CANADA – MEASURES AFFECTING THE IMPORTATION OF MILK

AND THE EXPORTATION OF DAIRY PRODUCTS

Additional Understanding between Canada and the United States

Regarding Procedures under Articles 21 and 22 of the DSU

            The following communication, dated 18 December 2001, from the Permanent Mission of Canada and the Permanent Mission of the United States to the Chairman of the Dispute Settlement Body, is circulated at the request of these delegations.

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            Pursuant to paragraph 14 of the Understanding of 21 December 2000 (WT/DS103/14, "the Understanding"), Canada and the United States would like to inform the DSB that they have agreed to the following additional procedures:

1.         In view of the fact that the Appellate Body in its report of 3 December 2001 (WT/DS113/AB/RW, WT/DS103/AB/RW) was unable to rule on the consistency or inconsistency of the Canadian measures with Canada's obligations under the covered agreements as referred to in WTO/DS103/16 and in view of the United States' request for the establishment of a second compliance panel under DSU Article 21.5 (WT/DS103/23) in relation to the Canadian measures, Canada and the United States agree to request that the arbitration requested by Canada under Article 22.6 (WT/DS103/18) remain suspended until:

            (a)        the DSB finds that Canada has failed to comply with the recommendations and rulings of the DSB or that the measures taken by Canada to comply with the recommendations and rulings of the DSB are inconsistent with the covered agreements as referred to in the second Article 21.5 compliance panel request.  In this event, the arbitrator will automatically resume its work.  The parties will cooperate to enable the arbitrator to circulate its report within 60 days of the resumption of its work;