Statements by the United States at the February 18, 2010 DSB Meeting

WTO-DSBGeneva,
February 18, 2010

ADOPTION OF THE AGENDA

• Mr. Chairman, the United States proposes that the agenda be adopted without item 5, which refers to the EU’s request for authorization to suspend concessions or other obligations in DS294.

• On Friday, February 12, the United States filed its objection to the level of suspension of concessions or other obligations proposed by the EU and its claim that the EU’s proposal does not follow the principles and procedures set forth in Article 22.3 of the DSU. The U.S. document has recently been circulated to Member as document WT/DS294/36 and is included with the documentation for today’s meeting.

• In light of the U.S. filing, item 5 is unnecessary, and we therefore suggest that the agenda be adopted without that item.

• In this connection, Members may recall the DSB meeting of January 21, 2008. The identical situation was presented then as is presented today: Japan had requested authorization to suspend concessions or other obligations; the United States had objected to that request before the meeting; and the DSB adopted its agenda without the item relating to Japan’s recourse to Article 22.2 of the DSU. Minutes of the January 21, 2008 DSB meeting are available at the back of the room.

• We propose that the DSB do the same thing today as it did then, and adopt today’s agenda without item 5.

[Second intervention:]

• We take note of the EU’s comments, as well as Japan’s. In light of the EU’s position, it appears that we will be addressing this matter again later in this meeting.

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.87)

• Mr. Chairman, the United States provided a status report in this dispute on February 5, 2010, in accordance with Article 21.6 of the DSU.

• As has been noted, a number of legislative proposals that would implement the DSB’s recommendations and rulings in this dispute were introduced in the First Session of the current (111th) Congress. The Second Session of the 111th Congress began in January.

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

1. SURVEILLANCE OF IMPLEMENTATION OF RECOMMENDATIONS ADOPTED BY THE DSB

B. UNITED STATES ANTI DUMPING MEASURES ON CERTAIN HOT ROLLED STEEL PRODUCTS FROM JAPAN: STATUS REPORT BY THE UNITED STATES (WT/DS184/15/ADD.87)

• The United States provided a status report in this dispute on February 5, 2010, 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.

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

1. SURVEILLANCE OF IMPLEMENTATION OF RECOMMENDATIONS ADOPTED BY THE DSB

C. UNITED STATES SECTION 110(5) OF THE US COPYRIGHT ACT: STATUS REPORT BY THE UNITED STATES (WT/DS160/24/ADD.62)

• The United States provided a status report in this dispute on February 5, 2010, in accordance with Article 21.6 of the DSU.

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

1. SURVEILLANCE OF IMPLEMENTATION OF RECOMMENDATIONS ADOPTED BY THE DSB

D. EUROPEAN COMMUNITIES MEASURES AFFECTING THE APPROVAL AND MARKETING OF BIOTECH PRODUCTS: STATUS REPORT BY THE EUROPEAN UNION (WT/DS291/37/ADD.25 WT/DS293/31/ADD.25)

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

• The United States recalls its concerns that endemic delays in the EU’s operation of its biotech approval process have the effect of blocking Members’ trade in important agricultural products.

• At the January meeting of the DSB, the United States highlighted its concerns regarding the delays at the second step of the EU process, which involves the EU’s Standing Committee on the Food Chain and Animal Health. And today we would like to draw Members’ attention to information which confirms those concerns.

• EU law provides that within three months after the EU’s scientific authority completes a positive risk assessment – that is, a scientific risk assessment that supports the approval of a biotech product – the EU Commission must submit a draft approval of that product to the Standing Committee for the committee’s consideration.

• Although the Standing Committee normally meets on a monthly basis, its first meeting of 2010 was not held until last week.

• Furthermore, the Standing Committee did not consider several of the outstanding biotech applications that have received positive risk assessments three (or more) months ago. For example, one product received a positive assessment in November 2007 – over two years ago – but still has not been submitted for the Standing Committee’s consideration.

• And with respect to the three biotech applications that the Standing Committee did consider, the risk assessments for each of these products had been issued at least 7 months ago. This means that the EU more than doubled the time set out under its law for the period between the scientific opinion and the Standing Committee’s consideration.

• Furthermore, even though each of these three applications had received positive risk assessments, the Committee failed to make a decision to approve the products. As a result, each of these applications will be delayed for additional proceedings under the EU system.

• In particular, the applications will be delayed while the EU submits the applications to the consideration of the EU Council. And if the Council fails to make approval decisions in accordance with the scientific opinions, there could be yet further delays.

• Unfortunately, the Standing Committee’s failure to make decisions in accordance with the EU’s own scientific opinions is the norm, not the exception. In fact, the United States understands that the Standing Committee has failed to approve a single biotech product for over ten years. This has resulted in significant delays in the consideration of each biotech product.

• The United States notes that, last week, the new EU Commission took office, and that the new Commission reportedly has modified the organizational structure for biotech approvals. The United States urges the new Commission, and the EU as a whole, to address the ongoing problems with biotech approvals.

1. SURVEILLANCE OF IMPLEMENTATION OF RECOMMENDATIONS ADOPTED BY THE DSB

E. UNITED STATES LAWS, REGULATIONS AND METHODOLOGY FOR CALCULATING DUMPING MARGINS (“ZEROING”): STATUS REPORT BY THE UNITED STATES (WT/DS294/34/ADD.6)

• Mr. Chairman, the United States provided a status report in this dispute on February 5, 2010, 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, and the United States will continue to consult with interested parties with regard to the remaining issues.

• Finally, as Members are aware, the EU has requested authorization from the DSB to suspend concessions or other obligations in this dispute, and the United States has objected to the EU’s request. Therefore, pursuant to Article 22.6 of the DSU, the matter has been referred to arbitration.

1. SURVEILLANCE OF IMPLEMENTATION OF RECOMMENDATIONS ADOPTED BY THE DSB

F. UNITED STATES MEASURES RELATING TO ZEROING AND SUNSET REVIEWS: STATUS REPORT BY THE UNITED STATES (WT/DS322/36/ADD.5)

• Mr. Chairman, the United States provided a status report in this dispute on February 5, 2010, 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.

1. SURVEILLANCE OF IMPLEMENTATION OF RECOMMENDATIONS ADOPTED BY THE DSB

G. UNITED STATES CONTINUED EXISTENCE AND APPLICATION OF ZEROING METHODOLOGY: STATUS REPORT BY THE UNITED STATES (WT/DS350/18/ADD.2)

• Mr. Chairman, the United States provided a status report in this dispute on February 5, 2010, in accordance with Article 21.6 of the DSU.

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

1. SURVEILLANCE OF IMPLEMENTATION OF RECOMMENDATIONS ADOPTED BY THE DSB

H. CHINA MEASURES AFFECTING THE PROTECTION AND ENFORCEMENT OF INTELLECTUAL PROPERTY RIGHTS: STATUS REPORT BY CHINA (WT/DS362/14/ADD.1)

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

• We are very much interested in whether China will complete its implementation by March 20, which is the expiration of the reasonable period of time for China to comply in this dispute. Given that March 20 is only about a month away, we would welcome receiving further information from China, including bilaterally, on its progress towards implementation.

2. CHINA MEASURES AFFECTING TRADING RIGHTS AND DISTRIBUTION SERVICES FOR CERTAIN PUBLICATIONS AND AUDIOVISUAL ENTERTAINMENT PRODUCTS

A. IMPLEMENTATION OF THE RECOMMENDATIONS OF THE DSB

• Thank you, Mr. Chairman. We thank China for its statement today, indicating that it intends to implement the DSB’s recommendations and rulings in this dispute.

• China’s measures impose significant market access barriers for importers and distributors of books, music, movies and other products subject to this dispute. We therefore look forward to China moving promptly to bring its measures into compliance with its obligations.

• We stand ready to discuss with China under Article 21.3(b) of the DSU a reasonable period of time for its implementation.

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

A. STATEMENTS BY THE EUROPEAN UNION AND JAPAN

• As the United States has explained at 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 have acknowledged that the 2006 Deficit Reduction Act does not permit the distribution of duties collected on goods entered after October 1, 2007.

• With respect to comments regarding further status reports in this matter, as we have already explained at previous DSB meetings, 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.

5. UNITED STATES LAWS, REGULATIONS AND METHODOLOGY FOR CALCULATING DUMPING MARGINS (“ZEROING”)

A. RECOURSE TO ARTICLE 22.2 OF THE DSU BY THE EUROPEAN UNION (WT/DS294/35)

• Mr. Chairman, as an initial matter, the United States fails to see why this agenda item is proceeding today. As we mentioned earlier in this meeting, on February 12, the United States filed its objection to the level of suspension of concessions or other obligations requested by the EU and its claim that the EU’s request does not follow the principles and procedures set forth in Article 22.3 of the DSU.

• Under the second sentence of Article 22.6 of the DSU, if the Member concerned (in this case, the United States) makes the objection or claim set out in the U.S. filing, “the matter shall be referred to arbitration.”

• Mr. Chairman, there is no decision for the DSB to take today, and no action is required of the DSB. In fact, as Japan noted earlier this morning, Article 22.6 does not refer to any decision by the DSB.

• As we explained earlier, the better course would have been the one that the DSB followed in January of 2008, when the DSB adopted its agenda without the item relating to Japan’s recourse to Article 22.2 of the DSU. The minutes of the meeting can be found at WT/DSB/M/245.

• Regrettably, the EU has chosen not to follow the common-sense approach of that precedent. We therefore have no objection if the DSB wishes under this agenda item to confirm that it may not consider the EU’s request for authorization, which is the agenda item today, since the matter has been referred to arbitration.

• In addition, the United States has a few reactions to the EU’s request and statement.

• To begin, the United States regrets that the EU has decided to escalate this dispute by requesting authorization to suspend concessions or other obligations in connection with this dispute. As we explained earlier this morning, we are conducting consultations with all interested parties in order to address the findings in this dispute.

• In addition, the United States strongly disagrees with the EU’s specific proposal for the suspension of concessions and other obligations. Those issues will be taken up in the arbitration that is currently underway.

• There are certain elements of the EU’s request, however, on which we would like to comment at this time.

• First, we are puzzled by the lengthy reference in the EU’s request to the dispute brought by Japan (DS322). The EU would not have any right to suspend concessions or other obligations with respect to the rulings in that dispute.

• Second, we note that the EU request refers to Article 6 of the DSU. However, Article 6 does not apply here. Article 6 deals with the establishment of panels. Despite the fact that the EU refers to an “Article 22.6 DSU arbitration panel,” that is incorrect. Article 22 makes clear that the arbitration is conducted by an “arbitrator,” not a panel.

• And of course the United States has not placed a request for a panel on the agenda of this DSB meeting, so no panel is being established today. Nor has the EU requested the establishment of a panel.

• On a related point, we note that in its request for authorization, the EU discusses at some length possible arbitration under Article 22.6 of the DSU. The EU even goes so far as to purport to specify the terms of reference of the arbitration. Of course, the EU is not in any position to do so. The EU request is not made under Article 22.6, but rather is under Article 22.2.

• In fact, the EU is requesting authorization to suspend the application to the United States of concessions or other obligations. The EU is not seeking nor initiating any arbitration. Indeed, presumably the EU would have preferred that its request be granted without arbitration.

• These aspects of the EU’s request have no procedural basis, nor do they have any basis in the text of the DSU, and they do not affect the arbitration.

6. UNITED STATES ANTI DUMPING MEASURES ON POLYETHYLENE RETAIL CARRIER BAGS FROM THAILAND

A. REPORT OF THE PANEL (WT/DS383/R)

• Mr. Chairman, we would like to begin by thanking the members of the Panel and the Secretariat for their work on this dispute.

• As we have indicated in our statements on zeroing in the past, our concerns with findings on the topic have been principally directed at those findings relating to zeroing outside the context of average to average comparisons in investigations.

• With regard to zeroing in the context of average to average comparisons in investigations, the U.S. Department of Commerce announced years ago that it would discontinue zeroing in this context as a result of earlier DSB recommendations and rulings.

• Accordingly, in the present dispute, the United States and Thailand sought an efficient means of addressing Thailand’s claims with a minimal burden on the resources of the parties and the dispute settlement system. We believe the procedural agreement we reached achieves that goal. We appreciate Thailand’s cooperation during this dispute and look forward to continuing that cooperation going forward.