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Statement by DSB Chairman

I have reviewed carefully the statements made and the discussion which took place yesterday in the DSB. I can declare the following.

Having reflected at length overnight, and taking into account the long-established practice of consensus decision-making in the GATT and WTO, I am convinced that it will not be appropriate to vote in the DSB on this matter which affects the fundamental operation of the DSU.

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However, in reviewing the statements made at the meeting last night, and after consulting with a number of Members, I believe that we must find a solution to the problem we now face. In that spirit and keeping in mind the proposals on the table, including those of Japan, a number of developing countries, the European Communities and the Director-General, I would suggest the following:

1. A number of delegations have highlighted the lack of clarity in how Articles 21.5 and 22 should be interpreted and the sequence in which they should be applied. I believe that many of these concerns are legitimate, but we face the problem of how to solve our problem in this dispute today, without undermining the spirit and letter of the DSU and, in particular, its provisions on consensus, automaticity and time-limits. I think that the best approach is to proceed by separating the Bananas case from the more general systemic issues. The solution to the Bananas matter would be totally without prejudice to future cases and to the question of how to resolve the systemic issue of the relationship between Articles 21.5 and 22 of the DSU.

2. The two parties will agree to proceed immediately to consultations under Article 4 of the DSU in an effort to find a mutually-agreed solution to their problems. That result is always the aim of the DSU and I am convinced that negotiations in good faith could resolve all problems.

3. As to Bananas, the original panel is now engaged in two Article 21.5 proceedings. In light of the request by the United States under Article 22.2, and assuming the EC make a request for arbitration under Article 22.6, the same individuals could be given the task of arbitrating the level of suspension. Let me be absolutely clear - a request for arbitration under Articles 22.6 will mean that the DSB will not authorize suspension of concessions at today's meeting. After the arbitrator's award is circulated, a new request for suspension of concessions could be made to the DSB at that time, and the DSB would be required to grant authorization, consistent with the decision of the arbitrator, unless there is a consensus against it. There remains the problem of how the panel and the arbitrators would coordinate their work, but as they will be the same individuals, the reality is that they will find a logical way forward, in consultation with the parties. In this way, the dispute settlement mechanisms of the DSU can be employed to resolve all of the remaining issues in this dispute, while recognizing the rights of both parties and respecting the integrity of the DSU. To assist the arbitrators, I will make sure that the minutes of this meeting are made available to them to take into account, as they deem appropriate.

4. As to the systemic issues concerning the relationship of Articles 21.5 and 22, they must be resolved expeditiously. A number of Members have proposed that the issue of this relationship should be referred to the General Council. I will propose to the Chairman of the General Council that this matter be taken up by that body and that it inform the DSB of the results of its discussions as soon as possible. Secondly, I will make this a priority issue for discussion in the DSU review, and I am prepared to conduct informal consultations on this matter at an early date.