U.S. Statements at the March 31, 2003
Meeting of the WTO Dispute Settlement Body

Item 1. UNITED STATES - SUBSIDIES ON UPLAND COTTON

A. DESIGNATION BY THE DSB OF A REPRESENTATIVE TO SERVE THE FUNCTION OF FACILITATING THE INFORMATION-GATHERING PROCESS, PURSUANT TO PARAGRAPH 4 OF ANNEX V OF THE SCM AGREEMENT

· Mr. Chairman, the United States believes that it is premature to appoint a DSB representative at this meeting under Annex V of the Subsidies Agreement. As we explained in informal consultations last week, Brazil is not entitled to use the Annex V procedures at this point.

· The United States has maintained throughout this dispute that the measures at issue are covered by Article 13 of the Agreement on Agriculture (the Peace Clause). In this dispute, Brazil is claiming adverse effects (including serious prejudice). Both the Subsidies Agreement and the Agreement on Agriculture make clear that such claims are precluded in the case of measures covered by the Peace Clause.

· The Annex V process can only be applied for claims of serious prejudice. Since the Peace Clause precludes actions based on such claims, the Annex V process cannot be applied in this dispute to the measures at issue.

· However, just as we entered into consultations with Brazil in good faith and responded to well over one hundred consultation questions, we are proposing a pragmatic way to safeguard both parties' positions. Under our proposal, if the panel were to determine that the Peace Clause does not apply, the parties could then engage in the Annex V process. Of course, just to be clear, Mr. Chairman, we believe that the Peace Clause does apply and so we would never reach this point.

· We remain prepared to consult further with a view to agreeing on an appropriate DSB representative - in fact, we were prepared to seek a consensus at this meeting. However, it is premature to appoint the DSB representative when the parties have not yet agreed on the time when the Annex V procedures should begin.

[Second intervention:]

Mr. Chairman, we would like to respond to some of the points made by some of the delegations that have just spoken:

· A Member cannot use the Annex V procedures to establish "the existence and amount of subsidization" or otherwise for purposes of establishing the applicability of the Peace Clause.

· The Annex V process is intended to be used to establish claims of serious prejudice under the Subsidies Agreement. Nowhere does Annex V provide that a Member may use Annex V of the Subsidies Agreement for purposes of the Agreement on Agriculture.

· While we agree that Brazil has invoked the procedures of Annex V, we do not agree that those procedures have already begun.

· With respect to third parties, we would like to recall what we said at the previous meeting: Annex V does not contemplate participation by third parties in the Annex V process or access to the information gathered in that process.

· We would like to conclude this discussion by reiterating that we look forward to further consultations in the near future.

Item 2. CANADA - MEASURES RELATING TO EXPORTS OF WHEAT AND TREATMENT OF IMPORTED GRAIN

A. REQUEST FOR THE ESTABLISHMENT OF A PANEL BY THE UNITED STATES (WT/DS276/6)

· At the March 18, 2003, meeting of the DSB, the United States requested the establishment of a panel pursuant to Article 6 of the DSU to examine whether Canada's measures relating to wheat exports and to the treatment of imported grain are inconsistent with Canada's obligations under the GATT 1994 and the TRIMs Agreement.

· As we explained at that meeting, our concerns with respect to wheat exports involve the wheat sales practices of the Government of Canada and its State-Trading Enterprise, the Canadian Wheat Board, which appear inconsistent with Canada's obligations under Article XVII of the GATT 1994.

· Our concerns with respect to imported grain involve discrimination in the rules governing the Canadian grain handling system and the Canadian rail transportation system, which appear inconsistent with Canada's obligations under Article III of the GATT 1994 and the TRIMs Agreement.

· At the March 18 meeting, Canada noted its disappointment that the United States would request a panel.

· However, our request can come as no surprise to Canada. Contrary to what Canada implied at the last DSB meeting, the United States most certainly has never agreed that Canada's wheat trading practices are consistent with Canada's obligations under the WTO Agreement. To the contrary, the United States has repeatedly expressed serious concerns about Canadian wheat trading practices.

· Accordingly, the United States respectfully renews its request that the DSB establish a panel pursuant to Article 6 of the DSU with the standard terms of reference to examine these matters.