27 January 1994

Table of Contents

I. INTRODUCTION

II. FACTUAL ASPECTS

III. FINDINGS REQUESTED BY THE PARTIES

IV. MAIN ARGUMENTS OF THE PARTIES

V. ARGUMENTS PRESENTED BY THE UNITED STATES AS A THIRD PARTY

VI. CONCLUSIONS

VIII. SUMMARY OF CONCLUSIONS AND RECOMMENDATION

ANNEX 1

ANNEX 2

ANNEX 3

* English only

1. On 30 April 1992, the European Economic Community (hereinafter "EEC") requested consultations with Brazil under Article 3:2 of the Agreement on Interpretation and Application of Articles VI, XVI and XXIII of the General Agreement on Tariffs and Trade (hereinafter "Agreement"), regarding the imposition of provisional countervailing measures on 9 April 1992 by Brazil on imports of milk powder and certain types of milk from the EEC. These consultation were held on 23 June 1992. On 6 July 1992, the EEC requested the Committee on Subsidies and Countervailing Measures (hereinafter "Committee") to conciliate on this matter under Article 17 of the Agreement (SCM/149). The conciliation request was considered at a special meeting of the Committee on 21 July 1992, and the EEC and Brazil were encouraged to find a mutually satisfactory solution consistent with Article 17:2 of the Agreement (SCM/M/61).

2. Brazil imposed definitive countervailing duties on milk powder and certain types of milk on 11 August 1992. On 31 August 1992, the EEC requested consultations with Brazil under Article 3:2 with regard to the definitive duties. These consultations were held on 5 October 1992. On 1 October 1992, the EEC requested conciliation under Article 17 regarding the definitive duties (SCM/151), and the Committee conciliated on this matter at its regular meeting on 28 October 1992 (SCM/M/62). The conciliation process did not lead to resolution of this dispute. On 23 December 1992, under Article 17:3 of the Agreement, the EEC requested the establishment of a panel on Brazil's imposition of provisional and definitive countervailing duties on milk powder and certain types of milk from the EEC (SCM/155).

3. At a special meeting on 25 January 1993, the Committee agreed to establish a panel on the matter (SCM/M/64). Australia and the United States reserved their rights to present their views to the panel.

4. On 3 March 1993, the Committee was informed by its Chairman in document SCM/164 that the terms of reference and composition of the Panel were as follows:

Terms of Reference:

Composition:

5. The Panel met with the parties to the dispute on 22-23 April and 17-18 June 1993. The Panel received a written submission from the delegation of the United States. The Panel submitted its findings and conclusions to the parties to the dispute on 16 December 1993.

6. The dispute before the Panel concerned the imposition by Brazil of provisional and definitive countervailing duties on milk powder and certain types of milk from the EEC. The provisional countervailing duties were imposed by Administrative Order No. 297 of 8 April 1992 (see ANNEX 1), and the definitive duties were imposed by Administrative Order No. 569 of 10 August 1992 (see ANNEX 2). For provisional duties, the effective date was 9 April 1992, and the effective date for the definitive duties was 11 August 1992.

7. The investigation in this case was opened on the basis of a request for initiation of an investigation filed on behalf of the Brazilian dairy industry by Sociedada Rural Brasilieira (Brazilian Rural Society, or SRB) and by Associacao Brasilieira de Productores de Leite B (Brazilian "B" Milk Producers Association, or ABPLB). By a letter dated 27 February 1992, Brazil notified the EEC of the request made by the Brazilian Rural Society to Brazil's relevant Department (DECEX) that an investigation be opened into the subsidization by the EEC of the manufacture of milk powder and its export to Brazil, and into the injury caused or likely to be caused to domestic production as a result of such subsidization. The request concerned products falling within sixteen tariff headings of the Brazilian Customs Tariff ¹, and the subsidies referred to in the request were those provided for in the EEC Regulations on export refund programmes and government aids for skimmed milk and butter, and on market expansion programmes. The letter offered the opportunity for consultations aimed at clarifying the situation and finding a solution satisfactory to both sides. The letter stated that, pursuant to Article 9 of Brazil's Resolution CPA No. 1227 of 2 June 1987, the EEC had fifteen days from the date of that notification to express formal interest in such consultations, which should be held within a month of that same date.

8. Public notice of initiation of an investigation was given by Brazil's Director of the Foreign Trade Department (DECEX) of the Ministry of Economic Affairs, Finance and Planning, in DECEX Circular No. 83, dated 16 March 1992 (see ANNEX 3). The product coverage included eleven headings of the Brazilian Customs Tariff Code. ²

9. Brazil imposed provisional countervailing duties on imports falling under seven headings of the Brazilian Customs Tariff by Administrative Order No. 297 of 8 April 1992. ³ These duties ranged from 31 to 52 per cent. The EEC protested against the imposition of these duties and by letters dated 30 April and 6 May 1992 requested full evidence of the basis on which the preliminary affirmative finding was made. In its letter of 30 April 1992, the EEC stated its wish to hold bilateral consultations under Article 3:2. In its letter of 6 May 1992, the EEC asked for the relevant data on the basis of which the provisional duties had been imposed. Brazil accepted the request for consultations through a letter dated 19 May 1992. Brazil's response to the questions in the EEC's letter of 6 May 1992 were provided in its letter of 27 July 1992 in which Brazil provided the EEC with its data on domestic production of milk powder.

10. On 18 May 1992, Brazil submitted a questionnaire to the EEC, requesting that the authorities in the EEC also forward the questionnaire to the relevant exporters. The accompanying letter ⁴ informed the EEC that Brazil's Ministry of Economy, Finance and Planning, by Decision No. 83 of 16 March 1992 published in the Official Journal of the Federal Government on 17 March 1992, regarding the case MEFP No. 10.768.007731/91/23, and considering that there was adequate evidence of subsidies to the EEC's production and exports of milk powder and of injury to the Brazilian industry resulting from the EEC's subsidies, had decided to open an investigation to demonstrate the existence of subsidies, of injury and of a causal link between the two regarding the EEC's exports of milk powder. ⁵ In a letter dated 25 May 1992, the EEC stated that, inter alia, it would like to hold consultations quickly in order to see positive evidence that the complaint met the requirements of Article 2:1 of the Agreement and to receive replies to the points raised in its letters of 30 April and 6 May 1992. This letter also stated that "[p]rovided the provisional measures are withdrawn and depending on the outcome of the consultation, the Commission will give due consideration to the questionnaire, but only as regards those parts which concerned it directly. ... It should be understood that the period for completing questionnaires, should the need arise, should not start until after the provisional measures have been withdrawn and all consultations have been completed." The EEC's response to the questionnaire was notified on 24 June 1992 to Brazil's Mission to the EEC in Brussels. In its response, the EEC provided to Brazil a copy of the legislation, dated 12 June 1992, which provided the basis for the assistance given to producers and exporters of milk powder in the EEC and identified the amount of restitution for two tariff lines concerning skimmed milk powder and whole milk powder. The EEC also provided statistics relating to the export of skimmed milk and whole milk powder from the EEC to Brazil and to third countries for the period 1985-1991. The EEC also informed Brazil that full data for the first two months of 1992 were not yet available, and that the EEC was willing to provide further information on request.

11. Meanwhile, on 25 May 1992, a representative of the EEC visited the Ministry of Economy, Finance and Planning in Brasilia and obtained certain portions of the petition submitted by the domestic industry. The EEC did not consider this meeting to be a consultation meeting under the Agreement.

12. Administrative Order No. 569, dated 10 August 1992, imposed definitive countervailing duties of 20.7 per cent on imports under eight headings of the Brazilian Customs Tariff Code. ⁶ On 20 August 1992, a rectification of the import data, which was earlier mentioned in paragraph (e) of the Administrative Order No. 569, was published and the EEC was informed of this change. ⁷ Administrative Order No. 569 stated that the "period of inquiry concerned the 12 months prior to the date of publication of DECEX Circular No. 83 of 16 March 1992, namely April 1991-March 1992." The Order entered into force on the date of its publication in the Official Gazette of Brazil (11 August 1992) and will remain in force for five years.

13. The EEC requested the Panel to find that:

14. The EEC initially requested the Panel to recommend that the provisional and definitive countervailing duties imposed by Brazil by Administrative Orders No. 297 of 8 April 1992 and No. 569 of 10 August 1992 respectively on imports of milk powder and certain types of milk originating in the EEC be immediately lifted, and that Brazil, with respect to imports of milk powder and certain types of milk originating in the EEC, reimburse any provisional and definitive countervailing duties imposed in violation of the provisions of the Agreement. In support of this request, the EEC stated that at least one panel report involving countervailing duties had been adopted, which had recommended the reimbursement of duties found to have been imposed in a manner inconsistent with GATT obligations. ⁸

15. The EEC subsequently informed the Panel that it was withdrawing the request for reimbursement. The EEC said that its initial request, which was motivated by the serious violations by Brazil of the provisions of the Agreement, was a policy recommendation that was normally within the competence of the Panel. However, in view of the EEC's general position that it should be left to the signatory concerned to determine the means by which it should bring its practice, if found contrary to the Agreement, into conformity with its provisions, the EEC no longer considered it necessary for the Panel to specifically recommend reimbursement, although in this particular case reimbursement may be the only way for Brazil to bring its action into conformity with the Agreement.

16. Brazil requested the Panel to find that the imposition of provisional and definitive duties by Brazil was in conformity with all applicable requirements of the Agreement. Brazil argued that the imposition of provisional measures in this case was not inconsistent with the requirements of Articles 1, 5:1 or 6 of the Agreement, and that the imposition of definitive duties was not inconsistent with Article 6 of the Agreement. Brazil had conducted the required investigation and there was ample evidence to support the conclusions regarding the imposition of the countervailing duties.

17. Regarding the EEC's request for reimbursement, Brazil recalled that the Committee established the Panel on the basis of document SCM/155 of 5 January 1993. In that document, the EEC had requested the establishment of the panel and that the panel "recommend that the countervailing duties ... be immediately lifted". There was no request in document SCM/155 for a recommendation that the duties be reimbursed. In its submission to the Panel, the EEC had gone beyond the request mentioned in document SCM/155 by requesting that the duties be reimbursed.

18. The main arguments of the parties to the dispute related to specific claims of the EEC with regard to provisional countervailing duties and definitive countervailing duties on milk powder and certain types of milk from the EEC. Section IV.3 presents arguments relating to provisional duties on imports of milk powder and certain types of milk, Section IV.4 presents the arguments relating to definitive duties on imports of milk powder, and Section IV.5 presents arguments relating to provisional and definitive countervailing duties on certain types of milk. In response to the EEC's claims, Brazil presented some evidence and arguments before the Panel which the EEC argued were not admissible because they were not reflected in the Administrative Orders No. 297 and No. 569. The main arguments relating to admissibility are presented in Section IV.1. Many of the arguments presented by the two parties to this dispute touched upon the importance of procedural obligations under the Agreement. In that context, Brazil argued that though the procedural obligations were important, the main issues in this case related to substantive aspects and those were what the Panel should focus on. The arguments relating to procedural and substantive aspects of the case are presented in Section IV.2.

1. Admissibility of Certain Evidence and Arguments

19. The EEC said that in response to the EEC's arguments on the insufficiency of the decisions published by Brazil, Brazil had for the first time adduced before the Panel what it considered to be relevant evidence, and for the first time made the argument that its decisions were based on best information available. The EEC argued that for evidence and arguments to be admissible before the Panel such evidence and arguments should have been reflected in the Administrative Orders imposing the measures, as required by Article 2:15 of the Agreement. Therefore, Brazil's evidence and arguments presented for the first time before the Panel were not admissible.

20. The EEC argued that in response to the EEC's claim that Administrative Orders No. 297 and 569 did not contain any basis for establishing material injury to domestic producers as required under the Agreement, Brazil had presented new evidence to the Panel in a belated attempt to justify the lack of factual basis and of a reasonable motivation in the two decisions imposing provisional and definitive duties in this case. Moreover, in an attempt to fit the data better to its arguments Brazil had repeatedly revised the data which it had provided to the Panel: for instance, Brazil had kept changing the figures of EEC's exports to Brazil of the products in question (see Section IV.4(a)). Also, the time period covered by the new data provided by Brazil was not always the same and furthermore, it differed from the period for which data was provided in Administrative Order No. 569.

21. The EEC said that the new evidence presented by Brazil related to the apparent consumption of milk powder in Brazil, the alleged volume of imports from the EEC, the share of these imports in Brazilian consumption, average producer prices of milk powder in Brazil, per capita income of agricultural workers, the sales of rehydrated milk in Brazil, and the effect of price controls on investment and productivity levels. Also for the first time, Brazil had presented in its written submission explanations of the relevance of that data for its decisions to impose countervailing duties. Similarly, for the first time Brazil had presented arguments based on a confidential World Bank report, the reference to the "formal and informal markets for milk in Brazil", and had made an attempt to address the possible impact on its domestic producers of factors other than the allegedly subsidized imports from the EEC (including information relating to imports of the products in question from Poland and Switzerland, and the alleged effect of Community exports on market prices in Brazil). The EEC argued that all the new information and data, irrespective of whether it was relevant or correct, was inadmissible and therefore should not be taken into account by the Panel in its examination.

22. The EEC explained its objections regarding the admissibility of the data and arguments presented by Brazil by pointing out that in accordance with Article 2:15 of the Agreement, Brazil had an obligation in its decisions of 8 April and 10 August 1992 "to set forth the findings and conclusions reached on all issues of fact and law considered material by the investigating authorities, and the reasons and basis therefor ...". Article 5:1 required the investigating authorities to consider certain factors and to make a provisional determination based on sufficient evidence with regard to those factors. Equally, Article 6:1 required the investigating authorities to consider certain factors and to make a definitive determination based on positive evidence with regard to these factors. Therefore, the legal question raised by the references made by Brazil to new information, data and considerations not previously included or mentioned in the Administrative Orders Nos. 297 and 569 was whether the Panel could properly review the conformity of these Orders with the Agreement by reference to such new information, data and considerations. In order to permit effective review by the Panel of the provisional and definitive duty determinations, the public notice referred to in Article 2:15 of the Agreement required an adequate explanation by the investigating authorities of how they had considered and evaluated the evidence they used in their provisional or definitive findings with regard to the factors provided for in Articles 5:1 and 6:1 to 6:4 of the Agreement. This was what was meant by Article 2:15 of the Agreement, which required the investigating authorities to state in the public notice "the findings and conclusions reached on all issues of fact and law considered material by the investigating authorities, and the reasons and basis therefor". It followed that Article 2:15 served the important purpose of transparency by requiring duly motivated decisions as the basis for the imposition of countervailing duties. The purpose of Article 2:15 would be frustrated if in a dispute settlement proceeding under the Agreement a signatory were allowed to defend challenged provisional and definitive determinations by reference to alleged facts and reasons for such determinations which were not part to the public notice of reasons accompanying these determinations. ⁹

23. In addition, the EEC argued that for a panel to review provisional and definitive determinations by reference to facts and considerations not previously mentioned in the public notice of reasons would also be inconsistent with the requirements of an orderly and efficient conduct of the dispute settlement process under the Agreement. A duly motivated and public statement of the reasons underlying a provisional or definitive countervailing duty determination at the time of that determination enabled the signatories to the Agreement to assess whether recourse to the dispute settlement mechanism was appropriate and provided a basis for a delimitation of the object of such dispute settlement proceedings. Furthermore, it was important to note that in the light of the wording of Administrative Orders Nos. 297 and 569, the EEC had no reason to believe that the countervailing duty determinations of Brazil were based on other considerations than those not reflected in these Orders. The task of the Panel was to review the consistency with the Agreement of Brazil's provisional and definitive duty determinations as stated in Orders No. 297 and No. 569, not the unpublished administrative record upon which these determinations were based. Therefore, even if Brazil was correct to argue that these facts, data and considerations existed in the administrative record upon which its countervailing duties were based, it was only the public notice issued pursuant to Article 2:15, not the administrative record per se, which was relevant for review by the Panel as a statement of reasons justifying the countervailing duties. Moreover, it was noteworthy that Brazil, in addition to not referring to these facts in Administrative Orders No. 297 and 569, did not provide them in its responses to the written requests for information in the EEC's letters of 30 April, 6 May and 31 August 1992.

24. The EEC argued that a proper review of Brazil's provisional and definitive countervailing duty determinations against the requirements of "sufficient evidence" in Article 5:1 and "positive evidence" in Article 6:1 and the footnote thereto meant that the Panel should examine whether the factual basis of the findings stated in the determinations were discernible from the text of Administrative Orders Nos. 297 and 569 and reasonably supported these findings. In carrying out this review, the Panel was not allowed to conduct a de novo review of the evidence relied upon by Brazil or to substitute its own judgement as to the sufficiency of the particular evidence considered by the investigating authorities in Brazil. To do so would ignore that the task of the Panel was not to make its own independent evaluation of the facts before the Brazilian authorities on whether the conditions of Article 5:1 and 6:1 to 4 of the Agreement were fulfilled, but to review the determination as made by Brazil for consistency with the above Articles of the Agreement, bearing in mind that in a given case reasonable minds could differ as to the significance to be attached to certain facts. ¹⁰ Therefore, the role of the Panel in reviewing Brazil's provisional and definitive countervailing duties was to examine whether the factual findings and analysis actually reflected in the decisions imposing the duties constituted sufficient or positive evidence in support of the findings made by the Brazilian authorities. The Panel would exceed the scope of its competence if in its review it took into account facts, information and considerations not included or mentioned in the Administrative Orders Nos. 297 and 569.

25. Brazil denied that it had adduced most of the evidence for the first time before the Panel, and argued that the EEC had become aware of the evidence for the first time on reading Brazil's submission to the Panel because the EEC had refused throughout the investigation process to engage in any meaningful dialogue which would have resulted in the information being imparted to the EEC. According to Brazil, the EEC had consistently "stone-walled" Brazil, had refused consultations and later had insisted that consultations had failed, and had refused to discuss the merits of the case. The EEC did not address its export subsidies which were well known to distort world trade in milk powder and other agricultural products, nor the sharp increase in its subsidized exports of milk powder to Brazil during the period of investigation as demonstrated by Brazil, nor the impact of these imports on market share, prices or investment in Brazil as established by the information before the Panel. The evidence provided by Brazil was not "completely new" but it was "current" evidence, and most assuredly was in fact "previously used" by Brazil during the investigation. This evidence was in the record of the investigation and could have been examined in Brasilia by the EEC officials. The EEC had no interest in doing so because the facts established by the investigation conducted by Brazil justified the imposition of both provisional and definitive countervailing duties.

26. In response to the EEC's arguments regarding the role of the Panel, Brazil argued that what the EEC was attempting to impose on the Panel was not justified under Article VI of the General Agreement or Article 18:1 of the Agreement. The latter provision directed the Panel to "review the facts of the matter and, in light of such facts, ... present to the Committee its findings concerning the rights and obligations of the signatories". Thus, no panel could perform its function if it was tied by the condition being imposed by the EEC.

27. Further, Brazil argued that the panel reports cited by the EEC did not support the EEC's position that for evidence and arguments to be admissible Article 2:15 required that such evidence and arguments should have been reflected in the Administrative Orders imposing the countervailing measures. The cited paragraphs in the report on "United States - Salmon" dealt with the volume and price effects of the imports in question and not with the alleged error in public notices of the determinations. The cited paragraphs in the report on "United States - Softwood Lumber" dealt with the evidence necessary to initiate an investigation, and the EEC had not complained that Brazil did not have adequate reason to initiate the investigation. Brazil agreed that a superficial reading of the paragraph cited from the report on "Korea - Polyacetal Resins" did suggest support for the EEC's position. However, a careful reading made clear that the situation confronting that panel was very different. The main issues in that case concerned injury, mainly with regard to the reasoning of the Korean authorities in applying a presumption of "import substitution". That Panel had found that the reasoning of the Korean authorities did not justify an affirmative determination. ¹¹ A side issue involved the receipt by the panel of a "transcript" offered to supplement the written report of the injury determination of the Korean authorities. This document was in addition to the justification already issued. In the current case, the situation was different. Brazil had acknowledged that its public notices of the two determinations did not contain the full reasoning for those actions (see below). Brazil had expected to discuss the reasons for those actions, together with the evidence in the record, with the officials from the EEC and had attempted to do so from February 1992 onwards. The EEC, however, had refused to do so. The entire record of the Brazilian investigation was, and remained, available to the EEC's authorities in Brazil anytime they wished to see it.

28. Further regarding the report of the panel on "Korea - Polyacetal Resins", Brazil said that to the extent that that panel has suggested that panels must look only at published determinations of proceedings, and never at the underlying record, Brazil disagreed and was confident that this Panel would also disagree. At times, panels may and must go beyond the published determinations to examine the record. For instance, even though extensive and elaborate determinations were written by the United States authorities, panels reviewing those determinations had found it necessary to go beyond the published reports and examine the administrative record. In the specific case of the report of the panel on "United States - Salmon" for example, the issue of standing was assessed totally on the basis of evidence in the administrative record which was not dealt with in the published determination. ¹² It was particularly important in the current case that the record be examined because throughout the investigation, Brazil had expected to discuss the record with the EEC. In fact, Brazil had expected to consult with a view to reaching an amicable settlement as contemplated by the General Agreement and the Agreement.

29. Brazil argued that there were no provisions in the Agreement that contradicted its statement that the administrative record could not be ignored in a panel review simply on grounds of lack of reference to it in the public notice. Brazil considered that Article 2:5 required the interested parties to go beyond the information in the public notice and to consult and examine relevant information in the record of the investigation. The record of the investigation in this case was replete with information on the requirements under Article 2 and 6, inter alia, the volume of subsidized imports, their effect on prices, the consequent impact of those imports on domestic producers, market share, and return on investments. It was not Brazil's fault that the EEC decided not to have access to the record of the investigation. Therefore the claim that Brazil did not carry out an investigation and that it failed to meet the requirements of Articles 2:1, 5:1 and 6, based on an isolated reading of the summarized public notices, was not acceptable.

TO CONTINUE WITH IMPOSITION OF PROVISIONAL AND DEFINITIVE COUNTERVAILING DUTIES ON MILK POWDER AND CERTAIN TYPES OF MILK FROM THE EUROPEAN ECONOMIC COMMUNITY

¹ These were 0402.10.0100, 0402.10.0200, 0402.10.9900, 0402.21.0101, 0402.21.0102, 0402.21.0103, 0402.21.0200, 0402.21.0199, 0402.29.0101, 0402.29.0102, 0402.29.0103, 0402.29.0199, 0402.29.0200, 0402.91.0000, 0402.99.0100 and 0402.99.0200.

² These were 0402.10.0100, 0402.10.0200, 0402.10.9900, 0402.21.0101, 0402.21.0102, 0402.21.0103, 0402.21.0199, 0402.29.0101, 0402.29.0102, 0402.29.0103, 0402.29.0199.

³ These were 0402.10.0100, 0402.10.0200, 0402.21.0101, 0402.21.0102, 0402.21.0103, 0402.21.0199 and 0402.29.0102.

⁴ This was Brazil's Note No. 85.

⁵ This is an unofficial translation of the relevant text. All translated quotations from the correspondence and public notices relating to this case, including those provided in the Annexes to this Report, are also unofficial translations.

⁶ These were 0402.10.0100, 0402.10.0200, 0402.21.0101, 0402.21.0102, 0402.21.0103, 0402.21.0199, 0402.29.0101 and 0402.29.0102.

⁷ The rectification was as follows: In paragraph 1(e) of Administrative Order No. 569, the numbers for whole milk powder were "15.7 per cent, 3.4 per cent and 5 per cent" instead of "19 per cent, 4.8 per cent and 7.5 per cent", and for skimmed milk powder were "39.2 per cent, 33.2 per cent and 78 per cent" instead of "19.9 per cent, 12.9 per cent and 30.9 per cent".

⁸ This was the report of the panel on "United States countervailing duties on fresh, chilled and frozen pork from Canada" (adopted on 11 July 1991, hereinafter referred to as "United States - Pork"), BISD 38S/30.

⁹ The EEC referred to some reports of panels to support its position. These were: "United States - Countervailing Duties on Imports of Fresh and Chilled Atlantic Salmon From Norway" (not yet adopted, hereinafter referred to as "United States - Salmon"), SCM/153, paragraphs 258-260; "United States -Measures Affecting Imports of Softwood Lumber From Canada" (not yet adopted, hereinafter referred to as "United States - Softwood Lumber"), SCM/162, paragraphs 332-333; and in particular, "Korea - Anti-Dumping Duties on Imports of Polyacetal Resins From the United States" (adopted on 27 April 1993, hereinafter referred to as "Korea - Polyacetal Resins"), ADP/92, paragraph 209.

¹⁰ In support of this argument, the EEC cited the report of the panel on "Korea - Polyacetal Resins", paragraphs 227-228, and the report of the panel on "United States - Softwood Lumber", paragraph 335.

¹¹ Brazil referred to the report of the panel on "Korea - Polyacetal Resins", paragraph 300 for this point.

¹² To support its response, Brazil cited paragraphs 221-234 of the same Report.