On the EC Banana regime

AMBASSADOR HAYES: Mr. Chairman, the discussion this morning has been most helpful.

The United States has reviewed carefully the Commission's proposal, and has discussed it with Commission officials. Many details of the Commission's proposals need to be resolved.

We recognize that the Commission has devoted considerable time and effort to developing this proposal.

As we informed the Commission, the United States cannot endorse this proposal as being consistent with WTO provisions.

The proposal would continue the discrimination between companies that supply the EU with Latin American bananas and companies, which are primarily European, that supply the EU with ACP bananas.

In addition, its lack of detail causes further concerns, since this proposal would only form the basis for EU Agriculture Council review and for further detailed regulations.

The United States welcomes the opportunity to continue consultations with the Commission with a view to reaching a quick solution to this long-standing dispute.

In a second intervention during the same DSB meeting Ambassador Hayes made the following points:

AMBASSADOR HAYES: The EU's latest proposal for distributing banana import licenses still favors growers in EU territories and former EU colonies, would discriminate against other suppliers and therefore does not meet the EU's WTO commitments.

Latin American countries which also dispute the EU's system have examined the proposal and feel it would not provide a speedy solution to the dispute.

Furthermore, the level of the proposed tariff applied to Latin American countries in one of the EU's TRQs is prohibitive. While the concept of allocating importing licenses on a first-come, first-served basis is not a problem, the way the EU has proposed it would be. The EU essentially has proposed an "all come all served" system for the ACP, and a "some come many not served" system for the rest of the suppliers. That is a problem; the license allocation system can't be a system which discriminates against other suppliers and other companies.

Japan - varietal testing of agricultural products

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

Canada - Measures affecting the importation of milk and exportation of dairy products

AMBASSADOR HAYES: The United States would like to thank Canada for its status report, as well as the information provided in implementation consultations earlier this month, and look forward to sitting down again on December 16 to continue consultations. Canada stated that the process for changing provincial milk marketing orders, provincial regulations, and federal legislation is now underway. We are told that process should be completed by the end of this calendar year, to coincide with the expiration of the reasonable period of time for compliance with the DSB recommendations.

Unfortunately, the new provincial programs that took effect on 1 August, and which are now being reduced to legal text, seem to be essentially the same old export subsidies. Low priced milk is still available in Canada only for export contracts. Moreover, the provincial programs continue to require that any milk committed to processors at such reduced prices be exported.

Canada also recently advised that it no longer collects information about either the price or volume of export contracts, so that basically there will be no record maintained of the volume or value of milk exported through the new provincial mechanisms. While Canada states that this situation is the product of its deregulation of dairy exports, turning a blind eye to the problem is not likely to contribute to the resolution of this dispute.

In short, it is now evident that Canada has elected to pursue a course that is inconsistent with compliance with its export subsidy reduction commitments and which will permit the attendant trade distortions to continue unabated. As a result, as Canada moves to finalize the incorporation of the new provincial export contracts into regulations and legislation, the United States concurrently will be making its preparations for the next round in this dispute.

India - Balance of payments quantitative restrictions on agricultural, textile and industrial products

AMBASSDOR HAYES: We thank the Indian delegation for its status report. We look forward to further reports in due course.

United States - Anti-dumping act of 1916: Implementation of the Recommendations of the DSB

AMBASSADOR HAYES: The United States intends to implement the recommendations and rulings of the DSB in a manner which respects U.S. WTO obligations, and we have begun to evaluate options for doing so.

The United States will need a reasonable period of time in which to implement.

We stand ready to consult with the European Communities and Japan regarding a reasonable period of time.

Canada - Term of Patent Protection: Implementation of the Recommendations of the DSB
AMBASSADOR HAYES: We thank the Canadian delegate for advising us of his government's intention to comply with the rulings and recommendations of the DSB.

We noted during the adoption of the Appellate Body and panel reports that the Appellate Body specifically recommended that Canada bring Section 45 of its Patent Act into conformity with its TRIPS obligations.

We are concerned, however, by recent press reports in Canada quoting an official from the Canadian Industry Ministry as saying that Canada is considering several possible responses to the [WTO] decision, including non-compliance."

We sincerely hope that non-compliance will not be an option for Canada. Instead, we are looking forward to discussing with Canada what a reasonable period of time for implementation might be. We hope that a meeting between our delegations can very quickly be arranged.

United States - Definitive Safeguard Measures on Imports of Circular Welded Carbon Quality Line Pipe from Korea: Request by Korea for the establishment of a panel

AMBASSADOR HAYES: We regret that Korea has chosen to request the establishment of a panel. We had hoped that the consultations would have addressed Korea's concerns, and believe that the safeguard measure in question complies fully with the requirements of the Safeguards Agreement and GATT 1994. We believe that a panel will reach the same conclusion."

Philippines - Measures Affecting Trade and Investment in the Motor Vehicle Sector: Request for the Establishment of A Panel by the United States

AMBASSADOR HAYES: 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 markets. 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.

These measures should have been removed on January 1 of this year. The Philippines of course 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. However, we have now been consulting for more than a year, and we have unfortunately not yet reached a solution that is satisfactory to both sides.

In light of the passage of time, and the distance between our two countries' positions, we have regrettably concluded that our interests are best served by moving forward with our panel request at this time. We have therefore taken the logical step of bringing this matter to the DSB.

My delegation of course remains open to further discussions with the Philippine Delegation. We hope very much that this matter can be resolved on a mutually agreeable basis.

As the matter remains unresolved at this time, however, we are asking for the establishment of a panel.

We do not agree with the suggestion that the Philippines are entitled to maintain their TRIMs just because they have requested an extension pursuant to Article 5.3 of the TRIMs Agreement. To the contrary: As we have said on many occasions, the fact that their extension request is pending does not prejudice their obligations under the TRIMs Agreement and the GATT 1994, or other Members' rights with regard to their measures. As things stand now, the Philippines' TRIMs have no justification under the WTO Agreement.

United States - Import Prohibition of Certain Shrimp and Shrimp Products: Recourse to Article 21.5 of the DSU by Malaysia.

AMBASSADOR HAYES: The United States is disappointed by the decision of Malaysia to request proceedings under Article 21.5 with respect to the U.S. implementation.

In the spirit of the Dispute Settlement Understanding, we have sought to resolve any outstanding issues regarding implementation through good faith consultations. We have consulted with Malaysia throughout the implementation period. Most recently, we offered to send a high level delegation to Kuala Lumpur to discuss Malaysia's concerns. Malaysia, however, declined our offer to engage in such consultations.

We are puzzled by Malaysia's contention that the DSB's recommendations and rulings require the United States to withdraw the U.S. measure in its entirety. We would recall that the Appellate Body report found no inconsistency between the U.S. legislation at issue and our obligations under the WTO. Rather, the report found fault with certain aspects of the way the law was administered. As the United States reported to the DSB during the implementation period, the United States took great care to address the DSB findings with respect to the implementation of the U.S. measure. Nothing in the DSB's recommendations called on the United States to withdraw its measure in its entirety, and the U.S. implementation steps amounted to full compliance with these recommendations.

The implementation steps have both responded to the issues raised by the Appellate Body report, and -- with the cooperation of the countries in the Indian Ocean region -- have advanced efforts to conserve endangered sea turtles. Because we have previously described to the DSB the U.S. implementation steps, we will not repeat them in detail again here today. We will, however, briefly summarize those steps and point out some recent developments since the U.S. implementation report to the DSB in January 2000.

We would recall that pursuant to the findings in the Appellate Body report, the United States Department of State issued revised guidelines implementing our Shrimp/Turtle law. Under the revised guidelines, the United States has certified Pakistan -- one of the original four complainants -- as having a comparable sea turtle conservation program. The Government of Malaysia, however, has not sought to make use of the revised guidelines.

Another key element of our implementation efforts has been an effort to negotiate an agreement with the governments of the Indian Ocean region on the protection of sea turtles in that region. Most recently, the United States provided financial assistance to facilitate the hosting of the first negotiating round by Malaysia. We look forward to continuing to work with Malaysia and the other concerned governments to finalize this agreement.

We would also recall that our implementation efforts included offers of technical training in the design, construction, installation and operation of TEDs to any government that requests it. The United States conducted a TEDs workshop in Karachi, Pakistan in January 2000, focusing on evaluation and training issues. We believe that this workshop assisted the Government of Pakistan in its adoption of a successful TEDs program.

To date, Malaysia has not requested any such assistance.

We are confident that the panel established under Article 21.5 and -- if this matter is appealed -- the Appellate Body will find that the United States has complied with the recommendations and rulings of the DSB. The United States, however, regrets that Malaysia has declined our offer to consult on this matter in Kuala Lumpur and has instead decided to pursue proceedings under Article 21.5. Rather than expending efforts in such counterproductive litigation, the United States submits that the involved parties should continue to engage in cooperative efforts towards our mutually shared goal of sea turtle conservation.

Mexico - Anti-dumping Investigation of High-fructose Corn Syrup (HFCS) From the United States: Recourse to Article 21.5 of the DSU by the United States

AMBASSADOR HAYES: Mr. Chairman, Mexico's reasonable period of time for compliance in the dispute on Mexico's antidumping investigation of HFCS expired on September 22, 2000. Two days earlier, Mexico published a revised antidumping resolution imposing anti-dumping duties on HFCS. Unfortunately, this resolution appears to be inconsistent with several provisions of the Antidumping Agreement, and we believe it does not comply with the DSB's recommendations and rulings. We are therefore seeking recourse to DSU Article 21.5, as set forth in document WT/DS132/6.

The United States and Mexico have been discussing mutually agreeable procedures under Articles 21 and 22 of the DSU in this matter. We hope to conclude those discussions in the near future, and will notify Members of our agreement.