The following are statements made by Ambassador Rita Hayes, Deputy U.S. Trade Representative, at the November 17, 2000 meeting of the World Trade Organization (WTO) Dispute Settlement Body

On Item 1.a. Status Report by the European Community on its Regime for the Importation, Sale and Distribution of Bananas.

"Unfortunately, it seems that the EC has nothing new to report since last month's meeting.

The EC is aware of the United States' position concerning its current proposal, which we outlined to DSB members last month. The EC is equally aware that its current proposal has been roundly criticized by many other members as well.

Given that this proposal will not settle this long-standing dispute, we would urge the Commission to reconsider it.

The United States would welcome the opportunity to continue consultations with the Commission with a view to reaching a prompt solution to this matter."

Item 1.b. Status Report by Japan on Measures Affecting Agricultural Products

"The United States thanks Japan for its report. We also hope to finish work with Japan on the few issues remaining in the near future."

Item 1.c. Status Report by Canada on measures affecting the importation of milk and exportation of dairy products

"The United States would like to thank Canada for its status report, but notes that Canada has not provided any information that would alter the United States view regarding the nature of the programs newly introduced at the provincial level. Those programs were established to replace the Special Class system, and like that system, also provide export subsidies. The substitute programs, introduced in August 2000 in all of the provinces that export dairy products, make milk available for export at preferential, subsidized prices. As a result, exports under the new programs must be counted toward the total limits that Canada accepted as part of its reduction commitment on export subsidies. If Canada's dairy exports continue at the pace established earlier this year, Canada will violate those reduction commitments again this year.

The United States wishes to emphasize that the reasonable period of time for Canada to bring its dairy exports into compliance with the DSB recommendations expires in slightly more than one month. Although not much time remains, Canada can still make the decision to acknowledge that the new programs are export subsidies and are subject to the same reduction commitments that are applicable to exports under the Special Class system. By doing so, Canada can achieve the compliance with the DSB recommendations that it has assured repeatedly will be accomplished."

Item 1.d. Status Report by India on quantitative restrictions on agricultural, textile and industrial products

"Once again, we thank the Indian delegation for its status report.

We look forward to further reports as the implementation deadline of April 1 draws closer."

Item 2. India B Measures Affecting the Automotive Sector: Second Request by the European Communities for the Establishment of a Panel

"As the Members of the DSB know, in July the DSB established a panel to examine the U.S. complaint on these Indian measures.

The United States believes that DSU Article 9.1 applies here. That is, we believe that a single panel should examine both the EC complaint and the US complaint.

We are pleased that the delegations of India and the EC agree with us. We are also pleased that they agree that the United States' pending request to the Director-General to compose the panel will apply to the single panel examining both complaints."

Item 3. Philippines B Measures Affecting Trade and Investment in the Motor Vehicle Sector: Second Request for the Establishment of A Panel by the United States

"The United States is requesting the establishment of a panel to examine the Philippines' trade related investment measures for firms that manufacture motor vehicles.

The Philippines' TRIMs regime requires manufacturing firms in the motor vehicle sector to use parts and components produced in the Philippines and to earn a percentage of the foreign exchange needed for importation by exporting finished goods. Manufacturers must comply with these measures to import goods at preferential tariff rates. Furthermore, it appears to us that import licenses for parts, components and finished vehicles are conditioned on compliance with these requirements.

These measures deny the Philippines' trading partners the opportunity to supply the Philippine market. In addition, they unfairly burden manufacturers operating within the Philippines. If anything, they retard rather than promote the development of the Philippines' motor vehicle industry.

The United States considers that these restrictions are inconsistent with the Philippines' obligations under Articles III:4, III:5 and XI:1 of the GATT 1994 and Articles 2.1, 2.2, 5.2 and 5.5 of the Agreement on Trade-Related Investment Measures.

Mr. Chairman: These measures should have been removed on January 1 of this year. The Philippines requested an extension of that phase-out period in accordance with Article 5.3 of the TRIMs Agreement. As soon as they did so, we began consulting with them, and we have met several times to exchange views on how to address both the Philippines' interests and ours.

Our dialogue with the Philippines has certainly been useful, and the Philippines delegation has been very forthcoming in answering the questions we have asked about their TRIMs regime. Indeed, our consultations are continuing. We very much look forward to the further discussions that we have planned with the Philippine Delegation. We remain hopeful that they will lead a mutually agreeable solution.

On the other hand, we have now been consulting for more than a year, and however optimistic we may be about reaching a solution that is satisfactory to both sides, we have not done so yet. We therefore have regrettably concluded that our interests are best served by moving forward with our panel request at this time."

Item 8. Other Business: United States - Tax Treatment for "Foreign Sales Corporations", WT/DS108

"Mr. Chairman, it is my pleasure to announce that on November 15, President Clinton signed into law H.R. 4986, the FSC Repeal and Extraterritorial Income Exclusion Act of 2000.

With the enactment of this legislation, the United States has implemented the recommendations and rulings of the DSB in the dispute entitled ?United States - Tax Treatment for "Foreign Sales Corporations", WT/DS108. Moreover, the legislation otherwise is consistent with U.S. WTO obligations.

It is my understanding that the European Communities does not share our assessment of the new legislation. I, of course, would urge the EC to reconsider its position -- but should that not occur, we have agreed at least on procedures which hopefully will allow our disagreement to be resolved in a responsible and orderly manner. These procedures have been circulated to the DSB."