WTO DISPUTE SETTLEMENT BODY MEETING

UNITED STATES MEASURES TREATING
EXPORT RESTRAINTS AS SUBSIDIES:
PANEL REQUEST BY CANADA

August 4, 2000

The United States finds Canada's initiation of this dispute to be troubling for a number of reasons. First of all, it is difficult to comment on substance, because, due to Canada's procedural violations, we don't know what half of Canada's case is about. In its request for a panel, Canada identified measures that are only vaguely described, and more importantly, on which there have never been any consultations.

Canada's request for a panel violates a fundamental principle of WTO dispute settlement process; namely, the principle that members are supposed to consult on a measure before they ask a panel to make a ruling regarding the WTO-consistency of the measure.

In this case, Canada asked for consultations - and consultations were held - with respect to two documents of a legislative nature; namely, the Statement of Administrative Action accompanying the Uruguay Round Agreements Act of 1994 and the preamble to the Department of Commerce's countervailing duty regulations.

However, in its request for a panel, Canada substituted new measures for the Statement of Administrative Action and the preamble, one such measure being an as-yet-unidentified "U.S. practice" under its countervailing duty statute.

Such an approach is inconsistent with WTO rules and it prejudices the ability of the United States to defend itself.

We do not know the basis for Canada's claims that this "U.S. practice" is WTO-inconsistent; we don't even know what the "U.S. practice" in question is.

These procedural problems are serious indeed. But leaving them aside to consider the one half of the case on which we did actually consult, suffice it to say that we do not believe that section 771(5) of the Tariff Act of 1930 (the statutory provision cited by Canada) is inconsistent on its face with the Subsidies Agreement.

The United States is prepared to defend this case on the merits, and we will be interested to see what Canada's arguments are should a panel ever be established.