DS161 and DS169: Appellate Body and Panel Reports on
Korea Measures Affecting Imports of Fresh,
Chilled and Frozen Beef. Case brought by Australia
and the US with Canada and New Zealand as third parties.
Dispute Settlement Body adopted the Appellate Body report
and the panel report as modified by the Appellate Body in
this case. The Republic of Korea was found to have
violated various WTO agreements. It was found to have
discriminated against imported beef (violating
national treatment in GATT) by requiring
imported beef to be retailed separately from domestic
beef i.e. through specialist stores, and it was found to
have incorrectly calculated its domestic support
incorrectly under the Agriculture Agreement.
and the United States welcomed and supported the adoption
of the reports. The United States noted that these were
the first Reports to address the domestic support
provisions of the Agriculture Agreement.
EU disagreed with the treatment of Korea in this case as
a developing country for the purposes of the Agriculture
Agreement. It emphasized that Koreas economic
situation could not justify developing country status
under any of the WTO Agreements.
expressed some reservations about certain findings but,
nevertheless, joined in the consensus to adopt the
Reports. In accordance with Article 21.3 of the Dispute
Settlement Understanding (DSU), Korea will have to
indicate its intentions about implementing the findings
within the next 30 days.
DS165 United States Import Measures on Certain
Products from the European Communities. Case brought by
the EU Back
Dispute Settlement Body (DSB) adopted the Appellate Body
report and the panel report as amended by the Appellate
case arose as a consequence of the banana dispute (case
DS27). It also reflects a problem that has become known
as sequencing. The subject of the case was a
US measure of 3 March 1999 that was the subject of this
brief, in September 1997, the DSB decided that the
EUs regime for banana imports violated WTO rules.
The EU had until 1 January 1999 to correct its banana
2 February 1999, the US complained that the EU had not
complied with the DSBs rulings, and asked for
authority to impose sanctions. However, a number of
questions and concerns were raised about the lack of
clarity in how Art.21.5 (examination of compliance) and
Art.22 (authorization to retaliate by imposing sanctions)
of the Dispute Settlement Understanding (DSU) should be
interpreted, and the sequence in which they should be
applied. The US and the EU could not agree on an
interpretation on how to proceed.
29 January 1999, the US and the EU agreed on an ad hoc
procedure (applying only to the banana case) which was
also adopted by the whole DSB. They agreed that the
USs request for sanctions would be referred to
arbitration (under DSU Art.22.6) to determine whether the
level of the proposed sanctions was justified. They also
agreed that this arbitration would be carried out by the
same individuals who were already engaged in Art.21.5
proceedings (i.e. to examine whether the EU had
2 March 1999, the arbitrators informed the DSB that they
needed more information and more time to complete their
3 March 199, the US announced measures that would require
importers to place bonds covering import duties of 100%
on the European products the US was proposing for the
sanctions. The US said it had to do this in order to
ensure it was within the timetable set out in the rules.
These bonds would be held, in the USs words
to preserve [the USs] right to impose 100%
duties as of 3 March, pending the release of the
arbitrators final decision.
following day, 4 March 1999, the EU launched a new case
(DS165), arguing that the measure was illegal.
on 9 April 1999 the arbitrators ruled that the proposed
sanctions were too severe. On 19 April 1999 the DSB
authorized the US to impose sanctions within the limit
set by the arbitrators, and the US did so by imposing
100% duties on some but not all of the products for which
the bonding requirements had been announced.
case, then, is about whether the USs 3 March 1999
bonding requirement was legal. Both the panel and
Appellate Body said it is not about the actual sanctions
imposed on 19 April 1999. The panel was established on 16
June 1999, and ruled on 19 April 2000. The bonding
requirement was found to violate WTO agreements.
sides appealed some of the legal interpretation. The
result, briefly, was that the USs 3 March 1999
action was found to violate the Dispute Settlement
Understanding because the action was taken before there
had been a ruling on whether the EU was still failing to
comply in the banana case.
Appellate Body also said it was not its role to sort out
the sequencing problem and that only WTO
members could do this.
the DSB meeting on 10 January 2001, All delegations who
spoke (Argentina, Canada, Ecuador, the EC, Jamaica,
Japan, also on behalf of Chile and Colombia, Korea, New
Zealand, Norway, Saint Lucia, Switzerland, the US and
Hong Kong, China) welcomed the Appellate Bodys
confirmation that only members can amend or interpret the
DSU rules and provisions.
countries stressed the need to re-start discussions on
the issue of sequencing, based on a proposal submitted to
the General Council by several of them on 10 October
EU welcomed the rulings. The US States said it was
satisfied that both the reports had correctly affirmed
that the measure at issue was no longer in effect.
chairperson said that further opportunities to exchange
views on this matter would depend upon the General
Council consideration of the 10 October 2000 proposal.