DI

SPUTESETTLEMENTMECHANI
SM UNDERWTO

Theset
tl
ementofdi
sput
esi
nanyi
nter
nat
ionalor
gani
zat
ionshoul
dbe‘
rul
e
or
ient
ed’
rat
hert
han‘
poweror
ient
ed’
ast
he‘
rul
eor
ient
edsy
stem’
bri
ngsst
abi
l
ityand
pr
edi
ctabi
l
ityand i
nter
nat
ionalt
radi
ng sy
stem necessar
il
yrequi
res ‘
rul
e based’
sy
stem t
hathasbeeni
nabi
gwayi
ntr
oducedi
ntheWTO Di
sput
eSet
tl
ement
Under
standi
ng(
DSU)
.

TheDSUcont
ains27Ar
ti
clesandf
ourappendi
ces,i
sper
hapst
hemostsi
gni
fi
cant
achi
evementoft
heUr
uguayRoundnegot
iat
ions,
oft
enbei
ngr
efer
redasi
nthecr
own,
ofWTO.Uni
quei
nPubl
i
cint
ernat
ionall
aw,t
heDSUconf
erscompul
sor
yjur
isdi
cti
on
ont
heDi
sput
eSet
tl
ementBodyf
ort
hepur
posesofr
esol
vi
ngdi
sput
es.

Ar
ti
cle Ioft
he DSU set
s outt
he cov
erage and appl
i
cabi
l
ity pur
suantt
oit
s
consul
tat
ionanddi
sput
eset
tl
ementpr
ovi
sionsconcer
ningt
he‘
cov
eredAgr
eement
s’
whi
ch ar
eli
sted i
n Appendi
xI;t
he Agr
eementEst
abl
i
shi
ng t
he Wor
ld Tr
ade
Or
gani
zat
ion;t
he13i
ndi
vi
dualmul
ti
lat
eralagr
eement
sont
radei
ngoods;GATs;
TRI
Ps;andt
hef
ourpl
uri
l
ater
alagr
eement
s.I
tencompassesmeasur
esaf
fect
ingt
he
oper
ati
onofanycov
eredagr
eementt
akenwi
thi
nthet
err
it
oryofamember
,incl
udi
ng
measur
est
aken byr
egi
onalorl
ocalgov
ernment
s.I
tdoesnotex
tend t
o ot
her
mat
ter
snotf
all
i
ngwi
thi
nthef
ourcor
ner
sofGATT.Ther
ulesofDSUwi
thspeci
al
modi
fi
cat
ionhav
ebeenappl
i
cabl
etoot
herAgr
eement
sasl
i
stedi
nAppendi
x2t
o
DSU.Ar
ti
cle3oft
heDSUset
soutt
hegener
alpr
ovi
sionswhi
chpr
ovi
desmai
nlyt
he
obj
ect
ivesoft
hedi
sput
eset
tl
ementmechani
sm.

Thei
nter
pret
ati
ver
oleoft
heWTO di
sput
eset
tl
ementsy
stem i
smadeexpl
i
citi
n
Ar
ti
cle3(
2)oft
heDSU,whi
chpr
ovi
dest
hatt
hesy
stem ser
vest
o‘cl
ari
fyt
he
pr
ovi
sionsoft
heWTO Agr
eement
sinaccor
dancewi
tht
hecust
omar
yrul
esof
i
nter
pret
ati
onofpubl
i
cint
ernat
ionall
aw’
.Accor
dingl
ytheAppel
l
ateBodyoft
heDSB
i
nit
svar
iousdeci
sionshasdependedonVi
ennaConv
ent
iononLaw ofTr
eat
ies
especi
all
yit
’sAr
ti
cle31asar
uleofi
nter
pret
ingt
heDSU.Ar
ti
cl
e31st
atest
hat‘A
t
reat
yshal
lbei
nter
pret
edi
ngoodf
ait
hinaccor
dancewi
tht
heor
dinar
ymeani
ngt
o
begi
vent
othet
ermsoft
het
reat
yint
hei
rcont
extandi
nthel
i
ghtofi
tsobj
ect
sand
pur
pose.
Appel
l
ateBodynot
wit
hst
andi
ngt
hef
undament
alr
uleofAr
ti
cl
e31(
1)oft
heVi
enna
Conv
ent
ion,hasdr
awn on ot
heri
nter
pret
ati
vemechani
sm mor
e speci
fi
cal
l
yon
‘
eff
ect
ivenesswhi
chhasbeenendor
sedbyt
heAppel
l
ateBodyas‘
fundament
alt
enet
oft
reat
yobl
i
gat
ion.I
nsomecases,t
heAppel
l
ateBodyhasi
nter
pret
edon‘
caset
o
case’basi
s,i
mpl
yi
ngt
hatmeani
ngmaychangeaccor
dingt
oci
rcumst
ancesoft
he
case.

UnderAr
ti
cle17oft
heDSU,t
heDSBhasbeenempower
edt
oest
abl
i
shst
andi
ng
Appel
l
ateBodywi
thsev
enmember
s,t
hreeofwhom shal
lser
veanyonecaseand
shal
lhearappeal
sfr
om panelcases.Thest
andi
ngAppel
l
ateBodyi
scomposedof
per
sons of r
ecogni
zed aut
hor
it
y,who hav
e demonst
rat
ed exper
ti
se i
nlaw,
i
nter
nat
ionalt
radeandt
hesubj
ectmat
teroft
hecov
eredMul
ti
lat
eralAgr
eement
s.
Thet
enur
eoft
hemember
soft
hisbodyi
sfoury
ear
swi
thapossi
bil
i
tyofr
e-
appoi
ntment
.

TheDSBi
s,i
nef
fect
,asessi
onoft
heGener
alCounci
loft
heWTO:t
hati
s,al
loft
he
r
epr
esent
ati
vesoft
heWTO membergov
ernment
s,usual
l
yatambassador
iall
evel
,
meet
ingt
oget
her
.Itdeci
dest
heout
comeofat
radedi
sput
eont
her
ecommendat
ion
ofaDi
sput
ePaneland(
possi
bly
)onar
epor
tfr
om t
heAppel
l
ateBodyofWTO,
whi
ch
mayhav
eamendedt
hePanelr
ecommendat
ioni
fapar
tychoset
oappeal
.Onl
ythe
DSBcanmaket
hesedeci
si
ons:Panel
sandt
heAppel
l
ateBodyar
eli
mit
edt
omaki
ng
r
ecommendat
ions.Thef
unct
ionoft
hepaneli
stoassi
stt
heDSB(
Art
.11oft
heDSU)
.
Apanelhast
omakeanobj
ect
iveassessmentoft
hemat
ter
,incl
udi
ngt
hef
act
sof
t
hecaseandi
tsconf
ormi
tywi
tht
her
elev
antcov
eredagr
eement
s.I
thasal
sot
o
makef
indi
ngsassi
sti
ngt
heDSBi
nrecommendi
ngorgi
vi
ngr
uli
ng.

Ar
ti
cle8oft
heDSUpr
ovi
dest
hatpanel
snor
mal
l
yar
ecomposedoft
hreepanel
i
sts
orf
ivepr
ovi
dedt
hepar
ti
est
othedi
sput
eagr
eef
ort
hesamewi
thi
ntenday
saf
ter
t
heest
abl
i
shmentofpanelbyt
heDSB.Panel
i
stsgener
all
yar
epr
esentorf
ormer
member
sofnon-
par
tydel
egat
iont
otheWTO,oracademi
cs.Panel
i
stser
vesi
nhi
s
i
ndi
vi
dualcapaci
tyandnotasgov
ernmentr
epr
esent
ati
veorr
epr
esent
ati
veofot
her
or
gani
zat
ion.Themembercount
ri
es’gov
ernment
sshal
lnoti
nfl
uencet
hepanel
i
sts.
I
fthedi
sput
einv
olv
esadev
elopi
ngcount
ryatl
eastonepanel
i
stshoul
dbef
rom
dev
elopi
ngcount
ryi
fthedev
elopi
ngcount
rysor
equest
s.

Thei
nter
est
soft
hir
dpar
ti
esi
nadi
sput
ehasbeenr
ecogni
zed(
Art
.10oft
heDSU)
andanymemberhav
ingnot
if
iedt
heDSBoft
hati
nter
est
,maybehear
dbyapanel
andmaymakewr
it
tensubmi
ssi
onst
othepanel
.Apanel
’
sdeci
sionwhet
hert
ogr
ant
‘
enhanced’par
ti
ci
pat
oryr
ight
stot
hir
d par
ti
esi
sa mat
tert
hatf
all
swi
thi
nthe
di
scr
eti
onar
yaut
hor
it
yoft
hepanel
.

The DSB uses a speci

aldeci
sion pr
ocedur
e known as '
rev
erse consensus'or
'
consensusagai
nst
'thatmakesi
tal
mostcer
tai
nthatt
hePanelr
ecommendat
ionsi
n
adi
sput
ewi
l
lbeaccept
ed.Thepr
ocessr
equi
rest
hatt
her
ecommendat
ionsoft
he
Panel(
asamendedbyt
heAppel
l
ateBody
)shoul
dbeadopt
ed"
unl
ess"t
her
eisa
consensusoft
hemember
sagai
nstadopt
ion.Thi
shasnev
erhappened,
andbecause
t
he nat
ion '
winni
ng'undert
he Panel
'
srul
i
ng woul
d hav
etoj
oint
hisr
ever
se
consensus,
iti
sdi
ff
icul
ttoconcei
veofhowi
tev
ercoul
d.

Oncei
thasdeci
dedont
hecase,i
.e.
,whet
hert
hecompl
ainthadbeenshownt
obe
r
ightorwr
ong,
theDSBmaydi
rectt
he'
l
osi
ng'
Membert
otakeact
iont
obr
ingi
tsl
aws,
r
egul
ati
onsorpol
i
ciesi
ntoconf
ormi
tywi
tht
heWTOAgr
eement
s.Thi
sist
heonl
y
di
rect
iont
hatemer
gesf
rom aWTOdi
sput
e.Ther
eisnoconceptof"
puni
shment
"or
ev
enr
est
it
uti
on.TheDSBwi
l
lgi
vet
hel
osi
ngpar
tya"
reasonabl
eper
iodoft
ime"i
n
whi
cht
orest
oret
heconf
ormi
tyofi
tsl
awset
c.

I
fthel
osi
ngpar
tyf
ail
stor
est
oret
heconf
ormi
tyofi
tsl
awswi
thi
nthe"
reasonabl
e
per
iodoft
ime"
,theDSB may
—onanexcept
ionalbasi
s—aut
hor
iseasuccessf
ul
compl
ainantt
otaker
etal
i
ator
ymeasur
est
oinduceact
ionont
hepar
toft
hel
osi
ng
par
ty.Thi
sisv
eryr
are.Al
mostal
lWTO member
s"v
olunt
ari
l
y"i
mpl
ementDSB
deci
sions i
nti
me.Ofcour
se,when a l
osi
ng count
rybr
ings i
tsl
aws et
c.i
nto
conf
ormi
tyi
tmaychoosehow t
odoso;i
ndeed,i
tmaynotnecessar
il
ymaket
he
changest
hatt
hewi
nni
ngpar
tywoul
dpr
efer
.

DI
SPUTESETTLEMENT:DI
SPUTEDS217

Uni
tedStat
es—Conti
nuedDumpi
ngandSubsi
dy
Off
setActof2000

Thissummar yhasbeen C urrentst at

us back to 
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preparedbytheSecr etari
at
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it
y.
Thesummar yisf orgeneralAu t
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iontoret
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at egr ant
edon Fi
ndalldocument
s
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ononlyandi snot
26 
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2004 fr
om t
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intendedtoaf
f ecttherights (
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chesDocument
sOnl
i
ne,
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s
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qui
ckhel
pwithdownloadi
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vehelpon
> 
One-
pagesummar yofkey Shor
ttit
le: US—OffsetAct DocumentsOnli
ne
fi
ndi ngsoft hisdi spute (By
rdAmendment)
> Thebasics:howdi sput esare > 
all
document
s
sett
ledi nWTO Co mplai
nant: Australia;Brazil
;
> Comput erbasedt r
ainingon Chil
e; Eur opean  
 
disputeset tl
ement
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es;Indi
a;
>  TextoftheDi spute
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ndonesi a;Japan; > 
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ngt hispage?
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lementUnder standing
Pleasecontact
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webmast er@wto.
or ggivi
ng
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and detail
softheoperatingsyst
em
> Gener al andwebbr owsery ouare
Respondent : Uni tedSt ates
> By rdAmendment using.
> 
Aust ral a Th
i ir
dPar ties: Argent ina; Canada;
> Brazi l Cost aRi ca; Hong
> 
Chi l
e
Kong, China; I
srael;
> EuropeanUni on( former l
yEC)
> I
ndi a Me xico ;N orwa y
> I
ndonesi a Ag reement s Ant i-dumpi ng
> Japan
> Kor ea,Republ i
cof
cited: (Arti
cleVIofGATT
(ascit
edi n 19 94):Ar t.1,5.4,8,
> Thai land
requestfor
> 
UnitedSt at es 18.1, 18.4
consult
ations)
>  Agreementon GATT1994: Ar t
.VI:3,
I
mpl ement ationofAr ti
cl eVIof
X:3,XXI II
:1, VI:
2
theGener al Agreementon
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> AgreementonSubsi di esand
7.9,10, 11. 4,18,
Count erv ail
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> AgreementEst abli
shi ngt he 32.1, 32.5
WorldTr adeOr gani zat i
on Agreement
Establ
ishingthe
Wor l
dTr ade
Organizati
on:Art
.
XVI:4
Requestfor 21 
December
 2000
Consult
ati
ons
recei
ved:
PanelRepor
t 16 
Sept
ember
 2002
ci
rcul
ated:
Appel
late 16 
Januar
y 2003
BodyReport
ci
rcul
ated:
Arti
cle 
21.3(c)13 
June 
2003
Arbi
tration
Repor t
ci
rculated:
Recourseto 31 
August
 2004
Arti
cle22.
6
Arbi
trat
ion
Report
ci
rculat
ed:

 
Summar
yoft
hedi
sput
etodat
e back 
to 
top

Thesummar ybel
owwasup-t
o-dat
eat30 Sept
ember 
2013
Seealso:One-
pagesummar
yofkeyfi
ndingsofthi
sdi
sput
e

Consul
tat
ions

Joi
ntcompl
aintbyAust
ral
i
a,Br
azi
l
,Chi
l
e,Eur
opeanCommuni
ti
es,I
ndi
a,I
ndonesi
a,Japan,Kor
eaand
Thai
l
and.

On21December2000and21May2001r
espect
ivel
y,t
hecompl
ainant
srequest
edconsul
tat
ionswi
th
t
heUSconcer
ningt
heamendmentt
otheTar
if
fActof1930si
gnedon28Oct
ober2000wi
tht
het
it
le
of“
Cont
inuedDumpi
ngandSubsi
dyOf
fsetActof2000”(
the“
Act
”)usual
l
yref
err
edt
oas“
theBy
rd
Amendment
”.Accor
dingt
othecompl
ainant
stheActi
sinconsi
stentwi
tht
heobl
i
gat
ionsoft
heUni
ted
St
atesundersev
eralpr
ovi
sionsoft
heGATT,t
heADAgr
eement
,theSCM Agr
eement
,andt
heWTO
Agr
eement
.Inpar
ti
cul
ar,
theActi
sal
l
egedt
obei
nconsi
stentwi
tht
heobl
i
gat
ionsoft
heUni
tedSt
ates
under
:(i
)Ar
ti
cle18.
1oft
heADAi
nconj
unct
ionwi
thAr
ti
cl
eVI
:2oft
heGATTandAr
ti
cle1oft
heADA;
(
ii
)Ar
ti
cle32.
1oft
heSCM Agr
eement
,inconj
unct
ionwi
thAr
ti
cleVI
:3oft
heGATTandAr
ti
cles4.
10,
7.
9and10oft
heSCM Agr
eement
;(i
i
i)Ar
ti
cleX(
3)(
a)oft
heGATT;(
iv)Ar
ti
cle5.
4oft
heADAand
Ar
ti
cle11.
4oft
heSCM Agr
eement
;(v
)Ar
ti
cle8oft
heADAandAr
ti
cle18oft
heSCM Agr
eement
;(v
i)
Ar
ti
cle5oft
heSCM Agr
eement
;and(
vii
)Ar
ti
cleXVI
:4oft
heMar
rakeshAgr
eementest
abl
i
shi
ngt
he
WTO,
Art
icl
e18.
4oft
heADAandAr
ti
cle32.
5oft
heSCM Agr
eement
.

On12Jul
y2001,t
hecompl
ainant
sindi
sput
eWT/
DS217r
equest
edt
heest
abl
i
shmentofapanel
.At
i
tsmeet
ingon24Jul
y2001,
theDSBdef
err
edt
heest
abl
i
shmentofapanel
.

PanelandAppel
lat
eBodypr
oceedi
ngs

Fur
thert
oasecondr
equestt
oest
abl
i
shapanelbyt
hecompl
ainant
s,t
heDSBest
abl
i
shedapanelat
i
tsmeet
ingon23August2001.Ar
gent
ina;Canada;
Cost
aRi
ca;HongKong,
Chi
na;I
srael
;Nor
wayand
Mexi
cor
eser
vedt
hei
rthi
rd-
par
tyr
ight
s.

On10August2001,
CanadaandMexi
cor
equest
edt
heest
abl
i
shmentofapanel
.Ati
tsmeet
ingon23
August2001,
theDSBdef
err
edt
heest
abl
i
shmentofapanel
.Fur
thert
oasecondr
equestt
oest
abl
i
sh
apanelbyCanadaandMexi
co,t
heDSBest
abl
i
shedapanelati
tsmeet
ingon10Sept
ember2001.
TheDSBal
soagr
eed,i
naccor
dancewi
thAr
ti
cle9oft
heDSU,t
hatt
hepanelest
abl
i
shedt
oexami
ne
t
hecompl
aintbyAust
ral
i
a,Br
azi
l
,Chi
l
e,EC,I
ndi
a,I
ndonesi
a,Japan,Kor
eaandThai
l
and(
WT/
DS217)
on23August2001woul
dal
soexami
net
hecompl
aintbyCanadaandMexi
co(
WT/
DS234)
.

On 15 Oct
ober2001,al
l11 compl
ainant
srequest
ed t
he Di
rect
or-
Gener
alt
o det
ermi
ne t
he
composi
ti
onoft
hePanel
.On25Oct
ober2001,t
hePanelwascomposed.On17Apr
il2002,t
he
Chai
rmanoft
hePaneli
nfor
medt
heDSBt
hatt
hePanelwoul
dnotbeabl
etocompl
etei
tswor
kinsi
x
mont
hssi
ncet
hepar
ti
eswer
egi
vent
hemaxi
mum amountoft
imef
orpr
epar
ingsubmi
ssi
onsand
or
alst
atement
s.ThePanel
expect
edt
ocompl
etei
tswor
kbyJul
y2002.

On16Sept
ember2002,t
hePanelRepor
twasci
rcul
atedt
oMember
s.ThePanelconcl
udedt
hatt
he
CDSOAwasi
nconsi
stentwi
thAr
ti
cles5.
4,18.
1and18.
4oft
heAnt
i-
Dumpi
ngAgr
eement
,Ar
ti
cles
11.
4,32.
1and32.
5oft
heSubsi
diesAgr
eement
,Ar
ti
clesVI
:2andVI
:3oft
heGATT1994,andAr
ti
cle
XVI
:4oft
heWTOAgr
eement
.ThePanelr
eject
edt
hecompl
aini
ngpar
ti
es’
clai
mst
hatt
heCDSOAwas
i
nconsi
stentwi
thAr
ti
cles8.
3and15oft
heAnt
i-
Dumpi
ngAgr
eement
,Ar
ti
cles4.
10,
7.9and18.
3oft
he
Subsi
diesAgr
eement
,andAr
ti
cleX:
3(a)oft
heGATT1994.Theyal
sor
eject
edMexi
co’
scl
aimt
hatt
he
CDSOAv
iol
atedSCM Ar
ti
cle5(
b).TheCDSOAi
sanewandcompl
exmeasur
e,appl
i
edi
nacompl
ex
l
egalenv
ironment
.Inconcl
udi
ngt
hatt
heCDSOAwasi
nvi
olat
ionoft
heabov
ement
ionedpr
ovi
sions,
t
hePanelhadbeenconf
ront
edbysensi
ti
vei
ssuesr
egar
dingt
heuseofsubsi
diesast
rader
emedi
es.
I
fMember
swer
eoft
hev
iewt
hatsubsi
disat
ioni
saper
mit
tedr
esponset
ounf
airt
radepr
act
ices,t
he
Panelsuggest
edt
hatt
heycl
ari
fyt
hismat
tert
hroughnegot
iat
ion.Pur
suantt
oAr
ti
cle3.
8oft
heDSU,
t
hePanelconcl
udedt
hatt
otheext
entt
hatt
heCDSOAwasi
nconsi
stentwi
tht
hepr
ovi
sionsoft
he
Ant
i-
Dumpi
ngAgr
eement
,theSCM Agr
eement
,andt
heGATT1994,t
heCDSOAnul
l
ifi
edori
mpai
red
benef
it
saccr
uingt
othecompl
aini
ngpar
ti
esundert
hoseagr
eement
s.ThePanelr
ecommendedt
hat
t
heDSBr
equestt
heUni
tedSt
atest
obr
ingt
heCDSOAi
ntoconf
ormi
tywi
thi
tsobl
i
gat
ionsundert
he
Ant
i-
Dumpi
ngAgr
eement
,theSCM Agr
eement
,andt
heGATTof1994byr
epeal
i
ngt
heCDSOA.

On18Oct
ober2002,t
heUni
tedSt
atesnot
if
iedi
tsdeci
si
ont
oappealt
otheAppel
l
ateBodycer
tai
n
i
ssuesofl
awcov
eredi
nthePanelRepor
tandcer
tai
nlegali
nter
pret
ati
onsdev
elopedbyt
hePanel
.On
13December2002,t
heAppel
l
ateBodyi
nfor
medt
heDSBt
hati
twasnotabl
etoci
rcul
atet
heRepor
t
wi
thi
n60day
sfr
om t
heappealandt
hatt
heRepor
twast
obeci
rcul
atednol
atert
han16Januar
y
2003.On16Januar
y2003,
theAppel
l
ateBodyci
rcul
atedi
tsRepor
t.TheAppel
l
ateBody
:

 uphel
dthef
indi
ngoft
hePanel
,inpar
agr
aphs7.
51and8.
1oft
hePanelRepor
t,t
hatt
he
CDSOAi
sanon-
per
missi
blespeci
fi
cact
ionagai
nstdumpi
ngorasubsi
dy,cont
rar
ytoAr
ti
cle
18. heAnt
1oft i-
Dumpi
ngAgr
eementandAr
ti
cle32. heSCM Agr
1oft eement
;
 

 consequent
lyuphel
dthePanel
’
sfi
ndi
ng,i
npar
agr
aphs7.
93and8.
1oft
hePanelRepor
t,t
hat
t
heCDSOAi
sinconsi
stentwi
thcer
tai
npr
ovi
si heAnt
onsoft i-
Dumpi
ngAgr
eementandt
he
SCM Agr
eementandt
hat
,ther
efor
e,t
heUni
tedSt
ateshasf
ail
edt
ocompl
ywi
thAr
ti
cle18.
4of
heAnt
t i-
Dumpi
ngAgr
eement
,Ar
ti
cle32. heSCM Agr
5oft eementandAr
ti
cleXVI
:4oft
he
WTOAgr
eement
;
 

 uphel
dthePanel
’
sfi
ndi
ng,
inpar
agr
aph8.
4oft
hePanel
Repor
t,t
hat
,pur
suantt
oAr
ti
cle3.
8of
t
heDSU,t
otheext
entt
hatt
heCDSOAi
sinconsi
stentwi
thpr
ovi
si heAnt
onsoft i-
Dumpi
ng
Agr
eementandt
heSCM Agr
eement
,theCDSOAnul
l
ifi
esori
mpai
rsbenef
it
saccr
uingt
othe
Compl
aini
ngPar
ti
esundert
hoseAgr
eement
s;
 
  r
ever
sedt
hePanel
’
sfi
ndi
ngs,
inpar
agr
aphs7.
66and8.
1oft
hePanelRepor
t,t
hatt
heCDSOA
i
sinconsi
stentwi
thAr
ti
cle5. heAnt
4oft i-
Dumpi
ngAgr
eementandAr
ti
cle11. heSCM
4oft
Agr
eement
;
 

 r
eject
edt
hePanel
’
sconcl
usi
on,i
npar
agr
aph7.
63oft
hePanelRepor
t,t
hatt
heUni
tedSt
ates
mayber
egar
dedasnothav
ingact
edi
ngoodf
ait
hwi
thr
espectt
oit
sobl
i
gat
ionsunderAr
ti
cle
5. heAnt
4oft i-
Dumpi
ngAgr
eementandAr
ti
cle11. heSCM Agr
4oft eement
;and
 

 r
eject
edt
hecl
aim oft
heUni
tedSt
atest
hatt
hePanelact
edi
nconsi
stent
lywi
thAr
ti
cle9.
2of
t
heDSUbynoti
ssui
ngasepar
atepanel
repor
tint
hedi
sput
ebr
oughtbyMexi
co.

TheAppel
l
ateBodyr
ecommendedt
hatt
heDSBr
equestt
heUni
tedSt
atesbr
ingt
heCDSOA i
nto
conf
ormi
tywi
thi
tsobl
i
gat
i heAnt
onsundert i-
Dumpi
ngAgr
eement
,theSCM Agr
eement
,andt
he
GATT1994.Fur
thert
oCanada’
srequest
,theDSBadopt
edt
heAppel
l
ateBodyRepor
tandt
hePanel
Repor
t,asmodi
fi
edbyt
heAppel
l
ateBody
,ati
tsmeet
ingon27Januar
y2003.

I
mpl
ement
ati
onofadopt
edr
epor
ts

On14Mar
ch2003,t
hecompl
ainant
srequest
edar
bit
rat
ionunderAr
ti
cle21.
3(c)oft
heDSU t
o
det
ermi
net
her
easonabl
eper
iodoft
imef
ori
mpl
ement
ati
onbyt
heUSoft
heDSBr
ecommendat
ions.
On24Mar
ch2003,t
hecompl
ainant
srequest
edt
heDi
rect
or-
Gener
alt
oappoi
ntt
hear
bit
rat
ori
n
consul
tat
ionwi
tht
hepar
ti
espur
suantt
ofoot
not
e12oft
heDSU.On4Apr
il2003,
theDi
rect
or-
Gener
al
appoi
ntedanAr
bit
rat
or.On13June2003,
theAr
bit
rat
ori
ssuedi
tsawar
dtot
hepar
ti
es.TheAr
bit
rat
or
concl
uded t
hatt
he “
reasonabl
e per
iod oft
ime”f
ort
he Uni
ted St
atest
oimpl
ementt
he DSB’
s
r
ecommendat
ionsandr
uli
ngsshoul
dbe11mont
hsf
rom t
hedat
eoft
heDSB’
sadopt
ionoft
hePanel
andAppel
l
ateBodyRepor
tsi
nthi
sdi
sput
e.Ther
easonabl
eper
iodoft
imewi
l
lther
efor
eexpi
reon27
December2003.

On14Januar
y2004,
theDSBwasi
nfor
medt
hatt
heUni
tedSt
ateshadmut
ual
l
yagr
eedt
omodi
fyt
he
r
easonabl
eper
iodoft
imewi
thThai
l
and,Aust
ral
i
aandI
ndonesi
a,r
espect
ivel
y,soast
oexpi
reon27
December2004.

Compl
i
ancepr
oceedi
ngs

On15Januar
y2004,ont
hegr
oundst
hatt
heUShadf
ail
edt
oimpl
ementt
heDSBr
ecommendat
ions
andr
uli
ngswi
thi
nther
easonabl
eper
iodoft
ime,
Brazi
l
,Chi
l
e,t
heEC,
Indi
a,Japan,
Kor
ea,
Canadaand
Mexi
cor
equest
edt
heDSBaut
hor
izat
iont
osuspendconcessi
onspur
suantt
oAr
ti
cle22.
2oft
heDSU.
On23Januar
y2004,
theUSr
equest
ed,
inaccor
dancewi
thAr
ti
cle22.
6oft
heDSU,
thatt
hemat
terbe
r
efer
redt
oar
bit
rat
ion,si
ncet
heUSobj
ect
edt
othel
evelofsuspensi
onofconcessi
onspr
oposedby
t
hef
oregoi
ngpar
ti
es.Ati
tsmeet
ingon26Januar
y2004,t
heDSBdeci
dedt
oref
ert
hemat
tert
o
ar
bit
rat
ion.

On31August2004,
thear
bit
rat
orci
rcul
atedi
tsdeci
sions.Thear
bit
rat
ordet
ermi
ned:

 I
trej
ect
stheposi
ti
onofBr
azi
l
,Canada,
Chi
l
e,t
heEur
opeanCommuni
ti
es,
Indi
a,Japan,
Kor
ea
andMexi
cot
hatt
hel
evelofsuspensi
onofconcessi
onsorot
herobl
i
gat
ionsshoul
dbe
equi
val
entt
othedi
sbur
sement
smadebyt
heUni
tedSt
atesundert
hemeasur ssue,i
eati .e.
,
CDSOA.TheAr
bit
rat
orconsi
der
edt
hatt
hisi
nter
pret
ati
onwasnotsuppor
tedbyt
het
ermsof
Ar
ti
cleXXI
IIofGATT1994ort
heDSU.TheAr
bit
rat
orf
oundi
tappr
opr
iat
etor
elyont
he
economi
cef
fectoft
hemeasur
e,aswasdonei
npr
evi
ousAr
ti
cle22.
6ar
bit
rat
ions.
 

 TheAr
bit
rat
orappl
i
edaneconomi
cmodelai
medatassessi
ngt
heef
fectofdi
sbur
sement
s
undert
heCDSOAonexpor
tsoft
heabov
e-ment
ionedMember
stot
heUni
tedSt
ates,
andt
hus
cameupwi
thacoef
fi
cientwhi
ch,mul
ti
pli
edbyt
heamount
sdi
sbur
sedbyt
heUni
tedSt
ates
undert
heCDSOAi
nrel
ati
ont
oant
i-
dumpi
ngorcount
erv
ail
i
ngdut
iescol
l
ect
edoni
mpor
ts
f
rom eachoft
het
hoseMember
s,gi
vesanassessmentoft
heeconomi
cef
fectoft
heCDSOA
onexpor
tsf
rom eachoft
hoseMember
sforagi
venper
iod.
 

 TheAr
bit
rat
ors’deci
sionsdonotpr
ovi
def
oranact
ual
,si
ngl
eval
ueoft
radenott
obe
exceeded by t
he abov
e-ment
ioned Member
s when suspendi
ng concessi
ons orot
her
obl
i
gat
ions v
is-
à-v
ist
he Uni
ted St
ates.The awar
ds al
l
ow t
hose Member
sto suspend
concessi
onsorot
herobl
i
gat
ionsup t
o amaxi
mum v
alueoft
radet
o becal
cul
ated by
mul
ti
ply
ingt
hepubl
i
shedamountofdi
sbur
sement
sundert
heCDSOAf
oragi
veny
earbyt
he
coef
fi
cientcal
cul
atedbyt
heAr
bit
rat
or.

Pr
oceedi
ngsunderAr
ti
cle22oft
heDSU(
remedi
es)

On10Nov
ember2004,Br
azi
l
,theEur
opeanCommuni
ti
es,I
ndi
a,Japan,Kor
ea,CanadaandMexi
co
r
equest
edaut
hor
izat
iont
osuspendconcessi
onsorot
herobl
i
gat
ionsunderAr
ti
cle22.
7oft
heDSU.At
i
ts meet
ing of26 Nov
ember2004,t
he DSB aut
hor
ized t
he suspensi
on ofconcessi
ons.On 6
December2004,Chi
l
erequest
edaut
hor
izat
iont
osuspendconcessi
onsorot
herobl
i
gat
ionsunder
Ar
ti
cle22.
7oft
heDSU.Ati
smeet
ingof17December2004,t
heDSBaut
hor
izedt
hesuspensi
onof
concessi
ons.

On23December2004,7and11Januar
y2005,Aust
ral
i
a,Thai
l
andandI
ndonesi
a,r
espect
ivel
y,
r
eachedUnder
standi
ngwi
tht
heUni
tedSt
ateswi
thr
espectt
othi
sdi
sput
e.Ati
tsmeet
ingof25
Januar
y2005,
theDSBagr
eedt
otakenot
eoft
heseUnder
standi
ngs.
On29Apr
il2005,
theEur
opeanCommuni
ti
esandCanadanot
if
iedt
heDSBt
hatt
heywer
esuspendi
ng,
asof1May2005,t
heappl
i
cat
ionofconcessi
onsandr
elat
edobl
i
gat
ionsunderGATT1994on
i
mpor
tsofcer
tai
npr
oduct
sor
igi
nat
ingi
ntheUni
tedSt
atesofAmer
ica.Thenot
if
icat
ionsf
rom t
he
Eur
opeanCommuni
ti
esandCanadasayt
hat
,fort
hef
ir
sty
ear
,anadv
alor
em addi
ti
onaldut
yof15per
centwi
l
lbei
mposedoncer
tai
npr
oduct
sor
igi
nat
ingi
ntheUni
tedSt
atesofAmer
ica,whi
chwoul
d
cov
er,ov
eroney
ear
,at
otalv
alueoft
radet
hatdoesnotexceedUS$27.
81mi
l
li
on(
inr
espectoft
he
Eur
opeanCommuni
ti
es)andUS$11.
16mi
l
li
on(
inr
espectofCanada)r
espect
ivel
y.

On18August
 2005,Japannot
if
iedt
heDSBt
hatt
heywer
esuspendi
ng,asof1Sept
ember2005,t
he
appl
i
cat
ionofconcessi
onsandr
elat
edobl
i
gat
ionsunderGATT1994oni
mpor
tsofcer
tai
npr
oduct
s
or
igi
nat
ing i
ntheUni
ted St
ates.Thenot
if
icat
ion f
rom Japan st
atest
hat
,fort
hef
ir
sty
ear
,an
ad 
val
orem addi
ti
onaldut
yof15percentwi
l
lbei
mposedoncer
tai
npr
oduct
sor
igi
nat
ingi
ntheUni
ted
St
ates,whi
chwoul
dcov
er,ov
eroney
ear
,at
otalv
alueoft
radet
hatdoesnotexceedUS$ 
52.
10
mi
l
li
on.

Att
heDSBmeet
ingon17Febr
uar
y2006,
theUni
tedSt
atesst
atedt
hatt
heUSCongr
esshadappr
oved
t
heDef
ici
tReduct
ionActon1Febr
uar
y2006andt
hePr
esi
denthadsi
gnedt
heActi
ntol
aw on8
Febr
uar
y2006br
ingi
ngt
heUSi
ntoconf
ormi
tywi
thi
tsWTO obl
i
gat
ions.Aust
ral
i
a;Br
azi
l
;Canada;
Chi
l
e;I
ndonesi
a;Hong Kong,Chi
na;I
ndi
a;Japan;Kor
ea;Mexi
co;Thai
l
and and t
he Eur
opean
Communi
ti
eswel
comedt
her
ecentst
epst
akenbyCongr
esst
owar
dst
her
epealoft
heCDSOAbut
di
sagr
eedwi
tht
heUni
tedSt
atest
hati
thadbr
oughti
tsmeasur
esf
ull
yint
oconf
ormi
tywi
tht
heDSB’
s
r
ecommendat
ionsandr
uli
ngs.

On28Apr
il2006,19Apr
il2007,3Apr
il2008,23Apr
il2009,22Apr
il2010,8Apr
il2011,7May2012
and22May2013,t
heEur
opeanUni
onnot
if
iedt
heDSBoft
henew l
i
stofpr
oduct
sonwhi
cht
he
addi
ti
onali
mpor
tdut
ywoul
d appl
y,pr
iort
othe ent
ryi
ntof
orce ofa l
evelofsuspensi
on of
concessi
ons.On22August2006,
23August2007,
29August2008,
14August2009,
25August2010,
26August2011,23August2012and23August2013,Japannot
if
iedt
heDSBoft
henew l
i
stof
pr
oduct
sonwhi
cht
headdi
ti
onali
mpor
tdut
ywoul
dappl
y,pr
iort
otheent
ryi
ntof
orceofal
evelof
suspensi
on of concessi
ons.

Canada—ExportCr
edi
tsandLoanGuar
ant
eesf
or
Regi
onalAi
rcr
aft-DS222
Thissummar yhasbeenpr epar ed Currentst at
us back 
to 
top
byt heSecr et
ariatunderit
sown
r
esponsi bil
i
t y
.Thesummar yi
sf or
generalinfor
mat iononlyandi s Aut
horizat
iontor
etali
ategr ant
edon18 
Mar
ch 
2003
noti nt
endedt oaf f
ecttherights
andobl i
gationsofMember s.
 
 
 
Keyf
act
s back to 
top
Seeal
so:
 > 
One-pagesummar yofkey Shor
tti
tl
e: Canada—Aircr
aft
f
indingsoft hisdi spute
> Thebasics:howdi sput esare Credi
tsandGuarant
ees
sett
ledi nWTO Compl
ainant
: Br
azi
l
> Comput erbasedt r
ainingon
disputeset tl
ement Respondent
: Canada
> TextoftheDisput eSet tl
ement
Under standing
Thi
rdPar
ti
es: Austr
ali
a;European
Communi t
ies;I
ndia;
Otherdi
sput
esinv olvi
ng:
Uni
tedStates
> Gener al Ag reement sci ted: Subsi
diesand
> Aircraft( ascit
edinrequestfor Count
ervai
ling
> Brazil consult
ati
ons)
> Canada Measures:Art
.1,
3
> 
Agr
eementonSubsidiesand Re questf or 22 
Januar
y 2001
Counter
vai
li
ngMeasur es
Consult
ati
ons
recei
ved:
PanelRepor
t 28 
Januar
y 2002
ci
rcul
ated:
RecoursetoArti
cle 17 
Febr
uar
y 2003
22.
6Ar bi
trat
ion
Reportci
rcul
ated:
 

Summar
yoft
hedi
sput
etodat
e back to 
top

Thesummar ybel
owwasup-t
o-dat
eat24 Febr
uary
 2010
Seealso:One-
pagesummar
yofkeyfi
ndingsofthi
sdisput
e

Consul
tat
ions

Compl
aintbyBr
azi
l
.

On22Januar
y2001,
Brazi
lrequest
edconsul
tat
ionswi
thCanadaconcer
ningsubsi
dieswhi
char
e
al
l
egedl
ybei
nggr
ant
edt
oCanada’
sregi
onal
air
craf
tindust
ry.Br
azi
l
’scl
aimsar
easf
oll
ows:

 Expor
tcr
edi
ts,
wit
hint
hemeani
ngofI
tem (
k)ofAnnexIt
otheSCM Agr
eement
,ar
ebei
ng
pr
ovi
dedt
oCanada’
sregi
onal
air
craf
tindust
rybyt
heExpor
tDev
elopmentCor
por
ati
on(
EDC)
andt
heCanadaAccount
.
 
 Loanguar
ant
ees,
wit
hint
hemeani
ngofI
tem (
j)ofAnnexIt
otheSCM Agr
eement
,ar
ebei
ng
pr
ovi
dedbyEDC,
Indust
ryCanada,
andt
hePr
ovi
nceofQuebec,
tosuppor
texpor
tsof
Canada’
sregi
onal
air
craf
tindust
ry.
 
 Br
azi
ltakest
hev
iewt
hatal
loft
heabov
e-ment
ionedmeasur
esar
esubsi
dies,
wit
hint
he
meani
ngofAr
ti
cle1oft
heSCM Agr
eement
,si
ncet
heyar
efi
nanci
alcont
ri
but
ionst
hatconf
er
abenef
it
.
 
 Accor
dingt
oBr
azi
l
,theyar
eal
socont
ingent
,inl
awori
nfact
,uponexpor
t,andconst
it
ute,
t
her
efor
e,av
iol
ati
onofAr
ti
cle3oft
heSCM Agr
eement
.

 
PanelandAppel
lat
eBodypr
oceedi
ngs

Fur
thert
oBr
azi
l
’sr
equest
,theDSBest
abl
i
shedapanel
ati
tsmeet
ingof12Mar
ch2001.Aust
ral
i
a,t
he
EC,
Indi
aandt
heUSr
eser
vedt
hei
rthi
rdpar
tyr
ight
s.On7May2001,
Brazi
lrequest
edt
heDi
rect
or-
Gener
alt
odet
ermi
net
hecomposi
ti
onoft
hePanel
.On11May2001,
thePanel
wascomposed.

On9August2001,
thePanel
inf
ormedt
heDSBt
hati
twoul
dnotbepossi
blet
ocompl
etei
tswor
k
wi
thi
nthe3mont
hsdeadl
i
nef
rom i
tscomposi
ti
on.Thepanel
inf
ormedt
hati
texpect
edt
ocompl
ete
i
tswor
kbyOct
ober2001.On28Januar
y2002,
thePanel
cir
cul
atedi
tsr
epor
ttot
heMember
s.The
Panel
:

 r
eject
edBr
azi
l
’scl
aimst
hatt
heEDCCor
por
ateAccount
,CanadaAccount
,theI
Qpr
ogr
ammes
“
assuch”const
it
utepr
ohi
bit
edexpor
tsubsi
diescont
rar
ytoAr
ti
cle3.
1(a)oft
heSCM
Agr
eement
;
 
 r
eject
edBr
azi
l
’scl
aimt
hatt
heEDCCor
por
ateAccount
, heI
CanadaAccountandt Q
pr
ogr
ammes“
asappl
i
ed”const
it
utepr
ohi
bit
edexpor
tsubsi
diescont
rar
ytoAr
ti
cle3.
1(a)of
t
heSCM Agr
eement
;
 
 uphel
dBr
azi
l
’scl
aimt
hatt
heEDCCanadaAccountf
inanci
ngt
oAi
rWi
sconsi
n,t
oAi
rNost
rum
andt
oComai
rconst
it
utesapr
ohi
bit
edexpor
tsubsi
dycont
rar
ytoAr
ti
cle3.
1(a)oft
heSCM
Agr
eement
;
 
 r
eject
edBr
azi
l
’scl
aimt
hatt
heEDCCor
por
ateAccountf
inanci
ngt
oASA,
ACA,
Kendel
lAi
r
Nost
rum andComai
rinDecember1996,
Mar
ch1997andMar
ch1998const
it
utesa
pr
ohi
bit
edexpor
tsubsi
dycont
rar
ytoAr
ti
cle3.
1(a)oft
heSCM Agr
eement
;
 
 r
eject
edBr
azi
l
’scl
ai hatI
mt Qequi
tyguar
ant
eest
oACA,
AirLi
tt
oral
,Mi
dway
,MesaAi
rgr
oup,
Ai
rNost
rum andAi
rWi
sconsi
nconst
it
utepr
ohi
bit
edexpor
tsubsi
diescont
rar
ytoAr
ti
cle3.
1(a)
oft
heSCM Agr
eement
;and
 
 r
eject
edBr
azi
l
’scl
ai hatI
mt Qloanguar
ant
eest
oMesaAi
rGr
oupandAi
rWi
sconsi
n
const
it
utepr
ohi
bit
edexpor
tsubsi
diescont
rar
ytoAr
ti
cle3.
1(a)oft
heSCM Agr
eement
.

ThePanel
alsor
ecommendedt
hatCanadawi
thdr
awt
hesubsi
diesi
dent
if
iedwi
thi
n90day
s.

Ati
tsmeet
ingon19Febr
uar
y2002,
theDSBadopt
edt
hepanel
repor
t.

I
mpl
ement
ati
onofadopt
edr
epor
ts

Att
heDSBmeet
ingon8Mar
ch2002,
Canadast
atedt
hati
twasconsi
der
ingi
tsopt
ionsonhowbest
t
oimpl
ementt
her
ecommendat
ionsandr
uli
ngsoft
heDSB.
 

Pr
oceedi
ngsunderAr
ti
cle22oft
heDSU(
remedi
es)

On23May2002,
ont
hegr
oundst
hatCanadahadf
ail
edt
oimpl
ementt
her
ecommendat
ionsoft
he
DSBwi
thi
nthe90-
dayt
ime-
per
iodgr
ant
edbyt
heDSB,
Brazi
lrequest
edaut
hor
izat
iont
osuspend
concessi
onspur
suantt
oAr
ti
cle22.
2oft
heDSU.Br
azi
lpr
oposedt
hatt
hesuspensi
onofconcessi
ons
t
akest
hef
orm ofsomeoral
loft
hef
oll
owi
ngcount
ermeasur
es:

 suspensi
onofi
tsobl
i
gat
ionsunderpar
agr
aph6(
a)ofAr
ti
cleVIofGATT1994t
odet
ermi
ne
t
heef
fectofsubsi
dizat
ionunderEDCCanadaAccountandEDCCor
por
ateAccount
pr
ogr
ammes;
 
 suspensi
onofappl
i
cat
ionofobl
i
gat
ionsundert
heAgr
eementonI
mpor
tli
cenci
ngpr
ocedur
es
r
elat
ingt
oli
censi
ngr
equi
rementoni
mpor
tsf
rom Canada;
and
 
 suspensi
onoft
ari
ffconcessi
onsandr
elat
edobl
i
gat
ionsunderGATT1994concer
ningt
hose
pr
oduct
sint
hel
i
stat
tachedt
oBr
azi
l
’scommuni
cat
ionof23May2002.

Att
heDSBmeet
ingon3June2002,
Brazi
landCanadai
nfor
medt
heDSBt
hatt
heyhadr
eachedan
agr
eementi
nthi
smat
ter
.Undert
het
ermsoft
heagr
eement
,thepar
ti
esagr
eedt
hati
twoul
dinnoway
pr
ejudi
cet
her
ightofBr
azi
ltor
equestaut
hor
izat
iont
otakeappr
opr
iat
ecount
ermeasur
esunder
Ar
ti
cle4.
10oft
heSCM Agr
eementandAr
ti
cle22.
2oft
heDSU,
noraf
fectt
her
elev
antt
imeper
iods
undert
heDSU.

Att
heDSBmeet
ingon24June2002,
Brazi
lst
atedt
hati
twasr
equest
ingaut
hor
izat
iont
osuspend
concessi
onsf
oranamountofUS$3.
36bi
l
li
ont
owar
dsCanadaast
hel
att
erhadf
ail
edt
owi
thdr
awi
ts
pr
ohi
bit
edexpor
tsubsi
dieswi
thi
nthet
ime-
fr
amespeci
fi
edbyt
hePanel
.Canadadi
sput
edBr
azi
l
’s
r
ightt
orequestaut
hor
izat
ionf
rom t
heDSBt
osuspendconcessi
ons.I
tar
guedt
hatBr
azi
lhadnot
f
ulf
il
ledt
hecondi
ti
onsspel
touti
nAr
ti
cle22.
2oft
heDSUandassuchi
tcoul
dnotav
ail
itsel
fofAr
ti
cle
22.
6oft
heDSU.Canadaal
soobj
ect
edt
othecount
ermeasur
espr
oposedbyBr
azi
l
.TheDSBr
efer
red
t
hemat
tert
oar
bit
rat
ionaccor
dingt
oAr
ti
cle22.
6oft
heDSUandAr
ti
cle4.
11oft
heSCM Agr
eement
.

On17Febr
uar
y2003,
thear
bit
rat
orci
rcul
atedi
tsawar
d.Thear
bit
rat
ordet
ermi
nedt
hatt
he
suspensi
onofconcessi
onsbyBr
azi
lcov
eri
ngt
radei
nat
otal
amountofUS$247,
797,
000woul
d
const
it
uteappr
opr
iat
ecount
ermeasur
eswi
thi
nthemeani
ngofAr
ti
cle4.
10oft
heSCM Agr
eement
.On
6Mar
ch2003,
Brazi
lrequest
edaut
hor
izat
iont
osuspendconcessi
onsorot
herobl
i
gat
ionsunder
Ar
ti
cle22.
7oft
heDSUandAr
ti
cle4.
10oft
heSCM Agr
eement
.Ati
tsmeet
ingon18Mar
ch2003,
the
DSBaut
hor
izedt
hesuspensi
onofconcessi
ons.

DI
SPUTESETTLEMENT:DI
SPUTEDS234
Uni
tedSt
ates—Cont
inuedDumpi
ngandSubsi
dy
Of
fsetActof2000
Thissummar yhasbeen C urrentst atus back to 
top  
 
preparedbyt heSecr etari
at
underitsownr esponsibil
it
y.
Thesummar yisf orgeneralAu t
horizat
iontoretali
at egr ant
edon Fi
ndalldocument
s
informati
ononl yandi snot fr
om t
hiscase
intendedtoaff ecttherights 26 
No v
e mbe r
 2004
(Sear
chesDocumentsOnl
i
ne,
andobl igat
ionsofMember s.Au t
horizat
iontoretali
at egr ant
edon mostrecentdocument
s
17 
December
 2004 appearontop)
 
 
  > quickhelpwi
th
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ng
> 
One-
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ndi ngsoft hisdi sputeK eyfacts back to 
top Document sOnli
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> Thebasics:howdi sput esare
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> Comput erbasedt r
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disputeset tl
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>  TextoftheDi spute
Sett
lementUnder standing Complai
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: C anad a;Mexico
> 
Pr obl
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Respondent
: Uni
tedSt
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webmast er@wto.
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detail
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By rdAmendment Brazi
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andwebbr owsery ouareusing.
> Canada European
> Mex ico
Communi ti
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> 
UnitedSt ates
>  Agreementon Kong,Chi na;I
ndia;
I
mpl ementati
onofAr ti
cleVIof I
ndonesi a;Isr
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theGener al Agreementon Japan;Kor ea,
Tari
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Republicof;
> GeneralAgreementonTar i
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and
> AgreementonSubsi diesand Ag reement s Anti-
dumpi ng
Counterv ail
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> AgreementEst abli
shingt he
c i
ted: (Arti
cleVIofGATT
Worl
dTr adeOr ganization ( ascit
edi n 1994) :Ar t.1, 5.4,8,
requestfor
18,18. 1
consult
ations)
GATT1994: Ar t
.VI,
VI:
3, X, X:3, XXI I
I:
1,
VI:
2
Subsidi esand
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Measur es: Ar t.5,
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32.1,32. 5
Agreement
Establishingt he
Wor l
dTr ade
Organi zation: Ar t
.
XVI,XVI :
4
Requestfor 21 
May
 2001
Consult
ati
ons
recei
ved:
PanelRepor
t 16 
Sept
ember
 2002
ci
rcul
ated:
Appel
late 16 
Januar
y 2003
BodyReport
ci
rcul
ated:
Arti
cle 
21.3(c) 13 
June 
2003
Arbi
tration
Repor t
ci
rculated:
Recourset
o 31 
August
 2004
Art
icl
e22.6
 Arbi
tr
ation
Report
ci
rcul
ated:
 

Summar
yoft
hedi
sput
etodat
e back 
to 
top

Thesummar ybel
owwasup-t
o-dat
eat24 Febr
uary
 2010
Seealso:One-
pagesummar
yofkeyfi
ndingsofthi
sdisput
e

Consul
tat
ions

Joi
ntcompl
aintbyCanadaandMexi
co.

On21December2000and21May2001r
espect
ivel
y,t
hecompl
ainant
srequest
edconsul
tat
ionswi
th
t
heUSconcer
ningt
heamendmentt
otheTar
if
fActof1930si
gnedon28Oct
ober2000wi
tht
het
it
le
of“
Cont
inuedDumpi
ngandSubsi
dyOf
fsetActof2000”(
the“
Act
”)usual
l
yref
err
edt
oas“
theBy
rd
Amendment
”.Accor
dingt
othecompl
ainant
stheActi
sinconsi
stentwi
tht
heobl
i
gat
ionsoft
heUni
ted
St
atesundersev
eralpr
ovi
sionsoft
heGATT,t
heADAgr
eement
,theSCM Agr
eement
,andt
heWTO
Agr
eement
.Inpar
ti
cul
ar,
theActi
sal
l
egedt
obei
nconsi
stentwi
tht
heobl
i
gat
ionsoft
heUni
tedSt
ates
under
:(i
)Ar
ti
cle18.
1oft
heADAi
nconj
unct
ionwi
thAr
ti
cl
eVI
:2oft
heGATTandAr
ti
cle1oft
heADA;
(
ii
)Ar
ti
cle32.
1oft
heSCM Agr
eement
,inconj
unct
ionwi
thAr
ti
cleVI
:3oft
heGATTandAr
ti
cles4.
10,
7.
9and10oft
heSCM Agr
eement
;(i
i
i)Ar
ti
cleX(
3)(
a)oft
heGATT;(
iv)Ar
ti
cle5.
4oft
heADAand
Ar
ti
cle11.
4oft
heSCM Agr
eement
;(v
)Ar
ti
cle8oft
heADAandAr
ti
cle18oft
heSCM Agr
eement
;(v
i)
Ar
ti
cle5oft
heSCM Agr
eement
;and(
vii
)Ar
ti
cleXVI
:4oft
heMar
rakeshAgr
eementest
abl
i
shi
ngt
he
WTO,
Art
icl
e18.
4oft
heADAandAr
ti
cle32.
5oft
heSCM Agr
eement
.

On12Jul
y2001,t
hecompl
ainant
sindi
sput
eWT/
DS217r
equest
edt
heest
abl
i
shmentofapanel
.At
i
tsmeet
ingon24Jul
y2001,
theDSBdef
err
edt
heest
abl
i
shmentofapanel
.

PanelandAppel
lat
eBodypr
oceedi
ngs

Fur
thert
oasecondr
equestt
oest
abl
i
shapanelbyt
hecompl
ainant
s,t
heDSBest
abl
i
shedapanelat
i
tsmeet
ingon23August2001.Ar
gent
ina;
Canada;Cost
aRi
ca;
HongKong,
Chi
na;I
srael
;Nor
wayand
Mexi
cor
eser
vedt
hei
rthi
rd-
par
tyr
ight
s.

On10August2001,
CanadaandMexi
cor
equest
edt
heest
abl
i
shmentofapanel
.Ati
tsmeet
ingon23
August2001,
theDSBdef
err
edt
heest
abl
i
shmentofapanel
.Fur
thert
oasecondr
equestt
oest
abl
i
sh
apanelbyCanadaandMexi
co,t
heDSBest
abl
i
shedapanelati
tsmeet
ingon10Sept
ember2001.
TheDSBal
soagr
eed,i
naccor
dancewi
thAr
ti
cle9oft
heDSU,t
hatt
hepanelest
abl
i
shedt
oexami
ne
t
hecompl
aintbyAust
ral
i
a,Br
azi
l
,Chi
l
e,EC,I
ndi
a,I
ndonesi
a,Japan,Kor
eaandThai
l
and(
WT/
DS217)
on23August2001woul
dal
soexami
net
hecompl
aintbyCanadaandMexi
co(
WT/
DS234)
.
On 15 Oct
ober2001,al
l11 compl
ainant
srequest
ed t
he Di
rect
or-
Gener
alt
o det
ermi
ne t
he
composi
ti
onoft
hePanel
.On25Oct
ober2001,t
hePanelwascomposed.On17Apr
il2002,t
he
Chai
rmanoft
hePaneli
nfor
medt
heDSBt
hatt
hePanelwoul
dnotbeabl
etocompl
etei
tswor
kinsi
x
mont
hssi
ncet
hepar
ti
eswer
egi
vent
hemaxi
mum amountoft
imef
orpr
epar
ingsubmi
ssi
onsand
or
alst
atement
s.ThePanel
expect
edt
ocompl
etei
tswor
kbyJul
y2002.

On16Sept
ember2002,t
hePanelRepor
twasci
rcul
atedt
oMember
s.ThePanelconcl
udedt
hatt
he
CDSOAwasi
nconsi
stentwi
thAr
ti
cles5.
4,18.
1and18.
4oft
heAnt
i-
Dumpi
ngAgr
eement
,Ar
ti
cles
11.
4,32.
1and32.
5oft
heSubsi
diesAgr
eement
,Ar
ti
clesVI
:2andVI
:3oft
heGATT1994,andAr
ti
cle
XVI
:4oft
heWTOAgr
eement
.ThePanelr
eject
edt
hecompl
aini
ngpar
ti
es’
clai
mst
hatt
heCDSOAwas
i
nconsi
stentwi
thAr
ti
cles8.
3and15oft
heAnt
i-
Dumpi
ngAgr
eement
,Ar
ti
cles4.
10,7.
9and18.
3of
t
heSubsi
diesAgr
eement
,andAr
ti
cleX:
3(a)oft
heGATT1994.Theyal
sor
eject
edMexi
co’
scl
aimt
hat
t
heCDSOA v
iol
atedSCM Ar
ti
cle5(
b).TheCDSOA i
sanew andcompl
exmeasur
e,appl
i
edi
na
compl
exl
egalenv
ironment
.Inconcl
udi
ngt
hatt
heCDSOAwasi
nvi
olat
ionoft
heabov
ement
ioned
pr
ovi
sions,
thePanelhadbeenconf
ront
edbysensi
ti
vei
ssuesr
egar
dingt
heuseofsubsi
diesast
rade
r
emedi
es.I
fMember
swer
eoft
hev
iew t
hatsubsi
disat
ioni
saper
mit
tedr
esponset
ounf
airt
rade
pr
act
ices,t
hePanelsuggest
edt
hatt
heycl
ari
fyt
hismat
tert
hroughnegot
iat
ion.Pur
suantt
oAr
ti
cle
3.
8oft
heDSU,t
hePanelconcl
udedt
hatt
otheext
entt
hatt
heCDSOAwasi
nconsi
stentwi
tht
he
pr
ovi
sionsoft
heAnt
i-
Dumpi
ngAgr
eement
,theSCM Agr
eement
,andt
heGATT1994,t
heCDSOA
nul
l
ifi
edori
mpai
redbenef
it
saccr
uingt
othecompl
aini
ngpar
ti
esundert
hoseagr
eement
s.ThePanel
r
ecommendedt
hatt
heDSBr
equestt
heUni
tedSt
atest
obr
ingt
heCDSOAi
ntoconf
ormi
tywi
thi
ts
obl
i
gat
ionsundert
heAnt
i-
Dumpi
ngAgr
eement
,theSCM Agr
eement
,andt
heGATT of1994by
r
epeal
i
ngt
heCDSOA.

On18Oct
ober2002,t
heUni
tedSt
atesnot
if
iedi
tsdeci
si
ont
oappealt
otheAppel
l
ateBodycer
tai
n
i
ssuesofl
awcov
eredi
nthePanelRepor
tandcer
tai
nlegali
nter
pret
ati
onsdev
elopedbyt
hePanel
.On
13December2002,t
heAppel
l
ateBodyi
nfor
medt
heDSBt
hati
twasnotabl
etoci
rcul
atet
heRepor
t
wi
thi
n60day
sfr
om t
heappealandt
hatt
heRepor
twast
obeci
rcul
atednol
atert
han16Januar
y
2003.On16Januar
y2003,
theAppel
l
ateBodyci
rcul
atedi
tsRepor
t.TheAppel
l
ateBody
:

 uphel
dthef
indi
ngoft
hePanel
,inpar
agr
aphs7.
51and8.
1oft
hePanelRepor
t,t
hatt
he
CDSOAi
sanon-
per
missi
blespeci
fi
cact
ionagai
nstdumpi
ngorasubsi
dy,cont
rar
ytoAr
ti
cle
18. heAnt
1oft i-
Dumpi
ngAgr
eementandAr
ti
cle32. heSCM Agr
1oft eement
;
 

 consequent
lyuphel
dthePanel
’
sfi
ndi
ng,
inpar
agr
aphs7.
93and8.
1oft
hePanelRepor
t,t
hat
t
heCDSOAi
sinconsi
stentwi
thcer
tai
npr
ovi
si heAnt
onsoft i-
Dumpi
ngAgr
eementandt
he
SCM Agr
eementandt
hat
,ther
efor
e,t
heUni
tedSt
ateshasf
ail
edt
ocompl
ywi
thAr
ti
cle18.
4
heAnt
oft i-
Dumpi
ngAgr
eement
,Ar
ti
cle32. heSCM Agr
5oft eementandAr
ti
cleXVI
:4oft
he
WTOAgr
eement
;
 

 uphel
dthePanel
’
sfi
ndi
ng,
inpar
agr
aph8.
4oft
hePanel
Repor
t,t
hat
,pur
suantt
oAr
ti
cle3.
8of
 t
heDSU,t
otheext
entt
hatt
heCDSOAi
sinconsi
stentwi
thpr
ovi
si heAnt
onsoft i-
Dumpi
ng
Agr
eementandt
heSCM Agr
eement
,theCDSOAnul
l
ifi
esori
mpai
rsbenef
it
saccr
uingt
othe
Compl
aini
ngPar
ti
esundert
hoseAgr
eement
s;
 

 r
ever
sedt
hePanel
’
sfi
ndi
ngs,
inpar
agr
aphs7.
66and8.
1oft
hePanelRepor
t,t
hatt
heCDSOA
i
sinconsi
stentwi
thAr
ti
cle5. heAnt
4oft i-
Dumpi
ngAgr
eementandAr
ti
cle11. heSCM
4oft
Agr
eement
;
 

 r
eject
edt
hePanel
’
sconcl
usi
on,i
npar
agr
aph7.
63oft
hePanelRepor
t,t
hatt
heUni
tedSt
ates
mayber
egar
dedasnothav
ingact
edi
ngoodf
ait
hwi
thr
espectt
oit
sobl
i
gat
ionsunderAr
ti
cle
5. heAnt
4oft i-
Dumpi
ngAgr
eementandAr
ti
cle11. heSCM Agr
4oft eement
;and
 

 r
eject
edt
hecl
aim oft
heUni
tedSt
atest
hatt
hePanelact
edi
nconsi
stent
lywi
thAr
ti
cle9.
2of
t
heDSUbynoti
ssui
ngasepar
atepanel
repor
tint
hedi
sput
ebr
oughtbyMexi
co.

TheAppel
l
ateBodyr
ecommendedt
hatt
heDSBr
equestt
heUni
tedSt
atesbr
ingt
heCDSOA i
nto
conf
ormi
tywi
thi
tsobl
i
gat
i heAnt
onsundert i-
Dumpi
ngAgr
eement
,theSCM Agr
eement
,andt
he
GATT1994.Fur
thert
oCanada’
srequest
,theDSBadopt
edt
heAppel
l
ateBodyRepor
tandt
hePanel
Repor
t,asmodi
fi
edbyt
heAppel
l
ateBody
,ati
tsmeet
ingon27Januar
y2003.

I
mpl
ement
ati
onofadopt
edr
epor
ts

On14Mar
ch2003,t
hecompl
ainant
srequest
edar
bit
rat
ionunderAr
ti
cle21.
3(c)oft
heDSU t
o
det
ermi
net
her
easonabl
eper
iodoft
imef
ori
mpl
ement
ati
onbyt
heUSoft
heDSBr
ecommendat
ions.
On24Mar
ch2003,t
hecompl
ainant
srequest
edt
heDi
rect
or-
Gener
alt
oappoi
ntt
hear
bit
rat
ori
n
consul
tat
ionwi
tht
hepar
ti
espur
suantt
ofoot
not
e12oft
heDSU.On4Apr
il2003,
theDi
rect
or-
Gener
al
appoi
ntedanAr
bit
rat
or.On13June2003,
theAr
bit
rat
ori
ssuedi
tsawar
dtot
hepar
ti
es.TheAr
bit
rat
or
concl
uded t
hatt
he “
reasonabl
e per
iod oft
ime”f
ort
he Uni
ted St
atest
oimpl
ementt
he DSB’
s
r
ecommendat
ionsandr
uli
ngsshoul
dbe11mont
hsf
rom t
hedat
eoft
heDSB’
sadopt
ionoft
hePanel
andAppel
l
ateBodyRepor
tsi
nthi
sdi
sput
e.Ther
easonabl
eper
iodoft
imewi
l
lther
efor
eexpi
reon27
December2003.

On14Januar
y2004,
theDSBwasi
nfor
medt
hatt
heUni
tedSt
ateshadmut
ual
l
yagr
eedt
omodi
fyt
he
r
easonabl
eper
iodoft
imewi
thThai
l
and,Aust
ral
i
aandI
ndonesi
a,r
espect
ivel
y,soast
oexpi
reon27
December2004.

Pr
oceedi
ngsunderAr
ti
cle22oft
heDSU(
remedi
es)
On15Januar
y2004,ont
hegr
oundst
hatt
heUShadf
ail
edt
oimpl
ementt
heDSBr
ecommendat
ions
andr
uli
ngswi
thi
nther
easonabl
eper
iodoft
ime,
Brazi
l
,Chi
l
e,t
heEC,
Indi
a,Japan,
Kor
ea,
Canadaand
Mexi
cor
equest
edt
heDSBaut
hor
izat
iont
osuspendconcessi
onspur
suantt
oAr
ti
cle22.
2oft
heDSU.
On23Januar
y2004,
theUSr
equest
ed,
inaccor
dancewi
thAr
ti
cle22.
6oft
heDSU,
thatt
hemat
terbe
r
efer
redt
oar
bit
rat
ion,si
ncet
heUSobj
ect
edt
othel
evelofsuspensi
onofconcessi
onspr
oposedby
t
hef
oregoi
ngpar
ti
es.Ati
tsmeet
ingon26Januar
y2004,t
heDSBdeci
dedt
oref
ert
hemat
tert
o
ar
bit
rat
ion.

On31August2004,
thear
bit
rat
orci
rcul
atedi
tsdeci
sions.Thear
bit
rat
ordet
ermi
ned:

 I
trej
ect
stheposi
ti
onofBr
azi
l
,Canada,
Chi
l
e,t
heEur
opeanCommuni
ti
es,
Indi
a,Japan,
Kor
ea
andMexi
cot
hatt
hel
evelofsuspensi
onofconcessi
onsorot
herobl
i
gat
ionsshoul
dbe
equi
val
entt
othedi
sbur
sement
smadebyt
heUni
tedSt
atesundert
hemeasur ssue,i
eati .e.
,
CDSOA.TheAr
bit
rat
orconsi
der
edt
hatt
hisi
nter
pret
ati
onwasnotsuppor
tedbyt
het
ermsof
Ar
ti
cleXXI
IIofGATT1994ort
heDSU.TheAr
bit
rat
orf
oundi
tappr
opr
iat
etor
elyont
he
economi
cef
fectoft
hemeasur
e,aswasdonei
npr
evi
ousAr
ti
cle22.
6ar
bit
rat
ions.
 

 TheAr
bit
rat
orappl
i
edaneconomi
cmodelai
medatassessi
ngt
heef
fectofdi
sbur
sement
s
undert
heCDSOAonexpor
tsoft
heabov
e-ment
ionedMember
stot
heUni
tedSt
ates,
andt
hus
cameupwi
thacoef
fi
cientwhi
ch,mul
ti
pli
edbyt
heamount
sdi
sbur
sedbyt
heUni
tedSt
ates
undert
heCDSOAi
nrel
ati
ont
oant
i-
dumpi
ngorcount
erv
ail
i
ngdut
iescol
l
ect
edoni
mpor
ts
f
rom eachoft
het
hoseMember
s,gi
vesanassessmentoft
heeconomi
cef
fectoft
heCDSOA
onexpor
tsf
rom eachoft
hoseMember
sforagi
venper
iod.
 

 TheAr
bit
rat
ors’deci
sionsdonotpr
ovi
def
oranact
ual
,si
ngl
eval
ueoft
radenott
obe
exceeded by t
he abov
e-ment
ioned Member
s when suspendi
ng concessi
ons orot
her
obl
i
gat
ions v
is-
à-v
ist
he Uni
ted St
ates.The awar
ds al
l
ow t
hose Member
sto suspend
concessi
onsorot
herobl
i
gat
ionsup t
o amaxi
mum v
alueoft
radet
o becal
cul
ated by
mul
ti
ply
ingt
hepubl
i
shedamountofdi
sbur
sement
sundert
heCDSOAf
oragi
veny
earbyt
he
coef
fi
cientcal
cul
atedbyt
heAr
bit
rat
or.

On10Nov
ember2004,Br
azi
l
,theEur
opeanCommuni
ti
es,I
ndi
a,Japan,Kor
ea,CanadaandMexi
co
r
equest
edaut
hor
izat
iont
osuspendconcessi
onsorot
herobl
i
gat
ionsunderAr
ti
cle22.
7oft
heDSU.At
i
ts meet
ing of26 Nov
ember2004,t
he DSB aut
hor
ized t
he suspensi
on ofconcessi
ons.On 6
December2004,Chi
l
erequest
edaut
hor
izat
iont
osuspendconcessi
onsorot
herobl
i
gat
ionsunder
Ar
ti
cle22.
7oft
heDSU.Ati
smeet
ingof17December2004,t
heDSBaut
hor
izedt
hesuspensi
onof
concessi
ons.

On23December2004,7and11Januar
y2005,Aust
ral
i
a,Thai
l
andandI
ndonesi
a,r
espect
ivel
y,
r
eachedUnder
standi
ngwi
tht
heUni
tedSt
ateswi
thr
espectt
othi
sdi
sput
e.Ati
tsmeet
ingof25
Januar
y2005,
theDSBagr
eedt
otakenot
eoft
heseUnder
standi
ngs.
On29Apr
il2005,
theEur
opeanCommuni
ti
esandCanadanot
if
iedt
heDSBt
hatt
heywer
esuspendi
ng,
asof1May2005,t
heappl
i
cat
ionofconcessi
onsandr
elat
edobl
i
gat
ionsunderGATT1994on
i
mpor
tsofcer
tai
npr
oduct
sor
igi
nat
ingi
ntheUni
tedSt
atesofAmer
ica.Thenot
if
icat
ionsf
rom t
he
Eur
opeanCommuni
ti
esandCanadasayt
hat
,fort
hef
ir
sty
ear
,anadv
alor
em addi
ti
onaldut
yof15per
centwi
l
lbei
mposedoncer
tai
npr
oduct
sor
igi
nat
ingi
ntheUni
tedSt
atesofAmer
ica,whi
chwoul
d
cov
er,ov
eroney
ear
,at
otalv
alueoft
radet
hatdoesnotexceedUS$27.
81mi
l
li
on(
inr
espectoft
he
Eur
opeanCommuni
ti
es)andUS$11.
16mi
l
li
on(
inr
espectofCanada)r
espect
ivel
y.

On18August
 2005,Japannot
if
iedt
heDSBt
hatt
heywer
esuspendi
ng,asof1Sept
ember2005,t
he
appl
i
cat
ionofconcessi
onsandr
elat
edobl
i
gat
ionsunderGATT1994oni
mpor
tsofcer
tai
npr
oduct
s
or
igi
nat
ing i
ntheUni
ted St
ates.Thenot
if
icat
ion f
rom Japan st
atest
hat
,fort
hef
ir
sty
ear
,an
ad 
val
orem addi
ti
onaldut
yof15percentwi
l
lbei
mposedoncer
tai
npr
oduct
sor
igi
nat
ingi
ntheUni
ted
St
ates,whi
chwoul
dcov
er,ov
eroney
ear
,at
otalv
alueoft
radet
hatdoesnotexceedUS$ 
52.
10
mi
l
li
on.

Att
heDSBmeet
ingon17Febr
uar
y2006,
theUni
tedSt
atesst
atedt
hatt
heUSCongr
esshadappr
oved
t
heDef
ici
tReduct
ionActon1Febr
uar
y2006andt
hePr
esi
denthadsi
gnedt
heActi
ntol
aw on8
Febr
uar
y2006br
ingi
ngt
heUSi
ntoconf
ormi
tywi
thi
tsWTO obl
i
gat
ions.Aust
ral
i
a;Br
azi
l
;Canada;
Chi
l
e;I
ndonesi
a;Hong Kong,Chi
na;I
ndi
a;Japan;Kor
ea;Mexi
co;Thai
l
and and t
he Eur
opean
Communi
ti
eswel
comedt
her
ecentst
epst
akenbyCongr
esst
owar
dst
her
epealoft
heCDSOAbut
di
sagr
eedwi
tht
heUni
tedSt
atest
hati
thadbr
oughti
tsmeasur
esf
ull
yint
oconf
ormi
tywi
tht
heDSB’
s
r
ecommendat
ionsandr
uli
ngs.

On28Apr
il2006,19Apr
il2007and3Apr
il2008,t
heEur
opeanCommuni
ti
esnot
if
iedt
heDSBoft
he
newl
i
stofpr
oduct
sonwhi
cht
headdi
ti
onali
mpor
tdut
ywoul
dappl
y,pr
iort
otheent
ryi
ntof
orceofa
l
evelofsuspensi
onofconcessi
ons.On22August2006,
23August2007and29August2008,
Japan
not
if
iedt
heDSBoft
henewl
i
stofpr
oduct
sonwhi
cht
headdi
ti
onali
mpor
tdut
ywoul
dappl
y,pr
iort
o
t
he ent
ry i
nto f
orce of a l
evel of suspensi
on of concessi
ons.

DI
SPUTESETTLEMENT:DI
SPUTEDS267
Uni
tedSt
ates—Subsi
diesonUpl
andCot
ton
Thissummar yhasbeen C urrentst at
us back to 
top  
 
preparedbyt heSecr etari
at
underitsownr esponsibil
it
y.
Thesummar yisf orgeneralAut
horizat
iontoret
ali
at egr ant
edon Fi
ndalldocument
s
informati
ononl yandi snot fr
om t
hiscase
intendedtoaff ecttherights19 
November  
2009
(Sear
chesDocumentsOnl
i
ne,
andobl igat
ionsofMember s. mostrecentdocument
s
  appearontop)
 
 
> quickhelpwi
th
Keyf
act
s back 
to 
top
downloadi
ng
Seealso:
> 
One-
pagesummar yofkey >compr
ehensivehelpon
fi
ndi
ngsofthisdispute Shor
tti
tl
e: US—Upl
andCot
ton Document sOnli
ne
> 
Thebasi
cs:howdisput
esar e
 sett
ledinWTO Compl
ainant
:Br
azi
l > 
all
document
s
> 
Computerbasedt rai
ningon
disputesett
lement Respondent
: Uni
tedSt
ates  
 
> TextoftheDi spute
Set
tl
ementUnder standing Thi
rdPar
ti
es:Argentina; Austral
i
a;
Benin;Canada; Chad; > 
Pr obl
emsv iewi
ngt hispage?
China;Chi nese Pleasecontact
Ot herdisputesinvolvi
ng: webmast er@wto.
or ggivi
ng
> Texti
les Taipei;European detail
softheoperatingsyst
em
> Agr
icult
ural
Pr oducts Communi ties;Indi
a; andwebbr owsery ouareusing.
> Cotton NewZeal and;
> Brazi
l
> 
Unit
edSt ates Pakistan;Par aguay;
> 
Agr eementonAgr icul
ture Venezuel a,
> 
General Agr
eementonTar if
fs Boliv
arianRepubl i
c
andTrade1994 of;Japan; Thailand
> 
Agr
eementonSubsi
diesand
Counter
vai
l
ingMeasures Agr eement s Agri
cult
ur e:Art.3.
3,
cited: 7.
1,8,9.1, 10.1
(ascit
edi n GATT1994: Art
.II
I:
4,
requestfor
XVI
consult
ations)
Subsi
diesand
Counter
v aili
ng
Measures: Ar t
.3,5,6
Requestfor 27 
Sept
ember
 2002
Consult
ati
ons
recei
ved:
PanelRepor
t 8 
Sept
ember
 2004
ci
rcul
ated:
Appel
late 3 
Mar
ch 
2005
BodyReport
ci
rcul
ated:
Art
icl
e 21.
5 18 
December
 2007
PanelReport
ci
rcul
ated:
Art
icl
e 21.
5 2 
June 
2008
Appel
late
BodyReport
ci
rcul
ated:
Recourseto 31 
August
 2009
Arti
cle22.
6
Arbi
trat
ion
Report
ci
rculat
ed:
 
 

Summar
yoft
hedi
sput
etodat
e 
back 
to 
top

Thesummar ybelowwasup-
to-
dateat
20 
Nov ember 
2012
Seealso:One-
pagesummaryofkeyfi
ndi
ngs
oft
hisdisput
e

Consul
tat
ions

Compl
aintbyBr
azi
l
.

On27Sept
ember2002Br
azi
lrequest
edconsul
tat
ionswi
tht
heUni
tedSt
atesr
egar
dingpr
ohi
bit
edand
act
ionabl
esubsi
diespr
ovi
dedt
oUSpr
oducer
s,user
sand/
orexpor
ter
sofupl
andcot
ton,aswel
las
l
egi
slat
ion,r
egul
ati
ons,st
atut
oryi
nst
rument
sandamendment
sther
etopr
ovi
dingsuchsubsi
dies
(
incl
udi
ngexpor
tcr
edi
ts)
,gr
ant
s,andanyot
herassi
stancet
otheUSpr
oducer
s,user
sandexpor
ter
s
ofupl
andcot
ton(
“USupl
andcot
toni
ndust
ry”
).

Br
azi
lcont
endedt
hatt
hesemeasur
eswer
einconsi
stentwi
tht
heobl
i
gat
ionsoft
heUni
tedSt
ates
undert
hef
oll
owi
ngpr
ovi
sions:Ar
ti
cles5(
c),6.
3(b)
,(c)and(
d),3.
1(a)(
incl
udi
ngi
tem (
j)oft
he
I
ll
ust
rat
iveLi
stofExpor
tSubsi
diesi
nAnnexI
),3.
1(b)
,and3.
2oft
heSCM Agr
eement
;Ar
ti
cles3.
3,7.
1,
8,
9.1and10.
1oft
heAgr
eementonAgr
icul
tur
e;andAr
ti
cleI
II
:4ofGATT1994.Br
azi
lwasoft
hev
iew
t
hatt
heUSst
atut
es,r
egul
ati
ons,andadmi
nist
rat
ivepr
ocedur
esl
i
stedabov
ewer
einconsi
stentwi
th
t
hesepr
ovi
sionsassuchandasappl
i
ed.

On 9 Oct
oberand 11 Oct
ober2002,Zi
mbabwe and I
ndi
a,r
espect
ivel
y,r
equest
ed t
ojoi
nthe
consul
tat
ions.On14Oct
ober2002,Ar
gent
inaandCanadar
equest
edt
ojoi
ntheconsul
tat
ions.The
Uni
tedSt
atesi
nfor
medt
heDSBt
hati
thadaccept
edt
her
equest
sofAr
gent
inaandI
ndi
atoj
oint
he
consul
tat
ions.

On6Febr
uar
y2003,Br
azi
lrequest
edt
heest
abl
i
shmentofapanel
.Ati
tsmeet
ingon19Febr
uar
y
2003,
theDSBdef
err
edt
heest
abl
i
shmentofapanel
.

PanelandAppel
lat
eBodypr
oceedi
ngs

Fur
thert
oasecondr
equestbyBr
azi
l
,theDSBest
abl
i
shedaPanelati
tsmeet
ingon18Mar
ch2003.
Ar
gent
ina,Canada,Chi
na,Chi
neseTai
pei
,theEur
opeanCommuni
ti
es,I
ndi
a,Paki
stanandVenezuel
a
r
eser
vedt
hei
rthi
rd-
par
tyr
ight
stopar
ti
cipat
eint
hePanel
’
spr
oceedi
ngs.

Att
hatmeet
ing,
theChai
rmanoft
heDSBannouncedt
hathecont
inuedt
oconsul
twi
thBr
azi
landt
he
Uni
tedSt
atesont
hei
ssueofappoi
nti
ngaDSBr
epr
esent
ati
vet
ofaci
l
itat
ethei
nfor
mat
ion-
gat
her
ing
pr
ocess,pur
suantt
otheAnnexVpr
ocedur
esundert
heSCM Agr
eement
,whi
chhadbeeni
nvokedby
Br
azi
lini
tspanelr
equest
.Fol
l
owi
ngacommuni
cat
ionf
rom t
heUni
tedSt
ates,on20 
Mar
ch2003,
Br
azi
lindi
cat
ed,i
nconf
ormi
tywi
thpar
agr
aph1ofAnnexV,t
hati
tconsi
der
edt
hef
oll
owi
ngt
hir
d-
count
ymar
ket
s as r
elev
ant
:Ar
gent
ina,Bangl
adesh,Col
ombi
a,Ger
many
,Indi
a,I
ndonesi
a,I
tal
y,
Por
tugal
,Phi
l
ippi
nes,
Slov
eni
a,Sout
hAf
ri
ca,
Sout
hKor
ea,
Swi
tzer
land,
Thai
l
andandTur
key
.

On24Mar
ch2003,
Beni
nreser
vedi
tst
hir
d-par
tyr
ight
s.On25Mar
ch2003,
Aust
ral
i
areser
vedi
tst
hir
d
-
par
tyr
ight
s.On26Mar
ch2003,Par
aguayr
eser
vedi
tst
hir
d-par
tyr
ight
s.On28Mar
ch2003,New
Zeal
andr
eser
vedi
tst
hir
d-par
tyr
ight
s.On4Apr
il2003,
Chadr
eser
vedi
tst
hir
d-par
tyr
ight
s.On9May
2003,Br
azi
lrequest
edt
heDi
rect
or-
Gener
alt
ocomposet
hepanel
.On19May2003,t
heDi
rect
or-
Gener
alcomposedt
hepanel
.

On17Nov
ember2003,t
heChai
rmanoft
hepaneli
nfor
medt
heDSBt
hati
twoul
dnotbeabl
eto
compl
etei
tswor
kinsi
xmont
hsduet
othecompl
exi
tyoft
hemat
terandt
hatt
hepanelexpect
edt
o
i
ssuei
tsf
inal
repor
ttot
hepar
ti
esi
nMay2004.
On8Sept
ember2004,
thepanel
repor
twasci
rcul
atedt
oMember
s.Thepanel
foundt
hat
:

 agr
icul
tur
alexpor
tcr
edi
tguar
ant
eesar
esubj
ectt
oWTOexpor
tsubsi
dydi
sci
pli
nesandt
hree
Uni
tedSt
atesexpor
tcr
edi
tguar
ant
eepr
ogr
ammesar
epr
ohi
bit
edexpor
tsubsi
dieswhi
ch
hav
enoPeaceCl
ausepr
otect
ionandar
einv
iol
ati
onoft
hosedi
sci
pli
nes;
 

 t
heUni
tedSt
atesal
sogr
ant
ssev
eral
otherpr
ohi
bit
edsubsi
diesi
nrespectofcot
ton;
 

 Uni
tedSt
ates’domest
icsuppor
tpr
ogr
ammesi
nrespectofcot
tonar
enotpr
otect
edbyt
he
Peace Cl
ause,and cer
tai
n oft
hese pr
ogr
ammes r
esul
tin ser
ious pr
ejudi
ce t
o Br
azi
l
’s
i
nter
est
sint
hef
orm ofpr
icesuppr
essi
oni
nthewor
ldmar
ket
.

On18Oct
ober2004,t
heUni
tedSt
atesnot
if
iedi
tsi
ntent
iont
oappealcer
tai
nissuesofl
awandl
egal
i
nter
pret
ati
onsdev
elopedbyt
hepanel
.On16December2004,t
heChai
rmanoft
heAppel
l
ateBody
i
nfor
medt
heDSB t
hati
nli
ghtoft
henumer
ousandcompl
exi
ssuesr
aisedi
nthi
sdi
sput
e,t
he
i
ncr
easedbur
denont
heAppel
l
ateBodyaswel
last
het
ransl
ati
onser
vices,t
hei
nter
veni
nghol
i
day
per
iod,andt
hef
actt
hatt
heAppel
l
ateBodyexpect
stobeconsi
der
ingt
woort
hreeot
herappeal
sin
t
hecomi
ngweeks,
theAppel
l
ateBodywoul
dnotbeabl
etoci
rcul
atei
tsRepor
tby
,17December2004.
TheChai
rmanst
atedt
hatt
heAppel
l
ateBodyest
imat
edt
hatt
heAppel
l
ateBodyr
epor
twoul
dbe
ci
rcul
atednol
atert
han3Mar
ch2005.

On3Mar
ch2005,t
heAppel
l
ateBodyr
epor
twasci
rcul
atedt
oMember
s.TheAppel
l
ateBodyf
ound
i
nteral
i
aasf
oll
ows:

A.Asr
egar
dst
heappl
i
cabi
l
ityoft
hePeaceCl
auset
othi
sdi
sput
e,t
heAppel
l
ateBody
:

 uphel
dthepanel
’
sfi
ndi
ngt
hatt
wochal
l
engedmeasur
es(
product
ionf
lexi
bil
i
tycont
ractand
di
rectpay
ment
s)ar
erel
atedt
othet
ypeofpr
oduct
ionunder
takenaf
tert
hebaseper
iodand
t
husar
enotgr
eenboxmeasur
esconf
ormi
ngf
ull
ytopar
agr
aph6(
b)ofAnnex2t
othe
Agr
eementonAgr
icul
tur
e;and,t
her
efor
e,ar
enotexempt
,byv
irt
ueofAr
ti
cle13(
a)(
ii
),f
rom
act
ionsunderAr
ti
cleXVIofGATT1994andPar
tII
Ioft
heSCM Agr
eement
;
 

 modi
fi
edt
hepanel
’
sint
erpr
etat
ionoft
hephr
ase“
suppor
ttoaspeci
fi
ccommodi
ty”i
nAr
ti
cle
13(
b)(
ii
),butuphel
dthePanel
’
sconcl
usi
ont
hatt
hechal
l
engeddomest
icsuppor
tmeasur
es
gr
ant
edsuppor
ttoupl
andcot
ton;
and
 

 uphel
dthepanel
’
sfi
ndi
ngt
hatt
hechal
l
engeddomest
icsuppor
tmeasur
esgr
ant
ed,bet
ween
1999 and 2002,suppor
tto upl
and cot
ton i
n excess oft
hatdeci
ded dur
ing t
he 1992
benchmar
kper
iodand,t
her
efor
e,t
hatt
hesemeasur
esar
enotexempt
,byv
irt
ueofAr
ti
cle
13(
b)(
ii
),f
rom act
ions underAr
ti
cle XVI
:1 oft
he GATT 1994 and Par
tII
Ioft
he SCM
 Agr
eement
;
 

B.Asr
egar
dsser
iouspr
ejudi
ce,
theAppel
l
ateBody
:

 uphel
dthe panel
’
sfi
ndi
ng t
hatt
he ef
fectoft
he chal
l
enged pr
ice-
cont
ingentsubsi
dies
(
mar
ket
ing l
oan pr
ogr
am pay
ment
s,usermar
ket
ing (
Step 2)pay
ment
s,mar
ketl
oss
assi
stancepay
ment
s,andcount
er-
cycl
i
calpay
ment
s)ar
esi
gni
fi
cantpr
icesuppr
essi
onwi
thi
n
t
hemeani
ngofAr
ti
cle6.
3(c)oft
heSCM Agr
eement
,byi
ntur
nuphol
dingt
hepanel
’
sfi
ndi
ngs
t
hat
:(i
)the“
samemar
ket
”inAr
ti
cle6.
3(c)maybea“
wor
ldmar
ket
”,a“
wor
ldmar
ket
”for
upl
andcot
tonexi
sts,and“
theA-
Indexcanbet
akent
oref
lectawor
ldpr
icei
nthewor
ld
mar
ketf
orupl
andcot
ton”
;(i
i
)“acausall
i
nkexi
sts”bet
weent
hepr
ice-
cont
ingentsubsi
dies
andsi
gni
fi
cantpr
icesuppr
essi
on,andt
hatt
hisl
i
nki
snotat
tenuat
edbyot
herf
act
orsr
aised
byt
heUni
tedSt
ates;(
ii
i)i
twasnotr
equi
redt
oquant
if
ypr
eci
sel
ythebenef
itconf
err
edon
upl
andcot
tonbyt
hepr
ice-
cont
ingentsubsi
dies;and(
iv)t
heef
fectoft
hepr
ice-
cont
ingent
subsi
diesf
ormar
ket
ingy
ear
s1999t
o2002i
ssi
gni
fi
cantpr
icesuppr
essi
oni
nthesame
per
iod;
 

 f
oundt
hatt
hepanelsetoutt
hef
indi
ngsoff
act
,theappl
i
cabi
l
ityofr
elev
antpr
ovi
sions,and
t
hebasi
crat
ional
ebehi
ndt
hisf
indi
ng,
asr
equi
redbyAr
ti
cle12.
7oft
heDSU;
and
 

 f
oundi
tunnecessar
ytor
uleont
hei
nter
pret
ati
onoft
het
erm“
wor
ldmar
ketshar
e”i
nAr
ti
cle
6.
3(d)oft
heSCM Agr
eementandnei
theruphol
dsnorr
ever
sest
hepanel
’
sfi
ndi
ngt
hatt
his
t
erm meanswor
ldsuppl
yshar
e;

C.Asr
egar
dsusermar
ket
ing(
Step2)pay
ment
s,t
heAppel
l
ateBody
:

 uphel
dthepanel
’
sfi
ndi
ngst
hatSt
ep2pay
ment
stodomest
icuser
sofUni
tedSt
atesupl
and
cot
ton,
underSect
ion1207(
a)oft
heFSRIActof2002,
aresubsi
diescont
ingentont
heuseof
domest
icov
eri
mpor
tedgoodst
hatar
einconsi
stentwi
thAr
ti
cles3.
1(b)and3.
2oft
heSCM
Agr
eement
;and
 

 uphel
dst
hePanel
’
sfi
ndi
ngst
hatSt
ep2pay
ment
stoexpor
ter
sofUni
tedSt
atesupl
and
cot
ton,pur
suantt
oSect
ion1207(
a)oft
heFSRIActof2002,ar
esubsi
diescont
ingentupon
expor
tper
for
mancewi
thi
nthemeani
ngofAr
ti
cle9.
1(a)oft
heAgr
eementonAgr
icul
tur
ethat
ar
einconsi
stentwi
thAr
ti
cles3.
3and8oft
hatAgr
eementandAr
ti
cles3.
1(a)and3.
2oft
he
SCM Agr
eement
;

D.Asr
egar
dsexpor
tcr
edi
tguar
ant
eepr
ogr
ams,
theAppel
l
ateBody
:

 i
namaj
ori
tyopi
nion,uphel
dthepanel
’
sfi
ndi
ngt
hatAr
ti
cle10.
2oft
heAgr
eementon
 Agr
icul
tur
edoesnotexemptexpor
tcr
edi
tguar
ant
eesf
rom t
heexpor
tsubsi
dydi
sci
pli
nesi
n
Ar
ti
cle10.
1oft
hatAgr
eement
;
 

 oneMemberoft
heDi
vi
sion,i
nasepar
ateopi
nion,expr
essedt
hecont
rar
yvi
ew t
hatAr
ti
cle
10.
2oft
heAgr
eementonAgr
icul
tur
eexempt
sexpor
tcr
edi
tguar
ant
eesf
rom t
hedi
sci
pli
nes
ofAr
ti
cle10.
1oft
hatAgr
eementunt
ili
nter
nat
ional
disci
pli
nesar
eagr
eedupon;
 

 f
oundt
hatt
hepaneldi
dnoti
mpr
oper
lyappl
ythebur
denofpr
oofi
nfi
ndi
ngt
hatt
heUni
ted
St
ates’expor
tcr
edi
tguar
ant
eepr
ogr
amsar
epr
ohi
bit
edexpor
tsubsi
diesunderAr
ti
cle3.
1(a)
oft
heSCM Agr
eementandar
econsequent
lyi
nconsi
stentwi
thAr
ti
cle3.
2oft
hatAgr
eement
;
 

 uphel
dthepanel
’
sfi
ndi
ngt
hat“
theUni
tedSt
atesexpor
tcr
edi
tguar
ant
eepr
ogr
ammesat
i
ssue-
GSM 102,
GSM 103andSCGP-
const
it
uteaperseexpor
tsubsi
dywi
thi
nthemeani
ngof
i
tem (
j)oft
heI
ll
ust
rat
iveLi
stofExpor
tSubsi
diesi
nAnnexIoft
heSCM Agr
eement
”,and
uphel
dthepanel
’
sfi
ndi
ngst
hatt
heseexpor
tcr
edi
tguar
ant
eepr
ogr
amsar
eexpor
tsubsi
dies
f
orpur
posesofAr
ti
cle3.
1(a)oft
heSCM Agr
eementandar
einconsi
stentwi
thAr
ti
cles3.
1(a)
and3.
2oft
hatAgr
eement
;and
 

 f
oundt
hatt
hepaneldi
dnoter
rinexer
cisi
ngj
udi
cialeconomyi
nrespectofBr
azi
l
’sal
l
egat
ion
t
hatt
heUni
tedSt
ates’expor
tcr
edi
tguar
ant
eepr
ogr
amsar
epr
ohi
bit
edexpor
tsubsi
dies,
underAr
ti
cle3.
1(a)oft
heSCM Agr ,becauset
eement heyconf
era“
benef
it
”wi
thi
nthe
meani
ngofAr
ti
cle1.
1oft
hatAgr
eement
;

Ati
tsmeet
ingon21Mar
ch2005,
theDSBadopt
edt
heAppel
l
ateBodyr
epor
tandt
hePanelr
epor
t,as
modi
fi
edbyt
heAppel
l
ateBodyr
epor
t.Ther
esul
ti
ngDSBr
ecommendat
ionsandr
uli
ngsi
ncl
udet
he
r
ecommendat
iont
hatt
heUni
tedSt
ateswi
thdr
aw,byatt
hel
atestwi
thi
nsi
xmont
hsoft
hedat
eof
adopt
ionoft
hePanelr
epor
tbyt
heDSBor1Jul
y2005(
whi
chev
eri
sear
li
er)
,thef
oll
owi
ngpr
ohi
bit
ed
subsi
dies:(
i)t
heexpor
tcr
edi
tguar
ant
eesundert
heGSM 102,GSM 103andSCGPexpor
tcr
edi
t
guar
ant
eepr
ogr
ammesi
nrespectofexpor
tsofupl
andcot
tonandot
herunschedul
edagr
icul
tur
al
pr
oduct
ssuppor
tedundert
hepr
ogr
ammes,andi
nrespectofoneschedul
edpr
oduct(
ri
ce)
;(i
i
)
Sect
ion1207(
a)oft
heFar
m Secur
it
yandRur
alI
nvest
ment(
FSRI
)Actof2002pr
ovi
dingf
oruser
mar
ket
ing(
STEP2)pay
ment
stoexpor
ter
sofupl
andcot
ton;and(
ii
i)Sect
ion1207(
a)oft
heFSRIAct
of2002pr
ovi
dingf
orusermar
ket
ing(
STEP2)pay
ment
stodomest
icuser
sofupl
andcot
ton.Asf
or
t
heact
ionabl
esubsi
diest
her
ecommendat
ioni
sthatt
heUni
tedSt
atest
akesappr
opr
iat
est
epst
o
r
emov
etheadv
erseef
fect
sofcer
tai
nsubsi
diesorwi
thdr
awt
hesesubsi
dieswi
thi
nsi
xmont
hsf
rom
t
hedat
eofadopt
ionoft
hePanelandAppel
l
ateBodyr
epor
ts,
i.
e.t
hecompl
i
anceper
iodexpi
redon21
Sept
ember2005.

 
Compl
i
ancepr
oceedi
ngs

Fol
l
owi
ngt
hesuspensi
onoft
hear
bit
rat
ionpr
oceedi
ngsunderAr
ti
cle22.
6tr
igger
edbyBr
azi
l
's
r
equestt
otakecount
ermeasur
eswi
thr
espectt
othepr
ohi
bit
edandact
ionabl
esubsi
dies(
seebel
ow)
,
on18August2006,Br
azi
lrequest
edt
heest
abl
i
shmentofacompl
i
ancepanel
.Ati
tsmeet
ingon1
Sept
ember2006,t
heDSBdef
err
edt
heest
abl
i
shmentofacompl
i
ancepanel
.Fur
thert
oasecond
r
equest
,ati
tsmeet
ingon28Sept
ember2006,t
heDSBagr
eed,i
fpossi
ble,t
oref
ert
hemat
terr
aised
byBr
azi
ltot
heor
igi
nalpanel
.Ar
gent
ina,Aust
ral
i
a,Canada,Chi
na,t
heEur
opeanCommuni
ti
es,I
ndi
a,
JapanandNewZeal
andr
eser
vedt
hei
rthi
rdpar
tyr
ight
s.Subsequent
ly,ChadandThai
l
andr
eser
ved
t
hei
rthi
rd par
tyr
ight
s.On 18 and 20 Oct
ober2006,Br
azi
land t
heUni
ted St
atesr
espect
ivel
y
r
equest
edt
heDi
rect
or-
Gener
alt
ocomposet
hecompl
i
ancepanel
.On25 
Oct
ober2006,t
heDi
rect
or-
Gener
alcomposedt
hepanel
.

On 9 Januar
y 2007,t
he Chai
rman oft
he paneli
nfor
med t
he DSB t
hatgi
ven t
he par
ti
cul
ar
ci
rcumst
ancesoft
hiscaseandt
heschedul
eadopt
edaf
terconsul
tat
ionswi
thpar
ti
est
othi
sdi
sput
e,
i
thadnotbeenpossi
blef
ort
hepanelt
ocompl
etei
tswor
kwi
thi
nthe90-
dayper
iodasf
oreseeni
n
Ar
ti
cle21.
5.Thepanel
expect
edt
ocompl
etei
tswor
kinJul
y2007.

On18December2007,
thecompl
i
ancepanelr
epor
twasci
rcul
atedt
oMember
s.ThePanelf
oundt
hat
wi
thr
espectt
othemeasur
etakenbyt
heUni
tedSt
atest
ocompl
ywi
tht
heDSBr
ecommendat
ionsand
r
uli
ngsr
elat
ingt
otheor
igi
nalpanel
'
sfi
ndi
ngofi
nconsi
stencywi
thAr
ti
cles5and6oft
heSCM
Agr
eement
:

 TheUni
tedSt
atesact
edi
nconsi
stent
lywi
thi
tsobl
i
gat
ionsunderAr
ti
cles5(
c)and6.
3(c)of
t
heSCM Agr
eementi
nthatt
heef
fectofmar
ket
ingl
oanandcount
er-
cycl
i
calpay
ment
s
pr
ovi
dedt
oUSupl
andcot
tonpr
oducer
spur
suantt
otheFSRIActof2002i
ssi
gni
fi
cantpr
ice
suppr
essi
onwi
thi
nthemeani
ngofAr
ti
cle6.
3(c)oft
heSCM Agr
eementi
nthewor
ldmar
ket
f
orupl
andcot
tonconst
it
uti
ng“
present
”ser
iouspr
ejudi
cet
othei
nter
est
sofBr
azi
lwi
thi
nthe
meani
ngofAr
ti
cle5(
c)oft
heSCM Agr
eement
. Byact
ingi
nconsi
stent
lywi
thAr
ti
cles 
5(c)and
6.
3(c)oft
he SCM Agr
eementt
he Uni
ted St
ates had f
ail
ed t
o compl
y wi
tht
he DSB
r
ecommendat
ionsandr
uli
ngs.
 Speci
fi
cal
l
y,t
heUni
tedSt
ateshadf
ail
edt
ocompl
ywi
thi
ts
obl
i
gat
ionunderAr
ti
cle7.
8oft
heSCM Agr
eement“
tot
akeappr
opr
iat
est
epst
oremov
ethe
adv
erseef
fect
sor.
..wi
thdr
awt
hesubsi
dy”
.
 

 Br
azlhadnotmadeapr
i imaf
aci
ecaset
hatt
heef
fectofmar
ket
ingl
oanandcount
er-
cycl
i
cal
pay
ment
spr
ovi
dedt
oUSupl
andcot
tonpr
oducer
spur
suantt
otheFSRIActof2002i
san
i
ncr
easei
ntheUSwor
ldmar
ketshar
einupl
andcot
tonascompar
edt
otheav
erageUSwor
ld
mar
ketshar
edur
ingt
hepr
evi
ousper
iodoft
hreey
ear
sandt
hatt
hisi
ncr
easef
oll
owsa
consi
stentt
rendov
eraper
iodwhensubsi
dieshav
ebeengr
ant
ed.
 Ther
efor
e,i
thadnotbeen
est
abl
i
shedt
hatt
heUni
tedSt
atesact
edi
nconsi
stent
lywi
thAr
ti
cles5(
c)and6.
3(d)oft
he
SCM Agr
eement
.

Wi
thr
espectt
othemeasur
etakenbyt
heUni
tedSt
atest
ocompl
ywi
tht
heDSBr
ecommendat
ions
andr
uli
ngsr
elat
ingt
otheor
igi
nalpanel
'
sfi
ndi
ngsofi
nconsi
stencywi
thAr
ti
cles10.
1and8oft
he
Agr
eementonAgr
icul
tur
eandAr
ti
cles3.
1(a)and3.
2oft
heSCM Agr
eement
,thepanel
found:

 Regar
dingGSM 102expor
tcr
edi
tguar
ant
eesi
ssuedaf
ter1Jul
y2005t
heUni
ted 
Stat
esact
ed
i
nconsi
stent
lywi
thAr
ti
cle10.
1oft
heAgr
eementonAgr
icul
tur
ebyappl
yi
ngexpor
tsubsi
dies
i
namannerwhi
chr
esul
tsi
ntheci
rcumv
ent
ionofUSexpor
tsubsi
dycommi
tment
swi
th
r
espectt
ocer
tai
nunschedul
edpr
oduct
sandcer
tai
nschedul
edpr
oduct
s,andasar
esul
t
act
edi
nconsi
stent
lywi
thAr
ti
cle8oft
heAgr
eementonAgr
icul
tur
e.Regar
dingGSM 
102
expor
tcr
edi
tguar
ant
eesi
ssuedaf
ter1Jul
y2005,
theUni
tedSt
atesal
soact
edi
nconsi
stent
ly
wi
th Ar
ti
cles 3.
1(a)and 3.
2 oft
he SCM Agr
eementbypr
ovi
ding expor
tsubsi
dies t
o
unschedul
edpr
oduct
sandbypr
ovi
dingexpor
tsubsi
diest
oschedul
edpr
oduct
sinexcessof
t
he commi
tment
soft
he Uni
ted St
atesundert
he Agr
eementon Agr
icul
tur
e.Byact
ing
i
nconsi
stent
lywi
thAr
ti
cles10.
1and8oft
heAgr
eementonAgr
icul
tur
eandAr
ti
cles 
3.1(
a)
and 3.
2 oft
heSCM Agr
eement
,theUni
ted St
ateshad f
ail
ed t
o compl
ywi
tht
heDSB
r
ecommendat
ionsandr
uli
ngs.Speci
fi
cal
l
y,t
heUni
tedSt
ateshadf
ail
edt
obr
ingi
tsmeasur
es
i
ntoconf
ormi
tywi
tht
heAgr
eementonAgr
icul
tur
eandhadf
ail
ed“
towi
thdr
aw t
hesubsi
dy
wi
thoutdel
ay”
.
 

 Wi
thr
espectt
ocer
tai
nexpor
tcr
edi
tsguar
ant
eesi
ssuedpr
iort
o1Jul
y2005,Br
azi
lhadnot
est
abl
i
shedt
hatt
heUni
tedSt
ateshadf
ail
edt
o“wi
thdr
awt
hesubsi
dywi
thoutdel
ay”
.

Thepanelal
soconsi
der
edt
hatt
otheext
entt
hatt
hemeasur
est
akenbyt
heUni
tedSt
atest
ocompl
y
wi
tht
he r
ecommendat
ions and r
uli
ngs adopt
ed by t
he DSB i
nthe or
igi
nalpr
oceedi
ng wer
e
i
nconsi
stentwi
tht
he obj
ect
ions oft
he Uni
ted St
ates undert
he cov
ered agr
eement
s,t
hese
r
ecommendat
ionsandr
uli
ngsr
emai
noper
ati
ve.

On12Febr
uar
y2008,t
heUni
tedSt
atesnot
if
iedi
tsdeci
siont
oappealt
otheAppel
l
ateBodycer
tai
n
i
ssuesofl
aw cov
eredi
nthecompl
i
ancepanelr
epor
tandcer
tai
nlegali
nter
pret
ati
onsdev
elopedby
t
hepanel
.On25Febr
uar
y2008,Br
azi
lnot
if
iedi
tsdeci
siont
oappealt
otheAppel
l
ateBodycer
tai
n
i
ssuesofl
awandl
egali
nter
pret
ati
onsi
nthecompl
i
ancepanelr
epor
t.On11 
Apr
il2008,
theChai
rman
oft
heAppel
l
ateBodyi
nfor
medt
heDSBt
hati
twoul
dnotbepossi
blet
oci
rcul
atei
tsr
epor
twi
thi
n60
day
sinl
i
ghtoft
henumer
ousandcompl
exi
ssuesr
aisedi
nthi
sappeal
,andt
hei
ncr
easedbur
denon
t
ransl
ati
onser
vices.I
test
imat
edt
hatt
heAppel
l
ateBodyr
epor
twoul
dbei
ssuednol
atert
han2June
2008.

On2June2008,
theAppel
l
ateBodyr
epor
twasci
rcul
atedt
oMember
s.

Asr
egar
dst
hescopeoft
heAr
ti
cle21.
5pr
oceedi
ngs,t
heAppel
l
ateBodyuphel
dthePanel
'
sfi
ndi
ng
t
hatBr
azi
l
'scl
aimsr
elat
ingt
oexpor
tcr
edi
tguar
ant
eesf
orpi
gmeatandpoul
tr
ymeatar
epr
oper
ly
wi
thi
nthescopeoft
heseAr
ti
cle21.
5pr
oceedi
ngs.Becauset
hecondi
ti
ononwhi
chi
twaspr
edi
cat
ed
hadnotbeenf
ulf
il
led,t
heAppel
l
ateBodydi
dnotf
indi
tnecessar
ytoconsi
derBr
azi
l
'sot
herappeal
t
hatt
hePaneler
redwheni
tfoundt
hatt
hemeasur
ethati
sthesubj
ectofBr
azi
l
'scl
aimsi
snott
he
r
evi
sedGSM 102pr
ogr
ammei
tsel
f.
TheAppel
l
ateBodyal
souphel
dthePanel
'
sfi
ndi
ngt
hatBr
azi
l
'scl
aimsagai
nstmar
ket
ingl
oanand
count
er-
cycl
i
calpay
ment
smadebyt
heUni
tedSt
atesaf
ter21Sept
ember2005wer
epr
oper
lywi
thi
n
t
hescopeoft
heseAr
ti
cle21.
5pr
oceedi
ngs.Becauset
hecondi
ti
ononwhi
chi
twaspr
edi
cat
edhas
notbeenf
ulf
il
led,t
heAppel
l
ateBodydi
dnotf
indi
tnecessar
ytoconsi
derBr
azi
l
'sot
herappealt
hat
t
hePaneler
redi
nfi
ndi
ngt
hatt
heor
igi
nalpanel
'
sconcl
usi
onsandr
ecommendat
ionsaddr
essedonl
y
t
hepay
ment
smadeundert
hemar
ket
ingl
oanandcount
er-
cycl
i
calpay
ment
spr
ogr
ammes,andnot
t
hepr
ogr
ammest
hemsel
ves.

Asr
egar
dst
her
evi
sedGSM 102expor
tcr
edi
tguar
ant
eepr
ogr
amme,t
heAppel
l
ateBodyf
oundt
hat
t
hePanelf
ail
edt
omakeanobj
ect
iveassessmentoft
hemat
ter
,underAr
ti
cle11oft
heDSU,
because
i
tdi
smi
ssedt
hei
mpor
toft
her
e-est
imat
esdat
asubmi
tt
edbyt
heUni
tedSt
atesont
hebasi
sof
i
nter
nal
l
yinconsi
stentr
easoni
ng.Consequent
ly,
theAppel
l
ateBodyr
ever
sedt
hePanel
'
sint
ermedi
ate
f
indi
ngt
hat“
thei
nit
ialsubsi
dyest
imat
espr
ovi
deast
rongi
ndi
cat
iont
hatGSM 102expor
tcr
edi
t
guar
ant
eesar
epr
ovi
dedagai
nstpr
emi
awhi
char
einadequat
etocov
ert
hel
ong-
ter
m oper
ati
ngcost
s
andl
ossesoft
heGSM 102pr
ogr
amme”
.

TheAppel
l
ateBodyuphel
dthePanel
'
sfi
ndi
ngt
hat“
theGSM 
102pr
ogr
ammei
snotdesi
gnedt
ocov
er
i
tsl
ongt
erm oper
ati
ngcost
sandl
osses”and,al
bei
tforr
easonst
hatdi
ff
erf
rom t
hoseoft
hePanel
,
t
hePanel
'
sconcl
usi
ont
hat“
theGSM 102expor
tcr
edi
tguar
ant
eepr
ogr
ammeconst
it
utesan'
expor
t
subsi
dy'becausei
tispr
ovi
dedagai
nstpr
emi
umswhi
char
einadequat
eto cov
eri
tsl
ongt
erm
oper
ati
ngcost
sandl
ossesundert
het
ermsofi
tem (
j)oft
heI
ll
ust
rat
iveLi
st”
.

Consequent
ly,t
heAppel
l
ateBodyuphel
dthePanel
'
sfi
ndi
ngt
hatGSM 102expor
tcr
edi
tguar
ant
ees
i
ssued af
ter1 Jul
y 2005 ar
e expor
tsubsi
dies wi
thi
nthe meani
ng ofAr
ti
cle 
3.1(
a)oft
he
SCM 
Agr
eementandAr
ti
cle10.
1oft
heAgr
eementonAgr
icul
tur
e;andt
hatr
egar
dingexpor
tcr
edi
t
guar
ant
eesi
ssuedundert
her
evi
sedGSM 102pr
ogr
ammeaf
ter1Jul
y2005t
heUni
ted 
Stat
esact
s
i
nconsi
stent
lywi
thAr
ti
cle10.
1oft
heAgr
eementonAgr
icul
tur
ebyappl
yi
ngexpor
tsubsi
diesi
na
mannerwhi
chr
esul
tsi
ntheci
rcumv
ent
ionofUni
tedSt
ates'expor
tsubsi
dycommi
tment
swi
th
r
espectt
o cer
tai
nunschedul
ed pr
oduct
sand cer
tai
n schedul
ed pr
oduct
s,and asar
esul
tact
s
i
nconsi
stent
lywi
thAr
ti
cle8oft
heAgr
eementonAgr
icul
tur
e.Regar
dingexpor
tcr
edi
tguar
ant
ees
i
ssuedundert
her
evi
sedGSM 102pr
ogr
ammeaf
ter1Jul
y2005,t
heAppel
l
ateBodyal
sof
oundt
hat
t
heUni
tedSt
atesal
soact
sinconsi
stent
lywi
thAr
ti
cles3.
1(a)and3.
2oft
heSCM Agr
eementby
pr
ovi
dingexpor
tsubsi
diest
ounschedul
edpr
oduct
sandbypr
ovi
dingexpor
tsubsi
diest
oschedul
ed
pr
oduct
sinexcessoft
hecommi
tment
soft
heUni
tedSt
atesundert
heAgr
eementonAgr
icul
tur
e.

TheAppel
l
ateBodyf
urt
herf
oundt
hat
,byact
ingi
nconsi
stent
lywi
thAr
ti
cles10.
1and8oft
he
Agr
eementonAgr
icul
tur
eandAr
ti
cles3.
1(a)and3.
2oft
heSCM Agr
eement
,theUni
tedSt
ateshad
f
ail
edt
ocompl
ywi
tht
heDSBr
ecommendat
ionsandr
uli
ngsandspeci
fi
cal
l
y,hadf
ail
edt
obr
ingi
ts
measur
esi
ntoconf
ormi
tywi
tht
heAgr
eementonAgr
icul
tur
eand“
towi
thdr
aw t
hesubsi
dywi
thout
del
ay”
.

Asr
egar
dswhet
hert
heef
fectofmar
ket
ingl
oanandcount
er-
cycl
i
calpay
ment
sissi
gni
fi
cantpr
ice
suppr
essi
on,t
he Appel
l
ate Body uphel
dthe panel
'
sfi
ndi
ngs t
hatt
he Uni
ted St
ates act
ed
i
nconsi
stent
lywi
thi
tsobl
i
gat
ionsunderAr
ti
cles 
5(c)and 
6.3(
c)oft
heSCM Agr
eementi
nthatt
he
ef
fectofmar
ket
ingl
oanandcount
er-
cycl
i
calpay
ment
spr
ovi
dedt
oUni
tedSt
atesupl
andcot
ton
pr
oducer
spur
suantt
otheFSRIActof2002i
ssi
gni
fi
cantpr
icesuppr
essi
on,wi
thi
nthemeani
ngof
Ar
ti
cle6.
3(c)oft
heSCM Agr
eement
,int
hewor
ldmar
ketf
orupl
andcot
ton,const
it
uti
ng“
present
”
ser
iouspr
ejudi
cet
othei
nter
est
sofBr
azi
lwi
thi
nthemeani
ngofAr
ti
cle5(
c)oft
heSCM 
Agr
eement
.
TheAppel
l
ateBodyal
sof
oundt
hat
,byact
ingi
nconsi
stent
lywi
thAr
ti
cles5(
c)and6.
3(c)oft
he
SCM 
Agr
eement
,theUni
tedSt
ateshadf
ail
edt
ocompl
ywi
tht
heDSB'
srecommendat
ionsandr
uli
ngs
and,speci
fi
cal
l
y,f
ail
edt
ocompl
ywi
thi
tsobl
i
gat
ionunderAr
ti
cle 
7.8oft
heSCM Agr
eement“
tot
ake
appr
opr
iat
est
epst
oremov
etheadv
erseef
fect
sor.
..wi
thdr
awt
hesubsi
dy”
.

TheAppel
l
ateBodyf
urt
herf
oundt
hatt
hePaneldi
dnotf
ailt
omakeanobj
ect
iveassessmentoft
he
mat
terbef
orei
t,asr
equi
redbyAr
ti
cle11oft
heDSU,
ini
tsanal
ysi
sofBr
azi
l
'scl
aimt
hatt
heef
fectof
t
hemar
ket
ingl
oanandcount
er-
cycl
i
cal
pay
ment
sissi
gni
fi
cantpr
icesuppr
essi
on.

TheAppel
l
ateBodyr
ecommendedt
hatt
heDSBr
equestt
heUni
tedSt
atest
obr
ingi
tsmeasur
es,
f
oundt
obei
nconsi
stentwi
tht
heAgr
eementonAgr
icul
tur
eandt
heSCM Agr
eement
,int
oconf
ormi
ty
wi
thi
tsobl
i
gat
ionsundert
hoseAgr
eement
s.

Ati
tsmeet
ingon 
20June2008,t
heDSBadopt
edt
heAppel
l
ateBodyr
epor
tandt
hePanelr
epor
t,as
modi
fi
edbyt
heAppel
l
ateBodyr
epor
t.

Pr
oceedi
ngsunderAr
ti
cle22oft
heDSU(
remedi
es)

On4Jul
y2005,
pri
ort
othei
nit
iat
ionoft
hecompl
i
ancepr
oceedi
ngs(
seeabov
e),
andi
nrespectoft
he
“
prohi
bit
ed subsi
dies”
, Br
azi
lrequest
ed,
 the DSB f
or aut
hor
izat
ion t
o t
ake appr
opr
iat
e
count
ermeasur
espur
suantt
oAr
ti
cle4.
10oft
heSCM Agr
eementandt
osuspendconcessi
onsor
ot
herobl
i
gat
ionspur
suantt
oAr
ti
cle22.
2oft
heDSU.
 Br
azi
lasser
tedt
hat 
ther
easonabl
eper
iodof
t
imehadexpi
redon1Jul
y2005.
 Br
azi
lst
atedi
tint
endedt
otakeappr
opr
iat
ecount
ermeasur
esi
nthe
f
orm oft
hesuspensi
onoft
ari
ffconcessi
onsandr
elat
edobl
i
gat
ionsundert
heGATT 1994by
i
mposi
ngaddi
ti
onalcust
omsdut
iesonal
i
stofpr
oduct
simpor
tedf
rom t
heUni
tedSt
ates,t
obe
def
inedbyBr
azi
l
.Inaddi
ti
on,gi
vent
hati
tconsi
der
edt
hati
twasnotpr
act
icabl
eoref
fect
ivet
o
excl
usi
vel
yappl
yaddi
ti
onali
mpor
tdut
iesandt
hati
tconsi
der
edt
hatt
heci
rcumst
anceswer
eser
ious
enough,Br
azi
lst
atedi
tmayr
esor
t,t
otheext
entnecessar
y,t
ocount
ermeasur
esi
nthef
orm of
suspensi
onofcer
tai
nobl
i
gat
ionsunder 
theAgr
eementonTr
ade-
Rel
atedAspect
sofI
ntel
l
ect
ual
Pr
oper
tyRi
ght
s(TRI
PSAgr
eement
)andt
heGener
alAgr
eementonTr
adei
nSer
vices(
GATS)
.

Wi
thr
egar
dtot
hepr
ohi
bit
edsubsi
dies,on5Jul
y2005t
hepar
ti
est
othedi
sput
ejoi
ntl
ynot
if
iedt
he
DSBof“
Agr
eedPr
ocedur
esunderAr
ti
cles21and22oft
heDi
sput
eSet
tl
ementUnder
standi
ngand
Ar
ti
cle4oft
heSCM Agr
eement
”.
 On14Jul
y2005,t
heUni
tedSt
atessubmi
tt
edi
tsobj
ect
ionst
othe
r
equestf
oraut
hor
izat
ionbyBr
azi
lpur
suantt
oAr
ti
cle22.
6oft
heDSUandAr
ti
cle4.
11oft
heSCM
Agr
eementchal
l
engi
ng t
he appr
opr
iat
eness of t
he count
ermeasur
es,t
he pr
oposed l
evelof
suspensi
onandasser
ti
ngt
hatt
hepr
inci
plesandpr
ocedur
essetf
ort
hinAr
ti
cle22.
3oft
heDSUhad
notbeenf
oll
owed.
 Ati
tsmeet
ingon15Jul
y2005,t
heDSBr
efer
redt
hemat
terr
aisedbyt
heUni
ted
St
atest
oar
bit
rat
ion.On17August2005,t
hepar
ti
est
othedi
sput
ejoi
ntl
yrequest
edt
heChai
rmanof
t
heAr
bit
rat
ort
osuspendt
heAr
ti
cle22.
6ar
bit
rat
ionpr
oceedi
ngsi
naccor
dancewi
tht
heAgr
eed
Pr
ocedur
esunderAr
ti
cles21and22oft
heDSU,andt
heAr
bit
rat
orsuspendedt
hepr
oceedi
ngs
accor
dingl
y.

On6Oct
ober2005,
inr
espectoft
he“
act
ionabl
esubsi
dies”Br
azi
lrequest
edt
heDSBf
oraut
hor
izat
ion
t
osuspendconcessi
onsorot
herobl
i
gat
ionsunderAr
ti
cle7.
9oft
heSCM Agr
eementandAr
ti
cle22.
2
oft
heDSU. 
Brazi
lasser
tedt
hatt
her
easonabl
eper
iodoft
imehadexpi
redon21 
Sept
ember2005.
 
Br
azi
lst
atedt
hati
npr
inci
ple,t
hesecount
ermeasur
eswoul
dtaket
hef
orm ofsuspensi
onoft
ari
ff
concessi
onsandr
elat
edobl
i
gat
ionsundert
heGATT1994bymeansoft
hei
mposi
ti
onofaddi
ti
onal
i
mpor
tdut
iesonal
i
stofpr
oduct
simpor
tedf
rom t
heUni
tedSt
ates,t
obedef
inedbyBr
azi
l
.In
addi
ti
on,Br
azi
lcont
endedt
hati
twasnotpr
act
icabl
eoref
fect
ivet
osuspendconcessi
onsorot
her
obl
i
gat
ionsexcl
usi
vel
ywi
thr
espectt
othesamesect
or/
agr
eementast
hati
nwhi
cht
hePanelandt
he
Appel
l
ateBodyhav
efoundt
hev
iol
ati
onsandt
hatt
heci
rcumst
ancesar
eser
iousenought
ojust
if
ythe
suspensi
onofconcessi
onsorobl
i
gat
ionsunderot
hercov
eredagr
eement
s.Ther
efor
eitaf
fi
rmedi
t
may
,tot
heext
entnecessar
y,r
esor
tto count
ermeasur
esi
nthef
orm ofsuspensi
onofcer
tai
n
obl
i
gat
ionsundert
heTRI
PSAgr
eementandt
heGATS.

On17Oct
ober2005,t
heUni
tedSt
atessubmi
tt
edi
tsobj
ect
ionst
other
equestf
oraut
hor
izat
ionby
Br
azi
lpur
suantt
oAr
ti
cle22.
6oft
heDSUandAr
ti
cle7.
10oft
heSCM Agr
eementar
gui
ngt
hatt
he
count
ermeasur
espr
oposedar
enotcommensur
atewi
tht
hedegr
eeandnat
ureoft
headv
erseef
fect
s
det
ermi
nedt
oexi
stwi
thi
nthemeani
ngofAr
ti
cle7.
9oft
heSCM Agr
eementandt
hatt
hel
evelof
suspensi
onpr
oposedi
snotequi
val
entt
othel
evelofnul
l
ifi
cat
ionori
mpai
rmentwi
thi
nthemeani
ng
ofAr
ti
cle22.
7oft
heDSU.Wi
thr
espectt
oBr
azi
l
'sr
equestf
or“
cross-
ret
ali
ati
on”
,theUni
tedSt
ates
cl
aimedt
hatt
hepr
inci
plesandpr
ocedur
essetf
ort
hinAr
ti
cle22.
3oft
heDSUhav
enotbeenf
oll
owed.
Ati
tsmeet
ingon18Oct
ober2005,t
heDSB r
efer
redt
hemat
terr
aisedbyt
heUni
tedSt
atest
o
ar
bit
rat
ion.
 On21Nov
ember2005,t
hepar
ti
est
othedi
sput
ejoi
ntl
yrequest
edt
heChai
rmanoft
he
Ar
bit
rat
ort
o suspend t
he Ar
ti
cle 22.
6 ar
bit
rat
ion pr
oceedi
ngs i
n accor
dance wi
tht
he Agr
eed
Pr
ocedur
esunderAr
ti
cles21and22oft
heDSU,andt
heAr
bit
rat
orsuspendedt
hepr
oceedi
ngs
accor
dingl
y.

On25August2008,andf
oll
owi
ngt
hecompl
eti
onoft
hecompl
i
ancepr
oceedi
ngs(
seeabov
e),Br
azi
l
r
equest
edt
hatt
het
woar
bit
rat
ionpr
oceedi
ngsber
esumed.
 Att
het
imet
hatBr
azi
lrequest
edt
he
r
esumpt
ionoft
hear
bit
rat
ionpr
oceedi
ngs,t
wooft
hear
bit
rat
orshadbecomeunav
ail
abl
etoser
vei
n
t
hesepr
oceedi
ngs.
 On 1 Oct
ober2008,t
hepar
ti
esagr
eed t
other
epl
acementar
bit
rat
ors.On
31 
August2009,
thet
woDeci
sionsbyt
heAr
bit
rat
orwer
eci
rcul
atedt
oMember
s.

Wi
thr
espectt
othe“
prohi
bit
edsubsi
dies”ati
ssue,t
heAr
bit
rat
ordet
ermi
nedt
hatBr
azi
lmayr
equest
aut
hor
izat
ionf
rom t
heDSBt
osuspendconcessi
onsorot
herobl
i
gat
ionsundert
heAgr
eement
son
t
radei
ngoodsi
nAnnex1A,
atal
evelnott
oexceedt
hev
alueofUSD 
147.
4mi
l
li
onf
orFY2006,
or,
for
subsequenty
ear
s,anannualamountt
obedet
ermi
nedbyappl
yi
ngamet
hodol
ogydescr
ibedi
nthe
Deci
sionoft
heAr
bit
rat
or.TheAr
bit
rat
oral
sodet
ermi
nedt
hat
,int
heev
entt
hatt
het
otall
evelof
count
ermeasur
est
hatBr
azi
lwoul
dbeent
it
ledt
oinagi
veny
earshoul
dincr
easet
oal
evelt
hatwoul
d
exceedat
hreshol
ddescr
ibedi
nthedeci
sions,updat
edt
oaccountf
ort
hechangei
nBr
azi
l
'st
otal
i
mpor
tsf
rom t
heUni
tedSt
ates,t
hen,Br
azi
lwoul
dal
sobeent
it
ledt
oseekt
osuspendcer
tai
n
obl
i
gat
ionsundert
heTRI
PSAgr
eementand/
ort
heGATSwi
thr
espectt
oanyamountofper
missi
ble
count
ermeasur
esappl
i
edi
nexcessoft
hatf
igur
e.

Wi
thr
espectt
othe“
act
ionabl
esubsi
dies”ati
ssue,t
heAr
bit
rat
ordet
ermi
nedt
hatBr
azi
lmayr
equest
aut
hor
izat
ionf
rom t
heDSBt
osuspendconcessi
onsorot
herobl
i
gat
ionsundert
heAgr
eement
son
t
radei
ngoodsi
nAnnex1A,atal
evelnott
oexceedt
hev
alueofUSD 
147.
3mi
l
li
onannual
l
y.The
Ar
bit
rat
oral
sodet
ermi
nedt
hat
,int
heev
entt
hatt
het
otall
evelofcount
ermeasur
est
hatBr
azi
lwoul
d
beent
it
ledt
oinagi
veny
earshoul
dincr
easet
oal
evelt
hatwoul
dexceedat
hreshol
ddescr
ibedi
nthe
deci
sions,updat
edt
oaccountf
ort
hechangei
nBr
azi
l
'st
otali
mpor
tsf
rom t
heUni
tedSt
ates,t
hen,
Br
azi
lwoul
dal
sobeent
it
ledt
oseekt
osuspendcer
tai
nobl
i
gat
ionsundert
heTRI
PSAgr
eement
and/
ort
heGATSwi
thr
espectt
oanyamountofper
missi
blecount
ermeasur
esappl
i
edi
nexcessof
t
hatf
igur
e.

Wi
thr
espectt
othe“
prohi
bit
edsubsi
dies”
,on6Nov
ember2009,Br
azi
lrequest
edaut
hor
izat
ionf
rom
t
heDSB t
osuspendt
heappl
i
cat
iont
otheUni
tedSt
atesofconcessi
onsorot
herobl
i
gat
ionsi
n
conf
ormi
tywi
tht
heAr
bit
rat
ors'Deci
sionpur
suantt
oAr
ti
cle22.
7oft
heDSUandAr
ti
cle4.
10oft
he
SCM Agr
eement
.Ati
tsmeet
ingon19Nov
ember2009,t
heDSBaut
hor
izedBr
azi
ltosuspendt
he
appl
i
cat
iont
otheUni
tedSt
atesofconcessi
onsorot
herobl
i
gat
ions.

Wi
thr
espectt
othe“
act
ionabl
esubsi
dies”
,on6Nov
ember2009,Br
azi
lrequest
edaut
hor
izat
ionf
rom
t
heDSB t
osuspendt
heappl
i
cat
iont
otheUni
tedSt
atesofconcessi
onsorot
herobl
i
gat
ionsi
n
conf
ormi
tywi
tht
heAr
bit
rat
ors'Deci
sionpur
suantt
oAr
ti
cle22.
7oft
heDSUandAr
ti
cle7.
9oft
he
SCM agr
eement
. Ati
tsmeet
ingon19Nov
ember2009,t
heDSBaut
hor
izedBr
azi
ltosuspendt
he
appl
i
cat
iont
otheUni
tedSt
atesofconcessi
onsorot
herobl
i
gat
ions.

On8Mar
ch2010,Br
azi
lnot
if
iedt
heDSB t
hat
,st
art
ingon7Apr
il2010,i
twoul
dsuspendt
he
appl
i
cat
iont
otheUni
ted 
Stat
esofconcessi
onsorot
herobl
i
gat
ionsundert
heGATT1994i
nthef
orm
ofi
ncr
easedi
mpor
tdut
iesoncer
tai
npr
oduct
swhent
heyar
eimpor
tedf
rom t
heUni
tedSt
ates.
Howev
eron30Apr
il2010,Br
azi
lnot
if
iedt
heDSBt
hati
thaddeci
dedt
opost
ponet
hei
mposi
ti
onof
count
ermeasur
esv
is-
à-v
ist
heUni
tedSt
atesi
ndi
cat
ingt
hatnocount
ermeasur
eswoul
dent
eri
nto
f
orcebef
ore21June2010,
sinceBr
azi
landt
heUni
tedSt
ateswer
eengagedi
nadi
aloguewi
thav
iew
t
oreachi
ngamut
ual
l
ysat
isf
act
orysol
uti
ont
othedi
sput
e.

I
mpl
ement
ati
onofadopt
edr
epor
ts

On25August2010,Br
azi
landt
heUni
tedSt
atesnot
if
iedt
heDSBt
heyhadconcl
udedaFr
amewor
k
f
oraMut
ual
l
yAgr
eedSol
uti
ont
otheCot
tonDi
sput
e(Fr
amewor
k)whi
chi
nit
sel
fdoesnotconst
it
ute
amut
ual
l
yagr
eedsol
uti
ont
othedi
sput
ebutset
soutpar
amet
ersf
ordi
scussi
onsonasol
uti
onwi
th
r
espectt
odomest
icsuppor
tpr
ogr
amsf
orupl
andcot
toni
ntheUni
ted 
Stat
es,
aswel
lasapr
ocessof
j
ointoper
ati
onr
evi
ewsasr
egar
dsexpor
tcr
edi
tguar
ant
eesundert
hepr
ogr
am GSM-
102.Br
azi
land
t
heUni
tedSt
atesal
soagr
eedt
ohol
dconsul
tat
ionsnotl
esst
hanf
ourt
imesay
ear
,unl
esst
heyagr
ee
ot
her
wise,wi
tht
heai
m ofobt
aini
ngconv
ergenceofv
iewsi
nrespectofasol
uti
ont
otheCot
ton
di
sput
e.TheFr
amewor
kal
sopr
ovi
dest
hat
,uponenact
mentofsuccessorl
egi
slat
iont
otheUSFood,
Conser
vat
ionandEner
gyActof2008,Br
azi
landt
heUni
tedSt
ateswi
l
lconsul
twi
thav
iew t
o
det
ermi
ningwhet
heramut
ual
l
yagr
eedsol
uti
ont
otheCot
tondi
sput
ehasbeenr
eached.Thej
oint
communi
cat
ional
sospeci
fi
edt
hatasl
ongast
heFr
amewor
kisi
nef
fect
,Br
azi
lwi
l
lnoti
mposet
he
count
ermeasur
esaut
hor
izedbyt
heDSB.

Att
heDSBmeet
ingon23Oct
ober2012,
Brazi
lsai
dthaton30Sept
ember2012,
the2008USFar
m Bi
l
l
hadexpi
redwi
thoutt
heenact
mentofasuccessorl
egi
slat
ion.
 Howev
er,t
aki
ngi
ntoaccountt
hatt
he
cur
rentUSagr
icul
tur
alsuppor
tpr
ogr
amsr
emai
nedunchanged,Br
azi
lhaddeci
dednott
oter
minat
e
t
heMemor
andum ofUnder
standi
ngandt
heFr
amewor
kAgr
eementandwoul
dthusnoti
mposeany
count
ermeasur
es at t
his t
ime.

Uni
tedSt
ates—Measur
esAf
fect
ingt
heCr
oss-
Bor
der
Suppl
yofGambl
ingandBet
ti
ngSer
vices -
DS285

Thi
ssummar
yhasbeen Cur
rentst
atus back to 
top  
 
pr
epar
edbyt
heSecr
etar
iat
underi
tsownr
esponsi
bil
i
ty.
Aut
hor
izat
iont
oret
ali
ategr
ant
edon Fi
ndal
ldocument
s
Thesummar
yisf
orgener
al
i
nfor
mat
iononl snot 2
yandi 8 
Januar
y 2013 f
rom t
hiscase
i
ntendedt
oaf
fectt
her
ight
s (
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chesDocument
sOnl
i
ne,

andobl
i
gat
ionsofMember
s.  mostr
ecentdocument
s
appearont
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Keyf
act
s back 
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qui
ckhel
pwi
th

Seeal
so: downl
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> 
One-
pagesummar
yofkey Shor
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f
indi
ngsoft
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Compl
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iguaand
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all
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Comput
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Respondent
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tedSt
ates  
 
di
sput
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Textoft
heDi
sput
e Thi
rdPar
ti
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Chi
nese
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Probl
emsv
iewi
ngt
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Set
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ng Tai
pei
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opean
Pl
easecont
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Communi
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owsery
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Ant
iguaandBar
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Agr
eement
s Ser
vices(
GATS)
:
> 
Uni
tedSt
ates
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t.I
I,
VI,
VII
I,
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Gener
alAgr
eementonTr
ade
 i
nSer
vices (
asci
tedi
nrequestXVI
,XVI
I
f
orconsul
tat
ions)

Requestf
or 13 
Mar
ch 
2003
Consul
tat
ions
r
ecei
ved:

Panel
Repor
t 10 
Nov
ember
 2004
ci
rcul
ated:

Appel
l
ateBody7 
Apr
il
 2005
Repor
t
ci
rcul
ated:

Ar
ti
cle 
21.
3(c) 19 
August
 2005
Ar
bit
rat
ion
Repor
t
ci
rcul
ated:

Ar
ti
cle 
21.
5 30 
Mar
ch 
2007
Panel
Repor
t
ci
rcul
ated:

Recour
set
o 21 
December
 2007
Ar
ti
cle22.
6
Ar
bit
rat
ion
Repor
t
ci
rcul
ated:

Summar
yoft
hedi
sput
etodat
e back 
to 
top

Thesummar
ybel
owwasup-
to-
dat
eat13 
Mar
ch 
2013
Seeal
so:One-
pagesummar
yofkeyf
indi
ngsoft
hisdi
sput
e

Consul
tat
ions

Compl
aintbyAnt
iguaandBar
buda.

On21Mar
ch2003,Ant
iguaandBar
budar
equest
edconsul
tat
ionswi
tht
heUSr
egar
dingmeasur
es
appl
i
edbycent
ral
,regi
onalandl
ocalaut
hor
it
iesi
ntheUSwhi
chaf
fectt
hecr
oss-
bor
dersuppl
yof
gambl
i
ngandbet
ti
ngser
vices.Ant
iguaandBar
budaconsi
der
edt
hatt
hecumul
ati
vei
mpactoft
heUS
measur
esi
stopr
eventt
hesuppl
yofgambl
i
ngandbet
ti
ngser
vicesf
rom anot
herWTOMembert
othe
Uni
tedSt
atesonacr
oss-
bor
derbasi
s.

Accor
dingt
oAnt
iguaandBar
buda,
themeasur
esati
ssuemaybei
nconsi
stentwi
tht
heUSobl
i
gat
ions
undert
heGATS,andi
npar
ti
cul
arAr
ti
clesI
I,VI
,VI
II
,XI
,XVIandXVI
Ither
eof
,andt
heUSSchedul
eof
Speci
fi
cCommi
tment
sannexedt
otheGATS.

On12June2003,
Ant
iguaandBar
budar
equest
edt
heest
abl
i
shmentofapanel
.Ati
tsmeet
ingon24
June2003,
theDSBdef
err
edt
heest
abl
i
shmentofapanel
.

PanelandAppel
lat
eBodypr
oceedi
ngs

Fur
thert
oasecondr
equestbyAnt
iguaandBar
buda,
theDSBest
abl
i
shedapanelati
tsmeet
ingon21
Jul
y2003.Canada,t
heEC,Mexi
coandChi
neseTai
peir
eser
vedt
hei
rthi
rd-
par
tyr
ight
s.On23Jul
y
2003,
Japanr
eser
vedi
tst
hir
d-par
tyr
ight
s.

On15August2003,
Ant
iguaandBar
budar
equest
edt
heDi
rect
or-
Gener
alt
ocomposet
hepanel
.On25
August2003,t
heDi
rect
or-
Gener
alcomposedt
hepanel
.On29Januar
y2004,t
heChai
rmanoft
he
Paneli
nfor
medt
heDSBt
hati
twoul
dnotbepossi
blef
ort
hePanelt
ocompl
etei
tswor
kinsi
xmont
hs
becausev
ari
ousf
act
orshadhadani
mpactont
hePanel
’
sti
met
abl
e,suchasapar
ty’
srequestf
or
pr
eli
minar
yrul
i
ngs,t
hei
nter
vent
ionoft
hehol
i
dayseason,t
heheav
yagendaoft
hepanel
i
stsaswel
l
ast
hecompl
exi
tyoft
hel
egalandf
act
ualquest
ionswhi
chhadbeenr
aised.ThePanelhopedt
o
compl
etei
tswor
kbyt
heendofApr
il2004.

I
nthecont
extoft
henegot
iat
ionsf
oramut
ual
l
yagr
eedsol
uti
ont
othepr
esentdi
sput
e,t
hepar
ti
es
r
equest
edt
hePanelt
osuspendt
hepanelpr
oceedi
ngs,i
naccor
dancewi
thAr
ti
cle12.
12oft
heDSU,
unt
il23August2004.On25June2004,t
hePanelagr
eedt
othi
srequest
.Thepar
ti
essubsequent
ly
r
equest
edacont
inuat
ionoft
hesuspensi
onunt
il4Oct
ober2004,
andt
hePanelagr
eedt
other
equest
on18August2004.Thepar
ti
esr
equest
edacont
inuat
ionoft
hesuspensi
onunt
il16Nov
ember2004,
andt
hePanelagr
eedt
other
equeston8Oct
ober2004.On5Nov
ember2004Ant
iguar
equest
edt
he
r
esumpt
ionoft
hepanelpr
oceedi
ngst
othePanelandt
heUni
tedSt
atesdi
dnotobj
ectt
othi
srequest
.
ThePanel
hast
her
efor
eagr
eedt
oresumet
hepanel
proceedi
ngsasf
rom 8Nov
ember2004.

On10Nov
ember2004,
ther
epor
toft
hePanel
wasci
rcul
atedt
oMember
s.ThePanel
foundt
hat
:

 The GATS Schedul

e oft
he Uni
ted St
ates has been i
nter
pret
ed t
oincl
ude speci
fi
c
commi
tment
sforgambl
i
ng and bet
ti
ng ser
vices undert
he sub-
sect
orent
it
led “
Other
Recr
eat
ional
Ser
vices(
exceptspor
ti
ng)
”;
 

 Thr
eeUSf
eder
all
aws(
theWi
reAct
,theTr
avelActandt
heI
ll
egalGambl
i
ngBusi
nessAct
)
andt
hepr
ovi
sionsoff
ourUSst
atel
aws(
thoseofLoui
siana,Massachuset
ts,Sout
hDakot
a
andUt
ah)ont
hei
rface,pr
ohi
bitone,sev
eraloral
lmeansofdel
i
ver
yincl
udedi
nmode1of
GATS (
i.
e.cr
oss-
bor
dersuppl
y),cont
rar
ytot
he Uni
ted St
ates’speci
fi
c mar
ketaccess
commi
tment
sforgambl
i
ngandbet
ti
ngser
vicesf
ormode1.Ther
efor
e,t
heUni
tedSt
ates
f
ail
edt
oaccor
dser
vicesandser
vicesuppl
i
ersofAnt
iguat
reat
mentnol
essf
avour
abl
ethan
 t
hatpr
ovi
dedf
orundert
het
erms,l
i
mit
ati
onsandcondi
ti
onsagr
eedandspeci
fi
edi
ntheUS
Schedul
e,cont
rar
ytoAr
ti
cleXVI
:1andAr
ti
cleXVI
:2oft
heGATS(
i.
e.concer
ningmar
ket
access)
;
 

 Ant
iguaf
ail
edt
odemonst
rat
ethatt
hemeasur
esati
ssuear
einconsi
stentwi
thAr
ti
clesVI
:1
andVI
:3oft
heGATS(
i.
e.concer
ningdomest
icr
egul
ati
on)
;
 

 TheUni
tedSt
ateswasnotabl
etoi
nvokesuccessf
ull
ytheGATSexcept
ionspr
ovi
sions.I
nthi
s
r
egar
d,t
heUni
tedSt
ateswasnotabl
etodemonst
rat
ethatt
heWi
reAct
,theTr
avelActand
t
heI
ll
egalGambl
i
ngBusi
nessActar
e“necessar
y”underAr
ti
clesXI
V(a)andXI
V(c)oft
he
GATS(
i.
e.“
except
ions”pr
ovi
sions,i
ncl
udi
ngf
orpubl
i
cmor
als)andar
econsi
stentwi
tht
he
r
equi
rement
soft
hechapeauofAr
ti
cleXI
Voft
heGATS;
 

 ThePaneldeci
dedt
oexer
cisej
udi
cialeconomywi
thr
espectt
oAnt
igua’
scl
aimsunder
Ar
ti
cles XI(
i.
e.concer
ning pay
ment
s and t
ransf
ers)and XVI
I(i
.e.concer
ning nat
ional
t
reat
ment
)oft
heGATS.

On7Januar
y2005,Uni
tedSt
atesnot
if
iedi
tsi
ntent
iont
oappealcer
tai
nissuesofl
aw andl
egal
i
nter
pret
ati
onsdev
eloped byt
hePanel
.On 19 Januar
y2005,Ant
iguaand Bar
budanot
if
ied i
ts
i
ntent
iont
oappeal
cer
tai
nissuesofl
awandl
egal
int
erpr
etat
ionsdev
elopedbyt
hePanel
.

On8Mar
ch2005,t
heChai
rmanoft
heAppel
l
ateBodyi
nfor
medt
heDSBt
hatt
heAppel
l
ateBody
woul
dnotbeabl
etoci
rcul
atei
tsRepor
twi
thi
nthe60-
dayper
iodduet
othet
imer
equi
redf
or
compl
eti
onandt
ransl
ati
onoft
heRepor
t,andt
hati
test
imat
edi
twoul
dbeci
rcul
atedt
o WTO
Member
snol
atert
han7Apr
il2005.

On7Apr
il2005,
ther
epor
toft
heAppel
l
ateBodywasci
rcul
ated.TheAppel
l
ateBody
:

 uphel
dthePanel
’
sfi
ndi
ngt
hatanal
l
eged“
tot
alpr
ohi
bit
ion”ont
hecr
oss-
bor
dersuppl
yof
gambl
i
ngandbet
ti
ngser
vicescannot
,inandofi
tsel
f,const
it
utea“
measur
e”subj
ectt
o
di
sput
eset
tl
ementundert
heGATS;
 
 

 f
oundt
hatt
hePanelshoul
dnothav
erul
edoncl
aimsadv
ancedbyAnt
iguawi
thr
espectt
o
ei
ghtst
atel
awsoft
heUni
tedSt
ates,
ast
owhi
chAnt
iguahadnotmadeapr
imaf
aci
ecaseof
i
nconsi
stencywi
tht
heGATS;
 
 

 uphel
dthePanel
’
sfi
ndi
ng,al
bei
tfordi
ff
erentr
easons,t
hatt
heUni
tedSt
ates’Schedul
e
i
ncl
udesacommi
tmentt
ogr
antf
ullmar
ketaccessi
ngambl
i
ngandbet
ti
ngser
vices.I
n
par
ti
cul
ar,
int
hecour
seofi
tsi
nter
pret
ati
onoft
heUni
tedSt
ates’
Schedul
e,t
heAppel
l
ateBody
 di
sagr
eedwi
tht
hePanel
’
sdesi
gnat
ionoft
wodocument
s— r
efer
redt
oasW/
120andt
he
1993Schedul
i
ngGui
del
i
nes— as“
cont
ext
”fort
hei
nter
pret
ati
onofMember
s’Schedul
es,
f
indi
ngi
nst
eadt
hatt
heyconst
it
ute“
prepar
ator
ywor
k”;
 
 

 uphel
dthePanel
’
sfi
ndi
ngt
hatt
heUni
tedSt
atesact
sinconsi
stent
lywi
thAr
ti
cleXVI
:1andsub
-
par
agr
aphs(
a)and(
c)ofAr
ti
cleXVI
:2bymai
ntai
ningcer
tai
nli
mit
ati
onsonmar
ketaccess
notspeci
fi
edi
nit
sSchedul
e;and
 
 

 r
ever
sedt
hePanel
’
sfi
ndi
ngt
hatt
heUni
tedSt
ateshadnotshownt
hatt
het
hreef
eder
al
st
atut
esar
e“necessar
ytopr
otectpubl
i
cmor
alsort
omai
ntai
npubl
i
cor
der
”,wi
thi
nthe
meani
ngofAr
ti
cleXI
V(a)
;foundt
hatt
heUni
tedSt
ates’measur
esar
ejust
if
iedunderAr
ti
cle
XI
V(a)oft
heGATSasmeasur
es“
necessar
ytopr
otectpubl
i
cmor
alsort
omai
ntai
npubl
i
c
or
der
”;anduphel
d,al
bei
tonanar
rowergr
ound,
thePanel
’
sfi
ndi
ngt
hatt
heUni
tedSt
ateshad
f
ail
edt
oshowt
hatt
hesemeasur
essat
isf
ythecondi
ti
onsoft
hechapeauofAr
ti
cleXI
V.

Ati
tsmeet
ingof20Apr
il2005,t
heDSBadopt
edt
heAppel
l
ateBodyr
epor
tandt
hePanelr
epor
t,as
modi
fi
edbyt
heAppel
l
ateBodyr
epor
t.

I
mpl
ement
ati
onofadopt
edr
epor
ts

Att
heDSBmeet
ingof19May2005,t
heUni
tedSt
atesst
atedi
tsi
ntent
iont
oimpl
ementt
heDSB’
s
r
ecommendat
ionsandi
ndi
cat
edt
hati
twoul
dneedar
easonabl
eper
iodoft
imet
odoso.Ast
he
Ant
iguaandBar
budaandt
heUni
tedSt
ateshadf
ail
edt
oagr
eeonar
easonabl
eti
meofper
iodf
or
i
mpl
ement
ati
oni
naccor
dancewi
thAr
ti
cle21.
3(b)oft
heDSU,on6June2005,Ant
iguaandBar
buda
r
equest
edt
hatt
her
easonabl
eper
iodoft
imebedet
ermi
nedt
hroughbi
ndi
ngar
bit
rat
ionpur
suantt
o
Ar
ti
cle21.
3(c)oft
heDSU.
 On30June2005,pur
suantt
other
equestf
rom Ant
iguaandBar
buda,t
he
Di
rect
or-
Gener
alappoi
ntedDrCl
aus-
Diet
erEhl
ermannt
oactasar
bit
rat
orunderAr
ti
cle21.
3(c)oft
he
DSU.
 On19August2005,t
heAr
bit
rat
orci
rcul
atedhi
sAwar
dtot
heMember
s,det
ermi
ningt
hatt
he
r
easonabl
eper
iodoft
imef
ori
mpl
ement
ati
onwas11mont
hsand2weeksf
rom 20Apr
il2005,
expi
ri
ngon3Apr
il2006.

Compl
i
ancepr
oceedi
ngs

On24May2006,t
hepar
ti
esi
nfor
medt
heDSBt
hat
,gi
vent
hedi
sagr
eementast
otheexi
stenceor
consi
stencyofmeasur
est
akenbyt
heUni
tedSt
atest
ocompl
ywi
tht
her
ecommendat
ionsandr
uli
ngs
oft
heDSB,t
heyhadagr
eedoncer
tai
npr
ocedur
esunderAr
ti
cles21and22oft
heDSU.On8June
2006,Ant
iguaandBar
budar
equest
edconsul
tat
ionsunderAr
ti
cle21.
5oft
heDSU.On6Jul
y2006,
Ant
iguaandBar
budar
equest
edt
heest
abl
i
shmentofanAr
ti
cle21.
5panel
. Ati
tsmeet
ingon19Jul
y
2006,
theDSBr
efer
redt
hemat
tert
otheor
igi
nalpanel
,i
fpossi
ble.
 Chi
na,
theEur
opeanCommuni
ti
es
andJapanr
eser
vedt
hei
rthi
rdpar
tyr
ight
s. On16August2006,
thePanel
wascomposed.

On20December2006,
theChai
rmanoft
hePaneli
nfor
medt
heDSBt
hatduet
othepar
ti
es'
schedul
ng
const
rai
ntsaswel
last
het
imer
equi
redf
ort
hecompl
eti
onandt
ransl
ati
onoft
her
epor
tint
oFr
ench
andSpani
sh,t
hePanelwoul
dnotbeabl
etoi
ssuei
tsr
epor
twi
thi
nthe90-
dayper
iodf
oreseeni
n
Ar
ti
cle21.
5oft
heDSU.ThePanelexpect
stoci
rcul
atei
tsr
epor
ttoMember
sbyt
heendofMar
ch
2007.

On30Mar
ch2007,
theAr
ti
cle21.
5panelr
epor
twasci
rcul
atedt
oMember
s.ThePanel
concl
udedt
hat
t
heUni
tedSt
ateshadf
ail
edt
ocompl
ywi
tht
her
ecommendat
ionsandr
uli
ngsoft
heDSB.

Ati
tsmeet
ingon22May2007,
theDSBadopt
edt
heAr
ti
cle21.
5panel
repor
t.

Pr
oceedi
ngsunderAr
ti
cle22oft
heDSU(
remedi
es)

On21June2007,
Ant
iguaandBar
budar
equest
edaut
hor
izat
ionf
rom t
heDSB,
pur
suantt
oAr
ti
cle 
22.
2
oft
heDSU,
tosuspendt
heappl
i
cat
iont
otheUni
tedSt
atesofconcessi
onsandr
elat
edobl
i
gat
ionsof
Ant
iguaandBar
budaundert
heGATSandt
heTRI
PSAgr
eement
.On23Jul
y2007,
theUni
tedSt
ates(
i)
obj
ect
edt
othel
evelofsuspensi
onofconcessi
onsandobl
i
gat
ionspr
oposedbyAnt
iguaandBar
buda
and(
ii
)cl
aimedt
hatAnt
iguaandBar
buda'
spr
oposaldoesnotf
oll
ow t
hepr
inci
plesandpr
ocedur
es
setf
ort
hinAr
ti
cle22.
3oft
heDSU.Ati
tsmeet
ingon24Jul
y2007,
theDSBagr
eedt
hatt
hemat
terhad
beenr
efer
redt
oar
bit
rat
ionasr
equi
redunderAr
ti
cle22.
6oft
heDSU.On21 
December2007,t
he
deci
sionbyt
heAr
bit
rat
orwasci
rcul
atedt
oMember
s.TheAr
bit
rat
ordet
ermi
nedt
hatt
heannuall
evel
ofnul
l
ifi
cat
ionori
mpai
rment
sofbenef
it
saccr
uingt
oAnt
iguai
sUS$21mi
l
li
onandt
hatAnt
iguamay
r
equestaut
hor
izat
ionf
rom t
heDSBt
osuspendobl
i
gat
ionsundert
heTRI
PSAgr
eementatal
evelnot
exceedi
ngUS$21mi
l
li
onannual
l
y.

Att
heDSBmeet
ingon24Apr
il2012,Domi
nicar
eadast
atementonbehal
fofAnt
iguaandBar
buda
whi
chst
atedt
hatt
heUni
tedSt
ateswasnoti
ncompl
i
ancewi
tht
her
uli
ngoft
hepanel
,theAppel
l
ate
Bodyandt
hecompl
i
ancepanel
. Ant
iguaandBar
budahadf
ormal
l
ynot
if
iedt
heUni
ted 
Stat
esofi
ts
desi
ret
oseekr
ecour
set
othegoodof
fi
cesoft
heDi
rect
or-
Gener
ali
nfi
ndi
ngamedi
atedsol
uti
ont
o
t
hisdi
sput
e. Ant
iguaandBar
budar
equest
edt
hatt
hismat
terr
emai
nundert
heDSB'
ssur
vei
l
lance.

Att
heDSBmeet
ingon28Januar
y2013,Ant
iguaandBar
budar
equest
edt
heDSBt
oaut
hor
izet
he
suspensi
onofconcessi
onsandobl
i
gat
ionst
otheUni
tedSt
atesi
nrespectofi
ntel
l
ect
ualpr
oper
ty
r
ight
s.Pur
suantt
other
equestbyAnt
iguaandBar
budaunderAr
ti
cle22.
7oft
heDSU,
theDSBagr
eed
t
ogr
antaut
hor
izat
iont
osuspendt
heappl
i
cat
iont
otheUni
tedSt
atesofconcessi
onsorot
her
obl
i
gat
ions consi
stent wi
th t
he Deci
sion by t
he Ar
bit
rat
or.