WORLD TRADE
ORGANIZATIONTN/RL/W/42
17 December 2002
(02-6953)
Negotiating Group on Rules Original:  English
QUESTIONS TO THE UNITED STATES ON TN/RL/W/24
The following communication, dated 10 December 2002, has been received from the
Permanent Mission of India.
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During the last meeting of the Disciplines Study Group held at the OECD Secretariat on 12-
13 September 2002, the United States had submitted a paper “Addressing Market Distortions in theGlobal Steel Sector” SG/STEEL(2002)23.  Subsequently the United States also shared this paper with
the Negotiating Group on Rules at the WTO (TN/RL/W/24).  With a view to obtaining a better
understanding of the issues contained in this paper,  India seeks the following clarifications from the
United States:
“Noting that the HLG ha s pointed to the WTO as an appropriate setting for pursuing better
disciplines on at least some of the market distor tions affecting trade in and production of steel”
1. Could the United States clarify whether there is any difference between “disciplines on trade
distorting practices” and “disciplines on market distortions affecting trade”?
2. Why in the view of the United States is WTO an appropriate setting for pursuing better
disciplines on market distortions affecting production of steel?
3. Could the United States specify the agreement that may be relevant at the WTO for
disciplines on market distortions affecting production of steel?
4. Could the United States explain why it has chosen to discuss issues relating to disciplines on
market distortions affecting trade in steel at the OECD?  Would the United States agree that
such discussions, wherein all WTO Members are not participating, cannot be an inclusive
process and could adversely affect the interests of Member countries?  As there may be a thin
line between discussions and negotiations at OECD on issues covered under the various WTOAgreements, why, in the view of the United States, does this situation not violate the
provisions of Article III:2 of the Marrakesh Agreement Establishing the WTO?
“how the results of our work could best be fo rmulated into a coherent package and transmitted
to appropriate fora for serious consideration and action”.
5. Could the United States  clarify the manner in which the results of works at the OECD on
Steel issues, that are transmitted to the WTO, could be taken into consideration by the NG
Rules?
“Subsidies or those measures with a subsidy-like effect”TN/RL/W/42
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6. Could the United States explain with illustrations what is meant by “those measures with a
subsidy – like effect”?
7. Could the United States identify some of the measures “with a subsidy – like effect” on which
any proposed disciplines may be included in the ASCM?  Why in the view of theUnited States are disciplines on such measures not already included in the ASCM?
8. Is the United States seeking to include in the ASCM disciplines on “measures with a subsidy
– like effect” even though such measures may not be considered a “subsidy” under Article 1
of the ASCM?
9. Is the United States proposing changes in “basic concepts and principles of the ASCM”
whereby disciplines would be included in the ASCM based on effects of a measures
irrespective of whether a financial contribution exists?
“Participants recognize that no single forum can adequately address the concerns identified
and, therefore, agree to pursue an integrated a pproach to the issues in reference to work being
done in – or within the competence of – th e OECD, WTO and other fora, as appropriate”
10. Could the United States identify the specific concerns which can be adequately addressed at
the WTO?
“we believe that the disciplines must extend beyond subsidies to address a broader range of
distorting practices and measures”
11. Could the United States clarify whether WTO is an appropriate forum for conducting
negotiations on disciplines to address a broader range of distorting process and measuresextending beyond subsidies?
12. Could the United States identify the specific distorting practices and measures beyond
subsidies for which WTO is an appropriate forum for improving disciplines?
13 Could the United States identify the specific distorting practices and measures beyond
subsidies for which WTO is not an appropriate forum for improving disciplines?
14. Could the United States specify provision of any agreement in the WTO relevant to
disciplines for preventing distortions, apart from those caused by subsidies?
“We should also be fashioning disciplines with the goal not only of preventing distortions, but
also encouraging restructuring, rationalization and adjustment”.
15. Could the United States clarify whether disciplines for “encouraging restructuring,
rationalisation and adjustment” can be addressed at the WTO under the mandate in
paragraph 28 of Doha Ministerial Declaration?
“Addressing – perhaps through strengthened subsidies disciplines – preferential access to
financing and steel production inputs, as well as circumstances in which governments absolve
steel firms of generally applicable obligations”
16. Could the United States clarify whether “strengthened subsidies disciplines” refers to the
disciplines under the ASCM?TN/RL/W/42
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17. Could the United States clarify whether “strengthened subsidies disciplines” would be generic
in nature or be limited to steel issues?  If latter be the case, then how does the United States
reconcile this with the fact that there is no mandate for the WTO to undertake sectoral
negotiation on steel issues?
18. What in the view of the United States is the difference between “clarifying and improving
disciplines” and “strengthened disciplines”?
19. If “clarifying and improving disciplines” can result in “strengthened disciplines” would be
United States agree that this would be equally applicable to the Anti-Dumping Agreement
and the ASCM?
20. Could the United States clarify why, in its view, the provisions ASCM are inadequate to
address “preferential access to financing and steel production inputs” and government
measures that “absolve steel forum of generally applicable obligations.
21. Could the United States clarify whether special exemptions to the steel industry from the
obligations contained in the domestic environmental laws and regulations of the country
concerned that all other domestic manufacturers must meet would constitute an example of
the government absolving steel firms of “generally applicable obligations”?
“Participants would agree to pursue liberalization of market access in the steel sector
aggressively as part of the Doha negotiations, not only to open up markets but also to reduce the
scope for dumping out of sanctuary markets”
22. Could the United States clarify the linkage between “liberalization of market access” and
reducing the “scope for dumping out of sanctuary markets?
“It is logical to assume that the use of these remedies would decline in conjunction with the
elimination of inefficient excess capacity and distortive trade measures internationally”
23. Could the United States point to any empirical evidence confirming that use of trade remedies
would decline in conjunction with inefficient excess capacity?
Development Dimension
24. India notes that the US proposal does not take into consideration the development dimension
which is an issue crucial to developing countries.  Any discipline on trade distorting measures
which may be agreed to must take into consideration the flexibilities available to developingcountries under the Subsidies Agreement.  The development dimension has been specifically
recognised in the Doha Ministerial Declaration as the needs of developing and least-
developed countries would be taken into account during the negotiations.  Would the
United States clarify its position on the development dimension and the need to preserve the
flexibility available to developing countries under the Subsidies Agreement?  How, in theview of the United States, should the needs of developing and least-developed countries be
taken into consideration in any improvements and clarifications on trade distorting measures
which may be agreed by various countries?
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