 
 WORLD TRADE  
ORGANIZATION   
WT/DS207/17 
25 May 2004 
 
 (04-2271) 
 Original:   Spanish 
  
 
CHILE – PRICE BAND SYSTEM AND SAFEGUARD MEASURES 
RELATING TO CERTAIN AGRICULTURAL PRODUCTS 
 
Recourse to Article 21.5 of the DSU by Argentina 
 
Request for Consultations  
 
  The following communication, dated 19 May 2004,  from the delegation of Argentina to the 
delegation of Chile and to the Chairperson of the Dispute Settlement Body, is circulated pursuant to 
Article 21.5 of the DSU. 
 
_______________ 
 
  On instruction from my Government, I have the pleasure to submit herewith Argentina's 
request for consultations with Chile pursuant to paragraph 1 of the "Understanding between the 
Argentine Republic and the Republic of Chile Re garding Procedures under Articles 21 and 22 of the 
DSU with Respect to the Dispute Chile - Price Band System and Safeguard Measures Relating to 
Certain Agricultural Products (WT/DS207)" and Article XXIII:1 of the GATT 1994. WT/DS207/17 
Page 2  
 
 CHILE – PRICE BAND SYSTEM AND SAFEGUARD MEASURES RELATING TO 
CERTAIN AGRICULTURAL PRODUCTS 
 
WT/DS207 
 
Request for Consultations in Connection with the Recourse by Argentina 
to Article 21.5 of the DSU 
 
 
 On 23 October 2002, the Dispute Settlement Body  (DSB) adopted the Report of the Appellate 
Body1 and the Report of the Panel2 as modified by the Appellate Body in the dispute Chile - Price 
Band System and Safeguard Measures Relating to Certain Agricultural Products  The Appellate Body 
found that Chile's price band system (hereinafter PBS) was inconsistent with Article 4.2 of the 
Agreement on Agriculture.   
 
 The Appellate Body further concluded as follows: 
 
"The Appellate Body recommends that the DSB request Chile to bring its price band 
system, as found, in this Report and in the Pa nel Report as modified by this Report, to 
be inconsistent with the Agreement on Agriculture , into conformity with its 
obligations under that Agreement." 
 On 6 December 2002, Chile communicated a requ est to the DSB that the determination of a 
reasonable period be the subject of binding arbitr ation, in accordance with Article 21.3(c) of the 
Understanding on Rules and Procedures Governing the Settlement of Disputes  (hereinafter the 
DSU).3 
 
 On 17 March 2003, the award of the arbitrator determined that the reasonable period of time 
for Chile to implement the recommendations and ruli ngs of the DSB was 14 months from the date of 
the adoption of the above-mentioned reports.  This reasonable period of time expired on 
23 December 2003.     On 25 September 2003, Chile published in the Official Journal Law No. 19.897 establishing 
rules on the importation of goods into the country , amending Article 12 of Law No. 18.525 and the 
Customs Tariff, and on 4 October 2003 Chile publis hed in the Official Journal Supreme Decree 
No. 831 of the Ministry of Finance regulating th e application of Article 12 of Law 18.525, as 
substituted by Article 1 of Law 19.897.
4  This Decree regulates certain aspects of the PBS, the 
modifications of which entered into force on 16 D ecember 2003 for the products at issue in this 
dispute, with the exception of edible vegetable oils , which ceased to be subject to the PBS as of the 
date of publication of Law No. 19.897.5   
 
                                                      
1 WT/DS207/AB/R. 
2 WT/DS207/R. 
3 WT/DS207/9. 
4 WT/DS207/15 of 22 September 2003, WT/DS207/15/Add.1 of 28 October 2003, and 
WT/DS207/15/Add.2 of 21 November 2003. 
5 National Customs Service of the Government of Chile, Technical Undersecretariat and Department of 
Classification, Circular No. 292 of 14 October 2003.  See also Chile's statement to the DSB of 
7 November 2003 (WT/DSB/M/157, paragraph 20).  WT/DS207/17 
 Page 3 
 
 
  Argentina strongly disagreed that these changes to the PBS, as regards wheat and wheat flour, 
were in compliance with the recommendati ons of the Panel and the Appellate Body.6   
  On 24 December 2003, Argentina and Chile concluded an "Unders tanding between the 
Argentine Republic and the Republic of Chile Re garding Procedures under Articles 21 and 22 of the 
DSU with Respect to the Dispute Chile – Price Band System and Safeguard Measures Relating to 
Certain Agricultural Products " (WT/DS207).
7 
  In the light of this Agreement and of Article XXIII:1 of the GATT 1994, and without 
prejudice to its other rights under the WTO, Argen tina hereby requests consultations with Chile. 
 
 Specifically, Argentina considers that, thr ough Law No. 19.897 and Supreme Decree No. 831 
of 2003, Chile modified the PBS in such a way that imports of the products at issue in this dispute are still affected by the imposition of specific duties and rebates whose application continues to be subject 
to floor and ceiling parameters, as well as to the reference price mechanism. 
 
 Thus, it would appear that Chile  has maintained a measure sim ilar to a variable import levy 
and a minimum import price with respect to the products  at issue in this dispute.  At the same time, 
Chile imposes "other duties or charges" on imports of  the said products that are not recorded in the 
relevant column of its Schedule.  Finally, it grants treatment less favourable than that accorded to the 
same products of Chilean origin.  In other words, Chile has not ensured the conformity of its laws, 
regulations and administrative procedures with its  obligations as provided in the WTO Agreements. 
  Consequently, Argentina considers that the measures adopted by Chile to implement the 
recommendations and rulings of the DSB are inconsis tent, inter alia, with the following provisions of 
the covered agreements: 
 
 Article 4.2 of the Agreement on Agriculture; 
 
 the second sentence of Article II.1(b) of the GATT 1994; 
 
 paragraph 4 of Article III of the GATT 1994,  
 and hence, 
 
 Article XVI.4 of the Marrakesh Agre ement Establishing the World Trade 
Organization. 
  Since the Understanding regarding procedur es under Articles 21 and 22 of the DSU with 
respect to this dispute stipulates that "Argentina shall request consultations, which the parties shall 
agree to hold within 15 days from the date of circulation of the request"
8,  Argentina looks forward to 
receiving Chile's reply to this request at an early date in order to fix a mutually acceptable date and 
venue for the consultations.  
__________  
                                                      
6 See, for example, Argentina's st atements at the DSB meetings of 2 October 2003 (WT/DSB/M/156, 
paragraphs 17-19), 7 November 2003 (WT/DSB/M/157, paragraph 19), and 1 December 2003 
(WT/DSB/M/159, paragraph 19).  This difference of opinion was also recorded in document WT/DS207/16. 
7 WT/DS207/16 of 7 January 2004. 
8 WT/DS207/16, paragraph 1. 