appellate Body Report, US — Shrimp, para. 101. back to text
762 Third Party Participation in Panels, Statement by the Chairman of the Council, C/COM/3 of 27 June 1994, page 1. back to text
763 (footnote original) Appellate Body Report on EC — Hormones, footnote 138. back to text
764 Panel Report, EC — Export Subsidies on Sugar (Australia), paras. 2.2 — 2.4. back to text
765. Panel Report, Turkey — Rice, paras. 6.1 — 6.2. back to text
766. (footnote original) Third Party Participation in Panels, Statement by the Chairman of the Council, C/COM/3 of 27 June 1994, page 1. At the request of Turkey, the statement was read out at the organizational meeting in this case. back to text
767. (footnote original) Panel Report on EC — Export Subsidies on Sugar (Australia), para. 2.2. back to text
768. (footnote original) Appellate Body Report on EC — Hormones, footnote 138. back to text
769. (footnote original) Panel Report on EC — Export Subsidies on Sugar (Australia), para. 2.3. back to text
770. (footnote original) Ibid. back to text
771. Panel Report, Turkey — Rice, paras. 6.4 — 6.9. back to text
772. Panel Report, EC — IT Products, para. 7.75. back to text
773. Panel Report, EC — Sardines, para. 165. back to text
774. Panel Report, India — Patents (EC), paras. 7.20 — 7.21. back to text
775. Appellate Body Report, US — 1916 Act, para. 145. back to text
776. (footnote original) Appellate Body Report, United States — Anti-Dumping Act of 1916 (”US — 1916 Act“), WT/DS136/AB/R, WT7 DS162/AB/R, adopted 26 September 2000, para. 145. back to text
777. (footnote original) Appellate Body Report, US — 1916 Act, supra, footnote 208, para. 150. See also Appellate Body Report, EC — Hormones, supra, footnote 40, para. 154. back to text
778. Appellate Body Report, US — FSC (Article 21.5 — European Communities), para. 243. back to text
779. WT/DSB/M/16, item 1, pp. 1 — 5. back to text
780. (footnote original) Panel Report on “EEC — Import Regime for Bananas”, issued on 11 February 1994 (not adopted), DS38/R, p. 4, para. 8; Panel Report on “EEC — Member States’ Import Regimes for Bananas”, issued on 3 June 1993 (not adopted), DS32/R, p. 2, para. 9; Panel Report on “Japan — Trade in Semiconductors”, adopted on 4 May 1988, BISD 35S/116,116 — 117, para. 5. See also Panel Report on “EEC — Tariff Treatment on Imports of Citrus Products from Certain Countries in the Mediterranean Region”, issued on 7 February 1985 (not adopted), L/5776, p. 2, para. 1.5; Interim Panel Report on “United Kingdom — Dollar Area Quotas”, adopted on 30 July 1973, BISD20S/230, 231, para. 3. back to text
781. Panel Reports, EC — Bananas III, para. 7.5. back to text
782. Panel Reports, EC — Bananas III, para. 7.8. back to text
783.Panel Reports, EC — Bananas III, para. 7.9. back to text
784. Panel Reports, EC — Bananas III (Article 21.5 — US) / EC — Bananas III (Article 21.5 — Ecuador II), para. 1.5, para. 7.722. back to text
785. Panel Report, EC — Tariff Preferences, Annex A, para. 7. back to text
786. Panel Report, US — Upland Cotton, Annex L — 1.7, paras. 6 and 12. back to text
787. Panel Report, EC — Export Subsidies on Sugar (Australia), para. 2.6. back to text
788. (footnote original) We also note that, in accordance with Article 10.4 of the DSU, nothing precludes a Member participating as a third party in a panel proceeding from requesting the establishment of another panel to examine the measures at issue. back to text
789. (footnote original) Panel Reports, EC — Export Subsidies on Sugar, para. 2.7; Panel Report, US — Upland Cotton, Annex L-1.7, para. 9; Panel Report, EC — Tariff Preferences, Annex A, para. 7; Appellate Body Report, US — 1916 Act, para. 150; Panel Reports, US — 1916 Act, para. 6.32; Appellate Body Report, EC — Hormones, para. 154; Panel Reports, EC — Bananas III, para. 7.9. back to text
790. (footnote original) Article 10.2 of the DSU indicates that the term “third party” is used throughout the DSU to refer to a Member that has “a substantial interest” in a matter before a panel, and which has notified its interest to the DSB. back to text
791. (footnote original) Panel Reports, US — 1916 Act, para. 6.33. back to text
792. (footnote original) Panel Reports, EC — Bananas III, para. 7.8; Panel Report, EC — Tariff Preferences, Annex A, para. 7. See also, Panel Reports, EC — Export Subsidies on Sugar, para. 2.5. back to text
793. (footnote original) Panel Reports, EC — Export Subsidies on Sugar, para. 2.5. back to text
794. (footnote original) Panel Report, EC — Tariff Preferences, Annex A, para. 7. back to text
795. (footnote original) Panel Reports, EC — Bananas III, para. 7.8. back to text
796. (footnote original) Panel Reports, EC — Bananas III, para. 7.8. back to text
797. (footnote original) Panel Reports, EC — Bananas III, para. 7.8. back to text
798. (footnote original) Panel Report, EC — Hormones (Canada), para. 8.17. back to text
799. (footnote original) Brazil submits that it has a significant economic interest in “the aircraft sector” (Letter from Brazil to the Panel, dated 21 December 2006, para. 6), that any findings concerning the relevant provisions of the SCM Agreement “in relation to the aircraft sector” are necessarily of direct and substantial economic interest to Brazil (Ibid., para. 6), that trade — distorting subsidies in “the aircraft sector” are considerably greater than the impact of similar policies on other industries (Ibid., para. 7), and that the interpretation of the SCM Agreement “as applied to the aircraft sector” may affect the way Brazil and other Members apply the relevant disciplines of the SCM Agreement to the “civil aircraft sector” (Ibid., para. 8). back to text
800. (footnote original) para. 7. back to text
801. (footnote original) Brazil has requested the Panel to grant it the “enhanced” third party right “to review and comment on the interim Panel Report, in particular the summary of Brazil’s arguments in the draft descriptive part of the Panel report”. In EC — Bananas III, the panel referred to the “normal practice” of permitting third parties to review the draft of the summary of their arguments in the descriptive part of the report (Panel Reports, EC — Bananas III, para. 7.9). Insofar as Brazil is merely requesting the Panel to permit Brazil to review and comment on the summary of its arguments contained in any descriptive sections of the Panel’s draft report, the Panel sees no reason to depart from the normal practice in WTO panel proceedings. We note that, while both the United States and the European Communities oppose Brazil’s request for “enhanced” third party rights, the United States considers that “the ability to comment on the description of its arguments in the draft descriptive part of the report” is “a right routinely provided to third parties, not an “enhanced” right”. Letter from the United States to the Panel, dated 9 February 2007, footnote 13. back to text
802. Panel Report, US — Large Civil Aircraft (2nd complaint), paras. 7.14 — 7.17. See also Panel Report, EC and certain member StatesLarge Civil Aircraft, paras. 7.164 — 7.167. back to text
803. Appellate Body Report, EC — Hormones, paras 152 — 153. See also Appellate Body Report, US — 1916 Act, para. 150. back to text
804. (footnote original) Canada Panel Report, para. 8.20. back to text
805. (footnote original) Adopted 25 September 1997, WT/DS27/AB/R. back to text
806. Appellate Body Report, EC — Hormones, paras. 154 — 155. back to text
807. Appellate Body Report, US — 1916 Act, para. 150. back to text
808. Panel Report, US — 1916 Act (EC), paras. 6.33 — 6.34. See also Panel Report, US — 1916 Act (Japan), paras. 6.33 — 6.34. back to text
809. (footnote original) Appellate Body Report [on EC — Hormones], para. 154. back to text
810. Appellate Body Report, US — 1916 Act, paras. 139 — 150. back to text
811. Panel Reports, US — Shrimp (Thailand) / US — Customs Bond Directive, paras. 7.3—7.4. back to text
812. Appellate Body Report, Chile — Price Band System, para. 163. back to text
813. Panel Report, Argentina — Poultry Anti-Dumping Duties, footnote 53. back to text
814. Panel Reports, EC — Trademarks and Geographical Indications (Australia), para. 7.86, and EC — Trademarks and Geographical Indications (US), para. 7.35. back to text
815. Panel Report, US — Upland Cotton, para. 6.54. back to text
816. Panel Report, US — Upland Cotton (Article 21.5 — Brazil), para. 8.28. back to text
817. Panel Report, Australia — Apples, paras. 7.76-7.78. back to text
818. (footnote original) For the purposes of these proceedings, the expression “preliminary written submissions of the parties to the dispute” refers to the preliminary written submissions by Canada of 13 May 2003 and the preliminary written submissions to be filed by the United States on 27 and 28 May 2003. back to text
819. Panel Report, Canada — Wheat Exports and Grain Imports, para. 6.6. back to text
820. Panel Report, US — Upland Cotton, para. 3. back to text
821. Panel Report, Australia — Automotive leather II (Article 21.5 — United States), para. 3.9. back to text
822. Panel Report, Australia — Salmon (Article 21.5 — Canada), paras. 7.5-7.6. back to text
823. Panel Report, Canada — Dairy (Article 21.5 — New Zealand and US), para. 2.34. back to text
824. (footnote original) We note, in this regard, that paragraph 6 of Appendix 3 to the DSU also links the participatory rights of third parties to this step in the proceeding. It states that third parties “shall be invited in writing to present their views during a session of the first substantive meeting of the panel”, (emphasis added) back to text
825. (footnote original) We note, in that respect, that the DSU does not place any limits on the number of submissions which panels can request of the parties in advance of the first meeting. back to text
826. Appellate Body Report, US — FSC (Article 21.5 — EC), para. 245. back to text
827. Decision by the Arbitrators, EC — Bananas III (US) (Article 22.6 — EC), para. 2.8. back to text
828. (footnote original) In this respect see footnote 138 in the Appellate Body Report on EC — Measures Concerning Meat and Meat Products (Hormones), adopted on 13 February 1998, WT/DS26/15, WT/DS48/13: “[T]he DSU, and in particular its Appendix 3, leave panels a margin of discretion to deal, always in accordance with due process, with specific situations that may arise in a particular case and that are not explicitly regulated. Within this context, an appellant requesting the Appellate Body to reverse a panels ruling on matters of procedure must demonstrate the prejudice generated by such legal ruling”. back to text
829. (footnote original) See paragraph 12. back to text
830. Decisions by the Arbitrators, EC — Hormones (US) (Article 22.6 — EC) / EC — Hormones (Canada) (Article 22.6 — EC), para. 7. back to text
831. (footnote original) Our decision may have been different if Australia had demonstrated that the countermeasures which Canada plans to adopt may affect Australia’s rights or benefits under the WTO Agreement. back to text
832. Decision by the Arbitrators, Brazil — Aircraft (Article 22.6 — Brazil), paras. 2.5-2.6. back to text
833. (footnote original) In EC — Hormones (Canada) (Article 22.6 — EC), EC — Hormones (US) (Article 22.6 — EC) Third-party rights were also requested, but not granted, in two other instances: Brazil — Aircraft, Award of the Arbitrator, paras. 2.4-2.6; and EC — Bananas III (US) (Article 22.6 — EC), Award of the Arbitrator, para. 2.8. back to text
834. (footnote original) See the arbitral awards in EC — Hormones (Canada) (Article 22.6 — EC), EC — Hormones (US) (Article 22.6 — EC), para. 7. back to text
835. Decision by the Arbitrators, US — Gambling (Article 22.6 — US), para. 2.31. back to text
836. (footnote original) The Panel examined relevant principles of international law, including the practice of the International Court of Justice in the Military and Paramilitary Activities in and Against Nicaragua case ([1984], ICJ Reports, pp. 430-431) and the Phosphate Lands in Nauru case ([1992], ICJ Reports, p. 259-262) cases (preliminary objections). back to text
837. Panel Report, Turkey — Textiles, para. 9.5. back to text
838. Panel Report, Turkey — Textiles, paras. 9.8-9.9. back to text
839. Panel Report, Turkey — Textiles, para. 9.10. back to text
840. (footnote original) See for instance the Panel Reports, EC — Bananas III, paras. 7.4-7.9; and EC — Hormones, paras. 8.12-8.15. back to text
841. (footnote original) Appellate Body Report on Japan — Alcoholic Beverages II, p. 13. back to text
842. Panel Report, Turkey — Textiles, paras. 9.11-9.12. back to text
843. (footnote original) We also note that the equivalent provisions in the Working Procedures for Appellate Review (see document WT/AB/WP/3 of 28 February 1997, Rules 23 and 24) do not have any such limitation either. In addition, as noted by the European Communities, co-complainants in a previous dispute have simultaneously participated as third parties to each others’ complaints. See, for instance, EC — Trademarks and Geographical Indications (DS174 and DS290), in which the United States and Australia were third parties to each others’ complaints. back to text
844. Panel Report, EC — IT Products, para. 7.78. back to text
845. Appellate Body Report, US — Shrimp, para. 101. back to text
846. Panel Report, Mexico — Corn Syrup, para. 7.41. back to text

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