In the event that the Appellate Body endorses any of the United States' claims on appeal, the European Communities requests the Appellate Body to rule on certain claims that the European Communities made before the Panel, which, according to the European Communities, the Panel decided only in part.
These claims were, first, that, by not entirely withdrawing FSC and ETI subsidies, the United States has failed to comply with the recommendations and rulings of the DSB as well as with Article 4.7 of the SCM Agreement. The European Communities submits that the Panel upheld this claim only "insofar as it found that the United States had failed to comply with the operative recommendations and rulings of the DSB."40 However, the Panel did not expressly state whether a violation of Article 4.7 of the SCM Agreementhad occurred, nor did it say that it was exercising judicial economy with regard to this claim of the European Communities.
Secondly, the European Communities argues that, by not entirely withdrawing FSC and ETI subsidies, the United States has failed to comply with the recommendations and rulings of the DSB and thereby its obligations under Articles 19.1 and 21.1 of the DSU. The Panel exercised judicial economy in respect of these claims. The European Communities argues that Article 19.1 of the DSU contains an implicit obligation on WTO Members similar to that in Article 4.7 of the SCM Agreement. Therefore, the European Communities considers that the United States is violating Article 19.1 and Article 21.1 of the DSU and requests the Appellate Body to make such a finding, in the event that it reverses any of the Panel's findings.
In addition, in the event that the Appellate Body considers that the Panel erred in holding that "the original DSB recommendations and rulings in 2000 remain operative"41, and that it did not therefore need to issue a new recommendation under Article 4.7 of the SCM Agreement, the European Communities requests the Appellate Body to make such a recommendation. The European Communities explains that the reason why it requested the first compliance panel not to make an Article 4.7 recommendation is that such a recommendation requires the fixing of a time period for withdrawal of the subsidy found to be prohibited. Compliance with WTO obligations should not be postponed through a "never-ending cycle"42 of litigation and advancement of the time-limit for compliance. The European Communities furthermore argues that, in the event that the first and second Article 21.5 panels erred in not making a recommendation in the first and second compliance proceedings, the Appellate Body should complete the analysis and make such a recommendation.
The European Communities adds that recommendations under Article 4.7 of the SCM Agreement and Article 19.1 of the DSU—in the event they are considered necessary by the Appellate Body—must be made "irrespective of a specific request of the complaining party".43 Accordingly, these recommendations may be made by the Appellate Body when the Appellate Body considers it necessary to complete the analysis in the absence of any such request. Such additional recommendations should not, however, imply setting a new time period for withdrawing the prohibited subsidies as that would undermine the effective operation of the dispute settlement system.