INTRODUCTION

On 14 September 2001, Chile requested consultations with Argentina pursuant to Article XXIII:1 of the General Agreement on Trade and Tariffs of 1994 (the “GATT 1994”), Article 4 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (the “DSU”) and Article 14 of the Agreement on Safeguards. This request was related to the definitive safeguard measure applied by Argentina on imports of peaches preserved in water containing added sweetening matter, including syrup, preserved in any other form or in water, imported under MERCOSUR Common Nomenclature (MCN) tariff codes 2008.70.10 and 2008.70.90.

The consultations took place on 2 November 2001, but the parties failed to reach a mutually satisfactory solution. On 6 December 2001, Chile requested the Dispute Settlement Body (the “DSB”) to establish a panel, in accordance with Articles 4 and 6 of the DSU in order to examine the definitive safeguard measure applied by Argentina on imports of preserved peaches.

At its meeting on 18 January 2002, 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:

“To examine, in the light of the relevant provisions of the covered agreements cited by Chile in document WT/DS238/2, the matter referred to the DSB by Chile in that document, and to make such findings as will assist the DSB in making the recommendations or in giving the rulings provided for in those agreements.”

On 16 April 2002, the parties agreed to the following composition of the Panel:

The European Communities, Paraguay and the United States reserved their rights to participate in the Panel proceedings as third parties.

The Panel met with the parties on 10 and 11 July 2002 and on 11 September 2002. The Panel met with the third parties on 11 July 2002.