INTRODUCTION

Complaint of Korea

On 3 September 2003, Korea requested consultations with the European Communities (“EC”) and certain EC member States pursuant to Article 4 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (“DSU”), Article XXIII:1(a) of the General Agreement on Tariffs and Trade 1994 (“the GATT 1994”), Article XXIII:1(b) of the GATT 1994 and Article 5(b) of the Agreement on Subsidies and Countervailing Measures (“SCM Agreement”), and Articles 4, 7 and 30 of the SCM Agreement, with regard to measures affecting trade in commercial vessels. Korea and the European Communities held consultations on 9 October and 14 November 2003, but failed to settle the dispute.

On 12 September 2003, China requested, pursuant to Article 4.11 of the DSU, to be joined in the consultations.

Establishment and Composition of the Panel

On 5 February 2004, Korea requested the establishment of a panel pursuant to Articles 6 of the DSU and Article XXIII:2 of the GATT 1994. At its meeting of 19 March 2004, the Dispute Settlement Body (the “DSB”) established a Panel in accordance with Article 6 of the DSU to examine the matter referred to the DSB by Korea in document WT/DS301/3. 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:

On 7 May 2004, Korea requested the Director-General to determine the composition of the Panel, pursuant to paragraph 7 of Article 8 of the DSU.