WORLD TRADE ORGANIZATION
ORGANISATION MONDIALE DU COMMERCE
ORGANIZACIÓN MUNDIAL DEL COMERCIO
WT/TPR/M/160/Add.1
27 September 2006
(06-4592)
Original: English/Spanish
anglais/espagnol
inglés/español
Trade Policy Review Body
22 and 24 March 2006
TRADE POLICY REVIEW
UNITED STATES
Minutes of Meeting
Addendum
Chairperson: H.E. Ms. Claudia Uribe (Colombia)
This document contains the advance written questions, and replies provided by the
United States.1
__________________________________________________________________________________
Organe d'examen des politiques commerciales
22 et 24 mars 2006
EXAMEN DES POLITIQUES COMMERCIALES
ÉTATS UNIS
Compte rendu de la réunion
Addendum
Présidente: S.E. Mme Claudia Uribe (Colombie)
Le présent document contient les questions écrites communiquées à l'avance et les réponses
fournies par les États Unis.1
__________________________________________________________________________________
Órgano de Examen de las Políticas Comerciales
22 y 24 de marzo de 2006
EXAMEN DE LAS POLÍTICAS COMERCIALES
ESTADOS UNIDOS
Acta de la reunión
Addendum
Presidenta: Excma. Sra. Claudia Uribe (Colombia)
En el presente documento figuran las preguntas presentadas anticipadamente por escrito,
junto con las respuestas facilitadas por los Estados Unidos.1
1
In English and Spanish only./En anglais et espagnol seulement./En inglés y español solamente.
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ADVANCE WRITTEN QUESTIONS BY MEMBERS
CUBA
Pregunta a formular a la delegación de Estados Unidos de América en ocasión de la reunión del
8vo Examen de la Política Comercial de ese país:
"La delegación de Cuba presenta en esta ocasión un informe sobre un grupo de medidas que
viene aplicando el Gobierno de los Estados Unidos de América contra nuestro país desde enero de
2004 a la fecha, las cuales refuerzan el bloqueo económico, comercial y financiero que desde 1962
ese Gobierno mantiene contra Cuba, así como su marcado carácter extraterritorial, lo cual realiza en
abierto desafío a la exigencia de la Asamblea General de las Naciones Unidas -- respaldada por la
inmensa mayoría de sus Estados miembros -- de que se ponga fin a esa ilegal política; lo que confirma
el más absoluto desprecio del Gobierno de los Estados Unidos de América a las Naciones Unidas, al
multilateralismo y al Derecho Internacional.
En este contexto, nuestra delegación desea preguntar a la delegación de los Estados Unidos de
América, que se autodefine como defensor del Sistema Multilateral de Comercio, cómo puede explicar
la aplicación de tales medidas, cuando no existe duda alguna de que todas ellas son violatorias de las
reglas de la OMC y contrarias a los compromisos que su país adoptó como miembro de
esta Organización?
Informe sobre Medidas aplicadas por los Estados Unidos de América a Cuba
Desde el anterior Examen realizado en enero del 2004 hasta la fecha, el gobierno de Estados Unidos de
América (E.U.A) no sólo ha mantenido, sino que ha reforzado e intensificado las prohibiciones y
restricciones del bloqueo económico, comercial y financiero, que de manera unilateral ha impuesto a
Cuba por más de cuarenta años, y que ha ocasionado inconmensurables afectaciones a la economía,
al comercio de bienes y servicios, y a la población del país.
El perjuicio económico directo causado al pueblo cubano por la aplicación del bloqueo a partir de
cálculos conservadores preliminares, supera los 82 mil millones de dólares; un promedio de
1 782 millones de dólares anuales. En el 2004 superó los 2 mil 764 millones de dólares y las
afectaciones directas sólo al comercio exterior alcanzaron la cifra de 822,6 millones de dólares.
Cuba es el único Miembro de la OMC sometido a sanciones tan lesivas, abarcadoras y de tal
complejidad, que su alcance extraterritorial afecta a otros miembros de la OMC en sus relaciones
comerciales tanto con Cuba como con los propios E.U.A. Incontables ejemplos han sido recogidos en
el Informe que cada año Cuba presenta al Secretario General de las Naciones Unidas, y que ha
motivado que por decimocuarta ocasión consecutiva en el año 2005, la Asamblea General de las
Naciones Unidas con el apoyo casi unánime de sus Estados miembros (182) exija poner fin a esa
política irracional e incongruente con los principios que propugnan la OMC, las Naciones Unidas y
otros organismos internacionales.
Tal y como lo refleja en su Informe la Secretaria de la OMC (WT/TPR/S/160), durante el período
objeto de examen, E.U.A redujo o flexibilizó sus controles y restricciones al comercio con alrededor de
una docena de países (varios de Europa, Iraq y Libia); sin embargo, en el caso de Cuba por el contrario,
los ha recrudecido e intensificado aún más. Las notorias y repudiadas leyes Torricelli (1992) y HelmsBurton (1996), junto a más de una decena de otras leyes que conforman la madeja del bloqueo,
mantienen plena vigencia.
En junio del 2004, el gobierno de E.U.A. puso en vigor nuevas regulaciones de la OFAC (Oficina para
el Control de Bienes Extranjeros, encargada de administrar las sanciones económicas y comerciales)
del Departamento del Tesoro, y se establecieron por parte del Departamento de Comercio criterios y
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controles más rigurosos con respecto a los paquetes de regalo y el equipaje de los viajeros procedentes
de E.U.A. hacia Cuba, como parte de la aplicación de las medidas anunciadas por el Presidente Bush
contra Cuba el 6 de mayo/04, en consonancia con las recomendaciones de la llamada Comisión de
Ayuda a una Cuba Libre.
Las regulaciones del Departamento del Tesoro están dirigidas a hacer más estrictas las restricciones de
viajes desde E.U.A. a Cuba, tanto para los estadounidenses como para los cubanos que allí residen, así
como otros aspectos relacionados con los viajes y el envío de remesas. Se trata de reducir así los
ingresos que Cuba obtendría por los viajes y las remesas, con las consiguientes afectaciones a la
economía cubana en general y al comercio de servicios en particular que, en los últimos años se ha
convertido en una importante fuente de recursos para el desarrollo económico de Cuba.
El reforzamiento de las restricciones a los viajes estuvo dado por la eliminación de categorías que hasta
esa fecha eran permitidas, la exigencia de la obtención de una licencia específica para otras categorías
que antes requerían una licencia general, la reducción del monto permisible de gastos en Cuba a los
viajeros autorizados; y la prohibición de importar productos cubanos por parte de los visitantes que
viajan a Cuba (excepto algunos muy específicos que califiquen como materiales informativos o
culturales). De ahí que:
1.
Se eliminó la categoría de Fully-Hosted Travel (Viajes por invitación, sin costo alguno
para el viajero), la cual había sido aceptada desde 1982, sin que por espacio de más de dos décadas se
considerarse una violación de las regulaciones de la OFAC. De manera que los ciudadanos de E.U.A.
u otras personas sujetas a la jurisdicción de ese país, no podrán viajar a Cuba como invitados del
gobierno de Cuba o de algún nacional cubano ( o de un tercer país), a menos que obtengan para ello
una licencia específica de la OFAC.
Acuden así a una nueva interpretación, según la cual aun cuando los viajeros hacia, desde, o dentro de
Cuba acepten bienes y servicios sin costo alguno para ellos, de todas formas se involucran en
actividades prohibidas en las que Cuba o un nacional de Cuba tiene un interés, como el pago de gastos
(transacciones) relacionados con el viaje (impuestos de aeropuerto, tarifas de atraque y otras).
En esta misma regulación se establece la prohibición de realizar pago alguno para viajar a Cuba a un
transportista aéreo de un tercer país que implique la existencia de un interés cubano, a menos que el
viaje se realice bajo una licencia específica o general.
2.
Se establecen nuevas limitaciones a los viajes para visitar familiares en Cuba. Las nuevas
regulaciones además de restringir la categoría de familiares (nacionales cubanos) que pueden ser
visitados en Cuba (a sólo familiares cercanos como esposa/o, hijos, nietos, padres, abuelos o
hermanos), limitan el número de visitas a una cada tres años, al amparo de una licencia específica y
para una estancia de sólo 14 días (en lugar de una cada doce meses y sin duración establecida, tal y
como regía con anterioridad). No se autorizarán visitas adicionales, y no se prevé la emisión de
licencias en situaciones de emergencia. Con anterioridad estas visitas se realizaban al amparo de una
licencia general o automática.
En el caso de visitas desde E.U.A. a nacionales no cubanos que se encuentran en Cuba al amparo de
una licencia del gobierno de E.U.A. (tales como estudiantes universitarios), se establecen una serie de
requisitos para la emisión de una licencia específica para los eventuales viajeros, entre los cuales se
mencionan la existencia de una situación de emergencia que motive el viaje, conocimiento previo por
parte de la Sección de Intereses de E.U.A. en la Habana y consulta con el Departamento de Estado
previa a la emisión de dicha licencia específica.
3.
Se limitan los viajes de ciudadanos bajo la jurisdicción de E.U.A. para participar en
ciertos eventos profesionales en Cuba, con la aclaración de que la licencia general (o automática)
para autorizar transacciones vinculadas a los viajes a Cuba para ciertas investigaciones profesionales en
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Cuba, no se extenderá para transacciones relacionadas con conferencias o reuniones profesionales en
Cuba, las cuales no serán categorizadas como investigación profesional. En este caso, el investigador
debe solicitar una licencia específica de OFAC.
4.
Se establecen nuevos requisitos a los viajes para participar en actividades educacionales
en Cuba, al requerir que los eventuales viajeros obtengan una licencia específica para estas
actividades, restringiendo aun más las posibilidades de obtenerla a determinadas instituciones y
eliminándola en el caso de las instituciones de enseñanza secundaria. La duración de esta licencia se
reduce de dos a un año, y para ciertas actividades la estancia en Cuba no puede ser menor de
10 semanas.
5.
Se restringen los viajes para asistir a competencias deportivas organizadas por
federaciones internacionales, al eliminar la posibilidad de la licencia general para participar en estas
competencias, y se instaura el requisito de una licencia específica, solicitada y analizada caso a caso.
Las nuevas regulaciones eliminan la posibilidad de autorizar la participación en talleres y eventos
clínicos relacionados o no con el deporte.
6.
Se limita el monto para los gastos en Cuba de los viajeros autorizados, en el caso de las
visitas familiares a Cuba. La cantidad autorizada a gastar diariamente se reduce a sólo 50 dólares para
cubrir pagos relacionados con el viaje, más una cantidad adicional de 50 dólares por viaje, para gastos
de transportación interna en Cuba. Con anterioridad, este monto se correspondía con el per diem de
167 dólares, establecido por el Departamento de Estado para el viaje de sus empleados.
La OFAC mantiene la discreción de emitir licencias específicas para autorizar gastos mayores. Como
política, esa entidad no es proclive a utilizar con frecuencia esta posibilidad, todo lo contrario.
7.
Se elimina la importación de productos (o mercancías) cubanos por los visitantes,
suprimiendo la posibilidad de que los viajeros autorizados a visitar Cuba adquieran y lleven consigo,
para uso personal en su viaje de regreso, mercancías cubanas por un valor de 100 dólares, como se
establecía con anterioridad, con la única excepción de los productos que clasifican como materiales
informativos.
En octubre del 2004, el Departamento de Estado de E.U.A. anunció el establecimiento de un “Grupo de
Persecución de Activos Cubanos” para investigar y detener nuevas vías de movimiento de divisas hacia
y desde Cuba, mencionando en particular al sector del turismo cubano, que se ha constituido en una
fuente principal de ingresos para Cuba. Sin dudas, esta medida constituye una de las mejores
demostraciones del recrudecimiento y la intensidad del bloqueo que han caracterizado los dos años
transcurridos desde el anterior Examen.
Respecto a las restricciones en las remesas enviadas desde E.U.A a nacionales cubanos, las
regulaciones de OFAC establecen:
1.
Remesas a familiares - Se modificaron las regulaciones que establecían una licencia general
para enviar 300 dólares trimestrales por parte de cualquier persona sujeta a la jurisdicción de E.U.A.
(mayor de 18 años) a cualquier hogar de un nacional cubano, para establecer el envío al amparo de esa
licencia general, sólo cuando las remesas son para miembros de la familia inmediata del remitente,
entiéndase sólo esposa/o, hijos, nietos, padres, abuelos o hermanos.
Además, se especifica que las remesas no pueden ser enviadas a funcionarios del Gobierno Cubano y
del Partido Comunista de Cuba. En adición, se reduce la cantidad total de las remesas trimestrales que
un viajero autorizado puede traer consigo de 3000 dólares a sólo los 300 dólares antes señalados.
2.
Remesas de Organizaciones No Gubernamentales de E.U.A. a Grupos/Organizaciones e
Individuos miembros de ellos en Cuba. Se define más claramente la política de licencias específicas
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para autorizar remesas de organizaciones gubernamentales, no gubernamentales e individuos sujetos a
la jurisdicción de E.U.A. a los llamados grupos pro democracia, o sociedad civil independiente, y
organizaciones religiosas, o a miembros individuales de estos grupos u organizaciones en Cuba.
En contraste con las disposiciones para las remesas familiares, en este caso no se ponen límites en la
cantidad y la frecuencia para el envío de tales remesas, lo cual demuestra el marcado fin político (no
comercial) de estas regulaciones.
3.
Transacciones relacionadas con las Remesas realizadas por bancos y otras instituciones.
Se elimina la licencia general (automática) que autoriza a esas instituciones a transferir las remesas
familiares trimestrales o las remesas destinadas a pagar los gastos para emigrar de Cuba. Estas
instituciones tienen que solicitar y obtener, según las nuevas regulaciones, una licencia específica para
prestar este servicio.
En el caso de otras transacciones no relacionadas con las remesas se continúa aplicando una licencia
general para las instituciones involucradas en ellas.
Adicionalmente a este reforzamiento de las restricciones a los viajes, las remesas, los paquetes de
regalo y los equipajes, en febrero del 2005, con aplicación en marzo de ese mismo año, tuvo lugar una
nueva interpretación de las regulaciones para la aplicación de la Ley para la Reforma de las Sanciones
Comerciales y el Incremento de las Exportaciones del 2000, referidos a las ventas a Cuba de productos
agrícolas y del sector salud, y en específico a los pagos realizados por la empresa cubana
responsabilizada con estas transacciones desde noviembre del 2001. Esa reinterpretación de los
requerimientos a la forma de pago al contado y por anticipado, supone costos y riesgos adicionales
para Cuba, en un contexto de prolongada y permanente hostilidad política por parte del gobierno de
E.U.A. hacia Cuba; e igualmente afecta a los exportadores de ese país.
Esta nueva restricción en los pagos se suma a las ya conocidas como el requisito a los exportadores
estadounidenses de productos agrícolas de solicitar licencias para viajar a Cuba y para exportar sus
productos; la ausencia de relaciones bancarias directas entre los dos países; la prohibición a los barcos
que participan en la transportación de estos productos desde E.U.A., a tomar cargas en Cuba hacia otros
destinos; y la prohibición a los barcos cubanos a participar en los embarques.
En el ámbito de la propiedad intelectual, mes tras mes y durante 4 años, en las sesiones del OSD
(Órgano de Solución de Diferencias) se revisa el tema del sucesivo incumplimiento por parte de E.U.A.
de las recomendaciones de ese Órgano sobre la Sección 211 de la Ley Federal de Asignaciones del
Presupuesto de los E.U.A., de 1998, relativo al registro, la renovación o la observancia en los E.U.A. de
marcas de fábrica o de comercio, nombres de comercio y nombres comerciales relacionados con
activos nacionalizados en Cuba. Tal y como recoge el Informe de la Secretaria, desde julio de 1999, la
Unión Europea impugnó ante la OMC esta legislación, que viola las obligaciones de trato nacional y
trato NMF contraídas por E.U.A. en el marco del Acuerdo sobre los ADPIC. Este reiterado
incumplimiento por parte de E.U.A. lo desacredita al desconocer a la OMC y sus principios y normas,
al tiempo que sienta un precedente muy negativo para la credibilidad y la efectividad del mecanismo de
solución de diferencias.
Como es conocido, tradicionalmente E.U.A. hace caso omiso a las preguntas y reclamos que Cuba
presenta en este ejercicio sobre su política de bloqueo económico, comercial y financiero. Sin embargo,
Cuba se siente en el derecho y la obligación moral de una vez más demandar de E.U.A. una respuesta a
la única pregunta coherente y consecuente en este caso: ¿cuándo el gobierno de E.U.A., actuando en
correspondencia con lo que predica sobre el libre comercio y el respeto a las normas y principios que lo
rigen, cambiará esta política de bloqueo y eliminará todas las restricciones que impone a Cuba y a otros
países al aplicarla?
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La demanda reiterada de respuesta a esta pregunta está sustentada en las cuantiosas afectaciones
directas al comercio de bienes y servicios y a la propiedad intelectual, a las que se hacía referencia
desde un inicio y algunas de las cuales, las más recientes, se han explicado de forma más
pormenorizada. Esta vez, Cuba espera de los representantes de E.U.A. una respuesta.
COLOMBIA
I.
Medidas que afectan las importaciones
A)
Régimen Aduanero
1.
En el anterior Examen, se nos comentaba que el Sistema Automatizado Comercial (ACS) sería
reemplazado por el Entorno Comercial Automatizado (ACE). En el Informe de la Secretaría para el
presente Examen, literal a), título i), párrafos 12 a 17, se comenta que ha habido avances en el proceso
de transición entre un régimen y otro, que se traduce en la creación de 400 cuentas y la habilitación del
Puerto Blaine de Washington.
a)
Sobre el particular, Colombia está interesada en conocer la experiencia con el Nuevo Sistema
ACE y la programación de los puertos terrestres, marítimos y aéreos que serán habilitados en el corto
plazo.
b)
En el diseño del Sistema ACE, se acogen los lineamientos y recomendaciones de la OMA, en
especial, sobre el Modelo de Datos Aduaneros?
c)
El acceso de los usuarios al Sistema ACE acarrea costos? Cuáles son los requisitos para
suscribir una cuenta?
2.
Los párrafos 18 a 24, literal b) título i), referentes a la transmisión electrónica de información
sobre carga, menciona que el reglamento de la Ley de Comercio Exterior de 2002 se encuentra en
vigencia desde enero de 2004. De otra parte, se menciona el Sistema Automatizado de Polarización
(ATS), como uno de los principales instrumentos utilizados por la Oficina de Aduanas y Protección en
Fronteras (CBP), para el análisis de información y riesgo de la carga.
a)
Qué otros instrumentos está empleando la CBP para dicho propósito?
b)
Es posible obtener información adicional sobre el ATS? Se encuentra plenamente vigente el
requisito del envío de manifiestos automatizados en lugar de las comunicaciones en papel? Si no, a
partir de que fecha entrará en vigencia?
c)
Se menciona que la aplicación del reglamento de la Ley de Comercio Exterior traerá costos
“sustanciales” para los transportistas aéreos. Existe una estimación sobre el incremento mencionado?
En el caso del transporte marítimo y terrestre se comenta que los sobrecostos son insignificantes, toda
vez que los conductores ya utilizan este sistema. Cómo ha sido la utilización de este sistema por parte
de este tipo de transportistas y como han logrado la racionalización de los costos?
3.
En relación con el literal c) sobre la Iniciativa de Seguridad de los Contenedores (CSI):
a)
Colombia está interesada en conocer cuáles son los requisitos para obtener la calificación de
puerto CSI?
b)
Existe algún programa de ayuda para los países en desarrollo? Al analizar los países cuyos
puertos han sido calificados como CSI observamos que si bien ha habido incremento desde el anterior
Examen en el 2004, a la fecha solamente 35 países gozan de esta calificación.
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c)
En el párrafo 27 se comenta que la carga destinada a los Estados Unidos que ya ha sido
inspeccionada en un puerto CSI no es inspeccionada a su llegada, salvo que exista nueva información
que altere el análisis inicial de los riesgos. Podrían suministrarnos estadísticas que reflejen el
porcentaje de carga inspeccionada al llegar a los Estados Unidos a pesar de provenir de un puerto CSI?
B)
Otros gravámenes que afectan las importaciones
En el párrafo 66, título iii) de la Sección III, se comenta que el gravamen por tramitación de mercancías
valoradas en más de 2000 dólares de EE.UU. fue ampliado hasta septiembre de 2014, como resultado
de la adopción de la Ley de Creación de Empleos de 2004. Adicionalmente, en el párrafo 67, se
comenta que la mencionada Ley dispuso que el Secretario del Tesoro debía realizar no más de
septiembre de 2005, un estudio de todos los gravámenes percibidos por el Departamento de Seguridad
Interior y formular recomendaciones sobre los gravámenes que han de eliminarse y la cuantía de los
que han de mantenerse.
a)
Colombia está interesada en conocer si el referido estudio se llevó a cabo. En caso afirmativo,
cuáles fueron las conclusiones?
b)
El estudio examinó también el gravamen de mantenimiento de puertos que se cobra a las
importaciones? Se tomó en cuenta que en el caso de las exportaciones ya no se cobra dicho gravamen
en cumplimiento de la Decisión de la Corte Suprema, que sostuvo que el gravamen presentaba
“indicios de un impuesto” y que el valor de la carga (base gravable) no “tenía una correlación fiable
con los servicios, instalaciones y beneficios federales de los puertos”?
C)
Antidumping, Subvenciones y Salvaguardias:
1.
Se menciona en la parte introductoria de la Sección III (párrafo 9) del Informe de la Secretaría
que la ayuda gubernamental a los productos nacionales puede consistir en desembolsos financieros.
Adicionalmente, en el mismo párrafo se relacionan 45 programas federales y 330 programas
subfederales de subvención vigentes en 2003 según la última notificación de Estados Unidos. Sería
posible obtener mayor información sobre el modo en el que opera esta ayuda? Cuáles son los criterios
para otorgarla?
2.
Salvaguardias: De acuerdo con el párrafo 103, literal a) título v), la Ley de Comercio Exterior
de 1974 limita el derecho máximo aplicable, al incremento en un 50% ad valorem del tipo vigente (si lo
hubiere). ¿Esto significa que si se determinara la viabilidad de adoptar una medida de salvaguardia a un
producto desgravado, el aumento del arancel podría ser ilimitado, dado que la restricción de la Ley
mencionada se refiere explícitamente a productos con nivel arancelario superior a 0%? Podría
interpretarse que los productos desgravados no podrían ser objeto de medidas de salvaguardia
arancelarias?
D)
Normas y reglamentos técnicos
1.
En el numeral 118, literal a) título vii) del informe de la Secretaría de la OMC, se menciona
que ninguna de las notificaciones realizadas por Estados Unidos entre julio de 2003 y junio de 2005
guardaba relación con medidas subfederales propuestas. También se informa que hay procedimientos
en vigor para notificar esas medidas, pero que no se ha identificado ninguna. A pesar de esto último,
¿es posible que haya reglamentos subfederales sin notificar?
2.
Se ha tenido en cuenta el trato diferenciado y más favorable para países en desarrollo
miembros que dispone el numeral 12.1 del artículo 12 del Acuerdo sobre Obstáculos Técnicos al
Comercio, en la aplicación de la Ley contra el Bioterrorismo y cómo se lleva a cabo esa aplicación?
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3.
En el numeral 129 del literal b) título vii) se informa que las autoridades estadounidenses han
indicado que el Gobierno de Estados Unidos no mantiene estadísticas centralizadas sobre la medida en
que los reglamentos técnicos estadounidenses se basan en normas internacionales. ¿El Gobierno de
Estados Unidos ha contemplado la posibilidad de implementar un sistema centralizado?
4.
En el numeral 131 del literal b), título vii) se indica que los reglamentos publicados en
aplicación de la Ley Federal de Inspección de la Carne y la Ley de Inspección de los Productos de
Aves de Corral, requieren que el nombre del país de origen figure en inglés en los contenedores
inmediatos de todos los productos de carne y aves de corral que entran en Estados Unidos. Sin
embargo, cuando los productos carne o productos de aves de corral importados a granel, se elaboran en
Estados Unidos no es necesario que el producto elaborado o su contenedor estén etiquetados. ¿El
gobierno de Estados Unidos tiene intención de modificar dichas leyes en cuanto a la exigencia de
etiquetado exclusivamente para productos importados?
5.
En el numeral 136, literal b), título vii) se menciona que la Ley de Acuerdos de
Comercialización de Productos Agrícolas de 1937 requiere que los productos básicos importados
satisfagan los mismos requisitos, o requisitos comparables, de grado, tamaño, calidad y madurez que
los establecidos para los productos nacionales en el marco de órdenes de comercialización federales.
Al respecto, ¿Cuáles son los intereses legítimos que defiende la mencionada Ley al fijar dichos
requisitos?
6.
En el numeral 146, literal b) título vii), se informa que las autoridades estadounidenses han
presentado a la OMC cinco notificaciones concernientes a acuerdos que conllevan la aceptación por
Estados Unidos de evaluaciones de la conformidad con reglamentos estadounidenses realizadas en el
extranjero. ¿Con cuáles sectores se relacionan dichas notificaciones?
E)
Reglamentaciones ambientales relacionadas con el comercio
1.
En el párrafo 172 del titulo ix), se afirma que "El Gobierno de los Estados Unidos presentó una
apelación para anular la decisión del Tribunal en agosto de 2005", en referencia a la decisión del
Tribunal del Distrito del Norte de California de revocar la decisión del Secretario de Comercio de
modificar la definición de "dolphin safe". Hasta donde conoce el Gobierno de Colombia, la apelación
al fallo del tribunal aún no ha sido presentada. Tampoco tenemos conocimiento de que la decisión
misma de apelar haya sido tomada recientemente.
Sobre el particular, el Gobierno de Colombia quisiera recibir mayor ilustración sobre los siguientes
aspectos:
a.
La decisión de apelar el fallo del Tribunal del Distrito del Norte de California en torno al
cambio de definición de "dolphin safe" ya ha sido adoptada?
b.
De ser así, cuándo se espera presentar la apelación?
c.
De no ser así, contempla el gobierno de Estados Unidos alguna fecha en particular para tomar
la decisión y presentar la apelación?
d.
Contempla el Gobierno de Estados Unidos la posibilidad de no presentar apelación?
e.
Si la respuesta anterior es afirmativa, contempla Estados Unidos algún tipo de ajuste a su
definición de atún "dolphin safe"? En particular, contempla Estados Unidos la posibilidad de cambiar
el enfoque de la misma, de uno basado en la modalidad de pesca del atún a uno basado en las prácticas
utilizadas en su pesca?
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f.
Específicamente, contempla Estados Unidos implementar una definición ajustada al criterio
que utiliza el Acuerdo Internacional para la Protección y Conservación de los Delfines - APICD - (del
cual Estados Unidos es Parte), en la cual se define al atún "dolphin safe" como aquel que fue capturado
en lances en los que no murió ni fue gravemente herido ningún delfín?
II.
Otras medidas que afectan la producción y el comercio
A)
Contratación pública
De acuerdo con el párrafo 247, literal c) referente a las condiciones de acceso en la materia, uno de los
objetivos de la política de contratación pública de los Estados Unidos es el de aumentar la participación
de los diferentes tipos de pequeñas empresas en la contratación pública. El Departamento de Comercio
determina anualmente los mecanismos de contratación y los factores de aplicación, destinados a
favorecer las pequeñas empresas. Sin embargo, estos mecanismos y factores de aplicación pueden
disminuir las posibilidades de contratación para los proveedores extranjeros que pueden participar en la
contratación pública de Estados Unidos. Por ejemplo, el monto de US$100.000 para reservar contratos
exclusiva y automáticamente a las pequeñas empresas, podría ser mayor de acuerdo con una decisión
administrativa del DOC.
Dada esta situación, se ha pensado en que los mecanismos de contratación y los factores de aplicación
sean establecidos de una manera más sólida para que estos no cambien anualmente y así darle una
mayor certeza a los proveedores extranjeros sobre la contratación a la cual pueden acceder?
B)
Derechos de propiedad intelectual relacionados con el comercio
1.
Derechos de Autor
La expedición de la “Ley sobre la lealtad en la concesión de licencias sobre obras musicales de 1998”1
por parte del Congreso de los Estados Unidos, en virtud de la cual se enmienda el artículo 110 (5)
relativo a las limitaciones de los derechos exclusivos, esto es, referido a ciertas utilizaciones que no
requieren el previo y expreso consentimiento del titular del derecho ni el pago de una remuneración,
sigue constituyendo motivo de preocupación para los autores colombianos. La preocupación se debe a
que, no obstante la declaración parcial del Grupo Especial de la OMC2, la ley mencionada permitiría
igualmente la utilización de un vasto catálogo de obras e interpretaciones del repertorio musical
colombiano con altos márgenes de audiencia en el territorio de los Estados Unidos.
Con base en lo anterior, nos permitimos formular a la delegación de los Estados Unidos las siguientes
preguntas:
a)
No obstante la determinación del Grupo Especial de la OMC en relación con el artículo 110 (5)
(A), ¿Estados Unidos modificará dicha disposición en razón al perjuicio que se causa a los titulares de
derecho de autor de otros países con esta limitación?
b)
¿Cuándo Estados Unidos va a modificar el contenido del artículo 110 (5) (B) acorde con el
laudo arbitral de la OMC proferido el 15 de enero de 2001?
2.
Patentes, marcas y observancia
a)
Existe en Estados Unidos un Plan Estratégico en materia de propiedad intelectual que recoja en
un solo documento las políticas y directrices en la materia a nivel tanto federal como estatal?
1
“Fairness in Music Licensing Act”
A través de esta declaración el Grupo Especial de la OMC decidió que solamente el literal (B) del
artículo 110 (5) no se ajustaba a los requerimientos del artículo 13 de los ADPIC.
2
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b)
Cuáles son los incentivos legales que tiene en la actualidad el Gobierno de los Estados Unidos
para la promoción de la propiedad intelectual como instrumento de desarrollo?
c)
Existe alguna política o acciones encaminadas hacia el uso de los documentos de patente como
fuente de información tecnológica para las PYMES (pequeñas y medianas empresas)?
d)
Existen políticas o acciones encaminadas hacia el aprovechamiento de las invenciones que
entran al dominio público?
e)
Cómo funciona el registro suplementario de marcas? Qué signos pueden acceder a dicho
registro?
f)
Cuál es el ámbito espacial de validez de las marcas registradas en el registro suplementario?
g)
La figura del “trade dress” está regulada en la normativa estadounidense? En caso afirmativo,
¿cómo funciona?
III.
Políticas Comerciales por Sectores
A)
Agricultura
Capítulo IV.2) iii) Programas internos.
Notamos que las notificaciones que debe hacer anualmente Estados Unidos al Comité de Agricultura
están atrasadas. Al haber notificado hasta el año comercial 2000 a 2001. ¿Podría decirnos Estados
Unidos cuáles son los problemas que enfrenta para hacer las notificaciones pendientes y cuándo estima
que las va a efectuar?
Capítulo IV.2) iii) literal f) Otros programas
¿Podría especificarnos con más detalle en qué consisten las órdenes de mercadeo aplicadas a frutas,
verduras, cultivos especiales y leche?
¿Qué se entiende por “reserve pools” (párrafo 41) y cómo opera?
¿En el caso de los requerimientos mínimos por producto, tales como grado, tamaño, calidad y madurez,
han sido notificados estos programas y normas al Comité de Obstáculos Técnicos al Comercio y de
haberlo sido, cuándo?
Capítulo IV.2.i) párrafo 13 y 4b Créditos a la exportación, seguros y garantías
Se refiere a los cambios pendientes en los programas de garantías de créditos a la exportación en
cumplimiento de las decisiones del Órgano de Apelación. Podría confirmarnos cuándo comenzarán a
regir los cambios anunciados en estos programas y si los mismos ya fueron aprobados? ¿Qué
productos se han beneficiado de estos programas?
Podría indicar Estados Unidos en que consiste la metodología que se empleará para que las primas de
los programas de garantía de crédito a la exportación estén basadas en el riesgo y cubran los costos de
largo plazo?
Capítulo IV.2.ii) párrafo 17 Medidas en frontera
Tomando como referencia el cuadro AIV.1 sobre contingentes arancelarios, en cuanto a las
importaciones de “carne de bovino fresca, refrigerada o congelada”, podrían los EEUU informar la tasa
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de utilización correspondiente a “otros” en los años 2002 y 2003 y en el caso de que su utilización sea
baja explicar la razones de dicho comportamiento?
B)
Servicios profesionales seleccionados
El documento preparado por la Secretaría no presenta información relacionada con los servicios
profesionales y su regulación. No obstante, estamos interesados en formular las siguientes inquietudes:
1.
En su examen de política comercial del 2004, Estados Unidos señalaba que "Conforme a la
legislación de los Estados Unidos, la reglamentación de las profesiones es competencia de los estados,
que, por lo general, constituyen juntas de concesión de licencias encargadas de administrar los
procedimientos en materia de licencias o de registro. Los profesionales titulados en el extranjero que
están autorizados a ejercer su actividad en una jurisdicción de los Estados Unidos deben cumplir
todas las leyes y reglamentos aplicables de dicha jurisdicción. La inexistencia de un régimen
reglamentario uniforme de alcance nacional supone que en cada Estado se aplican distintas
condiciones de acceso al mercado, aplicándose en muchos casos un trato de reciprocidad; esto hace
aún más compleja la entrada en el mercado tanto para los proveedores nacionales como extranjeros.
Las autoridades han indicado, sin embargo, que la formulación de normas modelo por las
organizaciones profesionales está impulsando la uniformidad y la armonización."
a)
Queremos conocer en detalle los avances que se han logrado en la formulación de normas
modelo para lograr la uniformidad y la armonización en la reglamentación de las profesiones en los
estados de Estados Unidos.
b)
Igualmente, los Estados Unidos en su examen de política comercial de 2004 mencionaban
que en su país "el comercio internacional de servicios profesionales se ve obstaculizado todavía por
una reglamentación nacional compleja", y señalaban que los principales obstáculos se presentaban en
materia de normas relacionadas con exigencia de presencia local, nacionalidad, residencia y exigencia
de forma jurídica.
Frente a la afirmación planteada, nos gustaría conocer cuales han sido las acciones emprendidas por los
Estados Unidos para tratar de reducir y/o eliminar esos obstáculos al comercio de servicios. En
particular frente a los servicios jurídicos; de contabilidad, auditoría y teneduría de libros;
asesoramiento fiscal; arquitectónicos; de ingeniería; integrados de ingeniería; y de planificación
urbana y arquitectura paisajista.
Evolución de la Política Comercial y de Inversiones
Podría indicar y describir los casos en los que los Estados Unidos han utilizado el concepto de
“seguridad nacional” que está en los párrafos 4, 7, 44 de la Sección II del Informe de la Secretaría
“Evolución de la Pochiullítica Comercial y de Inversiones”, como excepción a sus compromisos dentro
de la OMC?
En los párrafos 5 a 8 de la Sección II del Informe de la Secretaría “Evolución de la Política Comercial y
de Inversiones” se describen las instituciones que le ayudan al Ejecutivo de los Estados Unidos a
formular sus políticas comerciales y de inversión. ¿Podría explicar cómo participan los gobiernos de
niveles diferentes al federal en la formulación de esas políticas?
En el párrafo 11 de la Sección II del Informe de la Secretaría “Evolución de la Política Comercial y de
Inversiones” se indica que “Las negociaciones comerciales multilaterales son una prioridad para la
Administración en su propósito de abrir los mercados y reforzar las normas”. A lo que se añade que
“La Administración considera que las cuestiones relacionadas con… la ampliación del acceso a los
mercados para el comercio de manufacturas y servicios… pueden servir de base para una negociación
que reportaría beneficios significativos a los intereses de los Estados Unidos y la economía mundial”.
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Por lo anterior, se afirma que “la Administración ha decidido atribuir la máxima prioridad a impulsar el
PDD de la OMC y llevar las negociaciones a una conclusión satisfactoria antes del fin de 2006”.
Dentro de esa política, ¿podría indicar cómo se tomarán en cuenta dentro de esas negociaciones los
intereses de aquellos Miembros que exportan recursos humanos más que capital?
En el párrafo 21 de la Sección II del Informe de la Secretaría “Evolución de la Política Comercial y de
Inversiones” se indica que, “Las autoridades observaron que los Estados Unidos presentarían los
informes pertinentes sobre contratación pública cuando se hubiera terminado la sustitución de su
sistema de recolección de datos sobre contratación”. ¿Podría indicar cuándo y cómo estarán
disponibles esos informes?
En el párrafo 64 de la Sección IV del Informe de la Secretaría “Políticas Comerciales por Sectores” se
indica que “Con respecto a los bancos extranjeros que tienen sucursales o agencias en los Estados
Unidos, con arreglo a la Ley citada deben aplicárseles criterios de "buena capitalización" y "buena
administración" comparables con los que rigen para los bancos estadounidenses, "aplicándose
debidamente el principio de trato nacional e igualdad de oportunidades".” ¿Podría explicar en qué
consisten los citados criterios?
CHILE
II. Evolución de la Política Comercial y de Inversión
5.- Régimen de Inversión Extranjera
1.- ¿Puede Estados Unidos proveer una lista con las medidas restrictivas aplicadas a nivel estatal, de
acuerdo a lo indicado en el párrafo 43?
2.- De acuerdo a lo señalado en el párrafo 44 del informe de la Secretaria ¿Puede Estados Unidos
proporcionar una lista de las medidas que pueden ser ejercidas bajo el Defense Production Act of 1950,
que puedan afectar la Inversión extranjera en Estados Unidos? ¿Cómo se compatibilizan estas medidas
con los Acuerdos Bilaterales de Inversión (BIT), y los TLC suscritos por Estados Unidos?
III. Políticas y Prácticas Comerciales, por Medidas
2.- Medidas que afectan directamente a las Importaciones
i.a) Regimenes Aduaneros
1.- Respecto a la introducción del Entorno Comercial Automatizado (ACE), y tal como se señala en el
párrafo 15 del informe ¿existe alguna estimación y/o evaluación de los beneficios que traería al año
2009, cuando el ACE esté plenamente operacional?
2.- ¿De acuerdo a lo indicado en el párrafo 17 del Informe, existe alguna medición del impacto
económico del reglamento de la Ley de Comercio Exterior?
i.b) Transmisiones Electrónicas de Información de Carga
1.- ¿De acuerdo a lo indicado en el párrafo 19 del Informe, cuáles son los criterios y la metodología
para asignar los niveles de riesgo a cada expedición?
2.- ¿Existen instancias público y/o privadas para evaluar y analizar en conjunto todos los cambios que
se han introducido en los últimos 4 años, en relación al régimen aduanero y la seguridad de las cargas y
contenedores?
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iv. b) Medidas Antidumping y Compensatorias
El párrafo 73 del Informe de la Secretaría señala que en EE.UU. las determinaciones relativas al daño
son efectuadas por el USITC y las determinaciones sobre dumping/subsidios las realiza el USDOC.
Asimismo, las determinaciones preliminares del USITC son efectuadas en forma previa a las
determinaciones preliminares sobre dumping/subsidios del USDOC.
1.- ¿Cómo considera EE.UU. que se satisface lo establecido en el párrafo 5.7 del artículo 5 del AD, en
cuanto a que las pruebas de la existencia del dumping y del daño se examinarán simultáneamente en el
momento de decidir si se inicia o no una investigación?
2.- Informe indica en el párrafo 12 de las Observaciones Recapitulativas que en los años 2004 y 2005
las investigaciones antidumping iniciadas se han reducido y que esta circunstancia debiera mitigar las
preocupaciones de los exportadores extranjeros. ¿Cuál sería la causa de esa reducción: a) que la
autoridad ha adoptado una política al respecto; o b) que las industrias domésticas han presentado un
menor número de casos para investigarse?
3.- Los párrafos 75 y 76 del Informe indican que se han dictado nuevas directrices en materia de
fianzas continuadas aplicables a importadores y para impedir elusiones. ¿Estas nuevas directrices
tienen carácter de legislación vinculante? ¿Son éstas aplicables únicamente al caso de la Enmienda
Byrd o también tienen incidencia general en la normativa antidumping?
4.- ¿La “aclaración y mejora” de las disposiciones de los Acuerdos relativos al antidumping y a
subsidios y derechos compensatorios, a que se refiere el párrafo 80 del informe, implica la posibilidad
que ciertas disposiciones de tales Acuerdos sean efectivamente modificadas o derogadas?
5.- En el evento de la determinación de la existencia de dumping respecto de la madera blanda
procedente del Canadá (WT/DS264/AB/R), el Órgano del Apelación recomendó que Estados Unidos
pusiera su medida en conformidad con las obligaciones del AD, dado que actuó de manera
incompatible con el párrafo 4.2 del artículo 2 del Acuerdo Antidumping al determinar la existencia de
márgenes de dumping sobre la base de un método que incorpora la práctica de la "reducción a cero".
Para cumplir con lo señalado, EE.UU. modificó la metodología de cálculo cambiando el método
utilizado de promedio con promedio al de transacción por transacción. (párrafo 87)
¿Considera EE.UU. que esta modificación significa la no aplicación futura de zeroing, independiente
del método empleado? En caso contrario, ¿cómo se justifica técnicamente la aplicación de zeroing en
el marco del nuevo método, a la luz de los argumentos del Órgano de Apelación?
En el caso indicado anteriormente, actualmente se estima que el método de transacción por transacción
es el adecuado, ¿cuál es la razón de que no se haya utilizado dicho método desde el principio?
iv. d) Acuerdos de Suspensión
1.- De acuerdo a lo señalado por el párrafo 93 del Informe, la legislación de Estados Unidos permitiría
suspender un procedimiento de investigación en AD y en CVD en determinadas circunstancias y
siempre se llegue un acuerdo con el exportador para eliminar los efectos perjudiciales. ¿Quiere ello
decir que se trata de suspensiones fuera de los casos en que los respectivos Acuerdos autorizan un
compromiso?
iv. f) Exámenes a Efectos de Extinción de órdenes
1.- Para las revisiones EE.UU. considera de minimis cualquier subsidio compensable o margen de
dumping inferior a 0,5%, en tanto que las tasas de minimis en las investigaciones de inicio son de 1%
WT/TPR/M/160/Add.1
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para los subsidios (2% para los PED) y de 2% para los márgenes de dumping (3% para los PED).
(párrafo 96)
¿Cómo se justifica la necesidad de contar con diferentes estándares de minimis para las investigaciones
de inicio y las revisiones posteriores de las medidas?
v) Salvaguardias
1.- El párrafo 103 del informe señala que, de acuerdo a la ley, una medida de salvaguardia puede
revestir diversas formas como aranceles, restricciones cuantitativas, cuotas-arancelarias, licencias de
importación y otras medidas. Dada la variedad de posibilidades para aplicar una medida de
salvaguardia, ¿qué criterios se utilizar para determinar la imposición de una forma de medida u otra, y
así observar la exigencia del artículo 5 del AS respecto a que la salvaguardia sólo debe aplicarse en la
medida necesaria para prevenir o reparar el daño grave y facilitar el reajuste, ya que la aplicación de
medida en lugar de otra, para el caso concreto, podría resultar innecesariamente más restrictiva?
vii) Normas y Reglamentos Técnicos
1.- ¿Puede Estados Unidos señalar cuál es el procedimiento que se sigue a nivel federal para informarse
de los proyectos de reglamentos técnicos y/o procedimientos de evaluación de la conformidad de los
Estados, autoridades locales o municipales para determinar si procede o no la notificación a la OMC?
¿Se ha efectuado alguna evaluación respecto a si los estados, autoridades locales o municipales aplican
los procedimientos de transparencia que se requieren para efectos de las notificaciones a la OMC?
2.- ¿Cuál es la experiencia de Estados Unidos respecto a los Acuerdos de Reconocimiento Mutuo que
ha suscrito? ¿Cuáles son los costos de su implementación? ¿Qué requisitos deben cumplir los
organismos que evalúan la conformidad para ser designados por la autoridad del país exportador?
¿Cómo se administran los incumplimientos? ¿Existe la posibilidad de que terceros países puedan
incorporarse?
3.- ¿Cuál es el procedimiento de notificación y de comentarios respecto de reglamentos técnicos que
son establecidos mediante leyes, y por lo tanto con participación directa del Congreso?
4.- ¿En relación a materias de OTC, que productos requieren de certificación, rotulado o cumplimiento
de otros requisitos como autorizaciones previas? ¿Deben contar estos productos con dichas
certificaciones y autorizaciones en el momento de la importación y previo a su desaduanamiento?
viii.a) Medidas Sanitarias y Fitosanitarias
1.-En el párrafo 149 del informe se señala que en el Acuerdo con Australia se estipulan plazos
definidos para la implementación del Capítulo Medidas Sanitarias y Fitosanitarias (MSF) de ese
documento y la formación del Comité MSF. ¿Puede Estados Unidos compartir su experiencia en la
realización de dicho Comité?
2.- ¿De acuerdo a lo indicado en el párrafo 158 del informe, cuál es la situación actual de
reconocimiento de los sistemas regulatorios en carne bovina con Argentina?
3.- Estados Unidos ha utilizado los Marketing Orders, establecidos bajo el Agricultural Marketing
Agreement Act (AMAA) de 1937. Esta práctica se vuelve, en algunos casos, especialmente dañina con
la introducción de modificaciones, como la propuesta de modificación del Marketing Order 925 para
uvas de mesa, la que afectaría seriamente a Chile. ¿Puede Estados Unidos explicar los criterios
utilizados para la creación y/o modificación de un Marketing Order?, ¿Cómo se asegura que no se
convierta en una medida discriminatoria y/o una barrera al comercio?
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IV. Políticas Por Sectores
2.- Agricultura
1.- De acuerdo al párrafo 3 del informe de la Secretaría, la estimación del total de pagos
gubernamentales a la agricultura se incrementa significativamente (60%) en 2005 respecto del año
anterior, revirtiendo la tendencia decreciente de los últimos años, y alcanzando valores cercanos a los
registrados en 2000-2001, los más altos de la última década.
El último periodo en que Estados Unidos notificó los montos destinados a Ayuda Domestica fue para el
periodo 2000-2001. ¿Cuándo planea Estados Unidos actualizar dicha información por medio de su
notificación a la OMC?
2.- De acuerdo a los antecedentes del Departamento de Agricultura de EE.UU., ¿esta alza corresponde
a circunstancias particulares del año 2005 o debe esperarse que continúe en el futuro? De ser resultado
de circunstancias particulares de 2005, ¿cuáles son estas circunstancias?
3.- ¿Qué productos específicos han sido los principales beneficiados con el aumento de los
desembolsos gubernamentales de 2005?
3.- Servicios Financieros
1.- El marco o régimen legal para el comercio de servicios y las inversiones de Estados Unidos (a nivel
federal), ha demostrado ir más allá de los estándares OMC - GATS. En efecto, el régimen de
inversiones es implementado de manera no discriminatoria y con muy pocas excepciones (estando la
mayoría de ellas cubiertas por las excepciones generales de GATS). Sin embargo, y aún cuando las
regulaciones para el comercio de servicios a nivel federal son bastante liberales, a nivel estatal tienden
a imponer un numero de restricciones, generalmente relacionadas con requisitos de nacionalidad,
residencia, licenciamiento, etc.
¿Tiene Estados Unidos contemplado avanzar más en la implementación de las obligaciones derivadas
del Art. III del GATS a nivel estatal? ¿Pueden estas medidas ser presentadas de una manera más
sistemática para facilitar el comercio?
NEW ZEALAND
1. Trade Policy Developments (WT/TPR/S/160, p vii, para 4)
The Secretariat notes that the United States has made progress in implementing several WTO (Dispute
Resolution) rulings calling for changes to U.S. legislation, but a few rulings have not yet been fully
implemented.
•
Could the U.S. please provide a proposed timeline outlining future phases of implementation of
WTO rulings, as well as background information on the extent to which these have/have not
been implemented?
2. Participation in the WTO (WT/TPR/S/160, p.16 para 21 and WT/TPR/S/160, p. 88 para 23.)
The Secretariat notes that a few notification obligations were outstanding as at October 2005,
particularly on domestic support to agriculture, state trading activities, and statistics for government
procurement.
•
When will the US provide notification of its domestic support since that provided in 2004
covering the marketing years 2000 and 2001?
WT/TPR/M/160/Add.1
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•
What measures has the US put in place to ensure that the required notifications occur in a
timely manner in future?
3. Customs procedures and rules of origin (WT/TPR/S160, p.27 para 24)
•
Did the cost estimates from meeting the 24 hour rule (for cargo transported by vessel) include
the cost of the time of keeping containers on the wharf before shipment?
4. Tariffs (WT/TPR/S/160, p.31 para 47 and p.32 para 49).
The Secretariat notes that the average applied tariff for agriculture in 2004 was 9.7%, and remained
virtually unchanged with respect to 2002. The average applied tariff rate for non-agricultural products
was 4% in 2004, down from 4.2% in 2002. The products subject to the highest ad valorem of
ad valorem equivalent rates were tobacco (350%), whey (284%), sour cream (177%), and peanuts
(164%); in the non-agricultural sector, the highest rate was applied to footware (58%).
•
What is the US justification for maintaining high tariff protection in sectors like agricultural
food products?
5. Other charges affecting imports (WT/TPR/S/160, p.35 paras 66 and 67)
The Secretariat report notes that imports valued at more than US$2,000 are subject to a merchandise
processing fee collected by Customs and Border Protection (CBP). The fee is set at 0.21% of the
import value; the statutory minimum and maximum are US$25 and US$485.
•
Will the US be changing this fee so it reflects the approximate cost to CBP of processing the
entry of imported merchandise?
The Secretariat report notes that the American Jobs Creation Act of 2004 requires the Secretary of
Treasury to conduct a study of all the fees collected by the Department of Homeland Security, by
September 2005, and make recommendations concerning fees to be eliminated and the rate of fees to
be retained.
•
Has this study been completed? Will the merchandise processing fee be eliminated?
6. Sanitary and phytosanitary measures (WT/TPR/S/160, p. 55-56)
Following the detection of BSE in the US in December 2003, the US promulgated interim final rules
outlining new measures that had to be followed to “help further protect consumers against the agent
thought to cause BSE”.
•
Could the US advise when it intends to publish the final rules and whether these will take full
account of third countries’ BSE status?
7. Trade-related intellectual property rights (WT/TPR/S/160, p.81 paras 272-275)
•
How does the US consider that the retrospective application of extensions to the copyright term
encourage creativity and innovation?
8. Agriculture: Legal Framework and Overall support (WT/TPR/S/160, p.85 paras 10-11)
The Secretariat notes that payments to US agricultural producers amounted to US$13.3 billion in 2004;
preliminary estimates by the Department of Agriculture predict government payments for 2005 to
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increase to close to US$21.4 billion and that provisional data for 2004 suggests an increase in the PSE
to US$46.5 billion, or 18% of gross farm receipts, reversing the downward trend registered since 1999.
•
What is the US justification for increasing levels of support for the agricultural sector?
•
What program does the US have for reducing this level of support and ensuring that the
subsidies provided become less trade distorting over time, independent of the current WTO
negotiations?
9. Border measures (WT/TPR/S/160, p.87 para 18)
The Secretariat report notes that access to tariff quotas is on a first come, first served basis, except for
dairy products and sugar. Access to dairy is granted to “historical“ importers, “preferred importers”
designated by the country of origin, and on the basis of a lottery. One or more methods may be used.
•
What plans does the US have to simplify access to dairy tariff quotas?
10. Export subsidies (WT/TPR/S/160, p.92 para 46)
The Secretariat report notes that between October 2003 and September 2004, total cash bonuses under
the Dairy Export Incentive Program (DEIP) amounted to slightly less than US$2.7 million. Almost
two thirds of the total was for exports of non-fat dry milk (skim milk powder).
•
Does the US intend to continue to us the DEIP?
11. Food aid (WT/TPR/S/160 p. 93, paras 53-57)
The Secretariat report notes that the United States provided 56% of global food aid (by volume)
delivered in 2004.
•
To what extent does USDA expect food aid donations to continue and to what volume?
Several WTO Members have raised concerns over aspects of US food aid, including the effect of
monetisation requirements on domestic markets, and the use of proceeds from monetisation.
•
What work has been undertaken since the last US Trade Policy Review to minimise the
potential disruptions on trade caused by food aid?
AUSTRALIA
AGRICULTURE
Transparency
Could the US give an indication of when it expects to submit overdue notifications to the WTO
concerning domestic support commitments for the marketing years 2002, 2003, 2004 and 2005? As
part of this trade policy review process, could the United States please provide a preliminary indication
of support provided under each category of domestic support (green, amber and blue boxes) for these
three years?
Attempts to fill the peanut quota established under the Australia-United States Free Trade Agreement
have brought into focus the range of US regulatory agencies involved with importing certain types of
products. Has the US considered introducing one point of contact to provide importers with access to
comprehensive information on import requirements, covering administrative, quarantine, food safety
and other requirements applying to imports of food and agricultural products?
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US Farm Bill
Given US budgetary constraints, does the US envisage reductions in support for current programs in
the next Farm Bill that will cut into current applied levels of spending?
Milk Protein Concentrates
Australia is concerned about attempts to introduce legislation through the US Congress that would
severely restrict imports of casein and milk protein concentrates by creating new tariff barriers. How
does the US envisage the application of this legislation within its current WTO market access
commitments?
Food Aid
Can the US give up to date figures on food aid programs, and is it possible to indicate what proportion
of programs that are concessional or in fully grant form are monetised?
Export Credits
Can the US give a breakdown of export credit programs for agricultural products with repayment terms
of longer than 180 days and an indication of the size by total dollar value on a program by program
basis?
TRADE IN SERVICES
Maritime Services
Does the United States plan to make new commitments on maritime transport services in its revised
services offer? If not, why not?
Air Transport Services
The global market for auxiliary air transport services (including aircraft maintenance, reservations,
ticketing sales and promotion, as well as ground handling) is estimated to be worth $US90 billion
annually. In each of the sectors of the market, there is a strong trend towards the provision of these
services by specialist providers, thus further highlighting the distinction between these services and
bilateral traffic rights which are not covered by the GATS. Given this trend, and US providers’
interests in better and more transparent access to this expanding market, does the United States
envisage removing its MFN exemption relating to computer reservation systems services, and making
commitments in air transport related services such as cargo handling in the transport sector, and other
supporting services for air transport in its revised services offer? If not, why not?
Professional Services
The Australian Government retains concerns about the obstacles to the export of professional services
posed by the fragmented nature of licensing and registration arrangements in the United States. In its
last trade policy review, the US Government pointed to a trend towards greater harmonisation and
uniformity of these rules. Can the US Government outline the progress that has been made since its
last TPR in achieving harmonisation through model rules and the like, including uniformity in the
application of licensing and registration arrangements across the United States?
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GENERAL
US –FSC Dispute
The Appellate Body ruled in February 2006 that the United States has failed to fully implement the
Dispute Settlement Body recommendations and rulings in the United States - Tax Treatment for
Foreign Sales Corporations dispute. What steps is the United States considering to bring its regime
into compliance with the Appellate Body ruling?
CHINESE TAIPEI
Secretariat Report: WT/TPR/S/160
II.
DEVELOPMENTS IN TRADE AND INVESTMENT POLICY
(4)
PREFERENTIAL AND OTHER ARRANGEMENTS
(i)
Introduction
Question 1 (pages 16-17, paragraphs 21-22)
The US has recently been actively pursuing FTA negotiations, which reflects its strategy of increasing
leverage for promoting multilateral trade liberalization. Could the US please elaborate on its own
guidelines for choosing FTA negotiating partners?
We note also that partners in the three FTAs that have entered into force since the last US Trade Policy
Review are all APEC members. Given that APEC’s concept of “open regionalism” would facilitate
efforts to advance freer trade under a multilateral framework, is it the US’ intention to continue to give
priority to FTA talks with APEC economies in the future?
(ii)
Free-trade agreements
Question 2 (page 18, paragraph 30)
Under a dispute settlement regime, normally a complaining party is allowed to suspend the party
complained against from the benefits arising from a preferential agreement.
The Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu would appreciate knowing: a)
the reason for the US and Chile incorporating provisions for “monetary assessment” to back up dispute
panel decisions, and b) how these “monetary assessment” provisions are implemented?
Question 3 (page 19, paragraph 31)
We note with interest the non-market access requirements in the US-Australia FTA on
pharmaceuticals, such as the transparency procedure in listing pharmaceuticals for reimbursement
under the Australian Pharmaceutical Benefit System.
We would appreciate knowing whether such requirements are specific to Australia, or whether the US
intends to pursue similar requirements, either in the FTA context or bilaterally, with its trading
partners. Additionally, could the US please describe the problems encountered that prompted it to
pursue such requirements.
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III.
TRADE POLICIES AND PRACTICES BY MEASURE
(2)
MEASURES DIRECTLY AFFECTING IMPORTS
(i)
Customs procedures and rules of origin
Question 4 (page 25, paragraph 14)
As indicated in the report, users will be able to interface not only with the Customs and Border
Protection Agency (CBP), but also with other government agencies involved in import (and export)
procedures through the Automated Commercial Environment (ACE).
We are interested in knowing more about the ACE, as follows:
(a)
(b)
(c)
How do users interface with other government agencies involved in import (and
export) procedures?
What are the other government agencies with which users can interface?
What are the differences between ACE and the Automated Commercial System
currently used by CBP to process imports?
Question 5 (page 26, paragraph 21)
Importers may request that their names and addresses (and those of their shippers) appearing in vessel
cargo declarations be treated as confidential. To this end, importers must file a certification with the
CBP. Certifications are valid for two years and can be renewed. The press may copy but not publish
certified information.
Since importer information is usually viewed as confidential in the context of trade practices, could the
US please explain the purpose of allowing the press to copy but not publish the confidential, certified
information and under what circumstances the press would be allowed by the CBP to do so?
(iii)
Other charges affecting imports
Question 6 (page 35, paragraphs 66-67)
Imports valued at more than US$ 2,000 are subject to a merchandise processing fee collected by the
CBP. Originating imports under the free-trade agreements concluded between the United States and
Australia, Canada and Mexico, Chile, Israel, and Singapore are exempt. The American Jobs Creation
Act of 2004 requires the Secretary of the Treasury to conduct a study of all the fees collected by the
Department of Homeland Security by September 2005, and make recommendations concerning fees to
be eliminated and the rate of fees to be retained.
If the merchandise processing fee is intended to cover the service cost to the CBP of processing the
entry of imported merchandise, why is it that imports under these particular FTAs are exempt from this
fee? Is this exemption possibly compensated by the fee that might have been “over-collected” on
goods imported from non-FTA partner countries?
Furthermore, what are the results and
recommendations of the Secretary of the Treasury study?
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(iv)
Anti-dumping and countervailing actions
Question 7 (pages 39-40, paragraphs 81-83)
Anti-dumping measures have been the main means by which the US government has protected its
domestic market from unfair trade. According to the data in the Secretariat report and USDOC’s
website, the US initiated about 44 anti-dumping investigations per year between 2000-2004. During
the same period, it terminated only 20 cases, resulting in an increase in the total number of antidumping measures in force over the said period. However, the trend in recent years of decreasing
incidences of anti-dumping investigation initiations is a positive sign of less frequent use of the antidumping remedy by US domestic industries.
One rationale for justifying the use of anti-dumping measures is that exporters may adopt a dumping
strategy to exploit foreign markets if their own domestic market were protected by tariff and non-tariff
barriers. Accordingly, does the US think that the freer trade that could result from the Doha Round
would reduce the need to use anti-dumping measures? What experiences does the US have in this
context with countries with which it has an FTA relationship?
Question 8 (page 43, paragraph 97)
Some of the factors or criteria that the USDOC normally relies upon in determining the likelihood of
the continuation or recurrence of dumping in sunset reviews are illustrated in the report. However,
according to the requirements of Article 11.3 of the WTO Anti-dumping Agreement, the investigating
authority shall review the likelihood of continuation or recurrence of injury as well.
Could the US please explain what factors or criteria the USITC considers or relies upon in making a
determination of the likelihood of injury?
(viii)
Sanitary and phytosanitary measures
Question 9 (page 56, paragraphs 157-158)
It is stated in the report that “FSIS has specific responsibility for the safety of meat, poultry and egg
products.” However, in the recent investigation into the improper shipment of veal to Japan in January
2006, the Investigation Report concludes that mistakes were made by FSIS inspection personnel. In
addition, the inspection programme personnel at the establishment were not sufficiently aware of the
Export Verification programme, and should not have certified or approved the shipment of such
product to Japan.
Since we import a considerable amount of meat, poultry and egg products from the US every year,
could the US please indicate what steps will be taken to ensure that meat, poultry and egg products
meet all the US and the importing country’s food safety requirements?
As further indicated in the report, “Upon request, FSIS conducts on-site audits to evaluate whether a
country’s regulatory system attains the same level of protection as the US…to ensure continued
compliance, FSIS conducts periodic audits.” As on-site audit/inspection is the right of the importing
country, we believe that when the importing country has concerns about imported products, it may
exercise the same rights as those of the US. In this respect, we would appreciate it if the US could
explain the reasons for the request to replace BAPHIQ audit/inspections of US pet food facilities with
audit/inspections by APHIS.
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(4)
OTHER MEASURES AFFECTING PRODUCTION AND TRADE
(iii)
Government Procurement
Question 10 (page 74, paragraphs 240-241)
We understand that US policy with respect to market access of government procurement is to grant
reciprocal national treatment, while maintaining a number of domestic purchasing requirements for
procurement not covered by the GPA, NAFTA, the WTO plurilateral Agreement on Trade in Civil
Aircraft, and bilateral trade agreements. For procurement not covered by the above-mentioned
agreements, the Buy American Act restricts the purchase of supplies and construction materials by
government agencies to those defined as “domestic end-products”, in accordance with a two-part test,
i.e. manufactured in the United States, and the cost of domestic components exceeds 50% of the cost of
all components.
(a)
(b)
(c)
Are there any domestic purchasing requirements for services procurement not covered by the
GPA, NAFTA, the WTO plurilateral Agreement on Trade in Civil Aircraft, and bilateral trade
agreements?
What is the rule of origin applied in order to define “domestic end-products”? Is it tariff shift
or added-value rules?
How does this rule of origin differ from those applied to the “designated countries”, including
parties to the GPA, NAFTA, and other bilateral agreements that cover government
procurement?
Question 11 (page 76, paragraph 246)
As indicated, the US Administration is encouraging those States that have not participated in the GPA
to consider voluntarily covering their procurement under a few FTAs under a new reciprocity policy, to
benefit from new export opportunities.
As a member ready to join the GPA, we would like to know whether the said reciprocity policy will be
pursued in the GPA Negotiations on Extension of Coverage and Elimination of Discriminatory
Measures and Practices so that signatories to this Agreement may mutually benefit.
(iv)
Trade related intellectual property rights
Question 12 (page 82, paragraphs 277-278)
Under Section 337 of the US Tariff Act of 1930, certain unfair practices related to IPRs are considered
unlawful import practices. Section 337 investigations are initiated by the USITC. If the USITC
determines that a Section 337 violation exists, it can issue exclusion orders or cease and desist orders,
or both.
Between 1 January 2003 and 30 April 2005, 54 new Section 337 investigations were initiated, of which
47 involved allegations of patent infringement. Section 337 investigations may be initiated merely on
the basis of a complaint from an interested party against foreign companies. It is our understanding
that, once the ITC decides to initiate such an investigation, the companies being investigated can incur
excessively high legal costs in responding to charges. We trust, therefore, that objective criteria are
used in the process of determining whether or not to accept a complaint and to initiate an investigation
on patent infringement.
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In this context, it would be appreciated if the United states could:
(a)
(b)
Please provide details of the criteria used by the ITC to determine whether or not to initiate an
Investigation.
Please provide the figures on the total number of complaints filed involving patent
infringement between 1 January, 2003, and 30 April, 2005, and the number of complaints
rejected during that same period.
IV.
TRADE POLICIES BY SECTOR
(3)
FINANCIAL SERVICES
(ii)
Legislative and regulatory framework
Question 13 (pages 96-97)
In addition to corporate income tax, foreign bank branches in the US are also required to pay a 30percent “Branch Profit Tax” if the earnings of a foreign bank are not reinvested in a US trade or
business. We consider that this measure seriously affects the equality of competitive opportunity and
imposes an unfair burden on the operations of our banks in the US. Does the US have plans to
eliminate this additional “Branch Profit Tax”.
Question 14 (page 97, paragraph 69)
A foreign bank is required to establish an insured banking subsidiary (except for foreign bank branches
engaged in insured deposit-taking activities as of 19 December 1991) in order to accept or maintain
domestic retail deposits of less than US$ 100,000. This restriction on a foreign bank’s operation would
appear to seriously restrict the funding resources of a foreign bank branch and affect its ability to
compete with domestic banks on an equal footing.
Would the US please consider lifting this restriction and treating foreign bank branches on an equal
footing with domestic banks in this respect?
(4)
TELECOMMUNICATIONS SERVICES
Question 15 (pages 102-104, paragraphs 96-100)
As indicated in the report, public interests relying on an “open entry” standard should be taken into
consideration for applications by a foreign supplier from a WTO Member. Could the US please
describe the criteria for determining “public interests”, and illustrate how these criteria for licensing
requirements and procedures are based on objective and transparent principles so as not to constitute
unnecessary barriers to trade in telecommunications services?
As indicated in paragraph 97 on page 103, the US implemented its WTO commitments for satellite
services through the DISCO II Order adopted in November 1997. These commitments allowed foreign
satellite operators to provide satellite services to the US market. Accordingly, for Mode 1 to Mode 3 of
satellite-based mobile communications services, are there any limitations or requirements for market
access and national treatment under the US regulatory regime? If none, what measures does the FCC
undertake to ensure the rights of consumers whose services are provided by foreign satellite-based
mobile communications services operators?
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(5)
MARITIME TRANSPORT
(ii)
Main features and competition policy consideration
Question 16 (page 108, paragraph 118)
As mentioned in the Report, the United States has not tabled an offer with respect to Maritime
Transport Services in its initial offer on services in the Doha Development Agenda. Does the US plan
to make an offer in the Maritime Transport Services sector, and if so, could it please indicate by when?
GUATEMALA
•
El artículo V del AGCS define que un ACR por el que se liberalice el comercio de servicios
estará condicionado, entre otros, a tener una cobertura sectorial sustancial.
La nota del pie de página del literal a) del párrafo 1 de este artículo establece que para cumplir
esta condición en los Acuerdos, no deberá establecerse la exclusión a priori de ningún modo de
suministro.
1.
Con base en lo anterior, ¿Podría los Estados Unidos explicar la forma en que ha interpretado e
implementado esta disposición al momento de negociar y acordar un ACR?
2.
En el mismo sentido, pero para el caso de mercancías, ¿Podría los Estados Unidos explicar la
forma en que interpreta e implementa la frase ‘lo esencial de los intercambios comerciales‘ contenida
en el artículo XXIV del GATT?
SWITZERLAND
Report by the Secretariat
I.
Recent Economic Developments
(2)
Output and employment
Para. 6 of the Secretariat’s report suggests that the personal savings rate has become negative in the
course of 2005. This savings rate is low by international standards and also well below its long-run
trend. Could the authorities of the United States please provide their assessment of the causes for such a
development ? Since normally a negative savings rate can only be sustained on a transitory basis and
given that GDP growth has already slowed down markedly in the fourth quarter of 2005, what are the
risks that the US economy slips into recession in the coming months ? Also do the U.S. authorities
share the view of the Secretariat that low interest rates have discouraged domestic savings ? Is such an
assessment consistent with the fact that, at the same time, substantial foreign capital has been attracted
to the U.S. as a result of the progressive increase in the federal funds rate since mid-2004? The
Secretariat suggests further that the Administration adopted measures aiming at raising the personal
savings rate such as lower tax rates on dividends and capital gains. Could the U.S. authorities provide a
preliminary assessment of their experience with these instruments and, if any, are they considering
additional measures to raise the personal savings rate?
(4)
Fiscal policy
Para. 18: Could the U.S. authorities comment on the views expressed by the IMF that there is a case
for a bolder reduction of the deficits, that recent fiscal consolidation reflects mainly cyclical gains, and
that U.S. budget projections assume unprecedented compression of non-defense discretionary spending
and take no account of funding or operations in Iraq and Afghanistan after 2006 while the growing
scope of the Alternative Minimum Tax may overstate in the longer run the dynamics of fiscal revenue
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if it has to be corrected at some stage? Are the current fiscal trends consistent with a halving of the
deficit by the end of the decade ? Should the strong growth of the U.S. economy continue beyond 2005,
would the U.S. authorities be prepared to enhance their efforts toward balancing the budget by the end
of the present decade?
II.
Developments in Trade and Investment Policy
(2)
Institutional and Policy Framework
(ii)
Policy objectives
Para. 9 of the Secretariat’s report indicates that the United States continues to pursue a policy of
advancing open markets and the rule of law as part of a broader global security objectives. Also, the
United States considers that opening foreign markets to U.S. products and services will enhance
economic growth and prosperity. Based on the Secretariat’s report, there is, however, no indication in
this strategy that while foreign markets are to open to U.S. products and services, the U.S. market
should also open in parallel for foreign products and services to ensure both mutual benefit from trade
liberalization for all parties involved and increased efficiency for the U.S. economy itself. Could the
U.S. authorities comment on this apparent dichotomy in U.S. trade policy?
(iii)
Legislative developments
Para. 14: Section 125 of the Uruguay Round Agreements Act mandates that, beginning March 1st,
2000, and every five years thereafter, the report on WTO activities, transmitted by the President to
Congress, must include an analysis of the value of continued U.S. participation in the WTO. Following
the submission of the report, Congress can withdraw its approval of the WTO Agreement. Could the
U.S. authorities indicate if they have any plans to amend this section of the Uruguay Round
Agreements Act as it could create uncertainty among WTO Members over the long-term political
commitment of the United States to the multilateral trading system?
(4)
Preferential and Other Arrangements
(iii)
Unilateral preferences and other trade arrangements
Para. 39: This paragraph states that the President of the United States determines annually which subSaharan African countries are eligible for benefits. Does this relate only to the provision of technical
assistance or to all benefits of the AGOA?
(5)
Foreign Investment Regime
Paras. 44 and 45: We note with satisfaction that no acquisition has been blocked or divested under the
Exon-Florio amendment and that during 2004 there were only two out of 50 cases (acquisitions,
mergers, takeovers, etc.) where investigations were initiated by the CFIUS (Committee on Foreign
Investment in the United States). Also, no action was taken as a result of these investigations. This is
certainly of great importance for a sound and liberal FDI policy. However, the lack of a clear definition
of "national security" and the wide discretion in the interpretation of the concept of national security
(by the President) may cause legitimate concerns as discussions in other international fora have shown.
We welcome the fact that the CFIUS determines if a formal investigation under Exon-Florio is
warranted and that, in practice, it initiates investigations only in a limited number of cases. This creates
- under these circumstances and to some extent - a predictability for potential investors although the
length of time taken to complete a review process (and in some cases also substantial restructuring of
the proposed acquisition will be asked for as a condition for approval) could be quite costly for the
parties involved. In addition, concerns about a possible abuse of the discretion mentioned above to
disguise protectionism and discrimination of foreign investors cannot be overseen. In this latter respect,
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we would appreciate to know what the United States have done so far in order to avoid such
discriminatory and market distorting effects when applying the discretion mentioned above.
More generally, could the U.S. authorities explain on the basis of what precise criteria decisions are
being taken by the CFIUS to accept or block FDI ? Could they also elaborate on what their concept of
“national security” entails?
Paras. 46 and 47: The United States have - in addition to its membership to WTO and OECD (Code
of Liberalization and National Treatment Instrument) - concluded a number of treaties relating to trade
and investment, namely bilateral investment treaties containing pre-establishment elements (BIT), free
trade agreements (e.g. Singapore, Chile), NAFTA and trade and investment framework agreements. Do
the U.S. authorities foresee to continue to follow a multi-layered approach to international investment
arrangements, and if so, which will be its guiding principles?
III.
Trade Policies and Practices by Measure
(2)
Measures Directly Affecting Imports
(iv)
Anti-dumping and countervailing actions
(a)
Legislation and administration
Para. 73: The Secretariat’s report indicates that although the U.S. Department of Commerce
(USDOC) has the authority to self-initiate AD and CVD investigations, it seldom does. Could the U.S.
authorities explain under which conditions, USDOC might be self-initiating AD or CVD
investigations?
(ix)
Trade-related environmental regulations
Para. 170: This paragraph suggests that the United States applies trade measures to enforce U.S.
environmental provisions, notably those governing the use of marine resources and states some
examples of the fishing industry. Could the United States please expand on whether there are other
areas, apart from the fishing industry, where trade measures are applied in order to enforce U.S.
environmental provisions? Are there trade measures which are applied in order to enforce multilateral
environmental agreements to which the US is a Member?
Para. 172: According to the Secretary of Commerce, the intentional chase and encirclement of
dolphins was not having a "significant adverse impact" on any depleted dolphin stocks in the eastern
tropical Pacific. As a result, the definition of dolphin-safe would have changed to allow tuna caught by
chase and encirclements of dolphins to be considered dolphin-safe. Could the United States elaborate
on the actual status of the U.S. Government appeal of August 2005 to reverse the U.S. District Court's
decision for the Northern District of California of August 2004?
Para. 175: Could the United States give an update on the status of two-fleet rule which is mentioned
in para. 175 ? Does the U.S. Government intend to abolish this two-fleet rule which might constitute a
trade barrier for foreign manufacturers?
(4)
Other Measures Affecting Production and Trade
(ii)
Competition policy
Para. 212: The Secretariat’s report indicates that in addition to the federal legislation there is also
antitrust legislation in nearly all States. Could the U.S. authorities clarify the respective roles of State
versus federal antitrust legislations and why there would be a need to have such legislations both at the
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federal and state levels, all the more since apparently not all the States felt the need to have antitrust
legislation ? As a matter of fact, para. 224 suggests that the United States should "clarify assignments
of responsibility among different enforcement officials, particularly between the federal and state
levels." Indeed, discrepancies between federal and state law can lead to serious problems such as forum
shopping, where plaintiffs choose where to sue depending on the expected payoffs in court. From an
international trade perspective, this raises the question whether foreign parties generally have the same
rights under state antitrust law as they do under federal antitrust law. In other words, is there a danger
for foreign companies to be discriminated under state antitrust law ? Furthermore it would certainly be
desirable to diminish forum shopping opportunities. What measures will be taken to limit the
opportunities for forum shopping in antitrust law?
(iii)
Government procurement
Access conditions
Para. 250: According to para. 250 the sanctions decided by the United States against countries
considered to discriminate against U.S. products and services in their government procurement
practices are supposed to apply also to end-products and construction materials not covered by the
GPA. Independently of the issue of sanctions, would it be possible for the United States to elaborate on
the nature of products which are considered by the United States as materials - i.e. goods - not covered
by the GPA?
IV.
Trade Policies by Sector
(2)
Agriculture
(ii)
Border Measures
Para. 18: For the United States the best TRQ allocation method seems to be “first-come-first-served”.
At the same time, an exception is made for some products (dairy, sugar) in the allocation of TRQs.
What is the rationale for this exception?
(iii)
Domestic Programs
Paras. 24, 26: On counter-cyclical payments: How will the (new) counter-cyclical payments be
notified in the context of the implementation of the cotton case?
Table IV.1, p. 89: This table presents federal government payments. Do any programs exist at subfederal level? Have they been notified to WTO and under what “color”? Also, in view of the large
variety of farm structures over the country, do the United States have any instruments (federal/subfederal) for the specific promotion of small farmers?
(v)
Food Aid
Para. 54: Could the U.S. authorities provide more details on the McGovern-Dole International School
Feeding program?
Paras. 55 and 57: Could the U.S. authorities explain how Section 416(b) of the Agricultural Act of
1949 is in compliance with Art. 10.4 (b) and (c) AoA? In particular, could the authorities explain how
the United States ensure compliance with the FAO Principles of Surplus Disposal?
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(3)
Financial Services
(ii)
Legislative and Regulatory Framework
(c)
Securities services
Para. 76: The Secretariat’s report states that “Foreign and domestic broker-dealers who wish to solicit
business with U.S. persons are generally required to register with the SEC although foreign brokerdealers are exempt from registration requirements under certain circumstances.”. Could the U.S.
authorities provide concrete examples of what is meant by “certain circumstances”?
INDIA
Weight Restriction
Q.1
The present practice of limiting weight for 20 foot containers to 21 MT only is causing
hardship and adding to cost of shipment resulting in higher value of the export product. Can the US
raise this limit to 27 MT, which is the practice followed by several other countries?
Byrd Amendment
Q.2
On February 1, 2006, the US Congress approved the repeal of Byrd amendment with a
transition clause that the repeal would be effective from October 1, 2007. While India welcome the
action taken by US, we understand that the transition clause also provides that the collected AD &
CVD margins up to October 1, 2007 continue to be distributed after this date. US authorities are
requested to clarify its stand
Additional Bonding requirements
Q.3
US customs introduced a new provision requiring continuous bond from US importers of
agriculture and aquaculture products liable to antidumping duty since July 2004. As per the new
requirements, the bond should cover one year’s anticipated antidumping duty and it should be given in
addition to cash deposit of antidumping duty at the time the concerned shipments enter into US. Due to
the additional bonding requirement imposed by US customs, India’s shrimp exports have been
adversely affected. The magnitude of financial burden faced by Indian exporters has increased
tremendously. This is a non-tariff barrier. Would US agree to repeal this additional burden?
Tariff peaks on Apparel items
Q.4
US currently maintains tariff peaks going up to 32 % for apparel products under HS 61 and 62.
Such high tariffs affect India’s principal item of export interest particularly as the list of countries
which receives concessionary/zero tariff access under FTA or other arrangements is increasing. U.S is
requested to clarify its stand on eliminating the tariff escalation?
Generalized System of Preferences
Q.5
At a public hearing held in Washington on November 3, 2005, the relevance and importance of
continuing the GSP programme beyond December, 2006 was brought to the knowledge of the office of
USTR. It was submitted that the benefits of the scheme be continued to be made available to all
developing countries even beyond 2006 in a fair and non - discriminatory way. The current status of
these schemes may be indicated and whether any changes are contemplated.
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Services Offer
Q.6
US has recently raised the cap on H1b visas by 20,000 (over and above annual limit of 65,000)
for professional students obtaining degrees from US universities. However, the existing restrictions on
visas for business professionals are affecting the levels of market requirement in various sectors. Some
of Indian business visitors, including those coming for participation in trade fairs, etc., have also had
difficulties in getting their visas issued in a timely manner. What action would be taken by the US to
grant visas to business professionals without any hassle?
ISSUES RELATING TO H 1 B VISAS
Q.7
The cap on H 1B visas continues to be 65,000 per annum. This was increased by adding
another 20,000 H 1B visas for those who have a US degree. Both these caps have been exhausted.
Will the US review its decision in continuing with this cap on H 1B visas and let market forces dictate
the number?
Q.8
It has been noticed that issuing visas takes inordinately long time. In addition, the visa fees are
also being increased frequently. Further, on site / offshore outsourced projects have specific
requirements wherein individuals provide service in the US under a specific contract with the US
organization. For such service suppliers an alternative visa mechanism needs to be explored. This
should be a sub-sect of the overall H 1B visa mechanism wherein the eligibility for stake would be one
year or a period of contract whichever is lesser. Will the US consider setting up a separate visa
mechanism to address the specific requirements of on site/ offshore outsourced projects, wherein
Contractual Service Suppliers and Independent Professionals visit US to provide a service under the
specific contract to the US organization?
Location issues of H IB visa
Q.9
Currently when Indian professionals go to USA on a H IB visa, it allows them to work only in
a particular State of US. H IB visa is valid for three years and is extendable for further three years. In
this period if the assignment changes to another State, specific permission for change of location is
required from immigration and Naturalization Services (INS) of USA and this is time consuming
process. At times a professional is required to work on projects in different States within the same
month. India does not have such locational restriction. Would US government consider making the
H IB visa applicable for working any where in the USA?
Totalization Agreement/Social Security contribution
Q.10 For Indian IT professionals working in US, social security costs constitute a significant portion
of compensation costs to the Indian software companies executing projects abroad. US receive about
USD 500 million per year by way of social security contributions from Indian software
companies/employees. However, the benefits availed are insignificant as almost all the software
professionals return to India or migrate to other locations before they are eligible for the benefit. Would
US authorities consider the following suggestions:
(i)
(ii)
Employees of Indian companies working temporarily in the US under the HIB visa scheme are
exempted from paying Social security, or
Deductions made towards social security from employees of Indian companies are refunded
upon their return from the US.
Requirement of Underwriter Laboratories (UL) Approval
Q.11 Manufactures and exporters of PTFE(Teflon) Insulated Wires & Cables (PIWC) and
PTFE(Teflon) Sleeves/Tubling have reported that for any reasonable business with a U.S. buyer in their
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product area, there is a requirement of UL approval. However, the required technical specifications are
not readily available and even the UL website does not contain much details. Can the U.S consider
providing UL specifications and test requirements freely or at minimal cost? Can US government
allow the testing to be done at Indian laboratory/Test Center administered by the Government
Departments?
Buy America Act
Q.12 The Act mandates that American made products must be used in all construction using Federal
dollars. Preference is given to works and other government procurement contracts for bids that
include locally produced steel. This practice is notably common at the sub-federal level and many
States such as Connecticut, Louisiana, Maine, Michigan, Illinois, Maryland, New York, Pennsylvania,
Rhode Island and West Virginia, have such requirements that also apply to private contractors and subcontractors. With a view to ensuring that market access is not denied to exporters of castings, iron and
steel and non-ferrous metal from developing countries like India, whether necessary remedial action
could be taken by amending the Buy America Act?
SPS Measures
Q.13 ISPM: 15 – Wooden Pallets used for Export of Bulk tea as prepared by the International Plant
Protection Convention (IIPC) of the FAO became effective from 1st March, 2005.
This requires that Phytosanitary Measures in respect of movement of wood packaging material in the
form of pallets/packages, must fully meet the Standards of NIL risk against possible introduction
and/or spread of quarantine pets associated with wood packaging material in use in international trade.
Further this, the ISPM: 15 has adopted various measures of treatment like Heat Treatment(HT),
Methyl Bromide (MB) Fumigation, etc. The pallet must also contain a logo of the approved treatment
of wood packaging material and assigned mark/code number of the National Plant Protection
Organization(NPPO) approved producer of the wood packaging material.
The Plant Protection Adviser to the Govt. of India, Ministry Agriculture, has already initiated the
process of the accredition of Agencies to meet the aforesaid requirements in respect of tea industry in
North Eastern Region, West Bengal, Himachal Pradesh as well as South India. Would US Government
consider granting more time for Indian tea to conform to the aforesaid specified guidelines?
Q.14 The US Food and Drug Administration (FDA) insist for registration of any consignment of tea
exported to USA. Would U.S. authorities consider relaxing the FDI registration requirement for
samples of tea sent to potential importers based in USA?
Equivalency of Standards under National Programme for Organic Production of Government of
India with National with National Organic programme of USA.
Q.15 After the implementation of National Programme for Organic Production(NPOP) by
Government of India in 2001, Agricultural and Processed Food Products Export Development
Authority (APEDA) had sent the NPOP document to USDA with a request to acknowledge Indian
organic standards for equivalence with National Organic Programme (NOP) of the USA.
After the video-conference, on 16 February 2006 the Agriculture Marketing Service (AMS) of USDA
have recognized India’s accreditation system and the certification of organic agriculture products by
agencies accredited under NPOP for import of organic products into the US.
Would U.S. now take early action to reach a final decision on determination of equivalency of Indian
organic Standards with those of US NOP Standards?
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The US Federal Regulations
Q.16 Imports into the USA are regulated under the Federal regulations, often referred to as 21 CFR
123. They require that the purchaser/importer of the products should be able to demonstrate to the
authorities that the products have been produced in a safe and acceptable manner i.e. are in, compliance
with quality assurance system that incorporates HACCP, Standard Sanitary Operating Procedures
(SSOP) and Good Manufacturing Practices (GMP). These increased number of sanitary procedures act
as a non-tariff barriers/ technical barrier to Indian exports to USA. In order to remove these non-tariff
barriers, would U.S take steps to streamline the same?
High Domestic Support
Q.17 Chart IV.1 of the Secretariat Report (WT/TPR/S/160 dated 15 Feb 2006) brings out that US
Government payments to agricultural producers are on a continuous rise since the Farm Act 2002,
barring a small decline in 2004. Further, Government payments for 2005 are expected to increase to
close to US $ 21.4 billion. This increase is being driven inter alia by an almost four-fold increase in
counter-cyclical payments and a seven-fold increase in ad hoc emergency payments against those in
2004. Similarly, the OECD’s Producer Support Estimate (PSE) which was 15% as a share of gross
farm receipts in 2003, provisionally increased to 18% of gross farm receipts in 2004, reversing the
downward trend registered since 1999. Such large increases in trade-distorting domestic support by
Government to agriculture producers are a cause for concern, and are against the letter and spirit of the
objective of substantial progressive reduction in support and protection embodied in the WTO’s
Agreement on Agriculture. India also notes with concern the concentration of domestic support, as
also measured by the share of PSE in the gross receipts, in sugar, milk, wheat and other grains, which
adversely impacts poor and vulnerable, but otherwise competitive, farmers in developing countries.
Are these trends symbolic of US policy and approach to protect and support its agriculture sector, and
how does the US propose to address the concerns of globally competitive producers, including in
developing countries?
Specific Programmes
Q.18 Paragraph 24 of the Secretariat Report notes the concerns already raised by Members regarding
inter alia increases in expenditure under the State Programme on Agriculture, the Emergency Food
Programme, and non-product specific support, the expanding scope of Government guarantees under
US Crop Insurance Programmes, and the high level of specific support on cotton and soybean. The
classification of Crop Market Loan Assistance Payments under non-specific categories has also been
questioned. Could the US provide the justification for such classification, and the rationale for the
increases in expenditures reflected across a broad range of US support programmes?
As regards its Farm Insurance Programmes, the US Government offers subsidized insurance, including
through premiums, for natural disasters and price fluctuations. Further, the USDA evidently covers
underwriting costs and defrays the administrative costs of companies that sell farm insurance. Could
the US Government clarify under what heading such subsidies and underwriting of costs are accounted
for and notified to the WTO?
Complex Tariff Structure
Q.19 The Secretariat Report also draws attention to the barriers to market access in US, applied
inter allia through non-ad valorem duties (10.6% of total lines), TRQs (around 195 tariff lines are
subject to tariff quotas), tariff protection of up to 350% and tariff escalation across a number of
agriculture products. Nearly 91% of the out-of-quota tariffs are non-ad valorem compared to almost
28% of in-quota tariffs (Para 16 of Secretariat Report). Products such as tobacco, whey, sour cream
and peanuts, receive tariff protection in the range of 50-350%. Quotas, coupled with high out-of-quota
tariffs, are protectionist, and the non ad valorem tariffs erode export competitiveness and disadvantage
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low cost exports of developing countries. Does the US propose to simplify its tariffs and to convert all
residual quotas to a tariff-only regime?
Country-specific Allocations of Tariff Quotas
Q.20 Country-specific allocations of tariff quotas have been maintained by the US under Uruguay
Round Scheduled commitments and new ones have been negotiated by the US with trading partners
more recently. The selective allocation of tariff quotas and institution and maintenance of countryspecific allocations is discriminatory and undermines the fundamental principle of MFN. Does the US
propose to shift to a regime of global quotas with MFN-based allocations?
Q.21 The US practice of deputing their own officials (from APHIS/USDA) for certification of
Quarantine Treatment Facility (such as hot water treatment/vapor heat treatment etc.) in other countries
increases the cost of exports for the countries concerned. This practice makes low volume exports
completely unviable and serves as a barrier to trade. Would the US consider evolving a practice
wherein these requirements could be based on certification by the exporting countries, after
establishing the necessary equivalence in standards?
ARGENTINA
Sobre la base del documento WT/TPR/S/160, la República Argentina desea formular las siguientes
preguntas:
1.
En la página 18, párrafo 14, se menciona que el 9 de junio de 2005, la Cámara de
Representantes reafirmó por 338 votos a favor y 86 en contra la participación de los Estados Unidos en
la OMC, lo que supuso el rechazo de la Resolución conjunta Nº 27.1 Pregunta: ¿El Congreso de los
EEUU continuará revisando en forma quinquenal la participación de los EEUU a la OMC?
2.
En la página 19, párrafo 17, se menciona el debate de la Comisión de Medios y Arbitrios
Pregunta: ¿Podría los EEUU indicar si es posible obtener esa información?
3.
En la página 20, párrafo 20, se mencionan los cumplimientos pendientes de hacer por parte de
los EEUU Pregunta: ¿Los EEUU consideran que las modificaciones solicitadas por el OSD en el caso
Algodón fueron plenamente instrumentadas?; ¿por qué se omite mencionar dichas reformas dentro de
las que se encuentran pendientes?
4.
En la página 31 párrafo 8 se menciona que los EEUU toman medidas para garantizar el
suministro interno suficiente Pregunta: ¿Podrían enumerar las medidas tienen como objetivo
“garantizar el suministro interno suficiente”? ¿Estas medidas se orientan a la producción interna
exclusivamente?
5.
En la página 35, párrafo 29, el informe menciona que desde marzo de 2005 entraron en vigor
nuevas directrices de seguridad para importadores en el marco de la Asociación Aduanera y Comercial
contra el Terrorismo (C-TPAT). En este sentido, el informe menciona que los participantes en la CTPAT se benefician de una menor frecuencia de las inspecciones de su carga por la CBP y, además,
que esta asociación se creó mediante una orden del Ejecutivo, pero no se ha publicado ningún
reglamento para su funcionamiento. Pregunta: ¿Cuál es la razón y el fundamento por el cual los
participantes de la C-TPAT obtienen tal beneficio? y, por otro lado, ¿tienen previsto las autoridades
publicar algún tipo de reglamento que transparente este mecanismo?
6.
En la página 37, párrafo 34 se menciona que los Estados Unidos aplican normas de origen
preferenciales en el marco de varios acuerdos bilaterales de libre comercio concertados después de
1997 que aún no se han notificado a la OMC (octubre de 2005). Atento a la necesidad de transparencia
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Pregunta: ¿cuándo los EEUU realizarán la notificación a la OMC?; ¿Son acuerdos dentro del marco
de negociaciones de Acuerdo generales o sólo relacionados con normas de origen? ¿incluyen aspectos
relacionados con etiquetado y medidas sanitarias?; ¿Son los acuerdos preferenciales sobre normas de
origen compatibles con las normas de la OMC?
7.
En la página 37, párrafo 37, el informe menciona que, por lo general, las normas de origen no
preferenciales aplican los criterios de “íntegramente obtenido” y “transformación sustancial”, pero que
organismos distintos de la CBP (Oficina de Aduanas y Protección en Frontera) pueden adaptar e
interpretar con más detalle esos criterios para ajustarlos a las necesidades y fines del contexto
específico en el que se aplican las normas no preferenciales. Pregunta: ¿Podrían brindar más
información acerca de cuáles son esos criterios, así como también las necesidades y contextos
específicos a los que se refieren?
8.
En la página 39, párrafo 48, el informe menciona que los derechos específicos representan casi
un 11% del total de líneas arancelarias. Teniendo en cuenta el mayor nivel de protección que estos
proporcionan, especialmente a los productos de menor valor. Pregunta: ¿Existe la intención de los
Estados Unidos de eliminar en el corto o mediano plazo la aplicación de este tipo de derechos?
9.
En la página 47, párrafo 77, el informe menciona que algunos aspectos del sistema
antidumping y compensatorio impugnados en la OMC se resolvieron en el período objeto de examen,
como por ejemplo, la impugnación de la Ley Antidumping de 1916. Pregunta: ¿Podrían informarnos
que aspectos del sistema impugnados en la OMC no han sido resueltos en este periodo o aún no hayan
sido plenamente implementados?
10.
En la página 61, párrafo 116, el informe indica que las restricciones cuantitativas con fines
comerciales en vigor afectan principalmente al sector de los textiles y el vestido. Pregunta: ¿Qué otros
sectores se encuentran actualmente afectados a este tipo de restricciones?
11.
En la página 81, párrafo 195, el informe hace referencia a que los Estados Unidos mantienen
un programa de devolución de derechos, a través del cual se reembolsan derechos de aduana y algunos
impuestos y gravámenes interiores resultantes de la importación. Pregunta: ¿Podrían brindarnos
mayor información acerca de esos impuestos y gravámenes interiores?
12.
En la página 82, párrafo 199, el informe menciona que en la última notificación plena de los
Estados Unidos (Octubre de 2005) presentada en el marco del párrafo 1 del artículo XVI del GATT de
1994 y el artículo 25 del Acuerdo sobre Subvenciones y Medidas Compensatorias, se enumeran 375
programas de subvenciones, mientras que en la anterior notificación (2002) la cantidad había sido de
220. Preguntas: ¿Podrían indicar en que consisten tales programas? ¿Que productos específicos se
encuentran afectados por estas subvenciones?
13.
En la página 85, párrafo 210, el informe hace referencia al Programa de Asistencia a las
Empresas para el Ajuste al Comercio, que forma parte de un programa más amplio que presta también
asistencia a los trabajadores y los agricultores. Si bien se detallan los plazos de vigencia y el monto de
la ayuda del programa, no surge sobre que bases se aplica y que industrias son las beneficiadas por
dicho programa. Pregunta: ¿Podrían explicar de manera más detallada estos últimos puntos?
14.
En la página 100, párrafo 262, el informe menciona que, en uno de sus informes anuales, la
Comisión Federal de Comercio (FTC) indica, con respecto al sistema de patentes en los Estados
Unidos, que existe preocupación sobre la calidad de las patentes y las normas y procedimientos
jurídicos ya que pueden tener efectos anticompetitivos y aumentar los costos. En este informe, la FTC
recomendó una serie de modificaciones tales como nuevos procedimientos administrativos que
permitan el examen de las patentes, la oposición a las mismas con posterioridad a su concesión, el
aumento de la participación de terceros en los exámenes, la mejora de determinadas normas jurídicas
utilizadas para evaluar si una patente es obvia; la consideración del posible perjuicio a la competencia
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antes de ampliar el alcance de materia patentable. Pregunta: ¿Dichas recomendaciones fueron
implementadas y, si fuera el caso, cual fue su resultado
15.
En relación con lo mencionado en la página 112, párrafo 27 Pregunta: ¿Prevén los EEUU
presentar las rectificaciones de las notificaciones, pasando los pagos directos de la caja verde a la
caja ámbar conforme lo estableció el OSD en el panel de Algodón? ¿Cuál es el monto total y los años
en que dichos pagos se han producido?
16.
En relación con lo establecido en la página 117, párrafo 47 Pregunta: ¿cuál ha sido en los
últimos 10 años el volúmen de exportaciones sujeto a créditos, garantías y seguros a la exportación?
¿Cuál ha sido la suma entregada en virtud de esos programas en los últimos 10 años? ¿Y a cuánto
asciende el subsidio?
17.
En relación con el párrafo 53 de la página 118 Pregunta: ¿De qué medidas dispone los EEUU
para asegurar que la ayuda alimentaria prestada mediante sus planes no se encuentre directa o
indirectamente vinculada a sus exportaciones?
18.
En la página 143, párrafo 140, el informe menciona la implementación del Fondo de Capital
para la Construcción y del Fondo de Reserva para la Construcción, por el cual los propietarios o
arrendatarios estadounidenses de buques pueden obtener ventajas fiscales para construir buques que
reúnan las condiciones prescritas. Pregunta: ¿Podrían brindar más información sobre el tipo de ayuda
que proporcionan estos fondos?
19.
En relación con la aprobación por parte de los Estados Unidos de la importación de bienes
agrícolas, la Argentina observa con preocupación la existencia de demoras injustificadas en los
procedimientos de aprobación de productos agropecuarios o en los reconocimientos de las
regionalizaciones realizadas. Si bien la Argentina reconoce el derecho de los Miembros de adoptar
niveles de protección más elevados del que se lograría mediante la aplicación de normas
internacionales, resalta el hecho de que en estos casos debe existir evidencia científica suficiente.
Pregunta: ¿Pueden los EEUU explicar sobre cuáles evidencias científicas justifican el excesivo tiempo
que dedican a investigar la existencia o no de determinada patología?; ¿podrían los EEUU acortar
esos plazos teniendo en cuenta los estándares internacionales (OIE-CIPF-Codex)?
20.
Teniendo en cuenta que los pagos directos son subsidios distorsivos y dado que no se redujeron
otros subsidios distorsivos. al sumar todos estos subsidios, Pregunta: ¿los EEUU podrían confirmarse
han superado el límite consolidado de la caja ámbar?
21.
Pregunta: ¿Realizan los EEUU evaluaciones previas del impacto de las ayudas alimentarias,
que no sean realizadas en emergencia, de modo tal de asegurar que no dañen o menoscaben el
comercio de terceros países o a los productores del país receptor? En su caso ¿cuáles son esas
evaluaciones?
KOREA
Trade Policies and Practices by Measure
Measures directly affecting imports- Antidumping and Countervailing actions – Legislation and
administration (Byrd Amendment)
1.
We welcome the news in paragraph 79 on page 38 of the Secretariat Report that Legislation to
repeal the Byrd Amendment was passed by both houses in Congress and would be soon presented to
the President for signature. Despite the ongoing US legislative developments to comply with the WTO
adjudication against the Byrd Amendment, it is reported that a certain Korean exporter, who was
determined to have committed dumping in a preliminary anti-dumping investigation by the U.S.
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government, was asked to pay for the anti-dumping bond required by the Byrd Amendment. We also
note from other sources that the amendment will be ineffective only after October 2007 in accordance
with the recently drafted transitional clause.
We would like to know what is a specific timeframe that the US government is planning to
complete the process for repealing the Byrd Amendment. Please confirm that the legislation to
repeal the Amendment includes transitional clause mentioned above. If so, does the US
government have any plans to rectify the distortions caused by it during the transitional period,
like the Korean export’s case?
Measures directly affecting imports- Standard and technical regulations -standards
2.
We note that the U.S. distributors of home appliances require the UL sign to be marked on the
products. It takes 6 months to 1 year to complete such certification procedure, thereby working as a
barrier to many foreign exporters. According to Para 137-138 on page 52 of the Secretariat’s report,
under the Trade Agreements Act of 1979, U.S. federal government agencies are required to “take into
consideration” international standards when developing standards, and if appropriate, to base the
standards on international standards. And the Act also call upon the U.S. President to take reasonable
measures to promote the observance by State agencies and private persons of requirements equivalent
to those imposed on federal agencies in carrying out standards-related activities.
Please provide us with information to what extent such requirements or standards as UL
certification are based on standards developed by international organizations. Does the U.S.
government have any future plans to recognize foreign quality certification to be equivalent to
that of UL Mark?
3.
With regard to the development of voluntary consensus standards described in para. 141 on
page 53 of the Secretariat report, please explain what is a criteria for government agencies to choose to
participate in the development of certain standards and what is the role of the agencies in the process?
Trade Policies by Sector
Financial Services – Legislative and regulatory framework-Banking services
4.
We understand as described in in para 69 on page 97 of the Secretariat report that the US
maintains a general policy of national treatment towards foreign banks with some exceptions reserved
as market access restrictions in the GATS. We note that there are some restrictions on foreign bank's
retail financing business. Please explain what is the reason for imposing such restrictions and provide
us with information on whether there are further restrictions on sales activities, namely on the amount
of net liability and etc, related to foreign bank's retail financing business.
Financial Services – Legislative and regulatory framework- Securities services
5.
Paragraph 79 on page 99 in the Secretariat Report indicates that foreign investment advisors
are subject to monitoring by the SEC concerning the compliance with the Investments Advisers Act of
1940.
Please provide us with information in more detail regarding the monitoring process on
investment advisors residing outside the U.S. Does the SEC consider related provisions of the
country of the advisor's residency when it monitors the compliance of foreign investment
advisors residing outside the U.S. with the Act ? Are there any preliminary MOUs signed by
the SEC and foreign supervisors?
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Financial Services – Legislative and regulatory framework- Insurance services
6.
With regard to paragraph 88 on page 101 of the Secretariat report, it is known that the U.S.
allows cross-border transactions in insurance services. Please provide us with information on how
significant is the cross-border transaction out of the total insurance services.
7.
The Paragraph 90 on page 101 of the Secretariat report indicates that NAIC is in the process of
streamlining and consolidating insurance supervisory systems from different states. When will this
process be finalized? What's the ultimate objective of this consolidation work?
Telecommunication Services – Institutional framework and market access
8.
Regarding paragraph 96 on page 102 of the Secretariat’s report, please clarify whether resellers
who provide services by leasing equipments from basic telecommunication carriers should also have a
common carrier radio license to supply wireless services. Does the foreign participation limit (Section
310(b)(3) of the Communication Act) also apply to resellers supplying wireless services? Please
provide the number of the companies that have received authorization to exceed the 25% foreignownership benchmark of Section 310(b)(4) of the Communication Act? How many resellers are
included among those companies?
Telecommunication Services – Selected regulatory issues - public interest analysis and regulatory
standards
9.
With regard to the para 99 on page 104 of the Secretariat’s report, what are the requirements
for a foreign company to obtain a submarine cable landing license? Should the foreign company have
commercial presence in the U.S.?
EUROPEAN COMMUNITIES
I. RECENT ECONOMIC DEVELOPMENTS
WT/TPR/S/160-1
In paragraph 4, it is stated that “government spending…trended downwards until the first quarter of
2005.” This analysis seems slightly misleading to us, as the figures in table 2 suggest that spending
continued to grow in absolute terms (only the rate of growth declined). Could the US please clarify the
correct facts?
II. DEVELOPMENTS IN TRADE AND INVESTMENT POLICY
1. TRADE IN GOODS
(2) MEASURES DIRECTLY AFFECTING IMPORTS
Leather and Footwear
WT/TPR/S/160-3; p. 32, para. 48-52
The share of non-ad valorem tariff lines has declined from 12.2% of all lines in 2002 to 10.6% in 2004.
Although slightly more than half of comparable non-ad valorem tariff lines recorded declined between
2002 and 2004, on average non-ad valorem tariffs continue to afford higher protection than ad valorem
duties. In 2004, the average of ad valorem equivalents of non-ad valorem tariff rates was 10.7%,
compared with 4.3% for ad valorem duties. Non-ad valorem tariff rates apply mainly to agricultural
products, footwear and headgear, watches, and precision tools.
•
Within the schedule, the non-ad valorem duties are higher than the ad valorem duties. What are the
US’ plans to shift to ad valorem rates?
WT/TPR/M/160/Add.1
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Some 5.5% of all tariff lines had MFN rates exceeding 15% in 2004. The products subject to the
highest ad valorem or ad valorem equivalent rates were tobacco (350%), whey (284%), sour cream
(177%), and peanuts (164%); in the non-agricultural sector, the highest rate was applied to footwear
(58%).
•
Footwear is subject to particularly high tariff peaks. We would like to the reason for maintaining
such high rates on footwear imports considering the limited footwear industry in the US ? What are
the US plans to dismantle such peaks?
Textiles and Clothing
WT/TPR/S/160-3; p. 30, para. 3
The MID for textile and apparel creates discrimination compared to other manufactured products
exported to the US, as it is by far more stringent than for other products. These measures are having a
severe and unjustifiable impact upon the EU industry's ability to sell its textile and apparel products
into the US market.
Contrary to common and accepted practice of identifying the vendor as the manufacturer since the 80's
through a codification system, the new MID for textile and apparel is in breach of commercial
confidentiality rules. The MID structure allows any importer or buyer to access the exact address of the
manufacturer of a product, through the obligation, for the first data entry of the new MID, to provide on
the invoice the complete address of the manufacturer in order to check whether the syntax of the MID
is correct.
•
What are the objectives the new 'MID' requirement seeks to serve?
•
Could the US inform WTO Members on the methods it used prior to the introduction of the 'MID'
in order to identify the origin of textile and apparel products?
•
Could the US confirm that prior to the introduction of the 'MID' a mere certificate of origin was
sufficient for customs clearance without any reference to the name and address of manufacturer?
•
Could the US confirm that the 'MID' requirement is imposed on US based importers in the sense
that it is them who must provide all the necessary information (name pf manufacturer, address, etc)
as a condition for importation?
According to the Federal Register, Volume 70, No. 192 of October 5, 2005, Rules and Regulations,
page 58014, 'importers must be able to demonstrate to CBP their use of reasonable care in determining
the manufacturer'.
•
Could the US inform the body as to the exact methods to be used to verify that the importer has
constructed the 'MID' correctly and according to the relevant instructions and, thus, has determined
accurately the manufacturer?
•
Is it correct that for the first entry of the new 'MID' US based importers are bound to provide on the
invoice the complete address of the manufacturer of the product in order to allow US customs
services to verify that the construction of the 'MID' is correct according to the relevant rules and
instructions?
According to the Federal Register as above, 'if an entry filed for such merchandise fails to include the
MID properly constructed from the name and address of the manufacturer, the port director may reject
the entry or take other appropriate action'.
WT/TPR/M/160/Add.1
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•
Can the US inform whether the port director is bound under circumstances of incorrect
construction of the 'MID' to prohibit customs clearance of the relevant goods? Also can the US
inform the body on what other action may be taken by the port director in such circumstances?
•
Could the US explain why same requirements as the 'MID' do not apply to other products but only
to textile and apparel products?
•
Could the US inform whether the 'MID' requirement applies to textile and apparel products from
all countries without exception? If not, could the US specify those countries that are excluded from
this particular measure, the reason for any such exclusion, and the compatibility of any such
exclusion with WTO rules?
•
Could the US finally explain how this MID requirement is compatible with rules on protection of
commercially confident information?
Foreign investment regime
WT/TPR/S/160, page 22
• Paragraph 44: How do the US view the implementation of the Exon-Florio statute, which aims to
ensure that national security concerns are respected in takeovers and mergers involving foreign
firms? How do the US view the prospects for further legislation?
Competition policy
In Chapter IV (Trade Policies by Sector) paragraphs 102-103 the Secretariat Report summarises the
“international settlements policy of the Federal Communications Commission (FCC). The FCC policy
is a unilateral approach to deal with a problem which is in fact global: the fact that operators in
countries which have not yet or were late in liberalizing their markets will use their dominant position
as regards the termination of international calls on these countries to “overcharge” their services.
•
Why did the FCC not initiate discussions with other jurisdictions in order to set up a joint approach
to this global problem?
In Chapter IV paragraphs 108-112 the Secretariat Report refers to the December 2004 approach of the
FCC as regards access obligations imposed on the incumbent local exchange carriers (ILEC). In this
regard the FCC has not imposed any access obligation to the high-frequency portion of the local loop
used for line sharing, relying on the state of intermodal competition for broadband services (see
paragraph 111 of the report).
•
Does this approach not favour a duopolistic market structure and limit the opportunities for foreign
undertakings - who cannot reach an attractive deal with neither of both the ILEC and the cable
operators - to enter the US market?
2. TRADE IN SERVICES
Environmental services
•
Could the US clarify the origin (legislation, regulation, other) and scope of footnote 38 in its
schedule, that limits commitments to certain activities despite the US use of CPC codes?
•
In particular, could the US confirm which specific services are actually covered for each CPC as a
result of the limitation of the footnote?
WT/TPR/M/160/Add.1
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Legal services
•
The US requires a Foreign Legal Consultant (FLC) to have X years of experience in practising law
preceding his or her registration as an FLC. Could the US explain what requirements have to be
met by US citizens (either lawyers or not) in order to provide advice on foreign and international
law?
•
Could the US please provide a reply to the following question raised in the last TPRM exercise and
not yet answered:
According to the report by the WTO Secretariat (pages 156 to 162 of 2004 TPRM), the Federal
Government has the power to negotiate framework agreements with trading partners with respect to
professional and business services under which mutual recognition arrangements (MRAs) are
negotiated, but the MRAs are negotiated by representatives of the professions and other competent
authorities (members of state licensing boards, national associations of state boards or other such
organizations). The report mentions a number of arrangements that have already been concluded or that
are being discussed.
•
Could the US indicate whether, in the negotiation of such MRAs, these representatives of the
professions and other competent authorities do exercise powers delegated to them by central,
regional or local governments or authorities within the meaning of article I.3.(a)(ii) of the GATS so
that the arrangements can be considered as mutual recognition agreements concluded by the US as
a member of the WTO?
•
If the answer to the preceding question is negative, could the US indicate whether, once it notifies
those arrangements under Article VII of the GATS, the US, by way of such notification, become,
as a WTO member, bound by those arrangements under international law?
•
If the answer to the two preceding questions is negative, taking into account that the US are able, as
a WTO member, to undertake commitments in respect of professional and business services and in
developing disciplines on domestic regulation under article VI of the GATS, could the US indicate
which are the reasons that prevent them from negotiating, as a WTO member, MRAs in respect of
professional and business services under article VII of the GATS?
Telecom services
•
The US may wish to provide some basic information on the latest developments in their domestic
regulatory framework for different types of services. More specifically, we refer to recent
regulations on grouping of telecommunications services into different categories (basic-information
services). In particular, what type of services are covered in each category and what type of
regulations are applied for each category. As these distinctions are being reflected in the US
Revised Offer it will be particularly useful to provide such information to ensure a better
understanding of what is applied in each case.
Although according to the US, there is no precedent for the US not to grant an application for an
authorisation for the provision of telecommunications services, the requirement to conduct a public
interest analysis of applications involves the application of a condition for issuing a licence which
could raise questions on the level of objectivity and transparency, and on whether such level
corresponds to the expectations of the applicants. The latter need to be ensured that as long as they
fulfil certain conditions required for granting a licence that such licence will be granted to them. In
order to have a clear view of which conditions apply before an application is filed, conditions need to
be objective, not ambiguous, and transparent.
WT/TPR/M/160/Add.1
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•
The public interest analysis requirement raises the question as to whether it provides all necessary
safeguards to applicants and effectively eliminates any risk for reaching arbitrary decisions in the
course of examining an application for a licence.
Construction services
•
What is the US regulatory regime applicable to dredging works? In which conditions may a foreign
dredging company undertake dredging works in the US? (S5160-4).
Energy services
The report also suggests adopting measures at the sectoral level to enhance competition, including in
telecoms and electricity.
•
What is the US regulatory framework for transmission, distribution and supply of electricity?
•
What does the US plan to enhance competition in that sector? (S5160-3 § 224).
Maritime Transport
•
Could the United States provide some information regarding the waivers that have been granted to
foreign vessels for maritime transport services in domestic water-borne trade?
•
As it appears from the report (page 109), about 98% of international maritime transport of the US
is carried on foreign-flag vessels. Could you confirm that within the framework of the current
legislatory framework the United States do not apply restrictive measures with regard to market
and/or national treatment? If this is not the case could the United States specify which market
access and/or national treatment limitations are applied within the meaning of Articles XVI and
XVII GATS?
Postal and Courier services
•
Could the United States specify the regulatory provisions regarding the treatment of parcels and
packages and the extent to which foreign operators are allowed to provide the activity of collection,
sorting, transport and delivery of parcels and packages.
•
Could the United States specify the regulatory provisions regarding the treatment of outbound
letters and the extent to which foreign operators are allowed to provide the activity of collection,
sorting, transport and delivery of outbound letters.
•
Could the United States specify the regulatory provisions regarding the delivery of hybrid mail and
the extent to which foreign operators are allowed to provide this activity.
3. GOVERNMENT PROCUREMENT
WT/TPR/S/160, page 71ff
Paragraph 231: In 2003, the General Accounting Office has expressed concerns as to reliability of the
data contained in the FDPS (Federal Procurement Data System); these concerns seem to have been
reiterated in 2005 for the FDPS-NG (Federal Procurement Data System-New Generation) and seem to
exist since the system was put into operation.
WT/TPR/M/160/Add.1
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•
In these circumstances, what measures have been taken to ensure reliability of the data? (Sources:
http://www.gao.gov/new.items/d05960r.pdf and http://www.gao.gov/new.items/d04295r.pdf).
•
Paragraph 231: What is the situation of State procurement as to statistical reporting? How are
obligations reported? Could the US provide data for contracts awarded to Small businesses at State
level?
In paragraph 236, it is mentioned that several FAR amendments were adopted to implement new
legislation (Veterans Benefit Act of 2003, the Consolidated Appropriations Act of 2005, and the
Services Acquisition Reform Act of 2003).
•
What is the purpose and content of these amendments? Do they apply to GPA covered
procurements?
In paragraph 237, it is stated that US regulations allow for the preparation of list of suppliers by a
federal government agency provided that the agency prepares a written justification explaining the
circumstances for the need of such list.
•
Can the US explain the justifications which should be given in order to allow a federal agency to
use and maintain such lists? Would a supplier who is not on a list but who fulfils all the
requirements to participate in a particular procurement covered by that list be allowed to tender?
Furthermore, it is indicated that a number of 37 States covered by the GPA use lists of qualified
suppliers when tendering for certain types of procurement; Can the US indicate how many states
and which ones use such lists? Can the US also indicate the type of procurement concerned?
In paragraph 238 (Central Contractor Registration (CCR)):
• it is indicated that "as of August 2005, there were some 373,000 government vendors registered
with the CCR, of which 10,030 were foreign firms": are these foreign firms established in the US
or outside the US?
•
Can a foreign company established outside of the US acquire rapidly, easily and at no/low cost the
information needed to register? Can the US identify the information and describe the process to
acquire them? does it also encompass any type of business certificates/attestations? If so, how is it
stored in the register? is this information public? if not, who has an access to it?
•
Is any type of electronic signature required along the process of registration? If yes, what kind?
How long does the registration take before becoming operational in the case of a company which is
a newcomer on the US market? At state level does a similar system exist? If yes, in how many
States and which ones?
In paragraph 241: it is indicated that the Buy American Act does not apply to services.
•
Does this mean that there are no restrictions for foreign service providers to participate in a service
procurement in the US? If not, can the US explain the types of restrictions applied and the rules
applied to determine the origin of a service?
•
In paragraph 246, can the US provide more information on the so called "new reciprocity policy"?
In paragraph 247, it is stated that "The Small Business Act (P.L. 85-536), as amended, requires, in
principle, each contract with an anticipated value greater than US$2,500 but less than US$100,000 to
be reserved exclusively for small business concerns".
WT/TPR/M/160/Add.1
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•
Are there any measures in favour of small businesses for contracts with an anticipated value greater
than US100,000?
4. INTELLECTUAL PROPERTY RIGHTS
TRIPS and Public Health
In paragraph 252, the US refer to a number of FTAs it has already concluded and indicates that it is
committed to a policy of promoting increased IPR protection.
•
Can the US explain how IP provisions of bilateral agreements concluded for instance with Chile,
Jordan and Singapore enable those countries to make use of the flexibilities provided for in the
Doha Declaration on the TRIPS Agreement and Public Health?
In paragraph 260, the report recalls that the US is supportive of the solution agreed in August 2003
that waived the export restriction in TRIPS Article 31(f), under certain conditions, so medicines
purchased under compulsory licences could be supplied to countries that have insufficient or no
capacity for pharmaceuticals.
•
Can the US indicate which steps it has already taken to allow US manufacturers of generic
pharmaceuticals to produce patented medicines for export to countries in need without sufficient
capacity to produce them?
Patents
In paragraph 255, the report states that patents are granted by the US PTO using the first-to invent rule
that the US is the only WTO Member to use.
•
Can the US indicate which steps it has already taken in order to introduce the first-to-file rule for
patent registration in order to align its patent system with that of other WTO Members?
Geographical Indications
Method of implementing the TRIPS provisions on GIs in the US:
under section d) “Geographical Indications” of the “Trade-related intellectual property rights” section
of the report by the Secretariat, it is stated that the United States offers protection for GIs through its
trade mark system, including collective and certification marks.
•
Please explain the way in which trade marks, including collective and certification marks, protect
holders of geographical indications against uses of their geographical indications on goods not
originating in the place indicated by the geographical indication in question. In particular, please
explain this with respect to situations in which the geographical indication is used on goods of the
same class not originating in the place indicated by the geographical indication in question together
with the true origin of the goods, or the geographical indication is used in translation, or
accompanied by expressions such as “kind”, “type” or the like.
•
Could you please provide an example of a GI protected in the US that has been able to prevent the
US from the of the GI in translation on goods not originating in the place indicated by the GI?
•
Please indicate the type of characteristics of a product that certification marks may be able to
certify. Please provide figures (in percentage with respect to the total number certification marks
granted) on how many certification marks registered in the US are used to certify regional or other
origin.
WT/TPR/M/160/Add.1
Page 44
•
Could you please provide an example of a GI protected through a certification mark in the US and
corresponding to an area located in the US, summarizing the qualities, reputation or other
characteristics of the good that are essentially attributable to its geographical origin and which
justify that the indication in question is not simply a certification mark of regional origin, but a
geographical indication? Please provide information as well on how the link between the regional
origin and the qualities or characteristics of the goods are ascertained.
•
Is it possible for consumers in the US to distinguish certification marks of regional origin where the
goods certified do not have specific qualities, reputation or other characteristics essentially
attributable to their geographical origin, from certification marks used to protect geographical
indications?
•
We understand that recognized viticultural areas are also available as methods of protection of
geographical indications in the US. Are all recognized viticultural areas in the US geographical
indications? Could you please provide information on the qualities, reputation or other
characteristics of the wines that are considered to grant recognition as recognized viticultural areas
in the US ?
Proposal for a multilateral system of notification and registration of GIs for wines and spirits:
the report by the Secretariat refers in its section d) “Geographical Indications”, under “Trade-related
intellectual property rights”, to a proposal submitted by the US for a multilateral system of notification
and registration of GIs for wines and spirits, which we understand is contained in its latest version in
TN/IP/W/10
•
Please explain how the voluntary nature of your proposal for a multilateral system of notification
and registration of GIs for wine and spirits can be in line with Article II.2 of the Marrakesh
Agreement establishing the WTO, which states that the agreements and associated legal
instruments included in Annexes 1, 2 and 3 of the Agreement, which include the TRIPS Agreement
in Annex 1 C, shall be binding on all Members.
•
Please explain how your proposal ensures the reliability of the information made available on the
searchable database of GIs. In particular, please indicate how the system would deal with the
possible notification of an identical name by two or more Members, and also how it would deal
with absence of information with regard to the way in which the notified GIs are protected in their
country of origin, including the question of the date in which the GI obtained protection and the
date, if any, in which protection will expire.
•
Please explain the way in which your proposal intends to ensure that both administrative and
judicial authorities take account of the information posted on the searchable database proposed.
Please explain as well how administrative and judicial authorities would act if they ascertained that
the information available on the searchable database of GIs was unreliable, inaccurate or
incomplete.
5. TRADE POLICY STRATEGY
Trade policies
Bilateral, regional and global trade liberalisation is vital for promoting prosperity, growth and
development to the benefits of the world at large. The EC considers that the WTO and multilateral
liberalisation is the most certain way for promoting global interests for industrialised countries and
developing countries at large.
WT/TPR/M/160/Add.1
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•
How does US judge the relative importance and weight of bilateral/FTA policies and further
development of the WTO system in terms of its own trade and development needs?
•
To what extent has the US analysed and compared the efficiency and level of economic benefits
delivered by bilateral trade agreements by comparison with multilaterally agreed liberalisation?
What have been the specific results of such analysis?
•
The EC would like to know more about the US’ strategy for RTAs. In particular, the EC notes that
the US appears to follow a rather homogenous model for RTAs irrespective of the levels of
development of its counterparts which includes very long transition periods, including for the US
itself, and with no, or very limited, asymmetry in commitments between the US and its less
developed partners. The EC would also appreciate if the US could confirm their obligation to
"provide a full explanation to the Council for Trade in Goods of the need for a longer period".
Sustainable development/trade and social development
The EC welcomes the US’s emphasis on sustainable economic growth and sustainable development.
Looking at the overall policies of the US:
•
What plans do the US have for adoption of policy strategies in order to enhance sustainable
development? Does the issue of trade and sustainable development fit into the US’ overall
development strategies?
•
How do the US assess the possibilities for increasing trade and development while ensuring
environmental sustainability? Do the US currently have a specific plan addressing this?
The EC welcomes the detailed information provided on trade and labour issues.
•
The bilateral FTAs of the US systematically include provisions related to social issues and labour
rights. Do the US already have some experience to share with these provisions and their
enforcement?
•
Are the US taking initiatives aimed at ensuring respect for Core Labour Standards and promoting
decent work in Export Processing Zones (EPZs) in third countries?
•
Are the US promoting Corportate Social Responsibility (CSR) initiatives in third countries? Do
these initiatives include the promotion of Core Labour Standards?
The importance of linking trade with sustainable domestic policies, and in particular employment
related matters and core labour standards, was confirmed by the Final Report of the World Commission
on the Social Dimension of Globalisation of February 2004.
•
How do the US assess the conclusions of the report with regard to trade policy?
•
How will the US contribute to the folllow-up of the recommendations of the World Commission?
•
How will the US contribute, including with its trade policies, to the promotion of fair globalisation
and the promotion of decent work for all (as defined by the ILO) in line with the September 2005
UN Summit (§47)?
WT/TPR/M/160/Add.1
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MEXICO
II EVOLUCIÓN DE LA POLÍTICA COMERCIAL Y DE INVERSIONES / 3) Participación en
la OMC.
1.
Respecto de lo señalado en el párrafo 21, podría Estados Unidos explicar ¿porqué se ha
retrasado en llevar a cabo las notificaciones de ayuda interna?
II EVOLUCIÓN DE LA POLÍTICA COMERCIAL Y DE INVERSIONES / 4) Acuerdos
Preferenciales y de otra índole / ii) Acuerdos de Libre Comercio.
2.
En el párrafo 28 se menciona que Estados Unidos y Jordania negociaron un TLC en el cual la
liberalización del sector servicios se dio bajo un enfoque de “listas positivas”. México está interesado
en conocer la razón por la cual se utilizó este enfoque para este TLC, ya que en el documento se
menciona que Estados Unidos ha negociado sus acuerdos comerciales bajo el enfoque de “listas
negativas”.
3.
¿Cuál es la posición del Gobierno de Estados Unidos respecto a la disconformidad que hay por
parte de algunos sectores económicos y sociales que se oponen a la creación del Área de Libre
Comercio para las Américas?
III. POLÍTICAS Y PRÁCTICAS COMERCIALES POR MEDIDAS / 2) Medidas que afectan
directamente las importaciones / i) Régimen aduanero y normas de origen / c) Iniciativa de
Seguridad de los Contenedores.
4.
El párrafo 25 de la sección 2) “Medidas que afectan directamente a las importaciones” señala
que la “Iniciativa de Seguridad de los Contenedores” (CSI) “consiste en la selección e inspección de
contenedores de alto riesgo destinados a los Estados Unidos en el puerto de partida y la utilización de
sellos que evidencian la manipulación”. El mismo párrafo da información sobre el funcionamiento de
la CSI y sobre el número de puertos marítimos extranjeros que participan en la iniciativa (35 al 14 de
abril de 2005). Recientemente (principios de marzo de 2006), en la página web de la CSI encontramos
información complementaria en el sentido de que la iniciativa se extenderá pronto a numerosos puertos
alrededor del mundo (“numerous other ports around the world”). Al respecto, México desea preguntar
si es posible tener más información sobre cuáles puertos marítimos se unirían a esta iniciativa.
5.
En términos del procedimiento bajo la CSI, el párrafo 25 explica que la revisión de los
contenedores se lleva a cabo con “equipo de inspección no intrusivo, inspección física o ambas cosas”.
Sobre el particular: a) ¿Podrían los Estados Unidos dar más información sobre el tiempo que requiere el
procedimiento, según el método utilizado, en el despacho de mercancías?; b) ¿Opera de la misma
forma para las mercancías en tránsito?; c) ¿Cuáles son las lecciones que se podrían aprender en cuanto
a la eficiencia de los sistemas automatizados de manejo de riesgo establecidos en los puertos
anfitriones, en términos de evaluación del riesgo?, y d) ¿Cómo se inscribe todo lo anterior en las
negociaciones sobre facilitación del comercio?
III. POLÍTICAS Y PRÁCTICAS COMERCIALES POR MEDIDAS / 2) Medidas que afectan
directamente las importaciones / ii) Aranceles / b) Tipos arancelarios NMF aplicados.
6.
Respecto de lo mencionado en el párrafo 49, ¿Podría Estados Unidos indicar si el motivo del
arancel de 350% al tabaco es para proteger la salud humana, por cuestiones de recaudación, o por mera
política comercial?
WT/TPR/M/160/Add.1
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III. POLÍTICAS Y PRÁCTICAS COMERCIALES, POR MEDIDAS / 2) MEDIDAS QUE
AFECTAN DIRECTAMENTE A LAS IMPORTACIONES / iv) Medidas Antidumping y
Compensatorias / a) Legislación y aplicación.
7.
Sobre la Unidad de Análisis y Asesoramiento (Petition Counseling and Análisis Unit) descrita
en el párrafo 72, podrían los Estados Unidos responder si:
a) Esta asesora a las empresas estadounidenses que presentan solicitudes de inicio;
facilitándoles datos de comercio y de aranceles.(según el sitio web del ITA) ¿Cuál es el presupuesto de
ésta unidad? ¿Mantiene esta unidad un directorio de empresas estadounidenses, disponible para que lo
consulten las empresas interesadas en presentar una solicitud?
b) En ese mismo sitio de Internet, en la sección de preguntas frecuentes, menciona la sección
771(4)(E) de la Ley de Comercio de los Estados Unidos, según la cual los cosechadores o recolectores
de productos agrícolas pueden hacer una solicitud en contra de un producto agrícola terminado, en
conjunción con los procesadores de dicho producto terminado3.¿Podría Estados Unidos explicar cómo
funciona esta disposición, y en cuantos casos de productos agrícolas se ha utilizado? ¿Cuáles de éstas
se han traducido en la imposición de derechos en las determinaciones definitivas?
8.
El párrafo 73 menciona que el Departamento de Comercio de los Estados Unidos está facultado
para iniciar investigaciones por su propia iniciativa, pero rara vez lo hace ¿Podría Estados Unidos
decirnos cuántos inicios se han realizado bajo la iniciativa del Departamento de Comercio? ¿Cuáles de
éstos se han traducido en la imposición de derechos en las determinaciones definitivas?
9.
Sobre la Enmienda Byrd (párrafos 74, 77, 78, 79) ¿Hasta qué fecha se distribuirán las cuotas
antidumping y compensatorias recolectadas? ¿Dispone Estados Unidos de información sobre los
montos recolectados y distribuidos en el 2005? ¿Qué fuente de información o fuentes de información
oficiales están disponibles para que el público pueda consultar estos datos?
10.
Los párrafos 81 al 84 y el cuadro III.3 presentan estadísticas útiles y relevantes sobre la
aplicación de medidas Antidumping. En particular, al final del el párrafo 83 menciona que el valor de
las importaciones afectadas por las medidas antidumping entre 1980 y 2003 representa el 0.4% de las
importaciones totales. Existe un número de estudios académicos que confirman la intuición de que el
comercio de las mercancías sujetas a este tipo de medida se reduce significativamente no sólo durante
su vigencia, sino también incluso a partir del momento en que se inician las investigaciones, lo que se
denomina comúnmente como el “Chilling Effect” del Antidumping. Para tener una idea más real del
efecto de tales medidas, creo que sería útil contar con información sobre el comercio de los productos
sujetos a estas medidas, antes y después de su aplicación. Para los productos que están actualmente
sujetos a cuotas antidumping y compensatorias, y que no estuvieron sujetos a dichas cuotas en ningún
momento durante el periodo 1996-2001, ¿Podría facilitarnos Estados Unidos las importaciones anuales
para el total de dichos productos en el periodo 1996-2005?
III. POLÍTICAS Y PRÁCTICAS COMERCIALES, POR MEDIDAS / 2) MEDIDAS QUE
AFECTAN DIRECTAMENTE A LAS IMPORTACIONES / iv) Medidas Antidumping y
Compensatorias / c) Acuerdos de suspensión.
11.
El párrafo 94 menciona que, al 31 de diciembre de 2004, Estados Unidos mantenía vigentes
dos compromisos de precios, esto comparado con 273 órdenes de imposición de derechos antidumping.
Los compromisos de precios son una alternativa de solución a las cuotas Antidumping, que ha sido
“U.S. trade law does have a provision permitting harvesters of an agricultural product in certain
situations to file a petition against a finished agricultural product in conjunction with the processors of that
product. For more information please see Section 771(4)(E) of the Act.” la dirección de la página:
http://ia.ita.doc.gov/pcp/pcp-faq.html.
3
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poco aprovechada, y si es aplicada correctamente, elimina el daño causado a la industria doméstica por
la práctica del dumping, a la vez que se minimizan los efectos perjudiciales del antidumping para los
Miembros exportadores. ¿Cuáles son las razones más frecuentes por la que esta alternativa es
rechazada por los Estados Unidos? ¿Qué condiciones se deben cumplir para que se pueda ofrecer un
compromiso de precios?
III. POLÍTICAS Y PRÁCTICAS COMERCIALES, POR MEDIDAS / 2) MEDIDAS QUE
AFECTAN DIRECTAMENTE A LAS IMPORTACIONES / vii) Normas y reglamentos técnicos
/ a) Participación de la OMC y acuerdos comerciales preferenciales.
12.
Respecto de lo mencionado en el párrafo 118, ¿podría Estados Unidos explicar con más detalle
las razones por las que no se han identificado (y por lo tanto, notificado) medidas subfederales
propuestas?
13.
Por lo que se refiere al párrafo 121, ¿podría Estados Unidos explicar si los capítulos
correspondientes a obstáculos técnicos al comercio en los Acuerdos de Libre Comercio que ha
celebrado recientemente o se encuentra negociando, aplican al sector de bienes y también al de los
servicios? En caso de que la respuesta sea negativa, ¿podría Estados Unidos explicar porqué no
consideró procedente establecer reglas para las normas y reglamentos técnicos aplicables a los servicios
en dichos capítulos? (a diferencia del patrón seguido en el capítulo XI del Tratado de Libre Comercio
para América del Norte).
III. POLÍTICAS Y PRÁCTICAS COMERCIALES, POR MEDIDAS / 2) MEDIDAS QUE
AFECTAN DIRECTAMENTE A LAS IMPORTACIONES / vii) Normas y reglamentos técnicos
/ b) Reglamentos técnicos.
14.
En cuanto a lo descrito en el párrafo 122, ¿podría Estados Unidos indicar si pretende
comunicar regularmente a los Miembros del Comité de Obstáculos Técnicos al Comercio los
Programas Reglamentarios Unificados y Planes de Reglamentación?
15.
Con relación a lo señalado por el párrafo 123, ¿podría Estados Unidos señalar si la expedición
y elaboración de Leyes por parte del Congreso se encuentra también sujeta a los principios de la Ley de
Procedimiento Administrativo, cuando dichas leyes son o contienen reglamentos técnicos, tal y como
se encuentran definidos por el Acuerdo sobre Obstáculos Técnicos al Comercio?
16.
Respecto de lo señalado en el párrafo 125, ¿podría Estados Unidos explicar si existe la
obligación de elaborar manifestaciones de impacto regulatorio antes de proponer el desarrollo de un
reglamento técnico? De ser así, ¿podría Estados Unidos explicar si dichas manifestaciones de impacto
regulatorio están disponibles para el público (incluyendo nacionales extranjeros) y en qué lugar? En el
caso de los análisis de costo-beneficio que se deben presentar a la Oficina de información y Asuntos
Reglamentarios de la OMC están disponibles para su consulta y, en su caso, observaciones por parte
del público?
17.
Por lo que se refiere al párrafo 126, México desearía conocer con más detalle ¿qué se entiende
por “examen por homólogos”?
18.
En cuanto a lo previsto por el párrafo 129, ¿podría Estados Unidos indicar si tiene previsto en
el futuro elaborar estadísticas sobre el grado de armonización de sus reglamentos técnicos con las
normas internacionales?
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III. POLÍTICAS Y PRÁCTICAS COMERCIALES, POR MEDIDAS / 2) MEDIDAS QUE
AFECTAN DIRECTAMENTE A LAS IMPORTACIONES / vii) Normas y reglamentos técnicos
/ c) Normas.
19.
Por lo que se refiere a lo señalado por el párrafo 140, ¿podría Estados Unidos explicar en qué
casos los gobiernos pueden elaborar normas y cuál es la razón por la que 25 organismos públicos
federales utilizan normas elaboradas por gobiernos?
20.
Respecto del acuerdo entre los Estados Unidos y las CE sobre practicas de elaboración y
etiquetado de vino, descrito en el párrafo 143:
a) ¿podría Estados Unidos indicar cuáles serán las implicaciones de ese acuerdo (en particular,
de los reconocimientos de términos semi-genéricos y términos regulados) para las importaciones de
vino de terceros países a su territorio?, y
b) ¿podría Estados Unidos indicar cuándo se tiene previsto iniciar la segunda fase de
negociaciones y qué otras cuestiones comerciales relacionadas con el vino se abordarán en ellas?
III. POLÍTICAS Y PRÁCTICAS COMERCIALES, POR MEDIDAS / 2) MEDIDAS QUE
AFECTAN DIRECTAMENTE A LAS IMPORTACIONES / viii) Medidas sanitarias y
fitosanitarias / c) Ley contra el Bioterrorismo.
21.
¿Podrían los Estados Unidos informar si existen anteproyectos de modificación a la Ley contra
el Bioterrorismo, o bien respecto de los reglamentos publicados por la FDA para aplicar las
prescripciones de dicha Ley?
IV POLÍTICAS COMERCIALES, POR SECTORES / 3) Servicios financieros / ii) Marco
legislativo y reglamentario b) Servicios bancarios.
22.
En el párrafo 68 se menciona a la Ley de Actividades Bancarias Internacionales de 1978 como
la norma principal por la que se rigen las operaciones de los bancos extranjeros en territorio
estadounidense. Adicionalmente, también se menciona a la Ley Riegle-Neal sobre Bancos y Sucursales
Interestatales de 1994, la cual permite establecer sucursales en distintos Estados mediante fusión o
mediante el establecimiento de sucursales nuevas. México está interesado en conocer con mayor
amplitud y detalle el contenido de dichas leyes. ¿Existirá alguna página en Internet en donde se puedan
consultar ambas leyes?
23.
En el párrafo 71 se menciona lo siguiente: “…Además, existen pocas limitaciones al
establecimiento de una sucursal o agencia federal por un banco extranjero…” México quisiera saber
cuáles son esas “pocas limitaciones” a las que se hace referencia.
24.
En el párrafo 73 se hace referencia a la ley "USA Patriot" que establece medidas nuevas y más
amplias para prevenir, detectar y enjuiciar los actos de blanqueo de dinero y terrorismo. ¿Podría dicha
ley propiciar situaciones de trato discriminatorio entre nacionales estadounidenses y extranjeros en
cuanto a la prestación y establecimiento de servicios bancarios?
IV POLÍTICAS COMERCIALES, POR SECTORES / 3) Servicios financieros / ii) Marco
legislativo y reglamentario c) Servicios relacionados con los valores.
25.
En el párrafo 76 se señala que los corredores y agentes extranjeros están exentos en ciertas
circunstancias de la prescripción de registro. México está interesado en saber a que se refiere la frase
“en ciertas circunstancias”.
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IV POLÍTICAS COMERCIALES, POR SECTORES / 3) Servicios financieros / ii) Marco
legislativo y reglamentario d) Servicios de seguros.
26.
El párrafo 88 señala que trece Estados de la Unión Americana no tienen un mecanismo que
autorice la entrada inicial de compañías de seguros no estadounidenses en calidad de sucursales; pero
podrían otorgar tales derechos si la compañía de seguros ha obtenido licencia en otro Estado del país.
¿Existe algún plan para eliminar ese trato diferenciado entre Estados para las compañías de seguros no
estadounidenses?
IV POLÍTICAS COMERCIALES, POR SECTORES / 5) Transporte Marítimo / i) Principales
características y consideraciones de política de competencia.
27.
En el párrafo 118 se menciona que ESTADOS UNIDOS no incluyó los servicios de transporte
marítimo en su oferta inicial de servicios. México está interesado en conocer la razón de dicha
exclusión.
IV POLÍTICAS COMERCIALES, POR SECTORES / 5) Transporte Marítimo / iii) Comercio
internacional por vía acuática.
28.
En el párrafo 122 se señala que los Estados Unidos han negociado acuerdos marítimos
bilaterales con cuatro países. México quisiera conocer la cobertura y alcance de dichos acuerdos.
29.
¿Existe alguna limitación o trato discriminatorio para empresas extranjeras que busquen
invertir en empresas estadounidenses que se dedican al comercio internacional por vía acuática?
30.
En el párrafo 126 se menciona que existe un Programa de Seguridad Marítima, el cual da
apoyo financiero a la marina mercante estadounidense, con el fin de asegurar que cierto número de
buques de la flota comercial son aptos para uso militar y están disponibles para operaciones de
transporte marítimo en tiempo de guerra o en situaciones de excepción. México considera que dicho
Programa podría causar distorsiones al comercio marítimo internacional, ya que con base en el apoyo
financiero mencionado se podría poner en desventaja a otras naciones que estén compitiendo en este
sector y que buscan condiciones de acceso no discriminatorias. En este sentido, México solicita una
explicación más amplia sobre este asunto.
IV POLÍTICAS COMERCIALES, POR SECTORES / 5) Transporte Marítimo / v) Construcción
naval y reparación de buques.
31.
En el párrafo 138 se menciona que no hay restricciones a la inversión extranjera en astilleros o
instalaciones de reparación de buques de los Estados Unidos, pero las prestaciones de determinados
programas pueden estar supeditadas a prescripciones de nacionalidad. México está interesado en
conocer si existe algún plan para cambiar este trato diferenciado.
IV POLÍTICAS COMERCIALES, POR SECTORES / 6) Servicios de Transporte Aéreo / i)
Características principales.
32.
El párrafo 144 señala que los aeropuertos estadounidenses con servicios comerciales son
propiedad del gobierno estatal o local. No obstante, existen algunos servicios aeroportuarios tales como
las operaciones en las terminales y las zonas de aparcamiento, el transporte en tierra, el mantenimiento
de edificios, la publicidad, la manipulación de los equipajes, la construcción y la ingeniería, los cuales
pueden prestarse mediante contratación externa y contratos de gestión. En este sentido, México está
interesado en conocer si dichos servicios pueden ser prestados por nacionales extranjeros y si existe
algún límite para la participación de inversionistas extranjeros en compañías proveedoras de estos
servicios.
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IV POLÍTICAS COMERCIALES, POR SECTORES / 6) Servicios de Transporte Aéreo / ii)
Marco reglamentario.
33.
El párrafo 148 señala que el Departamento de Transporte de ESTADOS UNIDOS permite, en
ciertas circunstancias, que ciudadanos extranjeros sean propietarios de hasta el 49 por ciento de las
acciones de una compañía aérea sumando acciones sin derecho y con derecho a voto. México quisiera
una explicación más amplia de la expresión “en ciertas circunstancias”.
JAPAN
Report by the Secretariat (WT/TPR/S/160)
I. DEVELOPMENTS IN TRADE AND INVESTMENT POLICY
(1) INSTITUTIONAL AND POLICY FRAMEWORK
(i) Institutional and recent changes
Q1. The Exon-Florio provision (p.14, para.7)
The Exon-Florio provision (Section 721 of the Defense Production Act of 1950) provides a mechanism
to review and, if the President finds necessary, to restrict foreign direct investment that might threaten
the national security of the United States. In general, the Government of Japan fully understands the
necessity of regulations for national security reasons. The Government of Japan has concerns,
however, about the provision from the following viewpoints: (1) the lack of predictability for investors
due to an ambiguous definition of “national security”; (2) the lack of legal stability due to the
possibility that completed transactions can also be subject to future investigation; and (3) the lack of
due process, illustrated by non-disclosure of the facts, such as the reasons for the commencement of
investigation or the final decisions by the President. The Government of Japan is also concerned that
this provision could impede investment activities of Japanese companies beyond the extent necessary
for its original purpose. The Government of Japan urges the Government of the United States, in
implementing the Exon-Florio provision, not only to comply with the WTO rules but also to take
necessary measures to ensure transparency and fairness, to the maximum extent possible, in the process
from the notification to the Committee on Foreign Investment in the United States to the final decision
by the President. In these respects, please indicate the specific views of the Government of the United
States.
(ii) Legislative developments
Q2. Deficit Reduction Act of 2005 (p.15, paras.13 to14)
Regarding the controversial, Deficit Reduction Act of 2005, Democrats have argued that the Act is not
constitutional because the bill the House cleared on 1 February differed from the version passed by the
Senate on 21 December and said that it would ultimately go to court. The Act includes a provision
repealing the Byrd Amendment, which was determined inconsistent with WTO rules, and the program
for cotton. In this regard, please indicate the future perspective for the Act and the measures taken by
the Government of the United States.
Q3. Product Liability Law (p.15, paras.13 to 14)
The Product Liability Law in the United States constitutes a heavy burden for Japanese and U.S.
companies doing business in the United States, because of a large amount of damages and soaring
liability insurance premiums. The Government of Japan welcomes the efforts made by the Government
of the United States to achieve the tort reform. However, the tort reform is focused on some specific
areas such as asbestos litigation reform, medical liability reform, and Protection of Lawful Commerce
in Arms, and has not made any tangible progress on the reform of product liability, which constitutes a
majority of lawsuits. The Government of Japan therefore urges the Government of the United States,
as a part of the tort reform, to support and encourage the reform currently underway in many States to
limit product liability, and to promote the reform of product liability law at the federal level by placing
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limits on the amount of damages, and by shortening the limitation period, which has already been
attempted by relevant bills submitted to the Congress. In these respects, please indicate the specific
views of the Government of the United States.
(2) PARTICIPATION IN THE WTO
Q4. Bills that are inconsistent with the WTO (p.15 to 16, paras.15 to 21)
When legislative bills which if enacted will be apparently WTO-inconsistent are submitted, the U.S.
administration should try to convince the legislative branch not to pass such bills. In this regard, please
indicate the specific views of the Government of the United States.
Q5. Compliance with WTO recommendations (p.16, para.20)
There are dispute settlement cases in which the United States is yet to secure full implementation of the
DSB recommendations and rulings, well beyond the reasonable period of time granted under the DSU.
This is a regrettable situation in the sense that the United States, a key Member of the WTO who is
expected by many to demonstrate an exemplary manner, is in fact compromising the credibility of the
dispute settlement mechanism of the WTO. In this regard, please indicate the specific views of the
Government of the United States.
Q6. Submission of the report required in the WTO (p.16, para. 21)
(1) There has been no submission, since 2000, of the annual report in accordance with Article 7(3) of
the WTO Import Licensing Agreement. Please provide information on obligations regarding new
import licensing other than those contained in the notice of amendment under Article 5(1) of the
Agreement.
(2) Japan also requests the U.S. to submit the latest annual report expeditiously. In this regard, please
indicate the specific views of the Government of the United States.
II. TRADE POLICIES AND PRACTICES BY MEASURE
(1) MEASURES DIRECTLY AFFECTING IMPORTS
(i) Customs procedures and rules of origin
Q7. Maritime transport security (p.26, para.18)
As a part of initiatives for counter-terrorism, the United States has enforced the regulations
implementing the advance electronic submission of cargo information under the Trade Act of 2002,
and obliged to submit to the U.S. customs authorities the manifest of the international sea container
bound for the United States to the U.S. customs authorities no later than 24 hours prior to loading. As a
result, the deadline for delivery of containers to the yard, which had been commonly set around 24
hours prior to loading, has been moved up by 48 hours. This has decreased the efficiency of
distribution and imposed a huge burden on the operators including those with excellent compliance
records. The Government of Japan urges the Government of the United States to take measures for the
deregulation of the advance presentation of electronic cargo information (such as establishing deadline
extension) and the expansion of benefits to the participants of the Customs-Trade Partnership Against
Terrorism (C-TPAT), such as their exemption from the 24-hour rule and a reduced number of
inspections, in consideration of the compatibility between thorough security measures and efficient
distribution. In these respects, please indicate the specific views of the Government of the
United States.
Q8. Labeling requirements of origin for watches and clocks (p.29 to 30, paras.34 to 40)
Japan has long requested the Government of the U.S. to simplify its labeling requirements of origin for
watches and clocks. However, they have not been improved. Please indicate the specific views of the
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Government of the U.S. on when the system of its labeling requirements of origin for watches and
clocks will be simplified.
(ii) Tariffs
Q9. Complicated tariff system on garments, clocks and watches (p.31 to 32, paras.46 to48)
(1) The tariffs of some products in the U.S. are very complicated. For example, they levy tariffs on
ensembles based on the tariffs of each garment in the ensembles, not the bound tariff rate themselves.
They also levy tariffs on completed watches and clocks based on the tariffs of their parts and therefore,
tariffs are different for each watch and clock depending on their compositions. Japan would like to
know why the U.S. uses a complicated tariff system like this for some products and would like to know
the background for using this system.
(2) Japan has been informed that the tariff system of watches and clocks is linked with their labeling
system of origins, and there was a case that the U.S. abolished the obligation to indicate prices of parts
used in digital watches on the invoice, when the tariff of digital watches itself was eliminated.
Therefore, we understand that the elimination of tariffs for watches and clocks would imply elimination
of their labeling system of origin. In this regard, please indicate the specific views of the Government
of the United States.
(iii) Anti-dumping and countervailing actions
Q10. Continued Dumping and Subsidy Offset Act (p.36, para.74)
The Government of Japan welcomes that in February 2006 the Deficit Reduction Omnibus
Reconciliation Act 2005, which contains the provisions repealing the CDSOA, was approved by the
U.S. congress and was signed into law by the President of the U.S. Though this is a significant step
forward, Japan deeds that the U.S. has not fully taken the actions necessary to implement the rulings
and recommendations by the WTO Dispute Settlement Body (DSB) because the Act decrees that duties
on entries of goods made and filed before October 1, 2007 shall be distributed; thus the repeal of the
CDSOA will not have immediate effect and is postponed by a transitional clause. This means that,
although the CDSOA was repealed on its face, in substance it will remain in force for some time by
virtue of the transitional clause. Therefore, Japan urges the U.S. to immediately bring it fully in
compliance with the DSB’s recommendations and rulings. Japan also urges the U.S. to terminate the
aforementioned distribution immediately. In these respects, please indicate the specific views of the
Government of the United States.
Q11. Lawsuit related to the Anti-Dumping Act of 1916（p.38, para.77)
The Anti-dumping Act of 1916 was repealed on December 3, 2004. However, the Government of
Japan is concerned about the ongoing lawsuit against a Japanese company under the Anti-dumping Act
of 1916. The Government of Japan urges the Government of the United States to work on the judicial
authorities, through actions such as filing Amicus Curiae Brief, to prevent damages being inflicted
upon the Japanese company by a judgment based on the Act that was found inconsistent with the WTO
agreement and repealed already. In this regard, please indicate the specific views of the Government of
the United States.
Q12. Anti-Dumping measures on Certain Hot-Rolled Steel Products from Japan (DS184) (p.39,
paras. 82 to 83)
With regard to the dispute regarding the anti-dumping measures on certain hot-rolled steel products
from Japan, the measures taken by the United States were found inconsistent with the WTO Agreement
in August 2001. However, the Government of the United States has not fully implemented the WTO
Dispute Settlement Body (DSB)’s recommendations and rulings that called for certain legislative
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amendments. More specifically, the United States’ Tariff Act of 1930 requires the inclusion of
margins, concerning the companies under investigation, established in part based on “facts available”
in calculating “all others’ rate”. We are aware that a bill has been introduced in the US House of
Representatives (H.R.2473) that seeks to implement the DSB’s recommendations and rulings with
respect to the U.S. anti-dumping statute in May 2005. Please explain the present status of the
discussions in the Congress.
Q13. Softwood lumber from Canada（p.40, para.85 and p.42,para.92)
Japan and the United States are among the main import countries of softwood (coniferous) lumber from
Canada. We recognize from this report that the United States is in consultations with Canada
concerning the review of CVD (countervailing duties) orders on certain softwood lumber products
from Canada as of October 2005, and the WTO panel in November 2005 found that the USITC’s
Section 129 injury determination was not inconsistent with the AD (Anti-dumping) and SCM
(Subsidies and Countervailing Measures) agreement. In this regard, please indicate the present status
as well as the future prospects of these negotiations.
Q14. Zeroing (p.40 to 41 paras.87 to 88)
The Panel procedure is on-going for the case under which Japan challenges the “zeroing” procedures of
the United States. The zeroing procedures in original investigations have been already found
inconsistent with the WTO Agreement by the Appellate Body in EC—Anti Dumping Duties on Imports
of Cotton-type Bed Linen from India and United States—Final Dumping Determination on Softwood
Lumber from Canada. In addition, the Panel report for the case where the EC challenged the
United States’ zeroing methodologies was issued and circulated to the Members in October 2005. In
the report, the Panel found that the U.S. zeroing methodologies in original investigations were
inconsistent with the WTO Agreement on both an “as such” and “as applied” basis. The Government
of Japan deems zeroing procedures, not only in the original investigations but in any anti-dumping
proceedings, inconsistent with the WTO Agreement, and urges the Government of the United States
not to apply zeroing procedures in any anti-dumping proceedings. In this regard, please indicate the
specific views of the Government of the United States.
Q15. Model-Matching on administrative reviews (p.43, para.95)
(1) In calculating dumping margins, one needs to classify different models of the product in question
and its domestic “like product”, and then determine a domestic product model that is “identical” to or
“closely resembling” the export product model (so-called “model-matching”). In the annual review of
anti-dumping measures on ball bearings imported from Japan in FY2003/2004, the Department of
Commerce announced without any convincing reasons the revision of the model matching
methodology that had been used without any significant problems in the past fourteen anti-dumping
reviews. The new methodology proposed by the Department of Commerce, which compares prices of
dissimilar products, will reduce the predictability of the results of anti-dumping investigations, and
impose excessive burdens on Japanese exporters to submit an enormous amount of domestic sales and
price data. In addition, the Government of Japan is deeply concerned that reviews through the new
methodology are applied retroactively to the transactions prior to the introduction of the methodology.
Japan would like to ask the Government of the United States why the retroactive application to imports
before entry into force of the new methodology can be allowed, taking into account the basic principle
of non-retroactivity.
(2) Also, Japan urges the U.S. to fully recognize the evident unfairness of the new methodology that
causes the aforementioned problems, and to rescind the revision of the methodology. In this regard,
please indicate the specific views of the Government of the United States.
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Q16. Changed circumstances review of the determination of the past administrative review (p.43,
para.95)
With regard to the changed circumstances review of the revoked order on large newspaper printing
presses and components thereof (LNPPs) initiated by the Department of Commerce (the DOC) in
May 2005, it was announced in the final determination on 2 March 2006 that the DOC, (1) revised the
margin of Tokyo Kikai Seisakusho(TKS) for the 1997-1998 review to apply a rate of 59.67 percent,
(2) rescinded the anti-dumping duty order for TKS in January 2002, and (3) will reopen for
reconsideration a sunset review in 30 days.
The revocation of the order on LNPPs in 2002 was based on the fact that the domestic industry
withdrew its interest in the sunset review proceedings, and this is not at all relevant to the reason why
the new sunset review will be initiated, which is "TKS's deliberate misconduct".
In addition, if the revoked order is restored by the reconsideration, it will affect not only the company
subject to the changed circumstances review, but also other Japanese exporters. This would seriously
undermine the predictability of the normal business transactions of the exporters. The Government of
Japan is also concerned with this aspect. With respect to reconsidering the sunset review based on the
irrelevant reason of the revocation of the order in the past sunset review by the Government of the
United States, please indicate the reason why it is consistent with Article 11.3 of the AD Agreement.
Q17. Sunset Reviews (p.43, paras. 96-101)
The United States sunset review procedures, by their related legislations, regulations, policy bulletins
and in their actual implementations, maintain anti-dumping measures in principle, and terminate them
only in exceptional cases. Although the WTO Dispute Settlement Body rejected Japan’s claim for the
corrosion-resistant carbon steel flat products case, Japan still deems the United States’ sunset review
procedures not consistent with the WTO Anti-dumping Agreement. Indeed, many anti-dumping
measures are not terminated in five years and remain in force for a long time. We understand that the
anti-dumping duty on polychloroprene rubber has continued for more than 30 years and users in the
United States complain about this long-term measure. Japan urges the United States to terminate antidumping measures within five years, in principle, even before anti-dumping negotiations under WTO
Doha Development Agenda strengthen regulations related to the sunset legislation. In this regard,
please indicate the specific views of the Government of the United States.
(iv) Quantitative restrictions and controls
Q18. On-sale License of Alcoholic Beverages in the State of California (p.47 to 48, para. 113)
In the State of California, on-sale licenses that permit the sale of wine for consumption on the premises
where sold also authorize the sale of soju, an imported Korean alcoholic beverage which contains no
more than 24 percent of alcohol by volume and is derived from agricultural products. However, these
on-sale licenses do not permit the sale of shochu, an imported Japanese alcoholic beverage derived
from agricultural products, for consumption on the premises where sold. The Government of Japan
therefore urges the Government of the United States to permit the sale of shochu with the on-sale
license as is permitted for soju. In terms of alcohol content, the Government of Japan also urges the
Government of the United States to permit the sale of shochu that contains 24 percent or more and not
more than 26 percent of alcohol by volume with the on-sale license. In these respects, please indicate
the specific views of the Government of the United States.
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(v) Standards and technical regulations
Q19. Certificate of Label Approval on Alcoholic Beverages Imported into the United States (p.50,
para.130)
According to Part 4 Section 40, Part 5 Section 51, and Part 7 Section 31 of the Code of Federal
Regulation, Title 27, no imported alcoholic beverages in containers shall be released from the
United States Customs custody for consumption unless there is a certificate of label approval (ATF
Form 5100.31). Due to the regulations, even the alcoholic beverages intended for use as samples for
tasting must have the certificate of label approval prior to the import into the United States, which
stands as a high barrier for Japanese people to conduct promotion campaigns of Japanese alcoholic
beverages in the United States. The Government of Japan urges the Government of the United States
to allow imported alcoholic beverages which will be used as samples for tasting to be imported into the
United States without certificate of label approval. In this regard, please indicate the specific views of
the Government of the United States.
Q20. Automobiles Labelling Act (p.50, para.130)
Automobiles weighing less than 8,500 pounds, which are sold in the U.S., are obliged to labelling, such
as the percentage of U.S. or Canadian parts, the final assembling ratio, the final place of assembly and
the place of manufacture of the engine and transmission. This is aimed at stimulating the U.S.
consumers' spirit of "buy American", while placing much burden on the automobile manufacturers by
creating various kinds of labels based on dates and types. In addition, the real state of the procurement
rate is not properly calculated: for example, the procurement ratio does not reflect the labour cost of the
assembly lines. Regarding this Labelling Act, in March 2003, the Association of International
Automobile Manufacturers (AIAM) submitted a report to the Congress which pointed out some
problems such as: 1) the labelling rule does not provide enough information which support consumers
to make better choice of purchase; and 2) consumers are not quite interested in the labelling rule. In
these respects, Japan would like to know whether the U.S. plans to review the labelling rule.
Q21. Metric System (p.52, para.137)
The metric system is adopted as the international standard unit system by the International
Organization for Standardization and other international organizations in developing international
standards and criteria. While most countries have adopted the metric system, the United States
continues to use the unit of the yard and pound despite its accession to the Metre Convention. This
causes not only inconveniences in daily life but also obstacles in international trade. Given that the
Agreement on Technical Barriers to Trade (TBT) recommends reducing technical barriers on trade by
adopting international units, it is not in accordance with the WTO agreements, including the TBT
Agreement, that the United States is not taking necessary measures to promote the metric system. The
Government of Japan therefore urges the Government of the United States to ensure thorough adoption
of the metric system in public and private sectors of the United States. We also urge the Government
of the Untied States to provide information on its policy measures to promote the adoption of the
metric system. In these respects, please indicate the specific views of the Government of the
United States.
Q22. Container’s Weight Limit (p.52, para.137)
A large number of countries, including Japan, approve the limits of the maximum weight to 30.48
metric tons by container in transport freights, which is based on the international cargo standard
provided by the International Organization for Standardization. On the other hand, the U.S. federal
weight laws set weight standards not for cargoes or the boxes in which they move, but for the total
vehicle combination and its relative axle weights. The maximum gross vehicle weight on interstate
highways is 80,000 pounds (36.3 metric tons) except where lower gross vehicle weight is dictated by
the bridge formula. A freight tonnage can be calculated by subtracting (1) the weight of the tractor (the
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average weight is from 9 to 12 metric tons); (2) the weight of the container trailer (the average weight
is from 4 to 6 metric tons); and (3) the weight of the container itself (the average weight is around
3 metric tons) from the maximum gross vehicle weight. As a result of calculation, the remaining
weight is from 15 to 20 metric tons, which is below the maximum freight tonnage (30.48 metric tons)
provided by the International Organization for Standardization, by 10 to 15 metric tons (22 to 33
thousand pounds). The Government of Japan urges the Government of the United States to recognize
that the container’s weight limit set by the federal weight laws is inconsistent with the ISO regulation,
hampers the efficiency of logistics, causes a delivery delay by U.S. transport agencies, and increases
transport costs. Concerning the regulation of weight standards, we also urge the Government of the
United States to raise the upper limit of the maximum gross vehicle weight by 10 pounds from the
present 8 pounds, in order to conform to the international cargo standard. In these respects, please
indicate the specific views of the Government of the United States.
(vi) Sanitary and phytosanitary measures
Q23. The Bioterrorism Act (p.57, paras.161 to 164)
(1) With regard to the Public Health Security and Bioterrorism Preparedness and Response Act of 2002
(the“Bioterrorism Act”), the Government of Japan urges that an excessive burden should not be
imposed on exporters or individual senders of food beyond the level required by the purpose of the
Bioterrorism Act, that is, the protection of the United States from the threat of bioterrorism. In this
regard, please indicate the specific views of the Government of the United States.
(2) In particular, the Government of Japan has urged the Government of the United States not to oblige
non-commercial senders of food for non-commercial purposes and retail stores or other commercial
shippers on behalf of non-commercial individuals, if the non-commercial nature of the shipped food is
clearly declared on the parcel, to be subject to the prior notice requirement under the forthcoming final
rule. Please explain how the Government of the United States considers our request.
(3) The Government of Japan urges the Government of the United States to establish a contact point at
which Japanese nationals, particularly small- and medium-sized food processors and individuals, could
inquire in Japanese about the latest status of the related rules and guidelines and procedures to be taken
on the registration of food facilities, including the prior notice requirement. In this regard, please
indicate the specific views of the Government of the United States.
(4) The Government of Japan urges the Government of the United States to inform food processors, the
Japan Post, commercial transport service providers and Japanese nationals in general of any future
changes in the rules without delay through appropriate means. In this regard, please indicate the
specific views of the Government of the United States.
(5) The Government of Japan urges the Government of the United States to shorten the time for
procedures such as issuance of licences for importation. In this regard, please indicate the specific
views of the Government of the United States.
(vii) Trade-related environmental regulations
Q24. Ensuring consistency of environmental regulations across States (p.58 to 60, paras.169 to
175)
Many companies are incurring unnecessarily high costs in meeting environmental regulations that are
at variance from State to State, for example in the area of regulations related to global warming and
recycling. With regard to ensuring consistency of environmental regulations across States, please
indicate the specific views of the Government of the United States.
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Q25. CAFE (p.59, para.175)
The Energy Policy and Conservation Act of 1975 requires automobile manufacturers to calculate the
corporate average fuel economy (CAFÉ), which should clear certain thresholds for the purpose of
environmental protection. When calculating CAFÉ figures, it is necessary to compute the rate of
domestic manufacturing for each line, and to obtain the standards of fuel consumption for domestic and
imported automobiles respectively. However, as automobiles obtain standards in their own category,
the differentiation of domestic and imported vehicles sometimes brings out negative effects on the
improvement of fuel efficiency itself, which was the initial goal. Companies specializing in imported
and fuel inefficient large-sized cars and sports-type cars experience disadvantages. Automobile
industries, not only Japanese but also American, have been claiming that this measure may distort
sound investment activities by private companies and have demanded improvement. Japan would like
to know whether the Government of the United States has a concrete plan on tightening or loosening
the existing regulation.
(2) MEASURES DIRECTLY AFFECTING EXPORTS
(i) Export restrictions and controls
Q26. Re-export Control (p.60, paras. 176 to188)
(1) The US requires export licenses on the re-exports of U.S.-origin items even if they have already
received export licenses from exporting countries. Such a regulation could be recognized as an
extraterritorial application of U.S. domestic law, which is impermissible under the general international
law. In response to the questions by Japan in the TPR of the U.S. in January 2004, the U.S. answered
on page 113 of WT/TPR/M/126/Add.3 that U.S. re-export controls are required under the federal law
and reflect a long-standing Congressional requirement, and both export and re-export controls are
necessary to protect U.S. national security and foreign policy interests. However, Japan finds little
reason for the U.S. to control re-exports from countries, including Japan, that carry out effective export
controls not only by participating in all the international export control regimes, but also by having
introduced a catch-all system for weapons of mass destruction and their means of delivery. The U.S.
should exclude those countries from application of U.S. re-export control. In this regard, please
indicate the specific views of the Government of the United States.
(2) As Japan mentioned in the previous TPR and in the Regulatory Reform and Competition Policy
Initiative between Japan and the U.S., it still remains a serious problem that importers (re-exporters) of
U.S. origin items are prevented from taking appropriate procedures for export control compliance
because they are not provided with sufficient information on U.S. origin items by U.S. exporters.
Lacking sufficient information on these items, importers (re-exporters) face difficulties in identifying
the items correctly and determining whether they are subject to the U.S. regulations. As a transitional
measure pending exclusion of countries carrying out effective export controls from U.S. re-export
control, the U.S. should oblige its exporters to provide importers (re-exporters) of U.S. origin items
with sufficient information on these items, including ECCNs. Japan notes that the U.S. Department of
Commerce issued its ‘Best Practices for Transit, Transshipment, and Re-export of Items Subject to the
Export Administration Regulations (hereinafter referred to as ‘Best Practices’)’in November 2003 in
which it recommended US exporters to communicate the appropriate ECCNs or other classification
information to the end-user and to the ultimate consignee. However, this ‘Best Practices’ approach is
not legally binding and has not made a substantial change in U.S. exporters’ behavior. In response to
the questionnaire from Japan in the TPR of the United States in January 2004, the U.S. showed its
concern about making ECCNs notifications by U.S. exporters obligatory as follows: One concern we
(the U.S.) note is that the original classification of an export may not be accurate for re-export
transactions. In addition, the classification of the product may change if a U.S. origin item is altered
after receipt. Thus, if a re-exporter used the original classification supplied by the exporter, it may be
incorrect（Page 114, WT/TPR/M/126/Add.3. Japan requires further explanation on this. If an item
not subject to EAR when exported is altered (manufactured, processed) into an item subject to EAR in
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the importing country, is the importer (re-exporter) required to get the license from the U.S.
government? Or, if an item not listed in EAR (an item classified as EAR 99) is altered (manufactured,
processed) into an item listed in EAR in the importing country, is the importer (re-exporter) required to
get the license from the Government of the United States?
(3) It is indispensable for re-exporters to get information on U.S. origin items from U.S. exporters to
comply with U.S. re-export control because it is not easy for them to identify the characteristics of U.S.
origin items and the items incorporated into other products. It is unacceptable that only re-exporters
take responsibility for failures in compliance with U.S. re-export control while U.S. exporters are not
obliged to provide sufficient information of U.S. origin items that is necessary for compliance with
U.S. re-export control. The U.S. should oblige U.S. exporters to provide importers (re-exporters) with
sufficient information on the U.S. origin items as soon as possible. In addition, the U.S. export control
authority should make it a condition of approval of export license applications by U.S. exporters that
they provide importers (re-exporters) with appropriate information, including ECCNs, and exclude
importers (re-exporters) from the application of the U.S. re-export control in the case that such
information is not provided. In this regard, please indicate the specific views of the Government of the
United States.
Q27. Sanction Measures (p. 61, para.183)
The sanction measures taken by the U.S. based on related acts (the Iran and Libya Sanctions Act, the
Cuban Liberty and Democratic Solidarity Act, the Burmese Freedom and Democracy Act as well as
local and municipal sanctions acts) discourage, significantly and unreasonably, investment into, and the
establishment of economic relations with, the countries targeted by these laws, which affect not only
U.S. private enterprises, but also those world-wide. In legal terms, they constitute an extraterritorial
application of domestic laws, which is not permissible under the general international law and may
cause a problem of inconsistency with WTO agreements. Moreover, fairness, transparency and
predictability have not been observed in their applications. Japan, therefore, strongly requests the U.S.
to ensure the consistency of these acts with international laws, and to implement them prudently. In
this regard, Japan would like to know whether there has been any progress on discussions in the
Congress about the amendment of the Iran and Libya Sanctions Act for promoting Iran’s liberalization
(Iran Freedom Support Act), which was proposed both to the Senate and the House last year. In
addition, please provide the latest information on all effective sanctions acts instituted by the states and
local municipalities.
Q28. Export restrictions (p.61, para.186)
Japan, as one of the major wood-products importing countries, is concerned about the log export
restriction by the U.S. The U.S. has explained to Japan that the export prohibition measure aims to
protect wildlife such as spotted owls. Japan, however, regards this measure as a quantitative export
restriction for protecting domestic saw millers, which should be rectified in accordance with the WTO
rules. First of all, the protection of spotted owls and other wildlife must be realized through restricting
harvests but not through export bans. Secondly, only export restrictions have been introduced, while no
regulations have been established for the domestic trade of logs, and the U.S. is even requesting Japan
to expand wood product imports, which are processed from logs. It should be noted that Japan raised
this point in the previous TPR meetings of the U.S. In this regard, please indicate the current specific
views of the Government of the United States.
(ii) Section 301 and related actions
Q29. Unilateral measures (p. 62, paras.189 to190)
Japan is concerned that Section 301 of the Trade Act of 1974 and the related provisions such as
“Special 301” and “the Telecommunications Trade Act of 1988” could be inconsistent with the U.S.
obligations under the WTO contingent upon operations by the U.S. Japan would therefore like to
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request the U.S. to have regard towards consistency with the WTO rules on the occasion of operating
the unilateral measures cited above. In this regard, please indicate the specific views of the
Government of the United States.
(iii) Export assistance
Q30. Tax Treatment for Export Companies (ETI regime; formerly FSC regime) (p.64, paras.196
to 198
As stated in the Report by the Secretariat, the WTO compliance panel in September 2005 concluded
that the U.S. maintains prohibited FSC/ETI subsidies through the transition and grandfathering
measures of the American Job Act of 2004, and therefore, continues to fail to implement fully the
operative DSB recommendations. We are aware that Appellate Body in February 2006 upheld such
Panel’s findings. Please explain how the U.S. plans to implement the DSB’s recommendations.
(4) OTHER MEASURES AFFECTING PRODUCTION AND TRADE
(i) Competition policy
Q31. Competition Policy (p.67, para.212)
How many lawyers/economists are employed in DOJ and FTC respectively?
Q32. Extraterritorial reach of the U.S. Antitrust Law (p. 70, para.223)
A lawsuit of which has identical issue to the Hoffman-Laroche Ltd. v Empagran S.A. is ongoing before
the US Court of Appeals for the Eighth Circuit. The Government of Japan has concern that the
Japanese company could be suffered unforeseeable damages by the extraterritorial reach of the U.S.
Antitrust Law if the jurisdiction of the U.S. Court is admitted in this case. The Government of Japan
requests the Government of the United States to take appropriate action such as filing Amicas Curiae
Brief.
Q33. Matters contained in the Recommendations by the Government of Japan to the
Government of the United States regarding Regulatory Reform and Competition Policy,
7 December 2005 (p.71, para. 227)
(1) There is a mechanism which ensures dialogue between the governments of Japan and the
United States, i.e. the Regulatory Policy Initiatives, as mentioned in paragraph 227 of the Report by the
Secretariat. Under the mechanism, the recommendations were exchanged between the two
governments in December 2005 and the consultation has begun regarding the matters contained
therein. However, the Government of Japan considers it appropriate to readdress several issues at this
TPR meeting. In order to avoid unnecessary negative influence on the smooth movement of natural
persons and economic activities such as trade and investment, the Government of Japan is requesting
information on several issues on immigration control/consular affairs (please see attached papers.).
With regard to immigration control and consular affairs in attached papers, please indicate the specific
views of the Government of the United States respectively.
(2) The Government of Japan also requests the Government of the United States to disseminate
appropriate information in advance to the affected parties should there be any institutional changes. In
this regard, please also indicate the specific views of the United States.
Q34. Government Procurement – general p.72, para 231
What is the “procurement by U.S. agencies outside the United States”? Please provide some examples
which are categorized under this “procurement by U.S. agencies outside the United States”.
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Q35. Buy American Act (p.74, paras.240-246)
The Buy American Act of 1933 provides the US legal basis for discriminating against foreign products
at the federal level of the Government of the United States. The existing Buy American Act, which was
amended by the Uruguay Round Agreements Act, allows the President to refrain from applying the
“Buy American” restriction to countries that: have acceded to the 1994 Agreement; and provide
appropriate reciprocal procurement opportunities for U.S. products and U.S. suppliers. Japan would
like to request the U.S. to abolish Buy American Act, which accords a favourable treatment to the U.S.
products for government procurements not covered by the GPA, from the viewpoint of full application
of the principle of non-discriminatory treatment. Should it, however, be necessary to maintain this Act,
the Government of Japan requests the Government of the United States to implement it in a manner
consistent with the WTO rules. In this regard, please indicate the specific views of the Government of
the United States.
(ii) Trade-related intellectual property rights
Q36. Bilateral intellectual property agreements (p.76, para.252)
The Government of Japan has faithfully implemented the "Japanese Actions to be taken by the Patent
Office", confirmed by the Japan Patent Office (JPO) and the United States Patent and Trademark
Office (USPTO) in the Framework Talks. However, the United States has never entirely implemented
the introduction of an early publication system without exceptions, nor the improvement of reexamination. Japan strongly requests the United States to implement these items completely and
promptly. In this regard, please indicate the specific views of the Government of the United States.
Q37. “Submarine patents” (p.76, paras.252 and 255)
The early publication system in the United States provides exceptions whereby patent applications filed
in the United States, but not filed overseas, or matters included in a patent application filed in the
United States, but not included in the corresponding application filed overseas, cannot be laid open at
the request of the applicant. It is, therefore, possible for a patent application to become a "Submarine
Patent". This system creates serious social and economic loss due to investments in R&D, as the
information on the existence of another application already on file for the same invention is not
available. Any pending applications, already filed with the USPTO at the time of the amendment of the
law in 1994, continue to benefit from the former patent terms (i.e. a 17-year patent term from the date
of the patent grant). Therefore, it is still possible for additional submarine patents to arise. Japan
strongly requests the United States to implement fully and promptly what has already been confirmed
under the Framework Talks: i.e. by abolishing the exceptions from the early U.S. publication system,
and by publishing all applications except those not pending, or those not able to be laid open, after a
period of 18 months from the earliest filing date. In this regard, please indicate the specific views of the
Government of the United States.
Q38. Extension of the patent term (p.76, paras.252 and 255)
The USPTO provides that patent protection may be extended to compensate for any amount of
processing delays and USPTO-caused delays. This extended patent term is guaranteed for at least a 17year patent term. The Government of Japan would like to point out that there is a possibility of
deliberate delays being caused, and that under the U.S. current conditions of not having an adequate
early publication system, there would be other opportunities of creating submarine patents through the
extension of patent terms. In this regard, please indicate the specific views of the Government of the
United States.
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Q39. "First-to-Invent" system (p.76, para.255)
The United States is the only country to use the "first-to-invent" system, which, with regard to the
patent system, makes the United States rather unique. This system, however, lacks certainty and
predictability in the sense that a patentee’s status can be overturned by the appearance of the prior
inventor afterwards. This will provide extra burden to inventors who are required to prepare and keep
documentary evidence to prove the date of invention. Many countries, including Japan, have pointed
out that this issue creates a barrier for foreign companies when trying to penetrate the U.S. business
community. Although the practice of maintaining the first-to-invent system is not necessarily against
the TRIPS Agreement, Japan again requests the United States to adopt the first-to-file system and also
to improve all aspects of the patent systems that restrict trade in the United States. This is due to the
necessity of maintaining a transparent and stable system, as well as reducing the burdens borne by
users through the difference in systems. In this regard, please indicate the specific views of the
Government of the United States.
Q40. Priority in the Paris Convention (Hilmer Doctrine) (p.76, para.255)
The United States has a unique legal principle called “Hilmer Doctrine”, which reasons that the effect
of elimination subsequent applications by third persons on the ground of items on specification being
prior art retoacts only to the filing date in the United States. Foreign applicants usually file
applications, first in their own country and subsequently in the United States, thereby claiming priority
under the Paris Convention. Due to the "Hilmer" doctrine, such foreign applicants cannot prevent the
patent grant from conflicting with applications filed before the actual filing date of any subsequent
applications in the United States, even during the priority period, and thereby may suffer from this
disadvantage. This is against Article 4B of the Paris Convention, which stresses that acts by a thirdparty in the priority period "cannot give rise to any third-party right or any right of personal
possession". This is also inconsistent with Article 2.1 of the TRIPS Agreement which requires
compliance with Article 4 of the Paris Convention. In this regard, please indicate the specific views of
the Government of the United States.
Q41. Language discrimination in international applications under the PCT (p.76, para.255)
Article 102 (e) of the Patent Act provides that a PCT international application has the effect of
eliminating other applications filed subsequent to the application’s international filing date only when
the application designates the United States and is internationally published in English. When a PCT
international application is published in another language however, it does not have the effect of
eliminating subsequent applications. Thus, Article 102 (e) is discriminatory against languages other
than English. In Japan and Europe, international applications are not discriminated on account of
language. Therefore, it is unfair that the same treatment is not guaranteed in the United States. The
limitation of the effect of eliminating subsequent applications by Article 102 (e) narrows the advantage
of the moratorium on submitting translations under the PCT system, and is significantly
disadvantageous to applicants, who need to translate documents into English. The Government of
Japan requests that the Government of the United States abolish the language discrimination based on
Article 102 (e). In this regard, please indicate the specific views of the Government of the United
States.
Q42. Unity of invention (p.76, para.255)
The Government of Japan understands that the USPTO has been implementing a public comment
procedure and is trying to harmonize its patent system with the international system of Patent Law.
However, with regard to the unity of invention, under the current U.S. patent system, the scope of
inventions that can be included in a single application is, according to what we have been pointed out
so far, narrower than that under the systems of the JPO and the European Patent Office (EPO). Thus, a
patentee is obliged to submit multiple applications, thereby increasing the burden. The Government of
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Japan wishes to repeat its request to the Government of the United States to adopt the same criterion for
its unity of invention as that of Japan and Europe. In these respects, please indicate the specific views
of the Government of the United States.
Q43. Information Disclosure Requirement of Prior Art Documents (p.76, para.255)
All applicants for United States patents ought to disclose all important prior art documents of which
they know to the U.S. Patent and Trademark Office (USPTO) until the time that they obtain the patents
for which they have applied. In addition, they ought to submit English translations, in whole of in part,
of prior art documents if such documents are not in English. The Government of Japan therefore
requests that the Government of the United States take measures to reduce the burden on foreign patent
applicants, including eliminating the requirement to submit English translations and shortening the
period of the information disclosure requirement. In this regard, please indicate the specific views of
the Government of the United States.
Q44. Section 211 of the US Omnibus Appropriations Act of 1988 (p.80, para.267)
Please indicate the prospect of the amendment of Section 211 of the Omnibus Appropriations Act.
Q45. Copyright (p.81, para.273)
(1) With regard to the Digital Millennium Copyright Act, we understand that in the United States there
is currently a significant development of businesses in broadcasting / transmitting over computer
networks, such as webcasting or broadcasting/transmitting using IP multicasting technology. Japan
would like to know whether U.S. law provides for limitations/exceptions to the copyright of performers
and phonogram producers that make these broadcasts/transmissions over computer networks possible
without obtaining authorizations to broadcast/transmit from relevant performers and phonogram
producers.
(2) Do lines 6 and 7 of paragraph 273 mean that producers of phonograms do not have any right
concerning terrestrial digital broadcasting?
(3) With regard to “live musical performances” in line 8 of paragraph 273, Article 14 of the TRIPS
Article 14 calls for protection against unauthorized fixation of not only live “musical” performances
but also of all types of live performances, including performances such as the recitation of poems.
Please explain how the United States law protects against the unauthorized fixation of live
performances other than live musical performances.
(4) Concerning lines 1 to 3 of paragraph 274, please explain how broadcasting and cablecasting
organizations obtain authorization from relevant right holders (copyright holders, performers,
producers of phonograms and broadcasting organizations) in order to make simultaneous retransmissions of regular terrestrial broadcasting. Do broadcasting and cablecasting organizations need
to negotiate with the relevant right holders to obtain authorization to make the re-transmission, or is
there a system of statutory or compulsory licenses that enables them to make the re-transmission
without having to negotiate with relevant right holders for authorization? How is the amount of
remuneration decided in each case? Does the amount have to be negotiated as well or is it
automatically decided through some system of statutory remuneration? Are the same questions
applicable where the transmission is made over the Internet and if so, how would the responses be
different?
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III. TRADE POLICIES BY SECTOR
(1) FINANCIAL SERVICES
(i) Legislative and regulatory framework
Q46. Registration Requirements for Foreign Issuers in Case of Business Reorganization (p.98
para.75, 77)
In the fourth year dialogue of the Regulatory Reform and Competition Policy Initiative, the
Government of Japan requested the Government of the United States to abolish the Rule 145 of the
Securities Act of 1933 or mitigate it. This rule provides that when new stocks are issued in a business
reorganization and if U.S. residents come to hold more than 10% of the shares of the target company,
the acquiring company should submit registration forms, including financial statements based on the
United States Generally Accepted Accounting Principles (GAAP) to the Securities Exchange
Commission (SEC). This rule is applied even to non-American companies, which issue new stocks due
to their business reorganization by merger with other non-American companies outside the territory of
the United States.
In the fourth Report to the Leaders on the Regulatory Reform and Competition Policy Initiative, the
Government of the United States answered that SEC had carefully considered the desirable and
appropriate level of U.S. ownership for the purpose of exemption and in the interest of investor
protection, and that SEC had adopted a more tailored relief measure for non-American companies to
address conflicting regulatory mandates and offering practices. The Government of the United States
also mentioned in the report that non-American companies of which American residents’ ratio became
more than 10% due to merger are encouraged to raise specific concerns with SEC.
However, the rule obviously places excessive burden on Japanese companies which have never
reported their financial statements based on USGAAP and reorganized themselves by merger with
other Japanese companies, just because the U.S. ownership of stocks exceeds 10 percent, even taking
into account the need of investor protection. As a basis for this opinion, Japanese laws do not require
non-Japanese companies, which reorganized themselves by merger with other non-Japanese companies
either to file registration formats for issuing new stocks or to disclose their financial statements based
on the Japanese GAAP, even if non-residents’ shareholding ratio exceeds 10% of the total.
The Government of Japan therefore urges the Government of the United States to abolish this
registration requirement that is applied to non-American companies. In this regard, please indicate the
specific views of the Government of the United States.
Q47. Regulations on Sales and Offers of Foreign Investment Trusts (p.98-99 para.78-81)
In the fourth year dialogue of the Regulatory Reform and Competition Policy Initiative, the
Government of Japan requested the Government of the United States not to apply Section 7 (d) of the
Investment Company Act of 1940 and SEC Rule 7d-1 entitled “Specification of Conditions and
Arrangements for Canadian Management Investment Companies Requesting Order Permitting
Registration.” to non-Canadian foreign investment trusts which publicly offer their shares within the
territory of the United States. If not, the Government of Japan requested the Government of the United
States to abolish the following three conditions:
(1) At least a half of directors of investment trusts must be American citizens and reside in the
United States.
(2) Assets of investment trusts are required to be entrusted to banks in the United States; and
(3) Investment trusts are required to use United States Certified Public Accountants.
The Government of Japan recognizes that this rule is still applied to other foreign investment trusts
besides Canadian ones, places excessive burden on foreign investment trusts, and substantially limits
foreign investment trusts’ entry to the U.S. capital market.
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In the fourth Report to the Leaders on the Regulatory Reform and Competition Policy Initiative, the
Government of the United States answered that SEC had issued the orders to investment trusts from
five countries, Canada, Australia, Bermuda, South Africa and the United Kingdom, had also granted
limited exemptive relief from the Rule to a Canadian investment trust, and remained willing to consider
applications for this rule.
The Government of Japan, however, is aware that these are just rare and exceptional measures during
the period between 1950s and 1970s and most of past applicants were not given such orders and
relieves. It is difficult for the Government of Japan to understand that the Government of the United
States ensures enough opportunities for foreign investment trusts to enter into the U.S. investment trust
business by citing a very few exceptional measures. In addition, even though the Government of the
United States answered that SEC remains willing to consider applications for 7 (d) orders, it is still
difficult for the Government of Japan to interpret that the Government of the United States fully
understood the need of exceptional relief for foreign investment trusts.
Furthermore, in terms of costs, it is also very heavy burden for investment trusts of foreign countries,
which are geographically distant from the United States, to fulfill all of the three conditions listed
above.
Therefore, the Government of Japan urges the Government of the United States not to apply Rule 7d-1
to Japanese investment companies or to abolish at least these three conditions. In this regard, please
indicate the specific views of the Government of the United States.
Q48. Qualification of Financial Holding Companies (p.95-96 para.62-66)
To engage in the securities business in the United States with the scope comparable to that of U.S.
securities companies, including underwriting stocks and corporate bonds, foreign banks are required to
obtain the status of Financial Holding Companies (FHCs). In determining whether foreign banks are
comparable to U.S. banks in terms of capital and management, an injection of public funds into their
capitals is taken into consideration as one of negative factors. Because of this criterion, Japanese banks
are having difficulty in gaining the status of FHCs, and the business scope of securities subsidiaries of
these banks is substantially limited in the United States.
In the fourth year dialogue of the Regulatory Reform and Competition Policy Initiative, the
Government of Japan requested the abolishment of this criterion. However, in the fourth Report to the
Leaders, the Government of United States answered that the criterion is not the only factor but one of
several factors that may be taken into account to determine comparability of capital, and that the same
criteria for U.S. bank subsidiaries under FHCs are applied to foreign banks.
Compared to the situation several years ago, the problem of non-performing loan at Japanese banks is
substantially diminishing and their financial conditions have dramatically improved. In light of the
current situation, the Government of Japan urges the Government of the United States to ensure
Japanese banks obtain the status of FHCs, regardless of public fund injection. In this regard, please
indicate the specific views of the Government of the United States.
Q49. Deregulation of Investment into Initial Equity Public Offering by Foreign Investment
Trusts (p.98 para.75-76)
The National Association of Securities Dealers (NASD) Rule No. 2790 basically prohibits NASD
members and other persons associated with these members from conducting the following:
(a) Selling initially publicly offered stocks to accounts in which “restricted persons”, such as security
brokers, dealers and portfolio managers, have beneficial interests
(b) Purchasing these stocks in accounts in which these members and persons have beneficial interests
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This rule stipulates two conditions of exceptional treatments for foreign investment trusts as follows:
(1) Such foreign investment trusts are listed on foreign stock exchanges or authorized by foreign
authorities for public sale; and
(2) No “restricted person” owns more than 5% of the shares of the foreign investment trusts.
However, in the Japanese securities business, securities companies and banks are entrusted by
investment trusts to sell trust funds to their domestic investors, and it is those securities companies and
banks, not investment trusts, that have information about the investors. In addition, it is very difficult
even for these securities companies and banks to check if the second condition mentioned above is
always fulfilled because of the enormous number of investors. As a result of this regulation, Japanese
investment trusts have difficulties in investing their funds into initially publicly offered stocks in the
United States.
Therefore, the Government of Japan urges the Government of the United States to take necessary
measures to enable Japanese investment trusts that do not have any intention to sell their shares to, and
trade initially publicly offered stocks for the benefits of, “restricted persons” to invest their funds into
these stocks. In this regard, please indicate the specific views of the Government of the United States.
Q50. Securities services (p98, para.76)
(1) With respect to cross border trade, how does SEC supervise the foreign companies dealing with
cross border trade?
(2) It is indicated that there are situations where some foreign broker-dealers are exempt from
registration requirements. Please provide the criteria for foreign broker-dealers to obtain exemption.
(3) In the previous TPR, Japan requested the Government of the United States to relax disclosure
requirements in the issuance of new stocks as the reorganization. The response of the U.S. was that
they noted Japan’s concern and statement on the matter. Therefore, we would like to know whether
there has been any progress and the review by the Government of the United States on this
requirement.
Q51. Harmonization and Unification of the State-Based Regulatory Systems or Transition to the
Federal Regulatory System (p.100-102 para.86, 88-91)
Due to the State-based insurance regulation and supervision in the United States, foreign insurers who
wish to conduct insurance business in the United States are required to obtain business licenses in each
State in which they wish to operate. Moreover, insurers are required to apply for approvals of products
and premium rates and notify important matters in each supervisory authority of the States in which
they wish to sell insurance products.
As a result, insurers are obliged to be subject to examinations in every single State in compliance with
the laws of each State to obtain licenses and approvals. In addition, Japanese insurers operating in some
States have been faced with cases in which examinations for licensing and approval took excessively
long time compared with the standard period. These regulations cause unfair burden on insurers and
prevents them from responding customer needs in a timely manner.
Under these circumstances, the Government of Japan requested the Government of the United States to
realize harmonization and unification of the State-based regulatory and supervisory systems in terms of
both procedural and substantial requirements in the fourth year dialogue of the Regulatory Reform and
Competition Policy Initiative. It also requested to expedite examinations and enhance their
transparency in each State. In addition, to resolve these problems, the Government of Japan also
presented its demand that actions for reviewing the current regulatory system should be undertaken not
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only by the National Association of Insurance Commissioners (NAIC) but also by the Federal
Government and that they should inform the Government of Japan of the progress they achieved.
To our disappointment, however, the harmonization and unification of the State-based insurance
regulations have not been realized yet. There has not been any progress in harmonization or unification
of State-based procedure for license and approval. Examinations of these licenses and approvals also
have not been expedited. In addition, neither NAIC nor the Federal Government has provided
information on the measures taken in response to the previous requests from the Government of Japan.
Furthermore, the Government of Japan is aware that even in the United States there is criticism against
the current State-based system and growing voices for abolishing the current system and introducing
the federal regulatory system by establishing the Optional Federal Charter.
Therefore, the Government of Japan urges both the Government of the United States and NAIC to
realize the following:
(a) To harmonize and unify the State-based insurance supervisory systems, or to shift to the federal
regulatory system (Harmonization and unification can be realized by taking substantial measures by
which, for instance, an insurer who has obtained license of a particular line of business or approval of a
new product in one State is deemed to be eligible for the same business or product in other States);
(b) To play a role in promoting harmonization and unification of regulations of the State-based
supervisory system or shift to the federal regulatory system and to present practical timeframe of these
reforms to the Government of Japan; and
(c) To provide information about the progress of the unifying or the shifting to the Government of
Japan in a timely manner to ensure transparency of its process.
In these respects, please indicate the specific views of the Government of the United States.
Q52. Elimination of Reinsurance Collateral Requirement (p.100-102 para.86, 88-91)
Under the current reinsurance regulations of the United States, overseas (re)insurers are, without any
exception, required to post a trust account equivalent to 100 percent of credit amount within the
country, or to submit a letter of credit for collateral, when they conduct reinsurance businesses with
U.S. ceding companies on a cross-border basis. These requirements incur tremendous burden on
overseas insurers in reinsurance business. In addition, the Government of Japan is aware that the
revision of this requirement has been discussed in the United States by NAIC in response to the
concern raised by European insurers. However, it seems that a substantial plan of taking measures to
abolish these requirements has not been presented by NAIC yet.
Therefore, the Government of Japan urges the Government of the United States to take the following
measures:
(a) To eliminate these requirements in order to ensure that Japanese (re)insurers should not be
discriminated against; and
(b) To present a practical timeframe towards elimination of these requirements and to provide
information about its progress in a timely manner to the Government of Japan in order to ensure
transparency of its process.
In these respects, please indicate the specific views of the Government of the United States.
Q53. Abolishment of Trusteed Surplus Requirement (p.100-102 para.86, 88-91)
Under the state-based regulatory system, the Trusteed Surplus Requirement is imposed on not only
foreign insurance companies but also alien insurance companies’ branches in the United States. This
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regulation requires them to hold their major assets, which consist of deposits to the State authorities
and Trusteed Assets, exceeding their net liability at banks or trust companies within the United States.
However, this requirement virtually means that these insurance companies have to deposit enormous
proportion of their assets to these banks and trust companies. The Government of Japan believes that
this restriction excessively blocks flexible fund investment of these insurance companies and causes a
loss of many of their opportunities to gain profits.
Therefore, the Government of Japan urges the Government of the United States and NAIC to abolish
the Trusteed Surplus Requirement applied to alien insurance companies’ branches in the United States.
In this regard, please indicate the specific views of the Government of the United States.
(2) TELECOMMUNICATIONS SERVICES
(i) Institutional framework and market access
Q54. A major supplier in the mobile telecommunication market (p. 102 to 103, paras.93 to 98)
Does the United States assume a “major supplier” to be defined in the Reference Paper developed in
the Negotiating Group on Basic Telecommunication for the mobile telecommunication market? If so,
please explain how the United States guarantees obligations (competitive safeguards, interconnection)
applied to “major suppliers” on interior regulations. In these respects, please indicate the specific
views of the Government of the United States.
Q55. Foreign investment restriction on radio stations (p.103, para.96)
Paragraph 96 states that common carrier radio licences cannot be granted to or held by non-US citizens,
corporations not organized under the laws of the United States, or foreign governments. It is also
stated that licences cannot be granted to U.S. corporations of which more than 20% of the capital stock
is owned of record or voted by any of these entities. However, these statements are followed by a
qualification that licences may be granted to companies set up in the United States that are controlled
by holding companies set up in the United States and in which foreign individuals, corporations, or
governments own of record or vote more than 25% of the capital stock, unless the FCC finds that such
ownership is inconsistent with the public interest. Please explain the reasons why the United States
maintains such a low-level, i.e., 20%, as the limitation of FDI despite the fact that foreign indirect
investment has been 100% liberalized.
(ii) Selected regulatory issues
Q56. Public interest analysis and safeguards on regulations (p.104, paras. 99 to 100)
It is stated in paragraph 99 that “under the Communications Act of 1934, the FCC must conduct a
public interest analysis when evaluating applications to: obtain authority to provide facilities-based or
resold international services under Section 214; receive authorization to exceed the 25% foreignownership benchmark of Section 310(b)(4); or obtain submarine cable landing licences.” It is not
disclosed how long it generally takes for the United States to conduct the “public interest analysis” and
there are cases where the investigations have been extended over long periods of time. For example, in
the case of the assignment of management authority from the time of the Global Crossing to New GX,
more than 1 year passed from the application (Aug. 2002) to when the approval was filed (Oct. 2003).
Japan is concerned that the lack of transparency in the “public interest analysis” will have a detrimental
effect on foreseeability. In this regard, please indicate the specific views of the Government of the
United States.
Q57. Unbundled network element (p.106, para.111)
Although there is a statement in paragraph 111 that “the FCC has pursued a policy of creating
incentives to broadband deployment since 2003, by not requiring the incumbent local exchange carriers
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to unbundle new facilities that are designed to provide broadband services to residential customers,
such as fiber-to-the-home loops, fiber-to-the-curb loops, the high-frequency portion of the loop used
for line sharing, and hybrid loops”, the government of Japan is concerned that revision of these
unbundling regulations would lead to a reduction on the scope of the unbundling obligations specified
in the section 2.2 of the Reference Paper developed in the Negotiating Group on Basic
Telecommunication and adversely affect these obligations. In this regard, please indicate the specific
views of the Government of the United States.
Q58. Distinction between Telecommunication service and Information service (p.106, para.111)
The United States adopts the distinction under the Communications Act of 1934 (as amended) as
follows: “Telecommunication service” is to be subject to obligations of unbundled access and
responsibility for universal service fund, while “Information service” is not to be subject to those
regulations. This distinction has, however, become ambiguous due to development of technology. The
Government of Japan therefore requests the Government of the United States to clarify the distinct
criteria so that foreign suppliers can foresee the types of services classified and what regulations should
be imposed. In this regard, please indicate the specific views of the Government of the United States.
(3) MARITIME TRANSPORT
(i) Main features and competition policy considerations
Q59. Harbor Maintenance Tax (HMT) (p.108, para116-119)
At the meeting of the Automobile Consultation Group (ACG) in January 2003, Japan took up the
Harbor Maintenance Tax as an issue of great concern to the Japanese automobile industry and claimed
that the HMT clearly discriminates against imported cars. Japan would like to know whether the U.S.
has a plan to review the taxation system cited above.
Q60. Maritime transport and competition policy (1) and International water-borne trade (1)
(p.108 para.116 and p.110 para.129)
(1) Though approximately 98% of the U.S. ocean-borne foreign trade is carried on foreign-flag vessels,
the amount of cargo coming within the scope of the U.S. cargo reservation is not negligible considering
that the United States is the largest cargo owner country. Japan requests the U.S. to abolish the Cargo
Preference Measures, such as the requirement to use U.S. vessels to export Alaskan oil, which is
commercial cargo. These protectionist measures are inconsistent with the principle of national
treatment, and are also against the Ministerial Decision on the Negotiations on Maritime Transport
Services of the WTO, which prescribes that participants should not apply any protectionist measures
during the negotiations. In this regard, please indicate the specific views of the Government of the
United States.
(2) Since the repeal of the aforementioned rule, the FMC requires Japanese and U.S. carriers to report
to it on the progress of port situations in Japan. Efforts have been made and signs of progress have
been seen in various aspects: the "prior consultation system" has improved significantly (and the
improved system has been implemented steadily); and the Port Transportation Business Law was
revised to abolish the supply-demand adjustment restriction and thus has realized new entries into port
transport business. Progress has also been made toward the introduction of port terminal service
operations on a 24-hour/364-day basis. Japan strongly urges the FMC to fully understand these
positive developments. Despite significant improvement in the port situation of Japan however, the
FMC introduced in August 2001 a new order, which not only increased the number of items to be
reported, but also expanded the scope of the carriers subject to the reporting requirements. The order
includes requirements which go beyond the extent deemed appropriate to be imposed upon carriers.
For example, it directly requires Japanese carriers to submit translated copies of Japanese laws and
instructions concerned, causing a unfair and excessive burden on the carriers. Should it be the case that
the FMC decided to expand the range of the reporting requirements in order to judge whether or not it
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should impose unilateral sanctions, that would violate the Treaty of Friendship, Commerce and
Navigation between the United States and Japan, and Japan would deem it as a regrettable and serious
abuse of the FMC's mandate. Japan, therefore, strongly requests the U.S. to withdraw the order. In this
regard, please indicate the specific views of the Government of the United States.
Q61. Maritime transport and competition policy (2) (p.108, para 119)
The Federal Maritime Commission (FMC) is authorized by Section 19 (1) (b) of the Merchant Marine
Act of 1920 (the Jones Act) to make rules and regulations affecting shipping in foreign trade. The
FMC imposed a unilateral sanction against Japanese carriers in September 1997. Although the
sanction was removed in May 1999, the FMC still requires carriers to report to it on the situation of the
ports in Japan. The rule (repealed in May 1999), which provided grounds for unilateral sanctions, was
a violation of the Treaty of Friendship, Commerce and Navigation between Japan and the United
States, according to national treatment and most-favored-nation treatment . Japan, therefore, requests
the U.S. to work more closely with the FMC to ensure that such unilateral measures will no longer be
taken. Japan is concerned about the impact of the Jones Act and any other related legislation on
shipping trade, and submitted a list of questions (WT/GC/W/520) at the Review of the General Council
last December. Please provide information about the current situation regarding the responses to the
questions.
Q62. Domestic water-borne trade (p.108, para.120)
The supply of cargo services between two points within the United States is reserved for the ships built
in the United States. Japan requests the United States to abolish such a requirement. Though we
understand that naval ships should be constructed in the U.S. for security reasons, shipping companies
should be allowed to operate vessels constructed in foreign countries, considering, in particular, that,
civil airlines, the domestic railway companies and road transport operators are now allowed to use
aircrafts, trains and trucks made in foreign countries, respectively. Japan would like to know the reason
why the U.S. government imposes a construction requirement only on maritime transport.
Q63. Merchant Shipping Act of 1920 (Jones Act) (p.108-109, para120-121)
At the meeting of WTO General Council in December 2003, Japan requested the United States to
provide information on the progress made on the revision of the Jones Act, and the U.S. submitted
responses to this request. Japan would like to know whether there has been any further progress on the
revision of the Jones Act, and whether the U.S. is planning to revise the Act in the future.
Q64. International water-borne trade (2) (p.109, para.122)
The Ocean Shipping Reform Act of 1998 includes a provision allowing the discriminatory treatment of
Japanese and other foreign shipping firms, by making it possible to impose unilateral regulations on
pricing and other practices. As the pricing practice is the foundation of a free shipping activity on a
commercial basis, unilateral regulations by the FMC on the pricing practice obviously intervenes with
such a free shipping activity, thereby discriminating foreign firms. Furthermore, an amendment to the
Act in 1998 explicitly stipulates the right of the Federal Government to undertake this intervention.
Japan requests the United States to confirm that in the future the FMC shall not impose unilateral
regulations on shipping activities on a commercial basis, conducted by Japanese and other foreign
shipping firms, without having a regard to the reality of the market. In this regard, please indicate the
specific views of the Government of the United States.
Q65. International water-borne trade (3) (p.110, paras.126 to127)
According to the Maritime Security Program (MSP), a new ten-year program began on 1 October 2005
which gives an increased subsidy to the maximum of 60 ships. Japan requests the Government of the
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United States to abolish this program. It is obvious that the provision of such an enormous amount of
subsidy distorts conditions for free and fair competition in the international maritime market. In this
regard, please indicate the specific views of the Government of the United States.
Q66. International water-borne trade (4) (p.110, para.126)
According to paragraph 126 on page 110, a number of programmes are in place to allow the eventual
use of the U.S. commercial fleet for defence purposes. Has there ever been a case where the U.S. made
use of the U.S. commercial fleet for such a purpose in time of war or national emergency and if so,
please provide specific examples and explain under what circumstances it was necessary to do so.
Q67. Port services (P.111, para. 134)
Paragraph 134 on page 111 states that the U.S. intends to resolve the problem of port congestion in the
U.S. with the MARADSs Port Development Program. Please provide information on the content of the
program specifically.
(Attached paper)
Immigration control/consular affairs (Matters contained in the Recommendations by the Government
of Japan to the Government of the United States regarding Regulatory Reform and Competition Policy,
7 December 2005 )
1.
Visa Process
The Government of Japan urges the Government of the United States to:
(a)
Resume visa revalidation at the Department of State, in particular;
(i) Take necessary measures to use equipments to collect biometric identifiers in the
United States for visa revalidation applicants, such as equipments at airports for the
implementation of the US-VISIT program;
(ii) Consider the resumption of domestic revalidation only for certain categories of
visas whose bearers’ status is more reliably guaranteed;
(b) Commence the revalidation of E visas in third countries, and (since there is no statutory
prohibition of the revalidation of E visas in countries other than the United States and bearers’
home countries, and in some reported cases revalidation applications were rejected only due to
insufficient staff,) reinforce the ability to process visa revalidation at the United States
establishments in Canada and Mexico, including reviewing the level of staffing at these places;
and
(c) Shorten the time for visa revalidation in Japan, Canada and Mexico and clarify how long it
takes to revalidate visas, and secure the issue of revalidated visas in a few days after interview
by establishing an organizational setup to prioritize the revalidation process and by completing
a part of the examination of applications before interviews.
2.
(1)
Driver’s License
Real ID Act
The Government of Japan urges the Government of the United States to:
(a) Regard the term of validity of non-immigrant visas, which are valid for a longer time, as the
“period of time of applicant’s authorized stay” so that an excessive burden will not be placed
on Japanese nationals when States implement the Act;
(b) Confine the “official purposes” in the Act to the minimum that are genuinely necessary, and
clarify it so that foreigners do not always need to carry passports with them in case several
States do not comply with the Act or issue non-complying licenses as an option;
(c) Guide and monitor State Governments and related Federal authorities as much as possible
in the scope of the Federal Government’s authority, including by informing them of U.S.
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(2)
3.
immigration policies so that State Governments can change their regulations about driver’s
licenses smoothly; and
(d) Issue the Federal regulations as soon as possible in order to alleviate the concerns among
Japanese nationals which arise from the uncertainty about the actual impact of the Act, and to
avoid confusion as to the implementation of the Act in each State.
Improvement of State Rules
(a) Improvement of Term of Validity of International Driver’s License
A number of Japanese nationals drive with international driver’s licenses in the United States
until they obtain local State licenses, since it normally takes a long time to obtain the latter.
However, many States require foreigners to obtain State licenses upon the fixation of their
residence in the State and void their international licenses. In other states, international
licenses lose effect in a relatively short period, six months for example. Furthermore, the State
of North Carolina does not allow foreigners to drive with international licenses at all.
Therefore, the Government of Japan urges the Government of the United States to request
relevant State authorities to accept one-year term of validity of international driver’s licenses
issued by Japanese authorities, in accordance with the spirit of the Convention on Road Traffic,
to which the United States is also a signatory.
(b) “Sponsor” Requirement in Driving Test in the State of Massachusetts
The regulations of the State of Massachusetts provide that the applicant of driver’s license be
accompanied for a driving test by a “sponsor” who is 21 years or older with a valid driver’s
license issued in the United States and with a minimum of one year of driving experience. It is
often difficult to find an appropriate sponsor for a foreigner immediately after his or her arrival
at the country, and therefore this requirement in Massachusetts has been causing inconvenience
for Japanese nationals to obtain driver’s licenses in the State. It is possible but also costly to
ask an agent to provide a sponsor. The Government of Japan understands that Massachusetts is
the only State that requires a “sponsor” for driving tests. It urges the Government of the Untied
States to request the State authorities to abolish the rule, or otherwise mitigate the requirement
to avoid excessive burden imposed upon foreigners.
(c) Issuance of “Driver’s Certificate” in the States of Tennessee and Utah
Driver’s Certificates issued in Tennessee and Utah do not have a “photo ID” function that
driver’s licenses have, and therefore cause daily inconveniences to Japanese people in the
United States. The Government of Japan urges the Government of the United States to request
these States to abolish the measures.
(d) Restriction of Driving Test Location in the State of Rhode Island
In the State of Rhode Island it used to be possible to take driving tests near the applicant’s
residence. However, the recent change in the rule requires foreigners to take driving test at a
specified location, which is often far away from their residence. The Government of Japan
urges the Government of the United States to request the State to enable foreigners to take
driving tests near their residence as in the past.
Immigration Control by Use of Biometric Identifiers at Port of Entry and Departure
The Government of Japan urges the Government of the United States to:
(a) Collect information on the time required for passengers to pass immigration control, and
take necessary measures to make it shorter;
(b) Protect personal information collected through the US-VISIT program stringently, and
publicize the measures taken for the information protection as much as possible in order to
alleviate Japanese nationals’ concerns about the fact that their fingerprint information is
scanned and possessed by the Government of the United States; and
(c) Make further outreach efforts to promote better understanding of the program by the
Japanese public, especially when changes in procedures are expected to cause confusion, for
example, when the US-VISIT program is expanded in terms of the number of implementing
points of entry and departure, and when radio frequency identification (RFID) technology or
other new technology is introduced.
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4.
Suspension of Visa Waiver Program for Holders of Non Machine-Readable Passport
The Government of Japan urges the Government of the United States to:
(a) Make further efforts to inform relevant sectors, including travel agencies, of the fact that a
holder of a non machine-readable passport cannot enter the United States without a visa, so that
travel agencies confirm the passport of a traveler is machine-readable when the traveler
reserves or purchases an airplane ticket, and prevent in advance a holder of a non machinereadable passport from being rejected to travel to the United States on the very day of
departure; and
(b) Waive visa requirement for the nationals of the VWP countries who have travel documents
that are valid only for their return to the home country as an exceptional case, and continue to
waive visa requirement, after October 26, 2006, for those who have urgent passports issued at
overseas establishments of Japan (valid for a year) or the travel documents without biometrics
identifiers, even though the Government of the United States has decided that holders of non
biometrics passports issued after October 26, 2006, are required to obtain visas to enter the
United States.
5.
Social Security Number
The local agents of the Social Security Administration (SSA) issue Social Security Number
(SSN) after confirming that an applicant is eligible to obtain SSN by checking his or her entry
record on the database provided on-line by the Department of Homeland Security. Though the
Government of Japan is aware that the SSA and the Department of Homeland Security
continue efforts to expedite the process to verify immigration status, it still takes one to two
months for SSA to issue SSNs for foreigners. Since SSNs are required as identification on a
variety of occasions when Japanese nationals start living in the United States, for example, in
opening bank accounts and in contracting for credit cards, the delay in issuing SSNs causes
them significant inconvenience.
Accordingly, the Government of Japan urges the Government of the United States to take
necessary measures to expedite the issuance of SSNs.
6. Individual Taxpayer Identification Number
The Government of Japan urges the Government of the United States to:
(a) Reconsider the rule to enable the application for ITIN at any time before the Federal tax
return filing;
(b) Request the relevant authorities of States that require the presentation of either SSN or ITIN
for administrative procedures, such as application for driver’s license or filing for dependent
family deduction, to accept documentation which certifies their ineligibility to obtain SSN as a
substitute to ITIN; and
(c) Shorten the time to issue ITIN to alleviate the inconveniences of Japanese dependant
family.
7. Permission to Stay
(a) At present, it takes two to three months to extend permission to stay (I-94), and in the mean
time, it is not virtually impossible for Japanese workers in the United States to leave and reenter the country, which creates impediment to their business. The Government of Japan urges
the Government of the United States to expedite the extension process.
(b) The Government of Japan urges the Government of the United States to extend the term of
validity of I-94. In particular, the term of validity of I-94 issued to E visa bearers is two years
at maximum, and one year in some cases, in which case the bearer has to extend his or her I-94
every year. The Government of Japan therefore urges the extension of the term of I-94 issued
to E visa bearers.
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Report by the United States (WT/TPR/G/160)
III. TRADE POLICY DEVELOPMENTS, 2003-2005
(2) REGIONAL INITIATIVES
Q1. U.S. - EU Initiative to Enhance Transatlantic Economic Integration and Growth (p.15-16,
paras. 50-51)
The Initiative, issued at the June 2005 U.S.-EU Summit, reaffirms the importance of the U.S. – EU
regulatory cooperation and agrees on the establishment of the high-level Regulatory Cooperation
Forum as part of its implementation.
(1)Please provide information on the implementation of the Forum, including on the area of early
warning regulatory cooperation.
(2) Please also explain the implementation of the Work Plan, submitted in November 2005, in
accordance with the said Initiative, including information in the areas of intellectual property rights and
regulatory cooperation.
Q2. Agreement on Mutual Recognition between the United States of America and the European
Community (p. 15-16, paras. 50-51)
Regarding the Agreement on Mutual Recognition between the United States of America and the
European Community, please provide information on the following:
(1) the state of the implementation of the agreement and the kind of difficulties experienced in the
process of implementation;
(2) the evaluation by the U.S. of the implementation of the agreement from the view point of costbenefit performance, taking into account matters such as the number of cases of application of the
agreement in each sectoral area per year and administrative costs of the implementation;
and
(3) whether any further extension of sectoral coverage of the agreement is expected and if so, the areas
concerned.
Q3. African Growth and Opportunity Act (p.16, para. 53)
Concerning the extension to September 2007 of the AGOA’s special provision under which lessdeveloped beneficiary countries are permitted to use regional or third country fabric in apparel
imported into the United States under AGOA, is there any possibility of excessively promoting fabric
exports to Africa from a particular third-country?
Q4. U.S. - Australia Free Trade Agreement (p. 20, para.74)
With regard to the coverage of the United States – Australia Free Trade Agreement, it is noted in the
attached letter that both parties of the agreement confirmed that no provision of the agreement shall be
construed as imposing any obligation on a party regarding its immigration measures.
(1) Please explain how matters relating to immigration measures have been dealt with and how this
matter will be treated in the FTA to be concluded in the future by the U.S.
(2) What are the commitments on trade in services made under the United States – Australia Free Trade
Agreement that are not included in the schedules of specific commitments under the GATS?
(3) Please explain the details of the arrangements such as preferential tariff-rate quotas and safeguards
on certain procedures.
Q5. U.S. - Thailand Free Trade Negotiations (p.21, para. 80)
(1) Are negotiations of the U.S. - Thailand FTA expected to be concluded by the end of TPA in spite of
the suspension of the negotiation schedule due to the dissolution of the Thai House of Representatives?
If such is not the case, does the Government of the United States intend to continue negotiations to
complete this FTA after the TPA time limit?
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(2) Please explain whether the Government of the United States intends to pursue full coverage of
FTAs with all countries, as “comprehensiveness” is not mentioned in some FTAs such as those with
Oman and Bahrain.
TURKEY
WT/TPR/S/160
Part I/Recent Economic Developments, paragraph 12, 15, 18:
1.
In the Secretariat Report, under paragraph 12, it is stated that higher oil prices, the lagged
effect of previously expansionary monetary and fiscal policies, and the depreciation of the Dollar vis-avis the Euro may have had an effect on inflation.
On the other hand, in paragraph 15, it is explained that the US Administration has been
conducting a policy of fiscal stimulation by projecting 1.35 trillion US Dollar tax cut over FY 20012011 and projecting an overall 5.6 trillion US Dollar federal government surplus over the same period.
Furthermore, it is mentioned in the paragraph 18 that the IMF considers that despite recent
measures towards fiscal consolidation, there is a case for bolder reduction of the deficits including
measures to bolster revenue.
Can the contradictory nature of the combination of anti-inflationary and supply side policy
mix, and also the concerns expressed during this review process by US authorities about a potential for
lower growth in the face of a unilateral reduction in the fiscal imbalance be considered as a sign of
possible policy change in the future budgetary projections?
WT/TPR/S/160
Part II/ Developments in Trade and Investment Policy, paragraph 3:
2.
The Secretariat report states that the United States grants unilateral preferences to developing
countries under a number of schemes and that these preferences may be conditional on compliance
with various US policy objectives.
Could United States explain if all conditions are applied in the same manner to all countries in
granting unilateral preferences?
Could United States explain how the compliance of these conditions with the various policy
objectives can be assured?
WT/TPR/S/160
Part II/ Developments in Trade and Investment Policy, paragraphs 4,7,44:
3.
The Secretariat report indicates that, with some sector-specific restrictions, the United States
maintains a policy of national treatment for foreign direct investment.
According to the Secretariat report, these restrictions to national treatment apply with respect
to certain official support programs and in a number of limited cases Foreign Direct Investment is
subject to reporting requirements or review to take account of national security concerns.
Moreover; paragraph 7 of the report adds that the Omnibus Trade and Competitiveness Act of
1988 authorizes the President to restrict FDI that threatens national security.
The Secretariat Report, paragraph 44 further explains that under the “Exon-Florio
amendment”, the president may take action with respect to foreign acquisitions, mergers or takeovers
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on the ground of “national security” and that even the amendment does not define what the “national
security” is, it sets out certain factors to be considered.
Could US outline what these certain factors are that might be considered in the President’s
assessments for the any possible “national security” actions and how all these concerns affect the
inflow of FDI to the US?
WT/TPR/S/160
Part II/ Developments in Trade and Investment Policy, (iii) Legislative Developments,
paragraph 14
4.
In the paragraph 14 of the Secretariat Report, it is mentioned that on 2 March 2005, House
Joint Resolution 27 to withdraw the approval of the Congress from the Agreement establishing the
WTO was introduced and referred to the Committee on Ways and Means.
It is further stated in the same paragraph that the Administration strongly opposed H.J
Resolution 27.
Could US Delegation kindly refer to the reasons of the submission of H.J Resolution 27 that
envisages withdrawal of the approval of the Congress from the Agreement establishing the WTO?
WT/TPR/S/160
Part II/ Developments in Trade and Investment Policy, (3) Participation in the WTO,
paragraph 15
5.
In the Secretariat report, under paragraph 15, it is stated that the US authorities reaffirmed
their strong support of the multilateral trading system which they consider to be at the core of US
international trade relations.
On the other hand, since 2001, the US has been very ambitious in pursuing to sign new free
trade agreements especially with the developing countries.
Could US Delegation kindly elaborate how the US strikes a balance her FTA policies with the
Doha Development Agenda Negotiating Strategy.
WT/TPR/S/160
Part II/ Developments in Trade and Investment Policy, (4) Preferential and Other Arrangements,
(ii) Free Trade Agreements, paragraph 31
6.
Paragraph 31 of the Secretariat Report states that the US-Australia FTA is the first US FTA to
include non-market access provisions relating to public health and pharmaceuticals. According to the
report the US-Australia FTA requires Australia to apply transparent procedures in
listing new
pharmaceuticals for reimbursement.
Could US explain if the US has undertaken commitments with regard to her public health
policies under the said FTA or the mentioned non-market access commitments in those areas are
unilaterally taken by Australia?
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WT/TPR/S/160
Part II/ Developments in Trade and Investment Policy, 4) Preferential and Other Arrangements,
(iii) Unilateral preferences and other trade arrangements, paragraph 37
7.
As mentioned in the Secretariat report, paragraph 37, the US grants unilateral preferences to
GSP-eligible exports from beneficiary developing countries and the current GSP will be put force
through 31 December 2006.
We would appreciate if the US Delegation could provide information on the preparation of the
next GSP scheme.
We understand from the Secretariat report that the granting of preferences may be subject to
compliance with various US policy objectives.
In this respect we would also like to learn how this compliance mechanism operates and if
beneficiary countries are allowed to be informed in advance of any possible new requirements of US
policy objectives.
Is there a commonality of requirements between the GSP schemes and those other unilateral
preferences extended by the US to some countries under specific trade arrangements?
WT/TPR/S/160
Part II/ Developments in Trade and Investment Policy, (5) Foreign
paragraph 47
Investment Regime,
8.
In the Secretariat report, under paragraph 47, it is stated that under the Middle East Free Trade
Initiative (MEFTA), the US offered to negotiate new trade and investment framework agreements with
countries in the region and to deepen those already in place.
Could US Delegation give more information on their projection on this issue?
WT/TPR/S/160
Part III/Trade Policies and Practices by Measure, (1) Overview, paragraph 3
9.
In the aftermath of unfortunate terrorist act of September 11, the concept of security has
increasingly been playing an important role in the US trade policy decision making process. In this
regard, Secretariat report makes references to or contains quite amount of information on security –
related trade policy measures.
For example, paragraph 3 of the Secretariat report mentions that since its previous review the
US has taken additional steps to incorporate security considerations into its import procedures, notably
by promulgating regulations in relation to the Trade Act of 2002 and the Bioterrorism Act.
Could US Delegation make a general assessment on the effect of the security related measures
on the bilateral commercial relations of the US with her trading partners?
WT/TPR/S/160
Part III/Trade Policies and Practices by Measure, paragraph 6, 129
10.
In the Secretariat Report, under paragraph 5, it is written that the United States has made
numerous notifications under the TBT and SPS Agreements but there is no information on the extent to
which U.S. standards are based on standards developed by international organizations.
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In the paragraph 129 of the Secretariat report, it is further stated that the US authorities have
indicated that the US Government does not maintain centralized statistics on the extent to which US
technical regulations are based on international standards.
Even it seems that no specific information is available, could US Delegation give general
indicative information about the extent that these standards are in conformity with the ones developed
by international organizations?
WT/TPR/S/160
Part III/Trade Policies and Practices by Measure, (viii) sanitary and phytosanitary measures,
paragraph 155, 156
11.
It is mentioned in the Secretariat report that in general import of plants, animals, and their
products require an import permit issued by the Animal and Plant Health Inspection Service (APHIS).
It is further explained in the report of the WTO Secretariat that the assessment of APHIS and
the issuance of an import licence can take several years.
We understand from the paragraph 156 that the whole process from APHIS’ determination to
assess the risk to the issuance of an import licence to some extent depends on the regulations and that
if the regulations allow imports of a product from a particular area import permits are issued without
any additional risk assessments for a particular shipment.
Is there a maximum period of time set for the issuance of import permits?
Could US Delegation explain what kind of factors are examined in the APHIS’ process to issue
import licence?
WT/TPR/S/160
Part IV/Trade Policies By Sector, (2) Agriculture (i) Legal Framework and Overall Support,
paragraph 10, 20, 25, 26, 29
12.
According to the Secretariat report, payments to US agricultural producers amounted to 13.3
billion US Dollars in 2004 and preliminary estimates by the Department of Agriculture predict
government payments for 2005 to increase to close to 21.4 billion US Dollars.
The report mentions that the projected increase largely would be driven by an increase in
counter–cyclical payments and ad hoc emergency payments with respect to 2004.
As also highlighted by the Secretariat, in their report, counter-cyclical payment is one of the
main domestic support instruments introduced by the 2002 Farm Bill. According to the paragraph 26,
total amount of direct and counter-cyclical payments and loan programs accounted for %62 on average
of total government payments to agricultural producers in 2003-04.
It is known that the latest US notification on domestic support does not include support
granted under any of the programs covered by the 2002 Farm Bill.
When does US intends to make necessary notification for the counter-cyclical payments and
the other support instruments of support under the Farm Bill of 2002?
It is noted from the Secretariat report that the counter-cyclical payments program covers the
same commodities as the direct payments program.
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Under these conditions, how could US achieve to meet its domestic support obligations
stemming from WTO Agreement on Agriculture?
WT/TPR/G/160
Part III/Trade Policy Developments, (8)Agricultural Issues, paragraph 116
13.
Paragraph 116 of the Government Report reads that the Commodity Credit Corporation total
net direct payments in 2003 were 12.9 billion US Dollar and these net direct payments are notified as a
mix of blue and green box measures.
As it is known, different pre-conditions are defined in the Agreement on Agriculture to ensure
that each supporting instruments are assumed to be justifiable under one of the three domestic support
boxes.
Against this, could US delegation explain, how CCC net direct payments could be notified as a
mix of blue and green box measures, unless the nature of those net direct payments had been different
from each other?
The report further states that if the Secretary of Agriculture determines that the AMS ceiling
will be exceeded, the 2002 Farm Bill has a provision by which the Secretary shall, to the maximum
extent practicable adjust expenditures to avoid exceeding allowable levels.
Is this specific flexibility extended to the Secretary of Agriculture under the 2002 Farm Bill
can be assumed as a kind of “escape clause” giving room for manoeuvre to the US to meet her
obligations in notifications even in practice those commitments are not seemed to be met?
WT/TPR/S/160
Part III/Trade Policies and Practices by Measure, (iii) Other Charges affecting imports,
paragraphs 66, 68, 69
14.
Paragraph 66 states that the US imposes merchandise processing fee for the imports valued at
more than 2000 US Dollar amounting to 0.21% of the import value. We understand from the
Secretariat report that the application of the merchandise processing fee has been extended until
September 2014.
Furthermore, it is mentioned in the paragraph 68 that water-born imports valued at more than
2000 US Dollar and unloaded at a port receiving federal funds for maintenance are subject to a harbour
maintenance fee whereas exported cargo is exempted following the decision by the US Supreme Court.
Could US Delegation explain the rationale of these charges and its consistency with the relevant
GATT Articles?
WT/TPR/S/160
Part III/Trade Policies and Practices by Measure, (iv) Anti-Dumping and Countervailing
Actions, (f) Sunset Reviews
15.
Turkey considers the fact that, within the context of sunset review mechanism, continuous
prolongation of the implementation periods of the AD and CV duties by the U.S. authorities creates
serious market access barriers, problems and uncertainties for Turkish companies and for Turkey-US
bilateral trade relations.
Turkish Delegation would like to kindly ask whether the US Government considers reviewing
these procedures.
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WT/TPR/S/160
Part III/Trade Policies and Practices by Measure, (3) Measures Directly Affecting Exports
16.
The Secretariat report, paragraph 187, touches upon on the Transshipment Country Export
Control Initiative (TECI) which is aimed to avoid diversion of sensitive items to illicit purposes. The
initiative is very much in line with the 1540 numbered United Nations Security Council Resolution
which stipulates that states should establish effective controls over transit and transshipment for the
commodities of proliferation concern. Moreover Proliferation Security Initiative foresees transit and
transshipment controls.
On the other hand, GATT 1994 Article V on Freedom of Transit stipulates that there should be
freedom of transit through the territory of each contracting party.
In this regard, can US Delegation elaborate more on the scope of the transit/transshipment
controls executed by the US and their impacts on trade?
BRAZIL
1.
Chapter III, paragraph 03: “Most non-tariff restrictions are maintained for non-commercial
purposes, including a ban on imports of marine mammal products, shrimp, and tuna from countries
found not to be in compliance with U.S. environmental provisions.” What are the objective criteria and
procedures that the U.S. Government establishes in order to identify which countries among those who
export the above mentioned products do not meet the U.S. environmental provisions? What procedures,
if any, are in place in order to ensure that such provisions will not be used for commercial purposes?
2.
Chapter III, paragraph 74: Concerning the implementation of the DSB decision on
United States – Continued Dumping and Subsidy Offset Act of 2000 (CDSOA) - WT/DS217 and
WT/DS234, could the US Government indicate the estimated amount that will still be collected as
duties imposed on goods imported into the United States until the final and complete repeal of the Byrd
Amendment? For how long does the US Administration intend to continue distributing duties collected
under CDSOA to US companies?
3.
Chapter III, paragraph 76: The Secretariat´s report points out that there are new guidelines to
prevent circumvention. Which are the objective criteria that the U.S. Customs and Border Protection
uses in order to define those “sudden changes” in the declared values, claimed country of origin, or
declared classification?
4.
Chapter III, paragraph 81: In table III.3, the report shows statistics of anti-dumping
investigations in the period 1980-2004. However, it does not give information on the number of
applications for anti-dumping which were made in the mentioned period. Would it be possible for the
United States to provide such statistics for 2004 and 2005? In the same table III.3, the Secretariat´s
report provides the number of preliminary and final determinations for 2004. According to the
ANNEX II of the Anti-dumping Agreement, the authorities can make determinations on the basis of the
facts available if information is not supplied within a reasonable time or if an interested party does not
cooperate. What is the proportion of anti-dumping determinations based on facts available during 2004
and 2005? Would it be possible to identify a trend on such proportion?
5.
Chapter III, paragraph 82: The report informs that 38 out of 71 of the investigations initiated
during the period 2002-2003, or 54%, resulted in the application of provisional measures. That rate
rose to 92% in 2004 (24 out of 26 investigations). Those provisional measures are related to critical
circumstances that may arise as a result of the conditions listed in Article 7 of the Anti-dumping
Agreement, so they should be applied only on an exceptional basis. To what factor does the U.S.
Department of Commerce attribute this high percentage of incidence of provisional measures in 2004?
What would be the domestic and/or external factors that explain those critical circumstances?
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6.
Chapter III, paragraphs 150-160: The United States is deemed to attach importance to the
pursuit of sound scientifical basis in SPS matters. Nevertheless, the Office of Management and Budget
(OMB) can adopt measures based on “economic impact”. What is the rationale behind taking into
account economic concerns in SPS decisions?
7.
Chapter III, paragraph 156: "The process from APHIS' determination to assess the risk
presented by imports of a particular product to the issuance of an import licence can take several
years, depending on the quality of the data received for the risk assessment, among other factors."
Nevertheless, many delays have been registered in the certification process of Brazilian meat. Until the
end of 2005, Brazil was taking more than three years to certificate fresh meat. According to APHIS
staffers, the delay was due to lack of human resources, since many were been deployed to tackle the
BSE threat. What are the American government plans to prevent those delays from undermining the
credibility of the certification process?
8.
Chapter III, paragraphs 191-194: “the United States provides export financing through its
official export agency, the Ex-Im Bank”. The Bank is mandated to provide “credit at rates and terms
that are fully competitive with those supported by governments in the principal countries whose
exporters compete with U.S. exporters. Ex-Im Bank accepts risks that private sector is unwilling or
unable to take.” In a recent paper (TN/RL/GEN/94), presented at the Negotiating Group on Rules, the
US proposed the expansion of the prohibited category of subsidies on the Agreement on Subsidies and
Countervailing Measures (ASCM). According to the document, some “forms of egregious government
intervention such as (...) funding of companies or projects that would not otherwise receive
conventional commercial financing” should be the first candidates for inclusion in an expanded “red
box”.
(i) Does the US consider that the export financing, as currently provided by the Ex-Im Bank,
could be understood as a form of “egregious government intervention”, in the terms of its
proposal (TN/RL/GEN/94)? What would differentiate the practice of Ex-Im Bank when
accepting “risks that private sector is unwilling or unable to take” from the ones the US
describes in its proposal?
(ii) In addition, in paragraph 194, the report states that “close to 40% of total Ex-Im Bank
exposure is in the aircraft sector” – out of US$13.3 billion in support activities, in 2004. Could
the US Government please provide additional details on their support (guarantees, insurance
and credits) to the mentioned sector, including terms and rates of financing?
9.
Chapter III, paragraph 195: A number of assistance measures for export promotion are in place
in the US, among them a duty drawback program. The report does not provide detailed information
about the actual operation of the program. It states simply that “customs duties and certain internal
taxes and fees resulting from importation are refunded following the export of either the imported
product or the article manufactured from the imported product”. Regarding the US drawback
programme, is it possible to receive information on: (i) criteria for firms to be eligible for the program;
(ii) refundable taxes and fees and extent of refunds; (iii) mechanisms for the refund, including time
periods?
10.
Chapter III, paragraph 252: Regarding the American policy of promoting increased IPR
protection through free trade agreements, could the US Government exp Could the US Government
also specify: a) the advantages, favors, privileges or immunities granted to the nationals of other
countries by means of the 22 bilateral intellectual property agreements or memoranda of understanding
which it has already signed ; and b) exemplify how it intends to confer immediately and
unconditionally the same benefits to the nationals of all other WTO Members according to the
provisions of article 4 of the TRIPS Agreement? lain the adequacy of such agreements with the WTO
intellectual property system?
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11.
Chapter III, paragraph 254: Could the US Government indicate in its balance of payments for
intellectual-property-related trade the total share of royalties and license fees received from Brazil?
12.
Chapter III, paragraph 258: "The Cooperative Research and Technology Enhancement
(CREATE) Act of 2004 (P.L.108-447) provides that patentability is not precluded on the basis of
obviousness where subject matter that qualifies as prior art is developed by a person different from the
person claiming the invention, under certain conditions". What are those conditions?
13.
Chapter III, paragraphs 265-268: There are various examples of trade marks registrations
being granted to foreign generic names, such as the case of "cupuaçu", settled in the U. S. when the
firm pursuing the mark withdraw it voluntarily. What measures does the USPTO take in order to
prevent inadequate registration of generic names as trade marks? Are there any established criteria to
grant trade marks registrations of foreign words?
14.
Chapter III, paragraph 269: What are the criteria or conditions for a geographical indication of
foreign origin to be protected through the trade mark system in the United States? Is there any
difference between a collective mark (or a certification mark) and a geographical indication? Do they
have the same rights? How the US legislation or jurisprudence deals with conflicts related to the usage
of the same sign as a mark and a geographical indication?
15.
Chapter III, paragraph 275: “The Artists' Rights and Theft Prevention Act of 2005 (ART Act),
Title I of the Family Entertainment and Copyright Act of 2005 (Public Law No: 109-9), amended the
U.S. Federal criminal code to prohibit the unauthorized, knowing use or attempted use of a video
camera or similar device to transmit or make a copy of a copyrighted audiovisual work from a
performance of such work in a movie theatre.” Does it apply only to audiovisual works in a movie
theatre or it is also applicable to other copyrighted works, like for instance, live performance shows?
Does the enforcement of the above mentioned rule require the intention of the supposed infringer to use
or to allow the use of his/her copy for another unauthorized copies? In that case, is any kind of private
copy allowed?
16.
Chapter III, paragraph 276: Could the United States i) clarify the criteria used in its "Special
301" legislation in order to identify countries with alleged inadequate and ineffective intellectual
property protection; ii) explain why countries with a better law enforcement record against
counterfeiting and piracy can be worse labeled than those countries with less significant commitment in
these areas; iii) explain if and how the information and allegations provided by the US private sector in
the petitions that initiate the "Special 301" ranking process are checked and confirmed by the US
Government; and iv) elucidate what precautions are taken by the US competent authorities in order to
prevent the infliction of image damage on countries mentioned in the "Special 301" lists vis-a-vis the
capacity of those countries of attracting foreign direct investment?
17.
Chapter IV, paragraph 02: With regard to the implementation of the DSB rulings and
recommendations on United States – Subsidies on Upland Cotton – WT/DS 267, it is stated that, in
July 2005, the US Department of Agriculture announced it had sent to Congress proposed statutory
changes to comply with the panel and Appellate Body decisions on this dispute. Brazil understands that
the changes proposed by the Department of Agriculture included, besides the repeal of the Step 2
Program, the repeal of the statutory cap of 1% of the guaranteed value of the transaction on the fee
charged to the exporter under the Commodity Credit Corporation Programs (GSM 102 – General Sales
Manager, and SCGP – Supplier Credit Guarantee Program), as well as the elimination of the GSM 103
Program. However, to Brazil’s knowledge, the last two proposals have not been approved by the US
Congress, since the 2005 Deficit Reduction Act contemplated, among the proposed measures, only
repeal of the Step 2 Program. In this regard, does the US Government intend to submit legislative
proposals for the elimination of both the statutory cap of 1% and the GSM 103 Program in the near
future?
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18.
Chapter IV, paragraph 23: "The latest U.S. notification on domestic support covers the
marketing years 2000 and 2001". When does the U.S. intend to notify its domestic support for the
period after the Farm Act of 2002? Is there any early assessment available of those levels of support?
19.
Chapter IV, paragraph 28: "... if producers plant and harvest fruit, vegetables, or wild rice,
direct payments are eliminated or reduced." How the U.S. plan to comply with the WTO panel finding
that deemed this rule not eligible to green box criteria?
20.
Chapter IV, paragraph 38: "The Fair and Equitable Tobacco Reform Act of 2004 terminated
all production quotas and other price support mechanisms for tobacco beginning with the 2005 crop
year." Is there any preliminary assessment on the impact of the Act over the U.S. tobacco exports and
imports?
21.
Chapter IV, Paragraph 2: In the dispute US – Upland Cotton, the panel, as confirmed by the
Appellate Body, found that the effect of the so called “price contingency subsidies (Market Loan
Programme Payments, STEP 2 payments, Market Loss Assistance Payments, and Counter-Cyclical
Payments) is significant prices suppression within the meanings of Article 6.3(c) of the Agreement on
Subsidies and Countervailing Measures (SCM). Consequently such subsidies must be withdrawn or
have their adverse effects removed, pursuant to Article 7.8 of the SCM Agreement. What has the U.S.
done to comply with this obligation?
22.
Chapter IV, paragraphs 25 and 26: As shown in Table IV.1, the data for all domestic
programmes are available for market years 2002, 2003 and 2004. What is the reason for not updating
your notification on this pillar?
23.
Chapter IV, paragraphs 62-92: US commitments in the financial sector, with respect to
national treatment, are limited to the Federal level, while the establishment of financial institutions is
also subject to State level regulation. Is there any administrative or regulatory evolution that might
favor new commitments regarding measures that are less burdensome for foreign financial services
suppliers?
ADDITIONAL QUESTIONS FROM BRAZIL
1.
Chapter I, paragraph 37: Since July 2005, it amounts to 57 tariff lines graduated for Brazil
under the US SGP. On those lines, 46 of them did not reach any competitive limits in 2004 and 2005
(CNL 50% or US$115 million in 2004 and US$120 million in 2005). On the other 11 lines, it was
reached the percentage CNL on 3 of them, but not surpassing the established value limit to obtain the
waiver de minimis (US$15 million in 2004 and US$17,5 million in 2005). Why does not exist an
automatic review mechanism for graduation in the USA GSP Program? Why do some products are
eligible for this preferential treatment if there is not any import of this products by USA?
2.
Page 68 - paragraph 213: “The Sherman Act outlaws all contracts, combinations, and
conspiracies that restrain trade among the states or with foreign countries, as well as the
monopolization of any part of the trade or commerce among the states or with foreign countries.
However, the Sherman Act and FTC Act do not apply to conduct involving trade or commerce, other
than import trade or commerce, with foreign nations unless the conduct has a direct, substantial, and
reasonably foreseeable effect on domestic or import commerce or on export trade or commerce.
Where jurisdiction is based on export trade or commerce the antitrust laws apply to that conduct only
for injury to export business in the United States." In this way, what are the US domestic enforcements
against foreign export cartels?
3.
Page 68 - paragraph 213: With respect to exclusions and exemptions, a number of US statutes
permit immunity from antitrust laws in some specified cases. Immunity, for instance, is provided to
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certain activities in the agriculture sector under the Capper-Volstead Agricultural Producers'
Associations Act, which allows collective action in the processing, preparing for market, handling, and
marketing of agricultural products, and the Agricultural Marketing Agreement Act of 1937, which
authorizes marketing agreements with producers and processors of agricultural commodities. Although
not registered in the TPR, it is well known that many other sectors are exempted from US antitrust
laws. As stressed in paragraph 224, an OECD Report notes that competition policy in US could be
improved by measures such as terminating the antitrust immunity of government enterprises and
eliminating anomalous exemptions. What are these specific sectors? Do DOJ and (or) FTC have an
updated and transparent list of exclusions, including those related to jurisprudence outcomes?
4.
Page 68 - paragraph 214: “Foreign individuals or companies are granted national treatment
with respect to private lawsuits and may sue for the same amount; foreign states, however, may recover
only an amount equal to the damage inflicted plus the cost of the lawsuit.” What exactly is assured to
foreign companies on that basis? Does such treatment follow a specific interpretation of the GATT 94,
article III, regarding National Treatment?
5.
Page 74 - paragraph 243: “The Trade Agreements Act of 1979 waives the application of the
Buy American Act to the end-products of designated countries, which now include […] leastdeveloped countries.” Would it be possible to bring some evaluation of the results of such policy,
including statistic data on the number and value of contracts awarded to suppliers of the leastdeveloped Countries?
6.
Page 75 - paragraph 245: The Department of Defense also waives the restrictions of the Buy
American Act/Balance of Payments Program for the acquisition of defense equipment produced in any
"qualifying country" (countries with which there is a reciprocal procurement agreement or
Memorandum of Understanding). Is there statistical data on the contracts awarded under this
mechanism?
7.
Page 75 - paragraph 246: “The U.S. Administration has adopted a new reciprocity approach to
sub-federal procurement in two FTAs under negotiation. The Administration has written to Governors
requesting that state governments consider voluntarily covering their procurement under the U.S.Panama and U.S.-Andean FTAs under a new reciprocity policy, to benefit from new export
opportunities.” Would this approach cause any methodological innovation on the commitments under
these FTAs, or would the sub-federal agencies be listed in an annex to the FTAs, as usual?
8.
“Appendix Table”, page 137: At NAFTA trade, Article 401 (originating goods), letter D), is
stated that goods can be obtained or produced in the territory of one or more of the Parties. We
understand that it means full cumulation. Why you call this mechanism a bilateral cumulation instead
of full cumulation in the box located on page 137 (same line of NAFTA)?
9.
We would like to know the meaning of the maximum range of 15% settled for bilateral
cumulation in some free trade agreements. Actually in order to clarify this clause we would really
appreciate if you could provide us an example.
10.
How the USA customs are sure that all requirements to meet if full cumulation are
accomplished? Which are the main steps to be sure about this?
11.
How the USA customs are sure that all requirements to meet if "de minimis" rules for textiles
are accomplished? Which are the main steps to be sure if HS 50-63 total weight of fibres or yarns
doesn’t exceed 7% of total weight?
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CANADA
WTO Secretariat Report (WT/TPR/S/160)
Summary Observations, (2) Trade Policy Developments, Paragraph 5; and Part II. Developments in
Trade and Investment Policy, (2) Institutional and Policy Framework, (iii) Legislative
Developments, Paragraph 13:
The Secretariat Report sets out its understanding of the ultimate deadlines for the completion of
negotiations in order for amending legislation to be considered by Congress under the Bipartisan Trade
Promotion Authority Act (TPA). The Secretariat document refers to both April 1 and July 1, 2007 as
the deadline for signing a new agreement.
1.
Could the United States delegation clarify the deadline dates set out in the TPA Act including,
e.g., subsection 2103(b)(1)(C), which gives the President authority to enter into a trade agreement
before June 1, 2007, and subsection 2103(c)(1)(B), which appears to limit the time by which
implementing legislation may be introduced in Congress to qualify for Congressional TPA procedures?
Summary Observations, (3) Market Access in Goods, Paragraph 13:
The Secretariat Report refers to the status of U.S. legislation containing a clause to prospectively repeal
the Byrd Amendment (Deficit Reduction Act of 2005). The effective date of repeal under this
legislation is October 1, 2007.
The United States has claimed that it has "taken the actions necessary to implement the rulings and
recommendations in these disputes". Canada believes prospective repeal is only the first step towards
compliance, as we understand that antidumping and countervailing duties collected up to September
30, 2007, will remain subject to disbursement, that is to say, even after the effective date of repeal.
The Dispute Settlement Understanding requires Members to bring inconsistent measures into
compliance with the WTO Agreement promptly; where immediate compliance is not possible, a
Member has a reasonable period of time (RPT) in which to do so. In this case, the RPT ended over two
years ago, and October 1, 2007, the effective date of repeal, is almost 4 years later.
2.
Could the United States confirm when disbursements pursuant to the Byrd Amendment will
cease?
Summary Observations, (6) Access Conditions in Services, Paragraph 27.
The Secretariat Report notes that in December 2004, the FCC adopted new regulations that redefine the
extent to which incumbent firms are required to make elements of their network available to other
carriers.
3.
Could the U.S. provide more info on the new regulations and their impact for carriers?
Part III. Trade Policies and Practices by Measure, (2) Measures Directly Affecting Imports, (i)
Customs procedures and rules of Origin, (e) Rules of Origin, Paragraph 35:
The report by the Secretariat indicates that non-preferential rules of origin may be used for antidumping and countervailing measures.
4.
Can the United States clarify the circumstances under which rules of origin may be used for
such measures?. In particular, Canada is interested in U.S. views on whether rules of origin may be
applied for investigative or administrative purposes, i.e., whether they may used to determine the
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imports under consideration in the period of investigation or for use in enforcing an order or both.
Further, would such origin rules be used as an absolute standard against which imports may be assessed
regarding their origin, or as a guide, or as one criterion of many for making such a determination?
Part III. Trade Policies and Practices by Measure, (2) Measures Directly Affecting Imports,
(i) Customs Procedures and rules of origin, (e) Rules of Origin, Paragraph 37-39:
5.
Has the U.S. removed the discrepancy between its country of origin marking rules for nonoriginating steel flanges from NAFTA countries and those flanges processed in the US from imported
forgings from non-NAFTA countries?
Part III. Trade Policies and Practices by Measure, (2) Measures Directly Affecting Imports, (iv)
Anti-dumping and countervailing actions, (a) Legislation and administration, Paragraph 72:
The Secretariat Report notes that the ITA’s AD/CVD Petition Counselling and Analysis Unit assists
U.S. companies regarding trade remedy laws.
6.
Can the United States provide a general outline of the services available to U.S. companies,
including any legal services, provided by this unit? Are smaller firms given preference in terms of such
services? Further, does the International Trade Commission still operate a similar unit that used to be
called the Trade Remedy Assistance Office?
Part III. Trade Policies and Practices by Measure, (2) Measures Directly Affecting Imports, (iv)
Anti-dumping and countervailing actions, (a) Legislation and administration, Paragraph 75:
In July 2004, new guidelines for determining continuous bonding requirements for importers of
agriculture/aquaculture products subject to anti-dumping/countervail were issued.
7.
Canada would appreciate any comments by the U.S. as to their experience regarding the new
bonding requirements. How often have they been used and have they been effective in ensuring that
final duties assessed are paid? Have the new guidelines designed to prevent circumvention been
effective?
Part III. Trade Policies and Practices by Measure, (2): Measures Directly Affecting Imports, (iv)
Anti-Dumping and Countervailing Actions, (b) Anti-Dumping, Paragraph 84:
8.
Does the U.S. have any explanation or opinion as to the reason why almost two thirds of the
actions taken against imports from the U.S. are by three countries: China, Mexico and India? Has this
trend continued?
Part III. Trade Policies and Practices by Measure, (2) Measures Directly Affecting Imports, (iv)
Anti-dumping and countervailing actions, (c) Countervailing duties, Paragraph 91:
The Secretariat Report says that in June 2003, the USDOC modified the manner in which it analyses
whether a subsidized, government-owned company remained subsidized after it was “privatized”. In
October 2003, the USDOC issued revised final determinations in 12 specific cases that were at issue.
9.
What were the results of these revisions?
Part III. Trade Policies and Practices by Measure: (4) Other Measures Affecting Production and
Trade; (iv) Trade-related intellectual property rights, (b) Patents, Paragraph 255.
U.S. patent law is codified in Title 35 of the U.S. Code (35 U.S.C.), as amended. The Secretariat
Report notes that the United States “is the only WTO Member to use the first-to-invent rule”.
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10.
Would the United States consider using instead the first-to-file rule”?
Part III. Trade Policies and Practices by Measure, (4) Other Measures Affecting Production and
Trade; (iv) Trade related and intellectual property rights, (b) Patents, Paragraph 258.
The Secretariat Report notes that the “Cooperative Research and Technology Enhancement (CREATE)
Act of 2004 (…) provides that patentability is not precluded on the basis of obviousness where subject
matter that qualifies as prior art is developed by a person different from the person claiming the
invention, under certain conditions”.
11.
Would the United States please provide more details with respect to this matter?
Part III. Trade Policies by Practice and Measure, (4) Other Measures Affecting Production and
Trade; (iv) Trade related and intellectual property rights, © Trade marks, Paragraph 265.
The Secretariat Report notes that trade mark protection in the United States arises from the actual use
of the mark and that additional protection is provided by federal and state laws.
12.
Could the United States provide more details on these state trade mark laws?
Part III. Trade Policies by Practice and Measure, (4) Other Measures Affecting Production and
Trade; (iv) Trade related and intellectual property rights, (f) Enforcement Activities, Paragraph 279.
The Secretariat Report says that the Intellectual Property Protection and Courts Amendment Act of
2004 (P.L. 108-482) amended federal criminal code provisions regarding trafficking in counterfeit
labels.
13.
Can the U.S. provide more details on the Intellectual Property Protection and Courts
Amendment Act of 2004, more specifically with respect to trafficking in counterfeit labels?
Part IV. Trade Policies by Sector, (2) Agriculture, (iii) Domestic programmes, Paragraphs 23-26:
Table IV.1 forecasts large government payments for 2005, totalling $21.4 billion, including certain
expenditures that might be exempt from Current Total AMS on green box grounds. The cotton panel
(referred to in para. 12) concluded that payments under the Direct Payments program do not fully
conform with paragraph 6(b) of Annex 2 (para. 7.388 of the cotton panel report). Thus, the $5.0 billion
in Direct Payments for 2005 is not exempt on green box grounds. Adding market price support for
dairy and sugar to the sum of non-exempt payments establishes the Current Total AMS. Market price
support amounted to about $5.5 billion for dairy and sugar for 2000 and 2001, with a similar amount in
2005. In light of these facts, the Current Total AMS for 2005 would seem to have exceeded the
$19.1 billion commitment. Section 1601(e) of the 2002 Farm Act (referred to in para.25) requires an
adjustment of expenditures in order to pre-empt a breach of commitments.
14.
Since pre-emptive steps were not taken to adjust expenditures for 2005, can the United States
advise what processes are in place to address a possible breach of the 2005 commitment?
Part IV. Trade Policies by Sector, (2) Agriculture, (v) Food aid, Paragraphs 54-55:
As part of the Doha Development Agenda negotiations, Members are working to discipline the
commercial-displacing effects of food aid that is non-humanitarian in nature and driven by donor
interests.
15.
In this context, can the United States please provide an explanation of the rationale for
maintaining long-term concessional sales of US commodities as food aid, the market development
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objectives of US Public Law 480 (Food for Peace) food aid programs, and the surplus disposal
objectives of Section 416(b) programs?
Part IV. Trade Policies by Sector, (2) Agriculture, (v) Food aid, Paragraphs 56:
16.
Can the United States please explain the discrepancy between the noted monetization rate of
30% of PL 480 Title II food aid and USAID’s annual US International Food Assistance Reports, which
are mandated by Congress, and report that the monetization rates for Title II food aid were 47% in
1998, 52% in 1999, 53% in 2000, 65% in 2001 and 63% in 20024. Such variance in monetization rates
which point towards an increasing trend in Title II monetization is a concern, in particular given that
the practice of monetizing food aid has significant potential to displace commercial imports and local
production in recipient developing country markets, and has similar trade-distorting effects as export
subsidies.
Part IV. Trade Policies by Sector, (2) Agriculture, (v) Food aid, Paragraphs 57:
17.
Can the United States please explain how such open-market sales of food aid through both
Title II and the surplus disposal program, Section 416(b), do not have a “disruptive impact upon
production, prices, and marketing of the same or like products with the importing country,” when the
FAO Principles of Surplus Disposal and Consultative Obligations are widely recognized as failing to
accurately determine a recipient country’s capacity to import food, thereby potentially displacing
commercial sales?
Part IV. Trade Policies by Sector, (3) Financial Services, (ii) Legislative and regulatory framework,
(c) Securities services, Paragraph 78 and 84
Paragraph 78 states that a foreign investment company may not publicly offer shares in the U.S. unless
it is authorized to do so by the Security Exchange Commission (SEC). Paragraph 84 states that, if
certain conditions are met, the Commodity Futures Trade Commission (CFTC) exempts from
registration foreign Futures Commission Merchants (FCM), which in our understanding includes
foreign commodities and futures exchanges.
18.
Does the SEC envisage permitting a similar treatment that is afforded by the CFTC that would
effectively allow securities listed on foreign securities exchanges to be directly traded in the U.S.
without having to register with the SEC and with limited involvement of a registered-broker dealer,
conditional to certain requirements that would ensure market integrity and investor protection?
Part IV. Trade Policies by Sector, (3) Financial Services, (ii) Legislative and regulatory framework,
(c) Securities services, Paragraph 80
Paragraph 80 says that an offshore hedge fund must register with the SEC if it has more than 14 clients
who are residents in the U.S. regardless of the amount of assets under management while U.S. advisers
only need to register if they have more than US$30 million in assets and more than 14 clients.
19.
Could the United States provide the policy rationale behind this national treatment difference?
4
USAID’s US International Food Assistance Reports, Jan. 1999 (p.83), Jan. 2000 (p.73) , Jan, 2001
(p.48), Sept. 2002 (p.51), Feb. 2004 (p.48).
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Part IV. Trade Policies by Sector, (4) Telecommunication services, (ii) Selected regulatory issues,
(a) Public interest analysis and regulatory safeguards, Paragraph 99.
The Secretariat report mentions that when evaluating applications the FCC must conduct a public
interest analysis and that in the case of the WTO members this analysis relies on an “open entry”
standard.
20.
Is the U.S. considering incorporating explicitly a reference to the open entry standard into its
legislation?
Part IV. Trade Policies by Sector, (4) Telecommunication services, (ii) Selected regulatory issues,
(a) Public interest analysis and regulatory safeguards, Paragraph 100.
In its report, the Secretariat notes that the public interest analysis involves considerations for policy
concerns such as national security, law enforcement, foreign policy, or trade policy issues.
21.
Could the U.S. provide further explanations on what type of foreign policy or trade issues may
be raised in examining a license application?
Part IV. Trade Policies by Sector, (4) Telecommunication services, (ii) Selected regulatory issues,
(a) Public interest analysis and regulatory safeguards, Paragraph 105.
The Secretariat Report notes that besides the mentioned regulatory safeguards, the FCC reserves the
right to attach other conditions to an authorization or license.
22.
Could the U.S. provide more information on these other possible conditions?
Part IV. Trade Policies by Sector, (5) Maritime Transport, iii) International water-borne trade,
Paragraph 123
23.
Is the United States contemplating changes to the Shipping Act or the Ocean Shipping Reform
Act in light of the recent announcement by the European Commission (EC) that they intend to repeal
Regulation 4056/86 which provides Liner Shipping Conferences with an exemption against certain EC
regulations dealing with anti-competitive behaviour?
Part IV. Trade Policies by Sector, (6) Air Transport Services, (ii) Regulatory framework,
Paragraph 149.
"The provision of domestic air services is permitted only to U.S. carriers. Crews engaged in domestic
air passenger and freight service must be U.S. nationals or resident aliens. The "wet" leasing of aircraft
(with crew and, typically, maintenance, and insurance) to U.S. carriers is restricted to U.S. companies
and U.S. citizens."
24.
What is the rationale behind prohibiting U.S. air carriers from leasing aircraft and crew from
non-U.S. air carriers for international services, especially when the model U.S. Open Skies text
suggests such operations are permitted?
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ADDITIONAL QUESTIONS FROM CANADA
WTO Secretariat Report (WT/TPR/S/160)
Summary Observations, (2) Trade Policy Developments, Paragraph 5; and Part II. Developments in
Trade and Investment Policy, (2) Institutional and Policy Framework, (iii) Legislative
Developments, Paragraph 13:
The Secretariat Report sets out its understanding of the ultimate deadlines for the completion of
negotiations in order for amending legislation to be considered by Congress under the Bipartisan Trade
Promotion Authority Act (TPA). The Secretariat document refers to both April 1 and July 1, 2007 as
the deadline for signing a new agreement. A similar comment appears in the US Government Report
(WT/TPR/G/160) at Part I, the United States in the Multilateral System, Paragraph 4.
1.
Could the United States delegation clarify the deadline dates set out in the TPA Act including
e.g., subsection 2103(b)(1)©) which gives the President authority to enter into a trade agreement before
June 1, 2007, and subsection 2103(c)(1)(B), which appears to limit the time when implementing
legislation may be introduced in Congress to qualify for Congressional TPA procedures, i.e., it appears
to require that the implementing Bill be presented to Congress prior to July 1?
Part III. Trade Policies and Practices by Measure, (2): Measures Directly Affecting Imports, (vii)
Standards and technical regulations, (a) WTO participation and preferential trade agreements,
Paragraph 121:
The Secretariat Report notes that the three free-trade agreements which entered into force between mid
2003 and mid 2005 (Australia, Chile and Singapore) contain provisions on technical barriers to
trade. Canada understands that there are additional agreements awaiting entry into force (Bahrain,
Morocco, etc.) identical or similar provisions are found. A number of the provisions in these
agreements create additional obligations on the parties, over and above those contained in the WTO
TBT Agreement.
2.
Can the United States provide a list of the "TBT-plus" provisions and an explanation as to why
each provision is included? Will any of these "TBT-plus" provisions require increased "accountability"
between the parties regarding measures or actions taken in the TBT area?
Part III. Trade Policies and Practices by Measure, (2): Measures Directly Affecting Imports, (vii)
Standards and technical regulations, (b) Technical regulations, Paragraph 123:
The Secretariat Report makes reference to the Administrative Procedure Act (APA) and the rules
outlined under the APA which U.S. federal government agencies are required to follow. These include
a requirement for agencies to publish a notice of proposed rulemaking (NPRM) in the Federal Register.
Canada understands that evaluations by the Government Accounting Office (GAO) of agencies’
performance under the APA have identified a significant number of final actions which have been
published without an associated NPRM. Further, that agencies may not construe the "good cause"
exception narrowly as a rationale for not publishing an NPRM.
3.
Can the United States provide a more detailed explanation of how the APA operates, including
a discussion of direct final and interim final rulemaking procedures, as well as the scope of the law's
exceptions and examples of how they have been invoked by agencies?
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Part III. Trade Policies and Practices by Measure, (2): Measures Directly Affecting Imports,
(vii) Standards and technical regulations, (b) Technical regulations, Paragraph 125
Executive Order 12866 of September 1993 requires the Office of Management and Budget (OMB) to
review all “significant” rules by federal government agencies (excluding independent regulatory
agencies) prior to their publication in the Federal Register as proposed or final rules.
4.
Can the United States provide a list of which agencies are covered under Executive Order
12866? Can the U.S. provide the highlights of the guidance document for agencies on regulatory
analysis published in September 2003 by the Office of Management and Budget (OMB) and the
Council of Economic Advisors and how its contents differ in key areas from the earlier (1996) "best
practices" document?
Part III. Trade Policies and Practices by Measure, (2): Measures Directly Affecting Imports, (vii)
Standards and technical regulations, (b) Technical regulations, Paragraph 125:
The Regulatory Flexibility Act requires federal government agencies to analyze the anticipated effects
of a proposed rule on small entities and identify alternative approaches unless they certify that the rule
will not have a “significant economic impact on a substantial number of small entities.”
5.
Can the United States comment on the effectiveness of the Regulatory Flexibility Act (RFA)
since the Government Accountability Office (GAO) has frequently cited the need to clarify key terms
under the RFA; noted that agencies' compliance with RFA varied widely from one agency to another;
and, also found that agencies had different interpretations of RFA's requirements?
Part III. Trade Policies and Practices by Measure, (2): Measures Directly Affecting Imports, (vii)
Standards and technical regulations, (b) Technical regulations, Paragraph 126:
The Secretariat Report notes that under the Final Information Quality Bulletin for Peer Review, which
became effective in June 2005, scientific findings that represent the official position of a federal
government agency and that could eventually serve as the basis for the formulation and adoption of a
technical regulation are subject to peer review. At the time of the last Trade Policy Review of the
United States, Canada noted that there was concern raised by several members of the U.S. House of
Representatives with the OMB's draft Bulletin proposing to regulate scientific information in federal
agencies using a more uniform standard of peer review.
6.
Is the Final Information Quality Bulletin for Peer Review changed in any significant way(s)
from the draft Bulletin? If so, how and to what intended effect?
Part III. Trade Policies and Practices by Measure, (2): Measures Directly Affecting Imports,
(vii) Standards and technical regulations, (b) Technical regulations, Paragraph 129:
The Secretariat Report says that U.S. authorities have indicated that the U.S. Government does not
maintain centralized statistics on the extent to which U.S. technical regulations are based on
international standards.
7.
Does the U.S. intend to develop a capacity to be able to identify when U.S. technical
regulations are based on international standards? For example, through a RIAS tool and reporting
capacity? If "yes", is there a timetable in place for its development?
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Part III. Trade Policies and Practices by Measure, (2): Measures Directly Affecting Imports,
(vii) Standards and technical regulations, (c) Standards, Paragraph 137:
The Secretariat Report says that compliance with standards is not a legal requirement, but in practice
the U.S. market often provides strong incentives for imported and domestic products to meet certain
standards. Under the Trade Agreements Act of 1979, federal government agencies are required to "take
into consideration" international standards when developing standards, and if appropriate, to base the
standards on international standards.5
8.
Could the U.S. explain what is meant by “take into consideration" international standards when
developing standards, as well as the reference to "basing" standards on international standards, when
appropriate? Does the U.S. view this language as fully capturing the intent and spirit of the TBT
obligation in Article 2.4 of the TBT Agreement? Why is language which spells out the obligation in
considerable detail, for example, “use available international standards, guidelines and
recommendations as the basis for technical regulations and conformity assessment procedures where
they achieve the intended regulatory objective” not used? Does the existing language help explain the
relatively low level of adoption of international standards by domestic regulators?
Part III. Trade Policies and Practices by Measure, (2): Measures Directly Affecting Imports,
(vii) Standards and technical regulations, (c) Standards, Paragraph 137
Based on the Secretariat's report, it appears that the Trade Agreements Act of 1979 has a somewhat
different interpretation of the requirement to use international standards as the basis of technical
regulations.
Under the Act, recognized exceptions for not using international standards
include legitimate objectives listed under Article 2.2 of the TBT Agreement (e.g., deceptive practices,
protection of human health). The TBT Agreement, Article 2.4, notes fundamental circumstances
(fundamental climatic and geographical factors or fundamental technological problems) related to
fulfilling a legitimate objective, not the legitimate objective itself, as an acceptable basis upon which a
Member is forgiven the requirement to use an international standard.
9.
Could the U.S. confirm the interpretation contained in the Secretariat's report or otherwise
clarify the operation of the Act?
Part III. Trade Policies and Practices by Measure, (2): Measures Directly Affecting Imports,
(vii) Standards and technical regulations, (c) Standards, Paragraph 140:
The Secretariat Report says that according to OMB Circular A-119, the heads of federal government
agencies must provide OMB (through NIST) with the reasons for using government standards rather
than voluntary consensus standards. According to the latest NIST annual report, at least 72
government-developed standards were being used by 25 federal government agencies. At the same
time, federal agencies have adopted nearly 2500 private-sector standards, which include voluntary
consensus standards.
10.
Can the United States explain the difference between government-developed standards and
private sector standards? Are government standards developed under the same rules and procedures as
private standards? Are these procedures openly available for public scrutiny? Have all government
standards developers adopted the TBT Code of Good Practice?
5
19 USC 2532. In addition to legislation, regulatory guidance issued by the Office of Management and
Budget includes obligations to consider the trade impact and evaluate the merits of using relevant international
standards. See WTO document G/TBT/W/258, 26 October 2005.
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Part III. Trade Policies and Practices by Measure, (2): Measures Directly Affecting Imports,
(vii) Standards and technical regulations, (d) Conformity Assessment, Paragraph 144:
11.
To what extent do U.S. government regulators use international standards and guides for
conformity assessment?
Part III. Trade Policies and Practices by Measure, (2): Measures Directly Affecting Imports,
(vii) Standards and technical regulations, (d) Conformity Assessment, Paragraph 145:
Unlike in Paragraph 142, which makes reference to the membership of ANSI in IAF, there is no
reference to the participation of U.S. laboratory accreditation bodies in the global conformity
assessment system.
12.
To what extent do U.S. regulators accept tests and certification to U.S. requirements by
conformity assessment bodies which have foreign accreditation? Could the U.S. elaborate on the
bodies and fora in which they participate?
Part III. Trade Policies and Practices by Measure, (2): Measures Directly Affecting Imports,
(vii) Standards and technical regulations, (d) Conformity Assessment, Paragraph 146:
13.
Could the U.S. explain how it implements the equivalency provision of the TBT Agreement
(Article 6.1)? Could the US elaborate on the sectors covered by the five agreements which have been
notified? Are these based on bilateral recognition or MRAs?
Part III. Trade Policies and Practices by Measure, (4): Other Measures Affecting Production and
Trade, (i) Other government support including subsidies, (a) Overall support, Paragraph 199 and
Table III.7
The Secretariat Report notes that as of October 2005, the last U.S. full notification under Article XVI:1
of the GATT 1994 and Article 25 of the SCM Agreement dated back to October 2003. At that time,
the U.S. notified WTO Members of three federal tax concessions specifically benefiting the timber
industry in the amount of $470 million.
14.
Can the U.S. provide the current status of these subsidies? Does the U.S. intend to eliminate
them?
U.S. Government Report (WT/TPR/G/160)
Part III. Trade Policy Developments, 2003-2005, (8) Agricultural Issues, Paragraph 116.
The U.S. Government Report identifies The Commodity Credit Corporation (CCC) as the entity
responsible for managing U.S. farms programs through loans, purchases, payments, and other
operations. CCC total net direct payments in 2003 were $12.9 billion.
15.
Given that the US Administration must be monitoring expenditures so as to ensure that it is
complying with its domestic support obligations through, if need be, policy adjustments decided by the
Secretary of Agriculture, can the United States provide information on the amount of CCC
expenditures in 2004 and 2005 in support of agriculture?
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PERU
Marco Institucional y Normativo
1.
En la página 18, en el numeral 14, Estados Unidos menciona que el Congreso evalúa
quinquenalmente el retiro de la OMC, en esencia la firma del Acuerdo de la Ronda Uruguay. En este
sentido, ¿Estados Unidos también considera evaluar quinquenalmente la conveniencia de mantener
vigentes los acuerdos bilaterales que ha firmado?
Normas de Origen
2.
Dado que Estados Unidos considera que los acuerdos bilaterales representan un elemento
importante para promover la liberalización comercial y la eficiencia en la producción de sus socios
comerciales, ¿qué planes tiene para la armonización de los regímenes de origen de los diferentes
acuerdos y la posibilidad de acumulación entre países con los que tenga acuerdos?.
Medidas Sanitarias y Fitosanitarias
3.
En la página 68, numeral 149, se señala que Estados Unidos en sus acuerdos de libre comercio
con Australia y Chile en el Capítulo de Medidas Sanitarias no aplica el mecanismo de solución de
controversias de los acuerdos. ¿Cuál es la razón para sustraer del mecanismo de solución de
controversias de estos acuerdos bilaterales alguna controversia en materia sanitaria y fitosanitaria?
Asimismo, ¿por qué el Acuerdo de Libre Comercio con Singapur no contiene ninguna disposición
específica sobre medidas sanitarias y fitosanitarias?
4.
En la página 70, numeral 153, se señala que no existen directrices específicas para zonas libres
de plagas para cereales, material de vivero o madera. Teniendo en cuenta la importancia de estos rubros
para países en desarrollo, ¿Estados Unidos ha pensado en la elaboración de directrices específicas para
el reconocimiento de zonas libres de plagas para cereales, material de vivero o madera en el corto
plazo?
5.
En la página 72, numeral 160, se menciona que la FDA tiene la responsabilidad primaria de la
inocuidad de todos los demás productos alimenticios y de los medicamentos veterinarios, sin
especificar en términos generales sus funciones en cada caso. ¿Podría explicar cuáles son las funciones
y responsabilidades de la FDA en materia de inocuidad alimentaria y de medicamentos veterinarios?.
6.
En la página 73, numeral 164, solo se menciona los análisis de los efectos económicos tras la
entrada en vigor de la Ley contra el Bioterrorismo. ¿Se realizan estos análisis todavía?. ¿Se han
efectuado análisis sobre el impacto en la seguridad para la salud humana o la seguridad nacional
estadounidense de la aplicación de la Ley contra el Bioterrorismo con la finalidad de modificar o, en su
caso, suprimir algunas de sus exigencias?
7.
En el documento se señala que la política general del APHIS es evaluar los riesgos basándose
en “el riesgo de enfermedad asociado con la región desde la que se exportan (los animales y productos
de animales), en vez de basarse en la condición de “libre de enfermedades” o “no libre de
enfermedades” determinada país por país”. Podría explicar la racionalidad y preferencia del criterio de
riesgo en relación al nivel adecuado de protección? ¿Podría afirmar que la utilización de dicho criterio
no afecta o demora las decisiones respecto a solicitudes de regionalización y de reconocimiento de
zonas libres de plagas o enfermedades? ¿Por qué?
Reglamentaciones Ambientales Relacionadas con el Comercio
8.
En la página 74, numeral 169, se menciona la interrelación de la EPA con otras agencias
estadounidenses y gobiernos extranjeros sin referirse a sus funciones que están vinculadas al tema
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comercial. ¿Podría detallarse aquellas funciones de la EPA que tienen influencia en la relación
comercial con otros países?.
9.
En el caso de la cooperación en temas ambientales que Estados Unidos otorga a otros socios
comerciales, ¿podría precisarse qué entidad está a cargo de supervisar esta cooperación?. ¿Cómo se ha
manifestado en el incremento del flujo comercial con sus socios la cooperación para el tema comercio –
ambiente otorgada por Estados Unidos, y qué ejemplos podría citarse?.
APEC
10.
En la página 27, numeral 42, se hace referencia a los Planes de Acción Individual en el APEC
como un mecanismo de medición del progreso alcanzado por los Miembros. ¿Cuál sería la importancia
que Estados Unidos otorga a los Planes de Acción Colectiva en el foro APEC y en qué temas considera
que el trabajo en APEC puede ayudar a acelerar el progreso de la Ronda Doha de OMC?.
ALCA
11.
En la página 2, en el numeral 36, Estados Unidos señala que continúa insistiendo en la creación
de un Área de Libre Comercio de las Américas (ALCA) pero que a fines del 2005 las negociaciones
estaban bloqueadas. ¿Cuáles serían las alternativas que Estados Unidos propondría para reanudar las
negociaciones con miras a la conformación del ALCA, teniendo en cuenta su experiencia en las
negociaciones bilaterales y regionales de acuerdos de libre comercio y la sensibilidad de los países en
desarrollo expresada en esas negociaciones?. Concretamente, ¿qué pasos estaría considerando para
retomar las reuniones y qué acciones propondría?. Asimismo, ¿esas acciones incluirían impulsar la
definición de un programa de trabajo y un calendario?
Agricultura
12.
De acuerdo a los párrafos 11 y 20 del Informe, en el 2004, la ayuda a los productores habría
aumentado de 35600 millones a 46, 500 millones de dólares y para el ano 2005, las estimaciones del
Departamento de Agricultura prevén un aumento en los pagos oficiales directos a los productores,
impulsados en gran medida por los pagos anticíclicos y los pagos de urgencia.
13
¿Cómo se condice esta situación con el mandato de Doha? ¿Se ha pensado en corregir esa
situación para la próxima Ley de Seguridad Agrícola e Inversión rural? ¿Cómo se podría argumentar
que dichas medidas y el monto desembolsado no causan una mayor distorsión de la producción y el
comercio y que afectan los precios internacionales?
14.
¿Cual es la razón por la cual la ultima notificación de EEUU sobre la ayuda interna no incluye
la ayuda otorgada con arreglo a cualquiera de los programas comprendidos en la Ley de Agricultura de
2002
15.
Respecto a los pagos de urgencia ad hoc, el informe señala que para el 2005 habrían
aumentado en siete veces y que los pagos anticiclicos se habrían cuadruplicado. Podría EEUU indicar
en que rubros estuvieron concentrados dichos aumentos tanto para los pagos anticiclicos como para los
pagos de urgencia. En cual de los compartimentos del Acuerdo sobre la Agricultura, los EEUU
clasifican los pagos de urgencia ad hoc? ¿Por qué?
Propiedad Intelectual
16.
Conforme a lo señalado en el informe en los puntos 262 y 263 del informe, existe preocupación
por el tema de la calidad de las patentes en los Estados Unidos. ¿En líneas generales, tanto el USTR
como el USPTO tienen alguna estrategia para enfrentar este problema?
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17.
Como se conoce, el problema de la biopiratería viene creciendo en los últimos años de manera
preocupante. En la OMC se han hecho diversas propuestas para modificar el acuerdo de los ADPIC a
fin de incluir, en adición a las obligaciones ya existentes de divulgar en el artículo 29° del Acuerdo
ADPIC, la obligación de divulgar el origen de los recursos genéticos y material biológico en el sistema
de patentes, así como la evidencia de consentimiento informado previo y evidencia del acceso y
distribución de beneficios. En el punto 263 del informe se señala que un análisis hecho por las
Academias nacionales encuentra “rasgos de la legislación estadounidense que impiden la divulgación
de la información contenida en las patentes y que elevan el costo y la incertidumbre de los litigios sobre
validez e infracción de las patentes”. ¿Están los Estados Unidos haciendo algo para mejorar el sistema
de divulgación existente? ¿Existe alguna estrategia para combatir el fenómeno de la biopiratería, dentro
o fuera del sistema de patentes?
INDONESIA
1.
Anti dumping (page 39 of the Report)
It is the fact that the US is one of the most active countries using antidumping actions to protect its
domestic industries from unfair imports products. The Report says that at the end of 2004 AD orders
were applied to imports from 44 countries and of some 273 AD duty orders, 55% were applied on iron
and steel products and the rest were applied on chemicals, pharmaceuticals, agriculture and forestry
products. Based on our observation, for a quite lengthy time, most of the US antidumping actions are
focused on import of steel and iron products to protect inefficient domestic industries in the US market.
Indonesia is seeking further clarification on this observation.
2.
Other Charges affecting Imports. (page 35)
In the Report, it was said that import valued at USD 2,000 are subject to a merchandise processing fee
and the fee is set at 0.21% of the import value. As this policy is exempted from those countries which
have bilateral free trade agreement with the US, how the US reconciles this policy with Article III
(National Treatment) and Article XI (General elimination of quantitative restrictions) of the GATT
1994?
3.
Technical Regulation and Standards (page 48 – 54)
It is widely recognized that technical regulation, standards and phytosanitary are useful to protect
human, animal and plant life and health (Article XX of the GATT 1994). In the Report, it is said that
for that purpose, the US has used a specific technical regulation and phytosanitary other than developed
by international organizations. In this context, Indonesia is seeking further explanation as to how the
US could comply with the guidance in the said agreements to follow the standards developed by
international organizations (although this is not a mandatory).
4.
The US Administration is issuing a comprehensive Report on yearly basis in implementing
Section 182 of the US Trade Act of 1974. The Report contains countries which are deemed not
complied with certain WTO Agreements such as TRIPS, Import Licensing procedures, etc. In the
Report the US government has placed some countries, including Indonesia in a Priority Watch List as
countries which are not implementing the TRIPS Agreement in full. Through this report, the US is
strongly urging the countries concerned to improve, to amend and/or to revoke their polices which are
deemed not consistent with WTO Agreements. Indonesia wish to have an explanation as to what
extend this Priority Watch List could be justified under the WTO rules and disciplines.
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CHINA
CHAPTER 1: RECENT ECONOMIC DEVELOPMENTS
“Twin Deficits”
Question:（p.6 para.17，p.7-10. para.19－25)
Besides urging other economies to accelerate their growth to improve import in trade in goods and
services, what domestic approaches has the U.S. taken to tackle the “twin deficits” issues? How do
these measures take effect?
Does the U.S. have any plans to cope with the “twin deficits” without implementing any protectionist
measures which erode multilateralism and the trade relationship with other trading partners?
Does the U.S. deem the depreciation of US Dollar against other major currencies would serve as a way
to improve its current account deficit?
CHAPTER 2: DEVELOPMENTS IN TRADE AND INVESTMENT POLICY
(3) Participation in the WTO
Question: (p.16 para.21)
Are there any unfulfilled obligations regarding WTO transparency principle and notification by the
United State Government? If yes, why does the United State Government fail to have implemented
these obligations?
For the sake of transparency, would the U.S. explain to other Members why it took the U.S. about
10 months to fully respond in writing to Members’ written questions raised during last review instead
of 4-6 weeks as agreed under TPRM? What measures will the U.S. take to avoid this delay of responses
from happening again?
(4) Preferential and Other Arrangements
Question: (p.17 para.23)
As to the U.S. active pursuit of regional and bilateral free trade arrangements, would the U.S. elaborate
on how to ensure a complementary approach when applying to both the multilateral system of the
WTO and its regional and bilateral initiatives to lessen the effect of discrimination creation and trade
diversion by those arrangements?
How will the U.S. evaluate the “spaghetti bowl” effect of FTA arrangements on multilateral trading
system as reflected in the Sutherland’s Report?
Question: (p.21 para.42)
As an active player in both WTO and APEC, what strategy does the U.S. take to enhance the policy
synergy in those two different arenas?
(5) Foreign Investment Regime
Question: (p.22 para. 44-45)
In spite of a generally liberal foreign investment regime, the U.S. notably maintains restrictions on
foreign direct investment to some extent and alerts on foreign mergers and acquisitions of domestic
companies based on the so-called national security reasons. As the U.S. responded in the previous
review that factors to be considered in national security review changed with each acquisition and
merger transaction under the Exon-Florio Amendment and the transparency of its review process is
rather limited.
Although it varies from case to case, could the U.S. elaborate on what the major factors are
generally concerned by its authorities during a foreign merger and acquisition review?
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Does the U.S recognize the possibility of discretionary power abuse by relevant authorities under
the Exon-Florio Amendment due to lack of transparency in the review process?
Could the U.S. enlighten us on what have been done to keep its national security review as
transparent, predictable and fair as possible?
Question: (p.22 para. 44-45)
In 2005, CNOOC, an oil company from China, offered the highest bidding price for its intended
acquisition of Unocal, a California oil producer. But eventually CNOOC withdrew its filing under huge
political pressure from the U.S. side.
What are the U.S. comments on its surging domestic complaints from its industrial community
about the damages on U.S. business environment and commercial interests by the political
pressure imposed upon this case?
Taxation System
Foreign company’s branches in the U.S. or US companies with more than 25% foreign share are
required by the U.S. to register and keep records of transactions with affiliated companies. The records
should be stored in places designated by tax department, while further explanations to these
transactional records must be annually updated and registered. Otherwise, companies are subject to
different punishment.
Does this requirement apply equally to domestic companies of the U.S.?
Does this requirement impose extra burden to foreign invested enterprises and complicate their
business operation in the U.S. as well?
Please provide the rationale of this requirement and clarify its consistency with WTO national
treatment?
CHAPTER 3: TRADE POLICIES AND PRACTICES BY MEASURE
(2) Measures Directly Affecting Imports
Tariff
Question: (p.32 para.49)
At present in the U.S., 7% of tariff headings are three-time higher than the simple average rate of all
tariff headings, while 4% of tariff headings are 15% or higher. High tariffs and tariff peaks mainly
concentrate in textile and clothing, footwear and other travel products which account for a major part of
export for developing countries. However, the U.S. implement low tariffs on products of higher prices,
while implementing high tariff on products of low price.
Please clarify its policy-making intention of such tariff structure and evaluate its impact on
export from developing countries to the U.S.
Custom Clearance
Question: (p.27 para.22, p.35 para. 66-69)
According to the Secretariat Report, Paragraph 343 of the Trade Act (2002) stipulates that CBP must
receive advance information pertaining to any cargo before the cargo is brought into (or sent from or
pass through) the U.S. by any mode of commercial transportation. Otherwise the CBP may impose
punishment by a fine. However, the U.S. refuses to provide information on the accumulated number of
fines collected. Please clarify.
What recommendations were made concerning fees to be eliminated and the rate of fees to be
retained?
Does the U.S. Customs impose “harbor maintenance fee” on the basis of its actual expenditure
on maintenance? As the maintenance fee is designed for harbor maintenance, why does it apply
only to imported products but not to exported products of the U.S.?
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For the importation of some products, such as textile, clothing and footwear, does the U.S.
Customs require more specific information than other products?
Please clarify the consistency of the said information requirements and the rationale for the two
fees with Article 8 of GATT 1994.
The U.S. will fully deploy the Automated Commercial Environment (ACE) as part of its customs
modernization program by 2009. The ACE will replace the current Automated Commercial System.
Will the ACE further simplify customs procedures by reducing instead of increasing trade
barriers to foreign exporters, esp. to those small and medium ones from developing Members,
which often do not have much capacity of E-Commerce?
On what conditions does the U.S. Customs require commercially confidential information on
processing procedures of textile and clothing? What is the rationale for such requirement?
What measures does the U.S. Customs take to protect such commercially confidential
information on processing procedures?
Would the U.S. Customs extend the payment period of customs duty for clothing up to 210 days?
If importer fails to keep the imported clothing products within payment period of customs duty
to enable the Customs to determine final tariff, what would be the amount of fine imposed by the
Customs?
How would the U.S. evaluate the impact of a prolonged payment period on import of clothing?
Would the U.S. consider shortening the payment period to such an extent so as not to negatively
affect trade?
Question: (p.55 para.150)
Perishable goods are reported to be more frequently damaged than before due to cumbersome and
sometimes excessive inspection and approval procedures for goods entering the U.S. even though
increasingly detailed cargo information was submitted to CBP as requested. Typically, fresh lychee in
air-conditioned containers are to be unloaded and exposed in open air for 5 hours during a entry-of port
inspection and to wait for another 5 or even 7 days to finish all the clearance procedures, which often
leads to great commercial losses to exporters.
What measures would be taken to improve U.S. Customs sampling and inspection procedures in this
respect?
Export Restrictions
Question:( p.60 para.176)
The U.S. restricts seriously export of hi-tech products to China. Such restrictions deprive many U.S. hitech companies of its due right to export to China. According to China’s statistics, the U.S. ranked
No. 2 in 2001 as one of the largest hi-tech products exporters to China. However U.S. exports dropped
to No. 6 in that ranking in 2005, with its share of the total hi-tech imports of China falling from 16.5%
in 2001 to only 8.1% in 2005.
Has any U.S. institutions conducted any study on the impact of its export restrictions on its
current trade deficit with other Members? If yes, would the U.S. Government share the outcome
of these studies with Members?
Does the U.S. regard its current export restrictions on hi-tech products to China as one of the
major causes in US-Sino trade deficit?
Would the U.S. intend to review its current export restriction policy with a view to fostering a
healthier and more comprehensive US-Sino trade relations?
Export Licensing
Questions: (p.60 para.178)
It takes at least three months, even one year in some cases for the United State Government to issue an
export license after receiving an application. This period is considerably longer than those in many
other countries like Germany and Japan. Moreover, export licenses are issued with many other
additional conditions.
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Why does it take so long for the U.S. to issue an export license?
Sanction
When the U.S. sanctioned foreign companies in name of weapon proliferation, were there any
evidence presented to the sanctioned company to justify the U.S. intentions?
Anti-dumping
Question: (p.36-44)
The U.S. has granted market economy status to some countries since last review, As a full WTO
Member, China has made enormous progress in the development of its market economy. Regardless of
the actual situation of China’s economy, the U.S. fails to recognize the market economy status of
China.
In examining different cases for market economy status, does the U.S. realize that it has adopted
double standard, which simply constitutes discrimination against China?
Question: p.38 para. 77-79, p.40 para. 85, para, 87-88, p.42. para. 92, p.44 para. 101 etc.)
As mentioned in the Secretariat report, the U.S. has yet to fully implement and comply with several
other recommendations and rulings of the Dispute Settlement Body after its recent efforts to repeal the
Byrd Amendment far beyond “the reasonable period of time”. Notwithstanding, Members have been
showing great patience and understanding to wait and see the U.S. government working with the U.S.
Congress to achieve full compliance in this regard. However, it will not be fair for Members to see the
U.S. industries taking the U.S. administrative or congressional problems as, a buffer or even a leverage
against competition from foreign industries.
Does the U.S. government intend to redouble its efforts with the Congress to secure effective
compliance, which will help not only to uphold U.S. credibility in the WTO but also to preserve
its business environment of competition in the long run?
Separate Rate Policy on ADP
Question: (p. 38)
The Department of Commerce (DOC) of the U.S. adopts a “Separate Rate policy” in the Anti-dumping
investigations involving so-called “non-market economy (NME)” factors. This Separate Rate policy
assumes that all the enterprises in the NME country are controlled by the government and therefore
have to accept the nationwide rate, unless an enterprise can prove that its exports are not controlled by
the government.
Please provide the legal foundation of the Separate Rate policy and its consistency with the
WTO/ADP Agreement.
How would the DOC guarantee the legitimate rights of exporters from members not being
recognized as market economies are not further jeopardized?
During the period under review, DOC of the U.S. has modified the application procedures for separate
rates, which largely increase the difficulty in application for separate rates.
According to the new Separate Rate policy, does the investigating authority request every
respondent to fill out the application individually, regardless the fact that some of them might be
affiliated, commonly owned or foreign owned?
Does the investigating authority of the U.S. request the exporters to provide the Customs Form
7501, which, however, is possessed by the importers of the U.S.?
How would the investigating authority of the U.S. guarantee the burden of proof is reasonably
set?
Due to the differences of domestic regulations in registration of enterprises and custom clearance in
various Members, and due to the difference in operations of various exporters, especially those smalland-medium-sized enterprises of the developing Members, some exporters applying for separate rates
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may not be able to provide all the documents requested by the investigating authority. In such
circumstances, would the investigating authority consider handling the requests of documents in a
flexible manner?
What is the time limit to submit the requested documents when applying for separate Rate?
Would the investigating authority consider this time limit adequate for the exporters, especially
those small-and-medium-sized enterprises of non-English-speaking developing Members, to
prepare and submit all the requested documents? If not, would the investigating authority
consider to extend the time limit according to Article 6.1 of WTO/ADP Agreement?
Would the U.S. consider to adjust or even abolish this separate rate policy?
Would the investing authority of the U.S. take measures to guarantee the maximized justice in
the implemention of this separate rate policy?
New Sampling Method of the Administrate Review of Anti-dumping Measures
Question: (p.43 para.95)
DOC of the U.S. has adopted a new probability-proportional-to-size sampling method to select the
mandatory responding enterprises in the administrate review of Anti-dumping measures since May
2005. According to this new method, some large exporters might not be able to be selected and
therefore be forced to subject to an unknown average rate. While in contrast, those small enterprises
which lack adequate resources and are not ready to undertake the whole process of review might be
selected to be the mandatory respondents. In addition, due to the uncompetitive cost and price of these
small enterprises, the dumping margin are likely to be higher than normal, therefore the average duties
are also likely to be increased unfairly.
Will this new sampling method increase the uncertainty and difficulty of the administrative
review of the anti-dumping cases?
What is the justification of this new method? What is the legal basis of this new method? What
is the consistency of this new method with the WTO/ADP Agreement?
The Prices of Market-based Purchase of Input
During the period under review, the investigating authority of the U.S. has made changes in using
market-economy prices to value the factors of production in NME antidumping cases. The new practice
requires that the majority (i.e.,over 50%) of the particular input was purchased from market-economy
suppliers so that this purchased price to be used to value all consumption of a particular input, whereas
in the original method, this proportion was only 15-20%.
What is the reason and legal basis of this increase from 15-20% to 50% of the market-economy
prices in the calculation of the prices of the input?
Please explain the consistency of this change with the WTO rules.
The actual market-based prices of certain input shall be regarded as “best available information” so
long as this market–based price is reliable. And the investigating Authority’s decision of whether to use
an NME respondent’s actual purchase prices should not focus on the quantity of these purchases but on
their bona fide nature.
Please explain why the investigating authority use surrogate values when actual, marketeconomy prices are available. What is the consistency of this practice with the Article 2.4 of
WTO/ADP Agreement?
The Federal Circuit has held that where “input prices are market determined, accuracy, fairness, and
predictability are enhanced by using those prices., using surrogate values when market-based values are
available would, in fact, be contrary to the intent of the law.”
How will the investigating authority comment on this decision?
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Sunset Review
Question: (p.43 para. 96)
What measures would the U.S. take, in line with sunset clause, some anti-dumping measures
which had lasted for a long period of time?
Subsidy
Agricultural Subsidy
Question: (p.85-93)
Comparing to the FY 2004, did FY 2005 witness the increase of subsidies to support export of
agricultural products or the expansion of domestic support itself pursuant to the Farm Security
and Rural Investment Act of 2002?
If so, how would the U.S. interpret the practice to try to comply with DSB rulings to reduce
agriculture subsidy on the one hand and to continue to expand its subsidy support to its
agricultural products on the other?
When those supported output finds its way into markets, will it further affect the already
distorted international trade in agricultural products?
Other Subsidies
Question: (p.66 para. 204)
As estimated, the U.S will provide to its enterprises through the American Job Creation Act of 2004 a
total of USD76 billion in form of domestic subsidy, which is far over the amount of USD50 billion
paid under the former Foreign Sales Corporation Repeal and Extraterritorial Income Exclusion Acts.
How does U.S. comment on the above conclusion?
Pursuant to the American Job Creation Act of 2004, a transitional period is provided to enable the U.S.
to continue its grant of export subsidy to the U.S. enterprises till the end of 2006 before U.S.
completely abolishing its WTO-inconsistent tax rebate and exemption practices conducted under the
former Extraterritorial Income Exclusion Acts.
Please explain why the U.S. cannot promptly comply with the relevant DSB rulings?
Are these tax rebate and exemption only granted to domestic enterprises? If yes, how is this
practice consistent to the National Treatment principle of the WTO?
TBT/SPS
Question:（p.50 para. 129）
Would the U.S. throw some light on to what extent its SPS regulations are based upon
international standards? The Secretariat report states that the U.S. maintains no centralized
statistics on TBT related to such matters, please explain why?
Comment Period for Notifications
The U.S. sometimes fails to strictly comply with WTO SPS/TBT agreements by giving other Members
sufficient period to comment on its own notifications. For instance, the U.S. non-urgent notification on
Digital TV Tuner Requirements（G/TBT/N/USA/128）granted only 20 days from July 8-27, 2005 for
comments. China has officially requested U.S. to extend its comment period but this request was
abruptly refused.
Will the U.S. elaborate on why it failed to comply with the min. 60 days comment period
requirements pursuant to the TBT Agreement in this case? Why the reasonable request from
China to extend the comment period of this important notification was refused by the U.S.?
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What is the U.S. prepared to do now to make up for that? Does U.S. intend to terminate its
enforcement of the DTV Tuner requirements?
CR Safety Requirements on Lighters
In 2004 U.S. announced to raise the import price ceiling of gas refillable lighters subject to the
compulsory CR device requirements of 1993 from USD2.00 to USD2.25. The fact is when the U.S. set
its former safety standards in 1993, the international standard (ISO9994:2002) on the safety of lighter
products had already existed. However the U.S. refused to adopt the said international standards while
insisting on linking lighter’s price to its safety. By raising the price ceiling for lighter products subject
to this CR regulation, the U.S. has successfully impeded lighters export from other members.
Please explain the scientific reason behind the U.S. linkage between the safety of lighters and
their prices?
Deviating from prevailing International standards, how could the U.S. justify the consistence of
the its CR regulations with Article 2.4 of TBT Agreement.
Has the U.S. notified to the WTO the latest amendment to its 1993 regulation? If not yet, why?
When does the U.S. plan to fulfill its obligation of notification?
Please throw some light on how often the U.S. undertakes a review on its current technical
regulations to seek improvement?
Digital TV Tuner Requirements
Pursuant to the U.S. notification on Digital TV Tuner Requirements（G/TBT/N/USA/128）, the U.S.
proposes to advance the date on which all new television receiving equipment must include the
capability to receive over-the-air DTV broadcast signals from July 1, 2007, to a date no later than
December 31, 2006. The costs incurred with the new television receiving equipment sometimes are
even higher than that of the TV set itself. In addition, over 80% of the U.S. consumers are receiving
digital TV programs through cable or satellite TV services while only a fraction of them now take
advantage of Digital TV products in the U.S. Thus the U.S. finds it difficult to decide when analog
television service is to end.
Under situations mentioned above, will the U.S. clarify its justification to advance the date of
implementation of such a compulsory regulation?
Does the U.S. believe that DTV Tuner requirements will cause extra cost to both the
manufacturers and the consumers?
Have any U.S. authorities conducted a review on the trade implications of this regulation? If yes,
what are the findings?
Energy Conservation Standards
The Energy Conservation Standards for Certain Consumer Products and Commercial and Industrial
Equipment（G/TBT/N/USA/154）notified in 2005 by the U.S. made technical amendment to its
former energy conservation standards covering 15 products including washing machine.
Some of the amendments, including the test conditions for the lumen maintenance rate of
medium base compact fluorescent lamp, do not follow current international standards. Would
the U.S. explain why the international standards can simply not satisfy its requirements?
When this regulation will be put into force? Will it strictly respect the transparency principle of
the TBT Agreement?
Energy Efficiency Labeling Regulations on 7 Categories of Products
Draft regulations notified by the U.S (G/TBT/N/USA/151）on energy efficiency labeling with regard
to 7 categories of products including washing machines stipulated that: “Labels for most appliances
must provide the product's estimated annual operating cost. Manufacturers must calculate these costs
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using national average cost figures for energy (e.g., electricity, natural gas, etc.) published by
Department of Energy.”
Does the U.S. recognize that estimated annual operating cost has just too many uncertainties
behind its calculation, which can mislead consumers instead?
Does the U.S. believe that the above provisions in the draft regulation are in line with the Article
2.2 of the TBT Agreement and do not cause unnecessary obstacles to trade?
Automatic Detention System for Imported Food Inspection and Quarantine
Pursuant to the Federal Food, Drug and Cosmetic (FDC) Act，FDA of the U.S. will conduct automatic
detention to imported food products with potential problems up to 30 days.
Does the U.S. require the representativeness of the samplings in undertaking of the overall
inspection during the automatic detention?
The inspection results from the FDA or laboratories recognized by FDA will serve as the final
evidence to trigger the Automatic Detention System. If the Inspection authorities of an exporter
disagree with the U.S. inspection conclusions, do they have the right to request a review? What
are the procedures to apply for a review?
Usually inspection cost is borne by the FDA, then why inspection cost incurred during the
automatic detention shall be fully borne by the importer?
Will the U.S. justify the consistency between its automatic detention regulation and the Article
2.2 of the TBT Agreement?
Bioterrorist Act
Since its enforcement of Bioterrorist Act, has the U.S. conducted any study to analyze the
negative impact of the Act on normal trade. If yes, what are the findings?
What measures would the U.S. take to strictly honor the principles embodied in the Article 5.4 of
the SPS Agreement as “Members should take into account the objective of minimizing negative
trade effects” thus to eliminate the excessive impact of the Act and its implementing measures on
trade?
IPR protection
Section 337 of the Tariff Act of 1930
Question (p. 82 para. 227)
Section 337 of the Tariff Act of 1930 has provided domestic industries of the U.S. with dual remedy,
giving discriminatory treatment to foreign enterprises. Please explain its consistency with WTO
national treatment principle.
The General Exclusion Orders are comparatively low in standard and lack further specific standard for
judgment, with considerable uncertainty. Would the U.S. clarify the specific standard for judgment
under the General Exclusion Orders?
Section 337 of the Tariff Act of 1930 gives International Trade Commission the right to automatically
initiate the implementing procedure of process investigation. Would the U.S. explain the rationale of
this provision and its consistency with the TRIPS Agreement?
CHAPTER 4: TRADE POLICIES BY SECTOR
(2) Agriculture
Question: (p.85 para. 11)
As to U.S. support to its agricultural commodities and producers, the Secretariat’s report refers to the
OECD’s analysis: "while support is lower than the 1986-88 average, it is above the levels of the mid90s, and the most production and trade distorting forms of support are still significant, contributing to
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depressing world prices". Meanwhile the OECD also found out that the U.S. provisional data for 2004
suggests an increase in the Producer Support Estimate (PSE)… reversing the downward trend
registered since 1999.
Does the U.S. agree with the above analysis of the OECD?
Would it undermine the US credibility in the course of the ongoing agricultural negotiation of
DDA when its PSE of 2004 was increased against the expectation by other Members of a
downward trend globally?
Question: (p.86 para.12)
In March 2005, the WTO DSB concluded that the US export credit guarantees for unscheduled
commodities such as upland cotton and soybeans are prohibited export subsidies. It seems, in July
2005, the US authorities were proposing to eliminate a support program for cotton.
Would the U.S. efforts to make statutory change to export credit guarantees also cover soybeans?
What is the US timetable to make the change for full WTO compliance?
Question: (p.88 para.25 )
The latest U.S. notification on domestic support covers the marketing years 2000 and 2001. Among
other things, Members would like to see a notification on its domestic support granted under
programmes encompassed by the 2002 Farm Act.
When does the U.S. plan to notify to the WTO its updated domestic support? What difficulties does the
U.S. face to fully implement its notification obligation in this regard?
(3)Financial Services
Banking
Question (p. 96 para. 67)
Regarding CCS(Comprehensive and consolidated supervision) and the calculation capital
adequacy, would the U.S. further explain and clarify the requirements on CCS and its calculation
measures of capital adequacy when it examines and approves foreign banks’ applications of
establishment of branches in the U.S.?
Question (p. 97 para. 70-71)
There are also strict restrictions on foreign banks’ acquisition, merger or holding of American banks.
These restrictions considerably affect foreign banks’ business in the U.S.
Would the U.S. provide data in the last two years concerning: foreign banks’ applications of
establishing more operational outlets which have been approved; applications of establishing
branches or representative offices which have been approved; acquisitions, mergers or holding of
American banks?
Question (p. 96 para. 67)
In the U.S., branches of foreign banks are not entitled to draw small deposits under 100 thousand
dollars. They have to engage in such deposit business via their companies in the U.S.. Branches of
foreign banks established after Dec. 19th, 1991 cannot join the FDIC, which means deposits in foreign
banks are not under the protection of the Federal Deposit Insurance Law. The stipulations above
considerably restrict foreign banks’ development in the U.S..
Are the above stipulations and measures consistent with WTO MFN treatment and national
treatment?
What are the reasons for those restrictive measures taken by the U.S. in this regard? Is there a
plan to eliminate or reduce the restrictions?
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Insurance
Question (p.100 para. 86)
Legislations on market access are inconsistent in each and every state, with different insurance
regulation structures and different requirements on registration, solvency, operation, etc. They
constitute significant barriers to foreign enterprises on market access.
China is glad to see the effort of the U.S. towards consistent supervision. Please provide a
timetable of the process of consistent supervision.
Does the U.S. give the same treatment to foreign and domestic insurers in the operation of
insurance business such as registered capital, taxation, administration fee, etc? Would the U.S.
clarify whether its stipulations in these aspects are consistent with the national treatment
principle of the WTO?
Please explain the reason for which some states of the U.S. do not permit the entrance of foreign
state-owned insurance companies.
Please explain the reason for which some states of the U.S. do not permit the provision of services
of foreign state-owned reinsurance companies.
(4)Telecommunication Services
Question (p. 102-107)
Under American laws（54.709(a)(1) of Title 47 of the U.S. Code of Federal Regulations, for
international and domestic telecommunication fees, universal service fund shall be paid.
Would the U.S. explain how its universal service fund operates?
Would the U.S. clarify the definition and scope of “domestic end user”?
For example, if a foreign company which is registered and conducts its business mainly outside the
U.S. only leases circuit on the side of the U.S. for its telephone communications with its companies
within the territory of the U.S., is this foreign company an “American domestic end user” so that it
has to pay Universal Connectivity Charge which corresponds to the universal service fund?
Question (p. 102-107)
When foreign telecommunications enterprises apply for the reduction and exemption of income tax in
settlement of voice services on revenue generated within the territory of the U.S., there is no clear
definition on “revenue generated within the territory of the U.S.”.
Would the U.S. clarify the definition and scope of “revenue generated within the territory of the
U.S.”?
For instance, in international telecommunication voice service settlement, foreign telecommunications
company and American telecommunications company provide half-circuit respectively on the side of
their own countries to form a complete circuit, provide voice or broad band services between the two
countries, and the two parties offset the balance due in accordance with inbound and outbound volume
or traffic between the two countries. Is the net income of the foreign telecommunications company
(namely, the charge paid by the American telecommunications company to the foreign
telecommunications company) regarded as the “revenue generated within the territory of the
U.S.”?
Question (p. 103 papa.96)
The U.S. does not grant Common Carrier Radio Licenses to nor does it permit the holding of Common
Carrier Radio Licenses by the following forms of FDI: foreign governments or their representatives;
non-American citizens or their representatives; companies established not under American laws; over
20% of stock or right to vote belongs to foreign governments or their representatives, non-American
citizens or their representatives or companies established not under American laws.
What are the policy concerns over the restrictions above of the U.S.?
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(5) Maritime Transport
Question (p. 108)
Merchant Marine Act, 1920 puts limitations on foreign vessels’ engagement in transport business in
near ocean and within the U.S.; transport of projects whose expenses are born by the Federal
Government must be carried by American vessels.
Members are much concerned about this in previous reviews. What are the reasons for the U.S.
to adopt such strict protective policy?
Restrictions on Reallocation of Empty Containers
Protection of transport along the coast of the U.S. under Jones Act affects reallocation of empty
containers of foreign vessel companies.
Please explain the rationale of stipulations on reallocation of empty containers under Jones Act.
These stipulations under Jones Act have put extra burdens on foreign maritime companies,
putting them at a disadvantage in their competition with the US domestic companies. What are
the comments of the U.S. on this?
Contradiction between Federal Laws and State Laws in Maritime Transport Legislation
The American Constitution stipulates that federal laws supersede legislations of each and every state,
yet in maritime transport legislation, especially in oil pollution and environmental protection, each state
acts on their own, with standards usually higher than relevant stipulations of international conventions
approved by the Federal Government, which forces vessel owner to make extra arrangements in vessel
apparatus and responsibility guarantee, which considerably increase the cost and expenditure.
What are the comments of the U.S. on it?
Other Professional Services
The different regulations on professional services in each state have proven to be obstacles to trade in
professional services such as accounting, architecture, engineering, and legal services. The U.S.
promised at last review that its Federal Government would continue to work with all states to
encourage the elimination of any remaining measures that are inconsistent with GATS disciplines.
Would the U.S. enlighten Members on its latest achievements in this regard?
Visa
A recent report issued by the American Chamber of Commerce in China in Feb. 2005 reflects that
“…U.S. visa policy continues to place U.S. companies at a disadvantage. …One in six respondents has
lost significant sales or business relationships because of visa issues…Many manufacturers fear that
customers, particularly capital equipment purchasers, are developing a preference for EU suppliers
because of difficulties in getting visas to travel to the U.S.”
Has the U.S. Government ever recognized the worries and losses reflected above from the U.S.
companies in China regarding its current visa policy?
Does the U.S. have any plan to improve its visa policy and the efficiency of visa procedures for
the sake of trade facilitation?
ISRAEL
Israel appreciates and welcomes the reports prepared by the WTO Secretariat and the United States.
Israel appreciates and respects the active role the United States has been taking in the multilateral
trading system. Israel has a great interest in the TPR of the United States as it is Israel's most
significant trading partner. While Israel has an interest in various aspects of the US economy and trade
policy, we would like to address two main subjects: IPR's and standardization.
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1.
Israel would be interested to know the criteria used by the US for placing countries on
SECTION 301 OF THE 1974 TRADE ACT.
2.
Do WTO Members who abide by the provisions of the TRIPS Agreement appear on the "301
lists"?
3.
What type of protection does US copyright law grant to producers of sound recordings in
respect of the public performance and broadcasts of their sound recordings?
4.
As tariff duties have been reduced significantly over the years, standards requirements have
become a significant barrier to the free flow of goods around the world. What is the United States view
on concluding Mutual Recognition Agreements (MRA's) in order to alleviate the problems created by
Members' different standards requirements? Would the US be willing to conclude MRA's in laboratory
testing as an interim solution of this matter in sectors such as IT equipment and drugs.
HONG KONG, CHINA
Rules of Origin
(WT/TPR/S/160, P. 30, Para. 37)
1.
In paragraph 37 (page 30) of the Secretariat Report, it is said that the general standards for
determining non-preferential rules of origin may be adapted and interpreted further by agencies other
than Customs and Border Protection (CBP) to fit the needs and purposes of the particular context in
which non-preferential rules are applied. Although the Agreement on Rules of origin allows the
introduction of changes to Members’ non-preferential rules of origin or new non-preferential rules of
origin, Article 2(e) of the Agreement requires that “their rules of origin are administered in a
consistent, uniform, impartial, and reasonable manner” during the transitional period. We would like
to know how the US ensures that the further adaptation and interpretation of its non-preferential rules
of origin by its different agencies can be applied in a consistent and uniform manner and how to
prevent contradictory outcomes of such further adaptation and interpretation.
Anti-dumping
(WT/TPR/S/160, P. 39, Paras. 81 - 82 and Table III.3)
2.
Note that in 2004, while the number of investigations initiated is lower than that of 2002 or
2003, the incidence of provisional measures is much increased from 54% in 2002 and 2003 to 92%, i.e.
24 out of the 26 AD investigations initiated resulted in the application of provisional measures. Can
the US please clarify if there is a change in policy or practice or any other reason for the significant
increase.
(WT/TPR/S/160, P. 42 - 43, Paras. 93 - 94)
3.
Note that suspension agreements were entered into in respect of certain AD cases. Grateful to
know if this option is invariably offered to the exporting sides in all AD cases. If not, what are the
criteria for offering or adopting this option?
Export Assistance
(WT/TPR/S/160, P. 63, Para. 194 and Table III.6)
4.
There is an increasing trend in the amounts authorised by the Export-Import Bank in support
for export activities (from US$9.2 billion in fiscal year 2001 to US$13.3 billion in fiscal year 2004).
What are the reasons for the increase? Does the US envisage the rising trend to continue?
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THAILAND
WTO Secretariat Report (WT/TPR/S/160)
Part II. Developments in Trade and Investment Policy, (3) Participation in the WTO
1.
Thailand commends the United States for its high level of compliance with WTO notification
obligations. Paragraph 21 of the Report states that some notifications were outstanding as at October
2005, including the notification on domestic support for agriculture, with the latest notification of
March 2004 covering marketing years 2000 and 2001. When does the United States intend to notify its
agriculture domestic support for subsequent marketing years to the Committee on Agriculture?
Part II. Developments in Trade and Investment Policy, (5) Foreign Investment Regime
2.
Paragraph 44 of the report provides some information about the Exon-Florio Amendment,
which grants the President wide discretion in taking action against FDI transactions by, among other
things, suspending or prohibiting proposed transactions, as well as divestment of a completed
transaction. Please provide more details on this law, including all instances of implementation since its
enforcement and information on how we can obtain a copy of the Amendment and all related laws and
regulations. Also, how does the United States view this provision in light of the ongoing negotiations
in the Working Party on GATS Rules on Article X: Emergency Safeguard Measures, and how does the
United States plan to address this issue in that context?
Part II. Developments in Trade and Investment Policy, (4) Preferential and Other Arrangements, (ii)
Free-Trade Agreements
3.
According to paragraph 28 of the Report, the US-Jordan FTA services liberalization section
utilizes a positive-list approach. To date, what other FTAs has the United States signed that use this
approach? In which other FTAs under negotiations is the US considering using, or has agreed to use,
this approach?
4.
Could the United States please provide information on its preferential regime given to nonimmigrant workers entering the US in connection to bilateral/regional trade arrangements?
5.
Which types of visa are given as a result of NAFTA, US-Singapore, US-Chile, US-Australia
and other agreements, for which workers from other WTO Members are not eligible? What are the
quota numbers in each type and how do they affect the quota given to other WTO Members?
6.
Could the United States please provide progress reports on FTA initiatives not yet included in
the report, such as those with Malaysia and South Korea?
Part III. Trade Policies and Practices by Measure, (2) Measures Directly Affecting Imports, (i) Customs
Procedures and Rules of Origin
7.
Thailand understands that the US Customs and Border Protection requires certain WTO
Members to adhere to the 24-hour Advance Manifest Rule. Could the US elaborate on this Rule, and
the criteria for exempting Members from the Rule?
Part III. Trade Policies and Practices by Measure, (2) Measures Directly Affecting Imports, (iii) Other
charges affecting imports
8.
In paragraph 67, the Secretariat reports that Congress intended for the merchandise
processing fee (MPF) to approximate the cost to Customs and Border Protection (CBP) of processing
the entry of imported merchandise valued at over US$2,000. Bearing in mind that merchandise valued
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at US$2,001 should be subject to an MPF of about US$4.2, please clarify how the pre-determined
statutory minimum of US$25, as well as the statutory maximum of US$485, follow Congressional
intention and the principles of GATT Article VIII: Fees and Formalities connected with Importation
and Exportation.
9.
The United States has operated a harbour maintenance fee, or HMF, (paragraphs 68 and 69)
since 1987. The HMF is an ad valorem levy of 0.125% collected by the CBP on port use. Between
1987 and 1998 the HMF was applied to imports, exports, and domestic freight. The tax burden on
exports and national freight is comparatively low because ship-owners voluntarily pay the tax on a
quarterly basis. With regard to domestic freight, there are three exceptions: (1) payments under
US$10,000 per quarter; (2) traffic in Alaska, Hawaii and territorial dependents; and (3) the landing of
fish from ships and some freight shipments of Alaskan crude oil; however these exceptions do not
apply to imports. The tax has not been collected on exports since 1998 because the US Supreme Court
ruled that the portion of the HMF levied on exported cargo violated the Export Clause of the
Constitution, which bans taxes on exports.
The HMF appears to impose a tax that exceeds US commitments in its schedules of concessions, and
when compared to domestic products, imports are accorded less favorable treatment. The HMF may
also levy charges that exceed fees for harbour maintenance.
In light of the above, please clarify the HMF in terms of WTO consistency, particularly GATT Articles
II, III and VIII. Please also explain why imported cargo is subject to the harbour maintenance fee
while exported cargo is exempt (paragraph 69), considering SCM Agreement obligations regarding
export subsidies.
Part III. Trade Policies and Practices by Measure, (2) Measures Directly Affecting Imports, (iv) AntiDumping and Countervailing actions, (a) Legislation and administration
10.
Paragraph 75 of the Report identifies certain measures that the United States has taken to
determine continuous bond requirements for importers of agriculture/aquaculture merchandise subject
to AD or CVD cases. US law provides that Customs and Border Protection (CBP) may require a bond
or other security “[i]n any case in which bond or other security is not specifically required by law . . . .”
(19 USC §1623(a)). Because US AD/CVD statutes already provide for security of AD/CVD payments
by requiring importers to post cash deposits in the amount of estimated AD/CVD duties on entries of
subject merchandise after issuance of the order (19 USC §§ 1671e(a)(3) and 1673e(a)(3)), we are
concerned that this measure imposes an additional burden on agriculture/aquaculture exporters, and
could be WTO inconsistent. Could the United States please elaborate on the justification of CBP’s
authority to impose additional bond requirements on AD/CVD orders, in particular only on
agriculture/aquaculture merchandise?
11.
When calculating the continuous bond amount, does the United States take into account
whether the covered imports are from developing or least developed countries?
12.
Paragraph 76 of the Report describes new continuous bond guidelines, which include a
requirement for CBP to increase the continuous bond under certain circumstances after the Department
of Commerce (DOC) issues a preliminary affirmative determination. The Amendment to Bond
Directive 99-3510-004, posted on the CBP website listed in footnote 64, does not list all of the
circumstances that would mandate the CBP to increase the bond, providing only that, “If, at any time
after DOC issues a preliminary affirmative determination in an agriculture/aquaculture case, CBP
detects sudden changes in declared values, claimed country of origin, or declared classification, etc.,
CBP will consider such changes to reflect an increased risk” (emphasis added). To enhance the
transparency and predictability of the application of continuous bonds, could the United States provide
a complete list of all circumstances that would mandate CBP to increase a continuous bond? Please
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provide how authorities calculate the amount of increased continuous bond liability. In addition, are
there any circumstances under which the CBP must decrease the bond, and if so, what are they?
13.
According to paragraph 76, would the United States consider applying the increase in
continuous bond liability (using the same formula as paragraph 75) to other merchandise (apart from
agriculture/aquaculture merchandise) if it is determined to be in circumvention? Please describe how
circumvention is determined. Has the United States ever considered applying its continuous bond
requirements to other merchandise apart from agriculture/aquaculture merchandise? Please identify
any other types of merchandise that has been, is, or would likely to be, under consideration for
continuous bond application.
14.
Please describe any progress the US government has made on considering alternative means
to resolve the problem of uncollected AD/CVD revenue and to relieve the difficulties and burden
incurred by foreign exporters.
Part III. Trade Policies and Practices by Measure, (2) Measures Directly Affecting Imports, (iv) AntiDumping and Countervailing actions, (b) Anti-dumping
15.
The United States has recently begun using “sampling” to select mandatory respondents in AD
and CVD administrative reviews. Thailand is concerned about the WTO-consistency of this
methodology because, among other things, the use of selection frequency as a “weighting” factor may
lead to a sample rate that is not statistically valid, and it appears the United States will include margins
based on “facts available” in calculating an “all others” rate for other respondents.
16.
Please describe in detail the “probability-proportional-to-size” methodology the Department of
Commerce used to select respondents in the Brake Rotors from China and Softwood Lumber from
Canada administrative reviews.
17.
Will dumping margins that were calculated, in whole or in part, based on “facts available” be
included in the “all others” rate applicable to respondents that were not individually reviewed during
the administrative review?
18.
The Appellate Body and the panel in the softwood lumber dispute between the United States
and Canada ruled that the United States violated Article 2.4.2 of the AD Agreement by not taking into
account all comparable export transactions when the U.S. Department of Commerce (DOC) calculated
the overall margin of dumping. Does the U.S. intend to terminate the application of its zeroing
methodology in calculating dumping margins in all and every stages (investigation, reviews, and the
sunset review) of future AD cases?
19.
Thailand also seeks clarification on whether application of the zeroing methodology in
calculating dumping margins is required by US law. If so, please provide all information on such laws
and provisions.
Part III. Trade Policies and Practices by Measure, (2) Measures Directly Affecting Imports, (iv) AntiDumping and Countervailing actions, (c) Countervailing duties
20.
Does the United States intend to revise or repeal its existing policy of not applying CVD orders
against products from Non-Market Economy countries (NMEs) such as China, or would it simply
consider changing the status of NME countries to market economies? (Paragraph 89)
21.
Please explain in detail the criteria used in “same person” methodology. Is it identical to
“affiliated parties” test? (Paragraph 91)
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Part III. Trade Policies and Practices by Measure, (2) Measures Directly Affecting Imports, (iv) AntiDumping and Countervailing actions, (d) Suspension Agreements
22.
The threshold of “substantially all of the imports,” which the US AD Act sets at 85%,
consequently prevents the acceptance of a Suspension Agreement proposed by an individual exporter.
Please clarify this provision in light of Article 8.1 of the AD Agreement that allows any exporter to
voluntarily revise its prices or to cease exports at dumped price.
23.
Please explain how the United States determines the “reference price” or agreed price in
Suspension Agreements, as there may be more than one signatory with a different level of dumping or
subsidization?
24.
Please provide details on all AD and CVD Suspension Agreements into which the
United States has entered, and the reasons for which some were terminated. (paragraph 94)
Part III. Trade Policies and Practices by Measure, (2) Measures Directly Affecting Imports,
(v) Safeguards, (a) Global safeguards
25.
Please explain how the United States determines and quantifies all relevant factors that cause
serious injury, and how the United States isolates injury caused by non attribution factors from the
injury determination, pursuant to Article 4.2(b) of the Agreement on Safeguards. (paragraph 102)
26.
How does the United States determine which safeguard measures, such as ad valorem rate
increases, tariff quotas, import licensing, quantitative restrictions, or other measures, are to be used for
a particular case? (paragraph 103)
27.
Please explain how the United States applies safeguards in the form of import licensing
measures, and also provide examples of “other measures” (paragraph 103) that the United States has
used or might use as a safeguard measure.
28.
Please provide details on the calculation methodology the United States uses to determine
safeguard duty rates and quantitative restrictions.
Part III. Trade Policies and Practices by Measure, (2) Measures Directly Affecting Imports, (vii)
Standards and technical regulations
29.
Paragraph 131 states that the United States requires immediate containers of imported
processed meat and poultry products to be marked with the country of origin in English, whereas
imported meat and poultry processed in the United States are not subject to this requirement. Please
clarify how this complies with the national treatment principles of the TBT Agreement.
30.
Current US regulations concerning food labeling, such as the mandatory labeling of products
containing transfat, food allergens, and country of origin labeling, are stringent and quite costly. For
example, the United States allows importation of egg products only from FSIS certified facilities
(paragraph 158) and such products must also include food allergen labeling. These requirements
burden exporters with factory certification and examination costs as well as labeling costs. Does the
United States intend to simplify this process in the near future in order to facilitate trade?
Part III. Trade Policies and Practices by Measure, (2) Measures Directly Affecting Imports, (viii)
Sanitary and phytosanitary measures, (c) The Bioterrorism Act
31.
As the Bioterrorism Act of 2002 has entered into force for over 3 years, when does the
United States intend to publish information regarding the economic impact, particularly on trade, of
this regulation? We would especially appreciate information regarding the indicators listed in
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paragraph 164, such as the value of imports refused entry into the United States due to lack of
compliance with the regulations.
Part IV. Trade Policies by Sector, (2) Agriculture
32.
Paragraphs 10 and 11 mention an increasing amount of payments and Producer Support
Estimate (PSE) to US agricultural producers. According to the Doha Mandate, WTO member
countries are obliged to reduce their domestic supports substantially. Please explain why the United
States has increased payments to its agricultural producers in 2005, and how the United States intends
to comply with the mandate.
33.
In light of the United States’ recently proposed changes to eliminate its support program for
cotton, as indicated in paragraphs 12 and 13, does the United States also intend to eliminate its
support program for other products? Is the United States considering using a risk-based fee structure in
its export credit guarantee program for other products, such as soybean, sugar, corn, and rice?
34.
How does the US notify the counter-cyclical payments, the direct payments and the ad hoc
emergency payments to WTO as domestic support program in 2004 and 2005? In which categories
(Amber, Blue, or Green Box), and how much are these supports?
35.
Under the Export Credit Guarantee Program (GSM 102) described in paragraphs 47 to 52,
how much funding/financing does the United States allocate, in any given year, for programs with
credit terms between 180 days and three years? How does the United States plan to eliminate credit
terms longer than 180 days, as agreed in the Hong Kong Ministerial Declaration?
36.
Under food aid programs (paragraphs 53 to 57), how much does the US expend on: (1) nonemergency food aid; (2) Food for Progress program; and (3) Monetized Food Aid?
ECUADOR
ARANCELES:
Se evidencia un contraste entre los aranceles promedios relativamente bajos y los picos arancelarios en
el sector agrícola que parecen ser una característica de la política comercial de estados unidos y
aparecen como una contradicción con lo señalado en el párrafo 9, página 17 del informe de la secretaría
acerca de que “el principal objetivo de los estados unidos en las negociaciones comerciales
internacionales es la eliminación de los obstáculos al comercio de bienes y servicios y a las inversiones
extranjeras así como la difusión de un sistema de comercio basado en normas”.
Asimismo, si se considera el promedio de los aranceles para los productos no agrícolas es del 4% en el
2005, mientras que para los productos agrícolas es más del doble. ¿Cuál es la justificación de los
estados unidos para mantener altos aranceles de protección en sectores de productos de alimentación
agrícolas?
De la estructura arancelaria de los Estados Unidos de América se desprende que los derechos
específicos dificultan la competitividad para los bienes procedentes del Ecuador como país en
desarrollo. ¿Están los Estados Unidos considerando la reducción de dichos aranceles? Si así fuera, en
qué tiempo y de qué forma?
Podrían los Estados Unidos explicar qué grado de diferenciación existe entre los niveles arancelarios
NMF vigentes en Estados Unidos y sus niveles NMF consolidados en la OMC?
¿Cuál es el alcance de la leyenda “bound in WTO” que consta en el “Usito Tariff Database? significa
acaso que el derecho arancelario tiene el mismo nivel de “MFN duty rate” vigente o uno diferente?
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ACUERDOS DE LIBRE COMERCIO:
En el informe de la Secretaría de la OMC se señala un incremento sustancial de acuerdos de libre
comercio de Estados Unidos con una serie de países y subregiones. dentro de ellos, se informa que “los
Estados Unidos mantienen negociaciones para establecer acuerdos de libre comercio con Colombia,
Ecuador y el Perú”...”las autoridades de los Estados Unidos consideran que los ALC de los Estados
Unidos pueden promover la innovación, facilitar a los países participantes medios para la creación de
capacidad comercial y para que perfeccionen las técnicas de negociación, y promover la inversión, la
creación de empleo y el perfeccionamiento de las normas comerciales. También consideran que los
ALC son un medio para hacer avanzar la preparación y negociación de acuerdos multilaterales”
(párrafo 23, página 21).
Al respecto, teniendo en consideración que el Ecuador está por suscribir un ALC con los Estados
Unidos en estas próximas semanas. pueden los Estados Unidos proveer información sobre
proyecciones económicas, de inversión, y comercio que sustenten esas afirmaciones? es decir, tienen
los Estados Unidos estudios que estimen y cuantifiquen los beneficios de un ALC con nuestro país para
señalar lo mencionado en el informe de la Secretaría?
¿Podrían los estados unidos elaborar sobre cómo miran la suscripción de acuerdos bilaterales como
complementarios de las negociaciones comerciales multilaterales?
EROSION DE PREFERENCIAS:
La multiplicidad de ALC en diversas partes del planeta en los útimos años, así como por los posibles
resultados relativamente ambiciosos de la ronda de negociaciones en la OMC en materia liberalización
y de acceso a los mercados producirá erosión de las preferencias de los miembros que tengan dichos
acuerdos ¿qué percepción tienen los Estados Unidos sobre las dificultades para algunos países por la
erosión de sus preferencias? consideran que este tema debe ser tratado en la OMC? si ello es
afirmativo, ¿qué propuestas consideran adecuadas dentro de las negociaciones de la OMC para tratar
esa dificultad?
INVERSIONES:
El informe de la Secretaría señala “los estados unidos tienen tratados de inversión vigentes con 39
países. entre las principales características de los tratados bilaterales de inversión de los Estados Unidos
cabe citar: amplia cobertura; el trato nacional y trato NMF con respecto a las inversiones tanto
anteriores como posteriores al establecimiento, con sujeción a las excepciones sectoriales acordadas; la
observancia de ciertas normas de trato y protección con respecto a las inversiones abarcadas, las
normas relativas a la expropiación y la compensación; la libre transferencia de fondos; la prohibición
de determinados requisitos obligatorios en materia de resultados; la solución de diferencias a través del
arbitraje internacional.” (páarfo 46, página 160).
Tomando en cuenta que entre el ecuador y los Estados Unidos desde 1996 está vigente un tratado
bilateral de promoción y garantía de las inversiones, y que dentro de las negociaciones de un acuerdo
de libre comercio entre los dos países se incluye un capítulo correspondiente a inversiones y al
tratamiento para las ied, el Ecuador solicita información acerca de la percepción que tienen los Estados
Unidos sobre la convivencia de ese acuerdo bilateral en relación con un ALC.
¿Han considerado los estados unidos la eventual denuncia del acuerdo bilateral de promoción y
garantía de inversiones con el ecuador?
Podrían los estados unidos ofrecernos amplia información sobre lo que para su gobierno califica como
inversión y la forma en que se integra una lista ilustrativa acerca de lo que comprende el acto de la
inversión? es procedente una definición enmarcada en forma taxativa?
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COMERCIO Y SEGURIDAD:
LEY DE BIOTERRORISMO
Desde la pomulgación de la ley sobre bioterrorismo por parte del presidente de los Estados Unidos de
América en junio de 2002, podrían informar sobre las acciones emprendidas para evitar que esa ley sea
un obstáculo no arancelario para el comercio?
Tienen los Estados Unidos de Amèrica una evaluaciòn sobre el impacto comercial para los países de
América Latina desde la institucionalizaciòn de la ley de bioterrorismo y sobre los cambios en el
comportamiento de sus importaciones que puedan ser atribuidos como efectos de dicha ley?
Según parece, la ley de bioterrorismo autorizó alrededor de US$ 600 millones al gobierno federal para
su ejecución y preparación de las disposiciones aprobadas por el congreso estadounidense. Al respecto,
tomando en consideración que este monto supera sustancialmente cualquier posibilidad de apoyo que el
Ecuador pueda dar a la comercialización de sus exportadores, puede la delegación de los
Estados Unidos informarnos qué programas de asistencia técnica y financiera han establecido para que
los exportadores de países en desarrollo de América Latina estén preparados para cumplir todos los
requisitos de esa ley, a fin de continuar sus exportaciones sin mayores alteraciones comerciales?
¿Cuánto tiempo más tiene previsto estados unidos mantener la ley de bioterrorismo? tiene previsto
Estados Unidos hacer una revisión de esa ley? si la respuesta es afirmativa, cuándo?
PROPIEDAD INTELECTUAL:
Considerando las negociaciones en la omc, dentro del consejo de los adpic, y sobre la base del mandato
del párrafo 2.39 de la declaración de Hong Kong, el Ecuador desea conocer las razones por las cuales a
los Estados Unidos no les parece apropiado el enfoque sobre el develamiento de origen como un
enfoque para promover una mayor transparencia y claridad en la concesión de patentes? qué propuestas
alternativas ofrece?
PREGUNTAS ADICIONALES DEL ECUADOR
1.
En el párrafo 6, Cap. III, pág. 30, del Informe de la Secretaría, se manifiesta que la
normalización desempeña un papel importante por lo que respecta a la garantía de la seguridad y
calidad de los productos en los Estados Unidos. Los Estados Unidos han presentado numerosas
notificaciones en el marco de los Acuerdos OTC y MSF, pero no hay información sobre la medida en
que las normas estadounidenses se basan en normas elaboradas por organizaciones internacionales.
¿Podrían los Estados Unidos señalar en qué normas nacionales o internacionales se basan las
notificaciones presentadas en el marco de los Acuerdos OTC y MSF?
2.
¿Cómo juzgan los Estados Unidos la importancia de los Tratados de Libre Comercio
Bilaterales frente al mayor desarrollo del sistema de la OMC?
3.
En el Reporte de la Secretaría de la OMC no se hace mención a la biodiversidad ni a los
conocimientos tradicionales. ¿Podrían los Estados Unidos indicar cómo la biodiversidad y los
conocimientos tradicionales son protegidos en la legislación estadounidense?
4.
En el párrafo 29, cap. III, pág. 34, se señala que no se ha publicado ningún reglamento para el
funcionamiento de la Asociación Aduanera y Comercial contra el Terrorismo la C-TPAT. ¿Podrían los
Estados Unidos indicar si se prevé publicar un reglamento para el funcionamiento de la CTPAT? ¿De qué manera son aplicables las directrices de la C-TPAT mientras no exista un
reglamento?
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5.
Según el párrafo 48, cap. III, pág. 48, la participación de las líneas arancelarias no ad valorem
ha disminuido del 12,2 por ciento de las líneas en 2002 al 10,6 por ciento en 2004. ¿Podrían los
Estados Unidos especificar en cuánto ha disminuido la participación de las líneas arancelarias no
ad valorem, desagregados para productos agrícolas y no agrícolas, en los últimos 5 años?
6.
Dados los recientes resultados en el OSD sobre el cálculo de dumping y la publicación del
Departamento de Comercio de los Estados Unidos (DOC) sobre la propuesta para enmendar la
metodología de cálculo de dumping utilizado por esa institución, en el Federal Register (vol. 71, no.
43) del 6 de marzo pasado, ¿qué metodología alternativa al “zeroing” propondrían los EE.UU a fin
de cumplir con las normativas de la OMC sobre antidumping?
7.
En lo que corresponde a la derogatoria de la Ley de Compensación por Continuación del
Dumping o Mantenimiento de las Subvenciones (CDSOA) de 2000, conocida también como Enmienda
Byrd: ¿Podrían los Estados Unidos explicar por qué la derogatoria de la Enmienda Byrd no entró
en vigor automáticamente?, y ¿Por qué se permitirá que las empresas sigan recibiendo la
recaudación por aranceles de dumping de las entradas que se realicen hasta el 1 de octubre del
2007?
8.
Según el párrafo 164, pág. 73 del Reporte de la Secretaría, la FDA realizó análisis de los
efectos económicos de las disposiciones de la Ley contra el Bioterrorismo antes de su entrada en vigor,
como exige la legislación federal. La Secretaría no pudo comprobar los efectos en el comercio de esas
disposiciones tras su entrada en vigor, debido principalmente a la falta de información sobre
importantes indicadores, por ejemplo el valor de las importaciones rechazadas por no cumplir esas
disposiciones. ¿Podrían los Estados Unidos indicar si luego de su entrada en vigor han efectuado
algún estudio sobre los efectos económicos de las disposiciones de la Ley contra el Bioterrorismo?
9.
El Informe de la Secretaría no contiene información detallada sobre las disposiciones que rigen
la elaboración, modificación o cancelación de medidas sanitarias y fitosanitarias por parte de las
autoridades estatales. ¿Podrían los Estados Unidos señalar qué disposiciones rigen la elaboración,
modificación o cancelación de medidas sanitarias y fitosanitarias y qué principios deben observar
las autoridades en la elaboración de los reglamentos sanitarios y fitosanitarios? ¿Cuál es el plazo
normal de entrada en vigor de dichos reglamentos?
10.
¿Podrían los Estados Unidos señalar qué procedimiento siguen para asegurarse que las
medidas sanitarias y fitosanitarias que aplican se encuentren conformes a lo acordado en el
Acuerdo de la OMC sobre la Aplicación de Medidas Sanitarias y Fitosanitarias (Acuerdo MSF)?
Otras Preguntas
•
En el párrafo 131, pág. 64 del Reporte de la Secretaría se indica que los reglamentos
publicados en aplicación de la Ley Federal de Inspección de la Carne y la Ley de Inspección de
los Productos de Aves de Corral requieren que el nombre del país de origen figure en inglés en
los contenedores inmediatos de todos los productos de carne y aves de corral que entran en los
Estados Unidos. Cuando carne o productos de aves de corral importados a granel se elaboran
en los Estados Unidos, no es necesario que el producto elaborado o su contenedor estén
etiquetados. ¿Podrían los Estados Unidos explicar por qué se aplican estos reglamentos a
esos productos extranjeros y no a los nacionales, en contradicción al principio de “Trato
Nacional” de la OMC?
•
En el párrafo 19. pág. 33, del Reporte de la Secretaría, se indica que uno de los principales
instrumentos utilizados por la Oficina de Aduanas y Protección en Frontera (CBP) para
identificar cargas de alto riesgo es el Sistema Automatizado de Polarización (ATS). Se trata de
un sistema informático que analiza la información sobre carga mediante el uso de normas
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ponderadas, asignando un nivel de riesgo a cada expedición. ¿Podrían los Estados Unidos
detallar el funcionamiento del Sistema Automatizado de Polarización, especialmente en lo
que respecta al método de asignación de riesgos para cada expedición? ¿Cuáles son los
otros instrumentos utilizados por la CBP para identificar cargas de alto riesgo y cómo
funcionan?
•
Según el párrafo 23, pág. 34, la CBP exige a los participantes en el Sistema de Manifiestos
Automatizados (incluidos los transportistas, importadores, agentes de aduanas o servicios de
entrega urgente) que presenten la información sobre carga que sea "razonablemente necesaria"
para la identificación de expediciones de alto riesgo. ¿Podrían los Estados Unidos explicar
exactamente qué se debería entender por información “razonablemente necesaria”?
•
En el párrafo 26, pág. 35, se señala que en la CSI sólo pueden participar puertos que tengan un
tráfico "regular, directo y sustancial" de contenedores a puertos marítimos de los Estados
Unidos. ¿Podrían los Estados Unidos precisar qué se debe entender por puertos que
tengan un tráfico "regular, directo y sustancial" de contenedores a puertos marítimos de
los Estados Unidos?
•
En el párrafo 50, pág. 40, se indica que los contingentes arancelarios comprenden un poco más
del 2 por ciento de las líneas arancelarias. ¿Podrían los Estados Unidos especificar en qué
líneas arancelarias existen contingentes arancelarios?
•
Según el párrafo 51, pág. 40, a raíz de la Ronda Uruguay, los Estados Unidos consolidaron
todas las líneas arancelarias de los capítulos 1 a 97, excepto dos líneas dedicadas al petróleo
crudo. ¿Podrían los Estados Unidos indicar si consolidarán dichas líneas arancelarias?
•
Según el párrafo 120, pág. 62, entre julio de 2003 y julio de 2005 varios Miembros de la OMC
expusieron en el Comité de Obstáculos Técnicos al Comercio preocupaciones relativas a la Ley
contra el Bioterrorismo, y el programa de etiquetado del país de origen autorizado por la Ley
Estadounidense de Agricultura de 2002. ¿Podrían los Estados Unidos señalar hasta cuando
se ha previsto imponer esta serie de medidas?
•
Según los párrafos 191 y 192, pág. 79, el Ex-Im Bank tiene el mandato de facilitar garantías,
seguros y créditos a tipos y en condiciones que sean plenamente competitivos con los apoyados
por los gobiernos de los principales países cuyos exportadores compiten con los de los Estados
Unidos. ¿Podrían los Estados Unidos explicar en qué medida el mandato del Ex-Im Bank,
de “…facilitar garantías, seguros y créditos a tipos (de interés) y en condiciones que sean
plenamente competitivos con los apoyados por los gobiernos de los principales países
cuyos exportadores compiten con los de los Estados Unidos de América…”, son
compatibles con el Acuerdo sobre Subvenciones y Medidas Compensatorias de la OMC?
•
Según el párrafo 206, pág. 84, en la Ley para la Creación de Empleo en los Estados Unidos de
2004 se establece una deducción fiscal escalonada del 9 por ciento para empresas de
producción de determinados sectores. ¿Podrían los Estados Unidos indicar cómo tales
deducciones son compatibles con el Acuerdo sobre Subvenciones y Medidas
Compensatorias de la OMC?
Pregunta para coordinación y presentación con otros Países Miembros interesados (México, El
Salvador).
•
En relación con el trabajo de los migrantes en los Estados Unidos ¿Podrían los Estados
Unidos explicar cómo hacen cumplir sus leyes laborales, pago de salarios mínimos vitales
y los derechos de los trabajadores, para no crear competencia desleal (dumping social)?
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SOUTH AFRICA
SECTION III: TRADE POLICIES AND PRACTICES BY MEASURE
1.
Paragraph 138 of WT/TPR/S/160 (page 52) calls upon the President to “take such reasonable
measures as may be available to promote the observance by state agencies and private persons, in
carrying out standard-related activities, of requirement equivalent to those imposed on federal agencies,
and of procedures that provide for notification, participation, and publication with respect to such
activities”.
Can the US please give an example of a case where Federal standards differ with State
standards; and if such, which standard will prevail?
SECTION IV: TRADE POLICIES BY SECTOR
2.
The delay with submitting notifications to the WTO COA is a concern. This is mentioned in
various instances in the secretariat’s report WT/TPR/S/160. As at 8 March 2006, the members’ website
of the WTO contains the following as the US’ latest notifications:
Market Access: the last notification was G/AG/N/USA/54, for the year 2002/2003
Domestic support: the last notification was G/AG/N/USA/51, for the years 2000 and 2001 (i.e. preFarm Act 2002)
Export competition: the last notification was G/AG/N/USA/53, for the year 2002
When does the US intend to submit the outstanding notifications?
What steps is the US taking to ensure that notifications are submitted within prescribed timelines?
3.
WT/TPR/S/160: IV (2) (ii) 18: “… any importer, including manufacturers of like products, can
apply for a license…”
The US’s market access notifications indicate underfill of most quotas. To what extent is this due to
the allowance for US manufacturers of like products also to apply for licenses?
Is there a sanction of such manufacturers if they should receive a license but not utilize it? If yes, what
do such sanctions entail?
To what extend do administrative procedures contribute to the low fill rates of USA TRQs?
4.
WT/TPR/S/160: IV (2) (iii) 27 – direct payments: “… payments are based on historical acreage
and yields…”
On which years’ acreage and yields are these payments based?
5.
WT/TPR/S/160: IV (2) (iii) 29 – counter-cyclical payments: “… payments are also based on
historical acreage and yields…”
On which years’ acreage and yields are these payments based?
Are these historical acreages and yields changed from time-to-time?
6.
WT/TPR/S/160: IV (2) (iii) 31 – loan programmes (commodity or marketing assistance loans)
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What products, and in what volumes, were forfeited in the years 2003, 2004 and 2005? What
percentages of the total US crop did these constitute?
7.
WT/TPR/S/160: IV (2) (iii) 32 – loan programmes (marketing loans)
What amounts of loans, for which products and what volumes of each, were repaid at the “repayment
rate” in the years 2003, 2004 and 2005? What percentages of the total US crop did these constitute?
8.
WT/TPR/S/160: IV (2) (iii) 33 – loan programmes (loan deficiency payments programme)
What amounts of subsidies, for which products and what volumes of each, did producers collect in the
years 2003, 2004 and 2005? What percentages of the total US crop did these apply to?
9.
WT/TPR/S/160: IV (2) (iii) 43 – other programmes (Trade Adjustment Assistance for Farmers
programme): “… payments in 2004, amounted to US$11 million…”
Which products, and in what volumes, benefited from these payments in 2004?
10.
WT/TPR/S/160: IV (2) (iv) 51 – export credits, insurance and guarantees (Facility Guarantee
Programme): “…The export credit guarantee for sales of manufactured goods and services is only
extended to projects that are expected to benefit the export of U.S. agricultural products. The U.S.
authorities note that the Commodity Credit Corporation has issued one guarantee under this programme
since 1997.…”
Could the US provide details on the guarantee that was issued (country and products that benefited)?
11.
WT/TPR/S/160: V Food Aid: The USA provides emergency food aid through various
programmes and the USA efforts in this regard are very laudable. The USA also provides food aid
under various non-emergency programmes and the impact of these programmes on agricultural
production and production capacity in recipient and countries neighbouring recipient countries is not
always clear.
Can the USA provide an assessment on what the impact on prices and production quantities is in
developing countries of non-emergency food aid?
The non-emergency food aid strives to obtain certain laudable objectives in developing countries. Can
the USA provide an assessment on alternative methods to obtain these objectives than through the
provision of non-emergency food aid?
Can the USA provide the membership with statistics on the provision of non-emergency food aid and
also provide a break down of products and beneficiary countries and/or regions?
COSTA RICA
Medidas que afectan directamente las importaciones
i) Regimen aduanero
1.
En el párrafo 16 se indica que los importadores y los agentes de aduanas que utilizan el
Entorno Comercial Automatizado (ACE) pueden efectuar pagos de derechos y gravámenes a la Oficina
de Aduanas y Protección en frontera (CBP) por periodicidad mensual en vez de hacerlo por cada
expedición. Sírvase ampliar lo referente al mecanismo a través del cual funciona ese pago mensual, las
exigencias que se requieren al respecto tanto para los importadores como para los agentes de aduanas y
cuáles son los controles que existen al efecto.
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2.
En el párrafo 19 se hace alusión a un sistema de control de riesgo para las mercancías, a través
de un sistema informático que analiza la información sobre la carga mediante el uso de normas
ponderadas, asignando un nivel de riesgo a cada expedición. Sírvase agregar lo concerniente a la forma
de funcionamiento del control de riesgo.
3.
En el párrafo 20 se señala que tras la adopción de la Ley de Comercio Exterior, la declaración
de carga del buque debe enviarse a la CBP en formato electrónico por medio del Sistema de
Manifiestos Automatizados; y ya no se aceptan comunicaciones en papel. Sírvase indicar el
planeamiento que se hizo al respecto, señalando si la eliminación de la presentación de documentos se
hizo por etapas en las aduanas o si entró a regir de manera uniforme y general simultáneamente en todo
el país; si entró para todos los regímenes al mismo tiempo o se efectúo en forma gradual; si hubo algún
periodo que coexistieran la presentación virtual y en papel, cuál fue su experiencia en este proceso y
las precauciones que tomaron al respecto.
4.
En el párrafo 25 se hace referencia a la Iniciativa de Seguridad de los Contenedores (CSI) el
cual consiste en la selección e inspección de contenedores de alto riesgo destinados a Estados Unidos
en el puerto de partida y la utilización de sellos que evidencian la manipulación. Para tales efectos
destacan funcionarios de la CBP a los puertos participantes donde identifican los contenedores de alto
riesgo. Sírvase ampliar sobre las obligaciones y responsabilidades de los funcionarios de la CBP en
esos puertos, el período a través del cual se destacan en el puerto de partida, los controles y
coordinaciones que existen en relación con sus superiores en Estados Unidos. Asimismo sobre la
responsabilidad y obligaciones de los funcionarios del país anfitrión y en especial lo referente a su
potestad de seleccionar las cargas que serán objeto de revisión.
iii) Otras cargas que afectan a las importaciones
5.
En el párrafo 66 se señala que las importaciones valoradas en más de 2.000 dólares Estados
Unidos están sujetas a un gravamen por tramitación de mercancías recaudado por el Servicio de
Aduana y Protección de Fronteras, con las excepciones que ahí se indican. Sírvase ampliar la forma en
como controlan aquellos supuestos en que las mercancías formen parte de dos o más importaciones que
se efectúen con el propósito de evadir el pago del gravamen fijado y cuál es la sanción en caso de
incumplimiento.
Otras medidas que afectan a la producción y el comercio
i)
Política en materia de competencia
6.
En caso hipotético de un cártel internacional o una fusión. ¿Es posible para autoridades de
otros países establecer con Estados Unidos un mecanismo de notificación, intercambio de información,
asistencia mutua, recolección de pruebas, etc; para comunicar prácticas anticompetitivas en materia de
seguros, telecomunicaciones, otros? De ser esto posible ¿cuál es el procedimiento a seguir?
ii)
Derechos de propiedad intelectual relacionados con el comercio
7.
El párrafo 255 del Informe de la Secretaría se refiere al plazo de protección a las patentes de
invención otorgado por la legislación estadounidense. Por favor sírvanse explicar en detalle si las
disposiciones que prevén la posibilidad de extender o compensar el plazo de protección de las patentes
abarcan todos los tipos de patentes o se encuentran limitados para algunos tipos específicos de patentes.
8.
En el párrafo 261 del Informe de la Secretaría se hace referencia a la cantidad de patentes
solicitadas y otorgadas en Estados Unidos en el 2004. Por favor sírvanse indicar cuántas de estas
patentes otorgadas han sido revocadas, así como las principales causas para su revocación.
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Agricultura
i)
Medidas en frontera (págs 109-111)
9.
En el informe de la Secretaría, párrafo 16 del capítulo IV sobre políticas comerciales por
sectores, en este caso sobre la Agricultura (páginas 109-110), se indica que “alrededor de 195 líneas
arancelarias están sujetas a contingentes arancelarios. Cerca del 91 por ciento de los aranceles fuera de
contingente son aranceles no expresados ad valorem, frente a casi un 28 por ciento de los aranceles
dentro de los contingentes”. De esta forma, ¿considera Estados Unidos que el establecimiento de
aranceles no ad valorem, es una medida justa para el comercio multilateral y que no es más restrictiva
que la utilización de aranceles ad valorem?
iii) Programas de Ayuda Interna (págs 111-116)
10.
¿Por qué Estados Unidos aún no ha notificado la aplicación de su actual Farm Bill?
11.
¿Cuándo planea Estados Unidos notificar sus ayudas internas en la agricultura para los años
faltantes? ¿Podrá hacerlo durante este año, antes de finalizar las negociaciones de la Ronda Doha?
12.
¿Incluirá, en sus próximas notificaciones, un detalle del uso de la exención de minimis?
v) Ayuda Alimentaria (págs. 118-119)
Si bien la ayuda alimentaria puede representar un recurso para el desarrollo para algunos países
también puede ser un obstáculo para otros. De esta forma, Costa Rica está interesada en conocer la
opinión de Estados Unidos, como unos de los principales países que brinda este tipo de ayuda con
relación a los siguientes puntos:
13.
¿Tiene los Estados Unidos conocimiento de cuándo la ayuda que brinda se convierte en un
obstáculo para el desarrollo de un país, sea este receptor de la donación o posible exportador del
producto donado?
14.
De ser afirmativo, ¿qué medidas posee para corregir las distorsiones que estos programas de
ayuda alimentaria puedan provocar en el comercio multilateral?
15.
¿Considera Estados Unidos que la monetización de la ayuda alimentaria es una práctica
necesaria para que un país en desarrollo pueda lograr sus objetivos de desarrollo?
NORWAY
General questions:
1.
As described in paragraph 13 of the Secretariats report, chapter II, the Bipartisan Trade
Promotion Authority Act (TPA) is effective until 1 July 2007. Are there currently any legislative
procedures in progress to further extend the TPA, or to establish new and similar legislation?
2.
In paragraph 44 of the report it is stated that FDI into the United States is subject to reporting
requirements under the International Investment and Trade in Services Act. We would be pleased to
have more information on this act and its objectives, more specifically about what the requirements are
and what the potential consequences are of omitting to fulfill the reporting requirements.
Anti-dumping and countervailing measures:
3.
Norway continues to be concerned with the United States' active use of trade remedies, as
referred to in the Secretariat’s report. Norwegian exports of fish and fish products are effectively
hindered by the anti-dumping and countervailing measures imposed on fresh, whole Norwegian
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salmon. In our view, there is no basis for this measure, which was imposed in 1991, and continued after
a “Sunset review” in January 2006. Norway is concerned with the US practice relating to “Sunset
reviews”, which appears to be a purely mechanical procedure considering the fact that the Department
of Commerce has never lifted any AD-measures where American economic interests have been
involved. We would like to know what the United States intend to do in order to update the “Sunset
review”-practice in order to make it a functional review mechanism?
Maritime transport services:
4.
In addition to information on the US flagged and controlled fleet as provided in para 117 of the
Secretariats report, chapter IV, could you provide updated information on the size of the so-called
Jones Act fleet and its average age?
5.
According to information by MARAD6 the volume of cargo transported in US domestic ocean
trades was slightly reduced from 2000 to 2004 both in metric tons and metric ton miles. How does this
development compare to changes in the volumes transported by road and rail in the same period?
6.
In paragraph 122 of the Secretariats report there is some information on bilateral maritime
agreements. We would like to know if any of these agreements contains provision giving access to
government owned or controlled cargo on a reciprocal basis. We would also like to know if any of the
free trade agreements that the United States is a party to contain provisions on maritime transport,
which gives access to government owned or controlled cargo on a reciprocal basis.)
7.
Paragraph 130-131of the Secretariats report contain information on the food aid programme
and the cost of using US flagged vessels. We would like to know how much the extra cost of using US
flagged vessels, including the ”Excess 20%” referred to in paragraph 131, amounts to in USD annually
and as a percentage of the amount spent on food aid.
8.
Is participation in the Voluntary Intermodal Sealift Agreement (VISA) programme as
described in paragraph 128 of the Secretariats report limited to US flagged vessels?
9.
In footnote 127 to paragraph 129 it is said that ”agencies may opt for higher percentages” than
50% of gross tonnage to be transported by US flagged vessels. We would like to know if any agencies
have used this option, and if so which agencies and the percentage they have opted for.
10.
The Trade Policy Review document from 2003 contained information on restrictions on
transport of Alaskan crude oil for exports. We would like to know if Alaskan crude oil is exported, and
if so still subject to the requirement to be carried by US flagged vessels?
Intellectual property:
11.
In its annual report, the US Patent Office (USPTO) has stated its focus on increasing patent
quality. Patent quality is also one of the issues identified in a recent report by the Federal Trade
Commission (FTC) reviewing the U.S. patent system. We would like to ask the US Government
whether there are any concrete legislative, organizational or other measures under preparation or
execution in order to broaden the range of Prior Art search conducted by the USPTO when examining
patent applications, particularly prior art in more languages than up to now, and searches in more
databases and publications than hitherto, e.g. in developing countries, in order to improve the quality of
US patents? We also note with great interest the recommendations cited in the Secretariats report’s
from the report by the FTC on the working of the US patent system, in particular the one on new
administrative procedures to allow post-grant review of and opposition to patents. We point to the fact
that such procedures exist in e.g. Norway and the EPO, and are applied with success. What is the status
6
“US Domestic Ocean Trades 2004” published in January 2006
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of the work to introduce post-grant review procedures in the US patent system, and what would be the
time frame for introducing such procedures?
Government Procurement:
12.
Only 37 American states take part in the WTO agreement on Government Procurement (GPA).
This constitutes a considerable de facto market obstacle for foreign companies. We would like to know
what measures might be taken by the federal authorities in order to increase the number of states
participating, and give us an update on whether there are more states considering joining the GPA?
Agriculture:
13.
Page 56, paragraph 158 in the Secretariats report states that the United States has recognized 34
foreign systems as equivalent to the U.S. meat, poultry, and/or egg products regulatory systems. All
Nordic countries are included in this list except Norway, and we ask the United States to give us an
explanation for this.
PHILIPPINES
DEVELOPMENTS IN TRADE AND INVESTMENT POLICY
1.
We note from the Secretariat report that the United States views the Trade Promotion Authority
as an essential instrument to attaining its trade objectives. While it had been allowed to lapse in the
past, it has also been renewed several times thereafter.
Is there any possibility that the TPA will be extended or renewed soon after its expiry in July 2007?
Is the United States intending to expand the existing trade negotiating objectives embodied in the
current TPA legislation?
2.
The United States has concluded an FTA with one ASEAN member, and is negotiating with
two other ASEAN members. Does the US have plans to pursue a regional FTA some time in the future
3.
The US Generalized System of Preferences (GSP) programme is set to expire on 31 December
2006. We also understand that a five-year extension is being proposed. We cannot emphasize enough
the need for a timely, multi-year extension of the GSP. Certainty and predictability is vital for business
planning, both by exporters in developing countries and US importers who rely on duty-free consumer
goods or inputs for their industrial needs. What are the views of the United States on this matter?
TRADE POLICIES AND PRACTICES BY MEASURE
Sanitary and Phytosanitary Measures
4.
The Philippines notes that the Animal and Plant Health Inspection Service regulates the import
of plants, animals and their products into the United States by issuing import permits. We also note
from paragraph 156 of the Secretariat report that the process from risk assessment to issuance of an
import license can take several years. The Philippines would appreciate it if the United States can
make a clarification of the procedure as well as indicating the average length of time before import
permits are normally issued?
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TRADE POLICIES BY SECTOR
Agriculture – Legal Framework and Overall Support
5.
Can the United States provide Members an update on the 2007 Farm Bill that is now being
crafted? Can Members expect that the reforms being introduced into the Farm Bill shall adhere to those
being called for in the DDA negotiations?
Agriculture – Border Measures
6.
The Philippines would appreciate an elaboration on how the tobacco quota system is
implemented. How do interested Members access the annual quota for tobacco in the United States?
SINGAPORE
WT/TPR/S/160 Para 99-100
On the issue of foreign ownership control, we understand that there is a proposed legislation known as
the "Barton Bill" now under consideration by the US House of Representatives. News reports on this
have indicated that there is a provision in the Bill that would expand the current foreign ownership
restrictions in US communications laws by making them applicable to certain Internet, Broadband and
VOIP (voice over Internet Protocol) services. We would appreciate if the US could share information
on this Bill and in particular, on the motivations for such a proposal. While many countries are
considering the issue of imposing light-touch regulation on services such as VOIP, the general
direction of the market is that of allowing liberal FDI limits on the provision of services such as these.
WT/TPR/S/160 Para 109-112
There have been recent consolidations and others possibly in the Works (AT&T/SBC, Verizon/MCI,
and AT&T/Bellsouth). We would appreciate if the US could comment on action taken to ensure that
conditions of Competition are preserved in the US market, particularly in the following areas:
(a)
access to bottleneck network elements, given market consolidation and recent relaxation of
rules for incumbent local phone carriers to provide unbundled access to network elements;
(b)
provision of services such as IP transit, long distance transmission and local loop, as these
services are input to international capacity services and hence there have been some concern over
possible anti-competitive conduct by merged entities in favor of affiliates; and
(c)
provision of bundled services (i.e., fixed and mobile telephony, broadband internet access,
together with cable television) by merged entities and the risk of anti-competitive bundles that may
impede competition in individual service markets.
TRINIDAD AND TOBAGO
Report by the Secretariat (WT/TPR/S/160)
III.
Trade Policies and Practices by Measure
I.
Paragraph 77, page 38 indicates that certain aspects of the AD and CVD system challenged in
the WTO were resolved during the period under review.
Can the United States indicate when it envisages that all aspects of its AD and CVD
system, which has been challenges in the WTO, will be resolved?
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II.
According to paragraph 195, page 64, the United States maintains a duty drawback
programme. Customs duties and certain internal taxes and fees resulting from importation are refunded
following the export of either the imported product or the article manufactured from the imported
product.
Can the United States provide additional details on this program and its realised
benefits?
III.
In paragraph 210, page 67, it is noted that financial assistance to business is available through
the Trade Adjustment Assistance Programme for Firms, which is part of a broader programme that also
provides assistance to workers and farmers. The Trade Act of 2002 extended Trade Adjustment
Assistance until September 2007 and made available US$80 million over five years to assist firms
affected by import competition.
Can the United States outline key elements of its Trade Adjustment Assistance Program
as well as other related broader programs and their benefits?
IV.
Trade Policies by Sector (WT/TPR/S/160)
IV.
In December 2004, the Federal Reserve approved a new rating system for BHCs, including
FHCs. The revised rating system, which became effective 1 January 2005, emphasizes risk
management, introduces a more comprehensive framework for analysing and rating financial factors,
and provides a framework for assessing and rating the potential impact of the parent holding company
and its non-depository subsidiaries on the subsidiary depository institution(s). Under the new system, a
composite rating and the risk management component forms the basis to classify a BHC or FHC as
"well managed".
Can the United States provide additional information on this new rating system?
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REPLIES PROVIDED BY THE UNITED STATES
TO ADVANCE WRITTEN QUESTIONS
I. RECENT ECONOMIC DEVELOPMENTS
[China]
“Twin Deficits”
Question: p.6 para.17; p.7-10. para.19-25
Besides urging other economies to accelerate their growth to improve import in trade in goods and
services, what domestic approaches has the U.S. taken to tackle the “twin deficits” issues? How do
these measures take effect?
Does the U.S. have any plans to cope with the “twin deficits” without implementing any protectionist
measures which erode multilateralism and the trade relationship with other trading partners?
Does the U.S. deem the depreciation of US Dollar against other major currencies would serve as a way
to improve its current account deficit?
ANSWER:
Open trade policy does not in and of itself provide the tools to deal directly with
aggregate trade imbalances. The WTO is not the forum which deals with the tools affecting aggregate
or global trade imbalances, or macro fiscal policies of member countries.
However, from a U.S. perspective, these global imbalances are improperly viewed as a “twin deficits”
phenomenon. Empirically, the relationship between the two deficits is weak. More importantly, this
relationship is not the correct framework through which to view the problem.
The current imbalances in trade and payments are global in nature, with the United States 2005 deficit
on the current account of $805 billion offset by current account positions of other countries summing to
a surplus of $805 billion. There are three major areas for action by the United States and other
countries for a healthy reduction in U.S. deficits and other country surpluses.
First, higher rates of U.S. saving would contribute importantly. The growth of the U.S. federal budget
deficit earlier in the decade was part of counter-cyclical policy measures to support U.S. economic
growth in the face of the 2001 recession, the aftermath of the terrorist attacks in the United States in on
September 11, 2001 and generally weak conditions in the global economy. The U.S. federal budget
deficit peaked in 2004 at 3.6 percent of GDP, declined to 2.6 percent in 2005 as strong economic
expansion restored solid growth to government receipts. The most recent U.S. budget projects a
decline in the federal deficit to 1.4 percent of GDP in 2009, 70 percent below its peak share in 2004. In
addition to public sector saving, the decline in personal saving has also contributed to reduced overall
saving and its improvement could also contribute to reducing current U.S. and global imbalances.
Second, as mentioned in the question itself, strong growth performance on the part of a number of our
trade partners, where growth has been modest, would help moderate the current imbalances. The
achievement of stronger growth would obviously have intrinsic benefits to the countries in which it
occurs as well as help to reduce global trade imbalances.
Third and finally, countries have rates of saving well in excess of domestic investment opportunities,
whether the source of the excess saving be in the private sector or official government saving. The
United States, however, firmly believes that improvements in the fundamental conditions limiting
attractive investment opportunities in those countries where saving far surpasses investment would
make an extremely valuable contribution to the long-term reduction in the size of current global trade
and payment imbalances.
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[European Communities]
In paragraph 4, it is stated that “government spending…trended downwards until the first quarter of
2005.” This analysis seems slightly misleading to us, as the figures in table 2 suggest that spending
continued to grow in absolute terms (only the rate of growth declined). Could the US please clarify the
correct facts?
ANSWER:
While Table 2 shows the correct figures, the United States believes that past quarter-toquarter movements in federal outlays are irrelevant to the issues in the U.S. Trade Policy Review. In
order to be responsive to the European Communities’ interest, the following information is provided
about U.S. federal outlays during the period under review and the forecast period to 2009.
In recent years, outlays have been steady at roughly 20 percent of GDP (2003: 20.0 percent; 2004:
19.9 percent; and 2005: 20.1 percent). In the 2007 budget, outlays are projected to peak at 20.8 percent
of GDP due to the advent of a new prescription drug benefit under the federal Medicare program and
unanticipated spending associated with relief and recovery efforts in response to last fall’s hurricanes,
Katrina and Rita. Thereafter, outlays decline to 20.1 percent of GDP in 2007, 19.4 percent in 2008 and
19.1 percent in 2009. This restraint on the outlay side together with modest increases in receipts
relative to GDP, from actual levels of 16.3 percent of GDP in 2004 and 17.5 percent in 2005 to a
projected level of 17.7 percent in 2009 produce the reduction in the federal budget deficit form its
recent 2004 peak of 3.6 percent of GDP to 1.4 percent in 2009.
[Switzerland] (2) Output and employment
Para. 6 of the Secretariat’s report suggests that the personal savings rate has become negative in the
course of 2005. This savings rate is low by international standards and also well below its long-run
trend. Could the authorities of the United States please provide their assessment of the causes for such a
development? Since normally a negative savings rate can only be sustained on a transitory basis and
given that GDP growth has already slowed down markedly in the fourth quarter of 2005, what are the
risks that the US economy slips into recession in the coming months? Also do the U.S. authorities share
the view of the Secretariat that low interest rates have discouraged domestic savings? Is such an
assessment consistent with the fact that, at the same time, substantial foreign capital has been attracted
to the U.S. as a result of the progressive increase in the federal funds rate since mid-2004? The
Secretariat suggests further that the Administration adopted measures aiming at raising the personal
savings rate such as lower tax rates on dividends and capital gains. Could the U.S. authorities provide a
preliminary assessment of their experience with these instruments and, if any, are they considering
additional measures to raise the personal savings rate?
ANSWER:
The United States largely agrees with the Secretariat’s analysis contained in paragraph
6, regarding the decline in U.S. personal saving rate, while noting one factual error in the paragraph.
The measures taken by the Administration aimed at part in encouraging saving were taken in 2003, not
in 2005 as indicated in the text. We also refer Switzerland to footnote 3 on page 3 reporting U.S. views
that the personal saving rate may be under reported. Adjusting for the factors mentioned in footnote 3,
analysts find that the U.S. personal saving rate is decidedly positive, although the trend is still down.
With regard to the questions by Switzerland, there appears to be little risk of the U.S. economy slipping
into recession. The slowdown in the of GDP growth to 1.6 percent in 2005’s fourth quarter reflected
unusual factors such as the loss of oil and gas production in the region of the Gulf of Mexico in the
wake of destruction caused by hurricanes Katrina and Rita. Even with that slow down in the fourth
quarter, 2004-2005 year-over-year growth was 3.5 percent. Looking forward, the widely followed
Blue Chip consensus of economic forecasters currently projects U.S. real GDP growth increasing at an
annual rate of 4.7 percent in the first quarter of 2006, followed by 7 additional quarters (to the end of
the forecast period) at roughly 3 percent annualized growth per quarter.
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As U.S. personal and overall saving rates have declined and the current account deficit increased there
has been a distinct secular improvement in U.S. economic performance, from about the time of the
beginning of implementation of the Uruguay Round. Since 1994, U.S. real output has expanded by 42
percent, in part due to a 15.8 percent increase in employment (up by 18.3 million) and in part due to
substantial improvement in U.S. productivity growth. Output per hour worked in the U.S. private
business sector increased by 34 percent, led by a 61 percent rise in manufacturing productivity. Within
the period since 1994, the productivity growth trend has been strongest in the period since 2000.
Enhanced economic growth has helped increase the attractiveness of the United States to non-U.S.
capital, both for countries with an excess of saving over domestic investment and for investors seeking
higher rates of return. As net foreign capital flows to the United States have continued to increase, the
U.S. current account deficit has, since 1995, grown in every year except one. Increased levels of
foreign capital inflow have helped to keep U.S. interest rates low. This has directly lowered the return
on saving, and increased the incentive to consume. Further, for both business and consumers it has
raised the incentive to invest in longer-term productive assets. These developments would be reflected
in U.S. domestic data as declining rates of household and overall gross saving, which indeed has been
the case, and in large increase in the stock of productive U.S. capital, which has also been the case.
Switzerland also asks about our experience with the impact on saving of reductions in tax rates on
dividends and capital gains, and if we are considering additional measures to increase the personal
saving rate.
Two of the three main components of U.S. domestic saving—personal, corporate, and public savings—
have trended down over the last ten years. The personal saving rate has declined from 3.4 percent of
GDP in 1995 to -0.3 percent of GDP in 2005, and is mirrored by a rise in consumption. U.S. corporate
saving has remained relatively stable at between 18 and 19 percent of GDP. Public sector saving
declined from a surplus of 2.4 percent of GDP in 2000 to a deficit equivalent to 3.6 percent of GDP in
2004, due to tax law changes and to defense costs. (Data for 2005 is not yet available.)
One reason for the low personal saving rate is thought to be the high levels of household wealth in
recent years that have reduced the need for saving. In 2005, household net worth rose back to about
564 percent of disposable personal income – higher than any year except 1998-2000, which were
artificially increased by the stock market bubble. This measure of household net worth, obtained from
the Federal Reserve’s Flow of Funds Accounts, is the difference between household assets—including
defined-benefit pension wealth—and household liabilities. Higher net worth allows consumers to save
less currently while still maintaining high levels of future consumption, which will occur out of their
higher wealth.
On the business side, the Federal Reserve’s fourth quarter Flow of Funds showed a continued wide
negative financing gap (capital expenditures minus internal funds) for the non-farm non-financial
corporate sector. The financing gap in recent decades has usually been strongly positive, but in the
current expansion capital expenditures have been almost entirely financed by internal funds. In the
third and fourth quarters, internal funds shot upward as U.S. corporations took advantage of a
temporary tax break to repatriate foreign earnings. The tax benefit expired at the end of 2005.
The Bush Administration has focused in particular on reform of the U.S. tax base and on the taxation of
savings or the return to savings, such as interest, dividends, and capital gains in defining steps to
increase savings and investment. The broader goals of any comprehensive tax reform should be the
creation of a system that is simple, is fair, and promotes economic growth. In the U.S., a key goal
would be to keep any income from being taxed twice, as is currently the case with dividend income.
The President’s Tax Reform Panel has sought to design a revenue-neutral and distribution- neutral tax
plan to achieve these goals. In their 2005 report, the panel proposed two prototypes for reform: a
Simplified Income Tax (SIT) and a Growth and Investment Tax (GIT). Both had similar
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recommendations for simplifying taxation. While the SIT plan is a simplified version of the current
income tax system, the GIT plan moves to a modified consumption tax that retains some income tax
elements. The two plans diverge primarily in their taxation of business and capital income, using
different bases for business taxation. Either of these two recommendations represents a significant step
forward in making the U.S. tax system simpler, fairer, and growth enhancing, but each would involve
substantial transition costs.
Other policy reforms can also reduce impediments to personal saving. Under current law, interest
income is taxed, creating a savings disincentive for households (although this disincentive is mitigated
to some extent by policies that afford favorable tax treatment to various types of retirement accounts
(e.g., IRA and 401(k)). However, restrictions on these accounts limit their value as retirement-saving
vehicles. To make these accounts more effective, Congress passed legislation that increases
contribution limits and makes retirement assets more portable. In addition, the Administration has
proposed simplifying the retirement account system in two important ways: (1) creating a single
Retirement Savings Account (RSA) to replace the three types of Investment Retirement Accounts
(IRAs) currently in place; and (2) creating a Lifetime Savings Account (LSA) that could be used for a
variety of purposes, including retirement saving.
Lack of financial literacy may be another impediment to saving. The Department of the Treasury is
actively engaged in campaigns to improve financial literacy. In addition, the President has instructed
the Federal Deposit Insurance Corporation (FDIC), the Small Business Administration (SBA), and the
Treasury Department to work with consumer groups to ensure that financial literacy is widespread.
If the United States is successful in increasing saving, U.S. demand for other countries’ savings will
fall. The size and persistence of U.S. net capital inflows reflects a number of U.S. economic strengths - including its high growth rate and competitive economy. Countries that are net capital importers
have more potentially profitable domestic investment opportunities than they can fund with their
supply of domestic saving. They import foreign saving through net sales of assets to foreign investors.
In contrast, net capital exporters have excess supplies of domestic saving. The large U.S. foreign
capital inflows reflect expectations by foreign investors that they will realize a higher return by
investing in the U.S. than they will earn by investing in their own countries.
The recent rise in U.S. net capital inflows between 2002 and 2004 in part reflects global economic
conditions and policies, such as weak growth or less favorable investment conditions that led to greater
net capital outflows from these countries. In both instances, global capital flows provide important
benefits for net capital importers as well as net capital exporters. Net capital importers like the United
States benefit because they can maintain a level of domestic investment they would otherwise have to
reduce given their levels of domestic saving. Net capital exporters benefit because they can earn higher
returns on the saving they invest abroad than they expect to earn by investing in their own countries.
[Switzerland] (4) Fiscal policy
Para. 18: Could the U.S. authorities comment on the views expressed by the IMF that there is a case
for a bolder reduction of the deficits, that recent fiscal consolidation reflects mainly cyclical gains, and
that U.S. budget projections assume unprecedented compression of non-defense discretionary spending
and take no account of funding or operations in Iraq and Afghanistan after 2006 while the growing
scope of the Alternative Minimum Tax may overstate in the longer run the dynamics of fiscal revenue
if it has to be corrected at some stage ? Are the current fiscal trends consistent with a halving of the
deficit by the end of the decade? Should the strong growth of the U.S. economy continue beyond 2005,
would the U.S. authorities be prepared to enhance their efforts toward balancing the budget by the end
of the present decade?
ANSWER:
Between 2004 and 2005 the U.S. federal budget deficit fell from 3.6 percent of GDP to
2.6 percent of GDP. Underlying the decline was a better than 14 percent increase in federal receipts in
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2005, reflecting healthy growth of the U.S. economy. The United States is committed to policies
(including an increasingly open global market place) that support economic growth. In the President’s
2007 budget, released last month, the federal budget deficit is projected to fall further, to 1.4 percent of
GDP in 2009. This 1.4 percent deficit is well below the 40-year historical average of 2.3 percent.
Underlying this federal budget balance improvement is a projected 18 percent increase in outlays
between 2005 and 2009 and a 26 percent increase in revenues, made possible by sustained growth of
the U.S. economy. The 2007 budget can be found at http://www.gpoaccess.gov/usbudget/fy07/
browse.html.
[Turkey]
1. In the Secretariat Report, under paragraph 12, it is stated that higher oil prices, the lagged effect of
previously expansionary monetary and fiscal policies, and the depreciation of the Dollar vis-à-vis the
Euro may have had an effect on inflation.
On the other hand, in paragraph 15, it is explained that the US Administration has been conducting a
policy of fiscal stimulation by projecting 1.35 trillion US Dollar tax cut over FY 2001-2011 and
projecting an overall 5.6 trillion US Dollar federal government surplus over the same period.
Furthermore, it is mentioned in the paragraph 18 that the IMF considers that despite recent measures
towards fiscal consolidation, there is a case for bolder reduction of the deficits including measures to
bolster revenue.
Can the contradictory nature of the combination of anti-inflationary and supply side policy mix, and
also the concerns expressed during this review process by US authorities about a potential for lower
growth in the face of a unilateral reduction in the fiscal imbalance be considered as a sign of possible
policy change in the future budgetary projections?
ANSWER:
The United States believes that fiscal policy has moved in an appropriately countercyclical fashion to limit the scope of the 2001 recession and its aftermath. The current policy focus –
maintaining spending restraint and ensuring that low, growth-enhancing tax rates are maintained -- is a
solid basis for future sustained, healthy growth of the U.S. economy. At the peak of the previous U.S.
business cycle in 2000 the federal budget was in modest surplus. In face of recessionary pressures in
2001, countercyclical fiscal measures supported demand in, and renewed growth of, the economy with
the federal deficit peaking at 3.6 percent of GDP in 2004. With healthy growth restored, including
growth of federal receipts, the budget deficit declined to 2.6 percent of GDP and is projected to fall
further to 1.4 percent of GDP in 2009.
The independent U.S. Federal Reserve has the prime responsibility for U.S. monetary policy and has as
a primary objective, U.S. price stability. The recent record of the United States with respect to prices
stability has been good, with 2.3 percent increases in consumer prices in 2003 and 2004, and a 3.4
percent increase in 2005. Figures for 2005 were, of course, influenced by the sharp rise in petroleum
and energy prices. “Core” inflation data for the United States, which exclude volatile food and energy
prices, show a 2.2 percent price increase in 2005. The United States believes that one of the benefits
of the WTO, open markets and freer trade, makes a vital contribution to domestic price stability.
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II. DEVELOPMENTS IN TRADE AND INVESTMENT POLICY
Institutional and Policy Framework
[Colombia]
Section II, paragraphs 5 and 8, of the aforementioned report, describe the institutions that help the
Executive of the United States to formulate its investment and trade policies. Please explain how other
non-federal levels of government are involved in formulating such policies.
ANSWER:
With the passage of the NAFTA Implementation Act in 1993 and the Uruguay Round
Agreements Act in 1994, the United States created expanded consultative procedures between federal
trade officials and state and local governments. Under both agreements, USTR’s Office of
Intergovernmental Affairs and Public Liaison is designated as the “Coordinator for State Matters.”
IAPL carries out the functions of informing the states, on an ongoing basis, of trade related matters that
directly relate to or that may have a direct effect on them. U.S. territories may also participate in this
process. IAPL also serves as a liaison point in the Executive Branch for state and local government
and federal agencies to transmit information to interested state and local governments, and relay advice
and information from the states on trade-related matters. This is accomplished through a number of
mechanisms:
a. State Point of Contact System
For day-to-day communications, pursuant to the NAFTA and Uruguay Round implementing legislation
and Statements of Administrative Action, USTR created a State Single Point of Contact (SPOC)
system. The Governor’s office in each State designates a single contact point to disseminate
information received from USTR to relevant state and local offices and assist in relaying specific
information and advice from the states to USTR on trade-related matters.
b. Intergovernmental Policy Advisory Committee
For advice from states and localities on trade policy matters, USTR has established an
Intergovernmental Policy Advisory Committee on Trade (IGPAC). It is one of the four policy advisory
committees discussed above. The IGPAC is comprised of representatives from all three branches of
government and associations. Appointed on a bipartisan basis, the Committee makes recommendations
to the USTR and the Administration on trade policy matters from the perspective of state and local
governments.
c. Meetings of State and Local Associations and Local Chambers of Commerce
USTR officials participate frequently in meetings of state and local government associations to apprise
them of relevant trade policy issues and solicit their views. For example, in 2005 the Acting U.S. Trade
Representative addressed a joint plenary session of the National Conference of State Legislatures and
the National Association of Attorneys General to discuss the overall trade agenda and particular issues
of interest to states. USTR officials also address gatherings of state and local officials and local and
regional chambers of commerce around the country.
d. Consultations Regarding Specific Trade Issues
USTR initiates consultations with particular states and localities on issues arising under the WTO and
other U.S. trade agreements, and frequently responds to requests for information from state and local
governments.
[Colombia]
In Section II, paragraph 11 of this same report, it is stated that multilateral trade negotiations are a
priority for the Administration in its effort to open markets and strengthen rules. It furthermore states
that the Administration considers that the issues related to broadening market access for trade in
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manufactured goods and services could be the basis for negotiations that would yield significant
benefits to U.S. interests and the world economy. Based on the foregoing, it is asserted that the
Administration has decided to make promoting the WTO’s DDA [Doha Development Agenda] and
satisfactorily concluding the negotiations before 2006 a top priority. As part of such policy, please
state how the interests of those Members that export human resources rather than capital will be taken
into account.
ANSWER:
The tremendous potential of the DDA negotiations to promote economic growth in all
countries can be realized only through deeper liberalization across sectors, especially key
infrastructure-building sectors, and modes of supply. The U.S. believes that this potential cannot be
realized by focusing narrowly on a single mode of supply, such as the export of human resources. We
note the interest shown by developing countries in the cross-border plurilateral negotiations.
It is also important to recognize that the services negotiations in the DDA cover the temporary
movement of foreign service suppliers, and explicitly exclude labor and permanent migration. In this
respect, we feel that all WTO Members benefit from our commitments on Mode 4, which are among
the best in the WTO and apply to all of the more than 100 committed subsectors in the U.S. schedule.
[India]
Q.6
US has recently raised the cap on H1b visas by 20,000 (over and above annual limit of 65,000)
for professional students obtaining degrees from US universities. However, the existing restrictions on
visas for business professionals are affecting the levels of market requirement in various sectors. Some
of Indian business visitors, including those coming for participation in trade fairs, etc., have also had
difficulties in getting their visas issued in a timely manner. What action would be taken by the US to
grant visas to business professionals without any hassle?
ANSWER:
The United States greatly benefits from the international mobility of business
professionals. International business professionals help create competitive markets for suppliers and
consumers alike and allow trade partners to more efficiently provide each other with services. Services
are essential to the U.S. economy, comprising about 78 percent of the U.S. GDP, and the U.S.
government continues to implement polices and practices that facilitate the international trade in
services.
As of August 2005, U.S. diplomatic posts in India processed nearly 400,000 nonimmigrant visas, a
gain of about 2 percent over the same period the previous year. India is one of the largest source
countries in the world for student visas, H-1B, and L visas and the demand is expected to continue to
rise significantly in the years ahead.
The Department of State has instructed visa-adjudicating posts in India to emphasize the importance of
facilitating business travel, and to establish mechanisms to expedite appointments for business travelers
with urgent needs.
Among the programs envisioned by the U.S. include expanding the Business Executive Program,
increasing the number of daily visa appointments, and opening new consulates and consular sections.
[India]
Q.7
The cap on H 1B visas continues to be 65,000 per annum. This was increased by adding
another 20,000 H 1B visas for those who have a US degree. Both these caps have been exhausted.
Will the US review its decision in continuing with this cap on H 1B visas and let market forces dictate
the number?
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ANSWER:
The H-1B cap is codified in U.S. immigration law. Therefore, the U.S. Congress has
the authority to determine the annual H-1B cap. And, although temporary entry issues are domestically
sensitive, both the executive and legislative branches have expressed great support for international
trade generally and the facilitative movement of business travelers. Although we cannot predict
whether Congress will raise the cap, Congress is keenly aware of the visa concerns of our trading
partners and our domestic employers.
[India]
Q.8
It has been noticed that issuing visas takes inordinately long time. In addition, the visa fees are
also being increased frequently. Further, on site / offshore outsourced projects have specific
requirements wherein individuals provide service in the US under a specific contract with the US
organization. For such service suppliers an alternative visa mechanism needs to be explored. This
should be a sub-sect of the overall H 1B visa mechanism wherein the eligibility for stake would be one
year or a period of contract whichever is lesser. Will the US consider setting up a separate visa
mechanism to address the specific requirements of on site/ offshore outsourced projects, wherein
Contractual Service Suppliers and Independent Professionals visit US to provide a service under the
specific contract to the US organization?
ANSWER:
First, with regard to delays in visa issuance, please see response to question 6 above.
Next, in regard to increases in visa fees, some fees are set by the U.S. Congress; all others reflect the
cost of service and any reciprocal fees charged to U.S. citizens. Finally, in regard to creating a separate
visa mechanism to address specific requirements of on site/offshore outsourced projects, again, only
the U.S. Congress has the authority to establish visa categories. The Departments of State, Homeland
Security, and Labor implement visa categories that Congress establishes. Currently, business travelers
who are eligible may enter the U.S. in visa classifications that include: B-1; H-1B; and L. As
demonstrated by the initiatives outlined above in response to question 6, the U.S. Government
continues to seek new ways to address the facilitative movement of legitimate business travelers.
[India]
Q.9
Currently when Indian professionals go to USA on an H IB visa, it allows them to work only in
a particular State of US. H IB visa is valid for three years and is extendable for further three years. In
this period if the assignment changes to another State, specific permission for change of location is
required from immigration and Naturalization Services (INS) of USA and this is time consuming
process. At times a professional is required to work on projects in different States within the same
month. India does not have such locational restriction. Would US government consider making the
H IB visa applicable for working any where in the USA?
ANSWER:
The U.S. Department of Labor must certify a U.S. employer's statement in its Labor
Condition Application (LCA) that the prevailing wage for each H-1B worker will be paid. Prevailing
wage determinations are made on a state-by-state basis for the occupation involved. If the H-1B
worker moves to work in another state, the original certification is no longer valid as wages differ
between states. The employer must file a new LCA because the terms of employment for the H-1B
worker have changed.
In practice, the certification office at the U.S. Labor Department accepts electronic filing for all LCAs.
The certification usually takes less than 30 minutes. The new certification is then communicated to the
U.S. Department of Homeland Security. We are not aware of problems that have arisen under the
current system. If the H-1B worker will be employed to work in several states, the employer can file
an LCA giving the information for those states and receive certification to work in each state.
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[India]
Q.10 For Indian IT professionals working in US, social security costs constitute a significant portion
of compensation costs to the Indian software companies executing projects abroad. US receive about
USD 500 million per year by way of social security contributions from Indian software
companies/employees. However, the benefits availed are insignificant as almost all the software
professionals return to India or migrate to other locations before they are eligible for the benefit. Would
US authorities consider the following suggestions?
(i)
(ii)
Employees of Indian companies working temporarily in the United States under the
HIB visa scheme are exempted from paying Social security, or
Deductions made towards social security from employees of Indian companies are
refunded upon their return from the United States.
ANSWER:
The terms of withholding social security taxes are established through the negotiation
of bilateral taxation agreements. Countries interested in this issue may address the appropriate
authority within the U.S. government, the U.S. Social Security Administration.
[Peru]
Institutional and Regulatory Framework
1.
On page 18, paragraph 14, the United States mentions that every five years the Congress
evaluates whether or not to withdraw its support of the WTO—in essence, [withdrawing from] the
Uruguay Round Agreement. In this regard, does the United States plan to review, every five years,
whether or not to maintain in force the bilateral agreements it has signed?
ANSWER:
The provision of the Uruguay Round Agreements Act referred to in the question (and
paragraph 14 of the TPR) provides for Congressional review and oversight only to U.S. Membership in
the World Trade Organization. There is no similar provision for periodic review of FTAs. Under our
FTAs, the Parties, through a Joint Committee or Joint Commission, oversee the operation of the
Agreement.
[Switzerland]
(ii) Policy objectives
Para. 9 of the Secretariat’s report indicates that the United States continues to pursue a policy of
advancing open markets and the rule of law as part of a broader global security objectives. Also, the
United States considers that opening foreign markets to U.S. products and services will enhance
economic growth and prosperity. Based on the Secretariat’s report, there is, however, no indication in
this strategy that while foreign markets are to open to U.S. products and services, the U.S. market
should also open in parallel for foreign products and services to ensure both mutual benefit from trade
liberalization for all parties involved and increased efficiency for the U.S. economy itself. Could the
U.S. authorities comment on this apparent dichotomy in U.S. trade policy?
ANSWER:
For over 70 years, trade liberalization has been a cornerstone of U.S. economic policy.
In a speech before the United Nations on September 14, 2005, President Bush reaffirmed this
commitment when he called on all countries to join the United States in an ambitious undertaking,
saying, “The United States is ready to eliminate all tariffs, subsidies and other barriers to the free flow
of goods and services as other nations do the same.”
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Legislative developments
[Canada]
Summary Observations, (2) Trade Policy Developments, Paragraph 5; and Part II. Developments in
Trade and Investment Policy, (2) Institutional and Policy Framework, (iii) Legislative Developments,
Paragraph 13:
The Secretariat Report sets out its understanding of the ultimate deadlines for the completion of
negotiations in order for amending legislation to be considered by Congress under the Bipartisan Trade
Promotion Authority Act (TPA). The Secretariat document refers to both April 1 and July 1, 2007 as
the deadline for signing a new agreement.
1.
Could the United States delegation clarify the deadline dates set out in the TPA Act including,
e.g., subsection 2103(b)(1)(C), which gives the President authority to enter into a trade agreement
before June 1, 2007, and subsection 2103(c)(1)(B), which appears to limit the time by which
implementing legislation may be introduced in Congress to qualify for Congressional TPA procedures?
ANSWER:
At the request of the Administration, Congress extended TPA in 2005, but it expires on
July 1, 2007. Any agreement undertaken according to this authority must be signed before
July 1, 2007. The law also requires the Administration to notify Congress of the intention to sign an
agreement 90 days before the projected signing date. The law further requires notification of Congress
180 days prior to signature of the range of proposals advanced in the negotiations that may be in the
final agreement and could require changes in trade legislation. TPA extends past July 1 to cover the
passage of required implementing legislation for agreements finalized before that date. Thus, the DDA
negotiations must be substantively complete by December 2006 for the Administration to meet its
reporting obligations, and a ministerial conference similar to that held in 1994 in Marrakech will have
to convene not later than June 2007.
[Japan]
Q2. Deficit Reduction Act of 2005 (p.15, paras.13 to14)
Regarding the controversial, Deficit Reduction Act of 2005, Democrats have argued that the Act is not
constitutional because the bill the House cleared on 1 February differed from the version passed by the
Senate on 21 December and said that it would ultimately go to court. The Act includes a provision
repealing the Byrd Amendment, which was determined inconsistent with WTO rules, and the program
for cotton. In this regard, please indicate the future perspective for the Act and the measures taken by
the Government of the United States.
ANSWER:
The Deficit Reduction Act of 2005 was signed by the President on February 8, 2006
and is now in force.
[Japan]
Q3. Product Liability Law (p.15, paras.13 to 14)
The Product Liability Law in the United States constitutes a heavy burden for Japanese and U.S.
companies doing business in the United States, because of a large amount of damages and soaring
liability insurance premiums. The Government of Japan welcomes the efforts made by the Government
of the United States to achieve the tort reform. However, the tort reform is focused on some specific
areas such as asbestos litigation reform, medical liability reform, and Protection of Lawful Commerce
in Arms, and has not made any tangible progress on the reform of product liability, which constitutes a
majority of lawsuits. The Government of Japan therefore urges the Government of the United States,
as a part of the tort reform, to support and encourage the reform currently underway in many States to
limit product liability, and to promote the reform of product liability law at the federal level by placing
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limits on the amount of damages, and by shortening the limitation period, which has already been
attempted by relevant bills submitted to the Congress. In these respects, please indicate the specific
views of the Government of the United States.
ANSWER:
The Administration strongly supports legal reform as a cornerstone for a
comprehensive economic expansion program. The Administration is firmly committed to alleviating
the undue burden on the business community from inappropriate tort litigation and unreasonable
awards. It has supported a number of bills that seek these goals.
[Norway]
1. As described in paragraph 13 of the Secretariats report, chapter II, the Bipartisan Trade Promotion
Authority Act (TPA) is effective until 1 July 2007. Are there currently any legislative procedures in
progress to further extend the TPA, or to establish new and similar legislation?
ANSWER:
The Administration expects to seek renewal of Trade Promotion Authority and
continue the important effort to forge stronger trade ties around the world. However, given the difficult
struggle to restore this authority in 2002, there are no guarantees TPA will continue beyond the
expiration date.
[The Philippines]
1. We note from the Secretariat report that the United States views the Trade Promotion Authority as
an essential instrument to attaining its trade objectives. While it had been allowed to lapse in the past, it
has also been renewed several times thereafter.
¾ Is there any possibility that the TPA will be extended or renewed soon after its expiry
in July 2007?
¾ Is the United States intending to expand the existing trade negotiating objectives
embodied in the current TPA legislation?
ANSWER:
The Administration expects to seek renewal of Trade Promotion Authority and
continue the important effort to forge stronger trade ties around the world. However, given the difficult
struggle to restore this authority in 2002, there are no guarantees TPA will continue beyond the
expiration date.
Participation in the WTO
[Argentina]
1. On page 18, paragraph 14 mentions that on June 9, 2005 the U.S. House of Representatives
reaffirmed by 338 votes in favor and 86 against the participation of the United States in the WTO,
which implied a rejection of Joint Resolution No. 27.1. Question: Will the U.S. Congress continue to
review the participation of the United States in the WTO every five years?
ANSWER:
Yes, as required by the Uruguay Round Agreements Act, the Congress will continue to
review U.S. participation in the WTO every five years.
[Argentina]
2. On page 19, paragraph 17 mentions the debate of the Ways and Means Committee.
Question: Could the United States indicate whether it is possible to obtain that information?
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ANSWER:
The transcript of the debate is located at http://waysandmeans.house.gov/hearings.asp?
formmode=view&id=4307
[Argentina]
3. On page 20, paragraph 20, mention is made of the commitments that the United States still has
pending.
Question: Does the United States consider that the changes requested by the DSB [Dispute Settlement
Body] in the Cotton Case were fully implemented? Why does the United States fail to mention said
reforms among those still pending?
ANSWER:
The DSB recommendations and rulings in the dispute United States – Subsidies on
Upland Cotton (“Cotton”), WT/DS267, resulted from two sets of findings, one regarding prohibited
subsidies and one regarding actionable subsidies. The actions taken by the United States over the last
year address both. The United States has overhauled the Commodity Credit Corporation (CCC) Export
Credit Guarantee Programs, including the Supplier Credit Guarantee Program (SCGP), which were
found to have provided prohibited export subsidies. U.S. reforms include imposing a new risk-based
fee structure on two of the guarantee programs and ceasing to accept applications under a third
program. The United States has also enacted legislation repealing, as of the end of the current cotton
marketing year (specifically, as of August 1, 2006), the upland cotton user marketing certificate
program (known as the “Step 2” program) for both exporters and domestic mills. The Step 2 program
was found to constitute both a prohibited export subsidy and import substitution subsidy and payments
under the program in 1999-2002 were part of the measure found to have been causing “adverse effects”
during that period.
With respect to the citation to paragraph 20, we note that the referenced paragraph appears to be in the
Secretariat’s report, not the report prepared by the United States. Accordingly it would be necessary to
inquire of the Secretariat concerning questions about that paragraph.
[China]
Question: (p.16 para.21)
Are there any unfulfilled obligations regarding WTO transparency principle and notification by the
United State Government? If yes, why does the United State Government fail to have implemented
these obligations?
For the sake of transparency, would the U.S. explain to other Members why it took the U.S. about
10 months to fully respond in writing to Members’ written questions raised during last review instead
of 4-6 weeks as agreed under TPRM? What measures will the U.S. take to avoid this delay of
responses from happening again?
ANSWER:
Several notifications were in preparation when the Secretariat Report was being
drafted. On October 20, 2005, the United States submitted its new and full notification pursuant to
Article XVII:4(a) of the GATT 1994 and Paragraph 1 of the Understanding on the Interpretation of
Article XVII. Updated U.S. notifications under Articles 1.4, 7.3, and 8.2 of the WTO Agreement on
Import Licensing Procedures were recently submitted to the Secretariat.
The relevant reports on government procurement will be submitted when the replacement of our
procurement data system is complete. The new system, the Federal Procurement Data System, will be
accessible at www.fpds.gov. The United States fully intends to notify its domestic support
commitments under current farm programs. We note that these notifications are extremely data
intensive and that we are as current as many other WTO Members.
At our last TPR, the United States did respond to many of the questions submitted by Members - it
was the final package of responses that came afterwards. Together with other Members, we took steps
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during last year's TPR appraisal to agree on a new timeline to improve the exchange of questions and
responses. Under this new timeline, a Member being reviewed is to have more time - two weeks rather
than one week - to consider questions and prepare responses before their TPR begins. This new
timeline will considerably improve the exchange of questions and responses. In this
review, we provided preliminary responses to all of the Members that met the two-week deadline and
to many of those that did not.
[Colombia]
Section II, paragraph 21, of the Secretariat’s report on “Developments in Trade and Investment Policy”
indicates that officials commented that the United States would submit the pertinent reports regarding
government procurement when they had finished replacing their data-gathering system on procurement.
When and how will said reports be available?
ANSWER:
The United States is presently updating its Federal Procurement Data System (FPDS).
Procurement data is available in FPDS at the beginning of each fiscal year and all reports are available
by accessing https://www.fpds.gov.
[Japan]
Q4. Bills that are inconsistent with the WTO (p.15 to 16, paras.15 to 21)
When legislative bills which if enacted will be apparently WTO-inconsistent are submitted, the U.S.
administration should try to convince the legislative branch not to pass such bills. In this regard, please
indicate the specific views of the Government of the United States.
ANSWER:
Since entry into force of the Uruguay Round Agreements in 1995, a central theme of
U.S. policy has been to ensure the effective and timely implementation of our WTO commitments.
The Administration consults frequently with Congress on this matter and both branches of government
take this very seriously.
[Japan]
Q5. Compliance with WTO recommendations (p.16, para.20)
There are dispute settlement cases in which the United States is yet to secure full implementation of the
DSB recommendations and rulings, well beyond the reasonable period of time granted under the DSU.
This is a regrettable situation in the sense that the United States, a key Member of the WTO who is
expected by many to demonstrate an exemplary manner, is in fact compromising the credibility of the
dispute settlement mechanism of the WTO. In this regard, please indicate the specific views of the
Government of the United States.
[Japan]
Q6. Submission of the report required in the WTO (p.16, para. 21)
(1) There has been no submission, since 2000, of the annual report in accordance with Article 7(3) of
the WTO Import Licensing Agreement. Please provide information on obligations regarding new
import licensing other than those contained in the notice of amendment under Article 5(1) of the
Agreement.
(2) Japan also requests the U.S. to submit the latest annual report expeditiously. In this regard, please
indicate the specific views of the Government of the United States.
ANSWER:
Updated U.S. notifications under Articles 1.4, 7.3, and 8.2 of the WTO Agreement on
Import Licensing Procedures have been submitted to the Secretariat and will be circulated shortly.
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[Mexico]
1.
Concerning paragraph 21, could the United States explain the delay in issuing the notifications
of domestic support?
ANSWER:
The United States fully intends to notify its domestic support commitments under
current farm programs. We note our notifications are extremely data intensive and are as current as
those of many other WTO members.
[New Zealand]
1.
Trade Policy Developments (WT/TPR/S/160, p vii, para 4)
The Secretariat notes that the United States has made progress in implementing several WTO (Dispute
Resolution) rulings calling for changes to U.S. legislation, but a few rulings have not yet been fully
implemented.
Could the U.S. please provide a proposed timeline outlining future phases of implementation of WTO
rulings, as well as background information on the extent to which these have/have not been
implemented?
ANSWER:
The Administration continues to work with the U.S. Congress on legislation
implementing DSB recommendations and rulings in the Section 211, Section 110 and Hot-Rolled Steel
disputes. The legislative schedule is controlled by Congress, and it is not possible to provide a precise
schedule for completion of remaining steps. However, we note that Congress has over the past two
years undertaken major legislative implementation efforts in the FSC, 1916 Act, CDSOA and Cotton
disputes, and it is now in a position to focus on the remaining cases. The Administration and Congress
will be exploring possible legislative vehicles.
[New Zealand]
2. Participation in the WTO (WT/TPR/S/160, p.16 para 21 and WT/TPR/S/160, p. 88 para 23.)
The Secretariat notes that a few notification obligations were outstanding as at October 2005,
particularly on domestic support to agriculture, state trading activities, and statistics for government
procurement.
When will the US provide notification of its domestic support since that provided in 2004 covering the
marketing years 2000 and 2001?
What measures has the US put in place to ensure that the required notifications occur in a timely
manner in future?
ANSWER:
Pursuant to Article XVII:4(a) of the GATT 1994 and Paragraph 1 of the Understanding
on the Interpretation of Article XVII, the United States made a full and new notification of its state
trading enterprises for 2004 in document G/STR/N/10/USA. The Unites States is current in fulfilling
its notification requirements with respect to state trading enterprises.
The United States is presently updating its Federal Procurement Data System (FPDS). Procurement
data is available in FPDS at the beginning of each fiscal year and all reports are available by accessing
https://www.fpds.gov.
The United States continues to meet its domestic support obligation, as we have done since the
commitments were undertaken in 1995. Moreover, internal controls are in place to ensure that
outcome.
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[Switzerland]
Para. 14: Section 125 of the Uruguay Round Agreements Act mandates that, beginning March 1st,
2000, and every five years thereafter, the report on WTO activities, transmitted by the President to
Congress, must include an analysis of the value of continued U.S. participation in the WTO. Following
the submission of the report, Congress can withdraw its approval of the WTO Agreement. Could the
U.S. authorities indicate if they have any plans to amend this section of the Uruguay Round
Agreements Act as it could create uncertainty among WTO Members over the long-term political
commitment of the United States to the multilateral trading system?
ANSWER:
The Administration is not aware of any plans to amend the URAA in this respect. This
provision presents the opportunity for a thorough review of the operation of the WTO and to
demonstrate its benefits to the United States and world trade. This process gives the Members of
Congress skeptical of the WTO a chance to air their views, and offers WTO supporters a chance to
discuss ways that the WTO may be able to function more effectively. The measure does not require
the United States to withdraw from the WTO.
[Thailand]
1.
Thailand commends the United States for its high level of compliance with WTO notification
obligations. Paragraph 21 of the Report states that some notifications were outstanding as at October
2005, including the notification on domestic support for agriculture, with the latest notification of
March 2004 covering marketing years 2000 and 2001. When does the United States intend to notify its
agriculture domestic support for subsequent marketing years to the Committee on Agriculture?
ANSWER:
As noted above, the United States fully intends to notify its domestic support
commitments under current farm programs. We note our notifications are extremely data intensive and
are as current as those of many other WTO members.
[Turkey]
2. In the paragraph 14 of the Secretariat Report, it is mentioned that on 2 March 2005, House Joint
Resolution 27 to withdraw the approval of the Congress from the Agreement establishing the WTO
was introduced and referred to the Committee on Ways and Means.
It is further stated in the same paragraph that the Administration strongly opposed H.J Resolution 27.
Could US Delegation kindly refer to the reasons of the submission of H.J Resolution 27 that envisages
withdrawal of the approval of the Congress from the Agreement establishing the WTO?
ANSWER:
The joint resolution may be introduced by any Member of Congress once the
Administration submits its annual report on the WTO. It should be noted that the resolution is nonbinding. If it were to pass both the House and Senate, it would not require the United States to
withdraw from the WTO. Only the President of the United States can make that decision under our
Constitution.
Preferential and Other Arrangements
[China]
Question: (p.17 para.23)
As to the U.S. active pursuit of regional and bilateral free trade arrangements, would the U.S.
elaborate on how to ensure a complementary approach when applying to both the multilateral
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system of the WTO and its regional and bilateral initiatives to lessen the effect of discrimination
creation and trade diversion by those arrangements?
How will the U.S. evaluate the “spaghetti bowl” effect of FTA arrangements on multilateral
trading system as reflected in the Sutherland’s Report?
ANSWER:
The core of U.S. trade policy is to open markets and to advance the rule of law through
the multilateral trading system, as it has been since before the founding of the GATT. A strong and
vital WTO is central to that task. The United States also pursues bilateral and regional free trade
agreements (FTAs) that are complementary to and compatible with advancing the goals and obligations
of the multilateral trading system. U.S. FTAs, because of their comprehensive duty-elimination and
breadth of commitments, produce significant benefits for its partners, and thus strengthen and expand
the forces working towards global trade reforms. Furthermore, the liberalization undertaken by many
of our FTA partners has often led those Members to increased participation in liberalizing at the WTO.
[Chinese Taipei]
Question 1 (pages 16-17, paragraphs 21-22)
The US has recently been actively pursuing FTA negotiations, which reflects its strategy of increasing
leverage for promoting multilateral trade liberalization. Could the US please elaborate on its own
guidelines for choosing FTA negotiating partners?
ANSWER:
In considering potential FTA partners, the United States considers a range of factors,
including how the FTA fits with our larger goal of advancing free trade around the world, the likely
economic benefit to the United States, and a country’s commitment to open markets and to the rule of
law. These criteria are not applied in a mechanistic manner: considerations that weigh heavily in the
case of one country may be outweighed by other considerations in the case of other countries. In
addition, the U.S. government seeks input from both Congress and the private sector.
We note also that partners in the three FTAs that have entered into force since the last US Trade Policy
Review are all APEC members. Given that APEC’s concept of “open regionalism” would facilitate
efforts to advance freer trade under a multilateral framework, is it the US’ intention to continue to give
priority to FTA talks with APEC economies in the future?
ANSWER:
The United States is willing to consider entering into negotiations for an FTA with any
country that meets its criteria, as described above.
[Chinese Taipei]
Question 2 (page 18, paragraph 30)
Under a dispute settlement regime, normally a complaining party is allowed to suspend the party
complained against from the benefits arising from a preferential agreement.
The Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu would appreciate knowing: a)
the reason for the US and Chile incorporating provisions for “monetary assessment” to back up dispute
panel decisions, and b) how these “monetary assessment” provisions are implemented?
ANSWER:
In the US-Chile FTA, for commercial disputes, the United States and Chile agreed to
allow a defending party that does not implement an adverse report to choose between suspension of
benefits and payment of monetary assessments. In some cases, a monetary assessment might be more
appropriate than a suspension of benefits. There have been no disputes under the US-Chile FTA's
dispute settlement provisions. Therefore, the Parties do not yet have any experience implementing the
provisions, beyond what is provided in the text itself.
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[Chinese Taipei]
Question 3 (page 19, paragraph 31)
We note with interest the non-market access requirements in the US-Australia FTA on
pharmaceuticals, such as the transparency procedure in listing pharmaceuticals for reimbursement
under the Australian Pharmaceutical Benefit System.
We would appreciate knowing whether such requirements are specific to Australia, or whether the US
intends to pursue similar requirements, either in the FTA context or bilaterally, with its trading
partners. Additionally, could the US please describe the problems encountered that prompted it to
pursue such requirements?
ANSWER:
The United States has dealt with market access issues related to pharmaceutical
products through global, regional, and bilateral trade negotiations for many years. In previous FTAs,
we have negotiated the elimination of duties on exports of pharmaceutical products and strong IPR
provisions relating to pharmaceuticals. For many years other pharmaceutical issues have been part of
our various trade dialogues.
As the Australian Government’s own studies had shown, measures to enhance transparency and
accountability of its Pharmaceutical Benefit Scheme (PBS) process were warranted. The United States
also pursued specific non-tariff market access pharmaceutical provisions in the United States-Australia
FTA negotiations based on the guidance that the U.S. Congress provided in the Trade Act of 2002.
[Ecuador]
The WTO Secretariat’s report indicates a substantial increase in free trade agreements between the
United States numerous countries and sub-regions. The report states that “the United States is also
conducting negotiations to create FTAs with: …Colombia, Ecuador, and Peru,” among other countries.
Furthermore, “the U.S. authorities hold the view that U.S. FTAs can promote innovation, provide
participating countries with trade capacity building to develop negotiating skills, and promote
investment, job creation, and higher business standards. They also consider them as a means to
advance work and negotiations of multilateral agreements.”
Bearing in mind that Ecuador is about to sign an FTA with the United States in the upcoming weeks,
can that United States provide information regarding economic projections, as well as trade and
investment-related forecasts, to support these assertions? In other words, does the United States have
[reports] that estimate and quantify the benefits of an FTA for our country that allow it to justify the
statement appearing in the Secretariat’s report?
ANSWER:
Our statement was based on statistical analysis of trade data and the feedback we have
received from countries that have a free trade agreement with us. We encourage Ecuador to talk to our
trading partners about their experiences and benefits.
[Ecuador]
Could the United States elaborate on how believes the signing of bi-lateral agreements to be
complementary to multilateral trade agreements?
ANSWER:
The core of U.S. trade policy is to open markets and to advance the rule of law through
the multilateral trading system, as it has been since before the founding of the GATT. U.S. free trade
agreements (FTAs), because of their comprehensive duty-elimination and breadth of commitments,
produce significant benefits for its partners, and thus strengthen and expand the forces working towards
global trade reforms. Furthermore, the liberalization undertaken by many of our FTA partners has
often led those Members to increased participation in liberalizing at the WTO.
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Regional and bilateral agreements that are fully consistent with WTO rules and objectives can both
support and expand trade liberalization in the multilateral trading system. Without exception, the
regional initiatives in which the United States is involved look to the WTO as a solid foundation upon
which to build. These initiatives are recognition of the desirability of increasing freedom of trade by
the development, through voluntary agreements, of closer integration between the economies of the
countries party to such agreements, as long as the agreements do not result in increasing the external
barriers of the parties. Such agreements challenge the multilateral system to keep pace with the
interests and needs of Members, and contribute to the WTO system by introducing innovation and
strengthened disciplines. These agreements can become models for future multilateral liberalization in
new areas, such as agriculture, services, investment, and environmental and labor standards.
[Ecuador]
The multiplicity of FTAs in different parts of the globe in recent years, as well as the relatively
ambitious goals for the WTO round of negotiations on market deregulation and access will cause
erosion of preferences for those members with agreements in this regard. What is the U.S. stance as to
the difficulties erosion of preferences poses for some countries? Does the U.S. believe that this should
be handled under the aegis of the WTO? If so, what proposals are considered appropriate within the
WTO negotiations to discuss this difficulty?
ANSWER:
The issue of preference erosion has been noted in the Hong Kong Ministerial
Declaration as an issue to be examined in both the agriculture and non-agricultural negotiations in the
Doha Round. As a result, we are working with other Members to determine the scope of the problem
and how solutions like Aid for Trade can help those countries that make face adjustment due to
multilateral liberalization. We look forward to working with Ecuador and other Members on this issue
as negotiations progress.
[Turkey]
5. In the Secretariat report, under paragraph 15, it is stated that the US authorities reaffirmed their
strong support of the multilateral trading system which they consider to be at the core of US
international trade relations.
On the other hand, since 2001, the US has been very ambitious in pursuing to sign new free trade
agreements especially with the developing countries.
Could US Delegation kindly elaborate how the US strikes a balance her FTA policies with the Doha
Development Agenda Negotiating Strategy?
And
[European Communities]
Bilateral, regional and global trade liberalization is vital for promoting prosperity, growth and
development to the benefits of the world at large. The EC considers that the WTO and multilateral
liberalization is the most certain way for promoting global interests for industrialized countries and
developing countries at large.
•
How does US judge the relative importance and weight of bilateral/FTA policies and further
development of the WTO system in terms of its own trade and development needs?
ANSWER:
The core of U.S. trade policy is to open markets and to advance the rule of law through
the multilateral trading system, as it has been since before the founding of the GATT. A strong and
vital WTO is central to that task. The United States also pursues bilateral and regional free trade
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agreements (FTAs) that are complementary to and compatible with advancing the goals and obligations
of the multilateral trading system. U.S. FTAs, because of their comprehensive duty-elimination and
breadth of commitments, produce significant benefits for its partners, and thus strengthen and expand
the forces working towards global trade reforms. Furthermore, the liberalization undertaken by many
of our FTA partners has often led those Members to increased participation in liberalizing at the WTO.
•
To what extent has the US analyzed and compared the efficiency and level of economic benefits
delivered by bilateral trade agreements by comparison with multilaterally agreed liberalization?
What have been the specific results of such analysis?
ANSWER:
There is little doubt in the economic literature that the economic benefits resulting
from ambitious multilateral trade reforms, particularly in market access, far outweigh the benefits
which can be generated through bilateral trade agreements. It is our hope the European Union will join
us in leading the way in contributing significant improvements in new market access, particularly in
agriculture, that will enable the Doha Development Agenda to generate the greatest gains possible for
the global economy.
•
The EC would like to know more about the US’ strategy for RTAs. In particular, the EC notes that
the US appears to follow a rather homogenous model for RTAs irrespective of the levels of
development of its counterparts which includes very long transition periods, including for the US
itself, and with no, or very limited, asymmetry in commitments between the US and its less
developed partners. The EC would also appreciate if the US could confirm their obligation to
"provide a full explanation to the Council for Trade in Goods of the need for a longer period".
ANSWER:
The United States considers FTAs which contain comprehensive duty- elimination and
a wide scope of non-tariff trade reforms to be the “gold standard.” We see no better model on which to
base FTAs. U.S. FTAs are not cookie-cutter agreements. The United States negotiates each agreement
individually with each partner, to take account of the specific circumstances and needs of the trading
relationship.
A fundamental aspect of each of the U.S. FTAs is the elimination of duties on
substantially all the trade. For a small number of sensitive products, in order to eliminate tariffs
completely, the United States has agreed to an extended transition period, rather than abort the
elimination process at an earlier date or extend a small amount of market access for a finite period of
time.
All U.S. FTAs are notified to the WTO in accordance with the terms of reference of the Committee on
Regional Trade Agreements established by consensus following the completion of the Uruguay Round
Agreements (WT/L/127), with agreed-upon procedures which operationalize the terms of the 1994
Understanding on Article XXIV. U.S. FTAs are considered at length in the CRTA following referral
from the Council on Trade in Goods. The reports submitted to the CRTA by the United States pursuant
to the agreed procedures in the CRTA are exemplary in the provision of an explicit accounting of the
timetable for duty elimination on each and all tariff lines (e.g., WT/REG160/3; WT/REG160/4;
WT/REG161/3; WT/REG161/4;), and have provided a model of clarity and depth of explanation that
some Members have chosen to replicate in their submissions.
[Guatemala]
Article V of the GATS states that a regional trade agreement (RTA) to liberalize trade in services shall
be conditioned upon, inter alia, having substantial sectoral coverage.
The footnote for paragraph 1(a) of said article establishes that in order to meet this condition,
agreements should not provide for the a priori exclusion of any mode of supply.
With respect to the foregoing, can the United States explain how it has interpreted and implemented
this provision when negotiating and entering into RTAs?
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ANSWER:
Consistent with Article V, our FTAs cover all modes of supply. The chapter on crossborder trade in services in our FTAs encompasses cross-border supply, consumption abroad, presence
of natural persons, and for certain obligations, commercial presence. The FTA chapter on investment
covers rights for investors in manufacturing, services, and certain financial services, including
commercial presence. Financial services, typically covered in a separate chapter, cover cross-border
supply, consumption abroad, commercial presence and investment rights, and presence of natural
persons with regard to services within the scope of regulated financial institutions.
Also in this regard, but with respect to goods, can the United States explain how it interprets and
implements the phrase “with respect to substantially all the trade” [lo esencial de los intercambios
comerciales] contained in Article XXIV of the GATT?
ANSWER:
The United States sets a very high standard for the “substantially all the trade”
requirement. Consistent with that standard, our FTAs are far-reaching and comprehensive, both in
terms of the trade flows and tariff lines.
[Mexico]
2.
Paragraph 28 indicates that the United States and Jordan negotiated an FTA in which the
liberalization of services follows a “positive list” approach. Mexico would be interested in learning
why this approach was used in this FTA, since the document mentions that the United States has
negotiated its trade agreements based on a “negative list” approach.
ANSWER:
The United States-Jordan FTA, signed in 2000, was the third such free trade agreement
concluded by the United States. It is the only U.S. free trade agreement that uses the positive list
approach in services liberalization. Since that time U.S. policy has been to negotiate FTAs on the basis
of a negative list approach, and all subsequent FTAs have used this model.
[Mexico]
3. What is the position of the U.S. Government regarding the dissatisfaction on the part of certain
economic and social sectors that are opposed to the establishment of a Free Trade Area for the
Americas?
ANSWER:
President Bush reinforced his message that our free trade agenda is part of our agenda
for a freer world when, in his State of the Union address, he declared, “In a complex and challenging
time, the road of isolationism and protectionism may seem broad and inviting -- yet it ends in danger
and decline.” Economic isolationism will not make any country safer nor help it to reach its
development goals.
The United States negotiates free trade agreements when the President believes that they are in the
interest of the people. The governments in the Western Hemisphere have been working steadfastly
over the last ten years to complete a trade arrangement in our hemisphere is good for jobs, is good for
quality of life, and is good for democracy. To spread this message to all the peoples of the hemisphere,
the governments participating in the FTAA process created a committee to work on promoting dialogue
with civil society throughout the Americas. The United States looks forward to continuing this
dialogue with civil society and encourages our partners to do likewise.
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[Peru]
Asia Pacific Economic Cooperation (APEC)
10. On page 27, paragraph 42, the report mentions the Individual Action Plans as a means to measure
progress made by the member countries. How much priority does the United States attach to the
Collective Action Plans of the APEC Forum, on what issues does the U.S. believe that the work of
APEC could contribute to accelerating progress of the WTO’s Doha Round?
ANSWER:
The United States believes that the Collective Action Plans are a vehicle for progress
in trade and investment liberalization. In November 2005, APEC Leaders issued a strong political
statement of support for the DDA negotiations, which called for, inter alia, breaking the impasse in
agricultural negotiations, particularly with respect to the market access pillar. In June 2005, APEC
Trade Ministers unanimously endorsed an ambitious tariff-reducing formula (“Swiss formula”) for
non-agricultural goods. APEC has also worked to advance the DDA negotiations in areas such as tariff
elimination for information technology products and trade facilitation.
[Peru]
Free Trade Agreement of the Americas (FTAA)
11.
On page 2, paragraph 36 of the report, the United States indicates it is continuing to press for a
Free Trade Area of the Americas (FTAA), but that negotiations stalled in late 2005. What alternatives
would the U.S. propose to resume the negotiations toward establishing the FTAA, bearing in mind its
regional and bilateral experience negotiating free trade agreements and the sensitivity on the part of the
developing countries expressed in such negotiations? Specifically, what steps would the U.S. consider
with a view to resuming negotiations and what actions would it propose? Moreover, would these
actions include promoting the development of a program and timetable for work?
ANSWER:
The United States is looking forward to consulting with its trading partners in the
Western Hemisphere on the Free Trade Area of the Americas (FTAA) process. As one of the next
steps in the process, Colombia is undertaking consultations among all the FTAA participants on the
process. We will be participating in these consultations. We also welcome a discussion with Peru, as
with our other FTAA partners, on how best to chart a way forward.
[The Philippines]
2. The United States has concluded an FTA with one ASEAN member, and is negotiating with two
other ASEAN members. Does the US have plans to pursue a regional FTA some time in the future with
all of ASEAN?
ANSWER:
The United States is working to enhance its trade and investment relations with
ASEAN countries under President Bush’s Enterprise for ASEAN Initiative (EAI). Under the EAI, the
United States offered the prospect of bilateral FTAs with ASEAN countries that: (1) have Trade and
Investment Framework Agreements (TIFAs) with the United States; (2) are WTO members, and (3) are
committed to economic reforms and openness. The United States and each ASEAN partner jointly
determine if and when they are ready to launch FTA negotiations. The ultimate goal of the EAI is to
link these bilateral FTAs into a network of FTAs.
Under the EAI, the United States concluded and implemented our FTA with Singapore, launched an
FTA with Thailand, and concluded a TIFA and then launched an FTA with Malaysia. The United
States also negotiated a TIFA with Brunei and has stepped up its engagement under its existing TIFAs
with Indonesia and the Philippines. In addition, the United States supported Cambodia’s efforts to
accede to the WTO and then launched TIFA negotiations with the Cambodian Government; and is
working to help Vietnam and Laos accede to the WTO. Finally, the United States and ASEAN
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Members are negotiating a TIFA, which will serve as the framework for further work between them to
support ASEAN integration.
[The Philippines]
3. The US Generalized System of Preferences (GSP) programme is set to expire on 31 December
2006. We also understand that a five-year extension is being proposed. We cannot emphasize enough
the need for a timely, multi-year extension of the GSP. Certainty and predictability is vital for business
planning, both by exporters in developing countries and US importers who rely on duty-free consumer
goods or inputs for their industrial needs. What are the views of the United States on this matter?
ANSWER:
The President has included reauthorization of the GSP program for five years in the
budget that he presented to the Congress earlier this year.
[Thailand]
3.
According to paragraph 28 of the Report, the US-Jordan FTA services liberalization section
utilizes a positive-list approach. To date, what other FTAs has the United States signed that use this
approach? In which other FTAs under negotiations is the US considering using, or has agreed to use,
this approach?
ANSWER:
The United States-Jordan FTA, signed in 2000, was the third such free trade agreement
concluded by the United States. It is the only U.S. free trade agreement that uses the positive list
approach in services liberalization. Since that time U.S. policy has been to negotiate FTAs on the basis
of a negative list approach, and all subsequent FTAs have used this model.
[Thailand]
4.
Could the United States please provide information on its preferential regime given to nonimmigrant workers entering the US in connection to bilateral/regional trade arrangements?
ANSWER:
In the past, the United States has included in some of its FTAs certain non-immigrant
categories available to all countries (business visitors and intra-corporate transferees) and certain
categories available only to countries that have bilateral agreements with the United States (Treaty
Trader/Investor). The NAFTA, US-Chile and US-Singapore FTAs also include special provisions for
professionals that are available only to Canada, Mexico, Chile and Singapore.
[Thailand]
5.
Which types of visa are given as a result of NAFTA, US-Singapore, US-Chile, US-Australia
and other agreements, for which workers from other WTO Members are not eligible? What are the
quota numbers in each type and how do they affect the quota given to other WTO Members?
ANSWER:
There are two admission categories available to U.S. FTA partners that are not
available to other countries. The NAFTA allows for the mobility of certain professionals under the
admission category of NAFTA-TN. There is no numerical limitation, and this program does not in any
way affect the numerical limitations of other non-immigrant categories.
The US - Chile and US - Singapore FTAs allow for the mobility of professionals under the admission
category of H-1B1. In the case of Chile, the annual numerical limitation is 1,400, and in the case
of Singapore the annual numerical limitation is 5,400. The numbers for the H-1B1 program have a
small affect on the global H-1B program, since H-1B1 numbers are counted against the global H-1B
limitation. In practice, the affect has been very small since actual use of the Chile and Singapore
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numbers has yet to exceed a few hundred per year. In the WTO, the United States has committed to
allow up to 65,000 H-1Bs per year and in practice has exceeded that number.
There are no temporary entry provisions in the US-Australia FTA, or any other U.S. FTA.
[Thailand]
6.
Could the United States please provide progress reports on FTA initiatives not yet included in
the report, such as those with Malaysia and South Korea?
ANSWER:
On February 2, 2006, Ambassador Portman notified Congress of the United States’
intent to negotiate a free trade agreement with the Republic of Korea. The first round of negotiations
will be held the week of June 5 in Washington, D.C. and the Parties have agreed to meet at six to eight
week intervals thereafter. The aim is to conclude the negotiations by the end of this year. On March
8th, Ambassador Portman notified Congress of the United States’ intent to negotiate an FTA with
Malaysia. The first round of negotiations will be during the month of June in Malaysia. The Parties
will continue to meet at six to eight week intervals throughout the year, with the goal of completing the
negotiations in December.
[Turkey]
6. Paragraph 31 of the Secretariat Report states that the US-Australia FTA is the first US FTA to
include non-market access provisions relating to public health and pharmaceuticals. According to the
report the US-Australia FTA requires Australia to apply transparent procedures in listing new
pharmaceuticals for reimbursement.
Could US explain if the US has undertaken commitments with regard to her public health policies
under the said FTA or the mentioned non-market access commitments in those areas are unilaterally
taken by Australia?
ANSWER:
Both the United States and Australia committed to principles in the Pharmaceutical
Annex to the United States-Australia FTA including: to recognize the important role that innovative
pharmaceuticals products play in delivering high quality health care; to support research and
development and technology transfer; to promote of timely and affordable access to innovative
pharmaceuticals through transparent, expeditious, and accountable procedures that do not impede
application of appropriate quality, safety, and efficacy standards; and to maintain regulations and
policies that recognize the value of innovative pharmaceuticals through the operation of competitive
markets or procedures to value the objectively demonstrated therapeutic significance of a
pharmaceutical.
The transparency provisions of the Pharmaceutical Annex apply to both the United States and Australia
to the extent that each government’s federal healthcare authorities operate or maintain procedures for
listing new pharmaceuticals or indications for reimbursement purposes or for setting the amount of
reimbursement for pharmaceuticals under its federal healthcare programs. These provisions do not
cover pharmaceutical formulary development and management, which are subject to the Chapter on
Government Procurement and not the provisions of Annex-C. Programs implemented at the U.S. state
level are not covered by the Pharmaceutical Annex.
Unilateral preferences and other trade arrangements
[Brazil]
1. Chapter I, paragraph 37: Since July 2005, it amounts to 57 tariff lines graduated for Brazil under the
US GSP. Of those lines, 46 of them did not reach any competitive limits in 2004 and 2005 (CNL 50%
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or US$115 million in 2004 and US$120 million in 2005). On the other 11 lines, it was reached the
percentage CNL on 3 of them, but not surpassing the established value limit to obtain the waiver de
minimis (US$15 million in 2004 and US$17.5 million in 2005). Why does not exist an automatic
review mechanism for graduation in the USA GSP Program? Why are some products eligible for this
preferential treatment if there is not any import of this products by USA?
ANSWER:
Products from beneficiary developing countries that are no longer eligible for duty-free
treatment because they were exported in excess of the competitive need limitations may be
redesignated if they meet the criteria for redesignation specified in the statute. The petition process
outlined in the regulations allows the interagency group responsible for evaluating eligibility to collect
the information necessary for it to make recommendations to the President on whether the criteria have
been met.
[China]
Question: (p.21 para.42)
As an active player in both WTO and APEC, what strategy does the U.S. take to enhance the
policy synergy in those two different arenas?
ANSWER:
As an active participant in the WTO and APEC, the United States’ policy is to work to
ensure our bilateral and regional trading relationships are complementary to and compatible with
advancing the goals and obligations of the multilateral trading system. The goals of APEC are, of
course, consistent with and supportive of the trade-liberalizing goals of the WTO. For example, APEC
has worked to advance tariff elimination in the IT sector and supported the launch of the DDA trade
facilitation negotiations. In addition, at critical junctures, APEC Leaders and Ministers have conveyed
strong political messages to support the successful conclusion of the DDA. These statements
have reaffirmed the critical importance of achieving real new market opportunities in the DDA
negotiations on agricultural market access and in NAMA.
[India]
Q.5
At a public hearing held in Washington on November 3, 2005, the relevance and importance of
continuing the GSP programme beyond December, 2006 was brought to the knowledge of the office of
USTR. It was submitted that the benefits of the scheme be continued to be made available to all
developing countries even beyond 2006 in a fair and non - discriminatory way. The current status of
these schemes may be indicated and whether any changes are contemplated.
ANSWER:
See response to Q.7. Reauthorization of the GSP program, including any changes to
the existing program, is currently under consideration by Congress.
[Switzerland]
Para. 39: This paragraph states that the President of the United States determines annually which subSaharan African countries are eligible for benefits. Does this relate only to the provision of technical
assistance or to all benefits of the AGOA?
ANSWER:
The President's annual review to determine which sub-Saharan African countries are
eligible for AGOA benefits involves an assessment of country eligibility for preferential tariff
treatment available under the statute, and is not limited to technical assistance.
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[Turkey]
2. The Secretariat report states that the United States grants unilateral preferences to developing
countries under a number of schemes and that these preferences may be conditional on compliance
with various US policy objectives.
Could United States explain if all conditions are applied in the same manner to all countries in granting
unilateral preferences?
ANSWER:
Yes, all statutory criteria are applied in the same manner in determining country
eligibility for tariff preferences.
Could United States explain how the compliance of these conditions with the various policy objectives
can be assured?
ANSWER:
Each U.S. preference program is administered in accordance with the law, including
the eligibility criteria.
[Turkey]
7. As mentioned in paragraph 37 of the Secretariat report, the US grants unilateral preferences to GSPeligible exports from beneficiary developing countries and the current GSP will be put force through 31
December 2006.
We would appreciate if the US Delegation could provide information on the preparation of the next
GSP scheme.
We understand from the Secretariat report that the granting of preferences may be subject to
compliance with various US policy objectives.
In this respect we would also like to learn how this compliance mechanism operates and if beneficiary
countries are allowed to be informed in advance of any possible new requirements of US policy
objectives.
Is there a commonality of requirements between the GSP schemes and those other unilateral
preferences extended by the US to some countries under specific trade arrangements?
ANSWER:
The President has included, in his 2007 federal budget request, reauthorization of the
GSP program for a five-year period. The President’s request is under consideration by the Congress.
Information on the operation of the U.S. GSP program can be found on the USTR website at
www.ustr.gov. Proposed legislation, including any legislation proposing new requirements for
eligibility under the GSP program, is made available to the public online at: http://thomas.loc.gov.
The GSP, AGOA, ATPA, and CBI programs each have different eligibility requirements. Information
on the eligibility requirements for these programs can be found at www.ustr.gov.
Foreign Investment Regime
[Chile]
In reference to paragraph 43, can the United States provide a list of the restrictive measures applied at
the state level?
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ANSWER:
The United States does not maintain an inventory of restrictive measures affecting
foreign investment in each of our 50 States. The principle area of restrictive measures of which the
United States is aware affects insurance and banking investment. States do regulate foreign
participation in these service industries. Generally speaking, however, States want to attract foreign
investment and treat foreign investors in a non-discriminatory manner. If anything, States compete
with one another to attract foreign investment. Restrictive measures are therefore relatively rare.
[Chile]
With regard to paragraph 44 of the Secretariat’s report, can the United States provide a list of the
actions that can be taken under the Defense Production Act of 1950, which could affect foreign
investment in the U.S.? How compatible are these actions with the Bilateral Investment Treaties (BIT)
and the Free Trade Agreements (FTAs) signed by the United States?
ANSWER:
Under the Exon-Florio provision of the Defense Production Act of 1950, on the basis
of recommendations made to the President by the Committee on Foreign Investment in the United
States (CFIUS), or on his own authority, the President may, after making certain required findings,
suspend or prohibit transactions that involve foreign mergers or acquisitions. Under this authority, the
President could, for example, order a reduction in the level of foreign ownership in a U.S. company,
block entirely a foreign merger or acquisition, or order divestiture of foreign interests in a merger or
acquisition, either in whole or part. Where a proposed transaction is notified to CFIUS pursuant to the
Exon-Florio provision and where the transaction in fact raises national security concerns among the
CFIUS agencies, those agencies may negotiate mitigation measures with the parties to the proposed
transaction. As they address the national security concerns, such mitigation measures usually will
obviate the need for action by the President.
The Exon-Florio provision is fully consistent with the obligations contained in Bilateral Investment
Treaties (BITs) and Free Trade Agreements (FTAs) by virtue of the essential security exception
contained in the these investment and trade agreements.
[China]
Question: (p.22 para. 44-45)
In spite of a generally liberal foreign investment regime, the U.S. notably maintains restrictions on
foreign direct investment to some extent and alerts on foreign mergers and acquisitions of domestic
companies based on the so-called national security reasons. As the U.S. responded in the previous
review that factors to be considered in national security review changed with each acquisition and
merger transaction under the Exon-Florio Amendment and the transparency of its review process is
rather limited.
Although it varies from case to case, could the U.S. elaborate on what the major factors are
generally concerned by its authorities during a foreign merger and acquisition review?
Does the U.S recognize the possibility of discretionary power abuse by relevant authorities under
the Exon-Florio Amendment due to lack of transparency in the review process?
Could the U.S. enlighten us on what have been done to keep its national security review as
transparent, predictable and fair as possible?
ANSWER:
Avoiding Discriminatory and Market Distorting Effects
CFIUS implements Exon-Florio in the context of an open U.S. investment policy and, therefore,
attempts to provide a process that encourages foreign direct investment in the United States while, at
the same time, ensuring that legitimate national security interests are protected. The vast majority of
transactions submitted to CFIUS proceed without initiation of an investigation within thirty days of the
initial notification, and since 1988, only a single transaction subject to Exon-Florio has been blocked
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by the President. Some companies seek to withdraw their notifications voluntarily, which CFIUS
generally permits them to do. Voluntary withdrawal often reflects a decision not to proceed with the
notified transaction. However, the vast majority of transactions submitted to CFIUS or reviewed by
CFIUS on its own initiative are in fact carried out.
Factors Considered under Exon-Florio
In implementing the Exon-Florio provision since its enactment in 1988, CFIUS has addressed national
security issues raised by foreign acquisitions of U.S. companies. CFIUS thoroughly considers all
information about a proposed transaction as it pertains to national security. The Exon-Florio statute
contains a list of factors, among others, that the President or his designee (i.e., CFIUS) may consider
(50 U.S.C. App. § 2170(f)) in evaluating the effects of a proposed transaction on national security.
These are:
ƒ
domestic production needed for projected national defense requirements;
ƒ
the capability and capacity of domestic industries to meet national defense
requirements, including the availability of human resources, products,
technology, materials, and other supplies and services;
ƒ
the control of domestic industries and commercial activity by foreign citizens
as it affects the capability and capacity of the U.S. to meet the requirements of
national security;
ƒ
the potential effects of the transaction on the sales of military goods,
equipment, or technology to a country that supports terrorism or proliferates
missile technology or chemical and biological weapons; and
ƒ
the potential effects of the transaction on U.S. technological leadership in areas
affecting U.S. national security.
It is not possible to discuss in detail the factors taken into consideration by CFIUS in conducting a
national security review under Exon-Florio beyond those listed in the Exon-Florio statute. This is
because the factors that are relevant may be different for each transaction.
Definition of National Security
“National security” is not defined in the statute or in the implementing regulations. As noted above,
factors relevant to a review of the national security implications of a proposed transaction will vary
depending on the specifics of the transaction. Moreover, a definition of the term “national security”
would not necessarily result in guidance sufficiently detailed to be helpful to the parties to a proposed
transaction. The statute lays out a broad set of factors that may be considered, but this is not an
exhaustive list. Each transaction has unique characteristics and agencies are not constrained in
examining facets of a transaction that could impact national security.
[China]
Question: (p.22 para. 44-45)
In 2005, CNOOC, an oil company from China, offered the highest bidding price for its intended
acquisition of Unocal, a California oil producer. But eventually CNOOC withdrew its filing under huge
political pressure from the U.S. side.
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What are the U.S. comments on its surging domestic complaints from its industrial community
about the damages on U.S. business environment and commercial interests by the political
pressure imposed upon this case?
ANSWER:
We do not believe that the outcome of one proposed foreign acquisition would
undermine the overall positive environment in the United States for foreign investors. There now is a
debate on reforming the process for reviewing the potential effect on national security of proposed
foreign acquisitions. The United States will continue to welcome foreign investment because it can
bring in new technology, managerial skills, new production techniques and it creates good jobs for
American workers.
[China]
Taxation System
Foreign company’s branches in the U.S. or US companies with more than 25% foreign share are
required by the U.S. to register and keep records of transactions with affiliated companies. The records
should be stored in places designated by tax department, while further explanations to these
transactional records must be annually updated and registered. Otherwise, companies are subject to
different punishment.
Does this requirement apply equally to domestic companies of the U.S.?
ANSWER:
U.S. tax law requires taxpayers to retain and report the information necessary to show
correct U.S. tax liability. If a taxpayer (whether foreign or domestic) engages in transactions with an
entity that is not subject to U.S. tax jurisdiction and is therefore not subject to U.S. information
retention and reporting rules, then special reporting rules apply to the taxpayer so that the necessary
information will be available to U.S. tax authorities.
Does this requirement impose extra burden to foreign invested enterprises and complicate their
business operation in the U.S. as well?
ANSWER:
No. The reporting rules are intended to make sure that tax authorities can properly
determine the tax liability of domestic corporations and foreign corporations engaged in a trade or
business in the United States.
Please provide the rationale of this requirement and clarify its consistency with WTO national
treatment?
ANSWER:
These rules put domestic and foreign corporations that do business with foreign
affiliates on the same footing as domestic corporations that do business with domestic affiliates.
[Colombia]
Please list and describe the cases in which the United States has used the concept of “national security”
that appears in Section II, paragraphs 4, 7, and 44 of the Secretariat’s report on “Developments in
Trade and Investment Policy,” as an exception to their WTO commitments.
ANSWER:
Since 1988, the President has blocked only one transaction on national security
grounds under the Exon-Florio statute, which had no implications for U.S. WTO commitments.
Therefore, there have been no cases in which the United States has used the concept of
"national security" found in the Exon-Florio statute as an exception to its WTO commitments.
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[Ecuador]
The Secretariat’s report indicates that, “the United States has bilateral investment treaties in force with
39 other countries. Among the main characteristics of U.S. bilateral investment treaties are: a broad
coverage; national and MFN treatment both pre- and post-establishment, subject to agreed sectoral
exceptions; the observance of certain standards of treatment and protection with regard to covered
investments; rules concerning expropriation and compensation; free transfer of funds; prohibition of
certain mandatory performance requirements; settling of disputes through international arbitration.”
(Paragraph 46, Page 160).
Bearing in mind that a bilateral investment treaty [BIT] to promote and guarantee investments
between Ecuador and the United States that has been in effect since 1996, and that as part of the free
trade agreement negotiations between the two countries a chapter on investment and the treatment of
FDI [foreign direct investments] is included, Ecuador requests information regarding the U.S. stance on
the co-existence of such bi-lateral treaty and an FTA.
Has the United States considered the eventual termination of the bilateral treaty for the
promotion and guarantee of investments with Ecuador?
Can the United States provide us with in-depth information on what its government defines as
investment and the manner in which it draws up an illustrative list as regards what is considered to be
an act of investment? Is a restrictive definition appropriate?
ANSWER:
The United States has recently concluded free trade agreements (FTAs) with two
countries – Morocco and Honduras – that is each a party to a bilateral investment treaty (BIT) with the
United States. In each negotiation, the parties had to decide how to address the relationship between
the BIT and the FTA under negotiation. In each case, the parties agreed to keep their BIT in force but
to suspend dispute settlement under the BIT, except for two categories of disputes: (1) disputes
involving investments covered by the BIT as of the date of entry into force of the FTA; and (2) disputes
that arose prior to entry into force of the FTA that are otherwise eligible to be submitted for settlement
under the BIT. Disputes coming under either of these categories may be submitted for settlement under
the BIT for a period of ten years after the entry into force of the FTA. Alternatively, such disputes may
be brought under the FTA. The United States has been discussing a similar approach with Ecuador
during the negotiation of the U.S.-Andean Trade Promotion Agreement (USA-TPA).
As Ecuador’s USA-TPA negotiators are aware, the United States embraces a broad definition of
investment in its BITs and FTA investment chapters. The investment definition that the United States
proposes in these agreements includes an open-ended list of the characteristics that an investment may
have and of the forms that an investment may take. This wording is intended to ensure that a wide
range of current and future forms of investment will be covered by the obligations of the relevant BIT
or investment chapter.
[European Communities]
Paragraph 44: How dos the US view the implementation of the Exon-Florio statute, which aims
to ensure that national security concerns are respected in takeovers and mergers involving
foreign firms? How does the US view the prospects for further legislation?
ANSWER:
Implementation of the Exon-Florio Statute
In implementing the Exon-Florio provision since its inception in 1988, CFIUS has addressed national
security issues raised by foreign acquisitions of U.S. companies. CFIUS thoroughly considers all
information about a proposed transaction as it pertains to national security. The Exon-Florio statute
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contains a list of factors, among others, that the President or his designee (i.e., CFIUS) may consider
(50 U.S.C. App. § 2170(f)) in evaluating the effects of a proposed transaction on national security.
It is important to note that only a single transaction has been blocked under Exon-Florio. CFIUS
implements Exon-Florio in the context of an open U.S. investment policy and, therefore, attempts to
provide a process that does not discourage foreign direct investment in the United States, while, at the
same time, protecting legitimate national security interests. Some companies seek to withdraw their
notifications voluntarily, which CFIUS generally permits them to do. Voluntary withdrawal often
reflects a decision not to proceed with the notified transaction. However, the vast majority of
transactions submitted to CFIUS or reviewed by CFIUS on its own initiative are, in fact, carried out.
Prospects for Further Legislation
The Exon-Florio provision is flexible enough to allow for the full range of national security
considerations when reviewing proposed foreign acquisitions of U.S. companies. It provides for a
thorough national security review by agencies that are members of CFIUS in a manner that is
consistent with the promotion of foreign investment in the United States. At present, there are a
number of pieces of proposed legislation under consideration in the U.S. Congress that would modify
the Exon-Florio provision. CFIUS member agencies are working constructively with the relevant
congressional committees to seek to ensure that the law will continue to permit thorough national
security reviews in a manner that does not harm the long-standing policy of being open to foreign
investment in the United States.
[India]
Q.10 For Indian IT professionals working in US, social security costs constitute a significant portion
of compensation costs to the Indian software companies executing projects abroad. US receive about
USD 500 million per year by way of social security contributions from Indian software
companies/employees. However, the benefits availed are insignificant as almost all the software
professionals return to India or migrate to other locations before they are eligible for the benefit. Would
US authorities consider the following suggestions?
(i)
(ii)
Employees of Indian companies working temporarily in the US under the HIB visa
scheme are exempted from paying Social security, or
Deductions made towards social security from employees of Indian companies are
refunded upon their return from the US.
ANSWER:
The terms of withholding social security taxes are established through the negotiation
of bilateral taxation agreements. Countries interested in this issue may address the appropriate
authority within the U.S. government, the U.S. Social Security Administration.
[Japan]
Q1. The Exon-Florio provision (Section 721 of the Defense Production Act of 1950) provides a
mechanism to review and, if the President finds necessary, to restrict foreign direct investment that
might threaten the national security of the United States. In general, the Government of Japan fully
understands the necessity of regulations for national security reasons. The Government of Japan has
concerns, however, about the provision from the following viewpoints: (1) the lack of predictability for
investors due to an ambiguous definition of “national security”; (2) the lack of legal stability due to the
possibility that completed transactions can also be subject to future investigation; and (3) the lack of
due process, illustrated by non-disclosure of the facts, such as the reasons for the commencement of
investigation or the final decisions by the President. The Government of Japan is also concerned that
this provision could impede investment activities of Japanese companies beyond the extent necessary
for its original purpose. The Government of Japan urges the Government of the United States, in
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implementing the Exon-Florio provision, not only to comply with the WTO rules but also to take
necessary measures to ensure transparency and fairness, to the maximum extent possible, in the process
from the notification to the Committee on Foreign Investment in the United States to the final decision
by the President. In these respects, please indicate the specific views of the Government of the United
States.
ANSWER:
Predictability
While national security is not defined in the Exon-Florio statute or the implementing regulations, there
is general guidance in the Preamble of the regulations regarding the application of the statute. (31
C.F.R. Pt. 800, App. A (2005).) In general, it is expected that those considering a particular transaction
would use their judgment and discretion in reaching a decision as to whether or not to file a notice.
Exon-Florio does not define “national security,” in recognition of the fact that factors implicating
national security will vary according to the details of the transaction.
The text and legislative history of Exon-Florio make clear that the focus of Exon-Florio is on
transactions that could threaten to impair the national security of the United States. Although neither
the statute nor the Conference Report defines “national security,” the conferees explained that it is to be
interpreted broadly and without limitation to particular industries. There is no exemption from
investigation for any foreign merger or acquisition of a U.S. company in any industrial sector. The
Office of International Investment in the Department of Treasury, upon request, informally provides
guidance and meets with parties to discuss aspects of a transaction relevant to the decision whether to
file a notice with CFIUS.
Legal Stability
Transactions notified under Exon-Florio and subject to a national security review will not be reviewed
a second time unless CFIUS determines that the parties made a material omission or misrepresentation
of the facts provided to the Committee. There is no time limit on the authority of the President to take
action under Exon-Florio with regard to transactions that were not notified to CFIUS. The only
limitation on his authority with respect to such non-notified transactions is that whatever action the
President might deem appropriate under this authority must be based on the facts, conditions, or
circumstances existing at the time the transaction was concluded.
The Exon-Florio provision authorizes the President to suspend or prohibit any merger, acquisition or
takeover of a U.S. company by a foreign investor if he finds: (1) there is credible evidence that the
foreign acquirer might take action that threatens the U.S. national security; and (2) existing laws and
regulations, other than the International Emergency Economic Powers Act or Exon-Florio itself, are not
adequate and appropriate to address this threat. The President retains this authority indefinitely for
non-notified transactions. With respect to a notified transaction, the President will not exercise his
authority where either of two conditions is met: (1) CFIUS completes its review of the proposed
transaction without proceeding to an investigation, or (2) CFIUS undertakes an investigation of the
proposed transaction, at the conclusion of which the President decides to take no action. (See 31 C.F.R.
§ 800.601(d).) (The foregoing statement does not apply to instances in which a party to a transaction
has submitted false or misleading material information to CFIUS, or to instances in which a party has
omitted material information requested by CFIUS. See 31 C.F.R. § 800.601(e).)
Due Process and Disclosure
CFIUS shares with parties to a proposed transaction the reasons for initiating an investigation, to the
extent permitted by U.S. law, and consistent with its mandate to advise the President on matters of
national security. Sometimes the reason for an investigation is based on information that is “classified”
under U.S. law. In such cases, it may not be possible to reveal the reasons for an investigation without
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compromising classified information. Similar considerations may pertain to the reasons for the final
determination by the President.
Because implementation of the Exon-Florio provision involves questions of national security, there is a
limit on the extent to which the process can be transparent vis-à-vis the parties to the proposed
transaction. Because parties are encouraged to voluntarily notify potentially qualifying transactions to
CFIUS, and because their notifications may contain business confidential information, there is a limit
on the extent to which the process can be transparent vis-à-vis the public in general. In fact, ExonFlorio notifications are subject to strict confidentiality rules. (See 50 U.S.C. App. § 2170(c).) CFIUS
endeavors to provide the parties to a proposed transaction with ample opportunity to present their
arguments during the course of its initial review and, if necessary, during its investigation, both to
provide due process and to ensure that the most complete and accurate information is obtained to
inform the decision making process.
Compliance with WTO Rules
The United States is living up to its responsibilities and has implemented a regime that is predictable,
stable, and that provides an appropriate opportunity for participation in the review process. The
implementation of Exon-Florio is consistent with U.S. obligations under WTO agreements that provide
for essential security exceptions.
[Norway]
2. In paragraph 44 of the report it is stated that FDI into the United States is subject to reporting
requirements under the International Investment and Trade in Services Act. We would be pleased to
have more information on this act and its objectives, more specifically about what the requirements are
and what the potential consequences are of omitting to fulfill the reporting requirements.
ANSWER:
The International Investment and Trade in Services Survey Act or IITSSA (90 Stat.
2059, 22 U.S.C. 3101 et seq.) as amended, authorizes the President or his designate (currently the
Director of the Office of Management and Budget) to order the collection of limited statistics on
foreign direct and portfolio investment in the United States and U.S. direct and portfolio investment
abroad, as well as data on U.S. foreign trade in services. The Director of Office of Management and
Budget has delegated to the U.S. Department of Commerce the responsibility to collect statistics on
direct investment and U.S. foreign trade in services, and to the U.S. Department of the Treasury the
responsibility to collect portfolio investment statistics.
When Congress passed IITSSA in 1976, it recognized that “international investment significantly
affects the economies of the United States and other nations” and that improved investment data were
needed to evaluate the possible effects on “national security, commerce, employment, inflation, general
welfare, and foreign policy of the United States.” Congress further noted that U.S. services industries
accounted for a substantial part of the U.S. labor force and gross national product and that trade in
services “is an important issue for international negotiations.”
The IITSSA requires reports of all foreign investment in a U.S. business enterprise in which a foreign
person owns 10% or more of the voting interest, unless the investment is under $1 million, is under 200
acres, or is real estate intended for personal use. The data reporting requirements are detailed at:
http://www.osec.doc.gov/ogc/occic/invest.html
The following website contains more detailed information about the requirements as well as links to
filing forms:
http://www.bea.gov/bea/surveys/fdiusurv.htm
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Failure to report under the Survey Act may result in civil or criminal penalties. Willful failure to report
can result in fines up to $10,000, imprisonment of up to one year, or both. However, legislation
enacted after the IITSSA, such as the Paperwork Reduction Act, has stressed that minimal costs are to
be imposed on data respondents. Congress has underscored that by collecting such data there is no
intent to deter foreign investment in the United States, U.S. investment abroad, or trade in services.
[Switzerland]
Paras. 44 and 45: We note with satisfaction that no acquisition has been blocked or divested under the
Exon-Florio amendment and that during 2004 there were only two out of 50 cases (acquisitions,
mergers, takeovers, etc..) where investigations were initiated by the CFIUS (Committee on Foreign
Investment in the United States). Also, no action was taken as a result of these investigations. This is
certainly of great importance for a sound and liberal FDI policy. However, the lack of a clear definition
of "national security" and the wide discretion in the interpretation of the concept of national security
(by the President) may cause legitimate concerns as discussions in other international fora have shown.
We welcome the fact that the CFIUS determines if a formal investigation under Exon-Florio is
warranted and that, in practice, it initiates investigations only in a limited number of cases. This creates
- under these circumstances and to some extent - predictability for potential investors although the
length of time taken to complete a review process (and in some cases also substantial restructuring of
the proposed acquisition will be asked for as a condition for approval) could be quite costly for the
parties involved. In addition, concerns about a possible abuse of the discretion mentioned above to
disguise protectionism and discrimination of foreign investors cannot be overseen. In this latter respect,
we would appreciate to know what the United States have done so far in order to avoid such
discriminatory and market distorting effects when applying the discretion mentioned above.
More generally, could the U.S. authorities explain on the basis of what precise criteria decisions are
being taken by the CFIUS to accept or block FDI? Could they also elaborate on what their concept of
“national security” entails?
ANSWER:
Avoiding Discriminatory and Market Distorting Effects
CFIUS implements Exon-Florio in the context of an open U.S. investment policy and, therefore,
attempts to provide a process that encourages foreign direct investment in the United States while, at
the same time, ensuring that legitimate national security interests are protected. The vast majority of
transactions submitted to CFIUS proceed without initiation of an investigation within thirty days of the
initial notification, and since 1988, only a single transaction subject to Exon-Florio has been blocked
by the President. Some companies seek to withdraw their notifications voluntarily, which CFIUS
generally permits them to do. Voluntary withdrawal often reflects a decision not to proceed with the
notified transaction. However, the vast majority of transactions submitted to CFIUS or reviewed by
CFIUS on its own initiative are in fact carried out.
Factors Considered under Exon-Florio
In implementing the Exon-Florio provision since its enactment in 1988, CFIUS has addressed national
security issues raised by foreign acquisitions of U.S. companies. CFIUS thoroughly considers all
information about a proposed transaction as it pertains to national security. The Exon-Florio statute
contains a list of factors, among others, that the President or his designee (i.e., CFIUS) may consider
(50 U.S.C. App. § 2170(f)) in evaluating the effects of a proposed transaction on national security.
These are:
ƒ
domestic production needed for projected national defense requirements;
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ƒ
the capability and capacity of domestic industries to meet national defense
requirements, including the availability of human resources, products,
technology, materials, and other supplies and services;
ƒ
the control of domestic industries and commercial activity by foreign citizens
as it affects the capability and capacity of the U.S. to meet the requirements of
national security;
ƒ
the potential effects of the transaction on the sales of military goods,
equipment, or technology to a country that supports terrorism or proliferates
missile technology or chemical and biological weapons; and
ƒ
the potential effects of the transaction on U.S. technological leadership in areas
affecting U.S. national security.
It is not possible to discuss in detail the factors taken into consideration by CFIUS in conducting a
national security review under Exon-Florio beyond those listed in the Exon-Florio statute. This is
because the factors that are relevant may be different for each transaction.
Definition of National Security
“National security” is not defined in the statute or in the implementing regulations. As noted above,
factors relevant to a review of the national security implications of a proposed transaction will vary
depending on the specifics of the transaction. Moreover, a definition of the term “national security”
would not necessarily result in guidance sufficiently detailed to be helpful to the parties to a proposed
transaction. The statute lays out a broad set of factors that may be considered, but this is not an
exhaustive list. Each transaction has unique characteristics and agencies are not constrained in
examining facets of a transaction that could impact national security.
[Switzerland]
Paras. 46 and 47: The United States have - in addition to its membership to WTO and OECD (Code of
Liberalization and National Treatment Instrument) - concluded a number of treaties relating to trade
and investment, namely bilateral investment treaties containing pre-establishment elements (BIT), free
trade agreements (e.g. Singapore, Chile), NAFTA and trade and investment framework agreements. Do
the U.S. authorities foresee to continue to follow a multi-layered approach to international investment
arrangements, and if so, which will be its guiding principles?
ANSWER:
The United States will continue to pursue a multi-level approach to the negotiation of
disciplines on and market access for foreign investment. Over the last three years, the United States
has concluded negotiations on free-trade agreements (FTAs) with Chile, Singapore, five countries in
Central America and the Dominican Republic, Australia, Morocco, Oman, Peru, and Colombia. These
FTAs all include investment chapters with high standards of investor protection and substantial market
access opportunities for investors. The United States plans to pursue similar disciplines and market
access in the FTAs currently under negotiation with Thailand and Panama and in the FTAs with Korea
and Malaysia that we intend to begin negotiating later this year.
The U.S. government is also negotiating bilateral investment treaties (BITs) on the basis of a model
text that is substantially similar to the investment chapters of recent FTAs. A BIT with Uruguay was
concluded in 2005, and another BIT, with Pakistan, is under negotiation.
As in all of its investment negotiations since NAFTA, the United States plans to seek agreement with
its current and prospective FTA and BIT negotiating partners on several core principles. These include
national and most-favored nation treatment for the full life-cycle of investment (i.e., from pre-
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establishment to dissolution); coverage of all investment, direct and portfolio; the customary
international law minimum standard of treatment; international law disciplines on expropriation and
compensation for expropriation; unimpeded transfers, at market rates of exchange, into and out of a
host country; disciplines on performance requirements; the ability to employ senior management of an
investor’s choice, without regard to nationality; binding investor-state arbitration; a negative listing
approach to market access (i.e., benefits apply to all investors and investments unless a reservation
against a particular obligation is taken with respect to particular investors or investments in a party’s
schedule of non-conforming measures); and transparency of investment-related measures and
procedures.
[Thailand]
2. Paragraph 44 of the report provides some information about the Exon-Florio Amendment, which
grants the President wide discretion in taking action against FDI transactions by, among other things,
suspending or prohibiting proposed transactions, as well as divestment of a completed transaction.
Please provide more details on this law, including all instances of implementation since its enforcement
and information on how we can obtain a copy of the Amendment and all related laws and regulations.
Also, how does the United States view this provision in light of the ongoing negotiations in the
Working Party on GATS Rules on Article X: Emergency Safeguard Measures, and how does the
United States plan to address this issue in that context?
ANSWER:
More information about the Exon-Florio amendment (50 U.S.C. App 2170), related
regulations, and implementation may be obtained through the official CFIUS website at
http://www.ustreas.gov/offices/international-affairs/exon-florio/.
There is no connection between GATS Article X (Emergency Safeguard Measures) and Exon-Florio.
[Turkey]
3. The Secretariat report indicates that, with some sector-specific restrictions, the United States
maintains a policy of national treatment for foreign direct investment. According to the Secretariat
report, these restrictions to national treatment apply with respect to certain official support programs
and in a number of limited cases Foreign Direct Investment is subject to reporting requirements or
review to take account of national security concerns. Moreover; paragraph 7 of the report adds that the
Omnibus Trade and Competitiveness Act of 1988 authorizes the President to restrict FDI that threatens
national security. The Secretariat Report, paragraph 44 further explains that under the “Exon-Florio
amendment”, the president may take action with respect to foreign acquisitions, mergers or takeovers
on the ground of “national security” and that even the amendment does not define what the “national
security” is, it sets out certain factors to be considered. Could US outline what these certain factors are
that might be considered in the President’s assessments for the any possible “national security” actions
and how all these concerns affect the inflow of FDI to the US?
ANSWER:
Factors Considered under Exon-Florio
The Exon-Florio statute, section 721 of the Defense Production Act of 1950 (50 U.S.C. App. § 2170),
lists certain factors, among others, that the President may consider in assessing the national security
impact of a foreign acquisition of a U.S. company. CFIUS is guided in its review by the factors listed
in the Exon-Florio statute. These factors are:
ƒ
domestic production needed for projected national defense requirements;
ƒ
the capability and capacity of domestic industries to meet national defense
requirements, including the availability of human resources, products,
technology, materials, and other supplies and services;
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ƒ
the control of domestic industries and commercial activity by foreign citizens
as it affects the capability and capacity of the U.S. to meet the requirements of
national security;
ƒ
the potential effects of the transaction on the sales of military goods,
equipment, or technology to a country that supports terrorism or proliferates
missile technology or chemical and biological weapons; and
ƒ
the potential effects of the transaction on U.S. technological leadership in areas
affecting U.S. national security.
CFIUS also evaluates other issues, including:
ƒ
the record of the acquiring foreign entity as to compliance with U.S. laws and
regulations;
ƒ
the identity of the shareholders and others with influence over the foreign
entity, including foreign governments;
ƒ
the plans and intentions of the foreign acquirer for the U.S. target company;
ƒ
the risk of diversion of sensitive technology of the U.S. target company; and
ƒ
whether the U.S. company is the last or sole producer of products or provider
of services important to the national security.
If, at the end of the initial 30-day review period, CFIUS members still have national security concerns,
CFIUS can initiate a 45-day investigation.
The CFIUS review is limited to the national security concerns that might arise with respect to a foreign
acquisition of a U.S. company. The vast majority of transactions notified to CFIUS or reviewed by
CFIUS on its own initiative are carried out. Since 1988, only a single transaction subject to ExonFlorio has been blocked by the President.
[Turkey]
8. In the Secretariat report, under paragraph 47, it is stated that under the Middle East Free Trade
Initiative (MEFTA), the US offered to negotiate new trade and investment framework agreements with
countries in the region and to deepen those already in place.
Could US Delegation give more information on their projection on this issue?
ANSWER:
The Middle East Free Trade Area (MEFTA) initiative as currently envisioned seeks to
engage step by step with countries in North Africa, the Levant and the Gulf in deepening our trade and
investment relationship. Through Trade and Investment Framework Agreement discussions, bilateral
FTA discussions and other forms of engagement the United States is working to construct a regionwide FTA by 2013.
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III. TRADE POLICIES AND PRACTICES BY MEASURE
Overview
[Turkey]
9. In the aftermath of unfortunate terrorist act of September 11, the concept of security has
increasingly been playing an important role in the US trade policy decision making process. In this
regard, Secretariat report makes references to or contains quite amount of information on security –
related trade policy measures.
For example, paragraph 3 of the Secretariat report mentions that since its previous review the US has
taken additional steps to incorporate security considerations into its import procedures, notably by
promulgating regulations in relation to the Trade Act of 2002 and the Bioterrorism Act.
Could US Delegation make a general assessment on the effect of the security related measures on the
bilateral commercial relations of the US with her trading partners?
ANSWER:
In reference to the Bioterrorism Act, the U.S. Food and Drug Administration (FDA)
has encouraged public comment at every stage of the bioterrorism regulations' development. FDA
developed and published proposed regulations which were open to public comment from both domestic
and foreign parties. We also conducted numerous outreach meetings directed at foreign stakeholders,
both within the United States to foreign embassy officials in Washington and via videoconference. We
received numerous comments from foreign governments, industries, and trade associations on both
rules. We reviewed each comment that was submitted during the comment period and developed the
final rule, taking the comments into account. In the case of the prior notice and registration regulations,
we are allowing for several opportunities for interested individuals to provide comments even as we
begin implementing the interim final rule to make sure that we minimized any negative effect on trade
while ensuring our food safety and security. We have published a compliance policy guide that
describes the U.S. strategy for maintaining an uninterrupted flow of imports while improving their
safety in accordance with the Public Health Security and Bioterrorism Preparedness and Response Act
of 2002 (Bioterrorism Act) requirements. FDA included an economic impact analysis in the proposed
rules for affected entities to review and provide comment, and made revisions to the rules based on the
comments we received to further minimize the impact to trade consistent with the requirements in the
Act. Both interim final rules include a regulatory impact analysis.
The United States is very sensitive to the impact that U.S. Customs and Border Protection's (CBP) antiterrorism efforts have on the flow of trade and its resulting effect on the economies of the U.S. and our
trading partners. Due to the volume of containers being shipped on a daily basis, the impact of
terrorists using sea containers to conceal weapons of mass destruction would have an immediate and
devastating impact on global trade and the global economy. Greater cooperation and communication
between government agencies responsible for homeland security has provided a stronger defense
against terrorist acts, and has not negatively impacted the swift and effective transportation of
merchandise. The United States recognizes the potential for trade disruption and has taken every
possible step to ensure that legitimate trade is not disrupted.
[Cuba]
“The Cuban delegation presents on this occasion a report regarding measures of an overtly
extraterritorial nature that the Government of the United States of America has instituted against our
country from January 2004 to the present. Such measures intensify the economic, commercial and
financial embargo that the U.S. Government has maintained against Cuba since 1962, in open defiance
of the demand by the United Nations General Assembly – supported by the immense majority of its
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Member States – that it end this illegal policy. Indeed, this policy confirms the United States of
America’s most absolute disdain for the United Nations, multilateralism and international law.
In this context, our delegation wishes to ask the delegation of the United States of America, which
defines itself as a champion of multilateral trade, to explain the application of such measures when
there is no doubt that all of them violate WTO rules and are contrary to the commitments that their
country adopted as a member of this Organization.
Report on US Measures Applied with regard to Cuba
- Since the last Review of January 2004, heretofore, the government of the United States of America
(USA) has not only maintained, but also strengthened and intensified the prohibitions and restrictions
of the economic, commercial and financial embargo that it has unilaterally imposed on Cuba for more
than forty years. Said embargo has caused immeasurable harm to Cuba’s economy, its trade in goods
and services, and to this nation’s people.
- Based on conservative, preliminary calculations, the direct economic damage to Cuba from the
embargo’s application exceeds $US82 billion, an average of $US1.782 billion annually. In 2004, this
amount exceeded $US2.764 billion and the direct effect on foreign trade alone reached $US822.6
million.
- Cuba is the only Member of the WTO subject to sanctions of such a harmful, comprehensive, and
complex nature, whose extraterritorial scope affects other WTO members in their trade relations both
with Cuba, as well as with the USA. Countless examples have been included in the report that Cuba
presents to the United Nations Secretary-General each year, and which led the United Nations General
Assembly, with the almost unanimous support of its Member States (182), to demand in 2005 for the
fourteenth consecutive time an end to this irrational policy that is inconsistent with the principles
advocated by the WTO, the United Nations, and other international bodies.
- As the WTO Secretariat states in its report (WT/TPR/S/160), during the review period, the USA
reduced or relaxed restrictions on trade with about a dozen countries (several in Europe, Iraq and
Libya); however, in the case of Cuba it has, to the contrary, intensified them even more. The notorious
and reprehensible Torricelli (1991) and Helms-Burton (1996) laws, along with more than a dozen other
laws that form the basis of the embargo, continue to be in force.
- In June 2004, the US government put new Department of the Treasury OFAC (Office of Foreign
Assets Control, charged with administering economic and commercial sanctions) regulations into
effect, and established more rigorous Department of Commerce standards and controls with regard to
gift parcels and the baggage of travelers going from the USA to Cuba. Such actions are part of the
application of measures against Cuba announced by President Bush on May 6, 2004, in keeping with
the recommendations of the so-called Commission for Assistance to a Free Cuba.
- The Department of the Treasury regulations are aimed at tightening restrictions for travel from the
USA to Cuba, both for Americans and for Cubans who live there, as well as for other travel-related
aspects and remittances. An effort is thus being made to reduce revenues that Cuba would otherwise
receive from tourism and remittances, with the resulting effects on the Cuban economy in general and
on trade in services in particular, which in recent years has become an important source of financing for
Cuban economic development.
- Tightened travel restrictions have come about as the result of eliminating categories that until that
time were permitted, the requirement of having to obtain a specific license for other categories that
previously required a general license, the reduction in the amount authorized travelers are permitted to
spend in Cuba, and the prohibition on importing Cuban products by visitors who travel to Cuba (except
for a very specific few that qualify as informational or cultural materials). In this regard, the following
are specific examples:
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1. - The Fully-Hosted Travel category (travel by invitation, at no cost to the traveler) has been
eliminated. Said category had been accepted since 1982, without being considered a violation of
OFAC regulations for more than two decades. Therefore, American citizens and other persons subject
to the jurisdiction of the United States cannot travel to Cuba as guests of the government of Cuba or of
any Cuban national (or of a third-country national), unless they obtain a specific license from OFAC.
The United States has thus made a new interpretation, according to which even when travelers to, from,
or in Cuba accept goods and services at absolutely no cost to them, they nevertheless engage in
prohibited activities in which Cuba or a Cuban national have an interest, such as the payment of
expenses (transactions) related to travel (airport taxes, mooring fees, and others).
This same regulation also prohibits making any payment for travel to Cuba to a third-country air carrier
in which Cuba has an interest, unless such travel is carried out under a specific or general license.
2. - New travel restrictions on visiting relatives in Cuba have been established. In addition to
restricting the category of relatives (Cuban nationals) who can be visited in Cuba (to include only close
family such as a spouse, children, grandchildren, parents, grandparents or siblings), the new regulations
limit the number of visits to one every three years, require a specific license and are for only a twoweek stay (instead of one visit a year with no stipulated duration, as applied previously). Additional
visits will not be authorized, and there is no provision for issuing licenses in emergency situations.
Previously, these visits were carried out with a general or automatic license.
In the case of visits from the USA to non-Cuban nationals who are in Cuba with a license from the US
government (such as university students), a series of requirements for issuing a specific license for such
travelers has been established. Emergency situations may give rise to a trip, with the knowledge of the
US Interests Section in Havana and in consultation with the Department of State prior to the issuance
of said specific license.
3. – Travel to Cuba to participate in some professional events has been limited for citizens under
US jurisdiction. Specifically, the general (or automatic) license authorizing transactions regarding
travel to Cuba for some kinds of professional research will not be issued for transactions related to
conferences or professional meetings in Cuba, which will not be categorized as professional research.
In this case, the researcher must request a specific license from OFAC.
4. – New travel requirements to participate in educational activities in Cuba have been
established, by requiring that such travelers obtain a specific license for these activities. The
possibility of obtaining said license has been restricted to only specific institutions and eliminated in
the case of secondary education institutions. The effective period of said license has been reduced
from two years to one, and for some activities, the stay in Cuba cannot be less than ten weeks.
5. - Travel to attend sports competitions organized by international federations has been
restricted, by eliminating general licenses to participate in these competitions and requiring specific
licenses that are requested and analyzed on a case-by-case basis. These new regulations do away with
the possibility of authorizing participation in workshops and clinics, may they be sports-related or not.
6. - The amount authorized travelers can spend in Cuba has been limited in the case of family
visits to Cuba. The daily expenditure amount authorized has been reduced to only $50 to cover travelrelated expenses, plus an additional $50 per trip for domestic transportation expenses in Cuba.
Previously, this amount was equal to $US167 per diem established by the Department of State for its
employees’ travel.
OFAC may, at its discretion, issue specific licenses to authorize greater expenditures. As a policy, this
agency is not inclined to use this power frequently, rather quite the contrary.
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7. – The Import of Cuban products (or goods) by visitors has been eliminated, doing away with the
possibility that travelers authorized to visit Cuba acquire and take with them, for personal use on their
return trip, Cuban goods for a value of up to $US100, as had been set forth previously. The only
exception to such rule is for products that are classified as informational materials.
- In October 2004, the US Department of State announced the establishment of a Cuban Assets
Targeting Group to investigate and put a stop to new channels used to move currency to and from
Cuba. The aforementioned Department specifically mentioned Cuba’s tourism industry, which has
become a principal source of revenue in Cuba. Undoubtedly, this measure highlights the tightening
grip of the embargo that has characterized the two-year period since the last Review.
- With respect to the restrictions on remittances sent from the USA to Cuban nationals, the
OFAC regulations stipulate the following:
1. - Remittances to Relatives – The regulations authorizing a general license for any person (18 years
or older) subject to US jurisdiction to send $US300 per quarter to any household of a Cuban national
have been changed such that, under the general license, a remittance may only [be made] to the
sender’s immediate family members, i.e.—solely a spouse, children, grandchildren, parents,
grandparents or siblings.
Such regulations also specify that remittances cannot be made to employees of the Cuban government
or of the Communist Party of Cuba. Furthermore, the total amount of quarterly remittances that an
authorized traveler can bring with him or her has been reduced from US$3,000 to just US$300.
2. – Remittances from US Non-governmental Organizations to Groups/Organizations and their
Individual Members in Cuba. The specific license policy for authorizing remittances from
government organizations, non-governmental organizations and individuals subject to US jurisdiction
to the so-called pro-democracy groups, independent civil society, religious organizations, or to
individual members of these groups or organizations in Cuba has been more clearly defined.
In contrast with the dispositions for family remittances, in this case no limits have been set on the
quantity and frequency of such remittances, which demonstrates the overtly political (not commercial)
objective of these regulations.
3. – Transactions related to Remittances Made by Banks and Other Institutions. The general
(automatic) license authorizing such institutions to transfer quarterly family remittances or remittances
earmarked to pay expenses to emigrate from Cuba has been eliminated. According to the new
regulations, these institutions have to request and obtain a specific license to offer this service.
In the case of other transactions not related to remittances, a general license continues to apply to the
institutions involved in them.
- In addition to tightening restrictions on travel, remittances, gift parcels and baggage, a new
interpretation to enforce the regulations of the Trade Sanctions Reform and Export Enhancement Act of
2000 took place in February 2005, with implementation thereof in March of that year. Such Act refers
to sales to Cuba of agricultural and health-related products, and specifically to payments made by the
Cuban business responsible for these transactions since November 2001. That reinterpretation of the
requirements for the method of payment to be cash in advance entails additional costs and risks to
Cuba in a context of prolonged and permanent political hostility on the part of the US government
toward Cuba, and likewise affects that country’s exporters.
- This new restriction on payments is in addition to those already known, such as the requirement that
American exporters of agricultural products request licenses to travel to Cuba and to export their
products, the absence of direct banking relations between the two countries, the prohibition on boats
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that participate in the transportation of those products from the US from loading or unloading freight in
Cuba for other destinations, and the prohibition on Cuban boats from participating in the loading or
unloading.
- As regards intellectual property, month after month during four years of Dispute Settlement Body
(DSB) sessions, the issue of the constant non-fulfillment of the Body’s recommendations as to Section
211 of the 1998 Omnibus Appropriations Act with regard to the registration, renewal and compliance
in the USA of trademarks or service marks and trade names related to nationalized assets in Cuba has
been reviewed. As the Secretariat’s Report says, since July 1999, the European Union has challenged
this legislation before the WTO for violating the obligations of national treatment and MFN treatment
assumed by the US in the framework of the TRIPs Agreement. This reiterated non-compliance on the
part of the USA discredits it with this failure to recognize the WTO and its principles and rules while it
also sets a very negative precedent for the credibility and effectiveness of its dispute settlement
mechanism.
- As is already known, the USA has traditionally ignored the queries and protests that Cuba presents in
this exercise on its economic, commercial and financial embargo. Nevertheless, Cuba feels it is its
right and its moral obligation to once again demand a response from the USA to the only coherent and
rational question in this case: When will the US government, acting in keeping with what it preaches
about free trade and respect for the rules and principles that apply thereto, change this policy of
embargo and eliminate all the restrictions that it has placed on Cuba and on other countries through its
implementation?
- The reiterated demand for a response to this question is based on the numerous direct effects on the
trade in goods and services and on intellectual property, which have been referred from the outset and
the most recent of which have been explained in detail. This time, Cuba awaits a reply from the
representatives of the USA."
ANSWER:
The embargo is only one part of the United States' multifaceted Cuba policy, intended
to bring about a peaceful transition to democracy on the island. The United States maintains that the
embargo is a bilateral issue that has no place in multilateral fora. The embargo is not a blockade;
embargo regulations apply only to persons or entities subject to U.S. jurisdiction.
With regard to the DSB's recommendations in the section 211 case, the United States will continue to
work with the other party to that dispute in seeking to resolve it in accordance with the rules of this
Body.
Measures Directly Affecting Imports
Customs Procedures and Rules of Origin
[Argentina]
5. On page 35, paragraph 29, the report mentions that since March 2005 new security guidelines have
gone into effect for importers within the framework of the Customs Trade Partnership against
Terrorism (C-TPAT). In this regard, the report mentions that C-TPAT participants benefit from a
lesser frequency of inspection of their cargo by CBP [Customs and Border Protection] and that in
addition this partnership was created by Executive Order, but that no regulations have been published
for its operation.
Question: What are the reason and the basis upon which C-TPAT participants obtain this benefit?
And, further, do authorities anticipate publishing some kind of regulations to make this mechanism
more transparent?
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ANSWER:
The Customs-Trade Partnership Against Terrorism program is a voluntary, incentivesbased security program through which members of the U.S. trade community commit to strengthen
their international supply chains, from point of stuffing, through the shipment of the cargo to the
United States. In exchange for this enhanced supply chain security, shipments from C-TPAT importers
are considered lower risk for security concerns, and are afforded fewer cargo inspections. The program
is voluntary, not mandatory, and as such is not governed by U.S. government regulations.
Eligibility for the program is gauged against the clearly defined minimum security criteria for each
enrollment sector. These baseline security criteria are published on the CBP website. An applicant
must complete a comprehensive security self-assessment where they review their internal security
practices against these criteria. Measures are outlined to CBP, and deficiencies are addressed. Once
CBP determines that the applicant has demonstrated that they are meeting the minimum security
criteria, the member is accepted into the program and benefits are afforded. Once accepted into the
program, specially trained CBP Supply Chain Security Specialists conduct an onsite validation of the
submitted profile to verify the accuracy of the materials provided. This validation includes a foreign
site visit back to the point of stuffing. Members found to have weak supply chain security as a result of
the validation may be suspended or removed from the program.
[Argentina]
6. On page 37, paragraph 34, mention is made that the United States applies preferential rules of origin
under several bilateral free trade agreements signed after 1997 that have yet to be notified to the WTO
(October 2005). For the sake of transparency:
Question: When will the United States notify the WTO? Are these agreements within the framework of
general agreement negotiations or are they related only to rules of origin? Do they include aspects
related to labeling and sanitary measures? Are the preferential agreements on rules of origin
compatible with the rules of the WTO?
ANSWER:
The United States is in the process of notifying all of its free trade agreements signed
after 1997 that have entered into force as of March 1, 2006. The rules of origin chapters and productspecific rules of origin were concluded within the framework of comprehensive free trade agreement
negotiations. The rules of origin chapters of these agreements do not deal with country of origin
labeling or sanitary measures. All United States preferential agreements are fully consistent and
compatible with the rules of the WTO.
[Argentina]
7. On page 37, paragraph 37, the report mentions that, in general, the non-preferential rules of origin
apply the criteria of "wholly obtained" and "substantial transformation," but that agencies outside of
CBP (Customs and Border Protection) may adapt and interpret those criteria in greater detail to adjust
them to the needs and purposes of the specific context in which non-preferential rules are applied.
Question: Could you provide more information about what those criteria are and about the specific
needs and contexts to which they refer?
ANSWER:
In the context of an anti-dumping and countervailing duty order, the Department of
Commerce may develop different criteria and reach different determinations (in relation to the scope of
the antidumping/countervailing duty order) than what would be applied by the CBP for other origin
determination purposes.
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[Brazil]
8. “Appendix Table”, page 137: At NAFTA trade, Article 401 (originating goods), letter D), is stated
that goods can be obtained or produced in the territory of one or more of the Parties. We understand
that it means full cumulation. Why you call this mechanism a bilateral cumulation instead of full
cumulation in the box located on page 137 (same line of NAFTA)?
ANSWER:
The reference in the table to bilateral is an error, NAFTA allows for full cumulation
among all three NAFTA Parties.
[Brazil]
9. We would like to know the meaning of the maximum range of 15% settled for bilateral cumulation
in some free trade agreements. Actually in order to clarify this clause we would really appreciate if you
could provide us an example.
ANSWER:
In the U.S. – Israel FTA and the U.S. –Jordan FTA, for the purpose of satisfying the 35
percent domestic content requirement, the costs or value of materials from one Party which are used in
the production of a good in the other Party, may be counted up to 15 percent of the appraised value of
the final good.
[Brazil]
10. How the USA customs are sure that all requirements to meet if full cumulation are accomplished?
Which are the main steps to be sure about this?
ANSWER:
See Response to Brazil #11 below.
[Brazil]
11. How the USA customs are sure that all requirements to meet if "de minimis" rules for textiles are
accomplished? Which are the main steps to be sure if HS 50-63 total weight of fibers or yarns doesn’t
exceed 7% of total weight?
ANSWER:
This rule permits up to 7% (in some agreements, 10% in other agreements) foreign
fibers or yarns in an originating good. Originating textile goods are usually either fiber forward or yarn
forward. When CBP conducts a verification on a textile product, it verifies that the good has met either
the fiber forward or yarn forward rule of origin by reviewing documentation such as raw material
invoices, purchase orders, bills of lading, and other production records. If the production records
indicate the use of foreign fibers or yarns in an originating good, the documentation identifying the
fiber content of yarns or fabrics usually indicates the percentage of each fiber by weight. Furthermore,
the foreign fibers or yarns are usually of a fiber content different than the rest of the yarns and can be
isolated by fiber content testing by CBP laboratories. A CBP import specialist would review the
documentation received during the verification, ascertain if laboratory testing was necessary, and use
those tools to ascertain the percentage of foreign fibers or yarns present in an originating textile good.
[Canada]
Part III. Trade Policies and Practices by Measure, (2) Measures Directly Affecting Imports,
(i) Customs procedures and rules of Origin, (e) Rules of Origin, Paragraph 35:
The report by the Secretariat indicates that non-preferential rules of origin may be used for antidumping and countervailing measures.
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4.
Can the United States clarify the circumstances under which rules of origin may be used for
such measures? In particular, Canada is interested in U.S. views on whether rules of origin may be
applied for investigative or administrative purposes, i.e., whether they may used to determine the
imports under consideration in the period of investigation or for use in enforcing an order or both.
Further, would such origin rules be used as an absolute standard against which imports may be assessed
regarding their origin, or as a guide, or as one criterion of many for making such a determination?
ANSWER:
The general standards of substantial transformation may be adapted and further
interpreted by agencies other than CBP to fit the needs and purposes of the particular context in which
non-preferential rules are applied. For example, in determining whether certain merchandise originates
in a country subject to an antidumping or countervailing duty order, the Department of Commerce may
develop different criteria and reach different determinations (in relation to the scope of the
antidumping/countervailing duty order) than what would be applied by the CBP for other origin
determination purposes.
[Canada]
Part III. Trade Policies and Practices by Measure, (2) Measures Directly Affecting Imports,
(i) Customs Procedures and rules of origin, (e) Rules of Origin, Paragraph 37-39:
5.
Has the U.S. removed the discrepancy between its country of origin marking rules for nonoriginating steel flanges from NAFTA countries and those flanges processed in the US from imported
forgings from non-NAFTA countries?
ANSWER:
The United States is aware of the discrepancy with regard to the marking rules
applicable to flanges. Appropriate amendments to the 19 CFR Part 102 Regulation have been prepared
and are under review.
[Chile]
Customs Procedures
2. With reference to paragraph 17 of the report, has the economic impact of the regulations
promulgated under the Trade Act of 2002 been measured?
ANSWER:
The economic impact of the regulations related to the advanced electronic transmission
of cargo information (a requirement of the Trade Act of 2002) has been analyzed by U.S. Customs and
Border Protection in the Regulatory Impact Analysis of the Advance Electronic Filing Rule, which can
be found at http://www.cbp.gov/xp/cgov/import/communications_to_trade/advance_info/.
Electronic Transmission of Cargo Information
1. With regard to paragraph 19 of the report, what are the criteria and methodology used for assigning
a level of risk to each shipment?
ANSWER:
The Automated Targeting System (ATS) is CBP's primary decision support tool for
vetting risks for cargo. ATS utilizes various algorithms to vet relative risks for shipments for different
issues based on historical data and enforcement records. Algorithms are designed to detect unusual
shipments as well as shipments that match high-risk parameters. Risks are also addressed utilizing
targeting criteria of the Automated Commercial System (ACS) that targets specific shipments for exam
that match specified criteria.
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2. Are there public and/or private authorities to assess and analyze the overall changes that have been
introduced in the last 4 years, with regard to customs procedures, as well as cargo and container
security?
ANSWER:
Numerous U.S. Government agencies and private-sector representatives have analyzed
the changes to U.S. customs laws and regulations. These regulatory and private-sector advisory
processes provide important contributions to the development and implementation of border initiatives.
[Chile]
(i)(a) Customs Procedures
As noted in paragraph 15 of the report regarding the introduction of the Automated Commercial
Environment (ACE), has any estimate and/or assessment been done of the benefits that ACE would
offer when it is fully operational in 2009?
ANSWER:
The Automated Commercial Environment (ACE) is the new U.S. trade processing
system designed to consolidate and automate border processing to significantly enhance border security
and foster U.S. economic security through lawful international trade and travel.
The CBP automation transition to account-based processing began in October 2003 with the launch of
the ACE Secure Data Portal. This customized Web page provides a single on-line access point to many
legacy CBP systems and enables CBP employees and trade entities such as importers, the ability to
view account data.
The current business process links the filing of an “entry” with the payment of duty. With ACE, CBP is
moving away from paying duties and fees one entry at a time to the payment of entries on a periodic
basis. In July 2004, CBP implemented the ACE monthly statement capability, which enabled CBP, for
the first time, to collect payment of duties and fees monthly, and provide monthly account statements.
The ACE monthly statement and payment capability is the keystone of a transition from a transactionbased collection process to an integrated, account-based system.
The promise of ACE also includes what will be an unprecedented integration of data and
communication abilities among CBP, the trade community, and other federal agencies with trade
responsibilities. CBP continues to develop and deploy ACE capabilities, automating time-consuming
and labor-intensive transactions, and moving goods through the ports, onto markets faster, and at lower
cost. In addition, it will simplify dealings between CBP, the trade community, and other government
agencies. Among other capabilities, CBP personnel will have automated tools and better information
to decide – before a shipment reaches U.S. borders – what cargo should be targeted because it poses a
potential risk, and what cargo should be expedited because it complies with U.S. laws.
[Chinese Taipei]
Question 4 (page 25, paragraph 14)
As indicated in the report, users will be able to interface not only with the Customs and Border
Protection Agency (CBP), but also with other government agencies involved in import (and export)
procedures through the Automated Commercial Environment (ACE).
We are interested in knowing more about the ACE, as follows:
a)
How do users interface with other government agencies involved in import (and
export) procedures?
ANSWER:
Use of ACE is being expanded to other U.S. government agencies through the
International Trade Data System. As part of identifying requirements for ACE, CBP is conducting
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workshops with these agencies to help ensure ACE has the needed capabilities, and that they support
agency business processes and interagency coordination. To facilitate the single window for the trade,
agency “integration points” with ACE are being built into ACE the ACE development schedule, and
related capabilities will become operational in conjunction with the fielding of ACE between now and
the end of development in mid-2010.
b) What are the other government agencies with which users can interface?
ANSWER:
The Federal agencies that currently participate in ACE include:
HHS – Food and Drug Administration (FDA), Department of Transportation (DOT) – Federal Motor
Carrier Safety Administration (FMCSA), U.S. Department of Agriculture (USDA) – Animal and Plant
Health Inspection Service (APHIS), Federal Communications Commission (FCC), U.S. International
Trade Commission (ITC), DOT – Maritime Administration (MARAD), Department of Defense (DOD)
– US Army Corps of Engineers (USACE), Department of Commerce (DOC) – International Trade
Administration and Bureau of Census (Census), USDA – Agricultural Marketing Service (AMS),
Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Bureau of Labor Statistics (BLS), DOT
– Bureau of Transportation Statistics (BTS), Environmental Protection Agency (EPA), Federal
Maritime Commission (FMC), Food Safety Inspection Service (FSIS), DOC – Foreign Trade Zones
Board, DOT – National Highway Traffic Safety Administration (NHTSA), Office of Foreign Assets
Control (OFAC)U.S. Fish and Wildlife Service, DOD – U.S. Transportation Command, DOT – Federal
Aviation Administration (FAA)Transportation Security Administration (TSA)Information Analysis and
Infrastructure Protection, DHS, Homeland Security Advanced Research Projects Agency, DHS –
Alcohol and Tobacco Tax and Trade Bureau (TTB), DOC – NOAA / National Marine Fisheries
Service, Office for Law Enforcement – Internal Revenue Service.
c) What are the differences between ACE and the Automated Commercial System currently used by
CBP to process imports?
ANSWER:
The primary difference between ACE and ACS is in the efficiency and effectiveness of
transmitting, accessing, analyzing, and sharing trade data. ACE is providing significantly improved,
automated technologies that will enable CBP officers and other users to do their jobs better and faster,
with benefits for both the government and the trade community.
ACE consolidates seven different cargo processing systems – including ACS – into a single Secure
Data Portal; augments CBP screening and targeting capabilities; and provides a single, Web-based
window for the collection and use of trade data. ACE will enable CBP to make decisions on cargo
admittance early – before and at the border – and better detect, deter, and mitigate terrorist and other
threats, while facilitating the movement of lawful trade. Both government and trade entities will have a
national account view of their trade activity, vice a port-by-port or transaction-by-transaction view.
Among other benefits are reduced paper processing; manpower savings; simplified and expedited cargo
release; and a quicker time-to-market cycle for goods. ACE ultimately will enable CBP and other U.S.
government agencies with border enforcement responsibilities to enhance their ability to access a large
volume of information; analyze data and turn it into useful information, and share information quickly.
[Chinese Taipei]
Question 5 (page 26, paragraph 21)
Importers may request that their names and addresses (and those of their shippers) appearing in vessel
cargo declarations be treated as confidential. To this end, importers must file a certification with the
CBP. Certifications are valid for two years and can be renewed. The press may copy but not publish
certified information.
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Since importer information is usually viewed as confidential in the context of trade practices, could the
US please explain the purpose of allowing the press to copy but not publish the confidential, certified
information and under what circumstances the press would be allowed by the CBP to do so?
ANSWER:
Technically, the statement that "(T)he press may copy but not publish certified
information" is not correct. Title 19, United States Code (U.S.C.), section 1431(c) provides for the
public disclosure of certain manifest information and in subsection (3) permits CBP to adopt
regulations to establish procedures both for the dissemination of this information and for the protection
of other non-public information also contained on the manifest. 19 CFR 103.31 contains procedures
for importers, consignees, or U.S. shippers to request confidential treatment of their name and address
from the manifest information that is subject to disclosure. The regulation restricts the press to copying
information that it may publish and clearly states that the press may not publish information which has
been granted confidential treatment. Lastly, the press may lose their ability to examine and copy from
manifests if they are found to have made "any improper use of any information or data obtained from
such manifests."
[Colombia]
1. In the previous review, we were told that the Automated Commercial System (ACS) would be
replaced by the Automated Commercial Environment (ACE). The Secretariat’s report regarding this
review, subparagraph a), Title I), paragraphs 12 to 17, states that progress had been made in the
transition from one system to another, reflected in the creation of 400 accounts and the modernization
of Port Blaine in Washington.
a) In light of this, Colombia is interested in learning about the experience with the new ACE system
and scheduling for the land, marine and air ports to be modernized over the short term.
ANSWER:
ACE is being cooperatively developed with other federal agencies and the trade
community to provide advance electronic trade information, risk-based targeting, and account
management of trade entities. Initial ACE capabilities have been fielded, including electronic truck
manifest capabilities that are now operational at 39 land border ports. This capability provides CBP
Officers at our ports with a consolidated view of information on the cargo, truck, and driver crossing
our borders, enabling the officers to make faster, better, earlier decisions on authorizing trucks to cross
our borders. CBP is scheduled to complete the deployment of automated truck manifest and supporting
capabilities by early 2007. CBP has also begun planning for the development of: (1) entry summary,
accounts, and revenue capabilities; and (2) automated manifest for all modes of transportation. ACE
development is scheduled to be completed in mid-2010.
b) In the ACE System design, are the World Customs Organization (WCO) guidelines and
recommendations used in particular regarding the customs data model?
ANSWER:
Automated Commercial Environment (ACE)/International Trade Data System data
elements identified before 2005 are harmonized with the WCO model. Data harmonization is an
ongoing process that is part of ACE development and ITDS activities. To this extent, ACE is
consistent with, and supports the WCO Framework, the WCO Customs Data model, and corresponding
UN/EDIFACT messages.
c) Is there a fee for user access to the ACE System? What are the requirements to set up an account?
ANSWER:
There is no fee for becoming an ACE account; however each account must have
Internet access. To become an ACE account, an ACE application must be completed and mailed with
the required information.
The application can be downloaded and printed from
www.cbp.gov/modernization. Applicants must ensure that the form is complete and that pages 1, 8,
and 11, are signed. Applications must be mailed to the following address:
WT/TPR/M/160/Add.1
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ACE Secure Data Portal - ACE Application
U.S. Customs and Border Protection
Attn: Beauregard Building, Room A-314-3
7681 Boston Boulevard
Springfield, VA 22153
For questions on applying to ACE, e-mail CBP at [email protected].
[Colombia]
3. Concerning subparagraph c) on the Container Security Initiative (CSI):
a) Colombia is interested in learning the requirements for obtaining the status of CSI port.
ANSWER:
To be eligible for the expansion phase of CSI, a candidate nation must commit to the
following minimum standards:
1.
The Customs Administration must be able to inspect cargo originating, transiting, exiting, or
being transshipped through a country. NII equipment (including equipment with gamma or X-ray
imaging capabilities) and radiation detection equipment must be available and utilized for conducting
such inspections. This equipment is necessary in order to meet the objective of quickly screening
containers without disrupting the flow of legitimate trade.
2.
The seaport must have regular, direct, and substantial container traffic to ports in the
United States.
3.
Commit to establishing a risk management system to identify potentially high-risk containers,
and automating that system. This system should include a mechanism for validating threat assessments
and targeting decisions and identifying best practices.
4.
Commit to sharing critical data, intelligence, and risk management information with the
United States Customs and Border Protection in order to do collaborative targeting, and developing an
automated mechanism for these exchanges.
5.
Conduct a thorough port assessment to ascertain vulnerable links in a port’s infrastructure and
commit to resolving those vulnerabilities.
6.
Commit to maintaining integrity programs to prevent lapses in employee integrity and to
identify and combat breaches in integrity.
b) Is there an assistance program for developing countries? Analysis of countries with CSI ports
reveals that although the number has increased since the previous review in 2004, to date only 35
countries have this status.
ANSWER:
There is no specific assistance program within CSI for developing countries.
c) Paragraph 27 states that cargo intended for the United States that has already been inspected in a CSI
port is not inspected upon arrival, unless there is new information that changes the original risk
analysis. Can you provide statistics that reflect the percentage of cargo inspected upon arrival in the
United States despite coming from a CSI port?
ANSWER:
Statistics on cargo just from CSI ports are not available.
WT/TPR/M/160/Add.1
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[Colombia]
2. Paragraphs 18 to 24, subparagraph b) Title I), referring to the electronic transmission of cargo
information, states that the regulations of the Foreign Trade Act of 2002 have been in effect since
January 2004. The Automated Targeting System (ATS) is also mentioned as one of the main
instruments used by the Customs and Border Protection Office (CBP) for analysis of information and
cargo risk.
a) What other instruments is CBP using for this purpose?
ANSWER:
The Automated Targeting System (ATS) is CBP's primary tool vetting risks for cargo.
Risks are also addressed utilizing targeting criteria of the Automated Commercial System (ACS). ACS
is an older, legacy system and the system of record for ATS (i.e. source system), but its criteria provide
an effective targeting mechanism. An effective tool for macro-analysis of trade information is the
Trend analysis and Analytical selectivity Program (TAP). This system provides the capability to
generate and analyze profiles of trade data (entry summary) and provides the facility to analyze
changes in their patterns over time. CBP is also engaged under its Automated Commercial
Environment (ACE) Project in research and design efforts to develop new methods of targeting and
analysis.
b) Is it possible to obtain additional information on the ATS? Is the requirement in full effect to send
automated manifests instead of paper communications? If not, when does it take effect?
ANSWER:
ATS utilizes various targeting algorithms to vet relative risks for shipments based on
historical data and enforcement records. Automated manifesting requirements under the Trade Act are
now fully implemented.
c) It is stated that applications of the Foreign Trade Act regulation shall entail “substantial” costs for air
carriers. Is there an estimate of this increase? For land and marine transport, it is said that the extra
costs are insignificant, while the drivers are already using this system. How has this system been used
by this type of carrier and how were the costs kept down?
ANSWER:
CBP conducted and published the Trade Act Impact Analysis, which can be found on
its website at: http://www.cbp.gov/xp/cgov/import/communications_to_trade/advance_info/
The document is entitled "Regulatory Impact Analysis (RIA) - Advance Electronic Filing Rule".
[Costa Rica]
1. Paragraph 16 states that importers and brokers using the Automated Commercial Environment
(ACE) can make payments of duties and fees to Customs and Border Protection (CBP) on a monthly
rather than shipment-by-shipment basis. Please describe the mechanism by which this monthly
payment is made, the requirements for both importers as well as customs brokers in this regard, and
what controls exist for this purpose.
ANSWER:
Periodic Monthly payment is a feature of the Automated Commercial Environment
(ACE) that simplifies the processing and payment of duties and fees, and promotes account based
processing. Participating trade members may elect to remit payment of duties and fees for eligible
shipments released over a one month period on the 15th work day of the following month. Additional
information
can
be
found
on
the
CBP
website
at
the
following
URL:
http://www.cbp.gov/xp/cgov/toolbox/about/modernization/
WT/TPR/M/160/Add.1
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[Costa Rica]
2. Paragraph 19 mentions a risk control system for goods that uses a computer system to analyze cargo
information through the use of weighted rules and assigns a level of risk to each shipment. Please
explain how this risk control works.
ANSWER:
The Automated Targeting System (ATS) is CBP's primary decision support tool for
vetting risks for cargo. ATS utilizes various algorithms to vet relative risks for shipments for different
issues based on historical data and enforcement records. Algorithms are designed to identify relatively
unusual shipments as well as shipments that match specific high-risk parameters. Risks are also
addressed utilizing targeting criteria of the Automated Commercial System (ACS) that targets specific
shipments for exam that matches specified criteria.
[Costa Rica]
3. Paragraph 20 points out that following the adoption of the Trade Act regulations, the vessel cargo
declaration must be sent to CBP in electronic format through the Sea Automated Manifest System;
paper submissions will no longer be accepted. Please elaborate on the approach used in this regard,
specifying the following: whether the elimination of document submission in customs was done in
stages or was implemented in a uniform and general manner simultaneously in the entire country;
whether there was a period when both the paper and electronic submissions existed; what the
experience was as to this process; and, the precautions that were taken in this regard.
ANSWER:
CBP implemented the Trade Act requirements in a phased enforcement approach. The
official date for the implementation of the final rule itself was January 5, 2004. However, within the
final rule there are various implementation dates for each mode of transportation. Carriers and/or
automated NVOCCs were required to submit an electronic cargo declaration to CBP for all vessels
loading on or after March 4, 2004. Any vessel that began the entire voyage on or after March 4, 2004
had to comply with the specified advanced timeframes.
On July 6, 2004 CBP mandated all vessels required to make entry in accordance with Customs
regulations at 19 CFR, Part 4 and scheduled to arrive at anchor or at a dock in any harbor within the
Customs territory of the U.S. to be in compliance with the Trade Act Regulations. There were no
exceptions or waivers to the automation requirement for electronic transmission of cargo declaration
data mandated by the Trade Act. The Port Directors were given permission to deny the unlading of
cargo to vessel carriers that did not provide an electronic cargo declaration and continued to arrive with
only a paper Inward Cargo Declarations (CBP Form 1302) in violation of the Trade Act Regulations.
[Costa Rica]
4. Paragraph 25 makes reference to the Container Security Initiative (CSI), which involves the
screening and inspection of U.S.-bound, high-risk containers at the port of departure and the use of
tamper-evident seals. Under the CSI, CBP officers are deployed to participating ports, where they
identify high-risk containers. Please elaborate on the duties and responsibilities of the CBP officers in
these ports, the period they shall be deployed to ports of departure, and the supervision and
coordination that exist vis-à-vis their superiors in the United States. Furthermore, please describe the
duties and responsibilities of host country officials, especially as regards their authority to select cargo
that will be subject to inspection.
ANSWER:
(TDY).
CBP and ICE officers are deployed from 6 months to 1 year on Temporary Duty
ICE Special Agent – assists and advises the CBP Attaché or Senior Representative.
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•
•
•
Conducts outreach with foreign officials from the trade and shipping industries
on key aspects of the CSI program.
Coordinates with the host nation counterpart in the day-to-day operations of
the team.
Prepares weekly reports, reporting all incidents to the Attaché.
CBP Targeter – conducts initial targeting of all Bills of Lading
• Observes of all non-intrusive and physical examinations
• Records daily, weekly and monthly statistical information
Intelligence Research Specialist – analyzes Bills of Lading in support of the Targeter.
• Coordinates intelligence information with host country officials and sharing
that information with the Officers when relevant to targeting efforts
• Disseminates intelligence information in accordance with existing procedures
Host government can target containers they regard as a threat to their own security concerns.
[European Communities]
The MID for textile and apparel creates discrimination compared to other manufactured products
exported to the US, as it is by far more stringent than for other products. These measures are having a
severe and unjustifiable impact upon the EU industry's ability to sell its textile and apparel products
into the US market.
Contrary to common and accepted practice of identifying the vendor as the manufacturer since the 80's
through a codification system, the new MID for textile and apparel is in breach of commercial
confidentiality rules. The MID structure allows any importer or buyer to access the exact address of the
manufacturer of a product, through the obligation, for the first data entry of the new MID, to provide on
the invoice the complete address of the manufacturer in order to check whether the syntax of the MID
is correct.
ANSWER:
The comment period for the interim regulations has now closed and the only
government to submit comments was the Government of Switzerland. Neither the European
Commission nor any EU Member State submitted comments or concerns. We are surprised to read
that the new requirement of U.S. importers is having “a severe and unjustifiable impact” upon the EC
industry’s ability to sell its textile and apparel products into the U.S. market. We would appreciate
further information clarifying this assertion.
•
What are the objectives the new 'MID' requirement seeks to serve?
ANSWER:
The objectives are to assist in the enforcement of U.S. textile laws and to facilitate the
movement of trade into the U.S. The MID allowed CBP to eliminate the paper textile declaration and
thus allow electronic processing of entries.
•
Could the US inform WTO Members on the methods it used prior to the introduction of the 'MID'
in order to identify the origin of textile and apparel products?
ANSWER:
The U.S. required a paper textile declaration for all importations of all textile products.
The “Declaration of manufacturer, producer, exporter, or importer of textiles and textile products” was
a requirement of 19 CFR 12.130(f). In addition, under the MFA/WTO quota system many producer
countries signed a bilateral agreement with the U.S. that led to the issuance of an export license which
provided information regarding the manufacturer/producer of the merchandise.
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•
Could the US confirm that prior to the introduction of the 'MID' a mere certificate of origin was
sufficient for customs clearance without any reference to the name and address of manufacturer?
ANSWER:
A “mere certificate of origin” was never used for any imports. It is not recognized as a
required entry document for U.S. Customs and Border Protection entry purposes. A MID has been a
requirement for all importations, textiles and non-textile for quite some time. A textile declaration was
required until October 4, 2005.
•
Could the US confirm that the 'MID' requirement is imposed on US based importers in the sense
that it is them who must provide all the necessary information (name of manufacturer, address, etc)
as a condition for importation?
ANSWER:
Yes, it is the U.S. importer that must provide the information for entry purposes.
According to the Federal Register, Volume 70, No. 192 of October 5, 2005, Rules and Regulations,
page 58014, 'importers must be able to demonstrate to CBP their use of reasonable care in determining
the manufacturer'.
•
Could the US inform the body as to the exact methods to be used to verify that the importer has
constructed the 'MID' correctly and according to the relevant instructions and, thus, has determined
accurately the manufacturer?
ANSWER:
Where CBP officials have reason to believe that the MID may be incorrect, these
officials will request and review documents such as invoices to verify information.
•
Is it correct that for the first entry of the new 'MID' US based importers are bound to provide on the
invoice the complete address of the manufacturer of the product in order to allow US customs
services to verify that the construction of the 'MID' is correct according to the relevant rules and
instructions?
ANSWER:
No. The textile and apparel MID requirement is for the importer to provide the
Manufacture Identification Code on appropriate entry documentation. There is no requirement that the
name and address of the manufacturer appear on a commercial invoice.
According to the Federal Register as above, 'if an entry filed for such merchandise fails to include the
MID properly constructed from the name and address of the manufacturer, the port director may reject
the entry or take other appropriate action.
•
Can the US inform whether the port director is bound under circumstances of incorrect
construction of the 'MID' to prohibit customs clearance of the relevant goods? Also can the US
inform the body on what other action may be taken by the port director in such circumstances?
ANSWER:
The CBP Port Director has the authority, but is not bound to prohibit customs
clearance. Relating to the MID issue, the Port Director may assess penalties against U.S. importers
failing to use reasonable care in providing accurate information.
•
Could the US explain why same requirements as the 'MID' do not apply to other products but only
to textile and apparel products?
ANSWER:
As there was a regulatory requirement for importers to submit a textile declaration
traditionally filled out by the manufacturer, it was appropriate to eliminate the need for the paper
document thereby expediting the facilitation of legitimate trade. CBP worked closely with the U.S.
importing community which supports the elimination of the textile declaration and the use of the MID
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as it is now constructed. CBP will conduct a through review of formal comments on our interim
regulation before determining if the requirement should be applied to other/all commodities.
•
Could the US inform whether the 'MID' requirement applies to textile and apparel products from all
countries without exception? If not, could the US specify those countries that are excluded from
this particular measure, the reason for any such exclusion, and the compatibility of any such
exclusion with WTO rules?
ANSWER:
•
The MID requirement applies to all countries. There are no exceptions.
Could the US finally explain how this MID requirement is compatible with rules on protection of
commercially confident information?
ANSWER:
The U.S. Government and its employees are prohibited from disclosing business
confidential information pursuant to the Trade Secrets Act (18 USC 1905). All information contained
in the entry process is considered confidential and as such U.S. officials use this information for official
use only.
[Hong Kong China]
Rules of Origin
(WT/TPR/S/160, P. 30, Para. 37)
1.
In paragraph 37 (page 30) of the Secretariat Report, it is said that the general standards for
determining non-preferential rules of origin may be adapted and interpreted further by agencies other
than Customs and Border Protection (CBP) to fit the needs and purposes of the particular context in
which non-preferential rules are applied. Although the Agreement on Rules of origin allows the
introduction of changes to Members’ non-preferential rules of origin or new non-preferential rules of
origin, Article 2(e) of the Agreement requires that “their rules of origin are administered in a
consistent, uniform, impartial, and reasonable manner” during the transitional period. We would like
to know how the US ensures that the further adaptation and interpretation of its non-preferential rules
of origin by its different agencies can be applied in a consistent and uniform manner and how to
prevent contradictory outcomes of such further adaptation and interpretation.
ANSWER:
In terms of administering rules of origin, the centralized operation of the U.S. CBP
ensures consistency and uniformity, consistent with Article 2(e) of the Agreement on Rules of Origin.
[Japan]
Q7. Maritime transport security (p.26, para.18)
As a part of initiatives for counter-terrorism, the United States has enforced the regulations
implementing the advance electronic submission of cargo information under the Trade Act of 2002,
and obliged to submit to the U.S. customs authorities the manifest of the international sea container
bound for the United States to the U.S. customs authorities no later than 24 hours prior to loading. As a
result, the deadline for delivery of containers to the yard, which had been commonly set around 24
hours prior to loading, has been moved up by 48 hours. This has decreased the efficiency of
distribution and imposed a huge burden on the operators including those with excellent compliance
records. The Government of Japan urges the Government of the United States to take measures for the
deregulation of the advance presentation of electronic cargo information (such as establishing deadline
extension) and the expansion of benefits to the participants of the Customs-Trade Partnership Against
Terrorism (C-TPAT), such as their exemption from the 24-hour rule and a reduced number of
inspections, in consideration of the compatibility between thorough security measures and efficient
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distribution. In these respects, please indicate the specific views of the Government of the
United States.
ANSWER:
The requirement to provide CBP with advanced electronic cargo information does not
require the cargo be positioned or stored at the wharf. With regard to the above statement, “This has
decreased the efficiency of distribution and imposed a huge burden on the operators”, CBP notes it has
also heard from members of the trade community who have stated that the requirement of submitting
advanced information has allowed better efficiency in planning for cargo movements.
[Japan]
Q8. Labeling requirements of origin for watches and clocks (p.29 to 30, paras.34 to 40)
Japan has long requested the Government of the U.S. to simplify its labeling requirements of origin for
watches and clocks. However, they have not been improved. Please indicate the specific views of the
Government of the U.S. on when the system of its labeling requirements of origin for watches and
clocks will be simplified.
ANSWER:
The United States takes note of Japan’s comment regarding the simplification of
labeling requirements for country of origin markings for watches and clocks. The United States
believes that its country-of-origin marking requirements are clear and simple as drafted.
The question refers to the Special Marking Requirements set forth in Additional U.S. Note 4 to Chapter
91, Harmonized Tariff Schedule of the United States (HTSUS). The Note prescribes that watch and
clock movements, and watch and clock cases be marked with the name of the country of manufacture
and the name of the manufacturer or purchaser. If applicable, the number of jewels also must be
indicated by specified marking methods. The United States recalls that, partly at Japan’s request, these
requirements were modified in 1999 to permit marking of these parts by means of indelible ink.
[Mexico]
4. Paragraph 25, in Section 2, Measures Directly Affecting Imports, indicates that the “Container
Security Initiative” (CSI) involves the screening and inspection of U.S.-bound, high-risk containers at
the port of departure and the use of tamper-evident seals.” The same paragraph provides information
on the operation of the CSI and on the number of foreign seaports that participate in the Initiative (35
as of April 14, 2005). Recently (early March 2006), on the CSI website we found additional
information to the effect that the Initiative will soon be extended to “numerous other ports around the
world.” In this regard, Mexico would like to ask whether it would be possible to have additional
information on which seaports will join the CSI.
ANSWER:
As of April 19, 2006 CSI is operational in 44 ports. The additional ports added after
4/14/05 are; Shanghai, Shenzhen, Kaohsiung, China; Santos, Brazil, Colombo, Sri Lanka; Buenos
Aires, Argentina, Lisbon, Portugal; Salalah, Oman; and Puerto Cortes, Honduras. We have signed a
Declaration of Principles with Pakistan to have a CSI port in Karachi and Qasim.
[Mexico]
5. With respect to procedure under the CSI, paragraph 25 explains that the inspection of containers is
conducted “using non-intrusive inspection equipment, physical inspection, or both.” In this regard, (a)
Could the U.S. provide further information on the amount of time this procedure requires, depending
on the method used, in clearing goods? (b) Does the procedure operate in the same way for goods in
transit? (c) What lessons can be learned regarding the effectiveness of the automated risk management
systems set up at host ports, in terms of risk assessment? and (d) What part does all of this play in
negotiations on trade facilitation?
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ANSWER:
Non-intrusive inspection, physical inspection, or both, is conducted by the host
government. As a general rule the time needed to conduct these examinations is dependent upon how
the port terminals are laid out, as well as the process that is in place to transport the container to be
examined, in relation to the location of the NII equipment.
[New Zealand]
3.
Customs procedures and rules of origin (WT/TPR/S160, p.27 para 24)
Did the cost estimates from meeting the 24 hour rule (for cargo transported by vessel) include the cost
of the time of keeping containers on the wharf before shipment?
ANSWER:
No, CBP does not require that the cargo or container to be at the wharf in order to
transmit the required cargo information to CBP.
[Peru]
Rules of Origin
Given the United States’ view that bilateral agreements are an important means for promoting trade
liberalization and production efficiency with respect to its trading partners, what are its plans for
harmonizing the various rules-of-origin regimes of the different agreements and the possibility of
accumulation among countries with which it has agreements?
ANSWER:
Plurilateral FTAs of the United States allow cumulation for all products and between
all participating countries. These provisions can generate new commercial opportunities that
encourage economic growth and integration. In the context of these FTAs, consideration is given to all
methods that may help achieve these objectives, in a manner consistent with WTO commitments.
[Thailand]
7. Thailand understands that the US Customs and Border Protection requires certain WTO Members to
adhere to the 24-hour Advance Manifest Rule. Could the US elaborate on this Rule, and the criteria for
exempting Members from the Rule?
ANSWER:
The requirement to provide CBP with advanced electronic cargo information applies to
all vessel carriers and automated NVOCCs transporting cargo on board a vessel destined for the U.S.
The requirement to provide the cargo information 24 hours prior to loading pertains to all containerized
cargo with no exceptions. Bulk and break bulk carriers are required to provided their electronic cargo
information either 24 hour prior to arrival or at the time of departure to the U.S. depending on the
voyage sailing time.
Tariffs
[Argentina]
8. On page 39, paragraph 48, the report mentions that specific duties represent almost 11 percent of
total tariff lines. Taking into account the greater level of protection that these provide, especially for
products of lesser value:
Question: Does the United States intend to eliminate the use of this kind of duty in the short or medium
term?
ANSWER:
The number of non-ad valorem tariff lines in the U.S. schedule has continued to
decline, as noted in paragraph 48 of Chapter III. The share of non-ad valorem tariff lines declined from
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12.2 percent in 2002 to 10.6 percent in 2004. The United States has committed to bind all NAMA
tariff concessions in the Doha Round in ad valorem terms.
Similarly to many countries the United States maintains non-ad valorem tariff rates on a number of
agricultural products for historical reasons. We continue to support multilateral agricultural tariff
reductions in the Doha negotiations and will be engaged on these topics as long as there continues to be
ambition among other members for multilateral liberalization.
[China]
Question: (p.32 para.49)
At present in the U.S., 7% of tariff headings are three-time higher than the simple average rate of all
tariff headings, while 4% of tariff headings are 15% or higher. High tariffs and tariff peaks mainly
concentrate in textile and clothing, footwear and other travel products which account for a major part of
export for developing countries. However, the U.S. implement low tariffs on products of higher prices,
while implementing high tariff on products of low price.
Please clarify its policy-making intention of such tariff structure and evaluate its impact on
export from developing countries to the U.S.
ANSWER:
With regard to U.S. policy-making intentions on tariffs, we note that the United States
is fully engaged at all levels to achieve the mandate of paragraph 16 of the Doha Declaration. To this
end, the United States has been among the leaders in the efforts to achieve an ambitious market access
outcome in the NAMA negotiations on the basis of reciprocal and mutually beneficial tariff
concessions. We strongly support the use of a Swiss formula, which would have a harmonizing effect
on tariffs.
[Ecuador]
A contrast can be seen between the relatively low average tariffs and the tariff peaks for the agricultural
sector that seem to be a characteristic of U.S. trade policy. Moreover, such peaks contradict what is set
forth in paragraph 9, page 17 of the WTO Secretariat’s report which states that “…the main U.S.
negotiating objective with respect to international trade is the removal of trade barriers in goods,
services, and foreign investment as well as the extension of the rules-based trading system.”
Likewise, if the average tariff rate for non-agricultural products in 2005 is considered to have been 4%,
while for agricultural products it was more than double that rate, what is the U.S. justification for
maintaining high protectionist tariff rates on food products?
ANSWER:
The United States, like all WTO Members, has certain sensitive products to which
higher tariff rates are applied. However, compared to the rest of the world, the United States has
relatively open markets for agricultural imports. The average U.S. MFN applied tariff for agricultural
products (WTO definition) is 9.7 percent (including the ad valorem equivalent of non-ad valorem
rates), which is substantially lower than the average for the rest of the world of over 60 percent. We
continue to support multilateral tariff reductions in the Doha negotiations and will be engaged on this
topic as long as there continues to be ambition among other Members for multilateral liberalization that
results in real new market access. Tariffs in sensitive sectors are included in this approach — the U.S.
has repeatedly stated its willingness to reduce and eliminate tariffs in sensitive sectors if other WTO
Members are willing to do the same.
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[Ecuador]
A consequence of the U.S. tariff schedule is that specific duties reduce the competitiveness of good
from Ecuador as a developing country. Is the United States considering lowering such tariffs? If so,
when and how?
ANSWER:
The number of non-ad valorem tariff lines in the U.S. schedule has continued to
decline, as noted in paragraph 48 of Chapter III. The share of non-ad valorem tariff lines declined from
12.2 percent in 2002 to 10.6 percent in 2004. The United States has committed to bind all NAMA
tariff concessions in the Doha Round in ad valorem terms.
Similarly to many countries, the United States maintains non-ad valorem tariff rates on a number of
agricultural products for historical reasons. We continue to support multilateral agricultural tariff
reductions in the Doha negotiations and will be engaged on these topics as long as there continues to be
ambition among other members for multilateral liberalization.
[Ecuador]
Could the United States explain the extent of the differences between the MFN [Most-Favored-Nation]
tariff rate levels in effect in the United States and U.S. bound MFN tariff rate levels in the WTO?
ANSWER:
The U.S. MFN tariff rate levels refer to U.S. applied rates. At the end of a WTO
round, applied rates are typically “staged down” over several years until they reach the final bound rate
levels. For the Uruguay Round, the final year of staging for virtually all U.S. products was 2004. For
these products, the U.S. applied MFN rate is equal to the final bound rate. There is one rate line, HTS
3404.20.00 which continues to stage down until January 1, 2009 when it reaches a rate of zero. There
are also a handful of HTS items which are bound in WTO at a higher rate than the current MFN rate.
These include a lemon item in certain circumstances, certain petroleum items in certain circumstances,
and a body stampings item.
[Ecuador]
What is the scope of the category “Bound in WTO” that appears in the USITO [United States
Information Technology Office] Tariff Database? Does this mean that the tariff duty has the same
MFN duty rate in effect or a different one?
ANSWER:
The indication "Bound in WTO" does not address the applied rate of the tariff; rather it
means that the United States has bound the final staging of the tariff rate. Virtually all U.S. tariff lines
are bound, however those that are not are marked in the U.S. tariff database; there are two unbound
items that are marked with a “U” and a few items with ceiling rates that are marked with a “C.”
[European Communities]
WT/TPR/S/160-3; p. 32, para. 48-52
The share of non-ad valorem tariff lines has declined from 12.2% of all lines in 2002 to 10.6% in 2004.
Although slightly more than half of comparable non-ad valorem tariff lines recorded declined between
2002 and 2004, on average non-ad valorem tariffs continue to afford higher protection than ad valorem
duties. In 2004, the average of ad valorem equivalents of non-ad valorem tariff rates was 10.7%,
compared with 4.3% for ad valorem duties. Non-ad valorem tariff rates apply mainly to agricultural
products, footwear and headgear, watches, and precision tools.
• Within the schedule, the non-ad valorem duties are higher than the ad valorem duties. What are the
US’ plans to shift to ad valorem rates?
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ANSWER:
The number of non-ad valorem tariff lines in the U.S. schedule has continued to
decline, as noted in paragraph 48 of Chapter III. The share of non-ad valorem tariff lines declined from
12.2 percent in 2002 to 10.6 percent in 2004. The United States has committed to bind all NAMA
tariff concessions in the Doha Round in ad valorem terms.
Some 5.5% of all tariff lines had MFN rates exceeding 15% in 2004. The products subject to the
highest ad valorem or ad valorem equivalent rates were tobacco (350%), whey (284%), sour cream
(177%), and peanuts (164%); in the non-agricultural sector, the highest rate was applied to footwear
(58%).
Similarly to many countries the United States maintains non-ad valorem tariff rates on a number of
agricultural products for historical reasons. We continue to support multilateral agricultural tariff
reductions in the Doha negotiations and will be engaged on these topics as long as there continues to be
ambition among other members for multilateral liberalization.
•
Footwear is subject to particularly high tariff peaks. We would like to know the reason for
maintaining such high rates on footwear imports considering the limited footwear industry in
the US? What are US plans to dismantle such peaks?
ANSWER:
The U.S. has repeatedly stated its strong interest in participating in ambitious market
access negotiations in the Doha Round Non-agricultural Market Access group, on the basis of
reciprocal and mutually beneficial tariff concessions.
[India]
Q.4
The US currently maintains tariff peaks going up to 32% for apparel products under HS 61 and
62. Such high tariffs affect India’s principal item of export interest particularly as the list of countries
which receives concessionary/zero tariff access under FTA or other arrangements is increasing. U.S is
requested to clarify its stand on eliminating the tariff escalation?
ANSWER:
The U.S. has repeatedly stated its strong interest in participating in ambitious market
access negotiations in the Doha Round Non-agricultural Market Access group, on the basis of
reciprocal and mutually beneficial tariff concessions.
[India]
Q.19 The Secretariat Report also draws attention to the barriers to market access in US, applied inter
alia through non-ad valorem duties (10.6% of total lines), TRQs (around 195 tariff lines are subject to
tariff quotas), tariff protection of up to 350% and tariff escalation across a number of agriculture
products. Nearly 91% of the out-of-quota tariffs are non-ad valorem compared to almost 28% of inquota tariffs (Para 16 of Secretariat Report). Products such as tobacco, whey, sour cream and peanuts,
receive tariff protection in the range of 50-350%. Quotas, coupled with high out-of-quota tariffs, are
protectionist, and the non ad valorem tariffs erode export competitiveness and disadvantage low cost
exports of developing countries. Does the US propose to simplify its tariffs and to convert all residual
quotas to a tariff-only regime?
ANSWER:
The United States, like all WTO members, has a small number of specific domestic
sensitivities where slightly higher tariff rates are sometimes applied. In addition, similar to many other
countries the United States maintains non-ad valorem tariff rates on a number of products for historical
reasons. We continue to support multilateral tariff reductions in the Doha negotiations and will be
engaged on these topics as long as there continues to be ambition among other members for multilateral
liberalization. Tariffs in sensitive sectors are included in this approach — the U.S. has repeatedly
stated its willingness to reduce and eliminate tariffs in sensitive sectors if other WTO members are
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willing to do the same. In addition, we recognize the additional administrative requirements associated
with the use of TRQs, and strongly support the work being done to improve disciplines on TRQ
administration in the Agriculture negotiations.
[India]
Q.20 Country-specific allocations of tariff quotas have been maintained by the US under Uruguay
Round Scheduled commitments and new ones have been negotiated by the US with trading partners
more recently. The selective allocation of tariff quotas and institution and maintenance of countryspecific allocations is discriminatory and undermines the fundamental principle of MFN. Does the US
propose to shift to a regime of global quotas with MFN-based allocations?
ANSWER:
The United States allocates in-quota quantities under WTO tariff-rate quotas according
to commitments made in the WTO. The United States cannot unilaterally globalize these allocations
without the agreement from the countries which hold the allocations. The United States proposed in
the Doha Development Agenda that WTO members provide any increases in in-quota quantities on a
most favored nation basis, while providing special consideration to developing countries that have little
or no access to existing TRQs. Regarding TRQs resulting from bilateral and regional trade agreements,
the quantities are in addition to quantity commitments made under the WTO.
[Japan]
Q9.
Complicated tariff system on garments, clocks and watches (p.31 to 32, paras.46 to 48)
(1) The tariffs of some products in the U.S. are very complicated. For example, they levy tariffs on
ensembles based on the tariffs of each garment in the ensembles, not the bound tariff rate themselves.
They also levy tariffs on completed watches and clocks based on the tariffs of their parts and therefore,
tariffs are different for each watch and clock depending on their compositions. Japan would like to
know why the U.S. uses a complicated tariff system like this for some products and would like to know
the background for using this system.
(2) Japan has been informed that the tariff system of watches and clocks is linked with their labeling
system of origins, and there was a case that the U.S. abolished the obligation to indicate prices of parts
used in digital watches on the invoice, when the tariff of digital watches itself was eliminated.
Therefore, we understand that the elimination of tariffs for watches and clocks would imply elimination
of their labeling system of origin. In this regard, please indicate the specific views of the Government
of the United States.
ANSWER:
The U.S. has repeatedly stated its strong interest in participating in ambitious market
access negotiations in the Doha Round Non-agricultural Market Access group, on the basis of
reciprocal and mutually beneficial tariff concessions.
[Mexico]
6. Concerning paragraph 49, could the United States indicate whether the reason behind the 350%
tariff on tobacco involves the protection of human health, the collection of tax revenues, or simply
trade policy?
ANSWER:
The tobacco tariff and tariff-rate quota (TRQ) were established by Presidential
proclamation in September 1995 in accordance with authority provided by Congress and following
negotiations with affected trading partners under GATT Article XXVIII. The TRQ replaced domestic
content provisions that had been in effect since January 1, 1994.
WT/TPR/M/160/Add.1
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[New Zealand]
4.
Tariffs (WT/TPR/S/160, p.31 para 47 and p.32 para 49).
The Secretariat notes that the average applied tariff for agriculture in 2004 was 9.7%, and remained
virtually unchanged with respect to 2002. The average applied tariff rate for non-agricultural products
was 4% in 2004, down from 4.2% in 2002. The products subject to the highest ad valorem of ad
valorem equivalent rates were tobacco (350%), whey (284%), sour cream (177%), and peanuts (164%);
in the non-agricultural sector, the highest rate was applied to footwear (58%).
What is the US justification for maintaining high tariff protection in sectors like agricultural food
products?
ANSWER:
The United States, like all WTO Members, has certain sensitive products to which
higher tariff rates are applied. We continue to support multilateral tariff reductions in the Doha
negotiations and will be engaged on this topic as long as there continues to be ambition among other
Members for multilateral liberalization that results in real new market access. Tariffs in sensitive
sectors are included in this approach — the U.S. has repeatedly stated its willingness to reduce and
eliminate tariffs in sensitive sectors if other WTO Members are willing to do the same.
Other Charges Affecting Imports
[China]
Custom Clearance
Question: (p.27 para.22, p.35 para. 66-69)
According to the Secretariat Report, Paragraph 343 of the Trade Act (2002) stipulates that CBP must
receive advance information pertaining to any cargo before the cargo is brought into (or sent from or
pass through) the U.S. by any mode of commercial transportation. Otherwise the CBP may impose
punishment by a fine. However, the U.S. refuses to provide information on the accumulated number of
fines collected. Please clarify.
What recommendations were made concerning fees to be eliminated and the rate of fees to be
retained?
ANSWER:
We would be pleased to answer this question, but require an explanation of what
specifically should be clarified and what “recommendations” are being referenced.
Does the U.S. Customs impose “harbor maintenance fee” on the basis of its actual expenditure on
maintenance? As the maintenance fee is designed for harbor maintenance, why does it apply only
to imported products but not to exported products of the U.S.?
ANSWER:
The harbor maintenance fee is set by statute, 26 US.C. § 4461 and 4462. It is only
applied in association with port use for the movement of domestic shipments between ports, as well as
imported shipments.
For the importation of some products, such as textile, clothing and footwear, does U.S. Customs
require more specific information than other products?
ANSWER:
U.S. importers are required to submit a Manufacturer’s Identification Code (MID) on
all (textile and apparel) importations. The MID has allowed CBP to eliminate the paper textile
declaration and thus allow electronic processing of entries. Additionally, many products have specific
labeling requirements pursuant to 19 CFR 141.86.
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Please clarify the consistency of the said information requirements and the rationale for the two
fees with Article 8 of GATT 1994.
ANSWER:
The question presupposes an inconsistency with Article VIII of the GATT 1994.
The U.S. will fully deploy the Automated Commercial Environment (ACE) as part of its customs
modernization program by 2009. The ACE will replace the current Automated Commercial System.
Will the ACE further simplify customs procedures by reducing instead of increasing trade
barriers to foreign exporters, esp. to those small and medium ones from developing Members,
which often do not have much capacity of E-Commerce?
ANSWER:
A key objective of ACE is to facilitate trade through use of new technologies that will
save time and money, reduce labor intensive procedures, and make trade processing more efficient for
all trade entities.
On what conditions does U.S. Customs require commercially confidential information on
processing procedures of textile and clothing? What is the rationale for such requirement? What
measures does U.S. Customs take to protect such commercially confidential information on
processing procedures?
ANSWER:
Information on processing procedures of textiles and clothing may be relevant to
verifying claims of origin. The U.S. Government and its employees are prohibited from disclosing
sensitive information pursuant to the Trade Secrets Act (18 USC 1905). All information contained in
the entry process is considered confidential and as such U.S. officials use this information for official
use only.
Would the U.S. Customs extend the payment period of customs duty for clothing up to 210 days?
ANSWER:
The time for tendering estimated duties and fees is set by statute (19 USC § 1505).
If importer fails to keep the imported clothing products within payment period of customs duty
to enable the Customs to determine final tariff, what would be the amount of fine imposed by the
Customs?
ANSWER:
If an importer is found in violation of U.S. laws or regulations, penalties will be
assessed based upon the nature of the violation. The following citations will provide information on
penalties, 19 CFR 162.73 and 19 USC 1592.
How would the U.S. evaluate the impact of a prolonged payment period on import of clothing?
ANSWER:
The question is hypothetical and therefore difficult to answer. However, evaluation of
any such impact would likely require a financial study or cost/benefit analysis, or both.
Would the U.S. consider shortening the payment period to such an extent so as not to negatively
affect trade?
ANSWER:
The United States provides importers with numerous options with respect to the
tendering of duties, and importers can choose among these options to maximize efficiency.
[Chinese Taipei]
Question 6 (page 35, paragraphs 66-67)
Imports valued at more than US$2,000 are subject to a merchandise processing fee collected by the
CBP. Originating imports under the free-trade agreements concluded between the United States and
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Australia, Canada and Mexico, Chile, Israel, and Singapore are exempt. The American Jobs Creation
Act of 2004 requires the Secretary of the Treasury to conduct a study of all the fees collected by the
Department of Homeland Security by September 2005, and make recommendations concerning fees to
be eliminated and the rate of fees to be retained.
If the merchandise processing fee is intended to cover the service cost to the CBP of processing the
entry of imported merchandise, why is it that imports under these particular FTAs are exempt from this
fee? Is this exemption possibly compensated by the fee that might have been “over-collected” on
goods imported from non-FTA partner countries?
Furthermore, what are the results and
recommendations of the Secretary of the Treasury study?
ANSWER:
The merchandise processing fee (MPF) is a charge collected in connection with the
importation of goods. In providing for the eventual duty-free preferential access of goods under the
FTAs with the countries listed, the United States agreed to eliminate both the existing duty and the
MPF. We keep the revenues collected by application of the MPF in a separate account from which
they are eventually disbursed for the processing of imports only from countries subject to the fee.
Processing for imports from preferential trading partners is funded separately. The Treasury
Department has not yet completed its study of Customs Fees.
[Colombia]
Paragraph 66, Title III) of Section III, states that the assessment for processing goods appraised at over
2000 US dollars was extended to September 2014, as a result of adoption of the Jobs Creation Act of
2004. Furthermore, paragraph 67 states that the aforementioned Act provides that the Department of
the Treasury was to prepare a study by September 2005 at the latest of all assessments collected by the
Department of Homeland Security and make recommendations on the assessments to be eliminated and
those to be maintained.
a) Colombia is interested in learning whether this study was done.
conclusions?
If it was, what were the
b) Did the study also examine the maintenance assessment on ports covering imports? Was it taken
into account that for exports this assessment was not collected pursuant to the decision by the Supreme
Court, which held that the assessment presented “signs of a tax” and that the value of the cargo (tax
base) did not “have a reliable correlation to the federal services, facilities and benefits of the ports?”
ANSWER:
The Treasury Department Study has not yet been completed.
[Costa Rica]
5. Paragraph 66 states that imports valued at more than US$2,000 are subject to a merchandise
processing fee collected by Customs and Border Protection (CBP), with the exceptions indicated
therein. Please explain how CBP detects those instances in which goods are imported in two or more
loads in order to avoid paying the stipulated fee and what is the sanction in the case of non-compliance.
ANSWER:
CBP detects fraud in relation to MPF by reviewing entry summary documentation to
ensure that shipments are properly valued. If the CBP review identifies that goods imported into the
United States were intentionally separated into multiple shipments to avoid be assessed the MPF, the
importer would be subject to penalty action.
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[Indonesia]
2.
Other Charges affecting Imports. (page 35)
In the Report, it was said that import valued at USD 2,000 are subject to a merchandise
processing fee and the fee is set at 0.21% of the import value. As this policy is exempted from those
countries which have bilateral free trade agreement with the US, how the US reconciles this policy with
Article III (National Treatment) and Article XI (General elimination of quantitative restrictions) of the
GATT 1994?
ANSWER:
The exemptions for the merchandise processing fee in the particular FTAs mentioned
were negotiated as part of those FTAs in accordance with GATT Article XXIV.
[New Zealand]
5. Other charges affecting imports (WT/TPR/S/160, p.35 paras 66 and 67)
The Secretariat report notes that imports valued at more than US$2,000 are subject to a merchandise
processing fee collected by Customs and Border Protection (CBP). The fee is set at 0.21% of the
import value; the statutory minimum and maximum are US$25 and US$485.
Will the US be changing this fee so it reflects the approximate cost to CBP of processing the entry of
imported merchandise?
The Secretariat report notes that the American Jobs Creation Act of 2004 requires the Secretary of
Treasury to conduct a study of all the fees collected by the Department of Homeland Security, by
September 2005, and make recommendations concerning fees to be eliminated and the rate of fees to
be retained.
Has this study been completed? Will the merchandise processing fee be eliminated?
ANSWER:
The Merchandise Processing Fee does correspond to the cost of processing imports.
The Treasury Department has not completed its study. The United States has no intention of
eliminating the Merchandise Processing Fee.
[Thailand]
8. In paragraph 67, the Secretariat reports that Congress intended for the merchandise processing fee
(MPF) to approximate the cost to Customs and Border Protection (CBP) of processing the entry of
imported merchandise valued at over US$2,000. Bearing in mind that merchandise valued at
US$2,001 should be subject to an MPF of about US$4.2, please clarify how the pre-determined
statutory minimum of US$25, as well as the statutory maximum of US$485, follow Congressional
intention and the principles of GATT Article VIII: Fees and Formalities connected with Importation
and Exportation.
ANSWER:
Setting minimum and maximum amounts ensures that the customs clearance of very
high and very low value items, the processing of which do not involve substantially different costs,
would not pay unduly different import fees.
[Thailand]
9. The United States has operated a harbor maintenance fee, or HMF, (paragraphs 68 and 69) since
1987. The HMF is an ad valorem levy of 0.125% collected by the CBP on port use. Between 1987 and
1998 the HMF was applied to imports, exports, and domestic freight. The tax burden on exports and
national freight is comparatively low because ship-owners voluntarily pay the tax on a quarterly basis.
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With regard to domestic freight, there are three exceptions: (1) payments under US$10,000 per quarter;
(2) traffic in Alaska, Hawaii and territorial dependents; and (3) the landing of fish from ships and some
freight shipments of Alaskan crude oil; however these exceptions do not apply to imports. The tax has
not been collected on exports since 1998 because the US Supreme Court ruled that the portion of the
HMF levied on exported cargo violated the Export Clause of the Constitution, which bans taxes on
exports.
The HMF appears to impose a tax that exceeds US commitments in its schedules of concessions, and
when compared to domestic products, imports are accorded less favorable treatment. The HMF may
also levy charges that exceed fees for harbor maintenance.
In light of the above, please clarify the HMF in terms of WTO consistency, particularly GATT Articles
II, III and VIII. Please also explain why imported cargo is subject to the harbor maintenance fee while
exported cargo is exempt (paragraph 69), considering SCM Agreement obligations regarding export
subsidies.
ANSWER:
The provision that applied the fee to export shipments was ruled unconstitutional by
the United States Supreme Court. The fee’s rate of 0.125 percent ad valorem on the value of
commercial cargo loaded or unloaded on vessels using federally maintained harbor projects is
negligible.
[Turkey]
14. Paragraph 66 states that the US imposes merchandise processing fee for the imports valued at
more than 2000 US Dollar amounting to 0.21% of the import value. We understand from the
Secretariat report that the application of the merchandise processing fee has been extended until
September 2014.
Furthermore, it is mentioned in the paragraph 68 that water-born imports valued at more than 2000 US
Dollar and unloaded at a port receiving federal funds for maintenance are subject to a harbor
maintenance fee whereas exported cargo is exempted following the decision by the US Supreme Court.
Could US Delegation explain the rationale of these charges and its consistency with the relevant GATT
Articles?
ANSWER:
The fee corresponds to the cost of processing imports.
Trade Remedies
[Argentina]
9. On page 47, paragraph 77, the report mentions that some aspects of the antidumping and
countervailing systems being challenged in the WTO were resolved during the period under review, for
example, the challenging of the Antidumping Act of 1916.
Question: Could you tell us what aspects of the system challenged in the WTO have not been resolved
during this period or that have not been fully implemented?
ANSWER:
The United States has complied with the vast majority of DSB recommendations and
rulings in these disputes, in nearly all cases within the “reasonable period of time” for doing so. In
some cases, the question of implementation is pending before a compliance panel. The United States
continues its efforts to complete implementation of DSB recommendations and rulings involving
legislation in the Hot-Rolled Steel dispute (DS184). The United States has already completed
implementation of non-legislative recommendations and rulings in that dispute.
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[Brazil]
2. Chapter III, paragraph 74: Concerning the implementation of the DSB decision on United States –
Continued Dumping and Subsidy Offset Act of 2000 (CDSOA) - WT/DS217 and WT/DS234, could
the US Government indicate the estimated amount that will still be collected as duties imposed on
goods imported into the United States until the final and complete repeal of the Byrd Amendment? For
how long does the US Administration intend to continue distributing duties collected under CDSOA to
US companies?
ANSWER:
Subsection (a) of section 7601 of the Deficit Reduction Act provides that the CDSOA
is repealed “effective upon the date of enactment of this Act”. Subsection (b) provides that “[a]ll duties
on entries of goods made and filed before October 1, 2007, that would, but for subsection (a) of this
section, be distributed under [the Continued Dumping and Subsidy Offset Act of 2000 (“the CDSOA”)]
shall be distributed as if [the CDSOA] had not been repealed by subsection (a).”
The total amount of CDSOA disbursements each fiscal year for the past five years has ranged from
$226 million (FY 2005) to $330 million (FY 2002).
[Brazil]
3. Chapter III, paragraph 76: The Secretariat´s report points out that there are new guidelines to
prevent circumvention. Which are the objective criteria that the U.S. Customs and Border Protection
uses in order to define those “sudden changes” in the declared values, claimed country of origin, or
declared classification?
ANSWER:
The guidelines in place are not merely to prevent circumvention, but also to protect the
revenue from the risk of non-collection resulting from rate fluctuations. To detect circumvention, CBP
closely monitors import transactions, including changes in average unit values of the imported shrimp
and increases in shrimp imports from non-dumping countries.
[Brazil]
4. Chapter III, paragraph 81: In table III.3, the report shows statistics of anti-dumping investigations in
the period 1980-2004. However, it does not give information on the number of applications for antidumping which were made in the mentioned period. Would it be possible for the United States to
provide such statistics for 2004 and 2005? In the same table III.3, the Secretariat´s report provides the
number of preliminary and final determinations for 2004. According to the ANNEX II of the Antidumping Agreement, the authorities can make determinations on the basis of the facts available if
information is not supplied within a reasonable time or if an interested party does not cooperate. What
is the proportion of anti-dumping determinations based on facts available during 2004 and 2005?
Would it be possible to identify a trend on such proportion?
ANSWER:
During Fiscal Year (FY) 2004 (October 1, 2003-September 30, 2004) there were 33
anti-dumping petitions filed with the U.S. Department of Commerce. During FY 2005 (October 1,
2004-September 30, 2005) there were 10 anti-dumping petitions filed with the U.S. Department of
Commerce.
The need for investigating authorities to rely on the facts available can occur under a wide range of
circumstances and may involve only a small amount of information. The United States does not
maintain statistics on the number of instances in which the facts available had to be used. However, as
many respondents fail to report some amount of information, or report some inaccurate information, it
is common to fill such gaps with the facts available.
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[Brazil]
5. Chapter III, paragraph 82: The report informs that 38 out of 71 of the investigations initiated during
the period 2002-2003, or 54%, resulted in the application of provisional measures. That rate rose to
92% in 2004 (24 out of 26 investigations). Those provisional measures are related to critical
circumstances that may arise as a result of the conditions listed in Article 7 of the Anti-dumping
Agreement, so they should be applied only on an exceptional basis. To what factor does the U.S.
Department of Commerce attribute this high percentage of incidence of provisional measures in 2004?
What would be the domestic and/or external factors that explain those critical circumstances?
ANSWER:
In accordance with Article 7 of the Antidumping Agreement, the United States applies
provisional measures only if a preliminary determination has been made of dumping and consequent
injury. These determinations are made by the Department of Commerce and the International Trade
Commission, respectively. If the preliminary injury determination by the ITC is negative, then the
investigation is terminated and no provisional measures are applied. If the ITC's injury determination
is affirmative but Commerce's preliminary dumping determination is negative, then no provisional
measures are applied at that time, though measures may be applied if there is an affirmative final
determination. Furthermore, any provisional measures applied initially are rescinded if the ITC makes
a final determination of a threat of material injury (except where material injury would have been found
but for the initial imposition of provisional measures) or of material retardation of the establishment of
an industry. Thus, provisional measures are applied only if necessary to prevent injury being caused
during the investigation.
The data cited in the question reflect the determinations of the two agencies and the fact that there were
a higher proportion of negative preliminary determinations among investigations initiated in 2002 and
2003 than in 2004. In addition, of the investigations initiated in the 2002-2003 period, six were
terminated upon withdrawal of the petitions before preliminary determinations by both agencies were
made.
[Canada]
Summary Observations, (3) Market Access in Goods, Paragraph 13:
The Secretariat Report refers to the status of U.S. legislation containing a clause to prospectively repeal
the Byrd Amendment (Deficit Reduction Act of 2005). The effective date of repeal under this
legislation is October 1, 2007.
The United States has claimed that it has "taken the actions necessary to implement the rulings and
recommendations in these disputes". Canada believes prospective repeal is only the first step towards
compliance, as we understand that antidumping and countervailing duties collected up to September
30, 2007, will remain subject to disbursement, that is to say, even after the effective date of repeal.
The Dispute Settlement Understanding requires Members to bring inconsistent measures into
compliance with the WTO Agreement promptly; where immediate compliance is not possible, a
Member has a reasonable period of time (RPT) in which to do so. In this case, the RPT ended over two
years ago, and October 1, 2007, the effective date of repeal, is almost 4 years later.
2. Could the United States confirm when disbursements pursuant to the Byrd Amendment will cease?
ANSWER:
Subsection (a) of section 7601 of the Deficit Reduction Act provides that the CDSOA
is repealed “effective upon the date of enactment of this Act”. Subsection (b) provides that “[a]ll duties
on entries of goods made and filed before October 1, 2007, that would, but for subsection (a) of this
section, be distributed under [the Continued Dumping and Subsidy Offset Act of 2000 (“the CDSOA”)]
shall be distributed as if [the CDSOA] had not been repealed by subsection (a).”
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[Canada]
Part III. Trade Policies and Practices by Measure, (2) Measures Directly Affecting Imports, (iv) Antidumping and countervailing actions, (a) Legislation and administration, Paragraph 72:
The Secretariat Report notes that the ITA’s AD/CVD Petition Counseling and Analysis Unit assists
U.S. companies regarding trade remedy laws.
6. Can the United States provide a general outline of the services available to U.S. companies,
including any legal services, provided by this unit? Are smaller firms given preference in terms of such
services? Further, does the International Trade Commission still operate a similar unit that used to be
called the Trade Remedy Assistance Office?
ANSWER:
The AD/CVD Petition Counseling and Analysis Unit (PCAU) is part of the U.S.
Department of Commerce’s Import Administration, which is the administering authority for the
initiation of antidumping and countervailing duty investigations. Among the responsibilities of the
PCAU is to provide information to U.S. companies with respect to U.S. antidumping and
countervailing duty laws. This includes providing information as to the statutory requirements for a
petition, as well as explaining the process of filing a petition. However, PCAU neither encourages nor
discourages the filing of such petitions, and does not provide any legal services. The PCAU also
informs U.S. companies about publicly available trade statistics. All U.S. companies, regardless of size
or legal representation, are given equal treatment by the PCAU.
The U.S. International Trade Commission still maintains a Trade Remedy Assistance Office, which
assists small businesses seeking information about U.S. trade laws.
[Canada]
Part III. Trade Policies and Practices by Measure, (2) Measures Directly Affecting Imports, (iv) Antidumping and countervailing actions, (a) Legislation and administration, Paragraph 75:
In July 2004, new guidelines for determining continuous bonding requirements for importers of
agriculture/aquaculture products subject to anti-dumping/countervail were issued.
7. Canada would appreciate any comments by the U.S. as to their experience regarding the new
bonding requirements. How often have they been used and have they been effective in ensuring that
final duties assessed are paid? Have the new guidelines designed to prevent circumvention been
effective?
ANSWER:
U.S. Customs and Border Protection (CBP) has applied the bonding directive to the
antidumping duty orders on certain frozen warm-water shrimp. The U.S. Department of Commerce
has not yet assessed antidumping duties in these cases, so it is unclear at this juncture whether the
guidelines have been effective at protecting Customs’ revenue from the risk of non-payment due to rate
fluctuations. However, the amended guidelines have been effective in ensuring revenue protection in
instances of circumvention. CBP is closely monitoring import trends and the operation of the directive
and is prepared to make adjustments as appropriate.
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[Canada]
Part III. Trade Policies and Practices by Measure, (2): Measures Directly Affecting Imports, (iv) AntiDumping and Countervailing Actions, (b) Anti-Dumping, Paragraph 84:
8. Does the U.S. have any explanation or opinion as to the reason why almost two thirds of the actions
taken against imports from the U.S. are by three countries: China, Mexico and India? Has this trend
continued?
ANSWER:
China, Mexico, and India are among the United States' largest trading partners and are
significant users of the trade remedy rules. It is not clear that there is any particular “trend” in this
regard, but the most recent note posted by the WTO Secretariat (G/ADP/N/140) regarding antidumping
actions reported under Article 16.4 of the Antidumping Agreement lists recent actions involving
imports from the United States brought by Canada (2), Korea, and Pakistan.
[Canada]
Part III. Trade Policies and Practices by Measure, (2) Measures Directly Affecting Imports, (iv) Antidumping and countervailing actions, (c) Countervailing duties, Paragraph 91: [DOC]
The Secretariat Report says that in June 2003, the USDOC modified the manner in which it analyses
whether a subsidized, government-owned company remained subsidized after it was “privatized”. In
October 2003, the USDOC issued revised final determinations in 12 specific cases that were at issue.
9. What were the results of these revisions?
ANSWER:
Of the 12 countervailing duty orders referred to by Canada, as a result of USDOC's
application of its new methodology, two countervailing duty orders were revoked in full, one was
revoked with respect to one of the two exporters involved, and the cash deposit rates in five were
lowered or set to zero. The remaining four countervailing duty orders, all of which involved sunset
reviews, remained in place, although one order was subsequently revoked in the course of a changed
circumstances review. In addition, as a result of findings made by a panel under Article 21.5 of the
DSU, the USDOC is re-examining its determinations with respect to two of the sunset reviews.
[Chile]
(iv)(b) Anti-dumping and Countervailing Actions
Paragraph 73 of the Secretariat’s report states that in the United States, the United States International
Trade Commission (USITC) makes determinations related to injury while those regarding dumping or
subsidization are made by the U.S. Department of Commerce (USDOC). Likewise, USITC
preliminary determinations are made prior to those USDOC makes on dumping or subsidization.
1. What does the United States consider complies with the provisions of Article 5.5.7 of the Antidumping (AD) Agreement as regards simultaneously examining the evidence that dumping and injury
exist when deciding whether to initiate an investigation?
ANSWER:
Under U.S. statute, petitioners are required to file a petition for the imposition of antidumping duties simultaneously with both the Department of Commerce (DOC) and the International
Trade Commission (ITC). The DOC examines the entire petition, both the dumping and injury
allegations, and is the administering authority for initiation of the investigation. The ITC also
examines the injury allegations in the petition, and may consult with DOC with respect to the injury
information provided in the petition for purposes of initiation of the investigation.
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2. Paragraph 12 of the report’s Summary Observations states that in 2004 and 2005 anti-dumping
investigation initiations decreased and this should ease concerns among foreign exporters. Is the cause
of this decrease because (a) authorities have adopted a policy in this regard; or (b) domestic industry
has submitted fewer cases for investigation?
ANSWER:
Anti-dumping investigation initiations have decreased because domestic industries
have submitted fewer cases for investigations.
3. Paragraphs 75 and 76 of the report indicate that new guidelines have been issued regarding
continuous bond requirements for importers and in order to prevent circumvention. Are these new
guidelines legally binding? Are such guidelines solely applicable in the case of the Byrd Amendment
or do they also have repercussions for anti-dumping regulations in general?
ANSWER:
The CBP directive provides port directors with discretion to review continuous bond
requirements and obtain larger bonds where necessary to protect against the risk of non-payment of
duties. The August 2005 supplement to the directive specifies the objective criteria that CBP relies
upon when determining the risk of non-collection of customs revenue that is lawfully due, as well as
modifying the amount of the continuous bond required.
The guidelines are potentially applicable to any antidumping or countervailing duty order where CBP
determines that there is a risk of non-payment of duties, whether due to fluctuations in antidumping
rates, transshipment, undervaluation, or other factors. CBP will assess that risk based on the criteria
specified in the August 2005 supplement. To date, the guidelines have been applied to the antidumping
duty orders on certain frozen warm-water shrimp.
4. Does the “clarification and improvement” of the provisions of the Anti-dumping (AD) and
Subsidies and Countervailing Measures (SCM) Agreements referred to in paragraph 80 of the report
imply that some provisions of such agreements may actually be amended or repealed?
ANSWER:
The mandate in Paragraph 28 of the Doha Ministerial Declaration for the Rules
Negotiations provides for negotiations aimed at clarifying and improving disciplines under the WTO
Antidumping and Subsidies Agreements while preserving the basic concepts, principles and
effectiveness of these Agreements and their instruments and objectives, and taking into account the
needs of developing and least-developed participants. In its submissions to the WTO Rules
Negotiating Group, the United States has submitted a number of proposals that provide suggestions for
clarifications and improvements to the Agreements, in accordance with the Doha mandate. Whether
the Rules negotiations lead to amendments or repeal of any of the provisions of the Agreements is up to
the full Membership of the WTO.
5. In the Final Dumping Determination on Softwood Lumber from Canada (WT/DS264/AB/R), the
Appellate Body recommended that the United States bring its practices into line with AD obligations,
given that it acted in manner inconsistent with Article 2.4.2 of the AD Agreement when determining
the existence of dumping margins based on a method that includes the practice of “zeroing.” In order
to comply with the foregoing, the U.S. changed the calculation methodology used from the weighted
average-to-weighted average methodology to the transaction-to-transaction methodology (paragraph
87).
Does the United States consider this change to mean that zeroing will not be applied in the future,
regardless of the method used? Otherwise, in light of the Appellate Body’s arguments, how can
zeroing be technically justified in the context of the new method?
With regard to the foregoing, the current wisdom is that the appropriate method is the transaction-totransaction method. Why, therefore, hasn’t said method been used from the outset?
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ANSWER:
To the extent that the AD Agreement requires dumping to be offset by non-dumped
transactions, it does so only in the context of comparisons between weighted average normal values
and the weighted average of prices of all comparable export transactions during an investigation. The
United States discussed the many reasons why any offset obligation may not properly be applied to any
other comparison methodology in its submissions to the panel and Appellate Body (as appropriate) in
the various disputes on this issue (DS264, DS294, and DS322). As a routine matter, the United States
makes its submissions publicly available on the internet (http://www.ustr.gov/Trade_Agreements/
Monitoring_Enforcement/Dispute_Settlement/WTO/Section_Index.html).
With respect to the second part of Chile’s question, the reasons for the use of the transaction-totransaction comparison methodology were detailed in the implementation determination to which Chile
refers. See Notice of Determination Under Section 129 of the Uruguay Round Agreements Act;
Antidumping Measures Concerning Certain Softwood Lumber Products From Canada, 70 Fed. Reg.
22,636 at 22,645 to 22,646 (Dep’t Commerce May 2, 2005).
[Chile]
(iv)(d) Suspension Agreements
1. Pursuant to paragraph 93 of the report, the U.S. legislation would allow for AD and Countervailing
Duty (CVD) investigations to be suspended under specific circumstances, provided that an agreement
is reached with the exporter to eliminate injurious effects. Does this mean that such suspensions are in
addition to those cases in which the respective agreement authorizes a compromise?
ANSWER:
Section 734(b) of the Tariff Act, as amended (the Act), allows for suspension
agreements which eliminate completely sales at less than fair value or under which exports of the
subject merchandise cease. Exporters of the subject merchandise who account for substantially all of
the imports of that merchandise agree either to cease exports within six months after the date on which
the investigation is suspended or to revise their prices to eliminate completely any amount by which the
normal value of the merchandise exceeds the export price (or the constructed export price). Section
734(c) of the Act allows for suspension agreements, which eliminate completely the injurious effect of
exports to the United States. If the administering authority determines that extraordinary circumstances
are present in a case, it may suspend an investigation upon the acceptance of an agreement to revise
prices from exporters of the subject merchandise who account for substantially all of the imports of that
merchandise if the agreement will eliminate completely the injurious effect of exports to the United
States. In addition, the suppression or undercutting of price levels of domestic products by imports of
that merchandise must be prevented and, for each entry of each exporter, the amount by which the
estimated normal value exceeds the export price (or constructed export price) must not exceed 15
percent of the weighted-average amount by which the estimated normal value exceeded the export
price (or the constructed export price) for all less-than-fair-value entries of the exporter examined
during the course of the investigation.
[Chile]
(iv)(f) Sunset Reviews
1.
For purposes of reviews, the U.S. considers as de minimis any countervailable subsidy or
dumping margin that is less than 0.5%, while de minimis rates for initial investigations are
1% for subsidies (2% for developing countries) and 2% for dumping margins (3% for
developing countries) – (paragraph 96).
How is it possible to justify the need to have different de minimis standards for initial investigations
and subsequent reviews of measures?
ANSWER:
In United States – Countervailing Duties on Certain Corrosion-Resistant Carbon
Steel Flat Products from Germany, WT/DS213/AB/R, the Appellate Body found that the de minimis
WT/TPR/M/160/Add.1
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standards of Article 11.9 of the SCM Agreement do not apply to sunset reviews. In so finding, the
Appellate Body stated that “limiting the application of [an express de minimis] standard to the
investigation phase alone, does not lead to irrational or absurd results.” Id., para. 89. In addition, the
Appellate Body offered several reasons justifications for having different de minimis standards for
investigations and subsequent reviews of measures. First, the Appellate Body found that there was not
a clear “rationale” behind the 1 percent standard of Article 11.9 that must also apply in the context of a
sunset review. Id., para. 84. Second, the negotiators of the SCM Agreement may have believed that
automatic termination of a duty was not desirable merely because, after the investigation phase, the
level of subsidization fell below de minimis. Id., para. 86. Third, “original investigations and sunset
reviews are distinct processes with different purposes.” Id., para. 87. The United States agrees with
the Appellate Body’s observations, and notes that the panel in United States – Anti-Dumping Duty on
DRAMS from Korea, WT/DS99/R, found that the de minimis standard of Article 5.8 of the
Antidumping Agreement does not apply to assessment proceedings under Article 9.3.
[Chile]
(v) Safeguards
1. Paragraph 103 of the report states that, by law, safeguard measures may include tariffs, quantitative
restrictions, tariff quotas, import licensing, and other measures. Given the range of possibilities for
applying safeguard measures, what criteria are used in determining whether to impose one kind of
measure versus another in order to comply with Article 5 of the Safeguards Agreement which stipulates
that safeguards must only be applied to the extent necessary to prevent or remedy serious injury and to
facilitate adjustment, given that applying one measure instead of another in a particular case could be
unnecessarily more restrictive?
ANSWER:
As reflected in the question, Section 203(a)(3) of the Trade Act of 1974 identifies a
number of specific safeguard actions that the President can take, such as an increase in duties, a tariff
rate quota, or imposition of quantitative restrictions, following an affirmative determination of serious
injury, or threat thereof, by the U.S. International Trade Commission (USITC).
Section 203(a)(1)(A) provides that, after receiving the report by the USITC, the President shall take all
appropriate and feasible action within his power which the President determines will facilitate efforts
by the domestic industry to make a positive adjustment to import competition and provide greater
economic and social benefits than costs. As to the criteria for determining what action to take, Section
203(a)(2) sets forth a list of factors that the President must take into account in this decision. The first
item specified for the President to take into account is the USITC’s recommendation and report,
containing the USITC’s recommendation as to the action that would address the serious injury, or
threat thereof, to the domestic industry and be most effective in facilitating the efforts of the domestic
industry to make a positive adjustment to import competition. Among the other statutory factors to be
taken into account are the probable effectiveness of the various possible safeguard actions to facilitate
positive adjustment to import competition, the economic and social costs of the various possible
safeguard actions relative to their economic and social benefits, and various factors related to the
national economic interest of the United States.
[China]
Question: (p.36-44)
The U.S. has granted market economy status to some countries since last review. As a full WTO
Member, China has made enormous progress in the development of its market economy. Regardless of
the actual situation of China’s economy, the U.S. fails to recognize the market economy status of
China. In examining different cases for market economy status, does the U.S. realize that it has
adopted double standard, which simply constitutes discrimination against China?
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ANSWER:
Section 771(18) of the 1930 Tariff Act, as amended, (the Act) provides the definition
of a non-market economy (NME) for the purposes of the U.S. antidumping and countervailing law, as
well as the criteria that the U.S. Department of Commerce (the Department) must consider when
making a determination regarding a country’s market economy status. The Department must apply the
same criteria with respect to determining China’s NME status as it does to determining the NME status
of other countries. A country determined to be an NME is treated as such until that determination is
revoked. See Section 771(18)(C)(i). Provided there is a request from the government of the NME and
a procedural and substantive basis on which to proceed with a review of a country’s non-market
economy status, it is the Department’s practice to conduct such a determination in an open, transparent
process in a quasi-judicial proceeding.
The United States notes that not all non-market economies are the same, and that different non-market
economies follow different reform paths, each with a unique set of initial conditions. The criteria listed
in Section 771(18) all refer to “the extent” to which certain indicators are present in the country under
review. In evaluating these criteria, the Department considers not just whether the country has receded
from central planning, but also whether market forces have taken root in the economy.
[China]
Question: p.38 para. 77-79, p.40 para. 85, para, 87-88, p.42. para. 92, p.44 para. 101 etc.)
As mentioned in the Secretariat report, the U.S. has yet to fully implement and comply with several
other recommendations and rulings of the Dispute Settlement Body after its recent efforts to repeal the
Byrd Amendment far beyond “the reasonable period of time”. Notwithstanding, Members have been
showing great patience and understanding to wait and see the U.S. government working with the U.S.
Congress to achieve full compliance in this regard. However, it will not be fair for Members to see the
U.S. industries taking the U.S. administrative or congressional problems as, a buffer or even a leverage
against competition from foreign industries.
Does the U.S. government intend to redouble its efforts with the Congress to secure effective
compliance, which will help not only to uphold U.S. credibility in the WTO but also to preserve its
business environment of competition in the long run?
ANSWER:
The U.S. compliance record in WTO dispute settlement is very good. As the top user
of the dispute settlement system, both as complainant and respondent, the United States has been called
upon to implement in numerous disputes. The United States has complied with the vast majority of
DSB recommendations and rulings in these disputes, in nearly all cases within the “reasonable period
of time” for doing so. U.S. efforts to comply have been extensive and persistent and will continue in
that manner. Over the past two years, these efforts have paid off in legislation implementing DSB
recommendations and rulings regarding FSC, the 1916 Act, CDSOA and Cotton. Over the past two
years, these efforts have paid off in legislation implementing DSB recommendations and rulings in the
FSC, 1916 Act, CDSOA and Cotton disputes, and Congress is now in a position to focus on the
remaining cases.
[China]
Separate Rate Policy on ADP
Question: (p. 38)
The Department of Commerce (DOC) of the U.S. adopts a “Separate Rate policy” in the Anti-dumping
investigations involving so-called “non-market economy (NME)” factors. This Separate Rate policy
assumes that all the enterprises in the NME country are controlled by the government and therefore
have to accept the nationwide rate, unless an enterprise can prove that its exports are not controlled by
the government.
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Please provide the legal foundation of the Separate Rate policy and its consistency with the
WTO/ADP Agreement.
How would the DOC guarantee the legitimate rights of exporters from members not being
recognized as market economies are not further jeopardized?
ANSWER:
As part of its longstanding practice in proceedings involving non-market economy
(NME) countries, the U.S. Department of Commerce begins with a rebuttable presumption that all
companies within the country are essentially operating units of a single, government-wide entity, and
thus should receive a single antidumping duty rate (i.e., an NME-wide rate). The presumption of state
control flows directly from the designation of a country as an NME, as defined by Section 771(18) of
the Act. See also Sigma Corp. v. United States, 117 F. 3d 1401 (Fed. Cir. 1997). The Department of
Commerce recognizes, however, that some firms may operate independently of the government in their
export activities. Firms that can affirmatively demonstrate this independence are eligible to receive a
“separate rate.” When China acceded to the WTO, it accepted Commerce’s NME methodology,
including the presumption of state control and the separate rates test, under Article 15 of its Protocol
until 2016 or until China no longer warrants designation as an NME. Commerce determines eligibility
for a separate rate in the same manner today as upon China accession in 2001.
All exporters from WTO Members that the Department of Commerce has designated as being nonmarket economy countries have an opportunity to demonstrate that they operate independently of the
government in their export activities, and so the Department of Commerce in no ways jeopardizes their
legitimate rights.
[China]
During the period under review, DOC of the U.S. has modified the application procedures for separate
rates, which largely increase the difficulty in application for separate rates.
According to the new Separate Rate policy, does the investigating authority request every
respondent to fill out the application individually, regardless the fact that some of them might be
affiliated, commonly owned or foreign owned?
Does the investigating authority of the U.S. request the exporters to provide the Customs Form
7501, which, however, is possessed by the importers of the U.S.?
How would the investigating authority of the U.S. guarantee the burden of proof is reasonably set?
Due to the differences of domestic regulations in registration of enterprises and custom clearance in
various Members, and due to the difference in operations of various exporters, especially those smalland-medium-sized enterprises of the developing Members, some exporters applying for separate rates
may not be able to provide all the documents requested by the investigating authority. In such
circumstances, would the investigating authority consider handling the requests of documents in
a flexible manner?
What is the time limit to submit the requested documents when applying for separate Rate?
Would the investigating authority consider this time limit adequate for the exporters, especially
those small-and-medium-sized enterprises of non-English-speaking developing Members, to
prepare and submit all the requested documents? If not, would the investigating authority
consider to extend the time limit according to Article 6.1 of WTO/ADP Agreement?
Would the U.S. consider to adjust or even abolish this separate rate policy?
Would the investing authority of the U.S. take measures to guarantee the maximized justice in
the implementation of this separate rate policy?
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ANSWER:
The U.S. Department of Commerce requires every respondent to fill out the application
individually. The Department requests that exporters provide, insofar as they are able, Customs Form
7501. The Department of Commerce requires that firms submit various documents to the Department
demonstrating that the exporter in question qualifies for a separate rate. If firms can show that these
documents are not available, Commerce may accept alternative documentation or an affidavit.
[China]
New Sampling Method of the Administrate Review of Anti-dumping Measures
Question: (p.43 para.95)
DOC of the U.S. has adopted a new probability-proportional-to-size sampling method to select the
mandatory responding enterprises in the administrate review of Anti-dumping measures since May
2005. According to this new method, some large exporters might not be able to be selected and
therefore be forced to subject to an unknown average rate. While in contrast, those small enterprises
which lack adequate resources and are not ready to undertake the whole process of review might be
selected to be the mandatory respondents. In addition, due to the uncompetitive cost and price of these
small enterprises, the dumping margin are likely to be higher than normal, therefore the average duties
are also likely to be increased unfairly.
Will this new sampling method increase the uncertainty and difficulty of the administrative
review of the anti-dumping cases?
ANSWER:
As discussed below, the Department of Commerce has the authority under both the
U.S. antidumping law and consistent with the WTO Antidumping Agreement to limit its examination
when it is impracticable to examine each respondent firm individually. Whether the Department
employs sampling or chooses the firms that account for the largest volume of exports under review, all
firms in an antidumping review should be prepared to participate fully. The Department cannot select
firms to participate in a review based on which of them are better prepared to participate. In certain
circumstances, the Department has granted special consideration to help smaller firms who are not
represented by counsel, e.g., extra guidance in submitting information, extended deadlines, etc.
What is the justification of this new method? What is the legal basis of this new method? What is
the consistency of this new method with the WTO/ADP Agreement?
ANSWER:
When it is impracticable for the Department of Commerce to examine each respondent
firm individually in an antidumping duty investigation or administrative review, both the Antidumping
Agreement and the U.S. statute and regulations allow for limiting the number of respondent firms
through either a statistically valid sample or by choosing those that account for the largest volume of
exports of subject merchandise under investigation or review. See Section 777A of the Act and Article
6.10 of the Antidumping Agreement. Under U.S. Antidumping law, and consistent with the
Antidumping Agreement, the Department has the authority to determine which of these two methods
by which it limits the number of firms as well as which statistically-valid sampling methodology to use.
[China]
The Prices of Market-based Purchase of Input
During the period under review, the investigating authority of the U.S. has made changes in using
market-economy prices to value the factors of production in NME antidumping cases. The new practice
requires that the majority (i.e., over 50%) of the particular input was purchased from market-economy
suppliers so that this purchased price to be used to value all consumption of a particular input, whereas
in the original method, this proportion was only 15-20%.
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What is the reason and legal basis of this increase from 15-20% to 50% of the market-economy
prices in the calculation of the prices of the input?
Please explain the consistency of this change with the WTO rules.
ANSWER:
The Department of Commerce has not yet changed how it uses market-economy input
prices in NME antidumping cases. While Commerce has requested public comment on various
potential changes to how it does this, the Department is still considering the comments it has received.
[China]
The actual market-based prices of certain input shall be regarded as “best available information” so
long as this market–based price is reliable. And the investigating Authority’s decision of whether to use
an NME respondent’s actual purchase prices should not focus on the quantity of these purchases but on
their bona fide nature.
Please explain why the investigating authority use surrogate values when actual, market-economy
prices are available. What is the consistency of this practice with the Article 2.4 of WTO/ADP
Agreement?
ANSWER:
Where an NME producer purchases inputs from market economy suppliers and pays in
a market economy currency, the Department normally uses the actual price paid by the NME producer
for these inputs to value the input in question, where possible. See Section 773(c)(1) of the Act; 19
CFR 351.408(c)(1). The Department requires that the quantity of the input be “meaningful”, because
sales of small quantities cannot be relied upon to constitute a representative price and so constitute the
“best available information” under section 773(c)(1) of the Act. Additionally, the Department
disregards market economy input purchases when the prices for such inputs may be distorted or when
the facts of a particular case otherwise demonstrate that market economy input purchase prices are not
the best available information. Provided that conditions described above do not hold, the Department
will normally use market-economy input prices in its calculations of normal value in NME cases.
ADA Article 2.4 does not speak to the use of market-economy inputs in NME cases, which is one
component of Commerce’s NME methodology. When China acceded to the WTO, it accepted
Commerce’s NME methodology under Article 15 of China’s Protocol until 2016 or until China no
longer warrants designation as an NME.
[China]
The Federal Circuit has held that where “input prices are market determined, accuracy, fairness, and
predictability are enhanced by using those prices., using surrogate values when market-based values are
available would, in fact, be contrary to the intent of the law.”
How will the investigating authority comment on this decision?
ANSWER:
The statement quoted above was originally made by the U.S. Department of Commerce
itself in Final Determination of Sales at Less Than Fair Value: Oscillating Fans and Ceiling Fans from
the People's Republic of China, 56 FR 55271, 55274-75 (October 25, 1991). The Federal Circuit
repeated and affirmed this statement in Lasko Metal Prods. Inc. vs. United States, 43 F.3d (Fed. Cir.
1994). The logic of these statements, that the Department will use market-economy input prices when
they are available and not distorted, still forms the basis of the Department’s methodology in this area
today.
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[China]
Sunset Review
Question: (p.43 para. 96)
What measures would the U.S. take, in line with sunset clause, some anti-dumping measures which had
lasted for a long period of time?
ANSWER:
Under U.S. law, which is consistent with the WTO Antidumping Agreement, the
United States conducts a sunset review every five years that an antidumping measure is in place. The
United States will revoke the measure, unless as a result of the sunset review the Department of
Commerce finds that revocation would be likely to lead to continuation or recurrence of dumping and
the U.S. International Trade Commission finds that revocation would be likely to lead to continuation
or recurrence of injury, the United States will revoke the measure.
[Chinese Taipei]
Question 7 (pages 39-40, paragraphs 81-83)
Anti-dumping measures have been the main means by which the US government has protected its
domestic market from unfair trade. According to the data in the Secretariat report and USDOC’s
website, the US initiated about 44 anti-dumping investigations per year between 2000-2004. During
the same period, it terminated only 20 cases, resulting in an increase in the total number of antidumping measures in force over the said period. However, the trend in recent years of decreasing
incidences of anti-dumping investigation initiations is a positive sign of less frequent use of the antidumping remedy by US domestic industries.
One rationale for justifying the use of anti-dumping measures is that exporters may adopt a dumping
strategy to exploit foreign markets if their own domestic market were protected by tariff and non-tariff
barriers. Accordingly, does the US think that the freer trade that could result from the Doha Round
would reduce the need to use anti-dumping measures? What experiences does the US have in this
context with countries with which it has an FTA relationship?
ANSWER:
It is premature at this point to speculate as to whether freer trade resulting from the
Doha Round will reduce the need for Members to use trade remedies. As the United States stated in an
October 2002 submission (TN/RL/W/27) to the WTO Negotiating Group on Rules, trade liberalization
resulting from the Uruguay Round has led to increased trade overall, but has left markets more open to
the effects of unfair trade practices, while eliminating some of the less transparent means that Members
had previously used to deal with these problems, so it is not surprising that trade remedies have become
important to a broader universe of WTO Members. As further emphasized in the same U.S.
submission, it is essential that Members address directly the subsidies and other trade-distorting
practices that lead to unfair trade; addressing these root causes directly can help to minimize the need
for Members to resort to trade remedy measures.
The United States has FTAs with a number of countries, including with some of our largest trading
partners. The existence of an FTA generally does not affect our rights and obligations under the WTO
with respect to the application of antidumping and countervailing duty measures, and our experiences
have been largely the same with FTA partners as with countries with which we do not have an FTA.
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Question 8 (page 43, paragraph 97)
Some of the factors or criteria that the USDOC normally relies upon in determining the likelihood of
the continuation or recurrence of dumping in sunset reviews are illustrated in the report. However,
according to the requirements of Article 11.3 of the WTO Anti-dumping Agreement, the investigating
authority shall review the likelihood of continuation or recurrence of injury as well.
Could the US please explain what factors or criteria the USITC considers or relies upon in making a
determination of the likelihood of injury?
ANSWER:
U.S. law directs the U.S. International Trade Commission to consider numerous factors
in making determinations of likelihood of continuation or recurrence of material injury in five-year
reviews. Specifically, the U.S. statute directs the ITC to consider the likely volume, likely price
effects, and likely impact on the domestic industry if the order under review is revoked. 19 U.S.C. §
1675a(a). With respect to likely subject import volume, the statute directs the ITC to consider: (1)
likely increases in production capacity or existing unused capacity in the exporting country; (2) existing
and likely increases in inventories of subject merchandise; (3) the existence of barriers to importation
to subject merchandise in countries other than the United States; and (4) the potential for product
shifting. With respect to likely price effects of the subject imports, the statute directs the ITC to
consider: (1) the likelihood of significant underselling and (2) the likelihood of significant pricedepression or -suppression. With respect to likely impact of subject imports on the domestic industry,
the statute directs the ITC to consider likely declines or negative effects in output, sales, market share,
profits, productivity, return on investments, utilization of capacity, cash flow, inventories, employment,
wages, growth, ability to raise capital, and investments, and likely negative effects on the existing
development and production effects of the industry. The statute further directs the ITC to consider
generally: (1) its prior injury determinations; (2) whether any improvement in the state of the domestic
industry is related to the order(s) under review; (3) whether the domestic industry is vulnerable to
material injury upon revocation of the order(s) under reviews; and (4) any Commerce findings on duty
absorption. The ITC may consider the magnitude of the margin of dumping or net countervailable
subsidy determined by U.S. Department of Commerce, and is directed to consider information
regarding the nature of any countervailable subsidy.
[Colombia]
2. Safeguards: In accordance with paragraph 103, subparagraph a) Title V), the Foreign Trade Act of
1974 limits the maximum applicable duty to an increase of 50% ad valorem of the current rate (if any
exists). Does this mean that if it is determined that it is feasible to adopt a safeguard measure for a
product with reduced taxes, the tariff increase could be unlimited, since the restriction of the
aforementioned Act refers explicitly to products with tariff levels above 0%? Could it be interpreted
that the reduced tax products could not be eligible for tariff safeguard measures?
ANSWER:
Section 203(e)(3) of the Trade Act of 1974 states that “no action may be taken under
this Section which would increase a rate of duty to (or impose a rate) which is more than 50 percent ad
valorem above the rate (if any) existing at the time the action is taken.” The reference to “if any” in
Section 203(e)(3) thus makes clear that this provision contemplates and may apply to a product even
where there is no rate of duty existing at the time the action is taken. In such a case, the rate of duty
may not be raised to a rate above 50 percent ad valorem. It is accordingly not correct that that the
increase in tariff could be unlimited for such a product, nor is it correct that such products would not be
eligible for a tariff safeguard measure. Furthermore, it is not correct that the increase in tariff under a
safeguard measure could be unlimited for a product subject to reduced tariffs, nor is it correct that
products subject to reduced tariffs could not be eligible for tariff safeguard measures.
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[Hong Kong China]
Anti-dumping
(WT/TPR/S/160, P. 39, Paras. 81 - 82 and Table III.3)
2.
Note that in 2004, while the number of investigations initiated is lower than that of 2002 or
2003, the incidence of provisional measures is much increased from 54% in 2002 and 2003 to 92%, i.e.
24 out of the 26 AD investigations initiated resulted in the application of provisional measures. Can
the US please clarify if there is a change in policy or practice or any other reason for the significant
increase?
ANSWER:
In accordance with Article 7 of the Antidumping Agreement, the United States applies
provisional measures only if preliminary determinations have been made of dumping and consequent
injury. These determinations are made by the Department of Commerce and the International Trade
Commission, respectively. The data cited in the question do not reflect any change in policy or
practice; they reflect the determinations of the two agencies and the fact that there was a higher
proportion of negative preliminary determinations among investigations initiated in 2002 and 2003
than among those initiated in 2004. In addition, of the investigations initiated in the 2002-2003 period,
six were terminated upon withdrawal of the petitions before preliminary determinations by both
agencies were made.
[Hong Kong China]
(WT/TPR/S/160, P. 42 - 43, Paras. 93 - 94)
3.
Note that suspension agreements were entered into in respect of certain AD cases. Grateful to
know if this option is invariably offered to the exporting sides in all AD cases. If not, what are the
criteria for offering or adopting this option?
ANSWER:
The opportunity to request a price undertaking is provided for in U.S. law and
regulations and is available in all investigations. When a request for an undertaking is made in
accordance with U.S. law and regulations, the Department of Commerce gives it serious consideration.
Whether an undertaking is entered into in any particular case depends upon whether the parties are
willing to enter into an undertaking that meets the conditions of U.S. law (which are consistent with the
requirements of the Antidumping Agreement), and whether the undertaking is practical and
administrable.
[India]
Byrd Amendment:
Q.2
On February 1, 2006, the US Congress approved the repeal of Byrd amendment with a
transition clause that the repeal would be effective from October 1, 2007. While India welcomes the
action taken by US, we understand that the transition clause also provides that the collected AD &
CVD margins up to October 1, 2007 continue to be distributed after this date. US authorities are
requested to clarify its stand.
ANSWER:
Subsection (a) of section 7601 of the Deficit Reduction Act provides that the CDSOA
is repealed “effective upon the date of enactment of this Act”. Subsection (b) provides that “[a]ll duties
on entries of goods made and filed before October 1, 2007, that would, but for subsection (a) of this
section, be distributed under [the Continued Dumping and Subsidy Offset Act of 2000 (“the CDSOA”)]
shall be distributed as if [the CDSOA] had not been repealed by subsection (a).”
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[India]
Q.3
US customs introduced a new provision requiring continuous bond from US importers of
agriculture and aquaculture products liable to antidumping duty since July 2004. As per the new
requirements, the bond should cover one year’s anticipated antidumping duty and it should be given in
addition to cash deposit of antidumping duty at the time the concerned shipments enter into US. Due to
the additional bonding requirement imposed by US customs, India’s shrimp exports have been
adversely affected. The magnitude of financial burden faced by Indian exporters has increased
tremendously. This is a non-tariff barrier. Would US agree to repeal this additional burden?
ANSWER:
CBP introduced the new bonding guidelines to address the very real threat of noncollection of antidumping and countervailing duties. Over the past several years, CBP has been unable
to collect from the importers of record $500 million in antidumping and countervailing duties that are
lawfully due. Approximately 78 percent of that amount stems from antidumping and countervailing
duty orders in the agriculture and aquaculture sector. CBP is closely monitoring import trends and the
operation of the directive and is prepared to make adjustments as appropriate.
[Indonesia]
Anti dumping (page 39 of the Report)
1. It is the fact that the US is one of the most active countries using antidumping actions to protect
its domestic industries from unfair imports products. The Report says that at the end of 2004
AD orders were applied to imports from 44 countries and of some 273 AD duty orders, 55%
were applied on iron and steel products and the rest were applied on chemicals,
pharmaceuticals, agriculture and forestry products. Based on our observation, for a quite
lengthy time, most of the US antidumping actions are focused on import of steel and iron
products to protect inefficient domestic industries in the US market. Indonesia is seeking
further clarification on this observation.
ANSWER:
The United States applies its AD/CVD laws in a manner consistent with its obligations
under the WTO, and provides relief only for those industries that have been found to be injured by
reason of dumped imports or unfairly subsidized merchandise. The particular sectors identified above
have been the subject of anti-dumping orders from a number of WTO Members, and not merely the
United States.
[Japan]
(iii) Anti-dumping and countervailing actions
Q10. Continued Dumping and Subsidy Offset Act (p.36, para.74)
The Government of Japan welcomes that in February 2006 the Deficit Reduction Omnibus
Reconciliation Act 2005, which contains the provisions repealing the CDSOA, was approved by the
U.S. congress and was signed into law by the President of the U.S. Though this is a significant step
forward, Japan deeds that the U.S. has not fully taken the actions necessary to implement the rulings
and recommendations by the WTO Dispute Settlement Body (DSB) because the Act decrees that duties
on entries of goods made and filed before October 1, 2007 shall be distributed; thus the repeal of the
CDSOA will not have immediate effect and is postponed by a transitional clause. This means that,
although the CDSOA was repealed on its face, in substance it will remain in force for some time by
virtue of the transitional clause. Therefore, Japan urges the U.S. to immediately bring it fully in
compliance with the DSB’s recommendations and rulings. Japan also urges the U.S. to terminate the
aforementioned distribution immediately. In these respects, please indicate the specific views of the
Government of the United States.
ANSWER:
The Senate voted to approve the Deficit Reduction Act, which includes a provision
repealing the Continued Dumping and Subsidy Offset Act, by a vote of 51 to 50 (with the Vice
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President breaking the tie) on December 31, 2005. The House of Representatives voted to approve the
Act on February 1, 2006, by a vote of 216 to 214. The President signed the Act into law on February 8,
2006, and, at that point, the United States took all actions necessary to implement the rulings and
recommendations of the DSB.
The immediate termination of distributions to affected domestic producers would require a separate and
additional act of Congress.
[Japan]
Q11. Lawsuit related to the Anti-Dumping Act of 1916（p.38, para.77)
The Anti-dumping Act of 1916 was repealed on December 3, 2004. However, the Government of
Japan is concerned about the ongoing lawsuit against a Japanese company under the Anti-dumping Act
of 1916. The Government of Japan urges the Government of the United States to work on the judicial
authorities, through actions such as filing Amicus Curiae Brief, to prevent damages being inflicted
upon the Japanese company by a judgment based on the Act that was found inconsistent with the WTO
agreement and repealed already. In this regard, please indicate the specific views of the Government of
the United States.
ANSWER:
The United States takes note of Japan’s request. In this regard, we note that Japan has
filed its own amicus brief in which it asked the appeals court to require proof of predatory intent under
the 1916 Act. However, during the WTO dispute settlement proceedings, Japan asserted that the 1916
Act did not require predatory intent, in an attempt to show that the 1916 Act is an impermissible
“specific action against dumping”, rather than a competition law. We also note that the Japanese
company at issue here has been found to have engaged in deliberate misconduct during the
antidumping proceedings (e.g., by making secret rebate deals with customers to conceal dumping).
[Japan]
Q12. Anti-Dumping measures on Certain Hot-Rolled Steel Products from Japan (DS184) (p.39,
paras.82 to 83)
With regard to the dispute regarding the anti-dumping measures on certain hot-rolled steel products
from Japan, the measures taken by the United States were found inconsistent with the WTO Agreement
in August 2001. However, the Government of the United States has not fully implemented the WTO
Dispute Settlement Body (DSB)’s recommendations and rulings that called for certain legislative
amendments. More specifically, the United States’ Tariff Act of 1930 requires the inclusion of
margins, concerning the companies under investigation, established in part based on “facts available”
in calculating “all others’ rate”. We are aware that a bill has been introduced in the US House of
Representatives (H.R.2473) that seeks to implement the DSB’s recommendations and rulings with
respect to the U.S. anti-dumping statute in May 2005. Please explain the present status of the
discussions in the Congress.
ANSWER:
The Administration is currently working with the U.S. Congress to identify appropriate
legislative vehicles to complete implementation in DS184.
[Japan]
Q13. Softwood lumber from Canada（p.40, para.85 and p.42, para.92）
Japan and the United States are among the main import countries of softwood (coniferous) lumber from
Canada. We recognize from this report that the United States is in consultations with Canada
concerning the review of CVD (countervailing duties) orders on certain softwood lumber products
from Canada as of October 2005, and the WTO panel in November 2005 found that the USITC’s
Section 129 injury determination was not inconsistent with the AD (Anti-dumping) and SCM
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(Subsidies and Countervailing Measures) agreement. In this regard, please indicate the present status
as well as the future prospects of these negotiations.
ANSWER:
this dispute.
On July 1, 2006, the United States and Canada reached a bilateral agreement to settle
[Japan]
Q14. Zeroing (pp .40-41 paras. 87-88)
The Panel procedure is on-going for the case under which Japan challenges the “zeroing” procedures of
the United States. The zeroing procedures in original investigations have been already found
inconsistent with the WTO Agreement by the Appellate Body in EC—Anti Dumping Duties on Imports
of Cotton-type Bed Linen from India and United States—Final Dumping Determination on Softwood
Lumber from Canada. In addition, the Panel report for the case where the EC challenged the United
States’ zeroing methodologies was issued and circulated to the Members in October 2005. In the
report, the Panel found that the U.S. zeroing methodologies in original investigations were inconsistent
with the WTO Agreement on both an “as such” and “as applied” basis. The Government of Japan
deems zeroing procedures, not only in the original investigations but in any anti-dumping proceedings,
inconsistent with the WTO Agreement, and urges the Government of the United States not to apply
zeroing procedures in any anti-dumping proceedings. In this regard, please indicate the specific views
of the Government of the United States.
ANSWER:
As Japan is aware, the Panel in DS322 (the dispute between Japan and the United
States) is in the process of completing its work. The United States has made clear its specific views on
this issue in its submissions before the Panel in DS322, as well as in its submissions to the Appellate
Body in the appeal of DS294, to which Japan has had access as a third party.
[Japan]
Q15. Model-Matching on administrative reviews (p.43, para.95)
(1) In calculating dumping margins, one needs to classify different models of the product in question
and its domestic “like product”, and then determine a domestic product model that is “identical” to or
“closely resembling” the export product model (so-called “model-matching”). In the annual review of
anti-dumping measures on ball bearings imported from Japan in FY2003/2004, the Department of
Commerce announced without any convincing reasons the revision of the model matching
methodology that had been used without any significant problems in the past fourteen anti-dumping
reviews. The new methodology proposed by the Department of Commerce, which compares prices of
dissimilar products, will reduce the predictability of the results of anti-dumping investigations, and
impose excessive burdens on Japanese exporters to submit an enormous amount of domestic sales and
price data. In addition, the Government of Japan is deeply concerned that reviews through the new
methodology are applied retroactively to the transactions prior to the introduction of the methodology.
Japan would like to ask the Government of the United States why the retroactive application to imports
before entry into force of the new methodology can be allowed, taking into account the basic principle
of non-retroactivity.
(2) Also, Japan urges the U.S. to fully recognize the evident unfairness of the new methodology that
causes the aforementioned problems, and to rescind the revision of the methodology. In this regard,
please indicate the specific views of the Government of the United States.
ANSWER:
The U.S. Department of Commerce (Commerce) explained fully its reasons for
revising its model-matching methodology in this case in the Federal Register notice of final results
published on September 16, 2005. [70 FR 54711] As noted in the final results, all parties were given
ample notification that Commerce was considering a modification. Commerce solicited extensive
comments from interested parties regarding this new methodology and made revisions to the
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methodology to incorporate many of those comments and further improve the methodology. Both the
new methodology and the U.S. administrative review process are consistent with U.S. obligations
pursuant to the Antidumping Agreement.
[Japan]
Q16. Changed circumstances review of the determination of the past administrative review (p.43,
para.95)
With regard to the changed circumstances review of the revoked order on large newspaper printing
presses and components thereof (LNPPs) initiated by the Department of Commerce (the DOC) in May
2005, it was announced in the final determination on 2 March 2006 that the DOC, (1) revised the
margin of Tokyo Kikai Seisakusho(TKS) for the 1997-1998 review to apply a rate of 59.67 percent, (2)
rescinded the anti-dumping duty order for TKS in January 2002, and (3) will reopen for reconsideration
a sunset review in 30 days.
The revocation of the order on LNPPs in 2002 was based on the fact that the domestic industry
withdrew its interest in the sunset review proceedings, and this is not at all relevant to the reason why
the new sunset review will be initiated, which is "TKS's deliberate misconduct".
In addition, if the revoked order is restored by the reconsideration, it will affect not only the company
subject to the changed circumstances review, but also other Japanese exporters. This would seriously
undermine the predictability of the normal business transactions of the exporters. The Government of
Japan is also concerned with this aspect. With respect to reconsidering the sunset review based on the
irrelevant reason of the revocation of the order in the past sunset review by the Government of the
United States, please indicate the reason why it is consistent with Article 11.3 of the AD Agreement.
ANSWER:
As Japan knows, the United States conducts its sunset reviews on an order-wide basis,
and the Appellate Body has agreed that order-wide sunset reviews are consistent with Article 11.3 of
the AD Agreement. The Department of Commerce takes into account company-specific revocations in
sunset reviews. Therefore, a company-specific revocation that was based on misconduct is germane to
the sunset review's order-wide determination. Japan may recall that the U.S. Court of Appeals for the
Third Circuit concluded that TKS concealed rebates, destroyed documents and misled the Department
in its antidumping duty proceeding. Article 11.3 does not prohibit Members from ensuring that
determinations are conducted on the basis of an accurate factual record. To the extent Japan is
suggesting the contrary, the United States respectfully disagrees.
[Japan]
Q17. Sunset Reviews (p.43, paras. 96-101) [DOC]
The United States sunset review procedures, by their related legislations, regulations, policy bulletins
and in their actual implementations, maintain anti-dumping measures in principle, and terminate them
only in exceptional cases. Although the WTO Dispute Settlement Body rejected Japan’s claim for the
corrosion-resistant carbon steel flat products case, Japan still deems the United States’ sunset review
procedures not consistent with the WTO Anti-dumping Agreement. Indeed, many anti-dumping
measures are not terminated in five years and remain in force for a long time. We understand that the
anti-dumping duty on polychloroprene rubber has continued for more than 30 years and users in the
United States complain about this long-term measure. Japan urges the United States to terminate antidumping measures within five years, in principle, even before anti-dumping negotiations under WTO
Doha Development Agenda strengthen regulations related to the sunset legislation. In this regard,
please indicate the specific views of the Government of the United States.
ANSWER:
The United States’ procedures on sunset reviews are consistent with its WTO
obligations and have been upheld in several WTO disputes. We disagree with Japan’s characterization
of U.S. sunset review procedures. Of the 378 sunset reviews completed by the end of 2005, almost half
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(188) have resulted in the revocation of the antidumping or countervailing duty order. Thus, Japan’s
contention that antidumping and countervailing duty orders are terminated only in “exceptional cases”
under U.S. sunset procedures is not an accurate characterization.
[Korea]
1. We welcome the news in paragraph 79 on page 38 of the Secretariat Report that Legislation to repeal
the Byrd Amendment was passed by both houses in Congress and would be soon presented to the
President for signature. Despite the ongoing US legislative developments to comply with the WTO
adjudication against the Byrd Amendment, it is reported that a certain Korean exporter, who was
determined to have committed dumping in a preliminary anti-dumping investigation by the U.S.
government, was asked to pay for the anti-dumping bond required by the Byrd Amendment. We also
note from other sources that the amendment will be ineffective only after October 2007 in accordance
with the recently drafted transitional clause.
We would like to know what is a specific timeframe that the US government is planning to complete
the process for repealing the Byrd Amendment. Please confirm that the legislation to repeal the
Amendment includes transitional clause mentioned above. If so, does the US government have any
plans to rectify the distortions caused by it during the transitional period, like the Korean export’s case?
ANSWER:
Subsection (a) of section 7601 of the Deficit Reduction Act provides that the CDSOA
is repealed “effective upon the date of enactment of this Act”. Subsection (b) provides that “[a]ll duties
on entries of goods made and filed before October 1, 2007, that would, but for subsection (a) of this
section, be distributed under [the Continued Dumping and Subsidy Offset Act of 2000 (“the CDSOA”)]
shall be distributed as if [the CDSOA] had not been repealed by subsection (a).”
The President signed the Act into law on February 8, 2006, and the Administration will implement the
Act. It is not clear what distortions Korea refers to in its question. Neither the CDSOA nor section
7601 of the Deficit Reduction Act requires the payment of any anti-dumping bond.
[Mexico]
7. Regarding the Petition Counseling and Analysis Unit described in paragraph 72, could the United
States indicate whether:
(a)
Said Unit provides guidance to U.S. companies on submitting their initial petitions; it
supplies them with trade and tariff data (according to the ITA website). What is the budget of this unit?
Does it maintain a directory of U.S. companies and if so, if it available for consultation by companies
interested in submitting an application?
ANSWER:
The Petition Counseling Analysis Unit (PCAU) is a small unit, and there is no separate
specific line item for it in the budget of Department Commerce’s Import Administration. The PCAU
maintains a database of companies it has counseled but, as with all specific information concerning prepetition counseling; it is strictly confidential and not available for public disclosure.
(b)
The same Internet website, in the section on Most Frequently Asked Questions,
mentions section 771(4)(E) of the U.S. Trade Act, “permitting harvesters of an agricultural product in
certain situations to file a petition against a finished agricultural product in conjunction with the
processors of that product.” Could the United States explain how this provision works, and in how
many cases involving agricultural products it has been used? Which cases resulted in the imposition of
duties in the final determinations?
ANSWER:
Section 771(4)(E) of the Trade Act provides that, under certain circumstances set forth
in the statute, in an investigation involving a processed agricultural product produced from a raw
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agricultural product, the producers or growers of the raw agricultural product may be considered part of
the industry producing the processed product. The Department of Commerce applied this provision in
the initiation of antidumping investigations on Certain Frozen and Canned Warmwater Shrimp from
Brazil, Ecuador, India, the People’s Republic of China, Thailand, and the Socialist Republic of
Vietnam, as well as the initiation of an antidumping investigation on Certain Orange Juice from Brazil.
[Mexico]
8. Paragraph 73 indicates that although the USDOC has the authority to self-initiate investigations, it
seldom does. Could the United States tell us how many investigations have been initiated by the
Department of Commerce? Which of these cases resulted in the imposition of duties in the final
determinations?
ANSWER:
Under U.S. law, the Department of Commerce has the legal authority to self-initiate an
antidumping or countervailing duty investigation when it has the factual basis to show that an
investigation is warranted. The WTO Antidumping and Subsidies Agreements, like the predecessor
Tokyo Round Antidumping and Subsidies Codes, limit self-initiation to instances in which there are
“special circumstances.” While the U.S. statute does not define what “special circumstances” are, the
Department has exercised its authority to self-initiate in a manner consistent with the concept of
“special circumstances.” Since the WTO Agreement entered into force, the Department has not selfinitiated a single antidumping or countervailing duty investigation. Prior to entry into force of the
WTO Agreement, the Department self-initiated cases on the following three occasions: Steel from
various countries in 1979-82; Semiconductors from Japan in 1986; and Softwood lumber from Canada
in 1991. In the case of Softwood Lumber, a dispute settlement panel established under the Tokyo
Round Subsidies Code found that the Department’s self-initiation was not inconsistent with the
provisions of the Code. All of these cases resulted in the imposition of duties in the final
determinations.
[Mexico]
9. Regarding the Byrd Amendment (paragraphs 74, 77, 78, and 79), until what date will antidumping
and countervailing duties that have been collected be distributed? Does the United States have any
information on the amounts collected and distributed in 2005? What official source or sources of
information are available to the public for consultation with regard to these data?
ANSWER:
Subsection (a) of section 7601 of the Deficit Reduction Act provides that the CDSOA
is repealed “effective upon the date of enactment of this Act”. Subsection (b) provides that “[a]ll duties
on entries of goods made and filed before October 1, 2007, that would, but for subsection (a) of this
section, be distributed under [the Continued Dumping and Subsidy Offset Act of 2000 (“the CDSOA”)]
shall be distributed as if [the CDSOA] had not been repealed by subsection (a).”
Information from U.S. Customs and Border Protection on the amounts collected and distributed for
fiscal year 2005 under the CDSOA is available at the following website:
www.cbp.gov/xp/cgov/import/add_cvd/cont_dump/cdsoa_05/
[Mexico]
10. Paragraphs 81-84 and Table III.3 offer useful and relevant statistics on the application of
antidumping measures. The end of paragraph 83, in particular, mentions that the value of imports
affected by antidumping measures between 1980 and 2003 accounts for 0.4% of total imports. Are
there any academic studies available that would confirm the impression that trade in goods subject to
antidumping measures drops significantly not only while such measures are in effect but also even as
soon as the investigations begin, i.e., the so-called “chilling effect” of antidumping measures? To give
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us a more realistic idea of the effect of such measures, I believe it would be useful to have information
on trade in goods subject to such measures, before and after they are applied. With respect to goods
that are currently subject to antidumping and countervailing duties, but which were not subject to any
such duties between 1996-2001, could the U.S. provide us with figures on the annual imports of all
such products for the period between 1996-2005?
ANSWER:
The United States does not have available the specific, detailed trade data mentioned.
As a general matter, antidumping and countervailing duty measures address unfairly traded goods, and
should not have a “chilling effect” on fairly traded goods.
[Mexico]
11. Paragraph 94 notes that, as of December 31, 2004, the United States had two price undertakings in
place, compared with 273 orders to impose antidumping duties. The price undertakings are an
alternative solution to antidumping duties; they are infrequently applied, but if applied properly,
eliminate the harm caused to the domestic industry due to dumping, while minimizing the harmful
effects of antidumping measures on exporting members. What are the most common reasons why this
alternative solution is not used by the United States? What conditions must be met in order for a price
undertaking to be offered?
ANSWER:
The opportunity to request a price undertaking is provided for in U.S. law and
regulations and is available in all investigations. When a request for an undertaking is made in
accordance with U.S. law and regulations, the Department of Commerce gives it serious consideration.
Whether an undertaking is entered into in any particular case depends upon whether the parties are
willing to enter into an undertaking that meets the conditions of U.S. law (which are consistent with the
requirements of the Antidumping Agreement), and whether the undertaking is practical and
administrable.
[Norway]
3: Norway continues to be concerned with the United States' active use of trade remedies, as referred to
in the Secretariat’s report. Norwegian exports of fish and fish products are effectively hindered by the
anti-dumping and countervailing measures imposed on fresh, whole Norwegian salmon. In our view,
there is no basis for this measure, which was imposed in 1991, and continued after a “Sunset review” in
January 2006. Norway is concerned with the US practice relating to “Sunset reviews”, which appears
to be a purely mechanical procedure considering the fact that the Department of Commerce has never
lifted any AD-measures where American economic interests have been involved. We would like to
know what the United States intend to do in order to update the “Sunset review”-practice in order to
make it a functional review mechanism?
ANSWER:
We disagree with Norway’s characterization that the United States’ sunset review
procedures are a "purely mechanical procedure." Of the 378 U.S. sunset reviews completed by the end
of 2005, almost half (188) have resulted in the revocation of the antidumping or countervailing duty
order. The United States’ procedures on sunset reviews are consistent with its WTO obligations and
have been upheld in several WTO disputes.
[Switzerland]
Anti-dumping and countervailing actions
(a) Legislation and administration
Para. 73: The Secretariat’s report indicates that although the U.S. Department of Commerce (USDOC)
has the authority to self-initiate AD and CVD investigations, it seldom does. Could the U.S. authorities
explain under which conditions, USDOC might be self-initiating AD or CVD investigations?
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ANSWER:
The U.S. Department of Commerce (the Department) has the legal authority to selfinitiate an antidumping or countervailing duty investigation under U.S. law when it has the factual
basis to show that an investigation is warranted. The WTO Antidumping and Subsidies Agreements
limit self-initiation to instances in which there are “special circumstances,” and the Agreement on
Agriculture contains provisions relevant to initiation of CVD investigations on agricultural products.
While the U.S. statute does not define what “special circumstances” are, the Department has interpreted
this provision narrowly and as a result has self-initiated cases on only the following three occasions in
the last 20 years (out of almost 1,000 total cases): (1) steel from various countries in 1979-82; (2)
semiconductors from Japan in 1986; and (3) softwood lumber from Canada in 1991. U.S. law requires
that certain requirements be met before an AD or CVD case can be initiated, both for self-initiated and
petition-based cases: e.g., there must be evidence of dumping or subsidies; and there must be evidence
that the U.S. industry is suffering injury by reason of the imports. If the necessary requirements for
self-initiation are met, self-initiation may be an appropriate response in certain cases, but it would have
to be examined in the light of the facts of the particular situation. In this regard, we note that a GATT
dispute panel found that the 1991 self-initiation in softwood lumber satisfied the “special
circumstances” requirement of the Tokyo Round Subsidies Code.
[Thailand]
10. Paragraph 75 of the Report identifies certain measures that the United States has taken to
determine continuous bond requirements for importers of agriculture/aquaculture merchandise subject
to AD or CVD cases. US law provides that Customs and Border Protection (CBP) may require a bond
or other security “[i]n any case in which bond or other security is not specifically required by law . . . .”
(19 USC §1623(a)). Because US AD/CVD statutes already provide for security of AD/CVD payments
by requiring importers to post cash deposits in the amount of estimated AD/CVD duties on entries of
subject merchandise after issuance of the order (19 USC §§ 1671e(a)(3) and 1673e(a)(3)), we are
concerned that this measure imposes an additional burden on agriculture/aquaculture exporters, and
could be WTO inconsistent. Could the United States please elaborate on the justification of CBP’s
authority to impose additional bond requirements on AD/CVD orders, in particular only on
agriculture/aquaculture merchandise?
ANSWER:
The cash deposits that are made at time of entry are merely estimated AD/CVD duties.
The US antidumping and countervailing duty laws provide for the final assessment of AD/CVD duties
after the completion of an administrative review. CBP introduced the new bonding guidelines to
address the very real threat of non-collection of antidumping and countervailing duties. Over the past
several years, CBP has been unable to collect from the importers of record $500 million in antidumping
and countervailing duties that are lawfully due. Approximately 78 percent of that amount stems from
antidumping and countervailing duty orders in the agriculture and aquaculture sector. CBP’s bonding
guidelines fully comply with U.S. law, as well as U.S. WTO obligations.
[Thailand]
11. When calculating the continuous bond amount, does the United States take into account whether
the covered imports are from developing or least developed countries?
ANSWER:
In formulating the bonding guidelines, CBP has provided a list of objective criteria that
it considers when determining the risk of non-payment of antidumping and countervailing duties in
particular categories of merchandise and with respect to particular cases. The requirement to pay
customs duties that are lawfully due extends to all importers, regardless of the source of the
merchandise. The criteria, which are contained in the August 2005 supplement to the CBP directive,
provide discretion for CBP to consider such factors as the source of the merchandise.
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[Thailand]
12. Paragraph 76 of the Report describes new continuous bond guidelines, which include a
requirement for CBP to increase the continuous bond under certain circumstances after the Department
of Commerce (DOC) issues a preliminary affirmative determination. The Amendment to Bond
Directive 99-3510-004, posted on the CBP website listed in footnote 64, does not list all of the
circumstances that would mandate the CBP to increase the bond, providing only that, “If, at any time
after DOC issues a preliminary affirmative determination in an agriculture/aquaculture case, CBP
detects sudden changes in declared values, claimed country of origin, or declared classification, etc.,
CBP will consider such changes to reflect an increased risk” (emphasis added). To enhance the
transparency and predictability of the application of continuous bonds, could the United States provide
a complete list of all circumstances that would mandate CBP to increase a continuous bond? Please
provide how authorities calculate the amount of increased continuous bond liability. In addition, are
there any circumstances under which the CBP must decrease the bond, and if so, what are they?
ANSWER:
It is extremely difficult to foresee all the circumstances that could prompt CBP to
modify bond amounts. Therefore, in formulating the bonding guidelines, CBP provided a list of
objective criteria that it would consider when determining the risk of non-payment of antidumping and
countervailing duties in particular categories of merchandise and with respect to particular cases.
These criteria include previous collection problems with a particular case or industry and the similarity
to previous cases or industries where CBP has experienced problems with uncollected revenue. Also
included is a provision for higher bonds if CBP detects high-risk activity that may indicate
circumvention of the lawful payment of the antidumping and/or countervailing duties. The guidelines
specify that CBP will monitor bond amounts to determine whether circumstances have changed such
that a particular bond amount should be adjusted up or down or eliminated entirely. The formulas on
bond calculations are contained within the guidelines.
[Thailand]
13. According to paragraph 76, would the United States consider applying the increase in continuous
bond liability (using the same formula as paragraph 75) to other merchandise (apart from
agriculture/aquaculture merchandise) if it is determined to be in circumvention? Please describe how
circumvention is determined. Has the United States ever considered applying its continuous bond
requirements to other merchandise apart from agriculture/aquaculture merchandise? Please identify
any other types of merchandise that has been, is, or would likely to be, under consideration for
continuous bond application.
ANSWER:
To detect circumvention, CBP closely monitors import transactions, including changes
in average unit values of the imported shrimp, suspicious shifts in shrimp import volume from nondumping countries, and mis-classification.
The guidelines are potentially applicable to any antidumping or countervailing duty order where CBP
determines that there is a risk of non-payment of duties, whether due to fluctuations in antidumping
rates, transshipment, undervaluation, or other factors. CBP will assess that risk based on the objective
criteria specified in the August 2005 supplement to the CBP directive. To date, the guidelines have
been applied to the antidumping duty orders on certain frozen warmwater shrimp.
[Thailand]
14. Please describe any progress the US government has made on considering alternative means to
resolve the problem of uncollected AD/CVD revenue and to relieve the difficulties and burden incurred
by foreign exporters.
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ANSWER:
CBP is monitoring import trends and the operation of the directive and is prepared to
make adjustments as appropriate. Additionally, CBP is continually looking at ways to focus its
bonding policy so that it is adequately addressing the highest areas of risk for revenue loss.
[Thailand]
15. The United States has recently begun using “sampling” to select mandatory respondents in AD and
CVD administrative reviews. Thailand is concerned about the WTO-consistency of this methodology
because, among other things, the use of selection frequency as a “weighting” factor may lead to a
sample rate that is not statistically valid, and it appears the United States will include margins based on
“facts available” in calculating an “all others” rate for other respondents.
ANSWER:
When limiting its selection of respondents through the use of sampling, while there are
other valid approaches, in two recent cases the Department of Commerce has chosen to use a
“probability-proportional-to-size” or “PPS” sampling methodology. PPS sampling gives each
respondent a chance of being selected that is proportional to its export volume. Thus, although larger
exporters have a greater chance of being selected, each respondent has some chance of being selected.
This methodology is reflective of the Department’s aim to calculate an antidumping duty rate
applicable to companies in the sampling pool that were not selected for individual examination that
approximates the average margin of dumping of all the exports in the sampling pool.
When the Department employed sampling in the past, it has included any zero or de minimis dumping
margins and any dumping margins based on facts available in the antidumping duty rate that were not
selected for individual examination (We believe this is what Thailand intended to refer to when it
referenced the “all-others rate” although the two concepts are distinct). The most recent antidumping
administrative reviews involving sampling are ongoing, and the Department has not issued final
decisions. Therefore, rates for the non-selected companies in the sampling pool in these reviews have
not yet been calculated. However, the sampling method applied in those reviews will be consistent
with U.S. law and the WTO Antidumping Agreement.
[Thailand]
16. Please describe in detail the “probability-proportional-to-size” methodology the Department of
Commerce used to select respondents in the Brake Rotors from China and Softwood Lumber from
Canada administrative reviews.
ANSWER:
This issue is fully explained on the public record of these cases. See Extension of
Time Limit for Preliminary Results of Antidumping Duty Administrative Review and New Shipper
Review, 70 FR 75448 (December 20, 2005) citing to the November 16, 2005, Memorandum to the File
from Erin Begnal, Antidumping Duty Administrative Review: Brake Rotors from the People's
Republic of China (November 16, 2005, Sampling Memorandum) and Certain Softwood Lumber
Products from Canada: Extension of the Time Limit for the Preliminary Results of Antidumping Duty
Administrative Review, 71 FR 2023 (January 12, 2006) and the December 15, 2005 Memorandum to
the file. For further details, see answer to question 15 above.
[Thailand]
17. Will dumping margins that were calculated, in whole or in part, based on “facts available” be
included in the “all others” rate applicable to respondents that were not individually reviewed during
the administrative review?
ANSWER:
See answer to Thailand’s question number 15 above.
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[Thailand]
18. The Appellate Body and the panel in the softwood lumber dispute between the United States and
Canada ruled that the United States violated Article 2.4.2 of the AD Agreement by not taking into
account all comparable export transactions when the U.S. Department of Commerce (DOC) calculated
the overall margin of dumping. Does the U.S. intend to terminate the application of its zeroing
methodology in calculating dumping margins in all and every stages (investigation, reviews, and the
sunset review) of future AD cases?
ANSWER:
The United States fully implemented the recommendations and rulings of the Dispute
Settlement Body in the Softwood Lumber Antidumping dispute (DS264), within the reasonable period
of time. After similar findings by the panel in the dispute regarding offsets for non-dumped sales with
the EC (DS294), and months prior to adoption of that report, the U.S. Department of Commerce
announced that it would abandon the use of zeroing in investigations when using the average-toaverage comparison methodology. This announcement was published in the Federal Register on March
6, 2006 (71 Fed.Reg. 11189).
The Appellate Body has only recently released its report in the United States' dispute with the EC
(DS294), in which it found that the United States' methodology in assessment proceedings pursuant to
Article 9.3 is inconsistent with the AD Agreement. The United States is still carefully reviewing that
report and considering its options.
[Thailand]
19. Thailand also seeks clarification on whether application of the zeroing methodology in calculating
dumping margins is required by US law. If so, please provide all information on such laws and
provisions.
ANSWER:
U.S. law neither requires nor prohibits offsets for non-dumped transactions. This issue
was addressed and clarified by the U.S. Court of Appeals for the Federal Circuit in Timken Co. v.
United States, 354 F.3d 1334, 1342 (Fed. Cir.), cert.denied 125 U.S. 412 (Nov. 1, 2004).
[Thailand]
20. Does the United States intend to revise or repeal its existing policy of not applying CVD orders
against products from Non-Market Economy countries (NMEs) such as China, or would it simply
consider changing the status of NME countries to market economies? (Paragraph 89)
ANSWER:
In the 1986 Georgetown Steel case, the U.S. Department of Commerce argued that the
countervailing duty law, as it existed at that time, did not apply to non-market economies, and its
position was upheld. See Georgetown Steel Corp. v.United States, 801 F.2d 1308 (Fed. Cir. 1986). It is
possible that the United States will revisit the underlying rationale of the Georgetown decision and
reassess the policy of not applying countervailing duties to non-market economies.
[Thailand]
21. Please explain in detail the criteria used in “same person” methodology. Is it identical to “affiliated
parties” test? (Paragraph 91)
ANSWER:
The "affiliated parties" test primarily pertains to the USDOC's attribution
methodology, under which the Department examines to what extent two or more entities are related to
each other, based on legal, fiduciary, ownership or control factors, in order to assess whether and to
what extent subsidy benefits may be attributable across those entities. It has no direct connection to the
"same person" methodology that the Department used to analyze the effect of a change in ownership
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(including privatization) to subsidy benefits conferred prior to the sale of the company. Under that
methodology, the Department examined certain factors -- continuity of business operations, continuity
of production facilities, continuity of assets and liabilities, and retention of personnel -- to assess
whether the entity that resulted from the change of ownership continued to be the "same person" as the
prior entity and, therefore, continued to benefit from subsidies conferred prior to the change in
ownership.
Following litigation that challenged various aspects of the "same person" methodology, as of June
2003, the Department abandoned that methodology and now examines whether the change in
ownership occurred at arm's length and for fair market value. Under the arm's-length test, the
Department examines whether the change in ownership occurred between unrelated parties, each acting
in its own interest, or between related parties such that the terms of the transaction are those that would
exist if the transaction had been negotiated between unrelated parties. In this regard, the Department
may look for guidance to the standards of affiliation used in its attribution methodology. Under the
fair-market-value test, the Department examines several aspects of the change in ownership transaction
to determine whether the seller acted in a manner consistent with the normal sales practices of private,
commercial sellers in order to maximize its profit from the transaction. The Department first considers
whether an appropriate benchmark price exists, against which the price of the transaction may be
compared. If not, the Department examines various factors, including whether: the seller relied on an
objective analysis in determining the sale price, imposed artificial barriers to the transaction which
unduly restricted the bidding, the seller accepted the highest offer and received payment in cash or cash
equivalent, or provided discounts or imposed any post-sale commitments from the buyer which
distorted the price that buyers were willing to pay. If the Department determines that the change in
ownership was at arm's length and for fair market value, then it will normally find that non-recurring,
allocable subsidy benefits remain with the seller and do not benefit the new entity.
[Thailand]
22. The threshold of “substantially all of the imports,” which the US AD Act sets at 85%,
consequently prevents the acceptance of a Suspension Agreement proposed by an individual exporter.
Please clarify this provision in light of Article 8.1 of the AD Agreement that allows any exporter to
voluntarily revise its prices or to cease exports at dumped price.
ANSWER:
Article 8.3 of the Antidumping Agreement provides that Members need not enter into
price undertakings when their acceptance is considered impractical, or for other reasons, including
reasons of general policy. U.S. law reflects a general policy of not discriminating among exporters by
entering into agreements with some while others face the discipline of an antidumping measure. This
also reflects a determination that such uniform application of either an antidumping measure or price
undertaking will be more practical to administer.
[Thailand]
23. Please explain how the United States determines the “reference price” or agreed price in
Suspension Agreements, as there may be more than one signatory with a different level of dumping or
subsidization?
ANSWER:
The basis for determining reference prices may vary from agreement to agreement
depending upon the type of agreement and the ability of the parties to come to agreement. In
agreements designed to eliminate injury, the parties may be able to agree upon certain reference prices
that may be uniformly applied so as to eliminate completely the injurious effect of the subject imports.
In other cases, the agreements may reflect formulae that will be applied to individual exporter’s data to
establish exporter-specific reference prices that will eliminate dumping. Ultimately, case-specific
factors must be taken into account so that each agreement addresses the particular circumstances of the
parties to the agreement and the U.S. domestic industry injured by the imports.
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[Thailand]
24. Please provide details on all AD and CVD Suspension Agreements into which the United States
has entered, and the reasons for which some were terminated. (paragraph 94)
ANSWER:
The suspension agreements into which the United States has entered are
publiclyavailable through their publication in the Federal Register, through the Department of
Commerce’s public reading room and through its website (http://ia.ita.doc.gov/). Additionally, when a
suspension agreement is terminated, notice of that termination and the reason for the termination
(which may be pursuant to a 5-year sunset review or based on a finding of a violation) are also
published and publicly available through these same sources.
[Thailand]
Trade Remedies - Safeguards
25. Please explain how the United States determines and quantifies all relevant factors that cause
serious injury, and how the United States isolates injury caused by non attribution factors from the
injury determination, pursuant to Article 4.2(b) of the Agreement on Safeguards. (paragraph 102)
ANSWER:
Under Section 202(c)(1) of the Trade Act of 1974, the U.S. International Trade
Commission (USITC) is required when making a safeguard determination to take into account all
economic factors which it considers relevant, in accordance with Article 4.2 of the Agreement on
Safeguards, which provides that the competent authorities shall evaluate all relevant factors of an
objective and quantifiable nature having a bearing on the situation of the industry. In addition, Section
202(c)(2)(B) requires USITC to examine factors other than imports which may be a cause of serious
injury, or threat of serious injury, to the domestic industry. While both Section 202(c)(1) of the U.S.
statute and Article 4.2 of the Agreement on Safeguards identify specific factors to be examined, the
determination of what additional factors are relevant requires analysis by the USITC based on the facts
of the particular investigation. However, there is no requirement in U.S. law or in the Agreement on
Safeguards that the USITC “quantify” all relevant factors. Similarly, while the USITC examines
factors other than imports that may be a cause of injury, or threat thereof, to the domestic industry, and,
in accordance with Article 4.2(b) of the Agreement on Safeguards, ensures that any injury caused to the
domestic industry by such other factors at the same time is not attributed to increased imports, there is
no requirement in U.S. law or in the Safeguards Agreement that the USITC “isolate” any injury caused
by such other factors.
[Thailand]
26. How does the United States determine which safeguard measures, such as ad valorem rate
increases, tariff quotas, import licensing, quantitative restrictions, or other measures, are to be used for
a particular case? (paragraph 103)
ANSWER:
Section 203(a)(1)(A) of the Trade Act of 1974 provides that, after receiving the report
containing an affirmative determination of serious injury, or threat thereof, by the U.S. International
Trade Commission (USITC), the President shall take all appropriate and feasible action within his
power which the President determines will facilitate efforts by the domestic industry to make a positive
adjustment to import competition and provide greater economic and social benefits than costs. Section
203(a)(3) identifies a number of specific safeguard actions that the President can take, such as an
increase in duties, a tariff rate quota, or imposition of quantitative restrictions.
As to the criteria for determining what action to take, Section 203(a)(2) sets forth a list of factors that
the President must take into account in this decision. The first item specified for the President to take
into account is the USITC’s recommendation and report, containing the USITC’s recommendation as
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to the action that would address the serious injury, or threat thereof, to the domestic industry and be
most effective in facilitating the efforts of the domestic industry to make a positive adjustment to
import competition. Among the other statutory factors to be taken into account is the probable
effectiveness of the various possible safeguard actions to facilitate positive adjustment to import
competition, the economic and social costs of the various possible safeguard actions relative to their
economic and social benefits, and various factors related to the national economic interest of the
United States.
[Thailand]
27. Please explain how the United States applies safeguards in the form of import licensing measures,
and also provide examples of “other measures” (paragraph 103) that the United States has used or
might use as a safeguard measure.
ANSWER:
With regard to import licensing measures, Section 203(a)(3)(F) of the Trade Act of
1974 authorizes the President to “proclaim procedures necessary to allocate among importers by the
auction of import licenses quantities of the article that are permitted to be imported into the
United States.” To date, none of the safeguard measures applied by the United States have involved
the auctioning of import licenses for a quantity of goods.
With regard to “other measures,” the U.S. safeguard law describes the types of action the President
may take. U.S. law authorizes the President, among other things, to “take any other action which may
be taken by the President under the authority of law and which the President considers appropriate and
feasible” (section 203(a)(3)(I) of the Trade Act of 1974). Because the use of this authority is within the
President’s discretion, we cannot provide examples of measures that the President “might” take under
this authority.
[Thailand]
28. Please provide details on the calculation methodology the United States uses to determine
safeguard duty rates and quantitative restrictions.
ANSWER:
There is no specific calculation methodology that the United States uses to determine
safeguard duty rates and quantitative restrictions, but there are specific statutory requirements that
must be complied with. In determining a safeguard duty rate, Section 203(e)(3) of the Trade Act of
1974 provides that “no action may be taken under this Section which would increase a rate of duty to
(or impose a rate) which is more than 50 percent ad valorem above the rate (if any) existing at the time
the action is taken.” With respect to quantitative restrictions, Section 203(e)(4) provides that “any
action taken under this section proclaiming a quantitative restriction shall permit the importation of a
quantity or value of the article which is not less than the average quantity or value of such article
entered into the United States in the most recent 3 years that are representative of imports of such
article and for which are data are available, unless the President finds that the importations of a
different quantity or value is clearly justified in order to prevent or remedy the serious injury.”
[Turkey]
15. Turkey considers the fact that, within the context of sunset review mechanism, continuous
prolongation of the implementation periods of the AD and CV duties by the U.S authorities creates
serious market access barriers, problems and uncertainties for Turkish companies and for Turkey-US
bilateral trade relations.
Turkish Delegation would like to kindly ask whether the US Government considers reviewing these
procedures.
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ANSWER:
The United States’ procedures on sunset reviews are consistent with its WTO
obligations and have been upheld in several WTO disputes. We disagree with the characterization
that under the United States’ sunset review procedures there is a “continuous prolongation of the
implementation periods of AD and CV duties.” Of the 378 U.S. sunset reviews completed by the end
of 2005, almost half (188) have resulted in the revocation of the antidumping or countervailing duty
order.
Quantitative Restrictions
[Argentina]
10. On page 61, paragraph 116, the report indicates that the current quantitative trade restrictions
mainly affect the textiles and apparel sector.
Question: What other sectors are currently subject to restrictions of this type?
ANSWER:
We are aware of no other quantitative restrictions in effect other than those indicated in
the Secretariat Report.
[Japan]
Q18. On-sale License of Alcoholic Beverages in the State of California (p.47 to 48, para. 113)
In the State of California, on-sale licenses that permit the sale of wine for consumption on the premises
where sold also authorize the sale of soju, an imported Korean alcoholic beverage which contains no
more than 24 percent of alcohol by volume and is derived from agricultural products. However, these
on-sale licenses do not permit the sale of shochu, an imported Japanese alcoholic beverage derived
from agricultural products, for consumption on the premises where sold. The Government of Japan
therefore urges the Government of the United States to permit the sale of shochu with the on-sale
license as is permitted for soju. In terms of alcohol content, the Government of Japan also urges the
Government of the United States to permit the sale of shochu that contains 24 percent or more and not
more than 26 percent of alcohol by volume with the on-sale license. In these respects, please indicate
the specific views of the Government of the United States.
ANSWER:
California passed a bill including soju, a traditional Korean alcohol, as a product that
can be sold in establishments with on-sale liquor licenses for beer and wine. The bottle must read
“soju” and “derivatives” like shochu are specifically excluded. Both California state law and federal
regulations define wine as having 24 percent alcohol content or less. It appears that soju has no more
than 24 percent alcohol content by volume, while shochu, in most cases, has 25 to 26 percent alcohol
content by volume. Consequently, shochu must be labeled and regulated as a distilled spirit and is
taxed as a distilled spirit at $13.50 per proof gallon, which is higher than the tax on wine.
The Japanese government appears to suggest that Federal law should allow shochu to be regulated as a
wine. The definitions used for Federal regulatory purposes are statutory. “Wines” containing more
than 24 percent alcohol by volume are regulated (and taxed) as distilled spirits (26 U.S.C.
§§ 5001(a)(3) and 5041(a)). Federal tax rates on alcoholic beverages are statutory and therefore any
change in the rates would require amendment by Congress.
Shochu is sold in the United States at restaurants which are licensed to sell liquor (distilled spirits).
However, under Section 2 of the 21st Amendment of the U.S. Constitution, a State has wide latitude to
regulate the sale and distribution of alcohol beverages within the State. Accordingly, the State of
California may set regulations on whether shochu or other alcohol beverages may be sold at certain
licensed establishments.
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Standards and Technical Regulations
[Canada]
(vii) Standards and technical regulations, (a) WTO participation and preferential trade
agreements, Paragraph 121:
The Secretariat Report notes that the three free-trade agreements which entered into force between mid
2003 and mid 2005 (Australia, Chile and Singapore) contain provisions on technical barriers to trade.
Canada understands that there are additional agreements awaiting entry into force (Bahrain, Morocco,
etc.) identical or similar provisions are found. A number of the provisions in these agreements create
additional obligations on the parties, over and above those contained in the WTO TBT Agreement.
2.
Can the United States provide a list of the "TBT-plus" provisions and an explanation as to why
each provision is included? Will any of these "TBT-plus" provisions require increased "accountability"
between the parties regarding measures or actions taken in the TBT area?
ANSWER:
The U.S. approach to the Chapters on Technical Barriers to Trade in our Free Trade
Agreements since NAFTA has been to affirm the obligations in the WTO TBT Agreement. Any
additional obligation in the Chapter is “TBT-plus.” Provisions, such as those to enhance transparency
and oblige governments to provide a response to significant comments received in response to notices
on proposed regulations, should contribute to greater accountability in the regulatory decision-making
process.
[Canada]
Part III. Trade Policies and Practices by Measure, (2): Measures Directly Affecting Imports, (vii)
Standards and technical regulations, (b) Technical regulations, Paragraph 123:
The Secretariat Report makes reference to the Administrative Procedure Act (APA) and the rules
outlined under the APA which U.S. federal government agencies are required to follow. These include
a requirement for agencies to publish a notice of proposed rulemaking (NPRM) in the Federal Register.
Canada understands that evaluations by the Government Accounting Office (GAO) of agencies’
performance under the APA have identified a significant number of final actions which have been
published without an associated NPRM. Further, that agencies may not construe the "good cause"
exception narrowly as a rationale for not publishing an NPRM.
3.
Can the United States provide a more detailed explanation of how the APA operates, including
a discussion of direct final and interim final rulemaking procedures, as well as the scope of the law's
exceptions and examples of how they have been invoked by agencies?
ANSWER:
The recent U.S. submission to the TBT Committee on U.S. regulatory practice includes
summary information on the APA as well as links to further information on it (see G/TBT/W/258).
[Canada]
Part III. Trade Policies and Practices by Measure, (2): Measures Directly Affecting Imports, (vii)
Standards and technical regulations, (b) Technical regulations, Paragraph 125:
Executive Order 12866 of September 1993 requires the Office of Management and Budget (OMB) to
review all “significant” rules by federal government agencies (excluding independent regulatory
agencies) prior to their publication in the Federal Register as proposed or final rules.
4.
Can the United States provide a list of which agencies are covered under Executive Order
12866? Can the U.S. provide the highlights of the guidance document for agencies on regulatory
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analysis published in September 2003 by the Office of Management and Budget (OMB) and the
Council of Economic Advisors and how its contents differ in key areas from the earlier (1996) "best
practices" document?
ANSWER:
Executive Order 12866 applies to federal government agencies defined in 44 U.S.C.
3502 (1): “the term ‘agency’ means any executive department, military department, Government
corporation, or other establishment in the executive branch of the Government (including the Executive
Office of the President)…” with certain exceptions for independent regulatory agencies, as defined in
44 U.S.C. 3502(10). Information on Executive Order reviews completed by agency is available online
at http://www.reginfo.gov. We suggest that Canada make use of information on this site if there are
questions about a specific agency or regulation.
[Canada]
Part III. Trade Policies and Practices by Measure, (2): Measures Directly Affecting Imports, (vii)
Standards and technical regulations, (b) Technical regulations, Paragraph 125:
The Regulatory Flexibility Act requires federal government agencies to analyze the anticipated effects
of a proposed rule on small entities and identify alternative approaches unless they certify that the rule
will not have a “significant economic impact on a substantial number of small entities.”
5.
Can the United States comment on the effectiveness of the Regulatory Flexibility Act (RFA)
since the Government Accountability Office (GAO) has frequently cited the need to clarify key terms
under the RFA; noted that agencies' compliance with RFA varied widely from one agency to another;
and, also found that agencies had different interpretations of RFA's requirements?
ANSWER:
U.S. agencies continue to make progress in improving the effectiveness of the
Regulatory Flexibility Act. The Office of Advocacy of the Small Business Administration recently
released Report on the Regulatory Flexibility Act FY 2005. The report discusses in great detail agency
compliance with the RFA and the progress that the Office of Advocacy has made over the last year in
increasing the RFA’s effectiveness. For example, agencies are increasing the number of submissions
of draft rules to Advocacy for RFA review and the number of regulatory alternatives considered. For
more details, the report may be found at: http://www.sba.gov/advo/laws/flex/05regflx.html
[Canada]
Part III. Trade Policies and Practices by Measure, (2): Measures Directly Affecting Imports,
(vii) Standards and technical regulations, (b) Technical regulations, Paragraph 126:
The Secretariat Report notes that under the Final Information Quality Bulletin for Peer Review, which
became effective in June 2005, scientific findings that represent the official position of a federal
government agency and that could eventually serve as the basis for the formulation and adoption of a
technical regulation are subject to peer review. At the time of the last Trade Policy Review of the
United States, Canada noted that there was concern raised by several members of the U.S. House of
Representatives with the OMB's draft Bulletin proposing to regulate scientific information in federal
agencies using a more uniform standard of peer review.
6.
Is the Final Information Quality Bulletin for Peer Review changed in any significant way(s)
from the draft Bulletin? If so, how and to what intended effect?
ANSWER:
Yes, significant changes were made to the final Bulletin published in 2005 compared
to the draft published in 2003 and revised draft published in 2004. The two drafts and final Bulletin
are available on the OMB website as well as an explanation of the changes made and the ways the final
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version took into account the public comments received. The public comments are also on the website.
See htp://www.whitehouse.gov/omb/inforeg/infopoltech.html#iq.
[Canada]
Part III. Trade Policies and Practices by Measure, (2): Measures Directly Affecting Imports,
(vii) Standards and technical regulations, (b) Technical regulations, Paragraph 129:
The Secretariat Report says that U.S. authorities have indicated that the U.S. Government does not
maintain centralized statistics on the extent to which U.S. technical regulations are based on
international standards.
7.
Does the U.S. intend to develop a capacity to be able to identify when U.S. technical
regulations are based on international standards? For example, through a RIAS tool and reporting
capacity? If "yes", is there a timetable in place for its development?
ANSWER:
At this time, the United States has no plans to invest scarce resources in attempting to
track the extent to which final regulations are based on international standards and sees little merit in
doing so. The U.S. system emphasizes transparency and openness in the development of technical
regulations. Legislation implementing the Uruguay Round Agreements and additional guidance
provided to regulators encourage regulatory authorities to consider the use of relevant international
standards that may be effective and appropriate for meeting their regulatory objectives. From our
perspective, the provisions for transparency in the U.S. system, and the accountability of regulatory
authorities to respond to significant comments received on proposals, are meaningful in preventing
unnecessary barriers to trade. In our estimation, attempting to compile data on the extent to which U.S.
regulations are based on international standards would not necessarily contribute to the prevention of
unnecessary obstacles to trade. We have found the veracity of other Member’s calculation of the extent
to which their own regulations are based on international standards difficult to verify (or refute).
[Canada]
Part III. Trade Policies and Practices by Measure, (2): Measures Directly Affecting Imports,
(vii) Standards and technical regulations, (c) Standards, Paragraph 137:
The Secretariat Report says that compliance with standards is not a legal requirement, but in practice
the U.S. market often provides strong incentives for imported and domestic products to meet certain
standards. Under the Trade Agreements Act of 1979, federal government agencies are required to "take
into consideration" international standards when developing standards, and if appropriate, to base the
standards on international standards.7
8.
Could the U.S. explain what is meant by “take into consideration" international standards when
developing standards, as well as the reference to "basing" standards on international standards, when
appropriate? Does the U.S. view this language as fully capturing the intent and spirit of the TBT
obligation in Article 2.4 of the TBT Agreement? Why is language which spells out the obligation in
considerable detail, for example, “use available international standards, guidelines and
recommendations as the basis for technical regulations and conformity assessment procedures where
they achieve the intended regulatory objective” not used? Does the existing language help explain the
relatively low level of adoption of international standards by domestic regulators?
7
19 USC 2532. In addition to legislation, regulatory guidance issued by the Office of Management and
Budget includes obligations to consider the trade impact and evaluate the merits of using relevant international
standards. See WTO document G/TBT/W/258, 26 October 2005.
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ANSWER:
It is not clear to us what further explanation is needed other than a plain reading of the
language to understand what is intended by “take into consideration” and “basing” in this context. The
United States views its implementing legislation as consistent with the TBT Agreement, and as has
been noted, this is complemented by other legislation and regulatory guidance. We do not understand
why Canada’s suggested wording, “use available international standards, guidelines and
recommendations as the basis for technical regulations and conformity assessment procedures where
they achieve the intended regulatory objective”, which differs from TBT Article 2.4, would be
considered preferable. The WTO does not prescribe how a Member is to implement its obligations
domestically. We believe that U.S. regulators are able to explain the justification for departing from
relevant international standards, if they exist.
[Canada]
Part III. Trade Policies and Practices by Measure, (2): Measures Directly Affecting Imports,
(vii) Standards and technical regulations, (c) Standards, Paragraph 137:
Based on the Secretariat's report, it appears that the Trade Agreements Act of 1979 has a somewhat
different interpretation of the requirement to use international standards as the basis of technical
regulations. Under the Act, recognized exceptions for not using international standards include
legitimate objectives listed under Article 2.2 of the TBT Agreement (e.g., deceptive practices,
protection of human health). The TBT Agreement, Article 2.4, notes fundamental circumstances
(fundamental climatic and geographical factors or fundamental technological problems) related to
fulfilling a legitimate objective, not the legitimate objective itself, as an acceptable basis upon which a
Member is forgiven the requirement to use an international standard.
9.
Could the U.S. confirm the interpretation contained in the Secretariat's report or otherwise
clarify the operation of the Act?
ANSWER:
Para. 137 contains selective references to the provisions of Title IV of the Trade
Agreements Act of 1979. We would note that para. 137 comes under the heading of “standards” and
not “technical regulations” which are the subject of the Articles referenced by Canada. That being said,
we would note that the TBT Agreement must be read in context. Its preamble is explicit in stating that
“…no country should be prevented from taking measures necessary … for the protection of human,
animal or plant life or health, of the environment, or for the prevention of deceptive practices…”
[Canada]
Part III. Trade Policies and Practices by Measure, (2): Measures Directly Affecting Imports,
(vii) Standards and technical regulations, (c) Standards, Paragraph 140:
The Secretariat Report says that according to OMB Circular A-119, the heads of federal government
agencies must provide OMB (through NIST) with the reasons for using government standards rather
than voluntary consensus standards. According to the latest NIST annual report, at least 72
government-developed standards were being used by 25 federal government agencies. At the same
time, federal agencies have adopted nearly 2500 private-sector standards, which include voluntary
consensus standards.
10.
Can the United States explain the difference between government-developed standards and
private sector standards? Are government standards developed under the same rules and procedures as
private standards? Are these procedures openly available for public scrutiny? Have all government
standards developers adopted the TBT Code of Good Practice?
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ANSWER:
We would note that OMB A-119 is a domestic policy applicable to regulations as well
as government procurement. The measures covered go beyond the scope of the WTO TBT Agreement
and its Code of Good Practice for voluntary standards development.
[Canada]
Part III. Trade Policies and Practices by Measure, (2): Measures Directly Affecting Imports, (vii)
Standards and technical regulations, (d) Conformity Assessment, Paragraph 144:
11.
To what extent do U.S. government regulators use international standards and guides for
conformity assessment?
ANSWER:
The U.S. Code of Federal Regulations does not distinguish between technical
regulations and conformity assessment procedures, nor does it track which regulations require
conformity assessment procedures, or their relationship to international standards and guides.
[Canada]
Part III. Trade Policies and Practices by Measure, (2): Measures Directly Affecting Imports, (vii)
Standards and technical regulations, (d) Conformity Assessment, Paragraph 145:
Unlike in Paragraph 142, which makes reference to the membership of ANSI in IAF, there is no
reference to the participation of U.S. laboratory accreditation bodies in the global conformity
assessment system.
12.
To what extent do U.S. regulators accept tests and certification to U.S. requirements by
conformity assessment bodies which have foreign accreditation? Could the U.S. elaborate on the bodies
and fora in which they participate?
ANSWER:
See response to Question 11, above. The United States is represented in most
international fora, though not always through government representation. We have both government
and private bodies, for example, that are participants in the ILAC MLA. Should Canada have
questions about U.S. participation in a particular body, that information could be obtained through the
U.S. inquiry point and is usually available on the website of the relevant body.
[Canada]
Part III. Trade Policies and Practices by Measure, (2): Measures Directly Affecting Imports,
(vii) Standards and technical regulations, (d) Conformity Assessment, Paragraph 146:
13.
Could the U.S. explain how it implements the equivalency provision of the TBT Agreement
(Article 6.1)? Could the US elaborate on the sectors covered by the five agreements which have been
notified? Are these based on bilateral recognition or MRAs?
ANSWER:
The United States has not attempted to impose a horizontal definition of ‘equivalency’
on U.S. regulators to implement the provisions of the TBT Agreement. The recognition of equivalent
technical regulations is determined by the regulatory authority. Notifications made pursuant to Article
10.7 of the TBT Agreement contain information on the sectors covered a well as information on where
to obtain a copy of the text of the Agreement should Canada wish to analyze them further. We do not
understand the distinction between “bilateral recognition” and “mutual recognition agreements.”
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[Chile]
Q1. Can the United States explain what procedure is followed at the federal level to keep abreast of
draft bills on technical regulations and/or conformity assessment procedures of state, municipal, and
local authorities to determine whether WTO notification is appropriate or not? Has any assessment
been done to determine whether state, municipal, and local authorities apply transparency procedures
required for WTO notifications?
Answer:
There is no obligation for the United States to notify proposals of municipal
governments or other authorities below the state level of government. In order to comply with our
obligations to notify proposals of state authorities (the “level directly below that of the central
government”), the U.S. notification authority has subscribed to a private database which includes
information on state regulatory proposals and provides a basis for identifying notifications to be made
to WTO members. It is our understanding that U.S. states have in place procedures similar to the
Administrative Procedures Act which guides U.S. federal agencies in their development of technical
regulations.
[Chile]
Q2. What has been the experience of the United States regarding the Mutual Recognition Agreements
that it has signed? What are their implementation costs? What requirements must the institutions that
perform conformity assessment fulfill in order to be designated by authorities of the exporting country?
How is non-compliance handled? May third-countries join?
ANSWER:
The U.S. government is party to a limited number of agreements which may or may
not fit within Chile’s definition of “mutual recognition agreements.” Our experiences with such
agreements have been varied. For example, agreements which require a counterpart authority to
demonstrate the competence of its bodies to assess conformity to the other Party’s technical regulations
tend to require a significant amount of resources and commitment (e.g., negotiations, confidence
building, and implementation) on both sides. Implementation costs and operational aspects related to
such agreements vary according to sector and specific approach selected for mutual recognition. Many
of the observations made by Canada in its paper submitted to the WTO Committee on Technical
Barriers to Trade on its experience with mutual recognition agreements (G/TBT/W/167) are reflective
of our own experience. The United States believes that MRAs are only one option of many for
achieving the acceptance of conformity assessment results when those are required by regulation.
[Chile]
Q3. What is the procedure for notification and commentary regarding technical regulations established
through legislation, and therefore, with the direct participation of Congress?
ANSWER:
The U.S. Congress generally does not issue technical regulations. Rather, it delegates
that authority to Federal agencies within the Executive Branch.
[Chile]
Q4. As regards the World Trade Organization (WTO), which products require certification, labeling,
or compliance with other prior authorization requirements? Must these products have such certification
and authorization when imported or prior to clearing customs?
ANSWER:
This is a very general question and, as such, difficult to answer. The United States
does not have a single or monolithic approach to conformity assurance. Some regulatory authorities do
rely on testing and certification, others do not. Where testing or certification is required, it is not
necessarily a condition for Customs clearance.
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[China]
Comment Period for Notifications
The U.S. sometimes fails to strictly comply with WTO SPS/TBT agreements by giving other Members
sufficient period to comment on its own notifications. For instance, the U.S. non-urgent notification on
Digital TV Tuner Requirements（G/TBT/N/USA/128) granted only 20 days from July 8-27, 2005 for
comments. China has officially requested U.S. to extend its comment period but this request was
abruptly refused.
Will the U.S. elaborate on why it failed to comply with the min. 60 days comment period
requirements pursuant to the TBT Agreement in this case? Why the reasonable request from
China to extend the comment period of this important notification was refused by the U.S.? What
is the U.S. prepared to do now to make up for that? Does U.S. intend to terminate its
enforcement of the DTV Tuner requirements?
ANSWER:
As reported by the U.S. Representative to the March 2006 meeting of the TBT
Committee, on November 3, 2005, the Federal Communications Commission (FCC) modified its
digital tuner requirements to advance DTV transition. China’s written comments submitted to the FCC
in response to G/TBT/N/USA/128 were considered in making that decision and responses to them are
contained in the Commission’s “Second Report and Order” (FCC 05-190). A copy of the “Second
Report and Order” was provided to the PRC in bilateral meetings held on March 14, 2006 and is also
available at www.fcc.gov.
[China]
CR Safety Requirements on Lighters
In 2004 U.S. announced to raise the import price ceiling of gas refillable lighters subject to the
compulsory CR device requirements of 1993 from USD2.00 to USD2.25. The fact is when the U.S. set
its former safety standards in 1993, the international standard (ISO9994:2002) on the safety of lighter
products had already existed. However the U.S. refused to adopt the said international standards while
insisting on linking lighter’s price to its safety. By raising the price ceiling for lighter products subject
to this CR regulation, the U.S. has successfully impeded lighters export from other members.
Please explain the scientific reason behind the U.S. linkage between the safety of lighters and
their prices?
Deviating from prevailing International standards, how could the U.S. justify the consistence of
the its CR regulations with Article 2.4 of TBT Agreement?
Has the U.S. notified to the WTO the latest amendment to its 1993 regulation? If not yet, why?
When does the U.S. plan to fulfill its obligation of notification?
Please throw some light on how often the U.S. undertakes a review on its current technical
regulations to seek improvement?
ANSWER:
The Consumer Product Safety Commission (CPSC) Safety Standard for Cigarette
Lighters (16 CFR 1210) requires that disposable and novelty lighters meet specified safety
requirements for child resistance. The ISO 9994 standard does not include safety provisions for child
resistance and thus does not address the hazard of children playing with lighters as does the CPSC
standard. To date, the 1993 regulation has not been amended. Any proposed amendment would be
notified in accordance with our TBT obligations. The 1993 regulation contains an automatic inflation
adjustment provision for the price ceiling, which applies to all disposable lighters subject to the
standard, both import and domestic. In 2004, the CPSC informed the public of the current level of the
ceiling through a January 5, 2004 press release and again in a Federal Register Notice, 69 FR 19762
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(April 14, 2004). In response to questions the Chinese delegation has raised bilaterally and in meetings
of the TBT Committee, the U.S. has provided substantial documentation to provide information on the
scientific justification and basis for the Commission’s decision. In short, the strongest reported
determinant of whether consumers tend to leave lighters in household locations accessible to young
children is the replacement value of the lighters. This value is based primarily on the monetary cost of
the product – its retail price – to consumers. Generally, people tend more often to keep track of higher
priced lighters, whereas very low-priced lighters tend to be treated as disposable. The CPSC regulation
primarily addresses the risk of fires started by children under age 5: during 1988-90, an annual average
of 150 deaths, about 1,100 serious injuries and nearly $70 million in property damage resulted from
such fires. The total cost to the public from these child-play fires was estimated at about $385 million
per year. During that same period, no child-play fire deaths associated with luxury lighters were
identified. In 2005, the CPSC began a substantive review of its Safety Standard for Cigarette Lighters
which included solicitation of comments from the public to ensure the standard is still current and
consistent with Commission policies and goals. The review is ongoing. Staff is working on their
recommendations that then have to be submitted to the Commission for consideration.
[China]
Digital TV Tuner Requirements
Pursuant to the U.S. notification on Digital TV Tuner Requirements G/TBT/N/USA/128, the U.S.
proposes to advance the date on which all new television receiving equipment must include the
capability to receive over-the-air DTV broadcast signals from July 1, 2007, to a date no later than
December 31, 2006. The costs incurred with the new television receiving equipment sometimes are
even higher than that of the TV set itself. In addition, over 80% of the U.S. consumers are receiving
digital TV programs through cable or satellite TV services while only a fraction of them now take
advantage of Digital TV products in the U.S. Thus the U.S. finds it difficult to decide when analog
television service is to end.
Under situations mentioned above, will the U.S. clarify its justification to advance the date of
implementation of such a compulsory regulation?
ANSWER:
The date for compulsory transition to digital broadcast television is now February 17,
2009. Setting the date depended on numerous factors, including technical and economic feasibility of
the transition; as is evident, there is now significant advance notice of this requirement. Since
digitalization should enable the analog spectrum to be put to other uses, there are numerous benefits of
making the transition as soon as possible.
On November 30, 2005, the FCC amended its rules to move the date on which all TV receivers must
include the capability to receive digital television signals forward four months to March 1, 2007 and to
apply the tuner requirement to all television receivers, regardless of their size. This action is intended
to further the Commission’s efforts to ensure that consumers are able to receive off-the-air digital
broadcast television services as soon as possible.
The digital television reception requirement, which is also often termed the DTV tuner requirement, is
being implemented on a schedule that applies it first to large screen receivers and then to progressively
smaller screen sets and other devices that receive TV signals, such as VCRs and digital video recorders.
This phase-in plan is intended to allow manufacturers to realize increasing economies of scale with
production volume, so that digital tuner costs will be lower when the tuners are required in smaller sets.
On July 1, 2004, the tuner requirement was applied to 50% of large sets (screen sizes 36” and larger),
and last July (July 1, 2005), the tuner requirement was applied to all large sets and to 50% of mid-size
sets (25”- 36”). Beginning March 1, 2006, DTV tuners will be required in all mid-size sets as well.
With the change adopted in this Second Report and Order, the final step in the phase-in plan will now
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require that all new TV sets in all size ranges and other TV receivers include a DTV tuner beginning
March 1, 2007.
Does the U.S. believe that DTV Tuner requirements will cause extra cost to both the
manufacturers and the consumers?
ANSWER:
A digital tuner provides additional functionality to a TV, and it is reasonable to assume
that adding such functionality could increase the cost of a TV. Whether any additional cost is
significant or not will depend on the efficiency of manufacturers and the extent to which they can
achieve economies of scale. The new legislation includes provisions for consumer subsidies for digital
to analog converters.
Have any U.S. authorities conducted a review on the trade implications of this regulation? If yes,
what are the findings?
ANSWER:
We are confident this regulation is fully consistent with our trade obligations.
[China]
Energy Efficiency Labeling Regulations on 7 Categories of Products
Draft regulations notified by the U.S (G/TBT/N/USA/151) on energy efficiency labeling with regard to
7 categories of products including washing machines stipulated that: “Labels for most appliances must
provide the product's estimated annual operating cost. Manufacturers must calculate these costs using
national average cost figures for energy (e.g., electricity, natural gas, etc.) published by Department of
Energy. ”
Does the U.S. recognize that estimated annual operating cost has just too many uncertainties
behind its calculation, which can mislead consumers instead?
Does the U.S. believe that the above provisions in the draft regulation are in line with the Article
2.2 of the TBT Agreement and do not cause unnecessary obstacles to trade?
ANSWER:
Through the Energy Policy Act of 2005, Congress required the Federal Trade
Commission (FTC) to examine the effectiveness of current energy efficiency labeling requirements for
consumer products. In response to that directive, the FTC published the notice seeking comment on
the effectiveness of the Appliance Labeling Rule and suggestions for improvements to the energy
labeling program. The FTC also requested comments about the overall costs and benefits of the Rule
and its overall regulatory and economic impact. It specifically asked for information on whether the
current energy descriptors are understandable to consumers, whether the FTC should consider requiring
estimated annual operating costs as the primary descriptor on EnergyGuide labels, and on the costs and
benefits of requiring operating costs as the primary descriptor. This notification is an “Advance Notice
of Proposed Rulemaking.” In the U.S. system, such notices are made before the text of a proposed
regulation exists and is an opportunity for a regulatory agency to gather additional information to
inform any future action, such as to propose an amendment to the Appliance Labeling Rule.
Technically, the United States is not obliged to notify its “advance notices” pursuant to the TBT
Agreement but does so for the benefit of WTO members. Should the FTC decide to amend the
Appliance Labeling Rule, it will publish notice of its proposal at which point the U.S. will submit an
addendum to the original notification and provide an opportunity for comment. The final date for
comment on the advance notice was January 13, 2006. It is our understanding that the FTC is
considering the comments it has received, including those submitted by China, and has not yet made a
determination as to future actions.
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[China]
Energy Conservation Standards
The Energy Conservation Standards for Certain Consumer Products and Commercial and Industrial
Equipment（G/TBT/N/USA/154）notified in 2005 by the U.S. made technical amendment to its
former energy conservation standards covering 15 products including washing machine. Some of the
amendments, including the test conditions for the lumen maintenance rate of medium base compact
fluorescent lamp, do not follow current international standards.
Would the U.S. explain why the international standards can simply not satisfy its requirements?
ANSWER:
The energy efficiency standards were set by Congress in the Energy Policy and
Conservation Act of 2005 (Public Law 109-58). They were not initiated by regulation. The regulations
DOE has adopted/is adopting are for the purpose of implementing the standards set by law.
When this regulation will be put into force?
ANSWER:
The standards for medium base compact fluorescent lamps went into effect on January
1, 2006. All medium base compact fluorescent lamps manufactured for sale in the U.S. or imported as
of that date must meet the EPACT 2005 energy efficiency requirements. The standards are found in
section 135(c) of the Energy Policy Act of 2005 (Pub. L. 109-58) and section 430.32(u) of 10 CFR Part
430.
Will it strictly respect the transparency principle of the TBT Agreement?
ANSWER:
Yes.
[Colombia]
1. Numeral 118, subparagraph a) Title VII of the report from the WTO Secretariat states that none of
the notices made by the United States between July 2003 and June 2005 were related to proposed
subfederal measures. It also reports that there are procedures in force to report these measures, but
none has been identified. Despite this, is it possible that there are unreported sub-federal regulations?
ANSWER:
As noted in the Secretariat report, the United States has in place procedures to notify
state level proposals (“…level directly below that of the central government.”). The U.S. notification
authority has subscribed to a private database which includes information on state regulatory proposals
and provides a basis for identifying notifications to be made to WTO Members. The Secretariat report
failed to identify two notifications we have made concerning California:
G/TBT/N/USA/155 (11/23/2005)—California Senate Bill on organic aquaculture products;
and,
G/TBT/N/USA/159 (12/14/2005)—California Heavy Duty Smoke Emissions Test and Heavy-Duty
Vehicle Emissions Control System Inspections. (Note, due to a clerical error, the agency responsible
erroneously reads NCSCI/NIST, which is our notification authority. It should have read “State of
California.”)
[Colombia]
2. Has the separate and more favorable treatment for member developing countries in accordance with
numeral 12.1 of Article 12 of the Agreement on Technical Barriers to Trade been taken into account in
application of the Bioterrorism Act and how is this applied?
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ANSWER:
The Public Health Security and Bioterrorism Preparedness and Response Act of 2002
(the Bioterrorism Act or BTA) (PL 107-188), was enacted to enable FDA to respond quickly to
terrorist threats against the U.S. food supply and other food-related emergencies as a result of 9/11.
The Act applies to all foreign and U.S. facilities that manufacture, process, pack, or hold food for
human or animal consumption in the United States. FDA considered the impact on developing
countries and other small entities in its final regulatory impact analysis where it examined the
economic implications of the BTA as required the Regulatory Flexibility Act (5 U.S.C. 601-612). The
Regulatory Flexibility Act requires agencies to analyze regulatory options to lessen the economic effect
of a rule on small entities if a rule could have significant economic impact on a substantial number of
small entities. In response to comments from domestic and foreign public and private sector
stakeholders FDA made substantial changes to the proposed interim and final BTA rules to assist
affected entities minimize trade disruptions. FDA continues to exercise its enforcement discretion in
the months following the effective date of the rules (December 12, 2003), and has focused instead on
educating affected parties both domestic and foreign.
In addition, domestic and foreign food businesses were alerted to the general requirements of the rule
by the proposed and interim rules published in the Federal Register and FDA's outreach. This advance
notification provided ample time for effected entities to understand and prepare to comply with the
final rules. FDA conducted extensive outreach efforts to publicize the BTA regulations internationally.
FDA sent officials to countries several times to brief government officials and to listen to their
concerns, including satellite downlink public meetings on the BTA regulations which were broadcast
throughout the Americas, Caribbean Basin, Europe, Africa, and Asia. Extensive information about the
rules has been made available on the FDA’s website at: www.cfsan.fda.gov. FDA also notified to the
BTA to the WTO SPS and TBT Committees (G/SPS/N/USA/691/Add.5 and G/TBT/N/USA/32/Add.3)
and countries were encouraged to comment through their Enquiry Points or directly through responses
to the U.S. Federal Register notices in a timely manner.
[Colombia]
3. Numeral 129 of subparagraph b) Title VII) states that United States authorities indicated that the
Government of the United States does not keep centralized statistics on the extent to which the US
technical regulations are based on international standards. Has the Government of the United States
considered the possibility of implementing a centralized system?
ANSWER:
The U.S. system emphasizes transparency and openness in the development of
technical regulations. Uruguay Round implementing legislation and additional guidance provided to
regulators encourage regulatory authorities to consider the use of relevant international standards that
may be effective and appropriate for meeting their regulatory objectives. From our perspective, the
provisions for transparency in the U.S. system, and the accountability of regulatory authorities to
respond to significant comments received on proposals, are meaningful in preventing unnecessary
barriers to trade. In our estimation, attempting to compile data on the extent to which U.S. regulations
are based on international standards would not necessarily contribute to the prevention of unnecessary
obstacles to trade. We have found the veracity of other Member’s calculation of the extent to which
their own regulations are based on international standards difficult to verify (or refute).
[Colombia]
4. Numeral 131 of subparagraph b), Title VII) says that the regulations published in application of the
Federal Meat Inspection Act and the Poultry Products Inspection Act require that the name of the
country of origin appear in English on the immediate containers of all meat and poultry products
entering the United States. However, when the bulk imported meat or poultry products are processed
in the United States it is not necessary for the processed product or its container to be labeled. Does the
Government of the United States intend to amend such laws regarding the requirement of labeling
exclusively for importer products?
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ANSWER:
This will not change. If imported meat or poultry products are further processed in the
United States, i.e., removed from their containers and packaging, and cut up or processed in any way,
country of origin labeling is no longer required on the newly produced products or subsequent products
made from them. For example, if canned hams from Denmark (labeled as “Product of Denmark” on
entry to the United States) are shipped to a manufacturing establishment in the United States, and made
into ham salad, the country or origin of the ham is not required on the labeling of the ham salad
product. However, what will change are COOL requirements for round and muscle cuts of beef, lamb
and pork. The Farm Security and Rural Investment Act of 2002 (PL 107-171) amended the
Agricultural Marketing Act of 1946 to require that USDA's Agricultural Marketing Service to issue
interim voluntary guidelines for country-of-origin labeling (COOL) by September 30, 2002, followed
by regulations for a mandatory COOL program by September 2004. Commodities covered under the
COOL program include ground and muscle cuts of beef, lamb and pork, farm-raised and wild fish and
shellfish, perishable agricultural commodities (i.e., fresh and frozen fruits and vegetables), and peanuts.
Mandatory COOL requirements for meat, along with fresh and frozen fruits and vegetables, were
scheduled to go into effect on September 30, 2006. However, the U.S. House of Representatives action
moved the required implementation date for meat labeling to September 30, 2007. Poultry and poultry
products are not yet covered by this program.
[Colombia]
5. Numeral 136, subparagraph b), Title VII) states that the Agricultural Marketing Act of 1937 requires
that the basic products imported meet the same requirements, or comparable requirements, of grade,
size, quality and maturity as those established for domestic products within the framework of federal
marketing orders.
What are the legitimate interests defended by this Act in setting these requirements?
ANSWER:
Marketing agreements and orders are legal instruments authorized by the Agricultural
Marketing Agreement Act of 1937 and in subsequent amendments. The Secretary of Agriculture is
vested with the power to exercise the use of these instruments to regulate the marketing of eligible
commodities -- fruits, vegetables, specialty crops, and milk -- in certain clearly specified ways. The
U.S. believes that these regulations fully comply with World Trade Organization requirements. The
grade, size, quality, and maturity requirements specify minimums only, do not limit the volumes of
such commodities which may be imported, do not apply a tariff or quota to such imports, and are in
effect only during the same periods of time as domestic production is regulated. These requirements
are limited to grade, size, quality, and maturity. Domestic production is often required to meet
additional requirements related to pack and container, container marking, volume controls, and
assessments to fund administrative costs for marketing order operations.
[Colombia]
6. Numeral 146, subparagraph b) Title VII) says that the United States authorities have submitted five
notices to the WTO regarding agreements involving acceptance by the United States of evaluations of
compliance with United States regulations done abroad. What sectors do these notices pertain to?
ANSWER:
TBT Article 10.7 requires at least one party to an agreement “related to technical
regulations, standards or conformity assessment procedures” to notify other Members “of the products
to be covered by the agreement and a brief description of the Agreement.” The United States has made
the following notifications under Article 10.7:
G/TBT/10.7/N/20 (1 March 1999): US –EC Agreement on the Mutual Recognition in six sectors
(telecommunications equipment; electromagnetic compatibility; electrical safety; recreational craft,
pharmaceutical GMPs and medical devices).
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G/TBT/10.7/N/36 (18 April 2002): Japanese Recognition of U.S. Organic Standards for Plant-Based
Agricultural Products.
G/TBT/10.7/N/46 (21 July 2004): US – EC Agreement on the Mutual Recognition of Certificates of
Conformity for Marine Equipment.
G/TBT/10.7/N/49 (3 March 2006): US – EEA EFTA States (Norway, Iceland, and Liechtenstein)
Mutual Recognition Agreement in three sectors (telecommunication equipment, electromagnetic
compatibility, and recreational craft).
G/TBT/10.7/N/50 (3 March 2006): US – EEA EFTA States (Norway, Iceland, and Liechtenstein)
Agreement on the Mutual Recognition of Certificates of Conformity for Marine Equipment.
In addition, Brazil submitted two notifications on agreements to which we are party:
G/TBT/10.7/N/41 (12 December 2002): Plurilateral Mutual Recognition Arrangement on Calibration
and Testing Laboratory Accreditation Procedures.
G/TBT/10.7/N/42 (8 January 2003): Plurilateral Recognition Arrangement for Accreditation Bodies of
Testing and Calibration Laboratories (Inmetro, Brazil; SCC, Canada; A2LA, U.S.).
Additional information is contained in the notifications, including contact points for additional
information or copies of the texts.
[India]
Q.1
The present practice of limiting weight for 20 foot containers to 21 MT only is causing
hardship and adding to cost of shipment resulting in higher value of the export product. Can the US
raise this limit to 27 MT, which is the practice followed by several other countries?
ANSWER:
Vehicle weight limits in the U.S. are regulated to protect infrastructure as well as to
promote safety. The same vehicle weight limits that apply to containers used in international trade are
those that apply to all vehicles traveling on public roads in the U.S. Federally regulated gross-vehicleweight (GVW) limits are determined by the number of axles on the vehicle and the spacing of those
axles along the length of the vehicle. Federal weight limits, which are capped at 80,000 pounds, apply
to the Interstate Highway System with some grandfathered exceptions in states which allowed higher
weights before the Federal limits went into effect. Weight limits off the Interstate System are regulated
by the individual States. In addition to regulating weights off the Interstate System, the individual
States also have the option to classify containers moving in international commerce as nondivisible
loads, making them eligible for State issued overweight permits that would allow transport over the
Interstate System.
Regarding limiting the weight of 20 foot containers, there is no Federal highway weight regulation that
would limit the weight of a 20 foot container to 21 metric tons (46,300 pounds). Assuming a weight of
28,000 pounds for a tractor/chassis combination, the overall GVW limit of 80,000 pounds would allow
a container weighing up to 52,000 pounds if loaded on a 5-axle vehicle with at least 39 feet between the
tandem axle on the power unit and the tandem axle on the chassis.
[India]
Q.11 Manufactures and exporters of PTFE(Teflon) Insulated Wires & Cables (PIWC) and
PTFE(Teflon) Sleeves/Tubing have reported that for any reasonable business with a U.S. buyer in their
product area, there is a requirement of UL approval. However, the required technical specifications are
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not readily available and even the UL website does not contain much details. Can the U.S consider
providing UL specifications and test requirements freely or at minimal cost? Can US government allow
the testing to be done at Indian laboratory/ Test Center administered by the Government Departments?
ANSWER:
We would need more information to fully respond to India’s question. It is possible
that the products are being sold for use in a workplace environment, and subject to certification by an
OSHA-accredited Nationally Recognized Testing Laboratory (NRTL). There are 37 different types of
products for which OSHA requires NRTL approval, and the largest of these types is electrical products
and equipment. These requirements seek to prevent accidents through assuring the safety of products
used by American workers. Requirements for approval apply to private employers, most federal
government places of employment, and some state and local government places of employment. If this
is the case, then it is a misnomer that “UL approval” is required. Any NRTL with OSHA-recognized
scope for wire and cable could test and certify the products and apply its own mark (as opposed to the
UL mark), and UL is one of 18 organizations recognized as an NRTL. Thus, it is a misnomer that “UL
approval” is required. Recognition is open to bodies located in other countries. And, an NRTL may be
approved by OSHA to use outside parties to do part of its testing or evaluation activities.
Organizations interested in applying for the NRTL designation must apply to the OSHA NRTL
Program. The requirements for recognition as an NRTL are contained in 29 CFR 1910.7 and
information is available on OSHA’s website (www.osha.gov).
As India should be aware, UL is a private body and maintains ownership of the standards it develops.
The U.S. government is not in a position to provide its documents free of charge and/or on its behalf.
[India]
Q.16 Imports into the USA are regulated under the Federal regulations, often referred to as 21 CFR
123. They require that the purchaser/importer of the products should be able to demonstrate to the
authorities that the products have been produced in a safe and acceptable manner i.e. are in, compliance
with quality assurance system that incorporates HACCP, Standard Sanitary Operating Procedures
(SSOP) and Good Manufacturing Practices (GMP). These increased number of sanitary procedures act
as a non-tariff barriers/ technical barrier to Indian exports to USA. In order to remove these non-tariff
barriers, would U.S take steps to streamline the same?
ANSWER:
The U.S. government has instituted several laws and procedures to ensure the safety of
its food supply. The U.S. food safety system is based on strong, flexible, science-based laws and
industry’s legal responsibility to produce safe foods. Coordinated interactions among federal authorities
having complementary and interdependent food safety missions, in partnership with their state and
local government counterparts, provide a comprehensive and effective system. The system is guided
by the following principles: (1) only safe and wholesome foods may be marketed; (2) regulatory
decision-making in food safety is science-based; (3) the government has enforcement responsibility;
(4) manufacturers, distributors, importers and others are expected to comply and are liable if they do
not; and (5) the regulatory process is transparent and accessible to the public. In the United States, all
imported foods are required to meet the same standards and technical regulations as domestically
produced foods. The procedures and requirements for importation can very depending on the product
and its characteristics. The U.S. regulatory system encourages participation by regulated industry,
consumers, and other stakeholders. The food safety standards and technical regulations that apply to
domestically produced foods also apply to imported foods. The public notice and comment process
embodied in the Federal Register was designed to help develop the most streamlined approach
consistent with these objectives.
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[Indonesia]
3.
Technical Regulation and Standards (page 48 – 54)
It is widely recognized that technical regulation, standards and phytosanitary are useful to protect
human, animal and plant life and health (Article XX of the GATT 1994). In the Report, it is said that
for that purpose, the US has used a specific technical regulation and phytosanitary other than developed
by international organizations. In this context, Indonesia is seeking further explanation as to how the
US could comply with the guidance in the said agreements to follow the standards developed by
international organizations (although this is not a mandatory).
ANSWER:
U.S. legislation implementing the WTO agreements (the Uruguay Round Agreements
Act) and additional policy guidance buttress U.S. commitments in the WTO to consider the use of
relevant international standards as a basis for their technical regulations. Additional details are
provided in a recent communication the United States presented to the Committee on Technical
Barriers to Trade (G/TBT/W/258).
[Israel]
Q4. As tariff duties have been reduced significantly over the years, standards requirements have
become a significant barrier to the free flow of goods around the world. What is the United States view
on concluding Mutual Recognition Agreements (MRA's) in order to alleviate the problems created by
Members' different standards requirements? Would the US be willing to conclude MRA's in laboratory
testing as an interim solution of this matter in sectors such as IT equipment and drugs.
ANSWER:
The U.S. government is party to a limited number of agreements which may or may
not fit within Israel’s definition of “mutual recognition agreements.” Our experiences with such
agreements have been varied. For example, agreements which require a counterpart authority to
demonstrate the competence of its bodies to assess conformity to the other Party’s technical regulations
tend to require a significant amount of resources and commitment (e.g., negotiations, confidence
building, and implementation) on both sides. Implementation costs and operational aspects related of
such agreements vary according to sector and specific approach selected for mutual recognition. Many
of the observations made by Canada in its paper submitted to the WTO Committee on Technical
Barriers to Trade on its experience with mutual recognition agreements (G/TBT/W/167) are reflective
of our own experience. The United States believes that MRAs are only one option of many for
achieving the acceptance of conformity assessment results when those are required by regulation. We
do not see MRAs as necessarily alleviating the problems resulting from different standards, as
suggested by Israel. Further information is needed to better understand Israel’s perspective and to
respond to the specific questions regarding possible MRAs for IT equipment and drugs.
[Japan]
Q19. Certificate of Label Approval on Alcoholic Beverages Imported into the United States (p.50,
para.130)
According to Part 4 Section 40, Part 5 Section 51, and Part 7 Section 31 of the Code of Federal
Regulation, Title 27, no imported alcoholic beverages in containers shall be released from the United
States Customs custody for consumption unless there is a certificate of label approval (ATF Form
5100.31). Due to the regulations, even the alcoholic beverages intended for use as samples for tasting
must have the certificate of label approval prior to the import into the United States, which stands as a
high barrier for Japanese people to conduct promotion campaigns of Japanese alcoholic beverages in
the United States. The Government of Japan urges the Government of the United States to allow
imported alcoholic beverages which will be used as samples for tasting to be imported into the United
States without certificate of label approval. In this regard, please indicate the specific views of the
Government of the United States.
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ANSWER:
The Federal Alcohol Administration (FAA) Act at 27 U.S.C.§ 205(e) requires that “no
person shall remove from customs custody, in bottles, for sale or any other commercial purpose,
distilled spirits, wine or malt beverages unless . . . he obtained and has on his possession a certificate of
label approval (COLA) . . . .”
There is a very limited exemption to the COLA requirement for certain commercial samples but,
because of its narrow nature, is not often used. TTB regulations at 27 C.F.R. § 27.74 exempt
commercial samples used to solicit orders from foreign countries from the FAA Act COLA
requirements, subject to the following limitations:
The exemption applies to one sample of each alcohol beverage admitted during a calendar quarter for
each person. That is, each importer may bring in one sample of an alcohol beverage without a COLA.
No sample of beer shall contain more than 8 ounces, for wine no more than 4 ounces, and for distilled
spirits no more than 2 ounces.
The health warning statement must be affixed to the sample. See 27 U.S.C. § 215(a).
Other limited exceptions include those for trade fairs approved by the U.S. Department of Commerce
pursuant to the Trade Fair Act of 1959, in which importers may bring in alcohol beverage products
without a COLA for display but not for tasting, and for quality control purposes, in which importers
may bring in a limited number of alcohol beverage products without a COLA for laboratory testing.
[Japan]
Q20. Automobiles Labelling Act (p.50, para.130) Automobiles weighing less than 8,500 pounds,
which are sold in the U.S., are obliged to labelling, such as the percentage of U.S. or Canadian parts,
the final assembling ratio, the final place of assembly and the place of manufacture of the engine and
transmission. This is aimed at stimulating the U.S. consumers' spirit of "buy American", while placing
much burden on the automobile manufacturers by creating various kinds of labels based on dates and
types. In addition, the real state of the procurement rate is not properly calculated: for example, the
procurement ratio does not reflect the labour cost of the assembly lines. Regarding this Labelling Act,
in March 2003, the Association of International Automobile Manufacturers (AIAM) submitted a report
to the Congress which pointed out some problems such as: 1) the labelling rule does not provide
enough information which support consumers to make better choice of purchase; and 2) consumers are
not quite interested in the labelling rule. In these respects, Japan would like to know whether the U.S.
plans to review the labelling rule.
Answer:
The American Automobile Labeling Act (AALA) requires passenger motor vehicles to
be labeled with information about the country of origin of the vehicle and its parts. The requirements
are solely informational; they apply in the same way and to the same extent, regardless of where a
vehicle is manufactured. While there are costs associated with calculating country-of-origin
information, the National Highway Traffic Safety Administration, in implementing the AALA, has
sought to minimize cost impacts to the extent consistent with ensuring that consumers are provided
with the information required by the Congress. We do not believe these informational requirements are
burdensome. While the calculation of the U.S./Canadian parts content does not, per the AALA, include
final assembly, this fact is explained in a note included on the label. Moreover, the final assembly
point of the vehicle is included separately on the label.
[Japan]
Q21. Metric System (p.52, para.137) The metric system is adopted as the international standard unit
system by the International Organization for Standardization and other international organizations in
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developing international standards and criteria. While most countries have adopted the metric system,
the United States continues to use the unit of the yard and pound despite its accession to the Metre
Convention. This causes not only inconveniences in daily life but also obstacles in international trade.
Given that the Agreement on Technical Barriers to Trade (TBT) recommends reducing technical
barriers on trade by adopting international units, it is not in accordance with the WTO agreements,
including the TBT Agreement, that the United States is not taking necessary measures to promote the
metric system. The Government of Japan therefore urges the Government of the United States to
ensure thorough adoption of the metric system in public and private sectors of the United States. We
also urge the Government of the Untied States to provide information on its policy measures to
promote the adoption of the metric system. In these respects, please indicate the specific views of the
Government of the United States.
ANSWER:
The transition to the metric system is voluntary but the federal government currently
has an effort underway to encourage the use of the metric system. There is also an effort to amend the
Federal Fair Packaging and Labeling Act that would give manufacturers the option to continue to label
the products covered by the Act in dual units (that is, in inch-pound and metric units as they are doing
now) or to label products in only metric units. A number of sectors have voluntarily chosen to label in
metric, and use the metric system extensively. Currently 46 states permit metric-only labeling. NIST
is working with the remaining states (Alabama, Hawaii, New Jersey and New York) to encourage them
to go voluntarily metric-only as quickly as possible. For information regarding the U.S. metric system
activities, please visit NIST’s website at http://ts.nist.gov/ts/htdocs/200/202/mpo_home.html.
[Japan]
Q22. Container’s Weight Limit (p.52, para.137) A large number of countries, including Japan,
approve the limits of the maximum weight to 30.48 metric tons by container in transport freights,
which is based on the international cargo standard provided by the International Organization for
Standardization. On the other hand, the U.S. federal weight laws set weight standards not for cargoes
or the boxes in which they move, but for the total vehicle combination and its relative axle weights.
The maximum gross vehicle weight on interstate highways is 80,000 pounds (36.3 metric tons) except
where lower gross vehicle weight is dictated by the bridge formula. A freight tonnage can be
calculated by subtracting (1) the weight of the tractor (the average weight is from 9 to 12 metric tons);
(2) the weight of the container trailer (the average weight is from 4 to 6 metric tons); and (3) the weight
of the container itself (the average weight is around 3 metric tons) from the maximum gross vehicle
weight. As a result of calculation, the remaining weight is from 15 to 20 metric tons, which is below
the maximum freight tonnage (30.48 metric tons) provided by the International Organization for
Standardization, by 10 to 15 metric tons (22 to 33 thousand pounds). The Government of Japan urges
the Government of the United States to recognize that the container’s weight limit set by the federal
weight laws is inconsistent with the ISO regulation, hampers the efficiency of logistics, causes a
delivery delay by U.S. transport agencies, and increases transport costs. Concerning the regulation of
weight standards, we also urge the Government of the United States to raise the upper limit of the
maximum gross vehicle weight by 10 pounds from the present 8 pounds, in order to conform to the
international cargo standard. In these respects, please indicate the specific views of the Government of
the United States.
ANSWER:
Vehicle weight limits in the U.S. are regulated to protect infrastructure as well as to
promote safety. The same vehicle weight limits that apply to containers used in international trade are
those that apply to all vehicles traveling on public roads in the U.S. Federally regulated gross-vehicleweight (GVW) limits are determined by the number of axles on the vehicle and the spacing of those
axles along the length of the vehicle. Federal weight limits, which are capped at 80,000 pounds, apply
to the Interstate Highway System with some grandfathered exceptions in states which allowed higher
weights before the Federal limits went into effect. Weight limits off the Interstate System are regulated
by the individual States. In addition to regulating weights off the Interstate System, the individual
States also have the option to classify containers moving in international commerce as nondivisible
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loads, making them eligible for State issued overweight permits that would allow transport over the
Interstate System.
To return to the initial point that vehicle weight limits in the U.S. are regulated to protect infrastructure
as well as to promote safety, it is the gross weight of the vehicle, not the weight of the contents, which
determines the impacts of weight on vehicle stability and control and on infrastructure. In the case of
infrastructure, as axle-load weights increase, pavement damage increases exponentially. In the case of
bridges, overall gross vehicle weight is the primary consideration - heavier vehicles cause more
bending moment stress on bridges, increasing the risk of bridge failure.
[Korea]
2. We note that the U.S distributors of home appliances require the UL sign to be marked on the
products. It takes 6 months to 1 year to complete such certification procedure, thereby working as a
barrier to many foreign exporters. According to Para 137-138 on page 52 of the Secretariat’s report,
under the Trade Agreements Act of 1979, U.S. federal government agencies are required to “take into
consideration” international standards when developing standards, and if appropriate, to base the
standards on international standards. And the Act also call upon the U.S. President to take reasonable
measures to promote the observance by State agencies and private persons of requirements equivalent
to those imposed on federal agencies in carrying out standards-related activities.
Please provide us with information to what extent such requirements or standards as UL certification
are based on standards developed by international organizations. Does the U.S. government have any
future plans to recognize foreign quality certification to be equivalent to that of UL Mark?
ANSWER:
Without further information, it is difficult to know whether Korea’s concerns relate to
market place demands or government regulation. To the extent they are the latter, the U.S. Department
of Labor’s, Occupational Health and Safety Administration (OSHA), currently requires that certain
categories or types of products or equipment be “approved” (i.e., tested and certified) by third-party
organizations it calls “Nationally Recognized Testing Laboratories” (NRTLs). There are 37 different
types of products for which OSHA requires NRTL approval, and the largest of these types is electrical
products and equipment. These requirements seek to prevent accidents through assuring safety of
products used by American workers. Requirements for approval apply to private employers, most
federal government places of employment, and some state and local government places of employment.
Organizations interested in applying for the NRTL designation must apply to the OSHA NRTL
Program. The requirements for recognition as an NRTL are contained in 29 CFR 1910.7 and
information is available on OSHA’s website (www.osha.gov). Each NRTL has a scope of recognition
which specifies the particular types of products or equipment it is capable of approving and the test
standards used for the approval. NRTLs can use an appropriate international test standard for its
approvals. UL is one of 18 organizations recognized as an NRTL. Recognition is open to bodies
located in other countries. And, an NRTL may be approved by OSHA to use outside parties to do part
of its testing or evaluation activities. While the home appliance distributors mentioned in the question
may specify that only products with the UL mark are acceptable to them, from the standpoint of the
OSHA requirements, the mark of any NRTL that can approve these types of products is acceptable to
OSHA.
If the U.S. distributors’ products are being sold for use in a workplace environment, and subject to
certification by an OSHA-accredited NRTL, then a Korean certification body could seek to become an
accredited NRTL, but OSHA must consider whether reciprocal opportunities are available to U.S.
certification bodies in Korea.
Based on information provided by UL, it is our understanding that turnaround times in excess of 2-10
weeks generally indicate that a product failure has occurred, that the original submittal was incomplete
or required rework, or that the product was “new and unusual.” UL home appliance standards typically
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are developed and maintained using an American National Standards Institute (ANSI)-accredited
process which ensures transparency, openness, impartiality and consensus, effectiveness, relevance,
coherence, etc.
[Korea]
3. With regard to the development of voluntary consensus standards described in para. 141 on page 53
of the Secretariat report, please explain what is a criteria for government agencies to choose to
participate in the development of certain standards and what is the role of the agencies in the process?
ANSWER:
Essentially, it is the responsibility of U.S. regulators to assess whether participation in
voluntary, private-sector, consensus standards bodies is in the public interest and is compatible with
their missions, authorities, priorities, and budget resources. Agency representatives serving as
members of voluntary, private-sector, consensus standards bodies participate on an equal basis with
other members, consistent with the procedures of those bodies. The purpose of agency participation in
voluntary, private-sector, consensus standards bodies is (1) to eliminate the necessity for development
or maintenance of separate, Government-unique standards; and, (2) to further such national goals and
objectives as increased use of the metric system of measurement; use of environmentally sound and
energy efficient materials, products, systems, services, or practices; and improvement of public health
and safety. Guidance on federal participation in the development and use of voluntary consensus
standards (OMB Circular No. A-119) is available at www.whitehouse.gov/omb/circulars/a119.
[Mexico]
12.
Concerning paragraph 118, could the U.S. explain in greater detail why proposed subfederal
measures have not been identified (and, therefore, notified)?
ANSWER:
As noted in the Secretariat report, the United States has in place procedures to notify
state level proposals (“…level directly below that of the central government.”). The U.S. notification
authority has subscribed to a private database which includes information on state regulatory proposals
and provides a basis for identifying notifications to be made to WTO members. The Secretariat report
failed to identify two notifications we have made concerning California:
G/TBT/N/USA/155 (11/23/2005)—California Senate Bill on organic aquaculture products;
and,
G/TBT/N/USA/159 (12/14/2005)—California Heavy Duty Smoke Emissions Test and Heavy-Duty
Vehicle Emissions Control System Inspections. (Note, due to a clerical error, the agency responsible
erroneously reads NCSCI/NIST, which is our notification authority. It should have read “State of
California”).
[Mexico]
13.
Regarding paragraph 121, could the United States indicate whether the Chapters on technical
barriers to trade in the Free Trade Agreements concluded recently or under negotiation apply to the
goods sector as well as the services sector? If they do not apply, could the United States explain why it
did not consider it appropriate to establish rules for the standards and technical regulations applicable
to services in those Chapters (unlike the pattern followed in Chapter XI of the NAFTA)?
ANSWER:
The Chapters on Technical Barriers to Trade in recent Free Trade Agreements to
which the U.S. is a party are limited to goods consistent with the scope of the WTO Agreement on
Technical Barriers to Trade. As Mexico is aware, the NAFTA text was under negotiation at the same
time as the Uruguay Round. Since the advent of the WTO, our approach has been to affirm the
existing WTO obligations and, where possible, to build upon them.
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[Mexico]
14.
With regard to paragraph 122, could the United States indicate whether it intends to send on a
regular basis the Unified Regulatory Agenda and the Regulatory Plans to the Members of the
Committee on Technical Barriers to Trade?
ANSWER:
We take note of Mexico’s suggestion. As Mexico is aware, there is no specific
obligation for Members to submit such information to the WTO. The Unified Regulatory Agenda and
the Regulatory Plan is already made public and available through various means, including in a
searchable, electronic format at http://www.reginfo.gov/public/. We did not want to unnecessarily
burden the Secretariat with the information.
[Mexico]
15.
Regarding paragraph 123, could the United States indicate whether the laws drafted and issued
by Congress are also bound by the principles of the Administrative Procedure Act, when such laws are
or contain technical regulations, as defined by the Agreement on Technical Barriers to Trade?
ANSWER:
The Administrative Procedures Act establishes rules to guide federal agencies and is
not binding on the U.S. Congress. However, bills proposed in Congress are made public, interested
parties have an opportunity to express their views to members of Congress, as well as their staffs and
the staff of committees, debates are published in the Congressional Record, and committees issue
reports explaining the intent of the legislation, often on an article-by-article basis.
That said, Congress generally does not issue technical regulations. Rather, it delegates that authority to
Federal agencies within the Executive Branch.
[Mexico]
16.
Concerning paragraph 125, could the United States explain whether there is a requirement to
draft regulatory impact statements before proposing the establishment of a technical regulation? If so,
could the United States explain whether such regulatory impact statements are available to the public
(including foreign nationals) and where? Are the assessments of benefits and costs that must be
submitted to the OMB's Office of Information and Regulatory Affairs available for consultation and,
where appropriate, can the public comment on them?
ANSWER:
Presidential Executive Order 12866, “Regulatory Planning and Review”, sets out an
overarching regulatory philosophy and principles to guide agencies in developing effective an efficient
rules. Before recommending Federal regulatory action, an agency must demonstrate that the proposed
action is necessary. The Executive Order requires each agency to identify the problem that it intends to
address (including, where applicable, the failures of private markets or public institutions that warrant
new agency action) as well as assess the significance of that problem. It requires that agencies assess
both costs and benefits (quantitative and qualitative) of an intended regulation and propose or adopt a
regulation only upon making a reasoned determination that the benefits of the intended rule justify its
costs. The Order states that, in choosing among alternative regulatory approaches, agencies should
select those approaches that maximize net benefits. The President relies on the Office of Management
and Budget (OMB), an agency of the Executive Office of the President, to oversee and coordinate
Federal regulatory policy, including implementation of this Executive Order. OMB Circular A-4,
Guidelines for the Conduct of Regulatory Analysis, standardizes the way benefits and costs of Federal
regulatory actions are measured and reported. (The full text is available at www.omb.gov, and further
information on the approach to regulation is contained in G/TBT/W/258.) Regulatory impact
statements for economically significant (generally rules with over $100 million in impact) proposed
regulations are made public by the agencies. Public comments on them are invited as part of the notice
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and comment process. A good place to search for them is: http://www.regulations.gov/fdmspublic/
component/main.
[Mexico]
17.
Regarding paragraph 126, Mexico would like a more detailed explanation of what is meant by
“peer review.”
ANSWER:
As stated in the referenced Final Information Quality Bulletin for Peer Review, “peer
review is a form of deliberation involving an exchange of judgments bout the appropriateness of
methods and the strength of the author’s inferences. Peer review involves the review of a draft product
for quality by specialists in the field who were not involved in producing the draft. The peer reviewer’s
report is an evaluation or critique that is used by the authors of the draft to improve the product. Peer
review typically evaluates the clarity of hypotheses, the validity of the research design, the quality of
data collection procedures, the robustness of the methods employed, the appropriateness of the methods
for the hypotheses being tested, the extent to which the conclusions follow from the analysis, and the
strengths and limitations of the overall product.”
[Mexico]
18.
Concerning paragraph 129, could the United States say whether it plans in the future to develop
statistics on the degree of alignment of its technical regulations with international standards?
ANSWER:
The U.S. system emphasizes transparency and openness in the development of
technical regulations. Uruguay Round implementing legislation and additional guidance provided to
regulators encourage regulatory authorities to consider the use of relevant international standards that
may be effective and appropriate for meeting their regulatory objectives. From our perspective, the
provisions for transparency in the U.S. system, and the accountability of regulatory authorities to
respond to significant comments received on proposals, are meaningful in preventing unnecessary
barriers to trade. In our estimation, attempting to compile data on the extent to which U.S. regulations
are based on international standards would not necessarily contribute to the prevention of unnecessary
obstacles to trade. We have found the veracity of other Members’ calculation of the extent to which
their own regulations are based on international standards difficult to verify (or refute).
[Mexico]
19.
With respect to paragraph 140, could the United States indicate in what cases governments can
develop standards and why 25 federal government agencies are using government-developed
standards?
ANSWER:
Unfortunately, the Secretariat report does not make clear that OMB Circular A-119,
which directs federal agencies to adopt “voluntary consensus standards,” applies to both regulations
and procurement specifications. Agencies may still need to rely on government-unique standards
where there are no applicable voluntary consensus standards, or where use of voluntary consensus
standards is inconsistent with U.S. law or otherwise impractical. Agencies are required to report uses
of government-unique standards in lieu of voluntary consensus standards and to indicate their reasons
for doing so. As noted in footnote 174, the reports are available at http://standards.gov/NTTAA/index.
cfm?do=NTTAReports.main.
[Mexico]
20. Regarding the US-EC Agreement on wine-making practices and labeling of wine, referred to in
paragraph 143:
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(a)
Could the United States indicate the implications of this Agreement (especially
regarding the recognition of semi-generic terms and regulated terms) for wine imports from third
countries to the United States? and
(b)
Could the United States tell us when the second phase of negotiations will begin and
what other wine-related trade issues will be addressed in those negotiations?
ANSWER:
(a) As this is an agreement on trade in wine between the EC and the United States, the
primary effect of the agreement is with respect to wine imported from the EC and not from third
countries. However, the implementation of obligations with respect to wine sold on the U.S. market,
including U.S. wine, could have an equal impact on wine imports from third countries, depending on
the obligation and how it is implemented.
(b) The Agreement commits us to launch phase two negotiations within 90 days of the signing of the
first phase agreement which was March 10, 2006. The parties are free to raise any wine trade issue
they want in phase two. Nothing has been ruled out.
[South Africa]
1. Paragraph 138 of WT/TPR/S/160 (page 52) calls upon the President to “take such reasonable
measures as may be available to promote the observance by state agencies and private persons, in
carrying out standard-related activities, of requirement equivalent to those imposed on federal agencies,
and of procedures that provide for notification, participation, and publication with respect to such
activities”.
Q. Can the US please give an example of a case where Federal standards differ with State
standards; and if such, which standard will prevail?
ANSWER:
Para. 138 of WT/TPR/S/160 is describing the part of U.S. law that was designed to
implement the obligations to “take such reasonable measures as may be available” to central
governments (Members) for implementing relevant TBT Articles (3, 4, 7, 8, 9) to ensure compliance by
sub-central and non-governmental bodies. U.S. legislation (TAA of 1979, as amended by the URAA)
specifically prohibits U.S. agencies from using standards, technical regulations or conformity
assessment procedures as unnecessary obstacles to trade. Under U.S. law, unnecessary obstacles to
trade are not created if the demonstrable purpose is to achieve a legitimate domestic objective (e.g.,
protection of health, safety, or the environment) and if such activity does not operate to exclude
imported products which fully meet the legitimate objectives. Section 402 specifically obliges agencies
to ensure that imported products are treated no less favorably than like domestic or imported products.
There are relatively few standards developed by government agencies in the United States; instead, this
is a function of market demand and there are a number of non-governmental bodies which develop
standards to meet those needs.
The U.S. Constitution prevents States from creating unnecessary obstacles to interstate commerce.
Federal laws and regulations may either expressly or impliedly preempt State law. Express statutory
preemption exists when Congress adopts language specifically providing that States cannot adopt or
maintain any regulation that differs from the Federal regulations. Federal law may also impliedly
preempt State law if (1) Congress has fully occupied the particular field of regulation in question; or
(2) the State law conflicts with any Federal law or interferes with the objectives of Federal law.
[Thailand]
29. Paragraph 131 states that the United States requires immediate containers of imported processed
meat and poultry products to be marked with the country of origin in English, whereas imported meat
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and poultry processed in the United States are not subject to this requirement. Please clarify how this
complies with the national treatment principles of the TBT Agreement.
ANSWER:
It is unclear what question is being asked. The question appears to be premised on the
assumption that the United States requires imported processed meat and poultry products to be marked
with the country of origin, whereas it does not require imported unprocessed meat and poultry products
to be marked. If that is the case, that assumption is incorrect. Under 19 CFR section 134.11, "every
article of foreign origin (or its container) imported into the United States shall be marked . . . in such
manner as to indicate to an ultimate purchaser in the United States the English name of the country of
origin of the article, at the time of importation into the Customs territory of the United States." This
requirement applies regardless of whether the article has been processed or not.
[Thailand]
30.
Current US regulations concerning food labeling, such as the mandatory labeling of products
containing transfat, food allergens, and country of origin labeling, are stringent and quite costly. For
example, the United States allows importation of egg products only from FSIS certified facilities
(paragraph 158) and such products must also include food allergen labeling. These requirements
burden exporters with factory certification and examination costs as well as labeling costs. Does the
United States intend to simplify this process in the near future in order to facilitate trade?
ANSWER:
We believe that trans fat and food allergen labeling are necessary to protect and
promote the public health of U.S. consumers, and accordingly U.S. law requires that this information
be on labels of food products marketed in the United States. The Food and Drug Administration does
not require pre-approval or certification of food labels before a product can be imported into the U.S.,
but any food products that do not bear the necessary information would not be in compliance with U.S.
requirements and could be refused at the port of entry.
[Turkey]
Q10. In the Secretariat Report, under paragraph 5, it is written that the United States has made
numerous notifications under the TBT and SPS Agreements but there is no information on the extent to
which U.S. standards are based on standards developed by international organizations.
In the paragraph 129 of the Secretariat report, it is further stated that the US authorities have indicated
that the US Government does not maintain centralized statistics on the extent to which US technical
regulations are based on international standards.
Even it seems that no specific information is available, could US delegation give general indicative
information about the extent that these standards are in conformity with the ones developed by
international organizations?
ANSWER:
The U.S. system emphasizes transparency and openness in the development of
technical regulations. Legislation implementing the Uruguay Round Agreements and additional
guidance provided to regulators encourage regulatory authorities to consider the use of relevant
international standards that may be effective and appropriate for meeting their regulatory objectives.
From our perspective, the provisions for transparency in the U.S. system, and the accountability of
regulatory authorities to respond to significant comments received on proposals, are meaningful in
preventing unnecessary barriers to trade. In our estimation, attempting to compile data on the extent to
which U.S. regulations are based on international standards would not necessarily contribute to the
prevention of unnecessary obstacles to trade. We have found the veracity of other Member’s
calculation of the extent to which their own regulations are based on international standards difficult to
verify (or refute).
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Sanitary and Phytosanitary Measures
[Argentina]
19. Regarding the approval by the United States of agricultural imports, Argentina has observed with
great concern the existence of unjustified delays in the procedures for approving agricultural products
and in the recognition of regionalization schemes implemented. Although Argentina recognizes the
right of Members to adopt levels of protection that exceed those that would be achieved through the
application of international standards, it must highlight the fact that there must be sufficient scientific
evidence in these cases.
Question: Can the United States explain what scientific evidence justifies the excessive amount of time
it dedicates to investigate whether a determined pathology exists or not? Could the United States
shorten those time periods, taking into account international standards (OIE-CIPF-Codex)?
ANSWER:
The United States does in fact explain the scientific evidence that justifies its decisionmaking process. For example, USDA-APHIS conducts scientific risk assessments as its foundation for
making decisions on what import restrictions are necessary. The two WTO-recognized international
standard-setting organizations have developed guidance for performing plant pest risk analyses and
animal and animal product import risk analyses. APHIS also continues to develop new methodologies
and guidelines for conducting effective risk assessments, and makes these guidelines available to
interested parties. Examples include guidance on performing risk assessment for commodities and
organisms and weed-initiated pest risk assessment. Many APHIS activities demonstrate its support for
the regionalization concept. APHIS maintains a Regionalization Import Requests Web Site where
visitors can see requests that APHIS has received to establish regions in various countries for export to
the U.S. of various commodities. From this site visitors can not only see what types of requests were
made and when, but can also review risk assessment documentation developed to evaluate the requests.
For further details on the statutory and executive guidance related to the U.S. government rulemaking
process, please see the following website: http://www.whitehouse.gov/omb/circulars/a004/a-4.pdf.
[Brazil]
6. Chapter III, paragraphs 150-160. The United States is deemed to attach importance to the pursuit of
sound scientifical basis in SPS matters. Nevertheless, the Office of Management and Budget (OMB)
can adopt measures based on “economic impact”. What is the rationale behind taking into account
economic concerns in SPS decisions?
ANSWER:
U.S. Federal regulatory development is subject to statutory and executive mandates
whether these regulations target sanitary and phytosanitary considerations or non-health related
regulatory matters. For example, economic and environmental analyses may be required to accompany
the narrow sanitary considerations under review.
With regard to economic analysis of rulemaking, we note that U.S. regulatory agencies are required to
assess the potential economic costs and benefits of its proposed rules and its potential effects on small
entities, in accordance with Executive Order 12866 and the Regulatory Flexibility Act. However all
SPS measures must have a scientific basis. For further details on the statutory and executive guidance
related to the Federal government rulemaking process, please see the following website:
http://www.whitehouse.gov/omb/circulars/a004/a-4.pdf
[Brazil]
7. Chapter III, paragraph 156: "The process from APHIS' determination to assess the risk presented
by imports of a particular product to the issuance of an import licence can take several years,
depending on the quality of the data received for the risk assessment, among other factors."
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Nevertheless, many delays have been registered in the certification process of Brazilian meat. Until the
end of 2005, Brazil was taking more than three years to certificate fresh meat. According to APHIS
staffers, the delay was due to lack of human resources, since many were been deployed to tackle the
BSE threat. What are the American government plans to prevent those delays from undermining the
credibility of the certification process?
ANSWER:
Many APHIS activities show support for the regionalization concept. APHIS maintains
a Regionalization Import Requests Web Site where visitors can see requests that APHIS has received to
establish regions in various countries for export to the U.S. of various commodities. From this site
visitors can not only see what types of requests were made and when, but can also review risk
assessment documentation developed to evaluate the requests.
For further details on the statutory and executive guidance related to the Federal government
rulemaking process, please see the following website: http://www.whitehouse.gov/omb/circulars/a004/
a-4.pdf
With respect to Brazil’s specific request to APHIS to promulgate animal health import measures that
would allow Brazilian fresh beef to enter the United States, Brazilian authorities requested a suspension
of the consideration of this request in October 2005.
[Chile]
1. Paragraph 149 of the report states that in the FTA with Australia definite timeframes are stipulated
for implementing the Sanitary and Phytosanitary (SPS) Measures Chapter thereof and establishing a
Committee on SPS Measures. Can the United States share its experience regarding the establishment
of said Committee?
ANSWER:
The AUSFTA entered into force on January 1, 2005, obligating the United States and
Australia to establish a Committee on SPS Matters within 45 days after that date. The SPS Committee
was established and met on February 14, 2005. The second meeting of the Committee was held on
March 6, 2006.
2. With reference to paragraph 158 of the report, what is the current situation regarding the recognition
of the Argentine regulatory system for beef?
ANSWER:
Argentina is currently eligible to export cooked beef and beef products to the United
States, as it meets the USDA-FSIS criteria to do so.
http://www.fsis.usda.gov/PDF/Argentina_establishments.pdf
Since February 19, 2001, Argentina has been ineligible to export fresh (uncooked) beef to the United
States following the confirmation of foot-and-mouth disease (FMD) in Argentina. Specifically,
USDA/APHIS took regulatory action to prohibit the importation of fresh beef as an emergency
measure to protect the livestock of the United States from foot-and-mouth disease. Argentina continues
to experience detections of FMD, thereby preventing Argentina from meeting USDA/APHIS's
safeguarding standards with respect to this cattle disease which is not present in the United States.
http://www.aphis.usda.gov/vs/ncie/country.html#FMD-R
3. The United States has used Marketing Orders, established under the Agricultural Marketing
Agreement Act (AMAA) of 1937. This practice has become, in some cases, especially harmful with
the introduction of changes, such as the proposed change to Marketing Order 925 for table grapes,
which would seriously affect Chile. Can the United States explain the criteria used to create and/or
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change a Marketing Order? How can it ensure that it does not become a discriminatory measure and/or
trade barrier?
ANSWER:
Federal marketing orders are legal instruments authorized by the Agricultural
Marketing Agreement Act of 1937, as amended (AMAA). Marketing orders allow fruit and vegetable
growers to work together to solve marketing problems that they cannot solve individually, by helping
balance the availability of quality product with the need for adequate returns to producers and the
demands of consumers. Orders may provide for one or more of the following activities: quality
regulation; quantity regulation; research and development; promotion and advertising; and marketing
information collection.
Section 8e of the AMAA provides that when certain domestically produced commodities are regulated
under a Federal marketing order, imports of the commodity must meet the same or comparable grade,
size, quality and maturity requirements. Currently, there are 14 imported commodities subject to
regulation: avocados; dates; grapefruit; table grapes; hazelnuts; kiwifruit; olives; onions; oranges; Irish
potatoes; plums; raisins; tomatoes; and walnuts. Imports are regulated only during the period of time
that the applicable domestic commodity is being shipped and regulated.
Section 8e quality requirements are intended to: develop dependable markets for products by ensuring
consumer satisfaction and encouraging repeat purchases; promote buyer satisfaction and increase sales
by ensuring that only acceptable quality products are in the U.S. marketplace; and help avoid market
disruptions associated with poor quality offerings. Domestic industries operating under marketing
order programs strongly support section 8e regulations. Section 8e import regulations subject imported
products to the same standards as domestic products.
[China]
Question (p.50 para. 129)
Would the U.S. throw some light on to what extent its SPS regulations are based upon
international standards? The Secretariat report states that the U.S. maintains no centralized
statistics on TBT related to such matters, please explain why?
ANSWER:
The U.S. system emphasizes transparency and openness in the development of
technical regulations. Legislation implementing the Uruguay Round Agreements and additional
guidance provided to regulators encourage regulatory authorities to consider the use of relevant
international standards that may be effective and appropriate for meeting their regulatory objectives.
From our perspective, the provisions for transparency in the U.S. system, and the accountability of
regulatory authorities to respond to significant comments received on proposals, are meaningful in
preventing unnecessary barriers to trade. In our estimation, attempting to compile data on the extent to
which U.S. regulations are based on international standards would not necessarily contribute to the
prevention of unnecessary obstacles to trade. We have found the veracity of other Members’
calculation of the extent to which their own regulations are based on international standards difficult to
verify (or refute).
Sanitary and phytosanitary (SPS) regulatory measures are subject to the same level of transparency and
openness as those of other technical regulations (see above). Consistent with our obligations under the
WTO SPS Agreement, in particular SPS Article 3, the United States bases its SPS regulations on
international standards and guidelines where they exist and as appropriate. As noted above, the
United States does not maintain statistics in this regard, but in our implementation of the obligations
under the SPS Agreement the United States remains an active participant in the three recognized
international standards-setting bodies for human (CODEX), plant (IPPC) and animal (OIE) standards
and guidelines affecting international commerce
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[China]
Automatic Detention System for Imported Food Inspection and Quarantine
Pursuant to the Federal Food, Drug and Cosmetic (FDC) Act FDA of the U.S. will conduct automatic
detention to imported food products with potential problems up to 30 days.
Does the U.S. require the representativeness of the samplings in undertaking of the overall
inspection during the automatic detention?
ANSWER:
A representative sample is always needed whether it will be tested by FDA or by a
private lab. This includes samples taken in response to an import alert recommending Detentions
without Physical Examination (DWPE) (formerly automatic detention).
The inspection results from the FDA or laboratories recognized by FDA will serve as the final
evidence to trigger the Automatic Detention System. If the Inspection authorities of an exporter
disagree with the U.S. inspection conclusions, do they have the right to request a review? What
are the procedures to apply for a review?
ANSWER:
Import alerts recommending DWPE may be issued as a result of sampling or other
evidence that indicates that future entries appears to be violative. An importer always has the right to a
hearing to contest any detention action by FDA. A Notice of Detention and Hearing is provided to an
importer when a detention is initiated. This notice provides an opportunity for the introduction of
testimony or the filing of a statement in writing within 10 days following the date of detention shown
on the notice. This information can be found in FDA’s Regulatory Procedures manual Chapter 9.
Usually inspection cost is borne by the FDA, then why inspection cost incurred during the
automatic detention shall be fully borne by the importer?
ANSWER:
When FDA performs an inspection, FDA bears the cost except when that inspection is
performed in connection with the reconditioning of a violative product. When a product is detained
under an import alert, the importer may submit a private lab analysis to overcome the appearance of a
violation for that product. This cost is voluntarily incurred by the importer.
Will the U.S. justify the consistency between its automatic detention regulation and the Article
2.2 of the TBT Agreement?
ANSWER:
U.S. FDA’s detention process is fully consistent with Article 2.2 of the TBT
Agreement. The process is not more trade restrictive than necessary for the protection of human health
and safety and provides a process for products that have been detained to enter into the US market.
Importers are provided with advance notice via import alerts of all products recommended for
detentions without physical exam and are made aware of the process for gaining entry. Importers are
provided written notice and an opportunity to contest the detention and to provide evidence that the
product is not violative.
[China]
Bioterrorist Act
Since its enforcement of Bioterrorist Act, has the U.S. conducted any study to analyze the
negative impact of the Act on normal trade. If yes, what are the findings?
What measures would the U.S. take to strictly honor the principles embodied in the Article 5.4 of
the SPS Agreement as “Members should…take into account the objective of minimizing negative
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trade effects” thus to eliminate the excessive impact of the Act and its implementing measures on
trade?
ANSWER:
In reference to the Public Health Security and Bioterrorism Preparedness and Response
Act of 2002 (Bioterrorism Act), the U.S. Food and Drug Administration (FDA) has encouraged public
comment at every stage of the bioterrorism regulations' development. FDA developed and published
proposed regulations which were open to public comment from both domestic and foreign parties. We
also conducted numerous outreach meetings directed at foreign stakeholders, both within the U.S. to
foreign embassy officials in Washington and via videoconference. We received numerous comments
from foreign governments, industries, and trade associations on both rules. We reviewed each
comment that was submitted during the comment period, and developed the final rule, taking the
comments into account. In the case of the prior notice and registration regulations, we are allowing for
several opportunities for interested individuals to provide comments even as we begin implementing
the interim final rule to make sure that we minimized any negative effect on trade while ensuring our
food safety and security. We have published a compliance policy guide that describes the U.S. strategy
for maintaining an uninterrupted flow of imports while improving their safety in accordance with the
Public Health Security and Bioterrorism Preparedness and Response Act of 2002 (Bioterrorism Act)
requirements. FDA included an economic impact analysis in the proposed rules for affected entities to
review and provide comment, and made revisions to the rules based on the comments we received to
further minimize the impact to trade consistent with the requirements in the Act. Both interim final
rules include a regulatory impact analysis.
[China]
Question: (p.55 para.150)
Perishable goods are reported to be more frequently damaged than before due to cumbersome and
sometimes excessive inspection and approval procedures for goods entering the U.S. even though
increasingly detailed cargo information was submitted to CBP as requested. Typically, fresh lychee in
air-conditioned containers are to be unloaded and exposed in open air for 5 hours during a entry-of port
inspection and to wait for another 5 or even 7 days to finish all the clearance procedures, which often
leads to great commercial losses to exporters.
What measures would be taken to improve U.S. Customs sampling and inspection procedures in
this respect?
ANSWER:
It is the importer of record’s responsibility to arrange for examination and release of
commercial goods entering the United States. Information on this process can be found in Importing
into the United States, A Guide for Commercial Importers at the following website:
http://www.cbp.gov/linkhandler/cgov/toolbox/publications/trade/iius.ctt/iius.doc#EntryProc
The “Entry Process” section of the Guide states that “[w]hen a shipment reaches the United States, the
importer of record (i.e., the owner, purchaser, or licensed customs broker designated by the owner,
purchaser, or consignee) will file entry documents for the goods with the port director at the goods’
port of entry. Imported goods are not legally entered until after the shipment has arrived within the
port of entry, delivery of the merchandise has been authorized by Customs, and estimated duties have
been paid. It is the importer of record's responsibility to arrange for examination and release of the
goods, and delays can be minimized by following the Guide.
Goods may be entered for consumption, entered for warehouse at the port of arrival, or they may be
transported in-bond to another port of entry and entered there under the same conditions as at the port
of arrival.”
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Information on the agricultural quarantine inspection can be found at the following website:
http://www.cbp.gov/xp/cgov/import/commercial_enforcement/agric_quar_insp/agri_ins_overview.xml
[Chinese Taipei]
Question 9 (page 56, paragraphs 157-158)
It is stated in the report that “FSIS has specific responsibility for the safety of meat, poultry and egg
products.” However, in the recent investigation into the improper shipment of veal to Japan in January
2006, the Investigation Report concludes that mistakes were made by FSIS inspection personnel. In
addition, the inspection programme personnel at the establishment were not sufficiently aware of the
Export Verification programme, and should not have certified or approved the shipment of such
product to Japan.
Since we import a considerable amount of meat, poultry and egg products from the US every year,
could the US please indicate what steps will be taken to ensure that meat, poultry and egg products
meet all the US and the importing country’s food safety requirements?
ANSWER:
FSIS employees continuously inspect all U.S. slaughter and egg product
establishments during hours of operation, and inspect all U.S. meat and poultry processing
establishments daily. These inspections are conducted by food technologist, inspectors, and/or
veterinarians, depending on the specific activity involved. In addition, FSIS has local and national
supervisors and managers who visit establishments unannounced and at a frequency that is dependent
upon the compliance of the establishment or whether any incidents have occurred at an establishment.
FSIS also employs Regional and National Consumer Safety Officers and Compliance Officers who
respond to and investigate compliance and food safety issues that are found at every level of inspection,
at US ports/borders, and at foreign ports/borders. Consequently, FSIS ensures compliance with U.S.
domestic and importing country requirements via multiple layers of inspection and supervision: from
the inspector/veterinarian in each establishment, to the local supervisors, to the Regional managers and
investigators, to the National Office personnel.
As further indicated in the report, “Upon request, FSIS conducts on-site audits to evaluate whether a
country’s regulatory system attains the same level of protection as the US to ensure continued
compliance, FSIS conducts periodic audits.” As on-site audit/inspection is the right of the importing
country, we believe that when the importing country has concerns about imported products, it may
exercise the same rights as those of the US. In this respect, we would appreciate it if the US could
explain the reasons for the request to replace BAPHIQ audit/inspections of US pet food facilities with
audit/inspections by APHIS.
ANSWER:
If FSIS determines that a foreign inspection system is equivalent to the U.S. inspection
system, it then promulgates a rule which, when completed, results in the listing of the country in
Federal Regulations (9CFR 327.2 for meat and 9CFR 381.196 for poultry) as eligible to import into the
United States. FSIS will then periodically conduct on-site audits of a sub-set of the establishments
authorized by the exporting country in order to verify the maintenance of the system as equivalent to
the U.S. inspection system. In similar fashion, USDA-APHIS has requested that BAPHIQ judge the
U.S. system equivalent with respect to pet food inspections and that BAPHIQ conduct periodic on-site
audits of a sub-set of U.S. pet food establishments to verify the maintenance of the U.S. system as
equivalent to the Chinese Taipei inspection system for pet food.
[Ecuador]
Please state what action has been taken since the promulgation of the Bioterrorism Act of 2002 by the
President of the United States of America in June 2002 so as to prevent such law from becoming a nontariff barrier to trade.
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Has the United States of America done an assessment on the impact on trade with Latin
American countries of the implementation of the Bioterrorism Act and on the changes in import
patterns considered to stem from such law?
It seems that the Bioterrorism Act authorized approximately US$600 million to the federal
government for its implementation and the preparation of its provisions, adopted by the U.S. Congress.
Bearing in mind that this amount substantially exceeds any possible support that Ecuador can give to
its exporters for marketing, can the United States delegation inform us which technical and financial
assistance programs have been created so that exporters from developing countries in Latin America
can be prepared to comply with all the requisites of said Act and thus continue their exports without
significant obstacles to trade?
How much longer does the United States contemplate keeping the Bioterrorism Act in effect?
Does the United States foresee amending the aforementioned law? If so, when?
ANSWER:
The Public Health Security and Bioterrorism Preparedness and Response Act of 2002 (
the Bioterrorism Act or the Act) (PL 107-188), authorizes the U.S. Food and Drug Administration
(FDA), after public notice and an opportunity for domestic and international stakeholders to comment,
to develop rules for implementing the provisions of the Act, including section 307 (Prior Notice of
Imported Food Shipments). FDA and U.S. Customs and Border Protection jointly issued the Prior
Notice Interim Final Rule in October 2003, which allowed affected parties an additional opportunity to
comment on the interim final rule’s provisions. The rule took effect on December 12, 2003, as required
by the Bioterrorism Act. FDA is carefully considering all comments it received during the open
comment period on the interim final rule as it develops the final rule, including those comments filed
by the Government of Japan. FDA is working to develop provisions that are consistent with the
Bioterrorism Act, its legislative history and objectives, while at the same time minimizing the impact
on trade to the extent feasible. FDA has considered its international trade obligations under various
World Trade Organization (WTO) agreements, North America Free Trade Agreement (NAFTA), and
other international agreements throughout the rulemaking processes, and the regulations implementing
the Act are consistent with our international obligations. The Bioterrorism risk assessment was
conducted to fulfill these obligations. It can found at the following website:
http://www.cfsan.fda.gov/~dms/rabtact.html
The U.S. Food and Drug Administration (FDA) has not conducted an assessment on import patterns.
However, in making decisions on what a rule should require in light of statutory requirements, U.S.
government agencies use economic analysis – including the analysis of costs and benefits of various
regulatory approaches. U.S. government agencies prepare a draft economic analysis that estimates the
cost to affected stakeholders and the benefits the public will receive from a proposed rule. The agency
publishes the analysis in the Federal Register as part of the preamble to the proposed rule and solicits
comments on the analysis as well as comments on the substantive provisions being proposed.
Substantive provisions are revised in the rule and/or the economic analysis, as appropriate, in light of
the comments received and are then published in the final rule and economic analysis in the Federal
Register. The FDA followed this process for each of the Bioterrorism regulations.
The FDA did not receive appropriated funds specifically targeted to Bioterrorism Act promulgation.
FDA directed extensive outreach to both domestic and international stakeholders after publication of
the interim final rule (October 10, 2003; 68 FR 58974). Outreach activities included the following:
•
Dissemination of materials to guide affected domestic and international food
facilities through the new processes established to implement prior notice
requirements;
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•
•
•
•
•
•
•
•
•
•
Numerous domestic and international outreach meetings with the food
industry, trade organizations, and State and foreign government regulators;
A series of videoconferences and a satellite downlink video broadcast to more
than 1,000 sites around the world;
Materials provided for and events targeted to the media;
Presentations by FDA officials and exhibits at professional and trade
conferences and meetings to inform industry and state and local government
representatives of the new requirements;
Presentations by USDA’s Foreign Agricultural Service (FAS) and U.S.
embassy officials, who disseminated materials and answered questions in
various countries;
Cooperative arrangements with CBP and other Federal agencies to ensure that
information on the interim final regulations and their requirements was
disseminated to affected companies and individuals;
Issuance of several guidance documents (all available on the Internet) that
explain the prior notice requirements, including, “Prior Notice of Imported
Food: Questions and Answers,” “What You Need to Know About Prior Notice
of Imported Food Shipments,” and numerous web-based tutorials for PNSI.
Many of these guidance documents are available in foreign languages; e.g.,
Arabic, French, Hindi, Japanese, Malay, Portuguese, and Spanish;
Training in new or revised procedures for its field personnel, as well as CBP
field personnel. FDA included an initial transition period in the December
2003 prior notice CPG for more than eight months, during which the agencies
emphasized education to achieve compliance, rather than refusal of articles of
food with inadequate prior notice.
Shortly after publication of the interim final rule, FDA began disseminating at
U.S. ports flyers and posters summarizing the new requirements and informing
representatives of affected entities how to provide prior notice to FDA; and
FDA also provided (and continues to provide) online assistance and a help
desk after the interim final rule became effective.
Specifics regarding each of these activities are included on FDA’s website: http:///www.fda.gov.
There is no basis for revoking any of the Bioterrorism Act regulations. The Bioterrorism Act is a
statute, and there is no indication that Congress intends to revoke it. At present, the only regulation
that FDA is considering amending is the prior notice interim final rule. FDA is considering the
extensive comments it received and is in the course of determining what changes, if any, are
appropriate as it develops the final rule.
[India]
Q.13 ISPM: 15 – Wooden Pallets used for Export of Bulk tea as prepared by the International Plant
Protection Convention (IIPC) of the FAO became effective from 1st March, 2005.
This requires that Phytosanitary Measures in respect of movement of wood packaging material in the
form of pallets/packages, must fully meet the Standards of NIL risk against possible introduction
and/or spread of quarantine pets associated with wood packaging material in use in international trade.
Further this, the ISPM : 15 has adopted various measures of treatment like Heat Treatment(HT),
Methyl Bromide (MB) Fumigation, etc. The pallet must also contain a logo of the approved treatment
of wood packaging material and assigned mark/code number of the National Plant Protection
Organization(NPPO) approved producer of the wood packaging material.
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The Plant Protection Adviser to the Govt. of India, Ministry Agriculture, has already initiated the
process of the accredition of Agencies to meet the aforesaid requirements in respect of tea industry in
North Eastern Region, West Bengal, Himachal Pradesh as well as South India. Would US Government
consider granting more time for Indian tea to conform to the aforesaid specified guidelines?
ANSWER:
We welcome the question from India concerning its bulk tea exports to the
United States that are shipped on wood packaging materials. The United States has remained
concerned that the varying implementation rules of importing countries could cause a severe disruption
of trade. The United States has sought a commitment by all countries to adhere to IPPC standard
making procedures and avoid modifications from the IPPC standards in all but emergency situations.
The United States has implemented IPPC standard ISPM-15. We believe it is critical that all WTO
members focus on the smooth and effective implementation of ISPM-15 to ensure that it meets its
objectives with minimal disruption of trade.
[India]
Q.14 The US Food and Drug Administration (FDA) insist for registration of any consignment of tea
exported to USA. Would U.S. authorities consider relaxing the FDI registration requirement for
samples of tea sent to potential importers based in USA?
ANSWER:
There are no exemptions from prior notice requirements for samples of food, including
animal feed, for research and development. For more details, please refer to www.cfsan.fda.gov.
[India]
Q.15 After the implementation of National Programme for Organic Production(NPOP) by
Government of India in 2001, Agricultural and Processed Food Products Export Development
Authority (APEDA) had sent the NPOP document to USDA with a request to acknowledge Indian
organic standards for equivalence with National Organic Programme (NOP) of the USA.
After the video-conference, on 16 February 2006 the Agriculture Marketing Service (AMS) of USDA
have recognized India’s accreditation system and the certification of organic agriculture products by
agencies accredited under NPOP for import of organic products into the US. Would U.S now take early
action to reach a final decision on determination of equivalency of Indian organic Standards with those
of US NOP Standards?
ANSWER:
AMS’ assessment and side-by-side evaluation of India’s NPOP for an equivalency
determination under NOP Option #3 found that India’s National Organic Program (NPOP) could not
fulfill the objectives of the NOP and its implementing regulations. The recognition by AMS of the
Government of India’s NPOP conformity assessment program under NOP Option #2 provides India
with access to the U.S. organic markets. Under NOP Option #2 the Government of India will be able
to accredit certification bodies in India to certify Indian produced organic products based on the
requirements of the U.S. National Organic technical standards (this is also a requirement under NOP
Option #1) and an assessment against ISO 17011.
India’s request for a full equivalence determination would be a much longer process and would require
significant changes to the Government of India’s NPOP before the United States could determine if
there was a sufficient basis to begin simultaneous, yet independent technical discussions to examine
each other’s organic production and inspection rules. AMS determined that India’s NPOP was an
export standard designed to facilitate the export of India’s organic products to any foreign market.
India’s NPOP has a very flexible structure that contains very vague language designed to accommodate
a wide array of market requirements. Critical U.S. NOP requirements such as a mandatory organic
system plan; prohibition of sewage sludge; use of 100 percent organic livestock feed; and
determination of commercial availability were either not addressed in India’s NPOP or allow
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certification agents to make the ultimate decision to take action to enforce requirements on a case-bycase basis. India’s NPOP is an export standard based on technical standards that were considered by
AMS to be less rigorous than the NOP.
[India]
Q.21 The US practice of deputing their own officials (from APHIS/USDA) for certification of
Quarantine Treatment Facility (such as hot water treatment/vapor heat treatment etc.) in other countries
increases the cost of exports for the countries concerned. This practice makes low volume exports
completely unviable and serves as a barrier to trade. Would the US consider evolving a practice
wherein these requirements could be based on certification by the exporting countries, after
establishing the necessary equivalence in standards ?
ANSWER:
Preclearance inspections, treatments and/or other mitigation measures are conducted in
foreign countries under the direct supervision of qualified APHIS personnel in accordance with
phytosanitary procedures specified by the Agency. These procedures are designed to identify and/or
mitigate against the risk of exotic pest introductions through action taken in foreign countries. Integrity
checks to ensure compliance with the program guidelines may also be conducted at the U.S. port of
entry. Proposals for agricultural commodity preclearance programs are typically developed jointly by
the host country’s plant protection service and participating industry. If requested, APHIS will provide
appropriate host country officials with assistance in work plan development. Reconsideration of an
existing preclearance program would involve dialogue between APHIS, the host country’s plant
protection service and participating industry.
[Japan]
Q23. The Bioterrorism Act (p.57, paras.161 to 164)
(1) With regard to the Public Health Security and Bioterrorism Preparedness and Response Act of 2002
(the“Bioterrorism Act”), the Government of Japan urges that an excessive burden should not be
imposed on exporters or individual senders of food beyond the level required by the purpose of the
Bioterrorism Act, that is, the protection of the United States from the threat of bioterrorism. In this
regard, please indicate the specific views of the Government of the United States.
ANSWER:
The Public Health Security and Bioterrorism Preparedness and Response Act of 2002
(the Bioterrorism Act or the Act) (PL 107-188), authorizes the U.S. Food and Drug Administration
(FDA), after public notice and an opportunity for domestic and international stakeholders to comment,
to develop rules for implementing the provisions of the Act, including section 307 (Prior Notice of
Imported Food Shipments). FDA and U.S. Customs and Border Protection jointly issued the Prior
Notice Interim Final Rule in October 2003, which allowed affected parties an additional opportunity to
comment on the interim final rule’s provisions. The rule took effect on December 12, 2003, as
required by the Bioterrorism Act. FDA is carefully considering all comments it received during the
open comment period on the interim final rule as it develops the final rule, including those comments
filed by the Government of Japan. FDA is working to develop provisions that are consistent with the
Bioterrorism Act, its legislative history and objectives, while at the same time minimizing the impact
on trade to the extent feasible.
(2) In particular, the Government of Japan has urged the Government of the United States not to oblige
non-commercial senders of food for non-commercial purposes and retail stores or other commercial
shippers on behalf of non-commercial individuals, if the non-commercial nature of the shipped food is
clearly declared on the parcel, to be subject to the prior notice requirement under the forthcoming final
rule. Please explain how the Government of the United States considers our request.
ANSWER:
The United States is considering the Government of Japan’s concern that the final prior
notice rule should not require individual shippers of foods to notify FDA of imports prior to shipping
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foods, as is currently required by the interim final rule. The United States notes that FDA’s
“Compliance Policy Guide”, (December 2003, most recently revised in March 2005) states that “FDA
and CBP should typically consider not taking any regulatory action when an article of food is imported
or offered for import for non-commercial purposes with a non-commercial shipper” and that such
articles are not typically refused entry by FDA and CBP, even without prior notice, regardless of
whether the food is sent by international mail or home-delivery services. See
http://www.cfsan.fda.gov/~pn/cpgpn5.html.
(3) The Government of Japan urges the Government of the United States to establish a contact point at
which Japanese nationals, particularly small- and medium-sized food processors and individuals, could
inquire in Japanese about the latest status of the related rules and guidelines and procedures to be taken
on the registration of food facilities, including the prior notice requirement. In this regard, please
indicate the specific views of the Government of the United States.
(4) The Government of Japan urges the Government of the United States to inform food processors, the
Japan Post, commercial transport service providers and Japanese nationals in general of any future
changes in the rules without delay through appropriate means. In this regard, please indicate the
specific views of the Government of the United States.
ANSWER:
Recognizing the importance of informing Japanese food processors, Japan Post,
commercial express delivery service providers, and the general public of the latest status of the rules
and related guidance documents, the United States will strive to update the website of the Embassy in
Tokyo without delay as FDA issues new rules and/or guidance documents under the Bioterrorism Act.
The U.S. Embassy in Tokyo also plans to establish contact points at the Embassy and ConsulatesGeneral in Japan, at which Japanese nationals, individual food shippers and small and medium-sized
food processors could inquire in Japanese about Bioterrorism Act rules and how to comply with them.
Japanese nationals also will be able to inquire at these contact points about FDA’s enforcement policies
related to the Bioterrorism Act rules, which information FDA provides in compliance policy guides and
question and answer guidance documents.
(5) The Government of Japan urges the Government of the United States to shorten the time for
procedures such as issuance of licences for importation. In this regard, please indicate the specific
views of the Government of the United States.
ANSWER:
The FDA does not issue import permits. If this question is referring to facility
registration, as stated in the registration rule, registration generally takes 1 hour or less. If this question
is referring to timeframes for prior notice, no response can be made at this time since these timeframes
are part of on-going rulemaking.
[Mexico]
21.
Could the United States tell us whether there are any preliminary draft amendments to the
Bioterrorism Act, or any draft amendments to the regulations published by the FDA to enforce the
provisions of the Act?
ANSWER:
The Bioterrorism Act has not been amended by Congress and the U.S. Food and Drug
Administration (FDA) has no current plans to amend the Registration of Food Facilities Final Rule, the
Establishment and Maintenance of Records Final Rule, or the Administrative Detention Final Rule (21
CFR Part 1, Subparts H, J, and K, respectively). FDA currently is developing the Prior Notice Final
Rule as expeditiously as possible, which will respond to the numerous comments received suggesting
various amendments to the Prior Notice Interim Final Rule (21 CFR Part 1, Subpart I).
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[Peru]
3. On page 68, paragraph 149, the report states that in the United States’ free trade agreements with
Australia and Chile there is no dispute settlement mechanism applicable to the chapter on SPS
measures. What is the rationale for removing from the dispute settlement mechanism any sanitary and
phytosanitary-related dispute from these bilateral agreements? Moreover, why are there no specific
SPS provisions in the Free Trade Agreement with Singapore?
ANSWER:
In bilateral and regional Free Trade Agreements, the United States views the WTO as
the appropriate forum for settling SPS disputes. Any SPS concerns arising under the FTA could be
pursued through WTO Dispute Settlement mechanism, if necessary. With regard to the SPS
Agreement with Singapore, because there is little to no agricultural production in Singapore, SPS
provisions were unnecessary.
[Peru]
4. On page 70, paragraph 153, the report states that no specific guidelines exist regarding pest-free
areas for grains, nursery stock, or lumber. Bearing in mind the importance of these commodities for
the developing countries, has the United States given any thought to preparing specific guidelines for
the recognition of pest-free areas for grains, nursery stock, and lumber in the short term?
ANSWER:
USDA/APHIS (The United States Department of Agriculture, Animal and Plant Health
Inspection Service) is committed to conducting pest risk analyses in accordance with the International
Plant Protection Convention’s International Standard for Phytosanitary Measures (ISPM) No. 11, "Pest
Risk Analysis for Quarantine Pests,'' and its supplements. APHIS also continues to develop new
methodologies and guidelines for conducting effective risk assessments, and makes these available to
interested parties. Examples include guidance on conducting risk assessments for commodities and
organisms, and for weed-initiated pest risk assessment. Peru and other WTO Members are welcome to
petition USDA/APHIS for recognition of pest free areas or area of low prevalence.
[Peru]
5. On page 72, paragraph 160, the report states that the FDA has primary responsibility for the safety
of all other foods, and of veterinary drugs, but does not specify, in general terms, its functions in each
case. Could you explain the FDA’s functions and responsibilities in terms of food safety and
veterinary drugs?
ANSWER:
The U.S. Food and Drug (FDA) is a scientific regulatory agency responsible for the
safety of the nation's domestically produced and imported foods, cosmetics, drugs, biologics, medical
devices, and radiological products. FDA is part of the Executive Branch of the United States
Government within the Department of Health and Human Services (DHHS) and the Public Health
Service (PHS).
FDA's responsibility in the food area generally covers all domestic and imported food except: meat,
poultry, and frozen, dried and liquid eggs, which are under the authority of the U.S. Department of
Agriculture (USDA's Food Safety and Inspection Service (FSIS); the labeling of alcoholic beverages
(above 7 percent alcohol) and tobacco, which are regulated by the U.S. Department of the Treasury's
Bureau of Alcohol, Tobacco, and Firearms (ATF); and, the establishment of tolerances for pesticide
residues in foods and ensuring the safety of drinking water, which are the responsibility of the U.S.
Environmental Protection Agency (EPA).
The Center for Food Safety and Applied Nutrition (CFSAN) in addition to a nationwide field force,
carry out the mission of the FDA to promote and protect the public's health by ensuring that the nation's
food supply is safe, sanitary, wholesome, and honestly labeled, and that cosmetic products are safe and
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properly labeled. Program areas that are regulated at CFSAN include: infant formula; seafood, plant
and dairy foods; beverages and bottled water; acidified and low acid canned foods; cosmetics and color
additives; dietary supplements; foods ingredients and packaging; foodborne illnesses; food labeling and
nutrition; HACCP; inspections, compliance and recalls; pesticides; chemical contaminants; and
biotechnology.
In addition to these responsibilities, CFSAN also provides technical assistance for domestic and foreign
industry, government and consumers. Members of CFSAN participate in and lend their expertise to the
Codex Alimentarius Commission, the World Trade Organization and other organizations that are
tasked with designing international policy on global food trade issues. CFSAN works closely with
U.S. Department of Agriculture, Environmental Protection Agency, and Executive Office of the
President, Office of the United States Trade Representative in working groups and committees for
Sanitary and Phytosanitary Measures and Technical Barriers to Trade in order to ensure that U.S. food
regulations are in compliance with domestic and international obligations.
FDA’s Center for Veterinary Medicine (CVM) is responsible for ensuring that animal drugs and
medicated feeds are safe and effective for their intended uses and that food from treated animals is safe
for human consumption. Before a new animal drug can be marketed in the United States, it must be
approved by the FDA on the basis of quality, safety and efficacy. When the drug is for use in foodproducing animals, not only must the safety to the animal be demonstrated, but also the safety of food
products derived from the treated animals that are intended for human consumption. Once approved
products are on the market, the Center monitors the use of the products through surveillance and
compliance programs. One of CVM's highest food safety priorities is monitoring for the development
of antimicrobial resistance. In addition, CVM assures the safety of the food supply through elimination
of violative residues in meat and milk, as well as in other animal products. CVM is also responsible for
the safety of food by reviewing the safety of food additives used in animal feeds and in monitoring a
wide range of feed contaminants such as Salmonella and heavy metals.
Both CFSAN and CVM are consumer protection organizations that foster public and animal health by
approving safe and effective products for humans and animals and by enforcing other applicable
provisions of the Federal Food, Drug, and Cosmetic Act and other domestic and international
authorities. CFSAN and CVM are committed protecting the safety of the food supply throughout the
United States.
[Peru]
6. On page 73, paragraph 164, the report only makes mention of economic impact analyses following
the entry into force of the Bioterrorism Act. Are these analyses still ongoing? Has an impact analysis
been conducted to determine the effects of applying the Bioterrorism Act on the safety to human health
or U.S. national security, with a view to amending, or where necessary, repealing any of its provisions?
ANSWER:
U.S. government agencies use economic analyses – including costs and benefits of
various regulatory approaches, in making decisions on what rules should require in light of the
statutory requirements. As part of developing rules under U.S. law, U.S. government agencies prepare
a draft economic analysis to accompany a proposed rule that estimates the cost to affected stakeholders
and the benefits received from the rule. The agency publishes the analysis in the Federal Register as
part of the preamble to the proposed rule and take comment on the analysis along with comment on the
substantive provisions being proposed.
Substantive provisions are revised in the rule and/or the
economic analyses in light of the comments received, as appropriate. The final rule, including the final
economic analysis, is then published in the Federal Register. The U.S. Food and Drug Administration
(FDA) engaged in this process for each of the Bioterrorism regulations. Since FDA just completed
most of these rulemakings, it does not see a need to revise the rules.
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[Peru]
7.
The report indicates that APHIS’ general policy is to evaluate hazards based on “the disease
risk associated with the region from which [animals and animal products] are exported, rather than on
‘disease free’ or ‘non-disease free’ statuses determined on a country-by-country basis.” Could you
explain the rationale and preference for the risk criteria with respect to the appropriate level of
protection? Could you confirm that the use of said criteria would not affect or delay decisions
regarding requests for regionalization and recognition of pest- or disease-free areas? Why so?
ANSWER:
After the WTO SPS Agreement entered into force, APHIS modified its traditional
country-based import restrictions. APHIS applies a science-based evaluation of the risk presented by
imported animals and animal products, and recognizes that risk may be based on climatological,
geographical, and biological factors that are not always defined by national political boundaries.
In support of its activities regarding regionalization, APHIS maintains a Regionalization Import
Requests web site where visitors can review requests received by APHIS for the establishment of
export-eligible regions in various countries for specific commodities. From this site visitors can review
not only that types of requests were made and when, but they can also review risk assessment
documentation developed to evaluate the requests.
In addition, USDA/APHIS employs scientific risk assessment as its foundation for making decisions on
import restrictions. With regard to animal and animal import risk analysis, APHIS bases its decisions
on the guidance set forth under the WTO-recognized international standard-setting bodies.
Whenever USDA/APHIS promulgates an import decision through rule making, it is obligated to adhere
to the procedural requirements specified in the Administrative Procedure Act and various executive
orders and other documents. For further details on the statutory and executive guidance related to the
Federal government rulemaking process, please see the following website:
http://www.whitehouse.gov/omb/circulars/a004/a-4.pdf
[The Philippines]
4. The Philippines notes that the Animal and Plant Health Inspection Service regulates the import of
plants, animals and their products into the United States by issuing import permits. We also note from
paragraph 156 of the Secretariat report that the process from risk assessment to issuance of an import
license can take several years. The Philippines would appreciate it if the United States can make a
clarification of the procedure as well as indicating the average length of time before import permits are
normally issued?
ANSWER:
There is no maximum period of time set for the issuance of import permits; however,
for plants, animals and products derived from them that are currently eligible for entry into the United
States, the issuance of an import permit is fairly routine, provided sufficient information is submitted
with the request. Moreover, only a select group of products regulated by USDA-APHIS is required to
have a permit as a condition of entry into the United States. Links to this information can be found at:
http://www.aphis.usda.gov/ppq/permits/index.html
If a commodity is not already eligible for entry to the United States, USDA-APHIS bases import
restriction decisions on scientific risk assessment, including any decisions on whether the issuance of
an import permit is required. For further details on the federal government rulemaking process, please
see the following website:
http://www.whitehouse.gov/omb/circulars/a004/a-4.pdf
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[Thailand]
31.
As the Bioterrorism Act of 2002 has entered into force for over 3 years, when does the
United States intend to publish information regarding the economic impact, particularly on trade, of
this regulation? We would especially appreciate information regarding the indicators listed in
paragraph 164, such as the value of imports refused entry into the United States due to lack of
compliance with the regulations.
ANSWER:
U.S. government agencies use economic analysis, including the analysis of costs and
benefits of various regulatory approaches, in making decisions on what rules should require in light of
the statutory requirements. As part of developing rules under U.S. law, an agency prepares a draft
economic analysis to accompany a proposed rule that estimates the cost to affected stakeholders and
the benefits we will receive from the rule. The agency then publishes the analysis in the Federal
Register as part of the preamble to the proposed rule and reviews comments on the analysis as well as
on the substantive provisions being proposed. Substantive provisions are revised in the rule and/or the
economic analyses in light of the comments received, as appropriate, and the final version of each is
then published in the Federal Register. The U.S. Food and Drug Administration (FDA) engaged in this
process for each of the Bioterrorism regulations.
[Turkey]
11. It is mentioned in the Secretariat report that in general import of plants, animals, and their
products require an import permit issued by the Animal and Plant Health Inspection Service (APHIS).
It is further explained in the report of the WTO Secretariat that the assessment of APHIS and the
issuance of an import licence can take several years.
We understand from the paragraph 156 that the whole process from APHIS’ determination to assess
the risk to the issuance of an import licence to some extent depends on the regulations and that if the
regulations allow imports of a product from a particular area import permits are issued without any
additional risk assessments for a particular shipment.
Is there a maximum period of time set for the issuance of import permits?
ANSWER:
There is no maximum period of time set for the issuance of import permits; however,
for plants and animals (and the products derived from them) that are currently allowed entry to the
United States, the period of time to obtain an import permit is not lengthy provided that the initial
request for the permit provides sufficient information upon which to base a determination to issue a
permit. Moreover, only a select category of all products regulated by USDA-APHIS are required to
have a permit as a condition of being eligible to enter the United States.
Could US Delegation explain what kind of factors are examined in the APHIS’ process to issue import
licence?
ANSWER:
APHIS does not issue import licenses. For further information regarding import
permits for plants, animals and their products please visit the following website:
http://www.aphis.usda.gov/permits/permit_index.shtml
Trade-related environmental regulations
[Brazil]
1. Chapter III, paragraph 03: “Most non-tariff restrictions are maintained for non-commercial
purposes, including a ban on imports of marine mammal products, shrimp, and tuna from countries
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found not to be in compliance with U.S. environmental provisions.” What are the objective criteria and
procedures that the U.S. Government establishes in order to identify which countries among those who
export the above mentioned products do not meet the U.S. environmental provisions? What procedures,
if any, are in place in order to ensure that such provisions will not be used for commercial purposes?
ANSWER:
U.S. laws relating to the conservation and protection of fish, shrimp, or marine
mammal products are applied on the basis of objective criteria; commercial interests are not a factor in
determining whether exports from a particular country comply with U.S. law. For example, the Marine
Mammal Protection Action provides that any nation that harvests tuna with purse seine vessels greater
than 400 short tons (362.8 metric tons) carrying capacity in the eastern tropical Pacific Ocean (ETP)
and seeks to export such tuna and tuna products to the United States must meet the criteria for an
affirmative finding. These criteria are then set out in U.S. regulations (50 CFR 216.24(f)(9)).
[Colombia]
Paragraph 172 of Title IX) says that "the Government of the United States filed an appeal to nullify the
decision by the Court in August 2005", in reference to the decision by the US District Court for the
Northern District of California to revoke the decision by the Secretary of Trade to amend the definition
of "dolphin safe." As far as the Government of Colombia knows, the appeal of the court ruling has not
yet been handed down. We do not even know whether the decision to appeal was made recently.
The Government of Colombia would thus like to receive further illustration of the following:
a. Has the decision to appeal the ruling by the Northern California District Court regarding the
amended definition of "dolphin safe" been adopted?
ANSWER:
The United States has appealed the district court ruling of August 10, 2004 to the
United States Court of Appeals for the Ninth Circuit. The United States filed its notice of appeal on
October 6, 2004, filed its opening brief on August 25, 2005, and filed its reply brief on February 3,
2006. Briefing has now been completed. The court will hear oral argument before deciding the case;
that oral argument has not yet been scheduled.
b. If so, when is the appeal expected?
ANSWER:
See above.
c. If not, does the Government of the United States have any specific date in mind to make the decision
and file the appeal?
ANSWER:
See above.
d. Is the Government of the United States considering the possibility of not filing an appeal?
ANSWER:
See above.
e. If the answer to the above question is yes, is the United States considering any sort of adjustment of
its definition of "dolphin safe" tuna? In particular, is the United States considering the possibility of
changing the approach from one based on the method of fishing for the tuna to one based on the
practices used in the fishing?
ANSWER:
Not applicable, above answer was negative.
f. Specifically, is the United States considering implementing a definition adapted to the criteria used
by the Agreement on the International Dolphin Conservation Program - APICD - (to which the United
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States is a Party), in which "dolphin safe" tuna is defined as that caught by casting seine nets in which
no dolphins were killed or seriously injured?
ANSWER:
See above.
[Japan]
Q24. Ensuring consistency of environmental regulations across States (p.58 to 60, paras.169 to
175)
Many companies are incurring unnecessarily high costs in meeting environmental regulations that are
at variance from State to State, for example in the area of regulations related to global warming and
recycling. With regard to ensuring consistency of environmental regulations across States, please
indicate the specific views of the Government of the United States.
ANSWER:
The mission of the U.S. Environmental Protection Agency is to protect human health
and the environment through the development and enforcement of environmental laws and regulations.
EPA’s authority to establish federal regulations to protect human health and the environment comes
from the statutes passed by Congress. This is the case for other federal agencies responsible for
environmental protection, such as the U.S. Department of Interior and the National Oceanic and
Atmospheric Administration (NOAA). EPA may delegate environmental programs to states that have
demonstrated the ability to effectively implement each program. When a state implements an EPAdelegated program, it must adopt regulations at least as protective as the federal standards, but can also
choose to establish more stringent regulations. This approach is grounded in our constitutionally
established federal system of government, in which states maintain significant powers to enact and
implement regulations and programs according to their own conditions and needs.
[Japan]
Q25. CAFE (p.59, para.175)
The Energy Policy and Conservation Act of 1975 requires automobile manufacturers to calculate the
corporate average fuel economy (CAFÉ), which should clear certain thresholds for the purpose of
environmental protection. When calculating CAFÉ figures, it is necessary to compute the rate of
domestic manufacturing for each line, and to obtain the standards of fuel consumption for domestic and
imported automobiles respectively. However, as automobiles obtain standards in their own category,
the differentiation of domestic and imported vehicles sometimes brings out negative effects on the
improvement of fuel efficiency itself, which was the initial goal. Companies specializing in imported
and fuel inefficient large-sized cars and sports-type cars experience disadvantages. Automobile
industries, not only Japanese but also American, have been claiming that this measure may distort
sound investment activities by private companies and have demanded improvement. Japan would like
to know whether the Government of the United States has a concrete plan on tightening or loosening
the existing regulation.
ANSWER:
NHTSA recently proposed new CAFE levels and a reformed CAFE structure that
affects Model Year 2008 through 2011 light-duty trucks. The proposal can be found at:
http://www.nhtsa.dot.gov/cars/rules/rulings/LightTrucksRuling-20082001/ProposedRulemaking/CAFE-LigthTrucks-PR-24Aug05.pdf.
NHTSA plans to issue the final rule on or before April 1, 2006.
[Peru]
On page 74, paragraph 169, the report mentions the EPA’s interaction with federal government
agencies and foreign governments, but does not mention the EPA’s trade-related functions. Could you
elaborate on the functions of the EPA that affect trade with other countries?
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ANSWER:
The mission of the Environmental Protection Agency is to protect human health and
the environment through the development and enforcement of environmental laws and regulations.
EPA's regulatory functions can, in some instances, effect trade with other countries. For example,
regulatory action on a high risk chemical that is produced both domestically and internationally may
impact international trade. Where EPA is developing regulations or rules that might impact
international trade, EPA publishes draft regulations/rules in the Federal Register in advance to seek
public comments, and EPA consults closely with the Office of the U.S. Trade Representative (USTR)
and other interested agencies in the development of such regulations and rules. In addition to its
regulatory functions, EPA participates in policy development across many subject areas of the U.S.
government, including trade policy. For example, EPA participates in the interagency coordination
process to prepare for meetings of several WTO committees, including the SPS, TBT, and CTE
committees.
[Peru]
With respect to [technical] cooperation on environmental issues that the United States provides to other
trading partners, can you indicate which agency is in charge of supervising such cooperation? What
has been the impact of trade-related environmental cooperation provided by the United States in terms
of increased trade flow with its trading partners and what examples could you cite in this regard?
ANSWER:
In most cases, including recently concluded U.S. Free Trade Agreements (FTAs), the
State Department is in charge of supervising environmental cooperation with those FTA partners.
However, in the case of the NAFTA and the North American Agreement on Environmental
Cooperation (NAAEC), it is the Environmental Protection Agency that supervises cooperation.
Environmental cooperation is intended to strengthen the capacity of the United States trading partners
to develop and implement standards for the protection of the environment and human health. Increased
trade flow with trading partners is the goal of the free trade agreement but not necessarily of the
cooperation activities. Improved environmental protections and standards that are mutually supportive
with increased trade and economic activity are at the heart of cooperation activities. There may be
some instances where increased trade flow could result from environmental cooperation projects in a
particular sector. The United States has cooperative mechanisms with several trading partners but does
not track increased trade flow that may result from such activities.
[Switzerland]
Para. 170: This paragraph suggests that the United States applies trade measures to enforce U.S.
environmental provisions, notably those governing the use of marine resources and states some
examples of the fishing industry. Could the United States please expand on whether there are other
areas, apart from the fishing industry, where trade measures are applied in order to enforce U.S.
environmental provisions? Are there trade measures which are applied in order to enforce multilateral
environmental agreements to which the US is a Member?
ANSWER:
Apart from the fishing industry, trade measures may be applied in order to enforce
U.S. environmental provisions concerning wild plants and animals and certain toxic, hazardous, or
ozone depleting substances.
There are instances where the United States may apply trade measures in order to enforce U.S. laws
implementing multilateral environmental agreements (MEAs) to which the United States is a party.
For example, the United States implements its trade-related and other commitments under the
Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) through
national legislation, the Endangered Species Act of 1973 (ESA).
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[Switzerland]
Para. 172: According to the Secretary of Commerce, the intentional chase and encirclement of dolphins
was not having a "significant adverse impact" on any depleted dolphin stocks in the eastern tropical
Pacific. As a result, the definition of dolphin-safe would have changed to allow tuna caught by chase
and encirclements of dolphins to be considered dolphin-safe. Could the United States elaborate on the
actual status of the U.S. Government appeal of August 2005 to reverse the U.S. District Court's
decision for the Northern District of California of August 2004 ?
ANSWER:
The United States has appealed the district court ruling of August 10, 2004 to the
United States Court of Appeals for the Ninth Circuit. The United States filed its notice of appeal on
October 6, 2004, filed its opening brief on August 25, 2005, and filed its reply brief on February 3,
2006. Briefing has now been completed. The court will hear oral argument before deciding the case;
that oral argument has not yet been scheduled.
[Switzerland]
Para. 175: Could the United States give an update on the status of two-fleet rule which is mentioned in
para. 175 ? Does the U.S. Government intend to abolish this two-fleet rule which might constitute a
trade barrier for foreign manufacturers ?
ANSWER:
The final rule for Model Year 2008 – 2011 light truck Corporate Average Fuel
Economy (CAFE) standards will be published by the Department of Transportation’s National
Highway Traffic Safety Administration (NHTSA) on or before April 1, 2006. However, this
rulemaking does not address the so-called “two fleet rule”. NHTSA can not abolish the two-fleet rule
because it has no statutory authority to do so.
Measures Directly Affecting Exports
Export Controls and Restrictions
[Argentina]
Q. 4. On page 31, paragraph 8, mention is made that the United States is taking measures to ensure
sufficient domestic supply.
Question: Could you list the measures whose objective is "to ensure sufficient domestic supply?" Are
these measures geared exclusively toward domestic production?
ANSWER:
The Export Administration Act implements measures that "restrict the export of goods
where necessary to protect the domestic economy from the excessive drain of scarce materials and to
reduce the serious inflationary impact of foreign demand." Shortages in domestic production could
lead to such restrictions. However, these measures are not geared exclusively toward domestic
production capacity; but, also consider the scarcity of certain commodities that are natural resources.
Such measures include, for example, restrictions on the export of U.S. origin crude oil, natural gas,
certain refined petroleum products, and certain raw timber.
[China]
Question: (p.60 para.176)
The U.S. restricts seriously export of hi-tech products to China. Such restrictions deprive many U.S. hitech companies of its due right to export to China. According to China’s statistics, the U.S. ranked No
2 in 2001 as one of the largest hi-tech products exporters to China. However U.S. exports dropped to
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No. 6 in that ranking in 2005, with its share of the total hi-tech imports of China falling from 16.5% in
2001 to only 8.1% in 2005.
Has any U.S. institutions conducted any study on the impact of its export restrictions on its
current trade deficit with other Members? If yes, would the U.S. Government share the outcome
of these studies with Members?
Does the U.S. regard its current export restrictions on hi-tech products to China as one of the
major causes in US-Sino trade deficit?
Would the U.S. intend to review its current export restriction policy with a view to fostering a
healthier and more comprehensive US-Sino trade relations?
ANSWER:
The United States does not regard its current national security and foreign policy dualuse export controls as a significant factor in the U.S.-Sino trade deficit. This is because dual-use export
controls apply to only a small portion of overall U.S. exports. In 2005, the U.S. exported a total of
$41.8 billion in goods to the People’s Republic of China. In contrast, in 2005 the U.S Government
issued 1,337 export licenses valued at $2.4 billion for exports to China. Moreover, there are very few
denials of export license applications for China, only 47 denials valued at $13 million. Thus, export
controls are not a major factor in the U.S. trade deficit with China.
The United States just completed a comprehensive review of U.S. trade policy with respect to China.
[China]
Questions: (p.60 para.178)
It takes at least three months, even one year in some cases for the United State Government to issue an
export license after receiving an application. This period is considerably longer than those in many
other countries like Germany and Japan. Moreover, export licenses are issued with many other
additional conditions.
Why does it take so long for the U.S. to issue an export license?
ANSWER:
The export licensing process involves referral of every application to other government
agencies (State, Defense and Energy) for their review and input. In addition, the intelligence
community is consulted for any pertinent information on foreign end users of controlled U.S. goods. In
some cases, a pre-license check may be requested as a condition of granting the license. According to
BIS statistics, the average processing time to obtain a license to export goods or technologies to China
was 55 days in calendar year 2005, down from 77 days in 2004 and 81 days 2003.
[China]
When the U.S. sanctioned foreign companies in name of weapon proliferation, were there any
evidence presented to the sanctioned company to justify the U.S. intentions?
ANSWER:
The United States has a regular and ongoing dialogue with China on nonproliferation
matters. This dialogue has included discussion of the imposition of nonproliferation sanctions on
Chinese entities.
[Japan]
Q26. Re-export Control (p.60, paras. 176 to188)
(1) The US requires export licenses on the re-exports of U.S.-origin items even if they have already
received export licenses from exporting countries. Such a regulation could be recognized as an
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extraterritorial application of U.S. domestic law, which is impermissible under the general international
law. In response to the questions by Japan in the TPR of the U.S. in January 2004, the U.S. answered
on page 113 of WT/TPR/M/126/Add.3 that U.S. re-export controls are required under the federal law
and reflect a long-standing Congressional requirement, and both export and re-export controls are
necessary to protect U.S. national security and foreign policy interests. However, Japan finds little
reason for the U.S. to control re-exports from countries, including Japan, that carry out effective export
controls not only by participating in all the international export control regimes, but also by having
introduced a catch-all system for weapons of mass destruction and their means of delivery. The U.S.
should exclude those countries from application of U.S. re-export control. In this regard, please
indicate the specific views of the Government of the United States.
ANSWER:
The U.S. Government recognizes that the many governments have implemented
extensive export control systems, however the United States continues to be convinced that both export
and re-export controls are necessary to protect U.S. national security and foreign policy interests. U.S.
re-exports controls are required under federal law and reflect a long-standing Congressional
requirement.
(2) As Japan mentioned in the previous TPR and in the Regulatory Reform and Competition Policy
Initiative between Japan and the U.S., it still remains a serious problem that importers (re-exporters) of
U.S. origin items are prevented from taking appropriate procedures for export control compliance
because they are not provided with sufficient information on U.S. origin items by U.S. exporters.
Lacking sufficient information on these items, importers (re-exporters) face difficulties in identifying
the items correctly and determining whether they are subject to the U.S. regulations. As a transitional
measure pending exclusion of countries carrying out effective export controls from U.S. re-export
control, the U.S. should oblige its exporters to provide importers (re-exporters) of U.S. origin items
with sufficient information on these items, including ECCNs. Japan notes that the U.S. Department of
Commerce issued its ‘Best Practices for Transit, Transshipment, and Re-export of Items Subject to the
Export Administration Regulations (hereinafter referred to as ‘Best Practices’)’in November 2003 in
which it recommended US exporters to communicate the appropriate ECCNs or other classification
information to the end-user and to the ultimate consignee. However, this ‘Best Practices’ approach is
not legally binding and has not made a substantial change in U.S. exporters’ behavior. In response to
the questionnaire from Japan in the TPR of the United States in January 2004, the U.S. showed its
concern about making ECCNs notifications by U.S. exporters obligatory as follows: One concern we
(the U.S.) note is that the original classification of an export may not be accurate for re-export
transactions. In addition, the classification of the product may change if a U.S. origin item is altered
after receipt. Thus, if a re-exporter used the original classification supplied by the exporter, it may be
incorrect（Page 114, WT/TPR/M/126/Add.3. Japan requires further explanation on this. If an item
not subject to EAR when exported is altered (manufactured, processed) into an item subject to EAR in
the importing country, is the importer (re-exporter) required to get the license from the U.S.
government? Or, if an item not listed in EAR (an item classified as EAR 99) is altered (manufactured,
processed) into an item listed in EAR in the importing country, is the importer (re-exporter) required to
get the license from the Government of the United States?
ANSWER:
To clarify, in the United States' original response to Japan's TPR question from
January 2004 on making it obligatory for U.S. exporters to provide Japanese importers with the ECCN
of the item being exported, the United States replied in part, "We note one concern is that the original
classification of an export may not be accurate for re-export transaction. In addition, if a U.S.-origin
item is altered after receipt, which may change the classification of the product. Thus, if a re-exporter
used the original classification supplied by the exporter, it may be incorrect." An example of this is
when a dual-use focal plane array license, classified under ECCN 6A002.a.3, is exported to Japan and
integrated into a thermal imaging camera; the re-exported camera would be classified under 6A003.b.4.
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If an item, not subject to the EAR, is exported to Japan, it would not be subject to U.S. EAR-based reexport regulations. If an item classified EAR 99 is altered into an item list in the EAR, it would require
a U.S. re-export license only if the newly manufactured item dose not qualify for the de minimis
exception to the EAR. The Department of Commerce's Bureau of Industry and Security website has
"Guidance on Re-exports and Other Offshore Transactions Involving U.S.-Origin Items."
This guidance is available at http://www.bis.doc.gov/Licensing/ReExportGuidance.htm. BIS has also
translated this guidance into Japanese, and posted the translated text of the guidance on its web site at
http://www.bis.doc.gov/InternationalPrograms/Foreign_Language/DOC042203_Japanese.htm.
BIS
also offers seminars to explain U.S. regulations and provides extensive telephone, email, and one-onone counseling.
(3) It is indispensable for re-exporters to get information on U.S. origin items from U.S. exporters to
comply with U.S. re-export control because it is not easy for them to identify the characteristics of U.S.
origin items and the items incorporated into other products. It is unacceptable that only re-exporters
take responsibility for failures in compliance with U.S. re-export control while U.S. exporters are not
obliged to provide sufficient information of U.S. origin items that is necessary for compliance with
U.S. re-export control. The U.S. should oblige U.S. exporters to provide importers (re-exporters) with
sufficient information on the U.S. origin items as soon as possible. In addition, the U.S. export control
authority should make it a condition of approval of export license applications by U.S. exporters that
they provide importers (re-exporters) with appropriate information, including ECCNs, and exclude
importers (re-exporters) from the application of the U.S. re-export control in the case that such
information is not provided. In this regard, please indicate the specific views of the Government of the
United States.
ANSWER:
The U.S. Government appreciates the Government of Japan's suggestion to require an
exporter to share certain information with re-exporters to assist in complying with their obligations
under U.S. export control regulations. We are willing to discuss the suggestion that this becomes
obligatory, as the United States encourages exporters to communicate with their customers. We again,
however, note our concerns that the original classification of an export may not be accurate for the reexport transaction.
[Japan]
Q27. Sanction Measures (p. 61, para.183)
The sanction measures taken by the U.S. based on related acts (the Iran and Libya Sanctions Act, the
Cuban Liberty and Democratic Solidarity Act, the Burmese Freedom and Democracy Act as well as
local and municipal sanctions acts) discourage, significantly and unreasonably, investment into, and the
establishment of economic relations with, the countries targeted by these laws, which affect not only
U.S. private enterprises, but also those world-wide. In legal terms, they constitute an extraterritorial
application of domestic laws, which is not permissible under the general international law and may
cause a problem of inconsistency with WTO agreements. Moreover, fairness, transparency and
predictability have not been observed in their applications. Japan, therefore, strongly requests the U.S.
to ensure the consistency of these acts with international laws, and to implement them prudently. In
this regard, Japan would like to know whether there has been any progress on discussions in the
Congress about the amendment of the Iran and Libya Sanctions Act for promoting Iran’s liberalization
(Iran Freedom Support Act), which was proposed both to the Senate and the House last year. In
addition, please provide the latest information on all effective sanctions acts instituted by the states and
local municipalities.
ANSWER:
Undersecretary of State Burns addressed this issue in testimony to the International
Relations Committee of the House of Representatives on March 8, 2006. Please refer to
http://www.state.gov/p/us/rm/2006/62779.htm for the full text of his remarks.
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We would appreciate further details from Japan as to the specific state and municipality sanctions acts
that are of concern.
[Japan]
Q28. Export restrictions (p.61, para.186)
Japan, as one of the major wood-products importing countries, is concerned about the log export
restriction by the U.S. The U.S. has explained to Japan that the export prohibition measure aims to
protect wildlife such as spotted owls. Japan, however, regards this measure as a quantitative export
restriction for protecting domestic saw millers, which should be rectified in accordance with the WTO
rules. First of all, the protection of spotted owls and other wildlife must be realized through restricting
harvests but not through export bans. Secondly, only export restrictions have been introduced, while no
regulations have been established for the domestic trade of logs, and the U.S. is even requesting Japan
to expand wood product imports, which are processed from logs. It should be noted that Japan raised
this point in the previous TPR meetings of the U.S. In this regard, please indicate the current specific
views of the Government of the United States.
ANSWER:
Based on statutory requirements (the Forest Resource and Conservation Act (16 U.S.C.
620 - 620j)), the United States currently maintains a ban on the export of unprocessed timber
originating from all public lands, including both state and federal lands, located West of the 100th
meridian in the continental United States. The purpose of the statute is to provide relief for shortages
in unprocessed timber supplies, consistent with Article XI:2(b) of the General Agreement on Tariffs
and Trade 1994.
[Turkey]
16. The Secretariat report, paragraph 187, touches upon on the Transshipment Country Export Control
Initiative (TECI) which is aimed to avoid diversion of sensitive items to illicit purposes. The initiative
is very much in line with the 1540 numbered United Nations Security Council Resolution which
stipulates that states should establish effective controls over transit and transshipment for the
commodities of proliferation concern. Moreover Proliferation Security Initiative foresees transit and
transshipment controls.
On the other hand, GATT 1994 Article V on Freedom of Transit stipulates that there should be freedom
of transit through the territory of each contracting party.
In this regard, can US Delegation elaborate more on the scope of the transit /transshipment controls
executed by the US and their impacts on trade?
ANSWER:
The TECI is a multi-faceted, cooperative initiative that seeks to strengthen the trade
compliance and export control systems of those countries and companies that constitute global
transshipment hubs. By working to strengthen those systems, the United States seeks to enhance
security and confidence in international trade flows. It is entirely consistent with UN Resolution 1540
and the GATT.
Special 301 and Related Actions
[Indonesia]
4.
The US Administration is issuing a comprehensive Report on yearly basis in implementing
Section 182 of the US Trade Act of 1974. The Report contains countries which are deemed not
complied with certain WTO Agreements such as TRIPs, Import Licensing procedures, etc. In the
Report the US government has placed some countries, including Indonesia in a Priority Watch List as
countries which are not implementing the TRIPs Agreement in full. Through this report, the US is
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strongly urging the countries concerned to improve, to amend and/or to revoke their policies which are
deemed not consistent with WTO Agreements. Indonesia wish to have an explanation as to what extend
this Priority Watch List could be justified under the WTO rules and disciplines.
ANSWER:
Pursuant to Section 182 of the Trade Act of 1974, as amended by the Omnibus Trade
and Competitiveness Act of 1988 and the Uruguay Round Agreements Act (enacted in 1994), under
Special 301 provisions, USTR must identify those countries that deny adequate and effective protection
for IPR or deny fair and equitable market access for persons that rely on intellectual property
protection. Countries that have the most onerous or egregious acts, policies, or practices and whose
acts, policies, or practices have the greatest adverse impact (actual or potential) on the relevant U.S.
products must be designated as “Priority Foreign Countries.” USTR has also created a “Priority Watch
List” and “Watch List” under Special 301 provisions. Placement of a trading partner on the Priority
Watch List or Watch List indicates that particular problems exist in that country with respect to IPR
protection, enforcement, or market access for persons relying on intellectual property. Countries
placed on the Priority Watch List are the focus of increased bilateral attention concerning the problem
areas. The Special 301 analysis is based on a complex review process, including consultations among
different government agencies, including U.S. embassies in the countries concerned, and with the
private sector and foreign governments. Each country is evaluated on its particular factual
circumstances based on information obtained by the U.S. Government, including that provided by the
foreign governments concerned and that gathered by U.S. embassies in the country concerned. Foreign
governments are welcome to provide any information that they feel may be relevant to the Special 301
review. Among the factors considered in identifying such countries is whether a country’s intellectual
property regime meets internationally recognized standards of protection. Identifying countries that
deny adequate and effective protection for IPR or deny fair and equitable market access for persons that
rely on intellectual property protection is not inconsistent with WTO rules and disciplines.
[Israel]
1.
Israel would be interested to know the criteria used by the US for placing countries on
SECTION 301 OF THE 1974 TRADE ACT.
ANSWER:
Pursuant to Section 182 of the Trade Act of 1974, as amended by the Omnibus Trade
and Competitiveness Act of 1988 and the Uruguay Round Agreements Act (enacted in 1994), under
Special 301 provisions, USTR must identify those countries that deny adequate and effective protection
for IPR or deny fair and equitable market access for persons that rely on intellectual property
protection. Countries that have the most onerous or egregious acts, policies, or practices and whose
acts, policies, or practices have the greatest adverse impact (actual or potential) on the relevant U.S.
products must be designated as “Priority Foreign Countries.” USTR has also created a “Priority Watch
List” and “Watch List” under Special 301 provisions. Placement of a trading partner on the Priority
Watch List or Watch List indicates that particular problems exist in that country with respect to IPR
protection, enforcement, or market access for persons relying on intellectual property. Countries
placed on the Priority Watch List are the focus of increased bilateral attention concerning the problem
areas. The Special 301 analysis is based on a complex review process, including consultations among
different government agencies, including U.S. embassies in the countries concerned, and with the
private sector and foreign governments. Each country is evaluated on its particular factual
circumstances based on information obtained by the U.S. Government, including that provided by the
foreign governments concerned and that gathered by U.S. embassies in the country concerned. Foreign
governments are welcome to provide any information that they feel may be relevant to the Special 301
review. Among the factors considered in identifying such countries is whether a country’s intellectual
property regime meets internationally recognized standards of protection. Identifying countries that
deny adequate and effective protection for IPR or deny fair and equitable market access for persons that
rely on intellectual property protection is not inconsistent with WTO rules and disciplines.
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[Israel]
2.
Do WTO Members who abide by the provisions of the TRIP'S Agreement appear on the "301
lists" ?
ANSWER:
As discussed above in response to question 1, under the Special 301 provisions, USTR
identifies those countries that deny adequate and effective protection for IPR or deny fair and equitable
market access for persons that rely on intellectual property protection. Among the factors considered in
identifying such countries is whether a country’s intellectual property regime meets internationally
recognized standards of protection.
[Japan]
Q29. Unilateral measures (p. 62, paras.189 to190)
Japan is concerned that Section 301 of the Trade Act of 1974 and the related provisions such as
“Special 301” and “the Telecommunications Trade Act of 1988” could be inconsistent with the U.S.
obligations under the WTO contingent upon operations by the U.S. Japan would therefore like to
request the U.S. to have regard towards consistency with the WTO rules on the occasion of operating
the unilateral measures cited above. In this regard, please indicate the specific views of the
Government of the United States.
ANSWER:
Section 301 of the Trade Act of 1974 and the other provisions cited by Japan are fully
consistent with U.S. obligations under the WTO. As Japan is aware because it was a third party in the
case, the one WTO dispute challenging section 301 resulted in a specific finding of no WTO
inconsistencies. The relevant panel report was adopted by the DSB on January 27, 2000.
Export Assistance
[Argentina]
11. On page 81, paragraph 195, the report makes reference to the fact that the United States maintains a
duty drawback program, whereby customs duties and some domestic taxes and charges resulting from
the importation are reimbursed.
Question: Could you provide us with more information about those domestic taxes and charges?
ANSWER:
Generally, the claim is limited 99 percent of the duty paid. If an Internal Revenue Tax
is imposed under the HTSUS subheading on the merchandise in addition to the duty, that tax is
considered to be a duty and equally eligible for drawback. Drawback of 100 percent of the domestic
alcohol tax applies on the export of flavor extracts and medicinal or toilet preparations. Under the
unused merchandise drawback provision, 99 percent of the duty, import tax and import fees paid are
eligible.
[Australia]
The Appellate Body ruled in February 2006 that the United States has failed to fully implement the
Dispute Settlement Body recommendations and rulings in the United States - Tax Treatment for
Foreign Sales Corporations dispute. What steps is the United States considering to bring its regime
into compliance with the Appellate Body ruling?
ANSWER:
Congress, in a major legislative accomplishment, has repealed the FSC and ETI rules.
We were pleased that the Appellate Body in its most recent review of our legislation found that we had
largely complied with the WTO's findings on this issue. We remain aware of our WTO obligations.
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[Brazil]
Chapter III, paragraphs 191-194: “the United States provides export financing through its official
export agency, the Ex-Im Bank”. The Bank is mandated to provide “credit at rates and terms that are
fully competitive with those supported by governments in the principal countries whose exporters
compete with U.S. exporters. Ex-Im Bank accepts risks that private sector is unwilling or unable to
take.” In a recent paper (TN/RL/GEN/94), presented at the Negotiating Group on Rules, the US
proposed the expansion of the prohibited category of subsidies on the Agreement on Subsidies and
Countervailing Measures (ASCM). According to the document, some “forms of egregious government
intervention such as (...) funding of companies or projects that would not otherwise receive
conventional commercial financing” should be the first candidates for inclusion in an expanded “red
box”.
(i) Does the US consider that the export financing, as currently provided by the Ex-Im Bank,
could be understood as a form of “egregious government intervention”, in the terms of its
proposal (TN/RL/GEN/94)? What would differentiate the practice of Ex-Im Bank when
accepting “risks that private sector is unwilling or unable to take” from the ones the US
describes in its proposal?
ANSWER:
Given their unique role in international trade, official export credits have long been the
subject of special multilateral disciplines. Official export financing in the United States is provided
consistent with relevant rules under the WTO Agreement on Subsidies and Countervailing Measures
and the OECD Arrangement on Guidelines for Officially Supported Export Credits. With regard to the
U.S. proposal on prohibited subsidies (TN/RL/GEN/94, January 16, 2006) in the Negotiating Group on
Rules, footnote 6 of that proposal states the U.S. position in the negotiations that "the consistency of
any new rules with the export credit rules might also need to be considered."
(ii) In addition, in paragraph 194, the report states that “close to 40% of total Ex-Im Bank
exposure is in the aircraft sector” – out of US$ 13.3 billion in support activities, in 2004. Could
the US Government please provide additional details on their support (guarantees, insurance
and credits) to the mentioned sector, including terms and rates of financing?
ANSWER:
Programmatic details of the Export-Import Bank of the United States can be found at
http://www.exim.gov.
[Brazil]
9. Chapter III, paragraph 195: A number of assistance measures for export promotion are in place in
the US, among them a duty drawback program. The report does not provide detailed information about
the actual operation of the program. It states simply that “customs duties and certain internal taxes and
fees resulting from importation are refunded following the export of either the imported product or the
article manufactured from the imported product”. Regarding the US drawback programme, is it
possible to receive information on: (i) criteria for firms to be eligible for the program; (ii) refundable
taxes and fees and extent of refunds; (iii) mechanisms for the refund, including time periods?
ANSWER:
(i) The criteria for the different types of drawback depend on the statutory provision
under which the drawback claim is made.
Generally the importer, a person who receives the imported merchandise from the importer or the
exporter is entitled to claim drawback. If the importer and exporter are different persons, they will need
to cooperate with each other to make the claim. The claimant needs to show a link between the import
and export merchandise. For manufacturing drawback, the claimant must show that imported duty-paid
merchandise was used by the manufacturer to produce articles and exported within five years from
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importation. If the claim is made under the substitution provision the claimant must show that the
export article was made within three years after receipt of the imported merchandise, that the imported
merchandise was used during the same three-year period and that the substitute merchandise could be
used interchangeably in the manufacturing process to make the export article. For drawback based on
the use of domestic tax-paid alcohol, the claimant must show that the exported flavor extracts or
medicinal or toilet preparations were made with that alcohol.
(ii) The refundable duties and taxes also depend on the statutory provision under which the claim is
made.
Generally, the claim is limited 99 percent of the duty paid. If an Internal Revenue Tax is imposed under
the HTSUS subheading on the merchandise in addition to the duty, that tax is considered to be a duty
and equally eligible for drawback. Drawback of 100 percent of the domestic alcohol tax applies on the
export of flavor extracts and medicinal or toilet preparations. Under the unused merchandise drawback
provision, 99 percent of the duty, import tax and import fee paid are eligible.
(iii) Finally, the time periods applicable to the claim depend on the statutory provision under which the
claim is made.
For a manufacturing drawback claim, the period from import to export is five years. In addition, there
is a three-year period from receipt by the manufacturer to production of a manufactured article if the
claim is made under the substitution manufacturing provision. There is a three-year period from import
to export for other types of drawback.
The claim must be filed within three years after the export of the article on which the claim is made.
[Hong Kong China]
Export Assistance
(WT/TPR/S/160, P. 63, Para. 194 and Table III.6)
4. There is an increasing trend in the amounts authorised by the Export-Import Bank in support for
export activities (from US$9.2 billion in fiscal year 2001 to US$13.3 billion in fiscal year 2004). What
are the reasons for the increase? Does the US envisage the rising trend to continue?
ANSWER:
Ex-Im Bank is demand-driven, so it is difficult to predict how much activity it will
have in any one year. However, Ex-Im Bank has always strived to increase its activity from one year
to the next. Unless there is a global economic downturn, Ex-Im Bank activity is generally in the $1213 billion range. Ex-Im Bank's activity reached a low of $9.2 billion in FY01 due a slowing of the
global economy. However, Ex-Im Bank's activity in FY00 was $12.6 billion and $13.1 billion in
FY99. These were more typical than FY01.
[Japan]
Q30. Tax Treatment for Export Companies (ETI regime; formerly FSC regime) (p.64, paras.196
to 198）
As stated in the Report by the Secretariat, the WTO compliance panel in September 2005 concluded
that the U.S. maintains prohibited FSC/ETI subsidies through the transition and grandfathering
measures of the American Job Act of 2004, and therefore, continues to fail to implement fully the
operative DSB recommendations. We are aware that Appellate Body in February 2006 upheld such
Panel’s findings. Please explain how the U.S. plans to implement the DSB’s recommendations.
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ANSWER:
Congress, in a major legislative accomplishment, has repealed the FSC and ETI rules.
We were pleased that the Appellate Body in its most recent review of our legislation found that we had
largely complied with the WTO's findings on this issue. We remain aware of our WTO obligations.
Other Measures Affecting Production and Trade
Other Government Support Including Subsidies
[Argentina]
12. On page 82, paragraph 199, the report mentions that the most recent full notification by the
United States (October 2005), presented under Article XVI(1) of the GATT of 1994 and Article25 of
the Agreement on Subsidies and Countervailing Measures, includes a list of 375 subsidy programs,
whereas the previous notification (2002) contained only 220.
Questions: Could you indicate of what these programs consist? What specific products are affected by
these subsidies?
ANSWER:
Programs notified in the United States' subsidy notification include programs at both
the federal and sub-federal level. These programs provide assistance in the form of income tax
concessions and grants, as well as other forms of assistance. Industries benefiting from these programs
include agriculture, the energy sector, and fisheries. Programs at the state level also provide aid to rural
and under-developed regions. For more details regarding each of these programs, please refer to the
United States Subsidies Notification (WTO document G/SCM/N/95/USA).
[Argentina]
13. On page 85, paragraph 210, the report makes reference to the Trade Adjustment Assistance for
Firms Program, which is part of a broader program that also provides assistance to workers and
farmers. Although the program's period of effectiveness and the amount of aid available are included, it
is unclear what the basis for its application is and what industries benefit from it.
Question: Could you explain these last points in greater detail?
ANSWER:
The Trade Adjustment Assistance (TAA) Program, as set out in the Trade Act of 1974
as amended, provides technical assistance to help U.S. firms experiencing a decline in sales and
employment, resulting in important part from the increase in imports of like or directly competitive
articles. The Secretary of Commerce is responsible for administering the TAA Program and has
delegated the statutory authority and responsibility for this program under the Trade Act of 1974 to the
Department of Commerce’s Economic Development Administration (“EDA”). EDA regulations
implementing the TAA Program may be accessed via EDA’s Internet website at:
http://www.eda.gov/InvestmentsGrants/Lawsreg.xml
Although trade adjustment for firms is a small program ($12.8 million in FY 06), a broad spectrum of
industries has received trade adjustment assistance from the program, including, for example:
electrical equipment, lawn and garden products, printing machinery, and telecommunications
equipment. A list of those industries that have availed themselves of the TAA for Firms program is
available at http://taacenters.org/industries.html.
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[Canada]
Part III. Trade Policies and Practices by Measure, (4): Other Measures Affecting Production and
Trade, (i) Other government support including subsidies, (a) Overall support, Paragraph 199 and
Table III.7
The Secretariat Report notes that as of October 2005, the last U.S. full notification under Article XVI:1
of the GATT 1994 and Article 25 of the SCM Agreement dated back to October 2003. At that time,
the U.S. notified WTO Members of three federal tax concessions specifically benefiting the timber
industry in the amount of $470 million.
14. Can the U.S. provide the current status of these subsidies? Does the U.S. intend to eliminate them?
ANSWER:
The three identified provisions are part of our domestic tax law. The United States has
no present plans to modify the specific provisions.
[China]
Other Subsidies
Question: p.66 para. 204)
As estimated, the U.S will provide to its enterprises through the American Job Creation Act of 2004 a
total of USD76 billion in form of domestic subsidy, which is far over the amount of USD50 billion
paid under the former Foreign Sales Corporation Repeal and Extraterritorial Income Exclusion Acts.
How does U.S. comment on the above conclusion?
ANSWER:
China does not identify the provision(s) of the American Jobs Creation Act of 2004
(“AJCA”) that allegedly results in a “domestic subsidy.” If China is referring to section 102 of the
AJCA and the creation of an income tax deduction relating to income attributable to U.S. production
activities, the United States does not agree that this tax deduction constitutes a subsidy. However, even
assuming for purposes of argument that the tax deduction could constitute a subsidy, any such
“subsidy” would not be specific pursuant to Article 2 of the SCM Agreement.
[China]
Pursuant to the American Job Creation Act of 2004, a transitional period is provided to enable the U.S.
to continue its grant of export subsidy to the U.S. enterprises till the end of 2006 before U.S.
completely abolishing its WTO-inconsistent tax rebate and exemption practices conducted under the
former Extraterritorial Income Exclusion Acts.
Please explain why the U.S. cannot promptly comply with the relevant DSB rulings?
Are these tax rebate and exemption only granted to domestic enterprises? If yes, how is this
practice consistent to the National Treatment principle of the WTO?
ANSWER:
With respect to the first question, Congress, in a major legislative accomplishment, has
repealed the FSC and ETI rules. The Appellate Body, in its most recent review of our legislation,
found that we had largely complied with the WTO's findings on this issue. We remain aware of our
WTO obligations.
With respect to the second question, the FSC Repeal and Extraterritorial Income Exclusion Act of 2000
did not provide for a “tax rebate” or an “exemption,” but instead provided an exclusion from gross
income for extraterritorial income. While the United States is unsure as to what China means by
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“domestic enterprises,” the United States notes that foreign corporations can earn extraterritorial
income eligible for the exclusion.
[Colombia]
The introduction to Section III (paragraph 9) of the Secretariat’s Report states that government
assistance for domestic products could consist of financial outlays. In addition, the same paragraph lists
45 federal programs and 330 subfederal subsidy programs in effect in 2003 according to the most
recent notice from the United States. Would it be possible to obtain further information about how this
assistance works? What are the criteria used for approving it?
ANSWER:
Programs notified in the United States' subsidy notification include programs at both
the federal and sub-federal level. These programs provide assistance in the form of income tax
concessions and grants, as well as other forms of assistance. Industries benefiting from these programs
include agriculture, the energy sector, and fisheries. Programs at the state level also provide aid to rural
and under-developed regions, assistance for worker training and aid for minority-owned businesses.
For more details regarding these programs, please refer to the United States Subsidies Notification
(WTO document G/SCM/N/95/USA).
Competition Policy
[Brazil]
2. Page 68 - paragraph 213: “The Sherman Act outlaws all contracts, combinations, and conspiracies
that restrain trade among the states or with foreign countries, as well as the monopolization of any
part of the trade or commerce among the states or with foreign countries. However, the Sherman Act
and FTC Act do not apply to conduct involving trade or commerce, other than import trade or
commerce, with foreign nations unless the conduct has a direct, substantial, and reasonably
foreseeable effect on domestic or import commerce or on export trade or commerce. Where
jurisdiction is based on export trade or commerce the antitrust laws apply to that conduct only for
injury to export business in the United States." In this way, what are the US domestic enforcements
against foreign export cartels?
ANSWER:
We do not fully understand the question. If Brazil is asking whether United States law
reaches the activities of U.S. export associations having adverse effects only in foreign markets, the
answer is “no.” Claims for anticompetitive injury in foreign markets that is independent of, or not
directly related to, anticompetitive harm in the United States, are beyond U.S. jurisdiction.
[Brazil]
3. Page 68 - paragraph 213: With respect to exclusions and exemptions, a number of US statutes
permit immunity from antitrust laws in some specified cases. Immunity, for instance, is provided to
certain activities in the agriculture sector under the Capper-Volstead Agricultural Producers'
Associations Act, which allows collective action in the processing, preparing for market, handling, and
marketing of agricultural products, and the Agricultural Marketing Agreement Act of 1937, which
authorizes marketing agreements with producers and processors of agricultural commodities. Although
not registered in the TPR, it is well known that many other sectors are exempted from US antitrust
laws. As stressed in paragraph 224, an OECD Report notes that competition policy in US could be
improved by measures such as terminating the antitrust immunity of government enterprises and
eliminating anomalous exemptions. What are these specific sectors? Do DOJ and (or) FTC have an
updated and transparent list of exclusions, including those related to jurisprudence outcomes?
ANSWER:
The vast bulk of the U.S. economy is subject to standard antitrust enforcement. Any
exceptions to the application of the antitrust laws are narrowly and strictly construed. In addition, in
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some cases specialized regulatory agencies with sector-specific responsibilities apply competition rules
analogous to the federal antitrust laws, and the antitrust agencies retain an advisory, competition
advocacy role. The Justice Department and the FTC monitor the scope of antitrust exemptions closely
pursuant to their competition advocacy roles in the U.S. Government. There is a wealth of public
information available relating to U.S. antitrust exemptions. See, e.g., ABA Section of Antitrust Law,
Antitrust Law Developments (5th ed. 2002). The Antitrust Modernization Commission (AMC) (see
www.amc.gov) established by the U.S. Congress in 2002 is now studying the advisability of
modifying or dropping specific antitrust exemptions and its study group plan, dated May 6, 2005,
(available at http://www.amc.gov/pdf/meetings/ImmunitiesExemptionsStudyPlan.pdf ) includes a
recent list of exemptions. The FTC’s Chairman and its Associate Director for Policy and Coordination
for the Bureau of Competition both provided testimony to the AMC on this issue, supporting a critical
review of exemptions to assist in the promotion of vigorous competition and the health of the U.S.
economy. See http://www.ftc.gov/speeches/majoras/060321antitrustmodernization.pdf
and http://www.ftc.gov/os/2005/12/051202statutory.pdf. With regard to the OECD document cited at
224 of the Secretariat Report, Brazil is invited to examine its specific recommendations directly.
[Brazil]
4. Page 68 - paragraph 214: “Foreign individuals or companies are granted national treatment with
respect to private lawsuits and may sue for the same amount; foreign states, however, may recover only
an amount equal to the damage inflicted plus the cost of the lawsuit.” What exactly is assured to
foreign companies on that basis? Does such treatment follow a specific interpretation of the GATT 94,
article III, regarding National Treatment?
ANSWER:
Foreign companies suffering proven antitrust damages in United States courts may
recover to the same extent as domestic companies or individuals – i.e., treble damages and reasonable
attorneys’ fees. Such treatment predates the 1994 Uruguay Round Agreements and is consistent with
them, including Article III of the GATT.
[Costa Rica]
6. Supposing that there was an international cartel or merger, is it possible for foreign authorities to
create a mechanism with the United States for notification, information exchange, mutual assistance,
evidence gathering, etc., in order to inform each other of anti-competitive practices regarding the
insurance, telecommunications, or other sectors? If this is possible, what is the procedure to follow?
ANSWER:
Yes it is quite possible. When appropriate, United States antitrust authorities will
engage in informal discussions and activities with their foreign counterparts and may also consider
negotiation of formal consultation and cooperation agreements. See
www.usdoj.gov/atr/public/international/int_arrangements.htm for more information. The procedure to
follow is to contact the U.S. Department of Justice’s Antitrust Division and the Federal Trade
Commission.
[Japan]
Q31. Competition Policy (p.67, para.212)
How many lawyers/economists are employed in DOJ and FTC respectively?
ANSWER
The Antitrust Division of the U.S. Department of Justice currently employs 353
lawyers and 54 economists in its Washington sections and various field offices around the country.
The FTC currently employs 511 lawyers, of which 223 work on the competition mission, and 71
economists, of which 56 are dedicated to the agency’s competition mission.
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[Japan]
Q32. Extraterritorial reach of the U.S. Antitrust Law (p. 70, para.223)
A lawsuit of which has identical issue to the Hoffman-Laroche Ltd. v Empagran S.A. is ongoing before
the US Court of Appeals for the Eighth Circuit. The Government of Japan has concern that the
Japanese company could be suffered unforeseeable damages by the extraterritorial reach of the U.S.
Antitrust Law if the jurisdiction of the U.S. Court is admitted in this case. The Government of Japan
requests the Government of the United States to take appropriate action such as filing Amicas Curiae
Brief.
ANSWER:
Japan has not identified the antitrust lawsuit to which it makes reference, nor has Japan
posed an actual question to the United States here. Rather, Japan “requests the Government of the
United States take appropriate action such as filing Amicas Curiae Brief” in the unidentified case. In
appropriate cases, e.g., the Supreme Court and D.C. Circuit phases of the Empagran case, the U.S.
Government has filed and will continue to file amicus briefs. In deciding whether to make such filings,
the Government of the United States looks at a broad range of considerations, depending upon the case.
More specifically, factors that it may consider include the extent to which relevant legal issues are of
recurring importance to the interpretation and administration of the law, and whether the court is likely
to issue a decision of precedential significance. Japan can and does file its own amicus briefs in U.S.
judicial proceedings of interest to it. With respect to the Empagran case, the U.S. and Japanese briefs
supported similar lines of argument.
[Japan]
Q33. Matters contained in the Recommendations by the Government of Japan to the
Government of the United States regarding Regulatory Reform and Competition Policy,
7 December 2005 (p.71, para. 227)
(1) There is a mechanism which ensures dialogue between the governments of Japan and the United
States, i.e. the Regulatory Policy Initiatives, as mentioned in paragraph 227 of the Report by the
Secretariat. Under the mechanism, the recommendations were exchanged between the two
governments in December 2005 and the consultation has begun regarding the matters contained therein.
However, the Government of Japan considers it appropriate to readdress several issues at this TPR
meeting. In order to avoid unnecessary negative influence on the smooth movement of natural persons
and economic activities such as trade and investment, the Government of Japan is requesting
information on several issues on immigration control/consular affairs (please see attached papers.).
With regard to immigration control and consular affairs in attached papers, please indicate the specific
views of the Government of the United States respectively.
(2) The Government of Japan also requests the Government of the United States to disseminate
appropriate information in advance to the affected parties should there be any institutional changes. In
this regard, please also indicate the specific views of the United States.
ANSWER:
Japan’s views are duly noted.
[Switzerland]
Para. 212: The Secretariat’s report indicates that in addition to the federal legislation there is also
antitrust legislation in nearly all States. Could the U.S. authorities clarify the respective roles of State
versus federal antitrust legislations and why there would be a need to have such legislations both at the
federal and state levels, all the more since apparently not all the States felt the need to have antitrust
legislation ? As a matter of fact, para. 224 suggests that the United States should "clarify assignments
of responsibility among different enforcement officials, particularly between the federal and state
levels." Indeed, discrepancies between federal and state law can lead to serious problems such as forum
shopping, where plaintiffs choose where to sue depending on the expected payoffs in court. From an
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international trade perspective, this raises the question whether foreign parties generally have the same
rights under state antitrust law as they do under federal antitrust law. In other words, is there a danger
for foreign companies to be discriminated under state antitrust law? Furthermore it would certainly be
desirable to diminish forum shopping opportunities. What measures will be taken to limit the
opportunities for forum shopping in antitrust law?
ANSWER:
State antitrust enforcement is rooted in principles of federalism, a system – as in
Switzerland – in which both federal and state governments strive to protect and enhance the public
welfare in their respective territories. States may challenge anticompetitive conduct under the federal
antitrust laws – either on their own behalf as an injured consumer or on behalf of their residents as
parens patriae – or under their own state antitrust laws. We are unaware of any instance, however,
where the states have discriminated against foreign parties in their enforcement of the federal or state
antitrust laws. Although almost all states have their own antitrust laws, as a practical matter, most of
these statutes are similar in substance to the federal antitrust laws. Moreover, even where the state
statutes differ, they are generally interpreted by state courts consistently with federal law. Federal and
state antitrust enforcers also work closely together to ensure maximum consistency in antitrust
enforcement and to minimize any unnecessary burden on private parties. There are certain instances
where the enforcers decide that investigation and enforcement are more appropriate solely at the federal
level or at the state level; there are other instances where each enforcer has its own separate interest in
participating. In the latter situation, the federal and state antitrust enforcement agencies have devoted
substantial efforts to ensure effective coordination of parallel federal-state investigations, and generally
the process works well. The Antitrust Modernization Commission, which was created by the U.S.
Congress to examine whether the need exists to modernize antitrust laws, is currently studying the role
of state antitrust enforcement in a federal system and how it can best work in harmony with federal
enforcement to serve the public interest.
Government Procurement
[Brazil]
5. Page 74 - paragraph 243 : “The Trade Agreements Act of 1979 waives the application of the Buy
American Act to the end-products of designated countries, which now include […] least-developed
countries.” Would it be possible to bring some evaluation of the results of such policy, including
statistic data on the number and value of contracts awarded to suppliers of the least-developed
Countries?
ANSWER:
U.S. Federal procurement data is available in the Federal Procurement Data System
(FPDS) at the beginning of each fiscal year and all reports are available by accessing
https://www.fpds.gov.
[Brazil]
6. Page 75 - paragraph 245: The Department of Defense also waives the restrictions of the Buy
American Act/Balance of Payments Program for the acquisition of defense equipment produced in any
"qualifying country" (countries with which there is a reciprocal procurement agreement or
Memorandum of Understanding). Is there statistical data on the contracts awarded under this
mechanism?
ANSWER:
As stated above, U.S. Federal procurement data is available in FPDS, which includes
Department of Defense procurement data.
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[Brazil]
7. Page 75 - paragraph 246: “The U.S. Administration has adopted a new reciprocity approach to subfederal procurement in two FTAs under negotiation. The Administration has written to Governors
requesting that state governments consider voluntarily covering their procurement under the U.S.Panama and U.S.-Andean FTAs under a new reciprocity policy, to benefit from new export
opportunities.” Would this approach cause any methodological innovation on the commitments under
these FTAs, or would the sub-federal agencies be listed in an annex to the FTAs, as usual?
ANSWER:
Sub-federal entities covered by the FTA would be listed in an annex to the FTA.
[Chinese Taipei]
Question 10 (page 74, paragraphs 240-241)
We understand that US policy with respect to market access of government procurement is to grant
reciprocal national treatment, while maintaining a number of domestic purchasing requirements for
procurement not covered by the GPA, NAFTA, the WTO plurilateral Agreement on Trade in Civil
Aircraft, and bilateral trade agreements. For procurement not covered by the above-mentioned
agreements, the Buy American Act restricts the purchase of supplies and construction materials by
government agencies to those defined as “domestic end-products”, in accordance with a two-part test,
i.e. manufactured in the United States, and the cost of domestic components exceeds 50% of the cost of
all components.
a) Are there any domestic purchasing requirements for services procurement not covered by the GPA,
NAFTA, the WTO plurilateral Agreement on Trade in Civil Aircraft, and bilateral trade
agreements?
ANSWER:
There are domestic purchasing requirements for certain service procurements not
covered by the GPA or other agreements. For example, domestic purchasing requirements apply to
research and development services and transportation services.
b) What is the rule of origin applied in order to define “domestic end-products”? Is it tariff shift or
added-value rules?
ANSWER:
The U.S. Government defines “domestic end product” to mean:
(1) An unmanufactured end product mined or produced in the United States; or
(2) An end product manufactured in the United States, if the cost of its components mined, produced,
or manufactured in the United States exceeds 50 percent of the cost of all its components. Components
of foreign origin of the same class or kind as those that the agency determines are not mined, produced,
or manufactured in sufficient and reasonably available commercial quantities of a satisfactory quality
are treated as domestic. Scrap generated, collected, and prepared for processing in the United States is
considered domestic.
c) How does this rule of origin differ from those applied to the “designated countries”, including
parties to the GPA, NAFTA, and other bilateral agreements that cover government procurement?
ANSWER:
“Designated country end product” means a WTO GPA country end product, an FTA
country end product, a least developed country end product, or a Caribbean Basin country end product.
Under the trade agreements, the test the United States Government uses to determine country of origin
is “substantial transformation” (i.e., transforming an article into a new and different article of
commerce, with a name, character, or use distinct from the original article). Specifically, an article is a
product of a country or instrumentality only if (1) it is wholly the growth, product, or manufacture of
that country or instrumentality, or (2) in the case of an article which consists in whole or in part of
materials from another country or instrumentality, it has been substantially transformed into a new and
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different article of commerce with a name, character, or use distinct from that of the article or articles
from which it was so transformed (See the Code of Federal Regulations, Title 48, Section 25.003 and
Title 19, Section 177.22).
[Chinese Taipei]
Question 11 (page 76, paragraph 246)
As indicated, the US Administration is encouraging those States that have not participated in the GPA
to consider voluntarily covering their procurement under a few FTAs under a new reciprocity policy, to
benefit from new export opportunities.
As a member ready to join the GPA, we would like to know whether the said reciprocity policy will be
pursued in the GPA Negotiations on Extension of Coverage and Elimination of Discriminatory
Measures and Practices so that signatories to this Agreement may mutually benefit.
ANSWER:
As described in response to the EC question above, the United States is applying the
reciprocity policy only with respect to two FTAs (the U.S.-Andean FTA and the U.S.-Panama FTA).
[Colombia]
In accordance with paragraph 247, subparagraph c) regarding the conditions for relevant access, one of
the objectives of the United States government procurement policy is the participation of the various
types of small businesses. The Department of Commerce annually determines the procurement
methods and the application factors, intended to favor small businesses. Nevertheless, these
mechanisms and application factors can reduce the procurement possibilities for foreign suppliers that
can participate in United States government procurement. For example, the amount of US$100,000 to
reserve contracts exclusively and automatically for small businesses could be higher in accordance with
an administrative decision by the DOC.
Given this situation, has establishing the procurement mechanisms and application factors in a more
stable manner been considered so they do not change annually and thus provide greater certainty to the
foreign suppliers about contracts to which they can have access?
ANSWER:
The small business set aside program is mandated by the Small Business Act
(15 U.S.C.§ 631, et seq.), and may be modified by the Congress. The Small Business Act reserves
contracts between $2,500 and $100,000 for small business concerns. The Department of Commerce
does not set the dollar values at which contracts are reserved for small business concerns.
[European Communities]
Paragraph 231: In 2003, the General Accounting Office has expressed concerns as to reliability of the
data contained in the FDPS (Federal Procurement Data System); these concerns seem to have been
reiterated in 2005 for the FDPS-NG (Federal Procurement Data System-New Generation) and seem to
exist since the system was put into operation.
• In these circumstances, what measures have been taken to ensure reliability of the data? (Sources:
http://www.gao.gov/new.items/d05960r.pdf and http://www.gao.gov/new.items/d04295r.pdf).
ANSWER:
The U.S. Government has dedicated resources to operate and manage the Federal
Procurement Data System (FPDS), which accounts for over US$ 300 billion in expenditures. There is
currently a joint effort by the General Services Administration (GSA) and the Department of Defense
(DoD) to resolve GAO concerns as to reliability of the data. GSA is also tracking all transitions for the
largest federal procuring agencies as they migrate to machine-to-machine interfacing with FPDS.
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Procurement data is available in FPDS at the beginning of each fiscal year and all reports are available
by accessing https://www.fpds.gov.
•
Paragraph 231: What is the situation of State procurement as to statistical reporting? How are
obligations reported? Could the US provide data for contracts awarded to Small businesses at
State level?
ANSWER:
As required under Article XIV:5 of the GPA, the United States submits statistical data
on estimated U.S. state government expenditure. The methodology for estimating state-level
government procurement is to use basic state government finance data collected by the United States
Census Bureau to develop an approximation of expenditures on government procurement.
The United States does not have data on contracts awarded to small businesses by states.
[European Communities]
In paragraph 236, it is mentioned that several FAR amendments were adopted to implement new
legislation (Veterans Benefit Act of 2003, the Consolidated Appropriations Act of 2005, and the
Services Acquisition Reform Act of 2003).
•
What is the purpose and content of these amendments? Do they apply to GPA covered
procurements?
ANSWER:
The Veterans Benefit Act of 2003 (15 U.S.C. 657f) created the procurement program
for small business concerns owned and controlled by service-disabled veterans (commonly referred to
as the “Service-Disabled Veteran-owned Small Business (SDVOSB) Procurement Program”). The
GPA does not apply to this program.
The Consolidated Appropriations Act of 2005 (Pub. L. 108-447) provides an exemption from the Buy
American Act for acquisitions of information technology that are commercial items funded by the Act.
The amendment applies to procurements of information technology that are commercial items covered
by the GPA. The Consolidated Appropriations Act of 2005 also requires that contracting officers shall
not purchase products or services offered by Federal Prison Industries (FPI) unless the agency making
the purchase determines that the offered product or service provides the best value to the buying
agency, pursuant to Government-wide procurement regulations. The GPA does not apply to this
program.
The Services Acquisition Reform Act (SARA) of 2003 (Pub. L. 108-136) provides that architectural
and engineering services cannot be offered under a General Services Administration (GSA) multipleaward schedule contract or under government-wide task-and-delivery-order contracts unless performed
under the supervision of a licensed, professional architect or engineer and awarded pursuant to qualitybased selection procedures. The SARA also prohibits agencies from including a requirement in a
solicitation that would preclude an offeror from permitting its employees to telecommute or from
unfavorably evaluating an offeror’s proposal that includes telecommuting unless it would adversely
affect agency requirements, such as security. This amendment may apply to procurements covered by
the GPA and is consistent with the GPA.
[European Communities]
In paragraph 237, it is stated that US regulations allow for the preparation of list of suppliers by a
federal government agency provided that the agency prepares a written justification explaining the
circumstances for the need of such list.
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•
Can the US explain the justifications which should be given in order to allow a federal agency to
use and maintain such lists? Would a supplier who is not on a list but who fulfils all the
requirements to participate in a particular procurement covered by that list be allowed to tender?
Furthermore, it is indicated that a number of 37 States covered by the GPA use lists of qualified
suppliers when tendering for certain types of procurement; Can the US indicate how many states
and which ones use such lists? Can the US also indicate the type of procurement concerned?
ANSWER:
Qualification and listing in a Qualified Products List, Qualified Manufacturers List, or
Qualified Bidders List is the process by which products are examined and tested for compliance with
specification requirements, or by which manufacturers or potential offerors are provided an opportunity
to demonstrate their abilities to meet the standards specified for qualification. The head of a federal
procuring agency (or designee) must prepare a written justification before establishing a qualification
requirement. This justification includes: (i) the necessity for establishing the qualification requirement
and specifying why the qualification requirement must be demonstrated before contract award; (ii)
estimation of the likely costs for testing and evaluation that will be incurred by the potential offeror to
become qualified; and (iii) all requirements that a potential offeror (or its product) must satisfy in order
to become qualified. Only those requirements that are the least restrictive to meet the purposes
necessitating the establishment of the qualification requirements are specified. Please see the Federal
Acquisition Regulation (FAR) Part 9.2 for further information on qualification requirements and
qualification lists.
Where a potential offeror that is not on a qualified list can demonstrate to the satisfaction of the
contracting officer that the potential offeror (or its product) meets the standards established for
qualification and listing or can meet them before the date specified for award of the contract, the
potential offeror may submit an offer. However, a contracting officer does not have to delay a
proposed award in order to provide a potential offeror with an opportunity to demonstrate its ability to
meet the standards specified for qualification and inclusion on a list.
An example of a qualified manufacturers list for semiconductor devices can be accessed at
http://www.dscc.dla.mil/programs/qmlqpl/QPLdetail.asp?QPL=19500.
Other examples can be
accessed at the website for the Defense Supply Center Columbus, Sourcing Qualifications Unit:
http://www.dscc.dla.mil/programs/qmlqpl/.
Each U.S. State establishes and maintains its own procurement laws, regulations, and policies. For
information on state procurement practices, please refer to individual State procurement websites.
Websites for each State may be found at http://www.naspo.org/directors/.
[European Communities]
In paragraph 238 (Central Contractor Registration (CCR)):
• it is indicated that "as of August 2005, there were some 373,000 government vendors registered
with the CCR, of which 10,030 were foreign firms": are these foreign firms established in the US
or outside the US?
ANSWER:
•
The list includes foreign firms without regard to place of establishment.
Can a foreign company established outside of the US acquire rapidly, easily and at no/low cost the
information needed to register ? Can the US identify the information and describe the process to
acquire them? does it also encompass any type of business certificates/attestations? If so, how is it
stored in the register? is this information public? if not, who has an access to it?
ANSWER:
Please see the CCR Handbook, publicly available at http://www.ccr.gov/handbook.asp
for questions regarding registration. All information required to register is included in this handbook.
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The information contained in the CCR is used in confidence by contracting officers, and is not publicly
available.
For information on how suppliers apply for representations and certifications, please see the On-line
Representations and Certifications Application (ORCA) website at https://orca.bpn.gov/. ORCA
records are considered public information.
•
Is any type of electronic signature required along the process of registration? If yes, what kind?
How long does the registration take before becoming operational in the case of a company which is
a newcomer on the US market ? At state level does a similar system exist? If yes, in how many
States and which ones?
ANSWER:
An electronic signature is not required in the registration process.
registrations usually take approximately 48 hours to process.
New CCR
As noted above, each U.S. State establishes and maintains its own procurement laws, regulations,
policies, and procedures. For information on state procurement practices, please refer to individual
State procurement websites.
[European Communities]
In paragraph 241, it is indicated that the Buy American Act does not apply to services.
•
Does this mean that there are no restrictions for foreign service providers to participate in a service
procurement in the US ? If not, can the US explain the types of restrictions applied and the rules
applied to determine the origin of a service?
ANSWER:
The Trade Agreements Act of 1979, as amended, (19 U.S.C.§ 2501, et seq.) generally
prohibits federal procurments of goods and services from suppliers from countries which are not party
to the GPA or an FTA, or are not a least developed country.
The Federal Acquisition Regulation, Part 25.402(a)(2), requires contracting officers to determine the
origin of a service by the country in which the firm providing the service is established.
[European Communities]
In paragraph 246, can the US provide more information on the so called "new reciprocity policy"?
ANSWER:
The U.S. Administration is applying a new sub-federal reciprocity approach to subfederal procurement in two FTAs that it is negotiating (the U.S.-Panama and U.S.-Andean Free Trade
Agreements). This approach does not apply to previous commitments that U.S. States have made
under the GPA. Additional information on the policy may be found in State Government Procurement
and Free Trade Agreements: A New Sub-Federal Reciprocity Approach That Preserves State
Sovereignty and Provides Direct Benefits to States, available at http://www.ustr.gov/assets/.
[European Communities]
In paragraph 247, it is stated that "The Small Business Act (P.L. 85-536), as amended, requires, in
principle, each contract with an anticipated value greater than US$2,500 but less than US$100,000 to
be reserved exclusively for small business concerns".
•
Are there any measures in favour of small businesses for contracts with an anticipated value greater
than US100,000?
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ANSWER:
Yes, procurements may be set-aside for procurements above $100,000, in accordance
with Note 1 of the General Notes of the United States.
[India]
Buy America Act
Q.12 The Act mandates that American made products must be used in all construction using Federal
dollars. Preference is given to works and other government procurement contracts for bids that include
locally produced steel. This practice is notably common at the sub-federal level and many States such
as Connecticut, Louisiana, Maine, Michigan, Illinois, Maryland, New York, Pennsylvania, Rhode
Island and West Virginia, have such requirements that also apply to private contractors and subcontractors. With a view to ensuring that market access is not denied to exporters of castings, iron and
steel and non-ferrous metal from developing countries like India, whether necessary remedial action
could be taken by amending the Buy America Act?
ANSWER:
The Trade Agreements Act (TAA) (19 U.S.C. § 2501, et seq.) generally prohibits
federal agencies from purchasing products and services of a country that is neither a party to a trade
agreement with the United States (the WTO Agreement on Government Procurement (GPA), NAFTA
or a bilateral FTA) nor a least developed country. Moreover, based on Congressional mandates, U.S.
obligations under the GPA and FTAs do not apply to restrictions attached to federal funds for mass
transit and highway projects.
[Japan]
Q34. Government Procurement - general（p.72, para 231）
What is the “procurement by U.S. agencies outside the United States”? Please provide some examples
which are categorized under this “procurement by U.S. agencies outside the United States”.
ANSWER:
U.S. Military facilities and U.S. Embassies procure goods (e.g., air conditioning or
heating equipment) and services (e.g., engineering or janitorial services) in support of their operations
outside the United States.
[Japan]
Q35. Buy American Act (p.74, paras.240-246)
The Buy American Act of 1933 provides the US legal basis for discriminating against foreign products
at the federal level of the Government of the United States. The existing Buy American Act, which was
amended by the Uruguay Round Agreements Act, allows the President to refrain from applying the
“Buy American” restriction to countries that: have acceded to the 1994 Agreement; and provide
appropriate reciprocal procurement opportunities for U.S. products and U.S. suppliers. Japan would
like to request the U.S to abolish Buy American Act, which accords a favourable treatment to the U.S.
products for government procurements not covered by the GPA, from the viewpoint of full application
of the principle of non-discriminatory treatment. Should it, however, be necessary to maintain this Act,
the Government of Japan requests the Government of the United States to implement it in a manner
consistent with the WTO rules. In this regard, please indicate the specific views of the Government of
the United States.
ANSWER:
For procurements covered by the WTO Government Procurement Agreement (GPA),
the United States Government has waived the application of the Buy American Act and other
discriminatory provisions for eligible goods. In such cases, offers of eligible products receive equal
consideration with domestic offers.
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[Norway]
12: Only 37 American states take part in the WTO agreement on Government Procurement (GPA).
This constitutes a considerable de facto market obstacle for foreign companies. We would like to know
what measures might be taken by the federal authorities in order to increase the number of states
participating, and give us an update on whether there are more states considering joining the GPA?
ANSWER:
The coverage of states under the WTO GPA is based on negotiations under the GPA.
[Switzerland]
Para. 250: According to para. 250 the sanctions decided by the United States against countries
considered to discriminate against U.S. products and services in their government procurement
practices are supposed to apply also to end-products and construction materials not covered by the
GPA. Independently of the issue of sanctions, would it be possible for the United States to elaborate on
the nature of products which are considered by the United States as materials - i.e. goods - not covered
by the GPA?
ANSWER:
Goods procurements valued under the GPA threshold, presently US$193,000, are not
covered by the GPA. Additionally, the United States’ Annex 1 to the GPA states agency-specific
goods procurements not covered by the GPA.
The use of “construction materials” is a domestic term that refers to goods related to construction. The
Federal Acquisition Regulation (FAR) Part 25.003, defines construction materials as: “an article,
material, or supply brought to the construction site by a contractor or subcontractor for incorporation
into the building or work. The term also includes an item brought to the site preassembled from
articles, materials, or supplies. However, emergency life safety systems, such as emergency lighting,
fire alarm, and audio evacuation systems, that are discrete systems incorporated into a public building
or work and that are produced as complete systems, are evaluated as a single and distinct construction
material regardless of when or how the individual parts or components of those systems are delivered
to the construction site. Materials purchased directly by the Government are supplies, not construction
material.”
Intellectual Property Rights
[Argentina]
14. On page 100, paragraph 262, the report mentions that in one of its annual reports, the Federal Trade
Commission (FTC) notes that with regard to the U.S. patents system, there is concern regarding the
quality of patents and the legal standards and procedures since they can have anticompetitive effects
and increase costs. In this report, the FTC recommended a series of changes, such as new
administrative procedures that allow for the post-grant review and opposition to patents, an increase in
the participation of third parties in the review process, a tightening of specific legal standards used to
evaluate whether a patent is "obvious," and the consideration of the possible harm to competition
before extending the scope of the patentable subject matter.
Question: Were said recommendations implemented and, if they were, what was the result?
ANSWER:
No. The FTC recommendations are currently under consideration by the United States
government. In addition, a bill that addresses post grant opposition has been introduced into the 1st
Session of the 109th Congress.
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[Brazil]
10. Chapter III, paragraph 252: Regarding the American policy of promoting increased IPR protection
through free trade agreements, could the US Government explain the adequacy of such agreements
with the WTO intellectual property system? Could the US Government also specify: a) the advantages,
favors, privileges or immunities granted to the nationals of other countries by means of the 22 bilateral
intellectual property agreements or memoranda of understanding which it has already signed; and b)
exemplify how it intends to confer immediately and unconditionally the same benefits to the nationals
of all other WTO Members according to the provisions of article 4 of the TRIPS Agreement?
ANSWER:
The free trade agreements that the United States has negotiated do not affect any
obligations that the United States has vis-à-vis other WTO Members, including the MFN obligation
under Article 4 of the TRIPS Agreement. The United States will continue to meet its MFN obligations
under Article 4 of the TRIPS Agreement.
[Brazil]
11. Chapter III, paragraph 254: Could the US Government indicate in its balance of payments for
intellectual-property-related trade the total share of royalties and license fees received from Brazil?
ANSWER:
Yes. It is published in the Survey of Current Business (a monthly publication of the
Bureau of Economic Analysis of the Dept of Commerce), October Issue for 2004 data.
The article citation is below, page 56 is the most recent data for royalties and license fees:
$647 million in 2004 (page 56), up from $580 million in 2003 (page 54).
http://www.bea.gov/bea/ARTICLES/2005/10October/1005_xborder.pdf
[Brazil]
12. Chapter III, paragraph 258: "The Cooperative Research and Technology Enhancement (CREATE)
Act of 2004 (P.L.108-447) provides that patentability is not precluded on the basis of obviousness
where subject matter that qualifies as prior art is developed by a person different from the person
claiming the invention, under certain conditions". What are those conditions?
ANSWER:
See the response to Canada’s question #11 below.
[Brazil]
13. Chapter III, paragraphs 265-268. There are various examples of trade marks registrations being
granted to foreign generic names, such as the case of "cupuaçu", settled in the U. S. when the firm
pursuing the mark withdraw it voluntarily. What measures does the USPTO take in order to prevent
inadequate registration of generic names as trade marks? Are there any established criteria to grant
trade marks registrations of foreign words?
ANSWER:
Applications for U.S. trademark registration consisting of proposed marks that are
merely descriptive or generic for the goods/services will be refused registration. If an application
consists of foreign words, the examining attorney will require the applicant to provide a translation of
the wording and, if necessary, a transliteration. The examining attorney will examine the English
translation in the same manner as a regular filed application for an English word mark, and if it is
generic, it would be refused registration.
The United States' trademark system provides opportunities for any interested party to oppose or cancel
a trademark registration if that party believes that it will be damaged by the registration or continued
existence of a registration.
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[Brazil]
14.Chapter III, paragraph 269: What are the criteria or conditions for a geographical indication of
foreign origin to be protected through the trade mark system in the United States? Is there any
difference between a collective mark (or a certification mark) and a geographical indication? Do they
have the same rights? How the US legislation or jurisprudence deals with conflicts related to the usage
of the same sign as a mark and a geographical indication?
ANSWER:
The United States provides robust protection for geographical indications of both
domestic and foreign origin. Geographical indications of foreign origin are examined and protected in
the same manner as U.S. GIs through the trademark system as trademarks, certification marks or
collective marks.
Not all collective marks or certification marks are geographical indications. Collective marks and
certification marks are a means in which GIs can be protected. All trademarks, collective marks,
certification marks have the same exact rights in that U.S. law provides that the owner of the
trademark, collective mark or certification mark has the exclusive right to prevent confusing uses of the
mark by unauthorized third parties. See 15 U.S.C. §§ 1114 and 1125.
[Brazil]
15.Chapter III, paragraph 275: “The Artists' Rights and Theft Prevention Act of 2005 (ART Act), Title I
of the Family Entertainment and Copyright Act of 2005 (Public Law No: 109-9), amended the U.S.
Federal criminal code to prohibit the unauthorized, knowing use or attempted use of a video camera or
similar device to transmit or make a copy of a copyrighted audiovisual work from a performance of
such work in a movie theatre.” Does it apply only to audiovisual works in a movie theatre or it is also
applicable to other copyrighted works, like for instance, live performance shows? Does the
enforcement of the above mentioned rule require the intention of the supposed infringer to use or to
allow the use of his/her copy for another unauthorized copies? In that case, is any kind of private copy
allowed?
ANSWER:
The ART Act is limited to audiovisual works recorded in a motion picture exhibition
facility. Recording live musical performances without the consent of the performer(s) involved
violates section 1101 of the US copyright law. Under the ART Act, any unauthorized recording of the
audiovisual work in a motion picture exhibition facility, even if the intended use is personal and noncommercial, is prohibited. For an exhibition in a theater, the producer has only authorized the viewing
of a performance of the audiovisual work; often, the producer has not yet even authorized the
distribution of copies of the audiovisual work for home viewing.
[Brazil]
16. Chapter III, paragraph 276: Could the United States i) clarify the criteria used in its "Special 301"
legislation in order to identify countries with alleged inadequate and ineffective intellectual property
protection; ii) explain why countries with a better law enforcement record against counterfeiting and
piracy can be worse labeled than those countries with less significant commitment in these areas; iii)
explain if and how the information and allegations provided by the US private sector in the petitions
that initiate the "Special 301" ranking process are checked and confirmed by the US Government; and
iv) elucidate what precautions are taken by the US competent authorities in order to prevent the
infliction of image damage on countries mentioned in the "Special 301" lists vis-a-vis the capacity of
those countries of attracting foreign direct investment?
ANSWER:
Pursuant to Section 182 of the Trade Act of 1974, as amended by the Omnibus Trade
and Competitiveness Act of 1988 and the Uruguay Round Agreements Act (enacted in 1994), under
Special 301 provisions, USTR must identify those countries that deny adequate and effective protection
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for IPR or deny fair and equitable market access for persons that rely on intellectual property
protection. Countries that have the most onerous or egregious acts, policies, or practices and whose
acts, policies, or practices have the greatest adverse impact (actual or potential) on the relevant U.S.
products must be designated as “Priority Foreign Countries.” USTR has also created a “Priority Watch
List” and “Watch List” under Special 301 provisions. Placement of a trading partner on the Priority
Watch List or Watch List indicates that particular problems exist in that country with respect to IPR
protection, enforcement, or market access for persons relying on intellectual property. Countries
placed on the Priority Watch List are the focus of increased bilateral attention concerning the problem
areas. The Special 301 analysis is based on a complex review process, including consultations among
different government agencies, including U.S. embassies in the countries concerned, and with the
private sector and foreign governments. Each country is evaluated on its particular factual
circumstances based on information obtained by the U.S. Government, including that provided by the
foreign governments concerned and that gathered by U.S. embassies in the country concerned.
Enforcement is one aspect of intellectual property protection that is evaluated, among several other
areas. Foreign governments are welcome to provide any information that they feel may be relevant to
the Special 301 review.
[Canada]
Part III. Trade Policies and Practices by Measure: (4) Other Measures Affecting Production and
Trade; (iv) Trade-related intellectual property rights, (b) Patents, Paragraph 255.
U.S. patent law is codified in Title 35 of the U.S. Code (35 U.S.C.), as amended. The Secretariat
Report notes that the United States “is the only WTO Member to use the first-to-invent rule”.
10.
Would the United States consider using instead the first-to-file rule”?
ANSWER:
Elimination of the first-to-invent rule was part of a bill submitted in the first session of
the 109th Congress and is, therefore, under consideration.
The U.S. Administration has for some time indicated its willingness to consider switching to the firstto-file rule as part of substantive patent law harmonization in the World Intellectual Property
Organization.
For additional information, see the reply to Question #39 from Japan.
[Canada]
Part III. Trade Policies and Practices by Measure, (4) Other Measures Affecting Production and
Trade; (iv) Trade related and intellectual property rights, (b) Patents, Paragraph 258.
The Secretariat Report notes that the “Cooperative Research and Technology Enhancement (CREATE)
Act of 2004 (…) provides that patentability is not precluded on the basis of obviousness where subject
matter that qualifies as prior art is developed by a person different from the person claiming the
invention, under certain conditions”.
11.
Would the United States please provide more details with respect to this matter?
ANSWER:
The USPTO published final rules implementing the CREATE Act at: 1300 Off. Gaz.
Patent Office 70 (Nov. 8, 2005), 70 Fed. Reg. 54259 (Sept. 14, 2005), and the text is posted at:
http://www.uspto.gov/web/offices/com/sol/og/2005/week45/patcrea.htm
The final rule explains the conditions under which subject matter can be disqualified as prior art to
overcome an obviousness rejection:
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“the applicant must provide a statement in compliance with Sec. 1.104(c)(4) to the effect that the prior
art and the claimed invention were made by or on the behalf of parties to a joint research agreement,
within the meaning of 35 U.S.C. 103(c)(3), which was in effect on or before the date the claimed
invention was made, and that the claimed invention was made as a result of activities undertaken within
the scope of the joint research agreement. 35 U.S.C. 103(c)(3) defines a "joint research agreement" as a
written contract, grant, or cooperative agreement entered into by two or more persons or entities for the
performance of experimental, developmental, or research work in the field of the claimed invention,
that was in effect on or before the date the claimed invention (under examination or reexamination) was
made. The statement should either be on or begin on a separate sheet and must not be directed to other
matters (Sec. 1.4(c)). The statement must be signed in accordance with Sec. 1.33(b).
In addition to providing a statement, the applicant must also amend the specification to disclose the
names of the parties to the joint research agreement in compliance with Sec. 1.71(g)(1). If the applicant
disqualifies the subject matter relied upon by the examiner in accordance with the CREATE Act and
the procedures set forth in this final rule, the examiner will treat the application under examination and
the 35 U.S.C. 102(e), (f), or (g) prior art as if they are commonly owned for purposes of 35 U.S.C.
103.”
[Canada]
Part III. Trade Policies by Practice and Measure, (4) Other Measures Affecting Production and Trade;
(iv) Trade related and intellectual property rights, © Trade marks, Paragraph 265.
The Secretariat Report notes that trade mark protection in the United States arises from the actual use
of the mark and that additional protection is provided by federal and state laws.
12.
Could the United States provide more details on these state trade mark laws?
ANSWER:
State trademark laws vary from state to state within the United States. It is possible to
obtain state trademark registrations which are territorial in nature.
[Canada]
Part III. Trade Policies by Practice and Measure, (4) Other Measures Affecting Production and Trade;
(iv) Trade related and intellectual property rights, (f) Enforcement Activities, Paragraph 279.
The Secretariat Report says that the Intellectual Property Protection and Courts Amendment Act of
2004 (P.L. 108-482) amended federal criminal code provisions regarding trafficking in counterfeit
labels.
13.
Can the U.S. provide more details on the Intellectual Property Protection and Courts
Amendment Act of 2004, more specifically with respect to trafficking in counterfeit labels?
ANSWER:
The Intellectual Property Protection and Courts Amendments Act of 2004 is composed
of three parts and relates to anti-counterfeiting, fraudulent online identity usage, and the U.S. court
system.
Title I of the Act, entitled “Anti-Counterfeiting Provisions,” broadens 18 U.S.C. § 2318, which
prohibited the knowing trafficking in a counterfeit label affixed or designed to be affixed to a
phonorecord or a copy of a computer program or motion picture. The Act provides a private right of
action for violations of § 2318 by any copyright owner who is injured, or threatened with injury, by a
violation. The court can award the injured party actual damages and additional profits of the violator,
or statutory damages. Actual damages are calculated by multiplying the retail value of a copy of the
work to which the unlawful label is attached by the number of copies to which unlawful labels are
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affixed. Statutory damages can range from $2,500 to $25,000 for each violation. The damages can be
trebled for repeat violators.
The Act also extends § 2318 to all literary, pictorial, graphic, sculptural, or visual art works, in addition
to phonorecords, computer programs, and motion pictures. In addition, the Act also applies to an
“illicit label,” which is defined as a genuine certificate, licensing document, registration card, or similar
labeling component that is used by the copyright owner to verify that a copy of work is not counterfeit
or infringing of any copyright and that is distributed with a copy to which it is not authorized to be
affixed.
[China]
IPR protection
Section 337 of the Tariff Act of 1930
Question (p. 82 para. 227)
Section 337 of the Tariff Act of 1930 has provided domestic industries of the U.S. with dual remedy,
giving discriminatory treatment to foreign enterprises. Please explain its consistency with WTO
national treatment principle.
ANSWER:
A GATT dispute settlement panel report adopted in November 1989 found, among
other things, that former ITC procedures in investigations to determine whether there is a violation of
section 337 were inconsistent with the national treatment rule because importers and producers of
imported products may have been required to defend claims in both the ITC and in district court,
possibly at the same time, whereas infringement claims against domestic goods can be heard only in
district court.
Section 321 of the Uruguay Round Agreements Act amended the relevant provisions of U.S. law,
bringing U.S. procedures into conformity with national treatment obligations under GATT 1994, while
providing for the effective enforcement of intellectual property rights at the border. The amendments
to section 337 provided the means to prevent infringement proceedings being pursued against imported
goods in both forums at the same time. A district court hearing an infringement case is required to stay
its proceedings, at the request of a respondent in a section 337 proceeding, in respect of any claim that
involves the same issues as those pending before the ITC.
The General Exclusion Orders are comparatively low in standard and lack further specific standard for
judgment, with considerable uncertainty. Would the U.S. clarify the specific standard for judgment
under the General Exclusion Orders?
ANSWER:
The standards for issuing general exclusion orders can be found in section 337(d)(2),
which provides:
(2) The authority of the Commission to order an exclusion from entry of articles shall be limited to
persons determined by the Commission to be violating this section unless the Commission determines
that -(A) a general exclusion from entry of articles is necessary to prevent circumvention of an exclusion
order limited to products of named persons; or
(B) there is a pattern of violation of this section and it is difficult to identify the source of infringing
products.
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Section 337 of the Tariff Act of 1930 gives International Trade Commission the right to automatically
initiate the implementing procedure of process investigation. Would the U.S. explain the rationale of
this provision and its consistency with the TRIPS Agreement?
ANSWER:
Section 337 is one of several means by which the United States makes remedies
available for infringements of intellectual property rights, consistent with relevant provisions of the
TRIPS Agreement. The Commission has authority to institute section 337 investigations on its own
motion. Under section 337(b)(1), the Commission shall investigate alleged violations of section 337
“on complaint under oath or upon its initiative.” The Commission has used its authority to selfinstitute investigations sparingly; the most recent such case occurred more than 20 years ago.
[Chinese Taipei]
Question 12 (page 82, paragraphs 277-278)
Under Section 337 of the US Tariff Act of 1930, certain unfair practices related to IPRs are considered
unlawful import practices. Section 337 investigations are initiated by the USITC. If the USITC
determines that a Section 337 violation exists, it can issue exclusion orders or cease and desist orders,
or both.
Between 1 January 2003 and 30 April 2005, 54 new Section 337 investigations were initiated, of which
47 involved allegations of patent infringement. Section 337 investigations may be initiated merely on
the basis of a complaint from an interested party against foreign companies. It is our understanding
that, once the ITC decides to initiate such an investigation, the companies being investigated can incur
excessively high legal costs in responding to charges. We trust, therefore, that objective criteria are
used in the process of determining whether or not to accept a complaint and to initiate an investigation
on patent infringement.
In this context, it would be appreciated if the United states could:
a) Please provide details of the criteria used by the ITC to determine whether or not to initiate an
investigation.
ANSWER:
After a complaint is filed with the ITC, the Office of Unfair Import Investigations
examines the complaint for sufficiency and compliance with the applicable rules, and makes a
recommendation to the Commission regarding institution of the requested investigation. ITC rules
require, for example, the pleading of facts in support of the allegations in the complaint, and the
submission of considerable supporting data.
b)
Please provide the figures on the total number of complaints filed involving patent
infringement between 1 January, 2003, and 30 April, 2005, and the number of complaints rejected
during that same period.
ANSWER:
All or nearly all patent-based complaints filed with the ITC during this period resulted
in the institution of an investigation. In most cases, however, the Office of Unfair Import
Investigations requested that the complainant provide additional information in support of the
complaint prior to the ITC’s vote on institution.
[Colombia]
Approval of the “Fairness in Music Licensing Act of 1998”8 by the Congress of the United States,
amending Article 110 (5) relative to the limits of exclusive rights, that is, referring to certain uses not
requiring the prior express consent of the holder of the right or payment of any compensation,
8
“Fairness in Music Licensing Act”
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continues to be a cause for concern by Colombian authors. The concern is due to the fact that, despite
the partial statement by the Special Group of the WTO9, the aforementioned act shall also allow use of
a broad catalogue of works and interpretations from the Colombian musical repertoire with large
audiences within the territory of the United States.
1) Based on the above, we have the following questions for the United States delegation:
a) The decision by the Special Group of the WTO regarding Article 110 (5) (A) notwithstanding, will
the United States amend said provision due to the harm caused to the copyright holders from other
countries with this limitation?
b) When will the United States amend the contents of Article 110 (5) (B) in accordance with the WTO
arbitration decision handed down on January 15, 2001?
ANSWER:
As Members know, the legislative process is in the hands of the U.S. Congress. The
Administration, however, is working closely with the U.S. Congress, and conferring with the European
Communities, in order to reach a mutually satisfactory resolution of this matter.
[Colombia]
a) Is there a strategic plan in the United States regarding intellectual property that brings together
in one document the relevant policies and directives at the federal and state level?
ANSWER:
While there is no single document bringing together relevant policies and directives at
the federal and state level with regard to intellectual property, the United States has for decades
pursued the strategic goal of improving the protection of intellectual property at home and abroad, with
bipartisan support of the U.S. Congress. Numerous statutes, Executive Orders, and regulations have
been promulgated to achieve this broad objective. In addition, the USPTO has a Strategic Plan that
addresses patents and trademarks at the national level.
b) What are the current legal incentives offered by the Government of the United States to
promote intellectual property as a development instrument?
ANSWER:
The United States provides incentives for economic, social and cultural development
that are built into balanced U.S. intellectual property systems. U.S. intellectual property laws foster
innovation and creativity, and help to ensure that the competitive struggle is fought within certain
bounds of fairness. The patent system delivers to society a wealth of knowledge in every patent
application upon publication. In return for the valuable rights conferred by a patent, the patent law
demands a complete disclosure of each invention. This disclosure promotes the development and
improvement of technology, and discourages the duplication of unnecessary research. Copyright
protection effectively combats the propensity of people to copy rather than create, while leaving ideas
themselves in the public domain. The protection of trademarks and service marks preserves the
investment of the owners of marks in their intellectual creation by ensuring that no other merchant can
mimic the marks and by providing incentives for merchants to invest in good will and strive to improve
their products. Trademark protection also prevents the unjust enrichment of counterfeiters by
precluding use of marks that may cause confusion, deception and mistake, and thereby also serving an
importing consumer protection function. Trade secret laws also encourage creative behavior and
operate as an incentive to innovation. These laws protect against the misappropriation of trade secrets
and against additional inequitable conduct. The incentives provided under the intellectual property
laws of the United States nurture new ventures and technological progress. These developments in turn
enhance the competitiveness of businesses and serve society as a whole with the fruits of intellectual
labor.
9
Through this statement the Special Group of the WTO decided that only subparagraph (B) of Article
110 (5) did not meet the requirements of Article 13 of the ADPIC.
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c) Are there any policies or actions aimed at using the patent documents as a source of
technological information for the small- and medium-scale businesses?
ANSWER:
Yes. The USPTO publishes patents and trademarks via its Web site (www.uspto.gov)
so that they will be available as a source of technological information for all, including small and
medium scale businesses. The USPTO’s Patent and Trademark Depository Library Program (PTDLP)
administers a nationwide network of public, state and academic libraries designated as Patent and
Trademark Depository Libraries authorized by 35 U.S.C. 12 to:
•
Disseminate Patent and Trademark Information; and
•
Support Diverse Intellectual Property Needs of the Public
The dissemination of patents to the public has long been one of the primary missions of the U.S. Patent
and Trademark Office. The premise of our patent system lies in its mutual benefit to both the inventor
and our country. In return for full public disclosure, a U.S. patent offers certain rights to an inventor for
up to twenty years, during which time the inventor may exclude all others from making, using,
importing or selling his or her invention. The patent is published and disseminated to the public so that
others may study the invention and improve upon it. The constant evolution of science and technology,
spurred by the monetary incentive the U.S. patent system offers to inventors, strengthens our nation's
economy. New inventions lead to new technologies, create new jobs, and improve our quality of life.
Strong trademark protection can be as important as a strong patent portfolio to a successful business.
Unlike patents, trademark registrations are renewable for as long as the product or service they identify
is offered for sale. The rise of global communication networks and easily accessible commercial
markets significantly increases the importance of obtaining trademark protection for even the smallest
companies.
In addition, so called “small entity status” is available for individuals, small businesses, and non-profit
organizations under U.S. patent law and regulations, making them eligible for a 50 percent reduction of
many patent fees charged by the USPTO, facilitating their use of the U.S. patent system
d) Are there policies or actions aimed at using inventions entering the public domain?
ANSWER:
Yes. According to U.S. law, a patent term extends for 20 years from the date of filing
(35 U.S.C. 154(a)(2)). After the expiration of a patent, the public is free to use it. Consistent with this
practice, the United States Food and Drug Administration allows third parties to obtain marketing
approval of a product immediately after the expiration of an innovator’s patent on the product. For
additional. Information, see reply to sub-question (c) above.
e) How does the supplemental trademark register work? Who can access that register?
ANSWER:
The Supplemental Register is a secondary trademark register for the USPTO. It allows
for registration of certain signs that do not meet the requirements for registration on the Principal
Register, but are capable of distinguishing an applicant’s goods/services. Signs registered on the
Supplemental Register can be accessed at www.uspto.gov.
f) What is the scope of validity of the trademarks registered in the supplemental register?
ANSWER:
Signs registered on the Supplemental Register receive protection from conflicting
marks, but are excluded from receiving the advantages of certain sections of the Trademark Act of
1946. The excluded sections are listed in 15 U.S.C. §1094.
g) Is the “trade dress” figure regulated by United States law? If so, how does it work?
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ANSWER:
Trade Dress can be protected under U.S. trademark law if it is non-functional and
distinctive. For additional information, refer to Section 1202.02 of the Trademark Manual for
Examining Procedure (TMEP).
[Costa Rica]
7. Paragraph 255 of the Secretariat’s report mentions the term of protection granted by U.S. legislation
to patents for inventions. Please explain in detail whether the patent term extension or adjustment
provisions set forth include all kinds of patents or are limited to specific kinds of patents.
ANSWER:
Patent term extension or adjustment is available for any patent that has a 20-year term
measured from the filing date of the application, so both Utility and Plant applications are eligible for
patent term adjustment. Design patents have a 14 year term that is measured from the date of grant,
and thus are not entitled to patent term extension or adjustment.
[Costa Rica]
8. Paragraph 261 of the Secretariat’s report makes reference to the number of patents filed and granted
in the United States in 2004. Please state how many of the patents granted were revoked, as well as the
main reason therefor.
ANSWER:
To clarify our process, the term "revoked" is not used in U.S. patent practice, but a
U.S. Patent can be re-evaluated by the USPTO through re-examination or re-issue procedures and
under these all, some, or none of the claims can be confirmed. (Also see answer to question 7
(Costa Rica)). Additionally, U.S. federal courts can evaluate patent claims and find that all, some or
none of the claims are valid, invalid or unenforceable. In 2004, the USPTO granted a total of 195,611
patents. Requests for reexamination of a patent, however, may be made for any patent that is currently
in force, or approximately 1,670,000 U.S. patents. According to the USPTO's annual report,
http://www.uspto.gov/web/offices/com/annual/2004/060413a_table13a.html,
441
requests
for
reexamination were received in 2004. Of these, 410 requests were accepted for reexamination. The
number of applications that did not have any claims confirmed is not available, but historically, about
10% of the reexamined patents have no claims confirmed. In addition, it is very rare for a court to fully
invalidate an entire patent. We do not maintain statistics on court patentability determinations.
[Ecuador]
Regarding proposals made before the WTO TRIPS Council, and pursuant to the mandate of paragraph
239 of the Ministerial Declaration made in Hong Kong, Ecuador wishes to know that reason why the
United State does not consider the disclosure of origin to be appropriate for promoting more
transparency and clarity in granting patents. What alternative proposals can the United States proffer?
ANSWER:
The U.S. has provided several communications to the WTO where our objections to
new patent disclosure requirements are clearly stated, including because of the potential detrimental
impact on the patent system. These communications can be found on the WTO website, IP/C/W/434,
IP/C/W/449, and IP/C/W/469. In the United States, patent applications are required to disclose how to
make and use the claimed invention. Where the origin of genetic or other material used in an invention
is necessary to be able to make and use the invention, then U.S. practice does equire disclosure of the
origin of the genetic material. Additionally, in the United States a patent applicant has a "duty to
disclose" any information that is material to patentability, and the United States suggests that such a
duty to disclose is an appropriate mechanism to ensure transparency and clarity in granting patents.
The patent system is a critical incentive mechanism for promoting the research and development of
new inventions of legally obtained or accessed material. This is what ultimately results in new
inventions that enhance living conditions, including life-saving medicines, higher crop yields, and
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better treatments for diseases. As described extensively in our TRIPS Council communications, patent
disclosure requirements unrelated to patentability determinations will not create clarity in patents or
meaningfully increase transparency. Furthermore, such disclosure requirements will likely create legal
uncertainty, disincentives for innovation and other negative consequences to the patent system as
described in our communications to the TRIPS Council. Alternative mechanisms from new patent
disclosure requirements that may lead to improved patent quality and transparency, as well as
appropriate access to biological resources and equitable benefit sharing as a result of use of that
material can also be found in the U.S. TRIPS Council communication referenced above.
[European Communities]
TRIPS and Public Health
In paragraph 252, the US refer to a number of FTAs it has already concluded and indicates that it is
committed to a policy of promoting increased IPR protection.
•
Can the US explain how IP provisions of bilateral agreements concluded for instance with
Chile, Jordan and Singapore enable those countries to make use of the flexibilities provided for
in the Doha Declaration on the TRIPS Agreement and Public Health?
ANSWER:
Our free trade agreements (FTAs) contain the flexibility needed to address public
health crises, including flexibility in areas identified by the Doha Declaration as existing TRIPS
flexibilities. For example, many recent U.S. free trade agreements have no provisions relating to
compulsory licenses. Previously concluded FTAs, such as the United States -Singapore FTA, contain
provisions on compulsory licenses that specifically permit use for public health emergencies and
government use.
In the U.S. view, the intellectual property provisions of the bilateral Free Trade Agreements that the
United States has entered into, including with Chile, Jordan, and Singapore, are sufficiently flexible to
not affect the ability of the parties to take necessary measures to protect public health by promoting
access to medicines for all, and do not prevent the effective utilization of the August 2003
TRIPS/health solution.
In paragraph 260, the report recalls that the US is supportive of the solution agreed in August 2003
that waived the export restriction in TRIPS Article 31(f), under certain conditions, so medicines
purchased under compulsory licences could be supplied to countries that have insufficient or no
capacity for pharmaceuticals.
•
Can the US indicate which steps it has already taken to allow US manufacturers of generic
pharmaceuticals to produce patented medicines for export to countries in need without
sufficient capacity to produce them?
ANSWER:
We continue to strongly support the TRIPS/health solution. At the 2005 Hong Kong
Ministerial Conference we became the first WTO member to formally accept this solution as a
permanent part of the WTO TRIPS Agreement. The United States is the foremost contributor of
pharmaceutical aid to countries in need. The President’s Emergency Plan for AIDS Relief is a five-year
$15 billion commitment to combat disease in over 100 countries worldwide (the largest commitment
ever made by any nation).
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[European Communities]
Patents
In paragraph 255, the report states that patents are granted by the US PTO using the first-to invent rule
that the US is the only WTO Member to use.
•
Can the US indicate which steps it has already taken in order to introduce the first-to-file rule
for patent registration in order to align its patent system with that of other WTO Members?
ANSWER:
Report.
See the response to Canada’s question #10 concerning paragraph 255 of the Secretariat
[European Communities]
Geographical Indications
Method of implementing the TRIPS provisions on GIs in the US:
under section d) “Geographical Indications” of the “Trade-related intellectual property rights” section
of the report by the Secretariat, it is stated that the United States offers protection for GIs through its
trade mark system, including collective and certification marks.
•
Please explain the way in which trade marks, including collective and certification marks,
protect holders of geographical indications against uses of their geographical indications on
goods not originating in the place indicated by the geographical indication in question. In
particular, please explain this with respect to situations in which the geographical indication is
used on goods of the same class not originating in the place indicated by the geographical
indication in question together with the true origin of the goods, or the geographical indication
is used in translation, or accompanied by expressions such as “kind”, “type” or the like.
ANSWER:
U.S. owners of certification and collective marks have the ability under U.S. law to
stop confusing uses of their signs, which could include signs that mislead or confuse consumers as to
the geographical origin of the goods. In the context of a certification or collective mark that relates to
the geographical origin of the goods concerned, this would permit such owners to prevent the confusing
or misleading use of indications on related goods that do not originate in the place indicated by the
geographical indication in question.
[European Communities]
Any interested party may use the administrative trademark structures to oppose or cancel a registered
GI if that party believes that it will be damaged by the registration or continued existence of a
registration.
•
Could you please provide an example of a GI protected in the US that has been able to prevent
the US from the of the GI in translation on goods not originating in the place indicated by the
GI?
ANSWER:
Under U.S. law and practice, a translation of a term into a language other than English
may be found confusing in relation to the corresponding English term, such that the owner of the sign
in the English language would be able to stop its use in translation. Please refer to the Trademark
Manual of Examining Procedure (TMEP) 1207.01(b) (vi).
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[European Communities]
•
Please indicate the type of characteristics of a product that certification marks may be able to
certify. Please provide figures (in percentage with respect to the total number certification
marks granted) on how many certification marks registered in the US are used to certify
regional or other origin.
ANSWER:
A certification mark is any word, name, symbol, device, or any combination, used, or
intended to be used, in commerce with the owner’s permission by someone other than its owner, to
certify regional or other geographic origin, material, mode of manufacture, quality, accuracy, or other
characteristics of someone's goods or services, or that the work or labor on the goods or services was
performed by members of a union or other organization.
Figures are not maintained as to the percentage of certification marks registered in the U.S. used to
certify regional or other origin.
[European Communities]
•
Could you please provide an example of a GI protected through a certification mark in the US
and corresponding to an area located in the US, summarizing the qualities, reputation or other
characteristics of the good that are essentially attributable to its geographical origin and which
justify that the indication in question is not simply a certification mark of regional origin, but a
geographical indication? Please provide information as well on how the link between the
regional origin and the qualities or characteristics of the goods are ascertained.
ANSWER:
The certification mark owner sets the criteria that must be met in order to qualify for
the certification mark with respect to a good. To the extent those criteria consist of characteristics that
are essentially attributable to the geographical origin of the good – such that it constitutes a
geographical indication under the TRIPS Agreement – the certification mark provides protection for a
geographical indication. To the extent it does not consist of such characteristics, the certification mark
is not a geographical indication. Certification marks are not themselves specifically denominated at the
United States Patent and Trademark Office as “GI” or “non-GI”.
[European Communities]
•
Is it possible for consumers in the US to distinguish certification marks of regional origin
where the goods certified do not have specific qualities, reputation or other characteristics
essentially attributable to their geographical origin, from certification marks used to protect
geographical indications?
ANSWER:
Under the certification mark system, the consumer comes to associate particular
characteristics with the good accompanied by the mark. Where those characteristics are essentially
attributable to the geographical origin of the good, including where the certification mark owner has
specified criteria that are essentially attributable to the goods’ geographic origin, the consumer is
distinguishing geographical indications from other certification marks.
[European Communities]
•
We understand that recognized viticultural areas are also available as methods of protection of
geographical indications in the US. Are all recognized viticultural areas in the US geographical
indications? Could you please provide information on the qualities, reputation or other
characteristics of the wines that are considered to grant recognition as recognized viticultural
areas in the US ?
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ANSWER:
Signs that comprise American Viticultural Areas (AVAs) can also function as GIs
provided that they meet the GI definition under TRIPS.
[European Communities]
Proposal for a multilateral system of notification and registration of GIs for wines and spirits:
the report by the Secretariat refers in its section d) “Geographical Indications”, under “Trade-related
intellectual property rights”, to a proposal submitted by the US for a multilateral system of notification
and registration of GIs for wines and spirits, which we understand is contained in its latest version in
TN/IP/W/10
•
Please explain how the voluntary nature of your proposal for a multilateral system of
notification and registration of GIs for wine and spirits can be in line with Article II.2 of the
Marrakesh Agreement establishing the WTO, which states that the agreements and associated
legal instruments included in Annexes 1, 2 and 3 of the Agreement, which include the TRIPS
Agreement in Annex 1 C, shall be binding on all Members.
ANSWER:
The mandate for the negotiations for a multilateral system of notification and
registration of GIs for wine and spirits is in TRIPS Article 23.4. The language in Article 23.4 referring
to the facilitation of the protection of geographical indications eligible for protection “in those
Members participating in the system” makes it clear that WTO Members should be free to decide
whether or not to participate in the system and thereby to seek the facilitation of the protection of their
GIs under it.
•
Please explain how your proposal ensures the reliability of the information made available on
the searchable database of GIs. In particular, please indicate how the system would deal with
the possible notification of an identical name by two or more Members, and also how it would
deal with absence of information with regard to the way in which the notified GIs are protected
in their country of origin, including the question of the date in which the GI obtained protection
and the date, if any, in which protection will expire
ANSWER:
The multilateral system for notification and registration would be voluntary and would
not create extra-territorial rights. WTO Members would be able to use the information contained in the
database when making decisions regarding the registration and protection of trademarks and GIs in
accordance with its national laws.
•
Please explain the way in which your proposal intends to ensure that both administrative and
judicial authorities take account of the information posted on the searchable database proposed.
Please explain as well how administrative and judicial authorities would act if they ascertained
that the information available on the searchable database of GIs was unreliable, inaccurate or
incomplete.
ANSWER:
Please see above answer.
[Israel]
3.
What type of protection does US copyright law grant to producers of sound recordings in
respect of the public performance and broadcasts of their sound recordings?
ANSWER:
To the extent that a producer of a sound recording is an author, that producer is a
copyright owner under U.S. law and, therefore, has the exclusive rights provided by Section 106 of the
Copyright Law. With respect to the public performance and broadcast of a sound recording, as
provided by Section 106(6), the producer has the exclusive right to perform the copyrighted work
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publicly by means of a digital audio transmission. Section 114 sets out the scope of these exclusive
rights. A "digital transmission" is a defined term under Section 101 of the law and is a transmission in
whole or in part in a digital or other non-analog format.
[Japan]
Q36. Bilateral intellectual property agreements (p.76, para.252)
The Government of Japan has faithfully implemented the "Japanese Actions to be taken by the Patent
Office", confirmed by the Japan Patent Office (JPO) and the United States Patent and Trademark
Office (USPTO) in the Framework Talks. However, the United States has never entirely implemented
the introduction of an early publication system without exceptions, nor the improvement of reexamination. Japan strongly requests the United States to implement these items completely and
promptly. In this regard, please indicate the specific views of the Government of the United States.
ANSWER:
The provisions for the adoption of an "early publication" system in the United States
that were originally sent to the U.S. Congress (in the 104th Congress) were fully consistent with the
obligations of the 1994 United States-Japan patent accords.
U.S. obligations in those 1994 patent accords were satisfied by the timely introduction of the relevant
bill in the 104th Congress. The United States made every effort to have legislation passed that was
consistent with the 1994 patent accords, and Congress enacted Public Law 106-113 on November 29,
1999. This law contains a provision to publish, within 18 months, most patent applications filed in the
United States. The law also added new opportunities for third parties to participate in reexaminations,
including determinations made by the patent examiner to the Board of Patent Appeals and
Interferences, in accordance with the understanding reached as part of the Framework Talks. The U.S.
Congress more recently passed legislation that would provide for third party appeals to the Federal
Circuit in inter partes reexamination. (See Section 13106 of 5P.L. 107-273.)
[Japan]
Q37. “Submarine patents” (p.76, paras.252 and 255)
The early publication system in the United States provides exceptions whereby patent applications filed
in the United States, but not filed overseas, or matters included in a patent application filed in the
United States, but not included in the corresponding application filed overseas, cannot be laid open at
the request of the applicant. It is, therefore, possible for a patent application to become a "Submarine
Patent". This system creates serious social and economic loss due to investments in R&D, as the
information on the existence of another application already on file for the same invention is not
available. Any pending applications, already filed with the USPTO at the time of the amendment of the
law in 1994, continue to benefit from the former patent terms (i.e. a 17-year patent term from the date
of the patent grant). Therefore, it is still possible for additional submarine patents to arise. Japan
strongly requests the United States to implement fully and promptly what has already been confirmed
under the Framework Talks: i.e. by abolishing the exceptions from the early U.S. publication system,
and by publishing all applications except those not pending, or those not able to be laid open, after a
period of 18 months from the earliest filing date. In this regard, please indicate the specific views of the
Government of the United States.
ANSWER:
As explained in response to the prior question, legislation was submitted to the U.S.
Congress that would have provided for publication without exception, but the legislation that became
law provided exceptions. Because average patent pendency in the United States is approximately two
years, the possibility of submarine patents occurring based on applications pending on June 8, 1995,
has greatly diminished over time and will continue to do so. The USPTO is actively studying ways to
reduce the length of time an application is pending before it is granted, and means to further promote
publication (e.g., tying a petition to make special to early publication of the patent application). It is
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hoped that these efforts will eliminate any applications that are not published within 18 months of their
filing date.
Because most patent applications filed in the United States are published within 18 months, we believe
that experience with our publication system will demonstrate over time that the need for exceptions
will be proven to be unwarranted. Moreover, continuing efforts to further reduce patent pendency in
the United States will help to alleviate any problems that these exceptions may cause.
[Japan]
Q38. Extension of the patent term (p.76, paras.252 and 255)
The USPTO provides that patent protection may be extended to compensate for any amount of
processing delays and USPTO-caused delays. This extended patent term is guaranteed for at least a 17year patent term. The Government of Japan would like to point out that there is a possibility of
deliberate delays being caused, and that under the U.S. current conditions of not having an adequate
early publication system, there would be other opportunities of creating submarine patents through the
extension of patent terms. In this regard, please indicate the specific views of the Government of the
United States.
ANSWER:
If an applicant deliberately delays the processing of a patent application, these delays
can be considered a “failure to engage in reasonable efforts to conclude prosecution” and used to
reduce any patent term adjustment due to USPTO delays. As a result applicants are encouraged to
promptly and completely reply to Office actions so as to not incur a “failure to engage in reasonable
efforts to conclude prosecution” reduction.
[Japan]
Q39. "First-to-Invent" system (p.76, para.255)
The United States is the only country to use the "first-to-invent" system, which, with regard to the
patent system, makes the United States rather unique. This system, however, lacks certainty and
predictability in the sense that a patentee’s status can be overturned by the appearance of the prior
inventor afterwards. This will provide extra burden to inventors who are required to prepare and keep
documentary evidence to prove the date of invention. Many countries, including Japan, have pointed
out that this issue creates a barrier for foreign companies when trying to penetrate the U.S. business
community. Although the practice of maintaining the first-to-invent system is not necessarily against
the TRIPS Agreement, Japan again requests the United States to adopt the first-to-file system and also
to improve all aspects of the patent systems that restrict trade in the United States. This is due to the
necessity of maintaining a transparent and stable system, as well as reducing the burdens borne by
users through the difference in systems. In this regard, please indicate the specific views of the
Government of the United States.
ANSWER:
Although the U.S. first-to-invent patent system is unique, it is clearly compatible with
the TRIPS Agreement, it has worked well and, indeed, has certain advantages. For example, the U.S.
system is very fair in that it rewards the first inventor who files a patent application, rather than
rewarding the first person to file an application regardless of whether that first applicant to file an
application was, indeed, the first inventor.
From a purely statistical viewpoint there would seem to be little difference in result between a first-toinvent patent system and a first-to-file patent system. More than 99.9 percent of patent applications
filed in the U.S. raise no dispute as to priority of invention. Even when such disputes arise, the
inventor who filed first prevails in a significant majority of these cases. The actual effect of a switch to
first-to-file system, thus, is likely to have little or no actual significance based upon these statistical
findings.
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With regard to the alleged burden imposed by a first-to-invent system due to the use of documentary
evidence to prove the date of invention, it should be kept in mind that inventors in most first-to-file
systems also maintain such evidence in order to be able to assert "prior user rights" or derivation.
Documentary and other objective evidence is required to establish prior user rights in cases where an
earlier inventor wishes to continue using an invention that was patented by another party that filed first,
and obtained, a patent on that invention. Such evidence is also required to prove inventorship where
the first person to file derived the invention from the true inventor and is not entitled to the patent.
[Japan]
Q40. Priority in the Paris Convention (Hilmer Doctrine) (p.76, para.255)
The United States has a unique legal principle called “Hilmer Doctrine”, which reasons that the effect
of elimination subsequent applications by third persons on the ground of items on specification being
prior art retoacts only to the filing date in the United States. Foreign applicants usually file
applications, first in their own country and subsequently in the United States, thereby claiming priority
under the Paris Convention. Due to the "Hilmer" doctrine, such foreign applicants cannot prevent the
patent grant from conflicting with applications filed before the actual filing date of any subsequent
applications in the United States, even during the priority period, and thereby may suffer from this
disadvantage. This is against Article 4B of the Paris Convention, which stresses that acts by a thirdparty in the priority period "cannot give rise to any third-party right or any right of personal
possession". This is also inconsistent with Article 2.1 of the TRIPS Agreement which requires
compliance with Article 4 of the Paris Convention. In this regard, please indicate the specific views of
the Government of the United States.
ANSWER:
The concerns of the Hilmer Doctrine, if any, were mitigated to a large extent by
changes to the U.S. patent law that went into effect on June 8, 1995. These changes permit all patent
applicants, including those from Japan, to file provisional patent applications that will give them the
earliest possible prior art date for subsequently filed non-provisional applications. It should also be
noted that this issue is under discussion in the ongoing substantive patent law harmonization talks in
WIPO.
The effective date of a patent application as a prior art reference under the so-called "Hilmer" doctrine
is not inconsistent with the obligations of Article 4B of the Paris Convention, as it does not affect the
ability of an applicant to obtain a patent where the applicant has made a priority claim that establishes
an effective filing date prior to the effective prior art date of the patent. Note that WIPO's Patent
Cooperation Treaty explicitly allows countries to apply the Hilmer doctrine in Article 64.4.
[Japan]
Q41. Language discrimination in international applications under the PCT (p.76, para.255)
Article 102 (e) of the Patent Act provides that a PCT international application has the effect of
eliminating other applications filed subsequent to the application’s international filing date only when
the application designates the United States and is internationally published in English. When a PCT
international application is published in another language however, it does not have the effect of
eliminating subsequent applications. Thus, Article 102 (e) is discriminatory against languages other
than English. In Japan and Europe, international applications are not discriminated on account of
language. Therefore, it is unfair that the same treatment is not guaranteed in the United States. The
limitation of the effect of eliminating subsequent applications by Article 102 (e) narrows the advantage
of the moratorium on submitting translations under the PCT system, and is significantly
disadvantageous to applicants, who need to translate documents into English. The Government of
Japan requests that the Government of the United States abolish the language discrimination based on
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Article 102 (e).
United States.
In this regard, please indicate the specific views of the Government of the
ANSWER:
A bill has been introduced before the first session of the 109th Congress, but when or if
this Congress will take action on this bill is unknown.
[Japan]
Q42. Unity of invention (p.76, para.255)
The Government of Japan understands that the USPTO has been implementing a public comment
procedure and is trying to harmonize its patent system with the international system of Patent Law.
However, with regard to the unity of invention, under the current U.S. patent system, the scope of
inventions that can be included in a single application is, according to what we have been pointed out
so far, narrower than that under the systems of the JPO and the European Patent Office (EPO). Thus, a
patentee is obliged to submit multiple applications, thereby increasing the burden. The Government of
Japan wishes to repeat its request to the Government of the United States to adopt the same criterion for
its unity of invention as that of Japan and Europe. In these respects, please indicate the specific views
of the Government of the United States.
ANSWER:
The U.S. Patent and Trademark Office has been studying the implementation of unity
of invention for national applications for many years. There are serious implementation concerns,
including revenue, resource allocation and labor management. These concerns must be viewed in the
context of the difficulties in coping with application filings that continue to increase year-to-year,
especially in high-technology areas. There are also concerns that the current unity standard may not be
the best approach to the issue of limiting the claiming of multiple inventions in single applications,
especially in those emerging technologies. To that end, the United States, in the ongoing discussions of
WIPO's Standing Committee on the Law of Patents (SCP), has supported the formation of a Working
Group to further study this issue.
[Japan]
Q43. Information Disclosure Requirement of Prior Art Documents (p.76, para.255)
All applicants for United States patents ought to disclose all important prior art documents of which
they know to the U.S. Patent and Trademark Office (USPTO) until the time that they obtain the patents
for which they have applied. In addition, they ought to submit English translations, in whole of in part,
of prior art documents if such documents are not in English. The Government of Japan therefore
requests that the Government of the United States take measures to reduce the burden on foreign patent
applicants, including eliminating the requirement to submit English translations and shortening the
period of the information disclosure requirement. In this regard, please indicate the specific views of
the Government of the United States.
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ANSWER:
An applicant is required to submit is information that is known to be material to
patentability. The public interest is best served, and the most effective patent examination occurs when,
at the time an application is being examined, the Office is aware of and evaluates the teachings of all
information material to patentability. Each individual associated with the filing and prosecution of a
patent application has a duty of candor and good faith in dealing with the Office, which includes a duty
to disclose to the Office all information known to that individual to be material to patentability as
defined in this section. The duty to disclose information exists with respect to each pending claim until
the claim is cancelled or withdrawn from consideration, or the application becomes abandoned. The
Office believes that this policy best serves the public interest by ensuring that all known prior art that is
material to patentability is brought to the examiner’s attention. While translations “ought” to be
submitted, they are only required to be submitted if they are readily available, otherwise a concise
explanation of the relevance, as it is presently understood, is acceptable.
[Japan]
Q44. Section 211 of the US Omnibus Appropriations Act of 1988 (p.80, para.267)
Please indicate the prospect of the amendment of Section 211 of the Omnibus Appropriations Act.
ANSWER:
As we have noted in meetings of the WTO Dispute Settlement Body, several
legislative proposals relating to section 211 that would implement the DSB’s recommendations and
rulings in this dispute have been introduced in the current Congress, both in the U.S. Senate and the
U.S. House of Representatives. As Members know, the legislative process is in the hands of the U.S.
Congress. The Administration is, however, working closely with Congress concerning the
recommendations and rulings in this dispute.
[Japan]
Q45. Copyright (p.81, para.273)
(1) With regard to the Digital Millennium Copyright Act, we understand that in the United States there
is currently a significant development of businesses in broadcasting /transmitting over computer
networks, such as webcasting or broadcasting/transmitting using IP multicasting technology. Japan
would like to know whether U.S. law provides for limitations/exceptions to the copyright of performers
and phonogram producers that make these broadcasts/transmissions over computer networks possible
without obtaining authorizations to broadcast/transmit from relevant performers and phonogram
producers.
ANSWER:
Section 106(6) of the United States Copyright Law grants the copyright owner the
exclusive right to perform sound recordings publicly by means of digital audio transmission. Section
114 sets out the scope of these exclusive rights.
A statutory license is available if
broadcasters/webcasters have radio style transmissions that have satisfied certain criteria (e.g., noninteractive, broadcast schedule not published, does not exceed in the performance complement). If a
broadcaster/webcaster does not satisfy the criteria of eligibility for the statutory license, it will need to
obtain the authorization of the copyright owner. Under United States Copyright Law, there are a
number of exceptions and limitations to a copyright holder’s exclusive rights, such as the section 107
limitation for fair use, which may also be applicable.
(2) Do lines 6 and 7 of paragraph 273 mean that producers of phonograms do not have any right
concerning terrestrial digital broadcasting?
ANSWER:
Section 106(6) of the United States Copyright Law grants the copyright owner the
exclusive right to perform sound recordings publicly by means of digital audio transmission. However,
a non-subscription Federal Communications Commission (FCC) licensed digital broadcast
transmission is exempt (Section 114). Otherwise, as with webcasters, sound recording copyright
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owners have a performance right vis-à-vis cable and satellite digital broadcasts, as well as subscription
FCC licensed digital broadcasts.
(3) With regard to “live musical performances” in line 8 of paragraph 273, Article 14 of the TRIPS
Article 14 calls for protection against unauthorized fixation of not only live “musical” performances
but also of all types of live performances, including performances such as the recitation of poems.
Please explain how the United States law protects against the unauthorized fixation of live
performances other than live musical performances.
ANSWER:
Although there is no explicit federal legislation protecting non-musical live
performances, the United States protects against unauthorized fixations of live performances such as
recitations of poetry or plays because, under 106(1), (2) and (4) of the United States Copyright Law,
the copyright owner of the play or the poem has the exclusive right to authorize the public performance
of the copyrighted work, to prepare derivative works based on the copyrighted work and to reproduce
the copyrighted work. In addition, state laws often provide protection in this area.
(4)Concerning lines 1 to 3 of paragraph 274, please explain how broadcasting and cablec