WTO Dispute Settlement - Mutually Acceptable Solution - EC - Regime for the Importation, Sale, and Dsitribution of Bananas

	What's New? - Sitemap - Calendar Trade Agreements - FTAA Process - Trade Issues	español - français - português
		Search

EUROPEAN COMMUNITIES - REGIME FOR THE
IMPORTATION, SALE AND DISTRIBUTION OF BANANAS
AB-1997-3

Report of the Appellate Body

IV. Issues Raised in this Appeal

129. The appellant, the European Communities, raises the following issues in this appeal:

(a) Whether the United States had a right to bring claims under the GATT 1994;

(b) Whether the request for the establishment of the panel made by the Complaining Parties in WT/DS27/6 meets the requirements of Article 6.2 of the DSU;

(c) Whether the market access concessions made by the European Communities under the Agreement on Agriculture prevail, as a result of Articles 4.1 and 21.1 of the Agreement on Agriculture, over the obligations of the European Communities under Article XIII of the GATT 1994;

(d) Whether the EC's allocation of tariff quota shares, whether by agreement or by assignment, to some, but not to other, Members not having a substantial interest in supplying bananas to the European Communities, is consistent with Article XIII:1 of the GATT 1994; and whether the tariff quota reallocation rules of the BFA are consistent with the requirements of Article XIII:1 of the GATT 1994;

(e) Whether the European Communities is "required" under the relevant provisions of the Lomé Convention to allocate tariff quota shares to traditional ACP States in excess of their pre-1991 best-ever export volumes, and to maintain the EC import licensing procedures that are applied to imports of third-country and non-traditional ACP bananas;

(f) Whether the existence of two separate EC regimes for the importation of bananas is legally relevant to the application of the non-discrimination provisions of the GATT 1994 and the other Annex 1A agreements of the WTO Agreement;

(g) Whether the provisions of the Licensing Agreement apply to licensing procedures for tariff quotas; and whether Article 1.3 of the Licensing Agreement precludes the imposition of different import licensing systems on like products when imported from different Members;

(h) Whether Article X:3(a) of the GATT 1994 precludes the imposition of different import licensing systems on like products when imported from different Members; and whether both Article 1.3 of the Licensing Agreement and Article X:3(a) of the GATT 1994 apply to import licensing procedures;

(i) Whether the application of the EC activity function rules to imports of third-country and non-traditional ACP bananas, in the absence of the application of such rules to imports of traditional ACP bananas, is consistent with Article I:1 of the GATT 1994; and whether the EC export certificate requirement for the importation of BFA bananas is consistent with the requirements of Article I:1 of the GATT 1994;

(j) Whether the EC import licensing procedures are within the scope of Article III:4 of the GATT 1994; and, if so, whether the EC practice with respect to hurricane licences is consistent with the requirements of Article III:4 of the GATT 1994;

(k) Whether the GATS applies to the EC import licensing procedures, or whether the GATT 1994 and the GATS are mutually exclusive agreements;

(l) Whether "operators" under the relevant EC regulations are service suppliers within the meaning of Article I:2(c) of the GATS that are engaged in the supply of "wholesale trade services"; and whether vertically-integrated companies, which include such operators, are service suppliers;

(m) Whether the requirement of Article II:1 of the GATS to extend "treatment no less favourable" should be interpreted as including de facto, as well as de jure, discrimination;

(n) Whether the Panel erred by giving retroactive effect to Articles II and XVII of the GATS, contrary to the principle stated in Article 28 of the Vienna Convention;

(o) Whether the Panel misapplied the standard of burden of proof, set out in the Appellate Body Report in United States - Shirts and Blouses from India ⁶³: in deciding which companies are a "juridical person of another Member" and are "owned" by, "controlled" by or "affiliated" with persons of another Member within the meaning of paragraphs (m) and (n) of Article XXVIII of the GATS; in deciding the market shares of the companies engaged in wholesale trade in bananas within the European Communities; and in its conclusions concerning the category of "operators who include or directly represent EC or ACP producers" that have suffered damage from hurricanes;

(p) Whether the Panel erred in finding that the allocation to Category B operators of 30 per cent of the licences allowing the importation of third-country and non-traditional ACP bananas at in-quota tariff rates is inconsistent with the requirements of Articles II and XVII of the GATS;

(q) Whether the Panel erred in finding that the allocation to ripeners of 28 per cent of the Category A and B licences allowing the importation of third-country and non-traditional ACP bananas at in-quota tariff rates is inconsistent with the requirements of Article XVII of the GATS;

(r) Whether the Panel erred in finding that the allocation of hurricane licences exclusively to operators who include or directly represent EC or ACP producers of bananas is inconsistent with the requirements of Articles II and XVII of the GATS;

(s) Whether the Panel erred in concluding that the European Communities has not succeeded in rebutting the presumption that its breaches of the GATT 1994, the GATS and the Licensing Agreement have nullified or impaired benefits of the Complaining Parties.

130. The Complaining Parties, as appellants, raise the following issues in this appeal:

(a) Whether the Lomé Waiver granted to the European Communities for "the provisions of paragraph 1 of Article I of the General Agreement" applies also to breaches of Article XIII of the GATT 1994 with respect to the EC's country-specific allocations for traditional ACP States;

(b) Whether the European Communities is "required" under the relevant provisions of the Lomé Convention to provide duty-free access for 90,000 tonnes of non-traditional ACP bananas and a margin of tariff preference in the amount of 100 ECU/tonne for all other non-traditional ACP bananas;

(c) Whether the Panel erred in excluding from the scope of this case certain claims relating to Article XVII of the GATS made by Mexico and all the GATS claims made by Guatemala and Honduras because those complaining parties did not address such claims in their first written submissions to the Panel;

(d) Ecuador raises the question whether the Panel's finding at paragraph 7.93 of the Panel Reports concerning Ecuador's right to invoke Articles XIII:2 or XIII:4 of the GATT 1994 is properly within the scope of this appeal.

131. We will address these issues in turn, and we will deal simultaneously with the issues that have been raised by both the European Communities and the Complaining Parties.

A. Preliminary Issues

1. Right of the United States to Bring Claims under the GATT 1994

132. We agree with the Panel that "neither Article 3.3 nor 3.7 of the DSU nor any other provision of the DSU contain any explicit requirement that a Member must have a ‘legal interest’ as a prerequisite for requesting a panel" ⁶⁴. We do not accept that the need for a "legal interest" is implied in the DSU or in any other provision of the WTO Agreement. It is true that under Article 4.11 of the DSU, a Member wishing to join in multiple consultations must have "a substantial trade interest", and that under Article 10.2 of the DSU, a third party must have "a substantial interest" in the matter before a panel. But neither of these provisions in the DSU, nor anything else in the WTO Agreement, provides a basis for asserting that parties to the dispute have to meet any similar standard. Yet, we do not believe that this is dispositive of whether, in this case, the United States has "standing" ⁶⁵to bring claims under the GATT 1994.

133. The participants in this appeal have referred to certain judgments of the International Court of Justice and the Permanent Court of International Justice relating to whether there is a requirement, in international law, of a legal interest to bring a case. ⁶⁶ We do not read any of these judgments as establishing a general rule that in all international litigation, a complaining party must have a "legal interest" in order to bring a case. Nor do these judgments deny the need to consider the question of standing under the dispute settlement provisions of any multilateral treaty, by referring to the terms of that treaty.

134. This leads us to examine Article XXIII of the GATT 1994, which is the dispute settlement provision for disputes brought pursuant to the GATT 1994, most other Annex 1A agreements and the Agreement on Trade Related Aspects of Intellectual Property Rights ("TRIPs") ⁶⁷. The chapeau of Article XXIII:1 of the GATT 1994 provides:

;If any Member should consider that any benefit accruing to it directly or indirectly under this Agreement is being nullified or impaired or that the attainment of any objective of the Agreement is being impeded ...

Of special importance for determining the issue of standing, in our view, are the words "[i]f any Member should consider ..."⁶⁸. This provision in Article XXIII is consistent with Article 3.7 of the DSU, which states:

Before bringing a case, a Member shall exercise its judgement as to whether action under these procedures would be fruitful.

...

135. Accordingly, we believe that a Member has broad discretion in deciding whether to bring a case against another Member under the DSU. The language of Article XXIII:1 of the GATT 1994 and of Article 3.7 of the DSU suggests, furthermore, that a Member is expected to be largely self-regulating in deciding whether any such action would be "fruitful".

136. We are satisfied that the United States was justified in bringing its claims under the GATT 1994 in this case. The United States is a producer of bananas, and a potential export interest by the United States cannot be excluded. The internal market of the United States for bananas could be affected by the EC banana regime, in particular, by the effects of that regime on world supplies and world prices of bananas. We also agree with the Panel's statement that:

... with the increased interdependence of the global economy, ... Members have a greater stake in enforcing WTO rules than in the past since any deviation from the negotiated balance of rights and obligations is more likely than ever to affect them, directly or indirectly. ⁶⁹

137. We note, too, that there is no challenge here to the standing of the United States under the GATS, and that the claims under the GATS and the GATT 1994 relating to the EC import licensing regime are inextricably interwoven in this case.

138. Taken together, these reasons are sufficient justification for the United States to have brought its claims against the EC banana import regime under the GATT 1994. This does not mean, though, that one or more of the factors we have noted in this case would necessarily be dispositive in another case. We therefore uphold the Panel's conclusion that the United States had standing to bring claims under the GATT 1994.

2. Request for Establishment of the Panel

139. Article 6.2 of the DSU requires that a request for the establishment of a panel:

... identify the specific measures at issue and provide a brief summary of the legal basis of the complaint sufficient to present the problem clearly.

140. We agree with the Panel that the request in this case, WT/DS27/6, dated 12 April 1996, which refers to "a regime for the importation, sale and distribution of bananas established by Regulation 404/93 (O.J. L 47 of 25 February 1993, p. 1), and subsequent EC legislation, regulations and administrative measures, including those reflecting the provisions of the Framework Agreement on bananas, which implement, supplement and amend that regime", contains sufficient identification of the specific measures at issue to fulfil the requirements of Article 6.2 of the DSU.

141. With respect to whether the panel request provides, as required, a "brief summary of the legal basis of the complaint sufficient to present the problem clearly" ⁷⁰, we agree with the Panel's conclusion that "the request is sufficiently specific to comply with the minimum standards established by the terms of Article 6.2 of the DSU" (emphasis added). We accept the Panel's view that it was sufficient for the Complaining Parties to list the provisions of the specific agreements alleged to have been violated without setting out detailed arguments as to which specific aspects of the measures at issue relate to which specific provisions of those agreements. In our view, there is a significant difference between the claims identified in the request for the establishment of a panel, which establish the panel's terms of reference under Article 7 of the DSU ⁷¹, and the arguments supporting those claims, which are set out and progressively clarified in the first written submissions, the rebuttal submissions and the first and second panel meetings with the parties.

142. We recognize that a panel request will usually be approved automatically at the DSB meeting following the meeting at which the request first appears on the DSB's agenda ⁷². As a panel request is normally not subjected to detailed scrutiny by the DSB, it is incumbent upon a panel to examine the request for the establishment of the panel very carefully to ensure its compliance with both the letter and the spirit of Article 6.2 of the DSU. It is important that a panel request be sufficiently precise for two reasons: first, it often forms the basis for the terms of reference of the panel pursuant to Article 7 of the DSU; and, second, it informs the defending party and the third parties of the legal basis of the complaint.

143. We do not agree with the Panel that "even if there was some uncertainty whether the panel request had met the requirements of Article 6.2, the first written submissions of the Complainants ‘cured’ that uncertainty because their submissions were sufficiently detailed to present all the factual and legal issues clearly". ⁷³ Article 6.2 of the DSU requires that the claims, but not the arguments, must all be specified sufficiently in the request for the establishment of a panel in order to allow the defending party and any third parties to know the legal basis of the complaint. If a claim is not specified in the request for the establishment of a panel, then a faulty request cannot be subsequently "cured" by a complaining party's argumentation in its first written submission to the panel or in any other submission or statement made later in the panel proceeding.

144. We note, in passing, that this kind of issue could be decided early in panel proceedings, without causing prejudice or unfairness to any party or third party, if panels had detailed, standard working procedures that allowed, inter alia, for preliminary rulings.

3. GATS Claims by Guatemala, Honduras and Mexico

145. We do not agree with the Panel's decisions to exclude certain claims under Article XVII of the GATS made by Mexico ⁷⁴ and all of the GATS claims made by Guatemala and Honduras ⁷⁵ from the scope of this case. There is no requirement in the DSU or in GATT practice for arguments on all claims relating to the matter referred to the DSB to be set out in a complaining party's first written submission to the panel. It is the panel's terms of reference, governed by Article 7 of the DSU, which set out the claims of the complaining parties relating to the matter referred to the DSB.

146. In this dispute, the Complaining Parties filed a joint request for the establishment of the Panel in WT/DS27/6, dated 12 April 1996, and the parties to the dispute agreed that the Panel would have standard terms of reference pursuant to Article 7.1 of the DSU. The Panel's terms of reference in this dispute, therefore, must be determined by an examination of the joint request for the establishment of a panel in WT/DS27/6, which includes claims that the EC measures are inconsistent with, inter alia, Articles II, XVI and XVII of the GATS. The Complaining Parties filed their request for the establishment for a panel jointly, but they filed their first written submissions to the Panel separately. ⁷⁶ Any omissions in the arguments contained in the first written submissions of Mexico or of Guatemala and Honduras were rectified in their joint representations with the other Complaining Parties made at the first meeting of the parties with the Panel, as well as in their joint written rebuttal submission and in their joint representations made at the second meeting of the parties with the Panel. Specific arguments on all relevant GATS claims were made by the five Complaining Parties jointly in their oral statements at the first and second meetings with the Panel and in their written rebuttal submission.

147. For these reasons, we reverse the conclusions of the Panel that certain claims under Article XVII of the GATS made by Mexico ⁷⁷and all of the GATS claims made by Guatemala and Honduras ⁷⁸are not to be included within the scope of this case. We do not agree with the Panel's statement that a "failure to make a claim in the first written submission cannot be remedied by later submissions or by incorporating the claims and arguments of other complainants". ⁷⁹ Pursuant to Articles 6.2 and 7.1 of the DSU, the terms of reference of the Panel in this case were established in the request for the establishment of the panel, WT/DS27/6, in which the claims specified under the GATS were made by all five Complaining Parties jointly.

4. Ecuador's Right to Invoke Article XIII of the GATT 1994

148. Ecuador argues, in its submission of 9 July 1997, that the European Communities did not properly set out any allegation of error concerning paragraph 7.93 of the Panel Reports in the Notice of Appeal, nor did the European Communities include in its appellant's submission any statement of the grounds for such an appeal, any specific allegations of errors in the issues of law covered in the Panel Reports, or any legal arguments in support of an appeal of that finding. In the appellant's submission of the European Communities, there was merely a summary reference to paragraph 7.93 of the Panel Reports in Part IV, paragraph 352, of the Conclusions. Ecuador argues that this omission, on the part of the European Communities, does not meet the requirements of Rule 20(2)(d) or Rule 21(2) of the Working Procedures.

149. The Panel's finding on this issue reads as follows:

... we find that the failure of Ecuador's Protocol of Accession to address banana-related issues does not mean that Ecuador must accept the validity of the BFA as contained in the EC's Schedule or that it is precluded from invoking Article XIII:2 or XIII:4. ⁸⁰

150. Paragraphs (c) and (d) of the Notice of Appeal read as follows:

(c) The Panel erred in law in its interpretation of the Agreement on Agriculture and, in particular, of Articles 4.1 and 21.1 of that Agreement and their relation to the GATT, in particular its Article XIII.

(d) In the alternative: the Panel erred in its interpretation of Article XIII of GATT, in particular paragraph 2(d) (both in relation to the allocation of country shares in the Tariff Rate Quota (TRQ)) for bananas and to the tariff quota reallocation rules of the Banana Framework Agreement (BFA).

151. Rule 20(2)(d) of the Working Procedures provides that a notice of appeal shall include:

... a brief statement of the nature of the appeal, including the allegations of errors ... (emphasis added)

Rule 21(2)(b)(i) of the Working Procedures requires that an appellant's submission shall set out:

... a precise statement of the grounds for the appeal, including the specific allegations of errors in the issues of law covered in the panel report ... and the legal arguments in support thereof ... (emphasis added)

152. In our view, the claims of error by the European Communities set out in paragraphs (c) and (d) of the Notice of Appeal do not cover the Panel's finding in paragraph 7.93 of the Panel Reports. The finding in that paragraph explicitly deals with Ecuador's right to invoke Article XIII:2 or XIII:4 of the GATT 1994, given that Ecuador acceded to the WTO after the WTO Agreement entered into force and after the tariff quota for the BFA countries had been negotiated and inscribed in the EC Schedule to the GATT 1994. There is no specific mention of this Panel finding in either the Notice of Appeal or in the main arguments of the appellant's submission by the European Communities. Therefore, Ecuador had no notice that the European Communities was appealing this finding. For these reasons, we conclude that the Panel's finding in paragraph 7.93 of the Panel Reports should be excluded from the scope of this appeal.

B. Multilateral Agreements on Trade in Goods

1. Agreement on Agriculture

153. The European Communities raises the question whether the market access concessions for agricultural products made by the European Communities pursuant to the Agreement on Agriculture prevail over Article XIII of the GATT 1994. The European Communities maintains that this result necessarily follows from the meaning and intent of Articles 4.1 and 21.1 of the Agreement on Agriculture. Accordingly, the European Communities contends that it is permitted with respect to such market access concessions to act inconsistently with the requirements of Article XIII of the GATT 1994. The Panel concluded that the Agreement on Agriculture does not permit the European Communities to act inconsistently with the requirements of Article XIII of the GATT 1994.

154. The market access concessions for agricultural products that were made in the Uruguay Round of multilateral trade negotiations are set out in Members' Schedules annexed to the Marrakesh Protocol, and are an integral part of the GATT 1994. By the terms of the Marrakesh Protocol, the Schedules are "Schedules to the GATT 1994", and Article II:7 of the GATT 1994 provides that "Schedules annexed to this Agreement are hereby made an integral part of Part I of this Agreement". With respect to concessions contained in the Schedules annexed to the GATT 1947, the panel in United States - Restrictions on Importation of Sugar ("United States - Sugar Headnote") found that:

... Article II permits contracting parties to incorporate into their Schedules acts yielding rights under the General Agreement but not acts diminishing obligations under that Agreement. ⁸¹

This principle is equally valid for the market access concessions and commitments for agricultural products contained in the Schedules annexed to the GATT 1994. The ordinary meaning of the term "concessions" suggests that a Member may yield rights and grant benefits, but it cannot diminish its obligations. ⁸² This interpretation is confirmed by paragraph 3 of the Marrakesh Protocol, which provides:

The implementation of the concessions and commitments contained in the schedules annexed to this Protocol shall, upon request, be subject to multilateral examination by the Members. This would be without prejudice to the rights and obligations of Members under Agreements in Annex 1A of the WTO Agreement. (emphasis added)

155. The question remains whether the provisions of the Agreement on Agriculture allow market access concessions on agricultural products to deviate from Article XIII of the GATT 1994. The preamble of the Agreement on Agriculture states that it establishes "a basis for initiating a process of reform of trade in agriculture" and that this reform process "should be initiated through the negotiation of commitments on support and protection and through the establishment of strengthened and more operationally effective GATT rules and disciplines". The relationship between the provisions of the GATT 1994 and of the Agreement on Agriculture is set out in Article 21.1 of the Agreement on Agriculture:

The provisions of GATT 1994 and of other Multilateral Trade Agreements in Annex 1A to the WTO Agreement shall apply subject to the provisions of this Agreement.

Therefore, the provisions of the GATT 1994, including Article XIII, apply to market access commitments concerning agricultural products, except to the extent that the Agreement on Agriculture contains specific provisions dealing specifically with the same matter.

156. Article 4.1 of the Agreement on Agriculture provides as follows:

Market access concessions contained in Schedules relate to bindings and reductions of tariffs, and to other market access commitments as specified therein.

In our view, Article 4.1 does more than merely indicate where market access concessions and commitments for agricultural products are to be found. Article 4.1 acknowledges that significant, new market access concessions, in the form of new bindings and reductions of tariffs as well as other market access commitments (i.e. those made as a result of the tariffication process), were made as a result of the Uruguay Round negotiations on agriculture and included in Members' GATT 1994 Schedules. These concessions are fundamental to the agricultural reform process that is a fundamental objective of the Agreement on Agriculture.

157. That said, we do not see anything in Article 4.1 to suggest that market access concessions and commitments made as a result of the Uruguay Round negotiations on agriculture can be inconsistent with the provisions of Article XIII of the GATT 1994. There is nothing in Articles 4.1 or 4.2, or in any other article of the Agreement on Agriculture, that deals specifically with the allocation of tariff quotas on agricultural products. If the negotiators had intended to permit Members to act inconsistently with Article XIII of the GATT 1994, they would have said so explicitly. The Agreement on Agriculture contains several specific provisions dealing with the relationship between articles of the Agreement on Agriculture and the GATT 1994. For example, Article 5 of the Agreement on Agriculture allows Members to impose special safeguards measures that would otherwise be inconsistent with Article XIX of the GATT 1994 and with the Agreement on Safeguards. In addition, Article 13 of the Agreement on Agriculture provides that, during the implementation period for that agreement, Members may not bring dispute settlement actions under either Article XVI of the GATT 1994 or Part III of the Agreement on Subsidies and Countervailing Measures for domestic support measures or export subsidy measures that conform fully with the provisions of the Agreement on Agriculture. With these examples in mind, we believe it is significant that Article 13 of the Agreement on Agriculture does not, by its terms, prevent dispute settlement actions relating to the consistency of market access concessions for agricultural products with Article XIII of the GATT 1994. As we have noted, the negotiators of the Agreement on Agriculture did not hesitate to specify such limitations elsewhere in that agreement; had they intended to do so with respect to Article XIII of the GATT 1994, they could, and presumably would, have done so. We note further that the Agreement on Agriculture makes no reference to the Modalities document ⁸³or to any "common understanding" among the negotiators of the Agreement on Agriculture that the market access commitments for agricultural products would not be subject to Article XIII of the GATT 1994.

158. For these reasons, we agree with the Panel's conclusion that the Agreement on Agriculture does not permit the European Communities to act inconsistently with the requirements of Article XIII of the GATT 1994.

2. Article XIII of the GATT 1994

159. The European Communities raises two legal issues relating to the interpretation of Article XIII of the GATT 1994. The first is whether the allocation by the European Communities of tariff quota shares, by agreement and by assignment, to some Members not having a substantial interest in supplying bananas to the European Communities (including Nicaragua, Venezuela, and certain ACP countries in respect of traditional and non-traditional exports), but not to other such Members (including Guatemala), is consistent with Article XIII:1. The second is whether the tariff quota reallocation rules of the BFA are consistent with the requirements of Article XIII:1 of the GATT 1994.

160. Article XIII of the GATT 1994 requires the non-discriminatory administration of quantitative restrictions. As provided in paragraph 5, Article XIII also applies to tariff quotas. Article XIII:1 sets out a basic principle of non-discrimination in the administration of both quantitative restrictions and tariff quotas. Article XIII:1 stipulates that the importation or exportation of a product of a Member can only be prohibited or restricted if:

... the importation of the like product of all third countries or the exportation of the like product to all third countries is similarly prohibited or restricted.

161. In administering quantitative import restrictions or tariff quotas, Members must also observe the rules in Article XIII:2. The chapeau of Article XIII:2 provides that Members shall:

... aim at a distribution of trade in such product approaching as closely as possible the shares which the various Members might be expected to obtain in the absence of such restrictions ...

Article XIII:2(d) provides specific rules for the allocation of tariff quotas among supplying countries, but these rules pertain only to the allocation of tariff quota shares to Members "having a substantial interest in supplying the product concerned". Article XIII:2(d) does not provide any specific rules for the allocation of tariff quota shares to Members not having a substantial interest. Nevertheless, allocation to Members not having a substantial interest must be subject to the basic principle of non-discrimination. When this principle of non-discrimination is applied to the allocation of tariff quota shares to Members not having a substantial interest, it is clear that a Member cannot, whether by agreement or by assignment, allocate tariff quota shares to some Members not having a substantial interest while not allocating shares to other Members who likewise do not have a substantial interest. To do so is clearly inconsistent with the requirement in Article XIII:1 that a Member cannot restrict the importation of any product from another Member unless the importation of the like product from all third countries is "similarly" restricted.

162. Therefore, on the first issue raised by the European Communities, we conclude that the Panel found correctly that the allocation of tariff quota shares, whether by agreement or by assignment, to some, but not to other, Members not having a substantial interest in supplying bananas to the European Communities is inconsistent with the requirements of Article XIII:1 of the GATT 1994.

163. The second issue relates to the consistency of the tariff quota reallocation rules of the BFA with Article XIII:1 of the GATT 1994. Pursuant to these reallocation rules, a portion of a tariff quota share not used by the BFA country to which that share is allocated may, at the joint request of the BFA countries, be reallocated to the other BFA countries. These reallocation rules allow the exclusion of banana-supplying countries, other than BFA countries, from sharing in the unused portions of a tariff quota share. Thus, imports from BFA countries and imports from other Members are not "similarly" restricted. We conclude, therefore, that the Panel found correctly that the tariff quota reallocation rules of the BFA are inconsistent with the requirements of Article XIII:1 of the GATT 1994. Moreover, the reallocation of unused portions of a tariff quota share exclusively to other BFA countries, and not to other non-BFA banana-supplying Members, does not result in an allocation of tariff quota shares which approaches "as closely as possible the shares which the various Members might be expected to obtain in the absence of the restrictions". Therefore, the tariff quota reallocation rules of the BFA are also inconsistent with the chapeau of Article XIII:2 of the GATT 1994.

Notes:

63. WT/DS33/AB/R, adopted 23 May 1997.

64. Panel Reports, para. 7.49.

65. Standing, or locus standi, is generally understood to mean the right to bring an action in a dispute. See B. Garner, A Dictionary of Modern Legal Usage (Oxford University Press, 1987), p. 347; L.B. Curzon, A Dictionary of Law, 4th ed. (Pitman Publishing, 1993), p. 232. Article 1.1 of the DSU states that: "The rules and procedures of this Understanding shall apply to disputes brought pursuant to the consultation and dispute settlement provisions of the agreements listed in Appendix 1 to this Understanding ...". (emphasis added)

66. The EC's appellant's submission in paras. 9-10 refers to the ICJ and PCIJ Judgments in: the South West Africa Cases, (Second Phase), ICJ Reports 1966, p. 4; the Case Concerning the Barcelona Traction, Light and Power Company, Limited (Second Phase), ICJ Reports 1970, p. 4; the Mavrommatis Palestine Concessions Case, PCIJ (1925) Series A, No. 2, p. 1; the S.S. "Wimbledon" case, PCIJ (1923) Series A, No. 1, p.1; and the Case Concerning the Northern Cameroons, ICJ Reports 1963, p. 4. The Complaining Parties' appellee's submission, in para. 364, also refers to the ICJ Judgment in the South West Africa Cases.

67. Article XXIII of the GATT 1994 is referred to as the dispute settlement provision in most other Annex 1A agreements (Agreement on Agriculture, Agreement on the Application of Sanitary and Phytosanitary Measures, Agreement on Textiles and Clothing, Agreement on Technical Barriers to Trade, Agreement on Trade-Related Investment Measures, Agreement on Preshipment Inspection, Agreement on Rules of Origin, Licensing Agreement, Agreement on Subsidies and Countervailing Measures, Agreement on Safeguards) and in TRIPs.

68. We note that Articles XXIII:1 and XXIII:3 of the GATS use similar opening phrases: "If any Member should consider ..." and "If any Member considers ...".

69. Panel Reports, para. 7.50.

70. DSU, Article 6.2.

71. Panel Reports, para. 7.29.

72. DSU, Article 6.1.

73. Panel Reports, para. 7.44.

74. Panel Report, WT/DS27/R/MEX, paras. 7.309-7.311.

75. Panel Reports, paras. 7.57-7.58.

76. Guatemala and Honduras submitted a first written submission jointly.

77. Panel Report, WT/DS27/R/MEX, paras. 7.309-7.311.

78. Panel Reports, para. 7.58.

79. Ibid., para. 7.57.

80. Panel Reports, para. 7.93.

81. Adopted 22 June 1989, BISD 36S/331, para. 5.2.

82. Ibid.

83. Modalities for the Establishment of Specific Binding Commitments Under the Reform Programme, MTN.GNG/MA/W/24, 20 December 1993.

Continue on to Part 6 of EC - Regime for the Importation, Sale and Distribution of Bananas.