RESTRICTED
WORLD TRADE WT/DSB/M/16
4June1996
ORGANIZATION(96-2098)
DISPUTE SETTLEMENT BODY
8May1996
MINUTES OFMEETING
Held intheCentre William Rappard
on8May1996
Chairman: Mr.Celso Lafer (Brazil)
Subjects discussed: Page
1. European Communities -Régime fortheimportation, saleanddistribution of
bananas 1
- Request byEcuador, Guatemala, Honduras, Mexico andtheUnited States for
theestablishment ofapanel 1
2. European Communities -Measures concerning meat and meat products
(Hormones) 5
- Request bytheUnited States fortheestablishment ofapanel 5
3. USdraft billconcerning thedefinition of"domestic industry" inthearea of
safeguards 6
- Statement byMexico 6
1. European Communities -Régime fortheimportation, saleanddistribution ofbananas
- Request byEcuador, Guatemala, Honduras, Mexico andtheUnited States forthe
establishment ofapanel (WT/DS27/6)
TheChairman recalled thatatitsmeeting on24April, theDSBhadconsidered therequest
bytheGovernments ofEcuador, Guatemala, Honduras, Mexico andtheUnited States forthe
establishment ofapanel toexamine theircomplaint, andhadagreed torevert tothismatter atthepresent
meeting.
Therepresentative ofGuatemala, speaking onbehalf ofEcuador, Honduras, Mexico andthe
United States, reiterated their Governments 'request thatapanel beestablished toexamine the
Communities 'régime fortheimportation, saleanddistribution ofbananas established under Regulation
404/93, asamended bysubsequent legislations, regulations, andadministrative measures, including
theFramework Agreement onbananas. Theyrequested thatthepanel findthisrégime tobeinconsistent
withtheCommunities 'obligations under, interalia,thefollowing Agreements: (i)Articles I,II,III,
X,XI,andXIIIofGATT 1994; (ii)Articles 1and3oftheAgreement onImport Licensing Procedures;
(iii)theAgreement onAgriculture; (iv)Articles II,XVIandXVII oftheGATS; and(v)Article 2
oftheTRIMs Agreement.WT/DSB/M/16
Page2
Therepresentative oftheEuropean Communities noted thestatement made byGuatemala and
saidthatthisimportant long-standing dispute hadaffected several countries, including developing
countries which hadaspecial relationship withtheCommunities. Therégime maintained bythe
Communities hadcontributed tothestable economic andtrade development ofthose countries. He
regrettedthetimingoftherequest,sincetheCommunitiesbelievedthatthenormalprocedureofquestions
andanswers intheconsultation process hadnotbeen fully exhausted. Furthermore, fourofthe
complainants, namely Guatemala, Honduras, Mexico andtheUnited States, hadnotclarified, despite
theCommunities 'insistence, whether theyhadwithdrawn orwereprepared towithdraw theirrequest
forconsultations made inSeptember 19951.Itwasnotclearwhether thatcomplaint hadbeenterminated
andreplaced bythepresent request forapanel; suchuncertainty wasnotproductive fortheWTO
system. Hebelieved thatindividual complainants hadfundamentally different interests inthismatter.
Forexample onecountry didnotexport bananas totheCommunities andhadnoexport potential.
Another country hadexported small quantities ofbananas inthepast,andhadnointention ofexporting
thisproduct totheCommunities inthefuture. These twocountries 'interest inrequesting apanel was
therefore notevident.
TheCommunities didnotoppose theestablishment ofapanel atthepresent meeting. However,
based oneconomic considerations, itwould havebeenlogical toestablish fiveseparate panels. The
Communities would notinsist onthisissueandwould notoppose theestablishment ofasingle panel.
Herecalled thatArticle 9.2oftheDSU provided thatasingle panel established toexamine multiple
complaints "shall organize itsexamination andpresent itsfindings totheDSBinsuchamanner that
therights which theparties tothedispute would have enjoyed hadseparate panels examined the
complaints areinnowayimpaired." TheCommunities reserved itsright torequest thatthepanel
present separate reports onthisdispute.
TheDSBtooknoteofthestatements andagreed toestablish apanel withstandard terms of
reference inaccordance withtheprovisions ofArticle 6oftheDSU.
Therepresentatives ofBelize, Cameroon, Colombia, Costa Rica, Côted'Ivoire, Dominica,
Dominican Republic, Ghana, Grenada, India, Jamaica, Japan, Nicaragua, thePhilippines, SaintLucia,
Saint Vincent andtheGrenadines, Senegal, Thailand andVenezuela reserved theirthird-party rights
toparticipate inthepanel proceedings.
TherepresentativeofSaintLucia,speakingonbehalfofBelize,Dominica,DominicanRepublic,
Grenada, andSt.Vincent andtheGrenadines, saidthattheirGovernments hadaspecial interest in
thismatter beyond themeaning ofArticle 10oftheDSU. Healsostated thatCameroon, Côted'Ivoire,
Ghana,SenegalandSurinamesupportedthisstatement.Thebananaindustry,developedafterthecollapse
ofthesugarindustry,wasofcriticalimportancetotheireconomicviability.Itremainedvitallyimportant
totheirsocial andpolitical stability. Dominica, Grenada, SaintLucia andSt.Vincent andtheGrenadines
(Windward Islands), relied heavily onthebanana industry which accounted forthree-quarters ofexport
earnings andprovided 25percentofdirect employment. Acollapse ofthisindustry intheCaribbean
countries would havedisastrous economic effects andspread serious political andsocial instability in
theregion.
TheCommunities 'market wastheonlyoutlet forCaribbean bananas. Thiswasduetospecial
import arrangements which hadbeenapplied byindividual member States and,which hadensured
bothaccess andviable market returns forthehigher production costs ofCaribbean bananas. These
benefits were enshrined intheFourth Lomé Convention. Therefore, challenging theCommunities '
banana régime implied challenging theLomé Convention which hadbeeninforce foraquarter of
1WT/DS16/1WT/DSB/M/16
Page3
century. Itscompatibility withtheWTO wasnowbeing challenged bycertain dominant multinationals
which claimed thattheywould losetheirmarket share. Saint Lucia andtheother Caribbean banana-
exporting countries hadcontinually encouraged dialogue withvarious parties, including thecomplaining
LatinAmericanbanana-exportingcountriesandotherMemberswhichdidnotexportbananas.However,
theircomplaints hadnottaken intoaccount thestability thatthisrégime provided, which alsobenefited
thecomplainants, following thedepressed andchaotic market conditions in1991-92. Norhadthey
taken intoaccount thesubstantial reduction inbenefits accepted bytheACP countries infavour of
other exporting countries asaresult ofadapting their"historic rights" innational markets tothemore
difficult circumstances oftheCommunities 'single market.
TheCaribbean banana-exporting countries hadhoped that,inlightofthese circumstances and
withtheCommunities 'flexible approach, anydifficulties would havebeenresolved atthemeeting
on9April 1996 inMiami. TheCaribbean banana-exporting countries hadattended thatmeeting in
goodfaith, buthadbeeninformed thatapanel would berequested toexamine thismatter. Herecalled
thatpursuant totheDecision of9December 19942,awaiver fortariff preferences hadbeengranted
totheCommunities andtheACPcountries until29February 2000. Inaccordance withthisDecision,
"parties totheConvention would, uponrequest, promptly enterintoconsultations withanyinterested
party withrespect toanydifficulty ormatter thatmayariseasaresult oftheimplementation ofthe
preferential treatment forproducts originating intheACP countries". Such consultations hadnever
beensought. Therefore, requesting apanel without firstseeking consultations withtheACPcountries
wasnotinaccordance withthespirit ofthisDecision. Itwaspossible thatpanel recommendations
ontheCommunities 'banana régime could haveserious economic andsocial consequences forthe
Caribbean countries, including implications forother developing countries. Herequested fullrights
toparticipate inthepanel proceedings, including therightoforalintervention during suchproceedings.
Therepresentative ofIndia saidthathiscountry wastheworld 'slargest banana producer and
hadavitalinterest inthismatter.
Therepresentative ofCôted'Ivoire saidthatinthecontext ofthediversification process aimed
atdiminishing market uncertainty foritsmainexport products, namely coffee andcocoa, Côted'Ivoire
hadalsobecome aproducer ofbananas. Atpresent, theproduction ofbananas amounted toabout
300,000 tonnes, andasubstantial partofitspopulation derived itsearnings fromexports ofthisproduct.
Trade inbananas wasextremely important fortheeconomy andformaintaining thesocial andpolitical
balance ofhercountry. Although notallpossibilities forasolution hadbeenexhausted, apanel on
thismatter wasestablished. Supporting thestatement made bySaintLucia shesaidthatasathirdparty,
hercountry wished tohavespecial status enabling ittoparticipate fullyinthework ofthispanel,
including therighttoparticipate inthepanel proceedings.
Therepresentative ofCameroon supported thestatement made bySaintLucia. Members were
aware thatbanana exports wereimportant forCameroon 'seconomy andhercountry wished torequest
fullparticipation inthepanel proceedings, including therighttobeheard bythepanel.
Therepresentative ofGhana saidthathiscountry wished tobeassociated withthestatement
made bySaint Lucia. Asabanana producer, Ghana wished tobeaccorded third-party status which
would enable it,notonlytoparticipate inthepanel proceedings, butalsotohavetheright oforal
intervention during suchproceedings.
Therepresentative ofJamaica saidthatbecause ofthecritical importance ofthebanana industry
toitseconomy anditssubstantial interest inthismatter, hercountry reserved itsthird- party rights
2L/7604WT/DSB/M/16
Page4
toparticipate inthepanel inaccordance withArticle 10.2oftheDSU. Inorder topursue thismatter
inatransparent manner, Jamaica further requested thatitsparticipation include thefollowing: (i)
therighttomake written submissions; (ii)attendance atallmeetings ofthepanel, andtheopportunity
toreceive allsubmissions ofparties tothepanel; (iii)theopportunity tobeheard bythepanel, to
askquestions andtorespond toquestions raised byother parties regarding itssubmissions. Jamaica
hadasubstantial interest inthismatter since theproduction andexport ofbananas were ofvital
importance toitseconomy, particularly interms ofemployment andforeign exchange earnings. Under
successive Lomé Conventions, theCommunities anditsmember States hadundertaken anobligation
withregard tobananas inArticle 1ofProtocol 5oftheConvention: "inrespect ofitsbanana exports
totheCommunities 'markets, noACPStateshallbeplaced, asregards access toitstraditional markets
anditsadvantages onthose markets, inalessfavourable situation thaninthepastoratpresent." It
wasJamaica 'sunderstanding thatsince theinception oftheCommunities 'banana import régime in
1993, thenon-ACP banana-exporting countries hadbenefited fromhigher prices andincreased volume
ofexports. TheCommunities 'enlargement hadalsoprovided alarger market. Shefurther noted that
oneofthecomplaining parties wasnotabananas-exporter andhadnosupplier interest. These facts
would beclearly determined bythepanel inthecourse ofitsdeliberations. Jamaica would havepreferred
thatinthisdispute amutually satisfactory solution bereached toenable theconcerned parties continuing
toderive benefits. Sheregretted thatthishadnotbeenthecase, andconfirmed hercountry 'swish
toreserve itsthird-party rights toparticipate inthepanel deliberations.
Therepresentative ofDominican Republic saidthathiscountry, asinthepastunder theGATT,
wished toparticipate fullyasathirdparty inthepanel proceedings. Hesupported thestatement made
bySaint Lucia since theproduction ofbananas wasofvitalimportance tohiscountry.
Therepresentative ofCosta Ricasaidthathiscountry, asasignatory oftheFramework
Agreement onbananas andhaving asubstantial tradeinterest inthismatter, wished toreserve itsthird-
party rights toparticipate inthepanel proceedings. Considering therequest bySaint Lucia andother
delegations, hisgovernment wished torequest thatitsparticipation inthepanel bethesame asthat
granted toother countries.
TherepresentativeofColombiasaidthathercountry,asasignatoryoftheFrameworkAgreement
havingasubstantialtradeinterestinthisdisputeandbeingamajorbananaexporterintotheCommunities,
wished toreserve itsthird-party rights toparticipate inthepanel proceedings. Furthermore, inview
oftherequests made bysome delegations sherequested thatColombia alsobegranted anyspecial status
tobeextended toother Members.
Therepresentative ofNicaragua saidthathiscountry hadasubstantial interest inthismatter
andtherefore wished toreserve itsrights toparticipate inthepanel asathird party. Inaddition, it
alsoconsidered thatfortransparency andequity purposes, Nicaragua would alsoenjoy thesamespecial
treatment enabling ittoparticipate inthepanel proceedings.
Therepresentative ofVenezuela saidthathiscountry, asasignatory oftheFramework
Agreement, wished toreserve itsthird-party rights toparticipate inthepanel proceedings. Hesupported
therequest made bycertain countries onthismatter, andrequested thatanystatus granted tothem
alsobeextended toVenezuela.
Therepresentative ofCanada saidthat,although hiscountry didnotproduce norexport bananas
andhadnotparticipated inconsultations onthismatter, thequestion ofreserving itsthird-party rights
toparticipate inthepanel proceedings wasunder consideration. TheSecretariat would beinformed
ofCanada 'sdecision within tendays. Canada hadasystemic interest inthismatter andbelieved that
anumber ofissues ofsystemic interest could beraised inthepanel proceedings. Onesuchissue was
whether ornottheGATS wasrelevant tothismatter. Anyconclusions bythepanel onthismightWT/DSB/M/16
Page5
affect products otherthanbananas. Another issuerelated totherights ofparties toinvoke theprovisions
ofArticle XXIII ofGATT 1994withregard toamatter subject toawaiver. Inthiscontext, theUruguay
Round decision onwaivers maybeopentodifferent interpretations. Herecognized thatconclusions
reached bypanels maynotberelevant toother disputes even ifthesame issues were addressed.
However, there wasalsoajurisprudence developing intheWTO inwhich thecontrary appeared to
bethecase. Hesought guidelines which could enable Canada topresent itsviews ontheabove-
mentioned matters without formally reserving itsthird-party rights. Herecognized thatifevery
delegation wished toreserve itsthird-party rights onevery panel because ofpotential systemic
implications, thiswould create difficulties withregard tothedetermination ofthepanel'scomposition
andother practical considerations. However, thismatter wasofinterest toCanada aswellastoother
delegations.
Therepresentative oftheEuropean Communities saidthatonewould havetoconsider positive
andnegative aspects associated withCanada 'srequest. TheCommunities fullysupported requests
made bytheACPcountries andbyCosta Rica, Colombia, Nicaragua andVenezuela regarding their
third-party participation inthepanel proceedings which were more thanjustified byeconomic
considerations.
Therepresentative oftheUnited States saidthathisdelegation noted theinterest ofcertain
Members toparticipate inthepanel proceedings inamore extensive manner thanthatprovided for
inArticle 10.2oftheDSU. Onbehalf ofthecomplaining parties inthisdispute, hisdelegation wished
toexpress theirunderstanding thatthisrequest wasaddressed totheparties tothedispute andnotto
theDSBfordecision oraction. Henoted theCommunities 'request forfiveseparate panel reports.
Asthiswasadispute initiated byasingle panel request about asingle setofmeasures, there wasno
basis forfiveseparate reports.
Therepresentative oftheEuropean Communities reiterated that,pursuant toArticle 9.2of
theDSU, "thesingle panel shallorganize itsexamination andpresent itsfindings totheDSBinsuch
amannerthattherightswhichthepartiestothedisputewouldhaveenjoyedhadseparatepanelsexamined
thecomplaints areinnowayimpaired. Ifoneoftheparties tothedispute sorequests, thepanel shall
submit separate reports onthedispute concerned." Onthebasisofthis,theCommunities would make
aformal request forseparate panel reports.
TheDSBtooknoteofthestatements.
2. European Communities -Measures concerning meatandmeatproducts (Hormones)
- Request bytheUnited States fortheestablishment ofapanel (WT/DS26/6)
TheChairman drew attention tothecommunication from theUnited States contained in
WT/DS26/6.
Therepresentative oftheUnited States saidthathisauthorities wererequesting theestablishment
ofapanel tohelpresolve along-standing dispute withtheEuropean Communities. There wasno
legitimate basisfortheCommunities 'banontheimportation ofmeatfromanimals treated withcertain
growth-promoting hormones, which nullified orimpaired benefits accruing totheUnited States under
theWTO. TheUnited States believed thatthenewWTO rules would beinstrumental inresolving
adispute thathadremained unresolved under theGATT 1947because ofdeficiencies intherulesunder
theGATT 1947, theTokyo Round Codes, andtheCommunities 'refusal in1987toholdamultilateral
review ofitsHormone Directive.WT/DSB/M/16
Page6
TherepresentativeoftheEuropeanCommunitiessaidthathisdelegationbelievedthatthisrequest
waspremature. Although thiswasalong-standing dispute, therecent initiation ofthisdispute under
theWTO hadnotgiven theCommunities thetimetofullyclarify anumber ofpoints andexhaust all
avenues forconsultations. Therefore, theCommunities would notagree totheestablishment ofapanel
atthepresent meeting. Heinformed theDSBoftheCommunities 'request forconsultations withthe
United States3ontheunilateral measures taken bythelatter tocompensate foralleged damage assessed
unilaterally bytheUnited States andhoped toholdthese consultations atanearly date.
Therepresentative ofArgentina saidthathedidnothaveinstructions concerning thismatter,
butwished toindicate thatArgentina, asabeefexporter, wasclosely following thisissue. He
emphasized theimportance ofobserving thedisciplines oftheAgreement ontheApplication ofSanitary
andPhytosanitary Measures bytheparties concerned, which could permit amutually agreed solution
tothismatter.
TheDSBtooknoteofthestatements andagreed torevert tothismatter atitsnextmeeting.
3. USdraftbillconcerning thedefinition of"domestic industry" intheareaofsafeguards
- Statement byMexico
Therepresentative ofMexico, speaking under "Other Business", recalled hisdelegation 's
statement made atthemeeting oftheCouncil forTrade inGoods on29January 1996 concerning a
draftbillapproved bytheUSSenate under which thedefinition of"domestic industry", contained in
theUnited States 'legislation onsafeguards would beredefined. Thiswould enable theUnited States
toapply asafeguard measure incontravention ofArticle 4.1(c) oftheAgreement onSafeguards. Under
thenewdefinition ifaperishable product wasproduced intwodifferent States, andoneStateproduced
itinwinter andtheother insummer, theUnited States could implement asafeguard measure toprotect
winter producers without taking intoaccount theoutput oftheStateproducing theproduct inthesummer
when determining theexistence ofinjury orthreat ofinjury. Despite many statements denouncing
thisdraft billatthatmeeting on29January, andunfortunately forMembers andUSexporters of
perishable agricultural products, theintention tochange thedefinition of"domestic industry" continued
tobeactively considered bytheUSCongress. Thedraftbillredefining theterm"domestic industry"
wasnowbeing associated withanother bill,namely theIsrael-Gaza Strip Bill, currently under
consideration bytheFinance Committee oftheUSSenate andscheduled tobesubmitted forapproval
bytheSenate prior toMemorial Dayrecess, i.e.,25May. This package, negotiated intheUS
Congress, inwhich trade-related considerations ofthebillhadbeendiluted, would increase itschances
ofsuccess. Mexico understood thatiftheIsrael-Gaza StripBillwasadopted bytheSenate, itwould
thenbeforwarded tothejointConference Committee oftheSenate andtheHouse ofRepresentatives
inthecourse ofthismonth, orinearly June, since theinitiative hadalready beenapproved bythe
House ofRepresentatives. Inlightoftheabove, andthelikelihood ofimminent approval ofanew
definition of"domestic industry" bytheUSCongress, hisdelegation wished toreiterate itscomments
made on29January. Thiswasnotabilateral matter. Ifthedraftbillbecame lawandother Members
followed thesame path, there wasaserious danger thatsimilar safeguard measures could beapplied
against exports ofperishable agricultural products. Mexico reserved therighttoraisethisissue in
anyrelevant body, including theDSB, andtoassert itsrights under theWTO ifnecessary. Ithoped
thattheUSCongress would review thismatter inlightoftheUnited States 'obligations under theWTO
anddecide thatthesection ofthebillrelating tothenewdefinition of"domestic industry" wasnot
onlyinappropriatebutrancountertotheinterestsofitsownexportersofperishableagriculturalproducts.
3WT/DS39/1WT/DSB/M/16
Page7
Therepresentative ofCanada thanked Mexico forbringing thismatter totheattention ofthe
DSB. Hisdelegation hadexpressed itsviews onthismatter atthemeeting oftheCouncil forTrade
inGoods on29January. Canada hadadirect interest inthismatter asanexporter andimporter of
perishable products. Italsohadasystemic interest andbelieved thatthislegislation wasinconsistent
withtheUnited States 'obligations under theWTO. Canada hoped thattheUnited States would provide
Members withmore details regarding thislegislation.
Therepresentatives ofArgentina, Australia, Brazil, Chile, Costa Rica, Dominican Republic,
Guatemala, Honduras, NewZealand, Nicaragua, Peru, Philippines, onbehalf ofASEAN countries
andUruguay shared theconcerns expressed byMexico onthismatter.
Therepresentatives ofColombia, Costa Rica, Dominican Republic, ElSalvador, Honduras,
Nicaragua, Peru, Philippines, onbehalf ofASEAN countries andUruguay expressed thehope that
theUSAdministration would examine theimplications ofthislegislation inorder toreview itandbring
itintoconformity withtheUnited States 'obligations under theWTO.
Therepresentative ofArgentina saidthathiscountry, asanexporter ofperishable products
totheUSmarket, could beaffected ifthedraftbillwasadopted. Hereiterated thesuggestion made
byArgentina atthemeeting on29January, thatatthisstage, Members could callupontheUSExecutive
Branch tomake allnecessary efforts toprevent theadoption ofthisdraftbillwhich wasinconsistent
withtheWTO.
Therepresentative ofNewZealand saidthatinFebruary 1996, NewZealand hadjoined other
CAIRNS Group countries inmaking arepresentation totheUSAdministration onthisissue. New
Zealand hadalsomade abilateral representation. Iftheproposed amendments totheTrade Actof
1974 wereadopted, theUnited States would beinconflict withitsinternational obligations under the
WTO, inparticular theAgreement onSafeguards. Hiscountry understood thattheUSAdministration
considered thislegislation tobeconsistent withitsWTO obligations. However, fewcountries outside
oftheUnited States shared thisview. Hetherefore urged theUnited States toreview itsposition
soastoavoid anydispute settlement actions.
Therepresentative ofEgypt saidthathiscountry hadasystemic interest inthismatter. He
questioned theneedforMexico toraisethisissue since Article XVI:4 oftheWTO Agreement stated
that"each Member shallensure theconformity ofitslaws, regulations andadministrative procedures
withitsobligations asprovided intheannexed Agreements".
Therepresentative ofNorway expressed hisconcerns withthetendency todiscuss under "Other
Business"importantpolicymattersaffectingmanycountries.Henotedthatmoretimewasbeingdevoted
tomatters raised under "Other Business" thantoissues under themain agenda.
Therepresentative ofMexico thanked Members fortheirstatements. Referring tothecomment
made byNorway, hesaidthatthismatter hadbeenraised under "Other Business" forinformation.
Itconcerned aproposed legislation notanactual measure andcould nottherefore beinscribed onthe
agenda.
TheDSBtooknoteofthestatements.