U.S. Statement at DSB Meeting

September 25, 2009

1. SURVEILLANCE OF IMPLEMENTATION OF RECOMMENDATIONS ADOPTED BY THE DSB

A. UNITED STATES – SECTION 211 OMNIBUS APPROPRIATIONS ACT OF 1998: STATUS REPORT BY THE UNITED STATES (WT/DS176/11/ADD.82)

• Mr. Chairman, the United States provided a status report in this dispute on September 14, 2009, in accordance with Article 21.6 of the DSU.

• As noted in that status report, a number of legislative proposals that would implement the DSB’s recommendations and rulings in this dispute have been introduced in the current Congress, which convened in January.

• The U.S. Administration is working with Congress to implement the DSB’s recommendations and rulings.

B. UNITED STATES – ANTI DUMPING MEASURES ON CERTAIN HOT ROLLED STEEL PRODUCTS FROM JAPAN: STATUS REPORT BY THE UNITED STATES (WT/DS184/15/ADD.82)

• The United States provided a status report in this dispute on September 14, 2009, in accordance with Article 21.6 of the DSU.

• As of November 23, 2002, the U.S. authorities had addressed the DSB’s recommendations and rulings with respect to the calculation of antidumping margins in the hot-rolled steel antidumping duty investigation at issue in this dispute. Details are provided in the document numbered WT/DS184/15/ADD.3.

• And, with respect to the recommendations and rulings of the DSB that were not already addressed by the U.S. authorities by November 23, 2002, the U.S. Administration will work with the U.S. Congress with respect to appropriate statutory measures that would resolve this matter.

C. UNITED STATES – SECTION 110(5) OF THE US COPYRIGHT ACT: STATUS REPORT BY THE UNITED STATES (WT/DS160/24/ADD.57)

• The United States provided a status report in this dispute on September 14, 2009, in accordance with Article 21.6 of the DSU.

• The EC Trade Commissioner and the U.S. Trade Representative met this past July and announced that they had exchanged ideas on this dispute.

• The U.S. Administration will continue to confer with the European Communities, and to work closely with the U.S. Congress, in order to reach a mutually satisfactory resolution of this matter.

D. EUROPEAN COMMUNITIES – MEASURES AFFECTING THE APPROVAL AND MARKETING OF BIOTECH PRODUCTS: STATUS REPORT BY THE EUROPEAN COMMUNITIES (WT/DS291/37/ADD.20 WT/DS293/31/ADD.20)

• The United States thanks the EC for its status report and its statement today.

• As the United States noted at the August 31 meeting of the DSB, more than 60 pending biotech applications remain backed up in the EC approval system. This backlog results in ongoing bans on major U.S. agricultural products. Regrettably, it appears that not one of the pending applications has progressed since the August meeting of the DSB.

• At this meeting, the United States would like to respond to one of the assertions made by the EC at the August 31 meeting. In particular, the EC stated that the 2008 approval of a biotech soybean shows that the EC system is “speedy” and performs “satisfactorily.”

• We note that the EC selected this one application from among dozens. However, even this hand-picked application illustrates some of the major problems in the EC’s operation of its approval system.

• First, even after the EC scientific committee issued a favorable risk assessment, the EC continued for an additional five months to ban the import of any U.S. agricultural commodity that contained even trace amounts of this soybean variety.

• The EC’s stated rationale was that the approval had to be submitted for review by a committee of EC member State representatives. But the committee failed to act in accordance with the scientific opinion, and blocked the approval. The result was months of delay while the EC held an additional vote of member State representatives. Finally, the EC Commission had to take the step of approving the product over member State opposition.

• This same byzantine process has applied to every biotech application considered by the EC for more than 10 years. Not once has the committee of member State representatives acted in accordance with the scientific opinion by consenting to a biotech approval. The result is delays for each and every application.

• Second, the unnecessary five- month period between the favorable risk assessment and the ultimate approval of the biotech soybean is not the norm. Three quarters of the pending applications are still awaiting risk assessments. But of the seventeen (17) applications that have received risk assessments, at least fourteen (14) are still pending approval for more than five months after the assessment.

• In fact, some of those 14 pending applications received favorable risk assessments many years ago, but nonetheless remain unapproved. Two of these applications – covering different varieties of biotech maize – were found by the DSB to have been unduly delayed in breach of the EC’s obligations under the SPS Agreement. One of these maize varieties has been pending for over eight years, the other for more than thirteen years.

• In short, it defies credibility for the EC to assert that its biotech approval system is “speedy,” or that it operates “satisfactorily.”

• The United States thanks the DSB for its attention to this matter.

E. EUROPEAN COMMUNITIES – REGIME FOR THE IMPORTATION, SALE AND DISTRIBUTION OF BANANAS: SECOND RECOURSE TO ARTICLE 21.5 OF THE DSU BY ECUADOR: STATUS REPORT BY THE EUROPEAN COMMUNITIES (WT/DS27/96/ADD.8)

• Mr. Chairman, we thank the EC for its status report and statement today.

• As we all know, this is the longest running dispute in the WTO, and the reasonable period of time for compliance in this dispute expired more than 10 years ago, on January 1, 1999.

• While we take note of the EC’s efforts to reach agreement with interested parties to resolve the dispute, we also note that the commercial impact of the EC’s non-compliance over this very long period is undeniably large and damaging to a number of WTO Members.

• We call on the EC to resolve this dispute, and until then, we renew our request to the EC to provide a status report with respect to the dispute brought by the U.S. and those of the other complaining parties.

 

G. UNITED STATES – LAWS, REGULATIONS AND METHODOLOGY FOR CALCULATING DUMPING MARGINS (“ZEROING”): STATUS REPORT BY THE UNITED STATES (WT/DS294/34/ADD.1)

• Mr. Chairman, the United States provided a status report in this dispute on September 14, 2009, in accordance with Article 21.6 of the DSU.

• As noted in that status report, the United States has already taken a number of steps to implement the DSB’s recommendations and rulings in this dispute. With regard to the remaining issues, including those identified in the DSB recommendations and rulings, the United States will continue to consult with interested parties.

H. UNITED STATES – MEASURES RELATING TO ZEROING AND SUNSET REVIEWS: STATUS REPORT BY THE UNITED STATES (WT/DS322/36)

• Mr. Chairman, the United States provided a status report in this dispute on September 14, 2009, in accordance with Article 21.6 of the DSU.

• As noted in the status report, the United States has taken steps to implement the DSB’s recommendations and rulings in this dispute. With respect to the outstanding issues, the United States will continue to consult with interested parties in order to address those issues.

• Thank you.

 2. UNITED STATES – CONTINUED DUMPING AND SUBSIDY OFFSET ACT OF 2000: IMPLEMENTATION OF THE RECOMMENDATIONS ADOPTED BY THE DSB

A. STATEMENTS BY THE EUROPEAN COMMUNITIES AND JAPAN

• As the United States has already explained at numerous previous DSB meetings, the President signed the Deficit Reduction Act into law on February 8, 2006. That Act includes a provision repealing the Continued Dumping and Subsidy Offset Act of 2000. Thus, the United States has taken all actions necessary to implement the DSB’s recommendations and rulings in these disputes.

• We recall, furthermore, that Members, including the EC and Japan, have acknowledged during previous DSB meetings that the 2006 Deficit Reduction Act does not permit the distribution of duties collected on goods entered after October 1, 2007.

• We therefore do not understand the purpose for which the EC and Japan have inscribed this item today.

• With respect to comments regarding further status reports, the United States fails to see what purpose would be served by further submission of status reports repeating the progress the United States made in the implementation of the DSB’s recommendations and rulings.

 3. UNITED STATES – SUBSIDIES ON UPLAND COTTON: RECOURSE TO ARBITRATION BY THE UNITED STATES UNDER ARTICLE 22.6 OF THE DSU AND ARTICLES 4.11 AND 7.10 OF THE SCM AGREEMENT: DECISIONS BY THE ARBITRATORS

A. STATEMENT BY BRAZIL

• Mr. Chairman, the United States remains disappointed with the outcome of this dispute. Members of the DSB will recall that we have explained our concerns at previous meetings, and we do not wish to cover that ground again today. Instead, we would like to take this opportunity to comment on a few aspects of the awards of the Arbitrators that were circulated on August 31.

• In a number of respects, we wish to commend the work of the Arbitrators. It is clear that they approached their task in a methodical and thoughtful manner, and they reached a number of important conclusions, rejecting substantial aspects of Brazil’s DSB requests.

• For example, contrary to Brazil’s DSB request, the Arbitrators properly limited possible countermeasures by Brazil to the trade effects of the subsidies at issue on Brazil. If a Member could impose countermeasures for trade effects of a subsidy on the entire world, as Brazil requested and as previous arbitrators had concluded, those countermeasures would be unrelated to the nullification or impairment actually suffered by that Member.

• In addition, the Arbitrators properly rejected Brazil’s request for a one-time award of countermeasures for the Step 2 program, which had been repealed. The Arbitrators were right to refuse countermeasures for a measure that had already been withdrawn. Once a WTO Member has brought its measure into conformity with the covered agreements, the aim of the dispute settlement system has been achieved. A contrary finding that countermeasures could be authorized for a withdrawn measure would have meant a fundamental shift in the WTO dispute settlement system to retroactive sanctioning, and we commend the Arbitrator’s analysis of this issue.

• Furthermore, the Arbitrators were correct to reject Brazil’s arguments that it was entitled to an unlimited right to cross-sectoral countermeasures, for example, subject only to the “appropriate countermeasures” standard of Article 4.10 of the SCM Agreement. This argument was difficult to follow given that Brazil’s own request for DSB authorization cited to DSU Article 22.3 and explained how Brazil had followed those principles and procedures. The Arbitrator was correct to apply the disciplines of DSU Article 22.3 to Brazil’s request and to find that Brazil had not followed those principles and procedures.

• At the same time, we have certain concerns about the awards.

• With respect to the countermeasures for GSM-102, the Arbitrator acknowledged that its approach of using, and then combining, an interest rate subsidy and an “additionality” calculation, which it adapted from Brazil’s methodology, may overestimate any effects on Brazil in some aspects. Yet the Arbitrator still used it as the basis for the formula for countermeasures. We have some difficulty with the Arbitrator’s conclusion that the “appropriate countermeasures” standard in Article 4.10 of the SCM Agreement permitted it to proceed in this way.

• Similarly, in the arbitration concerning marketing loan and countercyclical payments related to cotton, the United States believes that the Arbitrator incorrectly gave Brazil the benefit of the doubt on several issues, such as the choice of price elasticities in the model for the effects of marketing loan and countercyclical payments.

• We also note from certain press reports that Brazil has said that it would like a dialogue. We would think that such a dialogue would imply more than making DSB statements. We therefore look forward to continuing our discussions with Brazil on the issues related to this dispute.

 4. UNITED STATES – ANTI DUMPING ADMINISTRATIVE REVIEWS AND OTHER MEASURES RELATED TO IMPORTS OF CERTAIN ORANGE JUICE FROM BRAZIL

A. REQUEST FOR THE ESTABLISHMENT OF A PANEL BY BRAZIL (WT/DS382/4)

• We are disappointed that Brazil has chosen to pursue its request for a panel in this matter.

• We understand that a panel will be established today. However, the United States does not agree with the view expressed by Brazil that pursuing this panel proceeding is necessary. If Brazil chooses to pursue this proceeding, however, we will of course defend the challenged measures before the Panel.

• We also wish to reiterate the concerns that we expressed at the August meeting of the DSB concerning the way in which Brazil has framed its panel request. As we noted in August, the panel request includes measures that were not in existence at the time of consultations and consequently could not have been, and were not, consulted upon.