RESTRICTED
WORLD TRADE WT/DSB/M/24
26November 1996
ORGANIZATION(96-4997)
DISPUTE SETTLEMENT BODY
16October 1996
MINUTES OFMEETING
Held intheCentre William Rappard
on16October 1996
Chairman: Mr.Celso Lafer (Brazil)
Subjects discussed Page
1. European Communities -Measures affecting livestock andmeat(hormones) 1
- Request byCanada fortheestablishment ofapanel 1
2. Japan -Measures affecting consumer photographic filmandpaper 2
- Request bytheUnited States fortheestablishment ofapanel
2
3. United States -TheCuban Liberty andDemocratic Solidarity Act 5
- Request bytheEuropean Communities andtheir member States forthe
establishment ofapanel 5
4. Proposed nominations fortheindicative listofgovernmental andnon-governmental
panelists 9
5. Adoption ofthe1996 Annual Report oftheDSB 9
6. Portugal -Patent protection under theIndustrial Property Act 12
- Statement bytheUnited States 12
7. Mutually agreed solutions 13
- Statement byIndia 13
8. United States -Import prohibition ofcertain shrimp andshrimp products 13
- Statement byThailand, onbehalf ofIndia, Malaysia andPakistan 13
1. European Communities -Measures affecting livestock andmeat(hormones)
- Request byCanada fortheestablishment ofapanel (WT/DS48/5)
TheChairman recalled thattheDSBhadconsidered thismatter atitsmeeting on27September
1996, andhadagreed torevert toitatthepresent meeting. Hedrew attention tothecommunication
from Canada inWT/DS48/5.WT/DSB/M/24
Page2
Therepresentative ofCanada recalled thatattheDSBmeeting on27September, theEuropean
Communities hadnotagreed totheestablishment ofapanel toexamine thismatter. Canada continued
toview these measures asunjustified andinconsistent withtheCommunities 'obligations under the
WTO. Therefore, forthesecond time, Canada wasrequesting theDSBtoestablish apanel toexamine
thismatter.
Therepresentative oftheEuropean Communities saidthathehadnosubstantive statement
tomake andthattheCommunities would abide bythedecision oftheDSBatthepresent meeting.
Therepresentative ofArgentina saidthathisdelegation wished toclosely follow thework of
thepanel inthisareagiven theveryhighshare ofArgentina intheworld meat trade. Herecalled
thestatement made byArgentina attheDSBmeeting on8May19961andreiterated thathiscountry
attached priority toarigorous andaconstructive application ofthedisciplines oftheAgreement on
theApplication ofSanitary andPhytosanitary Measures. Thisshould constitute thebasisinthesearch
forasolution tothismatter.
TheDSBtooknoteofthestatements andagreed toestablish apanel withstandard terms of
reference inaccordance withtheprovisions ofArticle 6oftheDSU.
Therepresentatives ofAustralia, NewZealand, Norway andtheUnited States reserved their
third-party rights toparticipate inthepanel proceedings.
2. Japan -Measures affecting consumer photographic filmandpaper
- Request bytheUnited States fortheestablishment ofapanel
(WT/DS44/2)
TheChairman recalled thattheDSBhadconsidered thismatter atitsmeeting on3October
1996, andhadagreed torevert toitatthepresent meeting. Hedrew attention tothecommunication
from theUnited States contained inWT/DS44/2.
TherepresentativeoftheUnitedStatessaidthaton13June1996,theUnitedStateshadrequested
consultations withJapan regarding thelatter'sspecific laws, regulations, andrequirements affecting
thedistribution, offering forsaleandinternal saleofimported consumer filmandpaper. Consultations
withtheaimofresolving thisdispute hadbeenheldon11July1996. They covered thefullrange
ofissues intheUScomplaint, including which specific measures constituted aviolation ofJapan's
obligations under GATT 1994. However, these discussions hadnotreached amutually satisfactory
solution. On3October 1996, theUnited States hadrequested theDSBtoestablish apanel butJapan
hadnotagreed thatthepanel beestablished. HisGovernment wassatisfied thatitsrequest wason
theagenda ofthepresent meeting forthesecond timewhich would permit thatapanel beestablished
inaccordance withArticle 6oftheDSU.
TheUnited States wasready topresent tothepanel evidence ofthebroad array ofmeasures
thatJapan hadputinplace, which wererestricting market access inthissector andwereinviolation
ofJapan'sobligations under GATT 1994. AstheUnited States hadpreviously emphasized these
measures included Japan'sactions: (i)toconsolidate itsprimary wholesale distribution system for
consumerphotographicmaterialsunderthecontrolofdomesticmanufacturers;(ii)toimposecumbersome
andnon-transparent restrictions onalternative channels formarketing film, suchaslarge scaleretail
stores; and(iii)tostifle theuseofpremiums andadvertising, tools typically usedbyforeign firms
1WT/DSB/M/16 .WT/DSB/M/24
Page3
toattract customers andgainmarket share. TheUnited States believed thatthesemeasures hadnullified
orimpaired benefits accruing toit,within themeaning ofArticle XXIII:1(a) ofGATT 1994asaresult
ofthefailure ofJapan tocarry outitsobligations under Articles IIIandXofGATT 1994. Inaddition,
byapplying these measures Japan hadnullified orimpaired, within themeaning ofArticle XXIII:1(b)
ofGATT 1994, thetariff concessions thatithadmade onconsumer photographic filmandpaper in
successive rounds oftariff negotiations.
Therepresentative ofJapan saidthatsincethisissueappeared ontheagenda oftheDSBmeeting
forthesecond time, hiscountry nolonger objected totheestablishment ofapanel because ofits
fundamental position tofullyrespect theprocedures laiddown inArticle 6.1oftheDSU. Nevertheless,
hewished todraw Members 'attention tothefactthattheUSrequest posed some serious problems
regarding theinterpretation ofArticle 6oftheDSU. Article 6.2oftheDSU stipulated thatarequest
fortheestablishment ofapanel "shall identify thespecific measures atissueandprovide abriefsummary
ofthelegalbases ofthecomplaint sufficient topresent theproblem clearly." Asstated attheDSB
meeting on3October 1996, Japan considered thattheUnited States hadnotdulyidentified some of
the"specific measures atissue", asrequired inArticle 6.2oftheDSU. Forexample: (i)reference
bytheUnited States totheterm"liberalization countermeasures" wasgeneric, andthustoogeneral
andambiguous tobe"specific measures"; (ii)attachment AtotheUSrequest which listed "distribution
measures"contained ameasure which theJapanese Government could notidentify, namely, the
"Administrative Guidance toPromote Rationalization ofDistribution System, 1966"; (iii)some other
expressions suchas:"butnotlimited to","other related measures, including guidelines", which appeared
inattachment A,aswellas"andrelated measures" attheendofthefirstparagraph implied thatthe
United States hadnotyetspecified allthemeasures atissue. Ifsucharequest were tobeaccepted
itwould mean thatinthefuture thecomplaining party could raise, during thepanel proceedings, any
measure itconsidered tofallwithin themeaning oftheterm"related measures". Therefore, Japan
believed thatpursuant toArticle 6.2oftheDSU, thescope ofthepanel should belimited tothemeasures
specified intheUSrequest, namely, thesixlawsidentified inthisrequest andtenmeasures contained
intheattachment A,thusexcluding the"Administrative Guidance toPromote Rationalization of
Distribution System, 1966". Under theseconditions, Japan would agree totheestablishment ofapanel
withstandard terms ofreference, inaccordance with Article 7oftheDSU.
Headded thattheUnited States, initsrequest forapanel, hadnotclearly indicated which
specific measure hadviolated which specific obligation under GATT 1994, andonwhatgrounds the
United States hadasserted thealleged violation. Sucharequest fortheestablishment ofapanel posed
serious problems inlightofArticle 6.2oftheDSU, which required acomplainant toprovide abrief
summary ofthelegalbasis ofthecomplaint sufficient topresent theproblem clearly.
Therepresentative oftheUnited States saidthathiscountry 'srequest forconsultations and
fortheestablishment ofapanel hadfullymettherequirements ofArticles 4and6oftheDSU. With
respect totherequest fortheestablishment ofapanel, theDSU required thatit"identify thespecific
measures atissue andprovide abriefsummary ofthelegalbasis ofthecomplaint". TheUSrequest
hadmetthisrequirement.
Itappeared thatJapan wastrying todivert theDSB'sattention fromtheimportant substantive
issues raised bytheUnited States, atactic usedattheDSBmeeting on3October 1996, when thiscase
firstappeared ontheagenda. Atthatmeeting, Japan hadtriedtodivert attention from aserious US
request toestablish apanel under theDSUbyitscounter-request forconsultations onrestrictive business
practices under the1960 Decision.2Itwasawell-established GATT principle written intotheDSU
inArticle 3.10, thatparties should accept requests forconsultations ingood faith, without linking
2WT/L/180WT/DSB/M/24
Page4
complaints andcounter-complaints. While hisGovernment regretted Japan'sapproach withrespect
tostandard terms ofreference, itwashopeful thatthetwoparties could workcooperatively incomposing
thepanel.
Therepresentative ofJapan saidthathiscountry hadnointention todivert attention from
substantive issues. Japan attached importance tothenewdispute settlement procedures which, inits
view, wasoneofthebestUruguay Round Agreements. Ithadnointention thattheresults ofthe
Uruguay Round negotiations beweakened intheimplementation process. Japan wasacting ingood
faithandhadnointention todivert attention fromimportant issues. However, inclusion intherequest
ofnon-existing matters could haveimplications onthecredibility ofthedispute settlement mechanism.
Therefore, the"Administrative Guidance toPromote Rationalization ofDistribution System, 1966"
should notbepartoftheterms ofreference andJapan could notaccept theterms ofreference proposed
bytheUnited States. Ifininterpreting theDSU itwasnotclearwhether standard terms ofreference
would notbelimited tothemeasures referred tobyJapan, hiscountry pursuant toArticle 7.3ofthe
DSU, wished theDSBtoauthorize theChairman todraw uptheterms ofreference inconsultations
withparties tothedispute withaviewtoeliminating theambiguous points intherequest. If,after
suchanexercise, ambiguity stillremained, Japan would reserve itsrights torequest thepanel tomake
aruling onthematter.
Therepresentative oftheEuropean Communities saidthattheCommunities hadasubstantial
interest intheJapanese market forconsumer photographic filmandpaper andhadtherefore followed
thedevelopments ofthiscasesince theinitiation ofconsultations inJune1996. TheUnited States '
complaint centred onproblems ofstructural barriers totheJapanese market andtheJapanese distribution
system. TheCommunities shared theseconcerns andagainst thisbackground continued totakeastrong
interest inthismatter since theoutset. Itintended tonotify substantial interest inthematter witha
viewtoparticipatingasathirdpartyinthepanelproceedings.Itlookedforwardtoreceivingsubmissions
from bothparties inorder toobtain afullunderstanding oftheirarguments inthese proceedings.
Thecaseunder the1960Decision onRestrictive Business Practices putforward thepotential
tradeeffects ofrestrictive business practices. TheCommunities alsoattached aconsiderable importance
tothisissue andwould liketoseeitproperly andexpeditiously dealt with. Henoted thatthe
Communities hadstillnotreceived anyreply from Japan toitsrequest tobejoined inconsultations
which theUnited States hadrequested withJapan pursuant tothe1960 Decision. Herecalled that
inAugust 1996, theUnited States hadaccepted therequest bytheCommunities tobejoined inthose
consultations andthatJapan hadreplied totheUnited States on3October 1996. Hisdelegation urged
Japan toprovide ananswer totheCommunities 'request tobejoined inthese consultations andnoted
withsome concern theintention oftheJapanese Government tomake participation insuchconsultations
conditional upon theacceptance bytheUnited States oftheJapanese request forconsultations onthe
samematter intheUSmarket. IntheCommunities 'viewsuchaposition wasinconsistent withcurrent
WTO practices anditwasappropriate fortheSecretariat toconfirm thisunderstanding, ifnecessary,
afterfurther analysis ofthelegalsituation which applied under the1960Decision, withrespect totwo
points:(i) thepossibility ofaparty torefuse third-party participation insuchconsultations; (ii)the
conditions under which suchparticipation might berefused.
TheChairman pointed outthatArticle 7.1oftheDSUstipulated thatpanels shallhavestandard
terms ofreference unless theparties tothedispute agree otherwise within 20daysfromtheestablishment
ofapanel. Herecalled thatinaccordance withArticle 7.3oftheDSU inestablishing apanel, the
DSBmayauthorize itsChairman todraw uptheterms ofreference ofthepanel inconsultation with
theparties tothedispute. Hetherefore enquired whether theDSBwished toauthorize himtohelp
indrawing uptheterms ofreference ofthepanel inconsultations withtheparties concerned.WT/DSB/M/24
Page5
Therepresentative oftheUnited States saidthatArticle 7.1oftheDSU stated thatstandard
terms ofreference shallapply unless parties agree otherwise within thenext20days. Article 7.3
oftheDSU referred tobyJapan wassubject toArticle 7.1oftheDSU. Therefore, ifJapan wished
todiscuss itsconcerns withtheUnited States within thenext20days, itwasfreetodoso,butthere
wasnoneedfortheChairman todraw uptheterms ofreference. Under Article 7.1oftheDSU after
20daysstandard terms ofreference would apply.
TheChairman saidthatheandtheSecretariat would beavailable tohelptodrawuptheterms
ofreference ofthepanel iftheparties found itnecessary.
Therepresentative ofJapan saidthatintheabsence ofanyprecedent inthismatter, itwas
important thatthecorrect procedure wasfollowed. Ifanyambiguity remained onthisissuethepanel
would beobliged todiscuss it.
TheDSBtooknoteofthestatements andagreed toestablish apanel withtheterms ofreference
tobedrawn upbytheparties tothedispute within 20daysinaccordance withArticle 7.1oftheDSU.
Therepresentatives oftheEuropean Communities andMexico reserved theirthird-party rights
toparticipate inthepanel.
Therepresentative ofJapan, inresponse tothepoint raised bytheEuropean Communities
concerning theinterest inparticipating inconsultations requested bytheUnited States withJapan under
the1960 Decision, saidthatithadbeenobvious on3October 1996, whyJapan could notreply to
thisrequest. Onthatday,Japan hadsaidthatitwould accept theUSrequest forconsultations under
the1960 Decision oncondition thattheUnited States would accept Japan'srequest forconsultations
onthesame matter. Thereply from theUnited States hadonlybeenreceived thatmorning. After
careful examination ofthisreply, Japan would reply totheCommunities.
Headded thathecould notunderstand whyJapan wasbeing criticized formaking thesame
request withregard totheUSmarket. Thefilmmarket inJapan wasa"mirror-image" ofthemarket
intheUnited States. Kodak hadseventy percentofthemarket share intheUnited States withthe
remaining thirty percentforother producers. InJapan, theshare ofFujiwasabout seventy percent
withthirty percentforother producers, including European producers. Therefore, Japan wasfully
entitled torequest similar consultations.
TheDSBtooknoteofthestatement.
3. United States -TheCuban Liberty andDemocratic Solidarity Act
- Request bytheEuropean Communities andtheirmember States fortheestablishment
ofapanel (WT/DS38/2 andCorr.1)
TheChairman drewattention tothecommunication fromtheEuropean Communities andtheir
member States contained inWT/DS38/2 andCorr. 1.
Therepresentative oftheEuropean Communities saidthattheCommunities 'concern withthe
USlegislation wasnotitsobjectives, buttheextra-territorial means chosen toachieve those objectives
andtheiradverse effect ontheCommunities 'tradeingoods andservices. TheCommunities objected
totheUnited States trying toforce other countries tofollow itsownforeign policy objectives through
boththethreat andactual imposition oftrade sanctions. Theprinciple, thatcountries should refrain
from trying toforce theirownpolicies onother Members through measures thatwere incompatibleWT/DSB/M/24
Page6
withWTO rules, waswell-established intheWTO jurisprudence, notably thesecond tunapanel.3
TheCommunities alsoobjected tojurisdiction exerted bytheUnited States overcompanies registered
intheCommunities andcontrolled bytheUSindividuals orcompanies insuchawayastoforce such
companies tofollow theUSforeign policy objectives.
Since June1996, theCommunities, acting onitsownbehalf andthatofitsmember States,
hadheldthree rounds ofconsultations withtheUnited States ontheHelms-Burton Actand"related
measures". By"related measures" wasmeant allpreviously existing anti-Cuba legislations referred
toandsometimes reinforced intheHelms-Burton Act. These consultations hadbeenheldpursuant
toArticle XXIII:1 ofGATT 1994 andArticle XXIII:1 ofGATS. Thefirsttworounds hadbeenheld
inGeneva, andthethirdoneinWashington D.C. These consultations, especially thelastround, had
clarified thefactsandthelegalassessment, buthadnotsolved theproblem.
TheUnited States hadtemporarily andpartially suspended therightofUScitizens under title
IIIoftheHelms-BurtonActtobringcivillawsuitsagainstpersons"trafficking"innationalizedproperties
inCuba towhich theUSnationals heldaclaim. Ithadalsodecided nottoapply intheyeartocome
thecertification provisions forimports ofspecialty sugar. Butthese provisions werestillintheAct,
andweremandatory andcould bere-introduced atanymoment. TitleIVoftheHelms-Burton Act,
whichprovidedfortheexclusionfromtheUnitedStatesofpersons"trafficking"innationalizedproperty,
wasalready fullyinforce andwasbeing applied against theCommunities 'citizens. Likewise, the
economic embargo provisions werefullyoperational andinuse.These provisions applied against the
Communities 'ships trading withCuba aswellasgoods from Cuba, evenifsuchgoods hadbeen
transformed intodifferent products oftheCommunities 'origin.
Thisstateofaffairswasunacceptable.TheCommunitiesbelievedthattheUSmeasuresidentified
initsrequest fortheestablishment ofapanel were inviolation ofanumber ofprovisions ofGATT
andGATS. These measures, eveniftheywerenotinconflict withWTO rules, nullified orimpaired
benefits accruing totheCommunities under GATT andtotheCommunities anditsmember States under
GATS. Finally, theCommunities believed thattheUSmeasures impeded theattainment ofcertain
general objectives ofGATT, suchastheexpansion ofproduction andtrade andtheright ofaccess
tomarkets. Consequently, theCommunities requested theestablishment ofapanel toruleontheissues
identified intherequest fortheestablishment ofapanel. Should theUnited States beunwilling to
accept theestablishment ofapanel atthepresent meeting, theCommunities would request thatthe
matter beputontheagenda ofthenextregular meeting oftheDSBscheduled for20November 1996.
TheCommunities requested thepanel tohavestandard terms ofreference orsuchterms asmight be
agreed between theparties tothedispute under Article 7oftheDSU.
Therepresentative oftheUnited States saidthaton3October 1996, theEuropean Communities,
acting foritselfanditsMember States, hadrequested theestablishment ofapanel ontheCuban Liberty
andDemocratic Solidarity (LIBERTAD) Actof1996, commonly referred toastheHelms-Burton Act.
TheCommunities hadrequested thatthepanel alsoexamine whatitreferred toas"related measures".
These measures governed theUnited States 'economic relations withCuba. TheUSPresident had
signed theLibertad Actintolawon12March 1996, intheaftermath oftheunjustified shooting down
oftwounarmed UScivilian aircraft bytheCuban Government. Thatattack, which wasinblatant
violation ofinternational law,hadresulted inthedeaths ofthreeUScitizens andonepermanent resident.
Thishadrequired astrong response bytheUnited States.
Cuba'sjetattack hadbeenthelatest inaserious ofactions taken bytheCuban Government
overthepast35years thathaddirectly affected theUSinterests. TheLibertad Act,together with
3DS29/R.WT/DSB/M/24
Page7
theCuban Democracy Actof1992, theFood Security Actof1985, andtheCuban tradeembargo dating
from the1960s, reflected theabiding USforeign policy andsecurity concerns withregard toCuba
pursued byeight USPresidents. TheLibertad Actwasdesigned topromote aswift transition to
democracy inCuba, agoalshared bytheCommunities anditsmember States. Given theforeign policy
andsecurity concerns underpinning decades ofUSrelations withCuba, andinthelightofthecommon
interests shared withitsEuropean friends withregard toCuba, theUnited States wassurprised and
concerned tofinditstactical andforeign policy differences overCuba raised before amultilateral trade
forum. TheCommunities 'request hadcitedsixdifferent measures, onlytwoofwhich were really
new. President Clinton hadsuspended theoperation ofoneofthose provisions, which reflected in
partadesire bytheUnited States towork inpartnership withother Governments onencouraging a
transition todemocracy inCuba. Indeed, thePresident hadappointed aspecial envoy toexplore with
theEuropean andother Governments jointinitiatives topromote thetransition todemocracy inCuba.
Through thisbilateral channel, theUnited States hadproposed anumber ofinitiatives, including a
setofprinciples forcompanies doing business inCuba, channelling assistance through independent
non-governmental organizations, provision ofnational media toCuban citizens, andoutreach tothose
inCuba working tofoster reform.
Theonlyother newprovision citedbytheCommunities initsrequest forapanel governed
theentry intotheUnited States ofcorporate officials whose companies "trafficked" inconfiscated US
property inCuba. Thisprovision hadyettobeapplied toEuropean firms. Even ifitwere, thetrade
andinvestment effects would benegligible. Theinclusion ofanumber ofpre-existing measures in
theCommunities'requestsuggestedthattherewasinfactverylittlenewfortheCommunitiestocomplain
about ontrade grounds intheLibertad Act. Thisunderlined thattheUnited States 'dispute withthe
Communities wasnotfundamentally atrade matter. Indeed, theCommunities hadnotsuggested that
theUSpolicy withregard toCuba generally, ortheLibertad Actinparticular, wasmotivated bytrade
protectionism. Inthisregard, theUnited States would invite theCommunities anditsmember States
toreflect onthefactthatcertain measures included initsrequest fortheestablishment ofapanel had
notonlybeeninforce forsome years, ordecades, buthadbeenexpressly justified bytheUnited States
under theGATT 1947 asmeasures taken inpursuit ofessential USsecurity interests.
Inthelightofthishistory, andgiven theminimal tradeandinvestment effects oftheLibertad
Actonoverall European interests, theUnited States asked theCommunities toreconsider whether to
press theirgrievances overtheUSpolicy withregard toCuba before theWTO. Thisorganization
hadbeenestablishedtomanagetraderelationsbetweenMembergovernments--notdiplomaticorsecurity
relations thatmight haveincidental trade orinvestment effects. TheCommunities anditsmember
States might wishtoconsider whether theWTO waswellequipped toaddress, letalone resolve, the
typeofdisagreement theyhadbrought totheDSB. Inparticular, itwasworth thinking veryconcretely
whattheCommunities anditsmember States would expect toachieve byinvoking thedispute settlement
proceedings intheWTO andwhat suchproceedings might putatrisk. TheUnited States found it
difficult toseeanydesirable result forthisbody, theUnited States, orother Members through the
course ofaction thattheCommunities anditsmember States hadproposed. Byinjecting this
disagreement regarding Cuba withtheUnited States overforeign andsecurity policy intotheWTO,
theCommunities hadtaken thisorganization intounexplored territory. Forthatreason, theUnited
States would notjoinaconsensus toestablish apanel atthepresent meeting. Hesuggested thatbefore
embarking onsuchacourse ofaction, theparties concerned should stepbackandtakethenecessary
timetoconsider another path.
Therepresentative ofAustralia saidthathercountry wished toregister strong concerns atthe
USmeasures, which itconsidered tobeunreasonable inregard tothetrade implications forthird
countries. There wasconcern withrespect tothepossible effects suchprovisions could haveon
Australia 'scommercial interests anditsWTO rights. Australia would continue tomonitor thesituationWT/DSB/M/24
Page8
closely fortheimplications oftheUSlegislation onitstradeandeconomic interests, including itsWTO
rights, andwould continue toexamine options forfuture actions tosafeguard itsinterests.
Therepresentative ofBolivia, speaking onbehalf ofmembers oftheRioGroup4,reiterated
theDeclaration made bythemembers oftheRioGroup on23May1995, aswellasthe1995 Quito
Presidential Declaration. TheGroup hadcondemned anyimposition ofsanctions ortrade restrictions
asprovided forintheCuban Liberty andDemocratic Solidarity Act. TheGroup hadrejected the
adoption ofthislegislation which violated principles andrulesofinternational law,theUnited Nations
Charter, infringed WTO principles andwascontrary tothespirit ofcooperation andfriendship which
should characterize relations between thecountries ofthehemisphere. TheGroup wasconcerned at
thescope oftheActwhich disregarded thefundamental principle ofthesovereignty ofstates since
itimplied extra-territorial application ofdomestic law.Iturged theUnited States toconsider thenegative
effects oftheimplementation oftheCuban Liberty andDemocratic Solidarity Act.
Therepresentative ofCanada noted thestatements made atthepresent meeting andsaidthat
likeother Members, hercountry continued tohaveconcerns withtheHelms-Burton Actwhich Canada
hadalready raised onanumber ofoccasions withtheUnited States bothintheWTO andinother fora.
Therepresentative ofCuba saidthathedidnotintend toreply tothepolitical statement made
bytheUnited States. Suchareply would beprovided byCuba inother fora,inparticular intheUN
General Assembly inthecontext oftheUnited States 'blockade against Cuba. Theissue raised by
theCommunities wasveryimportant andithadimplications beyond thebilateral relations between
theUnited States andCuba. Ithadbecome asubject ofworld-wide interest related tothepreservation
ofbasic principles ofthemultilateral trading system, theimplementation oftheUruguay Round
Agreements, andtherejection oftheunilateral andextra-territorial practices ininternational trade.
Cuba hadanalyzed thearguments presented bytheCommunities inWT/DS38/2 andconsidered that
thisdocument constituted agood legalbasis fortheDSBtoconduct itswork inanimpartial manner
ensuring theprimacy ofthelawandcompliance withtheWTO rules. Cuba fullysupported andendorsed
theCommunities 'initiative. Atthepresent meeting, hisdelegation didnotintend toanalyze theHelms-
Burton Actandother USlegislations which wereincompatible withtheWTO principles andobjectives
orviolated important Articles ofGATT 1994andother Uruguay Round agreements, thereby impairing
therights ofCuba andother Members. Hereferred toprevious statements made byCuba onthismatter
atthemeetings oftheGeneral Council5andtheCouncil forTrade inGoods6.
Therepresentative ofMexico saidthatthismatter wasofinterest toMexico notonlybecause
thislegislation haddirectly affected Mexican enterprises butalsobecause ithadimplications forthe
multilateral trading system. Mexico noted thestatements bytheCommunities andtheUnited States,
andreserved itsrights under theWTO withregard tothismatter.
Therepresentative ofIndia saidthathiscountry hadstrong concerns withrespect totheUS
legislation, inparticular, withthenotion ofextra-territoriality implied therein. Thiscould haveserious
implications forthehealth ofastrong, rule-based multilateral trading system.
Therepresentative ofSwitzerland saidthathiscountry hadalready expressed itsconcerns that
theHelms-Burton Acttended toextend theUSjurisdiction totheterritory ofother sovereign states.
4Argentina,Bolivia,Brazil,Chile,Colombia,CostaRica,Ecuador,Mexico,Panama, Paraguay,Peru,Trinidad
andTobago, Uruguay andVenezuela.
5WT/GC/M/11 .
6G/C/M/9 .WT/DSB/M/24
Page9
Thiscould conflict, insome cases, withtheinternational obligations oftheUnited States. Itcreated
insecurity forforeign investors andhampered theinvestment climate ingeneral. Furthermore, itcould
alsocreate trade restrictions. Switzerland reiterated thatitreserved itsrights under theWTO onthis
matter.
TheDSBtooknoteofthestatementsandagreedtoreverttothismatteratitsnextregularmeeting
tobeheldon20November 1996.
4. Proposed nominations fortheindicative listofgovernmental andnon-governmental panelists
(WT/DSB/W/40)
TheChairmandrewattentiontodocumentWT/DSB/W/40containingadditionalnamesproposed
byMembers forinclusion ontheindicative listinaccordance withArticle 8.4oftheDSU. Heproposed
thattheDSBapprove thenames contained therein.
TheDSBsoagreed.
5. Adoption ofthe1996 Annual Report oftheDSB(WT/DSB/W/37)
TheChairman saidthatinpursuance oftheReporting Procedures fortheSingapore Ministerial
Conference contained inWT/L/145, adrafttextofthe1996 Annual Report oftheDSB(hereinafter
referred toas"The Annual Report") contained inWT/DSB/W/37 wassubmitted foradoption. This
report covered thework oftheDSBsince theprevious overview ofWTO activities heldinDecember
1995. Heproposed thatfollowing itsadoption, theSecretariat beauthorized toupdate theAnnual
Report under itsownresponsibility inorder toinclude actions taken bytheDSBatitsmeeting on3
October andatthepresent meeting. Theupdated Annual Report would thenbecirculated on28October
andsubmitted totheGeneral Council atitsmeeting on7November. Healsoproposed thatanyactions
takenbytheDSBatmeetingsafter16October,beincludedbytheSecretariatunderitsownresponsibility
intheAnnual Report tobesubmitted totheMinisterial Conference inDecember 1996.
Finally, heinvited Members toagree toaproposal thatanannex beattached totheAnnual
Report which would contain anoverview ofthestateofplayofWTO disputes, prepared under the
responsibility oftheSecretariat. However, ifdelegations hadanyquestions orproblems withthis
proposed attachment theywere invited toconsult directly withtheSecretariat. Ifthere were any
objections, theannex would beremoved fromtheAnnual Report before itssubmission totheGeneral
Council on7November 1996. Thisproposal hadresulted from interest expressed byanumber of
delegations inhaving thistypeofinformation inthereport fortheMinisterial Conference. Theannex
would provide thestateofplayofWTO disputes inacomprehensive waytocomplement theAnnual
Report which included information onameeting-by-meeting basis.
Heinformed Members thathehadreceived afewfactual corrections from delegations with
regard totheAnnual Report which would beincorporated inthetextbytheSecretariat andsome
comments ofadrafting nature withregard toSection 12entitled "Summary conclusions" which did
notaffect thesubstance ofthesection. Inthelightofthesecomments hehadprepared atextindicating
theproposed deletions andadditions tothissection, which wascirculated toMembers atthepresent
meeting. Hethendrew attention tothose suggestions.
TherepresentativeofCanadasaidthathercountryfullysubscribedwiththeproceduresoutlined
bytheChairman, butwished tomake some general comments. Herdelegation hadreviewed theAnnual
Report andhadappreciated theeffort putintoitspreparation especially withregard tothefactual part.WT/DSB/M/24
Page10
However, inherdelegation 'sview theformat ofthefactual partoftheAnnual Report wasnot
particularly informative oruseful forthepurpose ofmostreaders andtherefore welcomed theproposal
foranannex concerning thestateofplayofWTO disputes. Thismight serve better thepurposes of
thefactual partoftheAnnual Report andherdelegation would appreciate anearly circulation ofthis
annex.
With regard toSection 12entitled "Summary conclusions" ofthisreport, Canada recognized
thatthere hadbeennocorresponding section inthe1995 Annual Report oftheDSB andtherefore
welcomed thisinitiative. Thiswasaparticularly useful section andCanada encouraged maintaining
andperhaps evenelaborating itinthefuture. Although notproposing anydrafting changes, itwished
toregister onecomment withregard tothepenultimate paragraph ofSection 12oftheAnnual Report.
Thereport recognized thatworking practices hadbeendeveloped tosolve problems inapragmatic
manner, butCanada wished topoint outthattodate,theexperience ofMembers withthesystem had
revealed anumber ofissues thatrequired further reflection. Asthese issues hadnotimpeded the
functioning ofthedispute settlement system therewasnoneedtoconsider themintheimmediate future
butMembers should keepthem inmind, tobedealtwithfullyattheappropriate time.
Therepresentative oftheUnited States noted thecomments presented bytheChairman. With
regard tothe"Summary conclusions" hesuggested thefollowing: (i)theoverlap between thefourth
andfifthparagraph should beeliminated; and(ii)inthesecond paragraph thetextafterthefirstcomma
inthefourth sentence should bedeleted asitunderstated thedegree withwhich theAppellate Body
hasmodified panel'sfindings. Hisdelegation alsowished tosuggest thatthereference concerning
transparency should reflect theprogress made intheareaofdocumentation asaresult ofthe
implementation oftheGeneral Council 'sDecision of18July1996, onderestriction ofdocuments.
Hisdelegation would submit further comments totheSecretariat.
Therepresentative oftheEuropean Communities saidthathisdelegations shared some ofthe
general observations made byother Members concerning thereadability andattractiveness toreaders
oftheAnnual Report. However, itwasimportant thattheAnnual Report beapproved asexpeditiously
aspossible. TheCommunities welcomed thesuggestion oftheaddition ofanannex containing the
stateofplayofWTO disputes andwould welcome anearly opportunity toseesuchanannex. He
suggested thatfurther thought begiven toaperiodic update ofthestateofplayofWTO disputes for
theinformation oftheDSBmembers. Inthepenultimate paragraph ofSection 12,theCommunities
would prefer thedeletion oftheword "however" fromthesentence: "Inmostcases, however, working
practices havebeendeveloped".
TheChairman thanked theCommunities forthesupport notonlytoinclude thestateofplay
oftheWTO disputes asanannex butforthesuggestion tocirculate periodically theupdate ofsuch
adocument toMembers.
Therepresentative ofIndia saidthathehadalready indicated totheSecretariat twocomments
which should bereflected intheAnnual Report. Atthepresent meeting hewished todraw attention
totwoimportant points. Firstonpage4oftheAnnual Report under item6there wasafootnote
referring todocument WT/DSB/W/35. Ashehadindicated attheoutset ofthemeeting hewould make
astatement onthismatter under "Other Business". Hetherefore proposed twooptions either thefootnote
beremoved orfollowing hisstatement under "Other Business" itbeappropriately elaborated toreflect
hisstatement.
Withregard tothe"Summary conclusions", hedrew attention tothethirdlastparagraph, and
inparticular tothesentences: "The DSBhasmoved beyond theGATT dispute settlement procedures
through theprogressive development intheDSUofpastpractices" and"Ittherefore provides Members
withboththepossibility ofreaching mutually satisfactory solutions tothatdispute andwiththecertaintyWT/DSB/M/24
Page11
ofalegalsolution tosuchadispute when necessary". Hewasunclear whether the"it"inthesecond
sentence referred totheDSU ortheDSB. Hethought itshould beclarified tomean theDSU.
Therepresentative ofKorea supported theproposals made bytheprevious speakers suggesting
addition ofsome valid points oramendments. Hesaidthatsince theDSBwasasemi-judiciary body
oftheWTO, inmostcases itwasdealing withproceedings which frequently involved automaticity.
Therefore given theparticular character ofthisbody, thesummary conclusions should avoid any
subjective, political oreconomic interpretation oranyassessment ofitswork. Summary conclusions
which were neutral andfactual aswellasdescriptive would bepreferable forthisAnnual Report.
With respect tofullevaluation oftheDSB'sfunctions anditswork heproposed thatitbedonein
1998 forthenextMinisterial Conference.
Heproposed thatinparagraph 3ofthe"Summary conclusions" thesentence "there areanumber
ofcomments thatmaybemade inthelightoftheDSBexperience" bereplaced by"thefollowing
conclusions, interalia,maybedrawn". Furthermore, inthisparagraph hefound thereference tothe
Unites States asunnecessary. Healsobelieved thatthedistinction between developing anddeveloped
countries wasinappropriate.
Withrespecttothelastsentenceofthefifthparagraph,namely:"Todate,theDSBhasreceived
sixnotifications reporting thatthemutually agreed solution wasfound andtheChairman oftheDSB
hasencouraged Members tomake fulluseofthisprovision" hethought thattheemphasis should be
placed onthefulfilment ofobligations byMembers asprovided forinArticle 3.6oftheDSU.
Therefore, hesuggested thattheabove-mentioned sentence readasfollows: "theDSBChairman has
urged theMembers tofulfil theirobligations under thisprovision." Inthenextparagraph, thefirst
sentence wasnotnecessary. Inthesentence "among itsfunctions theDSBadministered theindicative
listofgovernmental andnon-governmental panelists", itwasnecessary toindicate howmany panelists
were governmental andnon-governmental.
With regard tothethirdlastparagraph inviewofhisdelegation 'sposition regarding quasi-
judicial nature oftheDSBhequestioned theappropriateness ofthewords "spirit ofpragmatism" and
"greater cooperation". Inthepenultimate paragraph hethought thatitwould beuseful toidentify the
problems thathadarisen intheoverall operation ofthesystem. With respect tothelastparagraph
hebelieved thatthelanguage should beneutral andsuggested thedeletion oftheword "successful".
TheChairman saidthattheDSBwasmore thanaquasi-judicial body, having special functions
oftheGeneral Council. Itwasarule-oriented anddiplomatic body. Hebelieved thattheword
"pragmatism"reflectedatwo-trackpossibilityavailableundertheDSU.Throughconsultationsitoffered
apossibility ofnegotiated solution thatshould beconsistent withthecovered agreements. Alegal
trackwaspossible intheabsence ofagreement. Heinterpreted pragmatism tomean these twodistinct
possibilities which demonstrated theflexibility oftheDSUandtheDSB. Itwashardtomeasure success
oftheDSBinquantitative terms since itwasnottheaimoftheDSBtoestablish many panels.
Therepresentative ofNorway stated thathisdelegations shared someofthecomments regarding
readability ofthefactual partoftheAnnual Report. Hisdelegation supported theideathatanannex
beattached totheAnnual Report. Withregard tothe"Summary conclusions", hisdelegation thought
thatthissection would contribute tothevalue ofthereport andmake iteasier forMinisters inSingapore
todraw some conclusions. Norway hadalready submitted some comments andwelcomed informal
consultations which would beheldonthissubject. Itsupported thecomments regarding pragmatism.
Itthought thatdispute settlement intheWTO wasmuch more thanpurelitigation since theDSU had
expanded andadded tothescope formutually satisfactory settlements ascompared withGATT 1947.WT/DSB/M/24
Page12
Therepresentative ofHong Kong saidthathisdelegation supported thisdraftAnnual Report
together withtheproposals made bydelegations toimprove thetext. With regard totheparagraph
ofthe"Summaryconclusions"whichreferredtothemutuallyagreedsolutionsprovidedforunderArticle
3.6oftheDSU, hesaidthatArticle 3.5oftheDSUwhich stated thatmutually agreed solutions should
beconsistent withtheWTO Agreement should alsobereflected inreport. Additional factual comments
byhisdelegation would beshortly submitted totheSecretariat.
TheChairman proposed thattheDSB adopt theAnnual Report inWT/DSB/W/37 onthe
understanding thattheSecretariat would update theAnnual Report under itsownresponsibility and
incorporate drafting suggestions inanewtextwhich would becirculated toMembers together with
anannex onthestateofplayofWTO disputes. Following itscirculation, Members could make their
comments totheSecretariat. Ifnecessary, theChairman would holdconsultations onthisdocument.
TheDSBtooknoteofthestatementsandadoptedtheAnnualReportcontainedinWT/DSB/W/377
ontheunderstanding thatdrafting amendments proposed byMembers withregard tothe"Summary
conclusions" beincluded inthetextandcirculated together withanannex asproposed bytheChairman.
Ifnecessary, informal consultations would beheldonthismatter. TheDSBauthorized theSecretariat
toupdate theAnnual Report under itsownresponsibility.
6. Portugal -Patent protection under theIndustrial Property Act(WT/DS37/2)
- Statement bytheUnited States
Therepresentative oftheUnited States, speaking under "Other Business, saidthathiscountry
waspleased toinform theDSBthattheUnited States andPortugal hadresolved theirdispute onthe
interpretation andimplementation oftheobligations under Articles 33and70.2oftheAgreement on
Trade-RelatedAspectsofIntellectualPropertyRights(TRIPS).TheTRIPSAgreementobligedMembers
toprovide atermofprotection consistent withArticle 33toallpatents inforce, andtoallpatents granted
onapplications thatwere pending, onthedateofentry intoforce oftheTRIPS Agreement tothat
Member.
Inkeeping withthese obligations, Portugal hadissued aDecree inAugust 1996, clarifying
thatallpatents inforce, andallpatents granted onapplications thatwerepending on1January 1996,
would receive atermofprotection thatwasthelonger of15years fromgrant --Portugal 'sprevious
term--and 20years from thedateofapplication.
TheUnited States andPortugal hadjointly notified thesettlement ofthismatter totheDSB
inwriting on3October 1996. Thedocument circulated toMembers on8October 1996, asWT/DS37/2
hadincorrectly identified thenotification ascoming onlyfromtheUnited States. TheSecretariat had
assured theUnited States thatthiserror would becorrected8.TheUnited States waspleased thatthe
WTO dispute settlement procedures hadmade itpossible toachieve anamicable andspeedy solution
inthiscase.
TheDSBtooknoteofthestatement.
7Following itsadoption, theAnnual Report wascirculated inWT/DSB/8 andCorr.1 andAdd.1.
8WT/DS37/2/ Corr.1 .WT/DSB/M/24
Page13
7. Mutually agreed solutions
- Statement byIndia
Therepresentative ofIndia, speaking under "Other Business", thanked theChairman andthe
SecretariatforpreparingthedocumentWT/DSB/W/35,dated7August1996,onnotificationofmutually
agreed solutions under Article 3.6oftheDSU. Herecalled thattheSecretariat hadprepared thisvery
carefully worded paper inresponse toIndia'srequest made attheDSBmeeting on24April 1996.
However, hehadsome concerns regarding theapproach ofthispaper, butdidnotthink thatitwas
appropriate toraisethem atthepresent meeting inviewofthepreparatory work fortheMinisterial
Conference. Hisownthoughts onthissubject wereevolving andhewasstillintheprocess ofexamining
thismatter anddiscussing thesubject withcolleagues. Hetherefore onlywished toregister hisconcerns
about some oftheelements inthispaper without going intodetails ontheunderstanding thatafter7
November 1996, hewould make adetailed statement explaining hispoint ofviewonthisdocument.
Hetherefore reserved India'sposition onthisdocument tomake adetailed statement onthissubject
atalaterdate.
TheDSBtooknoteofthestatement.
8. United States -Import prohibition ofcertain shrimp andshrimp products (WT/DS58/1)
- Statement byThailand, onbehalf ofIndia, Malaysia andPakistan
Therepresentative ofThailand, speaking under "Other Business", onbehalf ofIndia, Malaysia
andPakistan, informed theDSBthaton8October 1996, theabove-mentioned countries hadsubmitted
ajointcommunication (WT/DS58/1) requesting consultations withtheUnited States pursuant toArticle
4oftheDSUandArticle XXII:1 ofGATT 1994, regarding thebanimposed bytheUnited States with
regard totheimportation ofshrimp andshrimp products from these countries under Section 609of
theUSPublic Law101-162, andtherelevant regulations. Section 609oftheUSPublic Law101-162
provided fortheprohibition ofshrimp orshrimp products which hadbeenharvested withcommercial
fishing technology which could adversely affect certain endangered species ofseaturtles.
On30April 1996, theUSDepartment ofState hadcertified 36nations which metthe
requirements setinSection 609oftheUSPublic Law101-162 andcould continue toexport shrimp
totheUnited States. Shrimp fromother nations including India, Malaysia, Pakistan andThailand had
beenembargoed effective 1May1996, except for8nations thathadbeenannounced ascountries only
harvesting shrimp using manual means andthusdidnotadversely affect seaturtles. Asaresult, shrimp
andshrimp products could notbeimported intotheUnited States intheabsence ofdeclaration orproof
thatsuchshrimp andshrimp products hadbeenharvested inamanner which didnotadversely affect
seaturtles.
Therefore, Thailand considered thattheUnited States hadfailed tocarry outitsobligations
andcommitments under several provisions oftheWTO Agreement, including butnotlimited toArticle
I,XIandXIIIofGATT 1994, andthatsuchfailure wasnotjustified byanyprovision oftheWTO
Agreement including theexceptions laiddawn inArticle XXoftheGATT 1994. Italsoconsidered
thatthesemeasuresnullifiedorimpairedbenefitsaccruingtotherespectivecountriesdirectlyorindirectly
under theWTO Agreement. Itlooked forward toreceiving aprompt response fromtheUnited States
withrespect tosetting avenue anddateforconsultations which, itbelieved, would result inamutually
satisfactory solution tothismatter.
TheDSBtooknoteofthestatement.