INTRODUCTION

On 12 October 2000, the Dispute Settlement Body (the “DSB”) adopted the Panel Report as upheld by the Appellate Body Report in Canada - Term of Patent Protection (“Canada - Patent Term”). At the DSB meeting of 23 October 2000, Canada informed the DSB, pursuant to Article 21.3 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (the “DSU”), that it would implement the recommendations and rulings of the DSB in this dispute and that it would require a “reasonable period of time” to do so, under the terms of Article 21.3 of the DSU.

In view of the impossibility of reaching an agreement with Canada on the period of time required for the implementation of those recommendations and rulings, the United States requested that such period be determined by binding arbitration pursuant to Article 21.3(c) of the DSU.

By joint letter of 10 January 2001, Canada and the United States notified the DSB that they had agreed that the duration of the “reasonable period of time” for implementation should be determined through binding arbitration, under the terms of Article 21.3(c) of the DSU, and that I should act as Arbitrator. The parties also indicated in that letter that they had agreed to extend the time-period for the arbitration, fixed at 90 days from the date of adoption of the Panel and Appellate Body Reports by the DSB, until 28 February 2001. Notwithstanding this extension of the timeperiod, the parties stated that the arbitration award would be deemed to be an award made under Article 21.3(c) of the DSU. My acceptance of this designation as Arbitrator was conveyed to the parties by letter of 11 January 2001.

Written submissions were received from Canada and the United States on 22 January 2001, and an oral hearing was held on 5 February 2001.

ARGUMENTS OF THE PARTIES

Canada

Canada requests the Arbitrator to fix the “reasonable period of time” at 14 months and two days, so that the “reasonable period of time” will expire on 14 December 2001, that is, the last day the Canadian Parliament is scheduled to sit before its Christmas recess in 2001.

INTRODUCTION

On 26 January 1999, the European Communities and their member States (hereafter referred to as the European Communities) requested consultations with the United States under Article 4 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (“DSU”) and Article 64.1 of the Agreement on Trade-Related Aspects of Intellectual Property Rights (“TRIPS Agreement”) regarding Section 110(5) of the United States Copyright Act as amended by the “Fairness in Music Licensing Act” enacted on 27 October 1998.

The European Communities and the United States held consultations on 2 March 1999, but failed to reach a mutually satisfactory solution. On 15 April 1999, the European Communities requested the establishment of a panel under Article 6 of the DSU and Article 64.1 of the TRIPS Agreement.

At its meeting on 26 May 1999, the Dispute Settlement Body (“DSB”) established a panel in accordance with Article 6 of the DSU with the following standard terms of reference:

Australia, Brazil, Canada, Japan and Switzerland reserved their rights to participate in the panel proceedings as third parties.

On 27 July 1999, the European Communities made a request, with reference to Article 8.7 of the DSU, to the Director-in-charge to determine the composition of the Panel. On 6 August 1999, the Panel was composed as follows:

The Panel met with the parties on 8-9 November 1999 and 7 December 1999. It met with the third parties on 9 November 1999.

On 15 November, the Panel sent a letter to the International Bureau of the World Intellectual Property Organization (WIPO), that is responsible for the administration of the Berne Convention for the Protection of Literary and Artistic Works.

INTRODUCTION

The United States, the European Communities and Japan appeal from certain issues of law and legal interpretations in the Panel Reports, United States - Anti- Dumping Act of 1916, complaint by the European Communities (the “EC Panel Report”)

and United States - Anti-Dumping Act of 1916, complaint by Japan (the “Japan Panel Report”). These Panel Reports were rendered by two Panels composed of the same three persons. The two Panel Reports, while not identical, are alike in all major respects.

The Panel was established to consider claims by the European Communities and Japan that Title VIII of the United States Revenue Act of 1916 (the “1916 Act”) is inconsistent with United States’ obligations under the covered agreements. The 1916 Act allows, under certain conditions, civil actions and criminal proceedings to be brought against importers who have sold foreign-produced goods in the United States at prices which are “substantially less” than the prices at which the same products are sold in a relevant foreign market.

The European Communities claimed that the 1916 Act is inconsistent with Articles VI:1 and VI:2 of the General Agreement on Tariffs and Trade 1994 (the “GATT 1994”), Articles 1, 2.1, 2.2, 3, 4 and 5 of the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (the “Anti- Dumping Agreement ”) and Article XVI:4 of the Marrakesh Agreement Establishing the World Trade Organization (the “WTO Agreement”). In the alternative, the European Communities claimed that the 1916 Act is inconsistent with Article III:4 of the GATT 1994. Japan claimed that the 1916 Act is inconsistent with Articles III:4, VI and XI of the GATT 1994, Articles 1, 2, 3, 4, 5, 9, 11, 18.1 and 18.4 of the Anti- Dumping Agreement and Article XVI:4 of the WTO Agreement.

INTRODUCTION AND FACTUAL BACKGROUND

On 20 August 1999, the Dispute Settlement Body (“the DSB”) adopted the Appellate Body Report in WT/DS70/AB/R and the Panel Report and recommendations in WT/DS70/R as upheld by the Appellate Body Report in the dispute Canada - Measures Affecting the Export of Civilian Aircraft (“Canada - Aircraft”). In its report, the Panel found, regarding Canada Account, that the Canada Account debt financing at issue constituted “subsid[ies] contingent in law … upon export performance” prohibited by Article 3.1(a) of the Agreement on Subsidies and Countervailing Measures (“SCM Agreement”), and that in granting this prohibited export subsidy, Canada had necessarily acted in violation of Article 3.2 of the SCM Agreement, i.e., that Canada Account debt financing since 1 January 1995 for the export of Canadian regional aircraft constituted export subsidies inconsistent with Article 3.1(a) and 3.2 of the SCM Agreement. The Panel found with regard to Technology Partnerships Canada (“TPC”) that TPC assistance to the Canadian regional aircraft industry constituted “subsidies contingent … in fact … upon export performance”, contrary to Articles 3.1(a) and 3.2 of the SCM Agreement.

The Panel recommended that Canada withdraw these subsidies within 90 days. The Appellate Body recommended that the DSB request that Canada bring its export subsidies found in the Panel Report, as upheld by the Appellate Body Report, to be inconsistent with Canada's obligations under Articles 3.1(a) and 3.2 of the SCM Agreement into conformity with its obligations under that Agreement. Specifically, the Appellate Body recalled that the Panel had recommended that Canada withdraw the subsidies identified in sub-paragraphs (b) and (f) of paragraph 10.1 of the Panel Report within 90 days.

On 18 November 1999, Canada submitted to the Chairman of the DSB, pursuant to Article 21.6 of the Dispute Settlement Understanding (“the DSU”), a status report (WT/DS70/8) on implementation of the recommendations of the DSB in the dispute. The status report described measures taken by Canada which in Canada's view implemented the DSB's rulings to withdraw the measures within 90 days.

INTRODUCTION

On 10 February 1999, Japan requested consultations with the United States pursuant to Article 4 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (hereinafter the “DSU”), Article XXII:1 of the General Agreement on Tariffs and Trade 1994 (hereinafter the “GATT 1994”) and Article 17.2 of the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (hereinafter the “Anti-Dumping Agreement”) regarding Title VIII of the US Revenue Act of 1916, also known as the US Anti-Dumping Act of 1916 (hereinafter the “1916 Act”).

Consultations were held on 17 March 1999, but did not lead to a mutually satisfactory resolution of the matter.

On 3 June 1999, Japan requested the Dispute Settlement Body (hereinafter the “DSB”) to establish a panel pursuant to Article XXIII of the GATT 1994, Articles 4 and 6 of the DSU and Article 17 of the Anti-Dumping Agreement. Japan claimed that the 1916 Act was inconsistent with Article III:4 of the GATT 1994; Article VI of the GATT 1994 and the Anti-Dumping Agreement, in particular Article VI:2 of the GATT 1994 and Article 18.1 of the Anti-Dumping Agreement as well as Articles 1, 2, 3, 4, 5, 9 and 11 of the Anti-Dumping Agreement; Article XI of the GATT 1994; and Article XVI:4 of the Marrakesh Agreement Establishing the World Trade Organization (hereinafter the “WTO Agreement”) and Article 18.4 of the Anti- Dumping Agreement.

On 26 July 1999, the DSB established a panel pursuant to the request made by Japan, in accordance with Article 6 of the DSU. In document WT/DS162/4, the Secretariat reported that the parties had agreed that the panel would have the standard terms of reference. The terms of reference are the following:

INTRODUCTION

Brazil appeals from certain issues of law and legal interpretation in the Panel Report, Brazil - Export Financing Programme for Aircraft, Recourse by Canada to Article 21.5 of the DSU (the “Article 21.5 Panel Report”). The Article 21.5 Panel was established pursuant to Article 21.5 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (the “DSU”) to consider a complaint by Canada with respect to the existence or consistency with the Agreement on Subsidies and Countervailing Measures (the “SCM Agreement”) of measures taken by Brazil to comply with the recommendations and rulings of the Dispute Settlement Body (the “DSB”) in Brazil - Export Financing Programme for Aircraft (“Brazil - Aircraft”).

The original panel found as follows: “… we find that payments on exports of regional aircraft under the PROEX interest rate equalization scheme are export subsidies inconsistent with Article 3 of the SCM Agreement.” The original panel then recommended “that Brazil withdraw the subsidies identified above without delay”, which in this dispute was found to be within 90 days. On appeal, the Appellate Body upheld this recommendation.

Brazil took steps to implement the recommendations and rulings of the DSB. Taking the view that the measures adopted by Brazil to comply with the recommendations and rulings of the DSB were not consistent with Article 3.1(a) of the SCM Agreement, Canada requested that the matter be referred to the original panel, pursuant to Article 21.5 of the DSU. On 9 December 1999, the DSB referred the matter to the original panel.

The Article 21.5 Panel considered claims by Canada that Brazil had failed to comply with the recommendations and rulings of the DSB. Canada argued that Brazil continued to issue NTN-I bonds pursuant to letters of commitment issued before 18 November 1999 under the terms and conditions of PROEX before its modification; and that the modifications to PROEX adopted by Brazil did not constitute the withdrawal of the subsidies, as PROEX was still inconsistent with the prohibition on export subsidies under Article 3.1(a) of the SCM Agreement.

INTRODUCTION

On 4 June 1998, the European Communities requested consultations with the United States pursuant to Article 4 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (hereinafter the “DSU”), Article XXIII of the General Agreement on Tariffs and Trade 1994 (hereinafter the “GATT 1994”) and Article 17.3 of the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (hereinafter the “Anti-Dumping Agreement”) regarding failure on the part of the United States to repeal Title VIII of the US Revenue Act of 1916, also known as the US Antidumping Act of 1916 (hereinafter the “1916 Act”).

Consultations were held in Geneva on 29 July 1998, but did not lead to a mutually satisfactory resolution of the matter.

On 11 November 1998, the European Communities requested the Dispute Settlement Body (hereinafter the “DSB”) to establish a panel pursuant to Article XXIII of the GATT 1994, Articles 4 and 6 of the DSU and Article 17 of the Anti- Dumping Agreement. The European Communities claimed that the 1916 Act was inconsistent with Article XVI:4 of the Marrakesh Agreement Establishing the World Trade Organization (hereinafter the “Agreement Establishing the WTO” - the Marrakesh Agreement Establishing the World Trade Organization including its annexes being referred to as the “WTO Agreement”); Articles VI:1 and VI:2 of the GATT 1994; and Articles 1, 2.1, 2.2, 3, 4 and 5 of the Anti-Dumping Agreement. In the alternative, the European Communities claimed that the 1916 Act was in breach of Article III:4 of the GATT 1994.

On 1 February 1999, the DSB established a panel pursuant to the request made by the European Communities, in accordance with Article 6 of the DSU. In document WT/DS136/3, the Secretariat reported that the parties had agreed that the panel would have the standard terms of reference. The terms of reference are the following:

INTRODUCTION

Background

On 5 January 1999, Mexico requested consultations with Guatemala under Article 4 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (“DSU”) and Article 17.3 of the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (“AD Agreement”) regarding the definitive anti-dumping measure imposed by Guatemala on imports of Portland cement from Cooperativa Manufacturera de Cemento Portland la Cruz Azul, SCL, of Mexico (“Cruz Azul”), as well as the actions that preceded it (WT/DS156/1).

Mexico and Guatemala held one-day consultations on 23 February 1999, but failed to reach a mutually satisfactory solution.

Establishment and Composition of the Panel

On 26 July 1999, pursuant to Article 17.4 of the AD Agreement and Article 6.2 of the DSU, Mexico requested the establishment of a panel to examine the consistency of Guatemala's definitive anti-dumping measure on imports of Portland cement from Mexico, as well as the actions that preceded it, with Guatemala's obligations under the Agreement Establishing the World Trade Organization (“WTO Agreement”), in particular those contained in the AD Agreement (WT/DS156/2 and WT/DS156/2/Corr.1).

At the meeting of the Dispute Settlement Body (“DSB”) on 26 July 1999, Guatemala stated that it could not join the consensus to establish a panel until certain domestic procedures concerning the investigation had been completed. The DSB agreed to revert to this matter at a later date.

At its meeting on 22 September 1999, the DSB established a panel in accordance with Article 6 of the DSU with standard terms of reference. The terms of reference were:

Ecuador, El Salvador, the European Communities, Honduras and the United States reserved their rights to participate in the Panel proceedings as third parties.

On 12 October 1999, Mexico requested the Director-General to determine the composition of the Panel, pursuant to Article 8.7 of the DSU.

INTRODUCTION

On 6 May 1999, the United States requested consultations with Canada pursuant to Article 4 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (the “DSU”) and, to the extent that it incorporates by reference Article XXII of the General Agreement on Tariffs and Trade 1994, Article 64 of the Agreement on Trade-Related Aspects of Intellectual Property Rights (the “Agreement”, “TRIPS” or the “TRIPS Agreement”) regarding the term of protection granted to patents that were filed before 1 October 1989 in Canada. The United States and Canada held consultations on 11 June 1999 in Geneva but failed to reach a mutually satisfactory solution to the dispute.

In a communication dated 15 July 1999, the United States requested the Dispute Settlement Body (the “DSB”) to establish a panel under Article 6.2 of the DSU. Specifically, the United States alleged that the TRIPS Agreement requires Members to grant a minimum term of protection to all patents existing as of the date of application of the Agreement and that Canada has been obligated to apply the provisions of the TRIPS Agreement since 1 January 1996. The United States alleged that Canada's Patent Act provides that the term granted to patents issued on the basis of applications filed before 1 October 1989 is 17 years from the date on which the patent is issued and that granting of such term of protection is inconsistent with Canada's obligations under Articles 33 and 70 of the TRIPS Agreement.

At its meeting on 22 September 1999, the DSB established a Panel in accordance with Article 6 of the DSU with the following standard terms of reference:

On 13 October 1999, the United States made a request, pursuant to paragraph 7 of Article 8 of the DSU, to the Director-General to determine the composition of the Panel. On 22 October 1999, the Director-General composed the Panel as follows:

PROCEDURAL BACKGROUND

On 20 August 1999, the Dispute Settlement Body (“DSB”) adopted the Appellate Body Report in WT/DS46/AB/R, and the Panel Report in WT/DS46/R as modified by the Appellate Body Report, in the dispute Brazil - Export Financing Programme for Aircraft (“Brazil - Aircraft”).

The DSB recommended that Brazil bring its export subsidies found in the Appellate Body Report, and in the Panel Report as modified by the Appellate Body report, to be inconsistent with Brazil's obligations under Articles 3.1(a) and 3.2 of the Agreement on Subsidies and Countervailing Measures (“SCM Agreement”) into conformity with its obligations under that Agreement. The DSB further recommended that Brazil withdraw the export subsidies for regional aircraft within 90 days.

On 19 November 1999, Brazil submitted to the Chairman of the DSB, pursuant to Article 21.6 of the Dispute Settlement Understanding (“DSU”), a status report (WT/DS46/12) on implementation of the Appellate Body's and the Panel's recommendations and rulings in the dispute. The status report described measures taken by Brazil which, in Brazil's view, implemented the DSB's recommendation to withdraw the measures within 90 days.

The status report indicated that the interest rate equalisation payments under PROEX would be granted only to the extent that the net interest rate applicable to a transaction under that programme was brought down to the appropriate international market “benchmark”. The implementing legislation included: (i) a Resolution by the National Monetary Council altering its own Resolution 2576 dated 17 December 1998, which establishes the criteria applicable to PROEX interest rate equalisation payments; and (ii) a Central Bank Circular Letter which establishes new maximum equalisation percentages and revokes Circular Letter 2843 dated 25 March 1999.

On 23 November 1999, Canada submitted a communication to the Chairman of the DSB (WT/DS46/13), seeking recourse to Article 21.5 of the DSU. In that communication, Canada indicated that there was a disagreement between Canada and Brazil as to whether the measures taken by Brazil to comply with the 20 August 1999 rulings and recommendations of the DSB in fact bring Brazil into conformity with the provisions of the SCM Agreement and result in the withdrawal of the export subsidies to regional aircraft under PROEX and Canada, therefore, requested that the DSB refer the matter to the original panel, pursuant to Article 21.5 of the DSU.

PROCEDURAL BACKGROUND

On 16 February 1999, the United States requested Korea to hold consultations pursuant to Article 4 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (“DSU”) and Article XXII of the Agreement on Government Procurement (WT/DS163/1 and GPA/D4/1) regarding certain procurement practices of entities concerned with the procurement of airport construction for Inchon International Airport (“IIA”) in Korea. The European Communities requested to join in the consultations on 8 March 1999 (WT/DS163/2) and Japan made the same request on 9 March 1999 (WT/DS163/3). Korea accepted neither of these requests.

A mutually satisfactory solution was not reached during the consultations held between the United States and Korea on 17 March 1999. In a communication dated 11 May 1999, the United States requested the Dispute Settlement Body (DSB) to establish a panel to examine the matter.

At its meeting on 16 June 1999, the Dispute Settlement Body agreed to establish a panel in accordance with the provisions of Article 6 of the DSU and Article XXII of the GPA, with the following standard terms of reference pursuant to Article XXII:4 GPA:

The European Communities and Japan reserved third party rights.

The Panel was composed on 30 August 1999 (WT/DS163/5). The composition of the Panel was as follows:

The Panel heard the parties to the dispute on 19 October 1999 and 11 November 1999. The interim report was issued to the parties on 3 March 2000.

FACTUAL ASPECTS

Introduction

This dispute relates to the Inchon International Airport (IIA) project, which is being constructed in the Republic of Korea. At issue is whether the entities that have had procurement responsibility for the project since its inception are “covered entities” under the Agreement on Government Procurement.