WORLD TRADE
ORGANIZATIONTN/RL/W/53
6 February 2003
(03-0787)
Negotiating Group on Rules Original:  English
REPLIES TO QUESTIONS PRESENTED TO THE UNITED STATES
ON SUBMISSION TN/RL/W/27
The following communication, dated 5 February 2003, has been received from the Permanent
Mission of the United States.
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The United States thanks Australia for its comments on TN/RL/W/27, the US paper on the
Basic Concepts and Principles of the Trade Remedy Rules , which comments Australia initially made
during the meeting of the WTO Negotiating Group on Rules in November 2002.  This paper responds
to those comments, formally submitted by Australia in document TN/RL/W/38.
Q. Does the United States consider trade-dist orting practices are the subject of the wider
universe of rules covered by the WTO Agreements?
Reply
Yes, the United States recognizes that there are other WTO agreements that address
trade-distorting practices.  However, the trade-distorting practices that are the focus of the
United States’ Basic Concepts paper are specifically those that lead to the need for the trade remedies
provided by the WTO Agreements on Implem entation of Article VI of the GATT 1994 (the
Anti-Dumping Agreement) and on Subsidies and Countervailing Measures.
Q. Does the United States consider that addressing trade-distorting practices should
exclude consideration of improving and clarifying trade remedy rules?
Reply
The Doha Mandate calls for the clarification and improvement of disciplines under the
Antidumping and Subsidies Agreements, including disc iplines on trade-distorting practices.  Thus, it
is clear that the Ministers at Doha did not consider the clarification and improvement of disciplines on
trade-distorting practices and the clarification and improvement of disciplines on trade remedy rules
to be mutually exclusive; indeed, the Mandate indicates that they should be addressed simultaneously.
Q. Would the United States agree that trade re medy instruments are designed to respond
to certain trade-distorting practices?
Reply
The United States would agree that the antidumping and countervailing duty remedies are an
indirect response to the Trade distorting practices that help foster injurious dumping and
subsidization.  In TN/RL/W/24, the United States ci rculated a paper that it prepared for the OECD’sTN/RL/W/53
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special process on steel that discusses a number of such practices in the steel sector.  We presented
this paper in part to illustrate that if meaningf ul steps can be taken to eradicate such distortions,
whether in steel or more generally, the need for and use of trade remedies may well be lessened as a
consequence of such reforms.
Part C, Section 1:  Anti-Dumping Rules as a Remedial Mechanism
Q. Does the United States consider that dumping by companies per se  stems from
government industrial policies or government interv ention in the marketplac e, or only injurious
dumping?
Reply
The United States believes that dumping by companies can stem from a variety of underlying
causes.  These include, but are not limited to, government industrial policies, government
intervention, and tariffs and non-tariff barriers.  Injury is a separate question that relates to the impact
that dumped imports may have on a domestic industry.
Part C, Section 2:  The Use of Countervailing Duties to Address Subsidization
Q. How would the United States propose strengthening disciplines on subsidies?
Reply
We believe that there are a variety of ways in which subsidies disciplines could be
strengthened, clarified and improved, and we intend to identify these areas in more detail in future
submissions.
Q. In terms of the four core principles out lined in the paper, could the United States
explain on which specific areas relating to transparency and due process it wishes to see further
refinement?
Reply
The United States refers Australia to its submission entitled Investigatory Procedures Under
the Antidumping and Subsidies Agreements  (TN/RL/W/35).  The submission elaborates further on
some of the transparency and due process-related issues the United States wishes to address in these
negotiations.
Q. The United States refers to work beg un in the OECD relating to trade distorting
practices in the steel sector.  The United Stat es proposes that participants agree to prohibit
substantially all subsidies to steel (with some exceptions) (refer page 4 of the US steel paper
contained in TN/RL/W/24).  It notes that this work could provide a basis for the work of the
Rules Negotiating Group.  Is the United St ates proposing within the Rules Group that
substantially all subsidies be prohibited?
Reply
In the context of the OECD process, the United States generally believes that the basic
discipline that should be developed for steel subsidies is a blanket prohibition on all subsidies that are
specific to the steel industry, whether on a de jure  or de facto  basis, providing exceptions for certain
narrowly articulated forms of assistance that would facilitate the permanent closure of uneconomic
steelmaking capacity. However, under this approach, subsidies that are not “specific” to all or part ofTN/RL/W/53
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the steel industry would not be prohibited.  The go al of the OECD process is to develop the elements
of an agreement appropriate to address the problems of steel, with the expectation that the results of
this work would be recommended for integratio n and reflection within the framework of WTO
subsidy rules that apply to steel trade.  How these results could best be integrated or reflected is, of
course, a question for WTO Members to consider and decide.  Notwithstanding that all of theparticipants in the OECD process are either currently WTO Members or are in the process of acceding
to the WTO, the United States still considers it important for all WTO Members at the very least to be
well informed of the progress being made in the OECD with respect to consideration of improved
steel subsidy disciplines so that they may be able draw conclusions, as appropriate, with respect to our
work in the Rules Negotiating Group.  We also believe it is possible that certain recommendations
might be developed in the OECD process that could merit a broader application than for steel alone,
although clearly some results may only be appropriate or feasible for the steel sector.  All of thesequestions will necessarily have to be assessed at a later stage, as work both in the OECD process and
the Rules Negotiating Group progresses.
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