STATEMENTS BY AMBASSADOR LINNET F. DEILY
AT THE SEPTEMBER 27 MEETING OF THE WTO DISPUTE SETTLEMENT BODY

Item 1. SURVEILLANCE OF IMPLEMENTATION OF RECOMMENDATIONS ADOPTED BY THE DSB

A. UNITED STATES – ANTI-DUMPING ACT OF 1916: STATUS REPORT BY THE UNITED STATES (WT/DS136/14/ADD.30 - WT/DS162/17/ADD.30)

· The United States provided an additional status report in these disputes on September 16, 2004, in accordance with Article 21.6 of the DSU.

· As noted in the report, legislation repealing the 1916 Act is pending in both the U.S. Senate and U.S. House of Representatives.

· On January 29, 2004, HR 1073, which would repeal the 1916 Act, was reported favorably out of the Committee on the Judiciary of the U.S. House of Representatives.

· On June 30, 2004, Ambassador Zoellick wrote a letter to the leadership of the U.S. House of Representatives urging the passage of repeal legislation “at the earliest opportunity.”

· The U.S. Administration will continue to work with Congress to achieve further progress in resolving these disputes with the European Communities and Japan.

Item 1. SURVEILLANCE OF IMPLEMENTATION OF RECOMMENDATIONS ADOPTED BY THE DSB

B. UNITED STATES – SECTION 211 OMNIBUS APPROPRIATIONS ACT OF 1998: STATUS REPORT BY THE UNITED STATES (WT/DS176/11/ADD.23)

· The United States provided a status report in this dispute on September 16, 2004, in accordance with Article 21.6 of the DSU.

· As noted in the report, legislation amending or repealing section 211 is pending in the U.S. Senate and the U.S. House of Representatives, and the Senate held hearings on this legislation in July.

· The United States Administration will continue to work with the U.S. Congress concerning appropriate statutory measures that would resolve this matter.

Item 1. SURVEILLANCE OF IMPLEMENTATION OF RECOMMENDATIONS ADOPTED BY THE DSB

C. UNITED STATES – ANTI-DUMPING MEASURES ON CERTAIN HOT-ROLLED STEEL PRODUCTS FROM JAPAN: STATUS REPORT BY THE UNITED STATES (WT/DS184/15/ADD.23)

· The United States provided a status report in this dispute on September 16, 2004, in accordance with Article 21.6 of the DSU.

· The Administration will continue to work with the U.S. Congress with respect to the recommendations and rulings of the DSB that were not already addressed by the U.S. authorities by November 23, 2002.

Item 1. SURVEILLANCE OF IMPLEMENTATION OF RECOMMENDATIONS ADOPTED BY THE DSB

D. UNITED STATES – CONTINUED DUMPING AND SUBSIDY OFFSET ACT OF 2000: STATUS REPORT BY THE UNITED STATES (WT/DS217/16/ADD.8 – WT/DS234/24/ADD.8)

· The United States provided a status report on September 16, 2004, in accordance with Article 21.6 of the DSU.

· As noted in the report, on June 19, 2003, legislation to bring the Continued Dumping and Subsidy Offset Act into conformity with U.S. WTO obligations was introduced in the U.S. Senate (S. 1299). On March 10, 2004, legislation repealing the CDSOA was introduced in the U.S. House of Representatives (H.R. 3933).

· In addition, on February 2, 2004, the U.S. Administration once again proposed repeal of the CDSOA, in its budget proposal for fiscal year 2005.

· The U.S. Administration will continue to work with Congress to achieve further progress in resolving these disputes with the complaining parties.

Item 2. UNITED STATES – FINAL DUMPING DETERMINATION ON SOFTWOOD LUMBER FROM CANADA

A. IMPLEMENTATION OF THE RECOMMENDATIONS OF THE DSB

· The United States intends to implement the recommendations and rulings of the DSB in a manner that 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 Canada regarding a reasonable period of time to implement.

Item 4. UNITED STATES – COUNTERVAILING MEASURES CONCERNING CERTAIN PRODUCTS FROM THE EUROPEAN COMMUNITIES

A. RECOURSE TO ARTICLE 21.5 OF THE DSU BY THE EUROPEAN COMMUNITIES: REQUEST FOR THE ESTABLISHMENT OF A PANEL (WT/DS212/15)

· Madam Chair, the United States regrets the EC’s decision to request the establishment of a panel, because the United States has implemented fully the recommendations and rulings of the DSB in this dispute.

· The DSB found that the U.S. Department of Commerce’s application of its privatization methodology in 12 different countervailing duty determinations was inconsistent with U.S. WTO obligations. The United States issued revised determinations in all 12 cases. Significantly, the EC is challenging only three of those determinations.

· All three determinations involved sunset reviews. As you know, in a sunset review, authorities are called upon to determine whether the termination of a definitive countervailing duty would likely lead to a continuation or recurrence of subsidization.

· In two of the sunset reviews in question, privatization wasn’t even a factor in the determinations, which were based on the existence of post-privatization subsidies. In fact, Commerce assumed that all pre-privatization subsidies had been extinguished.

· In the third sunset determination, the facts demonstrate clearly that aspects of the privatization transaction in question were not conducted on an arm’s length basis or at fair market value. Commerce therefore properly concluded – consistent with the DSB findings – that the privatization transaction did not extinguish the subsidies in question with respect to these aspects.

· In sum, the United States intends to vigorously defend the challenged determinations.

Item 5. CANADA – MEASURES RELATING TO EXPORTS OF WHEAT AND TREATMENT OF IMPORTED GRAIN

A. REPORT OF THE APPELLATE BODY (WT/DS276/AB/R) AND REPORT OF THE PANEL (WT/DS276/R)

· Madam Chair, the United States supports adoption of these reports that are before the DSB today.

· We wish to begin by thanking the members of the Appellate Body, the panel, and the Secretariat for their hard work throughout the course of this dispute.

· Turning to the substance of the reports, we are pleased with the panel’s findings that certain aspects of Canada’s grain handling system and its rail revenue cap program are inconsistent with the national treatment provisions of Article III:4 of the GATT 1994. We would note that measures that are both consistent with Canada’s national treatment obligation and meet Canada’s stated policy objectives are clearly available. Such measures could include ones that are based on the intrinsic characteristics of grain, to ensure proper grading of grain. We look forward to hearing more about Canada’s plans in this regard soon.

· And while we are also pleased that the Appellate Body rejected Canada’s appeal related to the sequencing of the panel’s analysis under Article XVII of the GATT 1994, we regret the Appellate Body’s affirmation of the panel’s findings with respect to our claim under Article XVII. Not only are we disappointed with the substantive outcome, which narrowly interprets Article XVII, but we also found the panel’s and the Appellate Body’s analytical approach troubling.

· In any case, we believe the panel’s findings regarding the practices of the Canadian Wheat Board reflect the need for stronger WTO disciplines on state trading enterprises. In this regard, we are pleased that Members agreed in July to the elimination of government financing, the underwriting of losses, and export subsidies provided to or by agricultural state trading enterprises like the Canadian Wheat Board. We are also pleased that Members agreed as well that the monopolistic powers of such enterprises are subject to further negotiation in the Doha negotiations. We look forward to working with other Members through those negotiations to create an effective regime to address the unfair practices of state trading enterprises.

· Finally, I would like to mention briefly the Appellate Body findings on the question of whether Canada raised its procedural objections to the first U.S. panel request in this dispute in a timely manner. It had been our understanding that Members should raise alleged procedural deficiencies at the earliest opportunity. In this dispute, Canada could have raised its objections during the two DSB meetings where the U.S. panel request was considered, but it did not. We note with interest that the Appellate Body has now explicitly determined that a preliminary objection – raised for the first time after panel establishment – is considered timely.

· In sum, Madam Chair, while the United States is disappointed with the disposition of our claim regarding the wheat trading practices of the Canadian Wheat Board, we are pleased that the panel found that Canada’s grain handling system and its rail revenue cap are inconsistent with national treatment principles and discriminate against imported grains. We look forward to prompt implementation by Canada of these findings.