RESTRICTEDWORLD TRADE
ORGANIZATIONWT/GC/W/144
5 February 1999
(99-0458)
General Council Original:  English
PROCEDURES FOR AMENDMENT AND INTERPRETATION OF THE DISPUTE
SETTLEMENT UNDERSTANDING
Response to European Communities’ Request for an Authoritative
Interpretation of the Dispute Settlement Understanding
Pursuant to Article IX:2 of the WTO Agreement
Communication from the United States
The following communication addressed to the Chairman of the General Council and dated
4 February 1999 has been received from the Permanent Mission of the United States with the request
that it be circulated to Members.
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On 25 January 1999, the Secretariat circulated to the General Council a document submitted
by the European Communities (EC) styled as a request for an “Authoritative Interpretation Pursuant
to Article IX:2" concerning key articles and provisions of the Dispute Settlement Understanding
(WT/GC/W/133).  The EC has also requested that consideration of this document be placed on the
agenda of the February 16 meeting of the General Council.  However, in reality the EC is asking the
General Council to amend the substantive provisions of the DSU, and this request cannot legally beconsidered except pursuant to the provisions of Article X:8 of the WTO Agreement.
Addressing the EC’s request as an “interpreta tion” of the DSU would directly contradict the
last sentence of Article IX:2 of the WTO Agreement.  Article IX:2  states clearly that “This paragraph
shall not be used in a manner that would undermine the amendment provisions in Article X.”  Actionby the General Council in response to the request in WT/GC/W/133 thus would be inconsistent with
the WTO Agreement and would needlessly damage the institutional fabric of this organization.  A
vote on this matter would have far-reaching implications for the operation of the WTO in the future.
The General Council can only address the EC’s  request in a manner that reflects its true
nature as a proposal to amend the DSU.  Indeed, the EC is free to propose an amendment to the DSU
at any time pursuant to the provisions of Article X:8 of the WTO Agreement.  In Article X, the
drafters wisely required that any amendments to the DSU are to be approved by consensus.  The
consensus requirement requires any difference of views to be resolved by negotiation and agreement
among all affected Members – not by voting.  The General Council must vigorously defend theArticle X safeguards on the WTO amendment process, and oppose any attempt by the EC to seek
General Council actions in disregard of the last sentence of Article IX:2.
Moreover, even when the General Council considers a proper request for authoritative
interpretation of the DSU -- which is not the situation in this case -- it should do so only on the basis
of a consensus recommendation by the Dispute Settle ment Body (DSB), after that Body has providedWT/GC/W/144
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an opportunity for careful examination and deliberation concerning the legal nature of the request and
the implications of the proposed interpretation.
The serious concerns of the United States regarding this matter are more fully set out below.
The EC request seeks to pre-empt the results of the DSU review
Pursuant to a Ministerial decision taken at the close of the Uruguay Round, the DSB is
currently engaged in a full review of WTO dispute settlement rules and procedures, and the question
of the relationship between DSU Articles 21.5 and 22 has already been raised as an issue to be
considered in that review.  At the DSB Meeting of January 25-February 1, many WTO Members
expressed the view that this question should be decided in the DSU review.  In fact, an informal
meeting of the DSB has been scheduled for February 11 with the express purpose of considering that
issue in the context of the DSU review.  If, as a result of the DSU review, there is a DSB
recommendation to change these or other provisions of the DSU, then such changes can be adopted
only by consensus.  The EC request for General Council action seeks to pre-empt the DSU review
process.
What the EC seeks requires an amendment of the DSU, and cannot be accomplished through the
adoption of an “authoritative interpretation”
The plain language of Article 22 precludes the interpretation of that Article sought by the EC;
the answers sought by the EC to its questions require that the text of Article 22 be amended.  The
EC’s request seeks to effect changes to the meaning of the DSU to add words, phrases and procedures
which were not put there by the drafters, but which the EC now seeks for its defense of its EC banana
regime.  For example, nothing in the  text of Article 22.2 requires  that a new panel and Appellate Body
proceeding be completed before the provisions of Article 22 can be invoked.  Yet the effect of theEC’s so-called “interpretation” would be to add language to impose such a requirement.  The text
contains no such language; the EC’s so-called “inter pretation” would add it.  A corollary effect would
be to delete or change the specific time frames set forth in Article 22, since such an “interpretation”
would render them null and void.  Thus, these “inter pretations” are in fact proposed amendments that
would alter rights and obligations under the DSU.
The EC request is contrary to the plain language of Article 22 , and is not necessary to give meaning
to Article 21.5
The text of both Articles 22.6 and 22.7 provides that the DSB, upon request,  shall grant
authorization to suspend concessions or other obligations unless the DSB decides by consensus to
reject the request.  Thus, the DSB is not only empowered to grant authorization to suspendconcessions – it has a clear affirmative obligation  to do so upon request, unless it decides by
consensus not to grant authorization.  Nothing in the text of Article 22 or any other Article of the DSU
makes a panel finding under Article 21.5 a prerequisite for a grant of authorization for suspension of
concessions under Article 22.  More importantly, such a requirement would contradict the time
deadlines expressly provided in Article 22.6.
It is entirely possible to read Article 21.5 and Article 22.2 together without revising the words
of either provision.  Nothing prevents completion of the expedited panel process provided for in
Article 21:5 within the reasonable period of time.   The fact that the EC repeatedly refused attempts to
engage in such a timely review in the  Bananas  dispute does not mean that such a review is
impossible.  The words of Article 22.2 are based on the assumption that the issue of compliance will
have been resolved by the expiration of the reasonable period of time, either because no action at all
has been taken, or because the issue has already been resolved by an Article 21.5 panel.  The words
“implement” and “implementation” in Article 21.3 can only be interpreted as referring toWT/GC/W/144
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full implementation, in light of the context supplied by Article 22.1, and full implementation does not
mean putting into place a measure as to which a dispute exists. For this reason, a “reasonable period
of time for implementation” provided in Article 21.1 means that disputes regarding compliance must
be resolved within that period.  Any other position amounts to an amendment extending the
implementation deadlines set forth in Article 21.3.
The texts of Article 22.2 and Article 22.6 take as  their common point of departure the date of
expiry of the reasonable period of time.  This choice of date is unambiguously stated in the DSU text,
and reflects the result of difficult negotiations.  The EC’s second question for “interpretation”
attempts to read this date out of the DSU and to substitute some other date.  This is not
“interpretation” but amendment of the text. If a change in the text could be brought about in this
manner, any of the dates in the DSU could be changed by a vote. Such action would flatly contradict
the consensus decision-making rule ordained for the DSB and in particular for amendments to the
DSU.
The EC request circumvents the amendment process under Article X
The EC’s attempt to impose new and different readings on Article 22.6 through voting on a
purported “authoritative interpretation” is a transparent attempt to subvert the safeguards on the
amendment process provided in Article X of the WTO Agreement.  These safeguards were put in
place precisely to avoid  ill-considered actions such as those proposed by the EC.
It should be clear to Members from the text a nd context of WTO Articles IX and X, and from
their negotiating history, that interpretations pursuant to Article IX:2 are designed primarily to address
situations where the precise meaning of a negotiated text may be considered unclear or where, in the
process of translating text into another official language of the WTO, a word may have been used
which conveys a slightly different meaning.
Just such a case occurred in the context of the Tokyo Round Customs Valuation Agreement,
where the word “undertaken” (as used in Article 8.1(b)(iv) of that agreement) was translated into
Spanish as a word with a significantly different m eaning.  In that case, the Committee dealt with the
situation through the adoption of an interpretation which made clear that the English word
“undertaken” was to be understood as meaning “carried out” so that its meaning would be the same in
all three languages.  The text of the Agreement - in all three languages – remained the same, only the
meaning was clarified.  However, where the meaning of the text of a WTO Agreement is clear (such
as in the case of the provisions discussed above), there is no need for an interpretation under
Article IX:2.
For the reasons outlined above, Articles IX:3 and X:8 require that the General Council
consider the proposal of the EC for action only as an amendment to the DSU and not as an
“authoritative interpretation”.
The General Council should not take action at this meeting even if the EC had submitted a proper
request for an authoritative interpretation, which it has not done
Where the General Council adopts an “authoritative interpretation” on the basis of an
admissible request under Article IX:2 -- which is not the case here -- then it must be given the time
and information it needs to accord this task the seriousness it deserves.  Authoritative interpretations
affect every Member and may have unpredictable effects.  They should not be voted through on a
hasty basis.
The procedure the General Council uses to consider such interpretations must be at least as
thorough and careful as the procedure used to obtain panel rulings.  The process should provide anWT/GC/W/144
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opportunity for those concerned to table submissions exploring the issues involved, and for a question
and answer process to explore all of the possible consequences of a particular ruling.
In the case of interpretations of the Multilateral Trade Agreements in Annex 1, Article IX:2
requires that the Ministerial Council or the General Council exercise its authority only  on the basis of
a recommendation by the Council overseeing the functioning of that Agreement.   This procedure
ensures careful and considered use of the General Council’s interpretive powers.  Although the DSU
is not an Annex 1 Agreement, it nevertheless stands to reason that the General Council must not
decide on an interpretation of the Dispute Settlement Understanding, which affects all of the
Multilateral Trade Agreements, on the basis of any lesser degree of consideration and deliberation.
Indeed, given the importance of the DSU to the overall functioning of the WTO Annex 1 agreements,
it is even more important for the DSB to first consider any proposed interpretations of the DSU andmake recommendations to the General Council.  This is, in fact, what the DSU review process is
designed to do.  Consequently, the General Council shou ld  exercise its authority to interpret the DSU
only on the basis of a recommendation by the Disput e Settlement Body, which is the body overseeing
the functioning of the DSU.
The WTO and the DSU are central to the trading system.  They are not to be tinkered with on
the basis of ten days’ notice and a few hours of debate.  Any alteration in these fundamental
provisions must be given careful consideration with a view to examination of all the possible
consequences.
The EC request seeks to interfere with a specific dispute currently proceeding under the DSU
The connection between the EC request and the ongoing dispute involving  EC - Regime for
the Importation, Sale and Distribution of Bananas  (DS 27) is obvious.  The use of the “authoritative
interpretation” provision to interfere with a specif ic ongoing dispute is inconsistent with the mandate
in Article 23 of the DSU, which calls for resolution of disputes through the procedures of the DSU.
The rules of the DSU itself (and earlier changes to dispute settlement rules under the GATT) have
applied only with respect to disputes initiated after  those changes entered into effect. 1  Similarly, any
“authoritative interpretation” of the WTO must apply only with respect to disputes initiated after  the
interpretation takes effect, that is, disputes for which a request for consultations is made on or after the
adoption of that interpretation.  It is unacceptable to change the rules of procedure during thependency of a dispute without the agreement of the parties to the dispute.
Even recognizing that the amendment sought by the EC could only apply prospectively, and
not affect the outcome of the Bananas  dispute, it nevertheless would reach far beyond the immediate
case at hand, affecting all WTO Members, not just the EC and those involved in trade in bananas.
Through its request, the EC is seeking to compel adoption of hastily-conceived amendments to
fundamental provisions of the DSU – provisions which were a key element in the acceptance of the
Uruguay Round agreements by the U.S. governme nt and by the governments of other Members.
These amendments would have far-reaching effects on compliance with rights and obligations under
all of the WTO Agreements.
As decided during the DSB meeting of January 25-February 1, the original panel in the
Bananas  dispute is proceeding with its work.  The Members of the WTO must safeguard that process,
just as they stand as guarantors of the integrity of all disputes under the WTO rules. Members should
                                                     
1See DSU Article 3.11, as well as paragraph A.3 of the Decision of 12 April 1989 on “Improv ements
to the GATT Dispute Settlement Rules and Procedures,” L/6489, BISD 36S/61.WT/GC/W/144
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not lend their support to the EC’s efforts to change the rules under which an ongoing panel is
operating.
Conclusions
In light of the many GATT disputes in which the GATT dispute settlement process was
flouted, the drafters of the WTO Agreement’s amendment provisions were particularly sensitive to the
possibility that a future Member of the WTO migh t someday seek to subvert the intention of the
agreement through interpretations of agreements or amendments which were not seen by all Members
as being in their interests.  For this reason, the drafters clearly specified in the final sentence of Article
IX:2 that it cannot be used to undermine the amendment provisions of Article X.  The drafters also
made amendments of the DSU subject to a consensus rule.  The present EC proposal for a purported“authoritative interpretation” contradicts those rules and legally the General Council can only
consider this matter under the WTO amendment provisions.
There may be, in the future, legitimate instances where authoritative interpretations of DSU
provisions might be desirable.  In such cases, any action by the General Council concerning anauthoritative interpretation of the DSU should be made on the basis of a recommendation by the DSB,
which is the body overseeing the functioning of the DSU.  The procedure the General Council uses to
consider such interpretations must be at least as thorough and careful as the procedure used to obtain
panel rulings or the procedure used to act on proposals to interpret the Multilateral Trade Agreements.
The General Council must be accorded the time and consideration to examine and deliberate on suchproposals and to examine all of their possible consequences for the dispute settlement system, rather
than be asked to make a sudden decision based on the desire to affect one particular dispute.
The appropriate forum for addressing the concer ns raised by the EC is in the DSU review
currently being conducted by the Dispute Settlement Body, and the appropriate time for action by theGeneral Council is when the Dispute Settlement Body has forwarded to the General Council its
recommendations on this and other matters arising from the DSU review process.
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