* The document was reproduced and reformatted from the text appearing on the World Trade Organization Website (visited 10/7/98)<http://www.wto.org/wto/dispute/distab.htm>. International Legal Materials is publishing only the Findings and Conclusions sections of the decision due to space constraints.

104 The current EC Schedule (Schedule CXL), which was negotiated as the result of the EC's enlargement to include Austria, Finland and Sweden, has not yet been certified by the Director-General. In any event, since the treatment of the poultry products in question is identical in both Schedule LXXX and Schedule CXL, we regard Schedule LXXX as the EC tariff schedule currently in force for the purposes of this dispute. See paragraph 22.

105 Commission Regulation (EC) No 1431/94 of 22 June 1994.

106 Brazil's panel request (WT/DS69/2) contains the following sentence: “The Government of Brazil considers that the EC has failed … to implement and administer a compensation tariff rate quota in line with the bilateral agreement reached between Brazil and the EC within the context of GATT Article XXVIII:4 negotiations.“

107 Article 1.1 of the DSU defines covered agreements as “the agreements listed in Appendix 1 to this Understanding”.

108 Paragraph 155.

109 Panel Reports on European Communities - Regime for the Importation, Sale and Distribution of Bananas, adopted on 25 September 1997, WT/DS27/R, para. 7.98, cited in the Appellate Body Report (WT/DS27/AB/R) at para. 167.

110 Award by the Arbitrator on Canada/European Communities Article XXVIII Rights, BISD 37S/80, at 84.

111 See paragraph 8.

112 Procedure for Modification and Rectification of Schedules of Tariff Concessions, Decision of the Contracting Parties on 26 March 1980, BISD 27S/25.

113 Paragraph 43.

114 Ibid.

115 Paragraph 22.

116 See paragraph 209.

117 Panel Report on European Economic Community - Payments and Subsidies Paid to Processors and Producers of Oil seeds and Related Animal-feed Proteins, adopted on 25 January 1990, BISD 37S/86, para. 146.

118 Annex 1 to Brazil's first written submission. The same language can be found, e.g. in the agreed minutes between the EC and Poland, published in the Official Journal of the European Communities No L 47/22, dated 18 February 1994.

119 Paragraph 56.

120 Paragraph 57.

121 Paragraphs 37 and 59.

l22 Paragraph 55.

123 Article XVI: 1 of the Agreement Establishing the World Trade Organization.

l24 Paragraph 54.

l25 We do not consider Brazil's reference to GATT Articles XIX:3 and XXIIL2 (paragraph 54) to be relevant to this case. Those provisions address withdrawal of concessions in specific situations involving safeguard measures or dispute settlement.

l26 Panel Report on German Import Duties on Starch and Potato Flour, noted by the Contracting Parties on 16 February, BISD 3S/77, para. 7.

127 Paragraph 40.

128 Article 32 of the Vienna Convention provides: “Recourse may be had to supplementary means of interpretation, including the preparatory work of the treaty and the circumstances of its conclusion, in order to confirm the meaning resulting from the application of Article 31…”.

129 EPCT/TAC/PV/18, p. 46, reproduced in the Analytical Index (1995) at p. 947.

l30 Paragraph46.

131 Appellate Body Report on India - Patent Protection for Pharmaceutical and Agricultural Chemical Products, adopted on 16 January 1998, WT/DS50/AB/R, para. 36.

132 Appellate Body Report on Banana III, op. cit., para. 160.

133 Paragraph 64.

134 Paragraph 65.

135 Appellate Body Report on United States - Measure Affecting Imports of Woven Wool Shirts and Blouses from India, adopted on 23 May 1997, WT/DS33/AB/R, p. 14. The report also states: ”… a party claiming a violation of a provision of the WTO Agreement by another Member must assert and prove its claim” (p. 16).

l36 Letters of complaint attached to Brazil's first written submission. We note that the EC did not respond to any of these letters in writing.

137 Paragraph 66.

138 Paragraphs 68 and 70.

139 Paragraph 71. We note that if the EC were to exclude non-Members from the basis of the calculation of tariff quota shares, such an exclusion in itself would not constitute a violation of Article XIIL2. The question we need to address here is whether the EC is required to exclude non-Members from the basis of the calculation of tariff quota shares.

140 We note in this regard that in the Banana III case, the panel made the following observation (which was not affected by the subsequent appeal): “The consequence of the foregoing analysis is that Members may be effectively required to use a general ‘others’ category for all suppliers other than Members with a substantial interest in supplying the product. The fact that in this situation tariff quota shares are allocated to some Members, notably those having a substantial interest in supplying the product, but not to others that do not have a substantial interest in supplying the product, would not necessarily be in conflict with Article XIII: 1. While the requirement of Article XIII:2(d) is not expressed as an exception to the requirements of Article XIII: 1, it may be regarded, to the extent that its practical application is inconsistent with it, as lex specialis in respect of Members with a substantial interest in supplying the product concerned”. See panel reports on European Communities - Regime for the Importation, Sale and Distribution of Bananas, op. cit., para. 7.75. The quoted passage, particularly the use of the phrase “all suppliers other than Members with a substantial interest in supplying the product” (emphasis added), indicates that the Banana III panel did not take the view that allocation of quota shares to non-Members under Article XIII:2(d) was not permitted

141 L/6992, 3 April 1992.

142 Paragraph 53.

143 Panel on Newsprint, adopted on 20 November 1984, BISD 31S/114.

144 Ibid, para. 55.

145 According to the annexes attached to the notification referred to in paragraph 234, one category of poultry meat (0207 41 10) originating in Hungary and Poland benefit from certain special non-MFN quotas under the Interim Agreements. However, imports under these quotas are dutiable at reduced rates. See Official Journal No L 348/1. Since Brazil has submitted no evidence regarding the nature of preferences on poultry products from East Europe, we are not in a position to know what kind of preferential treatment, if any, is given to other categories (0207 41 41 and 0207 41 71).

l46 Panel Report on Newsprint, op. cit., para. 55.

l47 In addition to these seven issues, Brazil refers to the nature of compensation in the context of the Licensing Agreement also. See paragraph 109. However, since we have already addressed this issue in our analysis of the Oilseeds Agreement, we do not consider it necessary to repeat the discussion.

148 Paragraph 76. We note that Brazil does not refer to Article 5 of the Licensing Agreement, which is a more general provision about notification. Article 1.4(a) only deals with the sources of publication.

149 Paragraph 77.

150 Footnote 3 to this subparagraph reads as follows: “For the purpose of this Agreement, the term ‘governments’ is deemed to include the competent authorities of the European Communities.“

151 Paragraph 80. See also paragraph 76.

152 Paragraph 81.

153 Paragraphs 82 and 84.

154 Paragraph 86.

l55 Paragraphs 87 and 88.

156 Paragraph 89.

157 Appellate Body Report on the Banana III, op. cit., para. 197.

158 Paragraph 91.

159 Paragraph 92.

160 Paragraphs 97 and 99. Brazil also refers to Article 3.5(h), which we have discussed in relation to speculation in licences. We note here again that the licences in question have fully been utilized.

161 Paragraph 101.

162 Paragraph 102

163 Paragraph 98.

164 Paragraph 164.

165 Paragraph 105. Since this issue involves both in-quota and over-quota trade, we address it in Section F below when we discuss Article X of GATT.

166 Paragraph 107.

167 Paragraph 108.

168 Paragraph 140.

169 Appellate Body Report on Banana III, op. cit., para. 204.

170 Paragraph 141.

171 Paragraph 142.

l72 Panel Report on Unite States - Restrictions on Imports of Cotton and Man-made Fibre Underwear from Costa Rica, adopted on 25 February 1997, WT/DS24/R, para. 7.65.

173 Paragraph 144.

174 Paragraph 147.

175 Paragraph 148.

176 Paragraph 151.

177 Paragraph 152.

178 Panel Report on Italian Discrimination Against Imported Agricultural Machinery, adopted on 23 October 1958, BISD 7S/60, para. 11.

l79 Footnote 1 to this paragraph reads: “These measures include quantitative import restrictions, variable import levies, minimum import prices, discretionary import licensing, non-tariff measures maintained through state-trading enterprises, voluntary export restraints, and similar border measures other than ordinary customs duties, whether or not the measures are maintained under country-specific derogations from the provisions of GATT 1947, but not measures maintained under balance-of-payments provisions or under other general, non-agriculture-specific provisions of GATT 1994 or of the other Multilateral Trade Agreements in Annex 1A to the WTO Agreement.“

180 Footnote 2 to this paragraph reads: “The reference price used to invoke the provisions of this subparagraph shall, in general, be the average c.i.f. unit value of the product concerned, or otherwise shall be an appropriate price in terms of the quality of the product and its stage of processing. It shall, following its initial use, be publicly specified and available to the extent necessary to allow other Members to assess the additional duty that may be levied.“

181 Paragraphs 119, 121 and 124.

182 Paragraph 122.

l83 One member of the Panel does not endorse this conclusion. See paragraphs 289 to 292.

184 Paragraphs 126, 128, 129 and 130.

185 Paragraphs 127and 131.

186 Paragraph 134.

187 Paragraph 135.

l88 See paragraphs 191 and 192.

189 Paragraph 116.

190 Paragraph 117.

191 Paragraph 15.