INTRODUCTION

On 21 December 2000, Australia, Brazil, Chile, the European Communities, India, Indonesia, Japan, Korea and Thailand, made a joint request for consultations with the United States of America under Article 4 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (the “DSU”), Article XXII:1 of the GATT, Articles 17.2 and 17.3 of the Anti- Dumping Agreement, and Articles 7.1 and 30 of the Subsidies and Countervailing Measures Agreement (the “SCM Agreement”) regarding the amendment to the Tariff Act of 1930 signed into law by the President on 28 October 2000 with the title of “Continued Dumping and Subsidy Offset Act of 2000” (WT/DS217/1). On 6 February 2001, consultations were held in Geneva, but failed to resolve the dispute.

On 21 May 2001, Canada and Mexico requested consultations with the United States pursuant to Article 4 of the DSU, Article XXII:1 of GATT 1994, Articles 7.1 and 30 of the SCM Agreement and Article 17 of the Anti-Dumping Agreement regarding the same matter (WT/DS234/1). Consultations were held on 29 June 2001 in Geneva, but the parties failed to reach a mutually satisfactory resolution of the dispute.

On 12 July 2001, Australia, Brazil, Chile, the European Communities, India, Indonesia, Japan, Korea and Thailand requested the establishment of a panel pursuant to Articles 4.7 and 6 of the DSU, Article XXIII of the GATT 1994, Article 17 of the Anti-Dumping Agreement and Article 30 of the SCM Agreement, in accordance with the standard terms of reference provided for in Article 7.1 of the DSU (WT/DS217/5). At its meeting of 23 August 2001, the Dispute Settlement Body (the “DSB”) established the Panel.

On 10 August 2001, Canada and Mexico separately requested the establishment of a panel with respect to the same matter pursuant to Articles 4.7 and 6 of the DSU, Article XXIII of GATT 1994, Article 17 of the Anti-Dumping Agreement and Article 30 of the SCM Agreement (WT/DS234/12 and WT/DS234/13). At its meeting of 10 September 2001, the DSB agreed to those requests and, pursuant to Article 9.1 of the DSU, referred the matter to the panel established on 23 August 2001 (WT/DS234/14).

INTRODUCTION

India appeals certain issues of law and legal interpretations in the Panel Report, European Communities – Anti-Dumping Duties on Imports of Cotton- Type Bed Linen from India – Recourse to Article 21.5 of the DSU by India (the “Panel Report”). The Panel was established to consider a complaint by India with respect to the consistency with the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (the “Anti- Dumping Agreement ”) and the Understanding on Rules and Procedures Governing the Settlement of Disputes (the “DSU”) of the measures taken by the European Communities to comply with the recommendations and rulings of the Dispute Settlement Body (the “DSB”) in EC – Bed Linen.

The original panel found that Council Regulation (EC) No 2398/97 of 28 November 1997, imposing definitive anti-dumping duties on imports of cottontype bed linen from India, is inconsistent with Articles 2.4.2, 3.4, and 15 of the Anti-Dumping Agreement. India and the European Communities appealed certain issues of law and legal interpretations developed by the original panel. The Appellate Body upheld the original panel's finding that “the practice of ‘zeroing’ when establishing ‘the existence of margins of dumping', as applied by the European Communities in the anti-dumping investigation at issue” is inconsistent with Article 2.4.2 of the Anti-Dumping Agreement. In addition, the Appellate Body found that “the European Communities, in calculating amounts for administrative, selling and general costs and profits in the anti-dumping investigation at issue”, had acted inconsistently with its obligations under Article 2.2.2(ii) of the Anti-Dumping Agreement and, therefore, reversed the findings of the original panel to the contrary in paragraphs 6.75 and 6.87 of the original panel report.

On 12 March 2001, the DSB adopted the Appellate Body Report and the original panel report, as modified by the Appellate Body Report. The parties to the dispute mutually agreed that the European Communities should have until 14 August 2001 to implement the recommendations and rulings of the DSB.

INTRODUCTION

In a communication dated 20 March 2001, Peru requested consultations with the European Communities pursuant to Article 4 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (“DSU”), Article XXII of the General Agreement on Tariffs and Trade 1994 (the “GATT 1994”), and Article 14 of the Agreement on Technical Barriers to Trade (the “TBT Agreement”), with respect to Council Regulation (EEC) No. 2136/89 (the “EC Regulation” or “Regulation”) laying down common marketing standards for preserved sardines.

On 31 May 2001, Peru and the European Communities held the requested consultations but failed to reach a mutually satisfactory solution.

In a communication dated 7 June 2001, Peru requested the establishment of a panel to examine the EC Regulation, with the standard terms of reference set out in Article 7 of the DSU. Peru made its request in accordance with Article XXIII of the GATT 1994, Articles 4 and 6 of the DSU and Article 14 of the TBT Agreement. In its communication, Peru stated that it considered the EC Regulation to constitute an unnecessary obstacle to international trade which is inconsistent with Articles 2 and 12 of the TBT Agreement, Article XI:1 of the GATT 1994 and the principle of non-discrimination under Articles I and III of the GATT 1994.

At its meeting on 24 July 2001, the Dispute Settlement Body (“DSB”) established a panel pursuant to Peru's request in accordance with Article 6 of the DSU. Canada, Chile, Colombia, Ecuador, the United States and Venezuela reserved their rights to participate in the Panel proceedings as third parties in accordance with Article 10 of the DSU.

At the meeting of the DSB on 24 July 2001, the parties to the dispute agreed that the Panel should have standard terms of reference provided in Article 2.1 of the DSU. The terms of reference of the Panel are as follows:

PROCEDURAL BACKGROUND

On 17 January 2001 Canada requested consultations with the United States pursuant to Article 4 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (hereafter the “DSU”), Article XXII of the General Agreement on Tariffs and Trade 1994 (hereafter the “GATT 1994”), Article 30 of the Agreement on Subsidies and Countervailing Measures (hereafter the “SCM Agreement”) and Article 17 of the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (hereafter the “AD Agreement”) regarding section 129(c)(1) of the US Uruguay Round Agreements Act (hereafter the “URAA”) and the Statement of Administrative Action (hereafter the “SAA”) accompanying the URAA.

Consultations were held in Washington, D.C., on 1 March 2001, but did not lead to a mutually satisfactory resolution of the matter.

On 24 July 2001, Canada requested the Dispute Settlement Body (hereafter the “DSB”) to establish a panel pursuant to Articles 4 and 6 of the DSU, Article XXIII of the the GATT 1994, Article 30 of the SCM Agreement and Article 17 of the AD Agreement. Canada's panel request referenced only section 129(c)(1) of the URAA as the measure at issue. Canada claimed that section 129(c)(1) of the URAA is inconsistent with Articles VI:2, VI:3 and VI:6(a) of the the GATT 1994; Articles 10, 19.4, 21.1, 32.1 and 32.5 of the SCM Agreement; Articles 1, 9.3, 11.1, 18.1 and 18.4 of the AD Agreement; Article XVI:4 of the Marrakesh Agreement Establishing the World Trade Organization (hereafter the “WTO Agreement”); and Articles 3.2, 3.7, 19.1, 21.1 and 21.3 of the DSU.

At its meeting on 23 August 2001, the DSB established a panel pursuant to the request of Canada, in accordance with Article 6 of the DSU. The panel was established with standard terms of reference. The terms of reference are the following:

INTRODUCTION

On 5 October 2000, Argentina requested consultations with Chile pursuant to Article XXIII:1 of the General Agreement on Trade and Tariffs 1994 (the “GATT 1994”) and Article 4 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (the “DSU”) – insofar as it is an elaboration of Article XXIII:1 of the GATT 1994 – as well as Article 14 of the Agreement on Safeguards and Article 19 of the Agreement on Agriculture. This request was related to the Chilean Price Band System (hereafter “the Chilean PBS”) and the imposition by the Chilean authorities of provisional and definitive safeguard measures on imports of wheat, wheat flour and edible vegetable oils.

The consultations took place on 21 November 2000, but the parties failed to reach a mutually satisfactory solution. On 19 January 2001, Argentina requested the Dispute Settlement Body (the “DSB”) to establish a panel, pursuant to Article XXIII of the GATT 1994, Articles 4 and 6 of the DSU, Article 19 of the Agreement on Agriculture and Article 14 of the Agreement on Safeguards, in order to examine the Chilean PBS, its provisional and definitive safeguard measures on imports of wheat, wheat flour and edible vegetable oils, and the extension of those measures.

At its meeting on 12 March 2001, the DSB established a panel in accordance with Article 6 of the DSU. At that meeting, the parties agreed that the Panel should have standard terms of reference. The terms of reference of the panel were, therefore, the following:

INTRODUCTION

On 4 October 2000 India requested consultations with the United States pursuant to Article 4 of the Understanding on Rules and Procedures Governing the Settlement of Disputes(DSU), Article XXII of the General Agreement on Tariffs and Trade, 1994 (GATT 1994) and Article 17 of the Agreement on Implementation of Article VI of the GATT 1994 (AD Agreement) concerning, inter alia, the United States anti-dumping investigation on cut to length carbon quality steel plate. The United States and India consulted on 21 November 2000, but failed to settle the dispute.

On 7 June 2001, India requested the Dispute Settlement Body (DSB) to establish a panel pursuant to Article XXIII:2 of the GATT 1994, Article s 4 and 6 of the DSU and Article 17 of the AD Agreement.

At its meeting on 24 July 2001, the DSB established a panel in accordance with Article 6 of the DSU to examine the matter referred to the DSB by India in document WT/DS206/2. At that meeting, the parties to the dispute also agreed that the panel should have standard terms of reference. The terms of reference are, therefore, the following:

On 16 October 2001, India requested the Director-General to determine the composition of the panel, pursuant to paragraph 7 of Article 8 of the DSU. On 26 October 2001, the Director-General composed the Panel as follows:

Chile, the European Communities and Japan reserved their rights to participate in the panel proceedings as third parties.

The Panel met with the parties on 23-24 January 2002 and on 26 February 2002. It met with the third parties on 24 January 2002.

The Panel submitted its interim report to the parties on 3 May 2002.

INTRODUCTION

Chile appeals certain issues of law and legal interpretations developed in the Panel Report, Chile –Price Band System and Safeguard Measures Relating to Certain Agricultural Products (the “Panel Report”).

The Panel was established on 12 March 2001 to consider a complaint by Argentina with respect to: (i) Chile's price band system for certain agricultural products; and (ii) Chile's provisional and definitive safeguard measures imposed on the same products. Before the Panel, Argentina claimed that Chile's price band system is inconsistent with Article II:1(b) of the General Agreement on Tariffs and Trade 1994 (the “GATT 1994”) and Article 4.2 of the Agreement on Agriculture. Argentina also claimed that the safeguard measures imposed by Chile constitute a violation of Article XIX:1(a) of the GATT 1994 and certain provisions of the Agreement on Safeguards.

In the Panel Report, circulated to Members of the World Trade Organization (the “WTO”) on 3 May 2002, the Panel found that Chile's price band system is inconsistent with Article 4.2 of the Agreement on Agriculture and Article II:1(b) of the GATT 1994. The Panel also found that Chile's safeguard measures on wheat, wheat flour and edible vegetable oils violated certain provisions of the Agreement on Safeguards and the GATT 1994.

The Panel concluded that, to the extent Chile had acted inconsistently with the provisions of the GATT 1994, the Agreement on Agriculture and the Agreement on Safeguards, it had nullified or impaired the benefits accruing to Argentina under those Agreements. The Panel recommended that the Dispute Settlement Body (the “DSB”) request Chile to bring its price band system into conformity with the Agreement on Agriculture and the GATT 1994. The Panel did not, however, make recommendations with respect to the safeguard measures challenged by Argentina.

On 24 June 2002, Chile notified the DSB of its intention to appeal certain issues of law covered in the Panel Report and certain legal interpretations developed by the Panel, pursuant to paragraph 4 of Article 16 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (the “DSU”), and filed a Notice of Appeal pursuant to Rule 20 of the Working Procedures for Appellate Review (the “Working Procedures”). On 4 July 2002, Chile filed its appellant's submission.

INTRODUCTION

On 23 August 2001, the Dispute Settlement Body (the “DSB”) adopted the Appellate Body Report and the Panel Report, as modified by the Appellate Body Report, in United States – Anti-Dumping Measures on Certain Hot-Rolled Steel Products from Japan (“US – Hot-Rolled Steel ”). At the DSB meeting of 10 September 2001, the United States 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 its inability to reach an agreement with the United States on the period of time reasonably required for implementation of those recommendations and rulings, Japan requested that such period be determined by binding arbitration pursuant to Article 21.3(c) of the DSU.

By joint letter of 6 December 2001, the United States and Japan 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 had indicated in a previous letter that they had agreed to extend the time period for the arbitration to 19 February 2002. Notwithstanding this extension of the time period, 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 the designation as Arbitrator was conveyed to the parties by letter of 10 December 2001.

Written submissions were received from the United States and Japan on 4 January 2002, and an oral hearing was held on 18 January 2002.

ARGUMENTS OF THE PARTIES

The United States

The United States requests me to fix the “reasonable period of time” at 18 months, so that that period will expire on 23 February 2003.

The United States submits that implementation will entail a multi-faceted process that may include extensive consultations with Congress, legislative action, internal analysis and revision of certain policies and practices, and a recalculation of the dumping margins.