WORLD TRADE
ORGANIZATIONWT/GC/W/409
20 July 2000
(00-3009)
Original:  Spanish
FIVE-YEAR REVIEW OF THE EXEMPTION PROVIDED
UNDER PARAGRAPH 3 OF GATT 1994
Questions from Panama
The following communication, dated 17 July 2000, has been received from the delegation of
Panama with the request that it be circulated to Members.
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As it indicated in its previous communication regarding the five-year review of the exemption
provided under paragraph 3 of the General Agreement on Tariffs and Trade 1994 (GATT 1994), the
Republic of Panama is greatly interested in contributing to a better understanding of the legislation
notified by the United States, and in particular whether or not that legislation meets the requirementsof paragraph 3(a) of the GATT 1994.  Accordingly, while reserving the right to submit further
questions in the future, the delegation of Panama is submitting to the United States the following
questions concerning the operation and implementation of the legislation notified.
1. In the course of seeking to avail itself of the advantages of the exemption provided under
paragraph 3 of GATT 1994, the United States notified some legislation on 20 December 1994.  The
Director-General of the GATT acknowledged receipt of that notification by a letter dated on that sameday.  There has never been any examination whatsoever in either the GATT or the WTO of that
notification, nor a decision as to whether the legislation notified meets the requirements of
paragraph 3 of GATT 1994.
(a) In the opinion of the United States, is it enough to notify legislation under paragraph 3 of the
GATT 1994 in order to enjoy the exemption in question?  Can a parallel for such a procedure
be found in any other part of the WTO Agreements?
(b) What is the process in its entirety that the United States regards as applicable for a Member
State to be able to enjoy the exemption provided under paragraph 3 of the GATT 1994?
2. For a country to be able to avail itself of the exemption provided under paragraph 3 of the
GATT 1994, the legislation notified must be mandatory.  In its replies to the questions submitted by
Panama, the delegation of the United States notes that the laws notified offer no exceptions or
discretion in their enforcement (reply to quest ion 3 from Panama, WT/GC/W/397).  However, the
delegation of the United States subsequently states that the laws may be suspended under "a statutory
waiver provision" (reply to question 5 from Panama).
(a) How does the United States understand the term "mandatory"?(b) What is the difference between an exemption and a suspension under "a statutory waiver
provision"?WT/GC/W/409
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(c) To which of the laws notified does "a statutory waiver provision" apply?
(d) In what situations has the Government of the United States availed itself of "a statutory
waiver provision"?  (This is the second part of question 4 from Panama, to which no answerwas given).
(e) In January 1991, during the Gulf War, President Bush "suspended" the application of the
legislation notified.  Please provide us with details of that act and its legal basis.  Please
provide details of other similar actions.
3. Exemption under paragraph 3 of the GATT 1994 would apply solely to the continuation or
prompt renewal of non-conforming provisions of su ch legislation, and their amendments that do not
increase the non-conformity.  The delegation of the United States considers that the standards and
regulations that implement the legislation would also be sheltered by that exemption (reply to
question 2 from Panama).
(a) On what does the United States base this assertion?
(b) Assuming, for the sake of argument, that the standards and regulations that implement the
legislation would also be sheltered by the exemption, would these standards and regulations
also have to meet the requirements of paragraph 3 of the GATT 1994?
(c) Assuming, for the sake of argument, that the standards and regulations that implement the
legislation would also be sheltered by the exemption, do the standards and regulations admit
any exception or discretion in their application?  If so, please provide details.
(d) Assuming, for the sake of argument, that the standards and regulations that implement the
legislation would also be sheltered by exemption, were such standards and regulations
amended or promulgated after the United States became a contracting party to the
GATT 1947?  If so, please provide details of each case and summarize their content.
(e) The standards and regulations applicable to at least one of the laws notified extend the
prohibition to the use, sale or lease of foreign-built or foreign-reconstructed vessels incommercial applications that include points in the territorial waters and economic zones of
other nations.  Assuming, for the sake of argument, that the standards and regulations that
implement the legislation would also be sheltered by the exemption, how do these rules meet
the requirement that the applications must be between points in national waters or the waters
of an exclusive economic zone?
4. Question 7 from Panama in document WT/GC/W/387 has not received a direct answer.  We
appreciate the opinion of the United States that the changes to which the legislation notified since
1994 has been subject have not decreased its conformity with Part II of the GATT 1947.  However,
we would like once again to ask the United States to describe the substance of these amendments andchanges and provide the corresponding texts.
5. We should like to adapt and endorse on our own behalf question 3 from the European Union
in document WT/GC/W/397.  The reply from the Unit ed States does not appear to answer the
question, since it does not state affirmatively or negatively whether there has or has not been anyextension since 1994 of the coverage of the legislation notified by the United States or its standards or
regulations.WT/GC/W/409
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(a) Has there been any extension of the prohibitions so as to cover new types of vessels (e.g. of
greater tonnage or size, flag, nationality of the owners, etc.) or new types of cargo or
passengers, new commercial activities, etc?
(b) Has there been any extension in the type of vessels (e.g. of greater tonnage or size, flag,
nationality of the owners, etc.) that might undertake the commercial activities mentioned in
paragraph 3 of the GATT 1994?
(c) We would be grateful if the United States could provide details in the event of any of the
replies to these question being in the affirmative.
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