RESTRICTED
WORLD TRADE WT/DSB/M/11
19March 1996
ORGANIZATION(96-0987)
DISPUTE SETTLEMENT BODY
21February 1996
MINUTES OFMEETING
Held intheCentre William Rappard
on21February 1996
Chairman: Mr.C.Lafer (Brazil)
Subjects discussed: Page
1. Brazil -Measures affecting desiccated coconut 1
- Request bythePhilippines fortheestablishment ofapanel 1
2. United States -Standards forreformulated andconventional gasoline 4
- Panel report 4
3. Turkey -Action onimports oftextiles andclothing 6
- Statement byHong Kong 6
4. United States -Restrictions onimports ofcotton andman-made fibreunderwear 9
- Statement byCosta Rica 9
5. Appellate Body -Working Procedures forAppellate Review 9
- Statement bytheChairman 9
1. Brazil -Measures affecting desiccated coconut
- Request bythePhilippines fortheestablishment ofapanel (WT/DS22/5)
TheChairman recalled thatthismatter hadbeenproposed forinscription ontheAgenda of
theDSBmeeting on31January. Itsconsideration was,however, postponed tothenextmeeting of
theDSB. Hethendrewattention tothecommunication fromthePhilippines indocument WT/DS22/5.
Therepresentative ofthePhilippines saidthatsincehercountry 'srequest fortheestablishment
ofapanel wasexplained inWT/DS22/5 shewished onlytopoint outthatthe121.5 percent
countervailing dutyimposed byBrazil onPhilippine 'sexports ofdesiccated coconut wasinconsistent
withBrazil 'sobligations under Article VIofGATT 1994andother related covered agreements. The
measure nullified Philippine 'sbenefits under theGATT 1994. Inwashercountry 'sview thatan
investigation should nothavebeeninitiated byBrazil noracountervailing dutyhavebeenimposed.
Although several meetings hadbeenheldwithBrazil overthelastfewmonths onthismatter, ithad
notbeenpossible toarrive atamutually agreed solution. Therefore, thePhilippines requested thatWT/DSB/M/11
Page2
apanel beestablished atthepresent meeting andhoped thatBrazil would beabletoagree tothisrequest.
Therepresentative ofBrazil recalled thathiscountry 'sarguments concerning thisdispute were
contained inWT/DS22/3. During thelastfewmonths, Brazil andthePhilippines hadbeendiscussing
thequestion ofapplicable law,i.e.,thelegalframework toexamine acountervailing measure imposed
byBrazil oncoconut imports from thePhilippines. Brazil firmly believed thatameasure should be
reviewed against thesamestandards which hadbeenusedforitsadoption. Thisprinciple wascontained
inArticle 32.3oftheUruguay Round Agreement onSubsidies andCountervailing Measures (SCM).
Members hadalsoagreed onthatprinciple inthetransitional arrangements negotiated in19941.
Overturning thisprinciple would notbeveryconstructive andmight cause serious problems forthe
WTO system. Members wereformally andmorally requested toabide bytherules which theyhad
established. Thisissue involved important standards suchasfairness, reasonableness andlegality.
Fairness, because allprocedures, decisions andpractices under acertain legal system ought tobe
examined. Reasonableness, since thePhilippines hadaneffective remedy fortheircomplaint inthe
Tokyo Round Subsidies Code which wasinplace fordispute settlement purposes untiltheendof1996.
Brazil wasnotagainst thereasonable rightofthePhilippines toseekredress towhatitperceived as
nullification andimpairment ofitsbenefits. Legality, because decisions hadbeen taken toavoid
"contamination" oftheWTO withGATT cases. InDecember 1994, Members haddecided thatthe
Tokyo Round Code would beextended untilDecember 1996inorder todealwithcases initiated under
thatCode, prior totheestablishment oftheWTO, andthattheSCM Agreement would notapply to
investigations initiated before 1January 1995. Brazil andthePhilippines were stilldiscussing this
matter. Brazil therefore considered thatitwaspremature toestablish apanel atthepresent meeting
andwished theDSBtorevert tothismatter atitsnextmeeting.
Therepresentative ofIndonesia, speaking onbehalf ofASEAN countries, saidthatASEAN
countries supported therequest fortheestablishment ofapanel. ThePhilippines hadonlyinvoked
itsrights under Article VIofGATT 1994 towhich Brazil wasalsobound. Ithadchosen neither to
invoke theTokyo Round Subsidies Code noritsrights under theSCM Agreement. Therefore, ASEAN
countries didnotsupport Brazil 'sviewthatthequestion oftheapplicable lawshould firstberesolved.
ThePhilippines hadcomplied withtheDSUrequirements andtheDSBwould havetoestablish apanel.
Indonesia andMalaysia hadalsobeenaffected bythesamemeasure taken byBrazil on21August 1995.
Theinvestigation initiated byBrazil ondesiccated coconut wasinconsistent withitsobligations under
Article VIofGATT 1994andtheWTO. Thishadresulted indefinitive countervailing duties of155.57
and196.5 percentforIndonesia andMalaysia respectively. Hereiterated thatBrazil hadneither
conducted theinvestigation transparently norhaditprovided areasonable opportunity forIndonesia
andMalaysia toclarify thefactual situation. Although asetofquestionnaires hadbeenanswered,
andsome statistical dataandvarious legal dispositions submitted, Brazil hadneglected totakethis
information intoaccount since itwasnotsupplied inPortuguese. Brazil 'sGovernment which should
havedetermined andcalculated thesubsidy margin onthebasisofinformation available, hadviolated
Article VIoftheGATT 1994. Malaysia andIndonesia reserved theirrighttoactively participate in
thepanel asthirdparties.
Therepresentative ofSriLanka saidthathisdelegation supported thePhilippines 'request
fortheestablishment ofapanel. Hiscountry agreed withthePhilippines ontherationale forapanel
toexamine thecountervailing duties imposed byBrazil onexports ofdesiccated coconut from the
Philippines. SriLanka wasoneofthecountries which hadalsobeenseverely affected byBrazil 's
action ondesiccated coconut andcoconut milkpowder. Thecountervailing dutyimposed byBrazil
on21August 1995 onimports ofdesiccated coconut andcoconut milkpowder amounted to81.4per
centand175.8 percentrespectively. SriLanka considered Brazil 'saction asunjustifiable and
1PC/15-L/7586 andPC/16-L7587WT/DSB/M/11
Page3
unreasonable because itviolated SriLanka 'srights under theGATT 1994. Consultations hadbeen
heldwithBrazil withaviewtoarriving atamutually acceptable solution, buttheoutcome ofthese
consultations hadnotbeenpositive. SriLanka would holdfurther consultations withBrazil untilall
prospects ofarriving atamutual settlement wereexhausted. SriLanka 'sexports ofdesiccated coconut
andcoconut milkpowder hadcome toahaltasaresult ofBrazil 'saction. Ashiscountry hadadirect
trade interest inthematter, itreserved itsthird-party rights.
Therepresentative ofthePhilippines thanked Brazil forelaborating onitsposition withrespect
totheapplication ofArticle VIofGATT 1994 contained inWT/DS22/3 andwished tomake the
following points. First, inpastGATT practice ithadbeenrecognized thatitwasuptothecomplainant
todecide whether itwanted toinvoke thegeneral GATT provisions --inthiscaseArticle VI--orthe
specific Tokyo Round Code provisions. There hadbeendisputes inthepastwhere parties hadinvoked
theirrights withrespect toArticle VIandnottheTokyo Round Codes. Second, thefactthatBrazil 's
investigation hadstarted in1994under theTokyo Round Subsidies Code didnotdeprive thePhilippines
oftheirrights under GATT 1994andtheDSU. ThePhilippines 'viewwasthatthetransitional provision
inArticle 32.3oftheSCM Agreement applied tothesaidAgreement itself anddidnotgovern the
application ofArticle VIofGATT 1994 which, since itsentry intoforce in1995, required Brazil to
implement countervailing measures onlyinconformity withArticle VI.Third, although theTokyo
Round Committee continued tobeinplace untiltheendof1996, thisdidnotpreclude thePhilippines
frominvokingitsrightsunderGATT1994.Moreover,theDecisionof8December1994onTransitional
Co-existence oftheTokyo Round Subsidies Code andtheWTO Agreement confirmed thepriority
ofWTO dispute settlement procedures overtheTokyo Round Subsidies Code. TheDecision of8
December 1994ontheconsequences oftermination of,orwithdrawal of,theTokyo Round Subsidies
Code governed onlythetransition fromtheTokyo Round Subsidies Code tothe1994SCM Agreement.
ThisDecision didnotprevent therightofMembers toinvoke Article VIofGATT 1994andtheDSU.
Fourth, Brazil hadstated thatArticle VIofGATT 1947, asinterpreted bytheTokyo Round Subsidies
Code, waslegally distinct fromArticle VIofGATT 1994, which inturnwasinterpreted bythe1994
SCM Agreement. Toinvoke Article VIofGATT 1994 "implied theadoption ofthespecific views
oftheWTO agreements asopposed tothose oftheTokyo Round Agreements."2ItwasthePhilippines '
position thatArticle VIofGATT 1994 andtheSCM Agreement weretwodistinct legalinstruments
andthePhilippines wassimply invoking itsrights under Article VIofGATT 1994. Brazil alsoalleged
thatinspiteofitsrepeated offers toconsult noformal consultations evertookplace. Consultations
hadnotbeenheldbecause Brazil refused toconsult. Shereiterated thaton27November 1995 the
Philippines hadrequested consultations under Article XXIII:1 ontheconsistency ofBrazil 'smeasure
withrespect toArticle VIofGATT 1994. On29November thePhilippines hadnotified theDSB,
theCouncil forTrade inGoods, theCommittee onSubsidies andCountervailing Measures andthe
Committee onAgriculture ofitsrequest. On8December, Brazil hadoffered toconsult onlyunder
theTokyo Round Subsidies Code. Inaletterdated 13December, thePhilippines hadstated thatBrazil 's
response of8December constituted arefusal toconsult under Article XXIII:1. Therefore thePhilippines
hoped thatBrazil would beabletoengage inArticle XXIII:1 consultations within the30-day period
provided forinArticle 4.3oftheDSU. On10January 1996Brazil hadresponded tothePhilippines '
letter of13December 1995andhadreiterated itsoffertoconsult onlyunder theTokyo Round Subsidies
Code. On15January thePhilippines hadinformed Brazil that,since Brazil maintained itsposition,
thePhilippines hadnoother recourse buttoinvoke Article XXIII:2 ofGATT 1994 andArticles 4.3,
6and7.1oftheDSU. Thus, on17January thePhilippines hadrequested theestablishment ofapanel.
ThePhilippines sought redress from theactions ofBrazil under Article VIofGATT 1994. Ithad
faithfully adhered totherequirements intheDSU, andnowrequested theestablishment ofapanel.
Since Brazil 'sdidnotagree withtheestablishment ofapanel atthepresent meeting thePhilippines
requested aDSBmeeting within 15daysinorder toconsider itsrequest fortheestablishment ofa
panel.
2SCM/193, p.3.WT/DSB/M/11
Page4
Therepresentative ofBrazil saidthathisdelegation noted allthestatements made atthepresent
meeting. Hereiterated thatthisissue involved suchimportant standards asfairness, reasonableness
andlegality ashehadstated inthestatement made earlier. Hestressed thatBrazil hadnever refused
toconsult.IthadonlyinsistedthatconsultationsshouldbeheldundertheTokyoRoundCodeprovisions.
Thequestion ofapplicable lawwascentral tothiscaseandifapanel wasestablished Brazil would
request apreliminary ruling onthequestion oftheapplicable law.
TheDSBtooknoteofthestatements andagreed toconvene itsnextmeeting on5March in
order torevert tothismatter.
2. United States -Standards forreformulated andconventional gasoline
- Panel report (WT/DS2/R)
TheChairman recalled thatatitsmeeting on10April 1995, theDSBhadestablished aPanel
toexamine thecomplaint byVenezuela. On31May1995theDSBhadestablished aPanel toexamine
thecomplaint concerning thesamematter byBrazil. Atthatmeeting, pursuant toArticle 9oftheDSU
inrespectofmultiplecomplaintstheDSBhaddecided,withtheagreementofallparties,thatforpractical
reasons thismatter beexamined bythepanel already established attherequest ofVenezuela on10
April 1995. ThePanel report, contained indocument WT/DS2/R andcirculated on29January 1996,
wasnowbefore theDSBforadoption attherequest ofVenezuela.
Mr.Harbinson(HongKong),speakinginhispersonalcapacityonbehalfofMr.Wong,Chairman
ofthePanel, saidthatthePanel hadbeenestablished bytheDSBon10April 1995 attherequest of
Venezuela. ThePanel hadbeengiven standard terms ofreference, withMr.Joseph Wong asChairman
andMr.Crawford Falconer andMr.KimLuotonen aspanelists. Australia, Canada, theEuropean
Communities andNorway hadreserved theirrights toparticipate inthePanel proceedings asthird
parties. On31May1995, theDSBhadestablished aPanel onthesame matter attherequest ofBrazil.
Pursuant toArticle 9oftheDSU inrespect ofmultiple complainants theDSBhaddecided, withthe
agreement ofalltheparties, thatforpractical reasons thismatter beexamined bythePanel already
established attherequest ofVenezuela. ThePanel hadmetwiththeparties tothedispute from 10
to12July1995 andfrom13to15September 1995. Ithadalsometwiththeinterested thirdparties
on11July1995. ThePanel hadissued itsinterim report totheparties on11December 1995. Following
arequest made bytheUnited States pursuant toArticle 15.2oftheDSU, thePanel hadheldafurther
meeting withtheparties on3January 1996. ThePanel hadissued itsfinalreport totheparties to
thedispute on17January 1996. ThePanel hadexamined thefinaldecision adopted on15December
1993bytheUnited States Environmental Protection Agency, "Regulation ofFuels andFuelAdditives:
Standards forReformulated andConventional Gasoline" (theGasoline Rule). After athorough analysis
oftheunderlying factsandarguments oftheparties, andinthelightofthefindings contained inthe
finalreport, thePanel hadconcluded thatthebaseline establishment methods contained intheGasoline
Rulewerenotconsistent withArticle III:4oftheGeneral Agreement, andcould notbejustified under
paragraphs (b),(d)and(g)ofArticle XXoftheGeneral Agreement. ThePanel hadtherefore
recommended thattheDSBrequest theUnited States tobring themeasures inquestion inconformity
withitsobligations under theGeneral Agreement. Inconcluding, thePanel hadunderlined thatitwas
notitstasktoexamine generally thedesirability ornecessity oftheenvironmental objectives ofthe
Clean AirActortheGasoline Rule. Itsexamination wasconfined tothose aspects oftheGasoline
Rulethathadbeenraised bythecomplainants under specific provisions oftheGeneral Agreement.
Under theGeneral Agreement, Members werefreetosettheirownenvironmental objectives butthey
were bound toimplement these objectives through measures consistent withitsprovisions, notably
those ontherelative treatment ofdomestic andimported products.WT/DSB/M/11
Page5
Therepresentative ofVenezuela expressed hisdelegation 'sgratitude tothepanelists andthe
Secretariat fortheirmeticulous andwell-structured work. Hiscountry appreciated thetimeandefforts
devoted toreviewing andanalysing thefactsandthelegalarguments submitted bytheparties during
theproceedings, andtheefforts inthesearch forasatisfactory settlement ofthedispute. Parties to
thedispute hadbeengiven equitable opportunity toparticipate intheproceedings bothorally andin
writing. ThePanel'sconclusions followed thesame lineofreasoning asthatofother panels inGATT
history. Several aspects ofthePanel report deserved special mention. First, thereport recognized
explicitly thatnoruleorprovision oftheWTO Agreement prevented theUnited States from setting
itsownclean airstandards. Members hadsovereign authority insetting their ownenvironmental
objectives buttheywerebound toensure thatnational standards andregulations accorded treatment
toimported products which wasnolessfavourable thanthatgranted tolikedomestic products. Second,
thereport acknowledged whatVenezuela hadrepeatedly stated totheUnited States namely, thatthe
objectives oftheClean AirActaimed atimproving airquality werenotquestioned. Venezuela had
brought thematter tothePanel todemonstrate thatthose objectives could beachieved without
discriminating against imported gasoline andwere infullconformity withtheprinciple ofnational
treatment laiddown inArticle IIIoftheGeneral Agreement. Inthisconnection, thePanel upheld
Venezuela 'sargument thatthere wasnojustification forthediscriminatory aspects oftheGasoline
Regulation, sinceseveral alternative methods wereavailable totheUnited States tomeetenvironmental
objectives without distorting thecompetitive conditions between imported anddomestically-produced
gasoline. Farfromseeking privileges orspecial treatment, allthatVenezuela hadasked oftheUnited
StateswastreatmentforVenezuelangasolinewhichwasnotlessfavourablethanthetreatmentestablished
intheRegulation forthelikeproduct ofUSorigin. Therefore, thesettlement ofthisdispute bymeans
oftheWTO procedures, hadoccurred despite Venezuela 'swish.
From thebeginning oftheprocess ofelaboration oftheGasoline Regulation in1992until1994
hiscountry hadbeenproposing alternatives totheUnited States enabling toavoid alldiscrimination
against imported gasoline. Oneofthese alternatives wasanagreement between thetwocountries to
beapplied inconformity withthemost-favoured-nation principle. Unfortunately theUSCongress,
when enacting theGasoline Regulation, hadrefused funds forputting thatproposal intoeffect. Therefore
Venezuela haddecided tobring itscomplaint totheDSB. Thereafter, intheframework oftheWTO
dispute settlement proceedings, alternatives hadbeenpresented tothePanel which, aftersubjecting
themtoathorough andbalanced examination, hadagreed withVenezuela thattheywerefeasible both
practically andlegally. Some ofthemeasures werefullyconsistent withtheGeneral Agreement, while
others, which werelessclearly consistent, atleasthadthevirtue ofgenerating alesstrade restrictive
effect. Inthelightofthese considerations andinaccordance withArticle 16.4oftheDSU Venezuela
hadrequested thattheadoption ofthereport beincluded intheAgenda ofthepresent meeting. However,
theUnited States hadnotified itsintention toapply forareview bytheAppellate Body ofcertain legal
aspects ofthereport. While recognizing thattheUnited States hadtherighttoappeal, itsdecision
todosocould setapattern which might befollowed byMembers where panel reports wereunfavourable
tothem. Clearly, thiswould adversely affect thecredibility ofpanel reports.
Therepresentative oftheUnited States saidthatthePanel report hadbeeninscribed onthe
Agenda oftheDSBforconsideration atthepresent meeting. However since theUnited States had
notified itsdecision toappeal certain legalissues, Article 16oftheDSU prevented consideration of
thereport foradoption atthepresent meeting. TheDSBwasnottheappropriate forum todiscuss
thelegal issues ofthereport thattheUnited States hadasked theAppellate Body toreview which
concerned thepanel'sconsideration ofArticle XXoftheGeneral Agreement. However, theUnited
States hadserious concerns about thepanel'streatment ofissues notcovered bythisappeal. Hewas
referring towhat theUnited States considered asignificant andinappropriate deviation from the
customary practice thatpanels hadfollowed inthepastunder theGATT 1947. Under pastpractice,
panels hadcarefully avoided discussing legalissues thatwereuncontested during thepanel proceedings,
orunnecessary tothepanel'sfindings inaparticular dispute. Since Article XVI:1 oftheWTOWT/DSB/M/11
Page6
Agreement affirmed thattheWTO shallbeguided bythecustomary practices ofthebodies established
intheframework oftheGATT 1947, itwastheUnited States 'expectation thatthispanel would follow
thatpractice. Regrettably, itdidnot.Inresponding totheclaim thattheUSmeasure inquestion was
inconsistent withArticle III:4oftheGATT 1994, theUnited States didnotcontest thatthemeasure
openly treated imports differently thanlikedomestic products, andthepanel acknowledged thisposition.
Nonetheless, thepanel proceeded todiscuss atlength theissue oflikeproducts withreference to
hypothetical situations notpresented, anditdidsoinamanner thatappeared tooffer opinions on
arguments andissues thathadarisen ormight ariseinthecontext ofdisputes other thanthisone.
Suchdiscussion wasinappropriate andshould serve asamodel forwhatfuture panels should notdo.
Article 11oftheDSU clearly setoutthelimited roleofpanels, which was"tomake anobjective
assessment ofthematter before it,including thefactsofthecase." Byopining onmatters thatwere
neither contested nornecessary toreach itsconclusions, thepanel exceeded these limits. TheGATT
1947 panel process gained theconfidence ofdelegations negotiating theDSU inpartbecause ofthe
conservative approach panels generally tookinconfining themselves strictly totheissues presented
forresolution. Thedeparture ofthispanel fromthatprinciple, anditsforay intounnecessary obiter
dicta,didnotsetagood example forthenewWTO system. TheUnited States expected thatfuture
panels would refrain from suchwandering intopolicy issues. Itsimply wasnotappropriate inthe
context ofdispute settlement.
Therepresentative ofBrazil wished toexpress itsgratitude tothepanelists, whohadput
tremendous efforts inunderstanding anddeciding thiscase,andtotheSecretariat whohadbeenefficient
andreliable asusual. Thedecision bytheUnited States toappeal didnot,inBrazil 'sopinion, diminish
themerits ofthisreport. Oneofthese merits wasthefinding thatdiscrimination could notbejustified
ifthedisciplines werenotrespected. Oneoftheother merits ofthereport wasthat,"under theGeneral
Agreement WTO Members arefreetosettheirownenvironmental objectives, buttheyarebound to
implement these objectives through measures consistent withitsprovisions, notably withthose onthe
relative treatment ofdomestic andimported products".3Since thebeginning ofthisdispute settlement
procedure, hisdelegation hadexpressed itsview thatthiswasnotanenvironmental case. Brazil
continued toholdthisview, andagreed withtheconclusions ofthepanel inthisrespect.
TheDSBtooknoteofthestatements andoftheUSdecision toappeal totheAppellate Body
thepanel report inDS2/R.
3. Turkey -Action onimports oftextiles andclothing
- Statement byHong Kong
TheChairman drew attention totherequest forconsultations byHong Kong contained in
WT/DS29/1.
Therepresentative ofHong Kong saidthathisauthorities fullyrespected therights ofMembers
toformcustoms unions orfree-trade areasinaccordance withtherelevant provisions ofthemultilateral
instruments which governed suchmatters. Nonetheless, Hong Kong wasverymuch concerned that
theimplementation ofcustoms unions orfree-trade areas should notadversely affect other Members.
Hewished toraiseHong Kong'sserious concern overaspecific issueassociated withtheimplementation
oftheCustoms Union between Turkey andtheEuropean Community. On1January 1996, quantitative
restrictions hadbeenimposed byTurkey ontheimport ofabroad range oftextile andclothing products
from Hong Kong andother sources i.e.atotaloftwenty-five suppliers. Theimposition ofthese
restrictions wasunilateral andwithout prior notification. Hong Kong hadwritten totheTurkish
3DS2/R para. 7.1.WT/DSB/M/11
Page7
authorities requesting details ofthemeasures taken andtheirjustification under theWTO Agreement.
Theresponse hadnotprovided satisfactory orcomplete answers tothequestions raised. Although
thevolume oftrade affected wasrelatively small, atstake were important points ofprinciple. The
quantitative restrictions violated Article XIoftheGATT 1994, which provided fortheir general
elimination, andArticle XIII, which required thatanysuchrestrictions beadministered inanon-
discriminatorymanner.TheserestrictionswerealsoinconsistentwithTurkey'sobligationunderArticle2
oftheAgreement onTextiles andClothing (ATC), which stipulated thatnewrestrictions shallnotbe
introduced except under therelevant provisions thereof orGATT 1994. Theobjective oftheATC
wastobring trade intextiles under theGATT disciplines overaperiod oftenyears. During the
transitional period, safeguards could onlybeinvoked ifserious damage, oractual threat thereof, could
bedemonstrated.Turkey'sactionhadnotmettheabove-mentionedcriteriaandthetransitionalsafeguard
provisions oftheATC hadnotbeeninvoked. IntheviewofHong Kong Article XXIV could notbe
interpreted tojustify theintroduction ofthequantitative restrictions byTurkey. Inaneffort toresolve
thisissue, Hong Kong hadrequested consultations with Turkey on12February 1996, under
Article XXII:1 oftheGATT 1994pursuant toArticle 4oftheDSU. Ithoped thatTurkey would fully
discharge itsobligations under theGATT andtheWTO andurged thattheaction taken byTurkey
berescinded. Inlightoftheoutcome ofthese consultations, itreserved itsrights totakethematter
further, should thisprove tobenecessary.
Therepresentative ofthePhilippines, speaking onbehalf ofcertain ASEAN countries, namely
Malaysia, thePhilippines andThailand which hadbeen affected bytheunilateral imposition of
quantitativerestrictionsbyTurkeyoncertaintextileandclothingproducts.AtthemeetingoftheCouncil
forTrade inGoods on29January, ASEAN countries hadregistered theirserious concern withthe
measure taken byTurkey andhadstated thattheyreserved theirrights topursue thematter under the
relevant WTO provisions, including GATT 1994andtheATC. LikeHong Kong, ASEAN countries
respected therights ofaMember toform customs unions orfree-trade areas inaccordance withthe
relevant multilateral tradeagreements. While theywelcomed theimplementation oftheCustoms Union
between Turkey andtheEuropean Community, theybelieved thatTurkey should haveensured that
theimplementation oftheagreement wasnotattheexpense ofother Members 'rights under relevant
WTO provisions. TheWTO wasarule-based institution andoneexpected reasonable compliance with
allthatwasagreed toandthatMembers would nottakeactions which would undermine thecredibility
oftheWTO. Attheconclusion oftheUruguay Round, Members hadcommitted themselves tobring
trade intextiles under thedisciplines ofGATT 1994 andtheATC. Malaysia, thePhilippines and
Thailand wished toreserve theirrights toparticipate inconsultations requested byHong Kong. They
would alsoprefer Turkey towithdraw thequantitative restrictions thatithadimposed.
Therepresentative ofIndia saidthathisdelegation wished tobeassociated withthestatement
made byHong Kong. India requested Turkey totakeintoaccount theserious concerns ofHong Kong
andtowithdraw thequantitative restrictions ithadimposed. Should thisnothappen, India wished
toreserve itsrights under theWTO Agreement and,inparallel, wished toexpress itsinterest tobe
joined inconsultations requested byHong Kong.
Therepresentative ofKorea shared theconcerns expressed byHong Kong. Asamatter of
principle, anumber ofquestions remained tobeanswered concerning thecompatibility ofthismeasure
withTurkey 'scommitments under theWTO Agreement. Hisauthorities were currently reviewing
thesubstantive effect theTurkish measure hadonKorea 'strade, aswellasthelegalimplications thereof.
Pending theresults ofthisreview, Korea reserved itsrights, including thatunder Article 4.11ofthe
DSU concerning therequest, tobejoined inconsultations.
Therepresentative ofPerusaidthathisdelegation echoed theviews expressed byHong Kong
andwished toreserve itsrights, including those under Article 4.11oftheDSU.WT/DSB/M/11
Page8
Therepresentative ofArgentina saidthathiscountry shared Hong Kong'sconcerns regarding
theconformityoftheunilateralmeasuresadoptedbyTurkeywhichalsoaffectedimportsfromArgentina.
Consultations were ongoing andArgentina wished toreserve itsrights onthismatter.
Therepresentative ofColombia saidthattheconcerns raised byHong Kong deserved careful
consideration. Colombia would befollowing theseconsultations veryclosely. Ithoped thatthismatter
could beresolved inthebestpossible manner.
Therepresentative ofBrazil saidthatitsexports oftextiles andclothing hadalsobeenaffected
bytheunilateral measure taken byTurkey. Brazil, therefore, wished toreserve itsrights onthisissue,
including those under Article 4.11oftheDSU.
Therepresentative ofPakistan saidthattheissue raised byHong Kong hadbeendiscussed
bytheCommittee onTrade andDevelopment (CTD) atitsmeeting on29January. Onthatoccasion,
Pakistan hadunderstood Turkey 'snatural disposition toforge closer relations withtheEuropean
Communities located incloseproximity ofthatmarket. Hiscountry however noted withdisappointment
thattheformation oftheCustoms Union hadresulted inraising discriminatory barriers against the
trade ofthird countries including Pakistan. Pakistan feltthatthisraised valid questions about the
compatibility ofsuchrestrictions withtherequirements oftherelevant provisions oftheGATT. Pakistan
noted Hong Kong'sstatement andwould follow withdeepinterest theconsultations requested byit.
Therepresentative ofTurkey saidthathiscountry hadaccepted toenter intobilateral
consultations withHong Kong inorder todiscuss thismatter which wascovered byArticle XXIV:8(a)
oftheGATT 1994. Turkey wasready tofixamutually agreed dateforconsultations withHong Kong.
Hisdelegation noted thestatements made atthepresent meeting andwould consider thepossible further
requests, taking intoaccount therelevant provisions oftheWTO Agreement.
TherepresentativeoftheEuropeanCommunitiesinformedtheDSBthattheCommunitieswished
tobejoined intheconsultations requested byHong Kong. Themeasures, asindicated byTurkey,
resulted from theimplementation oftreaty establishing theCustoms Union between Turkey andthe
European Community andwere, intheview oftheCommunities, consistent withtheprovisions of
theGeneral Agreement andinparticular were covered byArticle XXIV:8.
Therepresentative ofHong Kong saidthathisdelegation noted therequest oftheCommunities
tobejoined inconsultations inaccordance withArticle 4.11oftheDSU. Thelanguage ofArticle 4.11
wasclearinthatanyclaim ofsubstantial interest would befortheresponding party, inthiscaseTurkey,
toagree. Also, iftherequest tojoinconsultations wasdenied thentheMember requesting tojoin
consultations might proceed toinitiate theirownconsultations. Inthepresent case, anysuchrequest
tojoinconsultations wererequests tojoinHong Kong inconsultations withTurkey. Thepurpose of
suchrequests could notbetojoinTurkey inconsultations withHong Kong. Otherwise, thedecision
astowhether therequesting party should bejoined intheconsultations would beinthehands ofHong
Kong rather thanTurkey. Hong Kong hadnowish tobedifficult inthis,buthoped thatdue
consideration would begiven totheabove viewonthesystemic aspects ofthiscase. Hong Kong was
gladthatTurkey agreed tobilateral consultations. Hereferred toaletter fromtheTurkish authorities
indicating thatitwould notbeconvenient forthemtoconsult inGeneva intheweek beginning ofthe
11March, which wasthedatesuggested byHong Kong. Hehoped thatinlightoftheinterest which
hadbeenexpressed byanumber ofdelegations, Turkey might reconsider thismatter because given
thenumber ofdelegations interested, andgiven thefactthatthisdispute wastaking place under
multilateral instruments, itwould befarmore convenient forconsultations totakeplace onneutral
ground.
TheDSBtooknoteofthestatements.WT/DSB/M/11
Page9
4. United States -Restrictions onimports ofcotton andman-made fibreunderwear
- Statement byCosta Rica
Therepresentative ofCosta Rica, speaking under "Other Business", recalled thatattheDSB
meeting on31January hisdelegation hadinformed theDSBthaton22December 1995 Costa Rica
hadrequested consultations withtheUnited States withregard totherestrictions onCosta Rica'sexports
ofcotton andman-made fibreunderwear (category 352/652). However, these consultations didnot
arrive atamutually satisfactory solution. Since the60-day period forconsultations hadalready expired,
Costa Ricawould soonrequest theestablishment ofapanel toexamine thismatter. Inorder forthe
panel tobeestablished asquickly aspossible, Costa Ricawished torequest thatameeting oftheDSB
beconvened forthispurpose asprovided forinfootnote 5ofArticle 6oftheDSU.
TheDSBtooknoteofthestatement.
5. Appellate Body -Working Procedures forAppellate Review
- Statement bytheChairman
TheChairman, speaking under "Other Business", recalled thattheAppellate Body'sWorking
Procedures forAppellate Review which came intoforce on15February, hadbeen circulated in
WT/AB/WP/1. On19February informal consultations hadbeenheldforthepurpose ofproviding
atechnical briefing ontheWorking Procedures during thecourse ofwhich questions andcomments
hadbeenmade byMembers. Thepackage circulated on15February contained boththeWorking
Procedures adopted bytheAppellate Body andacovering letter fromtheChairman oftheAppellate
Body totheDSB Chairman. Theletter addressed theissues raised byMembers which hadbeen
conveyed totheAppellate Body during theconsultations heldbytheoutgoing andincoming Chairmen
oftheDSBinaccordance withtheDecision ontheEstablishment oftheAppellate Body contained
inWT/DSB/1.ItalsoexplainedtheAppellateBody'sreasonsforitsconclusionsoncertainkeyelements
oftheWorking Procedures. Forexample, onissues ofestablishment ofdivisions, rotation and
collegiality.
Theconsultations thathehadheldonbehalf ofMembers withtheAppellate Body, pursuant
toArticle 17.9oftheDSU andtheDSBDecision ontheEstablishment oftheAppellate Body, had
theobjective ofmaking theAppellate Body aware oftheconcerns ofMembers. Itwasimportant to
familiarize theAppellate Body withthesensitivities oftheWTO andits"climate ofopinion". Article
17.9oftheDSU contemplated neither anegotiations process noraformal approval bytheDSBof
theAppellate Body'sworking procedures. Theconsultations contemplated intheDSU andtheDSB
Decision ontheEstablishment oftheAppellate Body wereinthenature ofanadvice -consilium -counsel
to,andforthebenefit of,theAppellate Body, butnotacommand -praeceptum -thatobliged the
Appellate Body. Aquinas -distinguished between praeceptum -command andconsilium -advice, by
saying thatpraeceptum implied necessity toobey, while consilium provided options forthose towhom
theywere given. TheWorking Procedures forAppellate Review were legally ineffect, asof15
February. Theycould bemodified through theamendment procedure setoutinRule32oftheWorking
Procedures. Finally, hedrewtheattention ofMembers tothefactthattheAppellate Body haddecided
thattheWorking Procedures forAppellate Review would beissued asanunrestricted document.
Therepresentative ofMexico recalled thatinaccordance withArticle 17.9oftheDSU"working
procedures shallbedrawn upbytheAppellate Body inconsultation withtheChairman oftheDSB
andtheDirector-General, andcommunicated totheMembers fortheirinformation". Mexico hadhoped
thatitsconcerns, aswellasother Members 'concerns expressed during theinformal consultations,
would bereflected intheAppellate Body'sWorking Procedures. However, henoticed thatthiswas
notthecase. Hiscountry 'sconcerns pertained totheissues ofcollegiality andnationality ofAppellateWT/DSB/M/11
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Body members which might affect theintegrity andcredibility ofthedispute settlement mechanism.
Inaccordance withRule4.3oftheWorking Procedures "thedivision responsible fordeciding each
appeal shallexchange views withtheother members before thedivision finalizes theappellate report
forcirculation toWTO Members". Inother words, theseven members oftheAppellate Body would
influence thefinaldecision through anexchange ofviews before theappellate report isfinalized.
However, Article 17.1oftheDSU provided that"theAppellate Body shallhearappeals from panel
cases. Itshallbecomposed ofseven persons, three ofwhom shallserve onanyonecase. Persons
serving ontheAppellate Body shallserve inrotation". Herecalled thatcollegiality wasanewconcept
alien totheissues negotiated intheUruguay Round. When Article 17oftheDSU wasnegotiated
theideawasthateachappellate review would becarried outonlybythree members oftheAppellate
Body. Ontheonehand, Article V:4(b)(i) oftheRules ofConduct stated thatpersons serving onthe
Standing Appellate Body who, through rotation, areselected toheartheappeal ofaparticular panel
case(i.e.thethree persons) shallreview thefactual portion ofthepanel report andcomplete theform
atAnnex 3.Ontheother hand, Rule9.1,oftheWorking Procedures oftheAppellate Body stated
thateachmember (i.e.eachoftheseven members) shalltakethesteps setoutinArticle V:4(b)(i) of
theRules ofConduct.
Mexico wasalsoconcerned thatRule 6.2oftheWorking Procedures provided forthe
"opportunity forallmembers toserve regardless oftheirnational origin". Herecalled thatGATT
practice, aswellasArticle 8.3oftheDSU wereclearthat"citizens ofMembers whose governments
areparties tothedispute orthirdparties...shall notserve onapanel concerned withthatdispute, unless
theparties tothedispute agree otherwise". Thiswasthebestwaytoavoid possible direct orindirect
conflict ofinterest. Hisauthorities didnotdoubt theimpartiality, honesty andmoral integrity ofthe
Appellate Body members. However, itwould beverydifficult forMexico, andperhaps forother
Members, toexplain tosome sectors ofitsnational public opinion, inparticular those whodisagree
withfreetrade, thatinalostdispute acitizen oftheother party wasamember oftheAppellate Body,
while noMexican citizen hadthesame possibility.
Hisdelegation hoped thatthemembers oftheAppellate Body would urgently reconsider the
needtomaintain theconcepts ofcollegiality andnationality. Mexico reserved itsrights under Article
17.1oftheDSU withregard tocollegiality. Itwould alsoseek, ifitconsidered appropriate, todefine
more precisely thenotion "direct orindirect conflict ofinterest" inArticle 17.3oftheDSU through
theRules ofConduct which were stillsubject tonegotiations.
Therepresentative ofEgypt welcomed thefactthattheAppellate Body finalized itsWorking
Procedures. Hisdelegation would havewished tohavebeenconsulted further intheprocess ofthe
preparationoftheWorkingProcedures.However,thecoveringletterfromtheChairmanoftheAppellate
Body explained thevarious issues which would haveraised some concerns. Egypt wasnotconcerned
overcollegiality orovernationality. Appellate Body members would bereceiving documents related
toallappeals. Inaccordance withRule4.3oftheWorking Procedures, thedivision deciding each
appeal shallexchange views --notconsult --withother members. Working Procedures required only
anexchange ofviews notthatdueconsideration begiven totheviews expressed. However, theseven
members would beoverburdened withwork since theywould havetowork asiftheywereinvolved
ineachandevery case. They would havetostudy andreflect ondocuments circulated tothem and
induecourse exchange theirviews. Astothequestion ofnationality ofmembers, allprecautions had
already beentaken prior totheirselection. Although theRules ofConduct hadnotyetbeenadopted,
theAppellate Body should bebound bythesesamerulessincetherewerenotother suchrulesavailable.
Inconnection withRule8.1oftheWorking Procedures which indicated thattheRules ofConduct
fortheDSU hadonlybeenadopted onaprovisional basis, Egypt 'sposition wasthatthesame rules
would govern notonlytheAppellate Body butalsotheTextiles Monitoring Body. Incasethese rules
wereamended infuture, aggreater transparency should beobserved. While Members would notbeWT/DSB/M/11
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involved innegotiating amendments, atleasttheirviews would bemade known totheAppellate Body
members.
Therepresentative ofIndia saidhiscountry hadalready raised some concerns withregard to
theWorking Procedures andtheletter fromtheChairman oftheAppellate Body during theinformal
consultations on19February. Atthepresent meeting hewished toshare some systemic concerns and
todraw attention tothesubstance oftheWorking Procedures. Herecognized thatnotallconcerns
could bedealtwithbytheAppellate Body andthatsome ofthem would havetobedealtwithbythe
DSB. Atthepresent meeting hewished onlytoenumerate those concerns sothatinthefuture Members
would beabletodealwiththem inamanner consistent withtheroles thattheDSU assigned tothe
DSBandtheAppellate Body.
Ontheissue ofcollegiality Members hadhaddifferent views regarding theextent towhich
thefourmembers notserving onadivision should influence thedecision ofthedivision. Inhisview
anyprocess which would enable thefourmembers notserving onthedivision tobeinvolved inthe
dispute wascontrary totheletter andspirit ofArticle 17.1oftheDSU. Healsomentioned thatthe
circumstances under which theconcept ofcollegiality wasbrought totheforefront could notbeignored.
Rule4.3oftheWorking Procedures wasnotinaccordance withArticle 17.1oftheDSU andthis
problem could notberesolved through Rule4.4which isclearly inconsistent withRule4.3.
With regard tothequestion ofnationality, there were some practical reasons which made it
difficult tohavearequirement thatamember oftheAppellate Body should stand aside inanappeal
involving thatmember 'scountry oforigin. Article 17.3oftheDSUstipulated thattheAppellate Body
members should notparticipate intheconsideration ofanydispute thatwould create adirect orindirect
conflict ofinterest. Itwasamootpointwhether thenationality ofamember created aconflict ofinterest.
While oneshould notattach nationality tagstotheAppellate Body members itwould havebeenbetter
forthecredibility ofthesystem ifamechanism hadbeendevised toenable anappellant orappellee
toconvey informally hisconcerns about anAppellate Body member whowasacitizen ofacountry
involved inthedispute. Disputes brought totheAppellate Body werebound toacquire highpolitical
visibility andmedia attention. Therefore, itwould notbewisetoignore perceptions. Although Rule
6.2oftheWorking Procedures specified theprinciple ofrotation, itsmechanics werenotspelled out.
TheDSBneeded tobeassured thatthemechanism forensuring rotation wasreliable.
Rules 8,9,10and11hadbeenadopted onaprovisional basisandRule8.1implied thatRules
ofConduct were notyetapproved bytheDSB. India wasconcerned thatcertain rules acquired
legitimacy evenbefore theywerebrought before theDSBandMembers hadtofindways ofensuring
thatthisdidnotrecur inthefuture. Henoted thatthere wassome dichotomy. TheAppellate Body
believed thatdealing withtheissue ofnationality inanyother waywould beunnecessary inviewof
thequalifications required formembership oftheAppellate Body andundesirable because itwould
castdoubts onthecapacity oftheAppellate Body members tobeindependent andimpartial. However,
theAppellate Body waswilling toaccept asituation where there would beachallenge onthebasis
offinancial orprofessional interests. Ifthequalifications oftheAppellate Body members andtheir
selection process hadensured independence andimpartiality indecision-making thenthere would be
notneedfortheAppellate Body members tohaveRules ofConduct.
Rule32.2oftheWorking Procedures stipulated thattheAppellate Body might amend itsrules
incompliance withArticle 17.9oftheDSU. Inaccordance withWT/DSB/1 theDSBChairman should
consult withtheMembers inorder toobtain theirviews prior toadvising theAppellate Body onthe
workingprocedures.ItwouldbeananomaloussituationiftheMemberswereconsultedbytheChairman
attheinitial stage ofpreparation oftheWorking Procedures butnotwhen theywould besubsequently
amended.WT/DSB/M/11
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Healsohadasystemic concern withregard toRule15which implied thattheAppellate Body
could authorize amember tocontinue tobeamember afteritceased tobeamember. Thiswascontrary
toArticle 17.1oftheDSU which, inter alia,provided thatastanding Appellate Body shall be
established bytheDSBandthatitshallbecomposed ofseven persons. Rule15would leadtoasituation
where theAppellate Body could consist ofmore thanseven members oranAppellate Body member
continued aftertheexpiry ofhistermwithout theapproval oftheDSB. While thepractical needfor
theprovision contained inRule15wasunderstandable, hewould beseriously concerned ifamember
oftheAppellate Body could continue without concurrence orapproval bytheDSB. ThisRuleprovided
fornotification totheDSBinstead ofapproval andtherefore wasinviolation ofArticle 17.1ofthe
DSU. AstoRule29regarding failure toappear, itwasnotclearastohowtheviews ofaparticipant
whofailed tomake awritten submission andtoappear could beheard.
Healsonoted thattheletter oftheChairman oftheAppellate Body indicated thattheAppellate
Body hadheldconsultations withtheChairman oftheDSBinDecember 1995andJanuary andFebruary
1996. However, thefirstinformal consultations withtheMembers onthissubject hadbeenheldon
1February. Itwould havebeenappropriate anduseful ifinformal consultations onthissubject had
beeninitiated inDecember. TheAppellate Body members would havebeensensitized tovarious
concerns andissues prior todrawing upoftheirworking procedures. Ifconsultations hadbeenheld
intime Members would probably notfacethedifficulties atthepresent meeting. Herecalled that
theChairman oftheDSB, whenever provided aninput totheAppellate Body regarding working
procedures wasperforming anofficial dutyassigned tohimintheDSU. Itwould notbeunfair for
thecollectivity oftheDSBtoexpect thattheChairman would consult Members before providing an
input totheAppellate Body, evenifthere hadbeennodecision bytheDSBthattheChairman should
consultMembersbeforeadvisingtheAppellateBody.HewasgladthattheAppellateBodyhadexpressed
formally itsstrong commitment tothedispute settlement system asawhole. Countries involved in
theUruguay Round negotiations hadthevision andcourage tooptforastrengthened dispute settlement
system withtheAppellate Body attheapexofthatsystem. Members wereunlikely tobelesscommitted
totheintegrity ofthedispute settlement system asawhole thananybody else.
Therepresentative oftheUnited States thanked theChairman forholding theinformal meeting
on19February concerning theWorking Procedures forAppellate Review. Thetechnical briefing
provided atthatmeeting hadbeenveryuseful. Onthatoccasion theUnited States hadexpressed some
concerns, andinviewoftheChairman 'scommitment torelay those concerns totheAppellate Body,
hedidnotseetheneedtoreiterate thematthepresent meeting. However, hewished toregister some
oftheclarifications thatdelegations hadreceived concerning twoissues. First, theAppellate Body
Secretariat hadconfirmed thatthedecisions oftheAppellate Body might only"uphold, modify or
reverse" thelegalfindings orconclusions ofthepanel asprovided forinArticle 17.13 oftheDSU.
TheUnited States fullyunderstood thattheAppellate Body Secretariat didnotpresume tospeak for
theAppellate Body itself, butthishelped toclarify thereferences inRules 21and22to"thenature
ofthedecision orruling sought". Second, theproof ofservice requirement intheWorking Procedures
could leadtoaneedless waste ofpaper. Hiscountry noted thattheAppellate Body Secretariat had
confirmed thatproof ofservice might beprovided inamanner consistent withthecurrent practice
ofindicating onthedocument itself theparties towhom copies hadbeensent. Hefurther noted that
theWorking Procedures werefarfromperfect. Inparticular Rule29wasdisturbing initsimplications
forpossible sanctions against Members. However, itwould bebetter toliveforawhile withthe
problems thatthese rules presented rather thanhavetheAppellate Body entering intoaseries oftoo
frequent modifications ofthese newrules.
Therepresentative ofChile supported thestatements made byMexico andIndia withregard
tothequestion ofcollegiality. Rule4.3oftheWorking Procedures wentbeyond whatwasauthorized
under theDSU. Adivision consisting ofthree members wastodecide anappeal andunder no
circumstances wasanexchange ofviews withother members totakeplace. Anattempt hadbeenmadeWT/DSB/M/11
Page13
toensure flexibility intimeperiods provided forinRules 18.1and29.However, thisshould notbe
turned tothedisadvantage oftheparties. Herecalled thattheDSU hadnotauthorized theAppellate
Body toestablish time-periods ortoconsider thefailure tosubmit awritten submission. While Chile
wasaware thattheWorking Procedures hadbeenestablished inaccordance withArticle 17.9ofthe
DSU. Itwished theAppellate Body totakeintoconsideration theconcerns expressed byMembers
inorder toensure fairness intheimplementation ofprocedural aspects oftheAppellate Body.
Therepresentative ofCanada saidthathercountry wasveryinterested intheAppellate Body's
Working Procedures andhadmade several suggestions withregard tosome important elements ofthese
procedures. TheWorking Procedures aspresently drafted incorporated worthy principles. However,
Canada identified some questions andconcerns withregard toafewaspects ofthese procedures. Her
country intended tofollow closely theapplication ofthese procedures. Itexpected thattheywould
beapplied inapractical andflexible manner andthatwithtimeCanada 'squestions would beanswered
anditsconcerns would turnouttobeunjustified. Herdelegation wascertain thattheAppellate Body
would alsobeclosely watching howthese procedures worked inpractice andwould bereceptive to
thecomments andconcerns which Members might express atalaterdateprior toanyreview ofthese
procedures bytheAppellate Body.
Therepresentative oftheEuropean Communities saidthat, likeother delegations, the
Communities clearly accepted thepremise onwhich thedebate inthisforum wastaking place. The
Working Procedures wereindeed nowoperational asindicated intheinformal meeting on19February
andMembers werenotinvolved atthisstage inanynegotiating process. However, theCommunities
hadanumber ofconcerns. Thepractical concern hadalready beenaddressed bytheUnited States
andtheCommunities shared theUnited States 'views. Hisdelegation wasconcerned inparticular with
thequestion oftheservice ofdocuments asrequired byRule18andwasgrateful fortheconfirmation
that,asfaraspossible, theexisting practice would continue. However, Rule18should beapplied
withadegree offlexibility which would indeed allow fortheuseoftechnology, thefaxmachine and
copying which would facilitate whatcould otherwise beaburdensome extraobligation. Thelegaland
judicial concern related toRule29;theCommunities hadaverygenuine concern that,infact,anew
lawhadbeencreated inthesense thatfailure tomake asubmission within aprescribed time-limit or
toappear inanoralhearing could havetheresult ofthedismissal oftheappeal. Thiswasaserious
issue which should bedrawn totheattention oftheAppellate Body. TheCommunity hoped that
judgement bydefault would betherareexception totheruleandthatthose concerns becommunicated
totheAppellate Body. Thelinguistic concern related totheFrench andSpanish language versions
ofthetext. TheCommunities would besubmitting some comments inwriting assoonastheywere
available. Hestressed thatthese comments didnotrelate tosubstance. Theobjective wasonlyto
ensure conformity asbetween onelanguage version andanother. Rule8.1oftheworking procedures
stipulated thatonaprovisional basis theAppellate Body would adopt onlythose rules which are
applicable toit.ButthetextoftheRules ofConduct wasclear inallcases astowhich rules were
applicable toit.Inother words aruleofmutatis mutandis could wellapply butonehadtobecertain
whatthemutandis element contained. Forexample, onpage17ofthedocument WT/AB/WP/1 would
thefootnote onthatpagefallintothecategory ofthemutandis ?TheCommunities would bewatching
theapplication oftherulesofprocedure inthelightofexperience andhopefully some oftheconcerns
would dissipate. They would begrateful ifthose concerns could beconveyed totheAppellate Body.
TheDSBtooknoteofthestatements.