Statements by the u.s. representative
At the Meeting of the WTO Dispute Settlement Body (DSB)

Geneva
June 20, 2005

Item 1. SURVEILLANCE OF IMPLEMENTATION OF RECOMMENDATIONS ADOPTED BY THE DSB

A. UNITED STATES – SECTION 211 OMNIBUS APPROPRIATIONS ACT OF 1998: STATUS REPORT BY THE UNITED STATES (WT/DS176/11/ADD.32)

· The United States provided a status report in this dispute on June 9, 2005, in accordance with Article 21.6 of the DSU.

· As noted in the report, 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.

· The Administration is working with Congress to implement the DSB’s recommendations and rulings.

B. UNITED STATES – ANTI-DUMPING MEASURES ON CERTAIN HOT-ROLLED STEEL PRODUCTS FROM JAPAN: STATUS REPORT BY THE UNITED STATES (WT/DS184/15/ADD.32)

· The United States provided a status report in this dispute on June 9, 2005, in accordance with Article 21.6 of the DSU.

· As of November 23, 2002, the U.S. authorities had addressed the DSB’s recommendations and rulings with respect to the calculation of antidumping margins in the hot-rolled steel antidumping duty investigation at issue in this dispute. Details are provided in the document numbered WT/DS184/15/ADD.3.

· The U.S. Administration continues to support specific legislative amendments that would implement the DSB’s recommendations and rulings with respect to the U.S. antidumping duty statute, and is working with the U.S. Congress to pass these amendments. Indeed, the United States is pleased to note that, on May 19, 2005, legislation was introduced in the U.S. House of Representatives (H.R. 2473) that would implement the DSB’s recommendations and rulings with respect to the U.S. antidumping duty statute. The U.S. Administration will continue to work with Congress to enact this legislation.

C. UNITED STATES – CONTINUED DUMPING AND SUBSIDY OFFSET ACT OF 2000: STATUS REPORT BY THE UNITED STATES (WT/DS217/16/ADD.17 – WT/DS234/24/ADD.17)

· The United States provided a status report on June 9, 2005, in accordance with Article 21.6 of the DSU.

· As noted there, the U.S. Administration proposed repeal of the CDSOA in its budget proposal for fiscal year 2006. In addition, legislation that would repeal the CDSOA has been introduced in the U.S. House of Representatives.

· The U.S. Administration will continue to work with the Congress to enact legislation, and to confer with the complaining parties in these disputes, in order to reach mutually satisfactory resolutions of these matters.

D. UNITED STATES – SECTION 110(5) OF THE US COPYRIGHT ACT: STATUS REPORT BY THE UNITED STATES (WT/DS160/24/ADD.7)

· The United States provided a status report in this dispute on June 9, 2005, in accordance with Article 21.6 of the DSU.

· As noted in the report, the U.S. Administration continues to work with the U.S. Congress on this matter.

· The U.S. Administration will continue its consultations with the Congress and confer with the European Communities in order to reach a mutually satisfactory resolution of this matter.

E. MEXICO – MEASURES AFFECTING TELECOMMUNICATIONS SERVICES: STATUS REPORT BY MEXICO (WT/DS204/9/ADD.6)

· The United States would like to thank Mexico for its status report.

· The expiration of the RPT is now close at hand, and the United States hopes that Mexico will be able to successfully implement its proposed regulations for the resale of telecommunications services, the last element of our implementation agreement.

G. CANADA - MEASURES RELATING TO EXPORTS OF WHEAT AND TREATMENT OF IMPORTED GRAIN: STATUS REPORT BY CANADA (WT/DS276/20/ADD.1)

· The United States thanks Canada for its status report. We appreciate the additional information provided therein in response to our questions at the previous DSB meeting. We would like to ask two follow-up questions to confirm our understanding of that information:

· We understand based on Canada’s status report that Canada intends to promulgate a new regulation requiring elevator operators to notify the Canadian Grain Commission of the origin of all grain. Could Canada confirm that this is the only new regulation it intends to promulgate to replace the old measures related to mixing foreign grain with Canadian grain and entry of foreign grain into Canadian grain elevators?

· In addition, could Canada confirm that it does not intend to introduce any new regulations related to the extension of the rail revenue cap to cover foreign grain shipments?

Item 3. EUROPEAN COMMUNITIES - MEASURES AFFECTING TRADE IN COMMERCIAL VESSELS

A. REPORT OF THE PANEL (WT/DS301/R)

· Mr. Chairman, when Korea first requested the establishment of a panel, the United States indicated that it would be following this dispute with the utmost interest. We would now like to draw Members’ attention to a few points that should, in fact, be of interest.

· We would like to turn first to the Subsidies Agreement aspects of this dispute. We note that with respect to its claim under Article 32.1 of the Subsidies Agreement, Korea relied on the reasoning of the Appellate Body in the CDSOA dispute. The panel rejected Korea’s claim, but it did so by relying upon an analysis that is difficult to reconcile with the outcome in the CDSOA dispute.

· In the report that is before the DSB today, the panel noted that the provision of subsidies in response to subsidies provided by another Member could not by itself give rise to a violation of Article 32.1, because that would be tantamount to creating a new class of prohibited subsidies. Rather, the panel concluded that there must also be some additional element beyond the effect of the subsidy, such as a “transfer of financial resources” between foreign producers/exporters and their domestic competitors, in order to dissuade subsidization.

· However, the panel’s analysis of DSU Article 23.1 generates inconsistencies with its analysis of Article 32.1 of the SCM Agreement.

· First, notwithstanding its SCM Agreement discussion, the panel in fact has created a new category of prohibited subsidy – subsidies prohibited by DSU Article 23.1.

· Second, the panel found that, for purposes of Article 23.1, the EC subsidies created “an incentive for Korea to alter its conduct” with respect to Korea’s own subsidies. In so finding, the panel arguably undermined its finding under Article 32.1 that the EC subsidies did not have the effect of dissuading subsidization by Korea.

· Furthermore, we find quite startling the panel’s reasoning that it is a breach of Article 23.1 of the DSU for a Member to take any steps outside of formal WTO dispute settlement to seek to have another Member remove a WTO-inconsistent measure. This reasoning would have profound implications.

· It is quite surprising that a panel would think that a Member cannot pursue informal means to resolve a dispute, but must instead commit the time and resources needed for formal dispute settlement.

· Further, under the panel’s reasoning, it would be a breach of Article 23.1 for a Member to simply ask another Member to remove a WTO-inconsistent measure. More specifically, in the context of subsidies, it would be a breach for a Member to do anything to seek to influence the conduct of another Member so that the other Member would remove the adverse effects of a subsidy. However, it is difficult to see how an action that mitigates the adverse effects would not affect the subsidizing Member’s conduct.

· And the panel’s test of “designed to influence the conduct” would appear to be a subjective test, although in other contexts the panel emphasized that it did not endorse subjective tests.

· Mr. Chairman, the United States takes no position on whether the EC measures at issue are consistent or inconsistent with the EC’s WTO obligations. However, we did wish to note some of the logical conundrums posed by this report.