RESTRICTED
WORLD TRADE WT/DSB/M/1
28February 1995
ORGANIZATION(95-0417)
DISPUTE SETTLEMENT BODY
10February 1995
MINUTES OFMEETING
Held intheCentre William Rappard
on10February 1995
Acting Chairman: Mr.Peter D.Sutherland
Subjects discussed: Page
1. Rules ofProcedure formeetings ofDispute Settlement Body 1
2. Ethical Code ofConduct 2
3. Appellate Body 3
(a) Establishment oftheAppellate Body 3
(b) Procedures forappointment ofmembers oftheAppellate Body 3
4. Indicative listofgovernmental andnon-governmental panelists 5
5. Malaysia -Prohibition ofimports ofpolyethylene andpolypropylene 6
- Recourse toArticle XXIII:1 oftheGATT 1994 bySingapore 6
6. United States -Standards forreformulated andconventional gasoline 7
- Request forconsultations byVenezuela under Article XXIII:1 ofGATT 1994
withtheUnited States 7
1. Rules ofProcedure formeetings ofDispute Settlement Body (PC/IPL/9)
TheChairman recalled thatinaccordance withArticle IV:3oftheAgreement Establishing
theWTO, theDispute Settlement Body (DSB) "shall establish Rules ofProcedure asitdeems necessary
forthefulfilment ofitsresponsibilities." Inthiscontext, hedrew attention todocument PC/IPL/9
containing Rules ofProcedures forsessions oftheMinisterial Conference andmeetings oftheGeneral
Council,DisputeSettlementBody,andTradePolicyReviewBody.WithrespecttotheDisputeSettlement
Body, theabove-mentioned document specified thatwhen theGeneral Council convened astheDispute
Settlement Body, itshallfollow theRules ofProcedure formeetings oftheGeneral Council, except
asprovided otherwise intheDispute Settlement Understanding (DSU) orinthespecific rulesforDSB
contained inPC/IPL/9. Healsorecalled thattheGeneral Council hadapproved itsrules atthefirst
meeting inJanuary 1995leaving opentwoissues which weresubject tofurther consultations.1These
issues which concerned thequestion ofofficers andtheparticipation ofinternational organizations as
observers intheWTO, werealsorelevant totheRules ofProcedure fortheDSB. Heproposed that
1Therulesadopted bytheGeneral Council atitsmeeting inJanuary 1995weresubsequently issued
asWT/L/18.WT/DSB/M/1
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theDSBadopt theRules ofProcedure contained inPC/IPL/9 withtheexception oftheissues thatwere
stillinsquare brackets towhich theDispute Settlement Body would revert onceagreement onthem
hadbeenreached.
TheDispute Settlement Body soagreed.
Therepresentative oftheUnited States saidthatadecision onobservership forinternational
organizations should notinvolve afinaldetermination astowhich organizations would bepermitted
toparticipate inDSBactivities. Itwasimportant nottoclose thedooratalllevels toparticipation
ofother organizations, particularly when adispute involved issues onwhich other organizations had
special expertise oraspecial interest duetothepotential impact onagreements which theyadministered.
TheDSBshould beallowed toinvite other organizations onacase-by-case basis toensure thatitdid
notautomatically sacrifice thepotential benefits associated withtheirparticipation inDSBmeetings.
TheDispute Settlement Body tooknoteofthestatement.
2. Ethical Code ofConduct (PC/R, paragraph 50)
TheChairman recalled that,asindicated indocument PC/R, paragraph 50,thePreparatory
Committee hadforwarded thework doneondraftrules ofconduct fortheUnderstanding onRules
andProcedures Governing theSettlement ofDisputes, asresulting frominformal consultations onthis
matter, totheWTO asapossible basis forfurther work. Subsequently theGeneral Council, atits
January meeting, forwarded thismatter totheDispute Settlement Body forconsideration.
Mr.Trainor, onbehalf ofMr.Armstrong (New Zealand) presented aprogress report onthe
work doneduring theinformal consultations. Herecalled thatattheJanuary General Council meeting,
inthecontext oftheadoption oftheReport ofthePreparatory Committee, anumber ofmatters had
beenreferred torelevant WTO bodies tooversee continuing work. Inorder tomaintain thepositive
momentum developed ininformal consultations heldin1994 further informal consultations, opento
interested delegations, were heldunder theChairmanship ofMr.Armstrong on25January and1
February 1995. Constructive discussions tookplaceandfurther progress wasmade towards aconsensus
text. Mr.Armstrong intended toconduct further consultations intheweeks of20and27February
1995.
TheChairman thenproposed thattheDispute Settlement Body invite Mr.Armstrong topursue
informal consultations withtheview toconcluding afinaldraftCode ofConduct forconsideration
bytheDSBbefore 24March 1995.
Therepresentative oftheUnited States expressed hiscountry 'sappreciation forthetimedevoted
andattention given byother delegations tothisissue. Theobjective wastodevelop procedures that
would build confidence intheintegrity andimpartiality oftheWTO dispute settlement system. The
United States believed thateachWTO Member hadanimportant stakeinthissystem which represented
oneofthemajor achievements intheUruguay Round. Therefore theadoption ofaunified dispute
settlement system andthetremendous potential forexpansion ofthenumber andcomplexity ofdisputes
meant thatthepoolofpanelists would havetobesignificantly expanded beyond theGeneva-based
missions fromwhere panelists hadtraditionally beenselected. Itwasmorelikely thatnon-governmental
experts, forexample intheareasofintellectual property rights andservices, would beserving onpanels.
Healsonoted thatunder theWTO dispute settlement system newpeople would beinvolved andnew
types ofconflicts would occur. Under theGATT 1947 system, panel reports weresubject toreview
andadoption bytheGATT Council, which helped tooffset theweaknesses inthesystem. TheWTO
dispute settlement system represented asignificant improvement overtheoldsystem, butthehighWT/DSB/M/1
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probability thatpanel reports would beadopted bytheDSBmight raiseconcerns insome quarters.
ACode ofConduct forpanelists, Appellate Body members andadvisors tothedispute settlement process
wasonemeansofbuildingconfidenceinthesystem.TheUnitedStateswasfirmlycommittedtoreaching
agreement onaCode ofConduct. Inthisrespect aworking deadline would beuseful inencouraging
progress, butitwastheresult oftheprocess onwhich thesuccess ofthiseffort ultimately must be
judged andnottheprocess itself. Hiscountry would work withother delegations inthecontext of
theproposed time-frame andseehowmuch progress could bemade therein.
Therepresentative ofIndia recalled thathiscountry hadbeenparticipating intheinformal
consultations carried outbyMr.Armstrong. Although hedidnotquestion thebroader objectives of
ensuring absolute impartiality ofthepersons involved inthedispute settlement process atvarious levels,
hehadsome concerns about themanner inwhich thisobjective hadbeenpursued. Hiscountry would
continue tocooperate infuture consultations withaviewtoreaching aconsensus onthematter athand.
TheDispute Settlement Body tooknoteofthestatements andagreed thatinformal consultations
bepursued byMr.Armstrong withaviewtoconcluding afinaldraftCode ofConduct forconsideration
bytheDispute Settlement Body notlaterthan24March 1995.
3. Appellate Body (PC/IPL/13)
(a) Establishment oftheAppellate Body
TheChairman recalled thatinaccordance with Article 17:1 oftheDispute Settlement
Understanding (DSU), "astanding Appellate Body shallbeestablished bytheDispute Settlement Body."
HealsorecalledthatthePreparatoryCommitteehadapprovedtherecommendationsontheestablishment
oftheAppellate Body indocument PC/IPL/13 andhadagreed toforward themtotheWTO forfurther
action, asappropriate. Subsequently theGeneral Council, atitsmeeting inJanuary 1995, hadreferred
thismatter totheDispute Settlement Body forconsideration. Heproposed thattheDispute Settlement
Body establish theAppellate Body.
TheDispute Settlement Body soagreed.
(b) Procedures forappointment ofmembers oftheAppellate Body
TheChairman drew attention todocument PC/IPL/13 containing theprocedures forthe
appointment ofmembers oftheAppellate Body. Heproposed thattheDispute Settlement Body agree
tothefollowing time-table: (i)governments shallmake suggestions forcandidates fortheAppellate
Body nolaterthan24March 1995. Thesuggestions should beaddressed totheDirector-General of
theWTO; (ii)TheDirector-General, theChairman oftheDispute Settlement Body, theChairman
oftheGeneral Council andtheChairmen oftheCouncils forTrade inGoods, Services andTRIPS
would examine thesuggestions. After appropriate consultations aproposal onthecomposition ofthe
Appellate Body would besubmitted totheDispute Settlement Body bymid-May 1995.
Therepresentative oftheUnited States saidthathisGovernment welcomed theideaof
establishing aprocess forselecting themembers oftheAppellate Body andmaking itoperational.
Theprocedure forproposing potential candidates anddeveloping aslatemustbethorough. Itappeared
thatthere wasbroad agreement thattheAppellate Body would nothavetobeoperational untillate
1995. Accordingly, thenecessary timeshould beallowed toensure thebestpossible slateofcandidates.
Although theUnited States would work withothers onthebasis ofthedeadline setbytheChairman,
iturged theDispute Settlement Body toretain theflexibility toadjust theschedule asthedeadline
approached. Thiswould avoid thepossibility ofsome ofthebestqualified potential candidates being
passed overbecause theywould notbeimmediately obvious. TheAppellate Body would benefit from
having candidates withawidevariety ofbackgrounds toensure objective assessment oftheappealsWT/DSB/M/1
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itwould hear. Inthisregard, individuals withjuridical credentials should beconsidered atleastas
seriously asthose withdirect involvement inGATT work andnegotiations.
Healsoexpressed concern withtheprocess thattheSecretariat wasalready pursuing tohire
support staff. First, herecalled theagreement thatthesupport staffoftheAppellate Body would be
completely independent oftheSecretariat. Therefore, theSecretariat should notbeinvolved inthe
process ofinterviewing andselecting staff. Vacancy notices hadgone out,andthatwasapositive
step. However, theUnited States urged theSecretariat toadvertise thepositions fortheAppellate
Body ininternational journals andmagazines toensure thatagoodgroup ofcandidates emerged. The
recommendation ofthePreparatory Committee specifically noted thatthestaffshould behired bythe
Director-General inconsultation withtheChairman oftheDispute Settlement Body. Second, the
independence oftheAppellate Body staffmustbemaintained notonlyfrom theSecretariat, butalso
fromMember governments. Inthisregard, henoted thatindividuals should notserve ontheAppellate
Body staffwhile onleave ofabsence fromMember governments or"onloan" fromthose governments.
Therepresentative ofNewZealand supported theviewthatitwasimportant, inconsidering
thecomposition oftheAppellate Body, totakeintoaccount thequestion ofjuridical experience of
itsmembers. Inorder toensure thattheAppellate Body wasadequately equipped tofulfil thelegal
functions, thejuridical experience relevant toGATT lawwasimportant.
Therepresentative oftheEuropean Communities stressed theneedthattheAppellate Body
hadsolidlegalexperience aswellasexperience intheareaofinternational tradetoensure agoodbalance
between thetwotypes ofexperience. Heagreed withthesuggested time-frame forthedesignation
ofcandidates fortheAppellate Body. Oneshould notallow toomuch timetogoby.While itwas
necessary, asindicated bytheUnited States, toensure thattheverybestexperts available weretobe
drawn, atthesame timehebelieved thattoleave thedooropenforanindefinite period oftimewould
putMembers inasituation where thenumber ofexcellent candidates would betoogreat -agreater
number thanonecould actually dealwith. Therefore, adeadline should beestablished, andatagiven
timetheselection ofcandidates should bemade. Thesixweek deadline proposed bytheChairman
should beamply sufficient.
TheChairman saidthathisunderstanding ofthepoint made bytherepresentative oftheUnited
States wasnottodispute thecalendar, buttosignal thatatsome stage theUnited States might look
forsome flexibility inregard toit.
Therepresentative ofCanada supported thestatement made bytheCommunity. Itwas
understandable thatthere might besome needforflexibility inacalendar. However, theAppellate
Body, onceselected, stillhadconsiderable amount ofwork todoinorder tosetupitsownworking
procedures andbeready forthefirstcasewhich might soon bepresented totheAppellate Body.
Therefore, oneshould notwaittoolong.
Therepresentative ofIndia saidthatArticle 17:3oftheDSU clearly specified thetypeof
background required formembers oftheAppellate Body namely that"theAppellate Body shallcomprise
persons ofrecognized authority, withdemonstrated expertise inlaw,international tradeandthesubject
matter ofthecovered agreements generally". Heagreed withtheUnited States thatonemust look
forpeople withdifferent types ofbackground. Healsoagreed withthedeadline proposed bythe
Chairman.
TheChairman proposed toagree totheindicative time-limits which would continue tobeunder
review sincetherewasageneral understanding oftheurgency ofcompleting theprocess which required
theestablishment ofatime-frame. Hepointed tothefactthattherecommendations bythePreparatory
Committee ontheEstablishment oftheAppellate Body andthestaffsupport which were approvedWT/DSB/M/1
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bytheGeneral Council on31January 1995 through theadoption ofthereport ofthePreparatory
Committee asawhole hadbeenfollowed. Ifnecessary, these matters would bediscussed further.
TheDispute Settlement Body tooknoteofthestatements andagreed totheproposals readout
bytheChairman.
TheChairman saidthatatanappropriate datetheChairman oftheDSBwould consult with
Members oftheWTO Bodies inorder toobtain theirviews ontheworking procedures oftheAppellate
Body.
4. Indicative listofgovernmental andnon-governmental panelists
TheChairman recalled thatinaccordance withArticle 8.4oftheUnderstanding onRules of
Procedure Governing theSettlement ofDisputes, theSecretariat shallmaintain anindicative listof
governmental andnon-governmental individuals fromwhich panelists could bedrawn asappropriate.
Thisindicativelistshouldconstituteanintegratedlist,includingnamesintheGATT1947Rostertogether
withanyothernamesproposedbygovernments.Thelistshouldalsoindicatespecificareasofexperience
orexpertise oftheindividuals inthesectors orsubject matter ofthecovered agreements. TheRoster,
established on30November 1984, which appeared indocument L/7493 dated 23June1994, andAdd.1,
dated 25July1994, contained names ofnon-governmental persons. Newnames hadbeenadded to
theRoster since1984buttheCurriculum Vitae werenotuptodate. Intheprocess, governments were
invited torevise andupdate theRoster asitstood asof1January 1995, including through theprovision
ofupdated Curriculum Vitae fornames contained inthatlist.TheGATT 1947Roster would berevised
bysubmitting totheSecretariat written confirmation ofnames previously proposed bygovernments
toberetained, together withupdated Curriculum Vitae where thiswould beapplicable. Anynames
notconfirmed would notbeincluded intherevised Roster which would formanintegral partofthe
indicative list.TheChairman proposed thatmid-June 1995should bethedeadline forthesubmissions
totheindicative list.Healsoproposed thattheindicative listberevised periodically, forexample
every fiveyears.
Therepresentative oftheUnites States saidthathisGovernment believed thatadditional thought
needed tobegiven toanumber ofprocedural issues before proceeding inanefficient manner tothe
establishment oftheindicative list.Hisdelegation wasinterested indiscussing withdelegations and
theSecretariat issues suchas:(i)thenature oftheinformation thatshould besubmitted tosupport
thenominations ofindividuals totheroster; (ii)whether theDSBwould seektoassess thenominations
totheroster inlightoftheinformation received, andifso,overwhatperiod oftimeandthrough what
process should theassessment beconducted; and(iii)whether procedures should bedeveloped to
remove names fromtheindicative list.Hisdelegation believed thatamore normalized review ofthe
names suggested byMembers forinclusion intheindicative listwould enhance confidence inthedispute
settlement system. Inaddition, Members should beencouraged tonominate individuals serving as
government officials incapitals aswellasthose serving inGeneva forinclusion intheindicative list.
Thiswould greatly expand thebaseofexpertise onwhich theDSBcould drawtocompose future panels.
Heproposed thattheChairman oftheDSBconduct consultations withinterested delegations assoon
aspossible inorder toexchange views ontheabove-mentioned issues andrelated topics, anddevelop
aworkable setofprocedures. TheUnited States wasprepared tosubmit written comments inadvance
ofthese consultations, iftheDSBChairman would wishso.Healsonoted that,although theDSU
provided forsome formofacomprehensive roster, theMinisterial Decision ondisputes arising under
theGeneral Agreement onTrade inServices (GATS) created arequirement foraseparate roster of
panelists. Accordingly, amethod foreasily distinguishing persons withtherequired qualifications
fordisputes involving theGATS (such asaseparate list)would bemosthelpful, sinceonlythose persons
wellauthorized would beselected aspanelists.WT/DSB/M/1
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Therepresentative ofTunisia saidthatthetimeperiod until24March fordelegations torevise
names ontheroster andsuggest newnames wasinsufficient andsuggested thatthistimeperiod be
extended sothatagreater number ofpanelists, from different regions, beincluded intheindicative
list.Healsosaidthattheperiod offiveyears forrevising thelistwould betoolongandsuggested
thatitbereduced.
Therepresentative ofNorway saidthatalthough thesaidlistwasofanindicative nature, the
period offiveyears between eachrevision wastoolong. Hiscountry preferred aperiod ofthreeyears.
Italsosupported theproposal made bytheUnited States forholding informal consultations onmatters
related totheindicative list.
TheDispute Settlement Body agreed thattheissue oftheindicative listshould befurther
discussed andauthorized itsChairman toholdfurther informal consultations onthismatter.
5. Malaysia -Prohibition ofimports ofpolyethylene andpolypropylene
- Recourse toArticle XXIII:1 oftheGATT 1994 bySingapore (WT/DS1/1)
TheChairman drew attention tothecommunication from Singapore contained indocument
WT/DS1/1.
Therepresentative ofSingapore recalled thathisGovernment hadrequested consultations with
theGovernment ofMalaysia under Article XXIII:1 oftheGATT 1994inconnection withtheprohibition
onimports ofpolyethylene (HS3901.10 000and3901.20 000)andpolypropylene (3902.10 300and
3902.30000)whichhadbeeninstitutedandmaintainedbytheMalaysianGovernmentundertheCustoms
(Prohibition ofImports) (Amendments) (No.5) Order 1994(WT/DS1/1). Those prohibitions hadbeen
imposed on7April 1994, unless animport licence orApproved Permit (AP)hadbeenobtained from
theDirector-General ofCustoms. These measures wereinviolation ofMalaysia 'sobligations under
theAgreementEstablishingtheWTO,interalia,ArticleXandXIoftheGATT1994,andtheAgreement
onImport Licensing Procedures. Singapore hadpreviously expressed itsdeep concern overthe
Malaysian import restrictions ofplastic resins which wereaserious matter ofurgency toSingapore.
Sincetheimpositionoftheimportprohibitions,Singapore'sexportersandmanufacturersofpolyethylene
andpolypropylene hadbeenadversely affected. Given thefailure ofitsprevious approaches, Singapore,
inaccordancewithArticleXXIII:1andparagraph3ofArticle4oftheDisputeSettlementUnderstanding,
hadrequested consultations withMalaysia withaviewtoasatisfactory resolution ofthematter. The
consultationsunderArticleXXIII:1werescheduledfor13-15February1995.Shouldtheseconsultations
failtoleadtoasatisfactory resolution ofthematter, Singapore reserved theright torequest the
establishment ofapanel under Article XXIII:2 ofGATT 1994.
Therepresentative ofMalaysia confirmed hiscountry 'sreadiness toenter intobilateral
consultations withSingapore between 13and15February 1995. Notwithstanding thistrade dispute
between thetwocountries, ASEAN remained committed toonecommon bond, namely theconfidence
andbelief inthemultilateral dispute settlement system. Hehoped thatthebilateral consultations could
bring about anamicable resolution oftheproblem.
TheDispute Settlement Body tooknoteofthestatements andthattheparties wereconsulting
further.WT/DSB/M/1
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6. United States -Standards forreformulated andconventional gasoline
- Request forconsultations byVenezuela under Article XXIII:1 ofGATT 1994 with
theUnited States (WT/DS2/1)
Therepresentative ofVenezuela, speaking under "Other Business", recalled thaton11January
1995Venezuela withdrew itsrequest forconsultations under Article XXIII:2 oftheGATT 1947with
regardtotheRegulationonReformulatedGasolineadoptedbytheUnitedStatesEnvironmentalProtection
Agency. On20January 1995Venezuela requested consultations withtheUnited States. Thisrequest,
subsequently circulated inWT/DS2/1, wasmade pursuant toArticle XXII:1 oftheGATT 1994, Articles
14.1oftheAgreement onTechnical Barriers toTrade andArticle 4oftheUnderstanding ofRules
andProcedures Governing theSettlement ofDisputes. TheUnited States accepted Venezuela 'srequest
forconsultations which would beheldintheup-coming weeks.
Therepresentative ofBrazil saidthathisGovernment supported Venezuela 'srequest for
consultations withtheUnited States andwished toreserve itsrights toparticipate inthepanel, ifit
wasestablished, asaninterested third-party.
TheDispute Settlement Body tooknoteofthestatements.
Future meetings oftheDispute Settlement Body
Before closing themeeting, theChairman raised twopoints concerning future meetings ofthe
Dispute Settlement Body. First, asprovided bytheRules ofProcedures oftheGeneral Council and
theDispute Settlement Body, contained inPC/IPL/9, meetings oftheDispute Settlement Body will
beconvened inaccordance withtheten-day rulei.e.meetings oftheDispute Settlement Body shall
beconvened bytheDirector-General byanotice notlessthantencalendar daysprior tothedateset
forthemeeting. Inaddition, itshould alsobenoted thatalistofitems proposed fortheAgenda of
themeeting shallbecommunicated toMembers together withtheconvening notice forthemeeting.
ItshallbeopentoanyMember tosuggest items forinclusion intheAgenda, uptoandnotincluding,
thedayonwhich thenotice ofthemeeting istobeissued. Secondly, hedrewattention tothequestion
offrequency ofmeetings oftheDispute Settlement Body. Itwould appear that,inorder tomaintain
maximum efficiency inthefunctioning oftheBody, while respecting thedisciplines andthedeadlines
established bytheDSU, meetings oftheDispute Settlement Body should beheldonaregular basis.
Atentativeschedulemightbeestablishedforsuchmeetingseverysixweeks,withthenecessaryflexibility
totakeintoaccount exceptional circumstances. Consultations would beheldinthenearfuture onthis
matter. Heproposed thatthenextmeeting oftheDispute Settlement Body bescheduled inthesecond
halfofMarch 1995.
TheDispute Settlement Body tooknoteofthisinformation.