Thank you, Mr. Chairman. The United States welcomes the delegation from Caracas here for Venezuela's WTO Trade Policy Review. We appreciate the work of the WTO Secretariat in producing its report on Venezuela's trade policy regime, and we welcome the report prepared by the Government of Venezuela. We would also like to thank the discussant for his thought provoking and insightful comments and questions. We have prepared some questions based on these reports, and we look forward to receiving Venezuela's answers and learning more about its trade policies and practices.

The historically strong trade relationship between the United States and Venezuela has been a cornerstone of our bilateral relations and has generated important benefits for both countries. Venezuela is our 13th largest supplier of imports and our 25th largest export market in the world, with $20.9 billion in two-way goods trade during 2001. The U.S. and Venezuelan companies have made significant direct investments in each other's economies. We look forward to working with the Venezuelan government towards meeting the January 2005 deadline for completing the WTO negotiations. We are also engaged in free trade negotiations with Venezuela in the context of the Free Trade Area of the Americas.

The United States commends the Government of Venezuela on the liberalization of important sectors of the Venezuelan economy. Much of this reform has been accomplished since Venezuela's last review in 1996, particularly in the banking and telecommunication sectors. The United States encourages Venezuela's continuing participation in the GATS process.

We would like to highlight some areas of concern in Venezuela's trade policy regime. In particular, Venezuela uses various forms of discretionary import licensing to restrict imports of yellow corn, sorghum, dairy products, soybean meal, pork, poultry, beef, grapes and yellow grease. These products have been subject to complete denial or partial issuance of import licenses, inordinate delays in the issuance of import licenses, and license validity periods that are too short to be of any practical use to the importers.

Another element of uncertainty facing exporters of agricultural products to Venezuela is the price band system it applies. We believe Venezuela may have trouble reconciling its application of variable duties under this system with the obligations of the WTO Agriculture Agreement. Similarly, domestic purchase requirements applied to imports of corn would appear difficult to justify under the WTO. In addition, we question the WTO compatibility of a recent change in the application of the value added tax that treats certain imported products differently from domestic products unless there is no national production of the goods.

We also have concerns about new labeling requirements for footwear and textiles that Venezuela recently imposed that are extremely onerous and appear to constitute an unnecessary obstacle to trade. We would like more information about a number of programs that appear to constitute subsidies, and whether Venezuela intends to notify them to the SCM Committee. In the area of intellectual property rights, recent actions by the Government of Venezuela call into question whether it is protecting against the unfair commercial use of pharmaceutical test data. Also, the government resources being devoted to the enforcement of intellectual property rights required by the WTO do not appear to be adequate.

In conclusion, we welcome this opportunity to participate in an examination of the trade regime of a close neighbor and significant trading partner of the United States. In our comments and our more detailed questions that we have provided in writing, we raise a number of concerns that we hope the Government of Venezuela will address, both in its responses and in its actions. Our questions and comments are offered in a constructive spirit. We thank the delegation from Venezuela in advance for its willingness to consider these points and welcome the opportunity to engage with Venezuela and other delegations in a discussion of Venezuela's current trade policy regime.