. /.WORLD TRADE
ORGANIZATIONWT/GC/W/402
8 May 2000
(00-1863)
Original:  English
FIVE-YEAR REVIEW OF THE EXEMPTION PROVIDED
UNDER PARAGRAPH 3 OF THE GATT 1994
Communication from Japan
The following communication, dated 2 May 2000, has been received from the delegation of
Japan with the request that it be circulated to Members.
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Japan would like to thank the Delegation of the United States for responding to the questions
contained in WT/GC/W/344.  This paper is intended to facilitate substantial discussions on this issue,
after having received useful information from the US, and to contribute to the review process
provided for in the General Council.
1. Japan appreciates the US replies regarding questions (d) and (j) and would further appreciate
it if replies are provided on the following additional questions.
(a) Regarding the response to question (d), the US  states that ships built in the US by a
foreign capital company are considered as "US-built".  Japan wishes to know whether
there are any restrictions for foreign capit al participation in shipbuilding companies
and, if so, what they are.  Japan also wishes to know how many foreign capital
shipbuilding companies are currently being operated in the US.
(b) Referring to question (j), the US states that, "There have been proposals in Congress
to change US cabotage laws (also referred to collectively as the "Jones Act")".  Please
inform Members of the contents of such proposals.
2. As oppose to the answers mentioned in 1. above, it is regrettable to note that the replies to
questions (a), (b), (e), (f), (g), (h) and (i) are fa r from sufficient.  Japan would appreciate it if the US
could resubmit its replies, taking into consideration the following points.
(a) The US refers to the existence of specific mandatory legislations that fall within the
scope of paragraph 3 of the GATT 1994, but fails to explain in more detail why such
legislations are deemed necessary.  In light of the purpose of this review (to examine
"whether the conditions which created the need for the exemption still prevail"), we
believe that a more detailed and substantiated explanation would be required on theconditions of the shipbuilding industry in the US, including the present situation as
regards international competition and other relevant matters.
(b) Regarding the response to question (e), the US simply refers to the information it
submits to the WTO each year.  However, as such information does not include the
data on the following points, which, in our view, are vital to conduct meaningful andWT/GC/W/402
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balanced review under paragraph 3 of the GATT 1994, Japan requests the US to
provide Members with the relevant details.
- What is the exact number of shipbuilding companies in the US that build and
repair ships falling within the scope of the "Jones Act", as well as their
percentage in the shipbuilding industry as a whole?  What is the exact
number of employees, and their percentage in the industry as a whole,
working in such companies?
- Over the last ten years, what is the amount of annual sales for building
and repairing ships alike which fall within the scope of the "JonesAct", and what is the change in percentage, also over the last ten years,of such sales in relation to the total amount of sales within the US
shipbuilding industry?
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