|European Communities - Regime for the Importation, Sale and Distribution of Bananas - Recourse to Arbitration by the European Communities under Article 22.6 of the DSU - Decision by the Arbitrators|
9 April 1999
EUROPEAN COMMUNITIES - REGIME FOR THE
IMPORTATION, SALE AND DISTRIBUTION OF BANANAS
- RECOURSE TO ARBITRATION BY THE EUROPEAN COMMUNITIES UNDER ARTICLE 22.6 OF THE DSU -
DECISION BY THE ARBITRATORS
The Decision of the Arbitrators on European Communities - Regime for the Importation, Sale and Distribution of Bananas - Recourse to Arbitration by the European Communities under Article 22.6 of the DSU - is being circulated to all Members, pursuant to the DSU. The report is being circulated as an unrestricted document from 9 April 1999 pursuant to the Procedures for the Circulation and Derestriction of WTO Documents (WT/L/160/Rev.1).
TABLE OF CONTENTS
I. INTRODUCTION 1
II. PRELIMINARY ISSUES 2
A. WORKING PROCEDURES AND BUSINESS CONFIDENTIAL INFORMATION 2
B. REQUEST FOR THIRD-PARTY RIGHTS 3
C. REQUEST FOR SUSPENSION 3
D. INITIAL DECISION 4
III. PROCEDURES AND PRINCIPLES TO BE FOLLOWED UNDER ARTICLE 22.3 OF THE DSU 5
A. THE SCOPE OF REVIEW BY ARBITRATORS UNDER ARTICLE 22.3 6
B. APPLICATION OF ARTICLE 22.3 OF THE DSU IN THIS CASE 7
IV. THE CONCEPT OF EQUIVALENCE AND THE SCOPE OF THIS ARBITRATION PROCEDURE UNDER ARTICLE 22 8
V. IS THERE NULLIFICATION OR IMPAIRMENT OF US BENEFITS UNDER THE REVISED EC BANANA IMPORT REGIME? 12
A. ARTICLE XIII OF GATT 1994 12
1. The 857,700 tonnes reserved for traditional imports from ACP States 13
(a) The Applicability of Article XIII 13
(b) The Requirements of Article XIII and the 857,700 Tonne Tariff Quota for Traditional ACP Imports 14
(i) Article XIII:1 14
(ii) Article XIII:2 15
(c) The Requirements of the Appellate Body Report in Bananas III 15
2. The MFN Tariff Quota Shares 16
(a) The Requirements of Article XIII 16
(b) The Representative Period 18
B. GATS ISSUES 19
1. Licence Allocation Procedures 19
(a) The Findings in Bananas III on Articles II and XVII of GATS 20
(b) The Revised EC Licensing Regime 21
(c) The Requirements of Articles XVII and II of GATS 22
(d) The parties' arguments 22
(i) European Communities 22
(ii) United States 24
(e) The Arbitrators' Analysis of the Allegations 26
(i) General Arguments by the European Communities 26
(ii) Licence Allocations Under the Revised Regime 26
(iii) The Structure of the Revised Regime 28
(iv) Overall evaluation 30
(f) The "Single Pot" Licence Allocation 30
2. The Rules for "Newcomer" Licences 32
3. Summary 33
VI. PARAMETERS FOR THE CALCULATION OF THE LEVEL OF NULLIFICATION OR IMPAIRMENT 34
A. GENERAL CONSIDERATIONS 34
B. THE ISSUE OF "INDIRECT" BENEFITS 35
C. SERVICES CALCULATION ISSUES 38
D. COMPANY-SPECIFIC EFFECTS VS. OVERALL EFFECT ON THE US 40
VII. CALCULATIONS OF THE LEVELS 41
VIII. AWARD AND DECISION OF THE ARBITRATORS 43
IX. CONCLUDING REMARKS 44
1.1On 14 January 1999, the United States (US), pursuant to Article 22.2 of the DSU, requested the Dispute Settlement Body (DSB) to authorize suspension of the application to the European Communities (EC) and its member States of tariff concessions and related obligations under GATT 1994 covering trade in an amount of US$520 million (WT/DS27/43). At the DSB meeting held on 25 January-1 February 1999, the European Communities objected to the level of suspension proposed by the United States on the ground that it was not equivalent to the level of nullification or impairment of benefits suffered by the United States and claimed that the principles and procedures set out in Article 22.3 of the DSU had not been followed. Pursuant to Article 22.6 of the DSU, the European Communities requested that the original panel carry out the arbitration on the foregoing matters (WT/DS27/46). In response, the DSB decided on 29 January 1999 to submit the matter to arbitration of the original panel in accordance with Article 22.6 of the DSU (WT/DSB/M/54).
1.2The Arbitrators are:
Chairman: Mr. Stuart Harbinson
Mr. Kym Anderson
Mr. Christian H鋌erli
1.3The tasks of Arbitrators under Article 22 of the DSU are described in paragraphs 6 and 7 of that Article:
"& However, if the Member concerned objects to the level of suspension proposed, or claims that the principles and procedures set forth in paragraph 3 have not been followed where a complaining party has requested authorization to suspend concessions or other obligations pursuant to paragraph 3(b) or (c), the matter shall be referred to arbitration. & "
"The arbitrator[s] & shall determine whether the level of such suspension is equivalent to the level of nullification or impairment. The arbitrator[s] may also determine if the proposed suspension of concessions or other obligations is allowed under the covered agreement. However, if the matter referred to arbitration includes a claim that the principles and procedures set forth in paragraph 3 have not been followed, the arbitrator[s] shall examine that claim. In the event that the arbitrator[s] determine that those principles and procedures have not been followed, the complaining party shall apply them consistent with paragraph 3. & "
1.4Accordingly, our tasks encompass an examination of the equivalence of the level of proposed suspension to the nullification or impairment caused, and of whether the principles and procedures set forth in Article 22.3 of the DSU have been followed.1 In this decision, we address the following issues: (i) certain preliminary issues; (ii) the procedures and principles to be followed under Article 22.3 of the DSU, including (a) the scope of review by Arbitrators under Article 22.3 and (b) the application of Article 22.3 to this case; (iii) the concept of equivalence and the scope of this arbitration procedure under Article 22 of the DSU; (iv) whether there is continuing nullification or impairment of US benefits under the new EC banana import regime; (v) the parameters for the calculation of the level of nullification or impairment, including (a) the issue of "indirect" benefits and (b) specific issues concerning the calculation of nullification or impairment in services; and (vi) the level of suspension.
A.WORKING PROCEDURES AND BUSINESS CONFIDENTIAL INFORMATION
2.1We met with the parties on 5 February 1999 to establish our working procedures and timetable. Prior to that date, we invited the United States to submit a communication, if possible by 5 February 1999, explaining the methodology it applied in calculating its proposed level of suspension.2 Pursuant to the timetable (as later modified), the parties made their initial submissions on 11 February 1999 and their rebuttal submissions on 18 February 1999. We held a meeting with the parties on 22 February 1999.
2.2On 5 February 1999, the United States indicated that it would request the Arbitrators to establish procedures for the handling of business confidential information ("BCI") similar to those established in several pending panel procedures.3 In response, the European Communities indicated that any such procedures must allow the European Communities to have access to the BCI.
2.3On 10 February 1999, the United States requested the Arbitrators to establish specific procedures for BCI. Under the US proposal, there would be two levels of BCI: regular BCI and super BCI. Regular BCI was described as company-specific information that was non-public and sensitive, but that could be extrapolated from other public and non-public information available to governments and the company's competitors. Super BCI was described as non-public, sensitive company-specific information that could not be so extrapolated. As to regular BCI, one copy would be deposited with the Secretariat and one copy with the Geneva mission of the receiving party. As to Super BCI, one copy would be deposited with the Secretariat. Both types of BCI would also be available in the missions in the respective capitals of the parties (e.g. BCI submitted by the United States would be available for inspection by the European Communities at any time in the US mission to the EC in Brussels). For both types of BCI, there would be provisions related to non-disclosure, storage and return or destruction, and recipients of BCI would be required to sign a non-disclosure form. These provisions and the treatment of regular BCI were based on the procedures used in pending panel proceedings.4 The concept of super BCI was additional to those procedures, as were the US proposals that certain sanctions should be applied for violating the procedures and that only certain categories of representatives of a party should have access to BCI.
2.4Later on 10 February 1999, the chairman of the Arbitrators met with the parties to hear their views on the US request. The European Communities objected to it on the grounds that working procedures on confidentiality should not be adopted on a case-by-case basis, but rather by WTO Members as a whole. It noted that it had successfully opposed the adoption of such procedures in another case involving the United States. Second, the European Communities argued that special procedures were unnecessary because its officials were bound by confidentiality obligations contained in Article 214 of the EC Treaty. Third, the European Communities objected that such procedures would limit its rights because of practical problems that would be created if the information were not available in its Brussels headquarters. The United States responded that the extent of the BCI was limited, that it was in fact highly sensitive information because it was company-specific and that it was essential for the Arbitrators to have the information in order to perform their functions.
2.5On 11 February 1999, we adopted BCI procedures. While we agreed with the United States that special rules were justified in light of the type of information involved, we did not accept the need for special treatment of super BCI, for specific sanctions or for limitations on the identity of those permitted to view the information (so long as a non-disclosure form was signed). On 15 February 1999, the European Communities raised further objections concerning practicality, the impossibility of limiting reporting obligations to superiors within the European Communities and concerns that the inviolability of the EC Mission in Geneva had been put into question. On 16 February 1999, we modified the BCI procedures to address the latter point.
2.6On 17 February 1999, the European Communities indicated that it could not accept the BCI procedures and that the Arbitrators should not consider any BCI as to do so would violate Article 18.1 of the DSU, which prohibits ex parte contacts between parties and panelists. Since we are of the view that the procedures are reasonable in the circumstances5, we do not accept the EC argument that its decision not to receive information under the rules we have established means that the United States may not submit the information. Acceptance of the EC argument would mean that a party's refusal to participate in a proceeding would effectively prevent the proceeding from going forward.
2.7In any event, we note that we did not find it necessary to rely on the BCI submitted by the United States in setting the level of suspension. As explained below (Part VII), we used an alternative calculation method, not relying on company-specific cost and profit information but instead on non-business confidential information supplied in the parties' submissions. We did, however, examine non-company-specific BCI simply to compare it with the assumptions we had made. Our calculations would have been no different had that BCI not been examined.
B.REQUEST FOR THIRD-PARTY RIGHTS
2.8On 4 February 1999, Ecuador requested the Arbitrators to accord it third-party status in light of its special interest in the proceedings. However, in light of the absence of provisions for third-party status under Article 22 of the DSU and given that we do not believe that Ecuador's rights will be affected by this proceeding, we declined Ecuador's request. In this regard, we note that our Initial and Final Decisions in this arbitration fully respect Ecuador's rights under the DSU, and, in particular, Article 22 thereof.
C.REQUEST FOR SUSPENSION
2.9In a letter dated 22 February 1999, the European Communities requested that we suspend this arbitration proceeding until 23 April 1999, i.e. until 10 days or so after the date set for the completion of the pending proceedings brought by Ecuador and the European Communities pursuant to Article 21.5 of the DSU in respect of the revised EC banana import regime.6 However, in light of Article 22.6 of the DSU, which requires that an arbitration thereunder "shall be completed within 60 days after the date of expiry of the reasonable period of time", or 2 March 1999, we decided that we were obligated to complete our work in as timely a fashion as possible and that a suspension of our work would accordingly be inappropriate.
2.10On 2 March 1999, the Chairman of the Arbitrators informed the Chairman of the DSB as follows (WT/DS27/48):
"I write to inform you that the Arbitrators have today issued an initial decision to the parties in which we rule on matters related to the scope of our work and to certain aspects of the methodology and calculations of the United States for determining the level of suspension of concessions. In addition, we have requested the parties to supply us with additional information. This information should enable us to take a final view on the level of nullification or impairment based on the WTO inconsistency, if any, of the revised EC banana regime, and, if relevant, to determine the level of suspension of concessions or other obligations equivalent to the level of such nullification or impairment. Following our receipt and analysis of that information, we expect to be in a position to issue a final decision in this matter soon thereafter."
2.11The Initial Decision discussed issues related to Article 22.3, the concept of equivalence and the scope of this arbitration procedure under Article 22 and parameters for the calculation of the level of nullification or impairment. Our discussion of these issues appears verbatim (except as indicated otherwise) in Parts III, IV and VI of this Decision. As indicated above, in the Initial Decision, we also requested the parties to submit by 15 March 1999 answers in writing to certain questions, the answers to which were necessary for us to complete our task. In the case of the European Communities, we asked them to respond to certain arguments made in the US submissions concerning the consistency of the new EC regime for banana imports with the WTO Agreement (see Part V). In the case of the United States, we asked them to analyze two additional counterfactuals and to re-consider their calculations in respect of two of their original counterfactuals in light of our Initial Decision (see Part VII).
2.12We noted in our concluding remarks to the Initial Decision, that we were aware of the fact that, pursuant to Article 22.6 of the DSU, Arbitrators "shall" complete their work within 60 days after the expiry of the reasonable period of time for implementation. However, given that our own decisions cannot be appealed, we considered it imperative to achieve the greatest degree of clarity possible with a view to avoiding future disagreements between the parties. Reaching this objective required the parties to have more time to submit to us the information necessary for us to complete our tasks.7
2.13We emphasized that the number, scope and complexity of the tasks before us in our capacity as Arbitrators under Article 22.6 of the DSU required the continuing cooperation of the parties, acting in good faith in accordance with Article 3.10 of the DSU. In this regard, we encouraged the parties to continue in their efforts to reach a mutually acceptable solution to this matter promptly, as the suspension of concessions is not in the economic interest of either of them.
PROCEDURES AND PRINCIPLES TO BE FOLLOWED UNDER ARTICLE 22.3 OF THE DSU
3.1In its request for arbitration pursuant to Article 22.6 of the DSU, the European Communities maintains that the United States has not followed the procedures and principles set out in paragraph 3 of Article 22 in its request for the authorization to suspend concessions or other obligations pursuant to Article 22.6. The United States contends that the Arbitrators shall not examine the principles and procedures set forth in Article 22.3 in this arbitration proceeding because the United States has requested authorization to suspend concessions only pursuant to paragraph (a) of Article 22.3 of the DSU. In the view of the United States, the European Communities could only make such a claim if the United States had requested authorization to suspend concessions pursuant to paragraphs (b) or (c) of Article 22.3 of the DSU.
3.2The relevant parts of Article 22.3 of the DSU provide:
"In considering what concessions or other obligations to suspend, the complaining party shall apply the following principles and procedures:
(a) the general principle is that the complaining party should first seek to suspend concessions or other obligations with respect to the same sector(s) as that in which the panel or Appellate Body has found a violation or other nullification or impairment;
(b) if that party considers that it is not practicable or effective to suspend concessions or other obligations with respect to the same sector(s), it may seek to suspend concessions or other obligations in other sectors under the same agreement;
(c) if that party considers that it is not practicable or effective to suspend concessions or other obligations with respect to other sectors under the same agreement, and that the circumstances are serious enough, it may seek to suspend concessions or other obligations under another covered agreement;
(d) in applying the above principles, that party shall take into account:
(i) the trade in the sector under the agreement under which the panel or Appellate Body has found a violation or other nullification or impairment, and the importance of such trade to that party;
(ii) the broader economic elements related to the nullification or impairment and the broader economic consequences of the suspension of the concessions or other obligations; &
(e) if that party decides to request authorization to suspend concessions or other obligations pursuant to subparagraphs (b) or (c), it shall state the reasons therefore in its request. At the same time as the request is forwarded to the DSB, it also shall be forwarded to the relevant Councils and also, in the case of a request pursuant to subparagraph (b) the relevant sectoral bodies;
(f) for purposes of this paragraph, "sector" means:
(i) with respect to goods, all goods;
(ii) with respect to services, a principal sector as identified in the current "Services Sectoral Classification List" which identifies such sectors." (emphasis added, footnotes omitted).
3.3Before addressing the EC's challenge under Article 22.3 of the DSU, we recall the mandate of Arbitrators in this respect. Article 22.6 of the DSU provides in the relevant part:
"[I]f a Member concerned & claims that the principles and procedures set forth in paragraph 3 have not been followed where a complaining party has requested authorization to suspend concessions or other obligations pursuant to paragraph 3(b) or (c), the matter shall be referred to arbitration. & "
Article 22.7 of the DSU specifies:
"[I]f the matter referred to arbitration includes a claim that the principles and procedures set forth in paragraph 3 have not been followed, the arbitrator shall examine that claim. In the event the arbitrator determines that those principles and procedures have not been followed, the complaining party shall apply them consistent with paragraph 3. & "
A.THE SCOPE OF REVIEW BY ARBITRATORS UNDER ARTICLE 22.3
3.4In view of the United States defense to the EC's challenge, we first have to define the scope of the discretion granted under Article 22.3 of the DSU to a Member seeking authorization to suspend, and to distinguish it from the scope of the authority of Arbitrators to review, pursuant to paragraphs 6 and 7 of Article 22 of the DSU, the choice made by that Member.
3.5Article 22.7 of the DSU empowers the Arbitrators to examine claims concerning the principles and procedures set forth in Article 22.3 of the DSU in its entirety, whereas Article 22.6 of the DSU seems to limit the competence of Arbitrators in such examination to cases where a request for authorization to suspend concessions is made under subparagraphs (b) or (c) of Article 22.3 of the DSU. However, we believe that there is no contradiction between paragraphs 6 and 7 of Article 22 of the DSU, and that these provisions can be read together in a harmonious way.
3.6If a panel or Appellate Body report contains findings of WTO-inconsistencies only with respect to one and the same sector in the meaning of Article 22.3(f) of the DSU, there is little need for a multilateral review of the choice with respect to goods or services or intellectual property rights, as the case may be, which a Member has selected for the suspension of concessions subject to the DSB's authorization. However, if a Member decides to seek authorization to suspend concessions under another sector, or under another agreement, outside the scope of the sectors or agreements to which a panel's findings relate, paragraphs (b)-(d) of Article 22.3 of the DSU provide for a certain degree of discipline such as the requirement to state reasons why that Member considered the suspension of concessions within the same sector(s) as that where violations of WTO law were found as not practicable or effective.
3.7We believe that the basic rationale of these disciplines is to ensure that the suspension of concessions or other obligations across sectors or across agreements (beyond those sectors or agreements under which a panel or the Appellate Body has found violations) remains the exception and does not become the rule. In our view, if Article 22.3 of the DSU is to be given full effect, the authority of Arbitrators to review upon request whether the principles and procedures of subparagraphs (b) or (c) of that Article have been followed must imply the Arbitrators' competence to examine whether a request made under subparagraph (a) should have been made - in full or in part - under subparagraphs (b) or (c). If the Arbitrators were deprived of such an implied authority, the principles and procedures of Article 22.3 of the DSU could easily be circumvented. If there were no review whatsoever with respect to requests for authorization to suspend concessions made under subparagraph (a), Members might be tempted to always invoke that subparagraph in order to escape multilateral surveillance of cross-sectoral suspension of concessions or other obligations, and the disciplines of the other subparagraphs of Article 22.3 of the DSU might fall into disuse altogether.
B.APPLICATION OF ARTICLE 22.3 OF THE DSU IN THIS CASE
3.8The European Communities alleges that in cases where findings of violations or other nullification have been made in more than one sector, or under more than one agreement, requests for the suspension of concessions have to be made commensurate with the number or the degree of violations, i.e. with the amount of nullification or impairment suffered, in each of those sectors or under each of those agreements taken separately. Given the EC's position that the United States has not suffered any nullification or impairment in the area of trade in goods even under the previous regime, the European Communities contends that the United States should have considered seeking authorization to suspend concessions, in the first place, in the distribution service sector, or in the second place, in any other service sector for nullification suffered as a result of GATS violations, provided that such violations would continue under the revised regime. In view of the fact that the United States has requested the suspension of concessions on trade in goods, the European Communities claims that the US request is in reality a cross-sectoral request and should have been made under Article 22.3(b) or (c). Moreover, the United States is alleged not to have fulfilled the procedural requirements foreseen in subparagraphs (d) and (e) of Article 22.3.
3.9We do not share the EC's view. The scenario developed by the European Communities and the obligations contained in subparagraphs (b)-(e) of Article 22.3 would only apply if the dispute at issue concerned violations exclusively under the GATS. In that case, the US request would also in our view concern the suspension of concessions across sectors and across agreements. However, the obligations of subparagraphs (b) or (c) to substantiate why suspensions of concessions under the same sector or under the same agreement were not practicable or effective would only be relevant if the suspension of concessions proposed by the United States would be outside the scope of the panel or Appellate Body findings, e.g. if the proposed suspension would concern other service sectors than distribution services, or trade-related intellectual property rights.
3.10We recall that subparagraph (a) of Article 22.3 of the DSU refers to the suspension of "concessions or other obligations with respect to the same sector(s) as that in which the panel or Appellate Body has found a violation or other nullification or impairment." We note that the words "same sector(s)" include both the singular and the plural. The concept of "sector(s)" is defined in subparagraph (f)(i) with respect to goods as all goods, and in subparagraph (f)(ii) with respect to services as a principal sector identified in the "Services Sectoral Classification List". We, therefore, conclude that the United States has the right to request the suspension of concessions in either of these two sectors, or in both, up to the overall level of nullification or impairment suffered, if the inconsistencies with the EC's obligations under the GATT and the GATS found in the original dispute have not been removed fully in the EC's revision of its regime. In this case the "same sector(s)" would be "all goods" and the sector of "distribution services", respectively. Our conclusion, based on the ordinary meaning of Article 22.3(a), is also consistent with the fact that the findings of violations under the GATT and the GATS in the original dispute were closely related and all concerned a single import regime in respect of one product, i.e. bananas.
THE CONCEPT OF EQUIVALENCE AND THE SCOPE OF THIS ARBITRATION PROCEDURE UNDER ARTICLE 22
4.1Article 22.7 of the DSU provides that "[t]he arbitrator[s] & shall determine whether the level of such suspension is equivalent to the level of nullification or impairment" (emphasis added). In addition, Article 22.4 of the DSU provides:
"The level of the suspension of concessions or other obligations authorized by the DSB shall be equivalent to the level of the nullification or impairment." (emphasis added).
We note that the ordinary meaning of the word "equivalence" is "equal in value, significance or meaning", "having the same effect", "having the same relative position or function", "corresponding to", "something equal in value or worth", also "something tantamount or virtually identical".8 Obviously, this meaning connotes a correspondence, identity or balance between two related levels, i.e. between the level of the concessions to be suspended, on the one hand, and the level of the nullification or impairment, on the other.
4.2The former level, i.e. the proposed suspension of concessions, is clearly discernible in respect of the overall amount (US$520 million) suggested by the United States as well as in terms of the product coverage envisaged.9 However, the same degree of clarity is lacking with respect to the latter, i.e. the level of nullification or impairment suffered. It is impossible to ensure correspondence or identity between two levels if one of the two is not clearly defined. Therefore, as a prerequisite for ensuring equivalence between the two levels at issue we have to determine the level of nullification or impairment.
4.3In the original Bananas III dispute, the findings of nullification and impairment were based on the conclusion that several parts of the EC measures at issue were inconsistent with its WTO obligations. Therefore, any assessment of the level of nullification or impairment presupposes an evaluation of consistency or inconsistency with WTO rules of the implementation measures taken by the European Communities, i.e. the revised banana regime, in relation to the panel and Appellate Body findings concerning the previous regime.
4.4The immediate context of paragraphs 4 and 7 of Article 22, which spell out the requirement of "equivalence", confirms our conclusion. The introductory sentence of paragraph 6 of Article 22 refers back to the situation described in paragraph 2. The provision cross-referred to provides:
"If the Member concerned fails to bring the measure found to be inconsistent with a covered agreement into compliance therewith or otherwise comply with the recommendations and rulings within the reasonable period of time determined pursuant to paragraph 3 of Article 21.3, such Member shall, if so requested, and no later than the expiry of the reasonable period of time, enter into negotiations with any party having invoked the dispute settlement procedures, with a view to developing mutually acceptable compensation. If no satisfactory compensation has been agreed within 20 days after the date of expiry of the reasonable period of time, any party having invoked the dispute settlement procedures may request authorization from the DSB to suspend the application to the Member concerned of concessions or other obligations under the covered agreements."
Thus, authorization by the DSB of the suspension of concessions or other obligations presupposes the existence of a failure to comply with the recommendations or rulings contained in panel and/or Appellate Body reports as adopted by the DSB.
4.5We also note that both parties accept that it is the consistency or inconsistency with WTO rules of the new EC regime - and not of the previous regime - that has to be the basis for the assessment of the equivalence between the level of nullification suffered and the level of the proposed suspension. In fact, in this arbitration procedure the United States has dedicated a significant part of its written submissions and oral statements to the Arbitrators to the question why it considers the new regime to continue most of the WTO-inconsistencies of the previous regime.
4.6By the same token, the European Communities has repeatedly emphasized that any determination of the amount of concessions to be suspended would have to be based exclusively on the amount of the nullification or impairment caused by its revised regime if it were found to be WTO-inconsistent - albeit in another procedure before us, i.e. in our capacity as reconvened panelists under Article 21.5. However, we also note that the European Communities has to some extent responded to the US allegations concerning the alleged WTO-inconsistency of the revised regime in its written submissions or oral statements to the Arbitrators. Finally, the European Communities has pointed out several times that the consistency or inconsistency with WTO rules of its revised banana regime cannot be determined unilaterally by the United States, and that it considers any such determination outside the WTO dispute settlement mechanism as inconsistent with the unambiguous requirements of Article 23 of the DSU.
4.7In view of these considerations, it is our opinion that the concept of equivalence between the two levels (i.e. of the proposed suspension and the nullification or impairment) remains a concept devoid of any meaning if either of the two variables in our comparison between the proposed suspension and the nullification or impairment would remain unknown. In essence, we would be left with the option to declare the level of nullification or impairment
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