INTRODUCTION

On 12 October 2000, the Dispute Settlement Body (the “DSB”) adopted the Panel Report as upheld by the Appellate Body Report in Canada - Term of Patent Protection (“Canada - Patent Term”). At the DSB meeting of 23 October 2000, Canada 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 the impossibility of reaching an agreement with Canada on the period of time required for the implementation of those recommendations and rulings, the United States requested that such period be determined by binding arbitration pursuant to Article 21.3(c) of the DSU.

By joint letter of 10 January 2001, Canada and the United States 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 also indicated in that letter that they had agreed to extend the time-period for the arbitration, fixed at 90 days from the date of adoption of the Panel and Appellate Body Reports by the DSB, until 28 February 2001. Notwithstanding this extension of the timeperiod, 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 this designation as Arbitrator was conveyed to the parties by letter of 11 January 2001.

Written submissions were received from Canada and the United States on 22 January 2001, and an oral hearing was held on 5 February 2001.

ARGUMENTS OF THE PARTIES

Canada

Canada requests the Arbitrator to fix the “reasonable period of time” at 14 months and two days, so that the “reasonable period of time” will expire on 14 December 2001, that is, the last day the Canadian Parliament is scheduled to sit before its Christmas recess in 2001.