USTR - Statements by Ambassador Peter Allgeier, U.S. Representative to the WTO, at the meeting of the WTO Dispute Settlement Body (DSB).
                 
The Office of the United States Trade Representative

Statements by Ambassador Peter Allgeier, U.S. Representative to the WTO, at the meeting of the WTO Dispute Settlement Body (DSB).
Geneva 04/21/2006

Item 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.41)

      1. The United States provided a status report in this dispute on April 10, 2006, in accordance with Article 21.6 of the DSU.

      2. As noted in the report, several legislative proposals relating to section 211 that would implement the DSB’s recommendations and rulings in this dispute have been introduced in the current Congress, in both houses of Congress.

      3. The Administration is working with Congress to implement one or more of these legislative vehicles 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.41)

      1. The United States provided a status report in this dispute on April 10, 2006, in accordance with Article 21.6 of the DSU.

      2. 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 in this case.

      3. The U.S. Administration continues to support specific legislative amendments that would implement the DSB’s recommendations and rulings with respect to the U.S. antidumping duty statute, and is working with the U.S. Congress to pass these amendments.

      4. The U.S. Administration will continue to work with Congress to enact legislation until those changes are made to implement the DSB’s recommendations and rulings.

          C.  UNITED STATES – SECTION 110(5) OF THE US COPYRIGHT ACT:  STATUS REPORT BY THE UNITED STATES (WT/DS160/24/ADD.16)

            1. The United States provided a status report in this dispute on April 10, 2006, in accordance with Article 21.6 of the DSU.

            2. As the report indicated, the U.S. Administration is working closely with the U.S. Congress, and conferring with the European Communities, in order to reach a mutually satisfactory resolution of this matter.


             

            D.  EUROPEAN COMMUNITIES – PROTECTION OF TRADEMARKS AND GEOGRAPHICAL INDICATIONS FOR AGRICULTURAL PRODUCTS AND FOODSTUFFS: STATUS REPORT BY THE EUROPEAN COMMUNITIES (WT/DS174/25/ADD.3 - WT/DS290/23/ADD.3)

            1. We thank the EC for its status report.
            2. In past meetings, we highlighted a concern that, in a number of respects, the GI regulation proposed by the EC last December would introduce further encroachments on TRIPS-protected trademark rights beyond those in the previous GI regulation.  We acknowledge that the EC has made certain changes in its final regulation that address these concerns, and we thank the EC for these improvements. 
            3. However, certain aspects of the final GI regulation remain of concern, and we are not in a position today to accept the EC’s view that it has complied with the DSB recommendations and rulings in this dispute.
            4. For instance, previous Article 14(2) provided for the continued use of trademarks that acquire rights before the submission in the EC of a registration application for a conflicting GI.  In the final regulation, this applies only to trademarks acquiring rights before January 1, 1996, leaving any additional trademarks acquiring rights after January 1, 1996, potentially vulnerable.  This change is particularly significant because the DSB relied on the previous version of Article 14(2) in finding that the regulation’s violation of trademark obligations under Article 16 of the TRIPS Agreement was justified because the regulation imposed only very narrow exceptions to trademark rights.  The significant expansion of these exceptions in the new regulation is, therefore, a matter of concern to us.
            5. Secondly, it appears that the January 1, 1996, date in new Article 14(2) is intended to correspond to Article 24.5 of the TRIPS Agreement.  Article 24.5 requires, inter alia, that GI measures not prejudice the use of trademarks acquiring rights before the date of application of the TRIPS Agreement in the WTO Member concerned.  While January 1, 1996, may be the appropriate date for the EC itself, several EC member States have TRIPS application dates later than January 1, 1996.  Lithuania, for example, only acceded to the WTO on May 31, 2001.  For these EC member States, Article 24.5 applies to trademarks acquiring rights before the date of application of the TRIPS Agreement as to the EC member States concerned, which is after January 1, 1996.  The new GI regulation ignores this.
            6. In any case, the EC should recall the DSB finding that Article 24.5 of the TRIPS Agreement does not provide any authority to limit trademark rights, and that any exceptions to trademark rights must fit within the narrow bounds of Article 17 of the TRIPS Agreement. 
            7. We hope that the EC will take these comments into account in considering further amendments to its GI regulation and in applying this regulation.  The United States will continue to examine the regulation and how it is applied.

            E.  UNITED STATES – MEASURES AFFECTING THE CROSS-BORDER SUPPLY OF GAMBLING AND BETTING SERVICES: STATUS REPORT BY THE UNITED STATES (WT/DS285/15/ADD.1)

              1. Compliance with the recommendations and rulings of the DSB in this dispute relates exclusively to the sole point of whether the United States is now able to show that relevant U.S. laws do not discriminate against foreign suppliers of remote gambling on horse racing.  U.S. laws do not discriminate, and we can show this.

              2. As noted in the status report that we submitted, on April 5, 2006, the U.S. Department of Justice stated the position of the U.S. Government regarding remote gambling on horse racing in testimony before a subcommittee of the U.S. House of Representatives.  The Department of Justice explained that:


               

              The Department of Justice views the existing criminal statutes as prohibiting the interstate transmission of bets or wagers, including wagers on horse races.  The Department is currently undertaking a civil investigation relating to a potential violation of law regarding this activity.  We have previously stated that we do not believe that the Interstate Horse Racing Act, 15 U.S.C. §§ 3001-3007, amended the existing criminal statutes. 

              1. In view of these circumstances, the United States is in compliance with the recommendations and rulings of the DSB in this dispute.  
              2. We are aware from public statements that Antigua and Barbuda has a different understanding of the findings and conclusions of the DSB in this dispute.  We believe that understanding is incorrect, and that Antigua’s misreading of the results of this dispute has fostered misperceptions concerning their implications. 
              3. To set the record straight, it may be helpful to recall certain key points about the actual results of this dispute:
              4. First, this is an issue of public morals and public order.  The findings and conclusions in this dispute include an express finding that the measures at issue “are ‘measures ... necessary to protect public morals or to maintain public order’” under the exception provided for in Article XIV(a) of the GATS.
              5. Second, the Appellate Body made it clear that the sole outstanding issue under Article XIV relates to horse racing.  Under the chapeau of Article XIV, the Appellate Body concluded that “the only inconsistency that the Panel could have found with the requirements of the chapeau stems from the fact that the United States did not demonstrate that the prohibition embodied in the measures at issue applies to both foreign and domestic suppliers of remote gambling services, notwithstanding the [Interstate Horseracing Act]....”  The findings and conclusions adopted by the DSB reflected this, stating that the United States had not “shown, in the light of the Interstate Horseracing Act” the non-discriminatory application of the relevant measures.  Notwithstanding any assertions to the contrary, this question concerning horse racing is the only issue.
              6. Third, the Appellate Body expressly clarified that “the Panel did not, and we do not, make a finding as to whether the IHA does, in fact, permit domestic suppliers to provide certain remote betting services that would otherwise be prohibited by the Wire Act, the Travel Act, and/or the [Illegal Gambling Business Act].” 
              7. Against this background, the considerations relevant to compliance in this dispute are clear and straightforward.  The issue under Article XIV – the “only” issue, according to the Appellate Body – is the treatment of horseracing.
              8. As noted in our report and our statement today, our chief law enforcement agency, the U.S. Department of Justice, has explained that U.S. criminal statutes prohibit the interstate transmission of bets or wagers, including wagers on horse races; that it is currently undertaking a civil investigation relating to a potential violation of law regarding this activity; and that it does not believe that the Interstate Horse Racing Act amended relevant criminal statutes. 
              9. We hope that this explanation puts to rest any lingering misperceptions of the rulings and recommendations that the DSB in fact adopted in this dispute.

              Item 2.  MEXICO – TAX MEASURES ON SOFT DRINKS AND OTHER BEVERAGES

              A.  IMPLEMENTATION OF THE RECOMMENDATIONS OF THE DSU

              1. We thank Mexico for its statement that it intends to implement the DSB’s recommendations and rulings in this dispute.
              2. The United States is pleased that Mexico has indicated that it plans to do so by repealing its discriminatory beverage tax.
              3. We are prepared to discuss with Mexico a reasonable period of time for its implementation.  We cannot comment today on the specific proposal that Mexico has made for a “reasonable period of time,” but we look forward to discussing the “reasonable period of time” with Mexico.
                 

              Item 3.  IMPLEMENTATION BY THE EUROPEAN COMMUNITIES OF THE RECOMMENDATIONS AND RULINGS OF THE DSB IN RELATION TO “EUROPEAN COMMUNITIES - REGIME FOR THE IMPORTATION, SALE AND DISTRIBUTION OF BANANAS” AND RELATED SUBSEQUENT WTO PROCEEDINGS

              A.  STATEMENTS BY HONDURAS, NICARAGUA AND PANAMA

              1. Since the EC implemented its new bananas regime on January 1, a number of Members – including the United States – have voiced serious concerns about the regime.  However, the EC has not, as yet, addressed those concerns. 
              2. Instead, the EC has taken the further step of “suspending” the request it had made for a waiver from GATT Article XIII -- even though the EC continues to keep in place a special, preferential tariff-rate quota which it allocates to some Members but not to others.
              3. We are disappointed by the EC’s response to the concerns raised and are continuing our discussions with interested Members about this matter.
              4. We reiterate this is a matter of great importance to many Members.  It is imperative that the EC work with such interested Members to reach a mutually satisfactory resolution of the dispute as expeditiously as possible.

              Item 4.  UNITED STATES – CONTINUED DUMPING AND SUBSIDY OFFSET ACT OF 2000: IMPLEMENTATION OF THE RECOMMENDATIONS ADOPTED BY THE DSB

              A.  STATEMENTS BY CANADA, THE EUROPEAN COMMUNITIES AND JAPAN

              1. With respect to Members’ questions and comments about the U.S. implementation in these disputes, as the United States has already explained at the DSB meetings of February 17th and March 17th, 2006, 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.
              2. Thus, the United States has taken all actions necessary to implement the recommendations and rulings in these disputes.
              3. With respect to Members’ comments and request about possible status reports by the United States, as we already explained, the United States has taken all actions necessary to implement the recommendations and rulings in these disputes. 
              4. We therefore fail to see what purpose would be served by the submission of status reports repeating the progress the United States made in the implementation of the DSB’s recommendations and rulings.

              Item 5.  UNITED STATES – COUNTERVAILING MEASURES CONCERNING CERTAIN PRODUCTS FROM THE EUROPEAN COMMUNITIES

              A.  STATEMENT BY THE EUROPEAN COMMUNITIES

              1. We will convey to our capital the EC’s comments and its questions about these DOC proceedings, including its questions from previous DSB meeting.
              2. Turning to the EC’s comments about U.S. status reports, as we have noted at previous meetings, Members will recall that we made a statement at the meeting of September 27, 2005, when the DSB adopted the report of the Article 21.5 panel in this dispute, and that we followed up on that statement with a report to the DSB on the status of our implementation on November 28. 
              3. In connection with the EC’s request and the EC’s comments, Members will recall that the second sentence of Article 21.6 of the DSU provides that “the issue of implementation of the recommendations or rulings may be raised at the DSB by any Member at any time following their adoption.”  As we have said at two previous DSB meetings and are pleased to repeat again today, we would be happy to discuss with the EC on a bilateral basis their views on this issue.  This offer has been made twice before but has not been taken up by the EC.

              Item 6.  EUROPEAN COMMUNITIES AND CERTAIN MEMBER STATES – MEASURES AFFECTING TRADE IN LARGE CIVIL AIRCRAFT

              A.  REQUEST BY THE UNITED STATES FOR A DECISION OF THE DSB (WT/DS316/5)

              1. Mr. Chairman, this first subitem concerns the request by the United States for a decision of the DSB, which -- as you have just mentioned -- was circulated to Members in document WT/DS316/5.
              2. Our written request sets out the reasons why the United States is seeking this decision.  Let me take a moment to summarize what we are asking the DSB to do, and why.
              3. By way of background, Members will recall that on July 20, 2005, the DSB established a panel to examine the U.S. claims regarding the subsidies that France, Germany, the United Kingdom, Spain, and the European Communities have provided and are continuing to provide to Airbus, the European manufacturer of large civil aircraft.  That panel was composed on October 17, 2005
              4. Shortly thereafter, on October 26, 2005, the EC filed a request for preliminary rulings that raised various procedural objections with respect to the U.S. panel request.  In addition, certain member States committed additional new subsidies to Airbus.
              5. Although none of the objections in the EC’s preliminary ruling request had merit, the United States indicated its willingness to hold further consultations with the EC in order to address those concerns, and thereby to simplify matters for the panel.  The United States also wished to consult on the new Airbus subsidies.
              6. Accordingly, the United States filed a further request for consultations regarding the EC and member State measures on January 31, 2006.  The United States and the EC held those consultations on March 23, 2006.
              7. On April 10, the United States filed a further request for the establishment of a panel, following up on those consultations.
              8. In view of the relationship that I have just outlined between our 2005 panel request and the request filed this month, the United States considers that the efficient functioning of the dispute settlement system would be served if the matters contained in this month’s request were considered by the panel established last July. 
              9. The United States therefore decided to ask the DSB to take a decision to that effect, the decision we are now discussing.
              10. As we noted in our request, the DSB has taken similar decisions in analogous situations. For example, Article 9.1 of the DSU also reflects a policy, in certain circumstances, of having a single panel consider multiple panel requests related to the same matter whenever it is feasible to do so.  And, under Article 9.1, the DSB has in the past taken decisions to refer a subsequently submitted complaint to a previously established panel.
              11. While Article 9.1 obviously does not apply to the situation before us today, the United States believes that the DSB’s experience with that article provides useful guidance.  We have drawn upon that experience in structuring our request for a DSB decision.
              12. We hope that the Members of the DSB will be able to agree to our request, and we thank Members in advance for their support.
              13. In this connection, we also recognize that the European Communities is facing similar procedural issues in its dispute regarding alleged U.S. subsidies for large civil aircraft, since the EC has established two separate panels relating to the same matter.
              14. The United States believes that the decision we are seeking today in DS316 would be an appropriate approach for addressing the procedural issues in DS317 as well, and we would be prepared to support such a request by the European Communities.

              [Second intervention:]

              1. The United States thanks Brazil and Canada for their constructive interventions on this topic.  We appreciate their willingness to engage with us on the issues presented by this request for a decision.  We will refer to capital their comments and questions, and will be pleased to discuss these issues with them, and with any other Member, bilaterally or perhaps at a future DSB meeting.
              2. Turning to the EC comments, it is remarkable that the EC would assert that merger at this point in the process is not possible.
              3. The United States and the EC mutually agreed in February to pause their respective disputes precisely in order to allow time to work out the procedural issues that would arise from the existence of the first and second panel requests (some of which the Canadian representative noted in his intervention).
              4. As a consequence, the existing panel has taken no steps other than to establish its working procedures.  The panel has done nothing that would be affected by a modification of its terms of reference.  It has not yet begun addressing any of the parties’ claims, and no written submissions have yet been filed, so merger is simply a matter of adjusting the panel’s terms of reference so that a single panel can address all of the U.S. claims.
              5. As the U.S. request makes clear, the merger would as a substantive matter be quite straightforward.  The DSB would take the decision we have requested, and that would be that.
              6. The EC’s approach, by contrast, would raise substantial issues, such as whether the panelists in the two disputes should be the same, the possibility of two panels examining the same measures coming to divergent results (another issue the Canadian representative alluded to), issues in terms of compliance such as different reasonable periods of time and different recommendations and rulings, etc.
              7. As the United States previously noted, the DSB has in the past referred a new panel request to an existing panel, pursuant to Article 9.1.  The United States would refer the EC and other Members, for example, to the Indonesia Autos dispute, which also involved subsidies and claims of serious prejudice, and to which the EC was a complaining party.  There the terms of reference of the panel were amended to merge with a panel that was established after the original panel had been composed.
              8. In the interest of efficiency, this is the most logical approach.
              9. We invite the EC to reflect on the views expressed today, and to reconsider its approach to this issue.

                Item 6.  EUROPEAN COMMUNITIES AND CERTAIN MEMBER STATES – MEASURES AFFECTING TRADE IN LARGE CIVIL AIRCRAFT

              B.  REQUEST BY THE UNITED STATES FOR THE ESTABLISHMENT OF A PANEL (WT/DS316/6)

              1. We are disappointed that the EC was unable to permit the DSB to take the decision we were seeking under the previous subitem.  We do not propose to reiterate now our comments on the EC’s position.
              2. In any event, in light of the EC’s decision to block referral of the matter in the U.S. panel request to the existing panel in DS316, the United States is obliged to pursue establishment of a panel in the ordinary way. 
              3. Under the previous subitem, we also discussed in brief the reasons why we have brought this matter to dispute settlement, and we do not propose to repeat those points here either.
              4. We request that the DSB establish a new panel with respect to the matter contained in the U.S. panel request, pursuant to DSU Articles 6 and 7. 
              5. The United States further requests that the panel have the terms of reference provided for in DSU Article 7.1.

                [Second intervention:]
              6. We are, of course, disappointed by the EC’s decision not to permit the DSB to establish the panel today.
              7. We would like to comment on one statement made the EC during its intervention that is unusual for a statement objecting to establishment of a panel, namely the EC’s objection to the title of this dispute and its comments on who the proper responding parties are.
              8. The United States requested consultations, and the establishment of a Panel, with respect to the governments of Germany, France, Spain, and the United Kingdom, in addition to the EC.  Therefore, all five of those WTO Members are properly respondents in this dispute.  While it may be that the EC will be representing the interests of the member States in the dispute, that representation does not change the member States’ legal status as respondents.

              Item 7.  UNITED STATES – MEASURES AFFECTING TRADE IN LARGE CIVIL AIRCRAFT

              A.  INITIATION OF THE PROCEDURE FOR DEVELOPING INFORMATION CONCERNING SERIOUS PREJUDICE UNDER ANNEX V OF THE SCM AGREEMENT AND DESIGNATION OF MR. MATEO DIEGO-FERNÁNDEZ AS THE DSB REPRESENTATIVE REFERRED TO IN PARAGRAPH 4 OF THAT ANNEX FOR THE DEVELOPMENT OF EVIDENCE TO BE EXAMINED BY THE PANEL IN DS317 ESTABLISHED ON 17 FEBRUARY 2006 IN THE FORM OF WRITTEN RESPONSES BY THE UNITED STATES TO WRITTEN QUESTIONS FROM THE DSB REPRESENTATIVE TO THE UNITED STATES PURSUANT TO ANNEX V, PARAGRAPH 1 AND ANNEX V, PARAGRAPH 2 OF THE SCM AGREEMENT (WT/DS317/5)

              1. We are surprised that the EC is seeking a separate Annex V information-gathering process for the panel established on February 17th.  The EC initially stated that it sought establishment of that panel to “resolve a number of procedural imbroglios that had arisen” with regards to the terms of reference and Annex V process for the panel established in this dispute on July 20, 2005. (WT/DSB/M/205, para. 69; see also WT/DSB/M/204, para. 3.)
              2. By seeking now to have a separate Annex V process for the February 17th panel, the EC would achieve the opposite.  It would leave in place the July 20th panel and create an independent panel with a separate record, addressing claims that overlap in several areas.  The “imbroglios” in the July 20th panel’s proceedings that the EC said it wanted to resolve would remain unresolved, and would be exacerbated by new uncertainties with regard to the relationship between the July 20th and February 17th panels.
              3. We also note that, as the title of this agenda item indicates, the EC is seeking to unilaterally determine the identity of the representative of the DSB under paragraph 4 of Annex V of the SCM Agreement, as well as the particular procedures for its proposed information-gathering process.  Nothing in Annex V or the DSU gives the EC this authority.
              4. For these reasons, as well as the reasons we have raised at past DSB meetings, we are not in a position to agree to the EC’s request.

              ###