Canada - Measures Affecting the Importation of Milk and the Exportation of Dairy Products - Recourse to Article 21.5 of the DSU by New Zealand and the United States - AB-2001-6 - Report of the Appellate Body

I.          Introduction..................................................................................................................... 1

II.         Arguments of the Participants and Third Participant........................................................ 4

A........ Claims of Error by Canada – Appellant............................................................... 4

1......... Article 9.1(c) of the  Agreement on Agriculture  – "payments".............. 4

2......... Article 9.1(c) of the  Agreement on Agriculture  – "financed by virtue of governmental action"..................................................................................................... 5

3......... Article 10.1 of the  Agreement on Agriculture  and Article 3.1 of the SCM Agreement................................................................................................................ 8

B......... Arguments of New Zealand – Appellee................................................................. 8

1......... Article 9.1(c) of the  Agreement on Agriculture  – "payments".............. 8

2......... Article 9.1(c) of the  Agreement on Agriculture  – "financed by virtue of governmental action"..................................................................................................... 9

3......... Article 10.1 of the  Agreement on Agriculture...................................... 10

C......... Arguments of the United States – Appellee......................................................... 11

1......... Article 9.1(c) of the  Agreement on Agriculture  – "payments"............ 11

2......... Article 9.1(c) of the  Agreement on Agriculture  – "financed by virtue of governmental action"................................................................................................... 12

3......... Article 10.1 of the  Agreement on Agriculture  and Article 3.1 of the SCM Agreement.............................................................................................................. 14

D........ Arguments of the European Communities – Third Participant........................... 15

1......... Article 9.1(c) of the  Agreement on Agriculture  – "payments"............ 15

2......... Article 9.1(c) of the  Agreement on Agriculture  – "financed by virtue of governmental action"................................................................................................... 16

III.       Issue Raised in this Appeal............................................................................................ 16

IV.       Article 9.1(c) of the  Agreement on Agriculture............................................................ 17

A........ "Payments"........................................................................................................ 17

B......... "Financed By Virtue of Governmental Action"................................................... 29

V.        Article 10.1 of the  Agreement on Agriculture.............................................................. 34

VI.       Article 3.1 of the  SCM Agreement............................................................................... 34

VII.      Findings and Conclusions.............................................................................................. 35