WORLD TRADE WT/DS334/R 21 September 2007 ORGANIZATION (07-3877) Original: English TURKEY – MEASURES AFFECTING THE IMPORTATION OF RICE Report of the Panel WT/DS334/R Page i TABLE OF CONTENTS Page I. INTRODUCTION ....................................................................................................................1 II. FACTUAL ASPECTS ..............................................................................................................2 A. PRODUCT DESCRIPTION...............................................................................................................2 B. TURKEY'S RICE MARKET .............................................................................................................3 1. Turkey's rice production..........................................................................................................3 2. Rice consumption in Turkey....................................................................................................5 3. Turkey's imports of rice ...........................................................................................................5 4. Domestic rice producers.........................................................................................................12 C. GENERAL IMPORT REGIME ........................................................................................................13 1. Tariff rates...............................................................................................................................13 2. Preferential agreements for the importation of rice ............................................................13 3. General procedure for the importation of rice.....................................................................13 D. CERTIFICATES OF CONTROL ......................................................................................................14 1. Legal basis ...............................................................................................................................14 (a) Situation at the time of the establishment of this Panel ............................................................14 (b) New legislation after the establishment of this Panel ...............................................................17 2. Approved Certificates of Control ..........................................................................................17 (a) Statement by Turkey.................................................................................................................17 (b) Request for evidence from Turkey............................................................................................17 (c) New request for evidence from Turkey ....................................................................................17 3. Rejection of Certificates of Control.......................................................................................19 (a) Rejection of Certificates of Control..........................................................................................19 (b) Request for evidence from Turkey............................................................................................20 (c) New request for evidence from Turkey ....................................................................................20 4. Procedures in Turkish administrative courts.......................................................................21 (a) Arguments by MARA before an administrative court..............................................................21 5. Decision by a Turkish administrative court .........................................................................22 E. THE TARIFF RATE QUOTA SYSTEM ............................................................................................22 1. Situation at the time of the establishment of this Panel.......................................................22 (a) Decree No. 95/6814 of 30 April 1995.......................................................................................22 (b) Decree No. 2004/7333 of 10 May 2004....................................................................................23 (c) Decree 2005/9315 of September 2005......................................................................................23 (d) Communiqué No. 25,943 of the FTU .......................................................................................24 2. Earlier tariff quota regimes ...................................................................................................25 WT/DS334/R Page ii (a) Decree 2004/7135 of 20 April 2004 (from 20 April 2004 to 31 August 2004) ........................25 (b) Decree 2004/7756 of August 2004 (from 1 November 2004 to 31 July 2005) ........................27 3. Import licences ........................................................................................................................28 F. THE TURKISH GRAIN BOARD....................................................................................................29 G. LETTERS OF ACCEPTANCE.........................................................................................................32 1. The so-called "letters of acceptance"....................................................................................32 2. Evidence of letters of acceptance ...........................................................................................33 3. Content of letters of acceptance.............................................................................................33 4. Nature of letters of acceptance...............................................................................................34 H. LETTER FROM THE MINISTER OF STATE OF TURKEY................................................................35 III. PARTIES' REQUESTS FOR FINDINGS AND RECOMMENDATIONS.......................35 IV. ARGUMENTS OF THE PARTIES AND THIRD PARTIES ............................................38 V. INTERIM REVIEW...............................................................................................................38 A. REQUESTS FOR REVIEW OF PRECISE ASPECTS OF THE INTERIM REPORT ...................................38 B. REQUEST FOR JUDICIAL ECONOMY ...........................................................................................38 C. BURDEN OF PROOF ....................................................................................................................39 D. PARTIES' DUTY TO COLLABORATE ............................................................................................40 E. APPROPRIATE INFERENCES .......................................................................................................41 F. PANEL'S RECOMMENDATIONS ...................................................................................................41 G. ADDITIONAL REVISIONS AND CORRECTIONS ............................................................................43 VI. PRELIMINARY RULING BY THE PANEL ON THIRD PARTY RIGHTS..................43 VII. FINDINGS...............................................................................................................................45 A. BURDEN OF PROOF ....................................................................................................................45 B. THE DENIAL OR FAILURE TO GRANT LICENCES TO IMPORT RICE AT OR BELOW THE BOUND RATE OF DUTY...............................................................................................................48 1. The United States' claims .......................................................................................................48 2. Turkey's response ...................................................................................................................49 3. The challenged measure .........................................................................................................50 (a) The so-called "blanket prohibition" ..........................................................................................50 (b) The measure at issue .................................................................................................................51 (c) Conclusion ................................................................................................................................51 4. Order of analysis.....................................................................................................................52 5. Claim under Article 4.2 of the Agreement on Agriculture..................................................56 (a) Arguments of the parties...........................................................................................................56 (b) Article 4.2 of the Agreement on Agriculture ............................................................................57 (c) The Panel's analysis ..................................................................................................................57 WT/DS334/R Page iii (i) Importance of Article 4.2 of the Agreement on Agriculture......................................................57 (ii) Issues for the Panel's consideration..........................................................................................58 (iii) Has the United States produced evidence of the challenged measure?....................................59 (iv) Has Turkey produced evidence to rebut the presumption?.......................................................65 (v) Is