INTRODUCTION

On 16 February 2001, the Dispute Settlement Body (the “DSB”) adopted the Panel Report in Argentina - Measures Affecting the Export of Bovine Hides and the Import of Finished Leather (“Argentina - Hides and Leather”). At the DSB meeting of 12 March 2001, Argentina 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 its inability to reach an agreement with Argentina on the period of time reasonably required for implementation of those recommendations and rulings, the European Communities requested that such period be determined by binding arbitration pursuant to Article 21.3(c) of the DSU.

By joint letter of 12 June 2001, Argentina and the European Communities 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, which shall be completed no later than 90 days after the date of the appointment of the arbitrator. Notwithstanding this extension of the time-period, 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 12 June 2001.

Written submissions were received from Argentina and the European Communities on 3 July 2001, and an oral hearing was held on 18 July 2001.

ARGUMENTS OF THE PARTIES

Argentina

Argentina requests the arbitrator to fix the “reasonable period of time” at forty-six months and fifteen days, so that that period of time will expire on 31 December 2004.

Argentina submits that the text of Article 21.3(c) of the DSU makes it clear that the 15-month period provided as a guideline is merely indicative. Article 21.3(c) speaks of the possibility of fixing a period of longer than 15 months for the implementation of the recommendations and rulings of the DSB.