./.RESTRICTEDWORLD TRADE
ORGANIZATIONWT/GC/20
5 March 1999
(99-0905)
General Council Original:  English
TRADE MEASURES TAKEN BY THE UNITED STATES ON
3 MARCH 1999 AGAINST EUROPEAN COMMUNITIES' IMPORTS
Communication from the European Communities
The following communication has been received from the European Communities on
5 March 1999, with the request that it be circulated to Members.
_______________
With this letter I request, on behalf of the European Communities, the convocation of a
special meeting of the General Council for a discussion by the Membership of the unilateral tradesanctions the United States have taken on 3 March 1999 against EC imports.
On 3 March 1999, the US took the decision, effective as of that date, to withhold liquidation
on imports from the EC of a series of products toge ther valued at over $500 million on an annual basis
and to impose a contingent liability for 100% duties on each individual importation of affectedproducts as of this date. According to information provided by the United States Trade Representative
(USTR), this measure includes administrative provisions which foresee, among other things, the
posting of a bond to cover the full potential liability.
This measure deprives EC imports into the US of the products in question of the right to a
duty not in excess of the rate bound in the US Schedule. Moreover, by requiring the deposit of a bond,
US Customs effectively impose 100% duties on each individual importation, the return of which isuncertain, depending on future US decisions. The US has therefore effectively suspended US tariff
concessions on the EC products in question. The result is that those products are effectively being
stopped from entering the United States as of 3 March 1999.
The US makes no secret of the fact that the purpose and effect of this measure is to stop all
imports from the EC of the products in question as of 3 March 1999. This is evident from the attached
official USTR press statement and from the attached questions and answers which the Commission
has received in Washington and which apparently constitute a background text prepared for the press
conference conducted by USTR on 3 March to announce the measure.
It is clear that the US have taken this measure in blatant disregard of the provisions of the
Dispute Settlement Understandin g (DSU), in particular Article 22.6, which explicitly states:
“Concessions or other obligations shall not be suspended during the course of the arbitration”; and in
addition of Article 23.2(c) of the DSU, which provides that Members shall “follow the procedures set
forth in Article 22 to determine the level of suspension of concessions or other obligations and obtainDSB authorization in accordance with those procedures before suspending concessions or other
obligations under covered agreements…”. However, the arbitration procedure under Article 22.6 has
by no means finished, let alone resulted in a determination of over $500 million of nullification or
impairment. Nor has the DSB authorised any action of any kind by the US.WT/GC/20
Page 2
Clearly, the US measures also violate fundamental GATT provisions, such as Articles I, II,
VIII and XI of the GATT 1994.
This extremely serious US measure affects the basic functioning of the DSU, which is the
cornerstone of the WTO. It therefore affects the interest of each and every Member in a multilateral
system of dispute settlement based on the rule of law. The European Communities therefore consider
it important that every WTO Member be given the opportunity, in the special General Councilmeeting we are requesting, to express itself on this matter. We all have invested too much in the new
dispute settlement system to allow it to be destroyed by irresponsible unilateral action.
On behalf of the European Communities, I request that you distribute this letter and the
annexes to the Membership forthwith and that you convene a special General Council meeting todiscuss this matter within the next few days.
__________