PROCEDURAL BACKGROUND

On 20 March 2000, the Dispute Settlement Body (the “DSB”) adopted the Appellate Body Report in WT/DS108/AB/R and the Panel Report in WT/DS108/R as modified by the Appellate Body Report in the United States - Tax Treatment for “Foreign Sales Corporations” dispute. In its recommendations and rulings, the DSB requested the United States to bring the FSC measure that was found, in the Appellate Body Report and in the Panel Report as modified by that Report, to be inconsistent with its obligations under Articles 3.1(a) and 3.2 of the Agreement on Subsidies and Countervailing Measures (the “SCM Agreement”) and under Articles 10.1 and 8 of the Agreement on Agriculture, into conformity with its obligations under those Agreements. The DSB specified that the FSC subsidies had to be withdrawn “at the latest with effect from 1 October 2000”.

In its Report, the Appellate Body, inter alia, upheld the Panel's finding, in paragraph 7.130 of the original Panel Report, that the FSC measure constitutes a prohibited export subsidy under Article 3.1(a) of the SCM Agreement; reversed the Panel's finding, in paragraph 7.159 of the original Panel Report, that the FSC measure involves “the provision of subsidies to reduce the costs of marketing exports” of agricultural products under Article 9.1(d) of the Agreement on Agriculture and, in consequence, reversed the Panel's findings, in paragraphs 7.165 and 7.176 of the original Panel Report, that the United States has acted inconsistently with its obligations under Article 3.3 of the Agreement on Agriculture; and found that the United States acts inconsistently with its obligations under Articles 10.1 and 8 of the Agreement on Agriculture by applying export subsidies, through the FSC measure, in a manner which results in, or which threatens to lead to, circumvention of its export subsidy commitments with respect to both scheduled and unscheduled agricultural products.

On 29 September 2000, the Chairman of the DSB received a communication from the United States in which the United States “propose[d] that the DSB modify the time-period in this dispute so as to expire on 1 November 2000”. The United States asked “that the DSB approve this proposal and, to that end, request[ed] a meeting of the DSB on 12 October 2000 to consider this matter.”