Dispute Settlement Body 24 March 2006

The DSB adopts rulings in dispute concerning Mexico's tax on soft drinks

The DSB adopted on 24 March 2006 the Panel and Appellate Body reports regarding “Mexico — Tax Measures on Soft Drinks and Other Beverages” (DS308), which was brought by the United States.

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This summary has been prepared by the WTO Secretariat’s Information and Media Relations Division to help public understanding about developments in WTO disputes. It is not a legal interpretation of the issues, and it is not intended as a complete account of the issues. These can be found in the reports themselves and in the minutes of the Dispute Settlement Body’s meetings.

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Adoption of Appellate Body and Panel reports  

When a panel report comes out, it is either adopted by the Dispute Settlement Body or appealed by one or more main parties to the dispute. When the Appellate Body report comes out, it is automatically adopted by the DSB — unless there is consensus to reject it — and becomes binding.

DS308: Mexico — Tax Measures on Soft Drinks and Other Beverages

The Appellate Body report was circulated on 6 March 2006 and was on the agenda for adoption at the request of the US. The US said that the panel and Appellate Body reports were solid and well-reasoned. The US recalled that the dispute involved Mexico's tax on soft drinks and other beverages made with imported sweeteners, such as high-fructose corn syrup (HFCS) and beet sugar. The US added that it found it difficult to conceive how Mexico could eliminate its discrimination against US sweeteners and beverages made with those specific sweeteners without eliminating its beverage tax. It hoped that Mexico would eliminate quickly its discriminatory beverage tax and that in doing so it would not replace one prohibitive barrier to US HFCS with another, as reported by the Mexican Congress.

The EC, as a third party, raised some concerns regarding the Appellate Body's reasoning, noting its systemic interest in the important substantive and procedural legal issues at stake.


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Appointment / Re-appointment of Appellate Body members 

Under “other business”, the DSB Chairman recalled that he launched the process for selecting a new Appellate Body member to replace the late Mr. John Lockhart for the remainder of his term, until 11 December 2009. He also indicated that a Selection Committee consisting of the Director General and the 2006 Chairpersons of the General Council, the Goods Council, the Services Council, the TRIPS Council and the DSB in accordance with the procedures outlined in WT/DSB/1 had been established by the DSB. While the deadline for recommending candidates was set at 31 March 2006, China requested the extension until 30 April 2006. The Chair concluded that he was not in position to make a decision today and would consult with delegations on further steps.


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Next meeting 

The next meeting of the DSB will be on 21 April 2006.