WORLD TRADE WT/DS74/5
WT/DS102/6
ORGANIZATION 13March 1998
(98-1062)
Original: English
PHILIPPINES -MEASURES AFFECTING PORK AND POULTRY
Notification ofMutually-Agreed Solution
Thefollowingcommunication,dated12March1998,fromthePhilippinesandtheUnitedStates,
iscirculated pursuant toArticle 3.6oftheDSU.
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TheGovernments ofthePhilippines (GOP) andtheUnited States ofAmerica (USG) wishto
notify theDispute Settlement Body ("DSB") thattheyhavereached amutually satisfactory solution
regarding thematters raised bytheUnited States inPhilippines -Measures Affecting PorkandPoultry
(WT/DS74/1 andWT/DS102/1) respecting theadministration oftheGOP tariff-rate quotas relating
tofresh/chilled/frozen pork(HS0203) andfresh/chilled/frozen poultry (HS0207).
Weconfirm thattheGOPhasmodified therulesandregulations governing theadministrations
ofitsTRQs ascontained inAdministrative Order No.8,series of1997. Themodifications areset
forthinAdministrative Order No.1,series of1998 issued on18February 1998. Theprincipal features
oftheamendments toAdministrative Order No.8areasfollows:
1. Absent arelatively highlevelofquota utilization inanygiven yearindividual licensees
willsuffer penalties onquotas allocations inthesucceeding year. Under theamended Administrative
Order No.8,alicensee shallforfeit aportion ofitsquota allocation intheensuing quota yearwhen
quota utilization inthecurrent yearfallsbelow 80percentwhen computed overthe12-month TRQ
year. Thisrepresents anincrease from the50percentthreshold level contained intheoriginal
Administrative Order No.8.
2. Thepenalty forfailure tofulfiltherequisite utilization levelremains thesameasunder
theoriginal Administrative Order No.8,with50percentoftheunused andunsurrendered quotas
being recalled fromthenextTRQyear'sallocation onthefirstinstance offailure tomeettheutilization
threshold; a75percentreduction oftheunused andunsurrendered allocation inthesecond instance;
anda100percentreduction ofthatamount inthethirdinstance. However, whereas under theprevious
procedures, suchpenalties wereapplied onlywhen theywereconsecutive years ofunder-utilization,
therequirement forconsecutive instances ofunder-utilization hasbeeneliminated.
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WT/DS102/6
Page2
3. TheAdministrative Order alsohasbeenamended toprovide thatonlythose licensees
whofulfil theabove-referenced 80percentutilization level shall have access totheSystematic
Distribution Procedure (preferred distribution) oftheBeginning YearPooltogether withMAV entrants.
Allotherlicensees shallhaveaccess totheBeginning YearPoolonlythrough thefirst-come, first-served
procedures. Inaddition, MAVICs from thefirst-come, firstserved distribution shallnotbeissued
toanylicensee whohasnotutilized andthereby exhausted allofhis/her unsurrendered quota.
4. The12month quota period hasbeenmodified tocommence on1February eachyear
andthevalidity period oftheMAVIC hasbeenlengthened tothreemonths. These changes weremade
tofacilitate fullutilization ofthequota allocations.
5. TheGOP alsohasmade several technical changes toAdministrative Order No.8to
simplifylicensingproceduresandadministrationoftheTRQs.Forexample,applicantswillbepermitted
tosubmit copies oftheirincome taxreturns ortheappropriate Bureau ofInternal Revenue (BIR) form
forexempt organizations instead ofBIRtaxclearance certificates. Similarly, apro-forma invoice shall
bereplaced withtheairway billorbilloflading forissuing MAVICs.
6. TheUSGandGOPalsohaveagreed toperiodically review theutilization oftheGOP's
porkandpoultry TRQs.
Theamendments toAdministrative Order No.8incorporated inAdministrative Order No.1became
effective on6march 1998 andapply toalllicensees, Minimum Access Volume Import Certificates
(MAVICs), andprovisional MAVICs issued, orpools allocated, onorafter1January 1998.
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