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Complaint by Australia - Report of the Panel

TABLE OF CASES CITED IN THIS REPORT

Short TitleFull 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
Australia – Salmon Appellate Body Report, Australia – Measures Affecting Importation of Salmon, WT/DS18/AB/R, adopted 6 November 1998, DSR 1998:VIII, 3327
Brazil – Aircraft Appellate Body Report, Brazil – Export Financing Programme for Aircraft, WT/DS46/AB/R, adopted 20 August 1999, DSR 1999:III, 1161
Canada – Patent Term Appellate Body Report, Canada – Term of Patent Protection, WT/DS170/AB/R, adopted 12 October 2000, DSR 2000:X, 5093
Canada – Periodicals Appellate Body Report, Canada – Certain Measures Concerning Periodicals, WT/DS31/AB/R, adopted 30 July 1997, DSR 1997:I, 449
Canada – Pharmaceutical Patents Panel Report, Canada – Patent Protection of Pharmaceutical Products, WT/DS114/R, adopted 7 April 2000, DSR 2000:V, 2289
EC – Asbestos Appellate Body Report, European Communities – Measures Affecting Asbestos and Asbestos-Containing Products, WT/DS135/AB/R, adopted 5 April 2001, DSR 2001:VII, 3243
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 – Bananas III (US) Panel Report, European Communities – Regime for the Importation, Sale and Distribution of Bananas – Complaint by the United States, WT/DS27/R/USA, adopted 25 September 1997, as modified by the Appellate Body Report, WT/DS27/AB/R, DSR 1997:II, 943
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 – Sardines Appellate Body Report, European Communities – Trade Description of Sardines, WT/DS231/AB/R, adopted 23 October 2002
EC – Tariff Preferences Appellate Body Report, European Communities – Conditions for the Granting of Tariff Preferences to Developing Countries, WT/DS246/AB/R, adopted 20 April 2004.
EEC – Parts and Components GATT Panel Report, European Economic Community – Regulation on Imports of Parts and Components, adopted 16 May 1990, BISD 37S/132
India – Patents (US) Appellate Body Report, India – Patent Protection for Pharmaceutical and Agricultural Chemical Products, WT/DS50/AB/R, adopted 16 January 1998, DSR 1998:I, 9
India – Patents (US) Panel Report, India – Patent Protection for Pharmaceutical and Agricultural Chemical Products – Complaint by the United States, WT/DS50/R, adopted 16 January 1998, as modified by the Appellate Body Report, WT/DS50/AB/R, DSR 1998:I, 41
India – Patents (EC) Panel Report, India – Patent Protection for Pharmaceutical and Agricultural Chemical Products – Complaint by the European Communities, WT/DS79/R, adopted 22 September 1998, DSR 1998:VI, 2661
Indonesia – Autos Panel Report, Indonesia – Certain Measures Affecting the Automobile Industry, WT/DS54/R, WT/DS55/R, WT/DS59/R, WT/DS64/R and Corr.1, 2, 3, and 4, adopted 23 July 1998, DSR 1998:VI, 2201
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
Korea – Various Measures on Beef Appellate Body Report, Korea – Measures Affecting Imports of Fresh, Chilled and Frozen Beef, WT/DS161/AB/R, WT/DS169/AB/R, adopted 10 January 2001, DSR 2001:I, 5
Korea – Various Measures on Beef Panel Report, Korea – Measures Affecting Imports of Fresh, Chilled and Frozen Beef, WT/DS161/R, WT/DS169/R, adopted 10 January 2001, as modified by the Appellate Body Report, WT/DS161/AB/R, WT/DS169/AB/R, DSR 2001:I, 59
Thailand – H-Beams Appellate Body Report, Thailand – Anti-Dumping Duties on Angles, Shapes and Sections of Iron or Non-Alloy Steel and H-Beams from Poland, WT/DS122/AB/R, adopted 5 April 2001, DSR 2001:VII, 2701
Turkey – Textiles Panel Report, Turkey – Restrictions on Imports of Textile and Clothing Products, WT/DS34/R, adopted 19 November 1999, as modified by the Appellate Body Report, WT/DS34/AB/R, DSR 1999:VI, 2363
US – 1916 Act Appellate Body Report, United States – Anti-Dumping Act of 1916, WT/DS136/AB/R, WT/DS162/AB/R, adopted 26 September 2000, DSR 2000:X, 4793
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
US – Certain EC Products Appellate Body Report, United States – Import Measures on Certain Products from the European Communities, WT/DS165/AB/R, adopted 10 January 2001, DSR 2001:I, 373
US – Corrosion-Resistant Steel Sunset Review Appellate Body Report, United States – Sunset Review of Anti-Dumping Duties on Corrosion-Resistant Carbon Steel Flat Products from Japan, WT/DS244/AB/R, adopted 9 January 2004
US – FSC (Article 21.5 – EC) Appellate Body Report, United States – Tax Treatment for "Foreign Sales Corporations" – Recourse to Article 21.5 of the DSU by the European Communities, WT/DS108/AB/RW, adopted 29 January 2002
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 – Section 110(5) Copyright Act Panel Report, United States – Section 110(5) of the US Copyright Act, WT/DS160/R, adopted 27 July 2000, DSR 2000:VIII, 3769
US – Section 211 Appropriations Act Appellate Body Report, United States – Section 211 Omnibus Appropriations Act of 1998, WT/DS176/AB/R, adopted 1 February 2002
US – Section 301 Trade Act Panel Report, United States – Sections 301-310 of the Trade Act of 1974, WT/DS152/R, adopted 27 January 2000, DSR 2000:II, 815
US – Section 337 GATT Panel Report, United States Section 337 of the Tariff Act of 1930, adopted 7 November 1989, BISD 36S/345

I. INTRODUCTION

1.1.
On 17 April 2003, Australia requested consultations1 with the European Communities pursuant to Article 4 of the Understanding on Rules and Procedures Governing the Settlement of Disputes ("DSU"), Article XXII of the General Agreement on Tariffs and Trade 1994 ("GATT 1994"), Article 64 of the Agreement on Trade-Related Aspects of Intellectual Property Rights ("TRIPS Agreement") and Article 14 of the Agreement on Technical Barriers to Trade ("TBT Agreement") concerning the protection of trademarks and the registration and protection of geographical indications for foodstuffs and agricultural products in the European Communities. The request was circulated to Members on 23 April 2003 in document WT/DS290/1. Consultations were held on 27 May 2003 but did not lead to a resolution of the dispute.
1.2.
On 18 August 2003, Australia requested the Dispute Settlement Body ("DSB") to establish a panel pursuant to Articles 4.7 and 6 of the DSU, Article XXIII:2 of GATT 1994, Article 64 of the TRIPS Agreement and Article 14 of the TBT Agreement.2 At its meeting on 2 October 2003, the DSB established a single Panel pursuant to the requests of the United States in document WT/DS174/20 and Australia in document WT/DS290/18, in accordance with Article 9 of the DSU (WT/DSB/M/156)3. At that meeting, the parties to the dispute also agreed that the Panel should have standard terms of reference. The terms of reference are, therefore, the following:

"To examine, in the light of the relevant provisions of the covered agreements cited by the United States in document WT/DS174/20 and Australia in document WT/DS290/18, the matter referred to the DSB by the United States and Australia in those documents, and to make such findings as will assist the DSB in making the recommendations or in giving the rulings provided for in those agreements."

1.3.
On 13 February 2004, the United States and Australia requested the Director-General to determine the composition of the Panel, pursuant to paragraph 7 of Article 8 of the DSU.
1.4.
On 23 February 2004, the Director-General accordingly composed the Panel as follows:

Chair: Mr Miguel Rodríguez Mendoza

Members: Prof. Seung Wha Chang

Mr Peter Kam-fai Cheung

1.5.
Argentina, Australia (in respect of the United States' complaint), Brazil, Canada, China, Colombia, Guatemala, India, Mexico, New Zealand, the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu (hereinafter referred to as "Chinese Taipei"), Turkey and the United States (in respect of Australia's complaint) reserved their rights to participate in the Panel proceedings as third parties.
1.6.
The Panel met with the parties on 23-24 June 2004 and on 11-12 August 2004. It met with the third parties on 24 June 2004.
1.7.
The Panel submitted its interim report to the parties on 16 November 2004. The Panel submitted its final report to the parties on 21 December 2004.

II. FACTUAL ASPECTS

A. MEASURE AT ISSUE

2.1.
The measure at issue in this dispute is identified in Australia's request for establishment of a panel as Council Regulation (EEC) No. 2081/92 of 14 July 1992 on the protection of geographical indications and designations of origin for agricultural products and foodstuffs, any amendments thereto (including Council Regulation (EC) No. 692/2003 of 8 April 2003, published in the Official Journal of the European Union No. L99 of 17 April 2003), and related implementing and enforcement measures.

B. PROCEDURAL HISTORY

1. Preliminary ruling prior to the first written submissions

2.2.
On 24 February 2004, the day after the Panel was composed and prior to the organizational meeting, the European Communities requested that the Panel issue a preliminary ruling that the United States' and Australia's respective requests for establishment of a panel were inconsistent with the requirements of Article 6.2 of the DSU. The European Communities considered it appropriate that the Panel issue a preliminary ruling before the first written submissions of the parties were due.
2.3.
At the organizational meeting, the Panel sought the parties' views on appropriate procedures to deal with this request. The complainants did not object to filing written responses to the request for a preliminary ruling prior to their first written submissions but requested additional time for the filing of their first written submissions.
2.4.
On 8 March 2004, the Panel adopted its working procedures and timetable, which indicated a date for the United States and Australia to file written responses to the European Communities' request for a preliminary ruling. They submitted their responses accordingly.
2.5.
On 5 April 2004, the Panel issued a preliminary ruling, which is set out in full in Section VII:A of this report.
2.6.
On 20 April 2004, the European Communities sent a letter to the Panel expressing its regret at the Panel's ruling and "reserving its right to raise issues of law regarding the interpretation of Article 6.2 of the DSU before the Appellate Body". In its letter, the European Communities asked the Panel to clarify the status of its preliminary ruling of 5 April 2004, in particular whether such ruling would be incorporated into the Panel's final reports and whether the findings contained in the ruling would be an integral part of the final reports.
2.7.
On 23 April 2004, the Panel responded to the European Communities, advising that its preliminary ruling would be reflected in the Panel's final reports, as appropriate.
2.8.
On 26 April 2004, the European Communities sent a second letter to the Panel indicating that it had understood from the Panel's previous response that the findings contained in the preliminary ruling of 5 April 2004 would be incorporated into the Panel's final reports, and could, therefore, be appealed in the same way as any legal interpretation contained in these reports.
2.9.
On 28 April 2004, the Panel responded again to the European Communities, advising that it had taken note of the European Communities' letter of 26 April 2004 and reiterating that its preliminary ruling would be reflected in its final reports, as appropriate.

2. Request for extension of time

2.10.
On 9 March 2004, the European Communities requested that the Panel extend the period for it to submit its first written submission in view of the circumstances that (a) there were two cases brought by two complainants; (b) these cases did not appear to contain identical claims; and (c) these cases raised new and complex issues and involved a large number of claims. It also alleged that the timetable was unbalanced in favour of the complainants.
2.11.
On 16 March 2004, the United States and Australia each responded to the European Communities' request, disagreeing with its assertions but not objecting to an extension of the period for the European Communities to submit its first written submission, provided that such extension would not affect the timeframe structure of the remainder of the timetable.
2.12.
On 22 March 2004, the Panel revised its timetable, extending the time for the submission of the respondent's first written submission, without affecting the time between any of the subsequent steps as established in the original timetable.

3. Request for separate reports

2.13.
On 3 March 2004, after the conclusion of the Panel's organizational meeting, the European Communities filed a request pursuant to Article 9.2 of the DSU that the Panel submit separate reports on the present dispute. On 8 March 2004 the Panel acknowledged receipt of such request. The complainants did not comment on this request.
2.14.
On 23 April 2004, the Panel informed the parties that it would submit separate reports on this dispute, as requested by the European Communities.
2.15.
At the second substantive meeting with the parties on 11-12 August 2004, the Panel invited the parties to comment on the way in which the Panel should submit separate reports. The Panel took note of the parties' views and confirmed the following facts: (a) the complainants have made similar, but not identical claims in this dispute; (b) the complainants have made separate written submissions and separate oral statements and submitted separate responses to questions, although they did submit 16 common exhibits with their respective first written submissions; (c) the complainants have not collectively endorsed the arguments made in one another's submissions although Australia, in its first oral statement, expressly endorsed certain comments made by the United States4, and the United States, on occasions, cited information and arguments submitted by Australia in support of its arguments; and (d) although each complainant reserved its right to participate in the Panel proceedings as a third party in respect of the other's complaint, they did not exercise these rights. They both declined the opportunity given to them by the Panel to make a statement as a third party during the session with the third parties.

4. Request for factual information from the International Bureau of WIPO

2.16.
On 9 July 2004, the Panel sent a letter to the International Bureau of WIPO requesting its assistance in the form of any factual information available to it relevant to the interpretation of certain provisions of the Paris Convention for the Protection of Industrial Property.5 The parties were given the opportunity to comment.
2.17.
The International Bureau's reply was received by the Panel and the WTO Secretariat on 14 September 2004. The Panel gave the parties an opportunity to submit comments on the reply by 28 September 2004. The parties submitted their comments accordingly.6
2.18.
The factual information provided by the International Bureau consists of a note it prepared and five annexes containing excerpts from the Official Records of the various Diplomatic Conferences which adopted, amended or revised the provisions currently contained in Articles 2 and 3 of the Paris Convention (Stockholm Act of 1967)7.

III. PARTIES' REQUESTS FOR FINDINGS AND RECOMMENDATIONS

A. AUSTRALIA

3.1.
Australia requests that the Panel find that the measures at issue are inconsistent with the European Communities' obligations under:

(a) Articles 1.1, 1.3, 3.1, 16.1, 22.2, 24.5, 41.1, 41.2, 41.3, 42, and 65.1 of the TRIPS Agreement and Article 2.1 of the TRIPS Agreement, incorporating Articles 2(1) and 2(2), 10bis(1) and 10ter(1) of the Paris Convention (1967);8

(b) Article III:4 of GATT 1994;

(c) Articles 2.1 and 2.2 of the TBT Agreement; and

(d) Article XVI:4 of the WTO Agreement.

3.2.
Australia requests that the Panel recommend that the European Communities bring its measures into conformity with its obligations under the WTO Agreement, including in respect of the TRIPS Agreement, GATT 1994 and the TBT Agreement.

B. EUROPEAN COMMUNITIES

3.3.
The European Communities requests that the Panel:

(a) find that certain measures no longer in force or not yet adopted at the time the Panel was established, and Australia's claims "under Articles 43, 44, 45, 46, 47, 48, 49 of the TRIPS Agreement", under Article 2(2) of the Paris Convention (1967) and "under Article 4 of the Paris Convention (1967)" as incorporated by Article 2.1 of the TRIPS Agreement, are outside the Panel's terms of reference; and

(b) reject all claims within the Panel's terms of reference.

IV. ARGUMENTS OF THE PARTIES

4.1.
The arguments of the European Communities and Australia, as set out in their submissions (European Communities' request for a preliminary ruling; Australia's response to the European Communities' request for a preliminary ruling, first written submissions, written rebuttals, oral statements, responses to questions; comments on each other's responses; and comments on the factual information from the International Bureau of WIPO), are attached as Annexes A and B.

V. ARGUMENTS OF THE THIRD PARTIES

5.1.
The arguments of those third parties that made submissions to the Panel (first written submissions, oral statements and responses to questions) are summarized and attached as Annex C.

VI. INTERIM REVIEW

6.1.
On 16 November 2004, the Panel submitted its interim report to the parties. On 30 November 2004, Australia and the European Communities submitted written requests for review of precise aspects of the interim report. On 7 December 2004, Australia and the European Communities submitted written comments on each other's request for interim review.
6.2.
The Panel has modified aspects of its report in light of the parties' comments where it considered appropriate, as explained below. The Panel has also made certain revisions and technical corrections for the purposes of clarity and accuracy. References to paragraph numbers and footnotes in this Section VI refer to those in the interim report, except as otherwise noted.

Further comments on 5 April 2004 preliminary ruling

6.3.
The European Communities requests the deletion of paragraphs 7.3 to 7.7 as the conformity of a panel request with Article 6.2 of the DSU must be evaluated on the face of the panel request. In its view, the references to discussions that take place in other fora, such as the Council for TRIPS, are irrelevant for this purpose.
6.4.
Australiaresponds that nothing in the DSU precludes the Panel noting that subsequent events confirmed the correctness of a particular conclusion.
6.5.
The Panel recalls that the European Communities made a request for a preliminary ruling the day after the Panel was composed in which it alleged defects in the panel request and submitted that it was appropriate that the Panel issue a preliminary ruling before the first written submissions of the parties were due. The Panel issued a preliminary ruling accordingly, in which it found that those allegations were unfounded on the face of the panel request and on the basis of the facts available to it at that time. That preliminary ruling sets out part of the basic rationale for the Panel's findings and recommendation in this dispute. Accordingly, in the course of making an objective assessment of the facts, the Panel does not disregard probative evidence relevant to that ruling submitted later in the course of the proceeding, other than the references to what took place during the consultations, which were without prejudice to the rights of the European Communities and other parties in these proceedings, in accordance with Article 4.6 of the DSU. The Panel has modified the relevant paragraphs, numbered 7.3 to 7.9 of the final report, to elaborate on the reasons for their inclusion.

Other preliminary rulings

6.6.
Australiarequests that the Panel elaborate its reasoning in paragraphs 7.35 to 7.39 and 7.42 to 7.45 with a view to reconciling it with that of the Appellate Body in Korea – Various Measures on Beef. Australia asserts that at paragraph 88 of its report on that dispute, the Appellate Body held that a panel could validly examine a WTO provision not specified in the panel request for the purposes of determining the consistency of a measure with a provision that was specified in the panel request.
6.7.
As a general comment, the European Communities considers that the interim review stage should not serve as an occasion to restate major parts of a party's arguments, nor to relitigate substantial parts of the interim report. Accordingly, the European Communities indicates that it refrains from commenting on all but two of the numerous issues raised by Australia without implying its agreement to the others. Specifically, the European Communities asks the Panel to include the preliminary rulings in these paragraphs in its conclusions at paragraph 8.1.
6.8.
The Panel notes that paragraph 7.38, numbered 7.42 in the final report, already explains why the assertion of an inconsistency with Article 4 of the Paris Convention (1967) amounts to a claim, rather than an argument. That distinction is referred to in the passage which Australia cites in its interim review comments. The Panel has added further detail and quotations of language where Australia in effect asserted its claim and made consequential amendments. The Panel notes that paragraph 39 of the Panel's preliminary ruling set out at paragraph 7.2 of the report already explains the basis on which the Panel accepted that the claim under Article 41 of the TRIPS Agreement was within its terms of reference. The Panel did not rule that Article 41 was within the terms of reference in all respects. This situation is quite different from that of the claims and arguments in the case to which Australia refers.

Claims regarding the "EC measure as a whole"

6.9.
Australiacomments that, apart from one limited aspect relating to the regulatory committee, the Panel has not addressed its claim that the EC measure as a whole accords less favourable treatment to imported products bearing an EC-defined GI than to like domestic products bearing an EC-defined GI, contrary to Article III:4 of GATT 1994. It requests that the Panel address the claim and reflect its finding on the "EC measure as a whole" in the conclusions.
6.10.
The Panel notes that Australia made claims regarding the "EC measure as a whole" under both the TRIPS Agreement and GATT 1994. With respect to the claims under the TRIPS Agreement, Australia referred in paragraphs 195 to 205 of its first written submission to five aspects of the Regulation which the Panel dealt with separately in sub-sections B.2, B.1, E.5, B.3 and E.3 of the findings, respectively. With respect to the claims under Article III:4 of GATT 1994, Australia listed eight bullet points at paragraph 177 of its first written submission and referred to their cumulative effect at paragraph 178. The Panel dealt with the third to sixth points in sub-section B.1 of the findings, the seventh point in sub-section B.2 and the eighth point in sub-section B.4. The Panel has added paragraphs 7,274 and 7,275 of the final report to explain why it is unnecessary to consider further the first and second points or the cumulative effect, and revised paragraph 7.66, numbered 7.68 in the final report, with respect to the labelling requirement, which was not mentioned in the first written submission in support of this claim. As for the conclusions, the Panel specifically sought the parties' views on whether they sought separate rulings on the procedural aspects of the Regulation or a ruling on the Regulation as a whole, in Panel question No. 49. In its response, Australia requested "that the Panel's findings be sufficiently detailed so as to facilitate a positive solution to the current dispute". The Panel has identified specific aspects of the Regulation in its conclusions which it has found inconsistent with a covered agreement in order to enable the European Communities to implement the recommendation. The Panel has not added a separate conclusion on the measure as a whole as this would not facilitate a positive solution to this dispute.

Endorsement of arguments by co-complainant

6.11.
Australiarequests that the Panel amend paragraphs 7.67 to 7.75. It comments that it did endorse generally all U.S. arguments, and did not just purport or attempt to endorse the arguments. This is a separate issue from whether the Panel considered any arguments that arose from this general endorsement. Australia recalls that a panel is not bound to accept the arguments of any party and is free to develop its own legal reasoning. Where there is a single panel, but multiple complainants and multiple reports, a panel can use arguments put to it by either party in assessing common claims. In this context, Australia has the right – either on grounds of efficiency or by way of endorsing either similar or alternative arguments – to endorse, in general terms, arguments by the other complainant in this dispute.
6.12.
With respect to the timing of the general endorsement, Australia recalls the Appellate Body's comment in India – Patents (US) (at para. 88) that arguments – as distinct from claims – "are set out and progressively clarified in the first written submissions, the rebuttal submission and the first and second Panel meetings with the parties as a case proceeds" and asserts that, in this dispute, the timing of the general endorsement can be readily explained when the appropriate context is recalled. At the time of the first opening statement, Australia endorsed U.S. arguments relating to the European Communities' obligations concerning the overlapping claims that Australia and the United States had made with regard to national treatment (under the TRIPS Agreement and GATT 1994) and trademark rights. The rest of Australia's first opening statement covered mainly claims that had not been made by the United States, namely, claims under Article 22.2 of the TRIPS Agreement and under the TBT Agreement. Australia repeated this endorsement at the opening of the second panel hearing. During the second hearing, however, the European Communities sought to make much of the fact that the United States and Australia did not have exactly the same arguments and that this meant that the European Communities' arguments were correct. It was in seeking to reject the European Communities' attempt to make more of the different arguments by the complainants that Australia responded by clarifying that it endorsed all of the United States' arguments.
6.13.
Australia accepts that it could have made clearer that its general endorsement was on the basis of endorsing the United States' arguments as alternative arguments wherever these were inconsistent with Australian arguments. However, Australia maintains that any differences between the United States' and Australian arguments are not material to the matter before the Panel. For example, regardless of the interpretation of Article 24.5 of the TRIPS Agreement, both Australia and the United States agree that it does not provide the European Communities with an excuse for its breach of Article 16.1 of the TRIPS Agreement.
6.14.
Australia refers to the statement in paragraph 7.72 that the Panel (or the European Communities) should not have to sift through the United States or Australian arguments looking for any inconsistency in order to understand the Australian case (where it intersects with the general endorsement of the United States' arguments). The Panel's comments may indicate that it does not consider a careful sifting of all of the arguments put to it, including Australia's, to be a necessary and integral part of its role. As such a view would be clearly contrary to Article 11 of the DSU, Australia requests that the statement be amended or withdrawn.
6.15.
Australia refers to the statement at paragraph 7.74 and asserts that the Panel attributes, without evidence, certain motives to Australia and, as a consequence, impugns Australia's conduct. However, it asserts that the Panel's assessment of Australia's motives is wrong and requests that the statement be withdrawn. While the Panel is right to ensure that a respondent's due process rights are protected, Australia comments that it is also incumbent on the Panel to respect the rights of a complainant and to ensure a fair hearing for all parties to a dispute. The European Communities did not object to a single panel being established by the DSB. Further, the European Communities was given extra time to prepare its first written submission, notwithstanding the largely overlapping nature of the claims by both complainants. In the hearings, the European Communities was allowed to speak as long as it wished, to introduce irrelevant material late in the process, to continuously reiterate immaterial points, and to waste time by asking the complainants a large number of irrelevant questions. This hardly suggests that the European Communities has suffered in any way from the single panel considering, for both reports, all the arguments put to it by either of the complainants. Further, as the European Communities had ample opportunity to counter the United States' arguments, Australia's general endorsement of the United States' arguments did not increase the "case" the European Communities had to answer or that the Panel had to consider.
6.16.
The European Communities expresses regret that Australia, in its comments on paragraphs 7.72, 7.74 and 7.75, summarily dismisses arguments made by the European Communities as irrelevant or immaterial.
6.17.
The Panel agrees that a complainant can endorse a co-complainant's arguments. However, the Panel does not consider that Australia's comment in its closing statement at the second substantive meeting that "Australia endorses all of the arguments put forward by the United States" was a sufficient basis for the Panel to consider that Australia's arguments as presented earlier were modified, given that there were material differences between those arguments and no information was provided as to how they should be reconciled. Paragraphs 7.71 and 7.72 already explained this point but the Panel has expanded them into paragraphs 7.73 to 7.79 in the final report to illustrate the problem. The Panel has examined the parties' arguments in the course of its objective assessment under Article 11 of the DSU but it does not undertake tasks inconsistent with that function. The Panel has expanded paragraph 7.72, numbered 7.79 in the final report, for the avoidance of doubt.
6.18.
The Panel has been mindful of the due process rights of all parties in these proceedings. The European Communities' consent to the establishment of a single panel did not relieve Australia of its burden of making a prima facie case in support of all its claims.
6.19.
The Panel takes note of Australia's explanation of the surrounding circumstances. Paragraph 7.74 reflected the oral interventions at the second substantive meeting. If Australia intended to respond to the European Communities' emphasis of differences between the complainants' respective arguments, then the mere assertion that those differences were not material was ineffective, and the endorsement would have transformed differences between the complainants' cases into contradictions within Australia's own case. Australia's interim review comments do not present any circumstances that would justify the Panel taking a different approach but, rather, point out differences between the arguments Australia presented itself and those of the United States. Therefore, the Panel has retained the first and second sentences of paragraph 7.74, numbered 7.81 in the final report, but deleted the following discussion. The Panel has also corrected paragraph 2.15.

The phrase "[w]ithout prejudice to international agreements"

6.20.
The European Communities requests the deletion of paragraphs 7,132 to 7,137 because it did not argue that the application of Article 12 of the Regulation would prejudice "the EC's obligations under the TRIPS Agreement". It quotes paragraph 66 of its first written submission and paragraph 43 of its first oral statement and asserts that "[t]hese statements do not contain any indication that the EC consider that its obligations under the TRIPS Agreement would be prejudiced by the application of Article 12 of Regulation 2081/92. Rather, the reference to the obligation to provide protection for geographical indications was clearly intended as a reference to the obligation of other WTO Members to provide protection. This is also what the EC explained in response to the Panel's Question No. 94(b)." The European Communities agrees that it is true that it did not provide an explicit response to Panel question No. 20 but it asserts that it did, however, address this point in response to Panel question No. 94, in which it clarified that whereas the application of these conditions would not prejudice the European Communities' national treatment obligations under the TRIPS Agreement, it would prejudice its national treatment obligations under the GATT. Given this context, it comments that the Panel is wrong to read into the European Communities' submission a statement which the European Communities clearly did not make, and which contradicts the entire logic of the European Communities' submissions. In its view, by attempting to read admissions into the European Communities' submissions, the Panel effectively distorts these submissions. This is not compatible with the task of the Panel under Article 11 of the DSU, which is to make an objective assessment of the facts. The European Communities also requests the deletion of paragraph 7,247 for the same reason and because it is unnecessary to the legal analysis which precedes it.
6.21.
Australiaresponds that, in its view, the Panel's summation of the arguments put forward by the European Communities is accurate. Australia notes that the statements quoted by the European Communities from its first written submission, first oral statement and response to question No. 94, in fact concern what Australia has referred to in this dispute as "TRIPS-defined GIs" of which the "EC-defined GIs" covered by the Regulation are generally a subset. However, the dispute has not concerned the European Communities' implementation of its obligations under the TRIPS Agreement and GATT 1994 concerning TRIPS-defined GIs more generally, it has concerned the European Communities' implementation of its obligations in relation to EC-defined GIs. Australia suggests that the relevance of the European Communities' arguments might be better understood if the Panel were to recall the relevance of the distinction between a "TRIPS-defined GI" and an "EC-defined GI". At the same time, however, Australia is of the view that the Panel's analysis of the arguments put forward by the European Communities is entirely correct. Since the allegedly incorrect nature of the statements was the only basis on which the European Communities requested that paragraphs 7,132 to 7,137 be deleted and paragraph 7,247 be amended, Australia suggests that the paragraphs be retained.
6.22.
The Panel takes note of the parties' comments and has carefully reviewed the European Communities' submissions, statements and responses to questions in this dispute, and confirms the following facts: (a) the interim report is consistent with the European Communities' own detailed analysis of the phrase "[w]ithout prejudice to international agreements" in its rebuttal submission; and (b) the European Communities repeatedly emphasized the importance of its own obligations in the interpretation of the equivalence and reciprocity conditions but there is no clear explanation on the record of this dispute as to how the obligations of other WTO Members would render the equivalence and reciprocity conditions under the European Communities' own Regulation inapplicable and the Panel declines to speculate. Therefore, the Panel has expanded and revised, rather than deleted, the relevant paragraphs, numbered 7,139 to 7,145 in the final report, and deleted the other paragraph without affecting the preceding legal analysis.
6.23.
The Panel takes note that, although the European Communities has now requested the deletion of most consideration of its own arguments concerning the phrase "[w]ithout prejudice to international agreements", this point is important to its defence and those arguments have not been withdrawn. Therefore, the Panel considers it important to address them as part of its objective assessment of the matter before it, in accordance with its function under Article 11 of the DSU.

Specific definitions of "nationals"

6.24.
Australia comments that, in view of the Panel's ruling that it cannot be considered to have endorsed all of the United States' arguments in its closing statement at the second substantive meeting, Australia has not argued that the European Communities is a separate customs territory Member of the WTO within the meaning of footnote 1 to Article 1.3 of the TRIPS Agreement or that, as a consequence, a special regime to determine nationals applies. Notwithstanding that Australia has pointed to some seeming anomalies in the European Communities' responses to the United States' arguments on the issue in Australia's response to Panel question No. 104, Australia's views on the meaning of the term "national" are as set out in its response to Panel question No. 23 (and referred to in paragraph 7,146). It is not contested by Australia that the determination of which persons are EC nationals is generally a matter for determination by the European Communities under its own law.
6.25.
The Panel had observed that Australia's views on the meaning of "national", as reflected in the interim report, include references to persons who are domiciled or who have a real and effective industrial or commercial establishment in a separate customs territory Member of the WTO. Consequently, the Panel considered it necessary to address the applicability of that specific definition. However, in light of Australia's confirmation in its interim review comments that it did not argue that the European Communities is a separate customs territory Member of the WTO, the Panel has revised paragraph 7,194, numbered 7,201 in the final report, and deleted the reasoning regarding that issue.

Examination of applications for registration

6.26.
The European Communities requests the amendment of paragraph 7,307(b) to take account of the requirement in Article 12a(2)(a) of the Regulation that a third country must also transmit "a description of the legal provisions and the usage on the basis of which the designation of origin or the geographical indication is protected or established in the country", which is a question of the law of the third country not Community law. It also comments that paragraph 7,307 should explain how the European Communities can implement Article 24.9 of the TRIPS Agreement with respect to such questions of foreign law, taking into account that the complainants have stated that such questions can be of high complexity and have indicated their unwillingness or inability to cooperate on such issues.
6.27.
Australiabelieves that the Panel's statement at paragraph 7,307 is accurate. It does not preclude information concerning the domestic law of the country of origin being one of the criteria referred to in Article 12a(2)(a) of the Regulation. Consequently, Australia suggests that there is no need for any change to paragraph 7,317. While the Panel may choose to elaborate its reasoning in respect of the consequences of Article 24.9 of the TRIPS Agreement, Australia does not believe such elaboration is necessary to the resolution of the dispute.
6.28.
The Panel takes note of the European Communities' request and notes that the description of protection in the country of origin is already included in paragraph 7,307, numbered 7,303 in the final report, which is the logical place for it. The Panel considers it inappropriate to make further findings in the paragraph. The Panel's findings on transmission of applications already apply to all accompanying documents, including the description of protection in the country of origin. Further, this is an "as such" claim but Article 12a(2)(a) of the Regulation does not specify what form of description of protection in the country of origin would be acceptable, nor is there conclusive evidence on this point. In any event, Article 62 of the TRIPS Agreement would appear to be important in framing any recommendation on implementation, but it lies outside the Panel's terms of reference, as explained in paragraph 7,314 of the final report.
6.29.
The Panel has also replaced, where appropriate, the word "verification" in relation to applications for registration later in the report in order to be consistent with the use of the word "examination" used in the description of the application procedures and the consideration of the national treatment claim under the TRIPS Agreement.

Article 2.1 of the TBT Agreement

6.30.
Australiarequests that the Panel review the reasoning set out in paragraphs 7,475 to 7,484, and elaborate its reasoning for the first sentence of paragraph 7,469 and the last sentence of paragraph 7,471. It comments that the Panel's analysis of the "less favourable treatment" elements of this claim seems premised on a misunderstanding of the basis of Australia's claim, which is the fact that Article 12(2) of the Regulation mandates – in the specified circumstances – a labelling requirement for an imported product bearing a GI that is not similarly mandated for a domestically produced product bearing a GI. Further, that mandated differential treatment results in less favourable treatment for an imported product bearing a GI. Australia comments that, as the Panel noted, the challenge is made to the relevant provision "as such". Thus, the fact that the European Communities may have the discretion to impose the same labelling requirement on a domestically produced product in the specified circumstances does not overcome the inconsistency of the labelling requirement set out in Article 12(2) of the Regulation with the European Communities' national treatment obligation under the TBT Agreement. If the Panel concludes that some revisions are necessary, it requests that the Panel complete its analysis of this claim. On the issue of "like products", it requests the insertion in paragraph 7,471 of an example from its arguments.
6.31.
The European Communities opposes Australia's request regarding "like products". The example given is one on which no discussion has taken place, and this is an issue on which Australia has made no claims or arguments.
6.32.
Regarding marks of origin, the European Communities requests the deletion of point (b) of paragraph 7,469, with which it does not agree. The use of the words "made in" is not a specific requirement for a mark of origin in Article IX:1 of GATT 1994. It comments that it does not understand what is meant by the references in that paragraph to indication "in pictorial matter" nor by indication "alongside the GI" nor how this is relevant. Given the Panel's findings, it considers it unnecessary to reach a conclusion on this issue.
6.33.
The Panel notes that the interim report already explains why Australia's argument does not demonstrate any difference in treatment but has made an addition to paragraph 7,469 in the final report. The reasoning in the paragraphs identified by Australia forms the basis for the statements it references in paragraphs 7,465 and 7,467 and the Panel sees no need to elaborate. The Panel has also retained the factual point in the paragraph, numbered 7,461 in the final report, because it is appropriate to explain why the European Communities' defence concerning marks of origin appears to be irrelevant to the preceding legal analysis. However, it has modified the point.

Right to prevent the use of translations of registered GIs

6.34.
The European Communities considers that it would be useful to recall in paragraph 7,530, for the sake of completeness, that under Article 13(1)(b) of the Regulation, GI holders do have a negative right to prevent the use of the registered name or names in translation.
6.35.
The Panel has added a footnote to clarify the scope of the positive right to use a GI with respect to translations and has also clarified the importance of the fact that a trademark may continue to be used under Article 14(2) of the Regulation. However, the Panel declines to amend the referenced paragraph as requested because the protection granted by Article 13 of the Regulation is already addressed elsewhere and it has not been shown to what extent Article 13(1)(b) covers translations.

Exceptions in trademark legislation with respect to the use of GIs

6.36.
The European Communities comments that the assertion in paragraph 7,569 to the effect that the its trademark legislation provides no exceptions with respect to the use of geographical indications is factually incorrect, and refers to its response to Panel question No. 153 and, specifically, to Article 6.1(b) of the First Trademark Directive and Article 12(b) of the Community Trademark Regulation. Therefore, even where a trademark owner is allowed under the GI Regulation to enforce his rights under the First Trademark Directive or the Community Trademark Regulation with respect to the confusing use of a registered GI, he cannot prevent such use if it is "in accordance with honest practices in industrial or commercial matters".
6.37.
Australianotes that the European Communities' comment is premised on the basis that an "indication concerning the... geographical origin... of goods" necessarily includes a GI, which is not always the case. In any case, the European Communities' comment intersects with the issue raised by Australia concerning whether a TRIPS-defined GI – and thus an EC-defined GI – can be analogous to "a descriptive term" within the meaning of Article 17 of the TRIPS Agreement.
6.38.
The Panel takes note of the European Communities' factual correction and has deleted the paragraph.

Scope of a limited exception for GIs in translation

6.39.
The European Communities suggests a redraft of paragraph 7,668 for the following reasons: (a) lest it imply that the European Communities agrees with the last sentence of paragraph 7,666; (b) to include all the relevant limitations to the exception in Article 14(2) of the Regulation relied upon by the Panel including "what is undoubtedly the most crucial one, namely that the trademark owner maintains the right to prevent any confusing uses by all parties except the GI holders"; and (c) because a registration under the Regulation may specify more than one linguistic version of the geographical indication and the last part of the second sentence of paragraph 7,668 may suggest otherwise.
6.40.
Australiarequests that the argument attributed to it in the first sentence of paragraph 7,668 should be referenced or deleted. Should the Panel retain the paragraph, Australia notes that the suggested re-draft by the European Communities eliminates the final point of the second sentence that registration "does not cover the name where rendered differently in another language". In Australia's view, the Panel's finding on this point is an accurate summation of the European Communities' own description of the effect of registration of a term as a GI, and it cites various statements in the European Communities' submissions. Australia suggests that any redraft of the existing second sentence of the paragraph retain the point, given the arguments actually made by the European Communities.
6.41.
The Panel has taken careful note of the parties' comments and has amended the paragraph, numbered 7,659 in the final report, to track more closely the wording of the explanations in the European Communities' own submissions, and then made a finding on the basis of the terms of the legislation and those explanations. It has also deleted the reference to Australia, and added references in the succeeding paragraph and elsewhere to the limitation provided by certain directives which the European Communities explained during the proceeding.

Descriptive terms

6.42.
Australiarequests that the Panel elaborate its reasoning at paragraph 7,689 which assumes that a GI is analogous to a descriptive term within the meaning of the example in Article 17, taking account of the arguments put forward by the parties, including those made by Australia in relation to the design and architecture of the TRIPS Agreement.
6.43.
The Panel has revised this and the preceding paragraph for clarity and added a reference to certain directives which the European Communities explained during the proceeding that provide further explanation of the legitimacy of certain interests. However, further elaboration on descriptiveness is unnecessary given that the Panel has expressly recognized that GIs are intellectual property rights, has not found that GIs are purely descriptive terms, and has noted the express requirements in Article 2(2) of the Regulation that GIs registered under the Regulation must describe certain matters.

Comparison of exceptions provisions

6.44.
Australiarequests that paragraph 7,679 be substantially revised as it is not possible to consider differences in the language of the various provisos in isolation from the nature of the minimum standards for the intellectual property rights concerned.
6.45.
The Panel has interpreted Article 17 in light of the minimum standards of which it forms a part, and has noted differences from rights granted by other forms of intellectual property protection where appropriate elsewhere. The Panel considers an observation of how the text differs from analogous texts in the same agreement to be relevant and does not base its reasoning on that observation alone. The Panel has modified the paragraph, numbered 7,671, in light of the comment received.

Articles 10bis and 10ter of the Paris Convention (1967)

6.46.
Australiacomments that the reasoning as currently expressed in paragraphs 7,729 to 7,733 seems to indicate that a responding party's assertion that it does not understand a claim is of itself a sufficient defence to a claim. Australia requests that the Panel review the content of these paragraphs and make appropriate amendments. In Australia's view, the key issue is whether the Panel understood Australia's claim and arguments and, if it did not, the steps it took to undertake an objective assessment. Moreover, it asserts that when the European Communities said it could not understand the claim because it could not see how a situation could arise where there would be an act of unfair competition, that this indicated that the European Communities did understand the claim, but did not agree that a relevant circumstance could arise. This does not affect the relevant obligation under the TRIPS Agreement.
6.47.
The Panel takes note of Australia's comments and has expanded and revised the paragraphs, numbered 7,721 to 7,726 in the final report, to remove this impression and to clarify the full extent of the argumentation in support of this claim on which the Panel was called upon to make its assessment.

Individual registrations

6.48.
Australiarequests that the Panel elaborate its reasoning in paragraph 7,753. It seeks clarification whether Australia's failure to specify any individual registrations in respect of which it requires relief affected the Panel's conclusion, and whether the Panel exercises judicial economy concerning ongoing registrations.
6.49.
The Panel has reworded its existing reasoning in the paragraph numbered 7,750 in the final report. Australia's failure to specify any particular individual registration effected after the date of establishment of the Panel was relevant to the exercise of judicial economy on the preliminary ruling but not the conclusion on the claim, and this has been clarified in paragraph 7.26 for the avoidance of doubt.

Conclusions

6.50.
Australiaasks whether the Panel exercises judicial economy on the claims under Article 2(1) of the Paris Convention (1967), as incorporated by Article 2.1 of the TRIPS Agreement.
6.51.
The Panel has revised paragraph 7,252 to state its reasons for exercising judicial economy in relation to this provision, and reflected this in its conclusions in paragraph 8.1.

Suggestion by the Panel on a way to implement its recommendation

6.52.
Australiacomments that it may assist the resolution of the dispute if the Panel were not to make any recommendation on how the European Communities could bring its measure into conformity. In Australia's view, amending the Regulation to accord with the interpretation that the European Communities submitted to the Panel would not necessarily bring the measure into conformity, even with respect to the reciprocity and equivalence conditions. This is because the European Communities consistently argued that the reciprocity and equivalence conditions of the Regulation were not inconsistent with the European Communities' national treatment obligations under the TRIPS Agreement. In addition, Australia is concerned that a recommendation by the Panel in respect of just one finding could be seen to suggest that the Panel's other findings of inconsistency are of lesser importance.
6.53.
The European Communities expresses surprise at Australia's suggestion as it would appear that a clarification that the European Communities does not apply conditions of reciprocity and equivalence would remove the concern expressed by Australia regarding the protection of its GIs under the Regulation. As regards Australia's argument that "the EC consistently argued that the reciprocity and equivalence conditions of the Regulation were not inconsistent with the EC's national treatment obligations under the TRIPS Agreement", the European Communities recalls that it conceded that the application of such conditions would be incompatible with the GATT. Furthermore, the European Communities fails to see the relevance of Australia's comment in the context of the discussion of paragraph 8.5, which concerns an issue of implementation. Finally, as regards Australia's concern that certain of the Panel's findings should not be regarded as being of lesser importance than others, the European Communities fails to see why a suggestion made by a Panel in respect of one of its findings would indicate that this finding is more or less important than other findings. For these reasons, the European Communities requests that paragraph 8.5 not be deleted.
6.54.
The Panel has modified its suggestion in paragraph 8.5 but, on the basis of the European Communities' remarks on interim review, considers it helpful to retain it. This suggestion does not imply that the Panel's other findings of inconsistency are of lesser importance.

Other requests for review

6.55.
Australiaalso requested deletion of paragraphs 7.64, 7.65 and 7,357 and footnote 526, and modifications to paragraphs 7,194, 7,214, 7,439, 7,473, 7,515 to 7,523, 7,589, 7,621, 7,700 and 8.2 and footnotes 565 and 591. It also makes some clerical observations. The Panel has modified its report in light of those comments.
6.56.
The European Communities also requested modification of paragraphs 8.1 and 8.2. The Panel has modified those paragraphs and paragraph 7,758 in light of those comments.

VII. FINDINGS

A. PRELIMINARY ISSUES

1. Consistency of panel requests with Article 6.2 of the DSU

7.1.
On 24 February 2004, the day after the Panel was composed and prior to the organizational meeting, the European Communities submitted a detailed request that the Panel issue a preliminary ruling that the United States' and Australia's respective requests for establishment of a panel were inconsistent with the requirements of Article 6.2 of the DSU. In accordance with the Panel's timetable, the United States and Australia submitted responses to the European Communities' request for a preliminary ruling.
7.2.
On 5 April 2004, the Panel issued the following preliminary ruling.9

(a) Introduction

1. The European Communities is of the view that the requests for establishment of a panel in this matter do not meet the requirements of Article 6.2 of the DSU. It has requested that the Panel issue a preliminary ruling regarding this question.10

(...)11

3. Australia is of the view that its request for establishment of a panel fully complies with the requirements of Article 6.2 of the DSU. It submits that the substantive basis of the European Communities' request for a preliminary ruling should be denied in full.12

4. Article 6.2 of the DSU provides as follows:

"2. The request for the establishment of a panel shall be made in writing. It shall indicate whether consultations were held, identify the specific measures at issue and provide a brief summary of the legal basis of the complaint sufficient to present the problem clearly. In case the applicant requests the establishment of a panel with other than standard terms of reference, the written request shall include the proposed text of special terms of reference."

5. The European Communities alleges that the requests for establishment of a panel are inconsistent with the following requirements in Article 6.2:

(a) they fail to identify the specific measure at issue; and

(b) they do not provide a brief summary of the legal basis of the complaint sufficient to present the problem clearly.

6. The Panel will examine each of the requests for establishment of a panel as a whole on its face in the light of the parties' respective communications to the Panel to date and the relevant provisions of the covered agreements to assess its compliance with each of these requirements in the sections below.13

(...)14

(c) Australia's request for establishment of a panel15

(i) Identification of the specific measure at issue

23. Australia's request, in its fourth paragraph, identifies the following measures at issue:

"The measure at issue is Council Regulation (EEC) No. 2081/92 of 14 July 1992 on the protection of geographical indications and designations of origin for agricultural products and foodstuffs, any amendments thereto (including Council Regulation (EC) No. 692/2003 of 8 April 2003, published in the Official Journal of the European Union No. L99 of 17 April 2003), and related implementing and enforcement measures ('the EC measure'). The EC measure lays down and implements rules on the protection of designations of origin and geographical indications for agricultural products and foodstuffs, excluding wines and spirits."

Council Regulation (EEC) No. 2081/92 and any amendments thereto

24. Australia's request identifies a particular regulation by the name of the authority which adopted it, by its number, by its date of adoption and by its full title. It includes amendments of this regulation, including one amendment which is identified by the name of the authority which adopted it, by its number, by its date of adoption, by its full title and by the date and place of its publication. This is a specific measure,16 and the request has identified it. There is no doubt as to which specific measure is in issue, as the European Communities has itself demonstrated by annexing a consolidated text of the regulation to the request for a preliminary ruling.17

25. The European Communities argues that:

"The unspecific reference to Regulation 2081/92 made in the Panel requests does not permit the EC to understand which specific aspects among those covered by Regulation 2081/92 the complainants intend to raise in the context of the present proceedings." (italics added)

26. The Panel considers the ordinary meaning of the terms of the text in Article 6.2 of the DSU, read in their context and in the light of the object and purpose of the provision, to be quite clear. They require that a request for establishment of a panel "identify the specific measures at issue". They do not require the identification of the "specific aspects" of these "specific measures."

"related implementing and enforcement measures"

27. Australia's request identifies, in addition to the regulation and any amendments thereto, "related implementing and enforcement measures". This phrase expressly refers to measures which implement and enforce Regulation (EEC) No. 2081/92, as amended. The word "related" is not used in isolation in the request.

28. The Regulation as amended itself expressly provides for the taking of particular types of decisions and actions and the adoption of rules of procedure for applying the Regulation. For example, Article 6 provides for the Commission to verify that registration applications include all the requisite particulars and, if it concludes that the name qualifies for protection, to publish certain details and, if no objection is notified, the name is entered in a register or, if the Commission concludes that the name does not qualify for protection, to decide not to proceed with the publication. Article 11a provides that the Commission may cancel the registration of a name. Article 12 provides for decisions by the Commission as to whether a third country satisfies the equivalence conditions and offers the requisite guarantees. Article 12b provides for the Commission, if it concludes that a name the subject of a registration request sent by a third country satisfies the conditions for protection, to publish certain details or, if it concludes that the name does not satisfy the conditions for protection, to decide not to proceed with publication. Article 16 provides for detailed rules for applying the Regulation to be adopted.18 Those decisions, actions and rules, among others, implement the Regulation. The European Communities has indicated that the competent judicial and executive authorities enforce the Regulation.19 In the Panel's view, this does not imply that there is any uncertainty as to which measures taken by those authorities implement and enforce the Regulation and which do not. All of the Regulation's implementing and enforcement measures form a group of specific measures which, although they may be a large group, are identified by Australia's request for establishment of a panel.20

29. For these reasons, on the basis of the facts available to us, the Panel rules that Australia's request for establishment of a panel did not fail to identify the specific measures at issue in accordance with Article 6.2 of the DSU.

(ii) A brief summary of the legal basis of the complaint sufficient to present the problem clearly

30. Australia's request, in its fifth paragraph, sets out in eight bullet points alleged inconsistencies with the covered agreements, by providing narrative text quoting or paraphrasing treaty text accompanied by provisions of the covered agreements identified by number. The numbered provisions identify every article of every covered agreement at issue and, in most cases where there are paragraphs within an article, such paragraphs are identified.

31. The European Communities takes issue with Australia's reference to whether Regulation No. 2081/92 is a "technical regulation" within the meaning of Annex 1 to the TBT Agreement because the definition does not impose any obligations which could have been violated.21

32. The Panel notes that the definition of "technical regulation" per se is not an obligation but rather defines a term used in other provisions of the TBT Agreement set out in Australia's request. The reference to the definition actually presents the problem more, rather than less, clearly because it explains why Australia considers that the measures at issue are subject to the relevant obligations.

33. The European Communities also takes issue with the reference to Article 2 of the TRIPS Agreement (incorporating by reference Articles 10, 10bis and 10ter of the Paris Convention). It argues that Articles 10, 10bis and 10ter are "complex provisions" divided into various paragraphs, and imposing numerous distinct obligations.

34. Australia replies that, irrespective of the accuracy of the European Communities' portrayal of these provisions, its claim is that the measures at issue diminish the legal protection for trademarks under the TRIPS Agreement, contrary to all aspects of these cited provisions.22

35. The Panel considers that the mere listing of provisions of the relevant covered agreements may not satisfy the standard of Article 6.2 of the DSU, for instance, where the listed provisions establish multiple obligations rather than one single, distinct obligation.23 However, where the multiple obligations are closely related and interlinked, a reference to a common obligation in the specific listed provisions may be sufficient to meet the standard of Article 6.2 of the DSU under certain circumstances in a particular case.24

36. With these considerations in mind, the Panel now examines the articles to which the European Communities has referred in Australia's request for establishment of a panel. The Panel notes that, on their face, the provisions within each of these articles are interlinked and very closely related, and that the separate paragraphs do not necessarily create distinct obligations. In particular:

(a) Article 10 of the Paris Convention (1967) extends the application of the provisions of Article 9, which relates to seizure of goods, to false indications of source. The second paragraph of Article 10 sets out a deeming provision for the purposes of the first paragraph;

(b) Article 10bis of the Paris Convention (1967) sets out a single obligation in paragraph (1) regarding unfair competition which is clarified in, and therefore closely related to, paragraphs (2) and (3); and

(c) Article 10ter of the Paris Convention (1967) sets out in paragraph (1) an obligation regarding legal remedies to repress all the acts referred to in Articles 9, 10 and 10bis, and in paragraph (2) an obligation regarding action to repress the same acts by particular types of legal person.

37. The European Communities also takes issue with the reference to "Articles 41 and/or 42 of the TRIPS Agreement". It submits that Article 41 is a "complex provision" subdivided into a number of paragraphs, which contain a number of different obligations; that Article 42 comprises several sentences establishing distinct obligations; and that it "does not understand the 'and/or' which seems to indicate that Articles 41 and 42 of the TRIPS Agreement are somehow alternative obligations".25

38. Australia replies that its reference to the essential elements of the relevant provisions is sufficient in this dispute to shed light on the nature of the obligations at issue in relation to the specific measures at issue. It also states that, in accordance with common usage, the expression "and/or" applies to all of the provisions cited.26

39. The Panel makes the following observations:

(a) Article 41 of the TRIPS Agreement contains general obligations which relate to acts of infringement of intellectual property rights covered by this Agreement. The accompanying narrative text of Australia's request clarifies that this claim is made because the measure at issue allegedly "diminishes the legal protection for trademarks under the TRIPS Agreement". The general obligations in Article 41 relate to "enforcement procedures as specified in [Part III]". Certain of those enforcement procedures, namely under Article 42, are also raised which clarifies that the general obligations are the subject of a claim in relation to these procedures. In particular, Article 42 is entitled "fair and equitable procedures" which is the subject of an obligation in Article 41.2;

(b) Article 42 of the TRIPS Agreement contains closely related obligations concerning fair and equitable procedures. The accompanying narrative text clarifies that this claim is made in relation to "the legal protection for trademarks under the TRIPS Agreement". The requirements of each sentence in Article 42 are distinct but they all set out specific features of fair and equitable civil judicial procedures concerning the enforcement of intellectual property rights; and

(c) the use of the term "and/or" at the end of a series or list of items connected by commas is a standard means of indicating that all items in that series or list may apply cumulatively or separately.27 There is nothing in the context of Australia's request for the establishment of a panel that would indicate that it refers only to the last two items in the series. There is nothing which prevents a complainant making claims in the alternative. This puts the respondent on notice that the complainant effectively makes all these claims.

40. The European Communities further contends that it is entitled to know which provision or aspect of Regulation No. 2081/92 is supposed to violate certain obligations and in which way such a violation is deemed to occur. In the Panel's view, the European Communities is seeking the arguments, rather than just the claims, of Australia.28 That being said, the Panel wishes to assure the European Communities that it is fully entitled to know the arguments of Australia during the course of the proceedings. Those arguments must be set out and may be clarified in Australia's submissions.29 However, Article 6.2 of the DSU does not require those arguments to be set out in the request for establishment of a panel.30

41. The Panel notes that Article 6.2 of the DSU calls for sufficient clarity with respect to the legal basis of the complaint so as to enable a defending party to begin preparing its defence.31 Our examination of Australia's request for establishment of a panel as a whole, in the light of Australia's and the European Communities' respective communications to the Panel to date and the relevant provisions of the covered agreements, leads us to believe that the request for establishment of a panel was sufficiently clear for the European Communities to begin preparing its defence.

42. For these reasons, on the basis of the facts available to us, the Panel rules that Australia's request for establishment of a panel did not fail to provide a brief summary of the legal basis of the complaint sufficient to present the problem clearly in accordance with Article 6.2 of the DSU.

(d) Due process

43. The European Communities is also of the view that the "deficiencies" of the requests for establishment of a panel seriously prejudice its due process rights as a defending party, notably, to know the case it has to answer.32

44. The Panel recalls once again that Article 6.2 of the DSU calls for sufficient clarity with respect to the legal basis of the complaint so as to enable a defending party to begin preparing its defence.33 In this respect, the Panel has found that the complainants' requests for establishment of a panel were sufficiently clear for the European Communities to begin preparing its defence.34 Therefore, the Panel considers that it is not necessary to make a separate ruling on this issue, as presented by the European Communities in its request.35

45. The Panel is mindful of the due process rights of all parties in this proceeding. In this regard, it notes that the European Communities had a period of over four months after the establishment of the Panel prior to its constitution plus a period of over seven weeks prior to receipt of the complainants' first written submissions to begin preparing its case, and will have an additional period of four and a half weeks from receipt of the complainants' first written submissions to continue preparation of its own first written submission, which is in excess of the maximum period proposed in Appendix 3 to the DSU.

(e) Timeliness

46. The European Communities submitted its request for a preliminary ruling two days after the composition of the Panel. It also raised its concerns at the DSB meetings at which the requests for establishment of a panel were considered.36

47. The Panel therefore considers that the European Communities has raised its concerns in a timely manner.37

(f) Conclusion

48. In light of the foregoing, on the basis of the facts available to us, the Panel rules that the measures and claims in Australia's and the United States' respective requests for establishment of a panel did not fail to meet the requirements of Article 6.2 of the DSU that they identify the specific measures at issue and provide a brief summary of the legal basis of the complaint sufficient to present the problem clearly. [End of 5 April 2004 ruling]

7.3.
The Panel stated expressly that its 5 April 2004 preliminary ruling was based on the facts available to it at that time.38 In this final report, the Panel makes further findings on the sufficiency of the panel request, in light of submissions made later during the course of the panel proceeding. These submissions confirm the Panel's ruling as to the meaning of the words used in the panel request and the Panel's assessment that the ability of the respondent to defend itself was not prejudiced.39
7.4.
First, the Panel recalls that the European Communities argued, in its request for a preliminary ruling, that:

"The unspecific reference to Regulation 2081/92 made in the Panel requests does not permit the EC to understand which specific aspects among those covered by Regulation 2081/92 the complainants intend to raise in the context of the present proceedings."40

7.5.
The Panel ruled that Article 6.2 did not require the identification of the "specific aspects" of the specific measures at issue.41 In any event, after consulting the parties' first written submissions, it is clear that the reference to "Regulation No. 2081/92, as amended" in the request for establishment of a panel did identify certain specific aspects among those covered by the Regulation that the complainant later raised, as follows:

(a) Australia's principal claims concerning national treatment (considered in Section VII:B of this report) are based on the differences between the two sets of registration and objection procedures set out in Regulation (EEC) No. 2081/92 (the "Regulation") in Articles 5 through 7 and 12 through 12d, respectively.42 This is one of the principal features of the Regulation. It was clear from the request for establishment of a panel that the complainant intended to raise these aspects of the Regulation; and

(b) Australia's principal claim concerning the legal protection for trademarks (considered in Section VII:D of this report) is based on Article 14 of the Regulation. This provision is specifically devoted to that issue. It was clear from the request for establishment of a panel that the complainant intended to raise this article of the Regulation, as the European Communities itself confirmed in its request for a preliminary ruling.43

7.6.
Second, the Panel recalls that the European Communities submitted in its February 2004 request for a preliminary ruling that:

"In the present case, the ambiguity of the Panel request is such that the EC is, to this date, not sure of the case which the United States and Australia are bringing before the Panel. As a consequence, the EC has been seriously hampered in its efforts to prepare its defence."44

7.7.
Specifically, with respect to the national treatment claims, it submitted as follows:

"[T]he US claim is limited to a paraphrasing of the treaty language of [Article 3 TRIPS and Article III:4 GATT]. The US claim does not permit to understand which provision or aspect of Regulation 2081/92 is supposed to violate the national treatment principle, and in which way such a violation is deemed to occur"; and

"Like the US claims, Australia's claims [regarding inter alia national treatment under Article 3.1 TRIPS and Article III:4 GATT] are limited to the restatement of language already contained in treaty provisions, and therefore encounter the same objections."45

7.8.
The Panel's assessment was that the request for establishment of a panel was sufficiently clear for the European Communities to begin preparing its defence.46 After consulting the European Communities' first written submission, and information submitted by Australia, the Panel is now aware that prior to the date of the request for establishment of a panel, the European Communities had already presented in the Council for TRIPS in September 2002 a statement that responded specifically to the argument that national treatment under the TRIPS Agreement applied to geographical indications. In that statement, the European Communities quoted the texts of Article 3 of the TRIPS Agreement and Article III:4 of GATT 1994 and argued that "[t]hose entitled to rights under TRIPS are nationals". This is also an important defence set out in the European Communities' first written submission, in which it is argued that "[t]he conditions for the registration of geographical indications do not depend on nationality".47 This supports the Panel's assessment that the relevant wording of the request for establishment of a panel was sufficiently clear for the European Communities to begin preparing its defence of the first national treatment claim.48
7.9.
Third, the Panel notes that, in any event, Australia's other claims (considered in Section VII:E of this report), brought under the provisions discussed in paragraphs 36 and 39 of the preliminary ruling, were not pursued in such detail. The Panel has found no prima facie case or rejected all these claims. This confirms the Panel's assessment that no prejudice has been caused to the rights of the respondent by these claims.

2. Measures no longer in force at the date of establishment of the Panel

(a) Main arguments of the parties

7.10.
Australia challenges Council Regulation (EEC) No. 2081/9249, including not only the current version of that Regulation as in force as at the date of establishment of the Panel50 but also two prior versions of the Regulation as originally adopted in 1992 and as amended in 1997.51 Australia's claims refer variously to the current version and these two prior versions of the Regulation.
7.11.
The European Communities responds that Australia's request for establishment of a panel does not make it clear that Australia intends to challenge several versions of the same measure resulting from subsequent amendments made over time. It also submits that the measure at issue is the Regulation as in force at the time the Panel was established and that an analysis of historical versions is not useful for the purposes of settling the present dispute.52

(b) Consideration by the Panel

3. Measures adopted after the date of establishment of the Panel

(a) Main arguments of the parties

7.18.
Australiaand the United Statessubmitted, as an exhibit, a copy of Commission Regulation (EC) No. 2400/9660, which is effectively the register under Article 6 of Council Regulation (EEC) No. 2081/92. Individual designations of origin and geographical indications are added to the register by amending the Commission Regulation. The exhibit includes amendments made up until the time of the first written submissions in this proceeding, nine of which were adopted after the date of establishment of the Panel. Those nine amendments effected the registrations of 15 individual designations of origin and geographical indications.61
7.19.
Australia and the United States also submitted, as an exhibit, an unofficial consolidated version of Council Regulation (EEC) No. 2081/92, which included amendments published in the Official Journal of the European Communities up until the date of establishment of the Panel.62 The latest of these amendments is the Act of Accession of ten new EC member States. They also submitted, as an exhibit, an extract from that Act of Accession which provides for the registration of three Czech beer GIs under Article 17 of the Regulation.63
7.20.
Australiachallenges individual registrations effected under the Regulation and notes that registrations are "ongoing".64
7.21.
The European Communities responds that these measures did not yet exist at the time the Panel was established and are therefore outside the terms of reference. In particular, it submits that the Act of Accession was subject to ratification, which was not completed on the date of establishment of the Panel, and did not enter into force until 1 May 2004.65

(b) Main arguments of third parties

7.22.
Chinaargues that the wording of the request for establishment of a panel specified amendments to the Regulation and that, therefore, they are properly included in the Panel's terms of reference. The respondent received notice of the inclusion of amendments and had enough opportunity to respond to the complainant's case. It is irrelevant whether the amendments came into effect before or after the Panel was established.66

(c) Consideration by the Panel

7.23.
The Panel begins by noting that Council Regulation (EEC) No. 2081/92 (referred to in this report as the "Regulation") has not been amended in any relevant respects during this panel proceeding. It was last amended in April 2003, prior to the date of the request for establishment of a panel.
7.24.
The Panel's terms of reference include not only the Regulation, but also its "related implementing and enforcement measures". The Panel considers that this phrase in the request for establishment of a panel is broad enough to include individual registrations, for the reasons given in paragraph 28 of its preliminary ruling of 5 April 2004, and in paragraph 7.15 above. The individual GIs which are entered in the Register under Articles 6 and 17 of the Regulation are set out in Commission Regulations (EC) No. 2400/96 and No. 1107/96.67 New registrations take the form of amendments to these Commission Regulations. Certain individual registrations were effected after the date of establishment of the Panel and prior to the date of the complainants' first written submissions68, and registrations continue to be made after that date.
7.25.
Australia's challenge of the individual registrations includes those effected after the date of establishment of the Panel. Each of the individual registrations applies to a different GI, is used by different producers and/or processors and may, in turn, affect rights in different trademarks. They are distinct measures. Those effected after the date of establishment of the Panel have added to the implementing measures as they stood at that date, although they have not affected the essence of the implementing measures vis-à-vis other registrations as they stood at that date.69
7.26.
However, Australia has not sought particular relief in respect of individual registrations effected after the date of establishment of the Panel70, as opposed to those effected earlier, and the Panel has found no prima facie case in support of the claims in respect of individual registrations effected at any time.71 Therefore, the Panel does not consider it necessary to rule on whether the individual registrations effected after the date of establishment of the Panel fall within the terms of reference in order to secure a positive solution to this dispute.
7.27.
The Panel wishes to note that individual registrations effected after the date of the request for establishment of a panel can be among the best evidence of the way in which certain provisions of the Regulation itself, which are at issue, are interpreted and applied.72 The Panel therefore refers to them, as factual evidence, in the course of its assessment of the matter before it.73 References in this report to the "Regulation" refer to the basic Regulation rather than related and implementing measures, unless the context indicates otherwise.

4. Claims under Article 2(2) of the Paris Convention (1967), as incorporated by Article 2.1 of the TRIPS Agreement

(a) Main arguments of the parties

7.28.
Australia claims that the Regulation imposes on other WTO Member nationals a requirement as to domicile or establishment in the European Communities for the enjoyment of rights contrary to Article 2(1) and 2(2) of the Paris Convention (1967) as incorporated by Article 2.1 of the TRIPS Agreement.74 In its view, Article 2(2) is an integral aspect of the national treatment obligation under Article 2(1).75
7.29.
The European Communities responds that these claims are outside the Panel's terms of reference because they relate to Article 2(2) of the Paris Convention (1967) which was not explicitly mentioned in the request for establishment of a panel. Article 2(2) prohibits the imposition of requirements as to domicile or establishment and is therefore different from, and additional to, the obligations resulting from the national treatment provision of Article 2(1).76

(b) Consideration by the Panel

7.30.
The Panel notes that Australia's request for establishment of a panel adapts the text of the national treatment obligations in Article 3.1 of the TRIPS Agreement and Article III:4 of GATT 1994. Australia's request then cites by number both those articles as well as Article 2 of the TRIPS Agreement "incorporating by reference Article 2 of the Paris Convention (1967)".
7.31.
In its submissions to the Panel, Australia claims that certain aspects of the Regulation are inconsistent with both Article 2(1) and 2(2) of the Paris Convention (1967) as incorporated by Article 2.1 of the TRIPS Agreement. The issue for the Panel is whether the reference to national treatment and to Article 2 of the Paris Convention (1967) is sufficient to present the legal basis of the complaint under Article 2(1) and 2(2), or only Article 2(1).
7.32.
The Panel considers that the mere listing of provisions of the relevant covered agreements may not satisfy the standard of Article 6.2 of the DSU, for instance, where the listed provisions establish multiple obligations rather than one single, distinct obligation.77 However, where the multiple obligations are closely related and interlinked, a reference to a common obligation in the specific listed provisions should be sufficient to meet the standard of Article 6.2 of the DSU under certain circumstances in a particular case.78
7.33.
Paragraph 1 of Article 2 of the Paris Convention (1967) expresses a national treatment obligation. Paragraph 2 prohibits local domicile or establishment requirements as a condition for the enjoyment of any industrial property rights. The texts of paragraphs 1 and 2 are linked by the use of the conjunction "[h]owever" which indicates that paragraph 2 restricts the rule of paragraph 1. Paragraph 2 in effect provides that certain conditions may not be imposed on foreign nationals, even if they are imposed on a country's own nationals.79 Paragraph 3 also reserves or excepts certain conditions from the national treatment obligation, but by stating certain conditions which may be imposed on foreign nationals, even if they are not imposed on a country's own nationals. Read in context, all three paragraphs either establish a single obligation or are very closely related: paragraph 1 sets out an obligation to provide national treatment and paragraphs 2 and 3 limit that obligation.
7.34.
Therefore, in the Panel's view, the references in the request for establishment of a panel to national treatment and to Article 2 of the Paris Convention (1967), which does not specify particular paragraphs, as incorporated by Article 2.1 of the TRIPS Agreement, is sufficient to explain the legal basis of the complaints under both paragraphs 1 and 2 of Article 2. Accordingly, the Panel rules that the claims under Article 2(2) of the Paris Convention (1967), as incorporated by Article 2.1 of the TRIPS Agreement, are within the Panel's terms of reference.

5. Claim under Article 4 of the Paris Convention (1967), as incorporated by Article 2.1 of the TRIPS Agreement and, consequently, under Article 24.5 of the TRIPS Agreement

(a) Main arguments of the parties

7.35.
Australiaclaims that Article 14(1) of the Regulation does not afford the right of priority in respect of trademark applications required to be granted by Article 4 of the Paris Convention (1967), contrary to Article 24.5 of the TRIPS Agreement.80 In its view, the reference to Article 24.5 of the TRIPS Agreement in its request for establishment of a panel permits the Panel to examine the consistency of the Regulation with Article 4 of the Paris Convention (1967) and, indeed, that examination is necessary for such a determination.81 It argues that the obligation not to prejudice eligibility for the registration of a trademark is plain on a reading of Article 24.5 and, given the express obligation on the European Communities to comply with Article 4 of the Paris Convention (1967), it was clear that non-compliance with that provision would constitute prejudice to the eligibility for registration of a trademark. Article 6.2 of the DSU should not be interpreted and applied in such a way as to require that a complaining party must have fully developed its argumentation for a dispute before presenting its request for establishment of a panel.82
7.36.
The European Communities responds that this claim is outside the Panel's terms of reference because Australia's request for establishment of a panel did not refer to Article 4 of the Paris Convention (1967).83

(b) Consideration by the Panel

6. Claim under Article 41 in conjunction with Articles 43, 44, 45, 46, 48 and 49 of the TRIPS Agreement

(a) Main arguments of the parties

7.44.
Australia argues in its first written submission that the European Communities has not ensured that enforcement procedures as specified in Part III of the TRIPS Agreement are available under its law, contrary to Article 41.1 of the TRIPS Agreement, as a consequence of inter alia the fact that the Regulation does not grant the Consultative Committee the authority required by Articles 43, 44, 45, 46 and 48 of the TRIPS Agreement, and does not provide judicial authorities with the authority required by Articles 43, 44, 45, 46, 48 and 49.85 Australia submits that the reference to Article 41 of the TRIPS Agreement in its request for establishment of a panel permits the Panel to examine the consistency of the Regulation with Articles 43 to 49 respectively and, indeed, that such an examination is necessary for such a determination.86
7.45.
The European Communities responds that this amounts to a claim under Articles 43 to 49 of the TRIPS Agreement not mentioned in the request for establishment of a panel and is therefore outside the Panel's terms of reference. The reference to Article 41 in the request for establishment of a panel is not sufficient to specify Articles 43 to 49 and, more specifically, Article 41.1 is a purely introductory provision which does not create separate legal obligations.87

(b) Consideration by the Panel

7.46.
The Panel recalls that Article 6.2 of the DSU requires that a request for establishment of a panel shall "provide a brief summary of the legal basis of the complaint sufficient to present the problem clearly". This calls for sufficient clarity with respect to the legal basis of the complaint so as to enable a defending party to begin preparing its defence.88
7.47.
The Panel recalls that in its preliminary ruling dated 5 April 2004, reproduced above, it considered the relationship between Article 41, which is specifically identified in the request for establishment of a panel, and the enforcement procedures in Part III of the TRIPS Agreement, in particular, in Article 42, which is also specifically identified in that request. The Panel did not rule that Article 41 was clearly within the terms of reference in all respects. After consulting the parties' first written submissions, it is clear that the relevant references in the request for establishment of a panel did not identify all the claims that Australia subsequently raised. Australia's request for establishment of a panel does not refer to Articles 43, 44, 45, 46, 48 or 49 or the other provisions of Part III. The textual link in the TRIPS Agreement between Article 41 and the other articles of Part III is found in paragraph 1 of Article 41, which provides that "Members shall ensure that enforcement procedures as specified in this Part are available under their law...". Australia's request for establishment of a panel does not indicate which of these other enforcement procedures are at issue, does not cite this text, nor does it refer specifically to paragraph 1 of Article 41.
7.48.
The Panel considers that Article 41.1 imposes an obligation. The language of that provision is expressed in terms of what Members "shall" ensure and is not hortatory. The substance of the provision adds qualitative elements to the procedures specified in Part III through use of terms such as "effective", "expeditious" and "deterrent" and is not redundant. However, it was not possible for the European Communities to know from the request for establishment of a panel that the claim under Article 41 put in issue the procedures required under any of Articles 43 through 49. The inclusion of a claim in Australia's first written submission under Article 41 of the TRIPS Agreement in conjunction with Articles 43, 44, 45, 46, 48 and 49 took the European Communities by surprise and deprived it of the right to begin preparing its defence of this claim earlier.
7.49.
Therefore, in this respect, the request for establishment of a panel does not satisfy the requirement of Article 6.2 to "provide a brief summary of the legal basis of the complaint sufficient to present the problem clearly". Accordingly, the claim under Article 41 of the TRIPS Agreement in conjunction with Articles 43, 44, 45, 46, 48 and 49 is outside the Panel's terms of reference.
7.50.
In any event, the Panel rejects all of Australia's claims under Articles 41 and 42 of the TRIPS Agreement, for the reason given in paragraph 7,731 of this report, which applies with equal force to all grounds on which these claims were purportedly made.

7. Claim under Article 20 of the TRIPS Agreement

7.51.
Australiaincludes in its request for establishment of a panel a claim that the Regulation diminishes the legal protection of trademarks contrary to Article 20 of the TRIPS Agreement. It presents arguments in support of that claim in its first written submission.89
7.52.
The European Communities responds that the Regulation is not inconsistent with Article 20 of the TRIPS Agreement.90
7.53.
In its second oral statement, Australia withdrew its claim under Article 20 of the TRIPS Agreement.91 Therefore, the Panel does not consider this claim any further.

8. Claims under Article 4 of the TRIPS Agreement, Article I:1 of GATT 1994 and Article 2.1 of the TBT Agreement

7.54.
Australiaincludes in its request for establishment of a panel claims that the Regulation is inconsistent with the MFN treatment obligations in Article 4 of the TRIPS Agreement, Article I:1 of GATT 1994 and Article 2.1 of the TBT Agreement.
7.55.
In its first written submission, Australia "reserves the right" to pursue these claims in the event that the European Communities is applying protection under the Regulation to GIs from another WTO Member or begins to do so.92 Australia did not pursue these claims. Therefore, the Panel does not consider them any further.

9. Claim under Articles 1, 63.1 and 63.3 of the TRIPS Agreement

7.56.
Australiaincludes in its request for establishment of a panel a claim that the Regulation is not applied in a transparent manner contrary to Articles 1, 63.1 and 63.3 of the TRIPS Agreement.
7.57.
In its first written submission, Australia "reserves the right" to pursue the claim under Articles 63.1 and 63.3 in the event that the European Communities should in fact have in place criteria and/or guidelines for the purposes of making assessments and/or determinations under "various provisions" of the Regulation.93 Australia did not pursue the claim regarding transparency under Articles 1, 63.1 or 63.3 of the TRIPS Agreement. Therefore, the Panel does not consider it any further.

10. Claim regarding application procedures under the TRIPS Agreement

7.58.
The European Communities submits that Australia has not made a claim concerning the application procedures under the TRIPS Agreement but only under GATT 1994.94 It does not indicate the reasons for its view.
7.59.
Australiareplies that it makes its claim in relation to the application procedures under the TRIPS Agreement as well and refers to passages in its first written submission.95
7.60.
The Panel has reviewed the passages in Australia's first written submission, to which it refers. They appear under a heading which refers expressly to "national treatment" and specific national treatment provisions of the TRIPS Agreement. They include the following statements:

"198. However, non-EC nationals seeking to register, and thus protect, an EC-defined GI in respect of a geographical location in the territory of another WTO Member pursuant to Regulation No. 2081/92 are not able to apply directly to the EC (whether to the Commission or another Community level body) to register an EC-defined GI.

(...)

"205. Moreover, notwithstanding any outward appearance of symmetry of treatment, the EC measure accords non-EC nationals less favourable treatment than that accorded to EC nationals in respect of the registration of an EC-defined GI from another WTO Member and in respect of the enforcement of trademark rights concerning the proposed registration of an EC-defined GI. The fact that the EC and its Member States have legally defined rights and obligations in relation to each other and to EC Member State nationals makes the registration and objection processes for EC nationals fundamentally different to those for non-EC nationals. Few other WTO Member governments have such legally defined relationships affecting the maintenance and enforcement of an intellectual property right, a right expressly recognised as a private right by the TRIPS Agreement."

7.61.
The Panel considers that the claim in respect of the application procedures under the TRIPS Agreement, whilst it could have been expressed more clearly, does appear in these passages in Australia's first written submission. The references to persons seeking to register a GI, or the proposed registration of a GI, include the application procedures. The submission refers expressly to the lack of direct applications for non-EC nationals and the obligations of EC member States in the registration process, which are the basis for this claim. Any doubts which the European Communities had in this respect should have been dispelled by Australia's express confirmation in its first oral statement that it had made this argument in support of its claim that the measure as a whole does not accord national treatment to non-EC nationals. A respondent that chooses not to respond to a claim does so at its own risk.
7.62.
The European Communities has suffered no prejudice to its ability to defend itself, because it has responded to overlapping claims presented by Australia based on the same aspects of the application procedures under GATT 1994 and the opposition procedures based on the same obligation under the TRIPS Agreement, as well as the same claim as made by the United States based on the same aspects of the application procedures under GATT 1994.
7.63.
For these reasons, the Panel will consider this claim.96

11. Claim regarding the labelling requirement under GATT 1994

7.64.
Australiaclaimed in its first written submission that the labelling requirement in Article 12(2) of the Regulation was inconsistent with Article 2.1 of the TBT Agreement, but it did not claim at that time that it was inconsistent with Article III:4 of GATT 1994.97
7.65.
The European Communities responded to Australia's claim in its first written submission, arguing that Article 12(2) of the Regulation did not constitute a technical regulation within the meaning of Annex 1.1 of the TBT Agreement and was not otherwise incompatible with Article 2.1 of the TBT Agreement. It responded to the United States' claim that Article 12(2) was inconsistent with Article III:4 of GATT 1994 and noted that Australia did not make such a claim in this regard.98
7.66.
In its rebuttal, Australiasubmitted that, should the Panel consider that Article 12(2) of the Regulation did not constitute a technical regulation within the meaning of Annex 1.1 of the TBT Agreement, it nevertheless accorded treatment less favourable to imported products inconsistently with Article III:4 of GATT 1994.99
7.67.
In its second oral statement, the European Communities maintained that Australia had challenged Article 12(2) of the Regulation under Article 2.1 of the TBT Agreement and that the United States had challenged it under Article III:4 of GATT 1994.100
7.68.
The Panel notes that Australia only asks the Panel to address Article 12(2) of the Regulation under Article III:4 of GATT 1994 should the Panel consider that Article 12(2) does not constitute a technical regulation within the meaning of Annex 1.1 of the TBT Agreement. This premise has not been met and further consideration is therefore unnecessary.101

12. Endorsement of arguments by another complainant

7.69.
Australia, in its opening statement at the first substantive meeting with the Panel, formally endorsed certain comments made by the United States. These were "those comments concerning the rights required to be granted in respect of trademarks" and "the comments made by the United States concerning the EC's national treatment obligations under the TRIPS Agreement and GATT 1994". Australia also offered "additional comments" in its first oral statement.102
The Panel understands that these endorsements refer to comments made by the United States in its first opening oral statement. By virtue of these endorsements, the referenced comments of the United States form part of Australia's case. This was confirmed in Australia's opening statement at the second substantive meeting as follows:

"Our case in total would include of course all the material we have submitted to the Panel directly, or via endorsement of arguments made by the US in this dispute."103

7.71.
However, the next day, in its closing statement, the representative of Australia said the following:

"Australia endorses all of the arguments put forward by the United States. Where there are differences between the complainants, these are a result of different understandings of the flawed measure at issue in this dispute and, in any case, are not material differences."104

7.72.
The European Communities objected orally during the same meeting. It informed the Panel that it did not know which particular arguments Australia was endorsing because at times the United States' arguments contradicted Australia's arguments. Further, an overall endorsement did not respect its rights of defence.
7.73.
The Panel notes, by way of illustration, the following examples provided by the European Communities of differences between the arguments presented by Australia and the United States. First, Australia had argued as follows with respect to the interpretation of Article 24.5 of the TRIPS Agreement:

"[T]he right to use a trademark refers to the ongoing ability to use a trademark where rights to a trademark have been acquired through use in good faith."105

7.74.
In its closing statement, Australia said that it endorsed arguments which include the following:

"'[T]he right to use a trademark' is not specifically limited in the text to trademarks whose rights are acquired through use (although it would appear to include such trademarks). Rather the obligation not to prejudice the right to use a trademark – to harm or damage the permitted or forbidden activity associated with application of a trademark to its purpose – would include an obligation with respect both to registered and non-registered trademarks (...)"106

7.75.
Australia's endorsement in its closing statement does not enable the Panel to ascertain the case that Australia asks it to consider on this key point (considered in Section VII:D of this report).
7.76.
Second, when the Panel asked Australia whether it alleged that Article 12(2) of the Regulation provides any less favourable treatment to imported products besides labelling costs, Australia replied "No."107 In its closing statement, Australia said that it endorsed arguments which included the following:

"The requirement of Article 12(2) that GIs for imported products, but not for domestic products, must be accompanied by a clear and visible indication of country of origin on the label is not simply a labeling cost issue. This requirement provides less favorable treatment to non-EC nationals and products in part because the non-EC GI, unlike the EC GI, is being burdened by an additional labeling requirement that is in the nature of a qualifier that detracts from the value of the GI (...)"108

7.77.
Australia's endorsement in its closing statement does not enable the Panel to ascertain the case that Australia asks it to consider on this point (considered in Section VII:B of this report). By way of further illustration, the Panel notes that the United States has presented arguments in support of its MFN claims which Australia chose not to pursue after the establishment of the Panel (mentioned in Section VII:A of this report).
7.78.
Therefore, the Panel does not agree with Australia that there are no material differences between the complainants' respective cases. Australia's endorsement in its closing statement was sweeping and unlimited. More information was required in order to explain how it related to parts of Australia's case as presented prior to the end of the second substantive meeting with the Panel.
7.79.
The Panel has examined the parties' arguments in the course of its assessment of the matter before it. However, it is not part of the Panel's function to participate in making a party's case, as this would compromise its duty to make an objective assessment. The Panel should not have to sift Australia's and the United States' respective arguments and make an assessment of where there are possible contradictions, where there is possible support for a claim and where the United States' arguments are irrelevant to Australia's claims, simply in order to establish what case Australia wished to bring. Further, the European Communities, as the respondent, is entitled to know the case that it has to answer from each complainant. It is unable to know with certainty what Australia's case actually is in the final analysis, as regards the endorsement in the closing statement. Australia bore the responsibility to make its own case clear and, as regards the arguments covered by this endorsement, it has failed to discharge that responsibility.
7.80.
The lateness of this endorsement also raises an issue of due process. Whilst the overlapping nature of the claims presented by the two complainants is a particular feature of this dispute, a respondent may choose to defend certain arguments in support of one claim, but not others. After the enlargement of one complainant's case at the end of the second substantive meeting, the respondent may understandably wish to respond to certain arguments for the first time. However, at that stage, it only has the opportunity to respond to written questions and comment on the other parties' responses, which may provide insufficient opportunity to respond to those arguments. This could compromise the respondent's ability to defend itself against each complainant.
7.81.
There are no relevant specific circumstances in this proceeding to take into account. Australia had ample opportunity to make its case. It did not endorse all the United States' arguments earlier when it endorsed specific comments, either at the first substantive meeting or in its opening statement at the second substantive meeting.
7.82.
Accordingly, the Panel does not consider that Australia's statement that it endorsed all of the United States' arguments was a sufficient basis for the Panel to consider that Australia's arguments as presented earlier were modified. Nevertheless, the Panel accepts Australia's earlier endorsements of certain comments of the United States, as described in paragraphs 7.69-7.70above, and takes note of the referenced comments.

13. Exhibits containing legislation of other Members

7.83.
Australia requests that the Panel reject six exhibits submitted by the European Communities which consist of extracts of legislation of Australia and two third parties. This request is made on the grounds that the exhibits are allegedly not relevant.109
7.84.
The Panel does not consider it appropriate to remove these exhibits from the record. They form part of the respondent's submission. To the extent that they lack evidentiary worth, they will suffer from that defect and the Panel will disregard them.

14. Request by a third party for a suggestion on ways to implement a recommendation

7.85.
Mexicoconsiders that "cochineal" should be removed from the list of products covered by the Regulation set out in its Annex II. As a third party, Mexico does not submit this as a claim, but requests that the Panel make a suggestion to this effect pursuant to the second sentence of Article 19.1 of the DSU. Mexico argues that there is no requirement that a request for such a suggestion must be forwarded by one of the parties. If the Panel does not deem it appropriate to make such a specific suggestion, the same result would be achieved by a suggestion that the European Communities withdraw the Regulation.110
7.86.
The Panel takes note of Mexico's request. The issue of the product coverage of the Regulation is not challenged by the claims in this dispute and is therefore outside the Panel's terms of reference. However, Mexico's attention is drawn to Article 10.4 of the DSU.

15. Order of analysis of claims

7.88.
The Panel will consider the claims relevant to each aspect of the measure in turn. The following sections of the findings are organized as follows:

– Section B National treatment claims

– Section C Trade-restrictiveness claim

– Section D Trademark claims

– Section E Other claims

B. NATIONAL TREATMENT CLAIMS

1. Availability of protection

(a) Do the conditions in Article 12(1) of the Regulation apply to WTO Members?

(i) Main arguments of the parties112

7.89.
Australia claims that GIs (as defined in the Regulation) located in the territory of a WTO Members outside the European Union can only be registered under the Regulation if the Member government in whose territory the GI is located is able and willing to meet the conditions in Article 12(1), which require it to adopt a system for GI protection that is equivalent to that in the European Communities and provide reciprocal protection to products from the European Communities.113 It specifically endorses comments made by the United States in its first oral statement concerning the European Communities' national treatment obligations under the TRIPS Agreement and GATT 1994.114
7.90.
Australia argues that the European Communities had consistently led other WTO Members to believe that Article 12(1) of the Regulation applied to them. It argues that the European Communities' interpretation of the Regulation does not invalidate the meaning of the provisions submitted by Australia, and is not supported by the text of Articles 12 to 12d, which only distinguish between nationals of WTO Members and other third countries where the express language so provides. The Regulation would not be interpreted by the European Court of Justice in light of the European Communities' international obligations because it does not state that it is intended to implement a particular GATT 1947 or WTO obligation.115 Australia understands that the introductory phrase "[w]ithout prejudice to international agreements" was intended to allow for an international agreement – whether bilateral or plurilateral – to incorporate different conditions but it does not, and was not intended to, incorporate the European Communities' obligations under the WTO Agreement.116
7.91.
Australia argues that the Panel is not bound by the European Communities' interpretation of its own measure to any extent. The Panel's obligation is to appraise whether that interpretation is supported by the text of the Regulation, having regard to all relevant factors including the plain text of the relevant provisions, the European Communities' previous explanations of their meaning, its failure to explain inconsistencies in its new interpretation and the fact that the statements of EC representatives to the Panel do not create new legal obligations in Community law.117
7.92.
The European Communities responds that the conditions in Article 12(1) of the Regulation do not apply to geographical areas located in WTO Members. The introductory phrase of Article 12(1) provides that it applies "[w]ithout prejudice to international agreements" – which include the WTO agreements. This is made clear by the eighth recital of the April 2003 amending Regulation which took specific account of the provision of the TRIPS Agreement. WTO Members are obliged to provide protection to geographical indications in accordance with Section 3 of Part II and the general provisions and basic principles of the TRIPS Agreement. For this reason, Article 12(1) and 12(3) do not apply to WTO Members. Accordingly, the registration of GIs from other WTO Members is subject to exactly the same conditions as the registration of GIs from the European Communities.118
7.93.
The European Communities argues that the procedure under Article 12a of the Regulation is not limited to the cases covered by Article 12(3). The term "third country" in Articles 12 through 12d does or does not include WTO Members depending on the wording, context and objectives of each specific provision. The evidence of prior statements by Community officials does not contradict the European Communities' interpretation in this Panel proceeding and more recent statements support it. The statements made by the agents of the European Commission before the Panel commit and engage the European Communities but their intention is not to create new legal obligations in public international or in Community law. They are made on behalf of the European Communities as a whole and not only the Commission. Community legislation must, so far as possible, be interpreted in a manner that is consistent with international law, in particular where its provisions are intended specifically to give effect to an international agreement concluded by the Community, as indicated by the phrase "[w]ithout prejudice to international agreements". An interpretation that limited that phrase to bilateral agreements would largely deprive it of its useful value.119
7.94.
The European Communities does not consider that the Panel is "bound" by the EC's interpretation of its own measure. However, it submits that the Panel must take due account of the fact that the Regulation is a measure of EC domestic law and establish its meaning as a factual element. This means that: (1) the burden of proof is on the complainant to establish the meaning of the measure. Given that the claim in the present dispute is based on the measure per se and not as applied, the complainant must establish "beyond doubt" that the measure entails a violation; (2) in making an objective assessment of the facts and the interpretation of the measure, the Panel should be guided by the rules of interpretation customary in the EC's domestic legal order; and (3) it is the EC's authorities who must interpret and apply the measure and therefore its explanations must be given considerable deference.120

(ii) Main arguments of third parties

7.95.
Argentinaasserts that the conditions of equivalence and reciprocity apply to GIs located in all third countries. It is unconvinced by the European Communities' explanation of its measure. If its intention had been to distinguish between WTO Members and other third countries, it could have done so more explicitly.121
7.96.
Brazilasserts that the conditions of equivalence and reciprocity apply to GIs located in all third countries. It considers that the European Commission's interpretation of the phrase "without prejudice to international agreements" would not necessarily withstand scrutiny by a judicial body and is unlikely given that the provisions that refer to "third countries" would have been drafted with only a handful of non-WTO Members in mind. The reference in Article 12(2) indicates that third countries means all third countries outside the European Communities, although in Articles 12a(2) and 12d(1) it could mean non-WTO Members. The EC's interpretation could a contrario indicate a recognition that the equivalence and reciprocity conditions violate national treatment obligations in GATT 1994 and TRIPS.122
7.97.
Canadaconsiders that Article 12 of the Regulation, read in context with Articles 12a, 12b and 12d, cannot support the interpretation advanced by the European Communities. The ambiguous reference to "international agreements" is insufficient to counter the clear wording. There would not appear to be an alternative legal basis for filing applications for countries outside the European Communities besides Article 12 due to the wording of Article 12a(1). Articles 12b and 12d refer to "WTO Members" and "third countries" which suggests no differential application to "third countries" in Articles 12 and 12a. The European Communities indicated that Article 12 applied to all WTO Members in a statement in September 2002 to the Council for TRIPS.123
7.98.
Chinaargues that the European Communities' interpretation is not accompanied by any supporting evidence and that there is no regulatory language in the provisions to exclude expressly the application of these provisions to WTO Members. The preamble to the April 2003 amending Regulation refers specifically to WTO Members in relation to the right of objection, but does not exclude WTO Members from the equivalence and reciprocity conditions. Had the drafters intended that it should not apply, they would have inserted a clause to that effect in the preamble. The European Communities appears to have admitted that portions of Article 12, regarding product specifications and inspection, do apply to WTO Members.124
7.99.
Colombiasubmits that, if the European Communities' interpretation of "without prejudice to international agreements" is correct, the Panel should recommend that it modify its legislation in such a way that that phrase acquires the scope and meaning that are assigned to it in the EC's first written submission.125
7.100.
Mexicosubmits that the language of Article 12(1) of the Regulation is precise and unequivocal. Third countries must satisfy conditions of equivalence and reciprocity in order to receive the same protection as EC member States.126
7.101.
New Zealandsubmits that the European Communities' interpretation of Article 12(1) and (3) and the phrase "without prejudice to international agreements" is novel and does not withstand close scrutiny. It runs counter to the usual meaning of that phrase and effectively admits that requiring nationals of WTO Members to satisfy the procedures in Article 12(1) and (3) would be contrary to WTO obligations. It is inconsistent with the wording of the Regulation itself and, if Article 12(3) does not apply to WTO Members, then the application procedure in Article 12a would not either. This is the first time that this interpretation has been raised by the European Communities. The alternative interpretation adopted by the complainant is consistent with the wording of the Regulation.127
7.102.
Chinese Taipei asserts that the conditions of equivalence and reciprocity apply to GIs located in all third countries.128

(iii) Consideration by the Panel

7.103.
The first issue in this dispute concerns the conditions for registration of GIs under the Regulation. It is not disputed that a GI located outside the European Communities has never been registered nor the subject of an application made under the Regulation, and that no attempt has ever been made to file an application to register such a GI under the Regulation.129 Therefore, the provisions concerning the protection of such GIs have never been applied in a particular instance. However, Australia challenges this aspect of the Regulation "as such".
7.104.
The parties agree that the conditions set out in Article 12(1) of the Regulation do not apply to the protection of GIs located within the territory of the European Communities. They disagree as to whether they apply to the protection of GIs located in other WTO Members. Australia claims that they do so apply, and it is not disputed that the European Communities never made a clear statement that these conditions did not so apply prior to this panel proceeding. However, the European Communities responds in its submissions to the Panel that the conditions only apply to third countries that are not WTO Members.
7.105.
The European Communities' position, as expressed in its submissions to the Panel, has been welcomed in principle by the complainants and by two third parties.130 If Australia were satisfied with this position, it would provide a positive solution to many of the national treatment claims in this dispute. However, Australia is not persuaded that the European Communities would be able to implement the position that it has presented to the Panel in light of the terms of the Regulation on its face, allegedly prior inconsistent statements by the European Communities in the Council for TRIPS, the Commission's Guide to the Regulation and elsewhere, and inconsistent statements made during this Panel proceeding by the European Communities.131 Australia submits that only formal amendments of the provisions of the Regulation could ensure their interpretation in a manner consistent with the European Communities' obligations.132 Therefore, although the European Communities submits that the Regulation already is in conformity with its obligations, the Panel is obliged to proceed with its assessment of the national treatment claims based on Article 12(1) of the Regulation.
7.107.
Turning to the Regulation, the Panel notes that it applies to the registration of "designations of origin" and "geographical indications", as defined.135 For ease of reference, and without prejudice to their consistency with the definition of a geographical indication in Article 22.1 of the TRIPS Agreement, we shall refer to them both as "GIs" in this report, except where the context requires otherwise.
7.108.
Certain facts are agreed. The parties agree that the Regulation contains two sets of detailed procedures for the registration of GIs for agricultural products and foodstuffs. The first procedure, in Articles 5 through 7, applies to the names of geographical areas located in the European Communities.136 It has been part of the Regulation since its adoption in 1992, although it has been amended subsequently in certain respects. The second procedure, principally found in Articles 12a and 12b, applies to the names of geographical areas located in third countries outside the European Communities.137 It was inserted in the Regulation in April 2003. A third procedure for registration of GIs protected under the national law of EC member States was formerly available under Article 17, but was deleted in April 2003. A fourth possibility is registration by means of an international agreement, discussed below.
7.109.
The parties disagree as to whether the second of these procedures is subject to additional conditions found in Article 12(1) of the Regulation that do not apply to the first procedure. Article 12(1) provides as follows:

"1. Without prejudice to international agreements, this Regulation may apply to an agricultural product or foodstuff from a third country provided that:

- the third country is able to give guarantees identical or equivalent to those referred to in Article 4,

- the third country concerned has inspection arrangements and a right to objection equivalent to those laid down in this Regulation,

- the third country concerned is prepared to provide protection equivalent to that available in the Community to corresponding agricultural products or foodstuffs coming from the Community."

7.110.
Article 12 has been part of the Regulation since its adoption in 1992, although it was amended in April 2003 by the insertion of the requirement of a right of objection equivalent to those laid down in the Regulation, when Article 12(3) and Articles 12a through 12d, including the second procedure described above, were inserted. It is not in dispute that many WTO Members, including Australia, do not satisfy the conditions set out in Article 12(1).
7.111.
The factual issue for the Panel to decide is whether the conditions set out in Article 12(1) apply to the availability of protection for GIs located in WTO Members. In other words, the factual issue is whether the registration procedure in Articles 12a and 12b is available for GIs located in WTO Members that do not satisfy the conditions in Article 12(1).
7.112.
Australia presents two types of evidence. The first is the text of the Regulation and the second consists of the European Communities' own statements concerning the Regulation prior to, and during, this Panel proceeding.
7.113.
The Panel begins its analysis by reviewing the measure on its face.138 The procedure in Articles 12a and 12b of the Regulation begins with the filing of an application under paragraph 1 of Article 12a and continues with its initial examination under paragraph 2. The text of paragraph 1 begins "[i]n the case provided for in Article 12(3)", which immediately limits the availability of the procedure according to the terms of Article 12(3). The text of paragraph 2 of Article 12a begins "[i]f the third country referred to in paragraph 1 deems..." which confirms that this aspect of the procedure is limited in the same way as paragraph 1. Paragraph 1 of Article 12b sets out the next step in the same procedure and refers to the registration request sent by "the third country", which is the third country described in Article 12b(2).
7.114.
Article 12(3) of the Regulation provides as follows:

"3. The Commission shall examine, at the request of the country concerned, and in accordance with the procedure laid down in Article 15 whether a third country satisfies the equivalence conditions and offers guarantees within the meaning of paragraph 1 as a result of its national legislation. Where the Commission decision is in the affirmative, the procedure set out in Article 12a shall apply."

7.115.
The case provided for in this paragraph is clear: it refers to a third country which satisfies the conditions in Article 12(1). The initial clause of Article 12a, as confirmed by the chain of cross-references in Articles 12a(2) and 12b(1), therefore limits the procedure in Articles 12a and 12b to such third countries. No other provision in Article 12a or 12b indicates that that procedure is available for the registration of GIs located in a third country which does not satisfy the conditions in Article 12(1), even if it is a WTO Member. This is consistent with Article 12b(2), which provides for objections in the same procedure, and expressly distinguishes between a "Member State of the European Union or a WTO member" and "a third country meeting the equivalence conditions of Article 12(3)". The implication is that a WTO Member is not necessarily a third country meeting those conditions.139
7.116.
The only other provision in the Regulation which could indicate the possibility of registration of GIs located in a third country which does not satisfy the conditions in Article 12(1) is the introductory phrase of Article 12(1) itself, which prefaces the conditions with the clause "[w]ithout prejudice to international agreements". The European Communities concedes that the application of the conditions in Article 12(1) of the Regulation would prejudice its obligations under Article III:4 of GATT 1994 and submits to the Panel that, as a consequence, it would not apply those conditions to GIs located in WTO Members. Nevertheless, it does not follow that the procedure in Articles 12a and 12b is available for the registration of GIs located in WTO Members. That procedure is limited to third countries which satisfy the conditions in Article 12(1) and there is no other procedure in the Regulation available for WTO Members that do not satisfy those conditions. There is the possibility of protection pursuant to an international agreement, but no existing international agreement either incorporates the procedure under Articles 12a and 12b of the Regulation or contains an application and registration procedure for GIs located in all WTO Members. In particular, neither GATT 1994 nor the TRIPS Agreement contains any such procedure.
7.117.
Other provisions in the Regulation may also shed light on this issue. Article 12d(1), which provides a right of objection to registration of GIs located in the European Communities, distinguishes twice between persons from "a WTO Member country or a third country recognized under the procedure provided for in Article 12(3)".140 This expressly grants a right of objection to persons from WTO Members and is a further indication that where the Regulation refers to "a third country recognized under the procedure provided for in Article 12(3)" it does not include a WTO Member unless it has been recognized under that procedure.
7.118.
Four other provisions also refer to "a third country recognized under the procedure provided for in Article 12(3)" (or analogous terms) without referring to a WTO Member: Article 5(5) on registration of GIs that straddle the external border of the European Communities, Article 6(6) on homonymous GIs, Article 10(3) on inspection structures and Article 13(5) on the coexistence of registered and unregistered GIs. The European Communities' view of Article 10(3) is that it includes WTO Members141, and there seems to be no reason why the other three provisions should exclude WTO Members. These provisions seem to confirm that WTO Members are included in the term "third countries" and therefore require recognition under the procedure provided for in Article 12(3).
7.119.
The preamble of the Regulation, which has contained the conditions in Article 12(1) more or less in their current form since the original version was adopted in 1992, sets out its justification. The 19th recital reads as follows:

"Whereas provision should be made for trade with third countries offering equivalent guarantees for the issue and inspection of geographical indications or designations of origin granted on their territory;"142

7.120.
The phrase "equivalent guarantees for the issue and inspection" of GIs is a clear reference to the conditions in Article 12(1). There is no recital referring to the possibility of GIs located in any other third countries which do not satisfy these conditions.
7.121.
The preamble to the April 2003 amending Regulation, which modified Article 12 and inserted a detailed procedure for applications and objections from third countries in Articles 12a through 12d, sets out the justification for the amendments as follows:

"(8) The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement 1994, contained in Annex 1C to the Agreement establishing the World Trade Organisation contains detailed provisions on the existence, acquisition, scope, maintenance and enforcement of intellectual property rights.

(9) The protection provided by registration under Regulation (EEC) No 2081/92 is open to third countries' names by reciprocity and under equivalence conditions as provided for in Article 12 of that Regulation. That Article should be supplemented so as to guarantee that the Community registration procedure is available to the countries meeting those conditions.

(10) Article 7 of Regulation (EEC) No 2081/92 specifies how objections are to be made and dealt with. To satisfy the obligation resulting from Article 22 of the TRIPS Agreement it should be made clear that in this matter nationals of WTO member countries are covered by these arrangements and that the provisions in question apply without prejudice to international agreements, as provided for in Article 12 of the said Regulation. (...)"143

7.122.
Paragraph 8 recalls the subject-matter of the TRIPS Agreement without elaborating on its relevance to the Regulation. This clarifies the reference to Article 22 of the TRIPS Agreement in paragraph 10 but it is not clear whether it also relates to paragraph 9. In any event, on the European Communities' later interpretation, the TRIPS Agreement is not relevant to the WTO-consistency of the conditions provided for in Article 12, as referred to in paragraph 9. Rather, the European Communities submits that GATT 1994 ensures their WTO-consistency. GATT 1994 is not recited in the preamble.
7.123.
Paragraph 9 contains no qualifier referring to WTO Members, which appears to confirm the position that the conditions in Article 12(1) apply to the availability of protection of GIs located in third countries and that the registration procedure in Articles 12a and 12b is not available for GIs located in WTO Members that do not satisfy those conditions.
7.124.
Paragraph 10 includes the phrase "without prejudice to international agreements, as provided for in Article 12", but it only relates to the right of objection granted to WTO Members' nationals. This is a clear reference to Articles 12b(2) and 12d(1), which were inserted by the amending Regulation. It can be noted that they are the only two provisions in the current version of the Regulation that expressly refer to a "WTO Member", where they also distinguish a WTO Member from a third country recognized under Article 12(3).
7.125.
In the Panel's view, the meaning and content of these aspects of the Regulation, together with the amending Regulation, are sufficiently clear on their face for Australia to have discharged its burden of proof of establishing that, under the Regulation "as such", the availability of protection for GIs located in WTO Members is contingent upon satisfaction of the conditions set out in Article 12(1) and recognition by the Commission under Article 12(3).144
7.126.
There is no supporting evidence of the meaning of these aspects of the Regulation in the form of an interpretation of the relevant provisions by the European Court of Justice or any other domestic court.145 This is partly explained by the facts that no requests for registration of foreign GIs have been made under the Regulation and that Articles 12a through 12d were inserted only recently, in April 2003.
7.127.
Australia also presents evidence consisting of various statements by executive authorities of the European Communities which contain interpretations of the Regulation. The Panel considers that such statements can be useful as, objectively, a WTO Member is normally well placed to explain the meaning of its own domestic law.146 However, the usefulness of any particular statement will depend on its contents and the circumstances in which it was made. The Panel has weighed the evidence and considers that one statement in particular, in light of the clarity of its contents and the official capacity in which it was delivered, is highly relevant to the issue at hand.
7.128.
In a lengthy statement to the Council for TRIPS in September 2002 (prior to the insertion of Articles 12a through 12d), the European Communities specifically responded to the following view expressed by a group of Members, including Australia:

"[U]nder the current EC regulations, the EC does not appear to provide protection for non‑EC geographical indications (i.e., place names of other WTO Members), except on the basis of bilateral agreements, or if the EC has determined that a country has a system for geographical indications that is equivalent to the detailed system of the EC."147

7.129.
The European Communities introduced the relevant part of its response as follows:

"(...) I would like to address one issue that is raised regarding the fact that the EU register for GIs on foodstuffs does not allow the registration of foreign GI unless it is determined that a third country has an equivalent or reciprocal system of GI protection."148

7.130.
The Panel notes that the European Communities was emphatic at that time that registration systems should primarily be aimed at domestic GIs and it quoted the legislation of several other WTO Members which allegedly do not register foreign GIs without an international agreement.149 This statement by the European Communities in September 2002 to the Council for TRIPS therefore appears to support Australia's interpretation of the Regulation on its face.
7.131.
The European Communities argues that the interpretation set forth in its September 2002 statement to the Council for TRIPS "is not incompatible with the text of Regulation 2081/92 as in force at the time it was made or with the statements of the EC in the present case". In its view, its intention at that time was not primarily to explain the EC system for the protection of geographical indications and its statement did not take account of amendments made in April 2003.
7.132.
In the Panel's view, the European Communities' September 2002 statement was very clear in its interpretation of the relevant point of the Regulation. Further, nothing in the April 2003 amending Regulation appears to render that statement incompatible with the current version of the Regulation. In fact, the Panel's examination of the insertion of Article 12(3) and Articles 12a through 12d confirms that the conditions in Article 12(1) remain applicable on the same terms.
7.133.
Australia also refers to the explanation of the amendments given by the European Commission at the time it proposed them, in March 2002. The Panel considers that this evidence corroborates the previous statement because of the clarity of its contents and the capacity in which it was made. In a press release, the Commission explained that, in order to comply with the TRIPS Agreement, it proposed to extend the right of objection to certain other WTO Member country nationals and further stated:

"Beyond mere TRIPS consistency, the Commission proposes important amendments designed to promote the EU system of denominations of origin as a model to the rest of the world. The driving idea behind is the wish to improve protection of European quality products also outside the EU. As the EU cannot force non-EU countries to do so, they would be invited to do so on a 'reciprocal basis'. If a non-EU country introduced an 'equivalent system' including the right of objection for the EU and the commitment to protect EU names on their territory, the EU would offer a specific protection to register their products for the EU market."150

The references to a reciprocal basis and an equivalent system are clear references to the conditions in Article 12(1) of the Regulation.

7.134.
In its submissions to the Panel, the European Communities rejects that interpretation and submits that, due to the introductory phrase of Article 12(1) of the Regulation, "[w]ithout prejudice to international agreements", the conditions in Article 12(1) do not apply to the availability of protection for GIs located in WTO Members. It refers to a statement it made to the Council for TRIPS in June 2004 in the days before the first substantive meeting of this Panel151 and a second edition of the Commission's Guide to the Regulation published in August 2004 in the days prior to the second substantive meeting of this Panel.152 It advises that "[t]he guide was not prepared in connection with the Panel proceedings".153
7.135.
The Panel recalls its reasoning in paragraph 7,116 above, and reiterates its view that, even if the phrase "[w]ithout prejudice to international agreements" had the effect of subjecting the conditions in Article 12(1) to the terms of GATT 1994 or the TRIPS Agreement, those agreements do not contain a procedure for applications and registration for GIs located in all WTO Members. WTO Members would still have to satisfy the conditions in Article 12(1) in order for their GIs to gain access to the procedure in Articles 12a and 12b.
7.136.
The European Communities admits that this would be a "nonsensical result".154 However, it is unable to provide a satisfactory explanation as to how this result could be avoided in light of the wording of Article 12a, which begins "[i]n the case provided for in Article 12(3)". The European Communities points out that Article 12(3) refers to the conditions in Article 12(1) and since, in its view, those conditions do not apply to WTO Members, the procedure in Article 12(3) and the reference in Article 12a do not apply to them either.155
7.137.
The Panel agrees that Article 12(3) provides for a Commission decision on whether a third country satisfies the conditions in Article 12(1) and accepts that, if those conditions do not apply to a third country, there would be no relevant decision under Article 12(3). Yet this does not alter the text of Article 12a which applies "[i]n the case provided for in Article 12(3)". Article 12a does not appear, on its face, to apply to the registration of a GI located in a third country, including a WTO Member, which is not recognized under Article 12(3). For these reasons, the Panel is not persuaded that the European Communities' interpretation is correct.
7.138.
It is not necessary for the purposes of this dispute to determine which are the precise international agreements covered by the phrase "[w]ithout prejudice to international agreements". It suffices to note that there is a plausible alternative interpretation that it refers to bilateral agreements under which the European Communities would protect specific GIs.156 The European Communities does not exclude this, but argues that there is no reason why only such specific agreements should be covered.157 There are currently no such bilateral agreements for agricultural products and foodstuffs, although one has been foreshadowed in a joint declaration with Switzerland.158
7.139.
In any event, the Panel is not persuaded by the European Communities' explanations during this Panel proceeding of the phrase "[w]ithout prejudice to international agreements" as used in Article 12(1) of the Regulation. At the first substantive meeting, in support of its first defence, it provided the following explanation of that phrase:

"(...) Such international agreements include the WTO Agreements. This is made clear by the 8th recital of Regulation 692/2003, which amended the procedures for the registration of non-EC geographical indications, and in this context took specific account of the provisions of the TRIPS.

"WTO Members are obliged to provide protection to geographical indications in accordance with Section 3 of Part II and the general provisions and basic principles of the TRIPS Agreement. For this reason, Article 12 (1) and (3) of Regulation 2081/92 do not apply to WTO Members. (...)"159

7.140.
This explanation was also reflected in a June 2004 statement that the European Communities made to the Council for TRIPS160 and the August 2004 edition of the Commission's Guide to the Regulation161.
7.141.
At the same time, the European Communities' second defence was that the conditions in Article 12(1) of the Regulation were not inconsistent with the national treatment obligations in the TRIPS Agreement, essentially because they discriminate according to the location of GIs and not according to the nationality of persons with rights in relation to GIs.162
7.142.
It was not clear how these two defences could be reconciled. If the first defence implied that the conditions did not apply because they would prejudice the European Communities' national treatment obligations under the TRIPS Agreement, it would have contradicted the second defence that these conditions were not inconsistent with the national treatment obligations in the TRIPS Agreement. The Panel sought clarification from the European Communities by posing the question "does the EC contest that equivalence and reciprocity conditions such as those under Article 12(1) and (3) of Regulation (EC) No. 2081/92, if applied to other WTO Members, would be inconsistent with the national treatment obligations in the TRIPS Agreement and/or Article III:4 of the GATT 1994?". The European Communities declined to give a specific answer to the Panel's question and concluded as follows:

"As regards the specific conditions contained in Article 12 (1) of Regulation 2081/92, the EC has already confirmed that it does not apply these to WTO Members. For this reason, the EC considers that the question whether these conditions are inconsistent with the national treatment obligations of the TRIPS Agreement and the GATT does not arise."163

7.143.
Australia then submitted that the European Communities had impliedly admitted that the conditions in Article 12(1) of the Regulation were contrary to WTO obligations.164
7.144.
The Panel again sought clarification at the second substantive meeting, by asking which precise obligations under an international agreement would be prejudiced by the application of the specific conditions in Article 12(1) of the Regulation to WTO Members. The European Communities responded that it was its obligations under Article III:4 of GATT 1994, but not Article 3.1 of the TRIPS Agreement, because the Regulation did not involve any discrimination between nationals. It later confirmed this in writing.165 Therefore, to the extent that the European Communities' explanation of the phrase "[w]ithout prejudice to international agreements" as used in Article 12(1) of the Regulation relies on the TRIPS Agreement, the European Communities has expressly denied that the phrase refers to its own obligations and the Panel does not consider that possible explanation further.166
7.145.
At this time, the European Communities' explanation of the phrase "[w]ithout prejudice to international agreements" as used in Article 12(1) of the Regulation relies on GATT 1994. In light of the European Communities' analysis that this phrase ensures that "should a conflict between the two acts or provisions occur, then the act or provision to which the 'without prejudice' reference is made prevails"167, it is clear that this explanation depends on the view that the equivalence and reciprocity conditions are inconsistent with the European Communities' obligations under Article III:4 of GATT 1994. However, this is difficult to reconcile with the European Communities' earlier view that the question whether these conditions are inconsistent with the national treatment obligations of GATT does not arise, quoted at paragraph 7,142 above. It was also omitted from the earlier explanation that the conditions did not apply because of obligations under the TRIPS Agreement, quoted at paragraph 7,139 above. Further, the evidence submitted by the European Communities provides no additional support for this explanation, as the amending Regulation recites the TRIPS Agreement but not GATT 1994, and the evidence identified at paragraph 7,140 above also reflects the explanation quoted at paragraph 7,139 above.
7.146.
For all these reasons, the Panel is not persuaded by the European Communities' explanations of the phrase "[w]ithout prejudice to international agreements" as used in Article 12(1) of the Regulation.
7.147.
The Panel takes note that there are various executive authorities involved in the implementation of the Regulation, including representatives of EC member States. Article 15 of the Regulation provides for a regulatory procedure under which the Commission shall be assisted by a regulatory committee composed of the representatives of the EC member States and chaired by the representative of the Commission, who does not vote.168
7.148.
The European Communities' delegation to this panel proceeding confirms that the submissions made by agents of the European Commission before the Panel commit and engage the European Communities.169 It also indicates that Community laws are generally not executed through authorities at Community level but rather through recourse to the authorities of its member States which, in such a situation, "act de facto as organs of the Community, for which the Community would be responsible under WTO law and international law in general".170 The Panel accepts this explanation of what amounts to the European Communities' domestic constitutional arrangements and accepts that the submissions of the European Communities' delegation to this panel proceeding are made on behalf of all the executive authorities of the European Communities.171
7.149.
The parties have presented evidence with respect to the approach that would be taken by the European Court of Justice if the executive authorities registered a GI that was not the subject of an international agreement and that was located in a third country that did not satisfy the conditions in Article 12(1) of the Regulation. The European Communities submits that, according to the settled case law of the European Court of Justice:

"Community legislation must, so far as possible, be interpreted in a manner that is consistent with international law, in particular where its provisions are intended specifically to give effect to an international agreement concluded by the Community."172

7.150.
The Panel is not persuaded that it is possible to interpret the relevant aspects of the Regulation in the manner advanced by the European Communities in these proceedings, for the reasons already given. The Panel also notes that the basic Regulation does not indicate that its provisions are intended specifically to give effect to any international agreement concluded by the Community. Whilst the April 2003 amending Regulation recites the TRIPS Agreement, it would only seem to do so to justify extending the right of objection to nationals of WTO Members. In any case, the European Communities' later explanation is that the interpretation must take account of GATT 1994, which is not mentioned at all, rather than the TRIPS Agreement.
7.151.
Article 11 of the DSU requires that "a panel should make an objective assessment of the matter before it, including an objective assessment of the facts of the case...". In our view, our duty to make an objective assessment prohibits us from accepting the interpretation of the applicability of the conditions in Article 12(1) of the Regulation presented by the European Communities in this proceeding, for the reasons set out above.
7.152.
Therefore, the Panel concludes that Australia has made a prima facie case that the equivalence and reciprocity conditions in Article 12(1) of the Regulation apply to the availability of protection for GIs located in third countries, including WTO Members. In other words, the registration procedure in Articles 12a and 12b is not available for GIs located in third countries, including WTO Members, that do not satisfy the conditions in Article 12(1). The European Communities has not succeeded in rebutting that case.
7.153.
The Panel wishes to note that it has evaluated the European Communities' interpretation of the applicability of the equivalence and reciprocity conditions and not found it reflected in the text of the Regulation. Had this interpretation been reflected in the text of the Regulation, the Panel could have reached a different conclusion which would have rendered it unnecessary to continue with an examination of the consistency of those conditions with the provisions of the covered agreements.

(b) National treatment under the TRIPS Agreement

(i) Main arguments of the parties

7.154.
Australia claims that the Regulation is inconsistent with Article 3.1 of the TRIPS Agreement and Article 2(1) of the Paris Convention (1967), as incorporated by Article 2.1 of the TRIPS Agreement, because it imposes conditions of reciprocity and equivalence on the availability of protection. Unless the WTO Member government in whose territory the geographical location at issue is situated is able and willing to meet the equivalence and reciprocity conditions, non-EC nationals are not able to access the rights available to EC nationals, including the advantages of registration.173 Australia, at the first substantive meeting, expressly endorsed the comments made by the United States concerning the EC's national treatment obligations under the TRIPS Agreement.174
7.155.
Australia argues that at least one right at issue in this dispute is the right to obtain registration. Under the Regulation, a non-EC national seeking to register a GI for an area located outside the EU is treated less favourably than an EC national seeking to register a GI for an area located within the EU. It is not necessary to make assumptions about the population of other categories of nationals and the location of their rights.175 In its view, a national for the purposes of the TRIPS Agreement, in the case of a natural person, is a person who possesses the nationality of a state in accordance with that state's laws or a person who is domiciled or who has a real and effective industrial or commercial establishment in a separate customs territory, as a proxy for the ordinary notion of nationality. In the case of a legal person, it is a person who is domiciled or who is established in the Member in accordance with whose laws nationality is claimed.176
7.156.
Australia considers that less favourable treatment under Article 3.1 of the TRIPS Agreement does not preclude formally different treatment, and could include disadvantages or costs, whereas Article 2(1) of the Paris Convention (1967) requires the granting of the same advantages.177 It argues that the perceived advantages of registration under the Regulation include protection against a registered name becoming generic, broad-ranging protection, including even against evocation of a registered GI, as well as ex officio Community-wide protection.178
7.157.
Australia refers to the jurisprudence on Article III:4 of GATT 1994 and considers that "treatment no less favourable" in Article 3.1 of the TRIPS Agreement could be examined in terms of whether the effect of a measure is to modify the conditions of competition in the EC market to the detriment of nationals of other WTO Members with regard to the protection of intellectual property.179 The effect of the Regulation at issue in this dispute is to accord less favourable treatment to non-EC nationals because the additional requirements for GIs located outside the EC overwhelmingly apply to non-EC nationals, given the reality that persons with an interest in securing the registration of the name of a geographical area will almost always be nationals of the Member in which that geographical area is located.180
7.158.
Australia considers that an overarching exceptions provision analogous to Article XX of GATT 1994 was unnecessary in the TRIPS Agreement and is irrelevant to the assessment of de facto discrimination under that agreement because there were pre-existing multilateral intellectual property conventions already in place; Members may take account of legitimate public policy objectives as recognized in Articles 7 and 8 but then must apply them in accordance with national treatment and MFN treatment; specific exceptions exist in the TRIPS Agreement for separate categories of intellectual property rights.181
7.159.
Australia also claims that the Regulation imposes a requirement of establishment in the EC inconsistently with Article 2(2) of the Paris Convention (1967).182
7.160.
The European Communities responds that this claim must fail. Its first defence is that it does not, in fact, apply the conditions in Article 12(1) of the Regulation to geographical areas located in WTO Members. That defence has been considered in the previous sub-section.
7.161.
The European Communities does not contest that national treatment under the TRIPS Agreement applies to more extensive protection granted in respect of intellectual property rights addressed in the TRIPS Agreement.183
7.162.
The European Communities argues that the conditions in Article 12(1) of the Regulation do not depend on nationality. The Regulation sets out two procedures for registration: one for geographical areas located within the European Communities and one for those located outside the European Communities. Whether the geographical area is located within or outside the European Communities is in no way linked to the question of the nationality of the producers concerned.184 This may concern the origin of the product but has nothing to do with the nationality of the producer, which is simply of no relevance for the registration of the GI.185 There are no legal requirements which ensure that applicants for GIs for geographical areas located in the European Communities are always, or usually, EC nationals.186 There is no reason why a foreign national cannot produce products in accordance with a product specification in a GI registration located in the European Communities, and there are examples of foreign companies which have invested in the European Communities in this way.187 If an applicant or user sets up a legal entity in the geographical area, that is simply a practical consequence of the fact that products must be produced in accordance with product specifications.188 Nationality is determined by the laws of each State and is not simply a matter of domicile or establishment, which is highlighted by the specific rules in Article 3 of the Paris Convention (1967) and footnote 1 to the TRIPS Agreement which would otherwise be unnecessary.189 The European Communities is not a "separate customs territory" within the meaning of footnote 1 to the TRIPS Agreement.190 The meaning of "interested parties" in Article 10(2) of the Paris Convention (1967) is inapplicable in Article 22 of the TRIPS Agreement.191 Nationality is not linked to the points of attachment but must be given a uniform meaning for all intellectual property rights.192 The Regulation does not require any comparison of nationals because it does not contain any discrimination on the basis of nationality.193
7.163.
The European Communities argues that the existence of different procedures which apply according to location of geographical areas is not sufficient to show less favourable treatment but rather there must be a substantive difference between those provisions which entails less favourable treatment. A measure would have to modify the conditions regarding the protection of intellectual property rights within the meaning of the TRIPS Agreement to the detriment of foreign nationals.194
7.164.
The European Communities argues that the jurisprudence on Article III:2 of GATT 1994 is not relevant to the present dispute because of differences between paragraphs 2 and 4 of Article III and between Article III and Article 3.1 of the TRIPS Agreement. There is no general concept of discrimination common to all WTO agreements. There has never been a de facto application of Article 3.1 and the concept of conditions of competition is not easily transposable to the TRIPS Agreement. Whilst it may be possible under certain circumstances that measures which are neutral on their face accord less favourable treatment to nationals, the Panel should take account of the following: (1) the present case relates primarily to the origin of goods which is already dealt with more appropriately in the context of Article III:4 of GATT 1994, not the TRIPS Agreement; (2) de facto discrimination is a notion closely related to preventing circumvention of national treatment obligations, which does not exist when the specific issue is dealt with in other national treatment provisions, such as those of GATT; and (3) the national treatment provisions of GATT and the TRIPS Agreement should not systematically overlap. In addition, the TRIPS Agreement does not contain any provision corresponding to Article XX of GATT 1994 and it would not seem appropriate for a measure justified on the basis of Article XX to be found incompatible with the covered agreements on the basis of a de facto application of TRIPS national treatment.195

(ii) Main arguments of third parties

7.165.
Brazilsubmits that the equivalence and reciprocity conditions in the Regulation are inconsistent with national treatment under Article 3.1 of the TRIPS Agreement. In most cases under the Regulation, discrimination according to geographical areas is discrimination between nationals.196
7.166.
Canadasubmits that the equivalence and reciprocity conditions in the Regulation are inconsistent with national treatment under Articles 2.1 and 3.1 of the TRIPS Agreement. Discrimination on the basis of geographical area discriminates on the basis of nationality because of the "simple and incontestable" reality that EC nationals are likely to register for protection of GIs located in the European Communities and non-EC nationals are likely to register for protection of GIs located outside the European Communities. The explicit requirement that the physical production of a good that qualifies for a GI take place in the area indicated by the GI, means that an applicant for a GI located in the European Communities will, in all probability be a national of an EC member State. The treatment of "nationals" under the TRIPS Agreement extends de jure to geographical area.197
7.167.
China considers that "nationals" within the meaning of the TRIPS Agreement includes natural persons who are domiciled, or legal persons who have a real and effective industrial and commercial establishment, in that Member.198
7.168.
Colombiaconsiders that any distinction that in any way identifies the GIs of the European Communities clearly entails a violation of national treatment obligations.199
7.169.
India considers that the only valid interpretation of "treatment with regard to the protection " in Article 3.1 of the TRIPS Agreement is that no less favourable treatment to nationals of other WTO Members cannot be provided unless no less favourable treatment is also provided to the GIs for which they apply, whether located in the European Communities or in other WTO Members. The only available exceptions are found in Article 3.2.200
7.170.
Mexicoconsiders that the equivalence and reciprocity conditions prevent nationals of other WTO Members enjoying the protection afforded by the Regulation, which is contrary to the national treatment principle in Article 3.1 of the TRIPS Agreement.201
7.171.
New Zealandsubmits that the term "nationals" clearly has a geographical connotation in the context of the TRIPS Agreement. Article 3 of the Paris Convention (1967) sets out a criterion for eligibility for protection to which the definition of "nationals" in Article 1.3 of the TRIPS Agreement refers. Footnote 1 to Article 1.3 of the TRIPS Agreement provides further support. The definition of an applicant in the Regulation includes persons according to their location. The most favourable treatment accorded to EC nationals should be compared with that received by WTO Member nationals. "Less favourable treatment" requires not only a difference in applicable laws but some disadvantage as a result of that difference. At worst, the difference means that the benefits of registration are entirely unavailable. At best, it means that other WTO Member nationals are subject to "extra hurdles" and disadvantaged. As a result, they do not have the same opportunities to protect their GIs through registration as do EC nationals. The individual's right to apply for protection is conditioned on factors over which the applicant has no control. The advantages granted by registration include those under Article 13 and, according to the preamble, higher incomes.202
7.172.
Chinese Taipei submits that the equivalence and reciprocity conditions violate the national treatment obligation in Article 3.1 of the TRIPS Agreement and Article 2(1) of the Paris Convention (1967). It recalls that national treatment under the TRIPS Agreement applies to "nationals" and that the European Communities compares EC nationals and non-EC nationals with GIs located in the European Communities. It treats them completely independently of EC nationals and non-EC nationals with GIs located outside the European Communities. This essentially is an argument that the European Communities can establish a separate set of rules for, and discriminate against, non-EC GIs as it wishes. Chinese Taipei submits that the Panel should examine whether any person, whether an EC or a non-EC national, with a GI, whether located in the European Communities or outside the European Communities, receives treatment less favourable than that accorded to an EC national with a GI located in the European Communities. Footnote 1 to the TRIPS Agreement applies to the European Communities as a separate customs territory.203

(iii) Consideration by the Panel

National treatment obligations in the TRIPS Agreement
7.173.
These claims are made under two national treatment obligations: one found in Article 3 of the TRIPS Agreement, which forms part of the text of that agreement, and the other found elsewhere, in Article 2 of the Paris Convention (1967) as incorporated by Article 2.1 of the TRIPS Agreement. The Panel will first consider the claim under Article 3 of the TRIPS Agreement.
7.174.
Article 3.1 of the TRIPS Agreement provides as follows:

"1. Each Member shall accord to the nationals of other Members treatment no less favourable than that it accords to its own nationals with regard to the protection of intellectual property, subject to the exceptions already provided in, respectively, the Paris Convention (1967), the Berne Convention (1971), the Rome Convention or the Treaty on Intellectual Property in Respect of Integrated Circuits...." [footnote 3 omitted]

7.175.
Two elements must be satisfied to establish an inconsistency with this obligation: (1) the measure at issue must apply with regard to the protection of intellectual property; and (2) the nationals of other Members must be accorded "less favourable" treatment than the Member's own nationals. The Panel will address each of these elements in turn. The parties do not agree on the meaning of "nationals" for the purposes of this claim. The Panel will therefore address that issue in the course of its consideration of the second element of this claim.

Protection of intellectual property

7.176.
The national treatment obligation in Article 3 of the TRIPS Agreement applies "with regard to the protection of intellectual property". Footnote 3 provides an inclusive definition of the term "protection" as used in Articles 3 and 4. It reads as follows:

"For the purposes of Articles 3 and 4, 'protection' shall include matters affecting the availability, acquisition, scope, maintenance and enforcement of intellectual property rights as well as those matters affecting the use of intellectual property rights specifically addressed in this Agreement."

7.177.
Article 1.2 explains the term "intellectual property":

"2. For the purposes of this Agreement, the term 'intellectual property' refers to all categories of intellectual property that are the subject of Sections 1 through 7 of Part II."

7.178.
Turning to the Regulation, Article 12(1) refers to how the Regulation "may apply", which is a reference to the availability of intellectual property rights in relation to "designations of origin" and "geographical indications", as defined in the Regulation. It is not disputed that "designations of origin" and "geographical indications", as defined in the Regulation, fall within the category of "geographical indications", the subject of Section 3 of Part II, and therefore part of a category of intellectual property within the meaning of Article 1.2 of the TRIPS Agreement.
7.179.
Therefore, this claim concerns the "protection" of intellectual property, as clarified in footnote 3 to the TRIPS Agreement, within the scope of the national treatment obligation in Article 3 of that Agreement.
7.180.
It is not necessary to show that the Regulation implements the minimum standards in Part II of the TRIPS Agreement for the purposes of these claims. National treatment is required with regard to the protection of intellectual property, even where measures provide a higher level of protection.

Less favourable treatment accorded to the nationals of other Members

Less favourable treatment