INTRODUCTION

Complaint of the European Communities

1.1 On 31 March 2006, the European Communities (“the EC”) requested consultations with Mexico pursuant to Article 4 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (the “DSU”), Article XXIII of the General Agreement on Tariffs and Trade 1994 (“GATT 1994”), Article 30 of the Agreement on Subsidies and Countervailing Measures (“SCM Agreement”) and Article 19 of the Agreement on Agriculture. The consultations concerned the definitive countervailing measures imposed by Mexico on imports of olive oil from the European Communities by the “Final Resolution in the investigation of price subsidization of imports of olive oil” published in the Official Journal of the United Mexican States (“Official Journal”) on 1 August 2005. The European Communities and Mexico held consultations on 5 May 2006. These consultations failed to resolve the dispute.

1.2 On 7 December 2006, the European Communities requested the establishment of a panel pursuant to Articles 4.7 and 6.2 of the DSU, Article XXIII of the GATT 1994, Articles 4 and 30 of the SCM Agreement, and Article 19 of the Agreement on Agriculture.

Establishment and Composition of the Panel

1.3 At its meeting on 23 January 2007, the Dispute Settlement Body (“DSB”) established the Panel pursuant to the request of the European Communities in document WT/DS341/2, in accordance with Article 6 of the DSU. At that meeting, the parties to the dispute also agreed that the Panel should have standard terms of reference.