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WORLD TRADE 
ORGANIZATION

WT/DS269/AB/R
WT/DS286/AB/R

12 September 2005

(05-3938)

  Original: English

EUROPEAN COMMUNITIES – CUSTOMS CLASSIFICATION
OF FROZEN BONELESS CHICKEN CUTS

AB-2005-5

Report of the Appellate Body


 

I. Introduction

II. Appeal by the European Communities 

A. Claims of Error by the European Communities – Appellant  

1. Interpretation of the EC Schedule in the Light of Article 31 of the Vienna Convention

(a) Ordinary Meaning 

(b) Context 

(c) Subsequent Practice 

(d) Object and Purpose 

2. Interpretation of the EC Schedule in the Light of Article 32 of the Vienna Convention

(a) Circumstances of Conclusion

(b) Characterization of Relevant Law of the European Communities 

B. Arguments of Brazil – Appellee  

1. Interpretation of the EC Schedule in the Light of Article 31 of the Vienna Convention 

(a) Ordinary Meaning 

(b) Context

(c) Subsequent Practice 

(d) Object and Purpose

2. Interpretation of the EC Schedule in the Light of Article 32 of the Vienna Convention 

(a) Circumstances of Conclusion 

(b) Characterization of Relevant Law of the European Communities 

C. Arguments of Thailand – Appellee  

1. Interpretation of the EC Schedule in the Light of Article 31 of the Vienna Convention 

(a) Ordinary Meaning 

(b) Context 

(c) Subsequent Practice

(d) Object and Purpose 

2. Interpretation of the EC Schedule in the Light of Article 32 of the Vienna Convention 

(a) Circumstances of Conclusion 

(b) Characterization of Relevant Law of the European Communities 

III. Other Appeals by Brazil and Thailand 

A. Claims of Error by Brazil – Other Appellant  

1. Terms of Reference

(a) Measures within the Terms of Reference 

(b) Products within the Terms of Reference 

2. Interpretation of the EC Schedule in the Light of Article 31 of the Vienna Convention 

B. Claims of Error by Thailand – Other Appellant  

1. Terms of Reference 

(a) Measures within the Terms of Reference 

(b) Products within the Terms of Reference 

2. Interpretation of the EC Schedule in the Light of Article 31 of the Vienna Convention 

C. Arguments of the European Communities – Appellee  

1. Terms of Reference 

(a) Measures within the Terms of Reference 

(b) Products within the Terms of Reference

2. Interpretation of the EC Schedule in the Light of Articles 31 and 32 of the Vienna Convention

IV. Arguments of the Third Participants 

A. China  

B. United States  

V. Issues Raised in this Appeal 

VI. Introduction

VII. Terms of Reference 

A. Measures Within the Terms of Reference

B. Products Within the Terms of Reference

VIII. Interpretation of the EC Schedule in the Light of Article 31 of the Vienna Convention 

A. The Ordinary Meaning of the Term "Salted" in Heading 02.10 of the EC Schedule  

1. Analysis of the Ordinary Meaning and "Factual Context" of the Term "Salted" 

2. The European Communities' Claim under Article 11 of the DSU 

3. Conclusion Concerning the Ordinary Meaning 

B. "Context"  

1. What Constitutes Context for Interpreting the Term "Salted" in Heading 02.10 of the EC Schedule?

2. The Meaning of the Term "Salted" in Heading 02.10 of the EC Schedule, Considered in its Context

(a) The Terms of Heading 02.10 Other than "Salted"

(b) The Structure of Chapter 2 of the EC Schedule and the Harmonized System and the Relevant Notes Thereto 

3. Rule 3 of the General Rules for the Interpretation of the Harmonized System 

4. Conclusion Concerning "Context" 

IX. Object and Purpose 

A. Object and Purpose of the Treaty or of a Particular Treaty Provision  

B. Did the Panel Rely on "Expansion of Trade" as an Interpretative Principle?  

C. Does a Criterion of "Preservation" Undermine the Security and Predictability of Tariff Concessions?  

D. Was Heading 02.10 Intended to Cover Frozen (Salted) Poultry Meat?  

X. Subsequent Practice

A. What May Qualify as Practice?

B. How Does One Establish Agreement of Parties that Have Not Engaged in a Practice?  

C. Was there "Consistency" of Customs Classification Practice in this Case?  

D. Conclusion  

XI. Interpretation of the EC Schedule in the Light of Article 32 of the Vienna Convention 

A. Introduction

B. The Concept of "Circumstances of the Conclusion of a Treaty"

1. The Concept of "Circumstances" 

2. Relevance of Circumstances for Interpretation 

3. "Circumstances " at What Time? 

4. What Kind of Knowledge is Required?

5. Whose Acts or Instruments May Qualify as "Circumstances"? 

6. What Types of Events, Acts, and Instruments? 

C. Characterization of Relevant Law of the European Communities

1. EC Regulation 535/94 

2. The  Dinter and Gausepohl  Judgments of the European Court of Justice 

D. Conclusion  

XII. Findings and Conclusions 

ANNEX I Notification of an Appeal by the European Communities under paragraph 4 of Article 16 of the DSU

ANNEX II Notification of an Other Appeal by Brazil under Article 16.4 and Article 17 of the DSU, and under Rule 23(1) of the Working Procedures for Appellate Review

ANNEX III Notification of an Other Appeal by Thailand under Article 16.4 and Article 17 of the DSU, and under Rule 23(1) of the Working Procedures for Appellate Review

ANNEX IV Chapter 2 of the Harmonized Commodity Description and Coding System


TABLE OF CASES CITED IN THIS REPORT

Short Title

Full Case Title and Citation

Argentina – Footwear (EC)  Appellate Body Report, Argentina – Safeguard Measures on Imports of Footwear, WT/DS121/AB/R, adopted 12 January 2000, DSR 2000:I, 515
Argentina – Footwear (EC)  Panel Report, Argentina – Safeguard Measures on Imports of Footwear, WT/DS121/R, adopted 12 January 2000, as modified by the Appellate Body Report, WT/DS121/AB/R, DSR 2000:II, 575
Argentina – Textiles and Apparel  Appellate Body Report, Argentina – Measures Affecting Imports of Footwear, Textiles, Apparel and Other Items, WT/DS56/AB/R and Corr.1, adopted 22 April 1998, DSR 1998:III, 1003
Brazil – Aircraft  Appellate Body Report, Brazil – Export Financing Programme for Aircraft, WT/DS46/AB/R, adopted 20 August 1999, DSR 1999:III, 1161
Brazil – Desiccated Coconut  Appellate Body Report, Brazil – Measures Affecting Desiccated Coconut, WT/DS22/AB/R, adopted 20 March 1997, DSR 1997:I, 167
Canada – Dairy  Appellate Body Report, Canada – Measures Affecting the Importation of Milk and the Exportation of Dairy Products, WT/DS103/AB/R, WT/DS113/AB/R, and Corr.1, adopted 27 October 1999, DSR 1999:V, 2057
Canada – Patent Term  Panel Report, Canada – Term of Patent Protection, WT/DS170/R, adopted 12 October 2000, as upheld by Appellate Body Report, WT/DS170/AB/R, DSR 2000:XI, 5121
Chile – Price Band System   Appellate Body Report, Chile – Price Band System and Safeguard Measures Relating to Certain Agricultural Products, WT/DS207/AB/R, adopted 23 October 2002, DSR 2002:VIII, 3045
Dominican Republic – Import and Sale of Cigarettes Appellate Body Report, Dominican Republic – Measures Affecting the Importation and Internal Sale of Cigarettes, WT/DS302/AB/R, adopted 19 May 2005
Dominican Republic – Import and Sale of Cigarettes Panel Report, Dominican Republic – Measures Affecting the Importation and Internal Sale of Cigarettes, WT/DS302/R, adopted 19 May 2005, as modified by Appellate Body Report, WT/DS302/AB/R
EC – Bananas III  Appellate Body Report, European Communities – Regime for the Importation, Sale and Distribution of Bananas, WT/DS27/AB/R, adopted 25 September 1997, DSR 1997:II, 591
EC – Chicken Cuts (Brazil) Panel Report, European Communities – Customs Classification of Frozen Boneless Chicken Cuts, Complaint by Brazil, WT/DS269/R, 30 May 2005
EC – Chicken Cuts (Thailand) Panel Report, European Communities – Customs Classification of Frozen Boneless Chicken Cuts, Complaint by Thailand, WT/DS286/R, 30 May 2005
EC – Computer Equipment   Appellate Body Report, European Communities – Customs Classification of Certain Computer Equipment, WT/DS62/AB/R, WT/DS67/AB/R, WT/DS68/AB/R, adopted 22 June 1998, DSR 1998:V, 1851
EC – Export Subsidies on Sugar Appellate Body Report, European Communities – Export Subsidies on Sugar, WT/DS265/AB/R, WT/DS266/AB/R, WT/DS283/AB/R, adopted 19 May 2005
EC – Hormones  Appellate Body Report, EC Measures Concerning Meat and Meat Products (Hormones), WT/DS26/AB/R, WT/DS48/AB/R, adopted 13 February 1998, DSR 1998:I, 135
EC – Tube or Pipe Fittings Appellate Body Report, European Communities – Anti-Dumping Duties on Malleable Cast Iron Tube or Pipe Fittings from Brazil, WT/DS219/AB/R, adopted 18 August 2003
Guatemala – Cement I  Appellate Body Report, Guatemala – Anti-Dumping Investigation Regarding Portland Cement from Mexico, WT/DS60/AB/R, adopted 25 November 1998, DSR 1998:IX, 3767
Japan – Alcoholic Beverages II  Appellate Body Report, Japan – Taxes on Alcoholic Beverages, WT/DS8/AB/R, WT/DS10/AB/R, WT/DS11/AB/R, adopted 1 November 1996, DSR 1996:I, 97
Korea – Dairy  Appellate Body Report, Korea – Definitive Safeguard Measure on Imports of Certain Dairy Products, WT/DS98/AB/R, adopted 12 January 2000, DSR 2000:I, 3
Mexico – Telecoms Panel Report, Mexico – Measures Affecting Telecommunications Services, WT/DS204/R, adopted 1 June 2004
US – Carbon Steel  Appellate Body Report, United States – Countervailing Duties on Certain Corrosion-Resistant Carbon Steel Flat Products from Germany, WT/DS213/AB/R and Corr.1, adopted 19 December 2002, DSR 2002:IX, 3779
US – FSC Panel Report, United States – Tax Treatment for "Foreign Sales Corporations", WT/DS108/R, adopted 20 March 2000, as modified by Appellate Body Report, WT/DS108/AB/R, DSR 2000:IV, 1675
US – Gambling Appellate Body Report, United States – Measures Affecting the Cross-Border Supply of Gambling and Betting Services, WT/DS285/AB/R, adopted 20 April 2005
US – Gasoline  Appellate Body Report, United States – Standards for Reformulated and Conventional Gasoline, WT/DS2/AB/R, adopted 20 May 1996, DSR 1996:I, 3
US – Line Pipe   Appellate Body Report, United States – Definitive Safeguard Measures on Imports of Circular Welded Carbon Quality Line Pipe from Korea, WT/DS202/AB/R, adopted 8 March 2002, DSR 2002:IV, 1403
US – Offset Act
(Byrd Amendment )
Appellate Body Report, United States – Continued Dumping and Subsidy Offset Act of 2000, WT/DS217/AB/R, WT/DS234/AB/R, adopted 27 January 2003
US – Offset Act
(Byrd Amendment) (EC)
(Article 22.6 – US)
Decision by the Arbitrator, United States – Continued Dumping and Subsidy Offset Act of 2000, Original Complaint by the European Communities – Recourse to Arbitration by the United States under Article 22.6 of the DSU, WT/DS217/ARB/EEC, 31 August 2004
US – Softwood Lumber IV   Appellate Body Report, United States – Final Countervailing Duty Determination with Respect to Certain Softwood Lumber from Canada, WT/DS257/AB/R, adopted 17 February 2004
US – Steel Safeguards Appellate Body Report, United States – Definitive Safeguard Measures on Imports of Certain Steel Products, WT/DS248AB/R, WT/DS249AB/R, WT/DS251AB/R, WT/DS252AB/R, WT/DS253AB/R, WT/DS254AB/R, WT/DS258AB/R, WT/DS259AB/R, adopted 10 December 2003

TABLE OF ABBREVIATIONS USED IN THIS REPORT

Abbreviation

Definition

BTIs Binding Tariff Information
DSB Dispute Settlement Body
Dinter  judgment European Court of Justice, Judgment, Dinter v Hauptzollamt Köln-Deutz, Case C-175/82, ECR [1983] 969
DSU Understanding on Rules and Procedures Governing the Settlement of Disputes
ECJ European Court of Justice
EC Decision 2003/97/EC Commission Decision of 31 January 2003 concerning the validity of certain binding tariff information (BTI) issued by the Federal Republic of Germany (notified under document number C(2003) 77) (2003/97/EC)
EEC Regulation 2658/87 Council Regulation (EEC) No. 2658/87 of 23 July 1987 on the tariff and statistical nomenclature and on the Common Customs Tariff
EC Regulation 535/94 Commission Regulation (EC) No. 535/94 of 9 March 1994 amending Annex I to Council Regulation (EEC) No 2658/87 on the tariff and statistical nomenclature and on the Common Customs Tariff
EC Regulation 1223/2002 Commission Regulation (EC) No. 1223/2002 of 8 July 2002 concerning the classification of certain goods in the Combined Nomenclature, and corrigenda
EC Regulation 1789/2003 Commission Regulation (EC) No. 1789/2003 of 11 September 2003 amending Annex I to Council Regulation (EEC) No 2658/87 on the tariff and statistical nomenclature and on the Common Customs Tariff
EC Regulation 1871/2003 Commission Regulation (EC) No. 1871/2003 of 23 October 2003 amending Annex I to Council Regulation (EEC) No 2658/87 on the tariff and statistical nomenclature and on the Common Customs Tariff
EC Regulation 2344/2003 Commission Regulation (EC) No. 2344/2003 of 30 December 2003 amending Annex I to Council Regulation (EEC) No 2658/87 on the tariff and statistical nomenclature and on the Common Customs Tariff
EC Schedule European Communities' Schedule LXXX
GATT 1994 General Agreement on Tariffs and Trade 1994
Gausepohl judgment European Court of Justice, Judgment, Gausepohl-Fleisch GmbH v. Oberfinanzdirektion Hamburg, Case C-33/92, ECR [1993] I-3047
General Rules World Customs Organization, General Rules for the Interpretation of the Harmonized System
Harmonized System World Customs Organization, Harmonized Commodity Description and Coding System
ILC International Law Commission
Panel Reports Panel Report, EC – Chicken Cuts (Brazil)
Panel Report, EC – Chicken Cuts (Thailand)
Vienna Convention Vienna Convention on the Law of Treaties , done in Vienna, 23 May 1969, 1155 UNTS 331; 8 International Legal Materials 679
WCO World Customs Organization
Working Procedures Working Procedures for Appellate Review , WT/AB/WP/5, 4 January 2005
WTO World Trade Organization
WTO Agreement Marrakesh Agreement Establishing the World Trade Organization

WORLD TRADE ORGANIZATION
APPELLATE BODY

European Communities – Customs Classification of Frozen Boneless
Chicken Cuts

European Communities, Appellant/Appellee
Brazil, Appellant/Appellee
Thailand,
Appellant/Appellee

China, Third Participant
United States, Third Participant

AB-2005-5

Present:

Sacerdoti, Presiding Member

Baptista, Member
Ganesan, Member

I. INTRODUCTION

1. The European Communities, as appellant, and Brazil and Thailand, as other appellants, each appeal certain issues of law and legal interpretations developed in the Panel Reports, European Communities – Customs Classification of Frozen Boneless Chicken Cuts (the "Panel Reports").1 The Panel was established to consider complaints by Brazil and Thailand concerning certain measures of the European Communities, pertaining to the classification of frozen boneless salted chicken cuts for tariff treatment.2

2. Brazil and Thailand claimed before the Panel that Commission Regulation (EC) No.  1223/2002 ("EC  Regulation 1223/2002") and Commission Decision No.  2003/97/EC ("EC Decision 2003/97/EC") resulted in tariff treatment for frozen boneless salted chicken cuts that is less favourable than that provided for in the European Communities' Schedule LXXX (the "EC Schedule"), in violation of Article II:1(a) and/or Article II:1(b) of the  General Agreement on Tariffs and Trade 1994 (the "GATT 1994").3 More particularly, Brazil and Thailand alleged that, through the challenged measures, "the European Communities changed its customs classification so that those products, which had previously been classified under subheading 0210.90.20 and were subject to an  ad valorem  tariff of 15.4%, are now classified under subheading 0207.41.10 and are subject to a tariff of 102.4€/100kg/net as well as being potentially subject to special safeguard measures pursuant to Article 5 of the Agreement on Agriculture."4

3. Brazil and Thailand also claimed before the Panel that, although Commission Regulation (EC) No. 1871/2003 ("EC Regulation 1871/2003") and Commission Regulation (EC) No. 2344/2003 ("EC Regulation 2344/2003") were not mentioned specifically in their requests for the establishment of a panel5, these Regulations must be considered as part of the challenged measures because they are "closely related" to and based on the same principle of long-term preservation, as set out in the challenged measures.6 Brazil and Thailand also alleged that the specific products at issue were "frozen boneless salted chicken cuts that have been deeply and homogeneously impregnated with salt in all parts with a total salt content of not less than 1.2% by weight", and that the terms of reference are not limited to products with a salt content between 1.2 and 3 per cent.7

4. In the Panel Reports, circulated to Members of the World Trade Organization (the "WTO") on 30 May 2005, the Panel determined that EC Regulations 1871/2003 and 2344/2003 were outside the Panel's terms of reference.8 The Panel further concluded that the specific products at issue in this dispute were "frozen boneless chicken cuts impregnated with salt, with a salt content of 1.2% – 3%" as provided for in the measures under the terms of reference.9

5. The Panel then proceeded to examine whether the measures at issue—EC Regulation 1223/2002 and EC Decision 2003/97/EC—resulted in the imposition of duties and conditions on the products at issue in excess of those provided for in the EC Schedule. The Parties agreed that the import duties levied on the products at issue, when classified under heading 02.07, exceeded 15.4 per cent  ad valorem, which is the bound duty rate for products covered by heading 02.10. In view of this agreement, the Panel concluded that, if it were to determine that "the products at issue are covered by the concession contained in heading 02.10 of the EC Schedule rather than the concession contained in heading 02.07, there is no question that the treatment accorded to those products under the measures at issue is less favourable than that provided for in the EC Schedule."10

6. Before the Panel, Brazil and Thailand claimed that the products at issue were not covered by heading 02.07, but rather by heading 02.10, while the European Communities alleged the reverse. Both Brazil and Thailand based their positions on the meaning of the term "salted" in heading 02.10 and submitted that the notion of "long-term preservation" is not included in the meaning of "salted" under that heading. On the contrary, the European Communities claimed that the products at issue were not "salted" because, in order to qualify under heading 02.10 (through salting), the product must have been "deeply and homogenously impregnated with a level of salt sufficient to ensure long-term preservation".11 The Panel found that the critical question in interpreting the EC Schedule is "whether the term 'salted' in the concession contained in heading 02.10 covers the products at issue which, in turn, will entail a determination of whether that concession includes the requirement that salting is for preservation and, more particularly, is for long-term preservation."12

7. Following an analysis under Articles 31 and 32 of the Vienna Convention on the Law
of Treaties
(the "Vienna Convention")13 of the term "salted" in the concession contained in heading 02.10 of the EC Schedule, the Panel concluded that:

(a) the "ordinary meaning" of the term "salted" is: to season, to add salt, to flavour with salt, to treat, to cure or to preserve.14 Therefore, there is nothing in the range of meanings comprising the ordinary meaning of the term "salted" that indicates that chicken to which salt has been added is not covered by the concession contained in heading 02.10 of the EC Schedule15;

(b) the factual context indicates that the ordinary meaning of the term "salted" is that the character of a product has been altered through the addition of salt.16 Therefore, the ordinary meaning of the term "salted" in heading 02.10 is not dispositive regarding the question whether the products at issue are covered by this concession17;

(c) the "context" of the term "salted"—namely, the terms of heading 02.10, the structure and the other parts of the EC Schedule, as well as the terms, structure, the Explanatory Notes and the General Rules for the Interpretation of the Harmonized System (the "General Rules")—do not clarify the "ordinary meaning" of the term "salted" in the concession contained in heading 02.10 of the EC Schedule, although the context does tend to indicate that the heading is not characterized necessarily by the notion of long-term preservation18;

(d) the European Communities' consistent practice of classifying the products at issue under heading 02.10 during the period between 1996 and 2000 amounts to "subsequent practice"19, and it indicates that "the products at issue are covered by the concession contained in heading 02.10 of the EC Schedule"20;

(e) given the lack of certainty associated with the application of the criterion of long-term preservation, an interpretation of the term "salted" in the concession contained in heading 02.10 that includes this criterion could undermine the "object and purpose" of security and predictability in trade relations, which lie at the heart of the Marrakesh Agreement Establishing the World Trade Organization (the "WTO Agreement") and the GATT 199421; and

(f) the relevant aspects of "supplementary means of interpretation", most particularly Commission Regulation (EC) No. 535/94 ("EC Regulation 535/94"), indicate that meat that has been deeply and homogeneously impregnated with salt and has a minimum salt content of 1.2 per cent by weight would qualify as "salted" meat under the concession contained in heading 02.10 of the EC Schedule.22 The supplementary means of interpretation under Article 32 of the Vienna Convention confirm the preliminary conclusions reached by the Panel under Article 31 of the Vienna Convention.23

8. After evaluating the claims of the Parties and interpreting the term "salted" according to the interpretation rules codified in the Vienna Convention, the Panel found, in the light of its above-referenced conclusions, that:

(a) frozen boneless chicken cuts that have been impregnated with salt, with a salt content of 1.2 to 3 per cent (the products at issue), are covered by the concession contained in heading 02.10 of the EC Schedule;

(b) EC Regulation 1223/2002 and EC Decision 2003/97/EC result in the imposition of customs duties on the products at issue that are in excess of the duties provided for in respect of the concession contained in heading 02.10 of the EC Schedule; and

(c) accordingly, the European Communities has acted inconsistently with the requirements of Articles II:1(a) and II:1(b) of the GATT 1994 and, thus, nullified or impaired benefits accruing to Brazil and Thailand.24

9. The Panel therefore recommended that the Dispute Settlement Body (the "DSB") request the European Communities to bring EC Regulation 1223/2002 and EC Decision 2003/97/EC into conformity with its obligations under the GATT 1994.25

10. On 13 June 2005, the European Communities notified the DSB of its intention to appeal certain issues of law covered in the Panel Reports and certain legal interpretations developed by the Panel, pursuant to paragraph 4 of Article 16 of the Understanding on Rules and Procedures Governing the Settlement of Disputes  (the "DSU") and filed a Notice of Appeal26  pursuant to Rule 20 of the  Working Procedures for Appellate Review  (the "Working Procedures").27 On 20 June 2005, the European Communities filed an appellant's submission.28 On 27 June 2005, both Brazil and Thailand notified the DSB of their intention to appeal certain issues of law covered in the Panel Reports and certain legal interpretations developed by the Panel, pursuant to paragraph 4 of Article 16 of the DSU, and each filed a Notice of Other Appeal29 pursuant to Rule 23(1) of the Working Procedures. On 28 June 2005, Brazil and Thailand each filed an other appellant's submission.30 On 8 July 2005, the European Communities, Brazil, and Thailand each filed an appellee's submission.31 On the same day, China and the United States each filed a third participant's submission.32

11. By letter dated 30 June 2005, Thailand requested authorization from the Appellate Body Division hearing the appeal (the "Division"), pursuant to Rule 18(5) of the Working Procedures, to correct three "clerical errors" in its other appellant's submission. On 4 July 2005, the Division, pursuant to Rule 18(5) of the Working Procedures, invited all participants and third participants to comment on Thailand's request. None of the participants or third participants commented on Thailand's request. On 6 July 2005, the Division authorized Thailand to correct the three clerical errors in its other appellant's submission.

12. On 13 July 2005, the Division hearing the appeal received an  amicus curiae  brief from the Association of Poultry Processors and Poultry Trade in the European Union Countries (avec).33 The Division does not find it necessary to take the brief into account in resolving the issues raised in this appeal.

13. The oral hearing in this appeal was held on 25 and 26 July 2005. The participants and third participants presented oral arguments and responded to questions posed by the Members of the Division hearing the appeal.

II. Appeal by the European Communities

A. Claims of Error by the European Communities – Appellant

1. Interpretation of the EC Schedule in the Light of Article 31 of the Vienna Convention

14. The European Communities submits that the Panel erred in its interpretation of heading 02.10 of the EC Schedule in respect of various elements of Article 31 of the Vienna Convention. Specifically, the European Communities alleges that the Panel erred in its consideration of the following: the "ordinary meaning" of the term "salted" found in heading 02.10; the "context" of that term; the "object and purpose" of the  WTO Agreement  and the GATT 1994; and the alleged "subsequent practice" of the parties concerning classification under heading 02.10.

(a) Ordinary Meaning

15. The European Communities agrees with the Panel that the dictionary definitions of the term "salted" include, but are not confined to, the notion of preservation. The European Communities also contends that it is from "the rest of heading 02.10, and the structure of chapter 2"34 of the Harmonized Commodity Description and Coding System of the World Customs Organization ("WCO") (the "Harmonized System") that the term "salted" in that heading derives its meaning as referring to a process of preservation.

16. The European Communities takes issue with the Panel's examination of what the Panel referred to as the "[f]actual context for the consideration of the ordinary meaning".35 The European Communities submits that the analysis of such "factual context" is not relevant to the legal question of the meaning of the term "salted", and that such an analysis is neither supported by the  Vienna Convention  nor by the academic sources to which the Panel referred.36 Furthermore, several of the Panel's conclusions as to the "factual context" are rendered erroneous as a matter of law in the light of an analysis of the context of the term "salted".

17. The European Communities further claims that certain of the Panel's conclusions in its analysis of the "ordinary meaning" of the term "salted" amount to "an egregious distortion of the facts" and are therefore inconsistent with the Panel's obligations under Article 11 of the DSU.37 First, the European Communities refers to the Panel's finding that "it appears that even small quantities of salt may have a preservative effect".38 In making this statement, the Panel "seriously misrepresent[ed] the technical evidence supplied" by the European Communities' expert.39 The Panel stated that "3% salt may prevent spoilage, albeit for a period of only a few days", whereas what the European Communities' expert had stated was that a level of salt of 3 per cent in  a raw and chilled product  is too low to prevent spoilage for more than a few days.40

18. Secondly, the European Communities challenges the Panel's finding that certain products under heading 02.10 such as Parma ham, prosciutto, and jamón serrano require further preservation after salting. The European Communities argues that it is not the salt content of these products that makes additional means of preservation necessary and that these additional means of preservation are not required. In support of its contention, the European Communities refers to certain statements made by its expert.41 Thirdly, the European Communities challenges the Panel's finding according to which the European Communities acknowledged that products covered by heading 02.10 of the EC Schedule "may require means of preservation in addition to [salting]" and that this acknowledgement "support[s] ... the view that a product preserved by salt for relatively short periods of time is not necessarily precluded" from falling under heading 02.10.42 The European Communities argues that it did not make such an acknowledgement, but rather that it only pointed out that preservation by salting did not imply that meat could not be "further preserved by other means".43 In the European Communities' view, there is no logical connection between this observation of the European Communities and the Panel's conclusion from it.

(b) Context

19. The European Communities submits that the Panel erred in interpreting the term "salted" when considering the term in its context. First, as regards the terms "salted, in brine, dried, smoked" in heading 02.10, the Panel wrongly found that the term "in brine" excludes the notion of preservation. The Panel found that "brine" is "water containing salt".44 In the European Communities' view, the words "to salt" and "salted"—which the Panel had previously cited correctly—"make it quite clear" that the action of putting a product in brine is intended to preserve the product.45 In support of its argument, the European Communities also refers to heading 08.12 of the Harmonized System, which states that brine is a "preservative solution".46

20. Secondly, the European Communities submits that the Panel erred in failing to take into account what, according to the European Communities, are the "exclusive distinguishing characteristics" of the terms "salted, in brine, dried, smoked" in heading 02.10. The Panel provided no explanation for its conclusion that the dictionary meanings of these terms "are broader than just pertaining to preservation".47 The terms "dried" and "smoked" may have different meanings in different contexts, but, with respect to meat and food, the dictionary definitions point to means of preservation. The Panel failed to identify the "intrinsic notion common to all terms" in heading 02.1048; all four terms in heading 02.10 include the concept of preservation, while only two of them involve the concept of preparation. Moreover, the Panel also disregarded the fact that the four processes referred to in heading 02.10 are the only ones commonly applied to the preservation of meat, and that the group of meats covered by heading 02.10 are the only meats to have this feature in common.49 The European Communities' further points out that meat that has been "subjected to processes" (that is, "prepared") is "generally classified" under Chapter 16 of the Harmonized System; this shows that, there must be "something special" about the products falling under heading 02.10. This special feature, the European Communities submits, relates to the processes applied under heading 02.10, namely, processes resulting in preservation of the meat.

21. Thirdly, the European Communities challenges what it considers to be the Panel's "failure to take account of [the] distinguishing features of heading 02.10 in Chapter 2".50 According to the European Communities, the headings in that Chapter form two categories, based on whether or not the meat has been subjected to the processes listed in heading 02.10. If those processes have been applied, the products fall under heading 02.10, which alone comprises the second category within Chapter 2. If those processes have  not  been applied, the products fall under one of headings 02.01 through 02.08, which make up the first category within Chapter 2. The European Communities also notes that headings 02.01 through 02.08 refer to the refrigeration of meat, and that heading 02.10 contains no reference to refrigeration. According to the European Communities, this implies that, for the products listed in heading 02.10, "the issue of refrigeration is not a significant consideration".51

22. The European Communities also refers to the Explanatory Note to Chapter 252, which speaks of "fresh" meat, "packed with salt as a temporary preservative during transport". According to the European Communities, the use of the word "temporary" in the Explanatory Note is "implicitly opposed" to permanent salting, with the result that heading 02.10 does not cover meats that are temporarily preserved by salt during transport.53 The Note also makes it clear that the mere presence of some salt does not make a product "salted" for the purposes of heading 02.10. The Note further suggests that not every change in the characteristics of a product, brought about by salting, means that a product falls under heading 02.1054; rather, heading 02.10 refers to the result achieved by preservation. The European Communities also argues that the Panel's finding that the term "salted" does not necessarily require that salting be sufficient for preservation is "legally irrelevant"55; this is so because the Explanatory Note makes it clear that the fact that a preservation technique other than those listed in heading 02.10 might be applied does not alter the classification of that product.

23. In addition, the European Communities argues that the Panel failed to take proper account of the "historical basis" of heading 02.10.56 At the outset, the European Communities considers the Panel's approach to be flawed because the Panel started with the negotiating history of the Harmonized System, rather than with the terms of that instrument. The Panel also "overlooked important elements" of the history of the Harmonized System that "clearly support the notion of preservation as the basis for heading 02.10."57

24. The European Communities disagrees with the Panel that the Geneva Draft Nomenclature of 193758 and the Brussels Nomenclature of 195959 are of "limited relevance" because of the changes in trade patterns and technology since their conclusions.60 The Panel failed to consider the introduction of refrigeration in developed countries as a major technological change. Given the absence of refrigeration in the past, trade in items such as salted, dried, or smoked meat "would not have been possible unless [these products] had been preserved".61 Furthermore, when the Brussels Nomenclature was introduced, the words "[c]ooked or otherwise simply prepared" were moved from the relevant heading of the Geneva Draft Nomenclature to Chapter 16 of the Brussels Nomenclature, suggesting that "there must have been a positive decision to keep the salted ... meats in a distinct category", namely a category characterized by preservation.62 According to the European Communities, when the Harmonized System was introduced, there was no indication that the drafters intended to change the scope of the heading pertaining to "salted, dried or smoked meat".

(c) Subsequent Practice

25. The European Communities claims that the Panel erred in interpreting and applying the concept of "subsequent practice" within the meaning of Article 31(3)(b) of the  Vienna Convention. The Panel erroneously "consider[ed] that the unilateral 'practice' of one party could have a bearing on [the interpretation of] a multilaterally agreed text and ... wrongly analyz[ed] the existence of 'practice' at the EC and multilateral level."63 The European Communities appeals the Panel's conclusion that the individual classification decisions of certain port authorities within the European Communities between 1996 and 2002 constitute "subsequent practice" within the meaning of Article 31(3)(b) for the purpose of interpreting heading 02.10 of the EC Schedule.

(i) "Concordant" and "Common" Practice

26. The European Communities challenges the Panel's application of relevant Appellate Body jurisprudence regarding Article 31(3)(b). That jurisprudence emphasizes that, in order to establish the common intentions of the parties, subsequent practice must entail a "concordant, common and consistent" sequence of acts or pronouncements that establishes a discernible pattern, implying the agreement of the parties regarding the interpretation of the treaty.64 The European Communities submits that a key legal issue before the Appellate Body in this proceeding is whether unilateral acts of one WTO Member that have been met with silence by other WTO Members can qualify as "subsequent practice" within the meaning of Article 31(3)(b), for purposes of interpreting WTO law. Such acts, in the European Communities' view, do not represent a concordant and common expression of the parties' understanding of the law.65

27. In this regard, the European Communities submits that a commentary of the International Law Commission (the "ILC"), relied on by the Panel, supports, in fact, the European Communities' point of view. The relevant statement of the ILC indicates that not all signatories must have engaged in a particular practice so as to show that all Members have accepted that practice.66 The European Communities argues that this statement implies that Article 31(3)(b) does not necessarily require, in all circumstances, that  all  parties to a treaty must have actively engaged in a practice; however, the statement does  not  support the "directly opposite" view that the practice of  one  party alone will suffice.67 Under public international law, the type and degree of practice required to establish the "agreement of the parties [to a treaty] regarding its interpretation" must be ascertained on a case-by-case basis.68 To this end, the European Communities relies on the ILC commentary that "the value of subsequent practice varies according[ly] as it shows the common understanding of the parties as to the meaning of the terms"69, a view also reflected by other commentators.70

28. The European Communities refers to the Appellate Body Report in  US – Gambling  to demonstrate the importance placed by the Appellate Body on the subsequent practice being "concordant" and "common".71 It notes that WTO Members have agreed upon a specific procedure for adopting interpretations of WTO law, namely Article IX:2 of the  WTO Agreement. According to the European Communities, this provision warrants a narrow application of Article 31(3)(b) of the Vienna Convention, as exemplified by the Appellate Body finding in  Japan – Alcoholic Beverages II; in that dispute, the Appellate Body found that adopted GATT panel reports and WTO panel reports cannot qualify as "subsequent practice".72 Article IX:2 of the WTO Agreement also implies that any practice that is considered for the interpretation of the multilateral trade agreements must take the form of overt acts that are  explicitly  submitted for the consideration of all WTO Members and adopted by a large majority of the WTO Membership.73 In support of its position, the European Communities notes that the Appellate Body and panels have so far consistently denied the status of "subsequent practice" to  all  examples of both multilateral and unilateral acts invoked by parties as subsequent practice.74

29. Moreover, the European Communities alleges that the Panel, in its interpretation and application of Article 31(3)(b), failed to take into account the specific context of WTO Members' Schedules and the Harmonized System. The European Communities disagrees with the Panel that, because Schedules are particular to each Member, a Schedule should be interpreted exclusively in accordance with a specific Member's subsequent practice (unless objected to by the other parties). This argument runs contrary to Members' intention that Schedules follow the Harmonized System, absent any clear indication to the contrary. The term "salted" appears in heading 02.10 of the Schedule of all WTO Members and thus should not be defined unilaterally. The European Communities submits that the Panel's finding would undermine the predictability and stability of the multilateral Schedules and the application of the Harmonized System because the Harmonized System confers exclusive authority for interpreting the nomenclature to the Harmonized System Committee and Council.75 The European Communities emphasizes that WTO Members' Schedules form an "integral part" of the GATT 1994, that they reflect rights and obligations of both importing and exporting Members, and that there is no difference between Schedules and other WTO obligations.76 Therefore, no individual Member's practice should be preferred over that of any other Member.

30. The European Communities also notes that the Appellate Body rejected, in EC – Computer Equipment, the notion of "legitimate expectations" in the context of customs classification, as well as the argument that unilateral acts of WTO Members, and lack of reaction thereto, are relevant for purposes of interpreting WTO law.77

(ii) "Consistency" of Practice

31. The European Communities submits that the Panel misapplied the concept of "consistency" of the alleged subsequent practice; the Panel's finding that the alleged practice is "consistent" is based on errors in respect of the object and the "geographic" and "systemic" scope of this practice, as well as its duration.78 The European Communities argues that the Panel interpreted the term "salted" in two multilateral treaties (namely, the Schedules attached to the  WTO Agreement  and the Harmonized System) on the basis of the "subsequent practice" of only  one  Member, even though that Member itself had already "disavowed" that practice.79

32. The European Communities submits that the Panel failed to examine the "totality" of the European Communities' legal system in its interpretation of heading 02.10.80 The European Communities notes that the Appellate Body has emphasized the need to consider implementing legislation on customs classification as well as classification practice during the Uruguay Round negotiations, and asserts that a series of contradicting acts would not permit a finding of "consistent practice".81 Accordingly, the Panel should have taken into account relevant jurisprudence of the European Court of Justice (the "ECJ") regarding the scope of heading 02.10 of the European Communities' Combined Nomenclature, a number of Explanatory Notes, and Binding Tariff Information ("BTI") notices relating to heading 02.10, all of which emphasize the notion of preservation under the European Communities' regime for classification of products under heading 02.10. Although the Panel referred to minutes of European Communities' customs committee meetings in 2002, it failed to consider the legislative measures that eventually resulted from those meetings.82

33. The European Communities argues that the Panel should not have limited its examination of the consistency of practice to the treatment of frozen salted chicken cuts with a salt content of between 1.2 and 3 per cent alone. Given that the interpretative issue to be resolved in this dispute is the meaning of the term "salted" in the concession contained in heading 02.10, relevant practice with respect to  all  kinds of salted meat subject to that heading should have been examined by the Panel.

34. The European Communities also challenges what it considers to be the Panel's failure to take into account relevant export classification practice of Brazil and Thailand. The European Communities contends that the definition in the Harmonized System of "customs tariff nomenclature" is not limited to the purpose of "levying duties of Customs on imported goods" as suggested by the Panel, and that the use of the Harmonized System is required for trade statistics for both imports and exports.83 According to the European Communities, neither Brazil nor Thailand argued that they used a classification system for exports different from the Harmonized System, and the export statistics of Brazil and Thailand, as well as of the United States, demonstrate that these countries accepted that such salted meats fell under heading 02.07.84

35. In addition, the European Communities argues that the jurisprudence of the International Court of Justice demonstrates that subsequent practice is established on the basis of the actions of high-level governmental representatives who have "international obligations" in mind, rather than on the basis of the daily activities of customs officers.85 The European Communities is of the view that the Panel "confused" Article 31(3)(b) with the concept of State responsibility, under which countries may be liable for acts of their officials.86

36. The European Communities also challenges the Panel for basing its finding of "consistency" on classification decisions by European Communities' port authorities during a limited period, namely between 1996 and 2002. The European Communities submits that the Panel failed to examine "consistency over time" and that it should not have relied on customs classification practice that had been corrected and thereby modified.87 If the Appellate Body considers that the classification practice of WTO Members is relevant for the interpretation of heading 02.10, the European Communities concludes that such practice would support its own position with respect to the meaning of the term "salted", namely, as requiring salting for preservation.88

(d) Object and Purpose

37. The European Communities submits that the Panel incorrectly distinguished between the object and purpose of the treaty and that of individual provisions of the treaty. The European Communities asserts that the Panel should have ascertained the object and purpose of Article II of the GATT 1994, read in conjunction with heading 02.10 of the EC Schedule.89

38. The European Communities also argues that the Panel erred in holding that "concessions made by WTO Members should be interpreted so as to further the general objective of the expansion of trade in goods and the substantial reduction of tariffs".90 The Panel failed to adequately consider that the true object and purpose of Article II of the GATT 1994 is the security and predictability of reciprocal market access arrangements.91 This goal would be undermined if panels were allowed to accord a "bias" towards a reduction in tariffs, and if the concessions in Members' Schedules were to be interpreted on the basis of the subjective views of certain exporting Members alone.92 In the European Communities' view, such a "bias" would be inconsistent with Article 3.2 of the DSU.

39. In addition, the European Communities challenges the Panel's finding that the notion of "long-term preservation" is "uncertain" and thus inconsistent with the objective of security and predictability of tariff concessions.93 The European Communities considers that the terms "long-term preservation" and "preservation" are not intrinsically uncertain, given their use under other headings of the Harmonized System. The European Communities disputes that a customs official will face uncertainty in applying the criterion of long-term preservation; in particular for a customs official with access to tools of analysis, the "highly traditional" products classifiable under heading 02.10 are "recognizable" and "well-known".94 Moreover, the Panel's finding of uncertainty in the notion of "long-term preservation" is vitiated by its failure to apply the same test to the alternative criterion of "preparation", as proposed by Brazil and Thailand.

40. Finally, the European Communities argues that the Panel's own interpretation of heading 02.10 undermines the objective of protecting and preventing circumvention of tariff concessions negotiated and settled in trade negotiations. The Panel ignored the European Communities' argument that heading 02.10 does not have the object and purpose of securing market access arrangements for frozen poultry, and that negotiating parties knew that a product would need to be salted so as to ensure its preservation in order to qualify under heading 02.10.95

2. Interpretation of the EC Schedule in the Light of Article 32 of the Vienna Convention

(a) Circumstances of Conclusion

41. The European Communities submits that the notion of "circumstances of [a treaty's] conclusion" within the meaning of Article 32 of the Vienna Convention should be interpreted narrowly. Drawing on academic commentators96, the European Communities argues that circumstances of a treaty's conclusion must have directly influenced the common intentions of  all parties to the treaty.97 The "multilateral aspect" of the circumstances of a treaty's conclusion has also been emphasized by the Appellate Body, suggesting a "stringent" threshold for using "practice" of Members as supplementary means for interpretation of WTO law.98 In this respect, the European Communities also considers relevant its arguments relating to "subsequent practice", including the need for deference to the formal procedure under Article IX:2 of the  WTO Agreement  and the need for such practice to demonstrate a high degree of consistency.99

42. The European Communities does not dispute that customs classification law and practice prior to and during negotiations of a treaty may qualify as "circumstances of [a treaty's] conclusion". However, the European Communities asserts that the Panel contravened the explicit guidance of the Appellate Body in  EC – Computer Equipment to the effect that the classification practice of the European Communities must not be considered separately from its customs legislation; that classification practice of other WTO Members must also be taken into account; that practice regarding a tariff heading must include the interpretation of that heading "in all circumstances"; and that such practice "must have endured".100

43. The European Communities also challenges the Panel's observations on the timing of the "circumstances". According to the European Communities, a "circumstance" in the form of a "condition relating to a negotiating party" must have been an objective fact, evident to all negotiators at the time, and must be analyzed on a case-by-case basis.101

44. Finally, the European Communities challenges the Panel's concept of "constructive knowledge", whereby all negotiating parties are deemed to have knowledge of a particular act or instrument of a WTO Member once it has been published.102 The European Communities also disagrees with the Panel that an event that is deemed to be known by the participants in the negotiations could have influenced the negotiators and is relevant for the interpretation of a treaty under Article 32. The European Communities argues that "deemed knowledge" cannot substitute the need to demonstrate a "direct link" between a circumstance and the common intentions of the parties.103

(b) Characterization of Relevant Law of the European Communities

45. The European Communities submits that the Panel mischaracterized the law and practice of the European Communities, in particular EC Regulation 535/94, and that this mischaracterization amounts to a distortion of facts contrary to Article 11 of the DSU.104 The European Communities challenges the Panel's use of this law and classification practice on the grounds that there was no trade in the products at issue at the time of the negotiations. The Panel should have considered the "totality" of the European Communities' legal system, including Section Notes, Chapter Notes, relevant Subheading Notes, and Explanatory Notes of the Combined Nomenclature, as well as the classification opinions of the European Communities and judgments of the ECJ.105

46. The European Communities challenges the Panel's interpretation of the ECJ's Gausepohl judgment106 as not being necessarily governed by the principle of "long-term preservation".107 According to the European Communities, the Panel erred in finding that EC Regulation 535/94 "superseded" the long-term preservation criterion in heading 02.10 of the Combined Nomenclature as recognized in the Gausepohl judgment.108 A Commission Regulation cannot override an interpretation given by the ECJ to the Combined Nomenclature, where that Nomenclature is implementing the Harmonized System. The European Communities argues that the Panel also incorrectly "dismissed" relevant Explanatory Notes to the Combined Nomenclature, although these Notes remained relevant for assessing classification practice even after the insertion of the Additional Note to the Combined Nomenclature through EC Regulation 535/94.109

47. The European Communities submits that, if the practice of all participating treaty parties must be taken into account when considering "circumstances of conclusion", this should extend to practice regarding all meat that is "salted, in brine, dried or smoked".110 In this respect, the Panel erred in rejecting a United States' customs classification ruling of 1993 regarding salted beef as evidence that heading 02.10 covers meat salted for preservation.

48. The European Communities is of the view that the Panel failed to determine properly the scope of relevant "circumstances" within the meaning of Article 32 as being those circumstances that could have influenced the common intentions of the parties with respect to heading 02.10 of the EC Schedule.111 The Panel failed to consider that the principle of preservation (as reflected in a United States classification ruling of 1993, and in European Communities' judgments and Explanatory Notes since the early 1980s) "prevailed" throughout the entire duration of the Uruguay Round negotiations in the minds of the negotiators with respect to heading 02.10.112 This practice was "confirmed through trade statistics which showed that only limited trade entered under heading 02.10, whereas the contentious issue was fresh, chilled and frozen [poultry] meat".113

49. The European Communities also argues that the results of tariff negotiations between 1986 and 15 December 1993 could not be altered by unilateral measures of one WTO Member.114 An act taken during the so-called verification period prior to the final adoption of the WTO Agreement could be of relevance, but compelling evidence would be required to prove that the negotiators had taken note of such act. No such evidence exists with respect to EC Regulation 535/94, in particular, because of its complex legal relationship with pre-existing ECJ case-law and Explanatory Notes to the Combined Nomenclature, as well as the absence of any discussion of this Regulation, or the scope of heading 02.10, at any point during the negotiations, the verification period, or thereafter.

50. The European Communities further challenges the Panel's finding that tariff classification laws and practice that do not amount to "subsequent practice" under Article 31(3)(b) may nonetheless be relevant as supplementary means of interpretation under Article 32.115 In the European Communities' view, a "high standard of consistency" would have to be demonstrated for such practice also to be relevant under Article 32.116 In any event, no exporter or Member State of the European Communities has challenged in the European Communities' legal system the measures that "rectified" the "temporary circumvention" of the application of heading 02.10.117 Moreover, neither Brazil nor Thailand has sought a classification ruling from the WCO.

51. Finally, the European Communities disagrees with the Panel that the Panel's conclusions under Article 32 were a "confirmation" of the meaning of heading 02.10 that it had derived from the application of Article 31.118 According to the European Communities, the Panel's conclusions under Article 32 are formally different and have a different scope than those under Article 31, and the Panel used Article 32 not to confirm, but to alter the meaning it had derived from its application of Article 31 of the  Vienna Convention.

B. Arguments of Brazil – Appellee

1. Interpretation of the EC Schedule in the Light of Article 31 of the Vienna Convention

(a) Ordinary Meaning

52. Brazil argues that the "factual context" of the term "salted", as identified by the Panel, is not only relevant, but must be taken into account in interpreting the term "salted" in heading 02.10 of the EC Schedule. In the light of the European Communities' arguments about the nature of "salted" meat products, the Panel had to determine whether the facts involving salted meat in this dispute corresponded to what the Panel had concluded was the ordinary meaning of the term "salted". Although "factual context" is not referred to explicitly in the rules of treaty interpretation as codified in the  Vienna Convention, such an analysis is included within a panel's functions as set out in Article 11 of the DSU. Brazil contends that a treaty interpreter must know the facts of a case in order to properly apply the law to that case.

53. Brazil also rejects the European Communities' allegations that the Panel violated Article 11 of the DSU by distorting the available evidence on the record. With respect to the Panel's finding that even small quantities of salt have a preservative effect on meat, Brazil argues that this conclusion was primarily based on technical literature presented by Brazil, rather than on the evidence of the European Communities' expert. According to Brazil, the European Communities is, in effect, questioning the Panel's factual findings, in particular the Panel's appreciation of a given piece of evidence. In any event, the Panel did not misrepresent the statement of the European Communities' expert.

54. With respect to the Panel's finding that certain types of meat falling under heading 02.10 may require additional means of preservation, Brazil maintains that the reasons that such meats require preservation are of "no relevance to the point at issue"119; regardless of whether spoilage is due to the effect of slicing (growth of moulds and yeast), as argued by the European Communities, or due to rancidity, the fact remains that further preservation is required to prevent such spoilage. Finally, contrary to the European Communities' arguments, Brazil asserts that the evidence on the record supports the Panel's finding that a product preserved by salt for relatively short periods of time is not necessarily precluded from qualifying under heading 02.10 of the EC Schedule. Brazil submits that it "seems a fair assessment [of the Panel] that sliced non-refrigerated meat is preserved by salt for a shorter period of time than sliced refrigerated meat".120

(b) Context

55. Brazil rejects all of the European Communities' arguments challenging the Panel's findings regarding the "context" of the term "salted". Brazil argues that the term "in brine" is broader than "preservation", such that, even if "preservation" may be "one of the possible meanings ascribed to the term" "in brine", it is not the exclusive meaning.121 According to Brazil, the fact that heading 08.12 refers to "brine" as a "preservative solution" does not lend support to the European Communities' argument that the term "in brine" exclusively relates to preservation. Brazil refers to the WCO Secretariat's letter to the Panel, which stated that, in the absence of an explicit provision that the term "preserved" has a "certain influence" on heading 02.10, that term has no relevance for the classification of salted meat under heading 02.10.122

56. Brazil furthermore argues that preparation, and not preservation, is the "exclusive distinguishing characteristic common to all terms in heading 02.10".123 Brazil alleges that the terms in heading 02.10 have ordinary meanings other than preservation and that the terms "dried" and "smoked" in relation to food and meat do not exclusively deal with preservation.

57. Next, Brazil argues that the structure of Chapter 2 of the Harmonized System supports Brazil's interpretation that heading 02.10 refers to preparation, rather than preservation. Brazil disagrees with the proposition that refrigeration is the distinguishing feature of headings 02.01 to 02.08. Rather, heading 02.10 is an exception that covers all types of meat that have been salted, put in brine, dried, or smoked. The European Communities is also wrong, according to Brazil, in suggesting that the absence of a reference to refrigeration under heading 02.10 implies that refrigeration is not significant for that heading. Brazil argues that the reason refrigeration is not referred to in heading 02.10 is "because what gives the product its character ... is simply that [this product] has been salted, brined, dried or smoked".124 Brazil also refers to the Explanatory Note to Chapter 2 of the Harmonized System and argues that the reference there to fresh meat "packed with salt as a temporary preservative during transport" does not support the European Communities' position because  preparing  with salt is different from  packing  with salt.125 "Preparing" with salt, according to Brazil, entails a process that leaves meat in a state different from its natural state.

58. Finally, Brazil takes issue with the European Communities' arguments regarding the historical basis of heading 02.10. Brazil argues that refrigeration existed, and was provided for, in the 1937 Geneva Draft Nomenclature. Brazil also contends that the European Communities misrepresents the subject of Item 18 of the Geneva Draft Nomenclature. Contrary to the European Communities' arguments, Item 18 does not refer to slightly salted, dried, and smoked meat, but rather to meat that has been "simply prepared". Brazil also disagrees with the European Communities' contention that the phrase "otherwise simply prepared" in Item 18 is of no significance. The fact that cooked meats were included under Item 18—together with salting, putting in brine, drying, and smoking—demonstrates that all such meats were simple preparations, and that Item 18 was not intended for the purpose of preservation. Brazil also contends that the fact that the term "cooked or otherwise simply prepared" was moved from Chapter 2 to Chapter 16 in the Brussels Nomenclature "does not change the fact that [the Harmonized System] Notes to Chapter 16 and [the Harmonized System] Explanatory Notes to Chapter 2 expressly refer to the processes listed in Chapter 2 as 'prepared or preserved'".126

(c) Subsequent Practice

59. Brazil agrees with the Panel's finding that, in the present case, the relevant subsequent practice is the concordant, common and consistent sequence of acts by European Communities' customs authorities, occurring subsequent to the entry into force of the EC Schedule, which establishes the agreement of WTO Members regarding the interpretation of the concession contained in heading 02.10 of the EC Schedule.

(i) "Concordant" and "Common" Practice

60. Brazil submits that the European Communities is incorrect in suggesting that the relevant question before the Appellate Body in this appeal is whether acts of one WTO Member that are met with silence by other WTO Members can qualify as "subsequent practice". Brazil acknowledges that the classification practice of other Members  may be relevant in the interpretation of tariff concessions of a certain Member's Schedule; however, given that the European Communities was the only Member that imported frozen salted chicken cuts and had a specific criterion for "salted meat" under heading 02.10 of its Combined Nomenclature, the classification practice of the European Communities is the only relevant practice in this case.127 Brazil also argues that the relevant acts were not objected to because the temporal proximity between the publication of EC Regulation 535/94 and the conclusion of the Uruguay Round resulted in "constructive knowledge".128

61. Brazil submits that the European Communities has confused the requirement that parties be in agreement on the interpretation of a treaty with the subsequent practice that consolidates that agreement. According to Brazil, Article 31(3)(b) of the Vienna Convention does not specify the number of parties that must engage in the relevant practice; rather, the requirement is that the subsequent practice must establish the  agreement  of the parties, which, in this case, is established as a fact.

62. Brazil submits that the European Communities' understanding of the term "salted" was known to all WTO Members when tariff concessions were negotiated, and was accepted by them when they signed the  WTO Agreement; the authority of the Ministerial Conference and the General Council under Article IX:2 of the WTO Agreement to adopt interpretations of that Agreement must be distinguished from the authority of adopted panel reports as considered by the Appellate Body in Japan – Alcoholic Beverages II.129 Brazil finds support in the Appellate Body Report in Chile – Price Band System for its view that a Member's Schedule imposes obligations on the Member who made the concession and not on all Members.130 According to Brazil, the scheduling practice of only one Member may be considered relevant in the interpretation of its tariff concession, as long as that practice amounts to subsequent practice.131

63. Brazil also disputes the European Communities' argument that there is no difference between a WTO Member's Schedule and other WTO obligations. Brazil refers to the Appellate Body Report in  EC – Computer Equipment as support for the proposition that, although  all  Members must agree on the scope of a tariff concession made by one Member, that tariff concession applies  only  to that one  Member that made the concession. Tariff concessions may be identical in some cases, but the obligation under a concession is different from other WTO obligations, because it is unique to the Member that made it.132 In Brazil's view, the European Communities, through EC Regulation 535/94 and the inclusion of Additional Note 7 in the Combined Nomenclature, announced to its negotiating partners in the Uruguay Round the definition and scope of its tariff concession under heading 02.10 of its Schedule.

64. In addition, Brazil disagrees with the European Communities that the Panel's approach to establishing "subsequent practice" is contrary to the WTO Members' intention that Schedules should follow the Harmonized System. Although Schedules should be based on the Harmonized System, they are not identical to it, because the Harmonized System was the starting point, but not necessarily the end result, of the negotiation. Brazil argues that parts of the EC Schedule are based on the Combined Nomenclature, which is, in turn, partly based on the Harmonized System and partly based on the subheadings of the Combined Nomenclature and other provisions. One such provision is Additional Note 7 to the Combined Nomenclature, which provides for a definition of "salted meat" that is unique to the EC Schedule and that does not exist in the Schedule of any other Member.133 According to Brazil, that definition is "aligned with the terms and structure" of the Harmonized System.134 In contrast, the subsequent introduction through the challenged measures of the concept of "preservation" into heading 02.10 modifies and limits the Harmonized System. Brazil submits that the predictability and stability of the multilateral Schedules would be undermined if the term "salted" in heading 02.10 of the EC Schedule were found to relate exclusively to a process that ensures "long-term preservation".135

(ii) "Consistency" of Practice

65. Brazil agrees with the Panel's assessment of "consistency" of the relevant practice.136 Contrary to the European Communities' assertion, the Panel did not fail to consider the European Communities' practice concerning products falling under heading 02.10 other than salted frozen chicken cuts as well as the practice of Brazil, Thailand, China, and the United States relating to heading 02.10. In this regard, Brazil points to the Panel's consideration of a BTI relating to dried salted ham.137 Brazil also asserts that the European Communities failed to provide any other evidence in support of its contention that some customs offices did not classify the products at issue under heading 02.10.

66. Brazil disagrees with the European Communities' submission that "subsequent practice" generally involves government representatives of a higher status than customs officials. The Panel treated correctly the European Communities' classification practice in the light of the Appellate Body's finding in  EC – Computer Equipment  that it is the  customs  classification practice of the importing Member that is important in the interpretation of tariff concessions.138

67. Brazil further submits that the Panel did not fail to examine the totality of the European Communities' law and jurisprudence surrounding the interpretation of heading 02.10. Brazil argues that the instruments upon which the European Communities would have the Panel rely largely predate  the EC Schedule and cannot be considered as "subsequent practice" within the meaning of Article 31(3)(b) of the Vienna Convention.139 Brazil further notes that minutes of European Communities' customs committee meetings in 2002 indicate that the European Communities deliberately did not include a reference to "long-term preservation" in EC Regulation 535/94. As to consistency over time, Brazil argues that no BTI or any type of supporting material or documentation was produced by the European Communities in support of its argument that classification by its customs authorities was not consistent. Brazil also agrees with the Panel that post-2002 practice does not undermine the Panel's finding that the classification practice by the European Communities between 1996 and 2002 was consistent.140

68. Brazil agrees with the Panel's treatment of the export and import classification practice of Brazil and Thailand.141 Brazil states that  export  classification practice is less rigorous than  import classification practice because, usually, export duties are not assessed and traders, rather than authorities, often undertake the actual classification. Moreover, Brazil has never imported the products at issue and, even if it had done so, it is the practice in the application of heading 02.10 in the EC Schedule that is at issue.142 Brazil also supports the Panel's treatment of the alleged "practice" of other WTO Members relating to heading 02.10. Because the evidence before the Panel was limited and concerned products that are not the same or identical to the products at issue, the Panel could draw no conclusions from that information.143

(d) Object and Purpose

69. Brazil submits that the Panel did not incorrectly distinguish between the object and purpose of the  WTO Agreement  and the GATT 1994, on the one hand, and that of the specific heading in the EC Schedule, on the other hand. Brazil argues that the object and purpose of the treaty  is the relevant inquiry, and that the tariff concession contained in heading 02.10 of the EC Schedule is  part of the terms  of that Schedule, which is, in turn, an integral part of the GATT 1994, pursuant to Article II of the GATT 1994.

70. Brazil also submits that the European Communities misconstrues the Panel's finding by arguing that the Panel's interpretation was "bias[ed]" toward the reduction of tariffs, instead of being based on the security and predictability of tariff concessions.144 Brazil points out that the wording of the Panel's reasoning flows from the language in the respective preambles to the  WTO Agreement  and the GATT 1994.

71. Brazil argues that the notion of "long-term preservation", used by the European Communities to define the meat classifiable under heading 02.10, would introduce a "great deal" of uncertainty, especially if the test to be applied at customs is whether the products are "well-known" or "instantly recognizable".145 Brazil submits that the European Communities presented no binding law or act to the Panel with a clear definition for the notion of "long-term preservation"146, and that the European Communities also failed to indicate where in the Harmonized System the notion of "long-term preservation" in relation to meat was to be found. Brazil also disagrees with the European Communities that negotiating parties knew that a meat product had to be salted for preservation to qualify under heading 02.10; rather, the knowledge of the parties was that heading 02.10 of the EC Schedule related to meat deeply and homogeneously impregnated with a salt content of not less than 1.2 per cent by weight.

2. Interpretation of the EC Schedule in the Light of Article 32 of the Vienna Convention

72. Brazil proposes that, if the Appellate Body finds that the European Communities' classification practice of the products at issue under heading 02.10 does not amount to "subsequent practice" under Article 31(3)(b), it should consider the classification practice as supplementary means of interpretation under Article 32. Brazil argues that supplementary means of interpretation are not limited to the "preparatory work" of the treaty and the "circumstances of its conclusion", but can include evidence of subsequent practice.147

(a) Circumstances of Conclusion

73. Brazil disagrees with the European Communities that, for "circumstances of [a treaty's] conclusion" to be relevant, they must have directly influenced the common intention of  all  the parties to the treaty. Brazil refers to the Appellate Body statement in  EC – Computer Equipment that customs classification practice of one of the parties may be of relevance and that the importing Member's practice is of "great importance".148 Even though the Appellate Body considered the classification practice of exporting Members to be relevant in that case, the present case is different in this respect because there was no customs classification practice of Brazil, Thailand, or European Communities' customs authorities regarding the products at issue during the Uruguay Round. Furthermore, in the dispute in EC – Computer Equipment, the relevant part of the Combined Nomenclature did not contain a special criterion to define the product at issue; by contrast, in the present case, EC Regulation 535/94 inserted Additional Note 7 in the Combined Nomenclature with a special definition for "salted meat" found in heading 02.10.149 Thus, according to Brazil, in the present case, the classification practice of the importing Member is the most, if not the only, relevant practice.

74. With respect to the Panel's concept of "constructive knowledge", Brazil argues that a "circumstance" need not be evident to all the negotiators at the time of conclusion and finds support for its view in Appellate Body case-law and public international law literature.150 Brazil submits that the BTIs that were found by the Appellate Body to be "circumstances of conclusion" in  EC – Computer Equipment  could not have been evident to all the negotiators.

(b) Characterization of Relevant Law of the European Communities

75. Brazil submits that the Appellate Body should not, as requested by the European Communities, disregard the customs legislation enacted by the European Communities at the time of the conclusion of the Uruguay Round on the grounds that there was no trade in frozen salted chicken cuts at that time. Brazil contends that legislation defining the products at issue for the purpose of the European Communities' Combined Nomenclature is a relevant "circumstance".

76. In Brazil's view, the Panel correctly interpreted the  Dinter  and  Gausepohl  judgments of the ECJ.151 Brazil argues that the  Dinter  judgment did not deal specifically with the scope of heading 02.10 and provides only general comments regarding Chapter 2 of the Combined Nomenclature, without any direct relevance to this case. Brazil also submits that the Panel adequately dealt with the  Gausepohl  judgment. In Brazil's view, the ECJ found no support in the Harmonized System for the conclusion that "salting", under heading 02.10, is a process for preserving meat.152 In contrast, EC Regulation 535/94 introduced an objective criterion (deep salt impregnation of 1.2 per cent) for salted meat, and did not refer to "long-term preservation". As to the European Communities' argument that EC Regulation 535/94 cannot change the ECJ's interpretation of a Harmonized System definition, Brazil submits that the ECJ does not have the authority to determine the meaning of the Harmonized System.153 Even if the European Commission took the ECJ's Gausepohl  judgment into account in EC Regulation 535/94, that judgment suggests that deep impregnation with 1.2 per cent of salt meets the ECJ's understanding of "long-term preservation".154

77. Brazil disagrees with the European Communities that EC Regulation 535/94 is not relevant as "circumstance" of conclusion because the negotiations on the EC Schedule were concluded prior to the period of verification of the Schedules.155 According to Brazil, the European Communities acknowledges that not all negotiators need to have  actual  knowledge of an act. Brazil submits that acceptance of the definition of "salted meat" in EC Regulation 535/94 during the process of verification of the Schedules can be deduced from the lack of objections.156

78. Finally, Brazil disagrees with the European Communities that the Panel used Article 32 to alter its conclusion concerning the meaning of the term "salted" that it had arrived at in applying Article 31. According to Brazil, the Panel concluded under Article 31 that the term "salted" in heading 02.10 is a broad term that is not  limited  to the notion of "long-term preservation"; under Article 32, the Panel confirmed that EC Regulation 535/94 did not provide that salting must be for "long-term preservation".

C. Arguments of Thailand – Appellee

1. Interpretation of the EC Schedule in the Light of Article 31 of the Vienna Convention

(a) Ordinary Meaning

79. Thailand submits that the Panel properly examined the factual context for the consideration of the ordinary meaning of the term "salted". Thailand refers to the principle under Article 31(1) of the Vienna Convention that "a treaty shall be interpreted in good faith", and claims that, under "factual context", the Panel took into account consequences that "normally" and "reasonably" flow from the text.157 In Thailand's view, if the Panel's analysis of the "ordinary meaning" had eschewed "factual context" and instead had included only dictionary definitions, the result would have been too restrictive and also inconsistent with prior Appellate Body rejections of a mechanical reliance on dictionaries.158

80. Thailand also challenges the European Communities' claim that the Panel failed to make an objective assessment of the facts in accordance with Article 11 of the DSU. Thailand argues that an appellant faces a high hurdle to establish that a panel has committed an "egregious error" in the appreciation of evidence, particularly with respect to scientific evidence.159 Contrary to the allegation of the European Communities, the Panel's conclusions with respect to the ordinary meaning of "salted" were not  based on  the Panel's appreciation of the European Communities' expert's opinions. Thailand further submits that the European Communities has not established that the Panel failed to make an objective assessment of the scientific evidence. With respect to the Panel's finding that a 3 per cent salt content may prevent spoilage in meat, Thailand argues that the Panel did not make reference to a product with a 3 per cent salt content that is not chilled; rather, the Panel was discussing a meat product that was "raw and chilled".

81. With respect to the European Communities' claim that it is the slicing of the preserved product, and not the salt content, as the Panel found, that makes necessary the use of additional means of preservation under heading 02.10, Thailand submits that the basis for this claim of error is "unclear".160 This is because, before the Panel, the European Communities did not contest the fact that meats such as Parma ham, prosciutto, and jamón serrano require further means of preservation. Thailand further argues that, in making the finding that "a product preserved by salt for relatively short periods of time is not necessarily precluded from qualifying under heading 02.10", the Panel did not rely on evidence by the European Communities' expert alone, but also relied on the European Communities' statements acknowledging this fact.161 Finally, Thailand submits that, even if the Appellate Body were to find that the Panel did not conduct an objective assessment of the facts contested by the European Communities, this would not affect the overall conclusions of the Panel with respect to the ordinary meaning of the term "salted".

(b) Context

82. Thailand argues that the European Communities has failed to establish that the term "in brine" refers exclusively to preservation. The European Communities' argument that the term "in brine" refers to preservation is based solely on its definition of the verb "to salt", and, as such, the argument does not concern the ordinary meaning of the term "in brine". Moreover, in Thailand's view, heading 08.12, which refers to brine as a "preservative solution", makes it clear that all the processes listed in that heading are "for the purpose of provisionally preserving the products".162

83. Thailand also submits that the Panel did not fail to take into account the distinguishing characteristics of the terms "salted, in brine, dried or smoked" in heading 02.10. The dictionary definitions of these terms include, but are not limited to, the concept of preservation. The ordinary meaning of these terms for meat products, in "today's context", is related to the taste and unique characteristics of the products, rather than the length of time for which the products are preserved.163 Thailand also rejects the argument that the special nature of the meats subject to heading 02.10 finds support in the nature of the meats covered by Chapter 16; rather, the Chapter Note to Chapter 16 makes it clear that the processes specified in Chapter 2 are for preparation or preservation.164

84. Thailand agrees with the European Communities that, for heading 02.10, the issue of refrigeration is of little or no importance, but submits that this is because preservation is not a determinative element for the classification of products under this heading. Instead, according to Thailand, the structure of the headings indicates that products may be divided into either fresh or preserved by a process (chilled or frozen) or prepared (salted, in brine, etc); the determinative element of heading 02.10, in Thailand's view, is preparation. Heading 02.10 covers all types of meat and offal, as long as that meat and offal is salted, in brine, dried, or smoked. All such meat is classified under heading 02.10, regardless of the state in which it is presented—for instance, fresh, chilled, or frozen. Thailand also rejects the European Communities' argument based on the words "temporary preservative" in the Explanatory Note to Chapter 2; according to Thailand, the European Communities provides no evidence to support its assertion that packing fresh meat with salt inevitably affects the product's characteristics.

(c) Subsequent Practice

85. Thailand submits that the Panel properly considered the classification practice of the European Communities from 1996 to 2002 as "subsequent practice" within the meaning of Article 31(3)(b) of the  Vienna Convention.

(i) "Common" and "Concordant" Practice

86. Thailand considers that the position of the European Communities with respect to the "common" and "concordant" nature of subsequent practice contradicts the approach of the Appellate Body in  EC – Computer Equipment  and in  EC – Export Subsidies on Sugar, where the Appellate Body attached importance to the practice of the European Communities when interpreting the EC Schedule.165 According to Thailand, in any event, the weight given to subsequent practice by the Panel was not dispositive for its findings that the products at issue were covered by the concession in heading 02.10.

87. Thailand submits that the Panel's findings are not inconsistent with the commentary of the ILC regarding subsequent practice.166 According to the ILC, it is not necessary for  all  signatories to a treaty to have  engaged  in a particular practice for it to qualify as subsequent practice; rather it is sufficient that the parties have  accepted  the practice. Therefore, Thailand submits that the practice of even one Member may qualify as "subsequent practice". On this basis, it was reasonable for the Panel to conclude that the classification practice of the European Communities alone with respect to the products at issue could be considered as subsequent practice. In addition, Thailand states that in public international law, acceptance may be deduced from a party's reaction or lack of reaction to the practice at issue.167

88. Thailand rejects the European Communities' argument that "subsequent practice" within the meaning of Article 31(3)(b) requires "overt acts" that are explicitly "adopted" by a "large majority" of the WTO Membership.168 In Thailand's view, the European Communities misunderstands the distinction that the  Vienna Convention  draws between a "subsequent agreement" in Article 31(3)(a) and "subsequent practice" in Article 31(3)(b). Thailand also refers to instances where the Appellate Body and panels found that certain acts and practices did not amount to "subsequent practice" within the meaning of Article 31(3)(b), and submits that those cases may be distinguished from the present case on their facts.169

89. Thailand agrees with the Panel that it makes "practical sense especially in the context of GATT schedules that are particular to each WTO Member" to attach "importance [to] the classification practice of the importing Member whose schedule is being interpreted".170 According to Thailand, the Appellate Body Report in EC – Computer Equipment  supports the view that a Member's Schedule is not the same as a generally applicable treaty provision of the GATT 1994 or other WTO agreements.171 In this regard, Thailand notes the Panel's factual finding that "the European Communities is apparently the only importing WTO Member with any practice of classifying the products at issue."172 Thailand also challenges the European Communities' reliance on the Harmonized System, and submits that there is no legal basis to equate the interpretation of the EC Schedule with an interpretation of the Harmonized System. The Panel's analysis of the EC Schedule does not purport to provide a definitive interpretation of the Harmonized System, nor does it undermine the interpretative role to be played by the Harmonized System Committee and Council.173

(ii) "Consistency" of Practice

90. Thailand argues that the Panel correctly applied the concept of "consistency" in finding that the European Communities' classification practice amounted to "subsequent practice" within the meaning of Article 31(3)(b). Thailand asserts that the present case can be distinguished from EC – Computer Equipment on the basis that the classification practice of the European Communities in the present case was consistent over a period of six years; this is different from the "clearly inconsistent classification practice among EC Member States" in the earlier case.174 Thailand further recalls the observation of the Panel that the European Communities presented no evidence demonstrating that the products at issue had been classified under heading 02.07 of the EC Schedule. According to Thailand, the Panel was not required to examine classification practice with respect to all kinds of salted meat subject to heading 02.10; only salted chicken cuts are relevant, but, in any event, the Panel analyzed a broader range of products falling under heading 02.10.

91. Thailand submits that the Panel did not "deliberate[ly] exclu[de]", as suggested by the European Communities, the export classification practice of Thailand and Brazil.175 Indeed, the Panel did consider the classification practice of Brazil, Thailand, the United States, and China in its analysis, and made the factual conclusion that the evidence on their practices was too limited. Thailand asserts that the European Communities, in this respect, asks the Appellate Body to go beyond an examination of   legal  questions. In addition, as Thailand does not have a tariff concession on frozen boneless chicken cuts for export, and does not impose export duties on this product, the Panel properly concluded that Thailand's export classification practice was not relevant for interpreting heading 02.10.176

92. In Thailand's view, the Panel did not fail to examine the "totality" of the relevant law and practice of the European Communities.177 Therefore, the Panel's consideration of relevant material from the European Communities' legislative system, including an Explanatory Note to the Combined Nomenclature of December 1994 and a BTI relating to salted ham from Spain, cannot be disturbed.178 According to Thailand, the Panel explicitly considered the  Dinter  and  Gausepohl  judgments of the ECJ in its interpretative exercise under Article 32 of the Vienna Convention, rather than under Article 31(2)(b), as directed by the Appellate Body in  EC – Computer Equipment.179

93. Thailand disagrees with the European Communities that practice of low-level customs officials cannot amount to "subsequent practice". Thailand refers to the Appellate Body Report in EC – Computer Equipment as well as international law literature suggesting that there is no such limitation of the types of practice that may be relevant for purposes of Article 31(3)(b).180 What may constitute subsequent practice depends on the type and nature of the treaty provision in question, which, in this case, is applied by customs officials.181

94. According to Thailand, the European Communities' contention that the Panel failed to consider certain evidence in its interpretative exercise is "factually incorrect".182 For Thailand, it is "unclear" whether the European Communities claims that the Panel failed to make an objective assessment of the evidence before it; if the European Communities does make such a claim, the European Communities has not sufficiently substantiated why the Panel acted inconsistently with Article 11 of the DSU.183

(d) Object and Purpose

95. Thailand submits that Article 31(1) does not refer to the "object and purpose" of a particular provision (in this case, Article II of GATT 1994 read in conjunction with the specific tariff heading of the EC Schedule at issue) but, rather, to the object and purpose of the treaty.184 A treaty interpreter must determine the ordinary meaning of the terms of the treaty (that is, the concession in heading 02.10) in the light of the object and purpose of the treaty (that is, the GATT 1994).

96. Thailand disagrees with the European Communities that the Panel's interpretation of the object and purpose was based on a "bias" towards trade expansion.185 The Panel was "merely paraphrasing" the Appellate Body Report in EC – Computer Equipment when referring to the security and predictability of the reciprocal arrangements "directed to the substantial reduction of tariffs and other barriers to trade".186

97. Thailand agrees with the Panel that the criterion of "long-term preservation" is "not ... predictable".187 For purposes of customs classification, the objective physical characteristics of the products are the "paramount consideration", rather than any purpose underlying those characteristics.188 In response to the European Communities' concern that the Panel took no account of the uncertainty of the alternative criterion of "preparation", Thailand submits that the burden of proving that the term "salted" in heading 02.10 of the EC Schedule was intended to be limited to the notion of "preservation" rested on the European Communities; given that the European Communities did not meet this burden, it was not incumbent on the Panel to assess any "alternative" criteria.189

98. For Thailand, there is no legal basis for the submission that heading 02.10 "did not have the overall object and purpose of securing mutually advantageous market access arrangements on frozen poultry".190 According to Thailand, this argument implies that the Panel should have taken into account the unilateral trade policy considerations of the European Communities' negotiators; the European Communities may not use its tariff classification to respond to changes in trade patterns.191

2. Interpretation of the EC Schedule in the Light of Article 32 of the Vienna Convention

99. Thailand submits that the Panel acted correctly in seeking recourse to supplementary means of interpretation under Article 32 of the Vienna Convention in order to confirm the interpretative result obtained through the application of Article 31. Thailand submits that Article 32 provides a
non-exhaustive list of available supplementary means of interpretation, and that the European Communities' classification practice, if found by the Appellate Body not to be "subsequent practice" within the meaning of Article 31(3)(b), should be considered under Article 32.

(a) Circumstances of Conclusion

100. Thailand does not agree with the European Communities that previous findings of the Appellate Body and public international law literature suggest that the events, acts, and instruments to be taken into account as part of the circumstances of a treaty's conclusion "must have directly influenced the common intentions of parties".192 Thailand submits that the Appellate Body has not suggested that the documents considered by a panel as "circumstances of conclusion" must have influenced parties in the drafting of the treaty text. Regarding the European Communities' rejection of the Panel's concept of "constructive knowledge", Thailand notes the Appellate Body's statement in EC – Computer Equipment  that the panel, in that case, should have considered relevant BTIs as supplementary means of interpretation; in Thailand's view, it is unlikely that all negotiating parties in the Uruguay Round were aware of these BTIs.

(b) Characterization of Relevant Law of the European Communities

101. Thailand submits that the Panel appropriately considered relevant law and practice of the European Communities during the Uruguay Round negotiations, in accordance with the Appellate Body's guidance in EC – Computer Equipment. Thailand disagrees with the European Communities that there was no relevant customs classification practice prior to the conclusion of the Uruguay Round, and points to the Dinter and Gausepohl  judgments of the ECJ. Thailand argues that the criterion established for heading 02.10 by EC Regulation 535/94 implemented and clarified the long-term preservation criterion recognized in the ECJ's  Gausepohl  judgment.193

102. Thailand further submits that Additional Note 7 to the Combined Nomenclature, enacted through EC Regulation 535/94, did not alter the scope of heading 02.10 of the Combined Nomenclature; rather, Additional Note 7 merely specified the criteria to be taken into account for classifying certain goods under that heading. Thailand also rejects the European Communities' argument that the establishment of criteria other than long-term preservation for the term "salted" in heading 02.10 would alter the scope of that heading. In Thailand's view, this argument is rebutted by the WCO's response to the Panel's questions, according to which the term "salted" in heading 02.10 is not limited to "preservation", and must be defined on the basis of the objective characteristics of the product.

103. Thailand agrees with the Panel that the Explanatory Notes to the Combined Nomenclature are not relevant because these Notes relate to swine meat and not to poultry meat, and cannot be applied by analogy to poultry meat in the absence of an explicit reference. Finally, Thailand asserts that the Panel properly declined to consider as relevant the practice of other Members, including a United States' customs ruling of 1993 relating to fresh or frozen beef sprinkled with salt, and a United States' customs ruling of 1996 relating to frozen salted bacon.194

III. Other Appeals by Brazil and Thailand

A. Claims of Error by Brazil – Other Appellant

1. Terms of Reference

(a) Measures within the Terms of Reference

104. Brazil appeals the Panel's conclusion that EC Regulations 1871/2003 and 2344/2003 (the "subsequent measures") are outside the Panel's terms of reference. Brazil recalls that a panel request is required to identify the "specific measures at issue"; identification of specific measures "does not occur by mere reference to the label or number given to a legal instrument", but, rather, "by the description of acts or omissions attributable to a WTO Member".195 The measures identified by Brazil in its panel request were "clearly identified as [measures] that changed the classification and tariff treatment of frozen salted chicken cuts".196 The violation alleged was the treatment less favourable than that provided for the product under heading 02.10 of the EC Schedule. According to Brazil, the subsequent measures that the Panel found to be outside its terms of reference are "in essence the same" as the two measures found to be within the Panel's terms of reference; these subsequent measures also produce the same violation identified in Brazil's panel request, namely, treatment less favourable than that provided for in the EC Schedule.197

105. Brazil argues that the Panel should have examined its panel request as a whole. Brazil's "depiction" in its panel request of the two explicitly referenced measures "as measures that reclassify and change the tariff treatment of frozen salted chicken cuts is broad enough to include legal instruments subsequent to [these two measures] that also reclassify and change the tariff treatment of frozen salted chicken cuts".198 Brazil acknowledges that the present case is "somewhat different" from the dispute in Chile – Price Band System, because "it does not technically deal with an amendment  to a measure"199; however, Brazil submits that the general principles and the reasoning applied in that case should be applied here as well. The two subsequent measures "are equivalent to amendments" of the two measures explicitly mentioned in Brazil's panel request, in that they confirm and clarify the reclassification and tariff change brought about by the two earlier measures. The two subsequent measures "also produce the same effect", namely, the violation of the European Communities' obligations "under heading 02.10 of the EC Schedule".200 The reclassification and change in tariff treatment of frozen salted chicken cuts by the European Communities "remained essentially the same" after the enactment of the two subsequent measures.201

106. Brazil also expresses the concern that a failure to include the subsequent measures in the Panel's terms of reference would not secure a prompt and positive solution to the dispute. Brazil furthermore contends that, contrary to the Panel's reasoning, it should not have had to draft its panel request with "broad, generic and/or inclusive language so as to cover specific legal instruments that it reasonably did not expect or anticipate" at the time it filed its request.202 Such reasoning would "give rise to a surge of vaguely worded Panel requests", contrary to Article 6.2 of the DSU that requires that measures be specifically identified.203 Moreover, the Panel did not provide an explanation of how and why the due process objective would have been compromised if the subsequent measures had been included in the Panel's terms of reference. In Brazil's view, the measures specifically identified gave adequate notice of the scope and claim of violation asserted by Brazil in its panel request, and the European Communities was made aware of the content and relevance of EC Regulation 1871/2003 to this dispute "many times throughout the Panel proceeding".204

(b) Products within the Terms of Reference

107. Brazil appeals from the Panel's conclusion that the products at issue are "frozen boneless chicken cuts impregnated with salt, with a salt content of 1.2 %-3%" and not "frozen boneless chicken cuts impregnated with salt, with a salt content of 1.2% or more". According to Brazil, the Panel failed to represent correctly the products covered by EC Regulation 1223/2002 and EC Decision 2003/97/EC, which led to the "flawed understanding" that the products under those instruments are determined by the salt content of these products, and not by the notion of long-term preservation.205 Although the salt percentages provided for in those measures—1.2 to 1.9 per cent, and 1.9 to 3 per cent, respectively—appear to describe the products affected by those measures, the "rationale" provided within each of those legal instruments for classification under heading 02.07 is that of long-term preservation.206 This is also apparent from EC Decision 2003/97/EC, according to which chicken cuts with a salt content of 1.9 to 3 per cent are similar to boneless chicken cuts with a salt content of 1.2 to 1.9 per cent. According to Brazil, this suggests that it is not the salt content that defines the products under that measure.

108. Brazil also argues that the products within the Panel's terms of reference are the products described in Brazil's panel request. Brazil takes issue with the Panel's statement that the products at issue are determined by the measures considered to be within the Panel's terms of reference. Although Article 6.2 of the DSU does not explicitly require that the products at issue be identified in the panel request, the Appellate Body has, in the past, relied on the description contained in the panel request to determine the scope of the measure at issue. Moreover, if the product at issue is in fact described in the panel request, then it is that product that constitutes the product within the panel's terms of reference, because, pursuant to Article 7 of the DSU, a panel's terms of reference are governed by the panel request. Brazil also refers to the Appellate Body's finding in  EC – Computer Equipment that, "with respect to certain WTO obligations, in order to identify 'the specific measures at issue', it may also be necessary to identify the products subject to the measures in dispute."207 Brazil contends that, for certain WTO obligations such as tariff concessions, the identity of the product in the panel request "becomes vital" in the fulfilment of the requirements under Article 6.2.208

2. Interpretation of the EC Schedule in the Light of Article 31 of the Vienna Convention

109. Brazil appeals the Panel's conclusion that the evolution of Chapter 2 of the Harmonized System does not indicate definitely that the predecessor to heading 02.10 of the Harmonized System was characterized by the notion of "preparation". According to Brazil, the terms of Items 13 and 18 of the Geneva Draft Nomenclature, as well as the Explanatory Notes to these Items, indicate that the processes within Item 18 exclude the concept of "preservation", because, within the structure of Chapter 2 of the Geneva Draft Nomenclature, preservation categories were deliberately placed as subdivisions within an Item.

110. Next, Brazil appeals the Panel's finding that the Explanatory Notes to heading 02.10 of the EC Schedule and to Chapter 2 of the Harmonized System are not helpful in determining the meaning of the tariff concession in heading 02.10. Brazil takes issue in particular with the Panel's finding that the notions of "preparation" and "preservation" may not be mutually exclusive in the context of heading 02.10. Contrary to the Panel's conclusion, the Explanatory Note to heading 02.10 does not merely "suggest", but actually "asserts" that the processes referred to in heading 02.10 are preparation processes.209 Brazil's also argues that the Panel gave "unjustified significance" to the overlap in the definitions of the terms "preparation" and "preservation".210 Brazil argues that "preparation" determines classification under heading 02.10, even if the processes of preparation may, in some cases and to some degree, also preserve meat.

111. Brazil furthermore argues that the Panel committed a legal error by concluding that Rule 3 of the General Rules for the Interpretation of the Harmonized System ("General Rule 3") was not applicable to the case before it. Brazil contends that the Panel's reliance on, and acceptance of, the parties' alleged position that the products at issue did not fall under two or more headings, such that the condition for applicability of General Rule 3 was not fulfilled, was "a grave legal error".211 The parties held "separate and distinct" understandings that led to different conclusions212; this should have signalled to the Panel that the products at issue were "prima facie classifiable" under two headings.213 Moreover, the Panel assumed that the products at issue were not "prima facie classifiable" under two or more headings, despite the fact that it had not, after a textual and contextual analysis, decided whether the products at issue fell under heading 02.10. Finally, the Panel "utterly ignored" Brazil's objection to its decision to not apply General Rule 3, expressed in Brazil's comments on the Panel's Interim Report.214

112. Should the Appellate Body find that the Panel erred in not applying General Rule 3, Brazil requests that the Appellate Body complete the Panel's legal analysis and find that General Rule 3 leads to classification of the products at issue under heading 02.10. Brazil argues that the factual findings of the Panel imply that, under General Rule 3, the products at issue are different from unsalted products and that these differences make the products at issue "more specific".215 The term "salted" in heading 02.10 describes the products at issue more specifically than the term "poultry" in heading 02.07. This is because heading 02.10 does not cover "other" meat that has not been specifically provided for under other headings but, rather, all kinds of meat, "as long as that meat has been prepared by salting, drying or smoking".216 Brazil also refers to the letter of the WCO to the Panel in support of its argument that "salting" is more specific than "freezing". According to Brazil, even if heading 02.10 were not "more specific" within the meaning of General Rule 3(a), General Rule 3(c) would be applicable, leading to a classification of the products at issue under heading 02.10.
 

To continue with  B. Claims of Error by Thailand - Other Appellant

1 Complaint by Brazil, WT/DS269/R, 30 May 2005; Complaint by Thailand, WT/DS286/R, 30 May 2005. At the request of the European Communities, pursuant to Article 9.2 of the DSU, the Panel issued two separate reports. These two reports have the same descriptive part and findings; the only "material difference" between these separate reports is the cover page and the conclusions. (Panel Reports, para. 6.21)

2 Panel Reports, para. 2.1.

3 Ibid., paras. 2.1 and 7.60.

4 Panel Reports, para. 7.3.

5 WT/DS269/3 (Brazil), 22 September 2003; WT/DS286/5 (Thailand), 28 October 2003.

6 Panel Reports, paras. 7.21-7.22.

7 EC Regulation 1223/2002 and EC Decision 2003/97/EC refer to frozen boneless salted chicken cuts impregnated with salt, with a salt content of 1.2 to 3 pr cent.

8 Panel Reports, para. 7.32.

9 Ibid., para. 7.36.

10 Ibid., para. 7.75.

11 Panel Reports, para. 7.81.

12 Ibid., para. 7.86. (footnote omitted)

13 Done at Vienna, 23 May 1969, 1155 UNTS 331; 8 International Legal Materials 679.

14 Panel Reports, para. 7.331.

15  Ibid., para. 7.151.

16 Ibid., para. 7.331.

17 Ibid., para. 7.151.

18 Panel Reports, para. 7.331.

19 Ibid., para. 7.303.

20 Ibid., para. 7.331.

21 Ibid.

22 Ibid., para. 7.423.

23 Ibid.

24 Panel Reports, para. 8.1.

25 Ibid., para. 8.2.

26 WT/DS269/6, WT/DS286/8 (attached as Annex I to this Report).

27 WT/AB/WP/5, 4 January 2005.

28 Pursuant to Rule 21(1) of the Working Procedures.

29 WT/DS269/7 (Brazil) (attached as Annex II to this Report); WT/DS286/9 (Thailand) (attached as Annex III to this Report).

30 Pursuant to Rule 23(3) of the Working Procedures.

31 Pursuant to Rules 22 and 23(4) of the Working Procedures.

32 Pursuant to Rule 24(1) of the Working Procedures.

33 In a letter dated 18 July 2005, Brazil requested the Appellate Body to "disregard" avec's amicus curiae brief. In a letter dated 21 July 2005, and at the oral hearing, Thailand requested that the Appellate Body "not take [this brief] into account". In its closing statement at the oral hearing, Brazil contested the arguments made by avec.

34 Chapter 2 of the Harmonized Commodity Description and Coding System is attached as Annex IV to this Report.

35 European Communities' appellant's submission, para. 62 (referring to Panel Reports, paras. 7.117-7.149).

36 Ibid. (referring to the Panel's reference to Sir Ian Sinclair, The Vienna Convention on the Law of Treaties, 2nd edn (Manchester University Press, 1984), p. 121, quoted at Panel Reports, footnote 153 to para. 7.105).

37 Ibid., para. 62.

38 Ibid., para. 63 (referring to Panel Reports, para. 7.146).

39 Ibid., para. 63.

40 Ibid., paras.  63-64 (referring to Panel Reports, footnote 249 to para. 7.146).

41 European Communities' appellant's submission, paras. 66-67.

42 Ibid., para. 69 (quoting Panel Reports, para. 7.149).

43 Ibid., para. 70.

44 Ibid., para. 77.

45 Ibid.

46 Ibid., para. 79.

47 European Communities' appellant's submission, para. 81 (quoting Panel Reports, para. 7.162).

48 Ibid., para. 82 (quoting Panel Reports, para. 7.161).

49 Ibid., para. 83.

50 Ibid., heading III.C.4.

51 Ibid., para. 89.

52 In its appellant's submission, the European Communities referred to this Note as "Chapter Note". (Ibid., para. 92) Subsequently, the European Communities clarified that this Note is properly characterized as "Explanatory Note to Chapter". (European Communities' appellee's submission, footnote 50 to para. 71)

53 European Communities' appellant's submission, para. 93.

54 Ibid., para. 96.

55 Ibid., para. 98.

56 Ibid., heading III.C.5.

57 Ibid., para. 100.

58 1937 Draft Customs Nomenclature of the League of Nations.

59 1959 Brussels Convention on Nomenclature for the Classification of Goods in Customs Tariffs.

60 European Communities' appellant's submission, para. 101 (quoting Panel Reports, para. 7.198).

61 Ibid., para. 103.

62 Ibid., para. 106.

63 European Communities' Notice of Appeal (attached as Annex I to this Report), paragraph 2(c). (footnote omitted)

64 European Communities' appellant's submission, paras. 111-112 (quoting Appellate Body Report, Japan – Alcoholic Beverages II, p. 13, DSR 1996:I, 97, at 106; Appellate Body Report, Chile – Price Band System, para. 214; and Appellate Body Report, US – Gambling, paras. 191-192).

65 Ibid., para. 116.

66 Ibid., para. 118 (referring to the quotation of the ILC Commentary in Panel Reports, para. 7.252).

67 European Communities' appellant's submission, para. 118.

68 Ibid., para. 120 (quoting Article 31(3)(b) of the Vienna Convention).

69 Ibid., para. 119 (quoting Yearbook of the International Law Commission (1966), Vol. II, p. 222, para. 15).

70 Ibid., footnote 68 to para. 119 (quoting M. Yasseen, "L'interprétation des Traités d'après la Convention de Vienne sur le Droit des Traités", in  Recueil des Cours de l'Académie de Droit International (1976), Vol. III, p. 48, para. 16).

71 Ibid., paras. 118-128 (quoting Appellate Body Report, US – Gambling, para. 192).

72 Ibid., para. 123 (quoting Appellate Body Report, Japan – Alcoholic Beverages II, p. 14, DSR 1996:I, 97, at 108).

73 Ibid., para. 124.

74 Ibid., paras. 125-126 (referring to Appellate Body Report, Japan – Alcoholic Beverages II, pp. 10-12, DSR 1996:I, 97, at 106-107; Decision by the Arbitrator, US – Offset Act (Byrd Amendment) (EC) (Article 22.6), footnote 57 to para. 3.42; Panel Report, US – FSC, para. 7.75; Appellate Body Report, US – Gambling, paras. 192-194; Appellate Body Report, Chile – Price Band System, para. 232; and Panel Report, Canada – Patent Term, para. 5.5 and footnote 48 to para 6.89).

75 European Communities' appellant's submission, para. 136 (referring to Articles 7 and 8 of the Harmonized System Convention).

76 Ibid., para. 131 (quoting Appellate Body Report, EC – Computer Equipment, para. 109).

77 Ibid., para. 143.

78 Ibid., para. 148.

79 Ibid., para. 170.

80 European Communities' appellant's submission, para. 273.

81 Ibid., para. 159 (referring to Appellate Body Report, EC – Computer Equipment, para. 94).

82 Ibid., para. 146 (referring to Panel Reports, paras. 7.269-7.270). See also European Communities' appellant's submission, para. 164.

83 Article 1(c) of the Harmonized System Convention; European Communities' appellant's submission, para. 154 (quoting Panel Reports, para. 7.284).

84 European Communities' appellant's submission, para. 157.

85 European Communities' appellant's submission, para. 165 and footnote 94 thereto.

86 Ibid., para. 167.

87 Ibid., paras. 168-170.

88 Ibid., paras. 171-174. See also para. 219.

89 Ibid., paras. 180-181. The European Communities relies, in support of its argument, on Appellate Body Report,  US – Line Pipe, para. 81 (on the object and purpose of Article XIX of the GATT 1994); Appellate Body Report, Chile – Price Band System, para. 234 (on the object and purpose of Annex 4 of the Agreement on Agriculture); and Appellate Body Report, EC – Computer Equipment, para. 84 (stating that concessions provided for in a GATT Schedule are, by virtue of Article II:7 of the GATT 1994, part of the terms of the treaty).

90 Panel Reports, para. 7.320 (quoted in European Communities' appellant's submission, para. 183).

91 European Communities' appellant's submission, paras. 184-188 (referring to Appellate Body Report, EC – Computer Equipment, para. 82; and Appellate Body Report, US – Gambling, para. 189).

92 Ibid., para. 189.

93 Ibid., para. 190 (referring to Panel Reports, para. 7.323).

94 Ibid., para. 207.

95 Ibid., paras. 212-218.

96 Yasseen, supra, footnote 70, p. 93.

97 European Communities' appellant's submission, paras. 228-230.

98 Ibid., para. 233 (referring, inter alia, to Appellate Body Report, EC – Computer Equipment, para. 93).

99 Ibid., paras. 234-235.

100 Ibid., para. 240.

101 Ibid., paras. 245-253. The European Communities relies on Appellate Body Report, US – Gambling, footnote 244 to para 196; Panel Report, Mexico – Telecoms, para. 7.44; Appellate Body Report, Canada – Dairy, para. 139; Appellate Body Report, EC – Computer Equipment, para. 92; and Yasseen, supra, footnote 70, p. 90.

102 European Communities' appellant's submission, para. 254 (referring to Panel Reports, para. 7.346).

103 European Communities' appellant's submission, para. 262.

104 Ibid., para. 288.

105 Ibid., para. 273.

106 European Court of Justice, Judgment, Gausepohl-Fleisch GmbH v. Oberfinanzdirektion Hamburg, Case C-33/92, ECR [1993] I-3047.

107 European Communities' appellant's submission, paras. 275-276 (referring to Panel Reports, paras. 7.398-7.400).

108 Ibid., para. 278 (referring to Panel Reports, para. 7.402).

109 Ibid., para. 286.

110 Ibid., para. 294.

111 European Communities' appellant's submission, para. 295.

112 Ibid., para. 306.

113 Ibid., para. 307.

114 Ibid., para. 304.

115 Ibid., paras. 312-314 (referring to Panel Reports, para. 7.422).

116 Ibid., para. 313.

117 European Communities' appellant's submission, para. 314.

118 Ibid., paras. 315-318 (referring to Panel Reports, paras. 7.332 and 7.423).

119 Brazil's appellee's submission, para. 70.

120 Ibid., para. 75.

121 Ibid., para. 83.

122 Ibid., para. 86; Panel Reports, p. C-143, para. 12.

123 Ibid., heading II.B.2.

124 Brazil's appellee's submission, para. 100.

125 Ibid., para. 102 (referring to the Explanatory Note to Chapter 2 of the Harmonized System).

126 Ibid., para. 116.

127 Brazil's appellee's submission, para. 123.

128 Ibid., para. 125 (referring to Panel Reports, para. 7.361).

129 Ibid., para. 130.

130 Ibid., paras. 133-134 (referring to Appellate Body Report, Chile – Price Band System, para. 272).

131 Ibid., para. 135.

132 Brazil's appellee's submission, para. 141.

133 Ibid., para. 147.

134 Ibid., para. 149.

135 Ibid., para. 150.

136 Brazil's appellee's submission, paras. 151-169.

137 Ibid., para. 153 (referring to European Communities' response to Question 53 posed by the Panel, Panel Reports, p. C-92).

138 Ibid., paras. 165-166 (referring to Appellate Body Report, EC – Computer Equipment, paras. 93 and 95-96)

139 Ibid., paras. 160 and 162-164 (referring to European Communities' appellant's submission, paras. 159-162; and Panel Reports, para. 7.393). These instruments include the ECJ's Dinter and Gausepohl judgments and the Explanatory Notes to the Combined Nomenclature.

140 Brazil's appellee's submission, para. 169 (referring to Panel Reports, para. 7.256).

141 Ibid., para. 155 (referring to Panel Reports, para. 7.284).

142 Ibid., para. 155.

143 Ibid., paras. 157-158 (referring to Panel Reports, para. 7.288).

144 Ibid., para. 179 (referring to European Communities' appellant's submission, para. 189).

145 Brazil's appellee's submission, para. 202 (referring to European Communities' appellant's submission, para. 207).

146 Ibid., para. 194.

147 Ibid., paras. 207-209 (referring to Sinclair, supra, footnote 36, p. 138).

148 Ibid., para. 216 (referring to Appellate Body Report, EC – Computer Equipment, para. 93).

149 Brazil's appellee's submission, para. 223.

150 Ibid., paras. 224-227 (referring to European Communities' appellant's submission, para. 252; Appellate Body Report, US – Gambling, footnote 244 to para. 196; Appellate Body Report, EC – Computer Equipment, paras. 92 and 94; and Panel Report, Mexico – Telecoms, para. 7.68).

151 European Court of Justice, Judgment, Dinter v Hauptzollamt Köln-Deutz, Case C-175/82, ECR [1983] 969; ECJ Judgment Gausepohl, supra, footnote 106.

152 Brazil's appellee's submission, para. 250.

153 Ibid., para. 257.

154 Brazil's appellee's submission, para. 258.

155 Ibid., paras. 263-276 (referring to European Communities' appellant's submission, paras. 301).

156 Ibid., para. 276.

157 Thailand's appellee's submission, paras. 13-14 (quoting Sinclair, supra, footnote 36, p. 121). (emphasis added by Thailand)

158 Thailand's appellee's submission, paras. 16-17 (referring to Appellate Body Report, US – Gambling, para. 166; and Appellate Body Report, US – Offset Act (Byrd Amendment), para. 248).

159 Ibid., paras. 21-23 (referring to Appellate Body Report, US – Steel Safeguards, para. 499; and Appellate Body Report, EC – Hormones, paras. 133 and 138).

160 Ibid., para. 27.

161 Ibid., para. 28 (quoting Panel Reports, para. 7.149).

162 Thailand's appellee's submission, para. 36.

163 Ibid., para. 39.

164 Ibid., para. 41.

165 Thailand's appellee's submission, paras. 60-62 (referring to Appellate Body Report, EC – Computer Equipment, para 93; and Appellate Body Report, EC – Export Subsidies on Sugar, para. 187).

166 Ibid., paras. 65-70 (referring to European Communities' appellant's submission, para. 117).

167 Ibid., para. 69 (referring to Yasseen, supra, footnote 70, p. 49, para. 18; and A. Aust, Modern Treaty Law and Practice (Cambridge University Press, 2000), pp. 191-193).

168 Ibid., para. 71 (referring to the European Communities' argument that such acts are "interpretations under Article IX:2 of the WTO Agreement, Decisions by the [Harmonized System] Committee or Council relating to the interpretation of the [Harmonized System] nomenclature, or acts that result from an equally rigorous procedure". (European Communities' appellant's submission, para. 144))

169 Thailand's appellee's submission, paras. 72-74 (referring to Appellate Body Report, Japan – Alcoholic Beverages II, pp. 13-14, DSR 1996:I, 97, at 106-107; Appellate Body Report, US – Gambling, para. 193; Panel Report, US – FSC, para. 7.75; and Panel Report, Canada – Patent Term, footnote 48 to para. 6.89).

170 Panel Reports, paras. 7.253-7.254; Thailand's appellee's submission, para. 76 (referring to European Communities' appellant's submission, para. 129).

171 Thailand's appellee's submission, para. 76 (referring to European Communities' appellant's submission, para. 131; and Appellate Body Report, EC – Computer Equipment, para. 109).

172 Ibid., para. 84 (quoting Panel Reports, para. 7.289).

173 Ibid., para. 90.

174 Ibid., para. 95 (referring to Appellate Body Report, EC – Computer Equipment, para. 95).

175 Thailand's appellee's submission, para. 98 (referring to European Communities' appellant's submission, para. 151).

176 Ibid., para. 104.

177 Ibid., para. 160.

178 Ibid., para. 105 (referring to Panel Reports, paras. 7.302 and 7.270).

179 Ibid., para. 106.

180 Thailand also refers to I. Brownlie, Principles of Public International Law, 6th edn (2003), p. 6.

181 Thailand's appellee's submission, para. 112.

182 Ibid., para. 107.

183 Ibid., para. 109 (referring to the standard for such a claim, as set out in Appellate Body Report,
US – Steel Safeguards, paras. 498-499).

184 Ibid., para. 121 (referring to Appellate Body Report, EC – Computer Equipment, paras. 13 and 85).

185 Ibid., para. 126 (referring to the European Communities' appellant's submission, para. 189).

186 Ibid., para. 125 (quoting Panel Reports, para. 7.320).

187 Ibid., heading II.D.2.

188 Ibid., para. 129.

189 Thailand's appellee's submission, para. 132.

190 Ibid., para. 134 (quoting European Communities' appellant's submission, para. 212).

191 Ibid., para. 139.

192 Ibid., para. 144 (referring to European Communities' appellant's submission, para. 229; and quoting Appellate Body Report, EC – Computer Equipment, para. 86; and Sinclair, supra, footnote 36, p. 141).

193 Thailand's appellee's submission, para. 161.

194 Ibid., paras. 172-176.

195 Brazil's other appellant's submission, para. 17.

196 Ibid., para. 21.

197 Ibid.

198 Ibid., para. 27.

199 Ibid., para. 28. (original emphasis)

200 Brazil's other appellant's submission, para. 27.

201 Ibid., para. 31. (emphasis added)

202 Ibid., para. 36.

203 Ibid., para. 37.

204 Ibid., para. 42.

205 Ibid., para. 45.

206 Ibid., para. 49.

207 Brazil's other appellant's submission, para. 63 (quoting Appellate Body Report, EC – Computer Equipment, para. 67).

208 Ibid., para. 64.

209 Brazil's other appellant's submission, para. 80. (original emphasis omitted)

210   Ibid., para. 81.

211 Ibid., para. 93.

212 Ibid., para. 94.

213 Rule 3 of the General Rules for the Interpretation of the Harmonized System.

214 Brazil's other appellant's submission, para. 101.

215 Ibid., para. 104.

216 Ibid.