WORLD TRADE ORGANIZATION  
ORGANISATION MONDIALE DU COMMERCE  
ORGANIZACIÓN MUNDIAL DEL COMERCIO  WT/TPR/M/235/Add.1 
1 November 2010 
 (10-5793) 
Trade Policy Review Body 
29 September and 1 October 2010 Original: English/ 
 anglais/ 
 inglés 
 
TRADE POLICY REVIEW 
UNITED STATES 
Record of the Meeting  
Addendum  
Chairperson:  H.E. Mr. Bozkurt Aran (Turkey) 
 This document contains the advance writte n questions, and replies provided by the 
United States.1 
__________________________________________________________________________________ 
Organe d'examen des politiques commerciales 
29 septembre et 1er octobre 2010 
 
EXAMEN DES POLITIQUES COMMERCIALES 
ÉTATS-UNIS 
Compte rendu de la réunion  
Addendum  
Président:  S.E. M. Bozkurt Aran (Turquie) 
 
 Le présent document contient les questions écrites communiquées à l'avance et les réponses 
fournies par les États-Unis.1 
__________________________________________________________________________________  
Órgano de Examen de las Políticas Comerciales 
29 de septiembre y 1° de octubre de 2010 
 
EXAMEN DE LAS POLÍTICAS COMERCIALES 
ESTADOS UNIDOS 
Acta de la reunión
 
Addendum  
Presidente:  Excmo. Sr. Bozkurt Aran (Turkía) 
 
 En el presente documento figuran las pre guntas presentadas anticipadamente por escrito, 
junto con las respuestas facilitadas por los Estados Unidos.1 
                                                      
1 In English only./En anglais seulement./En inglés solamente.   
    WT/TPR/M/235/Add.1 
 Page 3 
 
 
 ADVANCE WRITTEN QUESTIONS AND REPLIES 
 
ARGENTINA 
 
II.  TRADE AND INVESTMENT POLICY FRAMEWORK 
(1) Trade Policy Formulation  
1.  Paragraph 5 of the Report by the Secretariat indi cates that under the federa l structure of the U.S. 
government matters such as public procurement,  insurance-related services, and professional 
services, as well as technical regulations and san itary and phytosanitary measures, are regulated at 
the state level.  Could the United States explain how it reconciles, at the federal level, the standards 
and regulations that these states may is sue with international commitments? 
 
RESPONSE :  The United States has obligations under the various WTO agreements, and the 
application of those obligations at the sub-federal (sub-central level) may vary between agreements.  
For example, with respect to procurement a nd GATS commitments on insurance and professional 
services, the United States has assumed international obligations at the state level as set out in the 
relevant GPA and GATS schedules, respectively.  We work cooperatively with the States through 
various means to ensure that they understand and comply with such obligations, such as through the 
Inter-Governmental Policy Advisory Committee.  2.  Paragraph 7 of the Report by the Secretariat mentions that the President presented the Trade 
Policy Agenda for 2010, providing for strengtheni ng "the capacity to monitor foreign markets …" 
Could the United States clarify whether it plans  to strengthen these capacities beyond the WTO 
framework of consultations, negotiation s, and the Dispute Settlement System?  
 RESPONSE:   Ensuring full implementation of trade agreem ents is one of the strategic priorities of 
the United States.  The United States will continue to  seek to achieve this goal through a variety of 
means, including:  
• Asserting U.S. rights under the WTO Agreement, including the WTO dispute settlement 
mechanism and through WTO bodies and committees charged with monitoring 
implementation and with surveillan ce of agreements and disciplines; 
• Vigorously monitoring and enforcing bilateral agreements; 
• Invoking U.S. trade laws in conjunctio n with bilateral and WTO mechanisms; 
• Providing technical assistance to trading partners, especially in developing countries, to ensure 
that key agreements such as the Agreement on Basic Telecommunications and the Agreement 
on Trade-Related Aspects of Intellectual Pr operty Rights (TRIPS) are implemented on 
schedule;  and 
• Promoting U.S. interests under free trade ag reements (FTAs) through work programs, 
accelerated tariff reductions, and use or threat  of use of dispute settlement mechanisms, 
including with respect to labor and environment. 
 
3.  Paragraph 9 of the Report by the Secretariat mentions the "Trade Adjustment Assistance (TAA) 
program," expanded by the American Recovery and Rein vestment Act enacted in  February 2009. (…), 
which provides various benefits for workers, includ ing "income support, job training, and health 
insurance."  Could the United States provide more detail regarding the Trade Adjustment Assistance WT/TPR/M/235/Add.1 
Page 4 
 
 
 program?  Which sectors in agriculture, manufac turing, and services have benefitted and what were 
the amounts? 
RESPONSE:  Since the 2008 Trade Policy Review, significant changes were made to the Trade 
Adjustment Assistance (TAA) Program as part of the American Recovery and Reinvestment Act of 
2009, Public Law (P.L.  No. 111-5) enacted on Febr uary 17, 2009, and effective with TAA petitions 
filed on or after May 17, 2009.  Working with Congress, the President was able to sign into law the Trade and Globalization 
Adjustment Assistance Act of 2009 (TGAAA), as part of the American Recovery and Reinvestment 
Act of 2009 (ARRA).  The TGAAA reauthorized TAA programs;  expanded TAA coverage to more 
workers and firms, including workers and firms in th e service sectors for the first time;  made benefits 
available to workers whose jobs have been sen t "off-shore" to another country (as opposed to 
covering a more limited set of shifts in produc tion);  improved workers' training options;  and 
increased the affordability of health  insurance coverage.  Below is a description of the major changes 
to the TAA for Workers program.  (More informa tion on the TAA for Workers program is available 
at the following website:  http://www.doleta.gov/tradeact/ChangesFAQ.cfm#3.  
Old TAA for Workers Program  New TAA for Workers Program  
Group Eligibility 
• Workers must be associated with the 
production of an article in order to be eligible. 
• Shifts in production must be to a country 
that has specified tr ade agreements with 
the U.S. or accompanied by an actual or 
likely increase in imports to be covered. 
• Workers at downstream producers that 
are secondarily affected by increased imports from, or a shift in production to, countries other than Canada or Mexico are not eligible. 
 Group Eligibility 
• Expands TAA coverage to service sector 
workers whose job loss is related to increased imports of services, shifts in the provision of services to foreign countries, or who provide a service to a 
TAA-certified firm. 
• Expands eligibility to workers in public 
agencies. 
• Expands TAA eligibility to shifts in 
production or shifts in location of service to all countries, without the need to prove increased imports. 
• Eliminates the requirement that 
downstream secondary worker 
dislocations be related to trade with Canada or Mexico. 
• Provides automatic certification of 
petitions filed for worker groups employed by a company identified in an affirmative finding of injury by the 
International Trade Commission. 
• Allows for components of products to be 
certified based on increased imports of finished products.  WT/TPR/M/235/Add.1 
 Page 5 
 
 
 Trade Readjustment Allowances (TRA) 
• Up to 104 weeks of cash payments for 
workers enrolled in full-time training 
• Up to 130 weeks of cash payments if the 
worker was also enrolled in remedial 
training Trade Readjustment Allowances (TRA) 
• Up to 130 weeks of cash payments for 
workers enrolled in full-time training 
• Up to 156 weeks of cash payments if the 
worker was also enrolled in remedial 
training 
Training Enrollment Deadlines 
• Workers must be enrolled in training 8 
weeks after certification or 16 weeks 
after layoff, whichever is later, in order 
to receive TRA Training Enrollment Deadlines 
• Workers must be enrolled in training 26 
weeks after certification or layoff, 
whichever is later, in order to receive 
TRA 
Job Search Allowances 
• 90% of allowable costs, up to $1,250 Job Search Allowances 
• 100% of allowable costs, up to $1,500 
Relocation Allowances 
• 90% of costs, up to the statutory limit for 
Federal Employees 
• Provides an additional lump sum 
payment of up to $1,250 Relocation Allowances 
• 100% of costs, up to the statutory limit 
for Federal Employees 
• Provides an additional lump sum 
payment of up to $1,500 
Training Services 
• Training may only be approved on a 
full-time basis 
• Certified workers may not begin 
approved training until they have been 
totally or partially separated from 
adversely affected employment Training Services 
• Training may be approved on a full-time 
or part-time basis, although full-time 
training is required for TRA eligibility. 
• Certified workers may begin approved 
training when threatened with separation 
from adversely affected employment 
Health Coverage Tax Credit (HCTC) 
• Prior to May 2009, a tax credit covering 
up to 65% of an eligible participant's 
monthly qualifying health insurance premium 
• Beginning May 2009, the tax credit will 
be raised for all participants to cover 
80% of an eligible participant's monthly qualifying health insurance premium Health Coverage Tax Credit (HCTC) 
• A tax credit covering 80% of an eligible 
participant's monthly qualifying health 
insurance premium WT/TPR/M/235/Add.1 
Page 6 
 
 
 Alternative Trade Adjustment Assistance 
• Available to workers 50 years of age or 
older 
• Requires a separate certification of group 
eligibility 
• Workers may not participate in 
TAA-approved training 
• Requires full-time employment within 
26 weeks of separation 
• Available only for workers earning less 
than $50,000 per year in reemployment 
• Maximum benefit of $10,000 over a 
period of up to two years 
• Participants are eligible for the HCTC Reemployment Trade Adjustment Assistance 
• Available to workers 50 years of age or 
older 
• Does not require a separate certification 
of group eligibility 
• Workers may participate in TAA- 
approved training 
• Requires full-time employment, unless 
the worker is also enrolled in 
TAA-approved training and employed at least 20 hours per week, and does not set 
a deadline for reemployment 
• Available only for workers earning less 
than $55,000 per year in reemployment 
• Maximum benefit of $12,000 over a 
period of up to two years 
• Participants are eligible for the HCTC 
 
TAA for Firms 
The ARRA included provisions to expand the Trade Adjustment Assistance for Firms program at the 
U.S. Department of Commerce.  In addition to tec hnical changes to eligibility criteria for the review 
of Petitions for Eligibility, the legislation expanded the potential pool of clients significantly by allowing "service" industry firms the opportunity to apply for TAA.  The decision to allow service firms to become eligible for TAA was based on the fact that 80 per cent of U.S. workers are employed 
in the service sector.  Additionally, the expansion allows for some flexibility in collecting data to 
demonstrate import impaction by allowing a petitioner to utilize customer import information if it accounts for a significant percentage of the d ecline of the firm's sales or production. 
 Trade Adjustment Assistance for Firms (TAA), a federal program, provides financial assistance to 
manufacturers affected by import competition.  Sponso red by the U.S. Department of Commerce, this 
cost sharing federal assistance program pays for ha lf the cost of consultants or industry-specific 
experts for projects that improve a manufacturer's  competitiveness.  (More information on TAA for 
Firms is available at:  http://www.taacenters.org/)  TAA for Farmers 
The ARRA reauthorized and modified the Trade Ad justment Assistance (TAA) for Farmers program.  
The TAA for Farmers program helps producers of ra w agricultural commodities and fishermen adjust 
to a changing economic environment associated with import competition through technical assistance 
and cash benefits.  Producers of commodities who ha ve recently suffered a greater than 15 per cent 
decrease in the national average price, the quantity of production, value of production, or cash receipts 
compared to the average of the three precedi ng marketing years, and an increase in imports 
contributed importantly to this decline, may be eligible to receive free information, technical 
assistance, and cash payments to develop and impl ement Business Adjustment Plans from the TAA 
for Farmers program.  (More information on TAA for Farmers is available at:  http://www.fas.usda. gov/ITP/TAA/taa.asp). 
  WT/TPR/M/235/Add.1 
 Page 7 
 
 
 TAA for Communities 
The U.S. Economic Development Administratio n oversees the Community Trade Adjustment 
Assistance (Community TAA) Program, which is aimed at helping to create and retain jobs by providing project grants to communities that have experienced, or are threat ened by, job loss resulting 
from international trade impacts.  Grants under the program can be used to support a wide range of 
technical, planning, and infrastructure projects to  help communities adapt to pressing trade impact 
issues and diversify their economies.  (More in formation on the Community TAA program is 
available at:  http://www.eda.gov/PDF/CTAA%201-pager.pdf.)  Which sectors in agriculture, manufacturing,  and services have benefitted and what were the 
amounts?  
 
RESPONSE:   The reauthorized TAA program has not been in operation long enough to evaluate the 
impact of expanded eligibility and increased be nefits.  The following overview provides basic 
information on the expanded TAA programs, incl uding a summary of the numbers of workers and 
industries covered by TAA certifications. 
 
Program Overview 
The Trade Adjustment Assistance for Workers, Alternative Trade Adjustment Assistance (ATAA), 
and Reemployment Trade Adjustment Assistance (RTAA) programs are authorized under the Trade 
Act of 1974, as amended.  These programs are collect ively referred to as TAA, and provide assistance 
to workers who have been adversely affected by foreign trade.  The ARRA reauthorized and modified the Trade Ad justment Assistance (TAA) for Farmers program.  
The TAA for Farmers program helps producers of ra w agricultural commodities and fishermen adjust 
to a changing economic environment associated with import competition through technical assistance 
and cash benefits.  The ARRA is administered by  the United States Department of Agriculture, and 
the 2009 appropriation for the TAA for Farmers program was $90 million.  (More information on TAA for Farmers is available at:  http://www.fas.usda.gov/ITP/TAA/taa.asp)  The law also included provisions to expand the Trad e Adjustment Assistance for Firms program at the 
U.S. Department of Commerce.  In addition to tec hnical changes to eligibility criteria for the review 
of Petitions for Eligibility, the legislation expanded the potential pool of clients significantly by allowing "service" industry firms the opportunity to apply for TAA.  Trade Adjustment Assistance for 
Firms (TAA), a federal program, provides financial assistance to manufacturers (http://www.taacenters.org/industries.html) affected by  import competition.  Sponsored by the U.S. 
Department of Commerce, this cost sharing federa l assistance program pays for half the cost of 
consultants or industry-specific experts for http://w ww.taacenters.org/projects.html that improve a 
manufacturer's competitiveness.  The 2009 appropriation for the TAA for Firms program was $15.8 million.  (More information on TAA for Firms is available at:  http://www.taacenters.org/) 
 In FY 2009, the U.S. Department of Labor's Employment and Training Administration (ETA) 
administered two separate TAA laws—the program im plemented by the TGAAA that went into effect 
for petitions filed on or after May 18, 2009 (n ew program), and the TAA program that was 
administered under the Trade Act, which existed before May 18, 2009.  The TGAAA had a major impact on the administration of the TAA program.  In FY 2009, TAA 
petition filings increased by 104 per cent over FY 2008 petition filing.  More specifically, from May 
2009 thru July 2009, TAA petition filing increased by  288 per cent as compared with the same period 
of the previous year.  In March 2009, TAA pe titioners were given the option of withdrawing 
previously filed TAA petitions and re-filing on or af ter May 18, 2009, in order to take advantage of 
the expanded TAA program.  This resulted in a la rge number of TAA petitions being withdrawn and WT/TPR/M/235/Add.1 
Page 8 
 
 
 classified as terminated prior to May 18, 2009, and a corresponding large number of re-filed TAA 
petitions on or shortly after May 18, 2009.  Workers 
In FY 2009, ETA estimated the number of workers covered by TAA certifications was 201,053.  This 
represents a 58.7 per cent increase over FY 2008, when  126,633 estimated workers were covered.  In 
FY 2009, 80 per cent of the determinations issued we re certifications (excl uding terminations).  In 
FY 2009, the manufacturing sector had the greatest estimated number of TAA certified  workers with 
183,813 workers;  6,764 workers in the professional, scientific and technical services;  3,001 in 
administrative and support and waste management and remediation services, and 2,061 in and 
transportation and warehousing.  Agriculture, forest ry, fishing and hunting ha d 172 workers estimated 
to be covered by certifications.  
Industries 
ETA uses the North American Industry Classification System (NAICS) codes to track industry 
impact.  In FY 2009, the total TAA certifications  were 1,845 in all sectors.  In FY 2009, the 
manufacturing sector had the greatest number of certif ications with 1,620 fo llowed by professional, 
scientific, and technical services with 72;  ad ministrative and support and waste management and 
remediation services with 51;  and transportation and warehousing with 21 certifications.  In 
agriculture, forestry, fishing and hunting sectors the number of certifications was eight. 
 
(2) Participation in the WTO 
 
4.  Paragraph 11 of the Report by the Secretaria t mentions that, with respect to the Doha Round 
negotiations, the authorities indicated that those negotiations have not yiel ded meaningful results;  
thus the USTR is in favor of adopting a "diff erent approach to the end game in order to gain a 
stronger outcome."  Could the United States exp lain the content of this "different approach"?  
 
RESPONSE:   During the March 26, 2010, stock-taki ng meeting in Geneva, there was broad 
agreement among Members that the road ahead should focus on enga gement in various formats, 
including direct bilateral enga gement and small-group horizonta l discussions to help bridge 
negotiating gaps.  From the U.S. perspective, th is was an important step forward from previous 
approaches.  The United States has initiated and partic ipated in multiple, detailed bilateral discussions 
aimed at establishing a negotiating "playing field" which we hope will set the stage for more intense 
and targeted give-and-take negotiations.  This wo rk, in conjunction with on-going work in the 
Negotiating Groups and other configur ations, can help us to build momentum across all areas of the 
Doha Round negotiations.  
5.  Paragraph 15 of the Report by the Secretariat indicates that the United States has not complied 
with the rulings and recommendations of the Dispute Settlement Body with regard to the Copyright 
Act, Hot Rolled Steel, and the Omnibus Appropriati ons Act of 1998 cases.  Could the United States 
indicate the reasons why it has not complied with the DSB recommendations and what measures it 
plans to adopt to do so as soon as possible?  
 
RESPONSE:   The United States has come into compliance,  fully and promptly, in the vast majority 
of its disputes.  As for the remaining few instan ces where our efforts to do so have not yet been 
entirely successful, the United States has been worki ng actively towards compliance in furtherance of 
the purpose of the dispute settlement system.  The U. S. Administration will continue to work with the 
U.S. Congress and other interested parties to full y implement the recommendations and rulings of the 
Dispute Settlement Body in those disputes.  
6.  Paragraph 24 of the Report by the Secretariat men tions that, within the context of the Generalized 
System of Preferences (GSP), the United States gr ants a customs duty exemption regime to developing  WT/TPR/M/235/Add.1 
 Page 9 
 
 
 countries contingent upon their meeting criteria t hat "promote sound policies and expand trade and 
investments."  Could the United States explain this and list the criteria for promoting "sound 
policies"?  
 RESPONSE:   The legislation establishing each U.S. pr eference program, including GSP, provide a 
number of criteria and factors that must be taken into consideration when deciding
 whether to extend 
benefits to eligible countries.  The GSP statue  and the full list of criteria can be found at:  
(http://frwebgate3.access.gpo.gov/cgi-bin/TEXTg ate.cgi?WAISdocID=C0tZYD/2/1/0&WAISaction 
=retrieve) . 
 
III.  TRADE POLICIES AND PRACTICES BY MEASURE (1) Measuring directly affecting imports (i) Customs procedures 
 
7.  Paragraph 13 of the Report by the Secretar iat indicates that the 9/11 Commission Act of 2007 
prohibits containers from being loaded on a U. S.-bound vessel unless they have been scanned using 
non-intrusive imaging and radiation de tection equipment.  This prohibition will take effect on July 1, 
2012.  Nonetheless, the report indicates that the Secretary of Homeland Security could move up the 
implementation date for this Act or postpone it fo r renewable two-year periods after certifying that at 
least two of the six conditions established in the Act have been met.  What conditions does the Act 
include?  Are these conditions valid only for deciding to postpone implementation of the Act, or for 
moving it up as well?  If the former, what conditi ons must be met in order to move up the Act's 
implementation date? 
 
RESPONSE:   The legislation authorizes the Secretary to extend this deadline in two-year increments 
if the Secretary certifies to Congress that at least two
 of the following conditions exist: 
 
(A) Systems to scan containers in accordance with paragraph (1) are not available for 
purchase and installation. 
(B) Systems to scan containers in accordance w ith paragraph (1) do not have a sufficiently 
low false alarm rate for us e in the supply chain. 
(C) Systems to scan containers in accord ance with paragraph (1) cannot be purchased, 
deployed, or operated at ports overseas, includi ng, if applicable, because a port does not have 
the physical characteristics to install such a system. (D) Systems to scan containers in accordance with paragraph (1) cannot be integrated, as 
necessary, with existing systems. (E) Use of systems that are available to scan c ontainers in accordance with paragraph (1) will 
significantly impact trade capacity and the flow of cargo. 
(F) Systems to scan containers in accordance with  paragraph (1) do not adequately provide an 
automated notification of questionable or high-risk cargo as a trigger for further inspection by appropriately trained personnel. 
 The conditions are used to determine if the deadline for implementing the 100 per cent scanning 
mandate can be extended beyond July 1, 2012;  they are not intended to be used to move the deadline 
sooner than July 1, 2012.  
8.  Paragraph 16 of the Report by the Secretariat indicates that the Customs and Border Protection 
(CBP) Service performs post-clearance audits in the form of "focused assessments," which consist of 
a complete examination of the internal contro ls an importer uses to manage the risk of 
non-compliance with import regulations, or "quick response audits" that focus on a single issue.  What criteria are used to determine which imports  are subject to "focused assessment" audits and 
which are subject to "quick response" audits?" 
 WT/TPR/M/235/Add.1 
Page 10 
 
 
 RESPONSE:   Risk management principles are used when selecting importers for focused 
assessments audits.  Typically, when considering the total imports for a given year, risk factors such 
as priority trade issues within the total imports, ac tual or potential material discrepancies, and ranking 
as major importers are considered in determining ri sk for non-compliance.  Higher risk importers are 
selected when taking all risk factors into account.  An automated database that incorporates these 
multiple risk factors which is updated annually is used in the selection pro cess for focused assessment 
audit candidates.  
Quick response audits are narrowly focused audits of  a specific objective or risk area.  Mostly, these 
audits are initiated from referrals or requests from within or outside of CBP or other agencies. 
 
9.  In paragraphs 17 to 19, the Report by the Secret ariat indicates that the CBP administers a supply 
chain security program called C-TPAT (Customs-Trade Partnership against Terrorism).  Within this 
framework, companies that adopt "supply chain secur ity criteria" benefit from reductions in the risk 
score CBP assigns to their shipments.  As a resu lt, these companies' shipments face less frequent 
examinations than other shipments with a similar ri sk profile.  Nonetheless, the report indicates that 
all the companies that participate in this program are located in Mexico or Canada.  What are the 
"security criteria" referred to in the Report?  What  are the requirements a company must meet to gain 
access to this program?  Could the United States explain the reasons why companies located outside 
of Mexico and Canada are not included?  
RESPONSE:   The C-TPAT minimum security criteria a nd eligibility requirements for each sector 
may be found on the CBP website at:  http://www.cbp.gov/xp/cgov/trade/cargo_security/ctpat/ Participation in the C-TPAT foreign manufacturer sector  is limited to Mexico and Canada at this time. 
 (iii) Rules of origin 
 
10.  Paragraph 25 of the Report by the Secretariat indicates that in July 2008, CBP issued a proposal 
to establish uniform rules of origin in custom s legislation by replaci ng the "case by case" 
determination system based on substantial transfo rmation with the NAFTA marking rules that rely 
primarily on changes in tariff classification.  Coul d the United States indicate the status of this 
proposal? 
 
RESPONSE:   The proposal is under consideration.  Once the review is finished, a document will be 
published informing the public of the results. 
 
(iv) Tariffs 
(e) Temporary tariff suspensions 
 
11.  Paragraph 36 of the Report by the Secretaria t notes that until recently the Congress followed the 
practice of temporarily suspending or reducing tariffs on imports of a wide variety of goods (usually 
inputs for manufacturing) through bills on various tar iffs (Miscellaneous Tariff Bills -MTB).  The bills 
on temporary suspensions or reductions of duti es are examined by the Congress, Executive Branch 
agencies, and the International Trade Commission.  Those that meet the criteria established by Congress are put together in a single MTB, the last  of which was approved in 2006 and expired in 
late 2009.  What are the criteria a product must meet in order to benefit from these temporary 
reductions or suspensions and to which products  have they been applied to date?  Why hasn't 
Congress passed more such  bills in recent years?  
 
RESPONSE:   Miscellaneous Tariff Bills (MTBs) are s ubmitted by Members of both the Senate and 
House of Representatives according to guidelines set forth by the Senate Finance and House Ways 
and Means Committees.  MTBs are subject to a public comment period and then reviewed by 
Executive Branch agencies, including the U.S. In ternational Trade Commission.  These agencies  WT/TPR/M/235/Add.1 
 Page 11 
 
 
 evaluate MTBs with respect to the existence of domestic production of a like or competing product or 
domestic opposition, estimated tariff revenue losses from  the bill, trade policy considerations, and the 
ability of U.S. Customs to administer the MTBs.  
On August 11, 2010, President Obama signed H.R.  4380, the U.S. Manufacturing Enhancement Act 
of 2010, which incorporates MTBs that temporarily suspend or reduce tariffs on more than 400 products.  Details of products c overed by H.R. 4380 can be fou nd at:  http://frwebgate.access.gpo. 
gov/cgi-bin/getdoc.cgi?dbname= 111_cong_bills&docid=f:h4380enr.txt.pdf.  The temporary duty 
suspensions and reductions in the bill are set to expire on December 31, 2012. 
 
(v) Other charges affecting imports 
 
12.  Paragraph 39 of the Report by the Secretaria t indicates that imports unloaded at ports that 
receive federal funds for maintenance are subject to a harbor maintenance fee.  According to the 
authorities, the purpose of this fee is "have the bus inesses that benefit directly from the use of U.S. 
harbours ... bear the cost of maintenance of tho se harbours."  However, paragraph 40 of the Report 
indicates that exports have been exempt from this  fee since 1998.  Why are exports exempt from the 
fee if, like imports, they directly be nefit from the use of these ports?  
 
RESPONSE:   The U.S. Supreme Court held the harbor  maintenance fee is unconstitutional as applied 
to exports because it determined that it violated the Export Clause of the U.S. Constitution.  
 
13.  Paragraph 42 of the Report by the Secretariat indicates that imported beer must pay a federal 
excise tax amounting to US$18.00 per barrel.  How ever, the first 60,000 barrels produced each year 
by a domestic brewer with annual  production of less than two mi llion barrels benefit from a reduced 
rate of US$7.00.  Could the United States give the reason for this discrimination between domestic 
and imported beer? 
 
RESPONSE:   The United States has no basis to accept that the tax provisions in question are 
discriminatory.  The United States also notes that  total production of beer and wine by small 
producers is quite small, and these small producer s frequently face higher costs of production.  
However due to these higher production costs an y excise tax advantages offered to these producers 
have no trade distorting effect.  
14.  Paragraph 43 of the Report by the Secretaria t points out that small domestic producers of wine 
"can benefit from a credit of US$0.90 per gallon of  wine (US$0.056 for hard cider) on the first 
100,000 gallons.  Decreasing credits are offered to wineries that produce between 150,000 and 
250,000 gallons of wine per year."  Could the Unite d States provide estimates of the amounts of credit 
granted and the interest rates offered? 
 
RESPONSE:  The Internal Revenue Code includes a pr ovision that allows small domestic producers 
of wine to pay a reduced rate of tax.  Specifica lly, 26 U.S.C. 5041(c) allows domestic producers who 
produce not more than 250,000 wine gallons of wine during a calendar year to take a credit on the 
excise tax of $0.90 per gallon on the first 100,000 wi ne gallons of wine rem oved for consumption or 
sale.  The credit is reduced by 1 per cent for each  1,000 wine gallons produced in excess of 150,000 
wine gallons of wine during the calendar year.  The same applies for cider, except that the credit is $0.056 rather than $0.90 per gallon.  This provisi on does not provide for financial loans to producers 
of wine or cider.  
 WT/TPR/M/235/Add.1 
Page 12 
 
 
 (vii) Quantitative restrictions, controls, and licensing 
 15.  Paragraph 74 of the Report by the Secretariat indicates that controls are applied to natural gas 
imports for reasons of "public interest."  What are the "public interest" reasons and what are the 
characteristics of the controls applied?  
 
RESPONSE:   Under the Natural Gas Act (15 USC 717b), no person may import any natural gas from 
a foreign country without first having secured an or der authorizing it to do so.  The Natural Gas Act 
also provides that such orders shall be issued unl ess it is found that the proposed importation will not 
be consistent with the public interest.  The Natu ral Gas Act provides further that natural gas (and 
liquefied natural gas) imports from countries with which the United States has a free trade agreement 
calling for national treatment for trade in natural gas, and LNG imports from other countries, are 
deemed to be consistent with the public interest.  Applications for such importation must be granted 
without modification or delay. 
 
(iii) Technical rules and regulations 
 
16.  Box III.1 on page 38 of the Report by the Secretariat indicates that the Consumer Product Safety 
Improvement Act (CPSIA) established a new limit of  100 ppm for lead content in children's products 
and the paint used on such products.  According to the box, that provision would take effect in 
February 2009.  However, paragraph 93 indicates that  the new limit on lead content would take effect 
as of August 2011.  In addition, par agraph 93 also indicates that there may be "market disruption" if 
this new limit is applied to produc ts manufactured before the effective date.  What exactly is the 
effective date of this new limit?  Will the limit apply to products manufactured before that date? 
 RESPONSE:   The limits were implemented according to the following schedule:  February 2009-600 
ppm;  August 14, 2009-300 ppm;  August 14, 2011-100 ppm.  Products sold after these dates must be in compliance with the limits.  It does not matter when they were manufactured, they must be in 
compliance as of these dates.  17.  The second paragraph in Box III.1 mentioned above (page 45) indicates that the Act requires 
manufacturers "to the extent practicable" to place a "tracking label or other distinguishing permanent 
mark on children's products."  In ad dition, it indicates that the "Co mmission has the authority to issue 
a rule further defining the detail required in the tr acking labels.  Moreover, the Commission may, in 
the future, require that the additional information co ntained on tracking labels  for children's products 
be expanded to cover all consumer products ."  Could the United States clarify whether the "tracking 
label" on consumer children's products applies to  local manufacturers?  Could the United States 
specify why there is a need for such broad authority  in applying a label or tracking mark for all 
consumer goods in addition to the current country of origin labeling requirement for certain products?  
 RESPONSE:  The CPSIA applies to children's products ente red into U.S. commerce, whether or not 
those products were manufactured in the United Stat es.  For further information, please see Section C 
of the Statement of Policy:  Interpretation and Enforcement of Section 103(a) of the Consumer 
Product Safety Improvement Act, which discusses current requirements for tracking labels:  
http://www. cpsc.gov/about/cpsia/ sect103policy.pdf. 
 
18.  Paragraph 89 of the Report by the Secretariat indicates that in 2008 the United States enacted 
the Consumer Product Safety Improvement Act (CPSIA ), which establishes st ricter requirements for 
many of the 15,000 products under the jurisdic tion of the Consumer Product Safety Commission.  
Nonetheless, according to paragraph 94 the Co mmission itself has suggested to Congress the 
possibility of exempting certain produc ts from the requirement to meet the limits established by the 
CPSIA, "to ease the burdens of testing and certification on products unlikely to present more than a  WT/TPR/M/235/Add.1 
 Page 13 
 
 
 negligible health risk, and to regulate on a timet able influenced by the seriousness of the actual risks 
not artificial deadlines."  Why has the burden of t esting and certifications been increased on products 
that present an insignificant risk?  Was a prelimi nary study done on this situation?  Has the 
government considered delaying the timetable for appl ying the CPSIA, consideri ng that the Consumer 
Product Safety Commission itself recognizes that the deadlines are "artificial" and are not based on 
the "seriousness of the actual risks"? 
 
RESPONSE:  CPSC delayed the CPSIA timetable by imposing a lengthy stay of enforcement for 
most of the testing requirements until early 2010.  Chairman Tenenbaum's letter to Congress initiated 
discussions between Congress and the Commission on the issues set out in the letter.  There is no 
related legislative activity to this point, but we  will keep Argentina informed if there are any 
developments.  
19.  Paragraph 97 of the Report by the Secretar iat notes that although compliance with the rules 
established by the American National Standards Institu te (ANSI) is voluntary, in practice the U.S. 
market tends to offer strong incentives for domestic  and imported products to comply with those 
standards.  What are those incentives and what a re the requirements for gaining access to them?  
 
RESPONSE:   The United States Government does not maintain a list of what the market "requires" 
in order to do business in particular sectors of th e U.S. economy.  We have no way of knowing, for 
example, what retailers in a particular sector ar e requiring their suppliers to agree to (above and 
beyond the applicable legal requirements) in private sales contracts.  Argentine suppliers should reach 
out to their importers, customers and other business partners in the U.S. market to obtain this information for specific sectors of interest.  As is th e case in Argentina, the answer to this question is 
dictated by private sector market forces, which can  change very quickly and are often influenced by 
global factors, not just conditions inside one particular country. 
 
20.  Paragraph 111 of the Report by the Secretar iat mentions the procedure for evaluating the 
"pest-free status" of countries or regions.  Considering the comments submitted by SENASA in response to the notice (G/SPS/N/USA/2041), could th e United States indicate for what species the 
Province of Mendoza would be recogn ized as a fruit fly free area? 
 
RESPONSE:   APHIS plans to amend the list of pest-free areas to list Southern and Central Oases of 
the Mendoza Province of Argentina as free of Medfly.  
21.  Paragraph 113 of the Report by the Secretariat indicates that "the United States has recognized 
establishments in 34 countries with systems equivale nt to its own meat, poultry, and/or egg products 
regulatory systems."  Considering paragraph 12 of Decision G/SPS/19/Rev.2 of the SPM Committee and the second recommendation contained in the repor t on the Third Review of the Operation and 
Implementation of the SPS Ag reement (document G/SPS/53),  could the United States indicate whether 
this recognition of equivalent systems has  been reported to the SPM Committee? 
 RESPONSE:   The United States often reports its equi valence determinations to the Committee 
through formal committee meeting interventions.  
22.  Paragraph 127 of the Report by the Secretariat notes the publication of a Final Guidance on 
Regulating Genetically Engineered Animals and  also indicates that – under the National 
Environmental Policy Act – all genetically e ngineered animals must undergo an environmental 
assessment.  Could the United States describe th e content this "environmental assessment"? 
 
RESPONSE:   Genetically engineered animals are re gulated primarily under the new animal drug 
provisions of the Federal Food, Drug, and Cosmet ic Act.  Under these provisions, the recombinant 
DNA construct (the rDNA construct) meets the defi nition of a new animal drug because it is intended WT/TPR/M/235/Add.1 
Page 14 
 
 
 to alter the structure or function of an animal.  Agency actions, including approvals of new animal 
drug applications, must meet the requirements of  the National Environmental Policy Act (NEPA), 
which require environmental reviews.  In the case of an approval, the environmental review must 
address the effects that the approval would have on the environment.  The risk assessment that 
constitutes the basis of the analysis looks at either intentional release (if that is the intent of the 
application) or escape from the containment conditions  that constitute the conditions of use that would 
form the basis of the approval.  The risk assess ment would focus on the existing containment, its 
adequacy, including redundant containments to estima te the likelihood of escape.  In the event of an 
escape (should the application specify containment), the risk assessment would evaluate the ability of 
the GE animal to survive, reproduce, establish a popul ation, and disperse throughout the environment.  
The risk assessment would then evaluate the lik ely consequences of any of those outcomes (i.e., 
survival, dispersion), and the effects that t hose outcomes might have on the environment. 
 This would apply to all GE animals, regardless of  their intended use, speci es, etc.  The guidance 
document for GE animals can be found online a t:  http://www.fda.gov/downloads/AnimalVeterinary/ 
GuidanceComplianceEnforcement/G uidanceforIndustry/UCM113903.pdf. 
 
(2) Measures directly affecting exports 
(vi) Finance, insurance, and guarantees 
 
23.  Paragraph 155 of the Report by the Secretar iat indicates that the United States provides export 
financing through its official export credit agency,  the Export-Import Bank (Ex-Im Bank), which 
"accepts risks that the private sector is unwilli ng or unable to take."  However, its support is 
contingent upon a finding of "reasonable assurance of repayment."  Could the United States explain 
this idea of "reasonable assurance of repayment"? 
 
RESPONSE:   Ex-Im Bank is a self-sustaining instituti on in that it does not rely on government 
appropriations to fund its activities.  Rather, th e fees that Ex-Im Bank generates from its loan 
guarantee and insurance activities, and interest income from direct loans, are the source of its funding.  
Thus, for all of its lending programs, Ex-Im Bank expect s to be repaid.  At the same time, the role of 
Ex-Im Bank is to provide financing support when pr ivate sources are not available, or to counter 
foreign officially-supported competition.  And while  Ex-Im Bank expects to be repaid, it does have a 
slightly larger appetite for risk th an the private sector.  In this context, Ex-Im Bank prices to risk and 
structures transactions with credit enhancements in wa ys that minimize the risk as much as possible.  
Thus, the credit standard was coined, "reasonable assurance of repayment". 
 
Reasonable assurance of repayment in connection with corporate and financial institution risk 
(non-sovereign), at the practical level, involves the application of published credit standards for 
short-term and medium-term transactions, and the us e of comprehensive financial analysis and formal 
loan structuring for long-term project finance a nd transportation transactions.  The analysis Ex-Im 
Bank employs requires an evaluation of all of the pa rticipants in each transaction (lender, exporter, 
foreign buyer/guarantor). 
 
24.  Paragraph 158 of the Report by the Secretariat indi cates that in order to be eligible for financing 
from the Ex-Im Bank goods and services must "meet U.S. content requirements."  These are "not 
statutory requirements;  rather they reflect a concert ed attempt to balance the interests of labor and 
industry."  Could the United States clarify wheth er there is any type of regulation or explicit 
agreement establishing these "U.S. content requirements"? 
 
RESPONSE:   Ex-Im Bank is not subject to any statutory or regulatory requirements that dictate U.S. 
content.  
  WT/TPR/M/235/Add.1 
 Page 15 
 
 
 (vii) Promotion and marketing assistance 
 
25.  Paragraph 162 of th e Report by the Secretariat indicates th at the President has launched the 
"National Export Initiative," which includes measur es designed to improve access to trade finance, 
particularly for small and medium-sized companies, to strengthen promotion and marketing activities, 
and to ensure that U.S. companies have "free and fair" access to foreign markets.  What specific measures does this program include to achieve th ese goals and what requirements must companies 
meet in order to gain access to its benefits?  What criteria are used in this program to determine 
whether entry into a market is "free and fair"?  
 
RESPONSE:   The Administration remains committed to an international system that fosters free and 
fair trade overall.  The Export Promotion Cabi net has developed recommendations to address the 
eight priorities for the National Export Initiative set out in Executive Order 13534 on March 11, 2010.  
The recommendations cover all five components of the NEI -- access to credit, especially for small 
and midsize firms;  trade advocacy and export promotion efforts;  market access and removing 
barriers to the sale of U.S. goods and services abro ad;  enforcement of trade rules;  and pursuing 
policies that will increase global economic growth.  
Eight Priorities Identified in the NEI Executive Order 
Priority 1:  Exports by Small and Medium-Sized Enterprises (SMEs) Priority 2:  Federal Export Assistance 
Priority 3:  Trade Missions Priority 4:  Commercial Advocacy Priority 5:  Increasing Export Credit Priority 6:  Macroeconomic Rebalancing 
Priority 7:  Reducing Barriers to Trade 
Priority 8:  Export Promotion of Services  Regarding the measurement for the NEI's goal of doubl ing exports over five years, this means that 
total U.S. exports need to grow from $1.57 trillion in 2009 to $3.14 trillion by 2015.  For further information on the NEI priorities and recommendations, see the " Report To The President On The 
National Export Initiative:  The Export Promotion Cabinet's Plan For Doubling U.S. Exports In Five 
Years " issued in September 2010, which can be found at:  (http://www.whitehouse.gov/sites/default/ 
files/nei_report_9-16-10_full.pdf).  
(3) Other measures affecting trade and investments 
(i) Legal framework for companies and foreign investment regime  
26.  Paragraph 168 of the Repor t by the Secretariat notes that the Committee on Foreign Investment 
(CFIUS) has the authority to enter into "risk mitiga tion agreements" with the parties to a transaction, 
in order to address national security  risks.  This paragraph also indicates that the President may 
suspend or prohibit a covered transaction (mergers,  acquisitions, or takeovers that may result in 
foreign control over a person engaged in interstate commerce in the United States), when he believes 
that there is credible evidence that the foreign p erson exercising control over the U.S. company might 
take measures that impair national security.  Coul d the United States explain in greater detail what 
"risk mitigation agreements" consist of and specifically  what are the risks to "national security" that 
they address?  Could it indicate what type of meas ures could be seen as a threat to national security? 
 
RESPONSE:   The U.S. Treasury maintains a webpage  (http://www.ustreas.gov/offices/international-
affairs/cfius/) containing significant information about the Committee on Foreign Investment in the 
United States (CFIUS) and providing links to releva nt sources of law, as well as to the unclassified 
version of the annual reports that we are require d to provide to Congress.  The annual reports are 
available at:  http://www.ustreas.gov/offices/in ternational-affairs/cfius/reports.shtml. WT/TPR/M/235/Add.1 
Page 16 
 
 
 On pages 17-18 of the November 2009 annual report, you will find the following discussion: 
 
From 1997, when CFIUS first negotiated a mitigation measure in the context of a 
transaction notified under section 721, throug h 2008, CFIUS agencies entered into a 
total of 51 mitigation agreements with pr ivate parties.3 Mitigation measures have 
included a number of different types of legally binding undertakings.  These range from national security agreements (NSAs), wh ich are contracts that seek to address a 
number of perceived risks, to letters of  assurance, which are simpler documents 
appropriate for less complex cases or where the incremental risks posed by the 
transaction are relatively few and easier to mitigate. 
 
In 2008, CFIUS agencies negotiated, a nd parties entered into, two mitigation 
agreements related to two different cove red transactions.  Both mitigation measures 
were entered into after issuance of the Pr esident's January 23, 2008, Executive Order 
concerning CFIUS, which established the conditions under which CFIUS agencies 
may seek mitigation measures with respect to notified transactions. 
 
The USG agencies that are pa rties to these and earlier agreements use a variety of 
means to monitor and enforce compliance by the companies that are parties, 
including: 
 
• periodic reporting to USG agencies by the companies; 
• on-site compliance reviews by USG agencies; 
• third-party audits when provided for by the terms of the mitigation agreement;  and 
• investigations and remedial actions if  anomalies or breaches are discovered. 
 
In light of the number and complexity of mitigation agreements implemented to date, 
CFIUS agencies have taken a variety of acti ons to maximize their ability to monitor 
compliance, including: 
 
• increasing USG staffing levels and assigning sta ff responsibilities for monitoring compliance; 
• designing tracking systems to monitor required reports;  and 
• instituting internal instructions and procedures to  ensure that in-house expertise is drawn upon 
to analyze compliance with agreements. 
 With respect generally to the concept of "national security," please refer to th e official guidance that 
Treasury published on December 8, 2008, in the Federal Register  (and available on our webpage at:  
http://www.ustreas.gov/offices/international-affairs/cf ius/guidance.shtml), regarding the types of 
transactions that CFIUS has reviewed and that ha ve presented national security considerations.  The 
statute governing CFIUS requires CFIUS to review covered transactions notif ied to it "to determine 
the effects of the transaction[s] on the national secu rity of the United States," but does not define 
"national security," other than to note that the term includes issues relating to homeland security.  
Instead, the statute provides an illustrative list of fa ctors for CFIUS and the President to consider in 
assessing whether the transaction poses national security risks.  The guidance referenced above includes extensive di scussion of the types of transactions that CFIUS 
has reviewed and that have presented national securi ty considerations.  These transactions are divided 
into two major types, followed by discussion of each:  (1) transactions that have presented national 
security considerations because of the nature of the U.S.  Business over which control is being 
acquired and (2) transactions that have presented national security considerations because of the 
identity of the foreign person that is acquiring c ontrol of a U.S. business.  This discussion in the 
guidance is necessarily illustrative and does not purport to describe all national security considerations  WT/TPR/M/235/Add.1 
 Page 17 
 
 
 that CFIUS may identify and analyze in reviewing a transaction, however.  Furthermore, the fact that 
a transaction presents national security considera tions does not mean that CFIUS will necessarily 
determine that the transaction poses national secur ity risk, and the guidance does not identify the 
types of transactions that pose national security risk.  In addition, the guidance should not be 
interpreted to suggest that the U.S. Government encourages or discourages the types of transactions 
described in the guidance.  
27.  Paragraph 169 of the Report by the Secretaria t indicates that during the period under review the 
Treasury Department revised the regulations for implementing the activities of the Committee on 
Foreign Investment in the United States (CFIUS), the pur pose of which is to determine the effect of a 
transaction on the national security of the United St ates.  According to the Treasury Department, the 
revised regulations "increase clarity, reflect devel opments in business practices over the past several 
years and make additional improvements based on experien ce with the prior regulations."  Could the 
United States indicate what improvements have been made to the new regulations? 
 RESPONSE:   When the U.S. Treasury published the revised regulations in the Federal Register  on 
November 21, 2008, it included an explanatory section entitled "Discussi on of the Final Rule."  Please 
refer to that discussion for a very extensive, provision-by-provision explanation of the changes made by the revised regulations.  In addition,  the U.S. Treasury maintains a webpage 
(http://www.ustreas.gov/offices/international-affairs/cfiu s/) containing significant information about 
the Committee on Foreign Investment in the United States (CFIUS) and providing links to relevant 
sources of law, as well as to summaries of those sources of law.  A two-page summary of the revised CFIUS regulations issued by the U.S. Treasury in November 2008 is available at:  http://www.ustreas.gov/offices/international-affairs/cf ius/docs/Summary-FinalRegs.pdf.  It highlights 
many areas in which the regulations have provided helpful clarifications, so please refer to that 
document directly.  The summary also highlights numerous ways in which the revised regulations 
clarify how the review process works and ensures an efficient process. 
 
28.  Paragraph 171 of the Report by the Secretaria t indicates that transactions controlled by foreign 
governments and certain transactions that lead to foreign control of the "critical infrastructure" of the 
United States are subject to investigation, unless th e Secretary or Under Secret ary of the Treasury or 
any lead agency determines that the transaction wi ll not impair national security.  What are the 
criteria for determining whether a type of infrastr ucture is "critical"?  Could the United States 
provide concrete examples?  Could it indicate what changes the Treasury Department has made to 
the CFIUS procedures? 
 RESPONSE:   The revised CFIUS regulations, published in the Federal Register  on November 21, 
2008, define critical infrastructure as follows:  
"The term critical infrastructure means, in the context of a particular covered transaction, a system or asset, whether physical  or virtual, so vital to the United States 
that the incapacity or destruction of the pa rticular system or asset of the entity over 
which control is acquired pursuant to that covered transaction would have a 
debilitating impact on national security." 
 In addition, the "Discussion of the Final Rule" th at accompanied the publication of the revised CFIUS 
regulations provide the following discussi on of that provision of the regulations: 
 
"The Proposed Rule defined ''critical infrastru cture'' consistent with the definition of 
that term in section 721 and clarified th at, in determining whether a covered 
transaction involves critical infrastructur e, the Committee would consider the 
''particular'' systems or assets involved, rath er than defining certain classes of systems 
or assets as critical infrastructure.  Seve ral commenters expressed support for this WT/TPR/M/235/Add.1 
Page 18 
 
 
 approach.  Others suggested that the scope  of ''critical infrastructure'' be further 
illustrated by identifying infrastructure that would or would not be considered critical.  The Final Rule, at § 800.208, continues th e case-by-case approach of section 721 and 
the Proposed Rule towards identifying critical  infrastructure.  Under this approach, 
the Committee determines whether (1) a par ticular transaction notified to it is a 
''covered transaction,'' (2) that particular  covered transaction would result in foreign 
control of critical infrastructure of or within  the United States, and (3) that particular 
covered transaction has potential national security effects.  Accordingly, the 
definition of critical infrastructure turn s on the national security effects of any 
incapacity or destruction of the particular system or asset over which a foreign person 
would have control as a result of a covere d transaction.  Consistent with this 
approach, the Committee will not deem classes of systems or assets to be, or not to 
be, critical infrastructure." 
 29.  Paragraph 175 of the Report by the Secretaria t mentions that the United States applies additional 
requirements (independent of Article 721 of th e Defense Production Act of 1950 and the CFIUS) 
regarding the submission of information to forei gn investors who purchase agricultural land and on 
foreign investments in United Stat es companies covered by the Inter national Investment and Trade in 
Services Survey Act.  Could the United States sp ecify what these additional requirements are? 
 
RESPONSE:   The Agricultural Foreign Investment Di sclosure Act (AFIDA) became law in late 
1978.  The regulations, Part 781, Disclosure of Fore ign Investment in Agricultural Land were created 
to implement the AFIDA.  In particular, they we re created to establish a nationwide system for the 
collection of information pertaining to foreign owne rship in U.S. agricultural land.  The regulations 
require foreign investors who acquire, transfer or hol d an interest in U.S. agricultural land to report 
such holdings and transactions to the Secretary of Agriculture on an AFIDA Report Form FSA-153. 
 
(ii) State trading, state-owned enterprises, and privatization. 
 
30.  Paragraph 179 of the report indicates that, in  order to achieve certain public policy objectives, 
the Congress of the United States has created "go vernment corporations," which are defined as 
"corporations owned or controlled by the Governme nt of the United States."  What are the public 
policy objectives referred to in the report?  Specifica lly what government corporations operate in the 
United States;  what type of assistance do these corporations receive and in which sectors? 
 RESPONSE:   Paragraph 179 of the report refers to a fede ral statute, codified at 31 USC 9101, and to 
certain entities known as "government corporations" listed in that statute.  Contrary to the report, the 
statute does not define "government corporations " as "corporations owned or controlled by the 
Government of the United States" – that language w as taken from a different title of the U.S. Code.  
Also, 31 USC 9101 does not create the "government cor porations" listed therein.  Rather, the statute 
sets out budgeting and oversight rules that apply to specific entities, listed in the statute, that have 
been created by the federal government to fulfill specific public purposes.  For example, the statute 
applies to the Federal Home Loan Banks.  These are cooperatives that lending institutions use to 
finance housing and economic development in local communities.  A number of the entities listed in 
31 USC 9101 no longer exist.  For example, the Pe nnsylvania Avenue Development Corporation was 
created in 1973 for the purpose of redeveloping an area of Washington, D.C., and was dissolved in 
1996.  Further information on the statute referred to  in paragraph 179 of the report may be found at:  
http://uscode.house.gov/download/pls/31C91.txt.  
31.  Paragraph 180 of the Report by the Secret ariat notes that in addition to "government 
corporations" there are enterprises "sponsored" by th e government, which enjoy immunity from state 
taxes.  What is the specific definition of a go vernment sponsored ent erprise?  Why do these 
enterprises receive tax immunity?  WT/TPR/M/235/Add.1 
 Page 19 
 
 
 RESPONSE:   Congress chartered government-sponsored  enterprises (GSEs) to improve the 
workings of credit markets.  For the purpose of  budgetary treatment, Congress has defined the term 
"government-sponsored enterprise" in the Omnibus R econciliation Act of 1990 to refer to a corporate 
entity created by a law of the United States that — 
 
(A) (i) has a Federal charter authorized by law; 
(ii) is privately owned, as evidenced by capital stock owned by private entities or individuals; (iii) is under the direction of a board of directors, a majority of which is elected 
by private owners; 
(iv) is a financial institution with power to — (I) make loans or loan guarantees for limited purposes such as to provide 
credit for specific borrowers or one sector;  and (II) raise funds by borrowing (which does not carry the full faith and credit of the Federal Government) or to guara ntee the debt of others in unlimited 
amounts;  and 
(B) (i) does not exercise powers that are reserved to the Government as sovereign 
(such as the power to tax or to regulate interstate commerce); (ii) does not have the power to commit the Government financially (but it may be a recipient of a loan guarantee commitment made by the Government);  and 
(iii) has employees whose salaries and expenses ar e paid by the enterprise and are not Federal 
employees subject to title 5.2. 
 
(iii) Government procurement 
 
32.  Paragraph 186 of the Report by the Secretariat notes that the policy objective of federal government procurement is to ensure an open and competitive process, subject to certain preferences 
for domestic products.  In addition, in March 2009,  the President published a memorandum stating 
that it had been shown that federal agenci es had committed certain acts of "fraud, abuses, 
deficiencies in contract performance, and inade quate accountability for results."  What preferences 
are given to domestic products and what legal t exts establish these preferen ces?  How are these 
preferences compatible with the goal of promoting an "open and competitive" process?  What specific 
measures is the government taking or does it plan to take to ensure transparency or improve the 
management of federal agencies in terms to government procurement? 
 
RESPONSE:   The United States maintains various "buy American" requirements.  However, those 
requirements are generally waived with respect to  products of countries that are parties to the 
Agreement on Government Procurem ents and other U.S. trade agreements.  The United States 
complies with its international obligations with  respect to government procurement covered by 
international agreements.  For example, the Buy American Act is implemented through the Federal 
Acquisition Regulation (FAR) ( see www.acquisition.gov).  FAR part 25 addresses the Buy American 
Act and U.S. Federal procurements subject to obligations under interna tional agreements.  FAR 
section 25.001(b) provides that "The restrictions in the Buy American Act are not applicable in 
acquisitions subject to certain trade agreements."  See FAR 25.4.  As exemplified by the 
memorandum noted in Argentina's question, the Fe deral Government is continuously undertaking 
measures to ensure transparency and good practices in  its procurement.  For example, the Office of 
Management and Budget (OMB) has is sued a report on the results of the publication of the March 29, 
2009 Presidential memorandum.  See Report at:  http://www.whitehouse.gov/sites/default/files/omb/ 
assets/blog/Update _on_Contracting_Reforms.pdf.  OMB also issued several memoranda to address and increase agencies' use of competition.  See Memoranda at:  http://www.whitehouse.gov/omb/ 
procurement_ index_comp_contracting/.  WT/TPR/M/235/Add.1 
Page 20 
 
 
 33.  Paragraph 190 of the Report by  the Secretariat indicates that when developing their government 
contracting procedures government agencies may de viate from the Federal Acquisition Regulation 
(FAR) "when necessary to meet their specific needs and requirements."  To what type of "specific 
needs and requirements" does this refer?  Coul d the United States provide specific examples?  
 
RESPONSE:   The Office of Federal Procurement Policy Act  specifies the conditions for agency 
supplemental regulations as follows:  "(2) Any other regulations relating to procurement issued by an 
executive agency shall be limited to (A) regulati ons essential to implement Government-wide policies 
and procedures within the agency, and (B) additiona l policies and procedures required to satisfy the 
specific and unique needs of the agency."  (41 U.S.C. 421(c)(2)).  See also Federal Acquisition 
Regulation (FAR) Subpart 1.3 regarding agency s upplemental regulations and FAR Subpart 1.4 for 
Deviations from the FAR ( see http://www.acquisition.gov./).  With regard to FAR deviations that 
have been granted, see https://www.acquisition.gov/comp/caac/caacletters.htm. 
 34.  Paragraph 192 of the Report by the Secretariat notes that the American Recovery and Reinvestment Act (ARRA), enacted in  2009, contains two "buy Ameri can" provisions.  First, the 
Department of Homeland Security must purch ase textiles and apparel manufactured in the 
United States, with certain exceptions.  Second, a na tional preference is established for iron, steel, 
and manufactures produced in the United States and used  as construction materials in public works 
and buildings funded by the ARRA.  How are these prov isions consistent with  U.S. obligations under 
the WTO agreements? 
 
RESPONSE:   Both "buy American" provisions in the AR RA are implemented consistent with U.S. 
obligation under international agreements.  That m eans that those provisions do not apply to products 
from countries that are parties to the WTO Ag reement on Government Procurement or other 
international agreements that cover government procurement. 
 
35.  Paragraph 194 of the Report by the Secretaria t states that the "preferen ce margin for domestic 
goods under ARRA is higher than under the Buy American Act (BAA).  Thus, the overall level of restrictions on foreign products in federal proc urement funded by the ARRA is higher than that 
applied to most federal procurement not funded by  the ARRA, to the extent that procurement is not 
covered by the GPA or a relevant free trade agreemen t."  Could the United St ates provide data on the 
main goods and services that have benefited from the BAA over the last two years?  Could the 
United States explain what additional restric tions are applied to foreign products?  
 RESPONSE:   The Buy American Act does not apply to services, only to goods.  The United States 
does not have data on the main goods that have been subject to the Buy American Act.  The U.S. Government is generally prohibited from purchasi ng goods and services from countries that are not 
parties to the WTO Agreement on Government Pr ocurement or other agreements that cover 
government procurement.  
 36.  Paragraph 196 of the Report by  the Secretariat indicates that the procurement of supplies or the 
contracting of services valued at more than U S$3,000 and less that US$100,000 is reserved 
exclusively for small businesses, unless the procurin g entity determines that there is no "reasonable 
expectation of obtaining two or more responsible small business concerns that are competitive in 
terms of market prices, quality, and delivery. "  Procurement of more than US$100,000 must be 
reserved for small businesses when th ere is a reasonable expectation that  offers will be received from 
at least two companies and that awar ds will be made at "fair market price."  What criteria are used to 
determine whether a company is "competitive in term s of market prices, quality, and distribution" and 
to determine "fair market" price?  
RESPONSE:   There are no specific criteria that must be used to determine whether two or more 
responsible small business concerns that may subm it an offer are competitiv e in terms of market  WT/TPR/M/235/Add.1 
 Page 21 
 
 
 prices, quality, and delivery.  The Federal Acqui sition Regulation states with respect to the 
determination of whether a small business set aside is  required:  "Although past acquisition history of 
an item or similar items is always important, it is not  the only factor to be considered in determining 
whether a reasonable expectation [of receiving two o ffers and award made at fair market price] 
exists."  FAR 19.502-2(b)(2).  The FAR also requires the contracting officer to utilize techniques for 
conducting market research that include the following (FAR 10.002(b)(2)):   (i) Contacting knowledgeable individuals in Government and industry regarding market 
 capabilities to meet requirements. 
 (ii) Reviewing the results of recent market r esearch undertaken to meet similar or identical 
 requirements.  (iii) Publishing formal requests for information in appropriate technical or scientific journals 
 or business publications.  (iv) Querying the Government-wide database of  contracts and other procurement instruments 
 intended for use by multiple agencies and othe r Government and commercial databases that 
 provide information relevant to agency acquisitions. 
 (v) Participating in interactive, on-line co mmunication among industry , acquisition personnel, 
and customers. 
 (vi) Obtaining source lists of similar items fro m other contracting activities or agencies, trade 
associations or other sources. 
 (vii) Reviewing catalogs and other generally  available product literature published by 
manufacturers, distributors, and dealers or available on-line. 
 (viii) Conducting interchange meetings or holding presolicitation conferences to involve 
 potential offerors early in the acquisition process.  
FAR 15.404 and FAR 19 set out methods that contracti ng offers may use to evaluate cost or price.  
The U.S. Government Accountability Office (GAO ) has also addressed evaluation issues.  For 
example, it equated "fair market price" with pri ce reasonableness in the context of a small business 
set-aside.  See American Imaging Servs
., B–238969, B–238971, July 19, 1990, 90–2 CPD 51 at 2. 
 
(IV) Subsidies and other government assistance 
(a) General features  
37.  Paragraph 199 of the Report by the Secretar iat indicates that government assistance to 
businesses is provided at the federal, state, and local level and the main instruments of support 
include "direct payments."  Could the United States provide statistical information on direct payments 
over the last two years, broken down by wh ich sectors received them and in what amounts? 
 
RESPONSE:   The latest U.S. subsidy notification (G/SCM/N/186/USA) describes the nature and 
amount of incentives provided under the programs notified.  
38.  Paragraph 203 of the Report by the Secretariat indicates that the most important series of fiscal 
stimulus measures taken to combat the economic  and financial crisis was the "American Recovery 
and Reinvestment Act of 2009 (ARRA)", the cost of wh ich was estimated at US$787 billion for fiscal 
years 2009-2019."  Could the United States provide st atistical information on which sectors benefited 
from the ARRA for 2008 and 2009? 
 RESPONSE:  Precise statistical information as to the distri bution of funds by sector is not available.  
As noted in the Secretariat's report, the appropriate d funds under ARRA cover a ten-year period.  One 
overview of the funding (http://www.recovery .gov/) provides the following breakdown: 
 
Tax benefits (mostly to individuals):  $288 billion 
Contracts, Grants, Loans:   $275 billion WT/TPR/M/235/Add.1 
Page 22 
 
 
 Entitlements:     $224 billion 
 
Funding of various clean energy initiatives is one  of the dominant forms of focussed spending under 
ARRA.  One summary of clean energy spending under ARRA provided in a report by the Council of 
Economic Advisors (April 2010) lists the following appropriations by category: 
   Energy Efficiency:    $19.9 billion   Renewable Generation:    $26.6 billion 
  Grid Modernization:    $10.5 billion 
  Advanced Vehicles and Fuels:   $6.1 billion   Transit and High-Speed Rail:   $18.1 billion   Carbon Capture and Sequestration:  $3.4 billion   Green Innovation and Job Training:  $3.5 billion   Clean Energy Equipment Manufacturing: $1.6 billion 
  Other:      $0.4 billion 
  Total:      $90.2 billion  (See, www.whitehouse.gov/sites/default/files/imag e/arra_%20and_clean_ene rgy_transformation_3Q_ 
supplement.pdf.)  
 
(v) Trade related intellectual property rights 
 
39.  Paragraph 217 of the Report by the Secretariat mentions that the Intellectual Property Rights Act 
(PRO-IP) of 2008 has undergone some changes during the period under review.  Could the United States indicate what these changes were? 
 
RESPONSE:  The Prioritizing Resources and Organizati on for Intellectual Property Act (PRO-IP 
Act) was signed into law on October 13, 2008.  Among other things, the Act created the position of 
the IPEC and placed it within the Executive Offi ce of the President.  President Barack Obama 
nominated Victoria A. Espinel as the first IPEC  on September 25, 2009, a nd the Senate confirmed 
Ms Espinel on December 4, 2009.  The Admini stration placed the IPEC within the Office of 
Management and Budget ("OMB"), in the Executive Office of the President.  The IPEC submitted the 
first Joint Strategic Plan, titled the 2010 Joint Strate gic Plan on Intellectual Property Enforcement, to 
Congress on behalf of the interagency comm ittee which she chairs, on June 22, 2010. 
 IV.  DEVELOPMENTS IN SELECTED SECTORS (1) Agriculture 
 
40.  With respect to paragraph 3 of the Report by th e Secretariat, could the United States explain how 
support for production and trade affects world prices just as a high tariff would do?  
 RESPONSE:  We recognize that trade-distorting domestic supports are one of the areas that can 
affect agricultural markets.  However, cuts in such supports alone won't lead to reform in global 
agricultural markets.  Economic studies converge in  concluding that import barriers -- not domestic 
subsidies -- represent the lion's share of the distortions in global agricultural markets.  
 
Why are agricultural market access barriers much more significant than domestic subsidies in 
distorting agricultural markets?  The degree of a de veloped country's support to its agriculture sector 
that is provided through market access barriers is  much higher than the support provided by domestic 
subsidies, and even more so in developing countr ies.  Economists estimate that more than 80-90 per 
cent of total global support is provided by market access barriers.  Trade barriers distort both production and
 consumption because they directly affect producer and consumer prices.  Domestic 
subsidies may affect production in some cases by  providing incentives to increase production, but as  WT/TPR/M/235/Add.1 
 Page 23 
 
 
 many of these programs do not directly affect consumer prices, the impact on world agricultural 
markets is much less.  Market access barriers are much more prevalent across countries and 
commodities, and hence generate larger costs to the world trading system than do domestic support 
measures. 
 
The mandate for the WTO Doha Development Agenda negotiations calls for subs tantial reductions in 
trade-distorting domestic support.  However, the manda te also calls for these cuts to be accompanied 
by substantial improvements in market access;  a nd reductions of, with a view to phasing out, all 
forms of export subsidies. 
 
41.  Regarding paragraph 4 of the Report by the Secretariat, how did the United States report its 
Farm Act?  Was it reported in its entirety as a domestic support measure?  Or was it reported in 
sections according to whether it is an Amber Box, Blue Box, or Green  Box measure?  If the latter, 
could the United States explain what criteria were  used to divide the programs for reporting 
purposes?  
 
RESPONSE:  The United States reports measures from the Farm Bill that are in support of its 
producers in accordance with Article 6 and Annex 2 of the WTO Agreement on Agriculture (AoA).  
The Farm Bill contains some provisions which are not related to support of producers and do not fall 
within the notification requirements for domestic su pports under the AoA.  The United States reports 
programs that support producers as amber, blue or green box in accordance with the criteria 
specifically agreed to under the program for each  box.  The United States currently does not have 
programs that meet the blue box criteria in the Ao A, and thus has only notified those measures that 
have been green or amber.  42.  According to paragraph 31 of the Report by the Secretariat, the United States grants loans for emergency situations.  How does the authority det ermine that the application of a sanitary or 
phytosanitary measure to a specific product qualifies it for access to emergency loans?  
 
RESPONSE:  Farms qualify for Emergency loans related to  a sanitary or phytosanitary measure only 
if they have been placed under quarantine and t hus are not allowed to ship or sell product (and 
sometimes must destroy product).  These loans are av ailable to help deal with the losses related to 
complying with domestic quarantine measures.  The se are not related to sanitary or phytosanitary 
measures in other countries.  
 
43.  Paragraph 42 of the Report by the Secretaria t notes that the United States has tariffs ranging 
from 250 per cent to 0 per cent for agricultural pro ducts.  Could the United States indicate whether it 
plans to reduce this tariff spread?  How?  
 
RESPONSE:  The United States has no current plans to unila terally change its MFN tariffs or tariff 
quotas.  The United States would, of course, make  any required changes pursuant to an agreement 
under the Doha Development Agenda. 
 
44.  Paragraph 43 of the Report by the Secretaria t indicates that the quotas for cotton and dairy 
products have rarely been used.  Could the United St ates indicate whether it plans to eliminate the 
quantitative restrictions for these sectors?  
RESPONSE:  The United States has no current plans to unilaterally change its tariff quotas for cotton 
or dairy products.  The United States would, of course, make any required changes pursuant to an agreement under the Doha  Development Agenda. 
 
45.  Paragraphs 45 and 46 of the Report by the Se cretariat note that the United States has reserved 
the right to apply the special agricultural safeguard to products for which tariff rate quotas are also WT/TPR/M/235/Add.1 
Page 24 
 
 
 used.  Paragraph 46 of the Report by the Secretaria t also notes that the quantity-based safeguard has 
not been used since 2003, but that the price-based  safeguard has been used much more frequently.  
Could the United States indicate on which products th e safeguard has been most frequently used and 
provide 2009 data on the use of this safeguard?  
RESPONSE:  The United States refers Argentina to G/AG/N/USA/74. 
 
46.  Regarding domestic support, could the U.S.  tell us when it will submit pending notices on 
domestic support granted since 2008?  
 
RESPONSE:  The United States submitted its domestic support notification for the 2008 crop year on 
September 16, 2010.  Full data is not yet available for the 2009 crop year.  
47.  The U.S. has reported certain programs as not product specific.  Thus, instead of being included 
in the amber box, they are classified under non-pr oduct-specific de minimis support.  Could the 
United States explain why certain programs include d in recent years' reports that clearly do not 
benefit all products, such as the "Countercyclical pay ments," "Crop and revenue insurance subsidized 
by the Federal Crop Insurance," and "Net Fed eral budget outlays for grazing livestock on Federal 
Land" programs are not classified as product spec ific programs?  Shouldn't they be added to the 
amount used in the amber box, if they cannot be classified in the specific de minimis support for 
certain products? 
 
RESPONSE:  The programs that are notified as non-pro duct specific are so notified because they 
cannot be ascribed to a particular product.  Howe ver, we have notified these programs as amber box – 
so it is incorrect to say we are excluding them fro m amber box consideration.  In many years, the 
actual level of support for these is below the 5 per cent de minimis  level, so we do not include the 
support provided by these programs in our final AM S figure – consistent with WTO Agreement on 
Agriculture criteria.  We have explained this in de tail in other answers, particularly in the Committee 
on Agriculture.  48.  Could the United States repor t on 2008 Farm Act programs currently in effect that are not 
product specific? 
 
RESPONSE:  The United States refers Argentina to th e 2008 domestic support notification which the 
Secretariat is expected to post shortly. 
 
49.  Regarding the dairy product price support prog ram in the 2008 Farm Act, the price support 
program was modified.  The CCC will now purchase ce rtain products at minimum prices (in dollars 
per pound):  Butter:  1.05;  block cheddar cheese, 1.13;  barrel cheddar cheese, 1.10;  and non-fat 
dry milk:  0.80.  How will this price support be ca lculated?  Could the United States report on eligible 
production since 2008?  Could it confirm that this pr ice support, despite being limited to certain dairy 
products, benefits all milk producers in the U.S.?  
 
RESPONSE:  The United States refers Argentina to th e 2008 domestic support notification which the 
Secretariat is expected to post shortly.  50.  According to information in the press, payments will soon be author ized for agricultural 
disasters, apparently for 1.5 billion dollars and this will be done "administratively."  Could the 
United States report on the authorization for this?  If approved, could the United States confirm that 
these payments are actually justified by farm ers' losses and are unrelated to the upcoming 
Congressional elections, as suggested by some press reports?  
  WT/TPR/M/235/Add.1 
 Page 25 
 
 
 RESPONSE:  Irrespective of the source of funding for disast er payments for agricultural producers - 
whether under 2008 Farm Bill "permanent" disaster  programs, or other "ad hoc" programs or 
legislation, the United States will notify such paym ents accordingly and appropriately in line with 
criteria found in the Agreement on Agriculture. 
 
51.  Regarding green box direct payments – payment s separate from paragraph 6 of Annex 2 of the 
Agreement on Agriculture, could the United States re port on the updating of the base periods since 
1995?  Could it explain the consistency of th ese updates with the requirement under paragraph 6, 
subparagraph (a) of Annex 2 of the Agreement on Ag riculture that the base period be defined and 
fixed?  
 
RESPONSE:  The 1996 Farm Bill allowed producers to establish base acres for purposes of 
payments under the Agricultural Market Transition Ac t.  The base acres were  based on participation 
in farm programs between 1991-1995.  In the 2002 Farm Bill, producers with base acres who desired 
to add oilseeds to their base were allowed to up date base acres and yields, for purposes of payments 
under the 2002 Farm Bill.  Approximately one-third of enrolled producers updated their base acres.  
The eligibility for payments under both the 1996 an d 2002 Farm Bills was determined by a clearly 
defined and fixed base period, as specified in the le gislation.  No changes were made in the 2008 
Farm Bill.  Export competition – Food aid: 
 
52.  Paragraph 25 of the Report by the Secretariat indicates that the objectives of the Agricultural 
Trade Development and Assistance Act of 1954 (P.L. 480) include to "expand international trade".  
Could the United States confirm that this food aid includes trade objectives? 
 
RESPONSE:  In 2008, the United States implemented a new Farm Bill that renamed the Agricultural 
Trade Development and Assistance Act of 1954 to the Food for Peace Act.  The new law includes a 
provision to use resources to expand international tr ade without any reference to the source of the 
trade.  Authorities for five U.S. food aid programs are included in the Food for Peace Act, and the objectives for each program focus on items such as improving food security, addressing famine and 
food crises, expanding economic development, and meeting nutritional gaps.  There are no trade 
objectives listed in the authorities of the individual programs.  53.  Could the United States confirm that what is described in paragraph 26 of the Report by the 
Secretariat is concrete evidence of the commerc ial purpose of the Act authorizing food aid?  
 
RESPONSE:  We disagree with the assertion by Argentin a that paragraph 26 provides concrete 
evidence of the commercial purposes of  the Act authorizing food aid.  Paragraph 26 or the 
Secretariat's Report merely states that most food aid is provided as "in-kind" vs. as "cash," that some consider cash donations more efficient, and that th e U.S. GAO considers U.S. food aid could be made 
more efficient by relaxing shipping restrictions .  It says nothing about any commercial purposes 
underlying the Act. 
 
54.  Could the United States report on the implementa tion status of the Food for Peace Act of May 22, 
2008 (P.L. 110-246)? 
 RESPONSE:  The United States is implementing the law.  
 
Could the United States confirm that this Act also defines U.S. policy on food aid based on trade 
goals, as recognized in paragraph 3 of section 2 (7.  U.S.C. 1691) which reads "expand international 
trade"?  
 WT/TPR/M/235/Add.1 
Page 26 
 
 
 RESPONSE:  In 2008, the United States implemented a new Farm Bill that renamed the Agricultural 
Trade Development and Assistance Act of 1954 to the Food for Peace Act.  The new law includes a 
provision to use resources to expand international tr ade without any reference to the source of the 
trade.  Authorities for five U.S. food aid programs are included in the Food for Peace Act, and the 
objectives for each program focus on items such as improving food security, addressing famine and food crises, expanding economic development, and meeting nutritional gaps.  There are no trade 
objectives listed in the authorities of the individual programs.  Could the United States explain how all these provisi ons are consistent with what is proposed with 
regard to food aid in the Draft Modalities for Agriculture of the Doha Round (TN/AG/W/4/Rev.4), 
particularly paragraph 2(c) [sic --2(d)] of Annex L (no linkage with donor country's market 
development objectives)?  
 
RESPONSE:   Once the results of the Doha negotiations come into force, the United States will abide 
by the new commitments on food aid. 
 
(2) Financial Services 
(iii) Policy actions in response to the crisis 
 
55.  Paragraphs 64 and 65 of the Report by th e Secretariat describe the financial-sector measures 
taken.  Could the United States report whether assi stance has been provided to credit institutions 
linked to the export sector?  
 
RESPONSE:   The U.S. Government has provided no such assistance. 
 56.  Section IV.2(iii) of the Report by the Secretaria t on Financial Services refers to "policy actions in 
response to the crisis."  According to the report,  the measures that have been adopted are guarantees 
of bank liabilities;  retail deposit guarantees;  central bank assistance measures;  bank recapitalization through equity investments by private investors and Government;  open market or 
negotiated acquisitions of illiquid or otherwi se undesirable assets from weakened financial 
institutions;  and assistance to individual financial institutions.  
Certain international institutions have stated that  some of these measures may cause distortions in 
competitive conditions, including the risk of moral ha zard.  For example, the OECD has stated that 
the guarantees given to financial services providers have had profound effects on prices and the 
demand for secured and unsecured investment alternati ves.  In addition, given that the guarantees 
have been granted to large banks, those banks have benefited as compared to smaller banks.  In 
addition, the OECD has concluded that measures of  this type have distorted equitable competitive 
conditions among financial institutions that compete internationally.
2 
 
Could the United States indicate what other eff ects the measures adopted in response to the crisis 
have had on competitive conditions on trade in financial services?  
 
RESPONSE:   Key measures and their effects on competitive conditions in markets include: 
 Starting in August 2007, banks became increasing ly reluctant to lend to each other and began 
charging unusually high interest rates.  In response,  the Federal Reserve incr eased the availability of 
one- and three-month discount-window loans to banks.  
                                                     
 
2 "Expanded Guarantees for Banks:  Benefits, Costs, and Exit Issues", by Sebastian Schich, OECD 
Journal:  Financial Market Trends, Volume 2009 - Issue 2, 2010.  WT/TPR/M/235/Add.1 
 Page 27 
 
 
 In March 2008, the Federal Reserve created two pr ograms to provide short-term secured loans to 
primary dealers similar to discount-window loans provided to banks.  Conditions in these markets 
improved considerably in 2009. On October 14, 2008, the U.S. government announ ced a series of initiatives to strengthen market 
stability, improve the strength of financial instituti ons, and enhance market liquidity utilizing up to 
$750 billion in budgetary authority.  Additiona lly the Federal Deposit Insurance Corporation's 
instituted the Temporary Liquidity Guarantee Pr ogram.  The effect was to stabilize markets. 
 In the fall of 2008, the Federal Reserve provided secu red loans to institutions in the commercial paper 
market, ensuring that adequate funding was availabl e.  Since then, rates on commercial paper have 
fallen to low levels and these markets are once again functioning well.  The Federal Open Market Committee (FOMC) slashed its target for the federal funds rate over the 
course of more than a year, bringing it nearly to zero by December 2008.  Also, in response to a freeze in securitization markets, the Federal Reserve and the Treasury Department began a program that 
provides credit to institutions that securitize loan s.  Since then, issuan ce in these markets has 
gradually returned and rates on these securities have come down. 
 In the spring of 2009, the Federal Reserve, in conjunction with other fede ral regulatory agencies, 
conducted an exhaustive and unpreced ented review of the financial condition of the 19 largest U.S. 
banks.  These and other measures resulted, by th e second half of 2009, in competitive conditions 
improving with the 3-month LIBOR/OIS spread narrowing back to pre-crisis levels and the return of 
economic growth.  
(iv) Financial regulatory reform 
 
57.  Paragraph 69 of the Report by the Secretaria t refers to the U.S. government's "comprehensive 
financial regulatory reform proposal aimed at add ressing the regulatory gaps that resulted in the 
financial crisis."  Paragraph 70 of the Report by the Secretariat mentions that one of the five key 
objectives is to "raise international regulatory st andards and improve intern ational cooperation."  
Could the United States provide details regarding the se measures?  In particular, what does "raising 
international regulatory standards" mean?  
 
RESPONSE:  For example, the Dodd-Frank Act requires st ronger capital requirements for banks.  
This is consistent with Basel III which calls for a significant increase in the amount of common equity 
banks must maintain to absorb losses, from 2 per cent to 7 per cent.  This is an important achievement 
that will reduce the likelihood of future financial syst em problems -- a shared international objective.  
The United States supports the Basel Committee's wo rk and looks forward to reviewing the full 
package of reforms that the Basel Committ ee will send to the G-20 Leaders at Seoul. WT/TPR/M/235/Add.1 
Page 28 
 
 
 ASSOCIATION OF SOUTHEAST ASIAN NATIONS (ASEAN) 
 
Question 1:  
The report done by the WTO Secretaria t mentions the Trade Adjustment 
Assistance programme being administered by th e U.S., the expanded version of which accords 
benefits to service sector workers and firms that reloc ate outside the U.S..  Could the U.S. elaborate 
on how this has benefited or contributed to internat ional trade?  How, and to what degree, has the 
programme been successful? 
 
RESPONSE:   The Trade Adjustment Assistance program is part of the Obama Administration's 
policy to ensure that the benefits of international trade are shared more broadly, which is part of 
building domestic consensus for new trade initiatives.  By providing training and assistance to those 
adversely affected by foreign trade, workers and firms are better prepared to address challenges and 
take advantage of opportunities in the internationa l marketplace.  The service sector aspects of the 
reauthorized TAA program have not been in operati on long enough to evaluate impacts or benefits.  
The following overview provides basic information on the expanded TAA programs, including a summary of the numbers of workers covered by TAA certifications.  
TAA Program Overview 
 
Working with Congress, the President was able to sign into law the Trade and Globalization 
Adjustment Assistance Act of 2009 (TGAAA), as part of the American Recovery and Reinvestment Act of 2009.  The TGAAA reauthorized Trade Ad justment Assist ance (TAA) programs;  expanded 
TAA coverage to more workers and firms, including  workers and firms in the service sectors for the 
first time;  made benefits available to workers whose jobs have been sent "off-shore" to another 
country (as opposed to covering a more limited set of shifts in production);  improved workers' 
training options;  and increased the afford ability of health in surance coverage. 
 
Workers 
 In FY 2009, the U.S. Department of Labor's Employment and Training Administration (ETA) 
administered two separate TAA laws—the program implemented by the Trade and Globalization Adjustment Assistance Act of 2009 (TGAAA) that went  into effect for petitions filed on or after May 
18, 2009 (new program), and the TAA program that was administered under the Trade Act as amended by the TAA Reform Act of 2002,  which existed before May 18, 2009. 
 
The TGAAA had a major impact on the administration of the TAA program.  In FY 2009, TAA petition filings increased by 104 per cent over FY 20 08.  More specifically, from May 2009 thru July 
2009, TAA petition filing increased by 288 per cent as compared with the same period of the previous 
year.  In March 2009, TAA petitioners were given the option of withdrawing previously filed TAA 
petitions and re-filing on or after Ma y 18, 2009, in order to take advantage of the expanded TAA 
program.  This resulted in a large number of TA A petitions being withdrawn and classified as 
terminated prior to May 18, 2009, and a corres ponding large number of re-filed TAA petitions on or 
shortly after May 18, 2009.  In FY 2009, ETA estimated the number of workers covered by TAA certifications was 201,053.  This 
represents a 58.7 per cent increase over FY 2008, when  126,633 estimated workers were covered.  In 
FY 2009, 80 per cent of the determinations issued we re certifications (excl uding terminations).  In 
FY 2009, the manufacturing sector had the greatest estimated number of TAA certified workers with 183,813 workers;  6,764 workers in the professional, scientific and technical services;  3,001 in administrative and support and waste management and remediation services, and 2,061 in and 
transportation and warehousing.  Agriculture, forest ry, fishing and hunting ha d 172 workers estimated  WT/TPR/M/235/Add.1 
 Page 29 
 
 
 to be covered by certifications.  (More inform ation on TAA for Workers is available at:  
http://www.doleta.gov/tradeact/ChangesFAQ.cfm#3.)  
Firms 
 
The American Recovery and Reinvestment Act (ARRA ) of 2009 also reauthorized and modified the 
Trade Adjustment Assistance (TAA) for Firms program  a t  t h e  U . S .  D e p a r t m e n t  o f  C o m m e r c e .   I n  
addition to technical changes to eligibility criteri a for the review of Petitions for Eligibility, the 
legislation expanded the potential pool of clients significantly by allowing "service" industry firms the 
opportunity to apply for TAA.  Trade Adjustment Assistance for Firms (TAA) provides financial 
assistance to manufacturers
 affected by import competition.  Sponsored by the U.S. Department of 
Commerce, this cost sharing federal assistance program pays for half the cost of consultants or industry-specific experts for projects
 that improve a manufacturer's competitiveness.  (More 
information on TAA for Firms is available at:  http://www.taacenters.org/)  
Question 2: 
The fiscal stimulus packages adopted by the U.S. to stabilize consumption and investment, and to help 
the U.S. economy recover from the economic and  financial crisis, included the ARRA (American 
Recovery and Reinvestment Act of 2009).  The cost of this package runs th rough to 2019.  Will the 
components of this package also be disbursed through to 2019?  At present, the sectors benefiting 
from the package are the automotive, energy, agr iculture, and financial services sectors.  Are there 
any other specific sectors that the pa ckage is planned to be used for? 
 
RESPONSE:  The American Recovery and Reinvestment  Act ("Recovery Act") has budgetary 
impact between fiscal years 2009 and 2019.  A ccording to the original calculation from the 
Congressional Budget Office, the total budgetary imp act of the Recovery Act over that period will 
amount to $787 billion.  However, this impact is not evenly distributed over the entire period.  
According to the most recent CBO report, pub lished in August 2010, roughly 70 per cent of the 
Recovery Act's budgetary impact will have been reali zed by the end of fiscal year 2010.  In fact, the 
Recovery Act specifies "All funds appropriated in this Act shall remain available for obligation until 
September 30, 2010, unless expressl y provided otherwise in this Act."  As such, while many 
Recovery Act projects in areas such as next-genera tion infrastructure, transportation, clean energy and 
broadband will continue work for years to come, the vast majority of the funds will be committed and 
disbursed well before 2019.  Through the various tax relief and direct spending programs, the Recovery Act is designed to address 
a wide variety of issues and sectors in the Amer ican economy.  These include education, housing, 
energy, healthcare, science and technology, trans portation, agriculture, environmental protection, 
infrastructure, defense and security, and crime prevention, among others.  WT/TPR/M/235/Add.1 
Page 30 
 
 
 AUSTRALIA 
 
WTO SECRETARIAT REPORT 
IV. DEVELOPMENTS IN SELECTED SECTORS 
(II) Agriculture Policies  Paragraph 5 provides information on  the United States trade distorting support to its farmers.  Could 
the United States please indicate what reform measures it is considering as part of deliberations for 
the next Farm Bill? 
 
RESPONSE:  The U.S. Congress writes the Farm Bill and has begun to hold hearings across the 
country in anticipation of the 2012 Farm Bill.  Be fore it begins official deliberations on specific 
language, as usual Congress is first seeking input from  a variety of stakeholders and constituents.  
One item that has often been mentioned by producers gr oups in hearings thus far, is the need for less 
complex programs, particularly with resp ect to crop and revenue assurance programs. 
 
III. TRADE POLICIES AND PRACTICES BY MEASURE 
(1) Measures Directly Affecting Imports  
The Foreign Manufacturers Legal Accountability Act, currently pending before Congress, would 
require manufacturers of certain products imported into the U.S. to establish a registered agent in the 
U.S. to accept service of process on their beha lf.  This legislation would impose an additional and 
costly burden on foreign manufacturers.  Is  the U.S. considering less burdensome and 
trade-restrictive alternatives to this legislation? 
 RESPONSE:  The proposed Foreign Manufacturers Legal Ac countability Act, as reflected in bills 
pending before the U.S. Congress, reflects a desire to ensure that consumer s in the United States can 
be confident that the products they buy are safe a nd that there are procedures available under U.S. law 
to address effectively any product liability issues th ey may engender.  The United States believes 
these goals can be accomplished without imposing undue burdens on foreign manufacturers.  The 
FMLAA is still pending before Congress.  We are not in a position to speculate on the implications of 
particular provisions which are subject to further review and possible modification in the United States Congress. 
AUSTRALIA SUBSEQUENT QUESTIONS 
 
WTO SECRETARIAT REPORT GENERAL 
 
1. The U.S. is the world's largest producer of a number of agricultural products including milk 
(p.80).  It is the world's third largest producer of sugar beet (p.80).  On the other hand, agriculture 
tends to have the highest tariffs of all products in the U.S., and within agriculture the highest tariffs 
are for tobacco, dairy, corn and sugar (p.26, paragraph 32).  
• Can the U.S. explain the market conditions which it considered necessitated the provision of 
high levels of support to m ilk and sugar producers in the period 2004-08 (p.93)? 
 RESPONSE:  Paragraph 32 does not reference corn;  the U. S. applies tariffs of 0.05 cents/kg or 0.25 
cents/kg on corn.  The U.S. Intern ational Trade Commission estimates the ad valorem equivalents for 
these specific rates to be less than 1 per cent.  Su pport to the dairy and sugar industries, as provided 
for in U.S. legislation, has been long standing.  
  WT/TPR/M/235/Add.1 
 Page 31 
 
 
 • As one of the world's biggest producers of s ugar and dairy, why are high tariff barriers and 
farm payments used to protect such large a nd robust sectors?  Are these sectors competitive in 
the global agriculture market? 
 RESPONSE:  Support to the dairy and sugar industries, as provided for in U.S. legislation, has been 
long standing.  Dairy exports are a growing com ponent of the dairy sector.  Domestic sugar cannot 
meet demand and imports are a large component of domestic consumption.  
 
2. High tariff barriers and farm payments disconnect domestic U.S. producers from 
international competition and erode productivity? 
 
• What is the rationale for maintaining these polic ies in light of the disadvantages they pose to 
U.S. producers? 
 
RESPONSE:  The United States points out that the TPR re port shows that the United States has one 
of the lowest levels of support a nd similarly one of the lowest aver age tariff levels for agricultural 
products among WTO members.  The United States  has been a strong advocate of the multilateral 
reduction of tariffs and domestic support in the DDA,  and stands ready to join members in advancing 
these negotiations that can benefit producers across all sectors.  
OVERVIEW 
 
3. The report notes on page ix (paragraph 15) that  U.S. support for agriculture is low in relative 
terms compared to other OECD members but high in absolute terms.  Such support is also 
concentrated in a small number of sectors includi ng sugar, dairy, and cotton.  The OECD also notes 
that 'the new 2008 Farm Act did not address reforms to the milk and sugar sectors, which continue to 
receive high price support;  there is potential to reform and simplify commodity programmes.' 
 
• Given the large size of the U.S. agriculture sector , does the U.S. acknowledge that its support 
programs can have a negative impact on world market s, particularly given the narrow focus of 
these support programs on a select number of sectors? 
 
RESPONSE:  Support and protection around the world can affect world prices, although we again 
note that analysis by international institutions s hows that the greatest gains from trade will not come 
from further disciplines on domestic support but instead  will come from reductions in the high levels 
of tariffs and trade protection that many countri es have, especially in large advanced developing 
economies.  The United States has been a strong advocate of continued reform of the global 
agricultural trading system, involving the multilate ral reduction of tariffs and domestic support and 
elimination of agricultural export subsidies, and sta nds ready to join members in advancing the Doha 
negotiations that can benefit producers across all agricultural sectors. 
 
• What are the prospects for reform of support programs in the dairy and sugar sectors, and of 
commodity programs more broadly? 
 
RESPONSE:  The U.S. Congress writes the Farm Bill and has begun to hold hearings across the 
country in anticipation of the 2012 Farm Bill.  C ongress has received input supplied from agricultural 
producers regarding the next Farm Bill and we note that some groups have been considering possible 
changes in U.S. farm programs which have been sh ared with the Congress.  We are not in a position 
to speculate on the final content of the 2012 Farm Bill.  
4. The Report (page xi, paragraph 15) also states that while 'most of the support under the 2008 
Farm Bill is for nutrition programs for low income families and a large portion of the funding that is WT/TPR/M/235/Add.1 
Page 32 
 
 
 for farmers is decoupled from productio n and that of the support that rem ains, most is linked to prices 
and/or production'.  In 2007, the U.S. notified over US$5 billion of market price support for dairy, 
which was 14 per cent of the value of dairy production.   The Secretariat has noted that 'the large size 
of the agricultural sector means that the absolute amount of support is considerable and can affect 
world prices.' 
 
• What was the total value of dairy support provided in 2008 and 2009? 
 
RESPONSE:  The United States submitted its domestic support notification for the 2008 crop year on 
September 16, 2010.  In it, dairy support was approximately  $3.9 billion or 11 per cent of the value of 
dairy production.  Our 2009 domestic support notifica tion cannot be prepared until we have the full 
data sets, which are not yet available.  
 
• What are the prospects for reform of the support programs for dairy producers, to provide 
measures that are less trade and production distorting? 
 
RESPONSE:  The U.S. Congress writes the Farm Bill and has begun to hold hearings across the 
country in anticipation of the 2012 Farm Bill.  We  note that the National Milk Producers Federation 
has been considering possible changes in U.S. farm  programs and has shared its views with Congress.  
We are not in a position to speculate on the final content of the 2012 Farm Bill.  III TRADE POLICIES AND PRACTICES BY MEASURE (1) MEASURES DIRECTLY AFFECTING IMPORTS (iv) Tariffs 
 
5. We note in paragraph 31 that agricultural ta riffs, including ad-valorem equivalent rates of 
specific and compound tariffs amounted to an average of 4.8 per cent in 2009 , the same as in 2007. 
 
• Can the U.S. please clarify what methodology was used in the ad-valorem equivalent 
calculation, including the data set? 
 
• In particular, what base period for data was used, and why was it considered representative? 
 
RESPONSE:  AVEs are calculated from im port data published by the U.S. Bureau of Census.  
Specifically, the calculated duties and dutiable value data are used.  These data are available on the 
USITC's Dataweb [http://dataweb.usitc.gov].  AVEs for the current year are calculated on import data  for the previous year.  For example, AVEs for 
2010 are based on 2009 imports.  Previous year's data are used because full-year  data for the current 
year are not available early in the current year. 
 To find an AVE for an HTS 8-digit subheading (the U.S. tariff line), the calculated duties are divided by the dutiable value for imports that enter the United States under MFN provisions.  (vi) Contingency measures 
 
6. The report states that under the Deficit Reduc tion Act of 2005, which repealed the Byrd 
Amendment, CBP has continued to distribute AD  and CVDs assessed on entries of goods made and 
filed before 1 October 2007 to members of the aff ected domestic industry that supported the petition 
for the AD or CVD investigation (par. 50). 
  WT/TPR/M/235/Add.1 
 Page 33 
 
 
 • What is the value of the AD and CVDs assess ed on entries of goods made and filed before 1 
October 2007 that remains to be distributed, and what is the estimated timeframe for 
distribution? 
 
RESPONSE:  The amount of funds available is based on entries liquidated or reliquidated by port 
operations.  The amount available is  unknown until these liquidations/reliquidations occur.  There are 
AD/CVD monies remaining on unliquidated entries entered prior to October 1, 2007, but it is unknown as to how much of that money will eventu ally be available for CDSOA distribution, and 
how much will be refunded.  
 (vii) Quantitative Restrictions, Controls and Licensing 
 
7. Australia notes in paragraph 74 that import contro ls for "public interest" reasons are applied 
on natural gas. 
 
• For what "public interest" reasons are import c ontrols applied to natural gas, and how do 
they operate? 
 
• What guidelines or other criteria are us ed in determining the public interest? 
 
RESPONSE:   Under the Natural Gas Act (15 USC 717b), no person may import any natural gas from 
a foreign country without first having secured an or der authorizing it to do so.  The Natural Gas Act 
also provides that such orders shall be issued unl ess it is found that the proposed importation will not 
be consistent with the public interest.  The Natu ral Gas Act provides further that natural gas (and 
liquefied natural gas) imports from countries with which the United States has a free trade agreement 
calling for national treatment for trade in natural gas, and LNG imports from other countries, are 
deemed to be consistent with the public interest.  Applications for such importation must be granted 
without modification or delay. 
 
• With respect to the licensing requirements on st eel imports, how is the U.S. steel import 
licensing system consistent with 1(b) of Artic le 11 to the WTO Agreement on Safeguards and 
2(b) of Article 2 to the WTO Agreement on Import Licensing Procedures? 
 
RESPONSE:   While the initial steel import licensing program arose out of the safeguard action, steel 
import licensing under the Steel Import Monitoring and Analysis (SIMA) program is no longer tied to 
the 2001 safeguard action and now opera tes under separate legal authority.  The current steel licensing 
system is consistent with paragraph 1(b) of artic le 11 of the Safeguard Agreement because it is not a 
safeguard measure.  It does not limit imports in an y way.  The web-based licensing system was, and 
continues to be, fully automatic;  there is no discretionary licensing.  
The automatic SIMA licensing system under its current  authority is completely consistent with the 
WTO Agreement on Import Licensing Procedures.  Conditions in the global steel market, including 
overcapacity and government support ha ve led to rapid and sudden shifts  in steel trade causing injury 
to domestic producers.  The lag time between importa tion and the release of official import statistics 
left U.S. steel producers vulnerable to import surges or rapid price changes in this highly 
trade-sensitive sector.  The purpose of the SIMA system is to provide the public and interested 
stakeholders with accurate information about import tr ends on a more timely basis.  Aggregate import 
statistics collected from the web-b ased licensing system are updated weekly and made available to the 
public on the SIMA website, roughly six to eight weeks before the release of the official U.S. import 
statistics.  Other import data collected by the Un ited States cannot be made publicly available on as 
timely a basis as that collected under the SIMA syst em.  The SIMA system has proven useful to both WT/TPR/M/235/Add.1 
Page 34 
 
 
 steel producers and consumers, by increasing transp arency in the marketpl ace through a mechanism 
that imposes minimal burden on those subject to licensing requirements. 
 
8. The Foreign Manufacturers Legal Accountability Act, currently pending before Congress, 
would require manufacturers of certain products impor ted into the U.S. to establish a registered 
agent in the U.S. to accept service of process on their behalf.  This legislation would impose an 
additional and costly burden on foreign manufacturers.  Is the U.S. considering less burdensome and 
trade-restrictive alternatives to this legislation? 
 
RESPONSE:   The proposed Foreign Manufacturers Legal Accountability Act, as reflected in bills 
pending before the U.S. Congress reflects a desire to  ensure that consumers in the United States can 
be confident that the products they buy are safe a nd that there are procedures available under U.S. law 
to address effectively any product liability issues th ey may engender.  The United States believes 
these goals can be accomplished without imposing undue burdens on foreign manufacturers.  The 
FMLAA is still pending before Congress.  We are not in a position to speculate on the implications of 
particular provisions which are subject to further review and possible modification in the United States Congress. 
 
(ix) Sanitary and Phytosanitary (SPS) Measures 
 
9. While the federal 'rulemaking process' is an in tegral part of the mechanism for obtaining SPS 
clearance for market access for Au stralia's agricultural products to the U.S. and must be undertaken 
after the completion of the appropriate technica l risk assessment, it is also complex and lengthy. 
 
• Can the U.S. advise the time required for rulemaking to be concluded? 
 
RESPONSE:   The U.S. rulemaking process for SPS measure s is transparent and science-based.  The 
time required for such a review is largely depending  upon the nature of the market access request, the 
availability of scientific evidence to support the request, and the quality of data submitted by the 
petitioner, audit findings, etc.  
 
10. A list of in-progress risk analyses for plants is av ailable from the APHIS website, but the list 
is footnoted with the comment that, "The risk analyses and rulemaking or other policy documents for 
each issue on this list may be in any stage of pre paration, review, or clearance, but have not yet been 
released publicly."  
• Could the U.S. provide more detailed inform ation on the status of current risk analyses 
(including during the rulemaking procedure) t hat would improve the transparency of this 
process for trading partners? 
 
RESPONSE:   Under the Quarantine 56 revisions, APHIS h as established criteria allowing for a faster 
and more efficient approval process for certain fru its and vegetable imports, which have helped to 
alleviate trade barriers to imports.  The revisions simplified and expedited APHIS' process for approving eligible new imports and pest-free areas while continuing to ensure that measures are 
science-based and that USDA's process allows for p ublic participation in agency decision-making.  
However, it is difficult to provide petitioners or other interested pers ons detailed, accurate information 
regarding risk assessments that have yet to be completed. 
 
11. We note reference, in paragraph 110, to APHIS issuing a final rule in the Federal Register, 
effective 17 August 2007, that revises and reorganizes the import regulations for fruits and vegetables.   WT/TPR/M/235/Add.1 
 Page 35 
 
 
 • Could the U.S. provide advice on what products from what countries have been approved for 
import under these new arrangements and th e average time taken for these approvals?  
 
RESPONSE:   This provision modified the administrative portion of our risk assessment/rulemaking 
process and has reduced the amount of time requi red to complete the necessary rulemaking and 
approve market access in some instances to less than six months.  The time frame required to 
complete any specific risk assessment is contingent  on a variety of factors as outlined above in our 
response to #9.  
12. We also note paragraph 111 which states that based on the results of a risk assessment, 
APHIS may allow imports, subject to SPS requirements .  These are mostly issued as regulations, and 
must adhere to the procedural requirements of Sec tion (ix) of the Administrative Procedure Act.  
There are no statutory limitations regarding the dura tion of the process to approve first-time imports 
of plants, animals, and their products into the U. S.  Typically, this process takes between two and 
three years. 
 
• Could the U.S. provide advice on what products  (since 1 January 2005) from what countries 
have been progressed through the issuing of  regulations and how long these have taken? 
 
RESPONSE:   This information for fruits and vegetables is included in the U.S. Code of Federal 
Regulation, volume 7, beginning at 319.56-13 and con tinuing until the end of the sub-part.  Typically, 
two to three years is required to complete  the required rulemaking and authorize access. 
 
• Could the U.S. also advise on how many products have completed pest and disease risk 
assessment but have not completed issuing of  regulations, and how long these have been 
waiting? 
 
RESPONSE:   At any given time, the U.S. is workin g on 200 to 300 pest risk assessments and 
completes between 20 to 30 assessments per year. 
 
(3) OTHER MEASURES AFFECTING INVESTMENT AND TRADE 
(ii) State trading, state-owned enterprises, and privatization 
 
13. Australia notes in paragraph 181 the U.S. government plans to dispose of its equity stake in 
GM and Chrysler "as soon as practicable". 
 
• Could the U.S. provide an update on the timing of th e U.S. plan to dispose of its equity stake in 
these companies? 
 
RESPONSE:   The U.S. Government will exit its inv estments in GM and Chrysler as soon as 
practicable, consistent with the requirements of the Emergency Economic Stabilization Act (EESA).  
For its investments in GM, the most likely exit is to  gradually sell the U.S. Treasury's equity interest 
beginning with an initial public offering of GM.  On August 18, 2010, GM filed a registration 
statement with the Securities and Exchange Comm ission for an initial public offering (IPO) of its 
common stock.  Treasury agreed to be named as a se lling shareholder.  The offering is expected to 
occur before the end of the year.  Treasury will retain  the right, at all times, to decide whether and at 
what level to participate in the public stock offeri ng.  The IPO will be a significant step in carrying 
out Treasury's previously announced intention of di sposing of Troubled Asset Relief Program (TARP) 
investments as soon as practicable.  For Chrysler, th e exit strategy may involve a similar gradual sell 
off of shares beginning with an initial public offe ring or a negotiated private sale to a third party 
buyer.  On September 14, 2010, the chief executive offi cer of Chrysler stated that Chrysler's Board of 
Directors will consider an initial public offering as early as 2011 if market conditions are favorable. WT/TPR/M/235/Add.1 
Page 36 
 
 
  
(iii) Government Procurement  
 14. The report notes in paragraph 192 that the Ameri can Recovery and Reinvestment Act of 2009 
(ARRA) contains two "buy America" provisions. 
 
• Does the U.S. have a timetable for removing the barriers to foreign participation in 
government procurement set up by ARRA? 
 RESPONSE:   The "buy American" requirement in Sec tion 1605 of the American Recovery and 
Reinvestment Act of 2009 (ARRA) only applies to  public projects funded by ARRA.  When those 
projects are completed, the ARRA "buy American" requirement will no longer apply.  ARRA generally requires that the funds for public project s be obligated or under contract by the end of 
September 2010.  Section 604 of ARRA applies onl y to Department of Homeland Security (DHS) 
procurements of certain textile products utilizing any funds (ARRA or other) provided to DHS on or 
before February 17, 2009.  Both Section 604 an d 1605 are implemented consistent with U.S. 
obligation under intern ational agreements. 
 
(iv) Subsidies and other government assistance 
 
15. The report notes in paragraph 207 the credit agreements between the Treasury and Chrysler 
and GM relating to domestic production requirements. 
 
• Australia would be interested in knowing mo re about these agreements and how they relate to 
the U.S. WTO obligations. 
 RESPONSE:   Paragraphs 5.17 of the Chrysler Credit Ag reement (as amended) a nd paragraph 5.27 of 
the GM Credit Agreement (as amended) require that a certain percentage of pr oduction be done in the 
United States.  These agreements can be found at:  http://www.financialstability.gov/.  The 
United States considers these agreements to be consistent with its WTO obligations. 
 
(vi) Competition policy 
 
16. Paragraphs 248 – 250 cover exemptions from comp etition law that exist in federal statutes 
(Box 11.5) and note that 70 entities hold certificat es of review covering some 2,500 individuals and 
firms. 
 
• How does the Secretary of Comme rce undertake the assessments re quired to issue certificates 
of review which grant limited antitrust i mmunity to export activities (Box 111.5)? 
 
RESPONSE:   Under Title III of the Export Company Trading Act of 1982 ("ETC Act") (15 
U.S.C.4011 – 4021), the Secretary of Commerce will issu e an Export Trade Certificate of Review to 
an applicant that demonstrates that its proposed e xport conduct meets the following four criteria.  The 
proposed export conduct must not (1) result in subs tantial lessening of competition or restraint of 
trade within the United States nor a substantial rest raint of U.S. export trade;  (2) unreasonably alter 
prices in the United States for the relevant goods and services;  (3) not constitute unfair methods of 
competition against competing exporters of the rele vant goods and services;  and (4) not include any 
act that may reasonably be expected to result in  the sale of the relevant goods and services in the 
United States.  Congress intended that these standard s "encompass the full range of the antitrust laws" 
as defined in the ETC Act (15 U.S.C. 4013(a)). 
 The Secretary of Commerce may issue a Certificat e of Review only with the concurrence of the 
Attorney General.  The general analytical appr oach utilized by the Secr etary and the Attorney  WT/TPR/M/235/Add.1 
 Page 37 
 
 
 General, found in the "Guidelines for the Issuance of  Export Trade Certificates of Review", issued on 
January 11, 1985 (50 Fed.  Reg. 1786), involves an  economic examination of the overall purpose and 
effect of the proposed export conduct.  The issuance of an Export Trade Certificate of R eview is not considered to constitute an exemption 
from the antitrust laws. 
• Does the U.S. have in place the economic capac ity to assess the flow of products (through 
international input-output tables and alternative means) and the associated costs in terms of trade, productivity, prices and growth for partner countries and the U.S.? 
 RESPONSE:   We do not understand the second part of the question, concerning data on product 
flows, nor how it is relevant here.  
IV. DEVELOPMENTS IN SELECTED SECTORS 
(1) AGRICULTURE 
(ii) Agriculture Policies  
17. Australia notes in paragraph 4 that most agriculture policies in the U.S. are set out in the 
Food, Conservation, and Energy Act of 2008 (2008 Farm Bill). 
 
• Was any additional assistance, including assistance related to U.S. agricultural trade 
promotion, provided to U.S. agricultu ral producers under the American Recovery and 
Reinvestment Act of 2009? 
 
• How much additional assistance was provid ed under this Act and for what purposes? 
 
• Is this assistance on-going? 
 
RESPONSE:  Most of the additional funding provided by the ARRA of 2009 was directed towards 
food and nutrition programs and loans or loan guar antees for rural housing or other rural services (85 
per cent of available funding for the 2009 – 2010 pe riod).  Small amounts of funding were available 
for farm loans and watershed impr ovements.  The Act re-established the Trade Adjustment Assistance 
Program, which provides training and technical assistance to farmers and fishermen adversely affected by imports.  No funding was provided fo r agricultural trade promotion.  Details on budget 
outlays by activity can be found at:  http:// www.obpa.usda.gov/budsum/FY11budsum.pdf on pages 
140 and 141.  For fiscal year 2011, the only funds budgeted are for the Supplemental Nutrition Assistance Program.  
18. Paragraph 8 of the report states that U.S. Direct Payments are 'decoupled from current 
production and prices'.  However, in the U.S. – Subsidies on Upland Cotton case brought by Brazil, 
the Panel found that…on a plain reading, the amount of all PFC and DP payments were and are 
related to the type of production undertaken by the producer after the base period' (paragraph 385).  
This finding was upheld by the Appellate Body, wh ich found 'that the amount of payments under those 
measures is related to the type of producti on undertaken by a producer after the base period' 
(paragraph 341). 
 
• Have there been any changes to U.S. Direct Paym ents since the rulings that would make them 
possibly comply with Green Box criteria? 
RESPONSE:  We believe that the Direct Pa yments meet the criteria fo r decoupled income support in 
paragraph 6 as well as paragraph 1 of An nex 2 of the Agreement on Agriculture. 
 WT/TPR/M/235/Add.1 
Page 38 
 
 
 19. Australia notes in paragraph 10 that the 2008 Fa rm Bill extended the crops covered by the 
Counter-Cyclical Payments Program to include dry peas, lentils and chickpeas.  In the U.S.' most 
recent domestic support notifications for marketing years 2006 and 2007, counter-cyclical payments 
were notified as non-product-specific Agricultural Marke ting Services.  This is contrary to the rulings 
of the Panel and Appellate Body in the U.S. - Subsidies on Upland Cotton case, which found that counter-cyclical payments granted 'support to a specific commodity', namely, upland cotton. 
 
• Why has the U.S. continued to notify counter- cyclical payments as non- product-specific AMS? 
 RESPONSE:   CCPs are reported as non-product specific because payments are based on fixed 
historical area and yields (i.e., past production), not  current production.  Recipients are not required to 
produce any product to receive payments.  Recipien ts include producers of fruits and vegetables 
(whether because of historical production, double- cropping, or the availability of non-base-acres).  
Because any eligible crop can be grown on the base acres, payments cannot be ascribed to a specific 
product. 
 
20. Australia notes in paragraph 14 that under the 2008 Farm Bill, the U.S. has introduced a new 
revenue-based support program for covered commo dities and peanuts, the Average Crop Revenue 
Election (ACRE) Program, as an alternative to pr ice-based counter-cyclical payments.  The USDA's 
Economic Research Service has estimated ACRE pay ments will be around US $432 million in 2010, 
which is almost double the expected value of count er-cyclical payments of US$243 million in 2010. 
 
• How is the U.S. intending to notify this pr ogram in the WTO in future domestic support 
notifications? 
 
• Does the U.S. expect ACRE payments will eventual ly replace counter-cyclical payments?  If 
so, will support levels be higher under the ACRE program compared to counter-cyclical 
payments, as suggested by the forecast figures for 2010? 
 
RESPONSE:  The U.S. submitted its domestic support notification for marketing year 2008 on 
September 16, 2010, but the ACRE program was not yet in effect for the time period notified.  Any payments under the program will be notified in th e future consistent with the appropriate WTO 
criteria.  Future payments will depend on the level of sign-up, as well as the many parameters that 
affect program payments. 
 
21. The 2008 Farm Bill provides subsidies for upland cotton through the Economic Adjustment 
Assistance Program (EAAP), which provides 'a payme nt to domestic users of upland cotton from any 
source for specified uses, including modernising plants or equipment' (p.83, paragraph 15).  
Payments are US$0.04 for each pound of upland co tton consumed by an eligible user during the 
period beginning on 1 August 2008, and ending on 31 July 2012.  According to the Final Rule on the cotton program changes for upland cotton published on 18 August 2010, the value of the assistance provided will be US$0.03 cents per pound from 1 August 2012. 
 
• What is the estimated total value of assistan ce provided each year to  eligible cotton users 
under this program? 
 
• What are the 'specified uses' that would be eligible for payments? 
 
• How will the U.S. notify this program  in the WTO Committee on Agriculture? 
 
• Is this program consistent with the outcome  of the U.S. – Subsidies on Upland Cotton case? 
  WT/TPR/M/235/Add.1 
 Page 39 
 
 
 RESPONSE:   The U.S. submitted its domestic support notification for marketing year 2008 on 
September 16, 2010.  Payments under the EAAP  were $76.441 million and were notified as cotton 
product specific amber box support.  Assistance is only available for users of upland cotton that 
certify that the assistance is used to acquire, construc t, install, modernize, de velop, convert, or expand 
land, plant, buildings, equipment, facilities, or mach inery.  The program is available to any user of 
upland cotton, whether the upland cotton is from dome stic or imported sources. 
Specific questions on relevant titles of the Farm Bill 
 
(a) Title I (Commodity Programs) 
 
Sugar 
 
22. Paragraph 12 states that the U.S. Secretary of Agriculture may purchase sugar intended for 
food use and sell it to bioenergy producers. 
 
• Does this program allow for imported sugar to be sold to U.S. bioenergy producers? 
 
RESPONSE:   There is no prohibition in the law that prevents purchases of imported sugar for this 
program.  We note no purchases have been made under this program for sugar from any source. 
 
Average Crop Revenue Election (ACRE) Program 
 
23. Paragraph 14 states that 7.7 per cent of total enrolled farms had signed up for ACRE since 
the program began. 
 
• What actions is the U.S. Government  taking to encourage ACRE sign-up? 
 RESPONSE:   USDA makes program information available for interested producers.  USDA also 
informed producers of the new program and its bene fits.  The decision to sign up for the program is 
the prerogative of each farm.  
(d) Title IV (Nutrition) 
 
24. Paragraph 30 states that the Agricultura l Marketing Services of the USDA operates 
commodity purchase programmes to acquire food pr oducts for the National School Lunch Program 
and other Federal nutrition programmes.  It also  states that US$973 million worth of commodities 
were purchased by USDA for schools/child nutr ition programmes.  Paragraph 29 states US$93.85 
billion was spent on nutrition programs run under the USDA in FY2010. 
 
• Which specific commodities were purchased, and  how much was spent on each commodity, 
under USDA's nutrition programs in FY2010? 
 
• Of these nutrition programs, which commodities/ products are solely purchased from U.S. 
production? 
 RESPONSE:   AMS purchases a wide range of commodities, including eggs, fruits, vegetables, nuts, 
meats, poultry, and fish.  Data for fiscal year 2010 are not yet available.  Data on historical purchases 
can be found at:  http://www.ams.usda.gov/AMSv1. 0/ams.fetchTemplateDat a.do?template=Template 
Q&navID=CommodityPurchasing&leftNav=Commodi tyPurchasing&page=Co mmodityPurchasing&a
cct=AMSPW.  Food purchased by AMS for the school lunch and other nutrition programs are required to be procured from domestic sources.  This requirement is consistent with the WTO WT/TPR/M/235/Add.1 
Page 40 
 
 
 government procurement code, under which the Un ited States has a waiver for procurement for 
human feeding programs.  (j) Title XII (Crop Insurance a nd Disaster Assistance Programs) 
 
25. Paragraph 41 states that Supplemental Agricu ltural Disaster Assistan ce provides disaster 
assistance payments to producers of eligible commod ities in counties declared  by the Secretary of 
Agriculture to be "disaster counties," including co unties contiguous to disaster counties and any 
farms with losses in normal production of more than 50 per cent in a calendar year. 
 
• Does USDA currently plan to provide disaster assistance payments to farms that have less 
than a 50 per cent loss in normal production in a calendar year? 
 
RESPONSE:   For the Supplemental Revenue Assistance Payments Program (SURE), a "farm" is 
eligible when either: 
 
• a portion of the farm is located in a county covered by a qualifying natural disaster 
declaration (USDA Secretaria l Declarations only) or a contiguous county;  or, 
 
• the actual production is less than 50 per cent of the normal production. 
 
In the first instance, producers must suffer a 10 per cent production loss to at least one crop of economic significance on their farm in order to be eligible for SURE.  For a loss to be a qualifying 
loss, it must be caused by a natural disaster.  A crop of economic significance is one that contributes at least 5 per cent of the expected revenue for a producer's farm.  Therefore, SURE payments could be 
made to farms with less than a 50 per cent production loss in these areas. 
 
(iv) Support Levels 
 
26. In 2007 and 2008, in nearly all cases, the SSG was applied to very small quantities, for 
example:  4kg of cream over 45 per cent fat;  and 3kg of cocoa powder over 65 per cent sugar (p.90). 
 
• While these may be consistent with WTO entitle ments, does the U.S. consider these quantities 
to be sufficiently large to cau se disruption to the U.S. market? 
 
RESPONSE:   No. 
 27. The secretariat's Report states in paragraph 47 th at 'notifications by the United States to the 
WTO Committee on Agriculture cover domestic support up to crop year 2007 and do not include changes resulting from the 2008 Farm Bill'. 
 
• Can the U.S. please indicate when it will s ubmit its domestic support notifications for 2008 
and 2009? 
 RESPONSE:  The United States submitted its domestic support notification for the 2008 crop year on 
September 16, 2010.  Full data is not yet available for 2009. 
 
IV. DEVELOPMENTS IN SELECTED SECTORS (2) FINANCIAL SERVICES 
(iv) Financial regulatory reform  
28. The Secretariat Report (paragraph 69) notes that the U.S. Administration has released details 
of its comprehensive financial regulatory reform proposal aimed at addressing the regulatory gaps  WT/TPR/M/235/Add.1 
 Page 41 
 
 
 that resulted in the financial crisis, and that the White Paper was followed by proposed implementing 
legislation 
 
• Can the U.S. provide an update on the developmen t of financial regulatory reform legislation? 
 RESPONSE:   The Dodd–Frank Wall Street Reform a nd Consumer Protection Act (Public Law 
111-203, H.R. 4173) was signed into law by President Barack Obama on July 21, 2010.  This legislation establishes new authorities and supervisor y direction with regard to the U.S. financial 
markets including:  banking, securities, insuran ce, derivatives, executive compensation, consumer 
protection and corporate governance.  Following th e bill's passage, the regulatory implementation 
phase began.  While few provisions of the bill are effective immediately (e.g., the liquidation 
authority), in general, the legislation will become ef fective in stages.  The legislation is complex and 
requires approximately 250 rulemakings and 70 studies.   Over the next 6 to 18 months, regulators will 
undertake an intense period of rulemaking.  Th e rulemaking process will expand upon and flesh out 
the parameters of the new regulatory framework.  The resulting regulatory regime will contain both 
new elements and elements drawn from current U.S.  financial regulation.  In addition, regulatory 
implementation will likely be a dynamic process.   Rulemaking will include opportunity for public 
comment and all interested parties are invited to submit comments.  Interested persons may submit 
comments electronically through the Federal Rulemaki ng Portal at:  www.regulations.gov.  Electronic 
submission of comments allows the commenter maximum time to prepare and submit a comment, 
ensures timely receipt, and enables the comments to be made available to the public.  Comments 
submitted electronically through the www.regula tions.gov website can be viewed by other 
commenters and interested members of the public. 
 
• Does the financial regulatory reform legislation include the Foreign Account Compliance Tax 
Act (FACTA), which was signed into law in March 2010?  If so, what are the main features of 
FACTA, which may affect foreign institutions ' financial services trade with the U.S.? 
 
RESPONSE:  The compliance provisions included in the Hiring Incentives to Restore Employment 
Act of 2010 (HIRE Act), originally introduced as the Foreign Account Tax Compliance Act (FATCA) 
and hence commonly referred to as such, addresses ga ps in current information rules for U.S. 
taxpayers by requiring a foreign financial instituti on to report the identity of its U.S. accountholders, 
along with information about their accounts, or be  subject to a withholding tax on payments of 
U.S.-source income or gross proceeds from the sa le of certain assets producing U.S.-source income. 
 Although the FATCA provisions will not be effe ctive until 2013, the Treasury Department has 
already committed significant resources to deve loping preliminary guidance under FATCA and is 
seeking input from stakeholders, so that interest ed parties have time to comment and express any 
concerns as more final guidance is developed.  In  this regard, the Treasury Department has just, on 
August 27, released a notice describing prelim inary guidance and requesting comments on those 
proposals and other issues under FATCA.  The notice re flects efforts to balanc e the goals of reducing 
offshore tax evasion while minimizing the administra tive burdens imposed on affected parties, as well 
as a commitment to an open, collaborative rulemaki ng process.  More specifically, the notice indicates 
that the Treasury Department is considering wa ys to reduce the burden imposed by FATCA by 
building upon cooperation under existing agreements, such as bilateral tax treaties, and solicits 
comments on these and other possible approaches.  
29. Australia notes in paragraph 100 that the U.S.  has a number of government programs that 
preference the use of domestically flagged vessels to transport goods. 
 
• Can the U.S. provide the rationale for these measures and whether consideration has been 
given to removing these measures? WT/TPR/M/235/Add.1 
Page 42 
 
 
  
RESPONSE:   The cargo preference laws meet national security objectives by assuring that sufficient 
sealift capability and intermodal tr ansportation infrastructure exist to support vital homeland and 
national security interests.  These laws help sust ain the assured sealift capability of U.S.-flag vessels 
and the related mariner positions that are vital to our  national security and are fully compliant with the 
United States' WTO obligations.  
30. Australia also notes in paragraph 101 of the report that the Federal Maritime Commission 
(FMC) examines agreements filed under the Ocean Shipping Reform Act (OSRA) of 1998. 
 
• Has the U.S. proposed or scheduled a review of the OSRA?  If so, when? 
 
RESPONSE:   There is no mandated schedule of revi ew of the Ocean Shipping Reform Act.  
 
(5) Professional Services 
 
31. Paragraphs 132 and 133 of the report refers to th e H-IB visa program which allows for the 
entry of foreign professionals in "speciality occ upations" and the inclusion in the U.S.-Chile and 
U.S.-Singapore free trade agreements provisions t hat allow non-immigrant professionals to enter the 
U.S. temporarily to engage in business activities. 
 
• Can the U.S. explain the rationale for professi onal and business services visa restrictions (for 
example the annual cap on H-1B admissions)? 
 
• Does the U.S. have in place mechanisms to ass ess the economic costs of these quotas for the 
U.S. and for its trading partners? 
 
• For mode 4 international engagement (i.e. tem porary movement of providers/natural persons), 
are there concerns about whether people will return to their source country and are there 
mechanisms that may dispel these fears with e ffective pre-movement screening and selection? 
 
RESPONSE:  Numerical limitations for temporary worker programs are established by the 
U.S. Congress.  They reflect a wide variety of policy considerations and stakeholder interests, 
including demand for such workers in the United St ates, impact on domestic workforce, and relation 
to overall U.S. immigration policy.  Concerns about whether people will return to thei r home country exist to varying degrees for all 
admission categories and U.S. immigration author ities are continually seeking ways to enhance 
security, including through im proved pre-travel screening. 
 THE UNITED STATES REPORT  1. The U.S. claims that it has maintained its commitment to international trade obligations and 
avoided further aggravating economic difficulties that would have b een intensified by trade restrictive 
measures (p.11).  
• Does the U.S. acknowledge that the reint roduction of the Dairy Export Incentive 
Program (DEIP) aggravated internati onal market conditions for non-U.S dairy 
producers, and had a negati ve impact on world prices? 
  WT/TPR/M/235/Add.1 
 Page 43 
 
 
 RESPONSE:  No, the DEIP program was used in a limite d and targeted manner for a short period of 
time, and during its operation we attempted to minimize the imp act on non-subsidizing foreign 
suppliers  2. The U.S. report indicates that collaboration and knowledge sharing in itiatives with the EU, 
on issues including innovation, under the Transatlan tic Economic Council (TEC), were reviewed in 
October 2009 (p.22). 
 
• What were the outcomes of this review? 
 
• Can Australia access a copy of the review findings? 
 
RESPONSE:   The last meeting of the Transatlantic Economic Council (TEC) was held in October 
2009.  During that meeting, senior U.S. and EU policy and regulatory officials exchanged views on a range of transatlantic economic issues.  One of the decisions taken during that meeting was to 
establish the Transatlantic Innovation Action Partnershi p, with the goal of strengthening cooperation 
on innovation.  The Partnership is developing a wo rk plan in close collaboration with the private 
sector.  We expect to issue the work plan at th e next meeting of the TEC.  The proposals on the 
innovation work plan that the U.S. government r eceived from the private sector can be found at the 
following link:  http://www.state.gov/p/eur/rt/eu/tec/c34871.htm. WT/TPR/M/235/Add.1 
Page 44 
 
 
 BRAZIL 
 Paragraph 15, page 83, of the document ‘wt/tpr/s/200’ , informs that “the Economic Adjustment 
Assistance Program provides a payment to domestic  users of upland cotton from any source for 
specified uses, including modernizing plants or eq uipment.  Domestic users and exporters of extra-
long staple cotton also receive payments when worl d market prices fall for four consecutive weeks 
below U.S. prices and below 134% of the loan ra te for extra-long staple production”. Considering 
that domestic users of extra-long staple cotton woul d benefit from lower world market prices, would 
they still be entitled to receive the payment provid ed by the Economic Adjustment Assistance 
Program, regardless of the source of the cotton used? Would there be any conditionality for the 
domestic user to receive such payments?  
 
RESPONSE:  The Economic Adjustment Assistance Program  is only available for upland cotton use. 
It is not available for extra-long staple cotton use.  
 Regarding paragraphs 42-46, page 90 , could the U.S. detail the criteri a used for allocation of tariff 
quotas to specific countries? This  question has been raised before, during the last Trade Policy 
Review of the United States, in June 2008 , when it has been answered too generically.  
 
RESPONSE:  These allocations are based on commitments made in previous negotiations under the 
GATT (now incorporated into the WTO).  In ca ses where country allocations are not directly 
contained in commitments made in previous negotia tions, allocations are made  consistent with GATT 
Article XIII.  
 
While it can be stated that average U.S. applied MF N tariffs were low (8,9% according to Paragraph 
43, page 90), many significant tariff peaks remained, esp ecially in agriculture.   Brazil's top 20 export 
products face an average tariff in the U.S. market nearly twice as big as the top 20 U.S. export 
products face in Brazil. Specific duties and fees add ed an extra burden on im ports of sugar, orange 
juice, and ethanol.  Regarding ethanol, the same par agraph 43 of the document ‘wt/tpr/s/200’ informs 
that “ethyl alcohol used as fuel is also subject to "other duties or charges" and bound in HTSUS at 
US$0.1427 per litre”. Brazil notes that this meas ure constitutes an additional trade barrier against 
Brazilian exports, and hence, should be  phased-out as soon as possible.  When does the U.S. intend to 
withdraw such surcharge?  
RESPONSE:  The U.S. Congress has legislated the import surcharge on ethanol.  The United States 
is not in a position to speculate on any future actions that Congress might take on this issue.  
 
BRAZIL SUBSEQUENT QUESTIONS 
 
REPORT BY THE SECRETARIAT (WT/TPR/S/235) 
CHAPTER
 II - TRADE AND INVESTMENT POLICY FRAMEWORK  
(3) P REFERENTIAL TRADE AGREEMENTS AND ARRANGEMENTS  
(i) Bilateral and regional preferences  
 
1. Regarding paragraph  19, about regional trade agreemen ts, is there a balanced treatment 
concerning the liberalization of the agricultural and the industrial sectors?  
 RESPONSE:  A fundamental aspect of each of the U.S. FTAs is the elimination of duties on 
substantially all the trade.  This applies to tari ff elimination in both the agricultural and industrial 
goods sectors and, from the U.S. point of view, has always meant maximal tariff coverage.  
 
 
  WT/TPR/M/235/Add.1 
 Page 45 
 
 
 II – TRADE AND INVESTMENT POLICY FRAMEWORK 
(3) Preferential trade agreements and arrangem ents – (i) Bilateral and regional preferences 
 paragraph 19 – p. 15 (ii) Unilateral preferences 
 
2. Regarding paragraph 31, is there  any initiative towards the trans formation of specific tariffs 
in “ad valorem”, especially as regards agricultural goods? 
 
RESPONSE:   The referenced paragraph does not refer to ad valorem  tariffs.  We are considering 
conversion of non- ad valorem  tariffs to ad valorem  tariffs in the context of the Doha Round.  
 
(4) I
NVESTMENT AGREEMENTS AND ARRANGEMENTS  
 
3. According to the TPR report, the United States has 40 bilateral investment treaties (BITs) in 
force.  None was signed or entered into force during the period under review, nonetheless.  The 
NAFTA and most FTAs signed by the United States contain separate chapters on foreign investment, 
which are substantively identical to the provis ions of U.S. BITs. As stated in document 
WT/TPR/S/235, page 18, the U.S. is reviewing its model BIT.  The main reason presented for such 
review is to "ensure that the model BIT is consis tent with the public interest and the overall U.S. 
economic agenda". Could U.S. provide more specific information about the guidelines and 
fundamental aims of the new BIT model? For instan ce, will it still be focused on investor-state dispute 
settlement? What are the main orientations regar ding guarantees on matters such as compensation 
for expropriation and the right to transfer capital, profits and income from the host State? May the 
financial sector reforms call for renewed instituti onal framework for U.S. investment treaties?  
 
RESPONSE:   The Administration has received a large amount of input from the full range of 
stakeholders regarding many important issues in the model BIT.  We want to ensure that we have a 
full opportunity to carefully consider all such i nput before completing the review.  Given that the 
review is still pending, it would no t be appropriate to discuss specifi c changes under consideration.  
We can say, however, that we will be maintaining the core investment protections of the model BIT to 
ensure that our investors can compete on a level play ing field and are treated according to the rule of 
law in key foreign markets.  In addition, the Ad ministration is committed to strengthening labor and 
environmental protections, and we are exploring how we might do so in the model BIT.  We are also 
looking for ways to enhance provisions on transparen cy and public participation, which are concerns 
of a wide range of stakeholders.  CHAPTER III - TRADE POLICIES AND PRACTICES BY MEASURE (1) M
EASURES DIRECTLY AFFECTING IMPORTS  
(i) Customs procedures  
 
4. The Foreign Manufactures Legal Accountability Act (H.R.4678), approved by the House of 
Representatives Committee on Energy and Commerce and under consid eration in the Committee on 
Ways and Means, opens the possibility of foreign co mpanies’ prosecution in U.S. courts due to 
damages caused by products manufactured outside the U.S. The H.R. 4678 also demands that foreign companies appoint an agent for legal representa tion in the U.S. and recognize its domicile 
jurisdiction.  If a company does not designate an agent, its imports would be suspended.  This 
proposal might potentially violate GATT provisi ons, the Hague Service Convention and the Hague 
Evidence Convention. The Brazilian Government woul d like to know which measures are being taken 
by the U.S. Government to harmonize this legisla tive proposal with the aforementioned international 
obligations. 
 
RESPONSE:  The proposed Foreign Manufacturers Legal Ac countability Act, as reflected in bills 
pending before the U.S. Congress, reflects a desire to ensure that consumer s in the United States can WT/TPR/M/235/Add.1 
Page 46 
 
 
 be confident that the products they buy are safe a nd that there are procedures available under U.S. law 
to address effectively any product liability issues th ey may engender.  The United States believes 
these goals can be accomplished without imposing undue burdens on foreign manufacturers.  The 
FMLAA is still pending before Congress.  We are not in a position to speculate on the implications of 
particular provisions which are subject to further review and possible modification in the United States Congress.  
 
(iii) Rules of origin 
 
5. In July 2008, CBP issued a proposal to establish uniform rules of origin in customs 
legislation by replacing the system of case by case adjudication under substantial transformation. 
Would be possible to obtain the complete text  of “non preferential rules of origin”?  
 
RESPONSE:   The existing “non-preferential rules of origin” are set forth in CBP Regulations 19 
CFR Part 102, which can be accessed at the following website:  http://www.gpoaccess.gov/cfr/ 
index.html. 
 
6. Concerning the preferential rules of origin  under the Free Trade Agreements, does the U.S. 
have any statistics related to the use of  the "diagonal" accumulation provision? 
 RESPONSE:   The CAFTA-DR “diagonal” cumulation prov ision is relatively new, having been in 
effect only since August 2008.  Only a small percen tage of the CAFTA-DR clai ms indicate use of this 
provision.  
7. What treatment will be given to goods manufactured or processed in the free zones? 
 RESPONSE:   The United States does not understand this question.  Paragraph 26 does not include 
any language on “goods manufactured or processed in the free zones”. 
 
8. Only under the CAFTA DR there is a "diagonal " accumulation provision. Why does no other 
U.S. FTA contain provisions on diagonal accumulation?  
RESPONSE:   The CAFTA-DR is a separate agreement fro m other U.S. FTAs. Each U.S. FTA has its 
own provisions on accumulation, reflecting the results  of negotiations between the parties to the 
agreement. 
 
(iv) Tariffs 
 
9. According to the paragraph 31 of the documen t WT/TPR/S/235, “just over 10% of tariff lines 
in the Schedule are non-ad valorem tariffs”.  Is t hat proportion consistent with the principle of 
transparency of the world trade system?  Does th e U.S. government plan to reduce that proportion 
before the end of the Doha Round negotiations?  
RESPONSE:   The U.S. Harmonized Tariff Schedule is av ailable to the public at the following 
website:  http://www.usitc.gov/tata/hts/index.htm. At this time, we are only considering conversion of 
non-ad valorem  tariffs to ad valorem  tariffs in the context of the Doha Round.  
 
10. As described in the Chart III.2, the average tariffs for four product groups are significantly 
above (nearly twice or higher) the U.S. simple average applied MNF tariff level.  In addition, 
numerous product groups are subject to high standard deviations from their average tariffs, which 
shows that variation within groups is also significan t.  How is the U.S. considering the possibility of 
reducing its tariff peaks in the near future? 
  WT/TPR/M/235/Add.1 
 Page 47 
 
 
 RESPONSE:   As shown in the  Table III.1 of the Secretariat’s Report, incidence of international tariff 
peaks (defined as any tariff rate at or above 15 percent) in the U.S. schedule has declined from 7.7 
percent in1998 to 5.3 percent in 20 09.  As is the case with other Members, the incidence of tariff 
peaks in the U.S. tariff schedule would be further reduced with a balanced, ambitious conclusion of 
the Doha Round. 
 
(v) Other charges affecting imports 
 
11. How can the Exemption from the merchandisi ng processing fee, granted to countries that 
signed a FTA with the USA, described in the paragraph 37, be justified in the light of the most-
favored nation principle and article XXIV? 
 
RESPONSE:   The United States believes that the ex emption from the merchandise processing fee 
with respect to imports from U.S. FTA partners  is consistent with U.S. WTO obligations. 
 (vi) Contingency measures 
 
12. Paragraph 48 of Chapter III states that there have been no major changes in AD and CVD 
legislation since the last review. Please, id entify the changes implemented in the period.   
 
13. It is stated in paragraph 48 of Chapter III that the conference report accompanying the 2010 
Consolidated Appropriations Act directed the Secret ary of Commerce to work with the Secretaries of 
the Departments of Homeland Security and the Treasury to conduct an analysis of the relative 
advantages and disadvantages of prospective and retrospective AD (anti-dumping) and CVD (countervailing duties) systems. Please, inform the status of such analysis, the results and possible 
effects on the actual system.  
RESPONSE:   The Department of Commerce’s report to Congress on Retrospective and Prospective 
Antidumping and Countervailing Duty Collection Systems is in the final stages of review.  Once that 
process is complete, the report will be transmitted to the relevant Congressional committees, and upon 
approval will be made publicly available.   
 
14. Complaints under the Dispute Settlement Understanding were brought by Brazil, China, 
Korea, Thailand and Viet Nam regarding aspects of  U.S. AD and CVD investigations, procedures and 
findings, specially the practice of "zeroing". P1 ease inform how the U.S. actually addresses such 
practice, which has already been considered inc onsistent with its obli gations under the WTO 
Agreement and the Agreements annexed thereto, and what are the U.S. plans in terms of bringing its 
practice in line with such rules. 
 
RESPONSE:  The United States stopped applying the zeroing methodology in investigations 
effective on February 22, 2007, though the United States has applied zeroing in some administrative 
reviews after that date.  The Appellate Body reports on zeroing raise serious systemic concerns for the 
United States that go beyond the issue of zeroing.  Indeed, the United States believes that the 
Appellate Body reports create new obligations to limit the use of antidumping measures when such 
obligations were never agreed to by the WTO Me mbers.  Nevertheless, the United States takes its 
WTO obligations very seriously, and has stated pub licly that it intends to comply with the WTO 
rulings in all of the zeroing disputes.  We are ve ry actively engaged in a serious effort with our 
domestic stakeholders and our Congress to find an accep table solution.  We are not in a position at 
this time to provide details on the specific steps we will take or the timeframe to comply with the 
Appellate Body rulings.  
15. CBP (U.S. Customs and Border Protection) di stributed AD and CVDs revenues assessed on 
entries of goods made and filed before 1 October 2007 to members of the affected domestic industry WT/TPR/M/235/Add.1 
Page 48 
 
 
 that supported the petition for the AD or CVD inve stigation. ln late 2009 th e U.S. Supreme Court was 
asked to review the decision on th e unconstitutionality of the Byrd  Amendment's so-called "petition 
support requirement". P1ease inform any result of such a review. 
 
RESPONSE:  On May 17, 2010, the Supreme Court of th e United States denied the plaintiff’s 
petition for certiorari, as a result of which the decisi on of the Court of Appeals for the Federal Circuit 
is final.  No further review process is available to any party. 
 
16. Brazil notes that the United States conti nues to make disbursemen ts under the Byrd 
Amendment, in spite of the recommendations and ru lings of the Dispute Settlement Body in dispute 
DS 217 – Continued Dumping and Subsidy Offset Act of 2000.  Nevertheless, the United States has 
ceased to circulate Status Reports regarding the impl ementation of the results of the dispute.  Does 
the United States intend to c ontinue such disbursements? 
 
RESPONSE:  The President signed the Deficit Reduction Ac t into law on February 8, 2006.  That 
Act includes a provision repealing the Continue d Dumping and Subsidy Offset Act of 2000.  
Therefore, the United States has taken all actions necessary to implement the Dispute Settlement Body’s recommendations and rulings in the referen ced dispute.  Pursuant to the Deficit Reduction 
Act, antidumping and countervailing duties that are being collected on goods now entering the United 
States are not distributed to domestic firms. 
 
(vii) Quantitative restrictions, controls, and licensing 
 
17. U.S. import of natural gas is subject to c ontrols based on "public interest". Brazil would like 
to know what the definition of "public interest" is and what the guidelines for its implementation are. 
 RESPONSE:  Under the Natural Gas Act (15 USC 717b), no person may import any natural gas from 
a foreign country without first having secured an or der authorizing it to do so.  The Natural Gas Act 
also provides that such orders shall be issued unl ess it is found that the proposed importation will not 
be consistent with the public interest.  The Natu ral Gas Act provides further that natural gas (and 
liquefied natural gas) imports from countries with which the United States has a free trade agreement 
calling for national treatment for trade in natural gas, and LNG imports from other countries, are 
deemed to be consistent with the public interest.  Applications for such importation must be granted 
without modification or delay.  (viii) Technical regulations and standards 
 
18. What kind of impact assessment is made by the regulatory author ities?  Does it comply with 
any U.S. legislation?  
 
RESPONSE:   Pursuant to Executive Order 12866, federal agencies must prepare regulatory impact 
analyses (RIAs) of draft regulations that are “ec onomically significant,” and thus likely to impose 
economic impacts of $100 million or more in any one  year.  The RIA is made up of three elements: 
 
• a statement of need for the proposed action (e .g., identification of the market failure); 
• an examination of alternative appro aches to addressing the problem;  and 
• an analysis of the benefits and costs of each alternative.  
 For final rules that have similar “major” impacts,  agencies must submit anal yses such as this to 
Congress pursuant to the Congressional Review Act. 
 
19. Are the notifications made by sub- federal entities overseen by the States? 
  WT/TPR/M/235/Add.1 
 Page 49 
 
 
 RESPONSE:   No, they are overseen by the U.S. TBT Inqui ry Point, which is housed at the National 
Institute of Standards and Technology (NIST).  NIST officials review an electronic database of State-
level measures on a daily basis and notify proposed  technical regulations and conformity assessment 
procedures to the WTO after consultation with USTR. 
 
20. How do federal laws and regulations "pre-empt" State law? 
 
RESPONSE:   Federal laws enacted by the U.S. Congress and regulations issued by federal agencies 
may either expressly or implicitly preempt State law.  Express statutory preemption occurs when 
Congress enacts statutory language that explicitly prohibits States from adopting or maintaining any 
regulation that differs from the federal regulations.  Federal law may also implicitly preempt State law 
if (1) Congress has fully “occupied” a particular field of regulation in question;  or (2) a State law conflicts with any federal la w or interferes with the objectives of a federal law.  
 
21. In which cases does Congress make technica l regulations and c onformity assessment 
procedures?  
RESPONSE:   As noted in the Secretariat report, technical regulations and conformity assessment 
procedures "are usually adopted administratively by federal agencies, on the basis of regulatory 
authority delegated by Congress."  Although this is a rare occurrence, Congress has discretion to 
"define specific parameters for technical regulations or conformity assessment procedures, or even establish technical regulations and confor mity assessment procedures legislatively."  
 
22. Should the notifications referred in the sec tion “Technical regulations and standards” 
comply with the U.S. federal legislation? 
 
RESPONSE:   The United States does not understand the question that Brazil is posing.  U.S. 
notification practice is consistent with the relevant provisions of the TBT Agreement. 
 
23. Which measures is the United States taking to  replace the average 40-day period for comment 
to the 60-day period recommended by the WTO? 
 
RESPONSE:   We are reviewing the matter but believe th at the 40-day figure may be misleading.  
The United States often notifies measures that do not need to be notified for purposes of greater 
transparency (e.g., certain voluntary measures, requ ests for information in advance of a rulemaking, 
proposed measures based on relevant international standards), as well as measures to address urgent 
circumstances (e.g., certain interim final rules, ru les taken to comply with a court order).  The 
United States has notified hundreds of measures to th e WTO, including more than 60 this year alone.  
We will need to isolate the above-referenced notif ications from the remainder to determine whether 
there is an issue that needs to be addressed.    
24. Does the United States allow nationals from  WTO members to personally partake in the 
rulemaking procedures for development of tec hnical regulations and conformity assessment 
procedures? 
 
RESPONSE:   Yes, under U.S. law, including the Ad ministrative Procedure Act (APA), any 
stakeholder, foreign or domestic, is allowed to  provide comments on proposed regulations and the 
federal agency must consider all of the comments re ceived without discrimination.  Most U.S. States 
have an administrative procedure act similar to the federal APA.   
 
25. Even though “urgent problems” are not de fined by Executive Order 12889, what is the 
general understanding of those “urgent problems”? 
 WT/TPR/M/235/Add.1 
Page 50 
 
 
 RESPONSE:   The APA’s “good cause” provision allows ag encies to find that compliance with the 
required public notice and comment procedure would be “impracticable, unnecessary, or contrary to 
the public interest.”  Circumstances that justify the use of this provision normally involve “urgent 
problems” such as health, safety, and security emergencies that require immediate regulatory action.   
 
26. Executive order 12889, which regulates the pe riod for comments regarding U.S. technical 
and SPS regulations, makes an exception to the minimu m 75-day period in the case of SPS measures 
based on the need to address "urgent" problems. Br azil wishes to know if there are guidelines for the 
characterization of an urgent problem. Please exemplify.  
RESPONSE:   An outbreak or emergency health concern would warrant immediate action.  
 
27. Under which circumstances are notice and co mment requirements deemed "impracticable, 
unnecessary, or contrary to the public interest"? 
 RESPONSE:   See the answer to Question 25 . 
 
28. Does the United States recognize any procedu re with regard to regulatory cooperation such 
as equivalence of technical regulations or any other instruments of regulatory cooperation? 
 
RESPONSE:   The United States has employed several types of regulatory cooperation mechanisms.  
Many U.S. federal regulators have negotiated MOUs w ith their foreign counterparts in order to, e.g., 
exchange information and undertake other cooperativ e efforts.  While these are too numerous to list 
here, information about U.S. efforts on regulat ory cooperation can be found in the 2010 Report on 
Technical Barriers to Trade (http://www.ustr.gov/sites/default/files/REPORT%20ON%20 
TECHNICAL%20 BARRIERS%20TO%20TRADE%20FINALTO%20PRINTER%2025Mar09.pdf), 
including pages 32-38 (APEC) and 39-41 (North America).  In addition, the National Institute of Standards a nd Technology maintains a complete inventory of the 
government-to-government MRAs to which the United States
 is a party.  It also maintains a listing of 
the accreditation requirements for conformity  assessment bodies under each MRA to which the 
United States is a party and a list of conform ity assessment bodies that NIST has designated pursuant 
to each MRA as competent to perform tests or certif y products to ensure they conform to the other 
MRA party’s technical requirements.  (The Federal Communications Commission (FCC) website  
provides useful background information on U.S. MRAs and examples of how they work.) 
 
The United States also seeks to reduce foreign technical barriers by concluding “equivalency” 
arrangements with other governments.  A recent ex ample is the June 2009 exchange of equivalency  
determinations  between USDA and Canada's Food Inspection Agency on organic agricultural 
products.  As a result of that exchange, U.S. produc ers that a USDA-accredited agent has certified as 
meeting U.S. National Organic Program standards do not need to be certified under the Canada’s 
National Organic Standard in order to market their products in Canada as “organic.”  The exchange 
provides for Canadian producers to receive a sim ilar accommodation for products they export to the 
United States. 
 
29. What agency is in charge of  conducting inspections at the border, or even at manufacturing 
premises or retail outlets, to ensure compliance with  technical regulations? Which laws regulate this 
issue? 
 
RESPONSE:   There is no single answer to this question;  it depends on the sector.  Various 
regulatory agencies have such enforcement aut hority, depending on the specific activity being 
regulated.  For example, U.S. Customs and Border Protection (CBP) conducts inspections to secure  WT/TPR/M/235/Add.1 
 Page 51 
 
 
 U.S. borders while facilitating legitimate trade and tr avel.  Like all regulatory agencies, CBP issues 
and enforces regulations pursuant to laws passed by the Congress. 
 
30. What measures does the American government  take to prevent voluntary standards from 
becoming disguised technical barriers to trade?  
RESPONSE:   For voluntary measures, U.S. agencies conduct notice and comment rulemaking or 
publish draft measures for comment on their websites.  The United States often notifies such measures to the WTO under “other.”  Further, U.S. agencies a nd other U.S. stakeholders participate in standards 
development activities and, in those contexts, work to  ensure that the standards being developed, if 
subsequently adopted by Members, will not act as technical barriers to trade.  
 
(ix) Sanitary and phytosanitary measures 
 
31. According to Executive Order 12.866, an economic impact evaluation performed by the 
Office of Management and Budget (OMB) is requi red as part of the Animal and Plant Health and 
Inspection Service (APHIS) process of  risk assessment of a foreign produc t.  Therefore, the issuing of 
rules on recognition of sanitary status is conditione d to OMB`s economic evaluation, which leads to 
significant delays.  The SPS agreement states th at a risk assessment process can consider the 
economic losses due to the introduction of a disease agent, but not from market competition.  OMB`s 
economic impact evaluation takes into consideration th e potential trade impact of new imports to U.S. 
domestic producers.  Regarding the section “Sanita ry and phytosanitary measures”, which provision 
of the SPS agreement gives grounds for the inclusi on of the analysis of economic impact in the 
assessment of sanitary risk for the opening of th e U.S. market?  What are the scientific grounds for 
the use of such criteria? 
 RESPONSE:  The U.S. Administrative Procedures Act of 1946 established the regulatory process for 
all regulations.  This included public participation in the rule -making process, but ensured the 
scientific basis of final decisions.  The economic an alysis provides important information on the likely 
impact of a proposed regulatory change, but SPS me asures are not determined on the basis of the 
economic analysis – the Executive Order and APA ar e simply part of the internal transparency 
requirements within our government. 
 
32. According to paragraph 111, the “APHIS evaluat es the pest-free status of an area against the 
criteria of the IPPC standard for the establishment of pest-free areas, which has been incorporated by 
reference in the relevant regulations”. In the case of products of animal origin, what is the relation of 
the said development with the work of the World Animal Health Organization? 
 
RESPONSE:   APHIS also considers science-based sta ndards of the OIE as it sets its rules and 
regulations.  
33. Concerning the selling of gene tically engineered foodstuffs in U.S. markets, in those cases 
where they do not differ materially from their co nventional counterparts, would their label have to 
indicate that they are genetically engineered? 
 
RESPONSE:   In the United States, there exists no sp ecial labeling requirement for foods derived 
from products of genetic engineering (“GE food s”) as a class of foods.  Foods from new plant 
varieties must be as safe as comparable foods. 
 All new foods are required to be labeled when th ere is a significant change in that food (vs. 
comparable foods), i.e., nutritional, compositional,  a change in conditions of use, or when an 
allergenic component has been introduced in  a food where it does not naturally occur. 
 WT/TPR/M/235/Add.1 
Page 52 
 
 
 If there is no significant change, then a label is not required. 
 There is also a voluntary labeling system in the U.S.   However, all U.S. food labeling (mandatory or 
voluntary) must be truthful and not misleading.  Thus, for example, a food cannot be labeled as “non-
genetically engineered,” if no GE variety of th at food actually exists.  The product would not be 
allowed on the market if there was an identified health concern.  
(3) O
THER MEASURES AFFECTING INVESTMENT AND TRADE  
(iii) Government procurement  
 
34. As mentioned in the document WT/TPR/S/ 235, page 60, paragraph 190,  “Individual executive 
agencies often develop internal procurement poli cy and procedures to implement and supplement the 
FAR (Federal Acquisition Regulation).  Agencies may deviate from the FAR "when necessary to meet 
[their] specific needs and requirements", subject to  authorization by the agency's head.” Could U.S. 
better define the scope of terms like “when n ecessary” and “specific needs and requirements”, 
specifying practical situations wh ere these exceptions have taken place? 
 
RESPONSE:   The Office of Federal Procurement Policy Act  (41 U.S.C. 421(c)(2)) specifies the 
conditions for agency supplemental regulations as follows:  "(2) Any other regulations relating to 
procurement issued by an executive agency shall be limited to (A) regulations essential to implement 
Government-wide policies and procedures within  the agency, and (B) additional policies and 
procedures required to satisfy the specific and unique needs of the agency."  See also Federal 
Acquisition Regulation (FAR) Subpart 1.3 regard ing agency supplemental regulations and FAR 
Subpart 1.4 for Deviations from the FAR ( see www.acquisition.gov).  With regard to FAR deviations 
that have been granted, see  https://www.acquisition.gov/comp/caac/caacletters.htm. 
 
35. As mentioned in the document WT/TPR/S/23 5, page 60, Box III.4, “Prospective suppliers 
must register in the Central Contractor Regist ration (CCR) database prior to being awarded a 
federal procurement contract. […] Suppliers establis hed outside the United States must first obtain a 
NATO Commercial and Governmental Entity Code.”   What are the conditions that suppliers 
established outside the U.S. should accomplish to obtain a NATO Commercial and Governmental 
Entity Code?  What are the costs and how long does it take? 
 
RESPONSE:  For information on obtaining a NATO Comme rcial and Governmental Entity (CAGE) 
Code,  please see http://www.dlis.dla.mil/Forms/Form_AC135.asp.  Where a NATO CAGE code is 
obtained in the United States, there is no cost and it usually takes about one day.  However, other 
countries that issue NATO CAGE Codes may charge a processing fee.  For that information and the 
time it takes to obtain a Code from another country, please see the country point of contacts on the website noted above.  If a non-U.S. registrant has a ll application information readily available, the 
CCR registration process should take approximately one hour.  For more information, please see the 
CCR User’s Guide available at:  https://www.bpn.gov/ccr/handbook.aspx.  
 
36. Has the American Recovery and Reinvestment Act, described in paragraph 192, been adopted 
in a manner so as to not cause any trade-distor ting effects? Is it consistent with the SCM? 
 
RESPONSE:   The American Recovery and Reinvestment Act of 2009 (ARRA) requires that both of 
its “buy American” provisions must be applied "in a manner consistent with United States obligations 
under international agreements".   The regulations and measures that have been issued to implement 
these provisions ensure that the provisions are applied consistent with U.S. obligations under 
international agreements. 
 
37. As mentioned in the document WT/TPR/S/235 , page 61, Box III.4, “Under procedures other 
than sealed bids, the federal agency must select th e offer that represents the "best value".  The  WT/TPR/M/235/Add.1 
 Page 53 
 
 
 evaluation factors include price, quality, past perf ormance and technical ability of the supplier, and, 
for procurement that offers a significant opportunity  for subcontracting, the participation of small 
businesses.” Could U.S. better define the scope of  “significant opportunity for subcontracting”, 
specifying practical situations where these exceptions  have taken place?  What kind of criteria is 
commonly applied to determine it?  What is th e federal procurement amount expended by U.S. 
government covered by this exception? 
 
RESPONSE:   For information on subcontracting, please  see Federal Acquisition Regulation (FAR) 
Subpart 19.7 (www.acquisition.gov).  The United St ates does not have data on procurement that 
offers “significant opportunit[ies] for subcontracting”.  
 
38. As mentioned in the document WT/TPR/S/235, page 79, paragraph 62, “Procurement of more 
than US$100,000 must be set aside for small busin esses when there is a reasonable expectation that 
offers will be received from at least two small bus inesses, and awards will be made at a "fair market 
price".” What is the federal procurement amount  expended by U.S. government covered by this 
exception?  Which departments account for most par t of these expenses, and what are the main goods 
and services awarded?  Could U.S. better define the scope of “fair market price”? 
 
RESPONSE:   According to the latest figures available,  contained in the FY2008 U.S. statistical 
submission to the WTO Committee on Government Procurement,  the U.S.  federal government 
purchased $110 billion worth of goods and servi ces from small and minority businesses above the 
GPA threshold.  The federal agencies making most of these procurements were the Department of Defense, National Aeronautics and Space Admini stration, Health and Human Services, State 
Department, and the Department of Agriculture.  The main products and services these agencies 
purchased were architecture/engineering services, maintenance and repair of equipment services, 
space vehicle launchers, and automatic data processing support equipment. 
 Regarding determinations of “fair market va lue”, FAR 15.404 and FAR 19 set out methods that 
contracting offers may use to evaluate cost or price.  The U.S. Government Accountability Office 
(GAO) has also addressed evaluation issues.  For ex ample, it equated “fair market price” with price 
reasonableness in the context of a small business set-aside. See American Imaging Servs.
, B–238969, 
B–238971, July 19, 1990, 90–2 CPD 51 at 2. 
 
(iv) Subsidies and other government assistance 
 
39. Under its June 2010 credit agreement with the Treasury, Chrysler must manufacture in the 
United States at least 40% of its yearly U.S. sales volume or ensure that its U.S. production volume is 
at least 90% of its 2008 U.S. production volume. Is  such measure compatible with WTO’s agreements, 
particularly SCM and TRIMs? Please provide more information on this matter.  
 
RESPONSE:  The United States considers the credit agre ement to be compatible with its WTO 
obligations, including obligations under the agreemen ts identified by Brazil.  The credit agreement 
with Chrysler is not contingent upon export perfo rmance or the use of domestic over imported goods.  
Therefore, the United States considers it to be c onsistent with its obligations under the Agreement on 
Subsidies and Countervailing Measures.  Likewise, the terms of the loan to Chrysler do not implicate 
the obligations of the United States under the TRIMs Agreement.  
 40. The current charge of US$0.54 per gallon on imports of ethanol is about to expire on 
December 31, 2010.  Nonetheless, there are at leas t two important legislative proposals in Congress 
to extend that charge till 2016:  H.R. 4940 bill, presented by Representative Earl Pomeroy, and the 
S. 3231 bill, by Senators Charles Grassley and Kent  Conrad.  The US$0.54 per gallon additional duty 
is mandated in Chapter 99 of the Harmonized Tariff Schedule of the United States, which is 
designated as "temporary legislation";  yet this additional duty has been applied for three decades. WT/TPR/M/235/Add.1 
Page 54 
 
 
 Congress created this secondary tariff in 1980, shortly after creating tax incentives to the use of fuel 
ethanol. Currently, the U.S. ethanol production has surpassed 12 billion gallons per year, nearly 
twice that of Brazil. By the U.S. Administration own admission (report of the President`s Biofuels 
Interagency Working Group), the U.S. corn ethanol industry is 'mature'.  However, even if the 
President`s budget proposal, released on February 1s t, was quiet about the renewal of the secondary 
tariff, the Joint Committee on Taxation`s March 15t h analysis of the proposal included a one-year 
extension of the ethanol tariff in its estimates. Also , a Department of Energy official testifying before 
the House Ways & Means Committee on April 14th s uggested the Administration seeks to renew the 
45 cents per gallon tax incentive for the use of  ethanol (VEETC) for one year.  The Brazilian 
government has been committed to reducing barriers to  trade in clean energy. In this sense, the 
Brazilian Government would like to know how the U.S. Administration is planning to take the necessary steps to reduce U.S. barri ers to fuel ethanol trade, specific ally letting the current additional 
duty on fuel ethanol expire at the end of this year".  
RESPONSE:  The U.S. Congress has legislated the import surcharge on ethanol.  The United States 
is not in a position to speculate on any future actions that Congress might take on this issue.  
 
(v) Trade related intellectual property rights 
 
41. Regarding paragraph 215, please clarify w hat the United States has done in order to 
thoroughly implement paragraph 19 of the Doha Minist erial Declaration, especially the relationship 
between the TRIPS Agreement and the Convention on Biological Diversity. 
 
RESPONSE:   Paragraph 19 of the Doha Ministerial Declaration instructs the TRIPS Council “to 
examine, inter alia, the relationship between th e TRIPS Agreement and the Convention on Biological 
Diversity, the protection of traditional knowledge a nd folklore, and other rele vant new developments 
raised by members pursuant to Article 71.1.”  As a WTO Member, the United States has actively participated in these discussions.  In doing so, the United States has articulated its view that the 
TRIPS Agreement and the Convention on Biol ogical Diversity are mutually consistent. 
 42. Paragraph 221 mentions the U.S. Supreme Cour t decision in Bilksi vs. Kappos. According to 
the U.S. Supreme Court, “the decision states t hat, because the law does not categorically exclude 
them, patent claims for business methods may be c onsidered patentable matter, provided that they are 
not just abstract ideas.” Further, in the same par agraph, one may read that “claims that do not meet 
the machine-or-transformation test ma y still be eligible to be patented, but that such claims must also 
meet statute’s patentability requirements of nove lty, non obviousness and written description.” Please 
clarify the two sentences above and explain the machine-or-transformation test. 
 
RESPONSE:   To be patentable in the United States, inventions must qualify as patentable subject 
matter under U.S. law.  According to the U.S. Supr eme Court in Bilski v. Kappos, USPTO and courts 
may use the machine-or-transformation test as a us eful investigative tool for determining whether 
process claims qualify as patentable subject matter under 35 U.S.C. 101.  Under this test, a claimed 
process may qualify as patentable subject matter if it is  tied to a particular machine or apparatus, or 
transforms a particular article into a different state or  thing.  In addition, all inventions must meet the 
requirements of novelty, non obviousness and written description under Title 35 of the U.S. Code to 
be patentable.  
 
43. Paragraph 223 mentions the increasing patent pendency targets.  Please clarify the concrete 
effects in terms of patent quality considering the reported growing number of patent applications. 
 
RESPONSE:   USPTO is working, pursuant to its Stra tegic Plan, to increase patent quality and 
simultaneously decrease patent pendency time.  Initi atives to achieve these objectives include hiring 
new examiners, training and retaining them more ef fectively, promoting use of the hoteling program,  WT/TPR/M/235/Add.1 
 Page 55 
 
 
 building quality into every aspect of patent examin ation, fully leveraging and expanding the potentials 
of the electronic work environment and offering alte rnatives to the current one-size-fits-all approach 
to patent examination.  Between  March and August of 2010, pendency to first office action decreased 
by one month, despite an increasing patent applicatio n filing rate during that time period.  Compliance 
rates for patent quality increased during the same time period. 
 
44. In paragraph 234, regarding the participatio n of the United States in the WCT and WPPT 
treaties, please explain how the U.S. deals with limitations and exceptions to copyright and access to 
works that are in the public domain, considering th at these treaties include technological protection 
measures that may hinder or cripple access to certai n works. Please explain also the affirmation of 
the existence of an exemption from WPPT for broadcasting and public performance rights. 
 
RESPONSE:   The United States implemented Article 11 of the WIPO Copyright Treaty (WCT) and 
Article 18 of the WIPO Performances and Phonogr ams Treaty (WPPT) in the Digital Millennium 
Copyright Act of 1998.  Section 1201(a)(1)(A) of Title 17 prohibits the circumvention of a 
technological measure that effectively controls access to a “work protected under [the Copyright 
Act].”  Similarly, sections 1201(a)(2) and 1201(b) pr ohibit the trafficking in devices or services that 
circumvent a technological measure that effectively controls access to “a work protected under [the Copyright Act]” and a technological measure that effectively protects “a right of a copyright owner under [the Copyright Act] in a work or a portion th ereof,” respectively.  These statutory provisions 
exclude the application of Section 1201 to public domain works. 
 The United States notes that the prohibitions th at constitute legal protection for technological 
protection measures are distinct from the exclusive rights of copyright holders and thus have no bearing on the legal application of exceptions a nd limitations to exclusive rights.  This legal 
distinction is borne out by Secti on 1201(c)(1), which states that “[n]othing in this section shall affect 
rights, remedies, limitations, or defenses to copyri ght infringement, including  fair use, under this 
title.”  Nonetheless, Section 1201 contains a list of exemptions from the general prohibition on 
circumvention on technological protection measures.   These exemptions are found in 17 U.S.C. § 
1201(d) – (j).  In addition, section 1201 requires the Librarian of Congress to make a determination in 
a rulemaking proceeding as to whether persons who are users of a copyrighted work are, or are likely 
to be in the succeeding 3-year period, adversely affected by the prohibition to circumvent access 
controls in their ability to make non-infringing uses of  a particular class of copyrighted works.  See 17 
U.S.C. § 1201(a)(1)(C).  Moreover, although better viewed as a limitation on remedies rather than an 
exemption per se, U.S. law also requires courts to remit civil damages in any case in which a library, 
archive, educational institution, or public broadcast ing entity sustains the bur den of proving that it 
was not aware of and had no reason to believe that its acts constituted a violation of section 1201.  17 
U.S.C. § 1203(c)(5)(B).  These entities are also exem pt from any criminal liability for violations of 
the provisions on technological protection measures.   17 U.S.C. §1204(b).  These provisions ensure 
that technological protection measures do not hinder or cripple access to works.  As part of the triennial rulemaking proceedings  conducted by the Library of Congress under section 
1201(a)(1)(C) of the Copyright Act, the U.S. Co pyright Office has considered the effect of 
technological protection measures on public domain works.
3  Some commenters urged the exemption 
of a class of works consisting of what they termed  ``thin copyright works,'' consisting primarily of 
matter unprotected by copyright.  In its recommendation to the Librarian of Congress, the Register of Copyrights determined that the need  at that time for such an exemption had not been demonstrated.  
First, “in most cases the uncopyrightable material is  available elsewhere in ``raw'' form, but it is the 
inclusion of that material in a copyrightable database that renders it easier to use.”  Second, 
                                                     
 
3 See the Register’s Recommendation, Exemption to Prohibition on Circumvention of Copyright 
Protection Systems for Access Control Technologies, Fed. Reg. 65,209 (Oct. 27. 2000) available at:  
http://www.copyright.gov/fed reg/2000/65fr64555.html. WT/TPR/M/235/Add.1 
Page 56 
 
 
 commenters had not shown “that works of minimal copyright authorship are being attached to 
otherwise unprotectable material to take advantage of the 1201 prohibitions.”  The Register also found 
no showing “of any significant adverse impact thus far on nonprofit archival, preservation and 
educational activities or on criticism, comment, news  reporting, teaching, scholarship or research.”  
“Finally,” the Register explained, “in assessing the eff ect of circumvention on the market for or value 
of the works, it appears likely that if circumven tion were permitted, the ability of database producers 
to protect their investment would be seriously u ndermined and the market would be harmed.”  The 
record of section 1201(a)(1) rulemakings conducted to  date is available on the U.S. Copyright Office 
website for public viewing at www.copyright.gov/1201. 
 With respect to the United States exemption fro m the WPPT for broadcasting and public performance 
rights, the United States, pursuant to Article 15(3) of the WPPT, declared in a notification deposited 
with the Director General of WIPO, that it will ap ply the provisions of Article 15(1) of the WPPT 
only in respect of certain acts of broadcasting and communication to the public by digital means for 
which a direct or indirect fee is charged for re ception, and for other re transmissions and digital 
phonorecord deliveries, as provided under the United Stat es law.  This is consistent with the exclusive 
right of public performance for sound recordings under 17 U.S.C. § 106(6).  
45. Paragraph 238 states that “Sec tion 337 of the Tariff Act of 1930, declares unlawful ‘unfair 
methods of competition and unfair acts in the importa tion and sale of products in the United States, 
the threat or effect of which is to destroy or substantially injure a domestic industry, prevent the 
establishment of such an industry, or restrain  or monopolize trade and commerce in the United 
States.’” Please specify the relationship between th e antitrust and the intellectual property legislation 
as an additional means to avoid acts that restrain or monopo lize trade and commerce in the United 
States, considering monopolistic behaviors as re ported in the Federal Trade Commission’s study 
“Pay-for-Delay:  How Drug Company Pay-Offs Cost Consumer Billions”. 
 
RESPONSE:   The U.S. antitrust laws, in particular Sec tions 1 and 2 of the Sherman Act and Section 
5 of the FTC Act, prohibit acts that monopolize or restrain trade or commerce in the United States.  As a general matter, the antitrust laws work in tande m with the intellectual property laws to bring new 
and better technologies, products, and services to c onsumers at lower prices, and there is broad 
consensus that the basic goals of antitrust la w and intellectual property law are aligned. 
 
46. Considering that the U.S. Customs and Border and Protection (CBP) is empowered to make 
on-the-spot determinations of intellectual prop erty rights (IPR) infringement, as reported in 
paragraph 238, please clarify the m anner in which the officer reaches this determination.  Is it based 
upon a consultation of a database containing th e trademarks and copyright registers? Once the CBP 
makes a determination of an IPR infringement, is a j udicial review available for the importer of those 
goods? 
 
RESPONSE:   The manner in which U.S. Customs and Bo rder Protection (CBP) Officers determine 
that imported merchandise infringes intellectual prope rty rights will vary depending on the particular 
circumstances involved.  CBP has a multi-layered IP R enforcement strategy that seeks to deter the 
importation of infringing goods while facilitating the flow of legitimate merchandise.  In addition to 
seizing goods at the border, the strategy includ es post-importation audits, collaboration with our 
international trading partners and partnering with industry and other Federal agencies to enhance these 
efforts. 
 Enforcing intellectual property rights at the border involves numerous disciplines at CBP, including analysts, targeting staff, attorneys, auditors, laborat ory scientists and front line officers at the ports of 
entry.  Their efforts depend in large part on adva nce intelligence, such as, allegations from the trade 
community, importer track records, and predictions from risk modeling.  The latter is designed to  WT/TPR/M/235/Add.1 
 Page 57 
 
 
 complement traditional targeting techniques and is b ased on the statistical analysis of the agency’s 
data on imports and past violations to select high-risk shipments for examination.  In addition, CBP Officers receive regular product identification training from right owners and have 
access to on-line guides to supplement this training.   CBP’s Intellectual Property Rights Internal 
Search database ( a public version is available) of recorded trademarks and copyrights, while not an 
enforcement tool per se, also plays an important ro le in enforcement efforts, inter alia, by providing 
access to right owner contact information.  Lastly, in making infringement determinations, CBP Officers may seek technical input from right owne rs and legal advice from agency attorneys. 
Accordingly, the combination of targeting, produc t identification training, and technical and legal 
support operate to enable CBP Officers to take ex officio enforcement action at the border.  Once an 
infringement determination is made , the importer may lodge either an administrative (19 U.S.C. 1618) 
or judicial (19 U.S.C. 1608) appeal.  It should be noted, however, that CBP has ex offici o authority to enforce trademarks and copyrights at 
the border and that this authority is independe nt of the U.S. International Trade Commission’s 
authority referenced in paragraph 238 of  the TPR (Section 337;  19 U.S.C. 1337). 
 
47. With regard to paragraph 238, please clarify if it is possible to any owner of Intellectual 
Property Right (IPR) recognized by the U.S. compet ent authority to appeal to the U.S. International 
Trade Commission (USITC) aiming to avoid the entry and release of goods that infringes his IPRs or 
if this role of USITC is only available to American citizens and companies. 
 
RESPONSE:   A U.S. right holder, regardless of citizen ship (when dealing with an individual) or 
country of incorporation (when dealing with a company), may file a complaint at the ITC to obtain 
remedies against the importation of infringing merchandise as long as the entity filing the complaint 
satisfies the requirements found in 19 U.S.C. 1337(a)(2).  
CHAPTER IV - DEVELOPMENTS IN SELECTED SECTORS 
(1) A
GRICULTURE  
(ii) Agriculture policies  
 
48. Paragraph 15, page 83, of the document  ‘wt/tpr/s/235’, informs that “the Economic 
Adjustment Assistance Program provides a payme nt to domestic users of upland cotton from any 
source for specified uses, including modernizing plan ts or equipment.  Domestic users and exporters 
of extra-long staple cotton also receive payments when world market prices fall for four consecutive 
weeks below U.S. prices and below 134% of the loan rate for extra-long staple production”. 
Considering that domestic users of extra-long st aple cotton would benefit from lower world market 
prices, would they still be entitled to receive the payment provided by the Economic Adjustment 
Assistance Program, regardless of the source of the cotton used?  Would there be any conditionality 
for the domestic user to receive such payments? 
 RESPONSE:  The Economic Adjustment Assistance Program  only applies to upland cotton and does 
not apply to ELS cotton.  
49. Can the new Farm Act be considered a pr ogress towards the commitments that are being 
defined in the Doha Round? Regarding paragraph 22,  how should the reactivation of the “Dairy 
Export Incentive Program” in the light of U.S.’s negotiating position in the Doha Round, especially 
as regards the commitments stemming from the Hong Kong Ministerial Conference? 
 
RESPONSE:  The United States has consistently met its  WTO obligations on domestic support and 
will continue to do so.  As a st rong proponent of a new WTO agreement, the U.S. will of course abide 
by any new WTO commitments. Throughout the Doha negotiations, the United States has been a WT/TPR/M/235/Add.1 
Page 58 
 
 
 strong advocate of the multilateral elimination of the agricultural export subsidi es listed in Article 9 of 
the Agreement on Agriculture, including those curre ntly permitted to the United States (e.g. the export 
subsidies allowed for the Dairy Export Incentive Program).  Alt hough the United States utilized the 
DEIP program in marketing year 2008 and early in marketing year 2009 in response to the EU 
reintroducing export subsidies, the last DEIP subsidy was awarded in October 2009 as market 
conditions have improved.  Once the results of the Doha negotiations come into force, the 
United States will abide by the new commi tments on agricultural export subsidies. 
 50. The Cellulosic Biofuel Producer Credit progr am (Section 15.321 of the 2008 Farm Bill) 
establishes that producers can earn US$1.01 per ga llon of biofuel produced between December 31, 
2008, and January 1, 2013. On January 1, 2010, Congress voted to make black liquor, molasses-like residue left over from milling wood chips into pa per pulp, off limits for future tax credits.  For 
decades, paper companies have burned black liquor in boilers at power plants that generate electricity for paper mills. Black liquor contains li gnin and other chemicals that are extracted from 
wood chips in the pulping process.  By adding a small amount of diesel to black liquor, paper 
companies found they could claim an tax credit for production of alternative-fuel mixtures.  A new interpretation issued by U.S. Internal Revenue Service on the requirements for federal tax breaks on 
biofuels raised the possibility for paper compani es to retroactively claim additional credits under the 
Cellulosic Biofuel Producer Credit program till Janua ry 1, 2010.  A recent IRS memo states that 
`Black liquor meets the definition of cellulosic biofuel`.  The Brazilian Government would like to 
know if the new IRS interpretation of black liquor as a biofuel will allow paper producers to 
retroactively file for cellulosic biofuel producer cre dits till January 1, 2010, and how much such 
retroactive producer credits would amount to. 
 
RESPONSE:  The U.S. has undertaken several important cha nges in this area.  The Alternative Fuel 
Tax Credit was allowed to expire in 2009.  As Brazi l notes, an amendment to the health care reform 
bill excluded black liquor from the Cellulosic Biof uel Tax Credit. To answer Brazil’s specific 
question, paper producers may retroactively file for ce llulosic biofuel credits earned in 2009.  No tax 
data is available to answer how much will be cl aimed.  Although the cellulosic biofuel credit is $1.01 
per gallon as compared to the 50-cents-per-gallon alternative fuel credit the paper companies were 
claiming in 2009, allowing the cellulosic biofuel credit should not double the payout.  The alternative 
fuel credit was refundable, whereas the cellulosic biof uel credit is a nonrefundable income tax credit.  
Moreover, to get the cellulosic biofuel credit, the ta xpayer will have to pay back the alternative fuel 
credit.  In many cases, the alterna tive fuel credit, which taxpayers ha ve in hand, is likely to have a 
greater present value than an income tax credit that  will have to be carried over for a number of years 
and may never be usable. 
 
51. For losses incurred as result of  a disaster, producers count with the ”Supplemental Revenue 
Assistence Payments" (SURE) program, which grants  the subsidized contracting of crop insurance. 
The purpose of this program is to avoid case-by-c ase assistances.  Howeve r, many cotton producers 
from southern states (Arkansas, Mississipi and Louisiana) have not used SURE indicating that the 
insurance structure was not adequate to the producti on profile in the region.  Mentioning alleged 
losses to southern cotton production caused by floods in 2009, Senator Blanche Lincoln is seeking to 
grant the producers an "ad hoc" aid of approximately US$1.5 billion.  In a letter addressed to Senator 
Lincoln, vice-director of the Office of Management  and Budget Robert Nabors assured her that the 
U.S. Administration was committed to grant the "ad hoc" aid. The Brazilian Government would like to 
know the U.S.  Administration current position on th is matter and, if favorable to the extraordinary 
aid, how it is planning to legally justify the disbu rsement of these resources and to conciliate such 
disbursement with the U.S. ob ligations under WTO Agreements. 
 
RESPONSE:  Irrespective of the source of funding for disast er payments for agricultural producers - 
whether under 2008 Farm Bill “permanent” disaster  programs, or  other “ad hoc” programs or  WT/TPR/M/235/Add.1 
 Page 59 
 
 
 legislation, the United States will notify such paym ents accordingly and appropriately in line with 
criteria found in the Agreement on Agriculture.  
(iv) Support levels 
 
52. Could the U.S. detail the criteria used for allocation of tariff quotas to specific countries? 
This question has been raised before, during the la st Trade Policy Review of the United States, in 
June 2008, when it has been answered too generically. 
 RESPONSE:  These allocations are based on commitments made in previous negotiations under the 
GATT (now incorporated into the WTO).  In ca ses where country allocations are not directly 
contained in commitments made in previous negotia tions, allocations are made  consistent with GATT 
Article XIII.  
 
REPORT BY THE UNITED STATES (WT/TPR/G/235) 
 
1. In 2009, the U.S. Administration set a goal of doubling U.S. exports over the 2009-2014 
period. Considering that the U.S. exported $1. 56 trillion in good and services in 2009, which 
represents around 14.5 per cent of  world goods and services imports, is the U.S. Administration 
taking into account, in its National Export Initiative, the effects of this targ et in other economies, 
given the structure of world trade?  What are the main target markets to wh ere the U.S. is intending 
to increase exports in order to achieve this goal?  
 
RESPONSE:   A key determinant of U.S. export growth over the next few years will be the economic 
growth of our trading partners. In the short term, working to sustain a strong global economic 
recovery will require concerted and continued efforts by the Unite d States and its G-20 partners to 
ensure that the global economy shifts smoothly to more diversified sources  of economic growth.  
Over the medium and longer term, shifts in th e composition of economic growth in our trading 
partners will also be crucial to U.S. export growth .  A broad range of countries need to take policy 
actions that reduce their surpluses by stimulati ng domestic demand (especially consumption) and 
thereby increasing their demand for imports.  For details, including key markets, please see the 
“Report To The President On The National Export Initiative:  The Export Promotion Cabinet’s Plan 
For Doubling U.S. Exports In Five Years ” issued in September 2010, which can be found at:  
(http://www.whitehouse.gov/sites/defau lt/files/nei_report_9-16-10_full.pdf). 
 
2. The USA states on paragraph 4 of its Report (WT/TPR/G/235) that “concluding an ambitious 
and balanced Doha Round (…) remains a top U.S. trade ne gotiating priority.”  It also states that “A 
sound Doha agreement that provides meaningful liberaliz ation in all three core market access areas – 
agriculture, goods, and services – could boost the world economy, support m any good jobs, assist 
poorer countries, and reinforce confidence in a rul es based trading system.” The USA also asserts 
that “A weak agreement would not serve these intere sts and ultimately would weaken the WTO.”  
 
(a) Could the USA elaborate on what it sees as an amb itious and balanced outcome in the Agriculture 
disciplines of domestic support for developed countries?   (b) Could the USA elaborate on what it sees as an ambitious and balanced outcome in Agriculture 
market access for developed countries? 
 
(c) Could the USA define a “weak agreement”? Does it cover only elements of Market Access or does 
the U.S. also views domestic support in Agri culture part of the ambition of the Doha Round?  
 
RESPONSE:   The U.S. objectives for agriculture reform  continue to focus on the principle of 
substantial overall reforms, and specific commitme nts of interest in key developed and developing WT/TPR/M/235/Add.1 
Page 60 
 
 
 country Member markets.  The United States seeks ba lanced, ambitious results for each of the three 
pillars.  We view an ambitious outcome as the best  way to fulfill the promise of the Doha Round. 
 
In terms of what is currently on the table in the D oha negotiations, the value of what the United States 
would give in market opening, along with a reduc tion of U.S. agriculture support, is well-known and 
easily calculable.  In contrast, the value of new opportunities for our businesses, workers, farmers, and 
ranchers remains vague because of the broad flex ibilities available to key emerging markets, like 
China, India, and Brazil that are fast growing ec onomies and important markets of the future.  To 
achieve further progress, it is essential to gain more  clarity in the level of market access contributions 
by advanced developing countries, and ensure that the results provide significant new market 
opportunities in agriculture, goods, and services.  
3. As stated in Paragraph 4, the Doha Round remai ns a top U.S. trade negotiating priority.  In 
the light of the U.S. “leadership in the multilat eral trading system”, one of the fundamental features 
of U.S. trade policy, does the U.S. Administra tion considers the country plays adequately a leadership 
role for the conclusion of the Doha Round?  
 
RESPONSE:   The U.S. objectives for agriculture reform  continue to focus on the principle of 
substantial overall reforms, and specific commitme nts of interest in key developed and developing 
country Member markets.  The United States seeks ba lanced, ambitious results for each of the three 
pillars.  We view an ambitious outcome as the best  way to fulfill the promise of the Doha Round. 
 In terms of what is currently on the table in the D oha negotiations, the value of what the United States 
would give in market opening, along with a reduc tion of U.S. agriculture support, is well-known and 
easily calculable. In contrast, the value of new opp ortunities for our businesses, workers, farmers, and 
ranchers remains vague because of the broad flex ibilities available to key emerging markets, like 
China, India, and Brazil that are fast growing ec onomies and important markets of the future.  To 
achieve further progress, it is essential to gain more  clarity in the level of market access contributions 
by advanced developing countries, and ensure that the results provide significant new market 
opportunities in agriculture, goods, and services. 
 
4. As stated in Paragraph 4, the Doha Round rem ains a top U.S. trade negotiating priority. In 
the light of the U.S. “leadership in the multilat eral trading system”, one of the fundamental features 
of U.S. trade policy, does the U.S. Administra tion considers the country plays adequately a leadership 
role for the conclusion of the Doha Round?  
 
RESPONSE:   The United States continues to operate in a leadership role at the WTO, working to 
ensure that trade fulfills its potential as a powerfu l contributor to the revival of the global economy 
and the renewal of growth in which benefits are br oadly shared.  With regard to the Doha Round, the 
United States has promoted new approaches to addr ess significant gaps on core market access issues. 
It initiated and participated in multiple, detaile d bilateral discussions aimed at establishing a 
negotiating “playing field” which we hope will set th e stage for more intense and targeted give-and-
take negotiations.  This work, in conjunction with  on-going work in the Negotiating Groups and other 
configurations, can help us to build momentum  across all areas of the Doha Round negotiations. 
 
5. In Paragraph 1 the Report states that “t he WTO continues to serve as the multilateral 
foundation of U.S. trade policy”.  Is the po licy of creating an extensive series of bilateral and 
regional trade and investment agreements, as described in Paragraph 11, consiste nt with the priority 
the U.S. Administration gives to the WTO as the main venue for trade negotiations?   WT/TPR/M/235/Add.1 
 Page 61 
 
 
 RESPONSE:   The core objective of U.S. trade policy is  to open markets and to advance the rule of 
law through the multilateral trading system, as it has been since before the founding of the GATT.  A 
strong and vital WTO is central to that task.  The United States also pursues bilateral and regional free 
trade agreements (FTAs) that are complementary to  and compatible with advancing the goals of the 
multilateral trading system.  U.S. FTAs, because of their comprehensive duty-elimination and breadth 
of commitments, produce significant benefits for its partners, and, through th e economic growth this 
brings, for other trading partners as well.  This  also strengthens and expands the forces working 
towards global trade reforms.  The liberalization unde rtaken by many of our FTA partners has often 
led those Members to increased participati on in liberalizing efforts at the WTO. 
 
6. As mentioned in the document WT/TPR/G/235, page 9, paragraph 21, “( …) the United States 
will also enforce fully labor and environmental ri ghts specified in our trade agreements, including 
through dispute settlement as necessary. Over the la st year, we instituted more vigorous scrutiny of 
overseas labor practices that impinge upon labor obli gations in our trade agreements.”  Could U.S. 
present additional information regarding these labor and environmental clauses as well as their 
enforcement mechanism? Since labor affairs and ma tters should be discussed in the ambit of the 
International Labour Organization;  and considering that environmental concerns in the ambit f the 
WTO are still controversial issues, how does the U.S. Government intend to address these subjects 
vis-à-vis the present WTO agenda?  
 
RESPONSE:  United States trade agreements contain prov isions related to labor issues in the 
following areas:  adherence to internationally rec ognized labor rights;  effective enforcement of 
domestic labor laws;  fair and transparent pro cesses for adjudication of labor rights. (Further 
information on the labor aspects of specifi c trade agreements is available at: 
http://www.ustr.gov/trade-topics/labor/bilate ral-and-regional-trade-agreements). 
 
United States trade agreements also contain specific commitments related to effective enforcement of 
environmental laws, transparency and public pa rticipation in the deve lopment of policy and 
multilateral environmental agreements.  (Further information on the envi ronmental provisions of 
specific trade agreements is available at:  http ://www.ustr.gov/trade-topics/environment/bilateral-and-
regional-trade-agreements). 
 
Both labor and environment obligations are subjec t to the dispute settlement mechanisms of U.S. 
trade agreements, providing for monetary assessme nts or commercial remedies depending on the 
particular agreement.  
The DDA includes groundbreaking environmental mandates, including the liberalization of 
environmental goods and services and new disciplines on fisheries subsidies.  The United States is actively engaged in these negotiations and is suppor tive of ambitious results, consistent with these 
DDA mandates.  In addition, the United States par ticipates actively in continued discussions on trade 
and environment issues in the Committee on Trad e and Environment in Regular Session (CTERS). 
 
The United States will continue to encourage fu rther consideration of labor rights issues in 
multilateral fora.  However, it is not pa rt of the Doha Development Agenda.  
 
7. On paragraph 69 of its Report , the USA states that “Following a review of the Doha 
negotiations at the outset of this Administrati on, President Obama decided to support a different 
approach in order to revive the talks and gain a stro nger outcome, since the past negotiating process 
had produced no final agreement at ministerial gat herings in 2006, 2007, and 2008.”  Could the USA 
elaborate on how the new approach differentiates from the approach followed by the previous 
administration?   
 WT/TPR/M/235/Add.1 
Page 62 
 
 
 RESPONSE:   During the March 26, 2010, stock-taki ng meeting in Geneva, there was broad 
agreement among Members that the road ahead should focus on enga gement in various formats, 
including direct bilateral enga gement and small-group horizonta l discussions to help bridge 
negotiating gaps.  From the U.S. perspective, th is was an important step forward from previous 
approaches.  The United States has initiated and partic ipated in multiple, detailed bilateral discussions 
aimed at establishing a negotiating “playing field” which we hope will set the stage for more intense 
and targeted give-and-take negotiations.  This wo rk, in conjunction with on-going work in the 
Negotiating Groups and other configur ations, can help us to build momentum across all areas of the 
Doha Round negotiations.  WT/TPR/M/235/Add.1 
 Page 63 
 
 
 CANADA 
 
Report by the Government of the United States (WT/TPR/G/235) 
Part IV. Trade Policy Developments Since 2008;  (3) Bilateral Free Trade Agreements (FTAs);  
page 25, paragraph 109:  
 
The Competition Policy section of the FTA between the United States and Korea is very detailed (e.g. 
on transparency and procedural fairn ess) in comparison to the provisions set out in the North 
American Free Trade Agreement, or so me of the United States’ other FTAs. 
 
1. Could the United States explain why th ere has been a shift towards this approach?  
 
RESPONSE:  The United States has included some provi sions on transparency and procedural 
fairness in a variety of its FTAs since NAFTA, but th is has not meant a diminution in our interest in 
other competition-related aspects of such agreements .  It reflects increased interest in the related 
topics of government transparency and due pr ocess by business and other stakeholders, and by 
governments themselves, including the United States .  However, such provisions mostly are quite 
broad and general in nature.  Also, of course, ea ch FTA negotiation is unique in many aspects, as 
Canada indicates.  Report by the Secretariat (WT/TPR/S/235) Part II. Trade and Investment Policy Fram ework;  (4) Investment Agreements and 
Arrangements;  page 18, paragraph 34:  
 
2. Could the United States outline the status of the review of the “model BIT” and what is the 
timeframe for its expected completion?  
RESPONSE:   Questions 2 and 3 are addressed together in response to Question 3 below. 
 
3. What revisions, if any, does the United States exp ect to incorporate into a revised model BIT? 
 RESPONSE:  The Administration has received a large amount of input from the full range of 
stakeholders regarding many important issues in the model BIT.  We want to ensure that we have a 
full opportunity to carefully consider all such i nput before completing the review.  Given that the 
review is still pending, it would no t be appropriate to discuss specifi c changes under consideration.  
We can say, however, that we will be maintaining the core investment protections of the model BIT to 
ensure that our investors can compete on a level play ing field and are treated according to the rule of 
law in key foreign markets.  In addition, the Ad ministration is committed to strengthening labor and 
environmental protections, and we are exploring how we might do so in the model BIT.  We are also 
looking for ways to enhance provisions on transparen cy and public participation, which are concerns 
of a wide range of stakeholders. 
 
Part III. Trade Policies and Practices by Measure;  (1)  Measures directly affecting imports;  
(vi) Contingency Measures;  (a) Anti-dumpi ng and Countervailing Measures;  page 29, 
paragraph 48:   It is noted that the conference report to the 2010 Consolidated Appropr iations Act directed the 
Secretary of Commerce, working with other relev ant departments, to conduct an analysis of the 
relative advantages and disadvantages of prospective and retrospective systems of  the enforcement of 
anti-dumping and countervailing duty measures. The De partment of Commerce, in a Federal Register 
notice of March 31, 2010, asked for comments on th e issue. Commerce received comments from over 
three dozen parties and held a hearing on April 27, 2010, during which more than two dozen parties 
made presentations.  WT/TPR/M/235/Add.1 
Page 64 
 
 
 4. Has the Department of Commerce developed any conclusions further to this process, and are 
any changes to Commerce’s current method of trade  remedy duty enforcement being contemplated?  
 RESPONSE:  The Department of Commerce’s report to Congress on Retrospective and Prospective 
Antidumping and Countervailing Duty Collection Systems is in the final stages of review.  Once that 
process is complete, the report will be transmitted to the relevant Congressional committees, and upon 
approval will be made publicly available.   
 
On November 21, 2007 and June 8, 2008, the Go vernment of Canada submitte d to the Department of 
Commerce written comments regarding the issue of “targeted dumping.” The comments were further 
to Commerce’s requests for comments as published in the Federal Register on October 25, 2007 and 
May 9, 2008. On June 23, 2008, Commerce repor ted that comments had been received from 15 
parties.  
5. Could the United States elaborate whether Commerce has or is contemplating any change in 
its current use of the target dumping  methodology further to these comments?  
 
RESPONSE:   The Department of Commerce (DOC) is continually re-examining its practice with 
respect to the application of trade remedies, and input  from interested parties is a very important part 
of that process.  On a number of occasions ove r the past several years, DOC has sought public 
comment on the development of a methodology fo r determining whether “targeted dumping” is 
occurring.  Through this public comment process, DOC has received some very useful comments and 
suggestions on what guidelines, thresholds, and t ests it should use to identify and address targeted 
dumping.  As DOC continues to refine its practice, it will keep parties apprised of developments via 
public announcements in the Federal Register
. 
 
Part III. Trade Policies and Practices by Measure;  (1)  Measures directly affecting imports;  
(vii) Quantitative Restrictions, Controls and Licensing;  page 34:  As asked during the 2008 Trade Policy Review exer cise, Canada would again like to ask questions 
concerning the Marine Mammal Protection Act (MM PA).  In Canada’s view, the MMPA appears to 
be inconsistent with the obligations of the United States under the WTO agreements. Canada thanks 
the United States for the clarifications it provid ed in the past on the MMPA exceptions for certain 
Alaska natives, as well as on the conditions to be met for the National Oceanic and Atmospheric 
Administration to waive the prohibition on the importa tion of marine products.  Certain aspects of the 
MMPA, however, remain unclear. 
 6. Could the United States explain how under its  WTO obligations it justifies that the MMPA 
allows Alaska natives to produce and sell mari ne products in the United States under certain 
conditions, while denying the right of native people fr om other countries to sell marine products to the 
United States, when the taking of marine mammals  by native people from other countries meet the 
same conditions applicable to th e taking by Alaska natives? 
 
RESPONSE:  As explained in our 2008 responses, the MMPA provides for limited exceptions for 
taking of marine mammals by certain Alaska natives  provided that the taking is (a) for subsistence 
purposes;  (b) done for purposes of a limited trade in native handicrafts and clot hing;  and (c) is not 
accomplished in a wasteful manner.  These provisions of law are implemented by regulations and co-
management agreements that provide for the m onitoring of these populations and the harvests from 
these populations. Subsistence harvest quotas are est ablished and monitored by federal agencies and 
native governments.  In addition, the MMPA a llows for importation of seal products from other 
countries (including Canada) if:  (i) acquired in th ose countries as part of a cultural exchange with 
Alaska natives or (ii) imported for non-commercia l purposes in conjunction with travel in the 
United States or as part of a cultural exchange w ith Alaska natives.  Thus, the MMPA does, in fact,  WT/TPR/M/235/Add.1 
 Page 65 
 
 
 allow for importation of seal products from native people of Canada and elsewhere under limited 
circumstances.  
7. Canada would like to know why the United States still maintains a Presidential order 
withholding consideration of "...any Canadian request s for waivers to the exi sting moratorium on the 
importation of seals and/or seal products into th e United States" considering that the seal hunt in 
Canada is sustainable, well managed, strictly regulated and guided by rigorous animal welfare and 
conservation principles that are internationally recognized? 
 
RESPONSE:   As explained in our 2008 responses, the MMPA was enacted in 1972 to protect marine 
mammals from harassment, captu re, injury or other harm that could reduce marine mammal 
populations beyond the point at which they cease to be a significant functioning element in the ecosystem of which they are a part.  Any measures under this Act with respect to seal products are therefore aimed at the conservation of seal populations.  Part III. Trade Policies and Practices by Measure;  (1)  Measures directly affecting imports;  
(viii) Technical regulations and standards;  page 35 & 36, paragraph 81:  
 
The Secretariat notes that “the average period for comme nt specified in U.S. notifications of technical 
regulations and conformity assessment pro cedures between November 2007 and January 2010 is 
around 40 days, compared with the multi laterally recommended period of 60 days." 
 
8. Can the United States clarify whether the 40- day average comment period for United States 
TBT notifications relates to notifications under article  2.9 only or both 2.9 and 2.10 of the TBT 
agreement? 
 RESPONSE:   We are reviewing the matter but believe th at the 40-day figure may be misleading.  
The United States often notifies measures that do not need to be notified for purposes of greater 
transparency (e.g., certain voluntary measures, requ ests for information in advance of a rulemaking, 
proposed measures based on relevant international standards), as well as measures to address urgent 
circumstances (e.g., certain interim final rules, ru les taken to comply with a court order).  The 
United States has notified hundreds of measures to th e WTO, including more than 60 this year alone.  
We will need to isolate the above-referenced notif ications from the remainder to determine whether 
there is an issue that needs to be addressed.    
Part III. Trade Policies and Practices by Measure;  (1)  Measures directly affecting imports;  
(viii) Technical regulations and standards;  page 37 & 38, paragraph 91:  
 The Secretariat notes that the “Consumer Product Sa fety Commission must develop, in consultation 
with U.S. Customs and Border Protection, a ‘risk  assessment methodology’ for the identification of 
shipments of consumer products that are intende d for import and likely to include products in 
violation of import provisions enforced by the Comm ission”, and that such ri sk assessment will make 
use of information on manufacturers and importers who are "repeat offenders " of federal consumer 
product safety laws. 
 
9. Could the United States share with trading par tners details on the implementation of the “risk 
assessment methodology”?  
 RESPONSE:   Our risk assessment methodology is currently in development.  We would not be able 
to share any details until we have an in formation sharing agreement with Canada. 
 
10. Can the United States clarify whether spec ific measures are being undertaken for repeat 
offenders of federal consumer product safety  law? If so, will they be published?   WT/TPR/M/235/Add.1 
Page 66 
 
 
 RESPONSE:  Authority over repeat offenders is found in the CPSIA, Section 217.  An interpretive 
document on the civil penalty factors rule discusses how repeat offenders are to be treated.  This 
document, published in 2009, can be found on th e CPSC website:  http://www.cpsc.gov/about/ 
cpsia/sect217.html 
 CPSIA amended prior law to require the Commission to  now consider:  (1) the nature, circumstances, 
extent and gravity of the violation, including the natu re of the product defect or the substance;  (2) the 
appropriateness of the penalty in relation to th e size of the business or of the person charged, 
including how to mitigate undue adverse economic im pacts on small businesses;  and (3) other factors 
as appropriate.  These factors are in addition to the factors that were already required to be considered:  the severity of the risk  of injury;  the occurrence or absen ce of injury;  and the number of 
defective products or the amount of substance distributed.  
Part III. Trade Policies and Practices by Measure;  (1)  Measures directly affecting imports; 
(viii) Technical regulations and standards;  page 39, paragraph 93:  
 
The Secretariat notes that the U.S. Consumer Product Safety Commission estimates that the typical 
cost of third-party testing for toys is betw een US$1,000 and US$2,000, or around 4.4% of a 
hypothetical toy manufacturer's per-unit revenue. 
 
11. Can the United States provide clarification on how the Commission calculated the per-unit 
revenue cost estimates and indicate whether this estimate is also applicable to small and medium 
sized manufacturers?  
RESPONSE:  The questioner is referring to Appendix 1 in the staff briefing package that explained 
the justification for exempting periodic testing of children's products until a production volume of 
10,000 is reached.  The intent of the discussion was to  demonstrate that the testing rule would have a 
disproportionate impact on manufacturers of low-volume children’s products, many of which are small manufacturers.  
The $1,000-$2,000 dollar estimate for the typical cost of  testing toys is based on cost information that 
we obtained from multiple sources including testing labs, manufacturers, and public comments.  
Depending on the components and the tests required, th e cost to test some toys might be higher than 
this range and lower for other toys.  
The reference to the cost of testing being about 4.4%  of revenue is not an estimate of the average cost 
of testing as a percentage of revenue.  It is strictly applicable to the example used in the discussion.  In 
the discussion, it was assumed that a hypothetical toy retailed for about $8/unit (which is about the mean retail price of a toy according to a representative of a trade group) and that the manufacturer received about $3.38 per unit for the toy after the ma rkups at the wholesale and retail levels.  It was 
further assumed that the manufacturer produced 10,000 units of the toy and it costs $1,500 to test the 
toy.  In this particular case, the cost of t esting would be 4.4% of the revenue from that toy 
($1,500/10,000) ÷ $3.38).  If the number of units pr oduced or the revenue per unit were different, the 
cost of testing as a percent of revenue would also be different. 
 
Part III. Trade Policies and Practices by Measure;  (1)  Measures directly affecting imports; 
(viii) Technical regulations and standards;  page 39, paragraph 94:  
 The Secretariat notes that the Consumer Product Saf ety Commission has recommended that Congress 
should consider allowing the Commission to exempt certain products from th e limits established by 
the CPSIA “to ease the burdens of testing and certific ation on products unlikely to present more than 
a negligible health risk, and to  regulate on a timetable influenced by the seriousness of the actual 
risks not artificial deadlines”.  WT/TPR/M/235/Add.1 
 Page 67 
 
 
 12. Outside of direction from Congress, what me asures can the Commission undertake to lower 
the burden of testing and certifications of low-risk pr oducts, particularly with a view to alleviating 
costs to small- and medium-sized manufacturers?  
RESPONSE:   The Commission is consulting internally  on this matter to determine its options. 
 
Part III. Trade Policies and Practices by Measure;  (1)  Measures directly affecting imports; 
(ix) Sanitary and phytosanitary meas ures (SPS);  page 40, paragraph 99:  
 
The Secretariat's report notes that States are permitted to establish SPS measures, provided that these 
are consistent with federal rules and regulations, and with obligations under relevant WTO disciplines.  13. Could the United States describe the action it takes when SPS measures established by the 
States are not consistent with federal rules and regulations, and/or with obligations under relevant 
WTO disciplines?  
RESPONSE:  With regard to matters affecting internationa l trade, U.S. Government officials confer 
with state and local officials as appropriate and wo rk with the States to ensure measures are science 
based, transparent and consistent w ith our international obligations.  
 
Part III. Trade Policies and Practices by Measure;  (1)  Measures directly affecting imports; 
(ix) Sanitary and phytosanitary meas ures;  page 45, paragraph 123-124:  
 
The Secretariat's report notes the creation of the Food Safety Working Group to advise the President 
on how to strengthen the U.S. food safety system, adding that the working group has served as a 
mechanism to discuss and address cross-cutting issues such as new food safety legislation.   
 Comment:  Canada is following with interest the le gislative agenda and proposals of the U.S. House 
of Representatives and Senate on food safety.  The Government of Canada commends the U.S. on its efforts to strengthen its food safety system and l ooks forward to enhancing collaboration on key food 
safety issues of joint interest.    
 
RESPONSE:   The United States wishes to thank the Government of Canada for its continued 
cooperation and support in addressi ng potential food safety, animal  and plant health concerns. 
 Part III. Trade Policies and Practices by Measure;   (3) Other Measures Affecting Investment 
and Trade;  (iii) Government Procur ement;  page 60, paragraph 189:  
 The Secretariat report states that “OFPP and other federal agencies disseminate information on the 
federal procurement system through Acquisition Central and tender opportu nities through Federal 
Business Opportunities website (FedBizOpps).” 
 
Could the United States please provide a list of the websites where states and sub-federal entities covered under the GPA post their tender opportunities?  
RESPONSE:  The websites are as follows: 
 
Arizona:  https://procure.az.gov/bso/ Arkansas:  http://www.arkansas.gov/ dfa/procurement/bids/index.php 
California:  http://www.dgs.ca.gov/pd/Home.aspx Colorado:  http://www.colorado.gov/cs/Sa tellite/DPA-DFP/DFP/119926 4708367?opendocument 
Connecticut:  http://www.das.state.ct.u s/Purchase/New_PurchHome/Busopp.asp WT/TPR/M/235/Add.1 
Page 68 
 
 
 Delaware:  http://bids.delaware.gov/ 
Florida:  http://dms.myflorida.c om/business_operations/state_purchasing 
Hawaii:  http://hawaii.gov/spo/eprocurement 
Idaho:  http://adm.idaho.gov/purchasing/bidopportunities.html 
Illinois:  http://www.purchase.state.il.us/ipb/IPBhomep.nsf?Open Iowa:  http://bidopportunities.iowa.gov/ Kansas:  http://da.ks.gov/purch/contracts/bids.aspx Kentucky:  http://epr ocurement.ky.gov/ 
Louisiana:  http://wwwprd.doa.louisiana.gov/osp/lapac/pubmain.asp 
Maine:  http://www.maine.gov/portal/business/vendors.html Maryland:  https://ebidmarketplace.com/ Massachusetts:  http://www.comm-pass.com/ Michigan:  http://www.mich igan.gov/buymichiganfirst 
Minnesota:  http://www.mmd.admin.state.mn.us/solicitations.htm 
Mississippi:  http://www.mscpc.com/ 
Missouri:  http://oa.mo.gov/purch/ Montana:  http://svc.mt.gov/gsd/onestop/solicitationdefault.aspx New York:  http://www.ogs.state.ny.us/purchase/SearchBrowse.asp Nebraska:  http://www.das.state.ne.us/materiel/purchasing/ 
New Hampshire:  http://www.admin.state.nh.us/purchasing/vendorresources.asp 
Oklahoma:  http://ok.gov/DCS/Central_Purchasing/index.html Oregon:  http://www.oregon.go v/DAS/SSD/SPO/index.page 
Pennsylvania:  http://www.emarketplace.state.pa.us/ Rhode Island:  http://www.purchasi ng.ri.gov/rivip/PublicBidding.asp 
South Dakota:  http://www.state.sd.us/boa/opm/RFPS_Bids.htm 
Tennessee:  http://www.tn.gov/generalserv/purchasing/ 
Texas:  http://esbd.cpa.state.tx.us/ Utah:  http://purchasing.utah.gov/vendor/currentbids.html Vermont:  http://bgs.vermont.gov/purchasing/bids Washington:  http://www.ga.wa.gov/Business/3bids.htm 
Wisconsin:  http://vendornet.sta te.wi.us/vendornet/default.asp 
Wyoming:  http://ai.state.wy.us/generalservices/Procurement/index.asp Tennessee Valley Authority:  https://supplier.tva.gov/  Bonneville Power Administration:  http://www.bpa.gov/corporate/business/  Southeastern Power Administration:  http://www.fbo.gov/ 
Southwestern Power Administration:  http://www.fbo.gov/ 
Western Area Power Administration:  http://www.wapa.gov/business/default.htm    St. Lawrence Seaway Development Corporation:  http://www.fbo.gov/ Port Authority of New York and New Jersey :  http://www.panynj.gov/business-opportunities/ 
Port of Baltimore:  https://ebidmarketplace.com/ New York Power Authority:  http://www.nypa.g ov/doingbusiness/powerpurchase/powerpurchase.htm 
 Part III. Trade Policies and Practices by Measure;   (3) Other Measures Affecting Investment 
and Trade;  (iii) Government Procurement;  page 60, Box III.4:   The Secretariat report states that “The 15-day requi rement does not apply to the procurement of 
commercial items.” 
 15. Could the United States explain what  is considered a “commercial item”? 
 
RESPONSE:   A “commercial item” is defined in the Federal Acquisition Regulation (FAR) 2.101 
(See www.acquisition.gov) as follows:  WT/TPR/M/235/Add.1 
 Page 69 
 
 
 (1) Any item, other than real property, that is of a type customarily used by the general public or by 
non-governmental entities for purposes othe r than governmental purposes, and—  
 (i) Has been sold, leased, or licen sed to the general public;  or  
 (ii) Has been offered for sale, l ease, or license to the general public; 
(2) Any item that evolved from an item described in paragraph (1) of this de finition through advances 
in technology or performance and that is not yet av ailable in the commercial marketplace, but will be 
available in the commercial marketplace in tim e to satisfy the delivery requirements under a 
Government solicitation; (3) Any item that would satisfy a criterion expressed in  paragraphs (1) or (2) of this definition, but 
for—  
 (i) Modifications of a type customarily available in the commercial marketplace;  or   (ii) Minor modifications of a type not customarily available in the commercial marketplace made to meet Federal Government requirements.  Minor modifications means modifications that do 
not significantly alter the nongovernmental function or  essential physical charact eristics of an item or 
component, or change the purpose of a process. Fact ors to be considered in determining whether a 
modification is minor include the value and size of  the modification and the comparative value and 
size of the final product.  Dollar values and per centages may be used as guideposts, but are not 
conclusive evidence that a modification is minor;  (4) Any combination of items meeting the requirements of paragraphs (1), (2), (3), or (5) of this 
definition that are of a type customarily combined  and sold in combinati on to the general public;  
(5) Installation services, maintenance services, repair services, training services, and other services 
if—   (i) Such services are procured for support of an item referred to in paragraph (1), (2), (3), or 
(4) of this definition, regardless of whether such  services are provided by the same source or at the 
same time as the item;  and  
 (ii) The source of such services provides si milar services contemporaneously to the general 
public under terms and conditions similar to those offered to the Federal Government;  
(6) Services of a type offered and sold compe titively in substantial qua ntities in the commercial 
marketplace based on established catalog or market prices for specific tasks performed or specific 
outcomes to be achieved and under standard comme rcial terms and conditions . For purposes of these 
services—  
 (i) “Catalog price” means a price included in a catalog, price list, schedule, or other form that 
is regularly maintained by the manufacturer or ve ndor, is either published or otherwise available for 
inspection by customers, and states prices at whic h sales are currently, or were last, made to a 
significant number of buyers cons tituting the general public;  and  
 (ii) “Market prices” means current prices that ar e established in the course of ordinary trade 
between buyers and sellers free to bargain and that  can be substantiated through competition or from 
sources independent of the offerors.  (7) Any item, combination of items, or service refe rred to in paragraphs (1) through (6) of this 
definition, notwithstanding the fact that the item,  combination of items, or service is transferred 
between or among separate divisions, subsidiari es, or affiliates of a contractor;  or  
(8) A non-developmental item, if the procurin g agency determines the item was developed 
exclusively at private expense and sold in substa ntial quantities, on a competitive basis, to multiple 
State and local governments.”  
The Secretariat report states that “Al so, publication is not required when the head of the procuring 
agency determines in writing that advance notice is not appropriate or reasonable, after consultation 
with the Administrator for Federa l Procurement Policy and the Admini strator of the Small Business 
Administration”.  16. Could the United States provide exampl es of what is considered “appropriate or 
reasonable”? 
 WT/TPR/M/235/Add.1 
Page 70 
 
 
 RESPONSE:   The Small Business Act (15 U.S.C. 637(e)) and the Office of Federal Procurement 
Policy Act (41 U.S.C. 416)) require agencies to publish notices of proposed contract actions at the Government Point of Entry via the Internet at h ttp://www.fedbizopps.gov.  However, there are certain 
exceptions to this requirement at FAR 5.202.  An  example of a circumstance in which an advance 
notice is not considered “appropriate or reasonable” is the acquisition of vita l statistics information 
(such as birth and death certificate information) wher e the sensitive information is only available, in a 
specific electronic format, through states and jurisdictional government agencies. 
 The Secretariat report states that  “The legislation permits the use of non-competitive procedures 
under certain conditions, including the availability of  one supplier only […] and a determination by 
the head of the procuring agency that it is necessary  in the public interest to use procedures other 
than competitive procedures”.  17. Could the United States provide examples in wh ich it is “necessary in the public interest to 
use procedures other than competitive procedures”? 
 
RESPONSE:   FAR 6.302-7 provides that full and open competition does not need to be provided 
“when the agency head determines that it is not in th e public interest in the particular acquisition.”   
The “public interest” exception may be used, inter alia , for the acquisition of security services to 
protect officials and buildings and for emergency services to respond to disasters and acquisitions that 
affect public health. 
 
Part III. Trade Policies and Practices by Measure;   (3) Other Measures Affecting Investment 
and Trade;  (iii) Government Procur ement:  page 62, paragraph 196:  
 
The Secretariat report states that “Procurement of supplies or services valued at more than US$3,000 
but less than US$100,000 is reserved exclusively fo r small businesses, unless the procuring entity 
determines that there is not a reasonable expecta tion of obtaining two or more responsible small 
business concerns that are competitive in terms of market prices, quality and delivery”.  Procurement 
of more than US$100,000 must be set aside for small businesses when there is a reasonable 
expectation that offers will be received from at le ast two small businesses, and awards will be made at 
a fair market price’.  18. Could the United States please define what  is intended by the expression “reasonable 
expectation”? 
 RESPONSE:   The Federal Acquisition Regulation states with  respect to the determination of whether 
a small business set aside is required: “Although past acquisition history of an item or similar items is 
always important, it is not the only factor to be considered in determining whether a reasonable 
expectation [of receiving two offers and award made  at fair market price] exists.”  FAR 19.502-
2(b)(2).  The FAR also requires the contracting officer to utilize techniques for conducting market 
research that include the following (FAR 10.002(b)(2)): 
(i) Contacting knowledgeable individuals in Government and industry regarding market 
capabilities to meet requirements. (ii) Reviewing the results of recent market res earch undertaken to meet similar or identical 
requirements. 
(iii) Publishing formal requests for information in appropriate technical or scientific journals or 
business publications. (iv) Querying the Government-wide database of  contracts and other procurement instruments 
intended for use by multiple agencies and othe r Government and commercial databases that 
provide information relevant to agency acquisitions. (v) Participating in interactive, on-line comm unication among industry, acquisition personnel, 
and customers.  WT/TPR/M/235/Add.1 
 Page 71 
 
 
 (vi) Obtaining source lists of similar items from other contracting activities or agencies, trade 
associations or other sources. (vii) Reviewing catalogs and other generally  available product literature published by 
manufacturers, distributors, and dealers or available on-line. 
(viii) Conducting interchange meetings or holding presolicitation conferences to involve 
potential offerors early in the acquisition process. 
 
19. Could the United States please explain how th e notion of “fair market price” is evaluated? 
 
RESPONSE:   FAR 15.404 and FAR 19 set out methods that  contracting offers may use to evaluate 
cost or  price.  The U.S. Government Acc ountability Office (GAO) has also addressed evaluation 
issues.  For example, it equated “fair market price” with price reasonableness in the context of a small business set-aside.  See American Imaging Servs
., B–238969, B–238971, July 19, 1990, 90–2 CPD ¶ 
51 at 2.  Part III. Trade Policies and Practices by Measure;   (3) Other Measures Affecting Investment 
and Trade;  (iii) Government Proc urement;  page 63, paragraph 197: 
 The Secretariat report notes that “In fiscal year 2007, small businesses were  awarded approximately 
22% of the US$378.5 billion in procurement for which they were eligible. The statutory goal is at 
least 23%. Nearly US$44 billion in  federal procurement was awarde d in fiscal year 2007 to small 
businesses through non-competitive or r estricted competition methods.” 
 20. Could the United States please clarify und er what circumstances small businesses would be 
eligible? 
 RESPONSE:   The eligibility requirements vary among the small business programs ( See Small 
Business Regulations, 13 CFR parts 121, 124, 125, 126 and 127 (http://www.sba.gov/tools/resource 
library/lawsandregulations/inde x.html) and FAR Part 19. 
 
21. Could the United States please give more sp ecifications on the non-competitive and restricted 
competition methods used to awar d procurement to small businesses? 
 
RESPONSE:  The non-competitive competition methods used are sole source awards ( e.g., 8(a) sole 
source award).  The restricted competit ion methods used are the set asides ( e.g., small business set 
aside).  These sole source and restricted competiti on methods are set forth in the Small Business Act 
or the Federal Acquisition Regulation for each small business program and are exempt from the 
Competition in Contracting Act’s requirements that contracting officers shall promote and provide for 
full and open competition in soliciting offe rs and awarding Government contracts. 
 
Part III. Trade Policies and Practices by Measure;   (3) Other Measures Affecting Investment 
and Trade;  (iii) Government Proc urement;  page 63, paragraph 198: 
 
The Secretariat report states that “Access conditions  to state procurement are defined in state 
legislation:  37 states participate in the GPA. U nder reciprocity laws, many states increase the price 
of an out-of-state offer by the preference margin  granted in that state to resident bidders.” 
 
22. Could the United States explain how they en sure that the reciprocity laws and the preference 
margin are not transposed at the interna tional level for entities covered under the GPA? 
 
RESPONSE:  The United States complies with its intern ational obligations with respect to 
government procurement covered by international agreements.  For example, the Buy American Act 
is implemented through the FAR.  FAR part 25 ad dresses the Buy American Act and U.S. Federal WT/TPR/M/235/Add.1 
Page 72 
 
 
 procurements subject to obligations under interna tional agreements.  FAR se ction 25.001(b) provides 
that “The restrictions in the Buy American Act ar e not applicable in acquisitions subject to certain 
trade agreements.  See FAR 25.4. The United States works clo sely with State authorities to ensure 
compliance with U.S. obligations. 
 
Part III. Trade Policies and Practices by Measure;   (3) Other Measures Affecting Investment 
and Trade;  (iv) Subsidies and other government assistance;  (a) Genera l features;  page 63, 
paragraph 200:  
 
A U.S. Internal Revenue Service memorandum dated June 28, 2010, concluded that black liquor sold 
or used before January 1, 2010, meets U.S. En vironmental Protection Agency (EPA) registration 
requirements for fuel and fuel a dditives in section 40(b)(6), the Cellulosic Biofuel Producer Credit 
(CBPC).   
23. Could the United States elaborate on the financial impact of this change factored into total 
tax benefits cited in paragraph 200?   
RESPONSE:  The U.S. has undertaken several important cha nges in this area.  The Alternative Fuel 
Tax Credit was allowed to expire in 2009, and an amendment to the health care reform bill excluded 
black liquor from the Cellulosic Biofuel Tax Credit.   To answer Canada’s specific question, no tax 
data is available to answer this question at this  time.  Although the cellulosic biofuel credit is $1.01 
per gallon as compared to the 50-cents-per-gallon alternative fuel credit the paper companies were 
claiming in 2009, allowing the cellulosic biofuel cr edit should not double the layout.  The alternative 
fuel credit was refundable, whereas the cellulosic bi ofuel credit is a non-refundable income tax credit.  
Moreover, to get the cellulosic biofuel credit, the ta xpayer will have to pay back the alternative fuel 
credit.  In many cases, the alterna tive fuel credit, which taxpayers ha ve in hand, is likely to have a 
greater present value than an income tax credit that  will have to be carried over for a number of years 
and may never be usable.  
24. What is the total estimated tax credit impact of this decision?  
 
RESPONSE:   See answer above. 
 
25. Can black liquor producers return Alterna tive Fuels Mixture Tax Credit payments already 
received and instead claim the non-refundable tax credit under the CBPC?  
 
RESPONSE:   Yes. 
 
26. Can the tax credits under the CBPC be carried forward for use in future years? 
 
RESPONSE:   Yes. 
 
27. Can companies not already registered as pr oducers of cellulosic biofuels do so now and 
claim the CBPC retroactively for past periods? 
 
RESPONSE:   Yes. 
 
Part III. Trade Policies and Practices by Measure;   (3) Other Measures Affecting Investment 
and Trade;  (iv) Subsidies and other government  assistance, (c) Assistance to the Energy Sector; 
page 66, paragraph 210:  
 
Canada understands that the U.S. military is contri buting to research funding and testing of aviation 
biofuel.  WT/TPR/M/235/Add.1 
 Page 73 
 
 
 28. Can the United States clarify what are the c ontributions the United States military is making 
to alternative fuels in aviation? 
 
RESPONSE:  It is not the role of the Department of Defense (DOD) to support projects to create new 
fuels, rather DOD tests biofuels and additives to me et military specifications.  As one of the largest 
consumers of oil, DOD naturally is  interested in managing the availa bility and cost of fuel through 
researching the potential uses of alternative fuels or  additives, and in researching means to decrease 
the emissions of greenhouse gasses.  
The Department has initiated several fundamental research projects through grants and contracts.  
Most fundamental research projects are not limited to aviation  biofuels.  One research project, 
however, will develop computational and kinetic models that accurate ly simulate the burning of jet 
fuel.  The Department also has some applied r esearch projects to focus on military specifications.  
Some Canadian firms have participated in th ese projects.  Applied research projects regarding 
aviation biofuels focus on operational fuel qualit y issues and transportation delivery methods for 
military aircraft.  They include studies to improve product quality, cost, and testing of fuel additives 
and biofuels to meet exacting military specificati ons, such as improving fuel performance in a variety 
of climates and altitudes.   
Part III. Trade Policies and Practices by Measure;   (3) Other Measures Affecting Investment 
and Trade;  (v) Trade Related Intellectual Property Rights, page 67:  
 The following questions are not related to spec ific paragraphs but are of a broader nature.  
 The Secretariat Report notes that the United States has completed its ratification of the Singapore 
Treaty on the Law of Trademarks. Canada understands  that the United States was not required to 
enact new legislation in order to ratify the treaty but would be interested to know if the USPTO had to 
make any administrative changes.  29. Could the United States please provide details  concerning any changes in USPTO policies or 
procedures that were necessary to implement the treaty?  
 
RESPONSE:   The United States did not make any changes to USPTO policies or procedures, or to its 
law, in implementing the Singapore Treaty on the Law of Trademarks (STLT).  
Canada notes that decisions rendered by the Supreme C ourt of the United States in "College Savings 
Bank v. Florida Prepaid Postsecondary Education Expense Board", and in "Florida Prepaid 
Postsecondary Education Expense Board v. College Savings Bank" raise questions about the U.S. 
compliance with Art. 44(2) of the TRIPS Agreem ent.  Canada understands that there was also an 
attempt to resolve the issue rai sed by these decisions through legislation, namely, through the 
"Intellectual Property Restoration Act of 2003 (H.R. 2344)."  
 
30. Is there an intention to re-introduce legisl ation to attempt to address this issue? 
 
RESPONSE:   We are not aware of any current intention to introduce legislation comparable to H.R. 
2344, the "Intellectual Property Restoration Act of 2003.  On July 26, 2010, the United States Court of Appe als, Fifth Circuit released a decision regarding the 
application of U.S. laws related to the circumven tion of technological measures (TMs).  Despite a 
general legislative prohibition on the circumvention of 'access control' TMs, the court found that the 
law only applies to "forms of access that woul d violate or impinge on the protections that the 
Copyright Act otherwise affords copyright owners."  Access controls that prevent mere use or viewing 
of copyright material would not benefit from the legal protections.  The court also suggested that WT/TPR/M/235/Add.1 
Page 74 
 
 
 circumvention of a TM to access a work "to use it wi thin the purview of "fair use" permitted under the 
Copyright Act" would not attract liability.    
31. Does this mean that the Digital Millennium Copyright Act (DMCA) permits circumvention of 
a technological measure where such circumvention is  for a purpose other than infringing copyright? 
 
RESPONSE:  17 U.S.C. § 1201(a)(1)(A) prohibits the circumvention of a technological measure that 
effectively controls access to a copyrighted work.  The Digital Millennium Copyright Act (DMCA) 
defines the phrase “circumvent a technological measu re” to mean “to descramble a scrambled work, 
to decrypt an encrypted work, or otherwise to avoid, bypass, remove, deactivate, or impair a 
technological measure, without the authority of the copyright owner.” 17 U.S.C. § 1201(a)(3)(A). The statute also defines “effectively co ntrols access to a work” to mean th at “the measure, in the ordinary 
course of its operation, requires the application of in formation, or a process or a treatment, with the 
authority of the copyright owner, to gain access to  the work.” 17 U.S.C. § 1201(a)(3)(B).  The plain 
language of section 1201(a)(1)(A) restricts any unauthorized access to a copyrighted work that is 
protected by an access control;  nothing in the text of the statute links “access” with infringement of 
the underlying copyright.  The United States notes that  the Fifth Circuit’s decision is under appeal.  
 
Part III. Trade Policies and Practices by Measure;  (3) Other Measures Affecting Investment 
and Trade;  (vi) Competition policy;  (a) Gen eral features and policy;  page 77, paragraph 247:  
 32. Are efforts under way at present to negotiate further international cooperation instruments on 
competition enforcement? If so, with whom, in  what form, and what is a rough timeline for 
completion? 
 RESPONSE:   The United States does not normally disclose such information before a particular 
agreement or understanding is completed, and thus cannot comment further.    
 
Part IV. Developments in Selected Sectors;  (1 ) Agriculture;  (i) Agriculture in the United 
States;  page 91, paragraph 51: 
 
The report notes that “It [Chart IV.1] does not include counter-cyclical payments, which though 
price-based, are decoupled from production”.  In the context of the WTO Agreement on Agriculture 
the term “decoupled” has a certain meaning which is usually associated with the criteria in paragraph 6, Annex 2 of the Agreement.   
 
33. Could the United States elaborate as to how counter-cyclical payments can be considered 
“decoupled”? 
 
RESPONSE:   In paragraph 10, page 82, the report re flects the nature of the Counter Cyclical 
Payment (CCP) program, pointing ou t that “although payments are based on prices”, they do not 
affect current production.  That is, current productio n on land that is eligible for CCP payments is not 
tied to the program nor is even required, and the size of the payment is not affected by current production of any crop.  Furthermore, payments are based in part on historical yield and historical 
bases – again, not tied or coupled to current production.  Notwithstanding, the United States does not classify CCP as decoupled green box payments with in the meaning of AoA Annex 2 criteria as 
payments are also based in part on price.   
 
Part IV. Developments in Selected Sectors;  (2) Financial Services;  (i) General legal framework; 
page 94, paragraph 57:  Paragraph 57 states that “[u]nder the McCarran-Fer guson Act of 1945 (U.S. C ode Title 15, Chapter 
20), regulation of insurance services is primarily at the state level.” Part Five of the Wall Street  WT/TPR/M/235/Add.1 
 Page 75 
 
 
 Reform and Consumer Protection Act establishes the Federal Insurance Office which will be tasked 
with coordinating international insurance matters.  34. To what extent will the Federal Insuran ce Office have authority to make commitments in 
international fora on insurance supervisory standards  without consultation with individual states? 
 
RESPONSE:   The Dodd–Frank Wall Street Reform a nd Consumer Protection Act (Public Law 111-
203, H.R. 4173) was signed into law by President Barack Obama on July 21, 2010.  This legislation establishes new authorities and supervisory directi on with regard to the U.S. financial markets 
including:  banking, securities, insurance, deriva tives, executive compensation, consumer protection 
and corporate governance.  Following the bill’s p assage, the regulatory implementation phase began. 
While few provisions of the bill are effective immedi ately (for example, the liquidation authority), in 
general the legislation will become effective in stages.  The legislation is complex and requires 
approximately 250 rulemakings and 70 studies.  Over  the next 6 to 18 months, regulators will 
undertake an intense period of rulemaking.  Th e rulemaking process will expand upon and flesh out 
the parameters of the new regulatory framework.  The resulting regulatory regime will contain both 
new elements and elements drawn from current U.S.  financial regulation.  In addition, regulatory 
implementation will likely be a dynamic process.   Rulemaking will include opportunity for public 
comment and all interested parties are invited to submit comments.  Interested persons may submit 
comments electronically through the Federal eRulemaking Portal at:  www.regulations.gov.  
Electronic submission of comments allows the commenter maximum time to prepare and submit a 
comment, ensures timely receipt, and enables the comments to be made available to the public.  
Comments submitted electronically through the www.re gulations.gov website can be viewed by other 
commenters and interested members of the public.  Part IV. Developments in Selected Sectors;  (2) Financial Services;  (i) General legal framework; 
page 94, paragraph 57: 
 
Paragraph 57 states that “[t]he Federal Reser ve is the umbrella regulator for financial 
conglomerates that include a bank.  The activities of subsidiaries of financial holding companies 
(FHCs) are regulated by several different regulators.” 
 
35. We understand that U.S. risk-based and lever age capital requirements will be extended to 
foreign bank holding companies with operations in the U.S. How will this be implemented? 
 
RESPONSE:   See response to Question 38 below. 
 
Part IV. Developments in Selected Sectors;  (2) Financial Services;  (i) General legal framework; 
page 94, paragraph 58:  Paragraph 58 states that “[t]here have been no ma jor changes affecting the basic conditions of 
market access and national treatment for foreign financ ial institutions in the United States since 
2008.” 
 Canadian financial institutions have raised concer ns about their ability to comply with potential 
requirements under the Foreign Account Tax Co mpliance Act as reporting obligations for 
participating financial institutions may conflic t with domestic regulatory requirements.   
 
36. Will the application of the regime take into  consideration the unique circumstances of foreign 
institutions such as the low risk of U.S. tax evasion posed by Canadian financial institutions owing 
Canada’s comprehensive tax treaty with the U.S.? 
 RESPONSE:   See response to Question 38 below. WT/TPR/M/235/Add.1 
Page 76 
 
 
 37. What is the current status of the drafti ng of regulations under the Foreign Account Tax 
Compliance Act? 
 RESPONSE:   See response to Question 38 below. 
 
38. When does the U.S. anticipate the regulations  will be completed and brought into force?   
 
RESPONSE to Questions 35-38:  The compliance provisions included in the Hiring Incentives to 
Restore Employment Act of 2010 (HIRE Act), or iginally introduced as the Foreign Account Tax 
Compliance Act (FATCA) and hence commonly referred to as such, addresses gaps in current information rules for U.S. taxpayers by requiring a fo reign financial institution to report the identity of 
its U.S. accountholders, along with information about  their accounts, or be subject to a withholding 
tax on payments of U.S.-source income or gross proceeds from the sale of certain assets producing U.S.-source income. 
 
Although the FATCA provisions will not be effe ctive until 2013, the Treasury Department has 
already committed significant resources to deve loping preliminary guidance under FATCA and is 
seeking input from stakeholders, so that interest ed parties have time to comment and express any 
concerns as more final guidance is developed.  In  this regard, the Treasury Department has just, on 
August 27, released a notice describing prelim inary guidance and requesting comments on those 
proposals and other issues under FATCA.  The notice re flects efforts to balanc e the goals of reducing 
offshore tax evasion while minimizing the administra tive burdens imposed on affected parties, as well 
as a commitment to an open, collaborative rulemaki ng process.  More specifically, the notice indicates 
that the Treasury Department is considering wa ys to reduce the burden imposed by FATCA by 
building upon cooperation under existing agreements, such as bilateral tax treaties, and solicits 
comments on these and other possible approaches. 
 
Part IV. Developments in Selected Sectors;  (2 ) Financial Services;  (iv) Financial regulatory 
reform;  page 97, paragraph 69:  
 
Paragraph 69 states that “[o]n 17 June 2009, the U.S. Administration released the details of its comprehensive financial regulatory reform proposal, aimed at addressing the regulatory gaps that resulted in the financial crisis.  This white pap er was soon followed by proposed implementing 
legislation.”  
The Wall Street Reform and Consumer Protection Ac t provides authority for the Federal Reserve to 
apply enhanced supervision and pruden tial standards on institutions deem ed systemically important.   
 
39. To what extent do these new authorities appl y to foreign-owned financial companies with 
operations in the United States? 
 RESPONSE:   See response to Question 48 below. 
 
The Wall Street Reform and Consumer Protection Act allows exemptions for FDIC-insured 
institutions from the definition of swaps and security-based swap entities which limit those entities’ 
ability to receive federal assistance when those institutions use sw aps for the purposes of hedging. 
 
40. Could the United States please advise how fo reign entities that use swaps for such purposes 
will be treated? 
 
RESPONSE:   See response to Question 48 below.  WT/TPR/M/235/Add.1 
 Page 77 
 
 
 The Wall Street Reform and Consumer Protection Ac t allows for the imposition of more stringent 
prudential requirements on systemically important  non-bank financial companies and bank holding 
companies that do not submit acceptable living wills.    
41. Could the United States explain if this exte nds to foreign-owned financial entities? If so, 
would there be recognition of the living will requirements for foreign entities in their home jurisdictions? 
 
RESPONSE:   See response to Question 48 below. 
 
The Wall Street Reform and Consumer Protection Act restricts proprietary trading and investments 
into hedge funds and private equity funds by  insured depository institutions and bank holding 
companies.   42. Could the United States explain how this w ill this apply to foreign-owned entities?   
 
RESPONSE:   See response to Question 48 below. 
 
43. How will the geographical location of the restricted activities be taken into account? 
 RESPONSE:   See response to Question 48 below. 
 
Part IV. Developments in Selected Sectors;  (2 ) Financial Services;  (iv) Financial regulatory 
reform;  page 97, paragraph 70: 
 
Paragraph 70 states that “[t]he [regulatory reform] proposal is structured around five key objectives:  (1) promote robust supervision and regulation of financial firms;  (2) establish 
comprehensive supervision of financial markets;  (3) protect consumers and investors from financial 
abuses; […].”  While the head of the Bureau of Consumer Financia l Protection is appointed by and reports to the 
President, it is to be housed  within the Federal Reserve. 
 44. Are there measures envisioned to ensure i ndependence of the Consumer Bureau from other 
activities of the Federal Reserve? 
 RESPONSE:   See response to Question 48 below. 
 
The proposed ‘Consumer Financial Civil Penalty Fund’ no tes that it is to be made available to aid 
victims of illegalities.  45. Are payouts from this fund envisioned for criminal cases, or would civil compensation be 
covered by the fund as well?  
RESPONSE:   See response to Question 48 below. 
 
46. That is to say, could a consumer receive compensation where the Bureau has issued a civil 
penalty against an institution for a breach of the legi slation, or is it only available to victims where a 
court finds the institution to be in criminal violation of the law? 
 
RESPONSE:   See response to Question 48 below. 
 47. Will foreign consumers receive the sa me treatment as domestic consumers? WT/TPR/M/235/Add.1 
Page 78 
 
 
 RESPONSE:   See response to Question 48 below. 
 
48. Are any new consumer protection regulati ons or amendments to current regulations 
envisioned?  If so, how will foreign consumers be  treated and how will the requirements impact 
foreign financial institutions?   
 
RESPONSE to Questions 39-48:  The Dodd–Frank Wall Street Refo rm and Consumer Protection 
Act (Public Law 111-203, H.R. 4173) was signed into  law by President Barack Obama on July 21, 
2010.  This legislation establishes new authorities and supervisory direction with regard to the U.S. 
financial markets including:  banking, securities, insurance, derivatives, executive compensation, 
consumer protection and corporate governance.  Following the bill’s passage, the regulatory 
implementation phase began.  While few provisions  of the bill are effective immediately (for 
example, the liquidation authority), in general the legislation will become effective in stages.  The 
legislation is complex and requires approximately 250  rulemakings and 70 studies.  Over the next 6 to 
18 months, regulators will undertake  an intense pe riod of rulemaking.  The rulemaking process will 
expand upon and flesh out the parameters of the new regulatory framework. The resulting regulatory 
regime will contain both new elements and elements drawn from current U.S. financial regulation. In 
addition, regulatory implementation will likely be a dynamic process.  Rulemaking will include 
opportunity for public comment and all interested pa rties are invited to submit comments.  Interested 
persons may submit comments electronically th rough the Federal eRulemaking Portal at:  
www.regulations.gov.  Electronic submission of comments allows the commenter maximum time to prepare and submit a comment, ensures timely receipt, and enables the comments to be made available to the public.  Comments submitted electr onically through the www.regulations.gov website 
can be viewed by other commenters and interested members of the public.  Part IV. Developments in Selected Sectors;  (3 ) Transport;  (i) Air transport services;  page 98, 
paragraph 74: 
 
The U.S. has proposed new air passenger consumer protections that aim to strengthen requirements 
on foreign carriers, including the adoption of tarm ac delay contingency plans at large and medium 
hub airports.   
 49. Canada would be grateful if the United Stat es could elaborate further on the economic, legal, 
and administrative impacts of these proposed measures,  particularly as to how they could impact on 
foreign carriers? 
 
RESPONSE:   In a notice of proposed rulemaking (NPRM)  published in the Federal Register in June 
2010, the Department of Transportation proposed to expand to foreign air carriers the requirements in 
a DOT final rule addressing tarmac delays and other ai r travel problems that took effect in April 2010 
and applied only to U.S. airlines.  The NPRM also proposed to require that additional rules to protect 
air travelers apply equally to foreign airlines ope rating flights to and from the United States.  The 
comment period on the NPRM closes on September 23, 2010.  The Department will review the 
comments submitted and draft a final rulemaking.  If the final rule contains the same measures as 
proposed in the NPRM, there would be approximately 90 foreign air carriers that would be required to 
comply with the requirements.  Specific informati on about the expected impact (cost & benefit) of 
each of the measures can be found in the preliminar y Regulatory Impact Analysis associated with the 
proposed rule, which may be accessed at http://www.regulations.gov/ by entering docket number 
"DOT-OST-2010-0140."      WT/TPR/M/235/Add.1 
 Page 79 
 
 
 Part IV. Developments in Selected Sectors;  (3) Transport;  (ii) Maritime transport;  
(b) Regulatory framework;  page 102, paragraph 93:  50. Given the Antitrust Modernization Commission’ s findings reported in paragraph 248, namely 
that “exemptions from competition law can harm th e U.S. economy and, in the long run, reduce the 
competitiveness of the industries that sought these ex emptions,” has there been any public discussion 
of modifying or eliminating the alternative competition regime based on regulation for common 
carriers and marine terminal op erators under the Shipping Act? 
 
RESPONSE:  There have been no formal congressional committee hearings or other official public 
discussion or debate of the Shipping Act’s comp etition regulation since the 2002 Committee Hearing 
with Congressman Sensenbrenner’s Free Market Antitrust Immunity Reform (FAIR) Act of 2001. 
 
Part IV. Developments in Select ed Sectors;  (4) Telecommunic ations;  (iii) Regulatory and 
Policy Authority:  page 107, paragraph 117: 
 
The Secretariat Report notes that the FCC will se ek the advice of other government agencies on 
matters concerning national security , law enforcement, foreign policy and trade policy concerns when 
it considers an application to provide international te lecoms services or to take control of an existing 
provider of domestic or international telecoms services.  
 
51. Can the United States provide information on the foreign policy or trade policy concerns it 
considers when reviewing an application to provide international telecoms services or a controlling 
investment into a telecommunication service provider?  
RESPONSE:   The FCC rules provide Executive Branch authorities the opportunity to provide 
transparent advice on the identified factors, if rele vant agencies so choose, as these factors generally 
fall outside the FCC’s core expertise.  For exampl e, the FCC has regularly coordinated applications 
involving Submarine Cable Landing Licenses and serv ice to Cuba with the U.S. State Department. 
There is no presumption, however, that advice will be offered.  
What foreign policy or trade policy concerns woul d be considered in providing advice to the FCC 
would depend on the particular issues involved.  For example, if a Canadian supplier of Direct-to-
Home satellite service, or Digital Audio Radio sat ellite services were seeking a license, Canada’s 
unwillingness to offer trade right to U.S. suppliers of  these services would be a relevant trade policy 
concern. WT/TPR/M/235/Add.1 
Page 80 
 
 
 CHILE 
 III. TRADE POLICIES AND PRACTICES, BY MEASURES 
1. Measures directly affecting imports 
(i) Customs Regime 
 
Paragraph 13. The Implementing Recommendations of the 9/11 Commission Act of 2007 prohibit 
containers to be loaded on a vessel bound for the United States unless they were scanned using non-
intrusive imaging equipment and radiation detection equipment.
4 This prohibition will come into force 
on July 1, 2012 or at an earlier date set by the Secretary of Homeland Security5, who may delay 
implementation for renewable periods of two years aft er certifying that they meet at least two of the 
six conditions set in the Act. Meeting one of these conditions requires that the “use of systems that are 
available to scan containers...will significan tly impact trade capacity and flow of cargo.”6 
 
Paragraph 14. At the end of 2009, the Secretary of Homeland Security stated that the Department of 
Homeland Security is facing major challenges in implementing scanning 100 percent by 2012, so 
“she would seek to obtain the extensions authorized by law.”7 She also noted that in many ports it 
was currently “unfeasible” to scan 100 percent “with out seriously impeding the flow of shipments or 
redesigning the ports themselves which would require a huge capital investment.” In that context, she 
declared that the Department of Homeland Security  would continue to work with Congress to mitigate 
security threats “by all possible means.”  Comment
:  Currently, the 9/11 Commission Act of 2007 is in force. In particular, the European 
Commission produced a report in February 2010 indica ting concern about the implementation of this 
measure. 
The implications for Europe, in terms of global ma ritime shipping and trade, would be the following: 
 1. For the EU, the procedures and regulations would have to be redesigned with costs of 
approximately 430 million Euros in equipment at  ports and increased port operational costs by 
200 million Euros. 
 
2. Transportation will be severely disrupted and the costs will increase;  particularly for 
operations to the United States, they would have an additional cost of 10% and those ports that do not have the equipment will be out of the market.  
3. The estimated losses in the EU-U.S. bilateral trade are estimated at 10 billion Euros, and the 
global losses from the effects of the act at 100% would be 17 billion Euros.  Developing countries have not implemented or assessed th e impact of this Act, based on the fact that 
they do not have the resources to provide non-invasi ve inspection equipment at the ports where goods 
are shipped to the United States.  The ECLAC 2004 studies indicate that investment fluctuates 
between US$63 and US$134 million, pl us the costs for each contain er depending on the capacity and 
cargo volume.  To date, as stated in the report, it is not viable to scan 100%, but also the law has not yet been changed, so that in practice the terms remain in fo rce.  The U.S. is the second largest destination of 
exports, and if this measure is implemented, the impact would be unquantifiabl e, not only from the 
                                                     
 
4 Public Law 110-53, article 1701. 
5 Article 1701 b) 2). 
6 Article 1701 b) 4) E). 
7 “Transportation Security Challenges Post-9/11, ” testimony of Secretary Janet Napolitano to the 
United States Senate Committee on Commerce, Sc ience and Transportation, December 2, 2009.  WT/TPR/M/235/Add.1 
 Page 81 
 
 
 standpoint of the associated cost, but investme nts and changes in domestic regulation (port 
concessions, equipment costs, service costs, etc.).  Question:  In this sense, has the United Stat es considered on the one hand granting a different 
treatment to those countries with which it has de veloped a formal link through a bilateral trade 
agreement? On the other hand, what alternative exist s to the extent that Congress does not amend the 
act? Finally, is it feasible for foreign com panies to be certified under the C-TPAT program and 
thereby obtain reliable character and therefore make it no longer necessary for the cargo to be 
subject to 100% scanning?   
 
RESPONSE:   The 100% scanning provisions serve to prot ect national security and apply to all 
imports.  However, the United States is committed to  working with our domestic and foreign partners, 
trade and industry, to implement 100% scanning in a logical and practical manner that integrates 
smoothly into the global supply chain and minimizes  trade disruptions. The current legislation does 
not exempt C-TPAT companies from the 100% scanning mandate.  
 
(iii) Rules of Origin 
 
Paragraph 27. In NAFTA, the Central America -United States-Dominic an Republic Free Trade 
Agreement (CAFTA-DR) and the free trade agreements with Australia, Chile, Peru and Singapore, 
the change of tariff classification is mainly used to  determine the origin of a product with components 
from more than one country.  This change is some times used in combinati on with requirements of 
regional value content.  According to the prov ision on “diagonal” accumulation of CAFTA-DR, to 
determine whether a certain limited amount of wo ven garments originates under the Treaty, the 
materials used in the manufacture of such woven garments, which are produced in Mexico and which 
would be originating under CAFTA-DR if they had been produced in a member country, are 
considered produced in a CAFTA-DR
8 country.  No other free trade agreement of the United States 
contains provisions for diagonal a ccumulation.  In the context of the previous Review of the United 
States, the authorities indicated that this system be nefits U.S. companies with investments in Mexico 
and helps to integrate regional production.  
Comment:  In the Chile United States FTA, in textile matters, under art 3.20 No. 8 there is 
preferential treatment for cotton and manmade fib er non-originating fabrics (level of tariff 
preferences), indicating that non-originating goods  will have preferential tariff treatment as if they 
were originating goods, limited to an annual quantity of square meter equivalents SME.  
 
(vi) Special trade measures (a) Antidumping and countervailing duties 
 
Paragraph 50. Under the Deficit Reduction Act of 2005, which repealed the Byrd Amendment, the 
CBP has continued to distribut e antidumping and countervailing du ties on imports of goods made and 
reported prior to October 1, 2007 to members of the domestic production branch affected who 
supported the request for investigation on antidumping or countervailing duties.  The CBP distributed 
US$264 million in fiscal year 2007, US$180 milli on in 2008 and US$ 248 million in 2009
9.  The 
Federal Court of Appeal reversed a decision by the United States Court of International Trade that 
the so-called “requirement to support the applica tion” contained in the Byrd Amendment was 
unconstitutional. Under this requirement, if a domes tic company expresses publicly its support for the 
imposition of an order concerning antidumping or c ountervailing duties, it would then be entitled to 
                                                      
8 Appendix 4.1-B of CAFTA-DR. 
9 Online CBP information, "Continued Dumping and Subsidy Offset Act of 2000." Viewed at: 
http://www.cbp.gov/xp/cgov/trade/pr iority_trade/add_cvd/cont_dump. WT/TPR/M/235/Add.1 
Page 82 
 
 
 receive part of the funds raised as a result of the order.10 At the end of 2009, the United States 
Supreme Court was asked to review that decision.  
Question:  When is the final decision of th e United States Supreme Court expected regarding the 
constitutionality of giving the funds raised by antidumping or countervailing duties to companies that 
supported the imposition of such duties?   
 
RESPONSE:   On May 17, 2010, the Supreme Court of the United States denied the plaintiff’s 
petition for certiorari, as a result of which the decisi on of the Court of Appeals for the Federal Circuit 
is final.  No further review process is available to any party.  
Question:  How can it be ensured that the prot ection afforded to companies that supported the 
imposition of antidumping or countervailing duties is not greater than necessary to avoid the damage 
or in the best case scenario, to cancel the existi ng dumping or subsidy, if in addition to the duty 
applied, the funds raised are also delivered? Is this delivery of funds not an extra protection? 
 
RESPONSE:   The President signed the Deficit Reduction Act into law on February 8, 2006.  That 
Act includes a provision repealing the Continue d Dumping and Subsidy Offset Act of 2000 
(“CDSOA”).  Therefore, to the extent that th e distribution of antidumping and countervailing duties 
was found to be inconsistent with the WTO Agre ements, the United States has taken all actions 
necessary to implement the Dispute Settlement Body’s recommendations and rulings with respect to those statutory provisions.  Pursuant to the De ficit Reduction Act, antidumping and countervailing 
duties that are being collected on goods now entering the United States are not distributed to domestic 
firms.  Question:  How does the competent authority alloca te the proportion of damage or threat of damage 
that corresponds to the existence of dumping and th at of a subsidy in cases where the imposition of 
both types of duties is requested?  
 
RESPONSE:   The United States International Trad e Commission (USITC) made final injury 
determinations in seven original countervailing du ty investigations in 2009.  In six of these 
investigations, there was a corresponding antidum ping duty investigation.  In recent years, a 
substantial majority (but not all) petitions seeking initiation of a countervailing duty investigation also 
sought institution of a corresponding antidumping inv estigation.  In each of the six countervailing 
duty investigations on which the USITC made affirm ative final determinati ons in 2009, there was a 
corresponding antidumping duty investigation.  In each  of these investigations, the Department of 
Commerce found that the imports that were subsidiz ed were also dumped.  Consequently, there was 
no need for the USITC to distinguish between dumped  imports and subsidized imports in its injury 
analysis.  
(viii) Standards and technical regulations 
 
Paragraph 77.  During the period under review, no ma jor changes have been introduced in the legal 
framework governing the preparation of technical re gulations and conformity assessment procedures 
at the federal level.  Technical regulations and c onformity assessment procedures are usually adopted 
by administrative decision of the federal agenci es on the basis of the regulatory authority delegated 
by Congress.  However, this can define specific param eters for technical regulations or conformity 
assessment procedures, or even establish technical regulations and conformity assessment procedures 
by legislation.  
                                                     
 
10 SKF USA, Inc. v. United States, 556 F. 3d 1337 (Fed. Cir. 2009).  WT/TPR/M/235/Add.1 
 Page 83 
 
 
 Question:  As indicated at the end of th e paragraph where Congress may establish technical 
regulations and conformity assessme nt procedures by this legisla tive way, how are these technical 
regulations and their possible communication managed? 
 RESPONSE:   Please see answer to the question regarding Paragraph 81 of the report. 
 
Paragraph 80. Between November 2007 and Ja nuary 2010, the United States submitted 203 
notifications of technical regulations to the WTO. The Department of Transportation and the 
Department of Energy submitted 10 percent of the to tal notifications each, followed by the Food and 
Drug Administration, with 9 percent, and the Consumer Product Safety Commission, the Department 
of Agriculture and the Environmental Protection Agen cy, with 7 percent each. About 40 percent of the 
notifications were submitted by  sub-federal agencies and include d products such as electrical 
appliances, fertilizers, motor vehicles, industria l maintenance coatings, furniture, cigarettes and 
ammunition. During the period under review, 83 sub- federal measures were reported.  The vast 
majority of sub-federal measures reported to the WTO were submitted by the United States. 
 
Question:  Of all the notifications submitted to the WTO, how many of them relate to urgent 
notifications? As for urgent notificati ons during that period, in what sector did such situation mainly 
occur?  
 RESPONSE:   We do not have this data.  The United St ates has notified hundreds of measures to the 
WTO, including more than 60 this year alone.  
Paragraph 81.  The average term for submitting comme nts indicated in the notifications of technical 
regulations and conformity assessment proce dures carried out between November 2007 and January 
2010 was 40 days, compared to the 60 days recomme nded at the multilateral level. About 30 percent 
of the notifications, the bulk from sub-federal agenc ies, did not mention any “deadline for submission 
of comments.”  Question:  Does the absence of a notification deadlin e from sub-federal agencies mean that there is 
no possibility to comment or that they are received at any time?  
 
RESPONSE:   Regarding the 40-day figure, we are revi ewing the matter but believe that the number 
may be misleading.  The United States often notifi es measures that do not need to be notified for 
purposes of greater transparency (e.g., certain voluntary measures, requests for information in 
advance of a rulemaking, proposed measures based on relevant international standards), as well as 
measures to address urgent circumstances (e.g., certain interim final rules, rules taken to comply with 
a court order).  Proposed legislative measures have been notified to the WTO following the same procedure as for 
proposed regulatory measures.  For proposed legisl ative measures, any comments received have been 
forwarded to the legislative body in question so that the legislators can take the comments into 
account. 
 With respect to the notifications without a specific fi nal date for comments, we suspect that  most of 
these notifications relate to proposed legislation, bu t have not been able to confirm that in the time 
available.  As is the case in legislatures around th e world, there are no formal comment periods that 
attach to proposed bills.  Given that each bill move s at its own pace through the legislative process – it 
could be days, weeks, months, or even longer, and ma ny of the bills are not enacted at all – it is often 
difficult to specify a final date for comments.  As we review the matter further, the United States would be interested in learning from Chile how it 
handles this issue in its notification practice. WT/TPR/M/235/Add.1 
Page 84 
 
 
 Paragraph 87.  The United States has a wide range  of approaches to assess conformity. Regulatory 
agencies determine to what extent it is necessary  to use risk assessment to select a particular 
approach. The type of instrument used varies depe nding on the sector concerned.  Instruments such as 
the declaration of conformity issued by the supp lier or third-party certification are used. There are 
accreditation programs at all levels of government  and in the private sector, and conformity 
assessment agencies in the private sector are ofte n used. With respect to government accreditation 
programs, the organizations that meet the criteri a specified by the regulatory authority, regardless of 
location, obtain accreditation or are otherwise recognized to engage in conformity assessment 
activities. 
 Question:  Is it possible to know the areas where both cases exist for conformity assessment? (Issued 
by the supplier or third-party certification)  
 
RESPONSE:   The question is unclear but to the exte nt Chile is asking about what types of 
conformity assessment the private sector may require, the United States Government does not 
maintain a list of what the market requires in orde r to do business in particular sectors of the U.S. 
economy.  We have no way of knowing, for example, wh at retailers in a particular sector are requiring 
their suppliers to agree to (above and beyond the a pplicable legal requireme nts) in private sales 
contracts.  Chilean suppliers should reach out to  their importers, customers and other business 
partners in the U.S. market to obtain this informa tion for specific sectors of interest.  As is the case in 
Chile, the answer to this question is dictated by pr ivate sector market forces, which can change very 
quickly and are often influenced by global factors, not just conditions inside one particular country.  
All conformity assessment requirements required by federal agencies are published in the Code of 
Federal Regulations and additiona l information may be obtained from individual agency websites. 
 (ix) Sanitary and Phytosanitary Measures 
 
Question:  In relation to the rule making pr ocess in Sanitary and Phytosanitary matters in the 
United States, how is it determined and under what  parameters is it established that a product is 
significant or not significant? 
 RESPONSE:   As set forth in Executive Order 12866, “significant regulatory action" means any 
regulatory action that is likely to result in a rule that may:  1. Have an annual effect on the economy of $100 milli on or more or adversely affect in a material 
 way the economy, a sector of the economy, pro ductivity, competition, jobs, the environment, 
 public health or safety, or State, local, or tribal governments or communities;  2. Create a serious inconsistency or otherwise inte rfere with an action take n or planned by another 
 agency;   
3. Materially alter the budgetary impact of entitleme nts, grants, user fees, or loan programs or the 
 rights and obligations of recipients thereof;  or   4. Raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the 
 principles set forth in this Executive order. 
 
If a rule has been determined to be  significant, it will be reviewed through a full interagency process.  
However, it does not alter the U.S. mandate that all SPS measures are based on science.   
   
  WT/TPR/M/235/Add.1 
 Page 85 
 
 
 (3) Other measures affecting trade and investment 
(vi) Competition Policy 
 
(b) Paragraphs 248 et seq. It is reported that a ccording to the Antitrust M odernization Commission, 
exemptions from competition law may harm the U.S. economy, and in the long term, reduce the 
competitiveness of industries seeking to obtain them.  Question:  Is there any initiative to reduce, freeze or eliminate these exemptions, especially because 
the exceptions to the competition law may also undermine the c oncessions granted to a business 
partner?    
RESPONSE:   The United States notes that the great majority of its economy remains subject to the 
Federal antitrust laws despite the existence of various  antitrust exemptions and immunities.   There is 
no specific initiative to reduce, freeze or eliminate ex emptions, though an increase in the scope of an 
exemption presumably would require legislation wh ich could be opposed.  We will remain alert to 
possible opportunities to modify or repeal specific exemptions.  Moreover, the enforcement agencies 
and the courts are likely to continue to constr ue these exemptions and immunities carefully and 
narrowly.  
Question:  As the report refers to the fact that certain state laws and regulations that limit competition 
prevail over federal law, could you provide a list of these state laws and regulations?  
RESPONSE:   We are unable to provide Chile with a list of  state laws and regulations that might give 
exemptions from Federal antitrust law, nor are we aware of any specific document that does so.  The 
question of whether a particular sub-federal measure  qualifies as “state action” providing an antitrust 
immunity is quite fact specific.  Thus the status of state laws or regulations may vary from case to 
case, rather than offering a blanket, a priori  exemption. 
 
IV. EVOLUTION OF SOME SECTORS 
(1) Agriculture (ii) Agricultural policies- g) Title IX (Energy) 
 
Paragraph 33. The 2008 Farm Bill maintains and  expands the funding for the purchase of bio-
products by federal agencies, th e construction and improvement of advanced biofuel refineries, the 
research and development of biomass and biodiesel e ducation. There are new programs that promote 
renewable energy use in bio-refineries, renewabl e energy systems and improvement of energy 
efficiency, rural energy self-sufficiency, obtaini ng new generation raw ma terials and the use of 
forestry and woody biomass for energy production.... . The 2008 Farm Bill includes the Biomass Crop 
Assistance Program to help producers of bioma ss crops and processing facilities, and the Research 
and Outreach Initiative on Energy Efficiency and Agricultural Raw Materials for Bioenergy 
Production, which provides grants to research and disclosure services. The total mandatory funding 
through the 2008 Farm B ill is about US$620 million.” 
 
Question:  In the Report it is indicated that, under the 2008 Farm Bill, the use of forestry and woody biomass for energy production, inter alia, is enc ouraged and that there are new programs for that 
purpose.  Could the U.S. Delegation mention th e main measures specified therein, such as, for 
example, tax credits that allow elig ible employers in the forestry s ector to obtain credit recovery, or 
other things?    
RESPONSE:  The Report accurately reported on the main  programs in the 2008 Farm Bill that 
provide for the use of forestry and other woody biomass for energy production, including the Biomass 
Crop Assistance Program and the Biorefinery Assistance program.  The Farm Bill does not provide 
any tax credits for the forestry sector.  WT/TPR/M/235/Add.1 
Page 86 
 
 
 U.S. Government Report 
I. The United States in the Multilateral System (1) Overview, (iii) Monitoring and enforcement 
 
Paragraph 21.  In addition, the United States w ill fully enforce the labor and environmental rights 
specified in its trade agreements, including thro ugh the settlement of disputes, if applicable. 
Monitoring the implementation and enforcement of en vironmental obligations by our FTA partners is 
an important objective of U.S. trade policy.  We  will use the mechanisms available to focus on 
monitoring the issues of implementation and enforcem ent of the environmental provisions of FTAs. 
These mechanisms and high-level dialogue on trade and environmental issues with our FTA partners 
will provide the tools necessary to ensure that our F TA partners fully comply with their environmental 
obligations under the FTAs.”  Question:  Does the U.S. Delegation consider that, in addition to the use of mechanisms to monitor 
the implementation and enforcement of the environmen tal provisions of FTAs and high-level dialogue 
on these matters with their trade partners, the development of programs and projects for environmental cooperation in the framework of thes e agreements also substantially contributes to the 
better performance by their counterparts with th eir environmental commitments under the FTAs?  
 RESPONSE:   Yes, we agree that cooperation mechanis ms can significantly contribute to efforts to 
improve environmental protection and have concluded them in c onjunction with all of our recent 
FTAs. 
 
CHINA 
 
REPORT BY THE UNITED STATES 
 
1. Paragraph 8 on Page 6 notes that “The TGAAA reauthorized Trade Adjustment Assistance 
(TAA) programs;  expanded TAA coverage to mo re workers and firms, including workers and firms in 
the service sectors for the first time;  made bene fits available to workers w hose jobs have been sent 
"off-shore" to another country (as opposed to co vering a more limited set of shifts in production); 
improved workers' training options ;  and increased the affordability of health insurance coverage.  
The Administration has pledged to continue our ongoing work with Congress to ensure adequate 
funding for TAA programs and to ensure that U. S. workforce programs complement each other.” 
 
(1) Please give a detailed description of the latest development of Trade Adjustment Assistance (TAA) 
since last review. 
 RESPONSE:   Since the 2008 Trade Policy Review, significant changes were made to the TAA 
Program as part of the American Reemployment a nd Readjustment Act of 2009, Public Law (P.L. No. 
111-5) enacted on February 17, 2009, and effectiv e with TAA petitions file d on or after May 17, 
2009. 
 Working with Congress, the Presi dent was able to sign into law the Trade and Globalization 
Adjustment Assistance Act of 2009 (TGAAA), as part of the American Recovery and Reinvestment 
Act of 2009.  The TGAAA reauthorized Trade Ad justment Assist ance (TAA) programs;  expanded 
TAA coverage to more workers and firms, including  workers and firms in the service sectors for the 
first time;  made benefits available to workers whose jobs have been sent "off-shore" to another 
country (as opposed to covering a more limited set of shifts in production);  improved workers' 
training options;  and increased the affordability of health insurance coverage.  Below is a description 
of the major changes to the TAA for Workers pr ogram.  (More information on the TAA for Workers 
program is available at the following website :  http://www.doleta.gov/tradeact/ChangesFAQ.cfm#3. 
  WT/TPR/M/235/Add.1 
 Page 87 
 
 
 Old TAA for Workers Program  New TAA for Workers Program  
Group Eligibility 
 
• Workers must be associated with the 
production of an article in order to be 
eligible.   
• Shifts in production must be to a country 
that has specified trade agreements with 
the U.S. or accompanied by an actual or 
likely increase in imports to be covered.   
• Workers at downstream producers that are 
secondarily affected by increased imports from, or a shift in production to, countries other than Canada or Mexico are not 
eligible. 
 Group Eligibility 
 
• Expands TAA coverage to service sector 
workers whose job loss is related to 
increased imports of services, shifts in the provision of services to foreign countries, 
or who provide a service to a TAA-
certified firm.   
• Expands eligibility to workers in public 
agencies. 
• Expands TAA eligibility to shifts in 
production or shifts in location of service to all countries, without the need to prove 
increased imports.  
• Eliminates the requirement that 
downstream secondary worker 
dislocations be related to trade with 
Canada or Mexico. 
• Provides automatic certification of 
petitions filed for worker groups 
employed by a company identified in an 
affirmative finding of injury by the ITC. 
• Allows for components of products to be 
certified based on increased imports of finished products. 
Trade Readjustment Allowances (TRA) 
 
• Up to 104 weeks of cash payments for 
workers enrolled in full-time training  
• Up to 130 weeks of cash payments if the 
worker was also enrolled in remedial training Trade Readjustment Allowances (TRA) 
 
• Up to 130 weeks of cash payments for 
workers enrolled in full-time training  
• Up to 156 weeks of cash payments if the 
worker was also enrolled in remedial training 
Training Enrollment Deadlines 
 
• Workers must be enrolled in training 
8 weeks after certification or 16 weeks 
after layoff, whichever is later, in order to 
receive TRA Training Enrollment Deadlines 
 
• Workers must be enrolled in training 
26 weeks after certification or layoff, 
whichever is later, in order to receive 
TRA 
Job Search Allowances 
 
• 90% of allowable costs, up to $1,250 Job Search Allowances 
 
• 100% of allowable costs, up to $1,500  
Relocation Allowances 
 
• 90% of costs, up to the statutory limit for 
Federal Employees 
• Provides an additional lump sum payment 
of up to $1,250 Relocation Allowances 
 
• 100% of costs, up to the statutory limit for 
Federal Employees  
• Provides an additional lump sum payment 
of up to $1,500  WT/TPR/M/235/Add.1 
Page 88 
 
 
 Training Services 
 
• Training may only be approved on a full-
time basis 
• Certified workers may not begin approved 
training until they have been totally or 
partially separated from adversely 
affected employment Training Services 
 
• Training may be approved on a full-time 
or part-time basis, although full-time training is required for TRA eligibility.  
• Certified workers may begin approved 
training when threatened with separation from adversely affected employment 
Health Coverage Tax Credit (HCTC)  
• Prior to May 2009, a tax credit covering 
up to 65% of an eligible participant's monthly qualifying health insurance 
premium 
• Beginning May 2009, the tax credit will 
be raised for all participants to cover 80% of an eligible participant's monthly 
qualifying health insurance premium Health Coverage Tax Credit (HCTC) 
 
• A tax credit covering 80% of an eligible 
participant's monthly qualifying health insurance premium  
Alternative Trade Adjustment Assistance  
• Available to workers 50 years of age or 
older 
• Requires a separate certification of group 
eligibility 
• Workers may not participate in TAA-
approved training  
• Requires full-time employment within 26 
weeks of separation 
• Available only for workers earning less 
than $50,000 per year in reemployment 
• Maximum benefit of $10,000 over a 
period of up to two years 
• Participants are eligible for the HCTC Reemployment Trade Adjustment Assistance 
 
• Available to workers 50 years of age or 
older 
• Does not require a separate certification 
of group eligibility 
• Workers may participate in TAA- 
approved training  
• Requires full-time employment, unless 
the worker is also enrolled in TAA-
approved training and employed at least 
20 hours per week, and does not set a 
deadline for reemployment  
• Available only for workers earning less 
than $55,000 per year in reemployment 
• Maximum benefit of $12,000 over a 
period of up to two years 
• Participants are eligible for the HCTC 
 
TAA for Firms 
The American Recovery and Reinvestment Act of  2009 included provisions to expand the Trade 
Adjustment Assistance for Firms program at the U. S. Department of Commerce.  In addition to 
technical changes to eligibility criteria for the re view of Petitions for Eligibility, the legislation 
expanded the potential pool of clients significa ntly by allowing “service” industry firms the 
opportunity to apply for TAA.  The decision to allo w service firms to become eligible for TAA was 
based on the fact that 80 percent of U.S. workers ar e employed in the service sector.  Additionally, the 
expansion allows for some flexibility in collecting data to demonstrate import impaction by allowing 
a petitioner to utilize customer import information if it accounts for a significant percentage of the 
decline of the firm’s sales or production.   
Trade Adjustment Assistance for Firms (TAA), a federal program, provides financial assistance to 
manufacturers affected by import competition.  Sponso red by the U.S. Department of Commerce, this  WT/TPR/M/235/Add.1 
 Page 89 
 
 
 cost sharing federal assistance program pays for ha lf the cost of consultants or industry-specific 
experts for projects that improve a manufacturer's  competitiveness.  (More information on TAA for 
Firms is available at:  http://www.taacenters.org/.) 
 
TAA for Farmers 
The American Recovery and Reinvestment Act (ARR A) of 2009 reauthorized and modified the Trade 
Adjustment Assistance (TAA) for Farmers program.  The TAA for Farmers program helps producers of raw agricultural commodities and fishermen adjust  to a changing economic environment associated 
with import competition through technical assistance and cash benefits.  Producers of commodities 
who have recently suffered a greater than 15 per cent decrease in the natio nal average price, the 
quantity of production, value of production, or cash receipts compared to the average of the three 
preceding marketing years, and an increase in imports contributed importantly to this decline, may be 
eligible to receive free information, technical assi stance, and cash payments to develop and implement 
Business Adjustment Plans from the TAA for Farmers program.  (More information on TAA for 
Farmers is available at:  http://www.fas.usda.gov/ITP/TAA/taa.asp.) 
 TAA for Communities 
The U.S. Economic Development Administration oversees the Community Trade Adjustment 
Assistance (Community TAA) Program, which is aimed at helping to create and retain jobs by 
providing project grants to communities that have experienced, or are threat ened by, job loss resulting 
from international trade impacts.  Grants under the program can be used to support a wide range of 
technical, planning, and infrastructure projects to  help communities adapt to pressing trade impact 
issues and diversify their economies.  (More in formation on the Community TAA program is 
available at:  http://www.eda.gov/PDF/CTAA%201-pager.pdf.)  
 (2) Please give an evaluation of the effects of  TAA on workers, firms, industries, farmers and 
communities, especially in the context of global financial crisis.  
 RESPONSE:  The reauthorized Trade Adjustment Assist ance program has not been in operation long 
enough to evaluate the impact of expanded eligibility and increased benefits.  The following overview 
provides basic information on the expanded TAA programs, including a summary of the numbers of 
workers and industries covered by TAA certifications. 
 
Program Overview 
The Trade Adjustment Assistance for Workers, Alternative Trade Adjustment Assistance (ATAA), 
and Reemployment Trade Adjustment Assistance (RTAA) programs are authorized under the Trade 
Act of 1974, as amended.  These programs are collect ively referred to as TAA, and provide assistance 
to workers who have been adversely affected by foreign trade.  
The American Recovery and Reinvestment Act (ARR A) of 2009 reauthorized and modified the Trade 
Adjustment Assistance (TAA) for Farmers program.  The TAA for Farmers program helps producers of raw agricultural commodities and fishermen adjust  to a changing economic environment associated 
with import competition through technical assistance and cash benefits.  The ARRA is administered 
by the United States Department of Agriculture.  (More information on TAA fo r Farmers is available 
at:  http://www.fas.usda.gov/ITP/TAA/taa.asp.) 
 
The law also included provisions to expand the Trad e Adjustment Assistance for Firms program at the 
U.S. Department of Commerce.  In addition to tec hnical changes to eligibility criteria for the review 
of Petitions for Eligibility, the legislation expanded the potential pool of clients significantly by 
allowing “service” industry firms the opportunity to a pply for TAA.  Trade Adjustment Assistance for 
Firms (TAA), a federal program, provides financial assistance to manufacturers
 affected by import 
competition.  Sponsored by the U.S. Department of  Commerce, this cost sh aring federal assistance 
program pays for half the cost of consultants or industry-specific experts for projects  that improve a WT/TPR/M/235/Add.1 
Page 90 
 
 
 manufacturer's competitiveness.  (More inform ation on TAA for Firms is available at: 
http://www.taacenters.org/)  
In FY 2009, the U.S. Department of Labor’s Employment and Training Administration (ETA) 
administered two separate TAA laws—the program implemented by the Trade and Globalization Adjustment Assistance Act of 2009 (TGAAA) that went  into effect for petitions filed on or after May 
18, 2009 (new program), and the TAA program that was administered under the Trade Act as 
amended by the TAA Reform Act of 2002,  which existed before May 18, 2009. 
 
The TGAAA had a major impact on the administra tion of the TAA program.  In FY 2009, TAA 
petition filings increased by 104% over FY 2008 pe tition filing.  More specifically, from May 2009 
thru July 2009, TAA petition filing increased by  288% as compared with the same period of the 
previous year.  In March 2009, TAA petitioners were given the option of withdrawing previously filed 
TAA petitions and re-filing on or af ter May 18, 2009, in order to take advantage of the expanded 
TAA program.  This resulted in a large number of TAA petitions being withdrawn and classified as 
terminated prior to May 18, 2009, and a correspondi ng large number of re-filed TAA petitions on or 
shortly after May 18, 2009. 
 
Workers 
In FY 2009, ETA estimated the number of workers covered by TAA certifications was 201,053.  This 
represents a 58.7% increase over FY 2008, when 126, 633 estimated workers were covered.  In 
FY 2009, 80 percent of the determinations issued we re certifications (excl uding terminations).  In 
FY 2009, the manufacturing sector had the greatest estimated number of TAA certified workers with 
183,813 workers;  6,764 workers in the professional, scientific and technical services;  3,001 in 
administrative and support and waste management  and remediation services, and 2,061 in and 
transportation and warehousing.  Agriculture, forest ry, fishing and hunting ha d 172 workers estimated 
to be covered by certifications. 
 
Industries 
ETA uses the North American Industry Classification System (NAICS) codes to track industry 
impact.  In FY 2009, the total TAA certifications  were 1,845 in all sectors.  In FY 2009, the 
manufacturing sector had the greatest number of certif ications with 1,620 fo llowed by professional, 
scientific, and technical services with 72;  ad ministrative and support and waste management and 
remediation services with 51;  and transportation and warehousing with 21 certifications.  In 
agriculture, forestry, fishing and hunting sectors the number of certifications was eight.  
 
2. Paragraphs 11 and 77 on Pages 7 and 19 note that “In 2009, the United States also issued a 
notification of its intention to begin negotiations  with seven partner countries (Australia, Brunei, 
Chile, New Zealand, Peru, Singapore, and Vietnam) for the Trans-Pacific Partnership.” “During the 
period of this review, after a careful analysis and extensive consultation with Congress and with 
stakeholders … We also seek to expand the initial  group of TPP partners to additional countries 
throughout the Asia-Pacific region.  Two rounds of negotiations ha ve been completed and the third 
negotiating round is scheduled for October in Brunei.  Five rounds are scheduled for 2011.” 
 
(1) It would be highly desirable if the United States could share the latest progress of the TPP negotiations.  
 
RESPONSE:  The TPP partners have held two rounds earlier this year and the third will be held in 
early October in Brunei.  At this third round, we will begin negotiating text of the agreement and 
reach agreement on technical issues relating to the ex change of market access offers.  We also will 
continue our discussions on how to proceed on the “21
st-century” cross cutting issues, including 
regulatory coherence, competitiveness, supply chai ns, small-and medium-sized enterprises, and 
development.  We expect this third round to result in further solid progress in these negotiations.  WT/TPR/M/235/Add.1 
 Page 91 
 
 
 (2) Is there a roadmap or timeframe for the U.S. on TPP negotiations? 
 RESPONSE:   We have scheduled one mo re round this year and five rounds through October 2011.  
We are seeking to move the process as exped itiously as possible and the ministers of the TPP 
countries will take stock of our progress at APEC  ministerial meetings over the coming year. 
 
3. Paragraph 19 on page 9 notes that “We have also increased our focus on certain 
behind-the-border barriers that pose particularly tr oublesome problems for U.S. exporters.  Thus, in 
2009 the USTR announced that the Administration wo uld deploy resources more effectively to identify 
and confront unnecessary or unjustified barriers st emming from sanitary and phytosanitary (SPS) 
measures as well as technical regulations, stan dards, and conformity assessment procedures 
(standards-related measures) that restrict U.S. ex ports of safe, high quality  products.  While such 
measures often serve a vital role in safeguarding countries and their people, including protecting 
health, safety, and the environment, it is important  that SPS and standards-related measures do not 
act as disguised or unwarranted restrictions on ma rket access or discriminate against U.S. exports.” 
 
(1) Could the U.S. share with Members a detailed account of this new export policy?  (2) Could the U.S. explain how this policy is going to be implemented?   
RESPONSE:   The United States uses a variety of tools to tackle such barriers including formal and 
informal consultations, negotiations, and litigation in formal dispute settlement proceedings.  As part 
of its efforts to identify and address trade barriers in  the form standards-related measures, for the first 
time in 2010, USTR issued the 2010 Report on Technical Barriers to Trade (TBT Report) and the 2010 Report on Sanitary and Phytosanitary Measures.   These reports detail inter alia the processes 
USTR and other federal agencies use to track and resolve trade concerns regarding standards- and 
SPS-related measures as well as specific measures or practices.  The 2010 TBT and SPS Reports, plus 
a fact sheet detailing key barriers identified a nd successes in reducing TBT and SPS barriers, are 
available at:  www.ustr.gov/trade-topics/enforcement. 
 
CHINA SUBSEQUENT QUESTIONS 1 
 
I. ECONOMIC ENVIRONMENT 
 
1.  It is noted that, according to the point of view  expressed recently by the Federal Reserve, the U.S. 
economic outlook seems to be uncertain and, if ne cessary, the Fed will be ready to support the 
economic growth by various means. It would be  appreciated if the U.S. could elaborate on the 
following aspects:  
 (1) How does the U.S. government think of its  economic growth for the coming years? What 
policies and measures may the U.S. governme nt launch? Will the Fed change the current 
“exceptionally” low interest rate  policy in the near future? 
 
RESPONSE:  The U.S. projects steady growth in the next few quarters followed by faster growth in 
the future.  There is still a sizable output gap w ith a large degree of unemployment and underutilized 
capital.  This will allow for above trend growth in the next few years.  The Federal Reserve is an 
independent agency, we do not comment on its monetary policy decisions.   (2) How does the U.S. look at the high unemp loyment rate despite its  recent U.S. economic 
recovery? What short- and long-term measures does th e U.S. intend to take to reduce unemployment? 
 RESPONSE:  The unemployment rate has remained high, but this is not surprising given the fact that 
GDP growth – while positive – has not been s ubstantially above potential output growth.  The 
Administration is taking many measures to redu ce unemployment ranging from broad support for the WT/TPR/M/235/Add.1 
Page 92 
 
 
 overall economy to the HIRE act which provides incen tives for firms to hire workers to longer term 
measures such as expanded education programs.   (3) What is the plan of the U.S. for the trade area both in bilateral and multilateral 
framework?  
 
RESPONSE:   U.S. plans for trade in both the bilatera l and the multilateral fram ework are spelled out 
in the 2010 Trade Policy Agenda and 2009 Annual Repor t of the President of the United States on the 
Trade Agreements Program,  which can be accessed at http://www.ustr.gov/2010-trade-policy-agenda. 
 
2.  The U.S. federal budget deficit increased to ne arly 10% of GDP in 2009 and will be around 9.1% 
in 2010 according to the statistics of the Congressi onal Budget Office in last August, largely higher 
than the internationally recognized safety line of 3%.  
 
Could the U.S. explain whether it plans to reduce its deficit to a lo wer level? If yes, what specific 
measures will be taken?  
 RESPONSE:   The U.S. Government will be taking many  steps to reduce the budget deficit over the 
coming years. The President’s FY 2011 budget lays out  a number of savings that is estimated to 
reduce the deficit to roughly 4 percent of GDP by 2014.  Some of the improvement in the budget will 
come as a natural result of an improving economy  which will both reduce automatic stabilizer 
spending and increase revenues.  Savings will also result as temporary stimulus measures wind down.  
In addition, the President has called for a non-secur ity discretionary spending freeze, allowing some 
temporary tax cuts to expire, and made sure that th e health care reform (the Affordable Care Act) put 
substantial downward pressure on health care costs and the deficit in the medium and long term.  
Furthermore, the President has established a bipar tisan deficit commission to examine how to reduce 
the deficit further, with a goal of bringing the deficit under 3 percent of GDP and thus stabilizing the 
debt to GDP ratio over time. 
 
3. In-between early March 2009 and late August 2010, the broad index of the U.S. dollar nominal 
exchange rate has depreciated by 10.4%. Some anal ysts believe that the U.S. pursuit of export 
promotion and unemployment reduction will furth er promote a weaker dollar in the future.  
 
 (1)  Please explain the underlying reasons for the depreciation of the dollar, and its impacts 
on the U.S. economy, particularly  on its exports and employment?  
 
RESPONSE:  The exchange rate of the U.S. dollar is market determined.  Between July 2008 and 
March 2009, the dollar rose by 14 percent on a real effective basis (based on the Federal Reserve’s 
broad index) as the financial crisis led to a shar p increase in risk aversion resulting in safe-haven 
flows into dollar assets.  In addition, the crisis r esulted in some repatriation of capital flows by U.S. 
investors.  Actions in the spring of 2009 by glob al policymakers resulted in a moderation in downside 
risks, prompting global investors to re-allocate out of dollar assets amid a sustained recovery in asset 
markets.  As a result between March and December 2009 the U.S. dollar fell by nearly 10 percent on a 
real effective basis.  The dollar was relatively stead y in early 2010 but rose in May and June amidst a 
decline in risk aversion sparked by the sovereign de bt problems in Europe.  As concerns abated, the 
dollar returned to its earlier levels.  Overall, in the first 8 months of 2010 the real exchange rate of the 
dollar has been fairly steady, appreciating by 0.4 percent.   (2) What kind of dollar policy will the U.S.  government tend to ma intain in the future?  
 
RESPONSE:  The exchange rate of the U.S. dollar is and will continue to be freely determined in the 
exchange market.   WT/TPR/M/235/Add.1 
 Page 93 
 
 
 4. Please explain how the U.S. interprets “capital account convertibility”. How is it enforced in the 
U.S. in practice? 
 
RESPONSE:  The United States maintains open capital market s with no restrictions on cross-border 
financial transactions.  Nor is the United States cons idering adopting general ca pital controls.  There 
are certain restrictions on payments and transfers for current international transactions to respond to 
threats to national security, foreign policy, or the economy of the United States.  Since many of these 
involve specific sanctions, they are enumerated in  the U.S. section of the IMF’s Annual Report on 
Exchange Arrangements and Exchange Restrictions. 
 
II. TRADE AND INVESTMENT POLICY FRAMEWORK 
 
National Export Initiative 
 
5. In March 2010, President Obama's State of the Union speech proposed a National Export Initiative 
to generate 2 million jobs by doubling exports over the next five years. 
 
 (1) Could the U.S. explain, to implement its Export Initiative, what specific policies and 
measures the U.S. government will take? Whic h sectors and industries are the priorities of 
government support?  
 
RESPONSE:   In his State of the Union address in Ja nuary 2010, President Obama launched the 
National Export Initiative (NEI) and set a goal of doub ling U.S. exports in five years to support two 
million additional jobs in the United States.  To aid in achieving this goal, the President issued 
Executive Order 13534 on March 11, 2010, establishing eight policy priorities for the NEI and 
creating an Export Promotion Cabinet. As mandated,  the Export Promotion Cabinet through the Trade 
Promotion Coordination Committee prepared a Report delivered to the President in September 2010 , 
laying out the Export Promotion Cabinet’s plans for carrying out the NEI’s goals.  Please see the 
“Report To The President On The National Export Initiative:  The Export Promotion Cabinet’s Plan 
For Doubling U.S. Exports In Five Years ” issued in September 2010, which can be found at:  
(http://www.whitehouse.gov/sites/default/f iles/nei_report_9-16-10_full.pdf). 
 
 (2) How does the U.S. ensure th e consistency of relevant policies and measures with the WTO 
rules, including with the SCM Agreement?  
 RESPONSE:  The U.S. Government ensures that its policies are consistent with the WTO rules, 
including the Agreement on Subsidies and Counter vailing Measures, through the use of various 
internal interagency processes employed in the development and final ap proval of government 
policies.  
  (3) Please elaborate on the execution agency of the National Export Initiative and its 
functions?  
 RESPONSE:  As established by Executive Order 13534 of March 11, 2010, the Export Promotion 
Cabinet consists of: 
 the Secretary of State; 
 the Secretary of the Treasury;  the Secretary of Agriculture; 
 the Secretary of Commerce; 
 the Secretary of Labor;  the Secretary of Energy; 
 the Secretary of Transportation; 
 the Director of the Office of Management and Budget; WT/TPR/M/235/Add.1 
Page 94 
 
 
  the United States Trade Representative; 
 the Assistant to the President for Economic Policy; 
 the National Security Advisor; 
 the Chair of the Council of Economic Advisers;  the President of the Export-Import Bank of the United States; 
 the Administrator of the Small Business Administration; 
 the President of the Overseas Private Investment Corporation;  and 
 the Director of the United States Trade and Development Agency. 
 The Trade Promotion Coordination Committee (T PCC) established by Executive Order 12870 of 
September 30, 1993 is tasked with  helping to implement the NEI and serves as the secretariat for the 
Export Promotion Cabinet. 
 
Investment 
 
6. What policies and regulations does the U.S. have in place on cross-border investments or cross-
border mergers by foreign companies and financial institutions? Does it set a higher threshold for 
cross-border investments and mergers in some speci al areas such as energy and high technology? 
Does the U.S. adopt different standards on investments by foreign enterprises of different nature (e.g. 
state-owned and private)? What about the poli cy coherence for equity investments by different 
countries? Which regulations apply?  
 
RESPONSE:  The United States maintains a longsta nding commitment to welcoming foreign 
investment, both through greenfield investment a nd through mergers and acquisitions.  Almost all 
rules and regulations applicable to cross-border investments also apply to domestic investors’ 
investments, and are limited to antitrust, envir onmental and safety concerns, and other regulatory 
considerations of general applicability. In the case of a very few subsectors, the generation of nuclear 
energy, for example, the United States has histor ically maintained prohibitions or limitations on 
foreign investment. Almost all sectors are open to foreign investment, however.   
 The United States also has several national security-rel ated rules and procedures that could potentially 
be implicated by some foreign investments. One of these is the national security review process 
administered by the Committee on Foreign Investment in the United States.    7.  Please kindly describe economic policies on th e exploration and utilizatio n of mineral resources in 
the U.S. Does the U.S. have different provisi ons for foreign investors and domestic investors?  
 
RESPONSE:  As reflected in U.S. free trade agreements (FTAs) and bilateral investment treaties 
(BITs), the United States maintains an open and non-discriminatory framework with respect to 
foreign investors.  U.S. FTAs and BITs do include a non-conforming measure (NCM) which 
establishes exception to the obligation to provide non- discriminatory treatment, relating to oil and gas 
development on federal lands.  This  reflects a provision of the Mineral Leasing Act, administered by 
the Department of the Interior, providing for reci procity between the U.S. and foreign countries where 
oil and gas lessees are based.  This NCM may be found in, for example, Annex I to the recent TPA 
between Peru and the United States.  However, unde r longstanding Interior Policy, countries are 
assumed to provide reciprocal access to oil and gas resources for U.S. companies unless otherwise 
demonstrated, and no country is currently designate d or has been designated as failing to provide such 
access in nearly three decades. 
 
There are also some formality requirements relating to access to mineral resources under federal management that differ between U.S. and foreign i nvestors.  This is reflected in the formality 
provisions of U.S. BITs and FTA investment chapte rs, e.g. Article 10.14 of the Peru/U.S. TPA.  As  WT/TPR/M/235/Add.1 
 Page 95 
 
 
 reflected in those FTA and BIT provisions, these form ality requirements do not materially impair the 
protections afforded to foreign investor s and investments under those agreements.  
 8.  Please provide an introduction of the U.S. economic policies on reducing emissions of pollutants 
(including taxation) and the latest progress.  
 RESPONSE:  The following is an overview of the relevant U.S. economic policies. 
 Climate Change 
In 2009-2010 EPA finalized an endangerment finding  on greenhouse gases;  issued the first national 
rules to reduce greenhouse gas emissions under the Cl ean Air Act;  and initiated a national reporting 
system for greenhouse gas emissions.  Using the Clea n Air Act, EPA has issued final light duty motor 
vehicle greenhouse gas standards and provided a fr amework for continued improvements in that 
sector.  In 2010-2011, EPA will further develop th e national reporting system for greenhouse gasses 
to enable the agency to receive, quality-assure and verify data submitted electronically from 10,000-
15,000 covered facilities. 
 
Greenhouse Gas Emissions St andards for Automobiles 
In 2009-2010, EPA took the first Federal regulatory steps to address the problem of global climate 
change by requiring industries to report their gree nhouse gas emissions and ot her relevant data, and 
by issuing regulations that reduce greenhouse emissions from cars and light trucks and increase the United States’ use of renewable fuels.  Tran sportation sources emitted 28 percent of all U.S. 
greenhouse gas emissions in 2007 and have been th e fastest-growing source of those emissions since 
1990.  This year EPA is planning to take another major step by proposing to set national emissions 
standards under section 202 of the Clean Air Ac t to control greenhouse gas emissions from heavy-
duty trucks and buses. 
 
Prevention of Significant Deterioration 
In January 2011, EPA will begin im plementing its Prevention of Signi ficant Deterioration and Title V 
Greenhouse Gas Tailoring rule.  EPA issued a final rule in May 2010 that establishes a common sense 
approach to addressing greenhouse gas emissions fr om stationary sources under the Clean Air Act 
(CAA) permitting programs.  This final rule sets th resholds for greenhouse gas emissions that define 
when permits under the New Source Review Preventi on of Significant Deterioration (PSD) and title V 
Operating Permit programs are required for new and ex isting industrial facilities.  The rule “tailors” 
the requirements of these CAA permitting programs to limit which facilities will be required to obtain 
PSD and title V permits. 
 
Improving Air Quality 
Since passage of the Clean Air Act Amendmen ts in 1990, nationwide air quality has improved 
significantly for the six criteria air pollutants for which there are national ambient air quality 
standards.  Despite this progress, about 127 million Americans lived in counties with air considered 
unhealthy in 2008.  Long-term exposure to air pollu tion can cause cancer and damage to the immune, 
neurological, reproductive, cardiovascular, and respiratory systems. 
 
Strengthen Air Quality Standards 
Despite progress, millions of Americans still live in  areas that exceed one or more of the national 
standards.  Ground-level ozone a nd particle pollution still present challenges in many areas of the 
country.  This year's Regulatory Plan describes efforts to review the primary National Ambient Air 
Quality Standards (NAAQS) for carbon monoxide, lead  and particulates.  In addition, the Plan 
includes a joint review of the secondary NAAQS for oxides of nitrogen and oxides of sulfur. 
 WT/TPR/M/235/Add.1 
Page 96 
 
 
 A New Clean Air Interstate Rule 
In the spring of 2011, EPA expects to complete and begin implementing a new rule related to clean air 
and transport.  Strengthening the standards and decr easing the emissions that contribute to interstate 
transport of air pollution will help many areas of  the country attain the standards and achieve 
significant improvements in public health. 
 
Cleaner Air from Improved Technology 
EPA continues to address toxic air pollution under authority of the Clean Air Act Amendments of 
1990.  The centerpiece of this effort is the "Ma ximum Achievable Control Technology" (MACT) 
program, which requires that all major sources of a gi ven type use emission controls that better reflect 
the current state of the art.  This year's Regulatory plan describes MACT standards under 
development for electric utility steam-generating units. 
 
9.  In recent years, Chinese te lecoms equipment and computer manufacturing companies complained 
that their investment and business activities in the U.S. have been blocked by U.S. government 
agencies on grounds of national security.  They also  complained that relevant procedures were not 
transparent and the results were not made pub lic, depriving these enterprises of business 
opportunities without providi ng any reasonable explanation. 
 
Please elaborate on the basis of U.S. national secur ity review of information technology sector, the 
review procedures and scope of the review and, if possible, a list of the industries subject to review.  
 
RESPONSE:   The statute governing CFIUS contains strict confidentiality requirements, inter alia  
affording the parties to the transaction protect ion against disclosure of market-sensitive and 
proprietary information. These requirements do not allow CFIUS to comment publicly on specific 
transactions reviewed by CFIUS, nor to confirm wh ether a specific transaction has been reviewed by 
CFIUS.  Therefore, we are not able to  answer any transaction-specific question. 
 
The Committee on Foreign Investment  in the United States (CFIUS) is authorized by statute to 
conduct reviews of certain foreign investment tr ansactions solely for genuine national security 
concerns, not broader economic and national interests.   That basis holds regardless of the sector or 
investor involved in any particular transaction th at CFIUS might review.  CFIUS does not maintain a 
list of sectors that are, or are not, subject to review , or in which foreign inv estment is encouraged or 
discouraged.  Rather, the United States mainta ins a longstanding and overarching commitment to 
welcoming foreign investment.  CFIUS conducts its  reviews in a manner consistent with that 
commitment, by focusing solely on genuine nationa l security concerns, if any, raised by individual 
transactions.  
 
Aid For Trade  
 
10. Has the U.S. provided quota-free and duty-free treatment to LDCs’ exports in accordance with 
Hong Kong Ministerial Declaration?  If yes, pl ease elaborate whether a ll LDCs enjoy such a 
treatment. If not, please explain the reason and the plan of the U.S. to fulfill its commitments. 
 
RESPONSE:   The United States remains fully committed to implementing the decision on duty-free, 
quota-free (DFQF) on the terms agreed by Ministers in Hong Kong, together with the results of an 
agreement on the overall negotiations under the DDA.  Successful completion of the DDA is therefore 
a prerequisite for U.S. implementation of the DFQF initiative.  The United States’ notifications to the 
WTO concerning duty-free market access for LDCs are contained in document WT/COMTD/W/149 and its addendums.  The United States also participates in the Committee on Trade and 
Development’s annual review of the implementa tion of the Hong Kong Decision on Duty-Free and 
Quota-Free Market Access for Least-Developed Count ries, with our most recent participation in 
December 2009.    WT/TPR/M/235/Add.1 
 Page 97 
 
 
 11.  Will the U.S. adjust its development assistan ce policy according to its economic development? 
What are the specific plans to fulfill the 0.7% ODA/GNI target it has committed? 
 
RESPONSE:  The U.S. does not use the ODA-to-GNP ratio as a target as some countries do.  The 
U.S. feels it is much more important to aim for quality and impact.  Indeed, the Monterrey Consensus 
itself does not include specific commitments to increase ODA.  The United States views numerical 
aid targets, including the target of 0.7 percent of  donors' GNP for ODA, as arbitrary input targets that 
bear no relation to developing countries' ability to ab sorb aid.  They also focus assistance on aid 
volume rather than results.  Preliminary ODA data for 2009 indicates that U.S. ODA in 2009 was the 
highest level for any country in history at $28.7 b illion, a $1.8 billion or 7 percent increase from 2008 
levels.  Note that these figures are actual dis bursements, not pledges or budget allocations. 
 
III. TRADE POLICIES AND PRACTICES BY MEASURE 
 
12.  Please briefly introduce the U.S. policy, if any, on export rebates /tax exemptions on goods and 
services.  
 RESPONSE:  The United States does not have a fede ral value-added tax (VAT) regime, and 
therefore, does not have a policy regarding VAT re bates or exemptions provided on exports.  Federal 
excise taxes and state sales taxes are not imposed on exports.   
 
Official support for exports 
 
13.  To cope with the international financial crisi s, what measures have the U.S. taken to support the 
export trade financing and export credit insurance?  What about their effects? Are the measures still 
being enforced now?  
 
RESPONSE:   Ex-Im Bank undertook numerous initiatives in the face of the financial crisis. With 
liquidity constrained, Ex-Im Bank developed inn ovative solutions for its customers, including new 
products that increased the availability of capital and lowered the cost of financing.  For example, 
Ex-Im Bank created a take-out option, providing an opportunity for banks to sell their loans back to 
Ex-Im Bank and thereby freeing up funds for additional financing.   In FY 2009, Ex-Im Bank 
authorized $21 billion of activity, the single largest volume of activity in the Bank’s history.  All of 
the initiatives are currently active, and are likely to remain so until the private market recovers.  Once 
the market returns to “normal”, Ex-Im Bank will assess the necessity for con tinuing these initiatives. 
 
Government Procurement 
 
14.  It is understood that the contract value set  aside by the U.S. government for small U.S. 
enterprises accounts for up to 20-30% of the total expenditure of th e federal government 
procurement. Could the U.S. explain whether such  practice is in conformity with the relevant 
principles of the Agreement on Government Proc urement (GPA), particularly that of non- 
discrimination against foreign enterprises?  
 RESPONSE:  The Small Business Act requires 23% of all Federal prime contracts dollars to be 
awarded to small businesses.  Small businesses are encouraged to compete for Federal government 
contracts.  Where an eligible small business is aw arded a contract through competition, it is counted 
toward the goal.  A significant portion of the sm all business goal is met through open competition. 
Under the WTO Agreement on Government Procur ement (GPA), the U.S. General Note 1 in 
Appendix I provides that:  “Notwithstanding above,  this Agreement will not apply to set asides on 
behalf of small and minority businesses.”   
 WT/TPR/M/235/Add.1 
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 15.  With regard to Buy American Act and Fly Amer ican Act and other industry-specific acts which 
require procurement of domestic goods and services,  
 
 (1) Please indicate whether the U.S. equally treats foreign-funded enterprises registered in 
the U.S. and American-funded enterprises in the go vernment procurements? If not, please provide the 
list of acts with such provisions. 
 
RESPONSE:  Under the Buy American Act, if a good is produced in the United States by a foreign-
owned or a foreign-invested company, the good is  considered to be a U.S.-produced good.  The 
ownership of the manufacturer or producer is not  relevant (Federal Ac quisition Regulation (FAR) 
25.003) at http://www.acquisition.gov.  For services, the issue is where the firm providing the services 
is established;  a foreign-owned or a foreign-invest ed company that is established in the United States 
is considered to be a U.S. service provider (FAR 25.402).  The Fly American Act, implemented at 49 
U.S.C. 40118, requires the use of U.S. carriers, exce pt under certain circumstanc es.  The United States 
excludes transportation services from its cove rage under the WTO Agreement on Government 
Procurement.   (2) Please explain the reason to regard co mmercialized information technology as an 
exception in the Buy American Act. 
 RESPONSE:  Section 517 of Division H, Title V of th e Consolidated Appropriations Act of 2005 
authorized the exemption from the Buy American Ac t of acquisitions of information technology that 
are commercial items in order to promote govern ment access to commercial information technology.  
 
 (3) Please specify the co sts taken into account when calcula ting the ratio of domestic costs in 
goods as provided in the Buy American Act?  A re labor costs, depreciation cost of production 
equipment, and amortization cost  of patented technologies included? 
 RESPONSE:   T o  d e t e r m i n e  if a good is a U.S.-produced good, the cost of its components must 
exceed 50 percent of the cost of all of its components.  For components purchased by the contractor, 
the cost of components may include the acquisition co st, including transportation costs to the place of 
incorporation into the end product or construction ma terial, and any applicable duty.  For components 
manufactured by the contractor, the cost of com ponents may include all costs associated with the 
manufacture of the component, including transportation costs to the place of incorporation into the 
end product or construction material , plus allocable overhead costs, but excluding profit and any costs 
associated with the manufacture of the end produc t (FAR 25.003).  A cost is allocable to a 
government contract if it:  (a) is incurred specifically  for the contract;  (b) benefits both the contract 
and other work, and can be distributed to them in reasonable proportion to the benefits received;  or 
(c) is necessary to the overall operation of the busin ess, although a direct relationship to any particular 
cost objective cannot be shown (FAR 31.201-4). 
 
 (4) Please kindly provide the detailed flow c hart of the U.S. government procurement. 
 RESPONSE:   The flow chart below generally describ es the U.S. Government procurement system 
for procurement covered by FAR 15.   The particular steps may differ if other procurement methods 
are used.  WT/TPR/M/235/Add.1 
 Page 99 
 
 
 
 
Government assistance 
 
16.  Please elaborate on how the U.S. government identifies the recipients of its R&D funds, selects 
the mode, sets the standards, determines the scope, evaluates performance, and handles relevant 
irregularities.   
 RESPONSE:   Using the U.S. Department of Energy (DOE) as an example, much of the research 
conducted under DOE programs is funded through competitive so licitations.  The qualification 
procedures for many programs is to select research  partners and projects based on factors such as WT/TPR/M/235/Add.1 
Page 100 
 
 
 energy saving potential, likelihood of success, and alignment with the recommendations of industry-
developed technology roadmaps.  Se lection of applications is gene rally based on the findings of the 
technical evaluations, the importance and releva nce of the proposed application to program 
objectives, fund availability and cost reasonableness.  Internal government controls ensure that the 
applicable regulations as to the selection of appli cants, the conduct of the research and the evaluation 
of the research results are followed appropriately. 
 Competition and Intellectual Property  
 17.  What are the U.S. major regulations and measures to protect against international business 
frauds? How does the U.S. deal with such  complaints from foreign enterprises? 
 
RESPONSE:   Numerous civil and criminal statutes and re gulations at the federa l and state level deal 
with fraud, so it is difficult to answer a question at  this level of generality.  Foreign enterprises have 
recourse to the U.S. judicial system and administ rative agencies in pursuing complaints about fraud. 
 18.  Has the U.S. formulated and applied new regulat ions or measures in criminal legislation and law 
enforcement of intellectual propert y rights since the last review? 
 RESPONSE:   There have been no changes to the subs tantive criminal law relating to intellectual 
property offenses in the past two years.  Howeve r, the PRO-IP Act of 2008 created positions for 
Federal Bureau of Investigation Special Agents dedi cated solely to the investigation of IP offenses. 
 
19.  Regarding the U.S. copyright legislation, pl ease describe the recent revisions to the Digital 
Millennium Copyright Act. Is there any plan for furth er revisions on copyright legislation in the near 
future? 
 RESPONSE:  There have been no recent amendments to  the Digital Millennium Copyright Act 
(DMCA), nor are there any bills pending in Congress that would amend the DMCA.    20.  Questions concerning the Family Ent ertainment and Copyright Act of 2005: 
  (1) The Act provides that any person who, without the authorization of the copyright owner, 
knowingly uses or attempts to use an audiovisual recording device to transcribe or transmit a motion 
picture or other audiovisual work protected in a motion picture exhibition facility, shall be imprisoned for not more than 3 years (for first offen ce). Could the U.S. please share the statistics of 
such cases and persons jailed thereby? 
 
RESPONSE:  The statistics for prosecutions under the Act (codified at 18 U.S.C. 2319B) are not 
formally tracked ( see 18 U.S.C. 2320(g) setting out federal IP reporting requirements).  Anecdotally, 
the Justice Department is aware of seven pro secutions under the Act, with sentences ranging from 
probation to 21 months incarceration.   (2) The Act also provides that the owner or lessee of a motion picture exhibition facility, the 
authorized agent or employee of such owner or l essee, the licensor of the motion picture or other 
audiovisual work being exhibited, or the agent or employee of such licensor may detain, in a 
reasonable manner and for a reasonable time, any pers on suspected of a violation of this clause.  
Could the U.S. please explain the definition of “a reasonable manner” and “a reasonable time”? Has 
there been any such cases in practice? 
 RESPONSE:   18 U.S.C. 2319B(c) permits the owner or lessee of a motion picture facility, the 
licensor of the motion picture or audiovisual work  being presented, or an authorized agent or 
employee of the motion picture exhibition facility or licensor of the work, to detain a suspect for the  WT/TPR/M/235/Add.1 
 Page 101 
 
 
 purposes of questioning or summoning a law enforcement officer.  The Justice Department is unaware 
of any instance where the scope of this “safe harbor ” has been litigated in the context of the Act. 
 
IV. DEVELOPMENTS IN SELECTED SECTORS 
Agriculture 
 
21.  Please introduce U.S. tax subsidies to its farming, forestry, husbandry and fishery.  
 
RESPONSE:  U.S. tax policies pertaining to agriculture, forestry and fishing can be found in the 
latest U.S. notification on subsidies, G/SCM/N/186/USA . 
 
22.  What are the laws and regulations on the slaughtering of livestock and poultry and the 
distribution of meat products in the U.S. to en sure their quality and safety? What are the specific 
measures in this regard?  
 
RESPONSE:   The United States Department of Agricultu re’s Food Safety Inspection Service (FSIS) 
operates under the Federal Meat Inspection Act (FMI A), the Poultry Products Inspection Act (PPIA), 
and the Egg Products Inspection Act (EPIA), in  addition to Executive Orders, small business 
protection laws, and other guidance applicable to al l Federal agencies.  Under the associated Federal 
meat, poultry, and egg products in spection regulations, countries must  operate equivalent inspection 
systems to be allowed to export to the United States.  23.  What are the regulations and measures on the traceability of meat  products in the U.S.? What are 
the measures taken to effectiv ely link various segments of production such as cultivation, 
slaughtering, transportation, wholesaling and retailing? 
 
RESPONSE:   Under the implementing regulations of the FMIA, PPIA and EPIA, FSIS provides 
inspection for all meat, poultry, and egg products sold in interstate commerce, and re-inspects 
imported products to ensure that they meet U. S. food safety standards.  The traceability of these 
products is possible through Federal, State, and lo cal recordkeeping requirements and is needed when 
a product recall is initiated.  For FSIS, a full or partial traceback may be needed, depending on the 
incident.  If a full traceback is required due to a food safety outbreak, such as E. coli  O157:H7, FSIS 
would send official investigative personnel to conduct food safety assessments at source 
establishments and review establishment and other records in order to understand the movement of 
the product.  Other Federal authorities, as well as St ate and local authorities, would also investigate 
product movement and distribution to ensure, as far as possible, that an effective recall would be 
conducted. 
 
24.  Questions concerning Sec. 743 of the Ag riculture, Rural Development, Food and Drug 
Administration, and Related Agencies Appropriations Act, 2010: 
 Regarding the U.S. Department of Agricultu re Food Safety and Inspection Service’s standard 
procedures for authorization to importation of poult ry or poultry products into the U.S., it is noted 
that Sec. 743 of the Agriculture, Rural Developm ent, Food and Drug Administration, and Related 
Agencies Appropriations Act, 2010 includes a number of new requirements that apply to China. 
 
 (1) Please explain whether and how the following requirements provided in Sec. 743 apply to 
other countries exporting processed poultry or  processed poultry products to the U.S.? 
 
 implement a significantly increased level of port of entry re-inspection (Sec. 743 (a) (3)); 
 
RESPONSE:   This is not a new requirement or a requi rement solely applied to China. Under its 
normal process, FSIS performs a higher level of port of entry re-inspection for the initial imports of WT/TPR/M/235/Add.1 
Page 102 
 
 
 poultry products from any country that has not export ed or has not recently exported such products to 
the United States.     b. establish and conduct an information shar ing program with other countries importing 
processed poultry or processed poultry produc ts from China (Sec. 743 (a) (4)); 
 RESPONSE:   This is not a new requirement or a require ment solely applied to China.  Under its 
normal process, FSIS performs a higher level of port of entry re-inspection for the initial imports of 
poultry products from any country that has not export ed or has not recently exported such products to 
the United States. 
 
 c. report to the appropriate cong ressional committees (Sec. 743 (a) (5)); 
 
RESPONSE:   USDA will report information to the Congress with respect to its actions on China’s 
poultry equivalence application.  Reports of this nature are quite typical in the U.S. system of 
governance and Congress often asks the executive branch to report on issues of interest. 
  d. make publicly available, no later than 30 days from the date they are finalized, the reports 
of any new audits and on-site reviews conducted by the Secretary (Sec. 743 (a) (6); 
 RESPONSE:   This is not a new requirement or a requirement solely applied to China.    It is standard 
practice for FSIS to make all international audit reports and on-site review s for all countries public on 
its website well within 30 days from the date they are finalized.   
 
 e. All rules that authorize the importation of processed poultry or processed poultry products 
from China are deemed as “significant rules” (Sec. 743 (b)). 
 RESPONSE:   Equivalence rules, such as the 2006 propo sed rule for processed poultry from China, 
are generally “significant” rules, which simply means that the Office of Management and Budget 
(OMB) has 90 days to review the rule before it is published.   
 
 (2) Please clarify the meaning of “to conduct such audits and reviews at least once annually 
or more frequently” mentioned in Sec. 743 (a) (2). 
 RESPONSE:   As is performed in all countries exporting poultry or poultry products to the 
United States, audits will be conducted on an annual or  as needed basis to ensu re the safety of such 
products.  
 
 (3) Please clarify the meaning of “implement a significantly increased level of port of entry 
re-inspection”. Does this apply to processed poultry or processed poultry products only from China? 
If yes, what’s its legal basis? If not, please shar e documents from the U.S. Food Safety and Inspection 
Service to prove that the aforesa id “increased level of port of entry re-inspection” applies to 
processed poultry or processed poultry products from China and other countries. 
 
RESPONSE:   This measure applies to all countries.  A higher level of import inspections is applied 
to all newly imported meat, poultry, and egg product s regardless of the country of origin.  Normal 
import inspections will occur when an established number of shipments have been found to be 
satisfactory. 
 
 (4) Please specify the types of the information sharing program created by the U.S. 
Department of Agriculture in accordance with Sec. 743. 
  WT/TPR/M/235/Add.1 
 Page 103 
 
 
 RESPONSE:   USDA is interested in information that indicates whether the exporting country’s 
inspection system is equivalent to that of the United States.  
 
 (5) Please explain the requirement, and its ju stification, that “if the People’s Republic of 
China recommends more than 10 eligible facilities, reports shall be submitted to the Committees on 
Appropriations of both Houses of Congress”. 
 
RESPONSE:   Section 743(a)(7) requires FSIS to notify the appropriate Congressional committees 
the first time the number of facilities certified by China as eligible to export to the United States 
exceeds ten.  The initial facilities proposed to be ce rtified would already be identified in the FSIS 
audit report accompanying an initial equivalency dete rmination.  This audit report would already be 
publicly available and referenced in a proposed rule.  In addition, lists of all currently certified plants 
from every country are posted on FSIS' website as standard practice.  Thus, this notification 
requirement is simply a convenience for Congress so  that Congressional staff need not continually 
check these lists. 
 
 (6) According to the Act, the procedures for significant rules specified in Executive Order 
12866 apply to the promulgation of any rule allowing the importation of processed poultry or 
processed poultry products into the U.S. Could the U.S. explain its meaning? Please share the 
statistics on the impact of the "significant regulato ry action" on the promulgation of rules, covering 
the U.S. Department of Agriculture and other relevant government agencies. 
 
RESPONSE:   As set forth in Executive Order 12866, “significant regulatory action" means any 
regulatory action that is likely to result in a rule that may:   5. Have an annual effect on the economy of  $100 million or more or adversely affect in 
  a material way the economy, a sector of the economy, productivity, competition, jobs, 
  the environment, public health or safety, or State, local, or tribal governments or  
  communities;   6. Create a serious inconsistency or otherwi se interfere with an action taken or planned 
  by another agency;   7. Materially alter the budgetary impact of  entitlements, grants, user fees, or loan  
  programs or the rights and obligations of recipients thereof;  or  
 8. Raise novel legal or policy issues arisin g out of legal mandates, the President's 
  priorities, or the principles set forth in this Executive order.   The impact of designating a rule as significant is that OMB has 90 days to review the rule 
before it is published.  The 2006 processed poultr y rule for China was designated as “significant.” 
 
SERVICES 
Accounting Services 
 25.  So far, how many certified public accountants are there in the U.S.? Please note that certified 
public accountants here refer to the certified public accountants that are licensed by the National 
Association of State Boards of Accountancy (NAS BA) and can independently sign and issue a report. 
What’s the ratio of U.S. nationals vs. foreign ers? Among foreign holders of CPA qualifications, how 
many are partners of their accounting firms?  
RESPONSE:   The current number of CPA licenses is approximately 605,555.  Currently, there is no 
centralized repository of international licensee data, although enhanced tracking capability is now 
under development.  However, with regard to ex amination candidates, of the 93,000 candidates who 
sat for the Uniform CPA exam in 2009, approximately 10 percent were foreign.  There is currently no WT/TPR/M/235/Add.1 
Page 104 
 
 
 way of tracking how many foreign CPAs are partners  of their accounting firms.  It also bears noting 
that NASBA itself does not license CPAs;  only th e individual state accounting boards license CPAs. 
 26.  In the aforesaid question, are those forei gn holders of CPA qualifications (i.e. certified public 
accountants that have a foreign nationality, are licen sed by the NASBA and can independently sign 
and issue a report) subject to any restric tion in the scope of auditing business? 
 RESPONSE:   Foreign holders of a CPA license provided by a U.S. state accounting board enjoy all 
the practice rights of a U.S. national CPA. 
 
Appraisal Intermediary Services 
 27.  Please provide access conditions of th e U.S. appraisal agencies and appraisers. 
 
RESPONSE:   Based on the subsequent questions, we understand your use of “appraisal agencies and 
appraisers” to mean what we generally refer to as business valuation services and not appraisal 
services related to real estate.  Although states may have standards by which business valuation 
services must be performed, to our knowledge ther e are no restrictions on who may perform them.  
These services are generally performed by licen sed CPAs, although non-CPA financial consultants 
may also offer these services. 
 
28.  What are the U.S. regulations and requirements on appraisal intermediary services for 
enterprises’ multinational investme nt/cooperation or M&As? To what extent is the U.S. open to 
foreign appraisal agencies? Does it have any restri ction on the participation of foreign appraisal 
agencies in M&As in the U.S.?  
RESPONSE:   As indicated in the response to question 27, we are not aware of any restrictions on 
foreign business valuation agencies or services. 
 
29.  Please describe the system for the mutual recognition of qualifications in appraisal services 
between the U.S. and other countries.  
RESPONSE:   Because business valuation services are not regulated by government authorities, 
mutual recognition systems are not needed to f acilitate the provision of such services by foreign 
suppliers.    Financial Services  30.  The U.S. released Dodd-Frank Wall Street Reform and Consumer Protection Act (hereinafter 
referred as to the Dodd-Frank Act) on July 21, 2010. 
  (1) How will this Act affect foreign financial institutions’ operations in  the U.S.? Will the Act 
restrict the financial businesses and M&A activities of  Chinese-funded financial institutions in the 
U.S.? Please describe the practices and reasons.  
 
 (2) How is the Dodd-Frank Act impl emented? What’s the market reaction?  
 
RESPONSE:   Please see the response to Question 33 below. 
 
31.  The Dodd-Frank Act provides that, for a foreign bank that presents a systematic risk to the 
stability of the United States financial system, if the home country of the foreign bank has not adopted, 
or made demonstrable progress toward adopting an  appropriate system of financial regulation to 
mitigate such risk, the Fed can terminate the busin ess activities of the bank in  the U.S. For a foreign  WT/TPR/M/235/Add.1 
 Page 105 
 
 
 securities broker of the same conditions, the SEC ma y revoke its qualification to register as a U.S. 
broker, or succeed to the registration of a U.S. broker.  
 
Please explain how the U.S. judges whether the home country has adopted, or made demonstrable 
progress toward adopting, an appropriate system of fi nancial regulation to mitigate such risk. And 
what are the criteria, reasons and procedures of the judgment. 
 
RESPONSE:   Please see the response to Question 33 below. 
 
32.  The Dodd-Frank Act raises more stringent regulatory requirements on credit rating agencies, 
and as a result of the abolishment of a number of  exemption clauses, the three major credit rating 
agencies had asked their clients not to cite their ratings.  
  (1) How does the U.S. think the absence of ra tings from the rating agencies may affect the 
bond market? In addition to the six-month transition period, do regulatory agencies have a longer-
term solution?  
 
 (2) Regarding the fundamental issue of the cred it rating industry - which is the "issuer-pay 
model" - is there a better solution other than the system in which the SEC assigns rating 
organizations to determine the initial credit ratings? 
  (3) After the Act repealed the immunity of nationally recognized statistical rating 
organizations (NRSROs) under Rule 436(g) of the S ecurities Act of 1933, will the U.S. open the rating 
market and bring more international ra ting agencies into the NRSROs?  
 
RESPONSE:   Please see the response to Question 33 below. 
 
33.  To avoid regulatory arbitrage resulting from in consistent regulatory standards, what regulatory 
standards will be prioritized by the U.S. while  promoting the global convergence of financial 
regulatory standards?  
 RESPONSE to Questions 30-33:   The Dodd–Frank Wall Street Re form and Consumer Protection 
Act (Public Law 111-203, H.R. 4173) was signed into  law by President Barack Obama on July 21, 
2010.  This legislation establishes new authorities and supervisory direction with regard to the U.S. 
financial markets including:  banking, securities,  insurance, derivatives, executive compensation, 
consumer protection and corporate governance.   Following the bill’s passage, the regulatory 
implementation phase began.  While few provisions  of the bill are effective immediately (for 
example, the liquidation authority), in general the legislation will become effective in stages. The 
legislation is complex and requires approximately 250 rulemakings and 70 studies.  Over the next 6 to 
18 months, regulators will undertake an intense period of rulemaking. The rulemaking process will 
expand upon and flesh out the parameters of the ne w regulatory framework. The resulting regulatory 
regime will contain both new elements and elements drawn from current U.S. financial regulation. In 
addition, regulatory implementation will likely be a dynamic process.  Rulemaking will include 
opportunity for public comment and all interested pa rties are invited to submit comments.  Interested 
persons may submit comments electronically th rough the Federal eRulemaking Portal at 
http://www.regulations.gov/.  Electronic submissi on of comments allows the commenter maximum 
time to prepare and submit a comment, ensures time ly receipt, and enables the comments to be made 
available to the public.  Comments submitted elect ronically through the http://www.regulations.gov/ 
website can be viewed by other commenter s and interested members of the public. 
 
34.  The Comprehensive and Consolidated Supervisi on (CCS) is an essential tool of the U.S. banking 
supervision on foreign banks that seek to enter the U. S. market. This year, a U.S. delegation visited 
China to examine its banking supervision and recogni zed the banking supervision of China to some WT/TPR/M/235/Add.1 
Page 106 
 
 
 extent. However, the U.S. has not demonstrabl y acknowledged that China’s banking supervision 
meets the CCS criteria, thus significantly affecting the organ setup, size and structure adjustment and 
business operation of Chinese banking institutions in the U.S.  
  (1) Please explain the specifics and evaluation criteria of the CCS. 
 
 (2) How will the U.S. authorities comment on China's overall CCS capacity?  Is there any 
upcoming plan to confirm t hat banking supervision of China meets the CCS criteria?   
 
RESPONSE:   In considering whether to approve a bank license application for a foreign bank to 
operate in the United States, the Board of Gover nors of the Federal Reserve (“the Board”) must 
determine that the foreign bank applicant and any pa rent foreign bank engages directly in the business 
of banking outside of the United States, and that  the applicant has furnished to the Board the 
information it needs to assess the application adequa tely.  The Board generally also must determine 
that the foreign bank and any parent foreign bank  is subject to comprehensive supervision or 
regulation on a consolidated basis by its home c ountry supervisor (See 12 U.S.C. § 3105(d)(2)).  The 
Board also takes into account additional standards as set forth in the IBA and Regulation K (See 12 
U.S.C. § 3105(d)(3) and 12 CFR 211.24(c)).  
Regulation K provides that a foreign bank will be  considered to be subject to comprehensive 
supervision or regulation on a consolidated basis if  the Board determines that the bank is supervised 
and regulated in such a manner that its home country  supervisor receives sufficient information on the 
worldwide operations of the bank, including its re lationship to any affiliates, to assess the bank's 
overall financial condition and its co mpliance with law and regulation. 
 
In assessing this standard, the Board considers, amo ng other factors, the extent to which the home 
country supervisors:  (i) ensure that the bank h as adequate procedures for monitoring and controlling 
its activities worldwide;  (ii) obtain information on the condition of the bank and its subsidiaries and 
offices through regular examination reports, audit re ports, or otherwise;  (iii) obtain information on 
the dealings with and relationship between the bank a nd its affiliates, both foreign and domestic;  (iv) 
receive from the bank financial reports that are c onsolidated on a worldwide basis, or comparable 
information that permits analysis of the bank's fi nancial condition on a worldwide consolidated basis; 
(v) evaluate prudential standards, such as capital adequacy and risk asset exposure, on a worldwide 
basis.  These are indicia of comprehensive, consolidat ed supervision;  no single factor is essential and 
other elements may inform the Board's determination.  
The rule applies to both the foreign bank applicant a nd to any parent foreign bank of such an applicant 
and emphasizes the importance of access to informati on on the part of the home country supervisor.  
 
The Board has made a “working toward” CCS de termination for certain Chinese banks. These 
determinations were sufficient to support approva l of the branch applications.  A “full” CCS 
determination would be required to approve the ac quisition of a U.S. bank by a Chinese bank.  The 
Board has not yet made a “full” CCS determination for any Chinese bank. 
 Insurance  35.  In accordance with the recently adopted financi al reform legislation, the U.S. will set up the 
Federal Insurance Office (FIO) in the Department of  The Treasury.  The FIO is responsible to sign 
international agreements and foreign policies on insu rance prudence on behalf of the U.S.  Please 
describe the measures taken by the FIO in en couraging national treatment of foreign insurance 
institutions in the U.S., particular ly in promoting some states to abolish discriminatory treatment of 
foreign insurance institutions? 
  WT/TPR/M/235/Add.1 
 Page 107 
 
 
 RESPONSE:  Please see the response to Question 36 below. 
 Securities  36.  Please introduce and explain the relevant conditions, regulatory requirements and approval 
procedures on the equity participation of foreign secu rities institutions in the U.S. asset management 
institutions or the establishment of asset manageme nt institutions in the U.S. by foreign securities 
institutions. 
 
RESPONSE to Questions 35 and-36:   The Dodd–Frank Wall Street Reform and Consumer 
Protection Act (Public Law 111-203, H.R. 4173) was signed into law by President Barack Obama on 
July 21, 2010.  This legislation establishes new au thorities and supervisory direction with regard to 
the U.S. financial markets including:  banking , securities, insurance,  derivatives, executive 
compensation, consumer protection and corporate governance.  Following the bill’s passage, the 
regulatory implementation phase began.  While few pr ovisions of the bill are effective immediately 
(for example, the liquidation authority), in general th e legislation will become effective in stages. The 
legislation is complex and requires approximately 250 rulemakings and 70 studies.  Over the next 6 to 
18 months, regulators will undertake an intense period of rulemaking.  The rulemaking process will expand upon and flesh out the parameters of the new regulatory framework.  The resulting regulatory 
regime will contain both new elements and elements drawn from current U.S. financial regulation. In 
addition, regulatory implementation will likely be a dynamic process.  Rulemaking will include 
opportunity for public comment and all interested pa rties are invited to submit comments.  Interested 
persons may submit comments electronically th rough the Federal eRulemaking Portal at:  
www.regulations.gov.  Electronic submission of comments allows the commenter maximum time to prepare and submit a comment, ensures timely receipt, and enables the comments to be made 
available to the public.  Comments submitted electro nically through the www.regulations.gov website 
can be viewed by other commenters and interested members of the public.  Construction services  37.  The U.S. does not recognize the overseas perfor mance of parent companies, and the majority of 
the states require the bidders to have completed the pr oject(s) of the same or similar kind(s) in the 
respective states.  This significantly restricts forei gn enterprises’ access to  the U.S. construction 
market.  Does the U.S. have any plan to revise such requirements? 
 
RESPONSE:  We are not aware of plans in individual stat es to change their policies with respect to 
bidding in the construction sector.  
 
38.  The U.S. labor law and the quota restricti ons for service provider visas make it difficult for 
foreign service providers to access the U.S. construc tion market, while the high costs of local labor in 
the U.S. often represent a major constraint to bus iness development.  Could the U.S. please explain 
the reasons for these restrictive measures, and whet her the U.S. plans to relax the control or take 
other measures to facilitate the entry of the foreign service prov iders into the U.S. construction 
market?  
RESPONSE:  U.S. labor laws are designed to ensure the safety of and fair compensation for workers. 
Limitations on the temporary entry of foreign laborer s are established through legislation by the U.S. 
Congress and are based on a wide variety of polic y concerns, including security, impact on domestic 
workforce and overall consistency with U.S. immigra tion policy.  We are not aware of any plans to 
change these policies.  39.  The U.S. requires contractors to furnish a performance bond issued by an insurance company 
instead of a bank, as in the case of internationally  accepted practice.  This will make it difficult for a WT/TPR/M/235/Add.1 
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 foreign enterprise with a short-time presence in the a rea of engineering projects in the U.S. to get a 
high-value performance bond. As a result, the foreign enterprise is unable to provide services in the 
local construction market.  Could the U.S. please explain the reasons for the restriction through 
performance bond? Is there any plan to lift such restriction?  
RESPONSE:  U.S. law, as well as laws enacted by stat e and local governments, requires use of 
performance bonds, a type of surety bond, for public works projects.  These laws have been in place 
for more than a century.  U.S. law also requires that these bonds be underwritten by insurance 
companies, as banks are not legally allowed to write insurance.  International practice, however, is not 
for banks to furnish performance bonds;  banks pr ovide letters of credit, a different financial 
instrument.  These letters of credit do not cover 100 percent of the contract, however, as performance 
bonds do.  
The requirement for a surety bond is not a restri ction, but rather a protection for taxpayers from 
potential failure of contractors to perform as speci fied under the contract.  There are no plans to 
change longstanding U.S. law with respect to  mandating performance bonds for public works 
contracts.  It is equally unlikely that any state or local government with si milar legal requirements will 
change these beneficial laws.  
There are no legal requirements for surety bonds, su ch as a performance bond, for private contracts, 
although the parties to the contract may find it benefi cial to have such an arrangement.  Therefore, a 
contractor, regardless of nationality, is not precl uded from providing services in the local construction 
market on that basis.  Surety bonds are written for firms in the U.S. market regardless of nationality, 
based on criteria that enable the surety firm  to accept the risk of contractor failure. 
 Air transport services  
40.  How does the U.S. strengthen the monitoring of air ticket prices? How does it regulate the 
negotiated settlement price of airlines? 
 RESPONSE:  The Department of Transportation’s Bur eau of Transportation Statistics (BTS) 
publishes two measures of U.S. domestic air fares:  (1) average fares, which consists of the price charged by the airlines plus any additional taxes and fees levied by an outside entity at the time of 
purchase;  and (2) the Air Travel Price Index (ATPI), a statistical index that documents quarterly 
changes in airline prices since the first quarter of 1995.  The link to the re levant BTS web page is 
http://www.bts.gov/xml/atpi/src/index.xml. 
 
We are not sure what is meant by “the negotiated settlement price of airlines,” but the United States 
has not regulated airline pricing domestically since 1978 and has phased out almost all regulation of 
international airline pricing. 
 
Broadcasting 
 
41.  With regard to the protection of broadcasting signals:  How does the U.S. protect the signals of 
its broadcasting organs?  In a dig ital environment, especially a ne twork environment, how does the 
U.S. effectively protect these signals?  
RESPONSE:  In the view of the United States, signal piracy, whether broadcast, cable, satellite, or 
digital-terrestrial, is a serious economic problem .  In broad outline, the United States provides 
protection for broadcast signals along with the cont ent carried by the signal under U.S. copyright law, 
Federal telecommunications law, a nd through technical measures.  First, under the U.S. Copyright 
Act, the copying and distribution of broadcast copy righted works, including material that is fixed 
simultaneously with the transmission, is prohibite d. Such unauthorized copying and distribution is  WT/TPR/M/235/Add.1 
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 subject to civil damages and possible criminal pros ecution.  Second, U.S. federal telecommunications 
law prohibits the interception of cable and satellite si gnals.  See 18 U.S.C. § 2511;  47 U.S.C. §§ 553, 
605.  There are five federal statutes that further pr otect cable and satellite systems by criminalizing the 
trafficking in devices that facilitate the intercep tion of a signal carrying protected content.  See 18 
U.S.C. §§ 1341, 1343 and 2512;  47 U.S.C. §§ 553, 605.  In our bilateral free trade negotiations, the 
United States asks our trading partners to provide fo r protection against the theft of encrypted satellite 
and cable signals and the manufacture and trafficking in tools related to such signal piracy.  Third, 
U.S. broadcasting organizations may use technical measures such as encryption to protect against the 
unauthorized distribution of broadcast signals. For example, subscription networks (such as cable TV 
and DTH satellite services) suppliers typically empl oy encryption technologies. Free-to-air terrestrial 
television broadcasters may incorporate a “broadcast  flag” to prevent the unauthorized copying or 
retransmission of their signals.11 
 
Postal service and express delivery 
 
42.  Please provide the governing laws, proce dures and relevant regulatory measures for custom 
clearance of the postal items and express deliveries.  Does the U.S. Customs implement measures that 
facilitate the clearance of postal items and express delivery? If yes, please specify. 
 RESPONSE:  Customs and Border Protection (CBP) mail regulations (19 CFR Chapter 145) and the 
International Mail Imports  brochure can be obtained on the CBP  public Web site at:  www.cbp.gov. 
 
The U.S. Postal Service (USPS) routinely prioritizes and submits Express Mail (EMS) to CBP for 
inspection and clearance first. Due to the time c onstraints to process the EMS mail and their customer 
service agreement, CBP assists the USPS by clearing th is mail first, ahead of all other mail classes.  
However, if there are any violations detected the pa rcel is set aside for a complete physical inspection 
and depending on the violation, is held for th e relevant agency’s review and disposition.  
 
With respect to the clearance of items from priv ate express delivery companies, Section 407(e)(2) of 
the Postal Accountability and Enhancement Act ( 2006) requires that customs and other laws be 
applied in the same manner to both shipments by th e U.S. Postal Service and similar shipments by 
private companies. 
 
43.  Please introduce the applicable laws and adminis trative measures on M&As of express couriers. 
Are foreign investments subject to different risk as sessment, safety appraisal or inspection procedures 
when conducting M&As of U.S. express  couriers? 
 
RESPONSE:  We are not aware of any M&A policies specific to the express courier sector. 
 44.  What licenses do express couriers need to get in order to take up financial businesses such as 
payment collection (i.e. collecting payment on behalf of their clients) in the U.S.? What is the 
supervisory body and how is the busin ess supervised to ensure fund safety? 
 
RESPONSE:  We do not fully understand the question.  We are not aware of express courier 
companies providing financial services in the Unite d States.  In addition, we are not sure we 
understand what precisely is meant by “payment collection services” in this context. 
 
45.  In the area of traffic management, does the U.S. have any standardized requirements on the 
vehicles used for the express servi ces or special provisions on urba n administration of express service 
vehicles? 
                                                     
 
11 Such technical measures may be eligible for protection under the anti-circumvention provisions of 
the Digital Millennium Copyright Act. WT/TPR/M/235/Add.1 
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 RESPONSE:  We are not aware of any standardized re quirements specific to vehicles used for 
express delivery services.  
 
Tourism 
 
46. Since the launch of Sino-U.S. group tours, traveler groups to the U.S. have experienced complicated and prolonged visa app lication procedures as provided by  relevant policies of the U.S. 
At present, traveler groups to the U.S. have to wait for two to three months in queue before getting an 
interview after fixing a telephone a ppointment.  There has been compla ins that some key clients and 
large-scale group tours could not accomplish in terviews within the scheduled time, seriously 
hindering the business of group tours to the U.S.  In  addition, the default talk time of the telephone 
booking card for U.S.-bound travels is 12 minutes and booking would be impossible in case the remaining talk time is less than 4 minutes.  This  practice has led to an increasing accumulation of 
telephone cards with insufficient balance in the tr avel agencies authorized to organize tour groups, 
resulting in a waste of resources . 
 Please explain and specify the policies and measures in volved in the questions  above.  Does the U.S. 
plan to take further measures to optimize its visa procedures? 
 
RESPONSE:  Telephone cards to book visa appointments are available from any branch of the China 
International Trust and Investment Company bank lo cated in China or directly from the call center’s 
website, and are available in 8 or 12 minute increments.  Unused minutes may be used later or 
transferred to another party.  There is a brief grace period that allows an individual caller to complete 
an appointment.  Group appointments can be purc hased with a group pin, and travel agents 
subsequently communicate with the call center by fax or email.  This procedure is more convenient, 
and travel agents are urged to use this method to  book multiple appointments.  To encourage the use 
of group appointment scheduling and provide addi tional flexibility, the U.S. Embassy in Beijing 
requested the call center to book group applicants on different days or times, if desired.  The U.S. 
Embassy is also working with th e call center to streamline and bette r publicize its group appointment 
policies.  Antifraud measures necessitate some restri ctions, such as changing an applicant within a 
group, after an appointment is made. 
 The type of appointment system currently in u se was implemented because it is readily available 
throughout China.  Moving toward a 900 type of toll call, as is more usual in the United States, is not 
feasible at this time.  However, when the U.S. Department of State’s Bureau of Consular Affairs moves to a global services contract, further improvements to the appointment system are expected. 
 
In response to a surge in appointment requests beginni ng in April of this year, the U.S. Embassy in 
Beijing took several measures to assist applicants.  The call center hired additional staff to handle 
calls, the U.S. Mission in China became one cons ular district for visa purposes to encourage 
applicants to interview at any location which was most convenient or had a shorter wait time, 
additional appointments were made available thr oughout the summer as consular officers worked 
additional hours, including Saturdays, and the U.S.  State Department’s Bure au of Consular Affairs 
sent staff temporarily to several locations throughout China to assist.  Medical services 
 
47. Please kindly brief us the policies on foreign investment in opening medical institutions and 
practicing of foreign medical and technical personnel in the U.S.  
RESPONSE:   Hospital operators must comply with fede ral, state and local licensing requirements. 
Protection of public health is largely the responsibility  of the states, thus the majority of regulations 
dealing with healthcare are administ ered at the state level.  States govern the distribution of permits  WT/TPR/M/235/Add.1 
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 and licenses to construct and run hospitals.  In add ition, hospital operators would need to comply with 
state and local building code and zoning requirement s.  The federal government sets prices for health 
care provided under Medicare and Medicaid programs.   Hospitals must follow federal guidelines to 
receive Medicare and Medicaid reimbursements.  
With respect to medical and technical personnel trained and licensed in a foreign jurisdiction, 
generally the candidate will need to be licensed by a U.S. licensing jurisdiction in order to practice in 
the United States.  The paths to licensure depend on the specific profession, and may be specific to 
each jurisdiction;  therefore it is advisable to revi ew the requirements of a specific jurisdiction for a 
specific occupation.  However, the websites of either  national associations of the state-level licensing 
boards or a professional association of the profession frequently provide comprehensive guidance.  
For example: 
 For foreign trained physicians:  http://www.ama- assn.org/ama/pub/about-ama/our-people/member-
groups-sections/international-medical-gr aduates/practicing-medicine.shtml. 
 
For foreign-trained nurses:  https://www.ncsbn.org/171.htm. 
 A listing of professional associations and national associations can be found at:  
http://www.clearhq.org/Default.aspx?pageId=481144 
 In addition, one can use the following tool to  find state-level requirements for “Healthcare 
Practitioners:”  http://www.acinet.org/acinet/licen sedoccupations/lois_occ. aspx?stfips=99&by=occ& 
keyword=&searchType=&nodeid=16&keyphrase=.  
CHINA SUBSEQUENT QUESTIONS 2 
 I.  Overview 
 
1.  How does the U.S. Administration select those sectors which have great potentials in long-term 
development and will make vital contribution to the economic growth?  
 RESPONSE:   The United States does not select a nd favor specific sectors for long-term 
development, instead relying on market forces to  determine the future sources and directions of 
economic growth.  As articulated in the Admini stration’s Strategy for American Innovation, the 
challenge for the Federal Govern ment is to create favorable c onditions for growth through pro-
innovation policies, while not picking winners and losers – an approach that can result in bad 
decisions, wasted resources and stifling, rather  than promoting, innovation.  Instead, the 
Administration is working to ensure that the Federal Government is attuned to trends in U.S. industry 
and the global marketplace, and to achieve a bus iness and policy environment in which innovative 
and productive U.S. businesses have the tools, opp ortunities, and support to compete in the global 
marketplace. 
 
2.  Does the U.S. have any kind of evaluation on the benefits of free trade on domestic producers and 
consumers? If any, could the U.S. share with other members?  
 RESPONSE:   The benefits of free trade in the context of a rules-based system have been widely 
recognized, which is why we have an open mark et and are seeking a balanced and ambitious 
conclusion of the Doha Round.  The 2010 Trade Policy Agenda and 2009 Annual Report of the 
President of the United States on the Trade Agreements Program  outlines our agenda in this regard.  It 
can be accessed at:  http://www.us tr.gov/2010-trade-policy-agenda. 
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 3.  In the American Recovery and Reinvestment Act of 2009, Trade Adjustment Assistance (TAA) 
coverage has been expanded to workers and firms in service sectors.  
 
Please give a detailed description of the implementa tion of TAA in service sectors. How does the U.S. 
calculate or determine the impact of service im ports on domestic firms and workers in the same 
sector?   RESPONSE:   The Trade Adjustment Assistance program provides training and assistance to those 
adversely affected by foreign trade.  The service sector aspects of the reauthorized TAA program have not been in operation long enough to evaluate im pacts or benefits.  The following overview provides 
basic information on the expanded TAA programs, including a summary of the numbers of workers 
covered by TAA certifications.  TAA Program Overview 
Working with Congress, the Presi dent was able to sign into law the Trade and Globalization 
Adjustment Assistance Act of 2009 (TGAAA), as part of the American Recovery and Reinvestment 
Act of 2009.  The TGAAA reauthorized Trade Ad justment Assist ance (TAA) programs;  expanded 
TAA coverage to more workers and firms, including  workers and firms in the service sectors for the 
first time;  made benefits available to workers whose jobs have been sent "off-shore" to another 
country (as opposed to covering a more limited set of shifts in production);improved workers' training 
options;  and increased the affordabilit y of health insurance coverage.  
 Workers 
In FY 2009, the U.S. Department of Labor’s Employment and Training Administration (ETA) 
administered two separate TAA laws—the program implemented by the Trade and Globalization 
Adjustment Assistance Act of 2009 (TGAAA) that went  into effect for petitions filed on or after May 
18, 2009 (new program), and the TAA program that was administered under the Trade Act as 
amended by the TAA Reform Act of 2002,  which existed before May 18, 2009. 
 The TGAAA had a major impact on the administra tion of the TAA program.  In FY 2009, TAA 
petition filings increased by 104% over FY 2008.  Mo re specifically, from May 2009 thru July 2009, 
TAA petition filing increased by 288% as compared w ith the same period of the previous year.  In 
March 2009, TAA petitioners were gi ven the option of withdrawing previously filed TAA petitions 
and re-filing on or after May 18, 2009, in order to  take advantage of th e expanded TAA program.  
This resulted in a large number of TAA petitions be ing withdrawn and classified as terminated prior 
to May 18, 2009, and a corresponding large number of re-filed TAA petitions on or shortly after May 
18, 2009. 
 In FY 2009, ETA estimated the number of workers covered by TAA certifications was 201,053.  This 
represents a 58.7% increase over FY 2008, when 126, 633 estimated workers were covered.  In FY 
2009, 80 percent of the determinations issued were certifications (excluding te rminations).  In FY 
2009, the manufacturing sector had the greatest esti mated number of TAA certified workers with 
183,813 workers;  6,764 workers in the professional, scientific and technical services;  3,001 in 
administrative and support and waste management  and remediation services, and 2,061 in and 
transportation and warehousing.  Agriculture, forest ry, fishing and hunting ha d 172 workers estimated 
to be covered by certifications.  (More inform ation on TAA for Workers is available at:  
http://www.doleta.gov/tradeact/ChangesFAQ.cfm#3  
 
Application Process  
Applications for the Trade Act Program as amen ded by the Trade and Globalization Adjustment 
Assistance Act of 2009 have two distinct phases: 
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 1. To obtain TAA reemployment services and be nefits a group of workers must first file a 
petition with the U.S Department of Labor's Trad e Adjustment Assistance Program (TAA) requesting 
certification as workers adversely affected by fore ign trade If the worker group meets the necessary 
group eligibility criteria a certification will be issued.  
2. After a group certification is issued each work er in the group may then individually apply for 
services and benefits through their local One-Stop Career Center
 (http://www.doleta.gov/usworkforce/ 
onestop/onestopmap.cfm) to determine individual  TAA eligibility for services and benefits.  
 
Eligibility for TAA 
All Petitions for TAA are filed with Office of Trad e Adjustment Assistance (OTAA).  OTAA has sole 
responsibility for conducting a fact finding invest igation to determine whether group eligibility 
criteria have been met and issues official notice of  its decision within 40 days after the petition has 
been filed. 
 
In order for the U.S. Department of Labor to issue a Certification Rega rding Group Eligibility to 
Apply for Trade Adjustment Assistance, the certain requirements must be met, including: 
  (1) Workers have been totally or partially laid off or that worker layoffs have been 
 planned, and 
  (a)  Increased imports of articles or services, or   (b)  A shift in production of articles or an acquisition of services from any foreign 
  country, or 
  (c)  Loss of business from a custom er with TAA-certified workers, and 
  (d)  These trade effects have contributed  importantly to worker separations;  or 
 
 (2) Workers are employed by a company identifie d in an affirmative findi ng of injury by the 
 International Trade Commission (ITC). 
 
Once the U.S. Department of Labor issues a Certifi cation Regarding Group Eligibility, workers in that 
certified worker group may apply individually for be nefits and services through their local One-Stop 
Career Center. 
 When a determination by the U.S. Department of  Labor states that workers who petitioned do not 
meet the group eligibility requirements under this pr ogram, workers may obtain benefits and services 
from other job training programs such as  the Workforce Investment Act (WIA). 
 Group TAA Eligibility Requirements 
After receiving a TAA petition, OTAA investigators ga ther and analyze the facts to determine if the 
eligibility requirements are met.  Th ese requirements are summarized as follows: 
 1. The workers' company produces a product or su pplies a service or the workers' employer is a 
 public agency that supplies a service;  AND  
2. A required minimum of the workforce has been laid off in the 12 months preceding the date 
 of the petition or is threatened with layoffs (3 workers in groups of fewer than 50 or 5% of the 
 workforce in groups of 50 or more);  AND  
3. At least one of the following:  i. Increased imports of articles or services contributed importantly to an actual decline 
  in sales or production of like or directly competitive articles or services at the  
  workers' firm and to the workers' layoff or threat of a layoff;  OR   ii. Increased imports of articles like or directly competitive with articles produced  
  directly using services provided by the workers' firm contributed importantly to an WT/TPR/M/235/Add.1 
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   actual decline in sales or production at the workers' firm and to the workers' layoff or 
  threat of a layoff;  OR  
 iii. Increased imports of articles have contribut ed importantly to an actual decline in sales 
  or production at the workers' firm and to th e layoff or threat of a layoff at the workers' 
  firm of workers who produce component parts for like or directly competitive  
  articles;  OR  
 iv. A shift in the production of articles or supply of services to a country outside the  
  United States contributed importantly to the workers' layoff or threat of a layoff;  OR  
 v. The workers' firm's loss of business as  a supplier or downstream producer to a TAA-
  certified firm contributed importantly to an actual decline in sales or production at the 
  workers' firm and to the workers' layoff or threat of a layoff;  OR  
 vi. The acquisition of services from a foreign country by a public agency has contributed 
  importantly to a layoff or threat of a layoff of workers of the public agency.  
 
Worker groups also may be certified if the work ers are employed by a company identified in an 
affirmative finding of injury by the Internationa l Trade Commission (ITC).  Where the ITC has made 
such a finding the three criteria above  are not required for certification. 
 
Denial of a Petition 
Workers who are denied certification may request administrative reconsideration from the OTAA.  
Requests for reconsideration must:  (1) be in writing;   (2) include the TAA investigation number;  (3) 
be signed;  and (4) describe the group of workers in cluded in the petition.  Requests must also cite 
reasons why the workers consider the denial erroneou s according to the facts, the interpretation of the 
facts, or the law itself.  Reconsideration requests must be filed with the OTAA within 30 days. 
 
Firms 
The American Recovery and Reinvestment Act (ARRA ) of 2009 also reauthorized and modified the 
Trade Adjustment Assistance (TAA) for Firms program  a t  t h e  U . S .  D e p a r t m e n t  o f  C o m m e r c e .   I n  
addition to technical changes to eligibility criteri a for the review of Petitions for Eligibility, the 
legislation expanded the potential pool of clients significantly by allowing “service” industry firms the 
opportunity to apply for TAA.  Trade Adjustment Assistance for Firms (TAA) provides financial 
assistance to manufacturers  affected by import competition.  Sponsored by the U.S. Department of 
Commerce, this cost sharing federal assistance program pays for half the cost of consultants or 
industry-specific experts for projects  that improve a manufacturer's competitiveness.  (More 
information on TAA for Firms is avai lable at:  http://www.taacenters.org/) 
 II. Economic Environment  National income and economic balances 
 
4.  According to its view of point, what is a rea sonable household saving rate for the U.S.?  What does 
the U.S. plan to do to turn savi ngs into effective investments?  
 
RESPONSE:   In the short term, it is important that the economy grow more quickly and that the 
unemployment rate fall to a more acceptable level.   That suggests that it may be appropriate for 
saving to move lower to help support economic grow th.  In the longer run, saving will depend on how 
quickly wealth grows and how available credit becomes.  Based on reasonable assumptions for these 
variables, the Council of Economic Advisers suggests th at the saving rate would be in the 4 percent to 
7 percent range.  The current saving ra te is above 6 percent, which is well within that range.  Now that 
credit markets have resumed more normal functioni ng, the private sector will be the main path 
through which savings becomes effective investment s.  The Federal government is supporting a wide 
range of public infrastructure programs that will he lp raise business productivity and encourage more 
investment spending.  WT/TPR/M/235/Add.1 
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 5.  Against the background of insufficient tota l demand, increased government debts and the ever 
expanding balance sheet of the Federal Reser ve, how will the U.S. revive its economy while 
maintaining a stable financial status?  
 
RESPONSE:  It is useful to remember that a large porti on of the rise in government debt is also the 
result of the recession and the programs that were  designed to provide te mporary, but necessary 
stimulus.  Because we expect the economy to recove r and temporary spending programs to end, we 
are expecting a sharp improvement in deficit.  The Federal Reserve is an independent agency so we 
cannot speculate on potential policies. 
 
6.  Since the end of 2008, the Federal Reserve has been keeping the base rate between 0% and 0.25% 
and implementing a quantitative easing monetary po licy.  (1) Is the U.S. concerned about the 
potential global inflation caused by a long-term  zero rate policy?  If the world economy is 
increasingly menaced by inflation and the unemployment ra te in the U.S. is still high, will the Federal 
Reserve consider tightening its monetary policy? 
 
RESPONSE:   The stimulus – both monetary and fiscal – played a key role in preventing the economy 
from falling into an even deeper recession.  In the U.S. the unemp loyment rate still remains high and 
business capacity utilization remains low.  Consumer price inflation is at the lowest level in roughly 
40 years.  This suggests that infl ationary pressures are not building. 
 
 (2) What measures will the U.S. take to safeguard its creditors’ assets in States? 
 RESPONSE:   The best safeguard for creditors’ assets is  a U.S. economy that has returned to full 
employment based on a sustainable growth path.  A growing economy will help reduce the federal 
fiscal deficit.  The Administration budget contai ns programs that reduce the growth of federal 
spending, and the recently-passed health care refo rm is an important step to reducing future 
government health-care costs.  The recently appointed fiscal commission will provide a further 
roadmap for longer run fiscal consolidation. 
 
Monetary and fiscal policies 
 
7.  Currently, the significant fluctuations in the exchange rates between major currencies are leading 
to speculation, affecting the stability of the global financial market and bulk commodities, and 
restraining the pace of economic recovery throughout the world.  
 
As the main international reserve currency, how will the U.S. govern ment ensure the relative stability 
of U.S. dollars?  
RESPONSE:   The United States dollar has been the world’s primary reserve currency for over 60 
years.  We believe that as long as the United States maintains sound macroeconomic policies and 
deep, liquid, and open financial markets, the dollar w ill continue to be a major reserve currency.  The 
United States is committed to returning our fiscal ba lances to sustainable leve ls once the recovery is 
assured;  maintaining price stability;  and restoring the health and stability of our financial system. 
 8.  Paragraph 13, page 5 of the Secretariat’s Report mentions that direct government investment 
spending includes infrastructures, health info rmation technology, research on renewable resources 
and tax credits for particular types of private invest ment such as advanced energy manufacturing.  
 
Please elaborate on the specific investment budget fo r each area and their respective proportion to 
the total budget.  
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 RESPONSE:   The Recovery Act’s estimated cost of $787  billion is split roughly into thirds.  The 
first third, estimated to cost $288 billion, is for tax relief to individuals and businesses.  The second 
third, estimated to cost $234 billion, is for manda tory government programs designed to strengthen 
the country’s social safety net.  Examples of such programs include Unemployment Insurance, 
Medicaid, Social Security and Veterans Payments , Student Financial Assistance, Food Stamps, and 
Temporary Assistance for Needy Fam ilies.  The final third, estimated to cost $265 billion, is for 
discretionary spending programs.  This includes dire ct government investments and/or aid to States in 
areas such as education, highway infrastructure, high-speed railways, clean energy, broadband, and 
housing.   9.  Please provide the tax prefer ential policies implemented by the federal and state governments after 
the financial crisis to create more jobs and stimulat e economic recovery, in addition to the stimulus 
measures of ARRA as mentioned in Paragraph 13 of the Secretariat’s Report.  What is the effect of 
these policies so far?  Does the U.S. have any plan to adjust or modify such tax policies? If any, what 
is specific content in these policies?  
 
RESPONSE:   The provisions of ARRA can be found a t:  http://www.irs.gov/newsroom/article/0,,id= 
204335,00.html?portlet=6.  
Evaluations of the effect of ARRA can be found at:  http://www.whitehouse.gov/search/site/ 
american%20recovery%20and%20reinvest ment%20act?filters =im_og_gid:700). 
 10.  Please explain whether more tax on capital gai ns in the U.S. will restrain individuals from 
making investment in the post-financial crisis period.  
 
RESPONSE:   The top capital gains rates is currently ex pected to increase to 20 percent in 2011 and 
to 23.4 percent in 2013 as a result of the new tax on inv estment income enacted as part of Health Care 
Reform.  While slightly higher than the 20 percent rate enacted in 1997, these rates are lower than the 
28 percent rate in effect for the earlier part of  the 1990s.  These rates do not appear to have any 
significant effects on investment in the 1990s.  A majo r factor behind individuals’ decisions to invest 
is the confidence that their inv estments will be profitable, whic h depends on a strong and growing 
economy. 
 
Developments in trade and investment merchandise trade  
Trade in services   
11.  Please give a detailed description of the meas ures that the U.S. has taken with respect to 
outsourcing services (including encouraging and restri ctive measures) since the financial crisis as 
well as the causes, implementation and effect of such measures.  
 RESPONSE:   This request is exceedingly broad and be yond our ability to answer in the limited time 
available for TPR question responses.  A preliminary database search of legislation of the last two 
years containing the term “outsourcing” highlights the difficulties presented by this question.  Of the 
more than 40 state-level measures, we observed that mo st all of them were with respect to two issues: 
 
 (1) Evaluating the feasibility of, or reaffirm ing current initiatives for, outsourcing certain 
  government functions to private suppliers 
 (2) Establishing the independence of auditors  for certain auditing functions by requiring 
  that the auditors do not also provide internal audit outsourcing services.  Although the first type appears to offer expanded opportunities for trad e, without a substantial amount 
of research, it is not possible to determine if the fina ncial crisis is relevant, which appears to be the 
implication of the request.  Nor is it possible in th is time frame to evaluate the implementation and  WT/TPR/M/235/Add.1 
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 effect of the measures, either individually or together.  However, the United States welcomes the 
opportunity to discuss any specific trade-related measure with Members upon request.  12.  Please give a detailed description of the U.S. statistical system for the trade in services, in 
particular the specific statistical measures for different service sectors.  
 RESPONSE:   Below are descriptions of the five broad categories of private services that are 
presented in the U.S. international transactions acc ounts—travel, passenger fares, other transportation, 
royalties and license fees, and other private services. 
 Travel.   This account covers purchases of goods and servi ces by U.S. persons traveling abroad and by 
foreign travelers in the United States for busin ess or personal reasons. These goods and services 
include food, lodging, recreation, gifts, entertainment,  local transportation in the country of travel, and 
other items incidental to a foreign visit. U.S. trav el transactions with both Ca nada and Mexico include 
border transactions, such as day trips for shopping and sightseeing. 
 
A “traveler” is a person who stays less than a year in  a country and is not a resident of that country.  
Diplomats and military and civilian government pe rsonnel are excluded regardless of their length of 
stay;  their expenditures are included in other international transactions accounts.  Students’ 
educational expenditures and living expenses and me dical patients’ expenditures for medical care are 
included in “other private services.”  
Passenger fares.   This accounts covers the fares received by U.S. air carriers from foreign residents 
for travel between the United States and foreign countries and between foreign points, the fares 
received by U.S. vessel operators for travel on cruise  vessels, and the fares paid by U.S. residents to 
foreign air carriers for travel be tween the United States and foreign countries and to foreign vessel 
operators for travel on cruise vessels.  
Other transportation.   This account covers U.S. intern ational transactions arising from the 
transportation of goods by ocean, air, land (truck an d rail), pipeline, and inland waterway carriers to 
and from the United States and between foreign poi nts. The account includes freight charges for 
transporting exports and imports of  goods and expenses that transportation companies incur in U.S. 
and foreign ports. Freight charges cover the receipts of U.S. carriers for transporting U.S. exports of 
goods and for transporting goods between foreign poi nts and the payments to foreign carriers for 
transporting U.S. imports of goods.  Port services c onsist of the expenditures of foreign carriers in 
U.S. ports and of U.S. carriers in foreign ports.  (Beginning with the latest annual revision, in June 
2010, expenditures on fuel are excluded from port ser vices and instead recorded as trade in goods.) 
 Royalties and license fees.   This account covers transactions  with nonresidents that involve 
intangible assets—including patents, trade secrets, a nd other proprietary rights—that are used in 
connection with the production of goods, copyright s, trademarks, franchises, rights to broadcast live 
events, software licensing fees, and other intellectual property rights. 
 
Other private services.   This account covers education, fi nancial services, insurance services, 
telecommunications, business, professional, and technical services, and other services. 
 
Education consists of expenditur es for tuition and living expenses by foreign students enrolled in U.S. 
colleges and universities and by U.S. students fo r study abroad. This category excludes fees for 
distance-learning technologies and for educational and training services provided on a contract or fee 
basis;  these transactions are included in training services, under business, professional, and technical 
services. 
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 Financial services include funds management and a dvisory services, credit card services, fees and 
commissions on transactions in securities, fees on credit-related activities, and other financial 
services. 
 Insurance services consist of the portion of premiu ms remaining after provision for expected or 
“normal” losses, an imputed premium supplement that  represents the investment income of insurance 
companies on funds that are treated as belonging to policyholders, and auxiliary insurance services, 
such as actuarial services and claims adjustment services.  Separate estimates are provided for primary 
(or direct) insurance and for reinsurance.  
Telecommunications services consists of receipt s and payments between U.S. and foreign 
communications companies for the transmission of messages between the United States and other countries;  channel leasing;  telex, telegram, and ot her jointly provided basic services;  value-added 
services, such as electronic mail, video conferenci ng, and online access services (including Internet 
backbone services, router services, and broadband access services);  and telecommunications support 
services. 
 
Business, professional, and technical services covers  a variety of services, such as legal services, 
accounting services, and advertising services. 
 
The “other services” component of other private se rvices receipts consists mainly of expenditures 
(except employee compensation) by foreign governme nts in the United States  for services such as 
maintaining their embassies and consulates;  non-co mpensation-related expenditures by international 
organizations, such as the United Nations and the Inte rnational Monetary Fund, that are headquartered 
in the United States;  expenditures of foreign resi dents employed temporarily in the United States;  
and receipts from foreigners for the display, repr oduction, or distribution of motion pictures and 
television programs. 
 
The “other services” component of other private servi ces payments consists primarily of payments by 
U.S. distributors to foreign residents for the rights to display, reproduce, or distribute foreign motion 
pictures and television programs. 
 For most of the categories of services, additional deta il is available each October in an article in the 
monthly U.S. Bureau of Economic Analysis (BEA) publication, the Survey of Current Business .  The 
Survey  is available on the BEA Web site, www.bea.gov/.  The annual article also includes statistics on 
services supplied to foreign markets through foreign affiliates of U.S. companies, and to the U.S. 
market through U.S. affiliates of foreign companies. 
 These statistics are primarily based on data from surveys conducted by BEA, but the statistics for 
some services are based on data from a variety of  other sources, including U.S. Customs and Border 
Protection, surveys conducted by other federal government agencies, private sources, and partner 
countries.  The BEA surveys are available on BE A’s Website at:  www.bea.gov/international/index. 
htm#surveys. 
 13.  Has the U.S. ever assessed its statistical re sults of trade in services, i.e., the number of 
enterprises and the trade volume wh ich have not been covered by th e current statistics in trade in 
services? If any, how many enterprises and trade volu me have not been covered by the statistics of 
trade in service?  
 
RESPONSE:   BEA makes ongoing efforts to ensure that its  statistics are as accurate and complete as 
possible, but it has not conducted an exercise of ex actly the type described in the question.  The 
surveys of trade in services are mandatory under a law known as the International Investment and 
Trade in Services Survey Act, and reporting threshol ds for the surveys are set with a view to capturing  WT/TPR/M/235/Add.1 
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 a very high percentage of total trade in the ser vices covered.  BEA uses business information services, 
as well as information from the business press and from trade associations, to construct and update the 
mailing lists for its surveys.  In addition, it has u sed the results of a screening question on a Census 
Bureau survey of domestic firms to help  identify U.S. firms that import services. 
 
As stated in question 12 above, other sources are used for some types of services.  It should be noted 
that, in some cases, the data are not collected dir ectly from enterprises.  For example, statistics on 
travel expenditures are derived mainly from surveys of individuals;  estimates of education services 
are based on information from a private association on numbers of students, combined with 
information from government sources on tuition and student living costs;  and information on 
volumes for trade in goods is used in deriving compon ents of the statistics on transportation services.   
 Transparency---Notification of measures of gen eral application affecting trade in services 
 
14.  In the U.S. TPR of 2008, China has expressed  its concern in its Advanced Written Questions 
(No.124) that the U.S. had not abided by its trans parency commitments under Ar ticle III of the GATS 
since 2002. Article III provides that “Each Member s hall promptly and at least annually inform the 
Council for Trade in Services of the introduction of  any new, or any changes to existing laws, 
regulations or administrative guidelines which sign ificantly affect trade in services covered by its 
specific commitments under this Agreement”.  
 According to the informal note by the Secretaria t dated 18 June 2010(JO B(09)/10/Rev.2), from 
January 1995 to mid-June 2010, the U.S. only made one notification under Article III of the GATS in 
2000.  
Could the U.S. inform whether no such new laws, regulations or administrative guidelines or changes 
to exiting laws, regulations or administrative gui delines which significantly affect trade in services 
covered by its specific commitments  under this Agreement have been introduced in all these years? If 
yes, could the U.S. indicate how it will abide by its transparency commitments?  
 
RESPONSE:   The United States has recently submitted a notification under GATS Article III:3 on 
the Dodd-Frank Wall Street Reform and Consumer  Protection Act (Public Law 111-203, which was 
signed into law by President Barack Obama on July 21, 2010.  
 
Foreign direct investment 
 
15.  In July 2009, Northwest Non-ferrous Inter national Investment Company Limited and Firstgold 
Corp. entered into an acquisition agreement, pursuant  to which Northwest Non-ferrous International 
Investment Company Limited would spend USD26.5 m illion in purchasing 51% of the equity interests 
in Firstgold Corp to acquire the mining right to four gold mines in Nevada.  This transaction, 
however, was rejected by the Committee on Foreign  Investment (CFIUS) in December 2009 on the 
grounds of “national security”. 
 
 (1)  Please provide a clear definition of “national security”.  
RESPONSE:   The statute governing CFIUS contains strict confidentiality requirements, inter alia  
affording the parties to the transaction protect ion against disclosure of market-sensitive and 
proprietary information.  These requirements do no t allow CFIUS to comment publicly on specific 
transactions reviewed by CFIUS, nor to confirm wh ether a specific transaction has been reviewed by 
CFIUS.  Therefore, we are not able to  answer any transaction-specific question. 
 
With respect generally to the concept of “national security,”  please refer to the official guidance that 
Treasury published on December 8, 2008, in the Federal Register , regarding the types of transactions WT/TPR/M/235/Add.1 
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 that CFIUS has reviewed and that have presente d national security considerations.  The statute 
governing CFIUS requires CFIUS to review covere d transactions notified to it “to determine the 
effects of the transaction[s] on the national secur ity of the United States,” but does not define 
“national security,” other than to note that the term includes issues relating to homeland security.  
Instead, the statute provides an illustrative list of fa ctors for CFIUS and the President to consider in 
assessing whether the transaction poses national secur ity risks.  The guidance referenced above 
includes extensive discussion of the types of transa ctions that CFIUS has reviewed and that have 
presented national security considerations.  These tr ansactions are divided into two major types, 
followed by discussion of each:  (1) transactions that  have presented national security considerations 
because of the nature of the U.S. business over whic h control is being acquired and (2) transactions 
that have presented national security considerations because of the identity of the foreign person that 
is acquiring control of a U.S. business.  This di scussion in the guidance is necessarily illustrative and 
does not purport to describe all national security c onsiderations that CFIUS may identify and analyze 
in reviewing a transaction, however.   Furthermore, the fact that a transaction presents national 
security considerations does not mean that CFIU S will necessarily determine that the transaction 
poses national security risk, and the guidance does not  identify the types of transactions that pose 
national security risk.  In addition, the guidance shou ld not be interpreted to suggest that the U.S. 
Government encourages or discourages the types of transactions described in the guidance. 
 
 (2) In the U.S., proposed overseas acquisitions rejected by CFIUS can usually be granted an 
opportunity to making adjustments to plans. Historic al records indicate that most of the projects 
determined by the CFIUS to threaten the national s ecurity in the U.S. will end up with an adjusted 
plan after negotiations with the U.S. government. Ho wever, in the aforesaid acquisition, the U.S. 
government refused to give the Chinese enterprise an opportunity to make adjustments to its 
transaction plan.  
 Please explain the reasons. 
 RESPONSE:   The statute governing CFIUS contains strict confidentiality requirements, inter alia  
affording the parties to the transaction protect ion against disclosure of market-sensitive and 
proprietary information.  These requirements do no t allow CFIUS to comment publicly on specific 
transactions reviewed by CFIUS, nor to confirm wh ether a specific transaction has been reviewed by 
CFIUS.  Therefore, we are not able to  answer any transaction-specific question. 
 
CFIUS is charged with reviewing covered transac tions to identify and address any genuine national 
security risk that arises as a result of a covered tr ansaction.  Only the President has the authority to 
suspend or prohibit a covered transaction.  In certain circumstances described in Executive Order 
11858, CFIUS may refer a covered transaction to the Pr esident for him to decide whether to exercise 
that authority.  CFIUS is also authorized, subject to certain conditions, to enter into agreements or 
conditions to mitigate the national security risk it has identified, if any.  CFIUS seeks to resolve 
national security concerns, rather than prohibit tr ansactions.  Ultimately, however, CFIUS must be 
able to certify that there are no unresolved national security concerns, in order for CFIUS to conclude 
action on a covered transaction.  
 III.  Trade and Investment Policy Framework  Trade policy formulation 
 
16.  Paragraph 6 of page 13 of the secretariat’s report states that the United States aims to double exports in the next five years. According to IMF fo recasts, nearly 80% of the world economic growth 
from 2010 to 2015 will be generated by the developing countries.  
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 In this case, will the U.S. give more respect  to the legal system, consumer preference and 
corresponding technical regulations to developing count ries which are export destinations? Is there 
any plan or specific me asures in this regard?  
 
RESPONSE:   In his State of the Union address in Ja nuary 2010, President Obama launched the 
National Export Initiative (NEI), with the goal of doub ling U.S. exports in five years.  To aid in 
achieving this goal, the President issued Executiv e Order 13534 on March 11, 2010, establishing eight 
policy priorities for the NEI and creating an E xport Promotion Cabinet.  As mandated by the 
Executive Order, the Export Promotion Cabinet prepar ed a Report in September 2010 that laid out the 
Export Promotion Cabinet’s recommendations for ca rrying out the NEI’s goal.  (The Report can be 
found at:  http://www.whitehouse.gov/sites/default/ files/nei_report_9-16-10_full.pdf.)  The legal 
systems, consumer preferences and technical regulati ons of export destinations are of course relevant 
to any exporter, in any WTO Member.  17.  Please explain the purview and general proce dures for the U.S. Treasu ry and Internal Revenue 
Service’s participation in the development of ta x policies, and how the relevant authorities will be 
monitored.   
 
RESPONSE:   The Office of Tax Policy within Department of the Treasury develops tax policy, 
including tax legislative proposals, for the Executiv e branch of government and works with Congress 
in the development of tax legislation.  The In ternal Revenue Service is responsible for tax 
administration but not for the development of tax policies. 
 
18.  Please explain that if taxpayers disagree with  the related tax policy, what remedy channels do 
they have for complaints?   
 
RESPONSE:   Taxpayers have the Constitutional right to petition the government for redress of 
grievances.  Preferential trade agreements and arrangements  
19.  Page 15 of the Secretariat’s report introduces the development of regional FTAs of the U.S.  
 Please further clarify the proportion of tariff libera lization and sensitive product categories, as well 
as the treatments of sensitive products in the FTAs.  
 RESPONSE:  The United States negotiates each FTA indivi dually with each partner, to take account 
of the specific circumstances and n eeds of the trading relationship.  A fundamental aspect of each of 
the U.S. FTAs is the elimination of duties on subs tantially all the trade.  For a small number of 
sensitive products, the United States has agreed to an extended transition period, rather than a result 
short of tariff elimination.  
 IV.  Trade Policies and Practices by Measure  Taxation policy 
 
20.  Please specify regional tax policies by the U. S. federal and state governments, the differences 
between these state policies, and th eir roles.  In particular, please kindly elaborate on the conditions, 
procedures and applicable tax laws, tax contributions  for the establishment of partnership enterprises 
in Delaware.  
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 RESPONSE:   In general, the uniformity clause of th e Constitution precludes regional tax policies by 
the U.S. Federal government.  Numerous states ha ve tax policies to promote the development of 
certain areas with the state. 
 
21.  Please provide the industry-specific tax polici es by the U.S. federal and state governments, for 
example, on automotive, financial leasing and other industries.   RESPONSE:   The United States provides tax incentives for a number of industries.  A partial list of 
sectors to which tax incentives are provided includes energy-efficient automobiles, renewable energy 
production, oil, gas, and coal prod uction, pharmaceuticals, and homebu ilders.  A partial list of sectors 
to which tax incentives are provided on the state level includes biotechnology, telecommunications, 
transportation equipment and financial services.   22.  Please describe the basic status of U.S. environmental tax system.  
 
RESPONSE:   The U.S. currently imposes environmental taxes on crude oil and imported petroleum 
products at a rate of 8 cents per barrel to fund the Oil Spill Liability Trust Fund and a tax on fuels at a 
rate of 0.1 cent per gallon to fund the Leaking Underground Storage Tank Trust Fund. 
 23.  Please indicate whether the U.S. plans to intr oduce Border Tax Adjustment . If yes, please justify 
its consistency with the relevant WTO rules.   
RESPONSE:   This question appears to use the term “Bor der Tax Adjustment” to refer collectively to 
a wide variety of different proposals regarding treat ment of imports of carbon-intensive goods in the 
context of a country’s domestic climate change polic y.  No such proposal has been enacted into U.S. 
law, and the Obama Administration has not taken a position on the potential incorporation of such a 
proposal (or any specific proposal) as a means of furthering U.S. goals regarding the mitigation of 
climate change.  Such a measure was contained in a bill passed in June 2009 by the House of 
Representatives, but the bill has not been p assed by the Senate or enacted into law. 
 
24.  Please describe tax policies applicable for cr oss-border investment by U.S. companies and 
individuals, and the situation of the tax collection and management. 
 RESPONSE:   The U.S. employs a worldwide tax system, under which U.S. resident individuals and 
domestic corporations generally are taxed on all income, whether derived from the United States or 
abroad.  The foreign tax credit provides relief fro m double taxation.  The Internal Revenue Service 
(IRS) has the authority to issue regulations and/or rulings related to these provisions.  Taxpayers file 
information on their income, deductions, and credits  and the amount of tax due on their income tax 
returns.  All taxpayer determinations ar e subject to possible audit by the IRS. 
 
25.  Please elaborate on the provisions in subtitle A-Income Tax of the newly revised U.S. Internal 
Revenue Code on Subchapter C-Corporate Distributions and Adjustments of Chapter 1 - Normal 
Taxes and Sub–taxes? What are the changes compared with the previous version? 
 
RESPONSE:   Unfortunately, it is not clear as to what pending legislation or law the question refers, 
so we are not able to provide an answer.  
 
26.  Please indicate whether the U.S. takes diffe rent tax measures for high energy consuming/high 
polluting products and oth er products. If yes, what are the d ifferences and why? Are these measures 
restrictive to the production and sale of relevant products?  
  WT/TPR/M/235/Add.1 
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 RESPONSE:   A tax of up to $3,850 is imposed on auto mobiles that do not meet specified fuel 
economy standards.  The tax is likely to discourag e the production and sale of high energy consuming 
automobiles. 
 
27.  Please indicate the number of existing free trade zones (or tax free zones) in the U.S., and explain 
the differences of tax policies betw een these zones and other regions.  
 
RESPONSE:   The U.S. Foreign-Trade Zone (FTZ) progr am allows merchandise to be imported into 
the territory of the United States prior to the paym ent of customs duties.  Duties would not be owed 
on any merchandise that is re-exported and duties are deferred on merchandise that is ultimately 
entered for consumption in the U.S.  If the merchand ise is manufactured or processed within a zone, a 
company can apply to the FTZ Board for specific aut hority to have the merchandise classified in its 
condition as it leaves the zone, instead of as it arrive d, which could result in the assessment of a lower 
duty rate.  Internal revenue taxes can  also be deferred while merchandise is in foreign status in a zone, 
but would be due upon entry for sale in the U.S. mark et.  There are no other federal tax implications 
or benefits to FTZ activity.  There are approximately 250 FTZ  projects in the U.S., many of which 
have multiple sites. 
 
28.  Please introduce the U.S. property tax assessment methods, and provide the relevant bills and 
regulations.  
 
RESPONSE:   Property tax assessment is primarily done at the state and local level of government 
and varies according to the jurisdiction.  
 
Measures directly affecting imports:  Customs procedures 
 
29.  Paragraph 1, page 20 of the Secretariat Repor t mentions that “COAC is the formal venue for 
consultations with the private sector on customs matters.” 
 
Please provide a detailed description of the functi on and operations of the COAC. Is COAC also 
involved in the supervisi on of enterprise activities? 
 RESPONSE:   The COAC (Advisory Committee on Comme rcial Operations of the Customs and 
Border Protection) is a government-chaired, industry advisory group that provides the Departments of 
Homeland Security and Treasury with the perspectives and advice of the private sector.  Over the 
years, COAC has been involved in issues su ch as development of advanced electronic cargo 
information, streamlining of customs procedures, re view of trade policies and since 9/11, and issues 
relating to cargo security.  
The role of COAC is to review issues related to  the commercial operations of CBP and related DHS 
and Treasury functions and provide feedback and recommendations.   
 
During its eleventh two-year term, the Committee c onsidered such issues as:  enhanced border and 
cargo supply chain security, CBP modernization and automation, informed compliance and compliance assessment, account-based processing,  commercial enforcement and uniformity, 
international efforts to harmonize customs practices  and procedures, strategic planning, northern and 
southern border issues, agricultural inspecti on and the CBP mission, and import safety. 
 
COAC is not involved in the supervision of any CBP enterprise activities. The role of the COAC is 
consultative in nature and it operates under the pr ovisions of the Federal Advisory Committee Act 
(FACA). The Committee serves at the pleasure of the Secretary of Department of Homeland Security 
and the Secretary of Treasury. 
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 30.  Paragraph 5, page 20 of the Secretaria t Report mentions about “the Automated Commercial 
Environment or ACE” and “single portal system”.  
 
Please introduce in more details about the ACE and  single window. What are the differences between 
the two systems?  
 
RESPONSE:  ACE is a new CBP computer system for trade processing, being built in phases.  ACE 
is the computer system through which the single wi ndow will be fully realized for import and export 
transactions and would apply to all federa l agencies involved in those transactions. 
 31.  Please introduce the legislation backgr ound and progress of the Textile Enforcement and 
Security Act of 2010. If the legislation is voted through, what custom pro cedures and legal obligations 
in terms of technology will be additionally imposed on enterprises when exporting fabrics to the U.S.? 
 
RESPONSE:  The Textile Enforcement and Security Act of 2010 has been introduced in both the 
U.S. House of Representatives and the U.S. Senate .  The legislation addresses the issues of escalating 
fraud by increasing the necessary resources to investig ate and prosecute offenders with funds coming 
from fines and penalties collected. The legislation would establish an electronic verification of textiles 
and apparel imports, increase staff at high-volume ports for textile and apparel imports, and establish 
a non-resident importer program to ensure that r esident agents are held accountable for imported 
products.  The legislative proposals are still being reviewed a nd passage has not occurred.  Since the legislation 
is continuing to undergo various changes, U.S. Customs and Border Protection has not determined 
what, if any, new procedural obligations will be  required in order to implement the legislative 
requirements. 
 
Measures directly affecting imports:  Rules of origin 
 32.  Please indicate that under what circumstan ces and in what ways the U.S. conducts verification on 
the origin of imported goods under the non-preferen tial rules of origin. What are the relevant 
provisions on the transshipme nt of imported cargo under the preferential and non-preferential rules 
of origin, respectively? 
 RESPONSE:  Under non-preferential rules of origin, the Po rt Director may initiate a verification of 
the country of origin based upon, among other thi ngs, information received, examination of the 
merchandise, or a risk assessment.  Such verification is carried out as part of the normal process of 
verifying the truth of information provided in connection with the importation of the good.  
 
With regard to preferential rules of origin, U.S. free trade agreements and other preferential rules of 
origin schemes each have specific provisions with re gard to transshipment of imported cargo as well 
as verification of claims of origin. 
 
Tariffs 
 
33.  Please kindly describe U.S. tariffs on import and export trade of ethanol.  
 
RESPONSE:  U.S. imports of ethanol are subject to tariffs  of 1.9 or 2.5 percent.  Special provisions 
apply for certain countries subject to U.S. statutory preference programs.  The United States does not impose tariffs on exports of ethanol.  34.  Please introduce the U.S. non-tariff trade me asures on importation of software products such as 
engineering analysis software.   WT/TPR/M/235/Add.1 
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 RESPONSE:   We do not understand this question.  In pa rticular, we are unaware of any non-tariff 
trade measures affecting the importation of software.  If China has a more specific question, we would 
be happy to respond.  
 
Contingency measures 
 
35.  Paragraph 48 of the Secretariat Report mentions  that the U.S. conducts analysis of the relative 
advantages and disadvantages of prospective and retrospective AD and CVD system.  
 
Please share the analysis results and, if possible, any public report.  
 RESPONSE:  The Department of Commerce’s report to Congress on Retrospective and Prospective 
Antidumping and Countervailing Duty Collection Systems is in the final stages of review.  Once that 
process is complete, the report will be transmitted to the relevant Congressional committees, and upon 
approval will be made publicly available. 
 
36.  Does the U.S. believe that anti-dumpi ng and countervailing duties imposed on imported goods 
are a source of government revenue?  Does the allocation of anti-dumping and countervailing duties 
to the domestic applicants of related cases constitute  the Government's financial assistance to specific 
enterprise?  
 
RESPONSE:  The United States considers that anti-dumpi ng and countervailing duties paid into the 
U.S. Treasury constitute government revenue.  To th e extent China is referring, in the second sentence 
of its question, to the Continued Dumping and Subsidy Offset Act (“CDSOA”) of 2000, the United 
States notes that this Act was repealed on February 8,  2006, less than six years after its passage.  The 
repeal of the CDSOA applies to entries made on or after October 1, 2007.  With respect to entries 
prior to October 1, 2007, anti- dumping and countervailing duties on those entries might not be 
government revenue, depending upon the circumstances.  It is unclear what China means by the term 
“financial assistance.”  It appear s that the term “specific enterprise” refers to Article 2 of the SCM 
Agreement.  Disbursements under the CDSOA are not limited to certain enterprises within the 
meaning of Article 2 of the SCM Agreement.  
 37.  The Secretariat’s report mentions in para. 50 that the U.S. Supreme Court reviews the decision 
by the U.S. Court of Appeals for the Federal Circuit on the Byrd Amendments in late 2009.  
 
Could the U.S. explain what the result of the review is?  
 RESPONSE :  On May 17, 2010, the Supreme Court of the United States denied the plaintiff’s 
petition for certiorari, as a result of which the decisi on of the U.S. Court of Appeals for the Federal 
Circuit is final.  No further review  process is available to any party. 
 
38.  Within the 10 days from November 2-12, 2009, the U.S. Department of Commerce brought up to 
20 trade remedy cases against China. The U.S. has launched trade sanctions on a variety of steel 
products originating in China, and in 2009 alone, the U.S. broug ht seven anti-dumping cases against 
Chinese iron and steel companies. In addition, in Se ptember 2009, the U.S. also imposed safeguards 
on Chinese tires exported to the U.S. and levied high punitive tariffs.  
Please explain the context of and root causes fo r such high frequency and high quantity of trade 
remedy investigations, and provide the evaluation pr ogram for safeguards on tire exports to the U.S.  
 
RESPONSE:   The Department of Commerce (DOC) did not initiate any trade remedy investigations 
during the 10 day period in November referenced in the question.  During the final three months of WT/TPR/M/235/Add.1 
Page 126 
 
 
 2009, DOC initiated five antidumping and four counte rvailing duty investigations on imports from 
China. 
 
Furthermore, it should be noted that the filing of petit ions is not determined by the U.S. Government.  
Any industry that believes it is being injured by competition from dumped and/or subsidized imports 
may file an antidumping and/or countervailing duty pe tition requesting an investigation.  In order for 
DOC to initiate an investigation, the petition mu st meet certain requirements under U.S. law for 
initiation, including industry support, evidence of dumping and/or subsidization, and a demonstration 
of injury caused by the dumped and/or subsidized imports.  When a U.S. industry files an antidumping and/or countervailing duty petition that m eets these requirements, DOC must initiate an 
investigation.  Companies’ decisions to file antidumping and/or countervailing duty petitions may 
fluctuate depending on the state of the economy, a company’s own cost benefit analysis, etc.  
 
As to the tires safeguards question, the United St ates does not understand what  China means when it 
asks the United States to “provide the evaluation pr ogram for safeguards on tire exports to the U.S.”  
The United States notes that section 421(n), 19 U.S.C. §2411(n), provides that, at any time six months after the imposition of import relief section 421(m) , 19 U.S.C. §2411(m), the President may request a 
report from the U.S. International Trade Commissi on “on the probable effect of the modification, 
reduction, or termination of the re lief provided on the relevant industry .”  To date, the President has 
not requested such a report with regard to the ta riffs being applied to imports of tires from China.  
 
39.  It is understood that some of U.S. anti-dumpi ng or countervailing measures have been in place 
for decades.  
 Please clarify the reasons for such  measures, and whether such meas ures constitute trade protection 
in a disguised form. 
 
RESPONSE:   Under U.S. law, and consistent with the WTO Antidumping Agreement, antidumping 
duties remain in effect for as long as and to the ex tent necessary to counteract injurious dumping.  
Five years after the imposition of the duties, the Department of Commerce (DOC) and the U.S. 
International Trade Commission (USITC) undertake s unset reviews to determine whether revocation 
of the antidumping duty order would likely lead to  the continuation or recurrence of dumping and 
injury.  If the determinations by both agencies are affirmative, the order remains in place;  if the 
determination by either DOC or the USITC is ne gative, the order is revoked.  These reviews are 
conducted every five years for the duration of the or der.  Thus, the reason that some antidumping duty 
orders remain in place is that the evidence of r ecord supports the conclusion that dumping and injury 
are likely to continue or recur if the order were revoked. 
 
40.  After the U.S. took anti-dumping measu res on Chinese furniture, warm-water shrimp and other 
products, the relevant industries in the U.S. th reatened Chinese companies with an administrative 
review and imposed huge fees on a large number of Chinese companies. 
 
Please clarify whether such a practice is in line with  the U.S. law. What are the specific usages of the 
aforesaid fees collected by the U.S. side? It is  questionable whether these in dustries really need the 
U.S. government's trade remedy. In this case, doe s the U.S. government still deem it necessary to 
continue the relevant anti-dumping measures?   
 
RESPONSE:  We are unable to comment on actions, in cluding transactions to which the United 
States is not a party, that may be taken by priv ate parties.  As for the antidumping measures in 
question, the continued imposition of those measur es is based upon satisfaction of the relevant 
statutory criteria – such criteria being based upon a nd consistent with the corresponding criteria of the 
WTO Antidumping Agreement.  
  WT/TPR/M/235/Add.1 
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 41.  China understands that the field verificati on of anti-dumping and countervailing should follow 
proper investigative procedures in accordance with the WTO rules. According to Chinese enterprises 
involved, the U.S. Department of  Commerce officers took the way of search and arbitrarily requested 
the respondent enterprises to open any office and tu rn on any computer system for their inspection, 
and the officers even requested to read private emails. 
 
How does the U.S. investigating authority ensu re that the verification officers carry out the 
verification properly?   
 RESPONSE:  Verification is a procedure by which the i nvestigating authority attempts to confirm 
the accuracy of the information submitted by the respondent in response to the questionnaires issued 
during the proceeding.  An integral aspect of th is procedure is the review of the respondent’s 
accounting systems, which often requires the verifi er to examine and test the respondent’s on-line 
accounting system.  Access to the respondent’s com puter systems is always conducted with the 
specific purpose of verifying the accuracy of the information presented.  Requests seeking 
confirmation of the information provided and access to  the respondent’s computer systems are always 
relevant to the issue under consideration.  Depa rtment of Commerce verifiers always request the 
permission of the respondent enterprise before an insp ection.  The enterprise has the right to decline a 
specific inspection.  Department of Commerce verifier s do not seek to read private emails unrelated to 
the business of the company or its books and records.   However, if an employee or company official 
chooses to keep personal emails on a work comp uter, verifiers may come upon a personal email 
unintentionally.  In such cases, if the personal email is unrelated to the business of the company or its 
books and records, it will be disregarded.   
 
42.  According to Chinese enterpri ses, in the U.S. Department of Commerce’s anti-dumping and anti-
subsidy investigations on oil pipe related products originating in China, the case is:  the respondent 
enterprise A and a Japanese enterp rise B established a joint venture company C in the U.K., in which 
B has only less than 20 % of the shares. U.S. co mpany D is Japanese enterprise B’s wholly owned 
subsidiary in the U.S. The U.S. Department of Co mmerce took company D as an affiliated enterprise 
of company A, and requested the company to fill in the questionnaire as an affiliated enterprise. The 
Chinese enterprise understands that company D has no stake, personality or other association with 
itself (company A).   
How does the U.S. determine company D as an affilia te of company A? How does the U.S. identify 
affiliates in order to avoid un reasonable questionnaire burden on the respondent? Does the U.S. 
determination of affiliated companies in this case go against Article 2.3 of the WTO Anti-Dumping 
Agreement?  
 
RESPONSE:  The Department of Commerce explained its affiliation determination in the 
antidumping duty investigation on certain oil count ry tubular goods from the People’s Republic of 
China in the Issues and Decision Memorandum for the Antidumping Duty Investigation of Certain Oil 
Country Tubular Goods from the People’s Republic of China dated April 8, 2010 at Comment 10 
available at:  http://ia.ita.doc.gov/ frn/summary/prc/2010-8994-1.pdf.  This finding of affiliation is 
fully consistent with the relevant provi sions of the WTO Antidumping Agreement. 
 
43.  In a number of anti-dumping cases, the U.S. de termined the existence of "targeted dumping", and 
employed a return-to-zero approach in the calculation of the dumping margin. 
 
Could the U.S. kindly specify the provisions on "targeted dumping" in U.S. laws and regulations? 
How do these rules avoid abuse of "targeted dumping"? How does the return-to-zero approach 
adopted in the U.S. "targeted dumping" investigations comply with the WTO Anti-Dumping 
Agreement?  
 WT/TPR/M/235/Add.1 
Page 128 
 
 
 RESPONSE:  Section 777A(d)(1)(B) of the Tariff Act of  1930 (the Act) provides for certain 
conditions that must be met in order for the ad ministering authority to use weighted-average-to-
transaction comparisons in an investigation (e.g., th e so-called “targeted dumping” analysis).  This 
provision is consistent with the provisions of the second sentence of Article 2.4.2 of the WTO 
Antidumping Agreement, which similarly provides for the use of weighted-average-to-transaction 
comparisons when certain conditions have been me t in an investigation.  This is a methodology 
expressly provided for in the WTO Antidumping Agre ement, and which has been used in a very 
limited number of cases when the respondent export er/producer has been engaged in a pattern of 
export pricing which the drafters of the AD Ag reement agreed justified distinct treatment. 
 With regard to the question about the use of “zeroi ng” in connection with targeted dumping, the U.S. 
position has been fully spelled out in a number of dis putes.  To date, several dispute settlement panels 
have expressly agreed with the U.S. position and th e Appellate Body has not made contrary findings. 
 
44.  In anti-subsidy investigations on Chinese produ cts, the U.S. Department of Commerce has never 
determined whether the traders providing raw materials to the respondent enterprises would 
constitute "financial assistance".   
How could the U.S. Department of Commerce ensu re its analysis of transfer of subsidies in the 
calculation of the subsidy benefits?  
 
RESPONSE:  The Department of Commerce's (DOC) subsidy determinations with respect to 
transactions involving the purchase of raw material s from Chinese state-owned enterprises through 
trading companies are fully consistent with obligations under the Agreement on Subsidies and 
Countervailing Measures.  DOC’s calculations accurate ly determined the leve l of subsidy benefitting 
the respective respondent enterprises.  We note, however, that there is an ongoing WTO dispute 
involving this issue and it would not be appr opriate to comment further at this time. 
 
45.  According to the responding Chinese ent erprises, in anti-dumping and anti-subsidy 
investigations, the U.S. Department of Commer ce often threatened the Chinese enterprises with 
“adverse facts available”, raised requirements on answering irrational questionnaires, and would 
impose punitive tax rates on the en terprises if there was any unsatisfactory explanation given by the 
enterprises.  
 
How does the U.S. balance its investigation rights and the rational burden of proof collection on the responding enterprises? How does the U.S. guarantee the performance of its obligations under Article 
6.13 of The Anti-Dumping Agreement and Article  12.11 of The Agreement on Subsidies and 
Countervailing Measures?  
 
RESPONSE:  U.S. law implements the obligations set out in Articles 6.13 of the Anti-dumping 
Agreement and 12.11 of the Agreement on S ubsidies and Countervailing Measures (SCM 
Agreement).  Both articles require Members to “t ake due account of any difficulties experienced by 
interested parties, in particular small companies,  in supplying information requested, and shall provide 
any assistance practicable.”  Under U.S. law, s ection 782(c)(2) of the Tariff Act of 1930 requires the 
Department of Commerce (DOC) to  “take into account any difficulties experienced by interested 
parties, particularly small companies, in supplyi ng information” requested by DOC and requires DOC 
to “provide such interested parties any assistance that  is practicable in supplying such information.” In 
its proceedings, DOC requests information that is necessary to make its AD and CVD determinations. 
In the event a party receives a request for inform ation from DOC and the party believes it is “unable 
to submit the information requested in the requ ested form and manner” requested, the party is 
instructed to promptly notify DOC about its inabilit y, give a full explanation as to its inability, and 
suggest “alternative forms” in which it may submit the information.  In such cases, section 782(c)(1)  WT/TPR/M/235/Add.1 
 Page 129 
 
 
 of the Tariff Act of 1930 requires DOC to consider the company’s abilities and allows DOC to modify 
such requirements “to the extent necessary to avoi d imposing an unreasonable burden on that party.” 
 
In addition, pursuant to section 782(d) of the Ta riff Act of 1930, once DOC determines that a 
company’s response to a request for information in  an AD or CVD proceeding “does not comply with 
the request,” DOC is required to “promptly inform the person submitting the response of the nature of 
the deficiency and shall, to the extent practicable , provide that person with an opportunity to remedy 
or explain the deficiency” in a timely fashion.  If the person submits some or all of the information 
requested by DOC, and DOC is able to use that inform ation, then it is required by law to do so.  In all 
of DOC’s AD and CVD investigations, DOC has complied with these requirements.   
To the extent parties have failed to notify DOC about  their inability to answer questions in a timely 
fashion, and thus have refused access to or otherw ise have not provided necessary information by the 
deadlines, Article 6.8 of the Antidumping Agreemen t and 12.7 of the SCM Ag reement permits the use 
of the facts available. 
 
46.  Could the U.S. explain its policy meas ures and practices of anti-monopoly in the software 
industry?  
 
RESPONSE:   The U.S. antitrust laws treat the software industry under the same standards as they 
treat all other industries, including manufacturing, services and other technology sectors.  The U.S. antitrust laws proscribe price-fixing and other ha rd-core horizontal agreem ents among competitors, 
other sorts of agreements with anticompetitive e ffects, anticompetitive mergers and acquisitions, and 
acts of monopolization and attempted monopolization.   For a recent and general background on U.S. 
antitrust enforcement see , e.g.,  Statement of Christine Varney, Assistant Attorney General, Antitrust 
Division, before the Subcommittee on the Courts  and Competition Policy of the Committee on the 
Judiciary, U.S. House of Representatives, Oversight Hearing on the Federal Trade Commission and the U.S. Department of Justice’s Antitrust Divisi on, Washington, July 27, 2010, available at:  
http://www.justice.gov/atr/pub lic/testimony/260809.htm. 
 
Technical regulations and standards 
 50. As stated in The Consumer Product Safety Impro vement Act (CPSLA) of Box III1 of page 38 
of the Secretariat’s reports, laboratories ma y be accredited by the Consumer Product Safety 
Commission or the independent entities recognized by the commission.  
 
How does the U.S. ensure the publicity and transparency of the accreditation and avoid 
discrimination against other countries? Will the U.S.  consider providing support for the accreditation 
of laboratories of developing countries?  
 RESPONSE:  The CPSC website (http://www.cpsc.gov/a bout/cpsia/labaccred.html) contains 
numerous documents regarding laboratory accredita tion.  The process is thoroughly explained on 
these pages.  Government laboratories are all held to the same process and requirements.  It is not 
know what is meant by “providing support” in the last sentence.  Please clarify.  
 51.  As mentioned in paragraph 93, page 39 of the S ecretariat’s report, The U.S. acknowledges that 
third-party testing for toys has increa sed the cost of toy manufacturers.  
 
In this case, will the U.S. consider offering cert ain favorable policies elsewhere (such as taxes and 
dues) to eligible manufacturers as compensation?  
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Page 130 
 
 
 RESPONSE:  The United States is not considering this optio n.  However, the United States would be 
interested to learn of any measures that China has in place to offer fa vorable policies to U.S. exporters 
affected by Chinese regulations that raise costs for U.S. exporters.    
 
52.  Up to now this year, the U.S. has issued a number of TBT notifica tions that involve the alteration 
of testing procedures for relevant  products, leading to divergences between the U.S. and other WTO 
members. However, the U.S. did not publicly prov ide any relevant scientific basis or rational 
explanation for the alterna tion in a timely manner.  
 Could the U.S please explain how it would meet the requirements on the transparency of TBT 
notifications?  
 
RESPONSE:   The United States is unable to respond to th is question as posed, since China has not 
cited the measures to which it is referring.   
 53.  Please provide the precedents on management and control of hazardous substances under the 
California Proposition 65 and upda ting channels or summary of past precedents and specify the 
product categories and limited substances.  Furtherm ore, please introduce the progress in the federal 
legislation “H.R.2420” and the differences between the contents of the legislation and The Restriction 
of Hazardous Substances Directive (ROHS directive) adopted by the EU in aspects of product range, 
restrictive requirements, exemption mechanism and exemption details.  
 RESPONSE:   The United States does not understand the ques tion that China is asking with respect to 
precedents.  With regard to the second part of Ch ina’s question, the last major action on H.R. 2420 
was that the bill was referred to the House Co mmittee on Energy and Commerce on May 14, 2009.  
This information, as well as the text of the bill,  can be found online at Thomas.loc.gov, which will 
enable China to compare the cont ents of the bill with the provisions of the EU RoHS directive. 
 
CHINA SUBSEQUENT QUESTIONS 3 
 I.  TBT 
Transparency 
In 2009-2010, China submitted comments on 30 TBT notifications by the U.S., but received only one 
reply (USA/472 "Significant New Use Rules on Cert ain Chemical Substances"), the response rate is 
only 3.3%.  
1. The WTO/TBT Committee encourages Members to respond to the comments submitted by 
other members. China has been providing writte n responses to comments from Members including the 
U.S.. At this stage, China wishes to know how the U.S. will ensure that written responses are provided 
to the comments submitted by Members including China. 
 
RESPONSE:   The United States disagrees with China’s statistics.  The Committee recommended that 
Members “voluntarily respond to comments in writing, if so requested.”  The United States has a very 
strong record in this regard.  The United Stat es responds to all significant comments in writing, 
whether it is requested or not, as part of the final rule.  Providing such responses is also required under 
U.S. law, and the issue of whether those res ponses are supported by the arguments and evidence on 
the record is subject to judicial review in U.S. fe deral court.  This process ensures that comments are 
“taken into account” as is required by the TBT Agreem ent.   We would encourage China to revise its 
system for taking comments into account by inte grating procedures that provide a meaningful 
opportunity for foreign stakeholders to comment on proposed measures and taking into account and 
responding to in writing  such comments, for exampl e as the United States does in its system.     
  WT/TPR/M/235/Add.1 
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 Consumer Product Safety Improvement Act (CPSIA)  
During the 2008 WTO’s trade policy review of U.S ., China raised its concerns on the CPSIA and the 
ten notifications of TBT regul ation published thereafter. 
 2. Please explain that when imposing relevant limitations, has the U.S. conducted adequate risk 
assessment and referred relevant international stan dards according to requirements of applicable 
WTO agreements? If not, please specify  the reason for failing to do so. 
 
RESPONSE:   It is normal practice for CPSC to c onduct risk assessments when considering safety 
regulations for consumer products, and it considers outside views on these and other matters carefully 
as part of the public comment process.  The CPSIA incorporates ASTM F-963, a relevant 
international standard for toys.   
 
In section 102 of CPSIA, on articles regarding the laboratories owned or controlled by a government 
which requires that “the entity’s testing results ar e not subject to undue influence by any other 
person, including any other government entity”. 
 
3. Please explain that what measures may be adopted by the U.S. to ensure or certify the 
independency (neutrality?) and fairness of the t esting results of such entity. Please provide the 
specific evaluation measures and thereof further clarify the rationale of these measures. 
 
RESPONSE:   As China is aware, th e five criteria by which CPSC evaluates governmental 
laboratories are contained in section 102(b) of the Consumer Product Safety Improvement Act.  The 
United States has also provided these criteria to China on several occasions.  In a March 2010 letter to 
AQSIQ’s Minister Wei, CPSC Chairman Tenenbaum set out the criteria in the statute, as well as the 
rationale behind these criteria.  CPSC and AQSIQ officials have held numerous meetings and DVCs 
at which this specific matter was discussed.  We also provided copies of the Tenenbaum letter to China’s delegations to the March and June 2 010 meetings of the WTO Committee on Technical 
Barriers to Trade.  CPSC would be pleased to evaluate CIQ labs for recognition if AQSIQ would 
devise a structure that is consistent with the enumerated criteria.  
In this context, the United States would note that  CPSC has already recognized over 60 laboratories 
located in Chinese territory, incl uding several private sector-Chin ese government joint venture labs, 
for purposes of the CPSIA.  By contrast, Chin a has only recognized one U.S.-based conformity 
assessment body – and only for secondary testing – for purposes of its CCC scheme.  The United 
States would welcome the opportunity to discuss with  China the steps it plans to take to accept the 
results of U.S.-based conformity assessment bodies – in  particular those which have been accredited 
by ILAC-MRA or IAF MLA signatories -- for purpo ses of demonstrating compliance with Chinese 
technical requirements, such as those for the CCC scheme .  
 Comparing with commercial thir d party laboratories, CPSIA requires that laboratories owned and 
controlled by government shall be able to i ssue more accurate and authoritative testing results 
compared to all qualified institutions of the certain nation.”  
4. Please provide the rationale for setting a higher requirement on laboratories owned and 
controlled by the government? Will the U.S. explain how  to prove that testing results by laboratories 
owned and controlled by government are mo re accurate and authoritative than other qualified 
laboratories? 
 RESPONSE:  This is not an accurate statement.  Laboratories owned and controlled by the 
government do not need to prove that their testi ng results are “more accurate and authoritative” than 
other labs. 
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Page 132 
 
 
 Laboratories under AQSIQ assess the compliance of exported toys with technical requirements in 
foreign markets for non-profit purpose and according to relevant laws, thus, more fair results can be 
expected compared to that given by commercial third party laboratories. 
 
5. Will the Consumer Product Safety Commission (“ CPSC”) consider recognition of test reports 
issued by laboratories under AQSIQ? If not, pl ease explain the rationale of failing to do so. 
 
RESPONSE:   As China is aware, th e five criteria by which CPSC evaluates governmental 
laboratories are contained in section 102(b) of the Consumer Product Safety Improvement Act.  The 
United States has also provided these criteria to China on several occasions.  In a March 2010 letter to 
AQSIQ’s Minister Wei, CPSC Chairman Tenenbaum set out the criteria in the statute, as well as the 
rationale behind these criteria.  CPSC and AQSIQ officials have held numerous meetings and DVCs at which this specific matter was discussed.  We also provided copies of the Tenenbaum letter to 
China’s delegations to the March and June 2 010 meetings of the WTO Committee on Technical 
Barriers to Trade.  CPSC would be pleased to evaluate CIQ labs for recognition if AQSIQ would devise a structure that is consistent with the enumerated criteria.   
 
In this context, the United States would note that  CPSC has already recognized over 60 laboratories 
located in Chinese territory, incl uding several private sector-Chin ese government joint venture labs, 
for purposes of the CPSIA.  By contrast, Chin a has only recognized one U.S.-based conformity 
assessment body – and only for secondary testing – for purposes of its CCC scheme.  The United 
States would welcome the opportunity to discuss with  China the steps it plans to take to accept the 
results of U.S.-based conformity assessment bodies – in  particular those which have been accredited 
by ILAC-MRA or IAF MLA signatories -- for purpo ses of demonstrating compliance with Chinese 
technical requirements, such as those for the CCC scheme. 
 
6. Will U.S. consider further expanding of the coverage of exempted products? If not, will U.S. 
consider extension of the exemption period? If  not, please explain the rationale thereof. 
 
RESPONSE:   The United States is assuming that the qu estion refers to exemptions from the lead 
provision in CPSIA Section 101.  We refer Ch ina to 16 CFR Part 1500, Children’s Products 
Containing Lead;  Final Rule;  Procedures and Requirements for a Commission Determination or 
Exclusion.  The link is http://www.cpsc.gov/businf o/frnotices/fr09/determination.pdf.  CPSC has 
discretion to further expand and can consider exemptions on a case by case basis.  CPSC has 
indefinitely granted relief to certain  categories of products (ATV’s and bicycles).  In addition, the stay 
on testing remains in effect until February 2011.  According to CPSIA, the states or administrative ju risdictions of U.S., subject to giving a notice or 
oral report to CPSC and certain conditions, may adopt  rules different to CPSIA, which means that 
each state may adopt additional rules on lead limit applicable to children’s products. Therefore, the 
different states may adopt different standards on lead limit (for example, some states set a limit on while others absolutely ban the content of certain heavy metals) and thus impose additional 
compliance burdens on manufacturers.  
7. How will U.S. address the difference of the va rious state requirements and the relationship 
between such requirements and the obligations under applicable WTO/TBT agreements?  
RESPONSE:   Most U.S. States have an administra tive procedure act similar to the federal 
Administrative Procedure Act.  Such laws allow any stakeholder, foreign or domestic, to provide 
comments on proposed regulations.  The United Stat es also notifies proposed sub-federal technical 
regulations and conformity assessment  procedures to the WTO for comme nt.  In addition, the federal 
government reminds U.S. States of our internationa l obligations through formal  mechanisms such as 
USTR’s Intergovernmental Policy Advisory Committ ee (IGPAC), as well as informal channels.     WT/TPR/M/235/Add.1 
 Page 133 
 
 
 Further, some States have adopted regulatory revi ew processes similar to that of OMB, and there has 
been a marked increase in the use of other review  tools over the past decade.  In 1999, 27 States 
incorporated economic impact statements during their regulatory review process.  In 2009, 48 out of 
50 States utilized them at differing stages in their regulatory process.  Approximately 30 States utilize 
these statements to measure regulatory impact on small businesses, while other States measure 
impacts on the State economy or other issues like public  health or the environment.  Some States 
require that these statements are published for public comment, while others only require that 
statements are included in any final published rule.   
 
Hazardous Materials:  Transportation of Lithium Batteries 
The U.S. Department of Transportation (DOT) and Pipeline and Hazardous Materials Safety 
Administration (PHMSA) notified WTO with the dra ft of Hazardous Materials:  Transportation of 
Lithium Batteries (G/TBT/N/USA/518) on February 12, 2010. The draft imposed various requirements 
on the package and transportation of lithium batteri es. In May, 2010, China sent written comments on 
the notified measure. 
 
8. Recommendations on the Transport of Dangerous Goods of the UN set strict requirements on 
transportation of lithium batteries. According to Artic le 2.4 of the TBT Agreement:  “where technical 
regulations are required and relevant international standards exist or their completion is imminent, 
Members shall use them, or the relevant parts of them, as a basis for their technical regulations”, it is 
our suggestion that U.S. shall refer and implement the applicable provisions of the Recommendations 
on the Transport of Dangerous Goods  of the UN in management of lithium battery transport.  Will 
U.S. consider accepting such proposal to meet its  obligations under Article 2.4 of TBT Agreement? 
 
RESPONSE:   See response to Question 11 below.   
 9. Recommendations on the Transport of Dang erous Goods of the UN extended many a 
exemption to lithium-ions and lithium batteries;  and based on Article 2.5 of the TBT Agreement 
which reads as follows:  “A Member preparing, a dopting or applying a technical regulation which 
may have a significant effect on trade of other Me mbers shall, upon the request of another Member, 
explain the justification for that technical regulation in terms of the provisions  of Paragraphs 2 to 4”, 
we request U.S. to provide the scientific basis for cancellation of such exemptions 
 
RESPONSE:   See response to Question 11 below. 
 10. Regarding Chapter II of the notified draft, will th e U.S. give a full consideration to the safety 
difference of lithium batteries with different el ectrochemistry systems and revise the part regarding 
“canceling the exemptions for lithium-ions and lithium batteries”, so as to avoid unnecessary 
obstacles to trade?   
 RESPONSE:   See response to Question 11 below.   
 
11. Will U.S. consider China’s suggestion on pr oviding for a reasonable transition period of at 
least 180 days for developing countries, including Chi na, to effectively implement the regulation? If 
not, please give the reasons thereof.  
 RESPONSE:   The United States would refer China to the minutes of the March and June 2010 
meetings of the WTO Committee on Technical Ba rriers to Trade.  At those meetings, the 
United States addressed issues related to a PH MSA Notice of Proposed Rulemaking (Hazardous 
Materials:  Revisions to Requirements for the Tr ansportation of Lithium Batteries, RIN 2137-AE44
) 
in some detail.  The United States is considering the comments submitted by China as part of the 
ongoing rulemaking process. 
 WT/TPR/M/235/Add.1 
Page 134 
 
 
 Formaldehyde Standards for Composite Wood Act  
President Obama signed the "Formaldehyde Standar ds for Composite Wood Pr oducts Act" (S.1660, 
HR4805) on 7 July 2010. 
 12 Has the U.S. notified the Act to the WTO? 
 RESPONSE:  As you are aware, the “Formaldehyde Sta ndards for Composite Wood Products Act” is 
a relatively new piece of legislation.  The legi slation mandates the development of implementing 
regulations by January 2013, and su ch regulations will be published in  the U.S. Federal Register for 
public comment, including by China.  If the propo sed implementing regulations appear to contain 
technical regulations or conformity assessment procedures that significantly affect trade, the United 
States will also notify them to the WTO.  13. Please clarify which products are included in  Composite Wood Products determined in the 
Act? Is there any difference between outdoor and indoor used wood products in terms of 
formaldehyde emission limits? Will products containing wood structu res be considered as Composite 
Wood Products? 
 
RESPONSE:  As indicated (above) the legislation requir es the development of detailed regulations 
that will address these and other technical issues. 
 
14. Please explain how other WTO Members could have their exported wood products obtain the 
relevant certificates?  RESPONSE:  As indicated (above) the legislation requir es the development of detailed regulations 
that will address these and other technical issues.  15. Please clarify how the logs exported from the United States are quarantined?  Which agency 
is responsible for fumigation certificate issuance?  How does the administration for quarantine 
supervise the effect of quarantine treatment?  
 
RESPONSE:  We are unsure how (if at all) this questi on is related to formaldehyde standards for 
composite wood products. 
 
16. China believes that the increase in emission limit is too huge and the transition period is too 
short, thus having great negative impact on wood  product exported from other countries. Please 
provide the scientific basis for the est ablishment of threshold (0.09ppm).  
 
RESPONSE:  As mentioned, we are at an early stag e in the federal regulatory process.  The 
regulations are to be completed by January 1, 2013 and the process will be transparent and will 
provide China and others with opportunities to provi de comments.  In addition, we would be pleased 
to discuss the issue with  China bilaterally.   
 
All Terrain Vehicles (ATV) 
17. Please explain how CPSC supervises ATV  products, including specific spot-check 
procedures, contents, methods and cycles.  
RESPONSE:   CPSC staff conducts routine investigations through various avenues:  retail/distributor 
inspections, manufacturer establishment inspectio ns, product import invoice review and through 
internet monitoring.  There is no “cycle” to the inspection system;  it is routine and ongoing. 
 18. Please explain how EPA supervises ATV products, including inspection rules, contents, methods, cycles and identification rates?  WT/TPR/M/235/Add.1 
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 RESPONSE:   EPA supervises ATV products for emissions in the same way as for other motor 
vehicles, and special rules for ATVs are set out at:  http://www.epa.gov/otaq/recveh.htm#regulations.  19. Please further clarify the lead content po licy applied to ATV products.  Which parts are 
exempted? Are battery, zinc alloy, copper alloy and other materials containing lead exempted? 
 RESPONSE:   Pursuant to the U.S. Federal Register No tice dated May 12, 2009, there is currently a 
stay of enforcement on section 101(a) of the Cons umer Product Safety Improvement Act (CPSIA) of 
2008 that applies to certain components of y outh all-terrain vehicles (ATVs), youth off-road 
motorcycles and youth snowmobiles.  The stay specif ically applies to battery terminals containing up 
to 100 percent lead, and components made with meta l alloys, including steel containing up to 0.35 
percent lead, aluminum with up to 0.4 percent lead and copper with up to 4.0 percent lead.  Specified 
components include:  tire valve stems, fittings and connectors made with coppe r (and brass) alloys;  
brake and clutch levers and other brake com ponents, throttle controls , engine housings, and 
carburetors made with aluminum alloys;  and fast ener frames and structural or engine components 
made with steel alloys.  The stay  became effective on May 12, 2009 and will remain in effect until 
May 1, 2011.  For all other components of youth ATVs, the maximum limit for the amount of lead 
that can be contained is 300 ppm and will drop to 100 ppm on August 15, 2011, unless it is 
determined to be not technically  feasible to reach those levels. 
 20. Please provide the list of officially recogn ized local ATV product testing organizations. 
 
RESPONSE:   As this list changes, it is best to  consult the list on the CPSC website:  
http://www.cpsc.gov/cgi-bin/LabSearch/Default.aspx.   Other TBT Issues In 2009, the U.S. Customs and Border Protection Agency re-modified the Coun try of Origin labeling 
requirements on apparel exported to the U.S.. Accord ing to the latest rule, all wearing apparel items 
must be marked with the name of the country of or igin by means of a fabric label unless a precedent 
exists which has ruled in favor of another form of marking.  
21. What does "a precedent exists which has rule d in favor of another form of marking" mean? 
What is the scientific basis for "all wearing appar el items must be marked with the name of the 
country of origin by means of a fabric label"?  
 RESPONSE:   The reference to the precedent is to a legally binding decision by CBP which may 
grant a special exception to the general rule that appa rel articles must be marked with a fabric label.  
The requirement for a fabric label is  a legal requirement that the marking with the country of origin be 
legible, indelible and permanent to ensure that it remains on the article until it reaches the ultimate 
purchaser.  Can China clarify what it mean s by “scientific basis” in this context? 
 
On 19 July 2010, The U.S. Environmental Protection Agency (EPA) announced that the U.S. would 
terminate Energy Star Program for EPS and term inal products with EPS on 31 December 2010. 
Energy Star EPS Program may be replaced by the International energy efficiency labeling protocol. 
 
22. Please provide the specific labeli ng scheme to be used by the U.S. 
 
RESPONSE:   On May 26, 2010, EPA distributed a le tter proposing to sunset the ENERGY STAR 
specification for External Power Supplies and th e associated program recognizing products that 
incorporate them.  On July 19, EPA sent a letter to interested stakeholders concerning our decision to 
sunset the ENERGY STAR programs for EPSs a nd End-Use Products Using EPSs effective on 
December 31, 2010.  Here is the letter:  http ://www.energystar.gov/ia/partners/prod_development/ 
revisions/downloads/eps_eup_sunset_decision.pdf. WT/TPR/M/235/Add.1 
Page 136 
 
 
 As noted in the July letter, it is EPA’s inten tion that current ENERGY STAR product specifications 
with requirements for the use of an ENERGY STAR  EPS (e.g., computers, displays, televisions) will 
be changed to require Level V External Powe r Supplies as designated under the International 
Efficiency Marking Protocol, which is consiste nt with the current ENERGY STAR External Power 
Supplies performance levels.  EPA is also explor ing potential changes to the ENERGY STAR Battery 
Charging Systems (BCS) specification to broaden e ligibility to certain product categories currently 
covered by the End-Use Products Using Extern al Power Supplies program (e.g., cell phones). 
 Regarding draft Regulation on Test Procedures for Battery Chargers and External Power Supplies 
(No. G/TBT/N/USA/532), the changes to testing pr ocedures for battery chargers and external power 
supply products made in the notified draft regul ation will lead to the changes to production and 
testing conditions of manufacturers. Enterprises need longer time for technical R&D and equipment 
investment, so as to make themselves comp ly with the regulation effectively. 
 
23. Will the U.S. give developing countries, incl uding China, a longer transition period, in 
accordance with WTO's "special and differential treatment" principle?   If not, please explain why. 
 RESPONSE:  The rulemaking process for the Energy Co nservation Program:  Test Procedures for 
Battery Chargers and External Power Supplies;   Proposed Rule ([Docket No. EERE–2009–BT–TP–
0019];  RIN 1904–AC03) is ongoing, and the U.S. Depa rtment of Energy is considering all of the 
comments received from interested stakeholders in developing a final measure.  It will address all 
significant comments – including transition period issu es, if China raised this in its comments – as 
part of the final measure. 
 II.  SPS  
On July 30
th, 2009, United States House of Representatives adopted Food Safety Enhancement Act of 
2009 (H.R.2749 RFS) (“the Act”). The Act is the mo st significant amendment ever to the food safety-
related provisions set out in the country’s Fed eral Food, Drug and Cosmetic Act in seventy years. 
However, the U.S. has failed to notify the WTO of this Act.  
24. In accordance with WTO/SPS Agreement,  s anitary or phytosanitary measures include all 
relevant laws, decrees, regulations, requiremen ts and procedures, for which corresponding 
transparency obligations shall be fulfilled.  Could th e U.S. explain the rationale for not notifying it up 
until now? 
 
RESPONSE:   The U.S. Congress is in the process of cons idering this legislation and it is not clear 
when the bill might be passed into law or what its final details might be.  In fact, pending legislation 
often changes significantly before it becomes la w and sometimes congressional legislation never 
becomes U.S. law at all.  Accordingly, because the Food Safety Enhancement Act is not an SPS 
measure, the United States does not believe that it would be appropriate to notify it at this time.   
 
25. In the Act, evaluation of and annual fee co llection from food importers are mainly with 
reference to the economic level of American homeland.   Due to differences in the economic level of 
different countries, China considers this virtually im plements a discriminatory treatment to the export 
enterprises of the developing coun tries.  Will the U.S. consider lowering the current level for 
evaluation of and annual fee collection from food importers?  
RESPONSE:   As mentioned above, the Food Safety E nhancement Act is pending legislation, not 
U.S. law.  We are not in a position to speculate on the implications of particular provisions which are 
subject to further review and possible modification in the United States Congress.   
 
26. A variety of clauses in the Act, such as identification of hazards and identification of small 
enterprises, are the option of the secretary of department.  Our question is:  how will American  WT/TPR/M/235/Add.1 
 Page 137 
 
 
 government supervise and regulate the behaviors of the secretary of department through reasonable 
mechanism and fulfill its obligations under international agreements? Can foreign stakeholders 
participate in relevant process? 
 
RESPONSE:   As mentioned above, the F ood Safety Enhancement Act is pending legislation.  We are 
not in a position to speculate on the implications of  particular provisions which are subject to further 
review and possible modification in the United Stat es Congress.  However, foreign stakeholders are 
invited to participate in the U.S. rulemaking process.  27. China filed applications and submitted technical documents to export apples to the U.S. in 
1998.  However, quarantine risk assessment proces s of Chinese temperate zone fruits including 
apples by the U.S. authorities has not yet come to an end after twelve years.  Will U.S. provide 
justification for this undue delay and the complian ce with its obligation under the SPS Agreement?   
 
RESPONSE:   The United States has been working with  China to prepare a list of quarantine 
significant pests that are associated with Chinese appl es, which is a prerequisite to developing a risk 
analysis and subsequent risk mitigation import measures.  This process is science-based and 
predicated on the transparent exchange of technical information.  Given the complexity and extensive 
number of pest of quarantine significance involved, th is process has been underway for several years.  
We continue to engage in this process with a view  to developing risk mitigation measures that provide 
the United States with its appropriate level of pr otection and will allow the importation of Chinese 
apples. 
 
The Final Rule for the Importation of Artificially  Dwarfed Plants in Growing Media from the 
People’s Republic of China, requiring that China’s Penjing plants must be grown in growing media 
both before and after the transfer of the plants, an d must be free of soil. Meanwhile, the Penjing 
plants must be grown in greenhouses with mesh s creening of less than 1.6mm two years before export, 
and 0.6mm six months before export. China beli eves that these requirements are definitely not 
executable in such transactions . 
 
28. How will the U.S. justify its above-mentioned requirements on Penjing are reasonable and 
consistent with the SPS principle of science-based? 
 RESPONSE:   The United States has asked China to provide scientific evidence to support its 
petition.  At this time, China has not provided any sci entific data to demonstrate that the phytosanitary 
conditions in our current regulations should be modified.   
 
In May 2008, APHIS revised Lacey Act. 
 
29. The Act requires the importers to declare a wi de variety of products, far exceeding the extent 
to protect endangered wild species.  Involving many  goods varieties, it exerts enormous impact on the 
export trade of other members, such as timber and timber products.  However, no equal measures and 
requirements are made for the U.S.’s domestic pr oducts.  Will the U.S. explain how it considers the 
impact of the Act on international trade and its consistency with WTO obligations? 
 
RESPONSE:   The amended Lacey Act is a tool in our efforts to support other countries, as well as 
our own States, in the conservation of protected plant and wildlife resources, including ongoing 
efforts to combat illegal logging and associated tr ade.  The prohibitions of the amended Lacey Act 
apply to domestic (interstate) commerce as well as to imports and exports. We understand that China 
and many other WTO Members share the objective of combating illegal trafficking in wildlife and 
plants, including the specific objective of combati ng illegal logging and associated trade.  As an 
example, in 2007 China and the United Stat es signed a Memorandum  of Understanding on 
Cooperating to Combat Illegal Logging and A ssociated Trade. These efforts, including the WT/TPR/M/235/Add.1 
Page 138 
 
 
 enforcement tools of the amended Lacey Act, can be  expected to reduce inte rnational trade associated 
with illegal logging.  At the same time, we are awar e that China is concerned about possible effects on 
legal trade.  Therefore, we are working to implement the requirements of the amended Lacey Act, 
including the plant import declaration, in a careful , measured manner.  We have also joined with 
Indonesia to launch an “Asia-Pacific Regional Di alogue on Promoting Trade in Legally Harvested 
Forest Products” and were pleased that China join ed the United States, Indonesia and a dozen other 
countries in that process.  30. The Act requires the importers to fill out and submit “Plant and Plant Product Declaration 
Form”.  However, to correctly provide the plant sci entific names, origin of country, etc. of products, 
there exist great difficulties in sp ecific operation, especially involv ing some regulatory compliance 
certificates, for example, exported timber products in volve the timber imported from a third country. 
Import declaration of so many products adds huge unnecessary difficu lties and barriers to trade.  Will 
the U.S. provides necessary clarification and explanation, or provides relevant guideline? 
 
RESPONSE:   The plant import declaration (PPQ 505) re quires information on the genus and species 
of plant, the name of the country of where the pl ant was harvested, and the quantity and value of the 
importation.  Importers can provide a list of possi ble genus and species, as well as a list of possible 
countries of harvest.  The declaration requirement does not establish standards or require any 
documentation or certification as to legality.  The plant import declaration does not require 
“regulatory compliance certificates.”  Like much documentation required at the time of importation 
(e.g., customs invoices), the plant import declaration simply requires certain information to be 
submitted upon importation.  In the process of implementing the plant import declaration the United 
States has engaged in extensive consultations, incl uding with China, and has employed a “phased” 
approach.  The current list of goods requiring a pl ant import declaration is contained in a notice 
published in the U.S. Federal Register on Septem ber 2, 2009 (74 Fed. Reg. 45415).  That notice 
significantly revised the schedule fo r enforcing the plant import declaration, largely in response to 
comments that had been received on previous propo sed schedules.  In additi on, on August 4, 2010, 
the United States published a notice containing pr oposed definitions for “common food crops” and 
“common cultivars” and invited comments.  These are broad categories of plants and plant products 
that are excluded from the scope of the amende d Lacey Act (see 75 Fed. Reg. 46859).   Additional 
information on the amended Lacey Act, including specific guidance for importers on completing the plant import declaration is available on the APHIS web site:  http://www.aphis.usda.gov/ 
plant_health/lacey_act/index.shtml. 
 
31. Although the U.S. later on exempted some products, the importers still have to apply for and 
declare relevant documents separat ely in accordance with different laws and the regulations of 
different states.  Will the U.S. specify the ru les for implementation as soon as possible?  
 
RESPONSE:   Please refer to the answer to the pr evious question for information on the 
implementation process.  Importers  do not have to declare documents related to the laws and 
regulations of the countries or jurisdictions where the plants were harvested.  32. The specific implementation and operational details of the Act have not been specified. 
Meanwhile, the states of the U.S. have different legal proceedings and dimension of execution, and 
operational complexity and uncertain factors remain.  Could the U.S. please explain how to address 
the above-mentioned concern? 
 RESPONSE:   Please refer to the response to question 30 for information on implementation and 
operational details.  The amended La cey Act is a federal law and is enforced by federal agencies.  
Therefore, the concerns China raises, including the complexities or uncertainty that might arise from 
“different legal proceedings” of the states of the United States, are not relevant.  
  WT/TPR/M/235/Add.1 
 Page 139 
 
 
 33. Regarding China’s tea leaves export to the U. S., could the U.S. confirm that FDA will 
formally abolish the test requirements on the two pesticide residues namely cyhalothrin and 
bifenthrin?  
 
RESPONSE:   This question appears to relate to F DA’s Import Alert 99-08 that lists out products 
from firms that have been found to  contain illegal levels of pesticid e residues including those found in 
green tea extract.  Pursuant to U.S. law, FDA will maintain this import alert and continue to subject 
the violating firm to detention without physical examination (DWPE) until they meet the criteria for 
removal from DWPE.  In order for FDA to consid er removing a firm and/or product from DWPE, 
FDA must have evidence that establis hes the conditions that gave rise to the apparent violation have 
been resolved and which gives FDA confidence that fu ture entries will be in compliance with the Act. 
 
As of July 9th, 2010, the U.S.’s FDA began to implement new food safety regulations on large egg 
producers, so as to prevent eggs bei ng polluted by Salmonella enteritidis. 
 
34. Could the U.S. clarify if it takes similar me asures to imported eggs , or it promulgates some 
other new regulations on imported eggs food sa fety?  If yes, please provide more details . 
 
RESPONSE:   The FDA’s Egg Safety Final Rule applies to all eggs in intrastate and interstate 
commerce, including domestic and imported shell eggs.  The new food safety requirements became 
effective on July 9, 2010, for egg producers with  50,000 or more laying hens – about 80 percent of 
production. Among other things, it requires them  to adopt preventive measures and to use 
refrigeration during egg storage and transportation. The rule requires egg producers with fewer than 
50,000 but at least 3,000 laying hens to comply with the regulation by Ju ly 9, 2012.  Producers who 
sell all their eggs directly to consumers or have less than 3,000 hens are not covered by the rule.  
 
On July 23rd, 2010, the U.S. circulated a notice that its FDA revised the regulations on food additives 
in animal feed and drinking water, stipulating sa fe use of ammonium formate as pigwash acidifier. 
 
35. Will the U.S. clarify what follow-up measu res it takes to supervise and verify safe use of 
ammonium formate?  How does the U.S. deem the influence of the regulation on imported swine 
products in the U.S.? 
 RESPONSE:   The substance referred to is a food additiv e approval for the use of ammonium formate 
as an acidifier in swine feed.  The food additive re gulation includes the specific information that must 
be on the label to ensure its safe use.  It is the responsibility of the feed manufacturer to produce feeds 
that are safe and in compliance with the U.S. laws  and regulations.  This same responsibility applies 
to firms that import products in the United States. 
 
On April 9th, 2009 the U.S. notified a Proposed B ill “Importation of Wooden Handicrafts from China 
(Docket No. APHIS-2007-0117)”, which will resum e export of wooden handicrafts to the U.S. 
previously suspended.  The Bill is not only applic able to risk associated products, namely wooden 
handicrafts of bark whose diameter is over 1 centimet er, but also covers all wooden handicrafts.  All 
the products must be fumigated or thermally treated,  be issued with plant quarantine certificate, stuck 
with traceable label, and so forth. 
 
36. The U.S. add all wooden handicrafts in the scope of “regulated products”. Such measure 
drastically expands the scope of regulated products”, creating unnecessary barrier to trade and 
lacking scientific evidence.  Will the U.S. clarify the rationale and necessity for adopting such 
measures?  
RESPONSE:   Between 2002 and 2005, during routine two percent inspections at U.S. ports of entry, 
the United States had intercepted and quarantin ed significant pests on wood handicraft products WT/TPR/M/235/Add.1 
Page 140 
 
 
 shipped from China 418 times, incl uding on artificial Christmas trees, trellis towers, other home and 
garden wood décor, and wood handicraft items.   
 
Many of these interceptions occurred on shipments that  were certified as having been treated to kill 
these pests.  That, combined with the fact that we received little or no official response to our initial 
complaints about this problem, forced us to act to prevent further pest introductions. The intercepted 
wood boring pests were closely related to the As ian longhorned beetle, which had been introduced 
into the United States in shipments of wood packin g material from China, and for which the United 
States had spent in excess of US$200 million to eradicate.  
The April 2009 regulation allows for trade in Ch inese-origin wooden handicrafts to resume while 
continuing to protect the United States against th e introduction of plant pests, such as wood boring 
beetles.  37. Wooden Handicraft covers a variety of produc ts.  Different production process for each 
specific kind of wooden handicrafts result different quar antine pests risks.  Therefore, the U.S. should 
classify wooden handicrafts into subcategories, e.g. deep processed wooden handicrafts;  wooden 
handicrafts made of log, shoots or branch at a di ameter of more than 1cm, etc., rather than apply 
uniform measure to all kinds of products.  W ill the U.S. consider adop ting China’s suggestion? 
 RESPONSE:   U.S. measures are based on complete science based risk assessment that are 
transparent and available for public review.  Howe ver, we welcome scientific evidence from China to 
support its suggestion.  WT/TPR/M/235/Add.1 
 Page 141 
 
 
 CHINESE TAIPEI 
 
Question 1: I. ECONOMIC ENVIRONMENT (3) DEVELOPMENTS IN TRADE AND INVESTMENT  
(ii) Trade in services  
(Page 10, paragraph 24)  
The report states that the surplus in cross-border private services trade to talled US$152 billion in 
2009, up nearly 60% with respect to 2006. Our questions are as follows: 
 
(i) What were the causes of this unusually high trade surplus on services? (ii) What are the main constituent parts of th e “other royalties” and “license fees” categories? 
(iii) What have been the main contributing facto rs, including relevant measures taken by the U.S. 
 government, to the large trade surplus in services? 
(iv) If possible, could the U.S. please provide a list of the main services sectors, (by trade value 
 and destination) that accounted for the surplus in 2009?  
RESPONSE:   According to the Bureau of Economic An alysis (BEA) of the U.S. Department of 
Commerce, the U.S. private servi ces surplus increased from $94.7 billi on in 2006 to $149.0 billion in 
2009 (an increase of $54 billion between 2006 and 2 009, but a reduction of $3.5 billion from 2008).  
U.S. exports of private services increased $84 b illion between 2006 and 2009, while imports of 
private services increased by $30 billion.  
Economic factors drove growth in U.S. exports of services.  The major categories of export growth 
were business, professional and technical services as well as travel and passenger fares.  The decline in the value of the dollar in 2008 contributed to expor t growth, particularly in the travel and transport 
sector.  We are not aware of any U.S. government  action that may have influenced trade flows. 
 Royalties and License Fees categories broken out by BEA include:  Industrial Processes;   Books, 
records, and tapes;  Broadcasting and recording of live events;  Franchise fees;  Trademarks;  General 
use computer software;  and other intangibles.  
(v) Detailed Services sectors as well as its destina tions are not available for 2009 until mid to late 
October 2010, and is printed in the Survey of Cu rrent Business.  See BEA Website for Survey of 
Current Business:  www.bea.gov 
 (vi) Major services sectors trade is reported monthl y in the FT900 release by the Census Bureau 
of the U.S. Department of Commerce:  http://www.census.gov/foreign-trade/data/ 
 
Question 2: 
II. TRADE AND INVESTMENT POLICY FRAMEWORK 
(1) TRADE POLICY FORMULATION (Page 13, paragraph 8) 
 
The U.S. 2010 Trade Policy Agenda contains no ref erence to any trade prom otion authority (TPA) 
that allows executive departments to negotiate with outside parties. 
 
(i) Is there any timeframe set within the Ad ministration for seeking Congress approval to the 
 renewal of the TPA?  
 WT/TPR/M/235/Add.1 
Page 142 
 
 
 RESPONSE:  The Administration will look to initiate discussions with Congress in the near future 
regarding TPA for the Trans-Pacific Partnership Agre ement.  Likewise, at an appropriate time we will 
initiate discussion with Congress regarding TPA for the results of the Doha negotiations.  In the end, 
however, it will be the quality of the agreements rather than process which drives the legislative 
approval process.  With the prospect of an ambiti ous agreement that provides new market access, the 
U.S. Congress as well as the legislatures of other WTO Members would have a strong incentive to 
approve and implement the outcome.  (ii) Given that a new TPA is such an important prerequisite for a significant move forward in the 
Doha Round, could the U.S. please share with  us its views on the multilateral approach to 
achieving an early conclusion to the Round, and enlighten us on any planned U.S. efforts in 
the future to try to “jump-start” the DDA negotiations?  
 
RESPONSE:   There is broad support in the U.S. Congress for an ambitious, balanced result from the 
Doha Round negotiations.  Thus, the mechanics of  obtaining Congressional approval of the outcome 
of these negotiations begin with securing a strong result – one that achieves new trade flows and 
opens markets in agriculture, NAMA and services.  With  the prospect of an ambitious agreement that 
provides new market access, the U.S. Congress as well as the legislatures of other WTO Members 
would have a strong incentive to approve and implement the outcome. 
 Question 3: (2) PARTICIPATION IN THE WORLD TRADE ORGANIZATION  
(Page 14, paragraph 16) 
 
Regarding the dispute brought by Antigua and Bar buda, the report mentions that the USTR has 
concluded negotiations for a compensatory adjustmen t to its GATS schedule with most affected 
Members, but not yet with Antigua and Barbuda. 
 
Could the U.S. please provide an update on the latest progress of the negotiations?  
 
RESPONSE:  The United States is continuing to work with  the Government of Antigua and Barbuda 
to address a range of issues in connection with the provision of cross-border gambling services.  It remains the goal of the United States to find a mu tually advantageous outcome which respects the 
commercial interests and legitimate policy objectives of both countries. 
 
Question 4: 
(Page 14, paragraph 17) 
 According to the latest 2010 Report on the value of  the U.S.’s continued participation in the WTO, 
which the President is required under Section 125 of the Uruguay Round Agreement Act to submit to 
Congress every five years, “The WTO plays a vital role  as a vehicle for ensuring the ability of U.S. 
producers to pursue economic opportunities, while al so enabling global growth and development.”  
In addition, the Report states that “the WTO Agreem ents provide a foundatio n for high standard U.S. 
bilateral and regional agreements that make a pos itive contribution to a dynamic and open global 
trading system based on the rule of law.”  
 The U.S. appears to have some difficulty with implementing certai n rulings and recommendations of 
the DSB.  
 (i) Could the U.S. please advise what diffic ulties or obstacles it may have encountered in 
implementing these rulings and recommendations ?  
 
(ii) What plans does the U.S. have for accel erating the implementation of these decisions?  WT/TPR/M/235/Add.1 
 Page 143 
 
 
 RESPONSE:   The United States has come into compliance,  fully and promptly, in the vast majority 
of its disputes.  As for the remaining few instan ces where our efforts to do so have not yet been 
entirely successful, the United States has been worki ng actively towards compliance in furtherance of 
the purpose of the dispute settlement system.  The U. S. Administration will continue to work with the 
U.S. Congress and other interested parties to fully  implement the recommendations and rulings of the 
Dispute Settlement Body in those disputes. 
 
Question 5: 
(3) PREFERENTIAL TRADE AGREEMENTS AND ARRANGEMENTS 
(i) Bilateral and regional preferences (Page 16, paragraph 23) 
 
With regard to the negotiations with Trans-P acific Partnership (TPP) countries announced in 
November 2009 with the goal of shaping a regiona l trade agreement, we see this as a positive move. 
APEC trade statistics indicate that TPP8’s ex ports and imports of me rchandise goods amounted in 
2009 to USD1.6 trillion and USD2.1 trillion respec tively, accounting for 29% and 38% respectively 
of the exports and imports by Asia -Pacific economies. It would be in the economic interests of TPP 
members as well as global trade to seek “br oad-based membership” in the long run.  
 
It would be appreciated if the U.S. c ould please elaborate further as follows: 
 (i) We would be interested in knowing more details about plans that exist or are in discussion 
about broadening TPP membership. 
 
RESPONSE:  The TPP negotiations are open to any APEC count ry that is ready and able to meet a 
high-standard agreement. As we are approaching th e third round of negotiations, it will be difficult to 
add new countries to this first phase or “tranche” of  negotiations.  However, we expect other countries 
to join in later tranches.  
 (ii) What are the factors or criteria used  by TPP members in considering, recommending or 
inviting candidates to join the process of TPP negotiations? 
 RESPONSE:  The TPP negotiation is open to any APEC country that is ready and able to meet a 
high-standard agreement. Countries that have potential  interest in joining have informed the current 
TPP partners of their interest.  We have then be gun bilateral and plurilate ral discussions with those 
countries to discuss the TPP partners views on the standards and objectives of the agreement and the 
readiness of any potential new entr ant to meet those standards. 
 
(iii) What are the procedures for joining? Should candidates first become observers and then 
qualify for full membership on the a pproval of the current TPP members?  
 
RESPONSE:  Any APEC member potentially interested in joining should communicate that interest 
to current TPP partners.  There ar e no observers in these negotiations. 
 
There are no signs currently of the U.S. Administra tion launching any new bilateral FTA talks.  Our 
understanding is that it is concentrating on trying to resolve the outstanding issues associated with 
the three FTAs that are subject to Congressional  approval, namely with South Korea, Columbia and 
Panama. 
 
Does the U.S. intend to look for new FTA partners a fter these three FTAs have been concluded, or is 
it planning to shift its focus from bilateral FTAs  to regional (like the TPP) and multilateral 
negotiations?  
 WT/TPR/M/235/Add.1 
Page 144 
 
 
 RESPONSE:  The United States intends to seize the new opportunities that international growth can 
present in the next decade.  Notably, this includes our  work in the Trans-Pacific Partnership to craft a 
regional trade agreement for the 21st century that not only addresses market-access issues, but also 
tackles cross-cutting issues ranging from regulatory coherence to small business trade.  This also 
includes our work to bring the Doha Round to an ambitious, balanced, successful conclusion. 
 Question 6: 
(4) INVESTMENT AGREEMENTS AND ARRANGEMENTS 
(Page 18, paragraph 34)   
The report indicates that the U.S. is currently revi ewing its “model” bilateral investment treaty (BIT) 
to ensure that such agreements ar e consistent with the public interest and the overall U.S. economic 
agenda.  
 
(i) Could the U.S. please elaborate further on th e progress and direction of this review, as well 
as what it considers to be its major concerns?  
 
(ii) Will any restructured model still contain th e framework for the U.S. to proceed with 
consultations on such agreements with related countries? 
 RESPONSE:   The Administration has received a large amou nt of input from the full range of 
stakeholders regarding many important issues in the model BIT.  We want to ensure that we have a 
full opportunity to carefully consider all such in put before completing the review.  Given that the 
review is still pending, it would not  be appropriate to discuss specifi c changes under consideration.  
We can say, however, that we will be maintaining the core investment protections of the model BIT to 
ensure that our investors can compete on a level play ing field and are treated according to the rule of 
law in key foreign markets.  In addition, the Ad ministration is committed to strengthening labor and 
environmental protections, and we are exploring how we might do so in the model BIT.  We are also 
looking for ways to enhance provisions on transparen cy and public participation, which are concerns 
of a wide range of stakeholders.  Question 7:  
(5) AID-FOR-TRADE  
(Pages 18~19, paragraphs 36~39) 
 We appreciate the information provided by the U.S.  on its efforts on Aid-for-Trade. We would like to 
have further details of the following: 
 (i) What are the main objectives of the U.S.  current review of Aid-for-Trade policy? 
 RESPONSE:  The United States is currently reviewi ng the U.S. policy framework for foreign 
assistance is currently under review as part of th e Presidential Study Directive (PSD) on U.S. Global 
Development Policy and the Quadrennial Diplom acy and Development Re view (QDDR) and the 
Presidential Study Directive on U.S. Global Deve lopment Policy.  President Obama announced the 
new Global Development Policy in New York on Se ptember 22, 2010.  Details can be found at 
http://www.whitehouse.gov/the-press-office/2010/09/22 /fact-sheet-us-global-development-policy. 
 (ii) Could the U.S. please describe the mechani sm/s by which it ensures the accountability and 
transparency of its aid-for-trade programmes? 
 
RESPONSE:  The United States surveys every year US G agencies and overseas missions worldwide 
regarding their TCB or Aid-for-Trade activities. Th e survey collects funding information and activity 
descriptions on all TCB or Aid-for-Trade programs.   To further the goal of transparency, the  WT/TPR/M/235/Add.1 
 Page 145 
 
 
 information is disseminated on USAID’s website  at:  http://tcb.eads.usaidallnet.gov/.  The 
United States also reports to the OECD its ODA expenditures annually.  Question 8: III. TRADE POLICIES AND PRACTICES BY MEASURE  
(1) MEASURES DIRECTLY AFFECTING IMPORTS  
(i) Customs procedures  (Page 21, paragraph 8) 
 
As indicated in the report, pursuant to section 23 of the SAFE Port Act, the U.S. issued new 
regulations in 2008, commonly known as the “10+2 ru le”, which entered into effect in January 2009.  
 
It would be appreciated if the U.S. could please explain the legal basis for the rule under the WTO 
and comment on whether the higher costs for ex port countries’ governments and industries could 
possibly constitute barriers to trade?   RESPONSE:  The objective of the SAFE Port Act is to enable the U.S. Government to identify 
containers entering the United States that pose a secu rity risk. The Act is consistent with U.S WTO 
obligations. 
 
Question 9: 
(iii) Rules of origin 
(Page 24, paragraph 25) 
 It is noted from the report that the U.S. author ities are considering what action to take on a proposal 
to further improve the predictability and certaint y of the substantial transformation tests.  
 Could the U.S. please provide further details of the proposal and public comments received, as well 
as the possible action being considered? 
 
RESPONSE:   Further details on the Notice of Proposed Rulemaking regarding th e Uniform Rules of 
Origin for Imported Merchandise can be found in th e Federal Register (Vol. 73, No. 144, pg. 43385) 
which can be accessed at the following website:  http://www.gpoaccess.gov/fr/.  Public comments can 
be accessed at:  http://www.regulations .gov/ via docket number USCBP–2007–0100. 
 
Question 10: 
(iv) Tariffs 
(e) Temporary tariff suspensions (Page 27, paragraph 36) 
 
The report states that in April 2010 many differen t bills were before Congress proposing or extending 
a temporary suspension or reduction of duties on a variety of products, but none had been passed. 
 
(i) Please could the U.S. provide more information about the criteria and conditions that would 
be applied to proposals for MTBs . 
 
RESPONSE:   Miscellaneous Tariff Bills (MTBs) are su bmitted by Members of both the Senate and 
House of Representatives according to guidelines set forth by the Senate Finance and House Ways 
and Means Committees.  MTBs are subject to a public comment period and then reviewed by 
Executive Branch agencies, includi ng the U.S.  International Tr ade Commission.  These agencies 
evaluate MTBs with respect to th e existence of domestic production of a like or competing product or 
domestic opposition, estimated tariff revenue losses from  the bill, trade policy considerations, and the 
ability of U.S. Customs to administer the MTBs. WT/TPR/M/235/Add.1 
Page 146 
 
 
 (ii) We would also appreciate knowing the reas ons why none of the bills have been passed by 
Congress,  and whether there have been any new developments. 
 RESPONSE:  On August 11, 2010, President Obama signed H.R. 4380, the U.S. Manufacturing 
Enhancement Act of 2010 , which incorporates MTBs that temporarily suspend or reduce tariffs on 
more than 400 products.  
 
Question 11: 
(vi) Contingency measures (Page 29, paragraph 48)  
 
It is noted from the report that the U.S. is conducting an analysis of the relative advantages and disadvantages of prospective and retrospective AD and CVD systems.  
 
It would be most appreciated if the United States coul d provide further details of this analysis;  time 
schedule, preliminary conclusions so far, etc. 
 RESPONSE:  The Department of Commerce’s report to Congress on Retrospective and Prospective 
Antidumping and Countervailing Duty Collection Systems is in the final stages of review.  Once that 
process is complete, the report will be transmitted to the relevant Congressional committees, and upon 
approval will be made publicly available.    
 Question 12: (Page 30, paragraph 51) 
 
Could the U.S. please explain the sharp increa se in anti-dumping investigations and countervailing 
duty investigations, especially during and since the global financial crisis of 2007 to 2009?  
 RESPONSE:   The increase in the number of antidumping and countervailing duty investigations 
from 2007 to 2009 is due to the increase in the nu mber of properly documented petitions for the 
imposition of antidumping and countervailing duties f iled during that time period.  The filing of 
petitions is not determined by the U.S. Government.  Any industry that believes it is being injured by 
competition from dumped or subsidized imports ma y file an antidumping duty or countervailing duty 
petition requesting an investigation.   In order for the Department of Commerce (DOC) to initiate an 
investigation, the petition must meet certain re quirements under U.S. law for initiation, including 
industry support, evidence of dumping or subsidie s, and a demonstration of injury caused by the 
dumped or subsidized imports. When a U.S. indus try files an antidumping or countervailing duty 
petition that meets these requirements, DOC must initia te an investigation. Companies’ decisions to 
file antidumping and countervailing duty petitions may depend on the state of the economy, a 
company’s own cost-benefit analysis, etc.   
 
Question 13: 
(2) MEASURES DIRECTLY AFFECTING EXPORTS 
(ii) Export taxes and fees 
(Pages 46, 47 paragraphs 132~133, & page 111)  
There is a limit on the number of H-1B visas every year, which usually cannot meet the demand for 
professional service providers by industries such as ICT.  In 2009, the yearly numerical cap was 
65,000 H-1B visas.  In addition, Free Trade Agreem ents signed between the U.S. and other countries 
allow a carve-out from the numerical limit, thus reducing other (non-FTA) countries’ share in the 
cap.  
  WT/TPR/M/235/Add.1 
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 It would be appreciated if the U.S. could please cl arify and comment on the effects in practice of the 
particular aspects of its regulations as described above.  
 
RESPONSE:   Neither the annual cap for Chile (1400) nor  Singapore (5400) has ever been reached. 
However, even if they were reached, these visa allocations do not affect the U.S. GATS commitment 
for 65,000 H-1B admissions per year because, due to various exceptions, annual admissions under the 
H-1B program exceed the 65,000 threshold by a wide margin.  Question 14: (3) OTHER MEASURES AFFECTING PRODUCTION AND TRADE (iv) Subsidies and other government assistance  
(a) General features 
(Page 63, paragraph 199)  
As indicated in the report, government assistance to  businesses is granted at the federal level, as well 
as by state governments. 
 
(i) Have conflicts ever occurred between both entities, especially on the promotion of further 
development of the energy sector and the en couragement of private investment and 
competition  
 (ii) If so, what are the guiding prin ciples used in resolving these conflicts? 
 RESPONSE:   We are unaware of any instances of c onflict between federal and state government 
assistance to businesses in the energy sector. 
 
Question 15: 
(c) Assistance to the energy sector (Page 66, paragraph 209) 
 
As stated in the report, ARRA expands or creat es energy incentives for businesses and utilities that 
produce or use renewable energy. 
 
(i) Do these incentives also ap ply to foreign investors?   
 RESPONSE:  Foreign investors are eligible for Ameri can Reinvestment and Recovery Act (ARRA) 
funds as long as the projects are established in th e United States.  There has been a significant 
increase in foreign direct investment as a result of the ARRA. 
 
(ii) How do these incentives impact on subs titutes for fossil fuels in the U.S.? 
 
RESPONSE:  All the referenced incentives are desi gned to accelerate the development and 
deployment of substitutes for fossil fuel.  Solar, wind, geothermal, nuclear, and energy efficiency 
projects are all supported under the manufactur ing tax credits and other ARRA provisions. 
 
Question 16: 
(v) Trade related intellectual property rights   
(e) Enforcement activities (Page 76, paragraph 239) 
 
In 2008 and 2009, 72 Secti on 337 investigations were instituted, al most all of which involved claims 
regarding intellectual property rights, particularly patent infringement. 
 WT/TPR/M/235/Add.1 
Page 148 
 
 
 We are interested in knowing:  
 
(i) What elements are considered by the U. S. International Trade Commission (ITC) as 
determining factors in the decision to launch investigations?   
RESPONSE:   The Commission’s regulations set forth the requirements regarding the information 
required to be contained in a complaint.  See 19 C.F.R. § 210.8 through 210.12.  If a complaint 
contains such information the Commission generally  will institute an investigation.  Once an 
investigation is initiated, it is referred to the Ch ief Administrative Law Judge to be assigned to a 
presiding judge to adjudicate the issues arising in the investigation.  (ii) Over the period 2008 to August 2010, how many companies whose products are regulated by 
the ITC investigations as infringing on U.S. patents have been subject to exclusion and/or 
cease and desist orders? 
 
RESPONSE:   From January 2008 to the present, 18 limite d exclusion orders were issued directed to 
90 companies.  The Commission issued cease and desist  orders to 44 of these companies, all of which 
were domestic companies.   
Five general exclusion orders were issued duri ng the same time period which covered any company 
that attempted to import a covered good– i.e. one found to have been impor ted or sold in violation of 
section 337.  Two cease and desist orders were issued to domestic companies that imported goods 
covered by the general exclusion orders. 
 
(iii) How many cases are settled prio r to the initial determinations? 
 
RESPONSE:   Most, but not all, settlements occur prior to the final initial determination by the 
presiding administrative law judge.  In calendar year  2008, 15 investigations were terminated based 
on settlement.  In calendar year 2009, 13 investig ations were terminated by settlement agreement. 
 
From January 1, 2010 through August 2010, 19 i nvestigations have been terminated based on 
settlement agreements. 
 
Question 17: 
(vi) Competition policy (Page 77, paragraph 245)  
 
The report states that, “The DOJ and FTC are updating the Horizontal Merger Guidelines, which describe their standards for reviewing mergers. As part  of this initiative, the agencies held five public 
workshops between December 2009 and January 2010. According to the head of the DOJ's Antitrust 
Division, the workshops revealed gaps between curre nt practice and the Guidelines. In April 2010, 
the FTC released the proposed revision of  the Guidelines for public comment.”  
 
As we now know, the FTC and DOJ issued revised Horizontal Merger Guidelines on 19 August, 2010. 
The revisions retool the analytical steps for eval uating whether mergers lessen competition and harm 
consumers. The guidelines reflect a more flexible approac h by simply describing each of the elements 
that may be used to determine a merger’s effect rather than outlining a step-by-step process (i.e., first 
defining the relevant market and then assessing market concentration, potentia l competitive effects, 
possible entry, efficiencies).   
We would appreciate further information on the following aspects:  
 (i) Do these revisions result in more discretion?   WT/TPR/M/235/Add.1 
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 (ii) Will the revisions make it harder for the enterprises to get deals through the competition 
agencies?  
 
(iii) How will the revisions affect m erger cases challenged in Court? 
 
RESPONSE:   The revised Horizontal Merger Guidelin es provide transparency into the agencies’ 
current enforcement analysis in mergers.  The revi sed Guidelines contain no surprises.  They set forth 
concepts and considerations that have been central to  our merger review for some time.  The fact that 
agency practice has evolved reflects the reality that  we adjust and refine our approach to merger 
review to incorporate advances in economic learni ng and changes in business realities.  The enhanced 
transparency provided in the Guidelines will be benefi cial to the many different groups that consult 
them.  For instance, business executives and their la wyers considering potential transactions will be 
able to make more accurate predictions about likely enforcement decisions and plan business 
decisions accordingly.  The Guidelines should also be  a valuable resource for courts in understanding 
the views of the two government agencies charged wi th enforcing our nation’s merger laws. For more 
information, see the press release describing completi on of the revised Horizontal Merger Guidelines; 
available at:  www.justice.gov/atr/ public/press_releases/2010/261642.htm. 
 
Question 18: 
(Page 77, paragraph 247)  
According to the report, in 2009, the DOJ and FTC entered into a Memorandum of Understanding 
with the Russian Federal Anti-Monopoly Service.  The U.S. also has agreements on competition 
cooperation with several other countries.  
(i) Please could the U.S. explain the ob jectives of these arrangements/agreements? 
 (ii) Could the U.S. please inform us of other Members with which it is considering entering into 
negotiations on these arrangements/agreements? 
 (iii) What are the factors that the U.S. takes into consideration when deciding on potential 
partners in such arrangements/agreements? 
 (iv) Is the collection of information for use in  conducting investigations by the Department of 
Justice and the Fair Trade Commission incl uded in these arrangements/agreements?  
 RESPONSE:   We can confirm that we entered into a bilateral MOU with the Russian FAS in 2009.  
The objectives of these arrangements are the prom otion of bilateral coope ration and understanding. 
We are not at liberty to discuss our internal plans regarding possible future bilateral negotiations.  We 
take a variety of considerations into account in co nsidering new bilaterals, most obviously whether or 
not the other party has competition laws and enfor cement programs.  The collection and exchange of 
information sought in particular investigations  requires additional understandings concerning the 
confidential treatment of such information.  We have such understand ings with Australia, 
understandings conforming to our International Antitrust Enforcement Assistance Act of 1994, 15 
U.S.C. 6201 - 12. 
 WT/TPR/M/235/Add.1 
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 Question 19: 
IV. DEVELOPMENTS IN SELECTED SECTORS  
(2) FINANCIAL SERVICES 
(i) General legal framework (Page 94, paragraph 58)  
 
The limitations preventing foreign bank branches from accepting or maintaining retail deposits of less 
than US$100,000 in the U.S., and the fact that th ey cannot benefit from fe deral deposit insurance 
have long been regarded as creating a less favour able operating environment for foreign banks.  
 
Will the U.S. consider removing these limitations? 
 
RESPONSE:   Countries differ as to the scope of business they allow and the in-country capital they 
require for direct branches of foreign banks.  The United States is among the most liberal countries in 
the world with regards to capital for bank bran ches, allowing bank branches to lend based on the 
world-wide capital of its parent bank and requiring  only a capital equivalency deposit which is less 
substantial than normal capital requirements.  
 
Except for a number of grandfathered institutions, fore ign branches are in effect not allowed to take 
retail deposits.  Those wishing to do retail banki ng can do so through subsidiaries which are extended 
full national treatment, including with respect to ca pital requirements.  The United States does not 
intend to remove this limitati on on retail deposit taking by forei gn bank branches operating in the 
Unites States.  
 
Question 20:  
(iv) Financial regulatory reform  (Page 97, paragraph 69)  
 
To address the financial regulatory gaps that resulted in the financial crisis, the U.S. Administration 
released details of its compreh ensive financial regulatory reform proposal on 17 June, 2009. 
 
Could the U.S. please explain how these regulat ory measures will influence its financial services 
commitments and its resolution to liberalize the financial services s ector under the WTO? 
 RESPONSE:   Please see the response to Question 21 below. 
 
Question 21: 
(Page 97, paragraph 70)  
One of the key objectives of the Financial Regul atory Reform proposal is to promote robust 
supervision on financial institutions.   
What will be the U.S.’s stance on foreign bank br anches and subsidiaries following such regulatory 
change? Will more requirements and limitations be imposed on those branches/subsidiaries operating 
businesses in the U.S.? 
 
RESPONSE:   The Dodd–Frank Wall Street Reform a nd Consumer Protection Act (Public Law 111-
203, H.R. 4173) was signed into law by President Barack Obama on July 21, 2010.  This legislation 
establishes new authorities and supervisory directi on with regard to the U.S. financial markets 
including:  banking, securities, insurance, deriva tives, executive compensation, consumer protection 
and corporate governance.  Following the bill’s p assage, the regulatory implementation phase began. 
While few provisions of the bill are effective immedi ately (for example, the liquidation authority), in 
general the legislation will become effective in stages. The legislation is complex and requires  WT/TPR/M/235/Add.1 
 Page 151 
 
 
 approximately 250 rulemakings and 70 studies.  Ov er the next 6 to 18 months, regulators will 
undertake an intense period of rulemaking. The rulemaking process will expand upon and flesh out 
the parameters of the new regulatory framework.  The resulting regulatory regime will contain both 
new elements and elements drawn from current U.S.  financial regulation. In addition, regulatory 
implementation will likely be a dynamic process.   Rulemaking will include opportunity for public 
comment and all interested parties are invited to submit comments.  Interested persons may submit 
comments electronically through the Federal eRulemak ing Portal at www.regulations.gov.  Electronic 
submission of comments allows the commenter maximum time to prepare and submit a comment, 
ensures timely receipt, and enables the comments to be made available to the public.  Comments 
submitted electronically through the www.regula tions.gov website can be viewed by other 
commenters and interested members of the public. 
 
Question 22: 
(3) TRANSPORT 
(i) Air transport services 
(a) Main features 
Page 98, paragraph 74 
 According to the report, the U.S. will hire private en terprises to provide comme rcial services, such as 
airport services and building maintena nce, to all public airports. 
 (i) Could the U.S. please explain whether th ese commercial services will be open to foreign 
enterprises for bidding? 
 
RESPONSE:   In paragraph 75, it is stated that, “With  the exception of security services, foreign 
services suppliers may provide services to airpor ts on the same terms and conditions as domestic 
suppliers.”  Such foreign service suppliers woul d have to comply with all applicable security 
requirements.  The requirements for outsourcing and management contracting opportunities are 
determined by the individual airports seeking such c ontracts.  U.S. airports typically solicit for such 
contracting opportunities in airport trade periodicals and on their individual web sites.  The FAA does 
not collect, retain or distribute information govern ing contracting opportunities at U.S. airports.  
Participation by foreign service suppliers in the supply of these services in the United States would be 
governed by U.S. labor and immi gration laws, as well as appli cable licensing and certification 
requirements for specific occupations.  (ii) Will the U.S. include the commercial services of airports in its market access commitments in 
the Doha Round negotiations on services? 
 
RESPONSE:  In the U.S. view, the appropriate forum fo r consideration of these questions is the 
DDA services negotiations rather than the TPR. 
 
Question 23: 
(ii) Maritime transport 
(c) Water-borne trade (Page 104, paragraph 100) 
 
Existing legislation applies preferences to usi ng domestically flagged vessel  to transport goods under 
governmental programmes.  
 
(i) Could the U.S. please indicate how the legisl ation either conflicts with  or conforms to WTO 
rules?  
 WT/TPR/M/235/Add.1 
Page 152 
 
 
 RESPONSE:  The GATS does not to apply government procurement.  In addition, the United States 
has excluded transportation services from the procur ement that it covers under the Government 
Procurement Agreement. 
 
(ii) Will the U.S. include maritime-related servic es in its market access commitments in the Doha 
Round negotiations? 
 
RESPONSE:  The TPR is not a negotiating forum.  Requests made in the context of the DDA 
services negotiations should be taken up in that forum.  WT/TPR/M/235/Add.1 
 Page 153 
 
 
 COLOMBIA 
 Document WT/TPR/S/235 III. TRADE POLICIES AND PRACTICES, ACCORDING TO MEASURES 
(1) Measures that directly affect imports 
(i) Customs rules 
 
Paragraph 1 of the Secretariat’s report states:  “The Customs and Border Protection Service (CBP) 
of the United States, attached to the Department of  Homeland Security, deals with the administration 
and application of Customs legislation. The Cons ultative Committee for Trade Operations of the 
Customs and Border Protection Service, also ca lled COAC, is the formal forum for holding 
consultations with the private sector concerning Customs issues.” 
 1. Can the United States share in the way this Consultative Committee is run? 
 
RESPONSE:  The COAC (Advisory Committee on Commerc ial Operations of the Customs and 
Border Protection) is a government-chaired, industry advisory group that provides the Departments of 
Homeland Security and Treasury with the perspectiv es and advice of the private sector.  Over the 
years, COAC has been involved in issues such  as development of ad vanced electronic cargo 
information, streamlining of customs procedures, review of trade policies and since 9/11, issues 
relating to cargo security. 
 The role of COAC is to review issues related to  the commercial operations of CBP and related DHS 
and Treasury functions and provide feedback and recommendations.   
 
During its eleventh two-year term, the Committee c onsidered such issues as:  enhanced border and 
cargo supply chain security, CBP modernization and automation, informed compliance and compliance assessment, account-based processing, commercial enforcement and uniformity, 
international efforts to harmonize customs practices  and procedures, strategic planning, northern and 
southern border issues, agricultural inspecti on and the CBP mission, and import safety. 
 
COAC is not involved in the supervision of any CBP enterprise activities. The role of the COAC is 
consultative in nature and it operates under the pr ovisions of the Federal Advisory Committee Act 
(FACA). The Committee serves at the pleasure of the Secretary of Department of Homeland Security 
and the Secretary of Treasury. 
 
In paragraph 4, the Secretariat’s report states:  “Imp orters are not subject to any special registration 
requirement. Use of a Customs agent is optional. On ly United States citizens can obtain a permit to 
act as Customs agents.”  2. Could the United States share in the proce dure and prescriptions for obtaining the permit? 
 RESPONSE:   Procedures to obtain a broker’s license and permit are set forth in CBP Regulations 
Part 111, Subpart B, which can be accessed  at:  http://www.gpoaccess.gov/cfr/index.html. 
 
Paragraph 11 of the Secretariat’s report states:  “The CBP has the Automated Polarization System 
(ATS), a mathematical model that uses weighted  standards to assign a risk level to dispatches 
received and selects them for additional examination. 
 3. Could the United States extend the informati on in relation to the operation of this system?  
 
RESPONSE:   The function of ATS is to provide inform ation to support the decisions of CBP officers 
working in Advance Targeting Units (ATUs) at our ports of entry and CSI ports. The system provides WT/TPR/M/235/Add.1 
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 a uniform review of cargo shipments, identifies the highest threat shipments, and presents data in a 
comprehensive, flexible format to address specific  intelligence threats and trends. ATS uses a rules-
based program to highlight potential risk, patterns, a nd targets. Through rules, ATS alerts the user to 
data that meets or exceeds certain predefined criteri a. ATS uses national targeting rule sets to provide 
threshold targeting for national security risks for all modes:  sea, truck, rail, and air. CBP is 
continually striving to improve the ATS system by convening regular "rules conferences". The 
conferences are attended by our intelligence offi cers and representatives from various seaports and 
land border ports who update risk indicators and ensu re that the most current intelligence and trends 
are factored into ATS. 
 
Paragraph 17 mentions that the CBP continues to administer a security programs for the supply 
chain called C-TPAT (Customs and Trade Anti-Terrorism  Association), in the framework of which 
companies that adopt “security criteria for supply c hains” benefit from reducti ons in the risk index 
assigned by the CBP for their dispatches. As a consequence, dispatches by these companies receive 
much less frequent examinations that other dispatch es with a similar risk profile. Reductions in the 
risk index correspond to one of three security levels  adopted by participants. According to the CBP, 
the probability of these dispatches being examined is four to six times lower. 
 4. Does the United States recognize within th e C-TPAT the foreign companies that have been 
classified as the Figure of the Authorized Economic Operator in the various countries?  
 
RESPONSE:  CBP takes into account in its risk based au tomated targeting system the Authorized 
Economic Operator status of those foreign comp anies which are in good standing with a foreign 
customs industry partnership program with which CBP has signed a mutual recognition arrangement. 
 (iv) Special trade measures (a) Anti-dumping duties and countervailing duties  Paragraph 49 of the Secretariat’s report states that  “some aspects of the investigations, procedures 
and verifications of the United States in relation to anti-dumping duties and, to a lesser extent, 
countervailing duties, were subject to disputes with in the framework of the WTO during the period 
considered.  Brazil, China, Korea, Thailand and Vietnam submitted claims under the Understanding 
on Dispute Settlement.  The majority related, at least in part, to the American practice of not 
compensating sales not the object of anti-dumping, al so called “reduction to zero,” when calculating 
the dumping margins.” 
 
There are repeated observations by some WTO memb er States, including Co lombia, concerning the 
procedure for zeroing when calculating th e dumping margins, and the Appeal Body
12 has repeatedly 
rejected the methods for reducing to zero and has implemented additional criteria for assessing the 
impact thereof. In particular, this  Body has determined that the practice of “reducing to zero” 
negative dumping margins means that not all the pr ices of some export transactions are taken into 
account, specifically, transactions where negative marg ins were found, which is in breach of Article 
4.2.2 of the AD.   In addition, the Appeal Body decided that “reduc tion to zero” tends to exaggerate the calculated 
margins and could convert a negative dumping margin  into a positive one, which can distort not only 
the size of the dumping margin but also a verificati on of the very existence of the dumping.  In fact, 
this issue is expected to be clarified within the framework of the negotiation process relating to rules 
established in the Doha ministerial mandate. 
                                                     
 
12 EC – Cotton-Type Bed Linen (WT/DS141/AB/R); United States – Sunset Review – Corrosion-
Resistant Carbon Steel (WT/DS244/AB/R; WT/DS244/A B/R/corr.1);  EC- Pipe Fittings (WT/DS219/AB/R); 
United States – Softwood Lumber(WT/DS264/AB/R)  WT/TPR/M/235/Add.1 
 Page 155 
 
 
 Along these lines, on 9 January 2007, the Appeal Body issued its report in the case:  United States – 
Measures relating to zeroing and Sunset Reviews (DS322) .  In this report, the interpretation of the 
Appeal Body that this practi ce is prohibited by the Anti-D umping Agreement is convincing. 
 
5. In view of the repeated findings of the WTO’ s Dispute Settlement Body against the practice of 
“zeroing,” does the United States intend to change th e present practice of the “zeroing” methodology 
in its anti-dumping investigations?  
 
RESPONSE:  The United States stopped applying the zeroing methodology in investigations 
effective on February 22, 2007, though the United States has applied zeroing in some administrative 
reviews after that date.  The Appellate Body reports on zeroing raise serious systemic concerns for the United States that go beyond the issue of zeroing.  Indeed, the United States believes that the 
Appellate Body reports create new obligations to limit the use of antidumping measures when such 
obligations were never agreed to by the WTO Me mbers.  Nevertheless, the United States takes its 
WTO obligations very seriously, and has stated pub licly that it intends to comply with the WTO 
rulings in all of the zeroing disputes.  We are ve ry actively engaged in a serious effort with our 
domestic stakeholders and our Congress to find an accep table solution. We are not in a position at this 
time to provide details on the specific steps we w ill take or the timeframe to comply with the 
Appellate Body rulings.  Paragraph 50 of the Secretariat’s report states:   “Under the deficit Reduction Act 2005, which 
repealed the Byrd Amendment, the CBP has continued to distribute the anti-dumping and compensation duties laid down in relation to im ports of goods made and declared before 1 October 
2007 to members of the affected area of natio nal production which suppor ted the petition for an 
investigation relating to anti-dumping and count ervailing duties. The CBP distributed 264 million 
USA dollars during the 2007 tax year, 180 million USA dollars in the 2008 tax year and 248 million 
USA dollars in the 2009 tax year.
13  The Federal Appeal Court revoked a decision made by the 
International Commercial Court of the United States to  the effect that the so-called “requirement for 
support of the petition” contained in the Byrd Am endment was unconstitutional. According to that 
requirement, if a national company publicly stated  its support for the imposition of an order in 
relation to anti-dumping and countervailing duties, it was subsequently entitled to receive some of the 
funds collected as a result of the order.14  At the end of 2009, the United States Supreme Court was 
asked to examine that decision.”   6. Is there a pronouncement by the United St ates Supreme Court concerning the review of the 
revocation of unconstitutionality of the distributi on of anti-dumping and countervailing duties to the 
area of national production that supports th e petitions for investigation of anti-dumping and 
countervailing rights?  
RESPONSE:  On May 17, 2010, the Supreme Court of the United States denied the plaintiff’s 
petition for certiorari, as a result of which the decisi on of the U.S. Court of Appeals for the Federal 
Circuit is final.  No further review process is available to any party.  Paragraph 66 of the Secretariat’s document stat es:  “Petitions for imposition of countervailing duties 
are often accompanied by petitions for imposition of anti-dumping duties, which frequently give rise 
to the simultaneous application of both of them. Around 90 per cent of the 41 orders concerning countervailing duties in force in December 2009 were accompanied by orders relating to anti-
dumping duties.” 
 
                                                     
 
13 Online information from the CBP, "Continued Dumping and Subsidy Offset Act of 2000.” Consulted 
on: http://www.cbp.gov/xp/cgov/trade/ priority_trade/add_cvd/cont_dump. 
14 SKF USA, Inc. v. United States, 556 F. 3d 1337 (Fed. Cir. 2009). WT/TPR/M/235/Add.1 
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 7. If paragraph 5 of Article VI of GATT 1994 expressly provides that:  “No product from the 
territory of a contracting party, imported into th e territory of another contracting party, will be 
simultaneously subject to anti-dumping duties and countervailing duties intended  to remedy the same 
situation resulting from the dumping or from export subsidies,” on the basis of which rule in the 
Agreement on Implementation of Article VI of GATT 1994 (Anti-Dumping Agreement) does the United 
States simultaneously apply anti-dumping duties an d countervailing duties in the framework of the 
WTO?  
 
RESPONSE:  As is indicated in the provision quoted by Colombia, Article VI:5 expressly refers to 
“export subsidies.”  Export subsidies are specifi cally defined in the Agreement on Subsidies and 
Countervailing Measures and are a recognized subset of all subsidies.  Consistent with Article VI:5, 
section 772(c)(1)(C) of the Tariff Act of 1930, as amended, provides for an adjustment in the 
calculation of any margin of dumping to address th e existence of an export subsidy subject to a 
countervailing duty order.  
 
8. How do they separate in the causal relations hip the significant damage  caused by imports 
with dumping or those that have subsidies?  
RESPONSE:   The United States International Trade Commis sion made final injury determinations in 
seven original countervailing duty investigations in 2009.  In six of these investigations, there was a 
corresponding antidumping duty investigation.  In recen t years, a substantial majority (but not all) 
petitions seeking initiation of a countervailing duty investigation also sou ght institution of a 
corresponding antidumping investigation.  When  the Department of Commerce simultaneously 
initiates antidumping and countervailing duty investig ations concerning a particular product from the 
same country, the USITC will conduct both investig ations simultaneously, a lthough it may not make 
its final determinations in the antidumping and countervailing duties si multaneously if the Department 
of Commerce does not do so.  In each of the six countervailing duty investigati ons on which the USITC made affirmative final 
determinations in 2009, there was a corresponding an tidumping duty investigation.  In each of these 
investigations, the Department of Commerce found that  the imports that were subsidized were also 
dumped.  Consequently, there was no need for the USITC to distinguish be tween dumped imports and 
subsidized imports in its injury analysis. 
 
(b) Safeguards 
 
Paragraph 68 of the Secretariat’s report states:  “The safeguarding measures of the United States 
can include tariffs, quantitative restrictions, tariff quot as or other measures pr ovided by legislation. 
In the context of the NAFTA, Canada and Mexico  must be excluded from application of global 
safeguarding measures, unless their imports, c onsidered individually, represent a significant 
proportion of the total imports and significantly co ntribute to the serious damage caused. No other 
free trade agreement of the United St ates contains that prescription.” 
 9. Can the United States explain what the “oth er measures” provided for in the legislation 
consist of?  
 
RESPONSE:  Section 203(a)(3) of the Trade Act of 1974 (19 U.S.C. 2253(a)(3)) authorizes the 
President, after receiving an affirmative injury determination from the USITC, to–   (A) proclaim an increase in, or the imposition of, any duty on the imported article;  (B) proclaim a tariff-rate quota on the article;  (C) proclaim a modification or imposition of any quantitative restriction on the importation of the 
article into the United States;   WT/TPR/M/235/Add.1 
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 (D) implement one or more appropriate adjustme nt measures, including the provision of trade 
adjustment assistance under part 2 of this subchapter;  (E) negotiate, conclude, and carry out agreements  with foreign countries limiting the export from 
foreign countries and the import into the United States of such article;  
(F) proclaim procedures necessary to allocate amo ng importers by the auction of import licenses 
quantities of the article that are permitted to be imported into the United States; (G) initiate international negotiations to address th e underlying cause of the increase in imports of the 
article or otherwise to alleviate the injury or threat thereof;  (H) submit to Congress legislative proposals to facilitate  the efforts of the domestic industry to make a 
positive adjustment to import competition;  
(I) take any other action which may be taken by th e President under the authority of law and which 
the President considers appropriate and feasi ble for purposes of paragraph (1);  and  
(J) take any combination of actions lis ted in subparagraphs (A) through (I).  
 
10. Could it be interpreted that the United States simultaneously apply global safeguarding 
measures in the form of tariffs and qua ntitative restrictions or tariff quotas? 
 
RESPONSE:  As indicated in the answer to Question 9 above, the actions the President may take 
include an increase in or imposition of a duty, a tari ff-rate quota, and a modification or imposition of a 
quantitative restriction.  While sec tion 203(a)(3)(J) of the Trade Act of 1974 authorizes the President 
to take any combination of the actions listed in section 203(a)(3), we are unaware of any instances in 
which the President, in a global safeguard action, imposed a duty and a quantitative restriction on the same goods at the same time.  A ta riff-rate quota is a form of duty. 
 
(3) Other measures that affect trade and investments 
(i) Legal framework of companies and foreign investment rules  
 Paragraphs 168 and 175 of the Secretariat’s report state:  “The Foreign Investment and National 
Security Act 2007 (FINSA) authorizes the Committee for Foreign Investment in the United States 
(CFIUS), an inter-institutional committee established by law and chaired by the Treasury Secretary, 
to carry out examinations of the “transactions cover ed,” namely, mergers, acquisitions or takeovers 
that may “have as their consequence foreign cont rol of a person who trades between States in the 
United States.” The CFIUS is authorized to ent er into “risk mitigation agreements” with the parties 
involved in a transaction, for the purpose of deali ng with national security risks, if the law does not 
make any other provision that gives adequate a nd appropriate powers to resolve those risks. 
Furthermore, the Chairman may suspend or prohibi t a transaction so dealt with, when he considers 
that there is convincing evidence that the fo reign person exercising control over the American 
company might take steps to harm national security.  11. What is the margin of discretion for the CF IUS to enter into “ri sk mitigation agreements” 
based on reasons of risk to national security?  
 
RESPONSE:   Before addressing risk mitigation agreemen ts, we must clarify one point that is 
misstated in the question above:  only the President of  the United States is authorized to suspend or 
prohibit a covered transaction, not the Chairman of CFIUS, i.e., the Secretary of the Treasury.  The 
relevant – and correct – language of  the WTO draft report is as follows: 
 
 “Furthermore, the President may suspend or prohibit a covered transaction when he believes 
there is credible evidence that the foreign pe rson exercising control of the U.S. business might 
take action that threatens to impair national security.” 
 CFIUS’s use of risk mitigation agreements is addressed in Executive Order 11858, amended by the 
President on January 23, 2008 (and available at :  http://www.ustreas.gov/offices/international-WT/TPR/M/235/Add.1 
Page 158 
 
 
 affairs/cfius/eo.shtml).  Releva nt language of the Order includes Section 7, which is entitled “Risk 
Mitigation.”  We refer you to the Order, in cluding especially subsections (a) through (c). 
 
The CFIUS webpage also provides a link (h ttp://www.ustreas.gov/offices/international-
affairs/cfius/docs/Summary-EO11858-Amend.pdf) to a one-page summary of Executive Order 1185, as amended.  That summary includes the following e xplanation of some, but not all, of the Order’s 
implications for CFIUS’s use of risk mitigation agreements:  
 “Risk-Based Analysis
:  Risk mitigation provisions must be justified by a written analysis of 
the national security risk posed by a transaction, a nd CFIUS must agree that they are justified.  
 
 Existing Laws :  Limits CFIUS to seeking risk mitigat ion agreements or conditions only when 
other laws besides Section 721 are inadequate and, except in extraord inary circumstances, 
prohibits the use of mitigation agreements to require a party’s recognition of existing legal 
authorities. Also prohibits CFIUS agencies from using CFIUS’s authorities to gain leverage 
over the parties with regard to enforcement of  the agencies’ existing legal authorities outside 
the CFIUS process.”  
 
12. Is there a regulated procedure or is it solely discretional?  
 RESPONSE:  The Foreign Investment and National Security Act of 2007 provides the following, 
among other relevant provisions:   “(B) Risk-based analysis required.— Any agreement entered into or condition imposed under 
subparagraph (A) shall be based on a risk-based analysis, conducted by the Committee, of the 
threat to national security of the covered transaction.” 
  Executive Order 11858, as amended on January 23 , 2008 by the President (and available at:  
http://www.ustreas.gov/offices/international-affairs/cfius/eo.shtml), also governs CFIUS’s activities, including the use of risk mitigation ag reements.  We refer you to Section 7 of the 
Order, among other relevant provisions. 
 
Development of SPS policy  Since the last review of its Commercial Policy in 2008, the United States has not made any significant 
changes to the institutional framework that go verns the application of sanitary and phytosanitary 
measures at the federal level.  The United States is a member of the Codex Alim entarius Commission, the World Organization for 
Animal Health (OIE) and the International Plant Protection Convention (IPPC). Its sanitary and phytosanitary measures are based on internationa l rules and directives and are in accordance with 
the WTO’s SPS Agreement. 
 In relation to sanitary and phytosanitary issues, the United States has a coordinated inspection, vigilance and control system. The Animal and Plant  Health Inspection Service (APHIS) of the 
Department of Agriculture regulates the importatio n of plants, animals and derived products. The 
Bromatology Service (FSIS) of the Department of Agriculture regulates most imports of meat, poultry 
and some egg-based products.   The Food and Drug Administration (FDA) regulates the importation of all other food products and veterinary mediations imported. The Environmen tal Protection Agency (EPA) is responsible for 
regulating imports of pesticides and establishing limits for pesticide waste present in food. 
  WT/TPR/M/235/Add.1 
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 In general, imports of plants, animals and derived  products require an import permit issued by the 
Animal and Plant Inspection Service, which specifi es the conditions that must be met, such as 
treatment, inspection or certification, at the border or in the exporting country.  
 
The FDA, together with the Customs and Border Prot ection Service, carries out examinations at the 
port of entry of imported food products other than meat, poultry and egg-based products, which 
include sampling and analysis when necessary, in order to ensure that imported  food products meet 
the prescriptions of the food safety  system of the United States.  
 
The United States frequently uses the notification system in the context of the Committee on Sanitary 
and Phytosanitary Measures of the WTO. Notified me asures are normally published in the Federal 
Register. The American authorities state that their information service meets periodically with the 
State authorities responsible for regulation, in order to ensure the trans parency of the sanitary and 
phytosanitary measures applied by the States.  
(ix) Sanitary and phytosanitary measures  
According to paragraph 105 of the Secretariat’s repor t:  “According to the American authorities, the 
sanitary and phytosanitary measures are based on in ternational rules and directives “when there are 
any and they are appropriate.” The authorities stat e that the sanitary and phytosanitary prescriptions 
applied to the importation of vegetables, animals and derived products are established on the basis of 
the risk of illness or pests rep resented by those products.” 
 13. On this point, if the United States is a Member of the OIE and of the WTO, why does it make application of the international rules and directi ves conditional upon their appropriateness to them? 
 RESPONSE:  The SPS Agreement does not require WTO Members to base their measures on 
international standards without exception.  For exampl e, a Member is not expected to base its measure 
on a standard that does not exist, as indicated in Ar ticle 3.1 of the SPS Agreement.  Similarly, Article 
3.3 notes that Members may introduce measures that provide a higher level of sanitary or 
phytosanitary protection if the measure is based on science.  The U.S. policy referred to by Colombia 
is consistent with these principles.    
 
(a) Animal and Plant Health Inspection Service (APHIS): 
 
According to paragraph 1 07 of the Secretariat’s report:  “The importation of live animals into the 
United States is regulated by the APHIS.  In order to import live animals (apart from pets), a 
preliminary notice must be submitte d in all cases to the preliminary Notices Centre of the FDA.  In 
general, the importation of live animals from count ries affected by certain illnesses, such as livestock 
from countries affected by BSE, foot-and-mouth dise ase or rinderpest, is not permitted.  With regard 
to imports from other countries, an import permit fr om the APHIS is normally required and an official 
sanitary-veterinary certificate from the country of origin, placement in quarantine before exportation 
and after arrival in the United States and verification that the results of various tests carried out 
before and during quarantine in the United States are negative.”   14. Since this is the case, do the United Stat es not recognize the free zones or compartments 
endorsed by the OIE and is it not appropriate to carry out the risk evaluation process to support 
importation permits for live animals?  
RESPONSE:   The United States takes into account th e free zones/compartments recognized by the 
OIE into its science based risk evaluation process.  WT/TPR/M/235/Add.1 
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 Paragraph 111 of the Secretariat’s report states th at “The law has not established any limit for the 
duration of the approval process for imports of vegetables, animals and derived products made for 
the first time. Normally, this pro cess lasts between two and three years.” 
 
Since the United States has not established a time limit for this process, its requirement that its trade partners should have a defined period for establishing  the sanitary or phytosanitary requirements that 
allow entry of their products is not clear.   
15. Could the United States explain this position? 
 
RESPONSE:  In accordance with the principles of the SPS Agreement, sanitary and phytosanitary 
requirements in the United States are transparent and science-based.  The time required for a science-
based, transparent review may vary depending on th e circumstances of the request.  Consistent with 
that approach, the United States does not as a gene ral practice ask trading partners to define 
timeframes in the manner described in the question. 
 
According to paragraph 123 of the report from th e WTO Secretariat:  “In March 2009, the Chairman 
announced the creation of the Working Group on the sa fety of food products.  According to the 
authorities, the objective of the Working Group is  to encourage coordination in the federal 
government for the application of a new focus on fo od safety centered on public health and based on 
three fundamental principles:  to give the maximum pr iority to prevention, (2) to reinforce vigilance 
and compliance with legislation, and (3 ) to the capacity to respond and recover.” 
 16. What will be the mechanisms for encouragi ng both coordination between the levels of 
government and the new focus and guiding principles?  
 RESPONSE:  The President’s Working Group on Food Safety  serves as a mechanism to address 
cross-cutting issues and increase coordination of f ood safety activities across the U.S. government. 
Chaired by the Secretaries of Health and Human Services and the Department of Agriculture, the 
Working Group is bringing information and experience from the front lines of food safety to all 
federal agencies engaged in food safety rules and re gulations to monitor the implementation of its 
recommendations, regularly assess performance metri cs, ensure that food safety policies are 
adequately coordinated with efforts to safeguard  the food supply from deliberate tampering, and 
respond to new challenges.   (IV) DEVELOPMENT OF CERTAIN SECTORS (1) Agriculture (ii) Agricultural policies  Direct payments 
 
Paragraph 8 of the Secretariat’s report states:  “Agri cultural operations that used to produce cereals, 
cotton, nuts (peanuts) and oily seeds can benefit fr om direct payments that are based on the planted 
surface area and historic yields and are not c onnected to production and current prices.  The 
Agriculture Act 2008 reduced the payments to 83.3 per cent of the base surface area for 2009-2011, 
compared to 85 per cent in the 2002 Act.” 
 
17. Could the United States state in more deta il how it ensures that these payments are not 
connected to production and prices, bearing in mind that these are granted per planted surface area? 
 
RESPONSE:   There appears to be a misunderstanding, pe rhaps due to translation.  These payments 
are not granted per “planted surface area”.  In fact , production is not even required under the program.  
The Secretariat’s report accurately describes the natu re of the Direct Payment program when it states  WT/TPR/M/235/Add.1 
 Page 161 
 
 
 in paragraph 8 that Direct Payments “are dec oupled from current production and prices”.  Payments 
are based on historical yields and historical acreag e bases, and are not tied to current production of 
any crop.  Counter-Cyclical Payment Program 
 
Paragraph 10 of the Secretariat’s report states t hat “Counter-Cyclical payments are based on 
historical production and the difference between an indicative price and the “actual” price (based on 
current market prices).  The indicative price for ea ch product is established in the Agriculture Act and 
coincides with the indicative price fixed in the previous Act for 2004-2007, ap art from upland cotton, 
the indicative price of which was established at a sli ghtly lower level.  Most of the rates of payment 
for the 2010-2012 period have been kept at the same level, with the exception of those applied to 
wheat and oats, which have been  increased.  In the 2008 Agricu lture Act, the number of crops 
covered by the Counteri-Cyclical Payment Program increa sed with the inclusion of dried peas, lentils 
and chickpeas.  Although these payments are based on prices, it is not a requirement for payment that 
the crop covered by the program or any other crop should continue to be produced and the amount of 
the payment is not affected by the fact that a crop is produced.”  18. Could the United States state how these payments do not have any effect on prices, since that 
country fixes prices for almost all the pr oducts that have this type of aid? 
 RESPONSE:  The target or “indicative” prices mentioned under the Counter Cyclical Payment 
(CCP) program are established to calculate pot ential payments under the program when actual 
commodity prices fall below certain parameters.  Curre nt production on land that is eligible for CCP 
payments is not tied to the program nor is even requi red, and the size of the payment is not affected by 
current production of any crop.  Furthermore, paym ents are based in part on historical yield and 
historical bases – again, not tied or coupled to current production. 
 
19. Could the United States state how it determined the prices contained in the 2008 Agriculture Act?  At what intervals are they reviewed or changed?  
RESPONSE:  The target prices for the CCP program were set by the Congress in the Farm Bill and 
were determined at their discretion.  Changes to fa rm programs, including changes to parameters such 
as “target” prices that are used in the CCP progr am, are typically accomplished during the Farm Bill 
legislative process which Congress has genera lly undertaken every 5 or 6 years. 
 
20. Is price-fixing established in order to determ ine the aid that can be granted to producers or 
does it have some other purpose and, if so, what?  
RESPONSE:  The target or “indicative” prices established under the CCP program are established 
strictly to determine potential payments under the program and have no other purpose.  
 
Paragraph 38 of the Secretariat’s report states:  “In the 2008 Agriculture Act, chicken meat, caprine 
meat, ginseng, pecans and macadamia nuts were added to the list of products covered by the 
provisions on labeling indicating the country of or igin.  Various categories of label were also 
introduced, according to the animal having b een born or reared and/or slaughtered in the 
United States.  On 19 November 2009, the Dispute Settlement Body establis hed a special group to 
examine the claims from Canada and Mexico con cerning the provisions relating to labeling 
indicating the country of origin.”  21. Could the United States state how these meas ures are compatible with the Agreement on 
Technical Barriers to Trade?   
 WT/TPR/M/235/Add.1 
Page 162 
 
 
 RESPONSE:   This matter is the subject of WTO litigation.  Accordingly, it would we are unable to 
respond to this question.    (5) PROFESSIONAL SERVICES AND SERVICES PROVIDED TO COMPANIES  (i) Introduction 
 
Paragraph 133 of the Secretariat’s report states:   “The trade agreements between the United States 
and Chile and the United States and Singapore in clude provisions that permit non-immigrant 
professionals to enter the United States temporarily to undertake professional activities.  The numbers 
are limited to 1,400 in the case of Chile and to 5,400 in the case of Singapore. In 2004, the H1B1 admission category was introduced to implement app lication of the temporary entry provisions of 
those agreements.  Furthermore,  the citizens of Mexico and Canada can enter the United States 
temporarily to work at a professional occupation r ecognized by the TLCAN without any restrictions 
on numbers.” 
 
22. What has been the operational capacity of the quotas assigned to Chile and Singapore in the 
Free Trade Agreements signed by the USA with these two countries?  Have these quotas actually been 
used?  
 
RESPONSE:  The table below shows the number of H1-B1 visas issued to Chilean and Singaporean 
nationals between 2005 and 2009.   
H-1B1 Issuances to National s of Singapore and Chile 
FY05-FY09 Singapore Chile 
FY05 199 76 
FY06 286 154 
FY07 416 223 
FY08 411 308 
FY09 302 319 
 
Paragraph 218 of the Secretariat’s Report states that “The 2008 Act on Web transmission payments 
and the 2009 Act on Web transmission payments are also  in force.[1] These Acts  allow the recording 
industry to negotiate royalties with Internet radio stations and commercial Web transmission 
companies. Within the framework of both Acts, seve ral agreements were reach ed, the terms of which 
have been published by the United States Copyright  Office in Federal Register notices dated 3 March, 
17 July and 12 August 2009.” 
 23. In view of the piracy problems on the Internet, what mechanisms do you intend for the participation of the private sector?  
 
RESPONSE:  U.S. Government policies on this issue were stated in the 2010 Joint Strategic Plan on 
Intellectual Property Enforcement : 
 The Administration encourages cooperative efforts w ithin the business community to reduce Internet 
piracy. The Administration believes that it is essentia l for the private sector, including content owners, 
Internet service providers, advertising brokers, pa yment processors and search engines, to work 
collaboratively, consistent with the antitrust laws , to address activity that has a negative economic 
impact and undermines U.S. businesses, and to seek  practical and efficient solutions to address 
infringement. This should be achieved through car efully crafted and balanced agreements.  WT/TPR/M/235/Add.1 
 Page 163 
 
 
 Specifically, the Administration encourages actions by the private sector to effectively address 
repeated acts of infringement, while preserving the norms of legitimate competition, free speech, due 
process and the privacy of users. While the Admini stration encourages cooperative efforts within the 
business community to reduce Internet piracy, the Administration will pursue additional solutions to 
the problems associated with Internet piracy, in cluding vigorously inv estigating and prosecuting 
criminal activity, where warranted.15 
 
Document WT/TPR/G/235 
 
I. THE UNITED STATES IN THE MULTILATERAL SYSTEM 
(1) General view 
 
According to paragraph 19 of the government report:   “We have also increased our vigilance of 
certain obstacles in countries that pose problems t hat are particularly inconvenient for American 
exporters. Thus, in 2009, the USTR announced that  the Administration would deploy resources more 
effectively to detect and meet unnecessary or unjustifiable obstacles derived from sanitary and 
phytosanitary (SPS) measures and also from te chnical regulations, rules and procedures foe 
evaluating conformity (measures relating to stand ardization), which impose restrictions on American 
exports of high quality harmless products. Alt hough these measures often perform a fundamental 
function for safeguarding countries and their inhabit ants and also for protecting health, safety and 
the environment, it is important for the SPS measu res and those relating to the rules not to constitute 
concealed or unjustifiable restrictions on access to markets or to discriminate against American exports.”  24. Can the United States explain why it implements SPS that are more demanding than those 
defined in the international standards agreed in the forums in which that country is also a Member, 
thus creating an unnecessary or unjustifiable obstacl e to trade for all those countries that cannot 
achieve standards higher than those defined in those mentioned international organizations? 
 
RESPONSE:  The WTO SPS Agreement explicitly recognizes the rights of governments to apply 
more stringent requirements than international sta ndards to protect human, animal and plant life or 
health, as long as these are based on science, are necessary for the protection of life or health, and do 
not unjustifiably discriminate among foreign sources of supply.  The SPS Agreement recognizes the right of the United States to adopt a more protectiv e standard, as long as the United States can provide  
justification based on an analysis of sci entific evidence and the risks involved.  
 
(b) The process of the consultative committees 
 According to paragraph 66 of the Government report:   “The specific issues of interest to the IGPAC 
and the State contact points include new mechani sms for enforcing compliance of the measures 
relating to technical obstacles against trade (T OT) and the sanitary and phytosanitary measures 
(SPS), examination of the bilateral investment tr eaty model and challenges of State subsidies by 
foreign governments.” 
 25. What are the new mechanisms for enforcing co mpliance of the measures relating to technical 
obstacles against trade (TOT) and the s anitary and phytosanitary measures (SPS)?  
 
RESPONSE:  The United States monitors and secures U.S. trade rights and benefits under 
international agreements using a variety of tools including consultations, ne gotiations, and litigation 
in formal dispute settlement proceedings. 
                                                     
 
15  http://www.whitehouse.gov/sites/ default/files/omb/assets/intellectualproperty/intellectualproperty_ 
strategic_plan.pdf. WT/TPR/M/235/Add.1 
Page 164 
 
 
 USTR coordinates the Administration’s activities in identifying, monitoring, enforcing, and resolving 
the full range of international trade issues that ar ise under our international trade agreements. Those 
agreements include broad, multilate ral agreements such as those adopted at the creation of the World 
Trade Organization (WTO), regional agreements su ch as the North American Free Trade Agreement 
(NAFTA), and bilateral agreements such as the various free trade agreements (FTAs).  As part of its efforts to identify and address trade ba rriers in the form standards-related measures, for 
the first time in 2010, USTR issued the 2010 Reports on Technical Barriers to Trade (TBT Report) 
and Sanitary and Phytosanitary measures (SPS Repor t).  These reports detail inter alia the processes 
USTR and other federal agencies us e to track and resolve trade concerns regarding food safety and 
standards-related measures as well as specific me asures or practices.  For example, the SPS Report 
has identified concerns with  Colombia’s zero tolerance standard for Salmonella  on imported raw 
poultry products, which restricted imports of U.S. raw poultry;  its ban on U.S. live cattle due to BSE-
related concerns following the de tection of a BSE positive animal in the United States in 2003;  and 
import requirements for poultry that are related to AI that do not follow OIE recommendations.  The 
United States will continue to work with  Colombia to address these trade concerns. 
 The 2010 SPS and TBT Reports and  fact sheets detailing key barriers identified and successes in 
reducing these barriers, are available at:  www.ustr.gov/trade-topics/enforcement.  WT/TPR/M/235/Add.1 
 Page 165 
 
 
 COSTA RICA 
 
Secretariat Report General Overview  
5.  The general stability and openness of U.S. trade and investment during the period that is the object 
of the analysis did not impede a pronounced fall of U.S. trade. Between the third quarter of 2008 and the second quarter of 2009, imports of goods decreased in by almost 35 percent.  Imports of durable 
consumer goods and capital goods were particularly affected,  as consumers postponed the purchase 
of durable goods given the large decrease in wea lth, as a consequence of the housing an capital 
markets contraction and of the growing uncertainty in financial markets. U.S. companies canceled 
their investment plans in response to a smaller cons umer demand  and the rise in the cost of capital, 
which reduced the demand for the imports of capita l goods.  Exports of goods also decrease, although 
at a lesser pace, as a reflection of the deceleration of the global demand.  As imports fell at a greater 
rate than exports, the U.S. current account de ficit was markedly reduced, from a maximum of 
6 percent of the GDP in 2006 to somewhat less than 3 percent of the GDP in 2009. 
 
• What is the explanation for the general stab ility and openness of U.S. trade and investment 
during the period that is the object of the analysis has not impeded a pronounced fall of U.S. trade? 
 
RESPONSE:  The sharp reduction in U.S. trade was the result of the overall downturn in the world 
economy.  Through this severe recession, the Un ited States maintained compliance with its 
international trade obligations a nd avoided further aggravating econom ic difficulties that would have 
been intensified by trade restrictive reactions.   8.  The Administration uses business and investment policy to support the recuperation and re-balancing of the economy. Specifically, the U.S. busin ess policy aims to foment the growth of exports 
by means of assigning more resources to export promotion activities and in order to supervise and 
ensure the fulfillment of business commitments und ertaken by business agents. These activities are 
part of a new National Export Initiative implemented in  order to contribute to reaching the objective 
of doubling exports in the next five years. 
 
• What is involved in the new National Expor t Initiative, which has the objective of doubling 
exports in the next 5 years? 
 
• Will support be given to specific production sectors? 
 
RESPONSE:  In his State of the Union address in Janua ry 2010, President Obama launched the 
National Export Initiative (NEI) and set a goal of doub ling U.S. exports in five years to support two 
million additional jobs in the United States.  To aid in achieving this goal, the President issued 
Executive Order 13534 on March 11, 2010, establishing eight policy priorities for the NEI and 
creating an Export Promotion Cabinet.  Eight Priorities Identified in the NEI Executive Order 
Priority 1:  Exports by Small and Medium-Sized Enterprises (SMEs) 
Priority 2:  Federal Export Assistance 
Priority 3:  Trade Missions 
Priority 4:  Commercial Advocacy 
Priority 5:  Increasing Export Credit 
Priority 6:  Macroeconomic Rebalancing Priority 7:  Reducing Barriers to Trade WT/TPR/M/235/Add.1 
Page 166 
 
 
 Priority 8:  Export Promotion of Services 
While all industries are touched by the global economy, some industry sectors have greater export 
potential than others.  As articulated in the Administration’s Strategy for American Innovation , the 
challenge for the Federal Government  is to avoid attempting to pick winners and losers – an approach 
that can result in wasting resources and stifling, rath er than promoting, innovation.  Rather, the Export 
Promotion Cabinet’s goal is to ensure that innova tive and productive U.S. businesses have the tools, 
opportunities, and support to compete in the global marketplace.  For further information on the NEI 
priorities and recommendations, see the “ Report To The President On The National Export Initiative: 
The Export Promotion Cabinet’s Plan For Doubling U.S. Exports In Five Years ” issued in September 
2010, which can be found at:  (http://www.white house.gov/sites/default/files/nei_report_9-16-
10_full.pdf). 
 
10.  Some measures against recession contained dis positions that favored domestic providers of 
goods and services. Among these measures was the pr ovision of considerable assistance to certain 
sectors, particularly the financial and automobile sect ors, with dispositions aimed at impeding that 
the assistance "fled" outside the United States.  For example, in its loan agreements with the 
United States Department of the Treasury, two la rge domestic automobile manufacturers accepted to 
maintain specified levels of production in th e United States.  These loans were part of an 
85,000 million-dollar program (U.S. dollars) with the objective of "avoiding a major disturbance of 
the U.S. automobile industry, which would mean a systemic risk for the stability of the financial 
market and would have a negative effect on the United States Economy".  
• Which were the measures applied to combat  recession that favored domestic service 
providers?  In which sectors were th ey applied?  Are they still in force? 
 RESPONSE:  The Emergency Economic Stabilization Act requi red that recipients of funds from the 
Troubled Asset Relief Program have significant opera tions in the United States.  GM and Chrysler 
were the only automobile manufacturers that applie d for the Automotive Industry Financing Program.  
Treasury’s loan agreements with GM and Chrysler stipulate that a certain level of manufacturing be 
maintained in the United States.  For GM, this comm itment is effective until the later of December 31, 
2014, or the receipt by the U.S. Treasury of an amount equal to the total dollar amount of all Treasury 
invested capital.  For Chrysler, this commitment is effective until June 10, 2014 or the receipt by the 
U.S. Treasury of an amount equal to the total dollar amount of all Treasury invested capital. 
 
I. THE ECONOMIC ENVIRONMENT 
(1) National revenues and balances 
 
8.  According to the Administration, the U.S. economy must be "rebalanced" reducing its dependence 
on family spending and investment in housing as  the driving forces of economic growth, and 
increasing the part of investment not devoted to hous ing and exports in the total production.  The 
United States authorities point out that improvement of financial regulation and the lesser effect of prices of assets on wealth should place family unit savings  at levels that are closer to historic rates. In 
addition, they indicate that the United States has committed to raising the national savings rate, 
partly through the reduction of the fiscal deficit.  The authorities believe that in addition to these 
changes, if there is a successful shift towards a more balanced world growth model through the 
increase of consumption in countries with a current a ccount surplus, it will be possible to improve net 
exports even further and to guide the current deficit of the current account to its level in the mid-
nineties, approximately between 1 and 2 percent of the GDP. 
 
• What measures is the Obama Administration pl anning in order to “rebalance" the U.S. 
economy and reduce the dependence on family spe nding and housing investme nt as the driving 
forces of economic growth? 
  WT/TPR/M/235/Add.1 
 Page 167 
 
 
 RESPONSE:  The Obama Administration has enacted significant measures in four areas to rebalance 
the economy.  The Administration is seeking to in crease private personal saving, reduce the cost to 
the federal government of health care, reduce the federal fiscal deficit, and increase U.S. exports. 
 Personal saving has risen since the onset of the fina ncial and economic crisis and policies are aimed at 
further boosting saving.  The Administration’s FY2011 budget proposes requiring large employers 
who do not offer a retirement plan to automatically enroll their workers in a direct-deposit Individual 
Retirement Account on an opt-out basis.  The Administration has also proposed simplifying and 
expanding the Saver’s Credit to encourage greater saving for retirement.   
 In addition, the Administration is committed to retu rning government finances to a sustainable path 
once the recovery is assured. 
 
• In February 2010, the President signed statutory pay-as-you-go (PAYGO) legislation that 
requires any new tax cuts or mandatory spending programs to be offset by savings in the 
budget. 
 
• In March 2010, the President signed into law health  insurance reform legislation that will help 
reduce the federal fiscal deficit over the next deca de, and create an infrastructure that will help 
constrain healthcare costs over the long term.  From a fiscal standpoint, the Affordable Care 
Act will reduce the deficit by more than $100 billio n over the next ten years and by more than 
$1 trillion over the subsequent ten years, according to the Congressional Budget Office. 
 
• The President’s FY2011 Budget proposed specific steps to reduce deficits by $1.2 trillion over 
the next ten years, not counting savings associated  with the expected ramp-down of operations 
in Iraq and Afghanistan.  With those military sav ings included, the déficit reduction totals $2.1 
trillion.  The budget proposes a three-year freeze on non-security discretionary funding, 
requires the financial services industry to fully pay back the costs of the Troubled Asset Relief 
Program, allows the 2001-2003 tax cuts for house holds earning more than $250,000 to expire, 
and eliminates funding for inefficient fossil fuel subsidies. 
 As a result, the updated deficit projections from the Mid-Session Review show that the deficit will fall 
from 10 percent of GDP in FY2010 to 3.8 percent in  FY2014.  This reduction in the deficit is 
attributable to a combination of returning to fu ll employment in the medium-term, the winding down 
of the economic stimulus measures adopted in FY2009, and the policy measures proposed in the 
Budget. 
 Even after this substantial deficit reduction, however, the United States still faces unsustainable 
medium- and long-term deficits.  The President established a bipartisan commission charged with 
balancing the budget, excluding interest payments  on the debt, by 2015 and examining policies to 
meaningfully improve the long-run fiscal outlook,  including changes to address the growth of 
entitlement spending and the gap between project ed revenues and expenditures of the Federal 
Government.  The Commission is to provide the Pr esident with its recommendations by December 1, 
2010. 
 Finally, the President also set a goal of doubling exports in 5 years.  The Administration will try to 
meet this goal through the following steps:  by working to remove trade barriers abroad – both by 
enforcing our current trade agreements and by opening new market access;  by making firms 
(especially small businesses) aware of opportunities to export;  by increasing access to export 
financing;  and in general by pursuing a govern ment-wide approach to export advocacy abroad. 
 
 WT/TPR/M/235/Add.1 
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I. THE ECONOMIC ENVIRONMENT  
(3) Trade and investment performance 
(ii) Trade in services  
24.  In contrast with the persistent deficit in the trade in goods sector, United States traditionally 
registers a surplus in trade in services. In 2009,  the surplus in cross-border private services trade 
totaled 152,000 million U.S. dollars, which represen ts an increase of almost 60 percent with respect 
to 2006.  The largest surplus registered in 200 9 corresponded to royalties and licensing rights (which 
represent revenues and payments for intellectual  property rights), financial services, services 
provided to companies, professional services and t echnical services, while the largest deficit 
corresponded to insurance services.  
• What are the reasons explaining that insuran ce services had had the greatest deficit registered 
in the United States services sector in 2009? 
 
RESPONSE:  The United States has a long-standing defi cit in cross-border trade in insurance 
services, particularly reinsurance services. BEA data on insurance (primarily life, property and 
casualty, and reinsurance) are the sum of premium income adjusted for normal losses, investment 
income and auxiliary services.  The financial downt urn led to declines in the industry’s investment 
returns, contributed to increased cl aims in certain segments, such as  mortgage insurance and financial 
guarantees, and led to lower demand for propert y insurance as home values and home and vehicle 
sales declined.  
 
III. THE ECONOMIC ENVIRONMENT 
(1) Trade and investment performance 
(i) Trade in services  
12.  In the framework of the Container Secur ity Initiative (CSI), CBP officials were sent to 
participating foreign ports, where they identify high  risk containers. Officials of the host country 
inspect these containers by means of non-intrusive inspection equipment, physical inspection, or both 
means, and the CBP officials observe the inspections . According to the CBP, cargo addressed to the 
United States inspected in the foreign CSI port will not be inspected on its arrival to the United States, 
unless additional information modifies the initial risk eva luation, or the integrity of the seal of a 
container is doubtful. CSI is applied at 58 forei gn maritime ports, which co mprehend approximately 
80 percent of the cargo transported to  the United States in containers. 
 
• What risk variables does the CBP use to inspect a container in a foreign CSI port or on arrival 
to U.S. territory? 
 
RESPONSE:   CBP uses a variety of factors to determine whether or not a container is deemed high 
risk at a foreign CSI port.  CSI targeting is fo cused on weapons of mass destruction and nuclear 
material.  Different factors may play a role at a do mestic port to determine whether a container will be 
inspected for trade compliance issues, IPR issues, or other contraband or agency issues. 
 
13. The Implementation Recommendations of the 9/11 Commission Act of 2007 prohibit the loading of 
containers onto a ship going to the United Stat es unless they have been sc anned using non-intrusive 
imaging and radiation detection equipment.
16  This prohibition will come into effect on July 1, 2012, 
or on a prior date set by the De partment of Homeland Security17, which may postpone implementation 
for renewable two-year periods after certifying that at least two of the six conditions stipulated in the 
                                                      
16 Pubic Law 110-53, Article 1701. 
17 Article 1701 b) 2).  WT/TPR/M/235/Add.1 
 Page 169 
 
 
 Act are fulfilled. In order to fulfill one of these conditions , it is necessary that the "use of systems that 
are available to scan containers... will significan tly impact trade capacity and the flow of cargo".18 
 
• Does a country's possession of certifications su ch as the C-TPAT or BASC have a positive 
influence for the purposes of complianc e with the 9/11 Act of 2007? 
 RESPONSE:  CBP utilizes a risk based and layered cargo enforcement strategy that involves the use 
of advanced automated information, targeting tools, non-intrusive inspection equipment and 
partnership with foreign customs administrations and the trade community.  C-TPAT status will not 
exempt a trading partner from complying with U.S. security requirements. However, C-TPAT importer partners that have strong security measure s in place will be less likely to be examined for 
security reasons.  C-TPAT is codified in the SA FE Port of 2006 but remains a voluntary program. 
 
III. TRADE POLICES AND PRACTICES, BY MEASURES 
(1) Measures directly affecting imports 
(iv) Tariff Schedules (b) MFN customs rates applied  
29. Like only a few other members of the WTO, th e United States apply customs duties based on the 
fob value, at the point of export, rather than based on the cif value at the point of entry.  The following 
paragraphs are based on the United States Harmonized  Tariff Schedule of 2009.  Owing to the large 
number of non ad valorem duties contained in the Tar iff Schedule, it has not been possible to use the 
2010 Tariff Schedule, as there are no unit prices avail able as yet.  Nevertheless, it is not likely that it 
will imply a large difference in th e average customs duty levels. 
 
• Why does the U.S. apply its customs duties based  on the fob value at the point of export, 
instead of based on cif value at the point of entry? 
 
RESPONSE:   This has been the practice of the United States since prior to the conclusion of the 
GATT.  As a permitted method, the United States has not revisited the issue. 
 
III. TRADE POLICES AND PRACTICES, BY MEASURES 
(1) Measures directly affecting imports 
(v) Other charges affecting imports 
  
37 . Imports continue to be subject to a me rchandise processing fee and a port user fee.  The 
merchandise processing fee is applied to imports valued  in more than 2,000 U.S. dollars.  The fee is 
fixed at 0.21 percent of the imports value;  the legal minimums and maximums are 25 and 485 U.S. 
dollars.  Imports which can enjoy p referential treatment in virtue of the U.S. free trade agreements   
(with the exception of those with Jordan and Morocco), the Andean Trade Promotion and Drug 
Eradication Act (ATPDEA) and the dispositions of the African Growth and Opportunity Act (AGOA) 
relating to textiles and clothing are exempt. Imports  originating in Israel, the countries that are 
beneficiaries of the Basin Economic Recovery Act and the less developed countries are also exempt, 
indecently of whether they may or not enjoy pr eferential treatment.  The application of the 
merchandise processing fee has been extended to  October 2014, following the adoption of the 
American Jobs Creation Act of 2004. 
 
• Was the merchandise processing fee recognized by  the U.S. as “Other Duties and Charges” 
for the purposes of GATT dispositions? 
 
 
                                                     
 
18 Article 1701 b) 4) E). WT/TPR/M/235/Add.1 
Page 170 
 
 
 RESPONSE:   No. 
 
III. TRADE POLICES AND PRACTICES, BY MEASURES 
(1) Measures directly affecting imports 
(vi) Special trade measures Antidumping  and countervailing duties 
 
50.  In virtue of the Deficit Reduction Act of 2005, which revoked the Byrd Amendment, the CBP has continued to distribute   an tidumping and countervailing duti es established with regard to 
merchandise imports made and declared prior to Oc tober 1, 2007 to the members of the affected 
national producers, who supported the petition of investigation into matters of antidumping or 
countervailing duties.  The CBP distributed 264 million U.S. dollars in the fiscal period of 2007, 180 
million U.S. dollars in that of 2008, and 248 million U.S. dollars in that of 2009.
19  The Federal Court 
of Appeals revoked the decision made by the United St ates Court of International Trade that what has 
been called the "petition support requirement" contained in the Byrd Amendment was not 
constitutional.  With respect to this requirement, if a domestic company publicly declared its support 
for imposing an order in matters of antidumping or countervailing duties, it then had a right to 
receive part of the funds collected as a result of the order.20  At the end of 2009, the Supreme Court of 
the United States was asked to review this decision.  
• Is there an estimate of when the Supreme Court will issue its decision? 
 
RESPONSE:   On May 17, 2010, the Supreme Court of the United States denied the plaintiff’s 
petition for certiorari, as a result of which the decision  of the Court of Appeals for the Federal Circuit 
is final.  No further review process is available to any party.  
• Have the United States evaluated the impact of the  “petition support requirement” contained 
in this amendment on the quantity of initiated antidumping investigations?  
 
RESPONSE:  No. 
 
55.  Of the 254 orders regarding antidumping duties and cancellation agreement in force in 
December of 2009, 57 approximately percent were in  force for less than 10 years, 28 percent between 
10 and 20 years, and 15 percent over 20 years. The average duration of an antidumping duties order 
is between 9 and 10 years. 
 
56.  Antidumping duties orders which have been in  force between 25 and 36 years affect the following 
products:  printed cotton and polyester Grieg fabr ics, chloropicrin, potassium permanganate and 
barium chloride from China;  small-diameter car bon steel pipes from Chinese  Taipei;  sorbitol from 
France;  plastic adhesive tape from Italy;  and polychloroprene rubber and st eel bars for prestressed 
concrete from Japan. 
 
According to the information provided by the Se cretariat of the WTO, 43% of the antidumping 
measures in effect in the S in the year 2009 have been in effect fo r over 10 years, with recorded cases 
of some antidumping orders in effect for over 25 yea rs. While it is true that the WTO Antidumping 
Agreement foresees the possibility that antidum ping measures are indefinitely renewed for 
consecutive periods of five years, would they not consider it advisable to introduce limitation on the 
dispositions of that agreement in order to avoi d the indefinite application antidumping measures? 
 
                                                     
 
19 CBP information online, " Continued Dumping and Subsidy Offset Act of 2000 ".  Consulted at: 
http://www.cbp.gov/xp/cgov/trade/pr iority_trade/add_cvd/cont_dump. 
20 SKF USA, Inc. v. United States, 556 F. 3d 1337 (Fed. Cir. 2009).  WT/TPR/M/235/Add.1 
 Page 171 
 
 
 RESPONSE:  Under U.S. law, and consistent with the WTO Antidumping Agreement, antidumping 
duties remain in effect for as long as and to the ex tent necessary to counteract injurious dumping.  
Five years after the imposition of the duties, the Department of Commerce (DOC) and the U.S. International Trade Commission (USITC) undertake s unset reviews to determine whether revocation 
of the antidumping duty order would be likely to lead to the continuation or recurrence of dumping 
and injury.  If the determinations by both agencies ar e affirmative, the order remains in place;  if the 
determination by either DOC or the USITC is ne gative, the order is revoked.  These reviews are 
conducted every five years for the duration of the order.  The United States had terminated 
approximately 50 percent of its measures as a result of sunset reviews.  The United States does not 
agree that the introduction of arbitrary limits on the duration of duties would be prudent, as it 
potentially would require the investigating authority to ignore evidence of injurious dumping.    
III. TRADE POLICES AND PRACTICES, BY MEASURES 
(1) Measures directly affecting imports 
(viii) Technical legislation and regulations  
77.  During the period that is the object of anal ysis, no important changes have been made in the 
legal framework regulating the preparation of technical regulations and compliance evaluation 
procedures on the federal level.  Technical re gulations and compliance evaluation procedures are 
usually adopted by administrative decision of fe deral agencies, based on the regulatory authority 
delegated by the Congress.  However, the latter may define specific parameters for the technical 
regulations or compliance evaluation procedures,  or even establish technical regulations or 
compliance evaluation procedures through legislation.  For the case of technical regulations and compli ance evaluation procedures approved on a legislative 
level, how is the procedure of notifying the Secret ariat of Technical Barriers to Trade of the WTO 
carried out, and what treatment are the received observations is given? 
 
RESPONSE:  Proposed legislative measures have been notified to the WTO following the same 
procedure as for proposed regulatory measures.  For proposed legislative measures, any comments 
received have been conveyed to the legislative body in question so that the legislators can take the 
comments into account.  
78.  The states may also adopt technical regulations  or compliance evaluation procedures in their 
spheres of competence, which are all those wh ich are not expressly encompassed by federal 
legislation.  The states can delegate their power to  institute technical regulations or regulation 
compliance evaluation procedures in regional, lo cal or municipal governments.  Sub-federal 
measures notified to the WTO during the period unde r analysis refer to environmental protection, the 
preservation of the life and health of  the people, and consumer safety. 
 
• What is the mechanism of guaranteeing that the technical regulations or compliance 
evaluation procedures issued by the states do not contravene dispositions of federal scope? 
 
RESPONSE:   Federal laws enacted by the U.S. Congress and regulations issued by federal agencies 
may either expressly or implicitly preempt State law.  Express statutory preemption occurs when 
Congress enacts statutory language that explicitly prohibits States from adopting or maintaining any 
regulation that differs from the federal regulations.  Federal law may also implicitly preempt State law 
if (1) Congress has fully “occupied” a particular fiel d of regulation in question;  or (2) a State law 
conflicts with any federal la w or interferes with the objectives of a federal law. 
 
The main mechanism for addressing potential federal-Stat e conflicts is review by U.S. federal courts: 
either the U.S. Department of Justice or a privat e party can sue a State that it believes has enacted a 
law or regulation that has been “preempt ed” by the U.S. federal government.   WT/TPR/M/235/Add.1 
Page 172 
 
 
 91 . In virtue of the CPSIA, the Consumer Product Safety Commission, advised by the United States 
Customs and Border Protection Service (CBP), must p repare a "method of risk evaluation" to identify 
the shipments meant for imports that may contain consumer products that do not comply with the 
importing dispositions applie d by the Commission.  In addition,  the Commission must elaborate a 
plan for the exchange of information and the impro vement of coordination with the CBP. In the 
framework of the application of the risk evaluati on method, U.S. authorities point out that they do 
everything possible to identify manufacturers and impor ters who "repeatedly contravene" the federal 
laws of consumer product safety.  The Commission has devoted full time staff to the Commercial 
Targeting Analysis Center, an entity in which various organisms coll aborate, created by the 
Department of Homeland Security and the CBP to foment the exchange of information and the 
coordination of the implementation of dispositions  regarding imports between the competent federal 
agencies.  How is it guaranteed that the procedures for ver ifying compliance with the Consumer Product Safety 
Improvement Act (CPSIA) at the border do not a ffect imports of products coming from other 
countries?  
RESPONSE:  If products meet the CPSIA requirements, importers should not encounter any 
problems at the border.  
 
III. TRADE POLICES AND PRACTICES, BY MEASURES 
(1) Measures directly affecting imports 
(ix) Sanitary and Phytosanitary Measures 
 99.  Furthermore, the appropriate state level agencies may formulate and implement their own 
sanitary and phytosanitary measures.  According to federal legislation, the states are authorized to 
establish sanitary and phytosanitary measures as long as  they are compatible with the federal norms 
and regulations, as well as with the obligations imposed by the pertinent disciplines of the WTO. 
 
• What are the legal mechanisms that guarantee t hat the SPM measures established by the states 
conform with the federal regulations  and the obligations of the WTO? 
 
RESPONSE:   Various regulatory agencies, as well as the Department of Justice and the USTR, 
review state laws when appropriate to do so.  Part of that review may entail an analysis of whether the 
state requirement conflicts with a federal one.  In a situation where a conflict does exist, federal law 
will prevail.  100.  On the federal level, the establishment of sanitary and phytosanitary measures is subject to the 
following legislation:  the Federal Food, Drug and Co smetic Act;  the Food Quality Protection Act;  
the Federal Meat Inspection Act;  the Phytosani tary Protection Act;  the Federal Insecticide, 
Fungicide, and Rodenticide Act, and the Toxic Subst ances Control Act. In general, the sanitary and 
phytosanitary measures are subject to the same  administrative procedures with regard to the 
formulation of standards as the technical regulations (see above). 
 
What is the applicable legal procedu re for modifying a federal act?   
 
RESPONSE:  U.S. statutes are modified through the U.S.  legislative process.  Information on the 
process  can be found on the  following web s ite:  http://thomas.loc.gov/home/lawsmade.toc.html.  
 103.  The members of the Sanitary and Phytos anitary Measures Committee have expressed the 
United States specific concerns with regard to a cert ain number of questions.  Specifically, China has 
expressed a concern regarding Christ mas trees and wooden crafts articles, potted dwarf plants with a 
culture medium, cooked poultry products, the delays in  the processes of risk eva luation with respect to  WT/TPR/M/235/Add.1 
 Page 173 
 
 
 apples, and some issues to do with catfish. In add ition, the European Union has expressed concerns 
with respect to the restrictions on the impor t grade A dairy products, and Brazil has expressed 
concern regarding the prescription of carrying out an economic analysis which appears in the 
proposals of amending the SPS regulations and rest rictions to the imports of pork and beef.21  The 
United States has also taken part in the SPS Committee to announce changes or projects of 
modification of its policies, and to express its ow n concerns regarding the measures adopted by other 
Members. 
 
What is the procedure through which the U.S. hand les and follows up on the trade concerns presented 
by other trade partners?  
RESPONSE:  Trade concerns presented by other trading partners are reviewed by an interagency 
team of SPS experts from numerous federal agencies on a weekly basis for review, comment and possible action.  It is also common for there to be direct engagement between U.S. officials and counterparts from trading partners who may present specific concerns. 
 
III. TRADE POLICES AND PRACTICES, BY MEASURES 
(1) Measures directly affecting imports 
(ix) Sanitary and Phytosanitary Measures 
(a) The Animal and Plant Health Inspection Service (APHIS) 
 
111.  APHIS evaluates the plague-free condition of a zone applying the criteria of the IPPC standards 
for the determination of plague-free zones, which has  been referenced in th e pertinent regulations.
22 
In December of 2009, the APHIS had 120 risk anal yses in progress in 41 countries or regions.23 
Based on the results of the risk eval uation, the APHIS can authorize im ports subject to the fulfillment 
of sanitary and phytosanitary standards.  The great er part of these is published as regulations, and 
should correspond to the procedural requirements sti pulated in Article ix) of the Administrative 
Procedure Act.  No limit for the process of fi rst-time approval of vegetable, animal and derived 
products has been established in the legislation. Normally, this process lasts between two and three 
years.  
• What is the average period of time in winch the APHIS carries out a risk analysis? 
 
RESPONSE:   The time required for a science based, tr ansparent review is largely depending upon 
the nature of the market access request and the ava ilabity of scientific evidence to support the request, 
among other factors.  
III. TRADE POLICES AND PRACTICES, BY MEASURES 
(1) Measures directly affecting imports 
(ix) Sanitary and Phytosanitary Measures  
(b) The Food Safety and Inspection Service (FSIS)  
113.  The FSIS continues to use the Hazard A nalysis and Critical Control Point (HACCP) system, 
which considers "optimal framework for building sci ence-based process control to prevent food safety 
hazards in food production systems".
24  The United States has recognized the equivalence of 34 
foreign systems with the U.S. systems of regulatin g meat, poultry and/or egg products.  Only meat, 
                                                      
21 WTO documents G/SPS/R/45, 46, 49, 51, 53, 54, 55 and 56. 
22 Title 7 of the United States Code of Federal Regulations, Article 319.5. 
23 USDA APHIS (2009). 
24 Federal Register , 61 FR 38806, July 25, 2009. WT/TPR/M/235/Add.1 
Page 174 
 
 
 poultry and egg products coming from facilities cer tified by the competent authority of the foreign 
country recognized by the FSIS may be imported into the United States.25 
 
• What is the average time it takes the FSIS to  recognize the equivalence of the system of 
another country interested in exporting meat, poultry or egg products?   
 
RESPONSE:  The time required for a science based, transp arent review to determine if a trading 
partner has an inspection system that provides an eq uivalent level of protection may vary significantly 
depending on numerous factors, including how quickly the applicant coutnry completes the 
application process and what is f ound during FSIS audits, among others. 
 
• What is the applicable procedure for the import of pork? 
 
RESPONSE:  There are many different processes involved with importing animals and animal 
products into the United States.  The United States Department of Agriculture (USDA), Animal and 
Plant Health Inspection Service (APHIS), Veteri nary Services (VS) regulates the importation of 
animals and animal-derived materials to ensure  that exotic animal and poultry diseases are not 
introduced into the United States. 
 Generally, a USDA veterinary permit is needed for materials derived from animals or exposed to animal-source materials.  Various other animal  materials which require a permit include dairy 
products (except butter and cheese), and meat produc ts (e.g., meat pies, prepared foods) from 
countries with livestock diseases exotic to the U.S.  
 
FSIS is responsible for assuring that U.S. impor ted meat, poultry and egg products are safe, 
wholesome, unadulterated, and pr operly labeled and packaged. Meat, poultry and egg products 
exported from another nation must meet all safety st andards applied to foods produced in the U.S. 
However, under international law, food regulat ory systems in exporting countries may employ 
sanitary measures that differ from those applied domestically by the importing country.  
 Detailed information regarding U.S. import practi ces and regulations are available at USDA.gov. 
 
116.  The FSIS reinspects all the shipments of meat, poultry and egg products at the border, after they 
have been examined by the Cust oms Border Protection Service and the APHIS.  This process is called 
"reinspection" because imported products have alre ady had to pass through an equivalent process in 
the country of export.  In most cases, reinspection cons ists in routine controls, basically to ensure that 
the shipment comes from a certified establishment of  an authorized country.  If the shipment is not 
properly certified, the entry of the product into th e United States may be impeded.  The Automated 
Import Information System (AIIS) determines wh ich shipments should be the object of a more 
exhaustive reinspection, which may include a physi cal inspection, sample taking and testing. 
 
• What makes up the reinspection procedure carried  out at the border by the FSIS on all meat, 
poultry and egg product shipments? 
 
RESPONSE:  After an incoming shipment has met U.S. Customs and Border Protection and APHIS 
requirements, the shipment must be reinspected by FSIS at an approved import inspection facility.   
 FSIS import inspectors first check the documents to assure the shipment is properly certified by the 
foreign country.  Inspectors next examine each sh ipment for general conditio n and labeling and then 
                                                     
 
25 To see the list of authorized facilities, please c onsult the FSIS information online. Consulted at the 
following web address:  http://www.fsis.usda.gov/regu lations_&_policies/Index_of_Certified_Countries/index. 
asp [March 2010].  WT/TPR/M/235/Add.1 
 Page 175 
 
 
 conduct the inspection assignments.  More informa tion is available at:  http://www.fsis.usda.gov/ 
Regulations_&_Policies/fsis_i mport_reinspection/index.asp. 
 
• In the case of pork meat and sub-products, what procedure is used at the border? 
 
RESPONSE:   The procedure is outlined above, however , more information is available at:  
http://www.fsis.usda.gov/regulations/Import_Checklist/index.asp. 
 
III. TRADE POLICES AND PRACTICES, BY MEASURES 
(3) Other measures affecting trade and investment (ii) Government corporations, public companies and privatization 
 
179.  Congress has created "government corporations " with the objective of reaching certain public 
policy goals. Section 15 of the U.S. Code defines a government corporation as  "a corporation owned 
or controlled by the Government of the United States".
26  The Government Corporation Control Act 
stipulates that the term "government corpora tion" is understood to mean "mixed-ownership and 
wholly-owned government corporations".  This Act enumerates 28 entities, among them the Federal 
Deposit Insurance Corporation, the Tennessee Valley Authority and th e Federal Prison Industries of 
the Department of Justice, which are subject to budgetary, auditing and de bt-management practices 
stipulated in this Act.27 
 
Is it possible to discuss the objective of the " government corporations" created by the Congress 
further, as well as the sectors in which they operate ? Are they granted some degree of exclusivity or 
specific benefit?  
RESPONSE:  The U.S. Congress has created certain governme nt corporations to perform specific 
and limited public functions.  Each government co rporation is designed to perform a different 
function;  one cannot make general statemen ts on their objectives or modes of operation.  
 
III. TRADE POLICES AND PRACTICES, BY MEASURES 
(3) Other measures affecting trade and investment (iii) Public contracting 
 
186.  The objective of the federal government's cont racting policy is to assure that there is an open 
and competitive process, excepting cert ain preferences for domestic product.  In March of 2009, the 
President published a memorandum which commissions  federal agencies to eliminate wastefulness, 
fraud and abuse, and maximize the profitability of their contracts.
28  According to the memorandum, 
there have been reports indicating that "noncompetit ive and cost-reimbursement  contracts have been 
misused, resulting in wasted ta xpayer resources, poor contractor performance, and inadequate 
accountability for results". 
 
187.  In the memorandum, agencies are directed to:  improve the effectiveness and efficiency of the 
federal purchasing system:  strengthen the contra ct management and internal oversight;  maximize 
the use of competitive  in procu rement processes;  improve contact structure;  increase technical 
knowledge of the individuals in charge of procurement;  clarif y the function of outsourcing. The 
                                                      
26 5 USC 103. 
27 31 USC 9101. 
28 White House online information.  " Memorandum on Government Contracting ", March 4, 2009. 
Consulted at:  http://www.whitehouse.gov/the_pr ess_office/Memorandum-for-the-Heads-of-Executive-
Departments-and-Agencies-Subject-Government. WT/TPR/M/235/Add.1 
Page 176 
 
 
 Office of Management and Budget (O MB) has published guidelines with respect to these priorities for 
all government levels.29 
 
What are the main results of the publication of  the Presidential memorandum in March of 2009, 
which directs federal agencies to eliminate wa stefulness, fraud and abuse, and maximize the 
profitability of their contracts?  
RESPONSE:   The Office of Management and Budget (OMB) has issued a report on the results of the 
publication of the March 29, 2009 Presidential memorandum.  See Report at:  
http://www.whitehouse.gov/sites/default/files/omb/ assets/blog/Update_on_Cont racting_Reforms.pdf.  
OMB also issued several memoranda to addr ess and increase agencies’ use of competition.  See 
Memoranda at:  http://www.whitehouse.gov/omb/proc urement_index_comp_contracting/.  OMB is 
required by Section 864(d) of the Duncan Hunter National Defense Authorization Act for Fiscal Year 
2009 (Public Law 110-417) to report annually on the use of cost-reimbursement contracting by 
executive agencies.  The FY 2009 report is ava ilable at:  http://www.whitehouse.gov/sites/default/ 
files/omb/assets/procurement/cos t_contracting_report_031809.pdf. 
 
• Are there reports regarding the implementation of the guidelines of this memorandum on the 
part of federal agencies? 
 RESPONSE:   The Presidential memorandum instructs ag encies, with guidance from OMB, to focus 
on five priorities to improve the effectiveness and efficiency of the federal acquisition system.  
Priorities include:  (1) strengthen contract manageme nt and internal review practices;  (2) maximize 
the use of competition in contracting;  (3) improve how  contracts are structured;  (4) build the skills of 
the acquisition workforce;  and (5) clarify the role of outsourcing.  On July 29, 2009, the 
Administration issued guidance to the agencies se tting a net savings target of $40 billion a year 
through better acquisition and acquis ition-related program practices to eliminate wastefulness, fraud 
and abuse, and maximize the profitability of their c ontracts. Accordingly, each  agency was required to 
develop a plan to save 3.5 percent of baseline contra ct spending in FY 2010 and a further 3.5 percent 
in FY 2011. OMB issued acquisition guidance and re ports to the agencies to improve contracting 
practices at the agencies.  To see th e guidance and reports issued visit 
http://www.whitehouse.gov/omb/procurement_index_gov_c ontracting/.  OMB also issued a report on 
the agencies acquisition and cont racting improvements efforts.  See Report at 
http://www.whitehouse.gov/sites/default/files/omb/ assets/procurement_gov_c ontracting/Acquisition_
Contracting_Improvement_Plans.pdf.  189.  Federal contracting is decentralized.  Thr ough the Office of Federal Procurement Policy, the 
Office of Management and Budget provides orient ation and general directives regarding public 
contracting policies, regulations and procedures whic h must be applied at all government levels. The 
Office of Federal Procurement Policy and other fe deral agencies disclose information regarding the 
federal contracting system through the Acquisition Central, and regarding p ublic tender opportunities 
on the Federal Business Opportunities (FedBizOpps) website.
30  Federal agencies notify contract 
award to the Federal Procurement Data  System, which is of public access.31  Sub-federal 
governments have their own procurement agencies.  Does the FedBizOpp system function only as a point of access to information, or does it also permit 
submission of electronic offers? 
                                                     
 
29 OMB online information, " Briefing Room: Presidential Memorandum on Government Contracting ". 
Consulted at:  http://www.whitehouse.gov /omb/procurement_index_gov_contracting. 
30 Acquisitions Central, consulted at:  http:// www.acquisition.gov/;  and FBO, consulted at:  
http://www. fbo.gov/. 
31 FPDS.  Consulted at:  http://www.fpds.gov/.  WT/TPR/M/235/Add.1 
 Page 177 
 
 
 RESPONSE:  The agency contracting officers are required to send a notice of a procurement 
opportunity to the Government Point of Entry at http://www.fedbizopps.gov/.  The Fedbizopps system 
is a web-based portal that allows  the Government buyer to post a nd the vendor to review Federal 
Procurement Opportunities (solicit ation or request for proposals (RFP) over $25,000 in value.  
Electronic offers/proposals are accepted by the Gove rnment and are generally submitted to the agency 
buyer as stated in the solicitation or RFP.  
III. TRADE POLICES AND PRACTICES, BY MEASURES 
(3) Other measures affecting trade and investment 
(iv) Grants and other government aid (c) Support to the energy sector 
 
209.  The ARRA establishes or expands incentives w ith regard to energy for companies and public 
services which produce or use renewabl e energy.  These incentives are us ually granted in the form of 
tax rebates for the production of electricity employ ing wind energy, low-emission coal, geothermal 
energy, biomass, solar energy, and combined systems of thermal and electric energy.  The ARRA is 
responsible for distributing 2,300 million U.S. dol lars in tax rebates for the production of clean 
energy, and approximately 16,000 million U.S. doll ars to payments for renewable energy generation 
instead of tax rebates.  
• Can you discuss the benefits offered to pub lic companies and services that produce or use 
renewable energies? 
 
RESPONSE:  The ARRA offered incentives to companies for producing  renewable energy, and the 
primary mechanism for delivering that incentive w as through a tax rebate option established under the 
pre-existing Production Tax Credit.  The ARRA also  offered incentives to state and local government 
agencies (referred to as “public services” in paragraph 205) for using  renewable energy.  The primary 
mechanism for delivering that incen tive is through the State Energy Program and the Energy Efficient 
Conservation Block Grant program, which provide grants to state and local governments that may 
then fund incentives for the use of  renewable energy such as tax cred its, grants, and revolving loans. 
 
III. TRADE POLICES AND PRACTICES, BY MEASURES 
(3) Other measures affecting trade and investment 
(vi) Competition policy  
(a) General policy and characteristics  
245.  The DOJ and the FTC are revising the Hori zontal Merger Guidelines, which describe the 
standards regarding merger review. In the framewo rk of this initiative, five public workshops were 
held between December 2009 and January 2010.  Acco rding to the head of the Antitrust Division of 
the DOJ, the workshops revealed the existence of differences between curren t practices and the 
Guidelines.
32  In April of 2010, the FTC published the Guidelines revision project in order to receive 
public comments.33 
 
What are the main modifications planned to be included in the Horizontal Merger Guidelines, and 
what have been the principal public comments? 
                                                      
32 The DOJ online information, " An Update on the Review of the Horizontal Merger Guidelines ", 
comments of the Assistant Attorney General, Christine A. Varney, prepared for the final workshop of the 
Horizontal Merger Guidelines review project, January 26, Washington, D.C. Consulted at: 
http://www.justice.gov/atr/pub lic/speeches/254577.htm. 
33 The FTC online information, " Federal Trade Commission Seeks Vi ews on Proposed Update of the 
Horizontal Merger Guidelines ", February 4, 2010. Consulted at:  http://www.ftc.gov/opa/2010/04/hmg.shtm. WT/TPR/M/235/Add.1 
Page 178 
 
 
 RESPONSE:   The revised Horizontal Merger Guidelines have now been finalized.  We refer Costa 
Rica to the recent announcement of the final Guid elines and to the Guidelines themselves for the 
relevant information.  See “Department of Justice and Federal Trade Commission issue Revised 
Horizontal Merger Guidelines,” Press Rele ase, August 19, 2010;  available at:  
http://www.justice.gov/atr/public/press_releases/2010/261642.htm. 
 
247.  In November of 2009, the DOJ and the FTC  concluded a Memorandum of Understanding with 
Russia's Federal Anti-monopoly Service .  This is the only bilateral antitrust agreement made by U.S. 
antitrust agencies during the analyzed period.  Th e United States also have cooperation agreements 
in matters of competition with Germany, Australia , Brazil, Canada, Israel, Japan, Mexico and the 
European Union.34 
 
• What is the scope of the Memorandum of U nderstanding with Russia's Federal Anti-monopoly 
Service?  
 
• What are the results obtained with its implementation?  
 RESPONSE:   The 2009 MOU between the U.S. Depart ment of Justice, the Federal Trade 
Commission and Russia’s Federal Anti-Monopoly Service focuses on general and technical cooperation and on regular communication between the tw o countries’ agencies.  It is premature to try 
to summarize “results” from this new understanding, other than to note that it is working as intended. 
 
III. TRADE POLICES AND PRACTICES, BY MEASURES 
(3) Other measures affecting trade and investment 
(i) The framework of corporate legislation and foreign investment  (vi) Completion policy  
(b) Exemptions 
 248.  Various federal acts contain limited exempti ons from the legislation regarding competition 
(figure III.5).  According to the Antitrust Modern ization Commission, a bipartisan commission set up 
by the Congress functioning between 2004 and 2007, these exemptions may be harmful for the U.S. 
economy and, in the long-term, reduce competition in the production sectors that attempt to obtain 
them.
35 
 
• What measures have been taken to avoid the harmful effects of the exemptions from 
competition legislation on the U.S. economy and competitiveness? 
 
RESPONSE:  The United States notes that the great majority of its economy remains subject to the 
Federal antitrust laws despite the existence of vari ous antitrust exemptions and immunities.  We will 
remain alert to possible opportunities to modify or repeal specific exemptions.  Moreover, the 
enforcement agencies and the courts are likely to  continue to construe these exemptions and 
immunities carefully and narrowly. 
  
 
  
 
 
                                                     
 
34 The DOJ online information, " Antitrust Cooperation Agreements ". Consulted at:  
http://www.usdoj.gov/atr/public/international/int_arrangements.htm. 
35 Antitrust Modernization Commission  (2007).  WT/TPR/M/235/Add.1 
 Page 179 
 
 
 IV. PERFORMANCE IN SELECTED SECTORS 
(1) Agriculture 
(ii) Agricultural policies 
(a) Section I ( Commodity Programs) Optional  Program based on average crop revenues 
 obtained (ACRE) 
 
14.  The Farm Bill of 2008 introduced the op tional program based on the average crop revenues 
election (ACRE) as an alternative to counter-cyc lical payments.  The ACRE Program payments are 
also counter-cyclical, but they are based on reve nues (state-based yield and market prices in 
comparison with historic yield and prices).  On  opting for the ACRE Program, direct payments are 
reduced by 20 percent and loan interest by 30 percent.  As a total, 32,528,628 acres (12.8 percent of 
the total base surface) of 128,620 agricultural co ncerns (7.7 percent of all those registered) have 
joined the program. 
 
• Considering the high level of international co mmodity prices, it is expected that producers 
transfer from the price-based counter- cyclical program to ACRE Program. 
 
• To date, what percentage of all prod ucers have transferred to the ACRE Program? 
 
RESPONSE:  Producers were first eligible to sign up for ACRE program for the 2009 crop year, and 
approximately 7.7% of farms enrolled in the Di rect, Counter-Cyclical Farm and Acre Program 
enrolled in ACRE representing 12.8% of total base acr es.  These are percentages of farms enrolled in 
the program, and of program base acres, and not the percentage of all farms or farmers.  Program enrollment data for 2010 is not yet available.    
• Would the producers who decide to transfer to the ACRE Program have the option of 
returning to the price-based counter-cyclical program?  
 RESPONSE:  Once a producer elects to participate in th e ACRE program, that producer can no 
longer participate in the CCP program for the remainder of the Farm Bill. 
 
IV. PERFORMANCE IN SELECTED SECTORS 
(1) Agriculture 
(ii) Agricultural policies 
(c) Title III (Trade)  Export grants 
 
21.  The Dairy Export Incentive Program offers  subsidies (bonuses) to dairy product exporters 
through the CCC. In May of 2009 the program was announced with a campaign started on July 1, 
2008 with the publication of invitations to presen t offers so as to receive bonuses for exports of 
diverse quantities of powdered skim milk, cheese or butterfat. Another program announcement was 
made in on July 6, 2009 for the initiation of the ca mpaign of July 1 of 2009. The global export limits 
within the framework of the incentive program were 19,235 tons of butterfat, 68,201 tons of powdered 
skim milk, and 3,030 tons of cheese.  The aid to exports per exported unit varies depending on each 
offer.  Once the offer is received, the USDA/CCC makes a decision based  on the information provided 
by the exporter regarding the export sale contract .  The decision of the USDA/CCC is based on an 
evaluation of both the export and domestic markets for this product.  According to the authorities, the 
bonuses of the incentive program have the sole obj ective of offsetting the difference between the  
export market and the domestic market.  
 What is the treatment given to the Dairy Ex port Incentive Program – which provides subsidies 
(bonuses) to dairy products exporters — when the mu ltilateral commitment of eliminating subsidies to 
exports comes into force? WT/TPR/M/235/Add.1 
Page 180 
 
 
 RESPONSE:  Throughout the Doha negotiations, the United States has been a strong advocate of the 
multilateral elimination of the agricultural export su bsidies listed in (Article 9 of the Agreement on 
Agriculture), including those currently permitted to  the United States under the existing Agreement on 
Agriculture (e.g. the export subsidies allowed fo r the Dairy Export Incentive Program).  Once the 
results of the Doha negotiations come into force, the United States will abide by the new 
commitments on agricultural export subsidies. 
 23.  The majority of agricultural products have the right to participate in the Export Credit Guarantee 
Program (GSM-102).  In the fram ework of this program, the USDA guarantees the credits granted by 
private banks in the United States to approved fo reign banks for the purchase of agricultural products 
by foreign entities.  The rates are based on the count ry risk of the borrowing country, the type of loan 
and other factors. As of September 30, 2009, exporters have registered 5,300 million U.S. dollars (although in May of 2010, the figure decreased, owing to the cancellation of some guarantees).  The 
percentage of default (defined as the compensations for nonpayment during the whole period during 
as a percentage of the disbursements) was 5.33 p ercent.  The budget cost estimated for the GSM-102 
in the fiscal year 2010 is -1.21 percent, that is to say that it is expected that the interest plus the 
compensations for nonpayment will exceed the compensation payments   over the net present value. 
 
• How does the Export Credit Guarantee Program (GSM-102) work?  
 RESPONSE:  It should be noted that percent default rates cited are estimates for budgetary purposes 
and are based on assumptions about historical defau lt rates.  The actual default rates are not known 
until the programs are completed and the last guara nteed loans repaid.  A fact sheet describing how 
the GSM 102 program works can be found at:  http://www.fas.usda.gov/info/factsheets/gsm102-03.asp. 
 
• What products have been be nefited by this program? 
 
RESPONSE:  Products that are eligible for the program can be found at 
http://www.fas.usda.gov/excredits/gsmcommodities.html .  Specific activity under the program can be 
found at http://www.fas.usda.gov/excredits/Monthly/2010/10_09_01.pdf.  IV. DEVELOPMENT OF SOME INDUSTRIES (2) Financial Services 
(iv) Financial regulatory reform  
69.  On June 17, 2009, the U.S. government announ ced the details of its proposal for global financial 
reform, intended to remedy certain regulatory gaps  that were revealed during the financial crisis.
36  
This white paper was quickly followe d by a Bill for implementation. 
 
Could further information be provided as to the improvements that the Obama Administration will 
pursue to improve financial regulations? 
 RESPONSE:  The Dodd–Frank Wall Street Reform and Consumer Protection Act (Public Law 111-
203, H.R. 4173) was signed into law by President Barack Obama on July 21, 2010.  This legislation establishes new authorities and supervisory directi on with regard to the U.S. financial markets 
including:  banking, securities, insurance, deriva tives, executive compensation, consumer protection 
and corporate governance.  Following the bill’s p assage, the regulatory implementation phase began. 
While few provisions of the bill are effective immedi ately (for example, the liquidation authority), in 
general the legislation will become effective in stages.  The legislation is complex and requires 
                                                     
 
36 See Financial Regulatory Reform - A New Foundation:  Rebuilding Financial Supervision and 
Regulation .  WT/TPR/M/235/Add.1 
 Page 181 
 
 
 approximately 250 rulemakings and 70 studies.  Ov er the next 6 to 18 months,  regulators will 
undertake an intense period of rulemaking.  Th e rulemaking process will expand upon and flesh out 
the parameters of the new regulatory framework.  The resulting regulatory regime will contain both 
new elements and elements drawn from current U.S.  financial regulation. In addition, regulatory 
implementation will likely be a dynamic process.   Rulemaking will include opportunity for public 
comment and all interested parties are invited to submit comments.  Interested persons may submit 
comments electronically through the Federal eRulemak ing Portal at www.regulations.gov.  Electronic 
submission of comments allows the commenter maximum time to prepare and submit a comment, 
ensures timely receipt, and enables the comments to be made available to the public.  Comments 
submitted electronically through the www.regula tions.gov website can be viewed by other 
commenters and interested members of the public. 
 
IV. DEVELOPMENT OF SOME INDUSTRIES 
(4) Telecommunications 
(iii) Authority in charge of the policy and the regulations  
118.  The FCC also proposed the preparation of rule s to guarantee the neutrality of networks, i.e. all 
internet content will be equally accessible and th ere will be no discrimination against different 
content.
37 
 
Could further information be provided regarding th e FCC proposal to guarantee the neutrality of the 
networks, as well as the status of this proposal? 
 
RESPONSE:  On October 22, 2009, the Federal Communi cations Commission (FCC) voted to seek 
public input on draft rules that would codify a nd supplement existing principles to safeguard the 
Internet’s openness.  This process is intended to  secure and protect the many economic and social 
benefits of the open Internet by preventing anyone from restricting the free flow of lawful content and 
applications online. 
 
The open Internet NPRM provides a starting point for a many-month conversation about the open Internet, by framing the key issues and asking the pub lic for comment on proposed draft rules.  At the 
end of this process, the Commission will evalua te all comments it receives and, based on those 
comments and its own analysis, may choose to i ssue binding rules to preserve a free and open 
Internet. 
 
On September 1, 2010, the FCC released the Open  Internet Public Notice, which seeks comment on 
two under-developed issues in the Open Internet pr oceeding.  The first issue is the relationship 
between open Internet protections and services that are provided over the same last-mile facilities as 
broadband Internet access service (commonly calle d ‘‘managed’’ or ‘‘specialized’’ services).  The 
second is the application of open Internet rules to m obile wireless Internet access services, which have 
unique characteristics related to technology, associat ed application and device markets, and consumer 
usage.  The intended effect is to develop a more detailed record in the Open Internet proceeding. 
 
The NPRM proposes that the draft principles be en forced on a case-by-case basis by the FCC, and the 
Commission seeks comments on the enforcement pro cedures that it should follow.  For more 
information:  http://www.openinternet.gov/. 
 
119.  The American Recovery and Reinvestment Act of 2009 (the Recovery Act) requires the FCC to 
prepare a plan to facilitate broadband to the entire population of the United States. 
38  The objective 
                                                      
37 FCC (2009), "Notice of Proponed Rule Making", October.  Consulted at: 
http://hraunfoss.fcc.gov/edocs_public/attach match/FCC-09-93A1.pdf [July 2010]. WT/TPR/M/235/Add.1 
Page 182 
 
 
 of the FCC plan, which was presente d to Congress in March 2010 and it  is subject to review by the 
executive branch before the National Broadband Plan  recommendations are officially adopted, which 
consist of "including a detailed strategy for attaining accessibility and maximizing the use of 
broadband".39  The Recovery Act also provides US$4.7 billion to NTIA for the Broadband Technology 
Opportunities Plan (BTOP), which will assist with  the roll-out of broadband infrastructure and 
improve and extend public information centers, as well as encourage the sustainable development of 
broadband services.  The NTIA will also prepare and maintain a public national map of broadband 
capacity and availability. 
 
Could further information be provided regarding the content and status of the Broadband National 
Plan that the FCC presented in March 2010?  
RESPONSE:  The FCC has developed a comprehensive webs ite that provides extensive information 
about the National Broadband Plan.  Please visit www.broadband.gov/ for information on this 
program.  In addition, more information on NTIA ’s Broadband Technology Opportunities Plan can be 
found at:  http://www2.ntia.doc.gov/.  
                                                                                                                                                                    
 
38 The American Recovery and Reinvestment Act of the United States of 2009, Title VI - Broadband 
Technologies Opportunities Program, Article 6000.  Co nsulted at: http://en.wikisource.org/wiki/American_ 
Recovery_and_Reinvestment_Act_of_2009 [February 2010]. 
39 FCC (2010b).  WT/TPR/M/235/Add.1 
 Page 183 
 
 
 DOMINICAN REPUBLIC 
 
1. With regard to state aid and related fiscal measures from paragraph 154, page 61 of the 
government report: 
 
Please clarify whether the extent of reimbursement of  up to 99 percent of all duties, taxes and charges 
applied to imported products is only if exporting the imported product or a product manufactured 
from a product that is “of the same kind and quality” as the imported product  does not constitute a 
performance requirement for exports.   
 
RESPONSE:   No, this does not constitute a performance requirement.  There is no incentive to use 
domestic products over imported products in the export ed good or any requirement to export a given 
percentage of production.  For example if a co mpany makes 1000 laptops using 500 imported hard 
drives and 500 domestically produced hard drives, if  it exports 500 laptops that company could claim 
duty drawback for 500 hard drives.  However under this policy the company does not have to ensure 
that the 500 imported hard drives are in the exported la ptops just that the hard drives that are eligible 
for duty drawback are “of the same kind and quality” as those that were exported.   
2. Regarding temporary tariff suspensions referred to in paragraph 36, page 33 of the 
government report: 
 
Please indicate if there is a new law or extension to  date already approved that has to do with the 
temporary reduction of product duties.  
RESPONSE:  On August 11, 2010, President Obama signed H.R. 4380, the U.S. Manufacturing 
Enhancement Act of 2010 , which incorporates miscellaneous tariff bills (MTBs) that temporarily 
suspend or reduce tariffs on more than 400 products.   
With respect to other charges affecting im ports page 34, paragr aphs 42-43 and 44: 
 Please indicate whether the “rum, whiskey, vodka and other distilled alcoholic beverages imported”  
and not mentioned in these paragraphs, also enjoy th e same benefits, that is, do they pay the same 
kind of federal excise tax paid by local or natio nal producers of these products in the United States.  
 
RESPONSE:  As can be found in paragraph 41, the United States applies the federal excise tax on 
distilled spirits on both imported and dom estic goods at the same rates.  
 
4. In relation to safeguards, page 40, paragraph 69: 
 
Please indicate whether the measures applied to  certain agricultural products of price-based 
safeguard for agriculture (Chapter IV 1) are global measures or only applied to imports of these 
products of a/some specific country or countries.  
 RESPONSE:  Price-based safeguards are a pplied to imports from all sources except for imports 
entering under the provisions of free trade agreements (FTAs) if the provisions of the FTA prohibits application of the WTO special agricultural safeguard on imports from that partner.  
 5. The Secretariat Report noted in section IV on the Development of Some Sectors, on page 96, 
paragraph 3, that there are several products t hat are intended for export and represent a high 
percentage of the United States world trade.  As a result, the aid measures  to support the production 
and trade adopted in this country can influence worl d prices of these products and international trade 
for that matter.  WT/TPR/M/235/Add.1 
Page 184 
 
 
 In this regard, we would like to receive a more de tailed explanation with regard to whether there is a 
program in the United States that takes into accoun t the reduction or elimination of trade distorting 
measures, and what kind of work is being done in relation to this within the framework of the WTO 
Agriculture Committee meetings.   
 
RESPONSE:  The United States points out that the TPR re port shows that the United States has one 
of the lowest levels of support a nd similarly one of the lowest aver age tariff levels for agricultural 
products among WTO members.  All trade distorting measures for agriculture are notified to the 
Committee on Agriculture.  The United States has be en a strong advocate of the multilateral reduction 
of tariffs and domestic support a nd elimination of agricutural export subsidies in the Doha 
negotiations, and stands ready to join members in advancing these negotiations that can benefit 
producers across all agricultural sectors.  
6. The Secretariat Report indicated in point IV  on the Development of Some Sectors, on page 
100, paragraph 16, concerning dai ry products, that “the dairy products sector counts with the 
support of several programs.”   Could the U.S. state what these programs are, which are considerably different from other aid 
programs provided under Title I of the Agriculture  Act of 2008, and what are the sums reached of 
each program?  
RESPONSE:  Two particular programs referenced are the Market Price Support program for dairy in 
paragraph 16 and the Milk Income Loss Contract (MILC) Program  in paragraph 18.  The United States submitted its domestic support notifi cation for the 2008 crop year on September 16, 
2010 and in it, dairy support was approximately $3.9 billion which included both Market Price 
Support (MPS) and MILC payments.  
 
7. The Secretariat Report noted in point IV on the Development of Some Sectors, on page 107, 
paragraph 39, that the Agriculture Act of 2008 contains a list of products covered by the labeling 
provisions indicating the Country of Origin;  intr oducing different categories for labels, depending on 
whether the animal had been raised and/or slaughtered in the U.S. 
 Could the U.S. explain whether the measu re constitutes a technical barrier to trade?   
 
RESPONSE:  These questions relate to a matter that is the subject of a current WTO dispute 
settlement proceeding.  It would be in appropriate to comment on them here. 
 
8. In point IV on the Developmen t of Some Sectors of the Secretariat Report, on page 108, 
paragraph 48, it reports t hat 5.2 billion dollars of the domestic aid reported for 2007, were used as 
direct payment support for coupled income, and 4. 3 billion were disbursed for the provision of 
services.  
 
Could the United States further elaborate w hat the disbursed funds are used for?  
 
RESPONSE:  The report states that $5.2 billion was for the Direct Payment programs which are 
notified as decoupled income – not coupled as the ques tion states.  The $4.3 billion referenced was for 
State (or sub-national) programs for agriculture, whic h are regular annual outlays by states, net of fees 
and taxes.  State governments provide a number of generally available services, including extension, 
marketing, and research.  WT/TPR/M/235/Add.1 
 Page 185 
 
 
 DOMINICAN REPUBLIC SUBSEQUENT QUESTIONS 
 
 
1. The Commonwealth of Puerto Rico has a Law in force that imposes a $2.50/pound fee on 
imports of foreign coffee, Law 77 of May 5, 1931.  Th is measure refers to coffee that has already been 
processed.  Since this measure restricts trade in gr ound coffee that is labele d with a brand name in 
that country, and considering that a long time has  already elapsed, have they not thought about 
revising this Law to bring it into compliance with  the undertakings in the world trade framework?  
 RESPONSE:   We are unaware of any plans for change by the government of the Commonwealth of 
Puerto Rico. 
 
2.  The Commonwealth of Puerto Rico has Law 69 of May 30, 2002, in force.  This law imposes 
a scaled tax on production of both domestic and imported products.  As has been analyzed, this 
measure mainly favors domestic producers, and a ccordingly it harms importers by imposing higher 
payments.  Has the Government of Puerto Rico thought about revising this Law in response to the 
complaints that have been raised by beer producers from other countries?  
 
RESPONSE:  Due to the higher production costs that small producers of beer products in Puerto 
Rico frequently encounter, any excise tax adva ntages offered to these producers have no trade-
distorting effect. 
 
3.  The Commonwealth of Puerto Rico has Law No. 19 of May 1973, better known as the 
“Puerto Rico Fertilizer Act,” in force.  This Law establishes certain requirements for products to be 
imported, which are considered more restrictive t han necessary and operate as protection measures.  
Even that country’s own agricultural producers have, at  times, complained of the lack of alternative 
sources of fertilizer.  Has Puerto Rico thought about revising this Law and bringing it into compliance with the undertakings acquired in the World Trade Organization framework? 
 
RESPONSE:   The cited measure authorizes the Secretary of Agriculture to establish the number and 
the grades of all commercial fertilizer that may be manufactured, imported or sold for use in Puerto 
Rico.  The United States does not believe that the m easure is more restrictive than necessary or that it 
operates as a protection measure. WT/TPR/M/235/Add.1 
Page 186 
 
 
 ECUADOR 
 Report by the Secretariat:  WT/TPR/S/235 
III. Trade Policies By Measure 
(1) Measures Directly Affecting Imports (ix) Sanitary and Phytosanitary Measures (SPS measures)   
 
In para. 100, the Secretariat’s Report states that  state authorities may formulate and apply their own 
SPS measures.  The Report indicates that in conform ity with federal legislation, states are authorized 
to establish SPS measures as long as these are comp atible with the federal rules and regulations and 
the obligations imposed by the per tinent regulations under the WTO.  
 According to the International Convention of Ph ytosanitary Protection, once a product complies with 
the national regulations on phytosanitary protection,  it should not face further regulations that stall 
the product’s movement inside the country.  How does the approval of state imposed SPS measures 
affect movement of imported products within the United States?  
RESPONSE:  The WTO SPS Agreement recognizes that food safety and animal and plant health 
regulations do not necessarily have to be set by th e highest governmental authority and that they may 
not be the same throughout a country.  Where such regulations affect international trade, however, 
they should meet the same requirements as if they were established by the national government.  The 
national government remains responsible for impl ementation of the SPS Agre ement and supports its 
observance by other levels of government. In the Un ited States, we ensure that state SPS measures are 
consistent with our WTO obligations wh ich protect health and promote trade. 
 
In para. 111, the Secretariat’s Report indicates that applications to import vegetables, animals, and 
other products for the first time must be presente d by the authority responsible for phytosanitary 
protection.  According to the Report, the products’ risk may be analyzed when looking at applications.  Particularly, the APHIS has pub lished a norm, enforceable since August 17, 2007, 
which gives APHIS authority to review and reorgani ze the relative import regulations for vegetables 
and fruits, by:  (1) establishing a framework for APHIS to authorize imports without regulation, 
(2) establishing a similar framework fo r the approval of zones free of plagues, and (3) eliminating the 
list of specific products that may be imported with limitations according to certain risks.  The Report 
states that these regulations will simplify and speed  the processes for approval of new imports and 
zones free of plagues, allowing the public to con tinue participating in the regulatory processes.   
 
What has been the effect of these regulations in preventing “undue delays” as required by Annex C of 
the WTO Agreement on SPS Measures? How do these regul ations comply with Article 2(2) of the 
WTO Agreement on SPS Measures requiring parties to  ensure that SPS measures are applied only to 
the extent necessary to protect human, animal or plant life or health, and are based on scientific 
principles and sufficient scientific evidence? 
 RESPONSE:  Under the Q56 revisions, APHIS has establishe d criteria allowing for a faster and more 
efficient approval process for certain fruits and ve getable imports, which have helped to alleviate 
trade barriers to U.S. exports.  The revisions si mplified and expedited APHIS’ process for approving 
eligible new imports and pest-free areas while continuing to ensure that measures are science based 
and that USDA’s process allows for public participation in agency decisionmaking.  
 
    
  WT/TPR/M/235/Add.1 
 Page 187 
 
 
 IV. Developments in Some Sectors 
(1) Agriculture (ii) Agricultural Policies 
 
In para. 21, the Secretariat’s Report states that th e Incentives Program related to agriculture is meant 
solely to decrease the d ifferences between the export market and th e internal market.  Further, in 
para. 24, the Secretariat’s Report states that the Foreign Agricultural Service is in charge of the 
Market Access Program, which lends financial assist ance through participation in the costs carried 
by organizations authorized to engage in co mmercialization and foreign promotion activities. 
 
How do U.S. incentive and market access programs rel ated to agriculture comply with the export 
subsidy commitments established in Articl e 9 of the WTO Agreement on Agriculture? 
 
RESPONSE:   In paragraph 21, the Secretariat’s Report discusses the Dairy Export Incentives 
Program.  This program is an e xport subsidy as defined in Article 9 and is subject to U.S. export 
subsidy commitments established in the WTO Agreement on Agriculture (AoA). 
 The Market Access Program (MAP) discussed in para . 24 is a completely unrelated marketing and 
promotion program which provides cost-share fina ncial assistance to approved organizations for 
overseas marketing and promotional activities.  Th e MAP is not subject to U.S. export subsidy 
commitments established in the WTO AoA. 
 
Report by the United States:  WT/TPR/G/235 
IV. Development of Commercial Policies since 2008 (2) Regional Initiatives 
(x) Andean Trade Preferences Act   
In para. 108, the United States Government Repor t states that in December 2009, Congress extended 
the ATPA program until the end of 2010 for Colomb ia, Ecuador, and Peru.  Ecuador thanks the 
United States for granting tariff preferences to Andean countries under ATPA and for its ongoing efforts in the fight against drug trafficking.  Ecuador has made incredible strides in countering 
narcotics and advancing the country’ s development through trade.   
 In the past, the United States has extended ATPA fo r no more than one year.  These short-term 
extensions cause uncertainty for investors and erode  confidence in the Andean markets. To what 
extent would the U.S. government consider a long term extension (3-5 years) of ATPA? 
 RESPONSE:   In the U.S. political system the establishm ent of trade preference programs is strictly 
the prerogative of the U.S. Congress.  A number of factors likely weigh in the decision by Congress over the length of an extension of ATPA.   
 
ECUADOR SUBSEQUENT QUESTIONS 
 REPORT OF THE SECRETARIAT WT/TPR/S/235 
OVERVIEW 
II TRADE AND INVESTMENT POLICY FRAMEWORK (1) TRADE POLICY FORMULATION  
 
Paragraph 9 states that workers, companies and farmers  adversely affected by international trade 
can benefit from the benefits pr ovided in the Trade Assistance and Adjustment Program (TAA), 
authorized and expanded by the Recovery and Reinvest ment Act of the United States, enacted in 
February 2009. Similarly, the report states that in the framework of the expanded program, workers WT/TPR/M/235/Add.1 
Page 188 
 
 
 in the service sector and companies relocating ou tside the United States may benefit from the 
advantages of that program. 
 
1. What is the United States referring to  when it says “businesses and farmers adversely 
affected by international trade?” 
 RESPONSE:  See sections on TAA for Firms and TAA for Farmers below. 
 2. What requirements must be met by these wo rkers, companies, and farm ers in order to become 
eligible for the benefits prov ided for in the TAA program? 
 RESPONSE:  See section on Eligibility Criteria below, and sections on TAA for Firms and TAA for 
Farmers. 
 
3. What requirements must the  workers in the services sect or and the companies relocating 
outside the United States meet in order to become eligible for the advantages provided for in the TAA 
program? 
 
RESPONSE:   Trade Adjustment Assistance programs only apply to U.S. workers and firms.  
Benefits are available to workers who lose their j obs as a result of a company relocating outside the 
United States.  See section on Eligibility Criteria and TAA for Firms below.  
 
4. What advantages do the beneficiaries obtain from the program? 
 
RESPONSE:  See section on TAA Benefits below. 
 5. What amount was allocated to this  program during the period under review?  
 
RESPONSE:   TAA Appropriations for 2009 were: 
 
• TAA for Workers: $575 million 
• TAA for Firms:  $15.8 million 
• TAA for Farmers: $90 million 
• Community TAA: $40 million 
 
6. What sectors benefited from it? 
 RESPONSE:  See section on TAA Benefits below. 
 
TAA Overview 
 
Since the 2008 Trade Policy Review, significant ch anges were made to the Trade Adjustment 
Assistance (TAA) Program as part of the American Recovery and Reinvestment Act of 2009 (ARRA), Public Law (P.L. No. 111-5) enacted on February 17, 2009, and effective with TAA 
petitions filed on or after May 17, 2009. 
 
Working with Congress, the President was able to sign into law the Trade and Globalization 
Adjustment Assistance Act of 2009 (TGAAA), as pa rt of the ARRA.  The TGAAA reauthorized TAA 
programs;  expanded TAA coverage to more worker s and firms, including workers and firms in the 
service sectors for the first time;  made benefits available to workers whose jobs have been sent "off-shore" to another country (as opposed to coveri ng a more limited set of shifts in production); 
improved workers' training options;  and increased th e affordability of health insurance coverage.   WT/TPR/M/235/Add.1 
 Page 189 
 
 
 Below is a description of the major changes to th e TAA for Workers program.  (More information on 
the TAA for Workers program is available at the following website:  http://www.doleta.gov/tradeact/ 
ChangesFAQ.cfm#3.  
Old TAA for Workers Program  New TAA for Workers Program  
Group Eligibility 
 
• Workers must be associated with the 
production of an article in order to be eligible. 
• Shifts in production must be to a country 
that has specified trade agreements with the U.S. or accompanied by an actual or likely increase in imports to be covered.   
• Workers at downstream producers that are 
secondarily affected by increased imports from, or a shift in production to, countries other than Canada or Mexico are not eligible. 
 Group Eligibility 
 
• Expands TAA coverage to service sector 
workers whose job loss is related to increased imports of services, shifts in the provision of services to foreign countries, or who provide a service to a TAA-certified firm.  
• Expands eligibility to workers in public 
agencies. 
• Expands TAA eligibility to shifts in 
production or shifts in location of service to all countries, without the need to prove increased imports.  
• Eliminates the requirement that 
downstream secondary worker 
dislocations be related to trade with 
Canada or Mexico. 
• Provides automatic certification of 
petitions filed for worker groups employed by a company identified in an affirmative finding of injury by the 
International Trade Commission.  
• Allows for components of products to be 
certified based on increased imports of finished products. 
Trade Readjustment Allowances (TRA) 
• Up to 104 weeks of cash payments for 
workers enrolled in full-time training 
• Up to 130 weeks of cash payments if the 
worker was also enrolled in remedial training Trade Readjustment Allowances (TRA) 
• Up to 130 weeks of cash payments for 
workers enrolled in full-time training 
• Up to 156 weeks of cash payments if the 
worker was also enrolled in remedial training 
Training Enrollment Deadlines 
• Workers must be enrolled in training 8 
weeks after certification or 16 weeks 
after layoff, whichever is later, in order 
to receive TRA Training Enrollment Deadlines 
• Workers must be enrolled in training 26 
weeks after certification or layoff, 
whichever is later, in order to receive 
TRA 
Job Search Allowances 
• 90% of allowable costs, up to $1,250 Job Search Allowances 
• 100% of allowable costs, up to $1,500 WT/TPR/M/235/Add.1 
Page 190 
 
 
 Relocation Allowances 
• 90% of costs, up to the statutory limit for 
Federal Employees 
• Provides an additional lump sum 
payment of up to $1,250 Relocation Allowances 
• 100% of costs, up to the statutory limit 
for Federal Employees 
• Provides an additional lump sum 
payment of up to $1,500 
Training Services 
• Training may only be approved on a 
full-time basis 
• Certified workers may not begin 
approved training until they have been totally or partially separated from adversely affected employment Training Services 
• Training may be approved on a full-time 
or part-time basis, although full-time 
training is required for TRA eligibility. 
• Certified workers may begin approved 
training when threatened with separation from adversely affected employment 
Health Coverage Tax Credit (HCTC) 
• Prior to May 2009, a tax credit covering 
up to 65% of an eligible participant's monthly qualifying health insurance 
premium 
• Beginning May 2009, the tax credit will 
be raised for all participants to cover 80% of an eligible participant's monthly qualifying health insurance premium Health Coverage Tax Credit (HCTC) 
• A tax credit covering 80% of an eligible 
participant's monthly qualifying health 
insurance premium 
Alternative Trade Adjustment Assistance 
• Available to workers 50 years of age or 
older 
• Requires a separate certification of group 
eligibility 
• Workers may not participate in 
TAA-approved training 
• Requires full-time employment within 
26 weeks of separation 
• Available only for workers earning less 
than $50,000 per year in reemployment 
• Maximum benefit of $10,000 over a 
period of up to two years 
• Participants are eligible for the HCTC Reemployment Trade Adjustment Assistance 
• Available to workers 50 years of age or 
older 
• Does not require a separate certification 
of group eligibility 
• Workers may participate in TAA- 
approved training 
• Requires full-time employment, unless 
the worker is also enrolled in TAA-approved training and employed at 
least 20 hours per week, and does not set 
a deadline for reemployment 
• Available only for workers earning less 
than $55,000 per year in reemployment 
• Maximum benefit of $12,000 over a 
period of up to two years 
• Participants are eligible for the HCTC 
 
TAA for Firms  
The ARRA included provisions to expand the Trade Adjustment Assistance for Firms program at the 
U.S. Department of Commerce.  In addition to tec hnical changes to eligibility criteria for the review 
of Petitions for Eligibility, the legislation expanded the potential pool of clients significantly by 
allowing “service” industry firms the opportunity to a pply for TAA.  The decision to allow service 
firms to become eligible for TAA was based on the f act that 80 percent of U.S. workers are employed 
in the service sector.  Additionally, the expansion allows for some flexibility in collecting data to  WT/TPR/M/235/Add.1 
 Page 191 
 
 
 demonstrate import impaction by allowing a petitioner to utilize customer import information if it 
accounts for a significant percentage of the decline of the firm’s sales or production.   Trade Adjustment Assistance for Firms (TAA), a federal program, provides financial assistance to 
manufacturers affected by import competition. Sponso red by the U.S. Department of Commerce, this 
cost sharing federal assistance program pays for ha lf the cost of consultants or industry-specific 
experts for projects that improve a manufacturer's  competitiveness.  (More information on TAA for 
Firms is available at:  http://www.taacenters.org/)  TAA for Farmers 
 
The ARRA reauthorized and modified the Trade Ad justment Assistance (TAA) for Farmers program.  
The TAA for Farmers program helps producers of ra w agricultural commodities and fishermen adjust 
to a changing economic environment associated with import competition through technical assistance 
and cash benefits. Producers of commodities who ha ve recently suffered a greater than 15 percent 
decrease in the national average price, the quantity of production, value of production, or cash receipts 
compared to the average of the three precedi ng marketing years, and an increase in imports 
contributed importantly to this decline, may be eligible to receive free information, technical 
assistance, and cash payments to develop and impl ement Business Adjustment Plans from the TAA 
for Farmers program.  (More information on TAA for Farmers is available at:  
http://www.fas.usda.gov/ITP/TAA/taa.asp.) 
 
TAA for Communities 
 
The U.S. Economic Development Administrati on oversees the Community Trade Adjustment 
Assistance (Community TAA) Program, which is aimed at helping to create and retain jobs by 
providing project grants to communities that have experienced, or are threat ened by, job loss resulting 
from international trade impacts.  Grants under the program can be used to support a wide range of 
technical, planning, and infrastructure projects to  help communities adapt to pressing trade impact 
issues and diversify their economies.  (More in formation on the Community TAA program is 
available at:  http://www.eda.gov/PDF/CTAA%201-pager.pdf.) 
 
Eligibility Criteria and Certification Process:  TAA for Workers 
 Application Process  
 Applications for the Trade Act Program as amen ded by the Trade and Globalization Adjustment 
Assistance Act of 2009 have two distinct phases:  3. To obtain TAA reemployment services and be nefits a group of workers must first file a 
petition with the U.S. Department of Labor's Of fice of Trade Adjustment Assistance requesting 
certification as workers adversely affected by fore ign trade If the worker group meets the necessary 
group eligibility criteria a certification will be issued. 
 4. After a group certification is issued each work er in the group may then  individually apply for 
services and benefits through their local One-St op Career Center (http://www.doleta.gov/usworkforce/ 
onestop/onestopmap.cfm) to determine individual  TAA eligibility for services and benefits.  
 
Eligibility for TAA 
 
All Petitions for TAA are filed with the U.S. Depa rtment of Labor’s Office of Trade Adjustment 
Assistance (OTAA).  OTAA has sole responsibility for conducting a fact finding investigation to WT/TPR/M/235/Add.1 
Page 192 
 
 
 determine whether group eligibility criteria have been  met and issues official notice of its decision 
within 40 days after the petition has been filed.  
In order for OTAA to issue a Certification Re garding Group Eligibility to Apply for Trade 
Adjustment Assistance, the certain requirements must be met, including:  (1) Workers have been totally or partially laid off or that worker layoffs have been 
 planned, and   (a)  Increased imports of articles or services, or 
  (b)  A shift in production of articles or an acquisition of services from any foreign 
  country, or   (c)  Loss of business from a customer with TAA-certified workers, and   (d)  These trade effects have contributed  importantly to worker separations;  or 
 (2) Workers are employed by a company identifie d in an affirmative findi ng of injury by the 
 International Trade Commission (ITC). 
 
Once the OTAA issues a Certification Regarding Group Eligibility, workers in that certified worker 
group may apply individually for benefits and services through their local One-Stop Career Center.  When a determination by the OTAA states that workers who petitioned do not meet the group 
eligibility requirements under this program, work ers may obtain benefits and services from other job 
training programs such as the Workforce Investment Act (WIA). 
 
Group TAA Eligibility Requirements  
After receiving a TAA petition, OTAA investigators gather and analyze the facts to determine if the eligibility requirements are met.  Th ese requirements are summarized as follows: 
 4. The workers' company produces a product or su pplies a service or the workers' employer is a 
public agency that supplies a service;  AND   
5. A required minimum of the workforce has been laid off in the 12 months preceding the date 
of the petition or is threatened with layoffs (3 wo rkers in groups of fewer than 50 or 5% of the 
workforce in groups of 50 or more);  AND   6. At least one of the following:  
 
 i. Increased imports of articles or services contributed importantly to an actual decline in sales or production of like or directly competitive articles or services at the workers' firm and to the 
workers' layoff or threat of a layoff;  OR   ii. Increased imports of articles like or directly competitive with articles produced directly using services provided by the workers' firm contributed importantly to an actual decline in 
sales or production at the workers' firm and to the workers' layoff or threat of a layoff;  OR  
 iii. Increased imports of articles have contribut ed importantly to an actual decline in sales 
or production at the workers' firm and to the layoff or  threat of a layoff at the workers' firm of workers 
who produce component parts for like or directly competitive articles;  OR   iv. A shift in the production of articles or supply of services to a country outside the 
United States contributed importantly to the workers' layoff or threat of a layoff;  OR  
 v. The workers' firm's loss of business as  a supplier or downstream producer to a TAA-
certified firm contributed importantly to an actual d ecline in sales or production at the workers' firm 
and to the workers' layoff or threat of a layoff;  OR   vi. The acquisition of services from a foreign country by a public agency has contributed 
importantly to a layoff or threat of a layoff of workers of the public agency.  
  WT/TPR/M/235/Add.1 
 Page 193 
 
 
 Worker groups also may be certified if the work ers are employed by a company identified in an 
affirmative finding of injury by the ITC.  Where the ITC has made such a finding the three criteria 
above are not required for certification.  Denial of a Petition  
Workers who are denied certification may request administrative reconsideration from the OTAA.  
Requests for reconsideration must:  (1) be in writin g;  (2) include the TAA investigation number;  
(3) be signed;  and (4) describe the group of worker s included in the petition.  Requests must also cite 
reasons why the workers consider the denial erroneou s according to the facts, the interpretation of the 
facts, or the law itself.  Reconsideration requests must be filed with the OTAA within 30 days. 
 
Information on TAA Benefits 
 
The reauthorized Trade Adjustme nt Assistance program has not been in operation long enough to 
evaluate the impact of expanded eligibility and increased benefits.  The following overview provides 
basic information on the expanded TAA programs, including a summary of the numbers of workers and industries covered by TAA certifications.  
Overview 
 In FY 2009, the U.S. Department of Labor’s Employment and Training Administration (ETA) 
administered two separate TAA laws—the program im plemented by the TGAAA that went into effect 
for petitions filed on or after May 18, 2009 (n ew program), and the TAA program that was 
administered under the Trade Act, which existed before May 18, 2009. 
 
The TGAAA had a major impact on the administration of the TAA program.  In FY 2009, TAA petition filings increased by 104% over FY 2008 pe tition filing. More specifically, from May 2009 
thru July 2009, TAA petition filing increased by 288% as compared with the same period of the 
previous year.  In March 2009, TAA petitioners were given the option of withdrawing previously filed 
TAA petitions and re-filing on or af ter May 18, 2009, in order to take advantage of the expanded 
TAA program.  This resulted in a large number of TAA petitions being withdrawn and classified as 
terminated prior to May 18, 2009, and a corres ponding large number of re-filed TAA petitions on or 
shortly after May 18, 2009.  
Workers 
 
In FY 2009, ETA estimated the number of workers covered by TAA certifications was 201,053.  This 
represents a 58.7% increase over FY 2008, when 126, 633 estimated workers were covered.  In 
FY 2009, 80 percent of the determinations issued we re certifications (excl uding terminations).  In 
FY 2009, the manufacturing sector had the greatest estimated number of TAA certified workers with 183,813 workers;  6,764 workers in the professional, scientific and technical services;  3,001 in 
administrative and support and waste management and remediation services, and 2,061 in and 
transportation and warehousing.  Agriculture, forest ry, fishing and hunting ha d 172 workers estimated 
to be covered by certifications.  
Industries 
 ETA uses the North American Industry Classification System (NAICS) codes to track industry 
impact.  In FY 2009, the total TAA certifications  were 1,845 in all sectors.  In FY 2009, the 
manufacturing sector had the greatest number of certif ications with 1,620 fo llowed by professional, 
scientific, and technical services with 72;  ad ministrative and support and waste management and WT/TPR/M/235/Add.1 
Page 194 
 
 
 remediation services with 51;  and transportation and warehousing with 21 certifications.  In 
agriculture, forestry, fishing and hunting sectors the number of certifications was eight.  
 
(2) PARTICIPATION IN THE WORLD TRADE ORGANIZATION  
 In paragraph 11, the report notes that in the Doha negotiations, the USTR is in favor of “adopting a 
different approach in the final stage for more robust results.” 
 
7. Could this information be broadened?  
 
RESPONSE:   During the March 26, 2010, stock-taki ng meeting in Geneva, there was broad 
agreement among Members that the road ahead should focus on enga gement in various formats, 
including direct bilateral enga gement and small-group horizonta l discussions to help bridge 
negotiating gaps.  From the U.S. perspective, th is was an important step forward from previous 
approaches.  The United States has initiated and partic ipated in multiple, detailed bilateral discussions 
aimed at establishing a negotiating “playing field” which we hope will set the stage for more intense 
and targeted give-and-take negotiations.  This wo rk, in conjunction with on-going work in the 
Negotiating Groups and other configur ations, can help us to build momentum across all areas of the 
Doha Round negotiations. 
 
In paragraph 13, the report notes that the Unite d States submitted numerous notifications in the 
period under review.  However, they have yet to su bmit notifications of quantitative restrictions and 
preferential rules of origin.
40 
 
8. When does it intend to submit the notificati ons related to the quantitative restrictions and 
preferential rules of origin?  
 
RESPONSE:   The United States intends to submit an upda ted notification on quantitative restrictions 
and preferential rules of origin within the next few months. 
 
Paragraph 15 indicates that compliance with resolutions and recommendations of the Dispute 
Settlement Body (DSB) concerning Article 110 5) of the Copyright Law of the United States, to some 
aspects of the United States anti-dumping investigati on of certain products of  hot-rolled steel from 
Japan, and Article 211 of the Omnibus Appropriati ons Act of 1998, would still be pending.  
 
9. What are the reasons why the U.S. has  not implemented these DSB resolutions and 
recommendations?  
 10. Is there a timetable for implementing these DSB resolutions and recommendations? 
 
11. Given the amount of time that has transpired  without complying to the resolutions and the 
recommendations issued by the Dispute Settlement  Body concerning the methodology used for the 
Anti-dumping investigation, is there a special reason for this non-compliance?  If the answer is yes, 
please provide information on the implications  of the implementation of these resolutions and 
recommendations.   
 RESPONSE to Questions 9-11:   The United States has come into compliance, fully and promptly, in 
the vast majority of its disputes.  As for the rema ining few instances where our efforts to do so have 
not yet been entirely successful, the United States has been working activel y towards compliance in 
furtherance of the purpose of the dispute settlement system.  The U.S. Administration will continue to 
                                                     
 
40 The pending notifications have to do with the WTO G/L/59 document (Decision on the procedure for 
notification of quantitative restrictions) and paragraph 4 of Appendix II of the Agreement on Rules of Origin.  WT/TPR/M/235/Add.1 
 Page 195 
 
 
 work with the U.S. Congress and other interested parties to fully implement the recommendations and 
rulings of the Dispute Settlement Body in the disputes referred to in these questions. 
 
(3) PREFERENTIAL TRADE AGREEMENTS AND ARRANGEMENTS  
(i) Bilateral and regional preference   
Paragraph 18 indicates that according to the President’s Trade Policy Agenda for 2009, the 
United States “will consider proposals for new b ilateral and regional prospects which offer 
significant benefits compatible with . . . national economic policies.”
41 
 
12. Could the United States explain if their nationa l economic policies are fully compatible with 
the WTO and the negotiations covered in Artic le XXIV do not go beyond the WTO rules?  
 RESPONSE:   The core objective of U.S. trade policy is  to open markets and to advance the rule of 
law through the multilateral trading system, as it has been since before the founding of the GATT.  A 
strong and vital WTO is central to that task.  The United States also pursues bilateral and regional free 
trade agreements (FTAs) that are complementary to  and compatible with advancing the goals of the 
multilateral trading system.  U.S. FTAs, because of their comprehensive duty-elimination and breadth 
of commitments, produce significant benefits for its partners, and, through th e economic growth this 
brings, for other trading partners as well.  This  also strengthens and expands the forces working 
towards global trade reforms.  The liberalization unde rtaken by many of our FTA partners has often 
led those Members to increased participati on in liberalizing efforts at the WTO. 
 
Paragraph 19 states that since the last review of the United States, trade agreements with Costa Rica, 
Oman and Peru have entered into force. In add ition, the United States has existing free trade 
agreements with Australia, Bahrain, Canada, Chile , El Salvador, Guatemala, Honduras, Israel, 
Jordan, Morocco, Mexico, Nicaragua, the Dominican Republic, and Singapore.  
 
13. Do the new Free Trade Agreements signed by the U.S. consider the labor and environmental 
area agreements, and if so, which aspects?  
 RESPONSE:  United States trade agreements contain prov isions related to labor issues in the 
following areas:  adherence to internationally rec ognized labor rights;  effective enforcement of 
domestic labor laws;  fair and transparent processes for adjudication of labor rights;  mechanisms to 
foster cooperation between the parties on labor issu es;  and enforcement mechanisms that include 
consultations and arbitral panels with the av ailability of monetary assessments and commercial 
remedies.  (Further information on the labor aspect s of specific trade agreements is available at: 
http://www.ustr.gov/trade-topics/labor/bilate ral-and-regional-trade-agreements). 
 
United States trade agreements contain specific co mmitments related to effective enforcement of 
environmental laws, transparency and public pa rticipation in the development of policy and 
multilateral environmental agreements.  These provi sions also include a mechanism to settle disputes 
with commercial remedies.  (Further information on the environmental provisions of specific trade 
agreements is available at:  http://www.ustr. gov/trade-topics/environment/bilateral-and-regional-
trade-agreements.)  14. How has the United States progressed with these labor and environmental issues in trade 
agreements with countries like Colombia or Peru? 
 
RESPONSE:  The United States – Peru Trade Promotion Agreement includes a labor chapter with 
binding obligations to adhere to internationally recognized labor rights, and to effectively enforce 
                                                     
 
41 USTR (2009b). WT/TPR/M/235/Add.1 
Page 196 
 
 
 domestic labor laws and provide fair and transparen t processes for adjudication of labor rights.  The 
agreement also contains an enforcement mechanism that includes consultations and arbitral panels 
with the availability of monetary assessments and co mmercial remedie.  (Further information on the 
labor aspects of this agreement is available a t:  http://www.ustr.gov/sites/default/files/uploads/ 
agreements/fta/peru/asset_upload_file73_9496.pdf).  The United States – Peru Trade Promotion 
Agreement Environment Chapter and Annex on Forest  Sector Governance contain some of the most 
comprehensive environmental commitments ever in cluded in a trade agreement.  The provisions 
include the obligation to effectivel y enforce environmental laws, transp arency and public participation 
commitments as well as obligations to effectively implement multilateral environmental agreements.  
The Annex on Forest Sector Governance includes obligations on improving forest sector governance 
by increasing criminal penalties for illegal logging , wildlife trafficking and other environmental 
crimes.  Since completion of the trade agreement,  Peru created the Ministry of Environment, 
strengthened its forest sector supervisory agency and added over 3000 ecological police to enforce the 
laws.  (Further information on the environmental provisions of this agreement is available at:  
http://www.ustr.gov/sites/default/files/uploads/a greements/fta/peru/asset_upload_file953_9541.pdf). 
 
The United States has signed a free trade agreem ent with Colombia, but Congress must enact 
legislation to approve and implement the agreement in order for it to go into effect.  The agreement 
has the same labor and environment provisions  as the United States – Peru Trade Promotion 
Agreement, with the exception of the Forest Sector  Annex which appears only in the agreement with 
Peru.  (Further information on the labor and envir onment aspects of the United States – Colombia 
Trade Promotion Agreement is available at:  http://www.ustr.gov/sites/default/files/uploads/ 
agreements/fta/colombia/asset_upl oad_file993_10146.pdf, a nd http://www.ustr.gov/sites/default/files/ 
uploads/agreements/fta/colombi a/asset_upload_file644_10192.pdf). 
 
15. How is the Special and Differential Treatmen t for developing economies in the Free Trade 
Agreements with those countries being reflected?  
 RESPONSE:  The United States negotiates each FTA indivi dually with each partner, to take account 
of the specific circumstances and needs of the trad ing relationship.  A fundamental aspect of each of 
the U.S. FTAs is the elimination of duties on subs tantially all the trade.  For a small number of 
sensitive products, the United States has agreed to an extended transition period, rather than a result 
short of tariff elimination.  
 (ii) Unilateral preferences  
Paragraph 25 indicates that the United States grants unilateral preferential tariff  treatment within the 
framework of the Generalized System of Prefer ences (GSP), the Act on Growth and Opportunity for 
Africa (AGOA), the Caribbean Basin Economic Recovery Act (CBERA), and the Law of Trade 
Preferences for the Andean countries (LPCPA). Th ese preferences may be conditional depending on 
the fulfillment of criteria, which according to U. S. authorities, promote sound policies and promote 
trade and investments.  The United States submitted re quests for exemption to the WTO for these three 
laws in March 2007.
42 The General Council granted exemptions  for the Andean Trade Preference Act 
and the Caribbean Basin Economic Recovery Act until December 31, 2014, and for the Growth and 
Opportunity Act for Africa until September 30, 2015.43 
 
16. Could the United States government inform if it plans to make a new request for exemption to 
continue applying the Andean Trade Preference Act?  If the answer is no and in order to minimize the 
                                                      
42 WTO documents G/C/W/508/Rev.1, G/C/W/509/Rev.1 and G/C/W/510/Rev.1 of the WTO, of 
March 28, 2007. 
43 WT/L/753-55 WTO Documents of May 29, 2009.  WT/TPR/M/235/Add.1 
 Page 197 
 
 
 effects resulting from this elimination, are there plans  to create a special program for these countries 
to compensate them for the fight against drugs?  
 
RESPONSE:  The U.S. Government has made no decisi ons as to what it will do when the WTO 
waiver for the Andean Trade Preference Act expires in four years.  
Paragraph 25 notes that within the framework of the GSP program, the United States grants a duty-
free schedule for certain products coming from d eveloping countries that are eligible for this 
benefit.
44 In December 2009, Congress extended th e GSP program until December 31, 2010.45 The list 
of GSP beneficiaries is contained in General Note  4 of the Harmonized Tariff of the United States. 
 
17. Will the United States government extend th e GSP program when the term expires on 
December 31, 2010?  
 RESPONSE:   The U.S. Congress must enact legislation to extend the GSP program beyond its 
December 31 expiration.  Both the House of Represe ntatives and the Senate are currently working on 
this legislation. 
 
(4)  INVESTMENT AGREEMENTS AND ARRANGEMENTS  
Paragraph 34 indicates that the United States is examining the “model” of the bilateral investment 
treaty that it uses as a basis for its negotiations of  bilateral investment treaties. The purpose of this 
review is to “ensure that the model of the bilatera l investment treaty is compatible with the public 
interest and with the general economic program of the United States.”
46 
 
17. Could the United States indicate if, within th e “model” of the bilateral treaty that it is 
reviewing, it considers:  
• The “reciprocity”between the parties.   
• Will it consider the possibility of including other international organizations different from the 
ICSID to settle matters relating to Dispute Settlements? 
• Within the immigration issue “does it foresee an opening for business visas so that foreign 
investors can fulfill and follow throug h on their business investments? 
• What treatment does the United States see itse lf providing to small countries that have no 
territorial structure for states with federal and sub-federal laws? 
 
RESPONSE:   The Administration has received a large amount of input from the full range of 
stakeholders regarding many important issues in the model BIT.  We want to ensure that we have a 
full opportunity to carefully consider all such i nput before completing the review.  Given that the 
review is still pending, it would no t be appropriate to discuss specifi c changes under consideration.  
We can say, however, that we will be maintaining the core investment protections of the model BIT to 
ensure that our investors can compete on a level play ing field and are treated according to the rule of 
law in key foreign markets.  In addition, the Ad ministration is committed to strengthening labor and 
environmental protections, and we are exploring how we might do so in the model BIT.  We are also 
                                                     
 
44 19 USC 2461 et seq . 
45 Public Act No. 111-124. 
46 Federal Register, 74 FR 34071, July 14, 2009. WT/TPR/M/235/Add.1 
Page 198 
 
 
 looking for ways to enhance provisions on transparen cy and public participation, which are concerns 
of a wide range of stakeholders.  III. TRADE POLICIES AND PRACTICES BY MEASURES 
(1) MEASURES DIRECTLY AFFECTING IMPORTS (i) Customs Procedure 
 
According to paragraph 4, the impor ters are not subject to any speci al registration requirement, and 
the use of a customs agent is optional.  Only U.S. citizens can obtain a license to act as customs 
agents. 
 19. What academic level should a citi zen have to become a customs agent?  
 RESPONSE:  There are no education level requirements to become a customs broker.  However, to 
become a licensed customs broker an applicant must be  at least 21 years of age, a U.S. citizen, and not 
a federal employee.  He/she must have passed a broker licensing exam given by U.S. Customs and 
Border Protection.  
 
20. Are there training courses for customs agents by the CBP?   
 RESPONSE:  No.  U.S. Customs and Border Protection does not offer training to potential customs 
brokers.  However, there are independent cons ultants that offer seminars and training courses.  
 
21. Is there an example of companies or associa tions that constitute themselves as customs 
agents?  
 
RESPONSE:  There are many such brokerage companies.  The names of these companies are 
available by port on www.cbp.gov.  There are also many associations of brokerage companies.  One 
example is the National Customs Brokers and Freight Forwarders Association. Brokers can be individuals, partnerships, or corporations.  
 
In paragraph 5, page 24, the report states that a ccording to the SAFE Port Act of October 2006, the 
CBP should implement a “single portal system” for the compilation and distribution of “uniform 
electronic data on imports and exports,” in accordance with the provisions of Article 405, under that 
act. 
 
22. Has a deadline been set for the “single por tal system” or single window to begin operating?  
 
RESPONSE:  Development on the single window is curre ntly ongoing;  we do not yet have a 
completion date.  
 Paragraph 9 makes reference to the “security file of the importer.” 
 
23. What effect on cargo can the noncompliance of  delivery of the “security file of the importer 
have?”  
 
RESPONSE:  The Importer Security Filing is only required for cargo arriving into the United States 
by vessel.  Currently, non-compliant shipments are subject to a minimum of a non-intrusive 
inspection exam at a U.S. port of arrival, which may result in fees assessed by the terminal operator 
and a delay in the release of the cargo.  
 
According to paragraph 12, the ITUC is implemented in 58 foreign seaports. 
  WT/TPR/M/235/Add.1 
 Page 199 
 
 
 24. Of the total volume of containers coming out of the 58 foreign ports, what percentage of 
containers are inspected (physical or x-ray) by CBP personnel?  
 RESPONSE:  The percentage varies from port to port, but the overall average of containers inspected 
is approximately one percent. 
 
Paragraph 13 indicates that the consistent prohi bition in which the containers loaded onto a vessel 
bound for the United States, unless they have been sc anned using non-intrusive display and radiation 
detection equipment, will enter into effect on 1 July  2012 or at an earlier date set by the Secretary of 
Homeland Security, which may postpone the implem entation for renewable periods of two years after 
certifying compliance with at least two of the six conditions established in the Act.  
25. Could you clarify the scope of the six conditions posed to postpone the scan for 2 years of the 
goods exported to the United States?  
 
RESPONSE: 
 
(A) Systems to scan containers in accordance with  the requirements are not available for purchase and 
installation. (B) Systems to scan containers in accordance with  the requirements do not have a sufficiently low 
false alarm rate for u se in the supply chain. 
(C) Systems to scan containers in accordance with  the requirements cannot be purchased, deployed, or 
operated at ports overseas, including, if appli cable, because a port does not have the physical 
characteristics to install such a system. 
(D) Systems to scan containers in accordance w ith the requirements cannot be integrated, as 
necessary, with existing systems. (E) Use of systems that are available to scan c ontainers in accordance with the requirements will 
significantly impact trade capacity and the flow of cargo. 
(F) Systems to scan containers in accordance with  the requirements do not adequately provide an 
automated notification of questionable or high-ri sk cargo as a trigger for further inspection by 
appropriately trained personnel. 
 
According to paragraph 14, scanning of 100 per cen t by 2012 is not feasible without seriously 
impeding the shipping flow in some ports. 
 
26. What are the measures to adopt once the possi bility of meeting the 100% scanning has been 
determined to be unfeasible? 
 RESPONSE:   The Secretary of Homeland Security may extend the deadline of the 100% scanning 
requirement in two-year increments if the Secretar y certifies to Congress that at least two of the above 
conditions outlined in the response to the preceding question have been met. 
 
According to paragraph 15, the CBP uses systems to sc an containers destined for the U.S. in the ports 
of certain foreign countries. The United States governme nt bears all the costs associated with pilot 
projects covering that Initiative.  
27. How could a country have access to a Pilot Pr oject sponsored by the U.S., in the field of 
security and safe harbor under the use of non-intrusive inspection system?  
RESPONSE:   The pilot program referenced here is to wo rk with host countries to test the feasibility 
of implementing 100% scanning.  CBP has partnered with certain countries in strategic corridors to 
test the feasibility of scanning 100% of c ontainers destined for the United States.  
 WT/TPR/M/235/Add.1 
Page 200 
 
 
 28. What requirements must be satisfied to be a beneficiary of these types of projects?  
 
RESPONSE:   Countries must be willing to scan 100% of containers from the ports destined to the 
United States and provide sufficient staff to accommodate the scanning.  The ports should have direct and recurring container traffic to the United States. 
 
Paragraph 16 indicates that the CBP performs audits  after the dispatch as “focused assessments” or 
“quick response audits.”  
29. What aspects differentiate a “focused as sessments” control from a “quick response audit?”  
 
RESPONSE:   Quick Response audits are narrowly focused audits of a specific objective or risk area. 
These audits are mostly initiated based on referrals or requests from within or outside of CBP or other 
agencies.  
Focused Assessment (FA) involves an assessment of internal controls over import activities to 
determine if the importer poses an unacceptable risk for complying with CBP laws and regulations.  
Risk management principles are used when selecting importers for FA audits. 
 30. Are these two investigations performed in the CBP headquarters?  
 
RESPONSE:   Quick Response Audits and Focused As sessment audits are performed by CBP 
auditors at the Regulatory Audit Field Offices na tionwide. Headquarters typically perform oversight 
functions over the audits performed by the Field Offices. 
 
In paragraph 17, the report refers to a security  program called supply chain, C-TPAT (Customs 
Trade Partnership Against Terrorism), managed by the CBP.   
31. What requirements must be met by a company to take part in this program?  
 
RESPONSE:   Please visit the CBP/C-TPAT website at:  http://www.cbp.gov/xp/cgov/trade/ 
cargo_security/ctpat/ for more information regardi ng eligibility requirement s and the application 
process.  
 
32. How has it categorized potential users, c onsidering the differences between large companies 
and SMEs?  
 
RESPONSE:   C-TPAT minimum security criteria allo w for flexibility to accommodate a wide 
variety of business models and supply chains.  
 
33. If a company has several plants or industr ies within the national territory, should its 
accreditation be individual, i.e., for each one? Or is the level of risk associated with their Tax ID or 
the taxpayer registration?  
 
RESPONSE:   Corporate organizations have the opti on to set up their account collectively or 
individually depe nding upon their business model.  
 
In paragraph 19, the report notes that the United States has mutual recognition agreements with 
Canada, Jordan, New Zealand, Japan and Korea. 
 34. Are there mutual recognition agreements underway with other countries? If so, what are they   
 RESPONSE:   CBP is currently in discussions with the European Union.   WT/TPR/M/235/Add.1 
 Page 201 
 
 
 35. Do these mutual recognition agreements take in to account different levels of enforceability 
for small and medium-sized enterprises-SMEs?  
 
RESPONSE:   Mutual recognition agreements are desi gned and implemented in a way that there 
shouldn’t be a need for a different enforcement process.  More information about CBP’s mutual 
recognition process can be found at http://www. cbp.gov/xp/cgov/trade/cargo_security/ctpat/mr/. 
 
36  Can the countries that have achieved a mutual recognition with New Zealand, Canada, 
Korea, Japan, Jordan, achieve automatic recognition w ith the U.S., based on the requirements of the 
aforementioned countries?  
 RESPONSE:   No.  CBP undertakes a four step process w ith respect to achieving Mutual Recognition 
with individual partner countries, and mutual re cognition is not automatically conferred based upon 
existing arrangements with other countries.  
 
(iii) Rules of origin 
 
Paragraph 23 indicates that the United States ap plies preferential and no n-preferential rules of 
origin. The preferential rules of origin held in the framework of various free trade agreements 
concluded after 1997 have not yet been reported to the WTO (January 2010).
47 The determination of 
origin is based on self certification. 
 37. When does the U.S. government intend to no tify the WTO of these pref erential origin rules?  
 RESPONSE:   The United States intends to submit an updated notification on preferential rules of 
origin within the next few months. 
 
(vi) Special commercial measures 
(a) Anti-dumping and countervailing duties  
Paragraph 49 indicates that some aspects of th e investigations, proceedings and findings of the 
United States on anti-dumping and to a lesser exten t, countervailing duties, were the subject of 
disputes within the framework of the WTO duri ng the period considered. Brazil, China, Korea, 
Thailand, and Vietnam submitted claims pursuant to the Understanding on Dispute Settlement (Table 
AII.1). Most were concerned, at least in part, with the U.S. practice of not compensating for non-
dumped sales, also known as “zeroing” when calculating dumping margins.  
38. Will the U.S. change the procedures of these matters?  
 RESPONSE:  The United States stopped applying the zeroing methodology in investigations 
effective on February 22, 2007, though the United States has applied zeroing in some administrative 
reviews after that date.  The Appellate Body reports on zeroing raise serious systemic concerns for the United States that go beyond the issue of zeroing.  Indeed, the United States believes that the 
Appellate Body reports create new obligations to limit the use of antidumping measures when such 
obligations were never agreed to by the WTO Me mbers.  Nevertheless, the United States takes its 
WTO obligations very seriously, and has stated pub licly that it intends to comply with the WTO 
rulings in all of the zeroing disputes.  We are ve ry actively engaged in a serious effort with our 
domestic stakeholders and our Congress to find an accep table solution.  We are not in a position at 
                                                     
 
47 The United States reports on rules of origin contained in WTO G documents /RO/N/1/Add.1 of June 
22, 1995; G/RO/N/6 of December 19, 1995; G/RO/N/12 of October 1, 1996, and G/RO/N/18 of November 3, 
1997. WT/TPR/M/235/Add.1 
Page 202 
 
 
 this time to provide details on the specific steps we will take or the timeframe to comply with the 
Appellate Body rulings. 
 
Paragraph 55 points out that of the 254 orders on anti-dumping duties and suspension agreements in 
force in December 2009, approximately 57 percent had been in place less than 10 years, 28 percent 
between 10 and 20 years, and 15 percent over 20 years. The average length of an order on anti-
dumping duties is between 9 and 10 years.  
39. According to the United States government re port, since its accession to the World Trade 
Organization (WTO), it has proved to be the “fir m foundation of an open global trading system based 
on standards...that promote the we lfare of its people and its trading partners ....” Under this premise, 
why do the measures for periods extended beyond th ose established by the WTO remain in effect?  
 
RESPONSE:  Under U.S. law, and consistent with the WTO Antidumping Agreement, antidumping 
duties may remain in effect as long as and to the ex tent necessary to counteract injurious dumping.  
Five years after the imposition of the duties, the U.S. Department of Commerce (Commerce) and the 
U.S. International Trade Commission (USITC) undertak e reviews to determine whether revocation of 
the dumping order would be likely to lead to the c ontinuation or recurrence of dumping and injury.  If 
those determinations are affirmative, the order re mains in place;  if the determination by either 
Commerce or the USITC is negative, the order is revoked.  These reviews are conducted every five 
years for the duration of the order.  Thus, the reason that some antidumping orders remain in place is 
that the evidence of record supports the conclusion that dumping and injury are likely to continue or 
recur if the order were revoked. 
 
In paragraph 66 it indicates that applications fo r the imposition for countervailing duties are often 
accompanied by requests of the imposition for anti-dumping duties, which often leads to the 
simultaneous application of both.  Thus, about 90 percent of the 41 countervailing duty orders in 
force in December 2009 were accompanied by orders for anti-dumping duties. 
 
40. Please explain if this policy of double taxation f ees to the same product is compatible with the 
WTO rules?  
 
RESPONSE:   Article VI:5 of GATT 1994 addresses the si multaneous application of antidumping 
and countervailing duties and expressly refers to “expor t subsidies.”  Export subsidies are specifically 
defined in the SCM Agreement and are a recognized sub set of all subsidies.  Consistent with Article 
VI:5, section 772(c)(1)(C) of the Tariff Act of 1930, as amended, provides for an adjustment in the calculation of any margin of dumping to address th e existence of an export subsidy subject to a 
countervailing duty order.   (vii) Quantitative restrictions, controls and licenses 
 Paragraph 76 refers to the modification of the Lacey Act in 2008, in order to prevent trade in illegally 
obtained plants and of products manufactured from those plants.  
 41. What does the concept of “plants” cover?  
 RESPONSE:  Under the amended Lacey Act, “plant” means “Any wild  member of the plant 
kingdom, including roots, seeds, parts or  products thereof, and including tree s from either natural or 
planted forest stands.”  However, “common food crops” and “common cultivars” are excluded from 
the scope of the amended Lacey Act.  A draft regulation with a definition of these terms was published in the U.S. Federal Register on August 4, 2010  (75 Fed. Reg. 46859), with a deadline for 
comments of October 4, 2010.  The document is av ailable at either of the following web sites: 
http//www.gpoaccess.gov/fr or http//www.aphis.usda.gov.  WT/TPR/M/235/Add.1 
 Page 203 
 
 
 42. What documents or information must be submitted by companies in the declaration on 
imports of these plants and plant products?  
 RESPONSE:  The plant import declaration of the ame nded Lacey Act requires information on the 
scientific name (genus and species) of the plant or pl ants contained in the importation, the name of the 
country where the plant was harvested, and the quant ity and value of the importation.  The declaration 
does not require documentation or certification of legality. 
 
43. Has the impact of the Lacey Act, been measu red, in the trade of illegally obtained plants and 
products manufactured from these plants?  If so, what was the result of this measurement?  
 
RESPONSE:  As required by statute, agencies responsib le for implementing the amended Lacey Act 
are currently undertaking a review of the first two years of experience.  This review is ongoing and 
will include an assessment of the possible effect s of the amended Lacey Act on trade in illegally 
harvested plants and products manufactured from those plants.  
 
The same paragraph mentions that in December 2008 there began a period of gradual 
implementation of this requirement. 
 
44. When will this measure be fully applied and what would this mean?  
 
RESPONSE:  The prohibitions of the amended Lacey Act are in force as of May 22, 2008.  The 
requirement to file a plant import declaration for c overed plants and plant prod ucts is being enforced 
on a phased-in basis.  Products  currently requiri ng a declaration are described in a notice published 
in the U.S. Federal Register on September 2, 2009.  Changes, including enforcement of the 
declaration for additional products, will be published in subsequent notices. 
 
(ix) Sanitary and Phytosanitary Measures 
 
In paragraph 105, page 50, the report notes that  according to U.S. authorities, sanitary and 
phytosanitary measures are based on internati onal standards and guidelines “when they exist, and 
are appropriate.” 
 45. What percentage of sanitary and phytosanitary measures applied by the United States, during 
the examination, are based on international standards and guidelines?  
 
RESPONSE:  The United States places a high priority on ensuring that all of its SPS measures are 
transparent and based on science in concert with its WTO obligations.  While all U.S. SPS measures 
take relevant international sta ndards into consideration, the United States does not calculate a 
percentage of standards applied that simply adopt the international standard and/ or guideline.  This is 
not an obligation under the WTO SPS Agreement.  
 
In paragraph 110 there is reference to applications  for first-time import of vegetables, animals and 
their products in the United States, which may require a risk assessment. Paragraph 111 indicates 
that, on the basis of the results of the risk assessm ent, the APHIS is the entity that authorizes such 
imports, subject to compliance with sanitary and phytosanitary requirements. These are published 
mostly as regulations and must comply with the pr ocedural requirements estab lished in Article ix) of 
the Administrative Procedure Act. It also notes that no limit has been established in the law as to the 
length of the approval process for imports of vegetab les, animals and manufactured products that are 
made for the first time, and that norma lly, this process takes two to three years. 
 46. What are the reasons for the length of this process to last two to three years?  Would it be 
possible to shorten these terms?  WT/TPR/M/235/Add.1 
Page 204 
 
 
 RESPONSE:  The time required for a science based, transparent review largely depends upon the 
nature of the market access requ est, the availabity of scientific evidence to support the request, and 
the data submitted.  
 Under the Q56 revisions, APHIS has established cr iteria allowing for a faster and more efficient 
approval process for certain fruits and vegetable im ports.  The Q56 revisions simplified and expedited 
APHIS’ process for approving eligible new imports and pest-free areas while continuing to ensure 
that measures are science based and that USDA’s process allows for public participation in agency 
decisionmaking. 
 47. Has the United States considered setting a deadline for risk assessment and for the 
subsequent phases to it? 
 RESPONSE:   The United States ensures that its SPS meas ures are transparent, based on science and 
do not cause undue delay.  However, the United States does not support a general timeline for 
conducting risk assessments and its rulemaking pro cess.  The timeline for these processes largely 
depend upon the nature of the request, the data s ubmitted, and scientific information available during 
the review.  (3) OTHER MEASURES AFFECTING TRADE AND INVESTMENT (i) Legal framework for businesses and foreign investment regime 
 
According to paragraph 167, companies are subject to  taxation at the federal and state levels. Most 
states apply a corporate income tax.  Due to the inh erent variability of the tax regimes of the states, it 
was determined that the costs of compliance with th e corporate income tax at the state level duplicate 
the costs of complying with that tax at the federal level.
48  The maximum regulatory marginal federal 
corporate income tax is 35 percent,  while the combined rate of federal and sub-federal corporate 
income tax is 39.1 percent, the second highest among OECD countries.49 
 
48. Given that bilateral investment treaties are reci procal in nature:  In  order to avoid double 
taxation in treaties, could the United States exclude  foreign companies benefiting from this type of 
treaty, from the two types of taxes applicable to federal and sub-federal tax on corporate income?  
 
RESPONSE:  The United States does not address issues of double taxation in a bilateral investment 
treaty.  This is only done through a bilateral tax tr eaty.  Moreover, as a general matter, U.S. bilateral 
tax treaties only address taxation at the federal leve l.  They do not limit the imposition of state-level 
taxes.  
                                                      
48 Gupta and Mills (2003). 
49 This combination is the sum of the rate of the federal government, adjusted to take into account the 
deductions relating to income tax applied at the sub-federal level and “representative” sub-federal rate. 
Information in line with the OECD tax database of the OECD. Obtained in:  
http://www.oecd.org/ctp/taxdatabase.  WT/TPR/M/235/Add.1 
 Page 205 
 
 
 EGYPT 
 
(1) Sanitary and Phyto - Sanitary Measures (SPS):  
• What is the difference between the mandates of  each of the food Safety Working Group and the 
Food Safety and Inspection Service with respect to  the regulation and implementation of food 
safety measure in the U.S.? 
 
RESPONSE:   In March 2009, President Barack Obama announced the creation of a new Food Safety 
Working Group to advise him on how to upgrade the U.S. food safety system. The Working Group, chaired by the Secretary of Health and Human Services (http://www.hhs.gov/secretary/) and the 
Secretary of Agriculture (http ://www.usda.gov/wps/portal/!ut/p/_s.7_0_A/7_0_1OB?contentidonly= 
true&contentid=bios_vilsack.xml), is recommending a new, public health-focused approach to food 
safety based on three core principles:  (1) prioritiz ing prevention;  (2) stre ngthening surveillance and 
enforcement;  and (3) improving response and rec overy.  USDA’s Food Safe ty Inspection Service 
(FSIS) is one of the agencies engaged in this review.  
The Food Safety and Inspection Service (FSIS) is th e public health agency in the U.S. Department of 
Agriculture responsible for ensuring that the na tion's commercial supply of meat, poultry, and egg 
products is safe, wholesome, and correctly labeled an d packaged.  Under the President’s Food Safety 
Working Group, FSIS is leading the inte ragency efforts with regards preventing Salmonella  
contamination, reducing the threat of E. coli  O157:H7, and working with FDA and other regulatory 
agencies to build a national traceback and response system.   
 
• Since the U.S. is not a party of the Cartagena Protocol, what are the bases on which each of 
the Food and Drug Administration (FDA), Animal and Public Health Information System 
(APHIS), and Environmental Protection Ag ency (EPA) depends on for controlling the 
circulation of genetically modifie d products in both the U.S. market and in its international 
trade?  
 RESPONSE:   The United States uses health and safety laws written prior to the commercialization of 
modern biotechnology to regulate genetically e ngineered products.  The current system was 
delineated under the 1986 Coordinated Framework fo r Regulation of Biotechnology (United States 
Federal Register, June 26, 1986, 51 FR 23302).  More information is available online at 
http://usbiotechreg.nbii.gov.  To da te, the United States has not issued any new legislation for these 
products and new regulations, policy statements a nd guidelines will continue  to be developed as 
needed. 
 
Under the Coordinated Framework, agencies that were  responsible for regulatory oversight of certain 
product categories or for certain product uses are also  responsible for evaluating those same kinds of 
products developed using genetic engineering.  
 The laws currently used to regulate the products of  modern biotechnology are the Plant Protection Act 
(PPA), the Federal Food, Drug, and Cosmetic Act (FFDCA), the Federal Insecticide, Fungicide, and 
Rodenticide Act (FIFRA), and the Toxic Substances Control Act (TSCA). New regulations have been 
developed under these statutes as needed to addr ess genetically engineered products developed. 
 
While the United States is not a Party to the Cartag ena Biosafety Protocol (CBP), it does support the 
principles of the CPB, and encourages Parties to me et their obligations under the CPB.  Additionally, 
U.S. trade in all agricultural products, including pro ducts of biotechnology, is in accordance with all 
international regulations governing trade, such as the Agreement on Agriculture (AoA) of the WTO. 
 
 WT/TPR/M/235/Add.1 
Page 206 
 
 
 (2) Trade in Services (GATS): 
 
• The U.S. has GATS commitments with respect  to aircraft repairs and maintenance, and has 
scheduled MFN exemptions with regard to the sale and marketing of air transport services and 
the operation and regulation of Computer Reserva tion System (CRS) services.  As there is a 
forthcoming third review of the MFN exemptions, would the U.S. maintain its MFN 
exemptions with regard to the sale and ma rketing of air transport services, and the operation 
and regulation of CRS services ?. 
 RESPONSE:   As the need for these exemptions remain s, the United States has no plans to remove 
them in the context of the MFN exemption review.  
• Since the Uruguay Round, the U.S. has not off ered any improvements in its Mode 4 Offer, 
especially with regard to the issues of Cont ractual Service Suppliers (CSS) and Independent 
Professions (IP).  Whereas, most of the devel oping countries have shown substantial progress 
in their Offers.  How does the U.S. explain  this lack of progress in its Mode 4 offers
? 
 RESPONSE:   The TPR is not a negotiating forum.  Requests made in the context of the DDA 
services negotiations should be taken up in that forum. 
 
• As stated by the Secretariat Report, the U.S.  has not made any commitments on Maritime 
Services Sector, although the U.S. is the largest  cargo country. Furthermore, the negotiations 
based on the "Annex on Maritime Transport Service s" have been stagnating, due to divergent 
views over international shipping, auxiliary services and access to and use of port facilities. 
Please indicate whether the U.S.  has any specific plans to exerci se flexibility in these issues, 
and thus to facilitate the implementation of the Annex.  
 
RESPONSE:   The TPR is not a negotiating forum.  Requests made in the context of the DDA 
services negotiations should be taken up in that forum. 
 
(3) Trade Facilitation:  
 
• It is mentioned in the Secretariat Report that the Customs and Border Protection (CBP) 
maintains a searchable database of its rulings .  The CBP also publishes the “Customs 
Bulletin”, which is a weekly compilation of d ecisions, rulings, regulations, and regulatory 
proposals on customs matters.  Importers c an request an advance written ruling from the 
CBP.  Could the U.S. explain whether it provides this right of submitting the request of the 
advance ruling to other parties other than the importers ? 
 
RESPONSE:   Advance rulings may be requested by a variety of interested parties.  Eligibility to 
request an advance ruling is not restricted by geogr aphic location or U.S. residency.  Specifically, a 
ruling may be requested by any person who, as an im porter or exporter of merc handise, or otherwise, 
has a direct and demonstrable interest in the ques tion or questions presented in the ruling request, or 
by the authorized agent of such person.  A “p erson” in this context includes an individual, 
corporation, partnership, associati on, or other entity or group.  See  19 CFR §177.1(c). 
 Furthermore, examples of specific parties with a direct and demonstrable interest in questions 
presented that have received advance rulings ha ve included producers, manufacturers, carriers, 
drawback claimants, warehouse operators, foreign trade zone operators, and freight forwarders. 
 
• Regarding the “Single Portal System”, the Secret ariat Report states that, “although the Office 
of Management and Budget (OMB) may exempt  certain agencies.  According to the  WT/TPR/M/235/Add.1 
 Page 207 
 
 
 authorities, the OMB has not exempted any agenc ies”. What are the standards upon which the 
(OMB) may exempt certain agencies from impor t and exports requirements under the “Single 
Portal System”?  
 
RESPONSE:  OMB has never considered granting an exception and has no established standards 
other than the "vital national interest."  See  19 U.S.C. 1411 (d)(1)(C)(ii). 
 
• The “Single Portal System” is not yet fully op erational due to delays in the implementation of 
the Automated Commercial Environment (ACE),  which is the cargo processing instrument 
under this system. The U.S. has not set a target date for the implementation of the ACE.  Could 
the U.S. provide information regarding the intende d steps to fully implement its “Single Portal 
System ”, especially, with respect to th e implementation of the ACE?  
 
RESPONSE:  ACE is a new CBP computer system for trade processing, being built in phases.  ACE 
is the computer system through which the single wi ndow will be fully realized for import and export 
transactions and would apply to all federal agencies involved in those transactions. As development is 
currently ongoing, we do not have a co mpletion date for all functional pieces. WT/TPR/M/235/Add.1 
Page 208 
 
 
 EL SALVADOR 
 1. The Report by the Secretariat states:  “In th e context of this Review, the U.S. authorities 
indicated that support for the WTO remains a core prio rity of U.S. trade policy.  The Administration 
supports the successful conclusion of the Doha ne gotiations, but considers that a weak agreement 
would undermine the WTO and serve the interests of ne ither the United States nor any other country.  
According to the USTR, the past negotiating pr ocess has not generated me aningful market-opening 
results.  Thus, the USTR supports ‘a different approach  to the end game in order to gain a stronger 
outcome .’” 
 Could the United States specify what this “different approach to the end game in order to gain a stronger outcome in the framework of the Doha negotiations” is?  
RESPONSE:   During the March 26, 2010, stock-taki ng meeting in Geneva, there was broad 
agreement among Members that the road ahead should focus on enga gement in various formats, 
including direct bilateral enga gement and small-group horizonta l discussions to help bridge 
negotiating gaps.  From the U.S. perspective, th is was an important step forward from previous 
approaches.  The United States has initiated and partic ipated in multiple, detailed bilateral discussions 
aimed at establishing a negotiating “playing field” which we hope will set the stage for more intense 
and targeted give-and-take negotiations.  This wo rk, in conjunction with on-going work in the 
Negotiating Groups and other configur ations, can help us to build momentum across all areas of the 
Doha Round negotiations. 
 
2. The Report by the Secretariat indicates that during the review period “the United States has 
not notified ‘any new, laws, regulations or adminis trative guidelines or any changes to existing laws, 
regulations, or administrative guidelines, whic h significantly affect trade in services.”  
 El Salvador would like to know when the United Stat es will notify the new, or changes to existing, 
laws, regulations, or administrative guidelines that significantly affect trade in services pursuant to 
Article III(3) of the General Agreement on Trade in Services? 
 RESPONSE:   The United States has recently submitted a notification under GATS Article III:3 on 
The Dodd-Frank Wall Street Reform and Consumer  Protection Act (Public Law 111-203), which was 
signed into law by President Barack Obama on July  21, 2010, although certain  sections have delayed 
dates of entry into force.  WT/TPR/M/235/Add.1 
 Page 209 
 
 
 EUROPEAN UNION 
 I. ECONOMIC ENVIRONMENT   
U.S. Report, page 12, paragraph 45  
The Report recognizes the need for "renewed inter national cooperation in the areas of trade and 
financial reform", mentioning specifically capital re quirements. We note that the U.S. has not yet 
implemented Basel 2. In the meantime, the o versight body of the Basel Committee on Banking 
Supervision, at its 12 September 2010, meeting announ ced a substantial strengthening of existing 
capital requirements, thus reinforcing the Basel 2 requirements.  1. Against this background, could the U.S. provide detailed information on its plans to 
implement Basel 2, as well as Basel 3, which is now being discussed and introduced?  In particular, 
when does it intent to implement them and on how many banks?  
 RESPONSE:  The International Monetary Fund has evalua ted the United States’ implementation of 
the Basel 2 Capital Accord in its May 14 2010 report, “United States:  Publication of Financial Sector 
Assessment Program Documentation - Technical Note on Basel II Implementation Preparedness in the United States”.  Please refer to the report a t:  http://www.imf.org/external/pubs/cat/longres.cfm? 
sk=23866.0 for an extensive discussion of these issues. 
 With regard to new work by the Basel Committee,  the United States supports their work and looks 
forward to reviewing the full package of reform s that the Basel Committee will send to the G-20 
Leaders at Seoul in November 2010.  We support the Basel Committee’s various phase-in periods 
which are designed to allow implementation that will not risk economic recovery. 
 
II. TRADE AND INVESTMENT POLICY FRAMEWORK 
(3) PREFERENTIAL TRADE AGRE EMENTS AND ARRANGEMENTS 
(i) Bilateral and regional preferences 
U.S. Report, page 19, paragraphs 80 and 82 
 The Reports informs that pursuant to the No rth American Free Trade Agreement between the 
United States, Canada, and Mexico (NAFTA) "all rema ining duties and quantitative restrictions were 
eliminated, as scheduled, on January 1, 2008" and highlights the benefits ensuing from this agreement. 
 
2. Could the U.S. indicate whether any measures have been taken since the last TPR to eliminate 
regulatory barriers to trade between  the U.S. and its NAFTA partners? 
 RESPONSE:  The NAFTA partners have recognized the value of reducing unnecessary regulatory 
differences as a means of reducing transaction costs.   On June 8, 2009, Canada, Mexico and the 
United States circulated a paper (G/TBT/W/317) that described the North American experience on 
regulatory cooperation.  The paper describes the fo rms that regulatory cooperation has taken over the 
years, as well as the achievements reached to date.  Following their meeting in August 2009, President Obama, President Calderon and Prime Minister 
Harper issued a statement in which they noted the “progress achieved on reducing unnecessary 
regulatory differences” and instructed officials to “continue this work by building on the previous 
efforts, developing focused priorities and a sp ecific timeline.”  In October 2009, the Free Trade 
Commission, the body responsible for the implemen tation of the NAFTA, agreed to develop a work 
plan that included three elements:  competitiven ess, strengthening institutions, and communications WT/TPR/M/235/Add.1 
Page 210 
 
 
 and transparency.  As part of the competitiv eness agenda, the Commission agreed to pursue 
opportunities for additional regulatory cooperation.  
Canada, Mexico, and the United States agreed to  a set of common regulatory principles to guide 
North American regulators during regulatory deve lopment. These common principles are rooted in 
WTO rules and mirror closely OECD principles. Th ey include minimizing the adverse impact of 
regulations on fair and competitive market economies;  minimizing unnecessary duplicative requirements within North America;  identifyi ng alternatives to addressing a regulatory need, 
including non-regulatory options;  and ensuring transparent regulatory development and 
implementation. In light of these principles, Cana da, Mexico and the United States established a list 
of illustrative best practices that provide concrete guidance, in each of the three countries, on how to 
achieve our common principles.  These best practices  encompass government efforts to streamline the 
regulatory process, increase the use of regulatory impact assessment, and improve transparency 
through effective consultations throughout the process. 
 
In May 2010, President Obama and President Ca lderon committed to “significantly enhance the 
economic competitiveness and the economic well-bei ng of both the United States and Mexico through 
improved regulatory cooperation.”  The Presidents di rected the creation of a High-Level Regulatory 
Cooperation Council (HLRCC), which is comprised of  senior-level regulatory, trade, and foreign 
affairs officials from both countries.  The HLRCC held its first meeting in September 2010.  At that 
meeting, the Council held a constructive discussi on about our shared commitment to regulatory 
cooperation on key issues that affect both countries. 
 
WTO Secretariat's Report, page 15, paragraph 19 
 
The Report notes the entry into fo rce of three new FTA since the last TPR of the U.S.:  the FTAs with 
respectively Costa Rica and Oman on 1 January 20 09 and the FTA with Peru on 1February 2009. 
 3. Could the U.S. elaborate and clarify if and how social and labour issues are addressed within 
each of these agreements? 
 
RESPONSE:  United States trade agreements contain prov isions related to labor issues in the 
following areas:  adherence to internationally rec ognized labor rights;  effective enforcement of 
domestic labor laws;  fair and transparent processes for adjudication of labor rights;  mechanisms to 
foster cooperation between the parties on labor issu es;  and enforcement mechanisms that include 
consultations and arbitral pane ls with the availability of m onetary assessment and commercial 
remedies.  (Further information on the labor aspect s of specific trade agreements is available at: 
http://www.ustr.gov/trade-topics/labor/bilate ral-and-regional-trade-agreements.) 
 
The agreement with Costa Rica is part of the Dominican Republic-Central America-United States 
Free Trade Agreement.  The agreement includes a labor  chapter with a main obligation to effectively 
enforce domestic labor laws and an enforcement me chanism that includes consultations and arbitral 
panels with the availability of monetary assessment  and commercial remedies.  (Further information 
on the labor aspects of this agreement is availabl e at:  http://www.ustr.gov/sites/default/files/uploads/ 
agreements/fta/chile/as set_upload_file853_4012.pdf.) 
 The United States – Oman Free Trade Agreement also includes a labor chapter with a main obligation 
to effectively enforce domestic labor laws and an  enforcement mechanism that includes consultations 
and arbitral panels with the availability of mone tary assessment and commercial remedies.  (Further 
information on the labor aspects of this agreement is available at:  http://www.ustr.gov/sites/default/ 
files/uploads/agreements/fta/oman /asset_upload_file901_8812.pdf.)  
  WT/TPR/M/235/Add.1 
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 The United States – Peru Trade Promotion Agr eement includes a labor chapter with binding 
obligations to adhere to internationally recognized  labor rights, and to effectively enforce domestic 
labor laws and provide fair and transparent processes  for adjudication of labor rights.  The agreement 
also contains an enforcement m echanism that includes consultations  and arbitral panels with the 
availability of monetary assessment and commercial remedies.  (Further information on the labor 
aspects of this agreement is available at:  http ://www.ustr.gov/sites/defau lt/files/uploads/agreements/ 
fta/peru/asset_upload_file73_9496.pdf.) 
 
(5) AID-FOR-TRADE 
WTO Secretariat's Report, page 18, paragraph 36 
 According to the Report, the U.S. policy framework for foreign assistance is currently under review as 
part of the Presidential Study Directive on U.S. Global Development Policy and the Quadrennial 
Diplomacy and Development Review and the Presidential Study Directive on U.S. Global Development Policy. 
 
4. Could the U.S. provide a more detailed timeline for this review? 
 
RESPONSE:   President Obama announced the new U.S. Global Development Policy in New York 
on September 22, 2010.  Details can be fo und at:  http://www.whitehouse.gov/the-press-
office/2010/09/22/fact-sheet-us-global-development-policy. 
 
The Report states that U.S. aid-for-trade in 2008 stood at US$2.2 billion. 
 
5. Could the U.S. provide a breakdown of this figure, by region and by main category? 
 
RESPONSE:   In 2008, U.S. Aid for Trade/Trade Capacity Building funding was distributed as 
follows: 
 By region: 
• Asia:  $266 million, for a total of $1.14 billion since 2001 
• Central and Eastern Europe:  $32 million, for a total of $438 million since 2001 • Former Soviet Republics:  $49 million, for a total of $848 million since 2001 
• Latin America and Caribbean:  $174 million, for a total of $2.1 billion since 2001 
• Middle East and North Africa:  $602 million, for a total of $1.6 billion since 2001 
• Sub-Saharan Africa:  $1 billion, for a total of $2.6 billion since 2001 
 By main categories: 
 
WTO Awareness and Accession   $9.9 million  
WTO Agreements    $20 million 
 Trade Facilitation    $264 million 
 
Human Resources and Labor Development $87 million  
Financial Sector Dev/G ood Governance  $77 million 
 Physical Infrastructure    $1.1 billion 
 WT/TPR/M/235/Add.1 
Page 212 
 
 
 Trade-Related Agriculture   $367 million 
 
Environment Trade and Standards  $49 million 
 
III. TRADE POLICIES AND PRACTICES BY MEASURE 
(1) MEASURES DIRECTLY AFFECTING IMPORTS 
 A draft Foreign Manufacturers Legal Accountability  Act (HR 4678/ S1606) is currently being 
discussed in the House of Representatives and the Se nate.  We are very con cerned with the trade 
restrictive impact if legislation along the lines cu rrently proposed should be adopted, given the 
additional administrative burden and costs that w ould arise for our producers, particularly SMEs, on 
exporting to the U.S.. 
 
We are additionally concerned to note that the current version of the House Bill provides for a 
prohibition to import in the case where a registe red agent has not been established by foreign 
producers and manufacturers of covered products dist ributed in commerce. This appears to be 
problematic under GATT Article XI and al so raises concerns under GATT Art. III.4. 
 
6. Could the U.S. confirm that, before adopting any Act in this regard, alternative less trade 
restrictive means will be considered? 
 
7. Could the U.S. further confirm that it w ill ensure that any measures adopted complies fully 
with the U.S obligations in the WTO? 
 
RESPONSE to Questions 6 and 7:   The proposed Foreign Manufacturers Legal Accountability Act, 
as reflected in bills pending before the U.S. Congress reflects a desire to ensure that consumers in the 
United States can be confident that the products th ey buy are safe and that there are procedures 
available under U.S. law to address effectively an y product liability issues they may engender.  The 
United States believes these goals can be accomplis hed without imposing undue  burdens on foreign 
manufacturers.  The FMLAA is still pending before Congress.  We are not in a position to speculate 
on the implications of particular provisions wh ich are subject to further review and possible 
modification in the United States Congress. 
 
(i) Customs procedures 
 WTO Secretariat's Report, page 22, paragraphs 13 and 14  
The requirement to scan all U.S. bound containers be fore they are loaded at a foreign port  mandated 
by the Implementing Recommendations of the 9/11  Commission Act of 2007, which was already 
raised prominently during the 2008 U.S. TPR, remai ns a major concern to the EU and its economic 
operators.  We take note of the statements by th e Secretary for Homeland Security indicating she 
would seek to postpone the implementation of the scanning requirement beyond the July 2012 
deadline in the face of "prohibitive challenges"  in implementing it. We also welcome the good 
cooperation between the EU and U.S. customs author ities and their shared preference for risk based 
customs security tools.  In February 2010 the Commi ssion published a series of studies (compiled in a 
staff working document (SEC(2010)131)) showing that the 100% scanning requirement would entail significant costs for EU ports, operators and authorities. 
 
Has the U.S. performed a cost benefit analysis of the impact of the 100% scanning legislation on third 
countries?  If so, could the U.S. share the results? 
 
RESPONSE:   To date, CBP and DOE have assumed all the costs of implementing and operating the 
pilot programs associated with the 100% scanni ng mandate.  The United States is committed to  WT/TPR/M/235/Add.1 
 Page 213 
 
 
 working with our domestic and fore ign partners, trade and industry,  to implement 100% scanning in a 
logical and practical manner that integrates smoothly into the global supply chain.  9. Are alternative options being considered that are based on adequate risk analysis and hence 
less costly and burdensome for traders? 
 RESPONSE:   An interagency working group has been assembled to look at worldwide global supply 
chain security.  The working group is looking at all options in addressing the 100% scanning mandate 
and the path forward.  
 
WTO Secretariat's Report, page 22, paragraph 15  
The Report mentions the U.K. as one of the c ountries with a pilot programme under the Secure 
Freight Initiative (SFI). However, the U.K. por t of Southampton is no longer a SFI port, it has 
reverted to CSI (Container S ecurity Initiative) status. 
 (iv) Tariffs 
(b) Applied MFN Tariffs 
 WTO Secretariat's Report, page 25, paragraph 30  
 The Report refers to the 2009 HTSUS. 
 
10. With respect to customs classification in genera l, can the U.S. confirm it has in place a system 
of so-called additional rules of interpretation of the tariff (HTSUS), and if so whether such Additional 
Rules also control classification at the Harmonized System digits level? 
 RESPONSE:   The United States confirms that it has Additional U.S. Rules of Interpretation 
(“AUSRI”), which help define the scope and limits  of a tariff provision.  The AUSRI are legal 
authority for classification at the Harmonized System digits level.  
11. Do such additional rules of interpretation ha ve any impact on tariff treatment as fixed by the 
Schedules of Concessions within the me aning of Article II of the GATT 1994? 
 
RESPONSE:   No. 
 
12. With respect to the tariff classification of products which are subject to the Information 
Technology Agreement (ITA), does the U.S. agree that the customs classification of the IT products 
covered by the ITA is to be performed by  relying on the Harmonized System Convention? 
 
RESPONSE:   The WTO Agreements do not contain rules prescribing how products are to be 
classified.  Signatories to the Harmonized System Convention, including the United States, use the 
rules contained therein to classify merchandise.  Me mbers that are not signatories to the Harmonized 
System Convention may follow other rules.  Regard less of the classification rules they follow, all 
Members must accord to imports from other Me mbers the duty treatment provided in their WTO 
Schedules of Concessions, including products c overed by the ITA as well as other products. 
 
WTO Secretariat's Report, page 25, paragraph 31  
 
The Reports notes that only about 10% of tariff lines in the U.S. Schedule are non-ad valorem tariffs. 
However, non non-ad valorem tariff rates still apply to such non-agricultural items as apparel and 
clothing, footwear and headgear, watches, and preci sion tools, where some of the highest tariff 
protection persists.  WT/TPR/M/235/Add.1 
Page 214 
 
 
 13. Are there any concrete plans to shift to ad valorem rates for non-agricultural products? 
 RESPONSE:   At this time, we are only considering conversion of non- ad valorem  tariffs to 
ad valorem  tariffs in the context of the Doha Round. 
 (v) Other charges affecting imports  WTO Secretariat's Report, page 29, paragraph 43-44  
An increasing number of States have adopted legislati on deviating from the ordinary three-tier-system 
of distribution of alcoholic beverages by allowing,  subject to various conditions, the direct shipment 
of wine to the final consumer.  Most of these regulations allow direct shipment only from U.S. 
wineries, and not for imported wine.  However, as a WTO Member, the U.S. is obliged to accord to 
imported products treatment no less fa vourable than that accorded to like products of national origin 
in respect of all laws, regulations and requirements affecting their internal sale, offering for sale, 
purchase, transportation, distribution of u se (cf. Article 111:4 of the GATT 1994).  
 14. What steps does the U.S. government intend to take in order to ensure that existing 
discriminatory state laws are brought into  compliance with its WTO obligations? 
 
RESPONSE:  The United States has no basis to accept that  existing state laws are discriminatory. 
The United States believes its laws and regulations are consistent with U.S. obligations under the 
WTO. 
 
The EU argues that certain tax breaks for small producers of beer and wine openly discriminate 
against like imported products comi ng from small producers facing similar or identical difficulties 
(e.g. higher cost of production).  For instance,  the credit on the excise tax that domestic small 
wineries enjoy when producing not more than 250,000 gallons of wine is not available to foreign small producers.  Under the current regime, domes tic small producers will pay 17 cents and foreign 
small producers pay US$1.07 per gallon.  his is  a very significant advantage for domestic small 
wineries and puts imported product coming from like producers into a significant disadvantage.  The 
U.S. importers of alcoholic beverages have long complained about the competitive disadvantage 
resulting from these rules and have asked for a level playing field.  
 15. Considering this, how does the U.S. explain its assertion reported in paragraph 44 that tax 
advantages for small producers of beer and wine  do not have a trade distorting effect? 
 
RESPONSE:  The United States has no basis to accept that the tax provisions in question are 
discriminatory. 
 
(viii) Technical regulations and standards 
 
WTO Secretariat's Report, page 34, paragraph 77  
 
The Report states that technical regulations and conformity assessment procedures "are usually 
adopted administratively by federal agencies, on th e basis of regulatory authority delegated by 
Congress" but also that Congress "may define sp ecific parameters for technical regulations or 
conformity assessment procedures, or even establis h technical regulations and conformity assessment 
procedures legislatively." 
 16. Could the U.S. clarify how many technical regulations and co nformity assessment procedures 
as defined by the TBT Agreement have been brought  forward and/or adopted by Congress during the 
review period?  WT/TPR/M/235/Add.1 
 Page 215 
 
 
 17. Have these technical regulations and conform ity assessment procedu res been notified to the 
WTO according to the U.S. transparen cy obligations under the TBT Agreement? 
 RESPONSE to Questions 16 and 17:   It has not been possible to assemble the list requested by the 
EU, but we would be interested in discussing the is sue of legislative notification with the EU at the 
next meeting of the U.S.-EU High Level Regulatory Cooperation Forum. 
 
WTO Secretariat's Report, page 35, paragraph 78 
 
The Report notes the states' authority to adopt t echnical regulations and conformity assessment 
procedures in areas of their comp etence and the option that states delegate this authority to regional, 
local, or municipal governments.  
 
18. What measures has the U.S. undertaken - or is  planning to undertake - in order to ensure that 
state authorities and other sub-federal entities duly comply with the transparency obligations under 
the TBT Agreement? 
 
RESPONSE:   Most U.S. States have an administra tive procedure act similar to the federal 
Administrative Procedure Act.  Such laws allow any stakeholder, foreign or domestic, to provide 
comments on proposed regulations.  The United States also notifies proposed technical regulations and conformity assessment procedures at the level dir ectly below that of the central government to the 
WTO for comment.  In addition, the federal govern ment reminds U.S. States of our international 
obligations through formal mechanisms such as USTR’s Intergovernmental Policy Advisory 
Committee (IGPAC), as well as informal channels.  
 
The state of California has adopted a regulation that  would prohibit the marketing of "fois gras" as 
from 2012 on grounds of animal welfare.  
 
19. Could the U.S. clarify whether California is  authorized to take this type of measure? 
 20. How does the U.S. asses the compatibility of California's measure with  the U.S. obligations 
under the WTO?  
RESPONSE to Questions 19 and 20:   This is the first time that the EU has raised this concern, and 
we do not have any information on it at this time.  We would be pleased to discuss the issue with the 
EU bilaterally.  
WTO Secretariat's Report, page 35, paragraph 81  
 
According to the Report the average period for comme nt specified in U.S. notifications of technical 
regulations and conformity assessment pro cedures between November 2007 and January 2010 was 
around 40 days which is significantly below the multila terally recommended period of 60 days.  It is 
also noted that some 30% of notific ations, mainly by sub-federal entiti es, did not specify a "final date 
for comments". 
 
21. What measures has the U.S. taken, or is pl anning to take, in order to achieve a better 
compliance, including of its sub-federal entities, with the recommendation of the TBT Committee 
which foresees a normal time limit for comments of 60 days? 
 22. Of those 30% of notifications, could the U.S.  clarify what percentage did not provide any 
comments period due to the fact that the legislation had already been adopted, or that adoption was 
imminent? 
 WT/TPR/M/235/Add.1 
Page 216 
 
 
 23. Could the U.S. indicate whether it intends to take any measure to improve the handling of 
comments in light of the recommendations of the TBT Committee?  In  particular, are there any plans 
to review the current policy of pub lishing replies to the comments recei ved together with the final rule 
rather than before?  
RESPONSE to Questions 21-23:   We are reviewing the matter, but believe that the 40-day figure 
may be misleading.  The United States often notifi es measures that do not need to be notified for 
purposes of greater transparency (e.g., certain voluntary measures, requests for information in 
advance of a rulemaking, notices of hearings where stakeholders may participate, proposed measures 
based on relevant international standards), as well as  measures to address urgent circumstances (e.g., 
certain interim final rules, rules taken to comply with a court order).  The United States has notified 
hundreds of measures to the WTO, including more than  60 this year alone.  We will need to isolate 
the above-referenced notifications from the remainde r to determine whether there is an issue that 
needs to be addressed.   
 
WTO Secretariat's Report, page 37, paragraph 87  
 One barrier to entry into the U.S.  market is caused by the requi rement on manufacturers of electrical 
goods for use in the workplace to obtain certific ation by a body that is recognised by the 
Occupational Safety and Health Administration (OSH A), i.e. National Recognized Test Laboratory 
(NRTL).As the NRTLs are accredited and governmentally  controlled within the same mandatory legal 
system, the European Union considers that the current regime creates unn ecessary red tape and 
related costs for the U.S. and EU industries com pared to the EU system which does not oblige the 
manufacturer to follow third party certification fo r these products.  In the EU the manufacturer can 
establish conformity by issuing a Su pplier's Declaration of Conformity. 
 
24. Could the U.S. accept that the Supplier's Declaration of Conform ity is used as an alternative 
to the NRTL approval process for electrical products?  25. In addition, could the feedback on the results of the stakeholder consultation that OSHA 
conducted (Docket No OSHA-2008-0032) be made available? 
 RESPONSE to Questions 24 and 25:   The EU requested that OSHA consider accepting SDoC in 
lieu of the current NRTL system.  In response, OS HA asked for public comment on whether it should 
undertake rulemaking to accept SDoC as part of a Request for Information (Docket No OSHA-2008-
0032).  OSHA has not yet made a decision on this question but is in the process of finalizing its 
decision.  Once finalized, this decision will be publis hed as a notice in the Federal Register.  This 
notice will explain that decision as well as summari ze and respond to the information and comments 
received in response to the Request for Information.  
WTO Secretariat's Report, page 39-40, paragraph 97  
 
The Report notes that, as of March 2010, there were as many as 275 standards development 
organizations accredited by the American National Standards Institute (ANSI).  Existence of competing and conflic ting standards can act as an import ant barrier to trade.  Given the 
accreditation mechanism operated by the American Na tional Standards Institute (ANSI) and the large 
number of accredited standards development organizati ons in the U.S. there are concerns regarding 
the ability of the U.S.-standardization system to guarantee the consistency and the coherence with 
international standards.  This applies particular ly to those standards development organizations 
elaborating standards with an international out reach outside the regime of the international 
standardisation organisations ISO and IEC.   WT/TPR/M/235/Add.1 
 Page 217 
 
 
 26. Are there any actions taken or planned in or der to improve and/or ensure the consistency of 
standards elaborated in the U.S. with international standards   
RESPONSE:   The United States does not agree with the EU that there is a problem that needs to be 
addressed on the U.S. side.  The EU’s view that onl y ISO and IEC can develop international standards 
is belied by the TBT Committee Decision Principles fo r the Development of International Standards, 
which was recently re-affirmed by the TBT Committee, and the complete silence of the TBT Agreement on the subject (as opposed to the SPS Agreement where bodies are explicitly named).  
Moreover, ANSI accredits standards development or ganization based on whether those bodies apply 
principles like those elaborated in the WTO TBT Committee Decision on the Development of 
International Standards when deve loping standards.  Whether a sta ndard is “international” is not 
determined by the name of the body that devel oped it but on whether the TBT Committee Decision 
principles were applied when it was developed.  The EU’s view also makes little sense on policy 
grounds, as the United States has discussed at length in the NAMA negotiations. (See, e.g., 
WT/TN/MA/138.)  The United States would urge the EU, in the context of its ongoing review of its 
own standards system, to reform its approach to  standardization from one which seeks to cloak EU 
regional standards as international standards as a way of imposing EU-specific standards on others, to 
an approach that contributes to the development of  a truly international consensus. The United States 
looks forward to making concrete progress on revising the EU’s approach to standards as part of the 
U.S.-EU High Level Regulatory Cooperation Forum. 
 
(ix) Sanitary and phytosanitary measures 
 WTO Secretariat's Report, pages 41- 42, paragraph 107  
 
The U.S. import legislation does not apply the Wo rld organisation for Animal Health (OIE) standards 
regarding BSE, in particular Chapter 11.5 of the Terrestrial Animal Health Code which regulates 
trade of certain products, such as deboned skeletal muscle meat (excluding mechanically separated 
meat) from cattle, regardless of the BSE risk status of the country. The U.S. does not allow the import 
of any food or feed product containing bovine materials.  
The U.S. has not provided any additional scientif ic evidence to support its deviation from OIE 
standards. Furthermore, the U.S. does not recognise th e BSE status assessment made by the OIE as it 
treats countries which have the sa me BSE risk status differently. 
 
Unjustified import restrictions relating to BSE are th e single most important barrier to international 
trade in bovine and bovine products. Beyond their commercial importance, these barriers infringe 
international standards, guidelines and recommenda tions on which WTO Members shall normally 
base their sanitary and phytosanitary measures.  
The lack of any initiative to implement the OIE standar ds in its import rules, despite repeated appeals 
to this end, including during the previous trade po licy review of the U.S. in 2008, is furthermore 
disappointing given that the U.S. on the other hand uses the OIE standards for upholding its own 
export interests. 
 
27. When does the U.S. intend to bring its admin istrative rules into compliance with the OIE 
standards with regard to Bovi ne Spongiform Encephalopathy? 
 RESPONSE:  The United States is fully comm itted to ensuring that its import regulations governing 
BSE consider the relevant World Organization for Animal Health (OIE) guidelines in its review as 
quickly as possible.  WT/TPR/M/235/Add.1 
Page 218 
 
 
 Animal health rules exclude imports of live animals  and of certain products of animal origin into the 
U.S. from countries affected by specific diseases. Imports into the U.S. may require an import permit 
from APHIS;  an official veterinary health certificate from the country of origin;  quarantine prior to 
export and after arrival in the U.S.;  and negative test results for a variety of diseases before and 
during this quarantine. On top of these requirements which in themselves constitute stringent criteria, 
imports are only allowed from approved sources.  Fo r a source to be approved, the competent U.S. 
authorities undertake a lengthy assessment of the ani mal disease situation of the exporting candidates 
followed by a rulemaking procedure. Irrespective of their OIE official disease status, some EU 
Member States still do not have the possi bility to access the United States. 
 
28. When does the U.S. intend to recognize the o fficial animal health status laid down by the 
OIE? Alternatively, what steps are the competent U.S. authorities taking to expedite their technical 
and administrative process for the recognition of the EU Member States animal health status? 
 
RESPONSE:   The United States’ forthcoming proposed rule takes into account OIE country risk 
status (e.g., negligible, controlle d, and undetermined) and will incorporate the criteria for country 
designations and attendant import requirements  for live bovines and bovine products into the 
regulations. We intend to allow flexibility to (1) c oncur with designations given by the OIE, or (2) 
conduct our own evaluation, upon request, for countries not yet classified.  The United States hopes to release a proposed rule in the near future.  
WTO Secretariat's Report, pages 42-43, paragraphs 110 and 111  
 
The Report gives information about the procedure to  approve first time imports of plants, animals, 
and their products into the United States.  
 
29. Could the U.S. further inform about the pro cedures needed to allow import of plants and 
plant products into the U.S. and for which import requirements have not yet been laid down in its 
legislation (from the receipt of the application to  export the "new plants or plant products" until the 
export can take place)?  
 
RESPONSE:   The Animal and Plant Health Inspection Service (APHIS) regulates the importation of 
plants for planting under the authority of the Plant Protection Act. The regulations in 7 CFR part 319 
prohibit or restrict the importation into the United  States of certain plants and plant products to 
prevent the introduction of plant pests into the Un ited States. The regulations contained in "Subpart–
Nursery Stock, Plants, Roots, Bulbs, Seeds, and Other Plant Products" (§ 319.37)
 prohibit or restrict 
the importation of living plants, plant parts, and seeds for propagation. 
 
Specific permits are required for the importation into and transit through the U.S. of regulated plants 
and plant products for consumpti on or propagation. Required plant and plant product permits include 
those for planting such as nursery stock, small lots of seed, and post-entry;  plant products such as 
fruits and vegetables, timber, cotton and cut flowers;   protected plants and plant products such as 
orchids, and threatened and endangered plant species;  transit permits to ship regulated articles into, 
through, and out of the U.S.;  and departmental  permits to import prohibited plant materials for 
research.  The permits are available to be subm itted online or printed out and mailed/faxed in. 
Additional information relating to specific plants or  plant products is available on the USDA website 
at http://www.aphis.usda.gov/plant_h ealth/permits/plantproducts.shtml.  
 
30. Could the U.S. indicate the timeframe for th e completion of:  (a) the pest risk assessment 
(PRA) and (b) the legislation necessary to allow the import of the plant products of concern?  
RESPONSE:   APHIS estimates that it takes a minimum of 18 months on average to evaluate and 
approve new import requests under the rule maki ng system depending on the data submitted, the  WT/TPR/M/235/Add.1 
 Page 219 
 
 
 potential health concerns, etc.  To expedite the re view process APHIS announced a final rule to revise 
and reorganize its regulations pertaining to the im portation of fruits and ve getables, otherwise known 
as its Quarantine 56, or Q-56 regulations in July 2007 .  The purpose of the final rule is to simplify and 
expedite the APHIS process for approving new imports and pest-free areas, and to allow APHIS to 
focus its resources on more complex import issues. 
 The changes in the rule do not alter which fruits and vegetables are currently eligible for importation 
or how the risks associated with those commodities ar e evaluated or mitigated.  This rule only makes 
more timely the approval of fruits and vegetables th at are safe for importation into the United States.  
 
On October 29, 2008, APHIS launched a new sear chable online database, known as the Fruits and 
Vegetables Import Requirements—or FAVIR—database.  FAVIR allows customers to search, by commodity or country, for authorized fruits and ve getables and their requirements for importation into 
the United States.  
APHIS developed the FAVIR database in response to  the Q56 revision that established a streamlined 
approach for the importation of certain fruits an d vegetables without specific prior rulemaking.  
Commodities approved under the Q5 6 revision would not be reflected in the Code of Federal 
Regulations, but rather in an online database  
Information regarding the Q56 and FAVIR data bas es as well as the Plant Protection Act are available 
online at USDA.gov.  
31. Could the U.S. clarify if other authorities, besides the plant quarantine authorities, e.g. 
authorities responsible for invasive species, would n eed to provide opinions before import can be 
allowed? If so, what is the timeframe for these procedures?  
 RESPONSE:   Entry of invasive species is generally det ected by federal agency staff at the U.S. 
Department of Agriculture’s Animal and Plant Heal th Inspection Service for plants and insects. But 
U.S. Customs and Environmental Protection Agen cy officials are consulted for guidance when 
dealing with any living organisms that are intende d as pesticides and potentially for organisms having 
certain consumer and industrial uses;  the U.S. Fi sh and Wildlife Service is consulted for guidance on 
wildlife and fish;  the U.S. Coast Guard for ballast water;  U.S. Customs for general shipments;  and 
the U.S. Postal Service for shipme nts by mail, state eradication boa rds, and state or local agency 
scientists.  More information about our programs is available at:  http://www.invasivespecies.gov/.  
 
32. Could the U.S. inform if the administration has  sufficient capacity to handle applications to 
export new products as they are received?  If not , how long are received applications waiting before 
entering into the above mentioned procedures?  
 RESPONSE:   The United States is confident that it has sufficient capacity to handle applications on a 
timely basis.  33. On plant quarantine legislation, could the U.S.  confirm that a list of regulated pests will be 
made available, as described in The International Standard for Phytosanitary Measures ISPM 1, 
point 1.5 "Contracting parties shall, to the best of  their ability, establish and update lists of regulated 
pest … and make such lists available …” (Article VII.2i)"? 
 RESPONSE:   The list of regulated pests is available online at USDA.gov. 
 
34. On treatment with methyl bromide for plant quarantine purposes, could the U.S. clarify if this 
treatment will continue to be part of the U.S.  import requirements?  Have other less hazardous WT/TPR/M/235/Add.1 
Page 220 
 
 
 treatments been considered, as described in  the Montreal Protocol and recommended by the 
International Plant Protection Convention (IPPC)?  
RESPONSE:   In an effort to reduce the use of meth yl bromide for plant quarantine purposes, the 
United States Department of Agriculture establishe d a new national program in 2008 that works to 
develop environmentally compatible  and economically feasible alternatives to the use of methyl 
bromide as a soil and postharvest commodity treatment.   
 
(2) MEASURES DIRECTLY AFFECTING EXPORTS 
(vii) Promotion and marketing assistance  WTO Secretariat's Report, page 40, paragraph 163  The Report notes that the National Export Initiati ve creates an Export Promo tion Cabinet consisting 
of the heads of several federal agencies and that it has to cooperate with the Trade Promotion 
Coordinating Committee (TPCC), a statutory body that  coordinates the export promotion activities of 
a number of federal agencies.   35. Could the U.S. provide more details about the role of the Export Promotion Cabinet and the 
Trade Promotion Coordinating Committee in the National Export Initiative?  
RESPONSE :  In his State of the Union address in January 2010, President Obama launched the 
National Export Initiative (NEI) and set a goal of doub ling U.S. exports in five years to support two 
million additional jobs in the United States.  To aid in achieving this goal, the President issued 
Executive Order 13534 on March 11, 2010, establishing eight policy priorities for the NEI and 
creating an Export Promotion Cabinet.  The Tr ade Promotion Coordination Committee (TPCC) 
established by Executive Order 12870 of September 30, 1993 is tasked with helping to implement the 
NEI and serves as the secretariat for the Export Promotion Cabinet.  As mandated, the Export 
Promotion Cabinet through the TPCC prepared a Re port delivered to the President in September 
2010, laying out the Export Promotion Cabinet’s plans for carrying out the NEI’s goal.  Please see the 
“Report To The President On The National Export Initiative:  The Export Promotion Cabinet’s Plan 
For Doubling U.S. Exports In Five Years ” issued in September 2010, which can be found at:  
(http://www.whitehouse.gov/sites/defau lt/files/nei_report_9-16-10_full.pdf). 
 
36. What is the envisaged scope of collaborati on of these two bodies with exporting companies or 
companies wishing to engage in exporting?  
RESPONSE:  The Export Promotion Cabinet’s efforts, th rough the NEI, are focused on five areas 
which are:  access to credit, especially for small and midsize firms;  more trade advocacy and export 
promotion efforts;  removal of barriers to the sale of U.S. goods and services abroad;  enforcement of 
trade rules;   and pursuit of policies that will increase global economic growth. 
 
The key to success in increasing exports, however, lies in the private sector, with the Federal 
Government playing a supporting ro le by improving conditions that affect the private sector’s ability 
to export and by creating a more level playing field for U.S. companies. Please see the “ Report To The 
President On The National Export Initiative:  Th e Export Promotion Cabinet’s Plan For Doubling 
U.S. Exports In Five Years ” issued in September 2010, which can be found at:  (http://www. 
whitehouse.gov/sites/default/files/nei_report_9-16-10_full.pdf). 
  WT/TPR/M/235/Add.1 
 Page 221 
 
 
 (3) OTHER MEASURES AFFECTING INVESTMENT AND TRADE 
(i) Business framework and foreign investment regime  
 
WTO Secretariat’s Report, page 56, para 177  
 
The Report notes restrictions on FDI, notably in in surance and real estate, imposed by U.S. states. 
There are also substantive limitations in FDI market access in the banking sector.  
 
37. Would the U.S. consider removing or furth er relaxing the limitations that are imposed by 
certain States in the sectors of insurance, banking and real estate? 
 
RESPONSE:  In the U.S. view, the appropriate forum fo r consideration of these questions is the 
DDA services negotiations rather than the TPR.  The General Explanations of the Administration’s Fiscal Year 2011 call for limitations on tax deductions for reinsurance premiums  paid to affiliated foreign reinsurance companies. The European 
Union and many other countries have responded to th is measure with unanim ous criticism, pointing 
out that the planned measure is inconsistent with  WTO rules prohibiting discrimination as well as 
ultimately constituting a clear violation of the d ouble taxation agreements that the United States has 
concluded with other states. 
 38. Could the U.S. clarify whether it still intends  to implement the above measure, despite the 
inconsistencies this would raise with its obligations under the WTO and bilateral double taxation agreements? 
 RESPONSE:   As of this time, no measures have been adopted regarding tax deductions related to 
reinsurance.  The United States believes that it is impo rtant to ensure the equitable collection of taxes, 
and that this can be accomplished in a manne r consistent with its trade commitments. 
 
(iii) Government Procurement 
 
WTO Secretariat's Report, page 58, paragraph 182-183  The Report provides for data on the volume  of the U.S. federal procurement. 
 
39. Could the U.S. provide data on the volume of the above thres hold procurement covered by the 
U.S. GPA commitments for sub-central and ot her entities  (so-called Annex 2 and 3 entities), 
following the requirement of the Art.XIX(5) of the GPA?  
 
RESPONSE:  The United States made its statistical submission for FY2008 under Article XIX:5 of 
the GPA earlier in 2010.  The United States does not have data on the volume of state procurement 
above the U.S. Annex 2 thresholds.  The source of th e U.S. Annex 2 data is the U.S. Census Bureau, 
Government Division, 2008 Survey of State Govern ment Finances.  The U.S. statistical submission 
for FY2008 under Article XIX:5 provides data on the value of covered procurement above the 
threshold for  three Annex 3 entities, whose procurem ent is recorded in the Federal Procurement Data 
System by the Department of Transportation (St.  Lawrence Seaway Development Corporation) and 
the Department of Energy (Southeastern Power Administration and Southwestern Power 
Administration).  Covered contracts worth $255, 000 were recorded for the Southeastern Power 
Administration in FY2008, while no covered contract s were recorded above the threshold for either 
St. Lawrence Seaway Development Corporation or  the Southwestern Power Administration.  The 
procurement of the other covered Annex 3 entities ar e not recorded in the Federal Procurement Data 
System;  the United States has total estimations of their procurement, but does not have data on their 
procurement above the thresholds.   WT/TPR/M/235/Add.1 
Page 222 
 
 
 The Reports further notes that 70% of the value of federal procurement in 2009 was accounted for by 
the Department of Defence.  Under the GPA the U.S. has negotiated exemptions with regard to 
defence-related procurement. 
 
40. Could the U.S. clarify whether the proc urement of satellites is covered by its GPA 
commitments, in particular with respect  to the defense-related exclusions?   
 
RESPONSE:   The procurement of satellites by the Department of Defense is not covered by U.S. 
commitments under the GPA. 
 
41. What is the legal situation of tenders that combine both the purcha se of the satellite and the 
services leading to the satellite launch, given the fa ct that the latter servi ces are explicitly exempt 
from the U.S. GPA commitments?  
 RESPONSE:   Neither the procurement of satellites nor satellite launching services by the Department 
of Defense is covered by U.S. commitments under the GPA.  
 
WTO Secretariat's Report, page 61, paragraphs 191-193 
 
The Secretariat Report recalls that the Buy American Act of 1933 (BAA) and the American Recovery 
and Reinvestment Act of 2009 (ARRA) must be applie d consistently with U.S. international 
obligations. Goods, covered services and suppliers or iginating from GPA parties must thus receive 
national treatment.  
42. Could the U.S. explain how it will ensure t hat any existing Buy Am erican provisions are 
applied in line with its GPA obligations?  
RESPONSE:   The Buy American Act is implemented through the Federal Acquisition Regulation 
(FAR) available at:  https://www. acquisition.gov.  FAR part 25 a ddresses the Buy American Act and 
U.S. Federal procurements subject to obligations  under international agreements, including the WTO 
Government Procurement Agreement.  FAR 25.001(b) provides that:  “The restrictions in the Buy 
American Act are not applicable in acquisiti ons subject to certain trade agreements ( see FAR Subpart 
25.4). In these acquisitions, end products and cons truction materials from certain countries receive 
nondiscriminatory treatment in evaluation with domestic  offers.”  FAR 25.6 sets out the requirements 
for implementation of the “buy American” provision in the American Recovery and Reinvestment Act 
of 2009 (ARRA) consistent with U.S. obligations u nder international agreements.  Federal agencies 
covered by the GPA are required to follow  the FAR in conducting their procurement.  
 
43. Could the U.S. confirm that the final Fe deral Acquisition Regulation Rule published on 
30 August 2010 implementing the "Buy  American" provision in the ARRA will be sufficient to ensure 
compliance by covered U.S. procuring entities with their GPA obligations?  
RESPONSE:   Yes.  
 
44. Could the U.S. confirm that the U.S. O ffice of Management and Budget (OMB) has provided 
appropriate guidance to covered procuring entities on the application Buy American provisions? 
 
RESPONSE:   Yes.  
 
We are noticing ongoing Buy American trends eith er in provisions contained in proposed U.S. 
legislation (e.g. H.R. 5320 Assistance, Quality, an d Affordability Act) or through the recent founding 
of the Congressional Buy American Caucus aiming at strengthening laws requiring the federal 
government to make buying Americ an-made products a priority.   WT/TPR/M/235/Add.1 
 Page 223 
 
 
 45. Could the U.S. confirm that its international  obligations under the GPA will continue to be 
observed in the ongoing legislative processes? 
 
RESPONSE:   The U.S. Government continuously makes efforts to ensure compliance with its 
obligations under inte rnational agreements.  
 WTO Secretariat's Report, page 61, paragraph 191  
 The Report describes the federal Government's procurement policy under the Buy American Act.  
 46. What is the rationale for having different requi rements of local conten t even in the same 
sector depending of the instituti on administrating the programme? 
 
RESPONSE:   Congress defines the requirements.   
 
47. Is there any plan to modify the law and regul ations in order to harmonize the local content 
requirements?  
RESPONSE :  See response to Question 46. 
 
WTO Secretariat's Report, page 61, paragraph 192-194 
 
The Report describes the Buy American provisions  of the American Recovery and Reinvestment Act 
(ARRA).  48. Is Section 1605 of the ARRA implemente d equally across all sectors except defence? 
 
RESPONSE:   Section 1605 of the ARRA is implemente d as provided for in the ARRA and in a 
manner consistent with U.S. obliga tions under international agreements. 
 
49. The American Recovery and Reinvestment Act of 2009 requires U.S.-produced iron, steel and 
manufactured products to be used in public works an d public buildings funded by the Recovery Act, 
subject to certain exceptions (unavailability, unreas onableness of cost and inconsistent with the 
public interest).  It does not make a distinction among sectors.?   
RESPONSE:   See response to Question 46. 
 
50. Could the U.S. provide a complete brea kdown of the ARRA funds and number of contracts 
awarded by programmes and sectors, by national and foreign providers? 
 
RESPONSE:   The official U.S. government’s website that  provides access to data related to spending 
funded by the American Recovery and Reinvestme nt Act of 2009 (ARRA) is:  Recovery.gov.  The 
site’s “Download Center” provides access to all the data reported by recipients of ARRA funds since 
February 17, 2009 through June 30, 2010.  Note that the “Download Center” also provides a data 
dictionary to assist in identifying information pr esented in the award document.  Recovery.gov’s 
“Download Center” may be found at:  http://www.re covery.gov/FAQ/Pages/ DownloadCenter.aspx. 
 
51. Could the U.S. provide information as to the treatment that will be granted to foreign 
goods/suppliers in those sectors concerned by ARRA at the expiration of the funds? 
 
RESPONSE:   When the ARRA funds have been expended,  there will be no basis for the application 
of the ARRA requirements.   WT/TPR/M/235/Add.1 
Page 224 
 
 
 The 2009 Omnibus Appropriations Act excludes fr om the U.S procurement market, companies 
established in the U.S., who have following the rel evant U.S. legislation "inverted" to foreign tax 
jurisdictions ("inverted companies"). The Act do es not contain any clause referring to the U.S. 
international commitments and makes no exception for co mpanies, inverted to tax jurisdictions of 
countries, parties to the Governme nt Procurement Agreement (GPA). 
 52. Could the U.S. develop in detail on the im pact of the Omnibus Appropriations Act on the 
rights of the suppliers, considered as "inverted" to jurisdictions of one of the GPA parties? 
 RESPONSE:   Section 743 of Division D of the Omni bus Appropriations Act, 2009 (P.L. 111-8), 
prohibits the award of contracts using appropriated funds to any foreign incorporated entity that is 
treated as an “inverted domestic corporation” or to any subsidiary of one (whe rever incorporated).  An 
“inverted domestic corporation” is a foreign incorpor ated entity that, pursuant to  a plan (or a series of 
related transactions):  (1) directly or indirectly ac quires substantially all of the properties held directly 
or indirectly by a domestic corporation or substa ntially all of the properties constituting a trade or 
business of a domestic partnership;  (2) acquires at le ast 80 percent of the stock of the entity;  and (3) 
after the acquisition, the expanded affiliated group that includes the entity does not have substantial 
business activities in the foreign country in which or  under the law of which the entity is created or 
organized when compared to the total business act ivities of such expanded affiliated group.  This 
restriction discourages U.S. companies from expatria ting themselves to avoid paying U.S. taxes on 
business income generated in foreign countries.  An y supplier that meets the definition of inverted 
domestic corporation or is a subsid iary of one (whether incorporated in the United States or not) is 
subject to the prohibition.    
53. Could the U.S. explain how in this regard it has been providing for consistency with its 
international obligations taken in the GPA, in par ticular with the Article III (National Treatment and 
Non-Discrimination)?  
 
RESPONSE:   The prohibition is consistent with U.S. international obligations under the GPA. As 
explained in the previous answer, any supplier that meets the definition of inverted domestic 
corporation or is a subsidiary of one (whether inco rporated in the United States or not) is subject to 
the prohibition. The prohibition does not distinguish suppliers on the basis of foreign affiliation or 
ownership, but on the basis of historical U.S. owne rship and lack of substantial business activity in the 
foreign country in which the entity is created or organized. 
 
WTO Secretariat's Report, page 62, paragraph 195  
 The Report notes that "Iron, steel, and manufactured  goods used in mass transit and highway projects 
funded with grants administered by the Federal Tr ansit Authority or Federal Highway Administration 
are subject to domestic preferences."  
54. Could the U.S. provide statistical data on  the value of contracts awarded under this 
derogation from the U.S. GPA commitments? 
 
RESPONSE:   Data on procurements subject to 49 USC 5323(j) may be found at:  http://www.fta.dot. 
gov/documents/SAFETEA-LU_Funding_by_Program_by_Y ear.pdf and procurements subject to 23 
USC 313 may be found (Title I, only) at:  http://www.fhwa.dot.gov/safetealu/safetea-lu_ 
authorizations.pdf.  Counterpart sites for ARRA fu nds subject to these preferences may be found at:  
http://www.fta.dot.gov/index_9440.html and http:// www.fhwa.dot.gov/economicrecovery/index.htm, 
respectively.   WT/TPR/M/235/Add.1 
 Page 225 
 
 
 WTO Secretariat's Report, pages 62-63, paragraphs 196-198 
 The Report informs about the set aside for Americ an small and medium sized businesses and provides 
data on the contracts awarded under this derogations  to the U.S. GPA commitments by the federal 
procurement entities. 
 55. Could the U.S. inform in more detail about the policy applied to SMEs at the state level? 
 
RESPONSE:   The U.S. Government does not have such information. 
 
56. Could the U.S. provide statis tical data on contracts awarded to SMEs by sub-federal entities?  
 
RESPONSE:   The U.S. Government does not have such information. 
 
In paragraph 197 the Report mentions a statutory ta rget for the share of go vernment procurement to 
be awarded to SMEs.  
 57. Does this statutory targ et evolve over calendar years?  
 
RESPONSE:   The statutory target of 23 percent is set by the U.S. Congress. 
 
WTO Secretariat's Report, page 63, paragraph 198 
 
According to the Report there are different requi rements for local content and price preferences 
across the 37 States participating in the GPA.  
 
58. Could the U.S. specify per each sector and St ate the margin of applied preference (price and 
local content)?  
 
RESPONSE:   The U.S. Government does not have such information. 
 (iv) Subsidies and other government assistance   WTO Secretariat's Report, page 64, Table III.9  
 Table III.9, concerning federal subsidies programme s notified to the WTO, gives the amounts relating 
to subsidies in the fisheries sector for fiscal years 2005-2008. The Report does not provide any 
information on fisheries subsidies beyond 2008.   In the framework the 2009 American Recov ery and Reinvestment Act (ARRA) an amount of 
US$50 million has been earmarked to subsidise aquaculture.  Baitfish growers and catfish farmers 
are eligible if their 2008 feed costs were at least 25 percent of their total operating cost. They also are 
eligible if their feed costs are 25 percent above the average cost of feed from 2003-2007. 
 59. Can the U.S. confirm the above information?   
RESPONSE:   Yes. 
 
60. Are the products farmed by the beneficiari es competing with those products covered by anti-
dumping proceedings against ca tfish products from Vietnam?  
 
RESPONSE:  The Farm Service Agency’s 2008 Aquacu lture Grant Program will provide block 
grants to state Departments of Agriculture that ag ree to provide assistance to eligible aquaculture WT/TPR/M/235/Add.1 
Page 226 
 
 
 producers for losses associated with high feed costs during the 2008 calendar year.  For more 
information, see http://www.fsa.usda.gov/Intern et/FSA_File/fsa_recovactplans_aag052709.pdf. 
 
61. Did the beneficiaries of the above menti oned subsidies receive funds from collected 
antidumping duty revenues under the Continued Dump ing and Subsidy Offset Act of 2000 ("Byrd 
Amendment")?  If so, could the U.S. provide figures on the amounts disbursed? 
 RESPONSE:   The annual report for CDSOA payments , which lists all the disbursements and 
recipients in 2009, can be found at:  http:// www.cbp.gov/xp/cgov/trade/pri ority_trade/add_cvd/cont_ 
dump/.  
 
62. Could the U.S. confirm the above information?  If so, will the above subsidies be notified to 
the WTO and when?  
RESPONSE:   We confirm the information cited in the referenced press release.  If appropriate, the 
measures at issue would be notified by the United St ates in its next WTO subsidies notification, which 
is due June 30, 2011. 
 
63. Have the U.S. authorities assessed the impac t of the above subsidies on existing fishery 
resources? If not, how will they ensure that the su bsidies granted to New England fishermen do not 
result in overcapacity and overfishing? 
 
RESPONSE:   The new management system being impl emented in the Northeast groundfish fishery 
is intended to reduce overcapacity and encourage ecological sustainability. 
 
64. With regard to the amou nts of US$546,000 a nd US$954,000, which percentage of these 
amount cover operational costs, such as  crew, fuel, gear, insurance etc? 
 RESPONSE:   No portion of that funding will be used for the operational costs of fishermen. The 
funding will be used entirely for sector ma nagement and infrastructure development. 
 
65. Does the US$10 million subsidy package rel ate to a declared "commercial fisheries 
disaster"? 
 RESPONSE:   The measures described by the EU do not relate to a declared “commercial fisheries 
disaster”.  
66. If not, have the beneficiaries of the above subsidies separately benefited from commercial 
fisheries disaster assistance under either § 308 of the In terjurisdictional Fisheries Act, or § 312(a) of 
the Magnuson-Stevens Fishery Conserv ation and Management Act?  If so, could the U.S. provide 
information on the amounts disbursed? 
 
RESPONSE:   No, the $5 million amount is being provided to the states of Massachusetts, Rhode 
Island, New Hampshire, and Maine in order to set up permit banks at the state level;  it is not for 
individuals.  Also, the funding for fishing sector ma nagers is going to the Gulf of Maine Research 
Institute for sector management.  The referenced beneficiaries have not separately benefited from 
commercial fisheries disaster assistance under either § 308 of the Interjurisdictional Fisheries Act, or 
§ 312(a) of the Magnuson-Stevens Fishery C onservation and Management Act since 1999. 
 
Ms. Jane LUBCHENCO, Underse cretary for Oceans and Atmosphere and NOAA Administrator, in 
her written statement, when presenting the NOAA 2011 budget request before the U.S. Senate 
Committee on Commerce at a hearing on 3 March 2010, stated the following:   "NOAA recently 
released a draft catch share policy to encourage the consideration and adoption of catch shares  WT/TPR/M/235/Add.1 
 Page 227 
 
 
 wherever appropriate in fishery management and eco system plans and amendments, and will support 
the design, implementation, and monitoring of ca tch share programs.  Ca tch share programs give 
fishermen a stake in the benefits of well-managed fisheries, and therefore grea ter incentive to ensure 
effective management.  To support NOAA’s policy,  this budget includes an increase of $36.6 million, 
for a total request of $54 million, to establish a National Catch Share Program .  This program will 
provide a national framework to develop, manage , and improve catch share programs in fisheries 
across the Nation.  This increase will also con tinue the transition of the Northeast ground fish 
(multispecies) fishery to sector management as well as support new voluntary catch share programs 
in the Mid-Atlantic, Gulf of Mexico, and Pacific Coast regions." 
 
67. Could the U.S. provide more information ab out these "catch share" programmes?  Will the 
beneficiaries of these funds have to purchase their "c atch shares" or will they get them at no cost? 
Can catch shares be traded among participants in the fishery?  Could these catch shares be used as 
collateral when entering into credit a rrangements with lenders (e.g. banks)?  
 RESPONSE:   The shares are determined based on the catch history of participants in that fishery.  
The shares are not free, are not owned by the par ticipants, and cannot be used as collateral.   
 
68. Could the U.S. elaborate on the use of the requested funds (US$54 million) for "…the 
transition of the Northeast ground fish (mu ltispecies) fishery to sector management…"? 
 
RESPONSE:  The $54 million was requested by NOAA for development and implementation of 
catch share programs on a national scale.  A portion of that funding will support the development, 
implementation and management of the Northeast groundfish fishery.  Other fisheries around the 
nation will use the funding to develop and manage their own catch share programs.  These actions 
will promote ecological sustainability.  This is a request to Congress, which has not yet been acted 
upon.  
On 24 May 2010 Commerce Secretary Gary Locke annou nced a "Fishery Failure Determination" in 
Gulf of Mexico under Section 312(a) of the M agnuson-Stevens Act. According to the press release, 
Secretary Locke stated that “Commercial and recreati onal fishing provides vital jobs to the region 
and is essential to the Gulf Coast’s unique culture  and heritage.” With regard to the assistance 
requested under this "Fisheries Fa ilure", the press release mentions that "The administration has 
requested US$15 million of supplemental funding as a backstop to address this disaster, as well as 
US$5 million of economic development assi stance through the Economic Development 
Administration.  In addition, the administrati on is requesting unemployment coverage for this 
disaster, and the Small Business Administration is offering economic injury disaster loans, which can 
help fishermen and other affected businesses."    69. Have the requested US$15 million of supplem ental funding as a backstop to address this 
disaster, as well as US$5 million of economic development assistance through the Economic Development Administration, been granted?  
 
RESPONSE:   The requested $15 million and $5 milli on amounts in supplemental funding was 
appropriated on July 29, 2010, when President Obama signed H.R. 4899, the “Supplemental 
Appropriations Act, 2010” into law.  On September 23, 2010, the Economic Development 
Administration published a notice of the Gulf Oi l Spill Supplemental Funding Opportunity in the 
Federal Register
 (75 FR 57900).  The notice describes the ge neral policies and application procedures 
for the supplemental funding opportunity.  
 
70. With regard to the unemploym ent coverage specifically request ed for this disaster, can the 
U.S. provide figures about the amount s paid to the beneficiaries? 
 WT/TPR/M/235/Add.1 
Page 228 
 
 
 RESPONSE:   The estimated benefit outlays for unemploy ment insurance claims that were filed due 
to unemployment caused by the oil spill have been approximately $1.9 million. 
 71. With regard to the injury disaster loans, coul d the U.S. provide details about the terms under 
which such loans are granted? 
 
RESPONSE:   Economic Injury Disaster Loans (EIDL)  are working capital loans to help small 
businesses, small agricultural cooperatives and most private, non-profit organizations meet necessary 
financial obligations that cannot be met as a direct result of the oil spill disaster.  The loans are limited 
to entities that cannot provide for their own recovery .  An applicant must ha ve an accepta ble credit 
history, show the ability to repay the loan and provide  collateral, if available.  The interest rate is 
4.00% for businesses and agricultural cooperatives w ithout credit available elsewhere.  The term of 
the loan may be up to 30 years, based on the borro wer’s ability to repay.  The law limits EIDLs to 
$2 million for alleviating economic injury caused by the disaster.  
 
According to information published by Georgia's state authorities, a grant of US$1 million was 
awarded in May 2010 to assist with building impr ovements at the location of a manufacturing and 
distribution facility for Tri-Union Seafoods, LLC d. b.a. Chicken of the Sea International, under 
Georgia's Economic Development, Growth and Expansion Fund. The total estimated cost of the 
project is $21.5 million and the jobs to be created amount to 310 new jobs in four years. 
 72. Are the U.S. authorities aware of similar subsidies (grants) to the fish processing industry allocated to companies in this sector?  If yes, c ould information about such subsidy programmes be 
provided? 
 RESPONSE:   It should be noted that the Georgia assistance was provided under a job creation 
program available to all industries.  For the latest  information on other programs, please see the U.S. 
subsidies notification (G/SCM/N/186/USA). 
 
WTO Secretariat's Report, page 66, paragraph 209-212  
 
Paragraphs 209-212 of chapter IV do not include  information about the Renewable Fuels 
Reinvestment Act (RFRA) which was introduced in  the Congress in March 2010 and would extend the 
blenders’ credit, the Volumetric Ethanol E xcise Tax Credit (VEETC), until 31 December 2015. 
 
73. Is this excise tax credit limited to blends d estined for the domestic market or is it also 
available for exports? 
 
RESPONSE:   The credit is available for exports of ble nds made with domestically produced alcohol. 
 (v) Trade-related intellectual property rights (c) Trademarks and geographical indications  WTO Secretariat's Report, page 73, paragraph 228  
 
The Report mentions that GIs applications are pr ocessed through the USPTO "which states that these 
can be viewed as a subset of trademarks".   
74. How does this relate to TRIPS provisions defining trademarks under Section 2 Article 15 and 
provisions defining geographical in dications under Section 3 Article 22?  How are GIs defined under 
U.S. legal provisions?  
  WT/TPR/M/235/Add.1 
 Page 229 
 
 
 RESPONSE:   GIs are not specifically defined within the U.S. trademark law.  The trademark system 
already provides the requisite protection set forth in  the GI sections of the TRIPS Agreement, as well 
as the protection provided for trademarks in the trad emark section, vis-à-vis later in time GIs.  A 
geographic sign whose use on non-originating good s/services would be misleading or deceptive to 
consumers is not eligible for registration as a trad emark or as part of a trademark.  Geographically 
deceptive trademarks are excluded from trademark eligibility. 
 While the TRIPS Agreement does not require a registration system for the protection of GIs, the U.S. 
trademark system allows for the registration of signs that are GIs, as trademarks, certification marks, 
and collective marks.  The Report further notes that "a GI, like a trademark, may not be registered if it is considered to be a 
generic term".   
75. Apart from the guidelines set in the USPTO Trademark Manual of Examining Procedures, is 
there a legal definition of generic and what are the crit eria used to assess whether a term is generic?  
 
RESPONSE:   Please consult relevant U.S. case on la w generic evaluation related to geographic 
terms: 
 
Tea Board of India v. The Republic of Tea,  80 U.S.P.Q.2d 1881 (T.T.A.B. 2006) (“The test for 
determining whether a mark is generic is its pr imary significance to the relevant public.”) (“A 
certification mark used to certify regional origin  as well as the qualities and characteristics associated 
with the origin will not be deemed to have beco me a generic term as a pplied to particular goods 
unless it has lost its significance as an indication of geographic origin…This can occur when, by 
virtue of a failure to control the mark, the mark is used in connection with goods which originate 
somewhere other than the place named in the mark , or on non-genuine goods, or through otherwise 
uncontrolled use, but only if as a result of such misuse , the mark has come to primarily signify a type 
of goods with certain charac teristics, without regard  to regional origin and the methods and conditions 
for growing it….”)  
Institut National Des Appellations d’Or igine (“INAO”) v. Brown-Forman Corp ., 47 U.S.P.Q. 2d 1875 
(T.T.A.B. 1998) (“[W]e conclude that if the us e of the geographic designation is controlled and 
limited in such a manner that it reliably indicates to purchasers that the goods bearing the designation 
come exclusively from a particular region, then that term functions as a regional certification 
mark…”)  
In re Cooperativa Produttori Latte E Fontina Valle D’Acosta , 230 U.S.P.Q. 131 (T.T.A.B. 1986) 
(“[T]he lower-case treatment of this word by re ferences to name a kind of cheese with certain 
hardness, texture and flavor characteristics, and the fa ct that the record reveals that there is a domestic 
fontina cheese demonstrate to us that, to the Amer ican purchaser, ‘fontina’ primarily signifies a type 
of  cheese (much like brie, swiss, parmesan or mozzarella) regardless of regional origin, rather than a mark of certification.”) 
 
Community of Roquefort v. William Faehndrich, Inc ., 198 F. Supp. 291 (D.C.N.Y. 1961), aff’d., 303 
F.2d 494 (2d Cir. 1962) (“[I]f a geographical name wh ich has been registered  as a certification mark, 
identifying certain goods, acquires principal significan ce as a description of  those goods, the rights 
cease to be incontestable and the mark is subject to cancellation.”)  In addition to existing protection of geographical indications as referred to in paragraph 228, the 
State of California has introduced a system of enhanced protection for certain wines produced in 
certain California counties (Napa, Sonoma).  This s ystem is set out in the Business and Professions 
Code.  The EU fully supports the protection of these names of viticultural significance.  WT/TPR/M/235/Add.1 
Page 230 
 
 
 Unfortunately, however, this specific protecti on scheme is only open to Californian names of 
viticultural significance. 
 
76. Against the background of national treatment obligations contained in the TRIPS Agreement, 
how does the U.S. explain the exclusion from the sa me protection of names of  viticultural significance 
from other WTO Members? 
 
RESPONSE:   The protection for NAPA and SONOMA is something that the California Legislature 
enacted to protect its consumers from deceptive pr actices within the state and addresses demonstrated 
instances of consumer deception.   
 
(e) Enforcement activities  
WTO Secretariat's Report, page 69, paragraph 217  
The Report refers to the 2008 Prioritizing Res ources and Organization for Intellectual Property 
(PRO-IP) Act.  
77. Does the PRO-IP Act include measures to im prove the enforcement of copyright protection on 
internet, in particular, measures to fight against ill egal file sharing that takes place in U.S. colleges 
and universities? 
 
RESPONSE:   The Higher Education Act of 2008, rath er than the PRO-IP Act, is specifically 
intended to improve the enforcement of copyrigh t laws and prevent the illegal distribution of 
copyrighted works over the Internet  at U.S. colleges and universities.  That legislation became 
effective July 1, 2010.  The Administration’s Join t Strategic Plan also includes a number of action 
items designed to prevent or reduce infringement on-line by addressing the sources of illegal content 
through trade efforts and law enforcement efforts, as appropriate.  IV. DEVELOPMENTS IN SELECTED SECTORS (1) AGRICULTURE  (ii) Agriculture policies  WTO Secretariat's Report, page 81, paragraph 4-5 
 
The Reports gives an overview of the legislati on that set out U.S. agricultural policy. 
 78. Considering the evolution of U.S. agricultu ral policy in the 2002 and 2008 Farm Bills, could 
the U.S. assess the 2008 policy changes and draw conclu sions for future policy changes, in particular 
as far as trade-distor ting support is concerned? 
 
RESPONSE:   The 2008 Farm Bill continued the trend of the 2002 Farm Bill to include new areas, 
such as livestock, horticulture, and energy, but in ge neral there were limited policy changes in relation 
to trade-distorting support measures, particularly  in the absence of a DDA agreement. The U.S. 
Congress writes the Farm Bill and has begun to hold h earings across the country in anticipation of the 
2012 Farm Bill.  It is premature to speculate on th e shape of future legislation that addresses such a 
wide variety of issues and programs.   
WTO Secretariat's Report, page 83, paragraph 14 
 The Report notes that only 7.7% of total enro lled farms signed up for the Average Crop Revenue 
Election Program (ACRE) introduced by the 2008 Farm Act as an alternative to counter-cyclical 
payments.  WT/TPR/M/235/Add.1 
 Page 231 
 
 
 79. Could the U.S. please explain the reasons for such low interest? 
 
RESPONSE:  It should be noted that these figures are for 2009 and not for subsequent years, which 
could be higher or lower.  The United States would like to refer the EU delegation to USDA’s 
Economic Research Service’s publication “Factors Influencing ACRE Program Enrollment” at:  
http://www.ers.usda.gov/Publications/ERR84/.  In this  publication, several potential factors that could 
have limited farmer participati on were mentioned including the complexity of the program and steep 
learning curve especially related to effects on indivi dual operations;  the need for all landowners and 
operators on a farm to agree to participate;  the reduction of direct payments and marketing assistance 
loan rates and irreversibility of enrollment in the prog ram;  effect of timing of payments on cash flow;  
etc. 
 
WTO Secretariat's Report, page 85, paragraph 26-27 
 
The Report refers to the conclusions of the Government Accountability Office 2007 report how to 
improve the efficiency and effectiveness of U.S. fo od aid. It furthermore mentions the programme 
"Local and Regional Procurement Project" under whic h food aid is purchased in local and regional 
markets rather than provided as in-ki nd commodities transfers from the U.S. 
 80. What has been the assessment of the operati on of the pilot programme  'Local and Regional 
Procurement Project' so far?  Has the local purcha se of food aid allowed for a decrease in costs? 
 
RESPONSE:  At this stage, most of the pilot projects that USDA has selected for funding are just 
getting started with their operations.  It’s too early to assess the performance of the projects with respect to timeliness, efficiency, or a decrease in co sts.  The final evaluation report won’t be available 
until June 2012.  
 
81. More generally, how does the U.S. view th e recommendations issued by the GAO in the 
abovementioned report? 
 
RESPONSE:  The United States considers the recommenda tions as guidance that has helped to 
improve program performance.  Many of th e recommendations were easily acted upon and 
implemented into daily practice by USDA and USAID. Many of the recommendations related primarily to internal efficiencies that can be attained by adjusting administrative policies and 
procedures.  Others related to greater coordina tion between USDA and USAID and improvement in 
monitoring and evaluation of projects. 
 
USDA and USAID took action on many of the recommendations that resulted in improved effectiveness and efficiency.  For example, with  regard to reduction of shipping costs, USDA and 
USAID found that by cooperating more closely on sh ipping schedules, costs saving could be attained. 
Further, full implementation of information technol ogy solutions has permitted more accurate and 
timely billing and reimbursements.  Regarding m onitoring and evaluation of projects, USDA now 
requires comprehensive impact evaluations of every project funded.  These are just a few examples of 
how USDA and USAID have sought to implement the recommendations.  
 
WTO Secretariat's Report, page 89, paragraph 37 
 
The Report quotes OECD that government transfers to pig meat, poultry, beef and veal producers in FY2006-2007 were zero.  On the other hand, in the U.S. notification of domestic support (G/AG/N/USA/66) for the 2006 and 2007 marketing years spending was notified under the following 
livestock measures:  'Net Federal budget outlays fo r grazing livestock on Federal Land' (table DS:9); 
'Livestock compensation program' (table DS:1);  'Livestock indemnity program' (table DS:1) and 
'Beef cattle & sheep' (table DS:6). WT/TPR/M/235/Add.1 
Page 232 
 
 
 Could the U.S. specify whether the reported OECD  statement refers to the programmes based on the 
Farm Bill legislation only, or other legal bases as well? 
 RESPONSE:  The commodity-specific transfers reported by OECD are single commodity transfers 
(SCT) and include only transfers provided on the basis of production of that single specific commodity, irrespective of its legal basis.  Th e programs noted in the question from the EU are 
available to producers of more than a single specific commodity.  WTO Secretariat's Report, page 90, paragraph 45 
 
The Report notes that the fill rates for some dairy tariff quotas were "quite low". 
 83. In relation to tariff quota management, could the U.S. provide more information concerning 
the application of a fee of $150 for dairy import licenses for the 2011 tariff rate quota import year? 
How does the level of this fee relates to "the  approximate cost of services rendered" in the 
understanding of GATT Article VIII 1(a)? 
 
RESPONSE:  USDA regulations provide that a fee will be charged for each import license issued to 
a person or firm by the Licensing Authority in or der to defray USDA’s costs of administering the 
licensing system.  A notice is published annually in the Federal Register explaining what those costs 
are and what the fee will be for licenses in the co ming year.  Following is the content of the most 
recent notice.  “The total cost to USDA of administering the li censing system for 2011 has been estimated to be 
$333,000, and the estimated number of licenses expected  to be issued is 2,300. Of the total cost, 
$280,000 represents staff and supervisory costs direc tly related to administering the licensing system, 
and $53,000 represents other miscella neous costs, including travel, pos tage, publications, forms, and 
Automated Data Processing system support.  Accordi ngly, notice is hereby given that the fee for each 
license issued to a person or firm for the 2011 cale ndar year, in accordance with 7 CFR 6.33, will be 
$150 per license.”  WTO Secretariat's Report, page 90, paragraphs 50 and 51 
 
The Report states in paragraphs 50 and 51 that  counter-cyclical payments are "decoupled from 
production".  The EU would like to note that this statement is incorrect.  The correct definition of 
counter-cyclical payments is given in paragraph 10 on  page 82 where it is explained that while "these 
payments are based on prices, current production of the covered crop, or any other crop, is not 
required...". 
 
RESPONSE:   The definition referenced by the EU on pa ge 82 correctly reflects the nature of the 
Counter Cyclical Payment (CCP) program and wa s correctly pointing out that “although” – a key 
word the EU left out from this sentence - payments have a price component, they do not affect current 
production.  That is, current production on land that is  eligible for CCP payments is not tied to the 
program nor is even required, and the size of the pa yment is not affected by current production of any 
crop.  Furthermore, payments are based in part on historical yield and historical bases – again, not tied or coupled to current production.  Notwithsta nding, the United States does not classify CCP as 
decoupled green box payments within the meaning of AoA Annex 2 criteria as payments are also 
based in part on price.   WT/TPR/M/235/Add.1 
 Page 233 
 
 
 (3) TRANSPORT 
(ii) Maritime transport  WTO Secretariat's Report, page 102, paragraph 93 
 
The Report notes that the U.S. Federal Maritime Commission (FMC), among its other tasks, "monitors the laws and practices of foreign go vernments and carriers for unreasonable practices 
affecting U.S. ocean-borne foreign commerce."  The FMC is currently analysing what impact the 
repeal of the EU block exemption for shipping lin er conference (repeal of regulation 4056/86) might 
have for U.S. maritime trade and practices.  
 84. Could the U.S. provide information on when  this analysis would be published and whether the 
analysis would be followed up by any legislative initiatives? 
 
RESPONSE:   The FMC’s projected target date for completion of its analysis and publication of its 
results of the study is the end of 2011.  We ca nnot speculate on when and whether any legislative 
initiatives will occur.  
WTO Secretariat's Report, page 103, paragraph 95 
 
The Report notes continuing restrictions regarding c abotage of goods pursuant to Merchant Marine 
Act (Jones Act) of 1920.  However, the developments  in international container trades, including in 
vessel capacities, have meant that relay of internat ional cargo is today an operational and economic 
necessity.  There are also economic benefits to th e ports and customers, as well as environmental 
benefits as opening up for relay of international cargoes leads to a reduction in landside transport 
activity. 
 85. Would the U.S. consider opening up for relay of international cargoes between two ports in 
the U.S. using vessels operated by the same shippi ng company in interna tional liner services? 
 
RESPONSE:   Under U.S. cabotage laws the transporta tion of cargo between two domestic ports is 
reserved to U.S.-flag vessels meeting coastwise doc umentation requirements.  There has been no 
consideration of expanding coastwise trading privile ges for the onward transport between two U.S. 
ports of international trade cargoes to vessels that do not meet these requirements.  
86. Are there any considerations within the U. S. government on amending the Jones Act waiver 
procedure in light of experience drawn from the clea n-up work after the tragic oil spill accident in the 
Mexican Gulf? 
 
RESPONSE:  There is no consideration being directed to amending the Jones Act waiver procedure 
in light of the recent BP oil spill incident in the Gulf of Mexico.   (4) TELECOMMUNICATIONS 
 
WTO Secretariat's Report, page 105 
 Facilities-based special access servic es are still dominated by only three companies.  This situation 
translates into high prices for businesses as well as other telecom operators, including foreign 
operators.  87. Could the U.S. explain how the current regul ation of competition fo r special access services 
is compatible with its obligation under the Ba sic Agreement on Telecommunications Services and the WT/TPR/M/235/Add.1 
Page 234 
 
 
 Reference Paper, in particular Article 1 of the Reference Paper to have in place adequate competitive 
safeguards? 
 RESPONSE:   The FCC’s ability to regula te special access, based on its statutory authority, provides 
the competitive safeguard necessary to ensure that such services are provided on a competitive basis.  
The FCC regime, which typically relies on price cap s to ensure that rates for special access are 
reasonable, also provides for dere gulating such services when certain competitive triggers are reached 
(e.g. based on the number of suppliers of special acc ess services in a particular market.)  As in many 
aspects of the telecommunications market, the FCC h as to balance incentives for new entrants to build 
new facilities with the need to ensure that availabl e rates do not unduly affect users of such services. 
 
88. Does the U.S. envisage any measures to remedy this situation, and if so, which? 
 
RESPONSE:  The FCC has an ongoing rulemaking with re spect to special access, in which many 
foreign suppliers are participating, to review wh ether current rules are achieving the right balance 
between incentives for investment and reasonable access for users.  
 
With respect to the universal servi ce fund, the lack of a clear regulatory distinction between 
"telecommunication services" and "information services"  has led to inconsistency in classifying 
service revenues.  Such a lack of clarity may re nder difficult the operation of the universal service 
fund in a transparent, non-discriminatory and compe titively neutral manner, consistent with the 
objectives of Article 3 of the Reference Paper.   89. Could the U.S. share its appreciation of this issue? 
 RESPONSE:   The effects of technology development on regulatory classifications is not unique to 
the United States, and like other countries, the Unite d States is grappling with how to best address 
such issues, including with respect to universal  service.  Several ongoing rulemakings on universal 
service focus on the very goal s the EU has articulated. 
 (5)
 PROFESSIONAL AND BUSINESS SERVICES  
(ii) Accounting services 
 
WTO Secretariat's Report, page 113, paragraph 139 
 
On the issues of accounting standards, the Report notes that "The SEC is engaged in a "work plan" that could move public company accounting into co nvergence with International Financial Reporting 
Standards (IFRS) by 2015".  
 
90. Could the U.S. provide further informati on on the specific plans towards converging with 
IFRS, including the timing? 
 RESPONSE:   Comprehensive information on the plans to ward converging with IFRS may be found 
in the Securities and Exchange  Commission’s “Statement in Support of Convergence and Global 
Accounting Standards,” published earlier this year .  It may be found at:  http://www.sec.gov/rules/ 
other/2010/33-9109.pdf. 
 
As part of the "work plan" described in the St atement, the SEC has recen tly published requests for 
public comments, found at:  http://www.sec.gov/ru les/other/2010/33-9133.pdf;  http://www.sec.gov/ 
rules/other/2010/33-9134.pdf.  
  WT/TPR/M/235/Add.1 
 Page 235 
 
 
 (iii) Legal services 
 WTO Secretariat's Report, page 115, paragraph 141 
 
The Report notes that "legal services in the U.S. mu st be supplied by natural persons." According to 
current global practice, it is predominantly law firms (i.e. legal persons) that assume the provision of 
legal services.  91. Given this reality, will the U.S. consider allowi ng the provision of legal services also by legal, 
and not only by natural, persons? 
 
RESPONSE:  The legal profession and its regulators in the United States are continuously 
considering a range of regulatory modifications to serve the public interest.  It is not possible to 
anticipate whether this particular cha nge is likely in the near future.  
 
WTO Secretariat's Report, page 115, paragraph 143 
 The report mentions that foreign law firms are allowe d to establish legal subsidiaries in the U.S., with 
the same rights as U.S. firms.  Nevertheless, wh en those firms, or any other U.S. firm, hire foreign 
lawyers, the latter's ability to work e ffectively in the U.S. market is significantly limited by restrictions 
on the content of legal advise they are entitled to provide.  
 92. Will the U.S. consider removing those restrictions with a view to providing effective market 
access for all qualified foreign lawyers? 
 RESPONSE:   The legal services profession and its regulators in the United States consistently assess 
the effectiveness and efficiency of restrictions placed on the provision of legal services, with a view toward adapting to changing market demands and in  the public interest.  The adoption and revision of 
rules related to foreign lawyers has consistently b een in the direction of enhanced market access.  WT/TPR/M/235/Add.1 
Page 236 
 
 
 GUATEMALA 
 
Report of the Secretariat, Document WT/TPR/S/235 
(3) Other Measures that affect Trade and Investment (v) Trade Related Intellectual Property Measures  
 
The report of the Secretariat indicates that there wa s a decrease in the number of patent applications 
in 2009 (paragraph 223).  Could the United States indica te the factors to which this drop might be 
attributed?  
RESPONSE:   We believe that the global economic cr isis, which caused negative gross domestic 
product (GDP) growth, led to the decrease in th e number of patent applications in 2009. 
 
Similarly, could the United States specify whether th is decrease was limited to patent applications of 
persons residing in the United States or also in cludes applicants residing abroad?  In the latter case, 
to what extent?  
 RESPONSE:   The 2009 decrease was not limited to patent  applications of persons residing in the 
United States.  Applicants residing abroad were af fected to a similar extent as residents of the 
United States.  WT/TPR/M/235/Add.1 
 Page 237 
 
 
 HONG KONG, CHINA 
 
Contingency Measures 
 
(WT/TPR/S/235:   p. 29, para. 48) 
 
1. We note from the Secretariat Report that the relevant U.S. authorities will conduct an 
analysis of the relative advantages and disadvantages of prospective and retrospective anti-dumping 
and countervailing duty systems.  We would be int erested in learning more about the objective and the 
progress of this study. 
 RESPONSE:   The Department of Commerce’s report to Congress on Retrospective and Prospective 
Antidumping and Countervailing Duty Collection Systems is in the final stages of review.  Once that 
process is complete, the report will be transmitted to the relevant Congressional committees, and upon 
approval will be made publicly available.   
 (WT/TPR/S/235:  p. 29, para. 49)  2. The Secretariat Report notes that several U.S. anti-dumping investigations were the subject of 
WTO disputes during the review period, and most of the disputes concerned the U.S.’s practice of 
“zeroing” in calculating dumping margins.  As the Dispute Settlement Body has consistently ruled 
against the use of “zeroing” and the U.S. has comm itted to bringing it to compliance with the WTO 
jurisprudence, could the U.S. share with us its  concrete steps and the intended timeframe to rectify 
this WTO-inconsistent methodology? 
 RESPONSE:   The United States stopped applying the zeroing methodology in investigations 
effective on February 22, 2007, though the United States has applied zeroing in some administrative reviews after that date.  The Appellate Body reports on zeroing raise serious systemic concerns for the 
United States that go beyond the issue of zeroing.  Indeed, the United States believes that the 
Appellate Body reports create new obligations to limit the use of antidumping measures when such 
obligations were never agreed to by the WTO Me mbers.  Nevertheless, the United States takes its 
WTO obligations very seriously, and has stated pub licly that it intends to comply with the WTO 
rulings in all of the zeroing disputes.  We are ve ry actively engaged in a serious effort with our 
domestic stakeholders and our Congress to find an a cceptable solution.  We are not in a position at 
this time to provide details on the specific steps we will take or the timeframe to comply with the 
Appellate Body rulings. 
 
Maritime Transport 
 
(WT/TPR/S/235:  p. 101, para. 91)  3. Paragraph 3(a) of GATT 1994 provides an exemption from Part II of GATT 1994 for 
measures under specific mandatory legislation – enacted by a Member before it becomes a 
contracting party to GATT 1947 – which prohibit the use, sale or lease of foreign-built or foreign-
reconstructed vessels in commercial applications be tween points in national waters or waters of an 
exclusive economic zone.  On 20 December 1994, the U. S. invoked the provisions of Paragraph 3(a) 
with respect to specific legislation,  i.e. the Jones Act, that met th e requirements of that paragraph.  
Paragraph 3(b) of GATT 1994 calls for a review of this exemption five years after the date of entry 
into force of the WTO Agreement – and thereafter every two years for as  long as the exemption is in 
force – in order to examine whether the conditio ns which created the need for the exemption still 
prevail.  The last review of the Jones Act exemption was conducted in 2009. 
 WT/TPR/M/235/Add.1 
Page 238 
 
 
 We are concerned that this exemption has lasted for nearly 16 years after the establishment of the 
WTO, and that it may have a linkage with the U.S. ’s position on the services negotiations on maritime 
transport services under the DDA.  We would like to inv ite the U.S. to explain whether the legislation 
covered by the exemption still serve s the objectives originally intended, and whether the conditions 
for retention of the relevant measures still prevail. 
 
RESPONSE:   As the United States has explained in the c ontext of the biennial review, the conditions 
that create the need for the use of  this exemption by the United States still prevail.  The United States 
has very much the same need as it did in 1994 to  maintain its shipyards;   readiness to build and 
maintain naval vessels. 
 
MFN Exemptions 
 
(WT/TPR/S/235:  p. 101, para. 85;  p. 106, para. 110)  4. It is noted from the Secretariat Report that  the U.S. has maintained MFN exemptions in 
respect of aircraft repairs and maintenance servi ces and telecommunications services.  Both 
exemptions are of an indefinite period and the one on telecommunicatio ns is conditioned on 
reciprocity.  There are also other MFN exemptions mainta ined by the U.S. not featured in the Report. 
 
MFN exemptions, in particular those conditione d on reciprocity, are not consistent with the 
fundamental principle of the multilateral trading syst em.  MFN exemptions of an indefinite duration 
are also inconsistent in nature with the GATS A nnex on Article II Exemptions, which requires that all 
MFN exemptions maintained by Members should be reviewed from time to time and in principle not 
more than 10 years in duration.  We would therefore like to urge the U.S. to seriously consider 
removing all MFN exemptions and would appreciate the U.S.’s adv ice on any plan to remove them. 
 RESPONSE:   As the conditions creating the need for th e exemptions have not changed, we do not 
have plans to remove them at this time.    Telecommunications Services 
 
(WT/TPR/S/235:  p. 106, para. 110;  p. 109, para. 126) 
 
5. As noted from the Secretariat Report, in  respect of the direct-to-home (DTH), direct 
broadcast services (DBS) and digita l audio radio services (DARS) for which the U.S. has excluded 
from its commitments under the Agreement on Basic Telecommunications, the Federal 
Communications Commission (FCC) has allowed eleven  foreign satellites to pr ovide these services to 
the U.S.’s market under the ECO-Sat (effective co mpetitive opportunities for satellites) analysis that 
requires an applicant to show that satellite systems licensed in the U.S. may provide a similar service 
in the applicant’s home market.  If this is not the case, and unless the Commission determines that there is a strong public interest reason in favour of the service, the FCC will not permit a foreign 
satellite system to provide these services to the U.S.’ market. 
 
We note that in the revised offer of the U.S., additi onal commitments have been made in respect of the 
services concerned.  Such being the case, we would be interested in knowing -   
(a) whether the requirement of “similar service in the applicant’s home market” will be removed 
as a result of the implementation of the commitments in the revised offer;  and 
  WT/TPR/M/235/Add.1 
 Page 239 
 
 
 (b) whether there are still other remaining rest rictions after the implementation of the 
commitments in the revised offer. 
 RESPONSE:   In the U.S. view, the appropriate forum for consideration of these questions is the 
DDA services negotiations, rather than the TPR. WT/TPR/M/235/Add.1 
Page 240 
 
 
 INDIA 
 OVERVIEW 
 
Para 2.  Export regulations, used for foreign po licy and security reasons, hav e not changed, although 
a major review is currently under way.   
 
Question 1.  Is there any time frame for conclusion of this review? 
 RESPONSE:   Our goal is to begin publishing proposed revisions to control lists and licensing 
policies as soon as possible this year with the goal of  completely amending the lists next year.  This 
process will include any required Congressional notifi cations and the associated consultative process.  
 
Para 6. In his State of the Union Address in Janu ary 2010, the U.S. President set a goal of doubling 
exports over the next five years. 
 Question 2.  We request the U.S. to share precise  details how this goal is set to be met.  
 
RESPONSE:   As you note, in his State of the Union address in January 2010, President Obama 
launched the National Export Initiative (NEI) and set a goal of doubling U.S. exports in five years.  
To aid in achieving this goal, the President issued Executive Order 13534 on March 11, 2010, establishing eight policy priorities for the NEI and creating an Export Promotion Cabinet.  As mandated by the Executive Order, the Export Promo tion Cabinet prepared a Report to the President, 
delivered in September 2010, laying out the Export Promotion Cabinet’s recommendations for 
carrying out the NEI’s goal.  An element of U.S.  trade policy and the NEI is seeking to encourage 
export growth by allocating additional resources to export promotion activities, and to monitoring and 
enforcing partners' trade commitments.  For further information, please see the “ Report To The 
President On The National Export Initiative:  Th e Export Promotion Cabinet’s Plan For Doubling 
U.S. Exports In Five Years ” issued in September 2010, which can be found at:  
(http://www.whitehouse.gov/sites/defau lt/files/nei_report_9-16-10_full.pdf). 
 
Para 8.  Specifically, U.S. trade policy is seeking to  encourage export growth by allocating additional 
resources to export promotion activities, and to monitoring and enforcing partners' trade 
commitments.  These activities are part of a new National Export Initiative implemented to help 
achieve the goal of doubling exports in the next five years. 
 
Question 3.  What is the quantum of the additional resources allocated envisaged? 
 
RESPONSE:   U.S. government resources are being strate gically allocated to meet NEI goals.  The 
NEI is focused on three key areas:  (1) expanding trade promotion activities in support of U.S. companies, especially small and medium sized businesses, (2) expanding access to credit for U.S. 
businesses to help them develop and expand their export activities;  and (3) opening key foreign 
markets, reducing barriers to trade, and robustly enforcing our trade agreements. 
 
Para 9.  The Administration has not yet subm itted for Congressional consideration three FTAs signed 
before 2008 but still awaiting ratification. 
 
Question 4.  When does the Administration plan to submit these 3 FTAs to the Congress? 
 
RESPONSE:   The Administration is working to reso lve the outstanding issues in these FTAs and 
move forward.   WT/TPR/M/235/Add.1 
 Page 241 
 
 
 The Administration is working intensively to iden tify the steps it believes the Colombian government 
should take, building on progress to date, to address the concerns that have been raised related to the 
exercise of fundamental labor rights in Colombia.  
We are also working to address the outstanding issues related to the Panama FTA in order to be able 
to submit it for Congressional consideration.  Speci fically, we are seeking to address concerns with 
certain aspects of Panama’s labor regime and its tax transparency rules.  At the President’s direction, USTR is focused on resolving outstanding issues with the Korea FTA 
agreement by the G20 Summit in November.  If tho se issues have been resolved, President Obama 
intends to submit the KORUS FTA to Congress for approval in the months following his November 
meeting with President Lee.  
Para 11.  Furthermore, domestic preferences we re incorporated into the US$787 billion fiscal 
stimulus package of early 2009 to ensure that the manufacture of iron, steel, and manufactured goods 
used as construction materials in public projects fu nded with stimulus dollars is performed in the 
United States.  These domestic preferences, whic h must be applied in accordance with U.S. 
international commitments, are more restrictive than long-standing domestic preferences used in 
federal procurement under the Buy American Act of 1933.  
Question 5.  Is there any end date by when these measures will be phased out?  
 
RESPONSE:   The “buy American” requirement in Section 1605 of the American Recovery and 
Reinvestment Act of 2009 (ARRA) only applies to  public projects funded by ARRA.  When those 
projects are completed, the ARRA “buy American” requirement will no longer apply.  ARRA 
generally requires that the funds for public project s be obligated or under contract by the end of 
September 2010.  Section 604 of ARRA applies onl y to Department of Homeland Security (DHS) 
procurements of certain textile products utilizing any funds (ARRA or other) provided to DHS on or 
before February 17, 2009.  Both Section 604 an d 1605 are implemented consistent with U.S. 
obligation under intern ational agreements. 
 
Para 16.  To ensure that trade policy supports economic recovery and rebalancing more effectively, 
the United States should maintain the emphasis on the contribution that open and transparent trade 
and investment regimes can make to productivity, a key ingredient of export success.  Export 
promotion should be complemented by continue d reduction in remaining restrictions on market 
access and other distorting measures, in line with Members' observations durin g the previous Review 
of the United States, including with respect to  U.S. tariff peaks, support for agriculture, and 
remaining barriers to services trade and investment.  Question 6.  We would appreciate the U.S. sharin g details of steps taken to ensure than remaining 
barriers to services trade and investment are lifted since its previous review?  
 
RESPONSE:   The United States maintains one of the most open services and investment markets 
among WTO Members.  Without understanding the specifi c barriers to which the Secretariat refers, it 
is difficult for us to provide an answer to this question.  
I. ECONOMIC ENVIRONMENT 
 
Para 14.  The federal budget deficit widened subs tantially during the review period, reflecting 
increases in spending and falling revenues.  From 1.2% of GDP in 2007, the federal budget deficit 
increased to 3.2% of GDP in 2008, and nearly 10 % in 2009 (Table I.1).  Apart from the automatic 
effect of the weak economy on spending and revenu es the cost of fiscal stimulus packages under the WT/TPR/M/235/Add.1 
Page 242 
 
 
 Economic Stimulus Act of 2008 and the ARRA, assistance to the housing GSEs, and outlays under the 
Troubled Asset Relief Program also contributed to the increase in the deficit.  
Question 7.  We would like the U.S. to share measures it proposes to take to reduce federal budget 
deficit in the coming years. 
 
RESPONSE:   The U.S. Government will be taking ma ny steps to reduce the budget deficit over the 
coming years. The President’s FY 2011 budget lays out a number of savings that is estimated to 
reduce the deficit to roughly 4 percent of GDP by 2014.  Some of the improvement in the budget will 
come as a natural result of an improving economy  which will both reduce automatic stabilizer 
spending and increase revenues.  Savings will also re sult as temporary stimulus measures wind down.  
In addition, the President has called for a non-secur ity discretionary spending freeze, allowing some 
temporary tax cuts to expire, and made sure that th e health care reform (the Affordable Care Act) put 
substantial downward pressure on health care costs and the deficit in the medium and long term.  
Furthermore, the President has established a bipar tisan deficit commission to examine how to reduce 
the deficit further, with a goal of bringing the de ficit under 3 percent of GDP and thus stabilizing the 
debt to GDP ratio over time.  
II. TRADE AND INVESTMENT POLICY FRAMEWORK  
 
Para 8.  Under the trade promotion authority that  expired in July 2007, Congress had to approve or 
reject legislation implementing a new trade agreement without amendment and within a fixed period.  
The 2010 Trade Policy Agenda does not contain any reference to trade promotion authority.  According to the U.S. authorities, the Admi nistration will work with Congress on new trade 
negotiating authority at an appropriate time. 
 
Question 8.  Could the U.S. provide clarity on new trade negotiating authority and “appropriate 
time”?   
RESPONSE:   The Administration will look to initiate discussions with Congress in the near future 
regarding TPA for the Trans-Pacific Partnership Agre ement.  Likewise, at an appropriate time we will 
initiate discussion with Congress regarding TPA for the results of the Doha negotiations.  In the end, 
however, it will be the quality of the agreements rather than process which drives the legislative 
approval process.  With the prospect of an ambiti ous agreement that provides new market access, the 
U.S. Congress as well as the legislatures of other WTO Members would have a strong incentive to approve and implement the outcome. 
 
Para 15.  The United States has not yet implem ented the WTO Dispute Settlement Body's (DSB) 
recommendations and rulings relating to:  Section 110(5) of the U.S. Copyright Act;  some aspects of 
the U.S. anti-dumping investigation of certain hot rolled steel products from Japan;  and Section 211 
of the Omnibus Appropriations Act of 1998.  The implementation of  the recommendations and rulings 
in disputes on Section 211 and hot rolled steel has been outstanding for 88 months, and the Copyright 
Act dispute for 63 months (March 2010).  The United States has indicated in monthly updates to the DSB that work is under way in Congress to implem ent the DSB's recommenda tions and rulings in 
these cases.  
Question 9.  These non implementations of DSB’s ru lings undermine the credibility of the WTO.  We 
request the U.S. to indicate by when these rulings will be fully implemented?  
 
RESPONSE:   The United States has come into compliance,  fully and promptly, in the vast majority 
of its disputes.  As for the remaining few instan ces where our efforts to do so have not yet been 
entirely successful, the United States has been worki ng actively towards compliance in furtherance of 
the purpose of the dispute settlement system.  The U. S. Administration will continue to work with the  WT/TPR/M/235/Add.1 
 Page 243 
 
 
 U.S. Congress to fully implement the recommendations and rulings of the Dispute Settlement Body in 
these disputes.  
IV. DEVELOPMENTS IN SELECTED SECTORS 
 
Para 26.  The GAO has stated that food aid dona tions by the United States could be made more 
efficient if some legal requirements were relaxed, su ch as the obligation to carry 75% of food aid in 
U.S.-flagged ships.  
Question 10.  Is the U.S. contempl ating to relax these legal require ments to enhance efficiency of food 
and donations?   
RESPONSE:  The Cargo Preference Act, P.L.83-644 (August 26, 1954), as amended, sets forth 
permanent legislation concerning the transportation of  waterborne cargoes in U.S.-flag vessels.  We 
are not aware of any Congressional prop osals to change this legislation. 
 Para 78.  There are no legal or regulatory barriers to  private ownership of airports with commercial 
service, but the general legal compl exity at federal, state and local level, plus restrictions on the use 
of revenues have meant that there has been  little interest from the private sector. 
 
Question 11.  Does the U.S. plans to simplify these le gal complexities to promote private ownership of 
airports?   
 
RESPONSE:   As stated in paragraph 78, “The Airport Privatization Pilot Program, which began in 
1997, was intended to simplify the legal complexities a nd restrictions at the federal level and to assess 
whether privatization is a feasible way to ta p private capital for airport improvement and 
development.”  Thus, the Airport Privatization P ilot Program is the attempt to simplify the legal 
complexities to promote private ownership of airports.  The Airport Privatization Pilot Program is a Federal program of the U.S. Department of Tran sportation/Federal Aviation Administration and is 
further described in paragraphs 79 and 80. 
 
INDIA SUBSEQUENT QUESTIONS 1 
 Question 1.  In para 4 (Page 6) of Report by USA, the last line underlines the importance of 
meaningful liberalisation in all three core ma rket access areas including Services.  
 
Any liberalisation in services will have to include a ll Modes of supply.  However, India notes with 
concern that USA has not undertaken any improvemen t in its Mode 4 offer in Services over its UR 
commitments.  This is a continuous source of di sappointment to many other developing countries,  
who have export interest in Mode 4, because of their comparative advantage.  Why does, the USA 
which is a strong proponent of liberalisation and free trade in Services in other Modes,  treat Mode 4 
differently?  Does the USA plan to improve its Mode  4 commitments in WTO?  Specifically, does it 
plan to incorporate CSS and IP in its Mode 4 commitm ents to deal with cases of temporary entry of 
services suppliers delinked from commercial presence ?   
RESPONSE:   The TPR is not a negotiating forum.  Requests made in the context of the DDA 
services negotiations should be taken up in that forum. 
 
Question 2.  India is  concerned that rather t han liberalising, certain developments in USA have made 
supply of services through Mode 4 more  difficult and costly.  The recent hike in fee for H 1B/L visa 
application through HR 6060 Act is one such example. 
 
We request USA to address the follo wing concerns, in this context.  WT/TPR/M/235/Add.1 
Page 244 
 
 
 a. The steep hike in visa fee will make it much  more difficult for service suppliers to enter USA 
to supply services despite qualifying otherwise.  This may in fact impair the benefits accruing 
to them under the terms of the UR comm itments.  Under the GATS, every country has the 
right to “regulate the entry of natural persons into, or their temporary stay in, its territory, 
including those measures necessary to protect the integrity of, and to ensure the orderly 
movement of natural persons across, its borders” .  However, this right is qualified by the 
principle that such measures should not be applie d in such a manner as to nullify or impair 
the benefits accruing to any Member under the terms of a specific commitment.  The USA 
measure under  H.R. 6080  can lead to nullifica tion and impairment of the benefits accruing 
under the terms of the specific commitments, as  it erodes the cost competitiveness of services 
supplied through Mode 4.   
 b. The fee hike is supposed to fund increased border security measures and does not have any 
immediate connection to the cost of processi ng of applications for visa.  While India 
appreciates USA’s concern in strengthening its bor der security measures, it is not clear why 
should visa applicants for H1B and L visa be singl ed out for meeting most of the cost of the 
increased security measures.  
 c. This visa fee hike measure in effect  discriminates against foreign service suppliers as 
compared to domestic companies since the increased fee would apply to those companies who 
have more than 50 employees and 50% of their employees on non immigrant H1 B/L visa. Most of such companies covered by increased visa fee, would be foreign as U.S. domestic 
companies would have majority of their employee s as U.S. citizens.  To that extent, the 
foreign services suppliers would face discriminati on vis a vis the domestic service suppliers. 
 
RESPONSE:  We understand India’s concerns about HR 6080, which may affect certain Indian 
companies established in the United States.  We  take those concerns very seriously, and we 
acknowledge the important contributions that Indi an investors make to the U.S. economy.   
 The purpose of this new legislation is to provide immediate enhanced security  on our southern border 
and the increased fees related to the H-1B and L-1 pr ograms are designed to offset some of the cost.  
The fee increase is temporary (limited to a period of 3 years) and applies to all companies, domestic or foreign, that make heavy use of these programs.  We do not believe that the new fee structure is 
inconsistent with our GATS obligations.  
 We are happy to discuss this issue with India further in a bilateral setting. 
 
Question 3.  Para 131 Page 110 Sectt. report  
 
Will the USA list the professions which are subject to  national qualifying examinations with details of 
such examinations and the states that they are rec ognized in?  Will passing such examination  enable 
the service suppliers to meet the qualification requi rement for that profession in those states? 
 RESPONSE:   The federal government does not maintain such a list;  however, several websites offer 
a convenient way to find general examination require ments for different professions and state-specific 
qualification requirements.  General examination requirements for each profession may be found in 
the Department of Labor’s Occupational Outlook Ha ndbook:  http://www.bls.gov/oco/.  State-specific 
licensing information may be found us ing the database at Career OneStop:  http://www.careeronestop. 
org/EducationTraining/KeepL earning/GetCredentials.aspx. 
 
In addition, the Council on Licensure, Enforcement and Regulation (CLEAR) is a national association 
of state and provincial licensing authorities.  The we bsite provides extensive information, directories, 
and links to licensing boards and national professional associations:  http://www.clearhq.org/.  WT/TPR/M/235/Add.1 
 Page 245 
 
 
 Even where national examinations are offered,  state licensing boards generally retain the 
responsibility for establishing a passing score that  reflects the standards required for minimal 
competence in their state;  therefore there is often no national standard for passing an exam.  In 
addition, passing an examination, whether a national examination or state examination, is rarely the 
only qualification requirement, and therefore, in itself, would be insufficient for meeting the 
qualification requirements.  For every profession in which a national examination is offered, it is 
necessary to check with the releva nt state licensing board to confirm their specific requirements.  
 
Question 4.  Para 131 Page 110 Sectt. report 
 Is there an effort to bring in more professi ons under such national qualifying examinations? 
 
RESPONSE:   The federal government does not exercise any role with respect to the offering of 
national qualifying examinations.  They are gene rally offered for a given profession by a national 
association of the individual state boards. The decision to produce or promote a national exam is made 
by the association itself on behalf of the state boards. 
 
Question 5.  Para 132 of the Sectt report (Page 110)  details that in the recent years the demand for H 
1 B visas has been strong and the caps were reac hed shortly after the app lication process was opened 
on 1 April each year. 
 In such circumstances, the ceiling on H 1 B visa has the effect of restricting trade in Mode 4. USA 
itself demands from other countries removal of equity ceilings and other numerical limitations in 
other Modes, especially Mode 3.  By the same l ogic, why should there be a numerical ceiling for grant 
of H1 B visa? Why shouldn’t the actual number of vi sa be determined by free market principle i.e. by 
matching demand and supply, subject to meetin g suitable qualifications, experience and other  
appropriate requirements?  In any case, what is th e rationale for freezing  a figure of 65,000 annually 
for H 1 B visa, given the fact that in most  of the years demand has been much higher?  
 RESPONSE:   Our temporary entry regime is very ope n and our Mode 4 commitments remain among 
the best in the WTO. 
 
In recent years, demand for the H-1B program has decreased substantially.  The annual cap of 65,000 
has been reached only late in the fiscal year, indicating that at present , the numerical limitation does 
not appear to be far from actual demand.  However, we note that it is not unusual for some type of 
numerical limitation to be applied to certain categor ies of foreign workers.  In addition, most H-1B 
workers are not subject to the 65,000 cap, so in pr actice the United States admits far more than 65,000 
each year.  Question 6.  What is the rationale for not allo wing Government-owned or  government controlled 
insurance companies to conduct business in many stat es of the United States? If there is any specific 
concern, can it not be addressed by other enhanced  requirements for capital, transparency, 
documentation etc., rather than an outright prohibition?  
RESPONSE:   There remain a number of commercially important states that do not maintain 
limitations on authorization of government-owned or government controlled insurance companies.  
The National Association of Insurance Commissioner s has explained that the state regulators are 
concerned that state owned or controlled companie s could avoid U.S. regulatory oversight, especially 
regarding enforcement actions.  The meaning of  the terms “government-owned or government 
controlled insurance companies” vary by state.  Some  states use a general definition while others have 
some discretionary authority to define what is a “government-owned or government controlled 
insurance company.”  
 WT/TPR/M/235/Add.1 
Page 246 
 
 
 Question 7.  In Mode 2 for hospital services, Fed eral or state government reimbursement of medical 
expenses is limited to licensed, cer tified facilities in the United States or in a specific U.S. state.  This 
limitation discourages trade in Mode 2 in hospital ser vices.  What is the specific concern behind 
having this limitation?  Can this concern not be addressed by specifying standards or 
qualification/certification requirements for the foreign service supplier rather than restricting 
reimbursement of medical expenses? 
 
RESPONSE:  Whether a member wishes to a llow access to government funding is entirely up to that 
member.  Only licensed, certified facilities in th e United States are entitled to federal or state 
reimbursement of medical expenses, such as Medicare or Medicaid (insurance programs for elderly, 
disabled or low-income individuals). 
 
III. TRADE POLICIES AND PRACTICES BY MEASURE 
(2) MEASURES DIRECTLY AFFECTING IMPORTS 
(i) Customs Procedures  
 
Page 20, Paragraph 2:  The report states that im porters can request advance rulings from the U.S. 
Customs and Border Protection (CBP) and that advance rulings are binding.  
Question 8.  Is the facility of advance rulings available to traders and interested parties in other 
Members or the same are restricted to traders and interested parties in U.S. only? 
 
RESPONSE:   Advance Rulings may be requested by a vari ety of interested parties.  Eligibility to 
request an advance ruling is not restricted by geogr aphic location or U.S. residency.  Specifically, a 
ruling may be requested by any person who, as an im porter or exporter of merc handise, or otherwise, 
has a direct and demonstrable interest in the ques tion or questions presented in the ruling request, or 
by the authorized agent of such person.  A “p erson” in this context includes an individual, 
corporation, partnership, associati on, or other entity or group.  See
 19 CFR §177.1(c). 
 Examples of specific parties with a direct and demons trable interest in questions presented that have 
received advance rulings have included producers, manufacturers, carriers, drawback claimants, 
warehouse operators, foreign trade zone  operators, and freight forwarders. 
 
Question 9.  What are the subject matters on whic h advance rulings can be sought by the importer? 
Does CBP or any other governmental agency issue advance rulings on duty drawback, deferral or 
other relief from customs duties;  quotas, including tariff quotas;  origin of the good, and fees and 
charges, including manner of their calculation?  Please provide details . 
 
RESPONSE:   CBP issues advance rulings on a wide variet y of matters within the jurisdiction of U.S. 
Customs and Border Protection.  Some of the i ssues upon which CBP issues advance rulings include 
duty drawback;  the application of  regulatory and statutory fees and administrative charges, including 
the calculation of such fees and charges to a transac tion;  foreign trade zones;  warehouses;  carnets; 
temporary importations (including for processing, and non-processing such as exhibit);  return of 
domestic goods temporarily exported;  procedures fo r instruments of international traffic;  and 
merchandise in transit.  In addition, CBP issues  advance rulings on tariff classification, marking 
requirements, application of rules of origin and preferential rules of origin, the administration of 
quotas;  and the appropriate method, and the applicati on of the method, to be used for determining the 
customs value under a particular set of facts.  See generally
 19 C.F.R. §177.1(a)(1). 
 
Question 10.  If advance rulings are issued on drawback matters, please elucidate by giving an 
example as to how such rulings are issued?  A re such rulings issued at the time of importation? 
  WT/TPR/M/235/Add.1 
 Page 247 
 
 
 RESPONSE:   There are three general types of rulings that are done for drawback.  The first is 
general manufacturing drawback rulings.  Genera l manufacturing drawback rulings essentially pre-
approve manufacturing or produc tion operations, provided that the claimant satisfies all of the 
requirements of that ruling.  See  19 C.F.R. §191.7. 
 
A second common type of drawback ruling is a specific manufacturing drawback ruling, in which a 
drawback claimant may submit a request to CBP for a specific manufacturer’s drawback ruling to 
Customs Headquarters for approval.  In these rulings  the topics of the advance ruling usually are: 
whether the imported and substituted goods are “the  same kind and quality;” whether the actions 
taken on the goods can be deemed a manufacturing process or production; and whether the basis for the drawback claim is the imported good was “used in” or “appeared in” the good that is exported and 
the subject of the drawback claim.  See
 19 C.F.R. §191.8. 
 Other types of drawback rulings that are re quested include a determination of commercial 
interchangeability;  approval of accounting methods;  recordkeeping and inventory methods;  whether 
a good qualifies as “unused;  whether a proposed pro cedure qualifies as “destruction or recycling;” 
and the application of the drawback statutes w ith other preferential duty deferral programs to a 
particular transaction.  See
 19 C.F.R. Part 191. 
 
Like other rulings, an advance ruling concerning a dr awback transaction must also be requested for a 
prospective transaction.  See  19 CFR §177.1.  In most cases, this is prior to importation. 
 Question 11.  Can advance rulings be sought by th e importer on a matter that is already pending 
before any officer of customs, the appellate tribunal or any court? Will the CB P allow the application 
where the question raised therein is the same as in  a matter already decided by the appellate tribunal 
or any court? 
 
RESPONSE:  CBP issues advance rulings on prospective transactions.  CBP by regulation will not 
issue an advance ruling to any party while the same issue is the subject of a current transaction, or a 
completed transaction, nor a transaction pending before a federal court.  See
 19 CFR §§177.1(a)(2)(3) 
and 177.7(b).   
 
CBP does not reject a ruling request because the qu estion raised has already been decided by an 
appellate office or any court.  However, CBP will ca ll attention to the decisi on already reached by the 
appellant office or court, and apply the decision set by the appellant office or court to the transaction 
set forth in the advance ruling request.    Question 12.  How does the CBP handle the advance ruling applications that are not complete in every material respect?  Is there any time limit p rescribed for the U.S. Customs to return such 
applications to the applicant, pointing out the requirements that have not been met?  
 
RESPONSE:   If a request for a ruling that does not comply with all of the provisions required for an 
advance ruling, the applicant is notified in writing,  noting which requirements have not been met.  
Generally, the applicant will be given a period of thirty  (30) days from the date of the notice (or such 
longer period as the notice may provide) to supply a ny additional information that is requested or 
otherwise conform the ruling request to the re quirements referred to in the notice.  See
 19 CFR 
§177.3.  
There are no legally prescribed time frames for replying to applicants whose applications are 
deficient.  Generally, this is done promptly after the request is received, often within a few days. 
 
Question 13.  What are the cases or situations in which advance rulings can be refused?  Can the 
CBP reject an application for advance ruling without co mplying with the principles of natural justice, WT/TPR/M/235/Add.1 
Page 248 
 
 
 that is to say, without affording an opportunity to the applicant of being heard when there is a request 
from the applicant to provide so or when a determ ination contrary to that advocated in the ruling 
request is contemplated? 
 
RESPONSE:   No ruling letter will be issued in res ponse to a request for a ruling which fails to 
provide the information necessary for CBP to issue the ruling.  For example, CBP generally needs a 
sample or specification to issue a classification rulin g.  Moreover, no ruling lett er will be issued with 
regard to transactions or questions which are essentia lly hypothetical in nature.  No ruling letter will 
be issued in regard to a current or completed transact ion.  Finally, no ruling letter will be issued with 
respect to any issue which is pending before a Federal court.  See  19 CFR §§177.1(a)(2)(30 and 
177.7(b). 
 As to an opportunity to be heard, a requester is gi ven a right under regulations to request a conference 
or an oral hearing to discuss their ruling request.  Th e decision to allow a meeting or hearing is within 
the discretion of CBP, based on a consideration of whether it would be helpful to CBP in deciding the 
issues, or when CBP is contemplating a contrary position to the one advocated by the requester.  See
 
19 CFR §177.4(a).  Of course, the requester also has the right to judicial appeal of the actual treatment 
CBP provides the transaction after it occurs, a nd a right to a hearing in that context. 
 
Question 14.  Is there any time-limit set forth in the U.S. customs law for issuance of advance rulings 
by CBP and other governmental agencies?  If so , please indicate the time limits so prescribed, 
subject-wise?  
 RESPONSE:   While there are no time limits proscribed by law, as a matter of agency policy, CBP 
issues basic classification rulings within 30 days of receipt of a full and complete application for an 
advance ruling.  All other subject matter rulings an d complex classification rulings are issued within 
90 days of receipt of a full and complete application for an advance ruling. 
 
The U.S. has numerous Free Trade Agreements with tr ading partners that do have time limits within 
which each partner agrees to issue advance rulings.  Some of those agreements require that advance 
rulings be issued in 120 days, and some 150 days. 
 
Question 15.  Does CBP charge any fees for givi ng advance rulings?  What is the amount charged 
from the importers?  Please provide details. 
 
RESPONSE:   CBP does not charge any fees for issuing advance rulings. 
 Question 16.  What is the validity period of adv ance rulings?  Will the advance ruling hold good if, 
before such ruling is given effect to, the relevant law undergoes change? 
 RESPONSE:   Advance rulings issued by CBP represent the official position of CBP with respect to 
the particular transaction or issue described th erein and is binding on all CBP personnel and the 
requester until modified or revoked.  There is no temporal validity period for advance rulings.  See
 19 
CFR §177.9. 
 
Advance rulings become the official position of CBP  upon signature.  Thus, there is no possibility of 
the relevant law changing before the ruling goes into effect.  However, a change in the relevant law 
could cause the ruling to be revoked.  The advance ru ling may be modified or revoked within the first 
60 days of issuance without the required statutor y and regulatory notice and comment period, and a 
delayed effective date is required for a modification or revocation for advance rulings in effect longer 
than 60 days.  See  19 CFR §177.12.  WT/TPR/M/235/Add.1 
 Page 249 
 
 
 Question 17.  Are advance rulings issued by Cu stoms field offices? If so, will it not result in 
inconsistent customs decisions, creating uneven playi ng field for importers? How such inconsistencies 
are resolved? What is the time limit prescri bed for resolving such inconsistencies? 
 
RESPONSE:   No, advance rulings are not issued by CBP  field offices.  With the exception of basic 
tariff classification rulings, advance rulings are only issued by CBP Headquarters Office.  Tariff 
classification rulings are issued by the Director of the National Commodity Specialist Division (“NCSD”) which is under the authority and dir ection of the Headquarters Office that issues all 
advance rulings on behalf of CBP.  The Headquarters Office retains au thority to independently review 
all tariff classification ruling letters issued by the National Commodity Specialist Division.  See
 19 
CFR §177.2(c).  Thus, the problem envisioned in the question does not arise.  Question 18.  Does the U.S. law provide for review of advance rulings?  If so, who conducts such 
review? Are rulings issued by the Headquarters Office subject to review? 
 RESPONSE:   By law an applicant may administratively appeal an adverse advance ruling.  See 19 
U.S.C. §1625 (b).  The review of such rulings is ca rried out by the next higher level of administrative 
management.  
Advance rulings may be the subject  of a Federal Court challenge unde r certain, limited circumstances, 
including a finding of irreparable harm to the Plaintiff.  
The requester also has the right to judicial appeal  of the actual treatment CBP provides the transaction 
after it occurs. 
 
Question 19.  Is review conducted based on the petit ion filed by the importer only or the review is 
conducted, suo motto, in all cases?  What is  the time limit for conducting such review?  
 
RESPONSE:   In the case of an administrative review, a request for “reconsideration” may be 
initiated by a recipient of an adverse ruling, but it ma y also be brought to the attention of CBP by any 
interested party, including on occasion a self-initiated review.  As a matter of agency policy, CBP will 
issue a result of that reconsideration within 90 days  if all relevant information and requirements have 
been submitted, unless the reconsideration results in a modification of a previously issued ruling.  In 
such a case CBP follows the time frames specified in  the notice and comment procedures specified in 
19 U.S.C. §1625.   
 
Question 20.  Can the advance ruling be reviewed a fter it has been given effect to?  Also, please 
clarify whether the advance ruling can be given effect pending completion of review.   
RESPONSE:   Yes, an advance ruling can be reviewed af ter it has been given effect;  indeed, since 
the ruling is effective from the date of issuance, this will be true in all cases.  However, how a 
modification or revocation of the position set forth in the advance ruling is handled is dependent upon 
the length of time the ruling has been in effect.  Advance rulings may be m odified or revoked within 
the first 60 days of issuance without the required statutory and regulatory notice and comment period, and a delayed effective date is required for a modifi cation or revocation for advance rulings in effect 
longer than 60 days.  See
 19 U.S.C §1625(c).   
 
Question 21.  The advantage of advance ruling proce dure is that the applicant is assured of the 
finality of tax liability and he does not have to spend time, energy and money in litigation which are 
mostly long-drawn. So, will not the review process result in uncertainty and delayed import 
clearance? 
 WT/TPR/M/235/Add.1 
Page 250 
 
 
 RESPONSE:   Once the ruling is issued, the person who received it may rely on it;  there is no 
uncertainty or possibility of delayed import clearan ce.  Moreover, a review at the request of the 
applicant provides the applicant with a speedier means of review than if the applicant were required to 
await completion of the transaction and subsequent appeal.  Indeed, absent a successful review, the applicant may, in the case of an adverse ruling, fi nd that it no longer even is in a position to undertake 
the transaction.  Further, in the case of reconsiderat ion by CBP at its own or another’s initiative, if 
notice is given that a ruling is proposed to be revoke d, the previously issued ruling remains in effect 
until the revocation procedure is completed.  On ce the new ruling is issued, it does not become 
effective for 60 days following its issuance.  Thus, there is no uncertainty or delayed import clearance.  
 
Question 22.  Please clarify whether the advance ruli ng on a subject matter, say tariff classification is 
binding on the importer who had sought it or all importers.  Also, please clarify whether the advance 
ruling is binding on the customs station indicated in  the application as the port of import or at all 
customs stations.  
 
RESPONSE:   An advance ruling represents the official position of CBP with respect to the particular 
transaction or issue described therein and is binding on  all CBP personnel, including all ports of entry, 
until modified or revoked.  See
 19 CFR §177.9(a). 
 
An advance ruling is binding on the parties to the pr ospective transaction in the ruling.  The ruling is 
not binding with respect to other parties. 
 
Question 23.  Page 20, Paragraph 3:  The report st ates that Part 174 of title 19 of the Code of 
Federal Regulations specifies procedures for adminis trative review of certain customs decisions.  
Which customs decisions are taken for administrat ive review?  Please provide details.  Do these 
include the normal classification and valuation d ecisions that are routinely taken by the customs 
authorities in their day-to-day functioning while accepting import and export declarations?  Is 
administrative review conducted suo motto or at th e instance of an aggrieved importer or exporter. 
 
RESPONSE:   The CBP decisions that may be reviewed, or “protested” include:  (a) The appraised 
value of merchandise;  (b) The classification and rate and amount of duties chargeable;  (c) All 
charges or exactions of whatever character within the jurisdiction of the Secretary of the Treasury 
including the accrual of interest;  (d) The exclusion of merchandise from entry or delivery under any 
provision of the Customs laws;  (e) The liquidation or  reliquidation of an entry, or any modification 
thereof;  (f) The refusal to pay a claim for drawback;  and (g) The refusal to reliquidate an entry under 
section 520(c), Tariff Act of 1930, as amende d (19 U.S.C. §1520(c)).  See generally  19 CFR §174.11. 
 
The actions which trigger the ability to file a “prote st” include: 1) The date of notice of liquidation or 
reliquidation, which is the final computation or ascer tainment of duties owed on an entry;  (2) The 
date of the decision, involving neither a liquidation nor reliquidation, as to which the protest is made 
(e.g., the date of an exaction, the date of wr itten notice excluding merchandise from entry or delivery 
under any provision of the Customs laws, or the date  of written notice of a denial of a claim filed 
under section 520(d) of the Tariff Act of 1930, as ame nded);  or (3) The date of mailing of notice of 
demand for payment against a bond in the case of a su rety which has an unsatisfied legal claim under 
a bond written by the surety.  See generally  19 CFR §174.12(c).   
 Accordingly, the decisions taken by a CBP officer that involve any of the actions described above, 
resulting in exclusion of merchandise, or assessment of duties and/or taxes, may be the subject of a 
“protest.”   
Protests are not initiated by CBP.  The parties th at may “protest” include:  (1) The importer or 
consignee shown on the entry papers, or their sureti es;  (2) Any person paying or receiving a refund of 
any charge or  exaction;  (3) Any person seeking en try or delivery;  (4) Any person filing a claim for  WT/TPR/M/235/Add.1 
 Page 251 
 
 
 drawback;  (5) With respect to a determination of origin, under certain circumstances, any exporter or 
producer of the merchandise subject to that determina tion;  or (6) Any authorized agent of any of the 
above persons.  See  19 §CFR 174.13. 
 
Question 24.  Page 20, Paragraph 5:  The report states that under the SAFE Port Act of October 
2006, CBP must operate a “single portal system” for the collection and distribution of “standard 
electronic import and export data” but, the single window is not yet fully operational. In the connection, please provide details as to how the single window will work in actual practice and in 
what way it would facilitate trade. 
 
RESPONSE:   The vision for the single window is that automation will support the electronic 
transmission of all data required by U.S. Fede ral Government agencies for imports.  The same 
automation would also support the admissibility d ecision-making by those agencies and notifications 
of those decisions to the parties involved in th e trade transactions.  The end goal will be the 
elimination of submission of required inform ation on paper documents.  From a facilitation 
standpoint, we envision that the availability of a ll information electronically will enable automated 
decision-making on compliant trade to enable it to clear the government obligations without 
unnecessary delay, allowing the agencies to concentrat e their efforts on those transactions that are 
high risk and more likely to need further scrutiny. 
 
U.S. Customs and Border Protection (CBP) is taki ng steps towards the implementation of the single 
window.  However, significant challenges remain.  Among these are: 
 
• Re-engineering Business Processes:  Business Pr ocesses must be re-engineered in order to 
make full use of the single window.  Having a clear understanding of the underlying business 
processes is a prerequisite for a successful technical implementation.  This applies not only to 
CBP’s processes but to the business processes of th e Federal Government agencies that will be 
participating with CBP in the single window.  CBP has taken steps to create a Concept of 
Operations that define in business terms what the new processes will look like. 
 
• Creation of a single language for the trade to  provide the required data:  Moving from the 
paper form world to the electronic has required the agencies that will participate in the single 
window to come together to create common definitions of terms so the trade can submit the 
appropriate data electronically. 
 
Question 25.  Page 20, Paragraph 6:  The report st ates that release of merchandise is not contingent 
upon the completion of all import formalities, including payment of duties. Can this facility of taking 
delivery of the goods without payment of duties be clai med as a matter of right by the importer or this 
is subject to the discretion of the Customs to allow such facility?  
RESPONSE:   Generally, for commercial importations valued over $2000, importers are able to 
obtain release of their merchandise without payi ng duties, upon the posting of a bond that ensures 
compliance with import requirements, and secures the payment of duties, taxes, and fees.  However, 
there are exceptions to this rule.  For example, th ere are situations based on the prior payment record 
of the importer where the port director may require the filing of the entry summary with estimated duties attached prior to release of the goods.  See
 19 CFR §142.13(a). 
 Question 26.  It has been stated at page 21, parag raph 6 that a customs bond must be posted for each 
importation of merchandise.  Is it not administra tively burdensome?  Does it not add to paper work? 
Is there any requirement for taking a bond when  the importer has complied with all import 
formalities, including payment of duties?  Please clarify.  WT/TPR/M/235/Add.1 
Page 252 
 
 
 RESPONSE:   CBP requires a bond for all commercial cargo imported into the United States, as 
commercial cargo is released prior to the payment of any duties, taxes or fees.  The vast majority of 
cargo is secured by a continuous bond which is file d prior to any cargo being imported and remains in 
effect indefinitely as long as the importer (principal) and the surety do not terminate the bond.  A once-filed valid sufficient continuous bond will remain in effect for many years. 
 
Question 27.  Page 22, Paragraph 16:  The report states that the CBP conducts post-clearance audits 
in the form of “focused assessments” or “qui ck response audits” and that it conducted 320 audits in 
2008 and 345 in 2009. What percentage did it constitute in value terms, that is, the value of goods imported in 2008 and 2009?  
 RESPONSE:   This information is sensitive and not  available to parties outside of CBP. 
 
Question 28.  Is the importer intimated in advance ab out the visit of the audit team to his premises in 
all cases? Are the results of the audit intimated to him in all cases?  
 
RESPONSE:   Regulatory Audit informs importers in advance when audits falling under the purvue 
of Regulatory Audit programs are conducted. During th e entrance conference, we provide the auditee 
an estimated timeline for completion of audit.  We provide the auditee the results of our audit in the 
form of an audit report.   
 
Question 29.  What are the documents usually taken  up for scrutiny in such audits? Do these include 
the documents filed before the customs authorities only or also these include the documents, vouchers 
and declarations filed before other sister agenci es such as Direct Tax authorities, licensing 
authorities etc? Please provide details. 
 
RESPONSE:   Typical audit documentation includes entry documents, shipping documents, 
commercial invoices, packing slips, vouchers, Count ry of Origin declarations, and any other 
documentation required to support the importation or claim for preferential treatments under various 
trade programs.  We also review Company financ ial documents such as inventory records, accounting 
records;  licensing agreements;  and ot her documents supporting the import claims. 
 
(ii) Customs Valuation 
 
Question 30.  Page 23, Paragraph 21:  The report st ates that the transaction value method is used for 
approximately 86% of imports.  How the remaining 14% of imports are valued for customs purposes? 
What are the reasons for rejecting the transacti on value in these cases?  Please indicate in 
percentage terms the valuation methods fo llowed to clear this 14% of imports. 
 
RESPONSE:   The 86.4% statistic was based on responses to a question asked of importers whether 
they used the transaction value, asked as part  of the Entry Summary Compliance Measurement 
(ESCM) survey during the period October 2008–July 2009.   Those responses did not indicate the 
breakdown of the remaining 14%.  The requirement s of the Agreement on Customs Valuation are 
incorporated in U.S. law and regulation so the r easons for not applying transaction value in specific 
cases are those circumstances set out in the Agreement.   The preferred method of appraisement, under 
U.S. law, is transaction value. If the transaction va lue cannot be used, then certain secondary bases are 
considered. The secondary bases of value, listed in or der of precedence for use, are transaction value 
of identical merchandise;  transaction value of simi lar merchandise;  deductive value;  and computed 
value.  WT/TPR/M/235/Add.1 
 Page 253 
 
 
 INDIA SUBSEQUENT QUESTIONS 2 
 
Question 31 
 American Insurance Group (AIG) owed U.S. Government  on June 30, 2010, an outstanding debt and 
equity balance of USD101.2 Billion out of which USD74.7 Billion was the equity part.
50  Thus, the 
U.S. Government owns majority of equity interest in AIG.  
Have the states
51 which don’t allow government owned in surance companies to transact business, 
prohibited AIG from conducting business on the ground of being government owned?  If not, what is 
the reason for exempting AIG from the prohib ition on government owned insurance companies in 
these states? 
 
RESPONSE:   In 2010 the Trade Task Force of the Na tional Association of Insurance Commissioners 
undertook to review the remaining limitations set out in the United States GATS schedule in light of 
regulatory modernization efforts in several stat es in this area.  This review is ongoing.  
 
Question 32 
 
(Para 64 page 95 of Secretariat Report) :  Has the U.S. analyzed the im pact of the measures taken in 
response to financial crisis on the conditions of co mpetition in the financial services trade ? If yes, 
what is the outcome of the analysis?  
 RESPONSE:   There are ongoing work programs to evaluate policy responses to failures or near 
failures of financial institutions and financial mark ets in the G20, the Basel Committee, the Bank for 
International Settlements, and the Financial Stability  Board.  The IMF is working on evaluating the 
effects of the crisis on the global economy and on individual nations’ economies and responses to it.  
The United States has not thus far made an analysis of the competitive effect of the various monetary, 
regulatory, and fiscal measures taken in response to the crisis. 
 
Question 33 
 
(Para 66 page 96 of Secretariat Report):  The guidelines for the Cap ital Purchase Program  as 
detailed in the Secretariat Report are discriminat ory against the foreign service suppliers who have 
incorporated subsidiaries under the U.S. law. Ho w does it reconcile with the U.S. commitment for 
national treatment for Mode  3 for financial services? 
 RESPONSE:   Questions 33 and 34 are addressed toge ther in response to Question 34 below. 
 
Question 34 
 (Para 66 page 96 of Secretariat Report):   The summary of terms for the TARP Legacy Loans 
Program as detailed in the Secretariat Report a re discriminatory against the foreign service suppliers 
who have incorporated subsidiaries under the U. S. law. How does it reconcile with the U.S. 
commitment for national treatment for Mode 3 for financial services? 
 
                                                     
 
50 Source : AIG Website dated 08.09.10. 
51 Alabama, Alaska, Arkansas, Colorado, Connectic ut, Delaware, Georgia, Hawaii, Idaho, Kansas, 
Kentucky, Maine, Maryland, Montana, Nevada, New York  (non-life companies are au thorized; life and health 
companies are not), North Carolina, North Dakota, Oklahoma, Oregon, Pennsylvania, Rhode Island, South 
Dakota, Tennessee, Washington, West Virginia, Wyoming. WT/TPR/M/235/Add.1 
Page 254 
 
 
 RESPONSE:   It is the position of the United States that  the measures taken in response to the crisis 
were neither designed to discriminate nor implemen ted in a way that discriminates against foreign 
service suppliers.  While there may be differential treatment of certain classes of suppliers, including 
foreign suppliers, different treatment is not in  and of itself indicative of discrimination. 
 
As the WTO Secretariat’s report ma kes clear there were many programs under the broad authority of 
the Emergency Economic Stabilization Act often with different criteria for eligibility.  The legacy 
loan program was never implemented.  As envi saged, banks or savings associations owned or 
controlled by a foreign bank or company were not e ligible for the legacy loan program.  Eligible 
banks include any insured U.S. bank or U.S. sav ings association, where “U.S. bank” and “U.S. 
savings association” means a bank or savings association organized under the laws of the 
United States or any State of the United States, the District of Columbia, any territory or possession of 
the United States, Puerto Rico, Northern Mariana Islands, Guam, American Samoa, or the Virgin 
Islands; irrespective of nationality of ownership. 
 
Question 35 
 
(Para 133 page 111 of Secretariat Report):  Are the quotas for non immigrant professionals (1400 
for Chile and 5400 for Singapore) in the FTAs w ith Chile and Singapore, over and above the limit of 
65,000 H 1 B visas as per the U.S. Schedule of Commitments at WTO ? What is the actual number of 
visa granted under these FTAs in the last five years? 
 
RESPONSE:   Neither the annual cap for Chile (1400) nor  Singapore (5400) has ever been reached 
(see table below).  However, even if they were r eached, these visa allocations do not affect the U.S. 
GATS commitment for 65,000 H-1B admissions per year because, due to various exceptions, annual 
admissions under the H-1B program exceed the 65,000 threshold by a wide margin.  
H-1B1 Issuances to National s of Singapore and Chile 
FY05-FY09 Singapore Chile 
FY05 199 76 
FY06 286 154 
FY07 416 223 
FY08 411 308 
FY09 302 319 
 
INDIA SUBSEQUENT QUESTIONS 3 
 
Question 36.  In the WTO Secretariat Report (WT/TPR/S/ 235- Section I, Para 14), it is indicated that 
the United States adopted a fiscal stimulus pack age under the American Recovery and Reinvestment 
Act of 2009 (ARRA), at an estimated cost of  US$787 billion during fiscal years 2009-10.  What 
mechanism U.S. put in place to evaluate the effica cy of this stimulus package in reviving the U.S. 
economy?  
 
RESPONSE:  The American Recovery and Reinvestment Act contained some of the most rigorous 
accountability measures in history.  In addition to a number of measures to make the spending in the 
Act quite transparent, the bill includes a requi rement for the President’s Council of Economic 
Advisers to issue quarterly reports on the impact of th e Act.  There have been four reports thus far and 
they can be found at:  http://www.whitehouse. gov/administration/eop/cea/factsheets-reports. 
  WT/TPR/M/235/Add.1 
 Page 255 
 
 
 Question 37.  In th WTO Secretariat Report (Para 14) , it is indicated that the U.S. federal budget 
deficit widened substantially during the review period- from 1.2% of GDP in 2007, to 3.2% of GDP in 
2008, and to nearly 10% in 2009.  In Para 16, it is  indicated that the U.S. Administration anticipates 
that the federal budget deficit would be close to 11% of GDP in fiscal 2010 and that Policies in the 
2011 Budget would bring down the deficit to 3.9% of GDP in fiscal year 2014, from 10.6% of GDP in 
fiscal year 2010.  India would be interested in knowing in more detail the short term and long term plans of U.S. to curb its budget deficit.  Does U. S. also propose to have a benchmark federal budget 
deficit figure and strive to reign in the deficit within this limit?  
 RESPONSE:  The U.S. Government will be taking many  steps to reduce the budget deficit over the 
coming years. The President’s FY 2011 budget lays out a number of savings that is estimated to reduce the deficit to roughly 4 percent of GDP by 2014.  Some of the improvement in the budget will 
come as a natural result of an improving economy  which will both reduce automatic stabilizer 
spending and increase revenues.  Savings will also re sult as temporary stimulus measures wind down.  
In addition, the President has called for a non-secur ity discretionary spending freeze, allowing some 
temporary tax cuts to expire, and made sure that th e health care reform (the Affordable Care Act) put 
substantial downward pressure on health care costs and the deficit in the medium and long term.  
Furthermore, the President has established a bipar tisan deficit commission to examine how to reduce 
the deficit further, with a goal of bringing the de ficit under 3 percent of GDP and thus stabilizing the 
debt to GDP ratio over time. 
 
Question 38.   In the WTO Secretariat Report (Secti on II, Para 15), it is in dicted that the United 
States has not yet implemented the WTO Disput e Settlement Body's (DSB) recommendations and 
rulings relating to:  Section 110(5) of the U.S. Cop yright Act;  some aspects of the U.S. anti-dumping 
investigation of certain hot rolled steel products  from Japan;  and Section 211 of the Omnibus 
Appropriations Act of 1998. 
 The implementation of the recommendations and ru lings in disputes on Section 211 and hot rolled 
steel has been outstanding for 88 months, and the Copyright Act dispute for 63 months (March 2010). India requests U.S. to indicate the likely time fr ame within which these rulings are likely to be 
implemented.  
 RESPONSE:   The United States has come into compliance,  fully and promptly, in the vast majority 
of its disputes.  As for the remaining few instan ces where our efforts to do so have not yet been 
entirely successful, the United States has been worki ng actively towards compliance in furtherance of 
the purpose of the dispute settlement system.  The U. S. Administration will continue to work with the 
U.S. Congress to fully implement the recommendations and rulings of the Dispute Settlement Body in 
these disputes.  
Question 39.  In the WTO Secretariat Report (Section III), it is indicated that U.S. Customs and 
Border Protection (CBP) maintains several advance info rmation requirements such as presentation of 
vessel manifest information 24 hours prior to loadi ng the cargo on a U.S.- bound vessel at a foreign 
port;  mandatory collection of electronic cargo inform ation prior to the arrival of the cargo in the 
United States by any mode of commercial transpor tation;  SAFE Port Act, in November 2008 CBP 
establishing additional advance information requi rements for vessel-operating carriers;  and new 
advance information requirements for importers of  merchandise arriving into the United States by 
vessel, commonly known as the "10+2 rule". Has U.S. made an evaluation regarding the impact of 
these measures on the trade facilitation environment at the U.S. border?  India would be grateful if 
U.S. could share its assessment in this regard.  
 
RESPONSE:  The United States considers that more comp lete advance shipment data produces more 
accurate and effective cargo risk assessments.  In th is way, resources can be focused on true threats 
and legitimate cargo can speed through the system as quickly as possible.  We will continue to work WT/TPR/M/235/Add.1 
Page 256 
 
 
 with our domestic and foreign partne rs, trade and industry, to implement the requirements in a logical 
and practical manner that integrates sm oothly into the global supply chain.  
 
Question 40.  In the WTO Secretariat Report (Section III, Para 37), it is indicated that a merchandise 
processing fee applies to imports valued  at more than US$2,000 and that the fee is set at 0.21% of the 
import value with a  statutory minimum of US$25 and maximum of US$485.  India requests U.S. to elaborate the rationale behind imposition of such a processing fee and for maintaining it on an ad valorem basis.  India also requests U.S. to in form regarding the methodology for arriving at the 
statutory minimum and maximum values of th e merchandise processing fee and also the amount 
collected as merchandise processing fee during the two previous fiscal years.   
 
RESPONSE:   The merchandise processing fee is charged for the cost of processing the entry of 
imported merchandise.  The merchandise processi ng fee, including the statutory minimum and 
maximum values, is limited in amount to the approxima te costs of services rendered.  In Fiscal Year 
2008 (October 2007-September 2008), the United States collected a total of $1.9 billion in 
merchandise processing fees.  This figure includes both formal entries and informal entries (entries 
valued at $2,000 or less). In Fiscal Year 2009, this figure was approximately $1.5 billion.  
 
Question 41.  In the WTO Secretariat Report (Secti on III, Para 37), in several Panel and Appellate 
Bodies Decisions ( such as Softwood Lumber V;  U.S. – Shrimp ;  EC – Bed Linen;  U.S. – Zeroing ;  
U.S.- Polytethylene carrier bags, etc), it has been held that the methodology of zeroing used by the 
USDOC in the calculation of the margin of dumping is inconsistent with the provisions of Anti-
Dumping Agreement.  Does U.S. propo se to review in near future its practice of ‘zeroing’ in anti-
dumping investigations?   
 
RESPONSE :  The United States stopped applying the zeroing methodology in investigations 
effective on February 22, 2007, though the United states has applied zeroing in some administrative 
reviews after that date.  The Appellate Body reports  on zeroing raise serious systemic concerns for us 
that go beyond the issue of zeroing.  Indeed, the United States believes that the Appellate Body 
reports create new obligations to limit the use of  antidumping measures when such obligations were 
never agreed by the WTO Members.  Nevertheless, The United States takes its WTO obligations very 
seriously, and we have stated publicly that we inte nd to comply with the WTO rulings in all of the 
zeroing disputes.  We are very actively engaged in a serious effort with our domestic stakeholders and 
our Congress to find an acceptable solution.  Question 42.  In the WTO Secretariat Report (Section III, Para 56), it is indicate d that in some cases, 
anti-dumping duty orders of U.S. have been in effect for between 25 and 36 years.  This is a matter of 
concern and India requests U.S. to inform whethe r it considers appropriate that anti-dumping duties 
may be continued for such long periods of time?  
 
RESPONSE:  Under U.S. law, and consistent with the WTO Antidumping Agreement, antidumping 
duties remain in effect for as long as and to the ex tent necessary to counteract injurious dumping.  
Five years after the imposition of the duties, the Department of Commerce (DOC) and the U.S. International Trade Commission (USITC) undertake s unset reviews to determine whether revocation 
of the antidumping duty order would likely lead to the continuation or recurrence of dumping and injury.  If the determinations by both agencies are affirmative, the order remains in place;  if the 
determination by either DOC or the USITC is ne gative, the order is revoked.  These reviews are 
conducted every five years for the duration of the or der.  Thus, the reason that some antidumping duty 
orders remain in place is that the evidence of r ecord supports the conclusion that dumping and injury 
are likely to continue or recur if the order were revoked. 
  WT/TPR/M/235/Add.1 
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 Question 43.  The draft legislation called Fo reign Manufacturers Legal Acc ountability Act of 2010 
(FMLAA) currently before the United States Congress raises several concerns which are 
encapsulated below:  
 
i. The proposed law subjects foreign manufactu rers or producers to the personal jurisdiction of 
the State and Federal Courts of the U.S. for any  civil or regulatory proceeding.  This appears 
to be a jurisdictional over reach of the U.S. la w as it subjects the nationals across the world, 
who have a trade linkage with U.S. to the U.S. municipal laws.  How does the U.S. find it justifiable to subject foreign nationals to its regulatory and product liability laws, which 
normally have a territorial application to the nationals of that country? 
 ii. Has U.S. examined the likely adverse impact on trade facilitation environment in case such a 
law is enacted by U.S.?  
 iii. The fulfillment of  regulatory and quality  requirements of a product is normally the 
responsibility of the border agencies (like cust oms, health, quarantine, etc.) and products 
which do not fulfill such requirements ought not to be allowed to cross the customs barrier.  It 
is normally the responsibility of the importer/hi s authorized agent and the border regulatory 
agencies to ensure that only goods compliant with laid down standards, cross the borders.  
Through this proposed law, is the U.S. not making a paradigm shift from this principle and 
making the exporters liable to U.S. laws even  after goods have legally  crossed the customs 
border of U.S.? 
 iv. As the proposed legislation requires establis hment of a registered agent only for imported 
goods and not for domestically produced goods, does it not violate the principles of GATT 
Article III? 
 v. The proposed legislation seems to impose a pr ohibition on import by means other than duties 
and taxes as it lays down in Section 4 that “a person may not import into the U.S. a covered 
product (or component part that will be used in the United States to manufacture a covered 
product) if such product (or component part) was manufactured or produced outside the 
United States by a manufacturer or producer who does not have a registered agent …” .  The 
legislation being in the nature of import prohibition, does it not violate the principle enshrined under GATT Article XI of no prohi bition or restriction on imports except through 
duties of customs?  
 
vi. Section 2 of the draft law defines the t erm “commerce” as “tr ade, traffic, commerce or 
transportation between a place in  a State and any place outside thereof …” This definition 
can technically also apply to goods in transit;  as  ‘traffic’ or ‘transporta tion’ can be from the 
territorial waters or from bonded areas of the customs territory of a U.S. State to a place 
outside thereof, which can also imply a foreign te rritory.  By taking this interpretation, it 
appears that even for transit of goods from U. S. customs territory, there will be a legal 
requirement to have a registered agent.  If so, do es it not violate of the principles of freedom 
of transit enshrined under GATT Article V? 
 
RESPONSE:  The proposed Foreign Manufacturers Legal Ac countability Act, as reflected in bills 
pending before the U.S. Congress, reflects a desire to ensure that consumer s in the United States can 
be confident that the products they buy are safe a nd that there are procedures available under U.S. law 
to address effectively any product liability issues th ey may engender.  The United States believes 
these goals can be accomplished without imposing undue burdens on foreign manufacturers.  The 
FMLAA is still pending before Congress.  We are not in a position to speculate on the implications of 
particular provisions which are subject to further review and possible modification in the 
United States Congress.  WT/TPR/M/235/Add.1 
Page 258 
 
 
 Question 44.  In the WTO Secretariat Report (Section III,  Para 184), it is mentioned that the U.S. is a 
member of the GPA. Would the U.S. provide data on  how much of the procurement of the Government 
(Federal and Sub-Federal) as covered under the G PA has been made from abroad and the country-
wise break-up of the same?  
 
RESPONSE:    The United States does not have data on the value of goods and services that the U.S. 
Government procured from other countries.  Question 45.  In the WTO Secretariat Report (Section III, Para 214) it is mentioned that the ACTA is 
being negotiated among several countries.  Would the U.S. clarify what definition of counterfeiting 
obtains in its domestic laws?  
 
RESPONSE:   Federal criminal law in the United Stat es prohibits trafficking in counterfeit goods, 
which are defined as goods bearing a counterfeit mark.  Under 18 U.S.C. § 2320)(e)(1)(A), a 
counterfeit mark is a spurious mark that is "identi cal with, or substantially indistinguishable from," a 
mark on the federal register kept by the Patent a nd Trademark Office.  This standard is based on the 
same standard set forth in the Lanham Act coveri ng civil protection of marks, 15 U.S.C. § 1127  
 
Question 46.  In the WTO Secretariat Report (Section III, Para 237) mention has been made of the 
USTR’s annual review as mandated under the U.S. Law.   It is further mentioned that as per the 
review, 77 trading partners are examined for IPR protection and enforcement and then placed on 
certain lists.  Would the U.S. clarify  what objective criteria are used by the USTR to place its trading 
partners on these lists? Would the U.S. further clarify as to whether the submissions received by them 
from various sources are examined for accuracy and correctness of met hodology used to generate the 
data?  
 
RESPONSE:  Each year, as required by U.S. law, the Office of the United States Trade 
Representative (USTR) issues a Special 301 Report cataloguing specific IPR problems in numerous countries worldwide.  The review of each tradi ng partner’s IPR regime is done on a case by case 
basis, and all relevant factors are taken into cons ideration.  USTR consid ers information submitted by 
interested stakeholders and U.S. Embassies located  in foreign capitals.  In addition, USTR actively 
encouraged foreign governments to submit material wh ich can be taken into account in these reviews.  
A country is placed on the Special 301 list if it is  clear that it "denies adequate and effective 
protection of IPR or fair and equitable market access to U.S. persons that rely upon IP protection."  In 
addition to citing specific concerns, Special 301 also affords an opportunity to give credit where it is 
due, such as by improving the standing of countri es when there are significant improvements in IPR 
protection and enforcement.  Consistent with the goals articulated in the Presi dent’s 2010 Trade Policy Agenda, USTR enhanced its 
public engagement activities in the 2010 Special 301 process.  These activities were designed to 
ensure that Special 301 decisions are based on a r obust understanding of complicated issues involving 
intellectual property and to help  facilitate sound, well-balanced assessments of developments in 
particular countries.  USTR requested written submissions from the public  through a notice published in the Federal 
Register on January 15, 2010.  The 2010 review yielded 571 comments from interested parties, a 
significant increase from 2009.  The submissions r eceived by USTR were made available to the 
public online at:  www.regulations .gov, docket number USTR-2010-0003.  Further, on March 3, 
2010, USTR conducted a public hearing that permitte d interested persons to testify before the 
interagency Special 301 subcommittee about issues re levant to the review.  The hearing included 
testimony from 23 witnesses, ranging from forei gn governments to industry representatives to non-
governmental organizations.  A transcript of the hearing is available at:   www.ustr.gov.   
  WT/TPR/M/235/Add.1 
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 The Special 301 designations and actions announced in  the Report are the result of close consultations 
with affected stakeholders, interested parties,  foreign governments, the U.S. Congress, and of 
interagency discussions within the U.S. Government.  
All submissions receive careful examination.  USTR, together with the interagency Special 301 
subcommittee, makes a balanced assessment of inte llectual property protection and enforcement, as 
well as related market access issues, in accordance w ith the statutory criteria set out by Congress in 
the Special 301 statute.  
As noted above, this assessment is necessarily c onducted on a case-by-case basis, taking into account 
diverse factors such as a trading partner’s interna tional obligations and commitments, the concerns of 
rights holders and other interested parties, and the trade and investment policies of the United States.  
It is informed by the various cross-cutting issues and trends identified in the Report’s “Section I – 
Developments in IPR Protection and Enforcement” .  However, the assessment is especially based 
upon the particular facts and circumstances that sh ape IPR protection and enforcement regimes in a 
particular trading partner.   
 
Question 47.  The WTO Secretariat Report (Section III,  Para 238) mentions the provisions of the 
domestic laws by which certain ac ts can be considered unlawful.  It further states that the U.S. 
Customs are directed to bar entry of infringing goods under exclusion orders. Evidently, these orders 
do not work in the domain of the Internet for which a separate law has been enacted.  Would the U.S. 
clarify as to what recourse is available to a forei gn entity located outside the U.S. to obtain redressal 
under the DMCA if the ‘notice and take down procedure’  is ignored by an intermediary based in the 
U.S., especially since the mechanism of lodging a co mplaint with the police or initiating a suit are not 
only expensive but also requires physical p resence of the complain ant in the U.S.?  
 
RESPONSE:   The same remedies for copyright infringeme nt are available to foreign right holders as 
are available to right holders located in the Unite d States.  In addition, foreign right holders may 
authorize a person to act on the owner’s behalf in  legal matters if physical presence in the United 
States is not practicable for the right holder.  
Online intermediaries, or Internet Service Providers  (ISPs), are afforded safe harbors from secondary 
liability infringement actions if, among other requi rements, they participate in the notice and 
takedown procedures of the Digita l Millennium Copyright Act (DMCA).  17 U.S.C. § 512.  The safe 
harbor provisions of the DMCA are intended to  mitigate the potential burden of litigating online 
copyright infringement by providing right holders  with a more efficient mechanism for the rapid 
removal of allegedly infringing material.  Anecdotal  evidence indicates that th e system has facilitated 
large-scale numbers of notifications directed to I SPs, most of which comply with requests to take 
allegedly infringing material down.  In the event that a notification does not result in the permanent 
taking down of allegedly infringing ma terial, a right holder may take one of two actions.  First, if the 
ISP has not complied with the notification, th ere is no safe harbor from a secondary liability 
infringement action, and the right holder may initiate  litigation proceedings against the ISP.  Second, 
if the ISP has complied with the notification, but received a counter-notification from the alleged 
infringer to replace the material online, the right ho lder may pursue a direct infringement against the 
individual user.  If the identity of the allege d infringer is unknown, under section 512(h)(1) of the 
Copyright Act, “[a] copyright owner or a person au thorized to act on the owner’s behalf may request 
the clerk of any United States district court to i ssue a subpoena to a service provider for identification 
of an alleged infringer ….”  
 
Question 48.  The report by the U.S. (WT/TPR/G/235 , Section I, Paras 10 – 12) provides information 
of U.S. bilateral trade engagements with various c ountries. Information is also provided about the 
U.S. intent towards resolving outstanding issu es and subsequent implementation of Free Trade 
Agreements with Panama, Colombia  and Korea. India would be interested to know what issues WT/TPR/M/235/Add.1 
Page 260 
 
 
 remain outstanding in these agreements and the meas ures being proposed to resolve them. Can the 
U.S. provide this information?  
 RESPONSE:   The Korea, Colombia and Panama free trad e agreements are important trade priorities 
for the Administration, and the President has signaled his commitment to successfully address the 
outstanding issues related to each of these agreements in order to be able to move them forward for 
Congressional consideration.  The specific issues we  are focusing on are different in the case of each 
of the three prospective FTA partners, and the Admi nistration is consulting closely with the Congress 
and stakeholders on these issues. 
 
Question 49.  The report by the U.S. (WT/TPR/G/235, Section I, Paras 16 – 21) places on record their 
intention to make enforcement of trade agreements a cen trepiece of U.S. trade policy.  In this context, 
can U.S. please clarify which labour and environm ents rights they are referring to and if they have 
any relevance to WTO Agreements?  
 
RESPONSE:   United States trade agreements contain pr ovisions related to labor issues in the 
following areas:  adherence to internationally rec ognized labor rights;  effective enforcement of 
domestic labor laws;  fair and transparent pro cesses for adjudication of labor rights. (Further 
information on the labor aspects of specific trade ag reements is available at:  http://www.ustr.gov/ 
trade-topics/labor/bilateral-and -regional-trade-agreements). 
 United States trade agreements also contain specific commitments related to effective enforcement of 
environmental laws, transparency and public pa rticipation in the deve lopment of policy and 
multilateral environmental agreements. (Further in formation on the environmental provisions of 
specific trade agreements is available at:  www.ustr.gov/trade-topics/environment/bilateral-and-
regional-trade-agreements). 
 Both labor and environment obligations are subjec t to the dispute settlement mechanisms of U.S. 
trade agreements, providing for monetary assessme nts or commercial remedies depending on the 
particular agreement. 
 
The DDA includes groundbreaking environmental mandates, including the liberalization of environmental goods and services and new disciplines on fisheries subsidies.  The United States is actively engaged in these negotiations and is suppor tive of ambitious results, consistent with these 
DDA mandates.  In addition, the United States par ticipates actively in continued discussions on trade 
and environment issues in the Committee on Trad e and Environment in Regular Session (CTERS). 
 The United States will continue to encourage fu rther consideration of labor rights issues in 
multilateral fora.  However, it is not pa rt of the Doha Development Agenda. 
 
Question 50.  In the WTO Secretariat Report (WT/TPR/S/235- Section III, Para 81) it is revealed that 
the average period for comments specified in U.S. notifications is around 40 days, but close to 30% of 
notifications have no specific "final date for comments" , most such notifications being by sub-federal 
entities. Can United States explain as to how it plans to address this phenomenon or paradox of 
underreporting observed (in an already non-trans parent trade instrument/barrier like the TBT 
measure) and further throw light on as to why such high prevalence of TBT measures without any 
“final date for comments”?   
 
RESPONSE:   We are reviewing the matter but believe th at the 40-day figure may be misleading.  
The United States often notifies measures that do not need to be notified for purposes of greater 
transparency (e.g., certain voluntary measures, requ ests for information in advance of a rulemaking, 
proposed measures based on relevant international standards), as well as measures to address urgent 
circumstances (e.g., certain interim final rules, rule s taken to comply with a court order).  The United  WT/TPR/M/235/Add.1 
 Page 261 
 
 
 States has notified hundreds of measures to the WTO,  including more than 60 this year alone.  We 
will need to isolate the above-referenced notificatio ns from the remainder to determine whether there 
is an issue that needs to be addressed.  
With respect to the notifications without a specific fi nal date for comments, we suspect these relate to 
proposed legislation but have not been able to confir m that in the time available.  As is the case in 
legislatures around the world, there are no formal comment periods that attach to proposed bills.  Given that each bill moves at its own pace through the legislative process – it could be days, weeks, 
months, or even longer, and many of the bills are no t enacted at all – it is often difficult to specify a 
final date for comments.  As we review the matter further, the United States would be interested in 
learning from India how it handles this issue in its notification practice.  
Question 51.  In the WTO Secretariat Report (WT/TPR/S/235- Section III, Para 86 & Para 99).  Most 
of the U.S. states have enacted their own adminis trative procedures, which govern the development 
and adoption of technical regulations  and conformity assessment procedures by state agencies.  Can 
U.S. provide any explanation on how these would not impact the process of harmonisation efforts 
directed under Article 2 and 3 of the TBT Agreement and Article 3 of SPS Agreements?  
 
RESPONSE:  Many Members have federal structures and sometimes regulate at the sub-federal level 
and therefore have in place administrative procedures at the sub-federal level that govern the adoption 
of state-level measures, including technical regula tions and conformity assessment procedures.  In the 
United States, most U.S. States have an admini strative procedure act similar to the federal 
Administrative Procedure Act (APA).  Such laws allow any stakeholder, foreign or domestic, to 
provide comments on proposed regulations without di scrimination.  The United States also notifies 
proposed sub-federal technical regulations and conformity assessment procedures to the WTO for 
comments.  Those comments could include information on how the United States federal government, 
as well as other Members, are regulating in the same area and what voluntary consensus standards, including international standards where relevant, e ffective, and appropriate, are available for use. 
 In addition, some States have adopted regulatory re view processes similar to that of OMB, and there 
has been a marked increase in the use of other review tools over the past decade.  In 1999, 27 States 
incorporated economic impact statements during thei r regulatory review process.  In 2009, 48 out of 
50 States utilized them at differing stages in their regulatory process.  Approximately 30 States utilize 
these statements to measure regulatory impact on small businesses, while other States measure impacts on the State economy or secondary issues like pub lic health or the environment.  Some States 
require that these statements be published for public comment, while others only require that 
statements are included in any final published rule. 
 The United States believes that use of “good regulatory practice” (GRP), including robust notice and comment procedures, plays an important role in promoting harmonization since the use of GRP principles in rulemaking fosters better decision-making, coordination between regulators, and accountability, all of which support harmonization efforts, where feasible and appropriate.   
 
Question 52.  In the WTO Secretariat Report (WT/TPR/S/235- Section III, Para 87) it is stated that the 
U.S. uses various approaches for conformity assessment  the type of instrument used depending on the 
sectors.  One instrument used is  supplier's self-declaration of c onformity;  another is third-party 
certification. Accreditation programmes are operated by all levels of government and the private 
sector, and frequently rely on private-sector conform ity assessment bodies.  U.S. is requested to 
clarify as to how is it ensured that private standards are not being en couraged by such modus-
operandi?  
 
RESPONSE:   With respect to India’s question on “private  standards,” we are uncertain what India is 
asking or what link India is attempting to make  between “private standards” and conformity WT/TPR/M/235/Add.1 
Page 262 
 
 
 assessment.  Nevertheless, we can provide some ba sic information regarding how the United States 
implements its TBT Agreement obligations on st andards and hope that will be useful.   
 
The Trade Agreements Act of 1979, as amended, im plements the TBT Agreement as a matter of U.S. 
law.  Among other things, it requires U.S. regulators to use international sta ndards where appropriate.  
Pursuant to Executive Order 12866, the U.S. Office of Management and Budget conducts centralized 
interagency review of “significant” rules, which are th e rules that would tend to draw the most interest 
from our trading partners.  During that process, USTR  and other federal agencies have an opportunity 
to review draft proposed and final measures before  they are published in the Federal Register to 
determine whether any potential trade issues arise,  including with respect to voluntary standards set 
out therein.  USTR also provides input regarding potential trade issues, including those related to 
voluntary standards, in proposed legislation.  Re garding the Code of Good Practice, the American 
National Standards Institute (ANSI), which is a pr ivate sector body, has accepted the Code on behalf 
of its members.  More information can be obtained on the ANSI website. 
 
Question 53.  In the WTO Secretariat Report (WT/TPR/ S/235- Section III, Para 105) it states that SPS 
requirements applied on imports of plants, animals, and their products are established on the basis of 
the risk posed to human, animal or plant life or health  or to the environment arising from the imports.  
According to the authorities, SPS measures are based on international standards and guidelines 
"where they exist and as appropriate".  Why does the U.S. apply higher measures in terms of 
MRLs/PPM when it applies SPS measures?  
 
RESPONSE:   The WTO SPS Agreement explicitly recognizes the rights of governments to apply 
more stringent requirements than international sta ndards to protect human, animal and plant life or 
health, as long as these are based on science, are necessary for the protection of life or health, and do 
not unjustifiably discriminate among foreign sources of supply.  The SPS Agreement recognizes the 
right of the United States to adopt a more protectiv e standard, as long as the United States can provide  
justification based on an analysis of sci entific evidence and the risks involved.  
 
Question 54.  The WTO secretariat report (WT/TPR/S/235 , Section IV, Para 5-8) talks of the support 
to agriculture under the Farm Act of 2008.  It appears that the direct payments are not totally 
decoupled from the current production and prices .  It  is recognized that as and when the historical 
planting and yields data are updated, these pay ments have an impact on the current production 
through wealth and risk effect.  Can U.S. explain if such decoupling has been made?  
 
RESPONSE:  We believe that the payments meet the criteria for decoupled income support in 
paragraph 6 as well as paragraph 1 of Annex 2 of the Agreement on Agriculture. The TPR report 
accurately describes the nature of the Direct Paym ent program when it states in paragraph 8 that 
Direct Payments “are decoupled from current prod uction and prices”.  Direct Payments have no 
relation to current production or prices.  In fact , production is not even required under the program.  
We note that the Appellate Body found that Direct Payments do not have a price effect.   
 
Question 55.  The WTO secretariat report (WT/TPR/ S/235, Section IV, Para 10) mentions the 
programme on counter-cyclical payments as ba sed on historical production and the difference 
between a target price and the current prices.  Th ese payments have been seen to be trade distorting 
as these payments has impact on decision making of  farming community to cultivate a particular 
crop.  Could USA explain how these payments are de alt under WTO provisions (amber, blue or green 
box) and whether it seeks to go for box shifti ng (from one box to other) in future?  
 
RESPONSE:  In paragraph 10, page 82, the report reflect s the nature of the CCP program, pointing 
out that “although payments are based on prices”, th ey do not affect current production.  That is, 
current production on land that is eligible for CCP payments is not tied to the program nor is even 
required, and the size of the payment is not affect ed by current production of any crop.  Furthermore,  WT/TPR/M/235/Add.1 
 Page 263 
 
 
 payments are based in part on historical yield and historical bases – again, not tied or coupled to 
current production.  Notwithstandi ng, the United States does not classify CCP as decoupled green box 
payments within the meaning of AoA Annex 2 criteria as payments are also based in part on price.  
They are currently notified as amber box payments.   
 
Question 56.  WTO secretariat report (WT/TPR/S/235, Section IV, Para 26) points out that for many 
years, the USA has been the world’s biggest donor of food aid as direct transfers.  This form has been 
criticized in many forums as being less efficient  and more trade distortive than direct payment in the 
form of cash for local and regional purchases. Can the U.S. explain the reason for its food aid being 
in the form of in-kind commodities despite its recognized inefficiency and trade-distortive character?  
 
RESPONSE:  The United States does not agree with the asser tion that in-kind food aid is inefficient 
and trade-distorting.  For example, in fiscal year 2008, the United States provided more than $2.8 billion from U.S food aid programs to developing  countries, reaching tens of millions of people 
world-wide. 
 
Question 57.  WTO secretariat report (WT/TPR/S/235, Section IV, Paras 21-28) shows that the USA 
is providing export subsidy th rough many programmes like the Dairy Export Incentive Program 
(DEIP), Export Credit Guarantee Program (GSM-102)  etc.  Are these programmes are consistent 
with WTO provisions?  Could USA also explain  the impact of these programmes on international 
prices of the agricultural produc ts covered under these programmes?  
 
RESPONSE:  The DEIP program has been used consistent  with U.S. export subsidy commitments.  
WTO dispute settlement proceedings resulted in a determination that the Commodity Credit Corporation export credit guarantee program (GSM-102)  conferred an export subsidy with respect to 
specific agricultural goods during fiscal year 2006 of the United States Government. 
 With respect to any potential impact on internati onal prices, the U.S. did not use DEIP between 2004 
– 2007, and only 20,025 metric tons of nonfat dry milk (skim milk powder) were  subsidized in 2008, 
amounting to less than 2 percent of world exports . The limited use of the program for cheese and 
butter was for trivial quantities. The use of th e program for such small quantities would have 
negligible, if any, impact on world prices.  
 With respect to the GSM 102 program, in fiscal year 2008 about $3.2 billion in U.S . exports was financed under the program, accounting for less than 3 percent of U.S. agricultural exports.  In fiscal 
2009, about $5.3 billion in U.S. exports was fina nced under GSM 102, accounting for 5.5 percent of 
U.S. agricultural exports.  The program applies to a wide range of commodities, such that only a very 
small share of U.S. exports of any one commodity was financed by the program.  Such small values of 
exports financed by the program would have ne gligible, if any, impact on world prices. 
 
Question 58.  The WTO secretariat report (WT/TPR/S/ 235, Section IV, Paras 42-46) reveals that the 
USA applies combinations of trade policies/ instrume nts like tariff, tariff rate  quota, domestic support 
and special agricultural safeguards, and non-ad va lorem duties and non-tariff measures like SPS and 
TBT. All these measures are designed to protect agriculture sector which contributed about 0.8 
percentages to U.S. GDP and 1.4 percent of total employment.  Would U.S. elucidate on how these 
measures are not affecting the market access pros pects of agricultural products from developing 
countries and livelihood of millions of farmers in the rest of world?  
 RESPONSE:  The United States is the largest single country  importer of agricultural products from 
developing countries.  All of the measures listed in the above questions are le gitimate and operate in a 
manner consistent with WTO principles and disci plines.  The WTO recognized, for example, the 
importance of having SPS measures that are based on science.  We do not feel that such legitimate 
measures “affect” the market access prospects of ag ricultural products from developing countries.  WT/TPR/M/235/Add.1 
Page 264 
 
 
 The report notes that the United States has some of the lowest average tariff levels of WTO members 
and the third lowest measure of support for OECD  members as measured by the Producer Support 
Equivalent.  Except for a few commodities that have tariff-rate quotas , the United States generally 
has a very open market and is one of the world’s largest importers of agricultural products.  Analysis 
by international institutions such as the World Bank  shows that the greatest gains from trade will not 
come from further disciplines on already low levels  of domestic support but instead will come from 
reductions in the high levels of tariffs and trade pr otection that many countries have, especially in  
developing economies. 
 
Question 59.  The WTO Secretariat Report (WT/TPR/S/ 235, Section IV, Para 54) mentions the very 
high absolute level of PSE to agriculture sector in the U.S. which make it the third-ranked OECD 
country in this regard.  Has USA made an eval uation regarding the impact of these measures on 
international prices of agricultura l commodities especially for wheat, maize, soybeans, rice, corn and 
cotton?   
 RESPONSE:  The report does not state that the United Stat es had the third highest level of PSE, but 
instead, the third lowest level. Analysis done by ma ny international institutions shows that the greatest 
gains from trade will not come from further disciplin es on already low levels of domestic support but 
instead will come from reductions in the high levels of tariffs and trade protection that many countries 
have, especially in  developing economies. 
 
Question 60.  The WTO secretariat report (WT/TPR/S/ 235, Section IV, Para. 132) refers to the H1B 
visa programme which allows for the entry of foreign professionals in "specialty occupations". 
Recently, the U.S. has sharply increased the fees for th is kind of visa.  Such an increase can be a non-
tariff barrier to the rendering of services by foreign firms operating in the U.S.  Can U.S. please 
explain the reasons for the hike in th e visa fee for the foreign professionals?  
 
RESPONSE:  In August, the U.S. Congress passed HR 6080 making emergency appropriations for 
enhanced security on our southern border.  The f unding measures in the law include increases in fees 
associated with petitions filed by certain U.S. empl oyers for H-1B workers.  The increased fees are 
not paid by foreign professionals, but by certain  companies in the United States that petition for 
foreign workers.  WT/TPR/M/235/Add.1 
 Page 265 
 
 
 JAPAN 
 
SECRETARIAT REPORT II TRADE AND INVESTMENT POLICY FRAMEWORK (1) Trade Policy Formulation 
 
Question 1: Trade Policy Formulation (p. 12, para 2) USTR Kirk said at the Aug. 4 hearing of the Senate Agricultural Committee that the Obama 
administration hopes to soon explore with Congress the possibility of obtaining Trade Promotion 
Authority. Please explain the view of the U.S. government concerning renewing the Trade Promotion 
Authority (TPA) . 
 
RESPONSE:  The Administration will look to initiate discussions with Congress in the near future 
regarding TPA for the Trans-Pacific Partnership Agre ement.  Likewise, at an appropriate time we will 
initiate discussion with Congress regarding TPA for the results of the Doha negotiations.  In the end, 
however, it will be the quality of the agreements rather than process which drives the legislative 
approval process.  With the prospect of an ambiti ous agreement that provides new market access, the 
U.S. Congress as well as the legislatures of other WTO Members would have a strong incentive to approve and implement the outcome.  
 
III. TRADE POLICIES AND PRACTICES BY MEASURE 
(1) Measures Directly Affecting Imports 
(i) Customs procedures 
 Question 2:  24-hour rules, “10 plus 2” rules (p. 21, para 7-10) 
As part of counter-terrorism initiatives, the United States has enforced the 24-hour rule. As a result, 
the deadline for delivery of containers to the ya rd, which had been commonly set at around 24 hours 
prior to loading, has been moved up by 48 hours. Th is has decreased the efficiency of distribution and 
is imposing a huge burden on the operators, including those traders with excellent compliance 
records.  
In addition, the so-called “10 pl us 2” rule , which requires impo rters to report 10 additional data 
elements and carriers to report 2 additional  data elements, has been implemented. 
 
We understand that CBP is making an effort in implementing the rules in a flexible manner, but 
strongly request that the U.S. ensure that the rule does not disrupt the smooth flow of goods by 
listening to the views of industries continuously. 
 The Government of Japan urges the Government of the United States to make efforts in both securing 
and facilitating global trade, including a possible consideration of more flexible responses to C-TPAT 
(Customs Trade Partnership against Terrorism) par ticipants from viewpoint of providing clearer 
benefits to C-TPAT. Please explain the view of the U.S. government on this subject.  
 
RESPONSE:   C-TPAT is a program designed to recognize the security measures that companies 
have voluntarily undertaken in order to secure thei r supply chains.  This program is not included into 
the regulations implementing the statutory authority of the so-called “10 plus 2” rule.  However, C-
TPAT status will be considered in implementing th e program and will be a mitigating factor for any 
enforcement or penalty actions encountered by such  a member.  CBP is committed to working closely 
with the trade community to ensu re that the right data is being provided at the right time. 
 
Question 3:  Implementing Recommendations of th e 9/11 Commission Act (p.22, para 13 and 14) 
The “Implementing Recommendations of the 9/ 11 Commission Act,” enacted in August 2007, 
contains provisions that require the scanning of a ll U.S.-bound cargo containers in principle before WT/TPR/M/235/Add.1 
Page 266 
 
 
 their loading at foreign ports after July 1, 2012 or an earlier date.  The provisions, depending on how 
it would be implemented, could severely disrupt the flow of goods from foreign countries including 
Japan, into the U.S. (Japan requests that the U.S. deal  with this act with care in order to avoid the 
disruption of smooth trade.) Please explain the specific views of the U.S. on this matter. 
 RESPONSE:  The United States remains committed to wo rking with our domestic and foreign 
partners, trade and industry, to implement 100% scanning in a logical and practical manner that 
integrates smoothly into the global supply chain. CBP is using the current pilot ports to identify 
challenges associated with the 100% scanning mandate.  (iii) Rules of origin  Question 4:  Simplification of the Special Marking Requirements of Origin for Watches and Clocks 
(p. 23, para 23) 
When importing watches and clocks under Chapter 91 in to the United States, all movements, cases, 
and bands are required to have a special marking of origin under Additional U.S. Note 4 to Chapter 
91 in HTSUS and detailed requirements stipulating how this special marking must be performed. 
 The Government of Japan has long requested that th e Government of the United States quickly work 
towards a simplification of the special marking of or igin requirements. However, Japan is of the view 
that the special marking of origin requirements have not been improved.  
Although Japan appreciates that the United States a ccepted the use of indelible ink for the marking of 
origin in 1999, it does not agree with the United States government’s  assertion that its country-of-
origin marking requirements are clear and simple as drafted. 
 Japan believes that the country-of-origin marking on the finished products of watches and clocks is 
sufficient not only for customs clearance purposes, but also for consumer information purposes.  
In this regard, please indicate specific vi ews of the Government of the United States. 
 RESPONSE:  The United States does not agree that the U. S. marking requirements for watches and 
clocks are unnecessarily complicated. Moreover, the special marking requirements only apply to 
movements and cases provided that they are not only for opto-electronic display. 
 
(iv) Tariffs 
(b) Applied MFN tariffs 
 
Question 5:  Simplification of the Tariff Calcul ation Structure for Watches and Clocks (p. 25, 
para 31) 
The structure of calculating tariffs for watc hes and clocks under Chapter 91 of HTSUS is too 
complicated, with separate tariffs stipulated  for movements, cases, and bands, and tariffs on 
movements set at a fixed rate, while tariffs on ot her parts are set at ad valorem. Because of this 
complexity, the Government of Japan has long asked  the Government of the United States to quickly 
work on a simplification of the tariff calculation stru cture.  Unfortunately, Japan has a view that the 
tariff calculation structure remains as it is without improvement. 
 The obligation to indicate on invoices prices of indi vidual parts used for digital watches was removed 
when tariffs on digital watches were eliminated. Based on this move, Japan asserts that the tariff 
calculation structure and the special marking of origin requirements for watches and clocks are 
linked, and that the complicated special marking or  origin requirements for watches and clocks would 
become unnecessary if tariffs on watches and clocks were eliminated.  
  WT/TPR/M/235/Add.1 
 Page 267 
 
 
 As such, Japan would like to know the views of th e United States regarding whether it has any plan to 
eliminate its tariffs on watches and clocks, and if any, when they will be eliminated. 
 
RESPONSE:   The United States will consider the reduction or elimination of remaining watch tariffs 
as part of the Doha Round tariff negotiations.  
 
(vi) Contingency measures 
Anti-dumping and countervailing duties 
 
Question 6:  Prospective Retrospective Trade Remedy System (p.29,para 48) 
The Department of Commerce (DOC ) has worked with the Departments of Homeland Security and 
the Treasury to conduct an analysis of the relative advantages and disadvantages of prospective and 
retrospective antidumping and countervailing duty systems. The DOC invited the public to comment on the issue and held a public hearing on April 27,  2010. According to the Federal Register dated 
March 31, 2010, the DOC was initially scheduled to  release a report on June 14, 2010 but postponed 
the deadline. As Japan recognizes that change in duty  systems of the U.S. may have a great impact on 
many Japanese firms which export to the U.S..we w ould like to know the progress of the analysis. 
 
RESPONSE:   The Department of Commerce’s report to Congress on Retrospective and Prospective 
Antidumping and Countervailing Duty Collection Systems is in the final stages of review.  Once that 
process is complete, the report will be transmitted to the relevant Congressional committees, and upon 
approval will be made publicly available.   
 
Question 7:  AD/CVD Enforcement Proposals (p. 29, para 48) 
On August 26, 2010, the Department of Commerce (DOC) proposed 14 measures aimed at improving 
the enforcement of U.S. trade remedies, especially to non-market  economies (NMEs). As well as 
change in duty systems, change in its practices of  trade remedies also may have a great impact on 
many Japanese firms which export a nd intend to export to the U.S. Japan would like to know the 
examination schedule in the DOC after this fall.  
RESPONSE:   The Department of Commerce (DOC) will pursue the proposals that make up its Trade 
Law Enforcement Package primarily through a public notice and comment procedure in the 
Federal Register
.  This will give stakeholders, includi ng other governments, a full opportunity to 
comment on the proposed changes in practice. DOC plans to start the process for soliciting comment 
through the Federal Register  this fall.  Once comments are received, DOC will review and analyze 
them before undertaking the proposed changes to its practice. 
 
Question 8:  “All Others Rate” Provision (p. 29, para 48) 
The DSB adopted its recommendations and rulings that  found the U.S. statutory provision regarding 
“all others” rate to be inconsistent with th e Anti-Dumping Agreement in August 2001, over 9 years 
ago. Although the U.S. took certain measures to  implement part of the DSB recommendations, the 
remaining part of them has not yet been implemente d. Up until now, since they have left untreated, the 
provision in question has been applied to new anti- dumping investigations inconsistent to the WTO 
agreements and also could be in the future. The Government of Japan again requests the Government 
of the U.S. to amend this provision in order to implement the DSB recommendation immediately. A 
full and prompt implementation of the DSB’s recommendations and rulings is essential to the 
effectiveness and credibility of the WTO dispute set tlement system. Japan would like to know what 
steps the U.S. government intends to take to comp lete full implementation in the Congress and what 
steps will be taken.  
RESPONSE:   As of 23 November 2002, the U.S. authorities had addressed the DSB's 
recommendations and rulings with respect to the dispute regarding the calculation of anti-dumping 
margins in the hot-rolled steel from Japan anti-dumping duty investigation.  Details were provided in WT/TPR/M/235/Add.1 
Page 268 
 
 
 document WT/DS184/15/Add.3. With respect to th e DSB's recommendations and rulings regarding 
the “all others rate” provision, the U.S. administra tion intends to continue working with the Congress 
with respect to appropriate statutory measures that would resolve this matter. 
 
Question 9:  Zeroing (p. 29, para 49) 
On August 18, 2009, the Appellate Body correctly found that the U.S. ha d failed to bring WTO-
inconsistent “zeroing” procedures into conform ity with WTO obligations.  The adoption of the 
Appellate Body’s report confirmed that the U.S. had no choice but to abolish the use of “zeroing” in 
all anti-dumping procedures including periodic reviews in  order to comply with its obligations under 
the WTO Agreements.  However, the U.S. has regre ttably not yet abolished the use of “zeroing.” 
Japan is concerned that the U.S. Government has  been trying to change the WTO rule on anti-
dumping in order to avoid complying with the reco mmendations and rulings of the DSB. Japan would 
like to know the progress of implementation towards abolishing the use of zeroing in the procedures 
other than the W-to-W comparisons in the original  investigation, i.e., periodic review, sunset review, 
etc. 
 RESPONSE:   The United States stopped applying the zeroing methodology in investigations 
effective on February 22, 2007, though the United States has applied zeroing in some administrative reviews after that date.  The Appellate Body reports on zeroing raise serious systemic concerns for the 
United States that go beyond the issue of zeroing.  Indeed, the United States believes that the 
Appellate Body reports create new obligations to limit the use of antidumping measures when such 
obligations were never agreed to by the WTO Me mbers.  Nevertheless, the United States takes its 
WTO obligations very seriously, and has stated pub licly that it intends to comply with the WTO 
rulings in all of the zeroing disputes.  We are ve ry actively engaged in a serious effort with our 
domestic stakeholders and our Congress to find an a cceptable solution.  We are not in a position at 
this time to provide details on the specific steps we will take or the timeframe to comply with the 
Appellate Body rulings. 
 
Question 10:  Model-matching (p. 29, para 48) 
In calculating dumping margins, the Government of  the United States classifies different models of 
export products under investigation and their domes tic “like products” in the exporting country 
according to individual characteristics, and then de termines domestic products that are “identical” to 
or “closely resemble” the exporte d products (“model-matching”).  After the annual administrative 
review of anti-dumping measures on ball bearings imported from Japan in FY 2003 (the 15th review), 
the Department of Commerce decided to change fr om the existing model-matching methodology, 
which compares products of the same measuremen ts (outer diameter, inner diameter and width) and 
load rating (resistance), to a methodology whic h compares products whose measurements and load 
rating deviate from each other within 40% in total.  
When adopting the new comparison methodology, th e Department of Commerce did not show any 
reasonable grounds for the criteria of 40% of the to tal deviation.  The Japanese companies pointed 
out problems and raised some points which s hould be improved in the new methodology. They 
submitted opinions and provided information.  They  proposed that the percentage should not be 40%, 
but less than 20%.  However, no consideration has been given to these opinions. 
 
The Government of Japan and Japanese companies are concerned about the situation in which 
model-matching methodology was changed without rea sonable grounds and urge the Government of 
the United States to provide full and reasonable explanation for the change in the methodology.  
RESPONSE:  In accordance with U.S. law and the WTO Antidumping Agreement, antidumping 
investigations and reviews in the United Stat es are conducted transparently and with ample 
opportunity for interested parties to comment and make arguments in defense of their interests, 
including arguments concerning the methodology to be used.  This referenced proceeding has been no  WT/TPR/M/235/Add.1 
 Page 269 
 
 
 different.  In modifying the model matching met hodology in this proceeding, the Department of 
Commerce (DOC) gave all interested parties an opportunity to comment on the methodology, fully 
considered all of those comments and responded to  those comments on the record of the proceeding 
and in its final determinations.  In particular, contrary to the assertion in the question, DOC very 
carefully considered all comment s concerning the 40 percent tota l deviation criterion and responded 
to those comments.  In addition, DOC has fully e xplained on the record of the proceeding the reasons 
for modifying the model matching methodology. See Ball Bearings and Parts Thereof from France, 
Germany, Italy, Japan, Singapore, and the Unite d Kingdom: Final Results of Antidumping Duty 
Administrative Reviews , 70 FR 54711 (September 16, 2005) and accompanying Issues and Decision 
Memorandum at Comments 2 and 3.  Question 11:  Byrd Amendment (p. 29, para 50) The Byrd Amendment was found to be inconsiste nt with WTO Agreements in January 2003, and was 
finally repealed in February 2006. However, revenue s from anti-dumping duties on goods imported to 
the United States before October 1, 2007, continue to be distributed among the relevant parties under 
the transitional provision of the Deficit Reduction Act of 2005. This  means that although the Byrd 
Amendment was nominally repealed, it continues to st ay in effect. Therefore, the inconsistency with 
the WTO Agreements remains at present even a fter the repeal of the Byrd Amendment. The 
Government of Japan strongly requests the Government of  the U.S. to promptly halt the distribution of 
revenues under the Byrd Amendment and resolve the inc onsistency with the WTO Agreements. In this 
respect, please indicate the specific view of the U.S. Government. 
 RESPONSE:  The President signed the Deficit Reduction Ac t into law on February 8, 2006.  That 
Act includes a provision repealing the Continue d Dumping and Subsidy Offset Act of 2000.  
Therefore, the United States has taken all actions necessary to implement the Dispute Settlement Body’s recommendations and rulings in the referen ced dispute.  Pursuant to the Deficit Reduction 
Act, antidumping and countervailing duties that are being collected on goods now entering the United 
States are not distributed to domestic firms.   
 
Question 12:  Removal of the Long-continued Anti-dumping Measures (p. 31, para 56) 
On August 24, 2010, the U.S. an nounced publicly that it has lifted anti-dumping measures against 
Japan-made polychloroprene rubber. These anti-dum ping measures had been imposed by the U.S. 
since December 1973 and were the longest-continue d (more than 36 years) measures imposed against 
products made in Japan. Anti-dumping  measures must be ineffective in 5 years in principle in 
accordance with the WTO Ag reement. Only if the lifting of the measures may cause 
continued/renewed dumping and damages, the p eriod of the measures may be extended as an 
exception. However, upon the request of domestic industries, the U.S. government repeats the 
extension of the period for anti-dumping measures a nd continues them over the long term in many 
cases.  The Japanese government calls  for the U.S. to quickly remove unfairly continued anti-dumping 
measures. Please explain the view of the government on this subject. 
 
RESPONSE:  Under U.S. law, and consistent with the WTO Antidumping Agreement, antidumping 
duties remain in effect for as long as and to the ex tent necessary to counteract injurious dumping.  
Five years after the imposition of the duties, the Department of Commerce (DOC) and the U.S. 
International Trade Commission (USITC) undertake s unset reviews to determine whether revocation 
of the antidumping duty order would likely lead to  the continuation or recurrence of dumping and 
injury.  If the determinations by both agencies are affirmative, the order remains in place;  if the 
determination by either DOC or the USITC is ne gative, the order is revoked.  These reviews are 
conducted every five years for the duration of the order. Thus, the reason that some antidumping duty 
orders remain in place is that the evidence of r ecord supports the conclusion that dumping and injury 
are likely to continue or recur if the order were revoked. 
 WT/TPR/M/235/Add.1 
Page 270 
 
 
 Question 13:  Anti-dumping measures (p. 31, para 56) 
Since the 17th administrative revi ew of antidumping measures on ba ll bearings, the Department of 
Commerce (DOC) has requested from respondents the cost data of unaffiliated suppliers when 
respondents purchase a large proportion of final pro ducts from unaffiliated suppliers, while the DOC 
had only requested purchase prices from unaffiliated suppliers before the 17th administrative review. 
So far, Japanese companies have not been requested to submit such cost data by the DOC. However, 
the Government of Japan is concerned about the possi bility that in future administrative reviews, the 
DOC may request from Japanese companies cost data from unaffiliated suppliers which are third 
parties to Japanese companies and which Japanese com panies cannot control. In addition, the DOC 
has not clarified whether it is requesting the subm ission of cost data based on the percentage of 
purchase from unaffiliated suppliers. The Government of Japan requests that the DOC explain its 
view on this.  
Actually, in the 17th administrative review, an Eu ropean company was requested to submit cost data 
of unaffiliated suppliers to DOC since it had purc hased a large portion of final products from 
unaffiliated suppliers. The DOC applied the adverse fa cts available (AFA) rate to the European 
company when it replied to the DOC that its unaffil iated suppliers refused to submit relevant data. 
Japan considers that it is unfair to bring a less fa vourable result to a respondent which cannot submit 
relevant data due to the refusal of a third party. Please explain the U.S. view on this.  
 
RESPONSE:   Under U.S. law, and consistent w ith the WTO Antidumping Agreement, the 
Department of Commerce (DOC) may request cost information from the producer of merchandise that 
is subject to an antidumping investigation or review .  In some instances, DOC has declined to request 
cost information from an unaffiliated producer of the exported merchandise when an exporter’s sales 
to the United States of subject merchandise purch ased from an unaffiliated supplier were a small 
portion of all sales of subject merchandise to the Unit ed States by that exporter or the supplier to the 
exporter was not the producer of the merchandise.  Producers of merchandise that is subject to an 
antidumping investigation or review are interested par ties with respect to that proceeding.  The failure 
of an interested party to provide requested inform ation may warrant the use an adverse inference in 
employing the facts available to make a determinat ion.  However, whether an adverse inference is 
used and what facts available are used is depe ndent on the facts and circumstances of the case. 
 
(viii) Technical regulations and standards 
 
Question 14:  Technical regulations and standards (p. 35, para 77)  
With regard to the transportation of lithium batteries,  it is important to maintain the safety of air 
transportation as much as possible. However, as  seen in G/TBT/N/USA/518, there is a real possibility 
that strengthening the regulation on lithium tr ansportation could have a great influence on many 
people, especially manufacturers, shippers and cons umers when it is inconsistent with "the 
Recommendations on the Transport of Dangerous G oods" by the United Nations and "the Technical 
Instructions on the Safe Transport of  Dangerous Goods by Air" by the International Civil Aviation 
Organization. In this regard, Japan would like to request that the U.S. government analyze the 
influence of this regulation plan and examine the re gulation to see if it is compatible with existing 
rules. 
 
Please explain the view of the U.S. government on this subject. 
 RESPONSE:   The United States would refer Japan to the minutes of the March and June 2010 
meetings of the WTO Committee on Technical Ba rriers to Trade.  At those meetings, the 
United States addressed issues related to a PH MSA Notice of Proposed Rulemaking (Hazardous 
Materials: Revisions to Requirements for the Tran sportation of Lithium Batteries, RIN 2137-AE44) in 
some detail.  The United States is consideri ng the comments submitted by Japan and Japanese 
industry as part of the ongoing rulemaking process.  WT/TPR/M/235/Add.1 
 Page 271 
 
 
 Question 15:  Foreign Manufacturers Legal Accountability Act of 2010 (p. 37, para 89) 
To strengthen consumer protection, the House of Representatives’ Energy and Commerce Committee 
approved the Foreign Manufacturers Legal Accountability  Act of 2010 (H.R.4678) on July 21. This 
bill prohibits foreign manufacturers from exporting their products to the U.S. without registered 
agents in the country.  We fully understand its legisla tive intent but we are concerned that the bill 
could impose additional obligations and costs on foreign businesses, in particular SMEs, and also 
affect all companies operating in the U.S. which source parts and components from abroad, including 
U.S. manufacturers. 
 
The bill also seems to be questionable in relation to its compatibility with Article Ⅺ of the WTO 
GATT Agreement, as the bill bans imports from fore ign manufacturers who fail to register an agent in 
U.S. product liability actions or to consent to the U.S. jurisdiction in product liability lawsuits. We 
also see H.R. 4678 as problematic in that the bill would force foreign manufacturers to forfeit the 
right to resort to the Hague Service Convention.  
 The Government of Japan strongly requests of the Governme nt of the U.S. that the legislative intent of 
the bill be pursued by less trade-restrictive prov isions.  Please explain the view of the U.S. 
government on this subject. 
 
RESPONSE:   The proposed Foreign Manufacturers Legal Accountability Act, as reflected in bills 
pending before the U.S. Congress reflects a desire to  ensure that consumers in the United States can 
be confident that the products they buy are safe a nd that there are procedures available under U.S. law 
to address effectively any product liability issues th ey may engender.  The United States believes 
these goals can be accomplished without imposing undue burdens on foreign manufacturers.  The 
FMLAA is still pending before Congress.  We are not in a position to speculate on the implications of 
particular provisions which are subject to further review and possible modification in the United 
States Congress.  
(2) Measures Directly Affecting Exports 
(iv) Export restrictions and controls 
The Export Administration Act (EAA)  
Question 16:  Wood (p. 50, para 148) 
Regarding unprocessed wood from w estern red cedars, and as stated in the Secretariat’s report 
(Section III, paragraph 148), unpr ocessed timber originating from “federal, state and other public 
lands west of the 100th meridian in the 48 cont iguous states” is subject to export restrictions, 
regardless of the wood species.  We would like to know if there have been changes to the export 
restrictions on unprocessed timber since 2008. Could you provide us with detailed information?  
When and how were those restrictions recently review ed and justified as they stand now?  In addition, 
please inform us of what is the volume of th e annual harvest in the log-export-restricted areas 
(federal, state and other public lands west of the 100th meridian in the 48 contiguous states) over the 
last decade. 
 RESPONSE:   There have been no changes to or reviews of the Forest Resources Conservation and 
Shortage Relief Act (FRCSRA), which restricts e xports of unprocessed wood from western red cedars 
from federal, state and other public lands west of th e 100th meridian in the 48 contiguous states, since 
2008.  The United States does not collect data on the volume of the annual harvest in the public land 
area restricted for export under FRCSRA.  Exports from public lands are not restricted from Alaska (or Hawaii).  According to 2009 trade statistics, th e U.S. exported 7,614 m3 of western red cedar to 
Japan, of which 6,302 m3 was exported from Alask a and 1,312 m3 was exported from Washington.  
 WT/TPR/M/235/Add.1 
Page 272 
 
 
 (vi) Finance, insurance, and guarantees 
 
Questions 17:  Concerning the (Ex-Im) bank (p. 51, para 155)  
(1) Please provide information on the bank’s perfor mance in recent years, with categories of export 
finance, insurance, and guarantees concerning agricu lture, with sub-categories of commodities, 
livestock, foodstuffs, farm equipment, chemicals, supply and services. 
 
(2) Japan would like to know the same information on  the performance, as indicated above in (1), of 
the other institution(s) engaging in expor t finance in the agricultural sector, if any. 
 RESPONSE:  In 2009, Ex-Im Bank authorized support, including insurance, for an estimated 
$153 million of exports of U.S. agricultural goo ds and services, including commodities, livestock, 
foodstuffs, farm equipment, chemicals, supplies and services. In addition, the Bank authorized 
$38 million of working capital guarantees for agricu ltural exports from U.S. small and medium-sized 
businesses.  Information on USDA’s agricultural e xport credit guarantee programs can be found at 
http://www.fas.usda.gov/excredits/ecgp.asp. 
 
(vii) Promotion and marketing assistance 
 
Questions 18:  Export Strategy (p. 53, para 162,163) 
Regarding the National Export Initiative, what will be the main feature in the agricultural sector, and 
how will the USDA be involved in the implementati on of the plan? What is the benchmark of exports 
to be doubled in five years (Total export value in 2009)? 
 
Also, Japan would like to know the details on the ‘export promotion activiti es’ which is the support 
for a company or industry provid ed by the Trade Promotion Coordinating Committee (TPCC). In 
addition to the details, Japan would like to know (i) the criteria that are required for a 
company/industry to receive the support based on th e activities, (ii) how m any companies/industries 
have received the support and (iii) the amount of the support that each company/industry received. 
 RESPONSE:   The National Export Initiative announced by President Obama in January 2010 seeks 
to double U.S. exports for all goods and services ov er a five-year period. USDA is actively involved 
in supporting the initiative, including evaluating expo rt markets more strategically, increasing focus 
on trade shows and foreign buyer missions, enhanc ing partner outreach to small and medium-sized 
businesses, improving access to credit, working to enfor ce international trade rules to help remove 
barriers, strengthening information-sharing and coor dination with other federa l and state agencies, and 
supporting new trade agreements that in crease access for agricultural exports. 
 The Export Promotion Cabinet, through the TPCC,  has developed specific recommendations for each 
of the eight priorities set out in the NEI Executive Order. These eight priorities involve programs of 
more than one agency. For example, the Departme nt of Commerce (Commerce), the Department of 
Agriculture (Agriculture), and the U.S. Trade and Development Agency (USTDA) manage trade 
mission programs that introduce U.S. companies to potential buyers overseas (Priority 3). Similarly, 
the Export-Import Bank of the United States (Ex-Im Bank), the Small Business Administration 
(SBA), the Overseas Private Investment Corporati on (OPIC), and Agriculture provide export credit 
and other forms of financing support to SMEs th at export (Priority 5), and the United States Trade 
Representative (USTR), Agriculture, and Commerce work  to enforce trade agreements and eliminate 
market access barriers (Priority 7). 
 Regarding the benchmark for the NEI’s goal of doubling exports over five years, this means that total 
U.S. exports need to grow from $1.57 tr illion in 2009 to $3.14 trillion by 2015. 
  WT/TPR/M/235/Add.1 
 Page 273 
 
 
 For details on export promotion activities and the Trade Promotion Coordinating Committee, in 
relation to the National Export Initiative, please see the “ Report To The President On The National 
Export Initiative:  The Export Promotion Cabinet’ s Plan For Doubling U.S. Exports In Five Years ” 
issued in September 2010, which can be found at:  (http://www.whitehouse.gov/sites/default/files/ 
nei_report_9-16-10_full.pdf). 
 
(3) Other measures affecting investment and trade 
(iii) Government procurement 
 
Question 19:  Buy American provision (p. 59, para 188) Japan is strongly concerned about the recent trend t hat Buy American provisions are built into recent 
bills such as the Assistance, Quality and Afford ability Act 2010 (H.R.5320) and the Jobs for Main 
Street Bill (H.R.2847).  (Japan requests that such re gulations and operations are consistent with the 
obligations of the U.S. under the Agreement on Go vernment Procurement (GPA) and that they do not 
counter the international efforts against protectionism.)  
 
In order to monitor how Buy American provisio ns are practiced, it is important for Members, 
especially Parties to GPA, to im prove transparency of the U.S. pr ocurement procedures. Japan would 
like to ask the U.S. how many procurement Bu y American provisions have been applied and how 
much the monetary amount of these procurements from  the enforcements of Buy American provisions 
is. 
 RESPONSE:   Where the U.S. Government applies “buy American” provisions, it applies them in a 
transparent manner.  The United States genera lly waives “buy American” requirements for 
procurement covered by the WTO Agreement on G overnment Procurement. The United States does 
not maintain the monetary amount of procurements under those provisions. 
 
(v)  Trade related intellectual property rights  
(b) Patents  
Question 20:  ”First-to-Invent” system (p. 71, para 219) 
The United States is the only country to use the “f irst-to-invent” system, which, with regard to the 
patent system, makes the United States rather uniqu e.  This system, however, lacks certainty and 
predictability in the sense that a patentee’s status  can be overturned by the appearance of a prior 
inventor.  This places an extra burden on in ventors who are required to prepare and keep 
documentary evidence to prove the date of invention.   Many countries, including Japan, have pointed 
out that this issue creates a barrier for foreign com panies when trying to penetrate the U.S. business 
community.  Although the practice of maintaining th e first-to-invent system is not necessarily against 
the TRIPS Agreement, Japan again requests the Unit ed States to adopt a first-to-file system and also 
to improve all aspects of the patent systems that restrict  trade in the United States.  This is due to the 
necessity of maintaining a transparent and stable syst em, as well as reducing the burdens borne by 
users through the difference in syst ems.  The Patent Reform Act has been submitted to the U.S. 
Congress, which includes provisions to switch the U. S. patent system from first-to-invent to first-to-
file.  In particular, please explain the prospects of the U.S. patent reform. 
 RESPONSE:   The "Patent Reform Act of 2010" (S. 515) w as introduced in the U.S. Senate in March 
2009 and reported by the Senate Judiciary Committee in April of 2009.  In a letter dated October 5, 
2009, the Secretary of Commerce, on behalf of the Administration, expressed support for the 
transition of the United States to a "first-inventor-t o-file" system from the current "first-to-invent" 
system.  In a letter dated April 20, 2010, the Secretary of Commerce stated that "The Administration is eager to see patent reform enacted this congressional session."  
 WT/TPR/M/235/Add.1 
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 Question 21:  “Submarine patent” (p. 71, para 219) 
The early publication system in the United States provides exceptions whereby patent applications 
filed in the United States, but not filed overseas, or matters included in a patent application filed in 
the United States, but not included in the corres ponding application filed overseas, cannot be laid 
open at the request of the applicant.  It is, therefore, possible for a patent application to become a 
"Submarine Patent".  Due to not knowing whether or not another application is already on file for the 
same invention, this system creat es serious social and economic loss due to investments in R&D. 
 
Japan strongly requests the United States to implem ent fully and promptly what has already been 
confirmed under the Framework Talks:  i.e., by abolishing the exceptions from the early U.S. 
publication system, and by publishing a ll applications except those not pending, or those not able to 
be laid open, after a period of 18 months from the earliest filing date.  Please explain the U.S. view on 
this subject. 
 
RESPONSE:  In the United States, if an applicant makes a request, certifying that the invention 
disclosed in the application has not and will not be  the subject of an application filed in another 
country, or under a multilateral inte rnational agreement, that requires publication of applications 
18 months after filing, the a pplication cannot be published. 
 
The provisions for the adoption of an “early publi cation” system in the United States that were 
originally sent to the U.S. Congress more than a deca de ago were fully consistent with the obligations 
of the 1994 United States-Japan patent accords.  U. S. obligations in those 1994 patent accords were 
satisfied by the timely introduction of the relevant bi ll. The U.S. made every effort to have legislation 
passed that was consistent with the 1994 patent  accords, and Congress enacted Public Law 106-113 
on November 29, 1999.  This law contains a provisi on to publish, within 18 months, most patent 
applications filed in the United States.    Question 22:  Priority in the Paris Con vention (In re Hilmer) (p. 71, para 219) 
The “Hilmer” doctrine exists in the United States.  Foreign applicants usually file applications, first 
in their own country and subsequently in the Unite d States, thereby claiming priority under the Paris 
Convention.  Due to the “Hilmer” doctrine, such foreign applicants cannot prevent the patent grant 
from conflicting with applications filed before the actual filing date of  any subsequent applications in 
the United States, even during the priority peri od, and thereby may suffer disadvantages.  Please 
explain the U.S. view on this subject.  
RESPONSE:  The concerns of the Hilmer Doctrine, if any, were mitigated to a large extent by 
changes to the U.S. patent law that went into eff ect on June 8, 1995.  These changes permit all patent 
applicants, including those from Japan, to file provisi onal patent applications that will give them the 
earliest possible prior art date for subseque ntly filed non-provisional applications.  
 
Question 23:  Language Discrimination in int ernational applications under the PCT (p. 71, 
para 219) 
Article 102 (e) of the Patent Act provides that PC T international applications have the effect of 
eliminating subsequent applicati ons from the international filing da te only if the application primarily 
designates the United States and is published in Eng lish internationally. When PCT international 
applications are published in other languages internationally, however, they do not have the effect of 
eliminating subsequent applic ations. Thus, Article 102 (e) is  discriminatory against speakers of 
languages other than English. 
 In Japan and Europe, international  applications are not differentiated by language.  Therefore, it is 
unfair that the same treatment is not guaranteed in the United States.  WT/TPR/M/235/Add.1 
 Page 275 
 
 
 The limitation of effects of eliminating subse quent application by Article 102 (e) narrows the 
advantage of the moratorium on submitting transla tions under the PCT system, and is significantly 
disadvantageous to applicants, who need to translate documents  into English.  
 The Government of Japan requests that the Govern ment of the United States abolish discrimination 
on the basis of language based on Article 102 (e).  Please explain the U.S. view on this. 
 
RESPONSE:  Section 102(e) of the U.S. patent law provid es that a published U.S. patent application 
or a U.S. patent can have a prior art effect as of its  filing date.  The filing da te may be established by a 
PCT application that designates the Unite d States and was published in English. 
 
It is to be noted that proceeding through the PCT system is only one path available to an entity 
wishing to obtain a United States Patent;  the entity can  always elect to file directly with the USPTO.  
In this regard, a foreign applicant can even ta ke advantage of the U.S. provisional application 
procedure, in which formalities are virtually elim inated and which allows a filing date to be 
established regardless of the language of the provisional application.  
 
Question 24:  Unity of Invention (p. 71, para 219) 
With regard to unity of invention, under the current U.S. patent system, the scope of inventions that 
can be included in a single application is, according to what we have requested so far, narrower than 
that under the systems of the JPO and the European Pa tent Office (EPO).  Thus, a patentee is obliged 
to submit multiple applications, thereby increasing th e burden.  The Government of Japan wishes to 
repeat its request to the Government of the United States to adopt the same criterion for its unity of 
invention as that of Japan and Europe.  The U. S. view on the matter would be appreciated. We 
understand that the United States Patent and Trademark Office (USPTO) is making efforts to improve 
the practice regarding the unity of invention, such as requesting public comments. Please explain the 
progress on reviewing the practice. 
 RESPONSE:   The U.S. Patent and Trademark Office (USPTO) has been studying the 
implementation of unity of inventio n for national applications for many years.  We continue to look 
for ways to improve our processes.  USPTO publishe d a request for public comment on its restriction 
requirement practice that closed on August 13, 2010.  Among the public comments that were 
received, suggestions were made for adopting a uni ty of invention standard.  We are currently 
studying the suggestions that were provided. 
 
Question 25:  Information Disclosure Requiremen t of Prior Art Documents (p. 71, para 219) 
All applicants for United States patents ought to disclose important prior art documents to the U.S. 
Patent and Trademark Office (USPTO) as far as they know until they obtain patents. In addition, they 
ought to submit English translations of prior art documen ts as a whole or in part, in the case that the 
documents are not in English. The Government of Japan therefore requests the Government of the 
United States to take measures to reduce the burden on foreign patent applicants, including 
eliminating the requirement to submit English tr anslations and shortening the period of the 
information disclosure requirement.  Pl ease explain the U.S. view on this. 
 
RESPONSE:   In the United States, patent applicants a nd all other individuals associated with the 
filing and prosecution of a patent application have a duty of candor and good faith in dealing with 
USPTO, which includes a duty to disclose to USPTO a ll information known to that individual to be 
material to patentability.  The duty to disclose info rmation exists with respect to each pending claim 
until the claim is cancelled or withdrawn from consid eration, or the application becomes abandoned. 
 Foreign patent applicants are not required to s ubmit an English language translation of a foreign 
language document contained in their informati on disclosure statement (IDS) unless they already 
possess the translation, have it within their custody or control, or the translation is readily available to WT/TPR/M/235/Add.1 
Page 276 
 
 
 the applicant.  However, if the applicant does not  provide an English language translation of the 
document, the applicant must provide a concise e xplanation of its relevance.  We believe these 
regulations serve the public interest by helping ex aminers understand the relevance of available prior 
art.  (e) Enforcement activities  
Question 26:  Omnibus Appropriations Act (p.75, para 237) 
On June 11, 2009, the amendment of Section 211 of the Omnibus Appropriations Act (S1234;  A bill 
to modify the prohibition on recogn ition by United States courts of certain rights relating to certain 
marks, trade names, or commercial names) was subm itted to Senate Committee. Please indicate the 
present status and future prospects of the amendment. 
 RESPONSE:   S.1234 was introduced in the Senate by Senator Lieberman on 6/11/09 and referred to 
the Committee on the Judiciary on 6/11/09.  The co mpanion bill in the House of Representatives, 
H.R. 1103, was introduced by Congressman Wexler on 2/13/09 and referred to the House Judiciary 
Subcommittee on Courts and Competition Policy on 3/16/09. 
 The House Judiciary Committee held a hearing on Section 211 on 3/3/2010, the transcript of which 
can be found here:  http://judiciary.house.gov/hearings/hear_100303.html. 
 The Administration continues to work with Congress to  implement the WTO’s ruling on Section 211.   
 
Question 27:  Section 337 (p. 75, para 238) 
With regard to Section 337 of the Tariff Act of 1930, the ITC establishes a “target date” for final 
determination in each investigation within 45 days of the initiation of an investigation. Please indicate 
the average number of days between the initiation of an investigation and (1)”the target date”, or (2) 
the actual date of final determination.  
RESPONSE:   Generally speaking, investigations in th e last three years have been completed in 
approximately 16-17 months.  During calendar 2008, the time for completion was somewhat shorter, 
15 months.  During calendar year 2009, the length of time until final de termination was longer, 
approximately 20 months.  And dur ing calendar year 2010 to date, the period of time before final 
determination has been on average 16.9 months.  The length of time may vary depending on such 
factors as the number of parties, the complexity of the issues, and the schedules of the parties involved. 
 
IV. DEVELOPMENTS IN SELECTED SECTORS 
(1) Agriculture 
(i) Agriculture in the United States 
 Question 28:  Bioethanol (p. 80, para 3) 
The U.S. increases mandated conventional produ ction of corn ethanol every year under the 
Renewable Fuels Standard (RFS2). How does the U.S.  government assess the eff ects of this increase 
of production of corn biofuel in view the global food security?  
RESPONSE:  The Energy Independence and Security Act of 2007 (EISA) and the National 
Renewable Fuel Standard program (RFS2) require a significant incr ease in the volume of renewable 
fuels that are blended into transportation gasoline and diesel in the United States, reaching a total of 
36 billion gallons in 2022.  Within this total,  EISA established specific volume requirements for 
several different  biofuel categories:  advanced biofuels (including cellulosic biofuels, non-cellulosic 
biofuels, biomass-based diesel) and general rene wable biofuels.  To qualify toward the volume 
requirements, renewable fuel producers must demons trate that the feedstocks they use for fuel  WT/TPR/M/235/Add.1 
 Page 277 
 
 
 production meet the definition of renewable biomas s.  To qualify for each category, the fuel, 
evaluated over the full lifecycle, must achieve a certain level of greenhouse gas (GHG) emissions 
reduction in comparison to the gasoline and diesel fuels they displace.  EISA and RFS2 do not 
mandate production of corn ethanol each year.  Rath er, it mandates that a certain volume of general 
renewable fuels are used in the U.S. fuels supply each year.  Corn ethanol can qualify in the general 
renewable fuels category;  however, any fuel that  meets the renewable biomass definition and the 
lifecycle GHG emission reduction threshold also can be used to fulfill the volume mandate for this 
category. 
 
(ii) Agriculture policies 
(a) Title I (Commodity Programes) 
 
Question 29:  ACRE program, SURE program (p. 83, para 14, p. 89 para 40-41) Based on the implementation data, what is th e assessment of the U.S. government on the ACRE 
program compared to the Counter-Cyclical Payment in regard to its effecti veness and cost-efficiency? 
 
RESPONSE:   The first year of implementation of ACRE was 2009, thus there is only one year of 
data which would not be enough to make any meaningf ul assessment.  In addition, for the first year of 
ACRE implementation, there was limited farmer participation which would also diminish any 
potential assessment or comparison.  Furthermore, ACRE was designed to address the broader issue 
of farm revenue, which the Counter Cyclical Pa yment program does not address, thus a direct 
comparison would likely not be very meaningful. 
 
With regard to the ACRE and SURE programs,  farmers and stakeholders have pointed out at 
hearings on the 2012 farm bill and on other occasi ons that there are duplications.  Would the U.S. (1) 
explain how these two programs are implemented an d how the duplications, if  any, are being dealt 
with, and (2) indicate what is the view of the U. S. government on the future of these two programs in 
light of farmers’ comments on their complexity and possible duplications? 
 
RESPONSE: 
 
1. As noted, these programs are complex, which is to be expected given their general design to 
address farm revenue which looks at a number of f actors instead of just prices for one commodity.  
The programs’ regulations and implemen tation information can be found at:  
http://www.fsa.usda.gov/.  While both programs are d esigned to maintain farm revenue, there are a 
number of differences that mean in practical te rms duplication of program design and delivery is 
minimized.  Some notable differences are that SURE payments are specifically related to losses due to 
natural disasters, and ACRE only covers farms with  covered commodity base acres.  ACRE addresses 
revenue losses from either price or yield declines, while SURE supplements crop insurance that 
addresses crop or revenue losses from natural disasters. 
 2. The U.S. Congress writes the Farm Bill and has begun to hold hearings across the country in 
anticipation of the 2012 Farm Bill.  One item that  has often been mentioned by producers groups in 
hearings thus far, is the need fo r less complex programs, particularly  with respect to crop and revenue 
assurance programs. 
 
(iv) Support levels 
 
Question 30:  Direct Payment (p. 90, para 47, 52) 
The U.S. classifies the Direct Pa yments under the Farm Security and Rural Investment Act of 2002 in 
the notification of domestic support commitments as  Green box, decoupled income support. In that 
program, the flexibility of the planting of fruits, vegetables and wild rice is not allowed under the 
payment condition. As suggested in the Appellate Body’s finding in the United States-Subsidies on WT/TPR/M/235/Add.1 
Page 278 
 
 
 Upland Cotton, it seems that the payments under that program are related to the type of production 
after the base period.  Please show the rationale for th e U.S. to believe that the Direct Payment is still 
consistent with paragraph 6(b) of Annex 2 of the Agreement on Agriculture, whereas the production 
of fruits, vegetables, and wild rice is discouraged by  either elimination or reduction of the payment 
program. 
 
RESPONSE:   We believe that the payments meet th e criteria for decoupled income support in 
paragraph 6 as well as paragraph 1 of Annex 2 of the Agreement on Agriculture.  We note that 
paragraph 52 notes that the Committee on Agricult ure is the appropriate forum to review the 
implementation of commitments in the WTO. 
 
(2) Financial services 
(i) General legal framework 
 
Question 31:  Insurance (p. 94, para 59) As a federal tax is imposed at 4% of gross premiu ms when the insurer is not subject to U.S. taxes, 
Japan would like to know how the U.S. legitimizes this tax in light of the U.S. commitment under 
GATS Article 17 (National Treatment). 
 RESPONSE:  U.S. tax measures, such as this one, are consistent with our trade commitments. The 
United States includes the following limitation on na tional treatment in its GATS schedule, “A one 
per cent federal excise tax is imposed on all life insu rance premiums and a four per cent federal excise 
tax is imposed on all non-life insurance premiums co vering U.S. risks that are paid to companies not 
incorporated under U.S. law, except for premiums  that are earned by such companies through an 
office or dependent agent in the United States.” 
 
(iv) Financial regulatory reform 
 
Question 32:  Financial Regulatory Reform (p. 97, para 69) The Dodd-Frank Wall Street Reform and Consumer Pr otection Act (H.R.4173), which was enacted on 
July 21, includes the provision of Conflict Minerals (Sec. 1502). 
 Regarding Sec. 1502, please indicate the specifi c schedule and contents concerning the detailed 
regulations which the Securities and Exchange Commission will establish.  
RESPONSE:  Rulemaking for the Dodd-Frank Act will be ma de consistent with the requirements of 
the Administrative Procedure Act (5 USC 551-559,  701-706).  Rulemaking will include opportunity 
for public comment and all interested parties are i nvited to submit comments.  Interested persons may 
submit comments electronically through the Federa l eRulemaking Portal at www.regulations.gov.  
Electronic submission of comments allows the commenter maximum time to prepare and submit a 
comment, ensures timely receipt, and enables the comments to be made available to the public.  
Comments submitted electronically through the www.re gulations.gov website can be viewed by other 
commenters and interested members of the public. 
 (3) Transport (ii) Maritime transport (b) Regulatory framework 
 
Question 33:  Ballast water, Containers Scanning (p.102, para 92) With regard to the regulations on ballast wa ter management, there are different standards among 
states in the U.S. and some standards are more stringe nt than international ones.  As a result, such 
standards are a heavy burden on maritime trans port service suppliers and may prevent smooth trade.  WT/TPR/M/235/Add.1 
 Page 279 
 
 
 Could the U.S. explain the rationale for maintaini ng these standards in light of Article VI (Domestic 
Regulation) of the GATS?  
 RESPONSE:   Article VI applies in sectors where speci fic commitments are undertaken;  the United 
States has not undertaken commitments in maritime transport services.  
 
(c) Water-borne trade 
 
Question 34:  Jones Act (p. 103, para 95) 
All goods shipped between waterborne ports of the United States shall be carried by vessels built in 
the United States. This restriction only applies to the maritime transport sector, unlike other modes of 
transport such as air, rail and road where foreign-m ade aircraft, rolling stock and trucks can be used 
respectively without any such restrictions. Please exp lain how the U.S. views this restriction as 
legitimate only for maritime transport in light of Article VI (Domestic Regul ation) and Article XVII 
(National Treatment) of the GATS.  
 
RESPONSE:   The United States believes that the “Jon es Act” provisions of U.S. law are fully 
consistent with its obligations under the GATS.  Article VI applies in sectors where specific 
commitments are undertaken.  Article XVII appli es in sectors where specific commitments are 
undertaken, as reflected in a Member’s schedule of commitments.  Th e United States has not 
undertaken commitments in maritime transport servi ces.  With regard to HR 5620, the Administration 
has not taken a formal position on the proposed legislation. 
 
In addition, bill HR 5620 (the Oil Spill Account ability and Environmental Protection Act of 2010), 
which is currently under discussion in Congress, contai ns provisions related to the “Americanization 
of Offshore Shipping Operations in the Exclusive Ec onomic Zone”.  The substance of this proposed 
change means that there would be expansion of restrictions under the Merchant Marine Act of 1920 
(the Jones Act).  It would also bring a consider able influence on the activities of foreign flag vessels.  
Please provide the view of the U.S. Government on the conformity of this bill to the WTO principles of 
free and open market access and non-discriminatory treatment.  
 RESPONSE:   These provisions are in legislation proposed by Members of Congress and are not 
currently U.S. law. The Administration has not taken a formal position on the proposed legislation.  Question 35:  Maritime Security  Program (p. 103, para 98) 
The Maritime Security Program was extended for another ten years in Oct ober 2005, increasing the 
total amount of subsidies and the number of ships subsidized. 
Please explain the specific vi ews of the U.S. on the trade-distorting effect of the subsidies against free 
and fair competition in the international maritime market.  
 
RESPONSE:   The Maritime Security Program (MSP) serv es to maintain an active, privately-owned, 
U.S.-flag and U.S.-crewed liner fleet available to support the Department of Defense (DOD) 
sustainment in a contingency. MSP carriers must  commit 100 percent of their MSP vessel capacity 
and related intermodal transportation resour ces to DOD’s approved Emergency Preparedness 
Program. MSP provides DOD with assured access to commercial intermodal capacity to move 
ammunition and sustainment cargo. The objective of the program is to maximize DOD’s use of the 
commercial intermodal transportation system to serve America in peace and war while minimizing disruption to commercial operations.  
 
Question 36:  Small Shipyard Gr ant Program (p. 104, para 99) 
What is the concrete scheme or the structure of the ‘Small Shipyard Grant Pr ogram’? (conditions of 
subsidizations, grant rate, total records of the grants in 2008 and 2009, etc.) 
 WT/TPR/M/235/Add.1 
Page 280 
 
 
   - Why did the U.S. enlarge this grant program up to ten times since 2008? What has changed in the 
situation regarding small shipyards in the U.S. since 2008? 
 
RESPONSE:  Under the 2009 American Recovery and Re investment Act, the U.S. Maritime 
Administration received $100 million for the Small Shipyards Grant Program, which had been funded 
at $10 million in 2008.  This program provides 75 percent federal funds w ith 25 percent matching 
funds from the shipyard for capital improvements a nd related infrastructure improvements to foster 
efficiency, competitive operations, and quality ship co nstruction and repair.  Grant funds may also be 
used for maritime training programs to foster technical skills and operational productivity.  Two 
million dollars was designated for use in administer ing the program.  Small shipyards fall into two 
categories: those with fewer than 600 employees,  and those with between 600 and 1200 employees.  
 Additional information on the program and grant recipients can be found at:  
www.marad.dot.gov/about_us_landing_page/mara d_recovery_act/recovery.htm;  www.marad.dot. 
gov/news_room_landing_page/news_release s_summary/news_release/dot_96_09.htm 
 
www.gpo.gov/fdsys/pkg/FR-2009-03-04/pdf/E9-4532.pdf 
www.gpo.gov/fdsys/pkg/FR-2009-04-02/pdf/E9-7384.pdf www.gpo.gov/fdsys/pkg/FR-2010-01-13/pdf/2010-475.pdf 
 
Question 37:  Cargo Preference Measures (p. 104, para 100) 
As for the Cargo Preference Measures, such as the requirements to use U.S. vessels for the export of 
Alaskan oil, which is nevertheless commercial ca rgo, how does the U.S. explain the rationale for 
introducing such measures  which are against the Decision on Maritime Transport Services adopted 
by the Council for Trade in Services on 28 June  1996, which forbids the members to apply any 
measures during the negotiations?  Please explain the specific views of the U.S. on this matter. 
 RESPONSE:   The prohibition against exporting Alaskan oil was removed in 1995 and remains in 
effect.  This action removed a significant distortion of  the oil market, yields economic benefits, and is 
consistent with International Energy Agency recommendations.  Even with the requirement to 
transport the oil on U.S.-flag ships, eliminating the export prohibition has had on balance a beneficial 
trade liberalizing effect.    Question 38:  Ocean Shipping (p. 104, para 101)  The Ocean Shipping Reform Act of 1998 includes a provision allowing the discriminatory treatment 
of Japanese and other foreign shipping firms, by ma king it possible to impose unilateral regulations 
on pricing and other practices.  As the pricing practice is the foundation of a free shipping 
commercial activity, unilateral regulations by th e FMC on the pricing practice obviously create 
discrimination against foreign firms.  Please explain th e specific views of the U.S. on the rationale for 
maintaining such measures.  
RESPONSE:  The Government of the United States has in the past pointed out that the language 
added in 1998 to the Merchant Ma rine Act of 1920 did not add new authority over the commercial 
practices of carriers or the setting of rates in foreign commerce, but merely clarified the pre-existing authority of the FMC to address discriminatory and unfair competitive practices of carriers in U.S. 
trades.  The FMC has held that the term “practices  employed by owners, operators, agents, or masters 
of vessels of a foreign country” in section 19 of the Merchant Marine Act, 1920, includes pricing 
practices.  The Committee on Commerce, Science, and Transportation, agreed, and amended section 
19 to clarify that such pricing practices are within th e scope of that section.  Examples of the measures 
that the FMC can take against a carrier for such practices are listed in Section 19 of the Merchant 
Marine Act of 1920.   WT/TPR/M/235/Add.1 
 Page 281 
 
 
 Section 9 of the Shipping Act of 1984 (“Controlle d Carrier Act”) prohibits ocean common carriers 
controlled by governments from maintaining or assessing rates which are below levels that are just 
and reasonable.  Prior to OSRA, this prohibition did not apply to the bilateral trade (i.e. that between 
the controlled carrier’s home state and the U.S.).   OSRA broadened the scope of the Controlled 
Carrier Act inasmuch as it removed this exception and others. 
 Section 19 of the Merchant Marine  Act of 1920 authorizes the FMC to take action “to adjust or meet 
general or special conditions unfavorable to shipping  in the foreign trade . . . which arise out of or 
result from foreign laws, rules, or regulations, or from competitive methods, pricing practices, or other 
practices employed by owners, operators, agents, or m asters of vessels of a foreign country.”  Section 
19 of the Merchant Marine Act of 1920 is more e xpansive and authorizes and directs the Commission 
to "make rules affecting shipping in the foreign trade ... in order to ... meet special conditions 
unfavorable to shipping in the foreign trade ... wh ich arise out of or result from foreign laws..." A 
broad range of U.S. interests are protected:  all ca rriers serving our trades and also shippers who have 
an interest in competitive service and choices in the market place;  as well as other U.S. maritime 
companies, including intermediaries and terminal operators. The "conditions un favorable to shipping" 
include carriers' ability to service a trade and activitie s integral to transportation systems such as inter-
modal services, agency services, and cargo solicitation.   The restrictive practices which Section 19 protects against have been broadly defined and the 
Commission is empowered as an independent agency to act unilaterally to impose sanctions. The 
FMC cannot negotiate or make an agreement with a foreign country but it can, using the rule making 
process of Section 19, receive comments from all aff ected parties and engage in consultations with 
executive agencies.   Question 39:  FMC Reporting Requirements (p. 105, para 102) The Federal Maritime Commission (FMC) is authorized  under the Section 19 (1) (b) of the Merchant 
Marine Act of 1920 (the Jones Act) to make rules and regulations affecting shipping for foreign trade.  
The FMC imposed a unilateral sanction against J apanese carriers in September 1997.  Although the 
sanction was removed in May 1999, the FMC still re quires carriers to report on the situation of 
Japanese ports.  Efforts have been made and signs of progress have been seen in various aspects.  
The "prior consultation system" has been significant ly improved (and the improved system has been 
steadily implemented);  the Port Transporta tion Business Law was revised to implement the 
deregulation of the entry restriction into the por t transport business in Japan. Progress has also been 
made toward the introduction of a 24-hour/365-day po rt terminal service operation. Japan is strongly 
insisting that the FMC fully understand these positive developments.  
Despite the significant improvem ent in the Japanese port situa tion, in August 2001 the FMC 
introduced a new order, which not only increased the number of items to be reported, but also 
expanded the scope of the carriers subject to the reporting requirements. The order includes 
requirements which go beyond the extent deemed appropriate to impose upon carriers. It requires 
Japanese carriers to submit translated copies of th e Japanese laws and instructions concerned. Thus, 
the order has been causing unfair and excessive bur dens on carriers. Should it be the case that the 
FMC decides to expand the range of the reporting requi rements in order to judge whether or not it 
should impose unilateral sanctions, it would vi olate the Treaty of Friendship, Commerce and 
Navigation between the United States and Japan,  which Japan would recognize as a regrettable and 
serious abuse of the FMC's mandate. Japan, therefore, strongly requests that the U.S. withdraw the 
order. 
 
Please explain the specific views of the U.S. on this matter. 
 WT/TPR/M/235/Add.1 
Page 282 
 
 
 RESPONSE:   As we have stated before, the Government of the United States believes the FMC's 
actions with respect to Japan are fully consiste nt with the Treaty of Friendship, Commerce and 
Navigation.  The United States Government takes seriously its treaty obligations.   
 
(4) Telecommunications 
(i) Market structure 
 
Question 40:  Broadband (p.105, para 107) 
According to the report, the digitalization of all terrestrial broadcasting in the United States has 
made an additional spectrum available for wireless telecommunications services. Japan would like to 
know exactly what kinds of services use the additional spectrum.  
RESPONSE:   There are three main sets of users for spectrum made available in the United States 
from the U.S. transition to digital television, sp ectrum which was assigned or was planned to be 
assigned through an auction process.  For the spect rum set aside for purely commercial use, one 
applicant bid on a relatively narrow (8 MHz) band it chose to use for mobile broadcasting (a one-way 
subscription broadcast TV service), while the larger set of commercial frequencies were assigned to 
operators who plan to use the spectrum for commerc ial mobile radio services (e.g. two-way voice and 
data services).  Specifically what services the opera tors will deploy, however, is generally up to 
operators, not the government, provided that operato rs comply with technical service rules (e.g. 
prevention of interference), and these services have yet to be deployed.  Another set of frequencies is 
dedicated for public safety purposes, with the po ssibility of a public-private partnership, in 
combination with commercial uses;  the bid for this set of frequencies, however, did not attract 
bidders willing to meet the conditions originally estab lished and thus this bid is in the process of being 
redesigned.  
 
(ii) GATS commitments 
 
Question 41:  GATS (p.106, para110) The report says the United States reserves the ri ght to “allow the deduction for expenses of an 
advertisement carried by a foreign broadcast undert aking and directed primarily to a U.S. market 
only where the broadcast undertaking is located in a foreign country that allows a similar deduction 
for an advertisement placed with a U.S. broadcast undertaking.” However, this seems to be the 
reservation made at the Uruguay Round. Japan cons iders that this reservation was lifted through the 
Doha Development Agenda. Please explain the view  of the U.S. Government on this matter. 
 RESPONSE:   The United States disagrees with Japan and considers this reservation to be fully in 
effect.  As the Doha Development Agenda has yet to  be concluded, Japan is welcome, in the context 
of these negotiations to table a concession aimed at  negotiating the elimination of this reservation, 
including by helping develop a global consensu s on promoting the deductability of advertising 
expenses.  In the meantime, Japan can limit the app licability of this reservation to Japan by ensuring 
that Japan allows for reciprocal deductions of a dvertising expenses, which the United States believes 
is good policy. 
 (iii) Regulatory and policy authority  Question 42:  Intercarrier (p.107, para 115) 
Concerning the issue of intercarrier compensati on, the report says an intercarrier compensation 
Notice of Proposed Rulemaking is expected in the fourth quarter of 2010. If possible, Japan would like to know the envisioned content of the reforme d intercarrier compensation system as well as the 
schedule for proposals for assent.   WT/TPR/M/235/Add.1 
 Page 283 
 
 
 RESPONSE:  The FCC has yet to finalize a proposed syst em to address intercarrier compensation, 
and thus the content of such proposal is not yet available. 
 
Question 43:  Section 310 of the Communications Act (p. 107, para116) 
The report says the FCC may grant a common carri er wireless license to a U.S. company that is 
controlled by a holding company in which foreign individuals, corporations, or governments own or 
vote up to 100% of the capital stock. Concerning this, Japan would like the United States to explain to 
what exactly “a common carrier wi reless license” refers.  Moreover, Japan would like to know how 
the terms of “a holding company” as well as conc rete criteria (numerical cr iteria) for determining 
“controlled by a holding company” are defined. Addi tionally, please explain the legal grounds for the 
criteria. 
 
Direct investment from an alien or a foreign governme nt is allowed to make only up to 20 %. Japan 
would like to know the concret e reason for the figure (20%). 
 
RESPONSE:   Section 310 of the 1934 Communications Ac t, as amended, establishes the 20% figure. 
The FCC, through its authority established th rough Congressional statute (see 47 USC §151 and 
47 USC § 153), is charged with enforcing these pr ovisions and implementing rules effecting such 
enforcement.  
 
A common carrier wireless licensee is a licensee intending to use licensed spectrum to offer a 
common carrier service, typically defined as a te lecommunications service—i.e “the offering of 
telecommunications for a fee directly to the public, or to such classes of users as to be effectively 
available directly to the public, regardl ess of facilities used.” (See 47 USC § 153). 
 
For an explanation of holding companies and how they relate to wireless licenses please see 
background information made available on the F CC website, identified here:  http://www.fcc.gov/ 
ib/Foreign_Ownership_Guidelines_Erratum.pdf. 
 
Question 44:  FCC (p.107, para 116) 
The report says the FCC gives preference to foreign  investments by other WTO Members, who are 
treated with the refutable assumption that forei gn investment from them does not pose competitive 
concerns to the U.S. market.  Japan would like to kn ow what exactly the preference is as well as the 
criteria for making preferential treatment. 
 
RESPONSE:   The preference accorded WTO members is exemption from the Effective Competitive 
Opportunities test (“ECO-test), which still rema ins applicable to non-WTO members.  See 
http://www.fcc.gov/Bureaus/International/Orders/1997/fcc 97398.pdf.  Under this test, applicants from 
such countries must show that their home country offers competitive opportunities to U.S. suppliers 
sufficient to prevent anticompetitive conduct on services between the two countries. 
 
Question 45:  Utilization of spectrum (p.108, para 121) 
The report says that the United States government will make 500 megahertz of spectrum available for 
wireless technology by the end of the decade.  J apan would like the United States to explain how the 
available spectrum will be utili zed. Moreover, Japan would like to know the progress on completion 
of its plan and timetable by 1 October 2010, wh ich is required in the Presidential Memorandum. 
 
RESPONSE:   As of this moment, the plan is not yet complete and therefore details are not yet 
available. 
 WT/TPR/M/235/Add.1 
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 (iv)  International settlements policy 
 
Question 46:  List of Foreign Carriers (p.108, para 122) 
The report says that a “List of Foreign Carriers t hat are Presumed to Possess Market Power in 
Foreign Telecommunications Markets” is used fo r the purposes of implementing the Policy and 
certain other FCC rules. If there have been actual a pplications of some measures based on this list, 
Japan would like to know the measures taken. 
 
RESPONSE:   Measures differ based on the nature of th e market power the applicant possesses, but 
licenses and specific conditions are all publicly available.  A typical condition is reporting 
requirements relating to traffic between countries wh ere the applicant, or its affiliate, has market 
power, or a prohibition on accepting special concessi ons from a home- market affiliate.  Background 
on such measures is avialble here: http:// www.fcc.gov/ib/pd/pf/telecomrules.html#BM_63_14. 
 (vi)  Media ownership rules  
Question 47:  Media owner (p.110, para 129) 
Regarding the 2010 Quadrennial Revi ew of broadcast ownership rules, Japan would like to know 
concretely what has been discussed during the series of workshops intended to get public input for 
future decisions. Also, Japan would like to ask for the schedule and direction of ensuing action 
toward revisions of media ownership rules. 
 RESPONSE:  The key issue discussed has been how cha nges in the market have affected the 
diversity of media sources. Background on this pr oceeding, including schedul es, where available, can 
be found here:  http://www.fcc.gov/ownership/. 
 Many of these workshops are webcast live and representatives of WTO member countries are 
welcome to log on. 
 
(5) Professional and Business Services 
(i) Introduction 
 Question 48:  H1-b (p.110, para 132) 
According to the Secretariat’s report, the annual cap on H-1B admissions is 65,000 per fiscal year 
plus an additional 20,000 forei gn nationals holding a master's degree or higher from a U.S. 
university. Japan would like the United States to exp lain the reason for this regulation, and the 
possibility of relaxation or removal of this regulation.  
RESPONSE:   Numerical limitations for the H-1B program  are established through legislation.  The 
U.S. Congress took note of the fact that there are a large number of foreign students graduating with 
higher degrees from U.S. universities, who wish to become residents of the United States and who are highly sought after by U.S. companies.  The additio nal 20,000 allows such students to take jobs and 
remain in the United States while they are waiting to  receive green cards.  We are not aware of any 
intention to remove this provision of law. 
 
(iii) Legal services 
 
Question 49:  Acceptance of Foreign Lawyers as Fo reign Legal Consultants in Every State (p.114, 
para 140) In the United States, only thirty States and the Di strict of Columbia accept foreign lawyers as foreign 
legal consultants (FLCs), including the states of Iowa and Virginia which have been added to the list 
according to recent information by the Government of the United Stat es, and all the other States do 
not allow foreign lawyers to practice therein (the  remaining twenty states).  For the purpose of  WT/TPR/M/235/Add.1 
 Page 285 
 
 
 facilitating international trade and investment, a ll states should accept foreign qualified lawyers as 
FLCs.  Legal services play an important role in the U. S. market in terms of the market occupation.  In 
addition, the increase of foreign legal services will provide more business opportunities to all states 
equally.  It would be appreciated if the U.S. Government would provide some feedback on this 
regulation and explain how cons ultation with the ABA, state governments and the Supreme Court is 
proceeding with regard to FLCs and future plans of accepting FLCs. 
 
RESPONSE:   The federal government continues to suppor t the continued expansion of FLC rules in 
U.S. jurisdictions.  As mentioned in the report, the states with FLC rules represent 88 percent of the 
U.S. market for legal services as measured by GDP.  The impetus for considering FLC rules within a 
state is generally provided by a recognized demand. Adoption of FLC rules has progressed rapidly 
over the last decade due to a number of states with significant legal services trade recognizing their 
self-interest in providing an FLC option.  Conversely, consultations with states without FLC rules indicate a lack of specific expressed interest in th ese states by foreign lawyers, and therefore little 
incentive for adopting rule changes.   
 
Question 50:  Period of Practicing Experience Re quired for Acceptance of Foreign Lawyers as 
FLCs (p.114, para 140) Regarding the period of practicing experience that is required for foreign lawyers to be qualified as 
FLCs, the Government of Japan was informed by th e Government of the United States that the ABA 
amended the Model Rule in August 2006 to abolis h the requirement for practicing experience in the 
period immediately preceding the date of applicati on, to shorten the required period of practicing 
experience to five years, and to accept practicing experience in any country including a third country. 
The Government of Japan welcomes this positi ve move and requests the Government of the 
United States to continue its efforts to reduce th e period of practicing experience, to abolish the 
Requirement for Practicing Experience in the Period I mmediately Preceding the Date of Application, 
and to include Practicing Experience in a Third Country in all states.  
In this regard, please explain the concrete meas ures which the U.S. government has taken and the 
results of its consultations with the ABA, stat e governments, and the Supreme Court regarding the 
reform of rules for FLCs. 
 
RESPONSE:  While the U.S. government has no authority with respect to the adoption and revision 
of FLC rules, it regularly consults with stakeholders  about the trade interests of foreign governments.  
However, as indicated in the response to question 49, the states are generally motivated by the self-
interest of a robust business and trade environment, supported by an open legal services market that 
serves the public interest.  In this respect, th e regulatory “competition” among states acts as an 
incentive to regularly evaluate the effectiveness and efficiency of certain rules, and it can be noted 
that the more recent FLC rules are among the most pe rmissive with respect to the “experience” issues 
highlighted in the question.  The potential for revisi on of existing rules is enhanced by the fact that 
disciplinary actions related to FLCs have been rare.    
 
U.S. REPORT 
 IV. TRADE POLICY DEVELOPMENTS SINCE 2008 
(1) WTO Agreements and Initiatives 
(i) The Doha Development Agenda  
Question 51:  Market Access (p.18, para 69) 
Regarding services negotiations, Japan has been strongly interested in the United States’ new 
initiatives “that focus on improved packages in  services (providing new market access in key 
infrastructure services secto rs such as financial services, information and communications 
technology, distribution, energy and express delivery).” Japan would like the United States to provide WT/TPR/M/235/Add.1 
Page 286 
 
 
 detailed descriptions on:  (1) how to create subst antive “new market access” by an improved package 
beyond mere aggregation of existing services se ctors and (2) the way to ensure the active 
participation of emerging countries, which is c onsidered an indispensable element for its success. 
 
RESPONSE:   The TPR is not the most appropriate forum for discussing ongoing market access 
negotiations.  We believe that emerging economi es and indeed all Members will benefit from 
improving market access for services in general and infrastructure services in particular.  Efforts to 
focus the negotiations on key areas that promote sust ainable economic development can be helpful in 
encouraging emerging countries to take a more active role.  VI. TRADE AND THE ENVIRONMENT  Question 52:  Lacey Act (p.32, para 153)  
The Administration’s work on addressing the issue of  illegal logging and associated trade is 
mentioned in the U.S. Government’s report (Sec tion VI, paragraph 153).  Japan assumes that the 
implementation of the Lacey Act amendment is one of  such efforts. Japan would like to know if there 
have been any cases in which the importation of wood products was rejected because the import 
application did not comply with the amended Lacey Act requirements. 
 RESPONSE:  The amendments to the Lacey Act expand the statute’s prohibitions against trafficking 
in illegally harvested wildlife and plants to a broader group of plants, including timber and wood 
products.  Therefore, Japan is correct that implemen tation of the amended Lace y Act is related to the 
activities described in Section VI, paragraph 15 3.  The amended Lacey Act also introduced a 
requirement for a plant import declaration that is be ing enforced in a careful, measured fashion that 
includes a phased approach.  In pa rt, this is to avoid unnecessary disruptions to trade in legally 
harvested products.  Shipments not in compliance w ith the law may be refused entry or, in certain 
cases, seized.  Such enforcement decisions are made on a case-by-case basis, as is the case with any 
other violation of customs entry requirements.  To  date, we are not aware of any cases in which an 
importation of wood products was refused entry based  on the requirements of the amended Lacey Act.  WT/TPR/M/235/Add.1 
 Page 287 
 
 
 REPUBLIC OF KOREA 
 
Question 1:  Secretariat Report, pages 5-6, paragraphs 10-17  To counteract the global financial crisis, governme nts around the world have cut their key interest 
rates to the lowest level, while implementing enor mous fiscal stimulus packages at the same time. 
 As a result, severe economic slowdown has been prevented. As the current debates on double-dip 
recession show, however, the recovery in the private sector is still so weak that the expansionary 
macroeconomic policy is likely to continue over a considerable period of time.  
However, such expansionary macro economic policy can have significant impact on national trade as 
in the case of the United States in 1980’s. How does the U.S. government evaluate these effects? 
 
RESPONSE:   The current experience is very different from the 1980s.  The recession that ended in 
late 1982 was related to a very tight monetary policy th at drove interest rates, especially real interest 
rates, to extremely high levels.  The policy was ne cessary to bring down the very high inflation rate.  
The high real interest rates had an impact on the va lue of the dollar that had lasting effects on the U.S. 
trade-sensitive sectors.  The current  recession was not caused by monetary policy tightening.  It was, 
instead, related to financial market dislocations th at interfered with the basic function of allocating 
credit.  The current U.S. policy of fiscal expansion, with a credible long-term strategy of fiscal consolidation, will not lead to the same effects th at were seen post 1982.  World trade contracted 
significantly in late 2008;  the expansionary polici es of the U.S. and other countries, through the G20 
coordination process, were instrumental in reviving world trade and sparking a recovery.  Question 2:  Secretariat Report, pages 29-30, paragraph 50  The U.S. Court of Appeals for the Federal Ci rcuit reversed a decision by the U.S. Court of 
International Trade that the Byrd Amendment’ s so-called “petition support requirement” was 
unconstitutional and the U. S. Supreme Court was asked to review this decision in late 2009. 
 
1. Could the U.S. elaborate on the rationale behi nd the reversal by the U.S. Court of Appeals for 
the Federal Circuit of the decision by the U.S. Court of International Trade?  
RESPONSE:   The rationale is stated by the Court of A ppeals for the Federal Circuit in its opinions, 
which are available on its webs ite at www.cafc.uscourts.gov. 
 
2. Could the U.S. provide further details regar ding any development of the review process by 
the U.S. Supreme Court? 
 
RESPONSE:  On May 17, 2010, the Supreme Court of the United States denied the plaintiff’s 
petition for certiorari, as a result of which the decision  of the Court of Appeals for the Federal Circuit 
is final.  No further review process is available to any party. 
 
Question 3:  Secretariat Report, page 45, paragraphs 123-124  
 
In March 2009, the U.S. government launche d the Food Safety Working Group to advise the 
President on food safety system. What are the chan ges in the U.S. import policy as a result of the 
activities of the Working Group?  
RESPONSE:   The President’s Food Safety Working Group has initiated advances to protect the U.S. 
food supply from microbial contamination, reduc ing exposure to Salmone lla, and developed new 
standards for Campylobacter in poultry and issu es new guidelines for controlling E. coli O157:H7 on WT/TPR/M/235/Add.1 
Page 288 
 
 
 cattle farms.  In addition, the U.S. Food and Dr ug Administration, at the request of the SWG, 
launched the Reportable Food Registry (RFR), an electronic portal for industry and public health 
officials to report when there is reasonable pr obability that a food item will cause serious adverse 
health consequences.  Question 4:  Secretariat Report, page 82, paragraph 10  
 
The United States is implementing the Counter-Cycl ical Payment (CCP) Program that compensates 
for the difference between the effective price whic h is based on current market price and the target 
price which is set out in the Farm Act for each  product. The U.S. government has notified the CCP 
Program as non-product sp ecific AMS to the WTO. 
 1. What was the reason for the CCP program  being notified as non-product-specific AMS? 
 
RESPONSE:  CCPs are received based on fixed historical area and yields (i.e., past production), not 
current production.  Because any eligible crop can be grown on the base acres, payments cannot be 
ascribed to a specific product. 
 
2. Will the CCP program continue to be notified as non-product-specific AM S even in the case 
where product-specific AMS limit is introduced after th e completion of the DDA as prescribed in the 
current text of the draft modalities for agriculture? 
 RESPONSE:  It is premature to speculate how program s would be notified until an agreement is 
concluded.  Notwithstanding, u nder the current draft DOHA text, it is expected that the CCP will 
qualify as a blue box program, and if so, would likely be classified as such. 
 
Question 5:  Secretariat Report, page 83, paragraph 14  
 
The 2008 Farm Act introduced the Average  Crop Revenue Election (ACRE) Program. 
 
1. Which products are subject to the ACRE Program?  
RESPONSE:  The commodities eligible for ACRE payments are:  barley, corn, grain sorghum, oats, 
canola, crambe, flaxseed, mustard seed, rapeseed, safflower, sesame seed, sunflower seed, peanuts, 
long grain rice, medium grain rice (which includes short grain rice and excludes wild rice), soybeans, 
upland cotton, wheat, dry p eas, lentils, small chickpeas, and large chickpeas. 
 
2. When the subsidy payment record under the Program is notified to the WTO, will it be 
categorized into non-product-specific AMS? 
 
RESPONSE:  The ACRE program only began in 2009, and thus has not yet been notified to the 
WTO under the AoA.  It is premature to speculate about how this new program will be notified in the 
future.  ACRE will be notified in full consideration of our WTO obligations. 
 Question 6:  Secretariat Report, page 83, paragraph 16  
 According to the Inside U.S. Trade of May 21,  2010, the National Milk Producers Federation is 
known to have recommended to the U.S. government  to abolish the current market price support for 
dairy products and replace it with the two-phase insurance program.  
1. Is such program Green Box or Amber Box? 
 2. What are the details of the program? W ill the program be introduced in the future?  WT/TPR/M/235/Add.1 
 Page 289 
 
 
 RESPONSE:  Like many agricultural organizations, the National Milk Producers Federation has been 
considering possible changes in U.S. farm progr ams as part of the upcoming discussion of the new 
Farm Bill.  Details can be found on its website  (www.nmfp.org) under the topic “Foundation for the 
Future”.  The U.S. Congress writes the Farm Bill and no doubt will assess the advice provided by NMFP. 
 
REPUBLIC OF KOREA SUBSEQUENT QUESTIONS 
 
Question 1:  Secretariat Report, page 36, paragraph 82  
 
The Republic of Korea expressed its concerns regarding the proposed amendment of the U.S. 
Hazardous Materials Regulations on the transporta tion of lithium cells and batteries at the WTO TBT 
Committee in March 2010.  
The Republic of Korea would like to encourage the United States once again to adopt measures that 
are consistent with the relevant international standards, such as the UN Recommendation on the 
Transport of Dangerous Goods and th e ICAO Technical Instructions. 
 Even if it is considered inevitable to strengthen th e regulation, the Korean government is of the view 
that batteries that are less than 50% charged sh ould be exempted from the regulation. Korea’s 
domestic test results show that batteries that are l ess than 50% charged are safe even when they are 
transported by air.  What is th e U.S. government’s view on this? 
 
RESPONSE:  The United States would refer Korea to the minutes of the March and June 2010 
meetings of the WTO Committee on Technical Barriers to Trade.  At those meetings, the United 
States addressed issues related to a PHMSA Notic e of Proposed Rulemaking (Hazardous Materials:  
Revisions to Requirements for the Transportation of Lithium Batteries, RIN 2137-AE44
) in some 
detail.  The United States is considering the co mments submitted by Korea and Korean industry as 
part of the ongoing rulemaking process.    
 
Question 2:  Secretariat Report, page 37, paragraph 86 
 
The U.S. seems to have an increasing number of su b-federal standards and technical regulations. 
Why are sub-federal standards and regul ations increasing recently in the U.S.? 
 
RESPONSE:   We do not believe that the number of sub -federal measures is increasing;  rather, the 
United States has improved its notification practices  with respect to sub-federal measures over the 
past few years so that we are no tifying to the WTO more frequently. 
 What is the U.S. government’s assessment of thei r impact on trade vis–a-vis the federal standards and 
regulations? 
 RESPONSE:   This question cannot be answered without more specificity from Korea . 
 
Question 3:  Secretariat Report, page 37, paragraph 89 
 
During the period under review, the United States e nacted the Consumer Product Safety Improvement 
Act (CPSIA), which includes new regulatory re quirements concerning 15,000 consumer products, 
after a series of recalls of toys and other children’s products in 2007 and 2008. 
 In July 2010, the U.S. House of Rep resentatives passed the Foreign Manufacturers Legal 
Accountability Act, which requires foreign manufactu rers of products imported into the United States WT/TPR/M/235/Add.1 
Page 290 
 
 
 to establish registered agents in the United States, as a means to protect U.S. consumers from low-
quality imported goods. 
 
Many small- and medium-sized companies will fi nd it difficult to establish either temporary or 
permanent agents in the United States for reas ons pertaining to both money and personnel. 
 
This could affect foreign companies which export products to the United States, and consequently 
have an impact on U.S. manufacturers that depend on imported raw materials. 
 There is no doubt that this Act was enacted for a leg itimate cause of the protection of U.S. consumers. 
However, there are concerns that it could serve as  a new type of non-tariff barrier in regards to 
exports to the United States.  
What is the U.S. government's opinion on the eval uation that this requirement violates Articles 3 and 
11 of the GATT which stipulate that importing par ties must offer national treatment to imported 
products and must not impose prohibitions or restri ctions on imported products other than tariffs, 
taxes and other charges?  
RESPONSE:   The proposed Foreign Manufacturers Legal Accountability Act, as reflected in bills 
pending before the U.S. Congress, reflects a desire to ensure that consumer s in the United States can 
be confident that the products they buy are safe a nd that there are procedures available under U.S. law 
to address effectively any product liability issues th ey may engender.  The United States believes 
these goals can be accomplished without imposing undue burdens on foreign manufacturers.  The 
FMLAA is still pending before Congress.  We are not in a position to speculate on the implications of 
particular provisions which are subject to further review and possible modification in the United 
States Congress.  WT/TPR/M/235/Add.1 
 Page 291 
 
 
 MALAYSIA 
 TRADE AND INVESTMENT POLICY FRAMEWORK Page 12, paragraph 6 
 
To support economic growth, the P resident’s 2010 State of the Union Address defines four priorities: 
financial sector reform, support for American innovati on;  increased exports;  and investment in skills 
and education.    
Question 1:  Please explain what “suppo rt for American innovation” entails.  
 Question 2:  In what sectors specifica lly is this support provided for? 
 
RESPONSE:  Please see the response to Question 3 below.  
 
Question 3:  What is the timeframe for this support? 
 
RESPONSE:   In September 2009, the Obama Administration announced its “Strategy for American 
Innovation”, which aims to create favorable conditions for growth through pro-innovation policies, 
while not picking winners and losers – an approach th at can result in bad decisions, wasted resources 
and stifling, rather than promoting,  innovation.  As part of this stra tegy, the Administration is working 
to ensure that the Federal Government is att uned to trends in U.S. industry and the global 
marketplace, and to achieve a business and polic y environment in which innovative and productive 
U.S. businesses have the tools, oppor tunities, and support to compete in the global marketplace. More 
information about the Administrations “Strateg y for American Innovation” can be found at:  
http://www.whitehouse.gov/the_press_office/preside nt-obama-lays-out-strategy-for-american-
innovation/. 
 
Page 13, paragraph 8  The Trade Promotion Authority (TPA) expired in  July 2007. The 2010 Trade Policy Agenda does not 
contain any reference to the TPA. The Admini stration will work with Congress on new trade 
negotiating authority at an appropriate time.   Question 4:  We would appreciate if the U.S. could share its views if the TPA would be required in concluding the Doha Round negotiations.  
 RESPONSE:   There is broad support in the U.S. Congress for an ambitious, balanced result from the 
Doha Round negotiations.  Thus, the mechanics of  obtaining Congressional approval of the outcome 
of these negotiations begin with securing a strong result – one that achieves new trade flows and 
opens markets in agriculture, NAMA and services.  W ith the prospect of an ambitious agreement that 
provides new market access, the U.S. Congress as well as the legislatures of other WTO Members 
would have a strong incentive to a pprove and implement the outcome. 
 
Page 13, paragraph 9  Under the Trade Adjustment Assistance (TAA)  programme, workers, firms and farmers adversely 
affected by international trade are eligible for benefits which were expanded by the American 
Recovery and Reinvestment Act. Service sectors workers and workers from firms that relocate outside 
the United States are eligible for the benefits.   Question 5:  Can the United States explain in deta il the eligibility criteria and the benefits afforded to 
these workers?  WT/TPR/M/235/Add.1 
Page 292 
 
 
 RESPONSE:  Application Process - Applications for the Trade Act Program as amended by the 
Trade and Globalization Adjustment Assistance Act of 2009 have two distinct phases:  
• To obtain TAA reemployment services and benef its a group of workers must first file a 
petition with the U.S Department of Labor requesting certification as workers adversely 
affected by foreign trade.  If the worker gr oup meets the necessary group eligibility criteria a 
certification will be issued. 
• After a group certification is issued each worker in the group may then individually apply for 
services and benefits through their local One-Stop Career Center (http://www.doleta.gov/ usworkforce/onestop/onestopmap.cfm) to determ ine individual TAA eligibility for services 
and benefits. 
 
ELIGIBILITY FOR TAA  
 
All Petitions for TAA are filed with Office of Trad e Adjustment Assistance (OTAA) at the U.S. 
Department of Labor.  OTAA has sole responsibility for conducting a fact finding investigation to 
determine whether group eligibility criteria have been  met and issues official notice of its decision 
within 40 days after the petition has been filed.  In order for OTAA to issue a Certification Re garding Group Eligibility to Apply for Trade 
Adjustment Assistance, certain requirements must be met, including: 
 
 (1) Workers have been totally or partially laid off or that worker layoffs have been 
 planned, and   (a)  Increased imports of articles or services, or   (b)  A shift in production of articles or an acquisition of services from any foreign 
  country, or 
  (c)  Loss of business from a customer with TAA-certified workers, and   (d)  These trade effects have contributed  importantly to worker separations;  or 
(2) Workers are employed by a company identified in an affirmative finding of injury by the 
International Trade Commission (ITC). 
 
Once the OTAA issues a Certification Regarding Group Eligibility, workers in that certified worker 
group may apply individually for benefits and services through their local One-Stop Career Center.  When a determination by the OTAA states that workers who petitioned do not meet the group eligibility requirements under this program, work ers may obtain benefits and services from other job 
training programs such as the Workforce Investment Act (WIA).  
 
Group TAA Eligibility Requirements 
 
After receiving a TAA petition, OTAA investigators gather and analyze the facts to determine if the 
eligibility requirements are met.  Th ese requirements are summarized as follows: 
 1. The workers' company produces a product or su pplies a service or the workers' employer is a 
public agency that supplies a service;  AND   2. A required minimum of the workforce has been laid off in the 12 months preceding the date 
of the petition or is threatened with layoffs (3 wo rkers in groups of fewer than 50 or 5% of the 
workforce in groups of 50 or more);  AND   3. At least one of the following:   WT/TPR/M/235/Add.1 
 Page 293 
 
 
  i. Increased imports of articles or services contributed importantly to an actual decline 
  in sales or production of like or directly competitive articles or services at the    workers' firm and to the workers' layoff or threat of a layoff;  OR   ii. Increased imports of articles like or directly competitive with articles produced  
  directly using services provided by the workers' firm contributed importantly to an 
  actual decline in sales or production at the workers' firm and to the workers' layoff or   threat of a layoff;  OR   iii. Increased imports of articles have contribut ed importantly to an actual decline in sales 
  or production at the workers' firm and to th e layoff or threat of a layoff at the workers' 
  firm of workers who produce component parts for like or directly competitive  
  articles;  OR   iv. A shift in the production of articles or supply of services to a country outside the    United States contributed importantly to the workers' layoff or threat of a layoff;  OR   v. The workers' firm's loss of business as  a supplier or downstream producer to a TAA-
  certified firm contributed importantly to an actual decline in sales or production at the 
  workers' firm and to the workers' layoff or threat of a layoff;  OR  
 vi. The acquisition of services from a foreign country by a public agency has contributed 
  importantly to a layoff or threat of a layoff of workers of the public agency.  
 Worker groups also may be certified if the work ers are employed by a company identified in an 
affirmative finding of injury by the Internationa l Trade Commission (ITC).  Where the ITC has made 
such a finding the three criteria above are not required for certification. 
 
Denial of a Petition 
 Workers who are denied certification may request administrative reconsideration from the OTAA.  
Requests for reconsideration must:  (1) be in writing;   (2) include the TAA investigation number;  (3) 
be signed;  and (4) describe the group of workers included in the petition. Requests must also cite 
reasons why the workers consider the denial erroneou s according to the facts, the interpretation of the 
facts, or the law itself.  Reconsideration request s must be filed with the OTAA within 30 days. 
 Benefits in the New TAA for Workers Program 
 
As part of the American Recovery and Reinv estment Act of 2009, the Trade and Globalization 
Adjustment Assistance Act (TGAAA) reauthorized  Trade Adjustment Assistance (TAA) programs.  
This included and expansion of T AA coverage to more workers and firms, including workers and 
firms in the service sectors for the first time;  made  benefits available to workers whose jobs have 
been sent "off-shore" to another country (as opposed to covering a more limited set of shifts in 
production);  improved workers' trai ning options;  and increased the affordability of health insurance 
coverage.  Below is a description of the major changes to the TAA for Workers program, including 
benefits coverage.  (More information on the TAA fo r Workers program is available at the following 
website:  http://www.doleta.gov/tradeact/ChangesFAQ.cfm#3) 
 
Old TAA for Workers Program  New TAA for Workers Program  
Group Eligibility 
• Workers must be associated with the 
production of an article in order to be eligible. 
• Shifts in production must be to a country 
that has specified tr ade agreements with 
the U.S. or accompanied by an actual or Group Eligibility 
• Expands TAA coverage to service sector 
workers whose job loss is related to increased imports of services, shifts in the provision of services to foreign countries, or who provide a service to a TAA-certified firm.  WT/TPR/M/235/Add.1 
Page 294 
 
 
 likely increase in imports to be covered. 
• Workers at downstream producers that are 
secondarily affected by increased imports from, or a shift in production to, countries 
other than Canada or Mexico are not 
eligible. • Expands eligibility to workers in public 
agencies. 
• Expands TAA eligibility to shifts in 
production or shifts in location of service to all countries, without the need to prove 
increased imports.  
• Eliminates the requirement that 
downstream secondary worker dislocations be related to trade with Canada or Mexico. 
• Provides automatic certification of 
petitions filed for worker groups 
employed by a company identified in an 
affirmative finding of injury by the ITC. 
• Allows for components of products to be 
certified based on increased imports of finished products. 
Trade Readjustment Allowances (TRA)  
• Up to 104 weeks of cash payments for 
workers enrolled in full-time training  
• Up to 130 weeks of cash payments if the 
worker was also enrolled in remedial training  Trade Readjustment Allowances (TRA) 
 
• Up to 130 weeks of cash payments for 
workers enrolled in full-time training  
• Up to 156 weeks of cash payments if the 
worker was also enrolled in remedial training  
Training Enrollment Deadlines  
• Workers must be enrolled in training 8 
weeks after certification or 16 weeks 
after layoff, whichever is later, in order to 
receive TRA Training Enrollment Deadlines 
 
• Workers must be enrolled in training 26 
weeks after certification or layoff, 
whichever is later, in order to receive 
TRA 
Job Search Allowances  
• 90% of allowable costs, up to $1,250 Job Search Allowances 
 
• 100% of allowable costs, up to $1,500  
Relocation Allowances 
 
• 90% of costs, up to the statutory limit for 
Federal Employees  
• Provides an additional lump sum payment 
of up to $1,250 Relocation Allowances 
 
• 100% of costs, up to the statutory limit for 
Federal Employees  
• Provides an additional lump sum payment 
of up to $1,500  
Training Services  
• Training may only be approved on a full-
time basis 
• Certified workers may not begin approved 
training until they have been totally or 
partially separated from adversely 
affected employment Training Services 
 
• Training may be approved on a full-time 
or part-time basis, although full-time training is required for TRA eligibility.  
• Certified workers may begin approved 
training when threatened with separation 
from adversely affected employment  WT/TPR/M/235/Add.1 
 Page 295 
 
 
 Health Coverage Tax Credit (HCTC) 
 
• Prior to May 2009, a tax credit covering 
up to 65% of an eligible participant's 
monthly qualifying health insurance 
premium 
• Beginning May 2009, the tax credit will 
be raised for all participants to cover 80% of an eligible participant's monthly qualifying health insurance premium  Health Coverage Tax Credit (HCTC) 
 
• A tax credit covering 80% of an eligible 
participant's monthly qualifying health 
insurance premium  
Alternative Trade Adjustment Assistance 
 
• Available to workers 50 years of age or 
older 
• Requires a separate certification of group 
eligibility 
• Workers may not participate in TAA-
approved training  
• Requires full-time employment within 26 
weeks of separation 
• Available only for workers earning less 
than $50,000 per year in reemployment 
• Maximum benefit of $10,000 over a 
period of up to two years 
• Participants are eligible for the HCTC Reemployment Trade Adjustment Assistance 
 
• Available to workers 50 years of age or 
older 
• Does not require a separate certification 
of group eligibility 
• Workers may participate in TAA- 
approved training  
• Requires full-time employment, unless 
the worker is also enrolled in TAA-
approved training and employed at least 
20 hours per week, and does not set a deadline for reemployment  
• Available only for workers earning less 
than $55,000 per year in reemployment 
• Maximum benefit of $12,000 over a 
period of up to two years 
• Participants are eligible for the HCTC 
 
Question 6:  Is there a specific time fr ame for this adjustment assistance?  
 
RESPONSE:  Workers have to file a trade adjustment assi stance petition within one-year of their lay-
off.  As for how long workers receive benefits, this  depends on the type of assistance, as outlined in 
response to Question 5. 
 
Question 7:  How would assessment of benefits be  undertaken on the worker s that have relocated 
outside the United States?  
 RESPONSE:  Trade Adjustment Assistance program s only apply to U.S. workers. 
 
Page 16, paragraph 23  
In November 2009, President Obama announced that  the United States “will be engaging with the 
Trans-Pacific Partnership countries with the goal  of shaping a regional agreement that will have 
broad-based membership and the high standards worthy of a 21
st century trade agreement”. 
 WT/TPR/M/235/Add.1 
Page 296 
 
 
 Question 8:  Can the United States please share how it plans to achieve a 21st trade century trade 
agreement worthy of high standards? 
RESPONSE:  The United States is working with the other TPP parties to shape a high-standard, 
regional agreement that responds to th e challenges that businesses face in the 21st century.  We are 
considering including innovative elements in the ag reement that will make the regulatory systems of 
the TPP countries operate together more coherently  to help address regulatory and other non-tariff 
measures that increasingly are the main problems th at businesses face operating in foreign markets 
and to help address common concerns, such as food safety.  We also are looking at including new 
elements that enhance the ability of small- and me dium-sized businesses to export.  In addition, we 
are seeking to incorporate new ideas are transpar ency, environmental protection and conservation, 
worker rights, and development.  Question 9:  How does the United States view the TPP as a building block to the multilateral trading 
system?   
RESPONSE:   The core objective of U.S. trade policy is  to open markets and to advance the rule of 
law in the multilateral trading system, as it has been  since before the founding of the GATT.  A strong 
and vital WTO is central to that task.  The Unite d States also pursues bilateral and regional free trade 
agreements (FTAs) that are complementary to an d compatible with advancing the goals of the 
multilateral trading system.  U.S. FTAs, because of their comprehensive duty-elimination and breadth 
of commitments, produce significant benefits for its partners, and, through th e economic growth this 
brings, for other trading partners as well.  This  also strengthens and expands the forces working 
towards global trade reforms.  The liberalization unde rtaken by many of our FTA partners has often 
led those Members to increased participation in libera lizing efforts at the WTO.  Our approach to the 
TPP is guided by these principles. 
 
TRADE POLICIES AND PRACTICES BY MEASURE 
Page 20, paragraph 6 
 The average release time for U.S. imports is among the shortest in the world.   Question 10:  What is the average release time and it is benchmarked against any international 
standard? Is the timing the same for all ports of entry?  
 RESPONSE:  For shipments arriving by air, the average re lease time is 0.1 days if entry information 
was filed prior to arrival or on the same day;  and 2.8 days when entry information was filed after the 
day of arrival.   
For shipments arriving by sea, the average release ti me is -0.3 days if entry information was filed 
prior to arrival;  in other words, these goods are,  on average, released prior to arrival in the 
United States.  For shipments where entry information was filed on the day of arrival, average release 
time is 0.1 days. For those shipments where entry information is filed after the date of arrival, the average release time is 2.2 days.  
 
No data is available for imports in the truck and railroad environments, nor is this data broken down 
by port of entry. This data is not benc hmarked against any international standard. 
 
DEVELOPMENT IN SELECTED SECTORS  Page 103, paragraph 94 
 
The United States has not tabled an offer with respect to maritime transport services in its offer on 
services in the Doha Development Agenda.    WT/TPR/M/235/Add.1 
 Page 297 
 
 
 Question 11:  Could the United States please provide the justification as to why it has not tabled an 
offer on maritime transportation for the Doha Round?    
 REPONSE:   The TPR is not a negotiating forum.  Requ ests made in the context of the DDA services 
negotiations should be taken up in that forum.  WT/TPR/M/235/Add.1 
Page 298 
 
 
 MEXICO 
 
IV.  Development in Selected Sectors 
(2) Financial Services  
 1. Paragraph 58 indicates that there are some limita tions at the state level on the acquisition or 
establishment of banks, as well as on the establishment of branches or agencies.   What are these 
limitations?  
 RESPONSE:  Please refer to the GATS schedule of the United States. 
 
2. Paragraph 65 indicates that in May 2010 the Department of the Treasury notified Congress 
that the projected overall cost of TARP would total US$105.4 billion.   Could you specify the amount 
of this relief as a percentage of the Gross Domest ic Product and the total assets of the U.S. financial 
system?  
 
RESPONSE:  The amount of US$105.4 billion represents approximately 0.7% of U.S. GDP and 
0.7% of the assets of the U.S. banking system. 
 
3. Paragraph 70 details the objectives of the comprehensive financial regulatory reform 
proposal and indicates that this legislation had no t been passed by Congress as of June 2010.  We 
understand that this proposal has now been passed by the U.S. Congress.  Could you indicate the 
changes Congress introduced in the reform origi nally submitted by the Obama Administration?  
 
RESPONSE:  In the spring of 2009, President Obama pr oposed comprehensive financial reform to 
create a more stable financial system with stronger  protections for American families and businesses.  
The language of the original legislative proposal wa s substantially revised dur ing the course of the 
complicated and prolonged legislative process.  However, the Dodd-Frank Act accomplishes the 
original objectives of financial reform th at were identified by President Obama.  
 
(3) Transport 
 4. Paragraph 77 indicates that the funds provided under the American Recovery and 
Reinvestment Act (ARRA) of 2009, specifically to th e Federal Aviation Administration for airports, 
require that the steel and manufactured goods used in the projects must be produced in the United 
States.   Could you explain to what extent this provision could violate U.S. commitments on public 
contracting and those established in its regional agreements  
 
RESPONSE:  The funds for airports under the American Recovery and Reinvestment Act of 2009 
(ARRA), referred to in Paragraph 77, are provided to sub-federal entities through grants for airport 
projects.  In the Agreement on Government Proc urement, the United States takes the following 
exception in Note 1 to Annex 3 of Appendix I:  “ With respect to these entiti es, the Agreement shall 
not apply to restrictions attached to Federal funds for airport projects .”  Where regional agreements 
cover the same entities, a similar provision is incl uded in U.S. commitments.  The “Buy American” 
requirement in ARRA is applied consistent with U.S. obligations  under international agreements. 
 5. Paragraph 82 notes that in order to provide air transport services it is necessary to obtain 
two separate authorizations from the Department of  Transportation (DOT):  economic authority from 
the Office of the Secretary of Transportation, and  "safety" authority from the Federal Aviation 
Administration (FAA).   Of what does each of these authorizations consist?  
 
RESPONSE:  The two forms of economic authority granted by the Department to foreign air carriers 
are: (1) a foreign air carrier permit, under 49 U. S.C. 41301, and (2) an exemption from the permit  WT/TPR/M/235/Add.1 
 Page 299 
 
 
 requirement under 49 U.S.C. 40109. The foreign air carrier permit is the more permanent license, 
typically having a duration coextensive with the term s of the applicable bilateral aviation agreement 
between the United States and the applicant’s homela nd, or, if there is no agreement, a duration of 
five years.  The safety authority from the Federa l Aviation Administration consists of Operations 
Specifications.  
 
6. Paragraph 83 indicates that it is mandatory for U.S. air carriers to be in the hands of U.S. 
citizens and that non-U.S. citizens may not hold more than 25% of the capital in a U.S. air carrier.  
The Department of Transportation may, however, aut horize foreign capital investments above that 
percentage.   Under what circumstances is this authoriza tion granted and what are the requirements 
for non-U.S. citizens to increase their investment above the limit established?  
 
RESPONSE:  The circumstances in which such an author ization can be granted are described in 
paragraph 83 of the report.  The Department of Transportation may, on a case-by-case basis, allow 
total foreign equity investments (voting and non-vot ing) above 25%, as long as actual control remains 
in the hands of U.S. citizens.  In all cases, the pr esident and two thirds of the board of directors and 
other managing officers must also be U.S. citizens. 
 
(ii) Maritime  Transport 
 
7. Paragraph 93 notes that the Federal Mar itime Commission (FMC) is responsible for the 
implementation of an alternative competition reg ime for maritime transport companies and marine 
terminal operators.  What is this alternative compet ition regime?   It also notes that the Commission 
is responsible for applying and monitoring the la ws to identify unreas onable practices.  What 
practices are considered unreasonable?  
 RESPONSE:  The Federal Maritime Commission (FMC) regulates the operations of common 
carriers and other persons engaged in U.S. foreign oceanborne common carriage.  Agreements by and 
among ocean common carriers and marine terminal operators that are filed with the FMC, are exempt from U.S. antitrust laws, but subject to the FMC's re view and evaluation to ensure that they are not 
likely, by reduction in competition, to result in unreasonable increases in transportation cost or 
unreasonable reductions in service, or they otherwise violate the Shipping Act. 46 U.S.C. sections 
40101-41309.  In addition to evaluating and monitoring agreements among ocean common carriers and marine terminal operators, the Commission is also respons ible for ensuring that individual carriers and 
marine terminal operators, as well as those permitte d by agreement to act in concert, treat shippers 
and other members of the shipping public fairly by not engaging in activity prohibited by the Shipping 
Act.  For example, the Shipping Act prohibits an y common carrier, ocean transportation intermediary, 
or marine terminal operator from failing to est ablish, observe, and enforce just and reasonable 
regulations and practices relating to or connected with receiving, handling, storing, or delivering 
property.  46 U.S.C. section 41102(c). 
 
Furthermore, the FMC is authorized to take action to  ensure that the foreign commerce of the U.S. is 
not burdened by non-market barriers to ocean shi pping.  Pursuant to 46 U.S.C. sections 42101-42109 
and 46 U.S.C. sections 42302-42307, the FMC may ta ke countervailing action to correct unfavorable 
shipping conditions in U.S. foreign commerce and may impose penalties.  The FMC may address 
actions by carriers or foreign governments that eith er adversely affect shipping in the U.S. foreign 
oceanborne trades, including the intermodal operati ons of carriers or the operations of ocean 
transportation intermediaries, or that impair access of U.S.-flag vessels to ocean trade between foreign 
ports.  
 WT/TPR/M/235/Add.1 
Page 300 
 
 
 8. Paragraph 94 indicates t hat the United States did not present any offer at the WTO 
negotiations on maritime services and also did not present commitments on the revised offer of the Doha Development Program.   Could you tell us if the U.S. Government intends to present 
commitments in maritime services in its fi nal offer for the Doha Development Program?  
 
RESPONSE:  The TPR is not a negotiating forum.  Requests made in the context of the DDA 
services negotiations should be taken up in that forum. 
 
MEXICO SUBSEQUENT QUESTIONS 1 
 Protection of intellectual property Geographical indications [GIs] 
 
1. Does any international agreement provide for the protection of foreign GIs under the 
trademark category?  Are GIs subject to certai n provisions for the protection of rights and 
recognition, as is the case for all other trademarks,  or do they have some other special protection? 
 
RESPONSE:   While the TRIPS Agreement does not require a registration system for the protection 
of GIs, the U.S. trademark system allows for the registration of signs that are GIs, as trademarks, 
certification marks, and collective marks. 
 GIs are not specifically defined within the U.S. trademark law.  The trademark system already 
provides the requisite defensive protection set forth in the GI sections of the TRIPS Agreement, as 
well as the protection provided for trademarks in the trademark section, vis-à-vis later in time GIs.  A geographic sign whose use on non-originating goods/services would be misleading or deceptive to 
consumers is not eligible for registration as a trad emark or as part of a trademark.  Geographically 
deceptive trademarks are excluded from trademark eligibility.    Complementary protection for and recognition of na mes of viticultural significance used on wine and 
spirits labels of both domestic a nd foreign origin is available under the U.S. Federal Alcohol Labeling 
Act, administered by the Alcohol Tax and Trade Bureau (TTB). 
 
Enforcement actions 
 1. With regard to item 217, how is the O ffice of the Intellectual Property Enforcement 
Coordinator (IPEC) in the Executive Office of the President structured, and what is the basis for 
requesting support and assistance from the intellectual property enforcement agencies? 
 
RESPONSE:   On October 13, 2008, the PRO-IP Act created the position of the IPEC, placing it 
within the Executive Office of the President.  Presi dent Barack Obama nomina ted Victoria A. Espinel 
as the first IPEC on September 25, 2009, and the Se nate confirmed Ms. Espine l on December 4, 2009. 
The Administration placed the IPEC within the O ffice of Management and Budget (“OMB”), in the 
Executive Office of the President.  The office of the IPEC currently consists of the IPEC, one 
permanent employee, and four employees on temporary assignment from other federal agencies, including one each from:  (1) DOC, USPTO, Office of the Solicitor;  (2) DHS, Office of Policy;  (3) 
DOJ, Civil Rights Division;  and (4) DOJ, United Stat es Attorney’s Office for the Central District of 
California (Los Angeles), Cyber and Intellectual Pr operty Crimes Section (CHIP Unit Attorney).  The 
IPEC office works with each of th e agencies that are part of the statutory interagency advisory 
committee to formulate and implement the Joint Strategic Plan. 
 
2. With regard to item 218, how does implementa tion of the laws (Webcaster Settlement Act) 
regarding payments for 2008 and 2009 Web transmissi ons work, and how is this being adjusted to 
deal with new advances on the Internet without violating personal privacy rights?  WT/TPR/M/235/Add.1 
 Page 301 
 
 
 RESPONSE:   The Webcaster Settlement Act of 2008 a nd the Webcaster Settlement Act of 2009 
(WSAs) do not contain enforcement provisions, but rather permit private sector parties to benefit from negotiated agreements that set rates, terms and conditions for webcasters who reproduce and perform 
sound recordings under section 112(e) and section 114 of the Copyright Act, title 17 of the United 
States Code.  The rates and terms in the agreements made pursuant to the WSAs are available to any 
webcasters meeting the respective eligibility conditions of the agreement, as an alternative to the rates 
and terms of any determination by the Copyright Ro yalty Judges.  The activiti es and identities of end-
users are not contemplated by the agreements re ached under the WSAs;  instead, the WSAs address 
the legitimate business-to-business activities betw een webcasters and copyright owners.   
 
In 2002, the Librarian of Congress designated Sound Exchange as the Receiving Agent for collecting 
royalty payments made by eligible non-subscr iption transmission services that ultimately are 
disbursed to sound recording copyright owners and performers under the section 112 and section 114 
statutory licenses.  The WSAs allow the Receiving Ag ent, on behalf of a ll copyright owners and 
performers, to enter into agreements with webcast ers that establish royalty terms for the performance 
of sound recordings by eligible webcast services over the Internet for a period of not more than 11 
years beginning on January 1, 2005.  In addition,  any copyright owner may enter into a voluntary 
agreement with any webcaster setting alterna tive rates and terms governing the webcaster’s 
transmission of copyrighted works owned by the c opyright owner.  Such voluntary agreements apply 
in lieu of the rates and terms negotiated by the part ies under the WSAs or the rates and terms set forth 
in any determination by the Copyright Royalty Judges. 
 The Copyright Office does not administer the rates and terms of the agreements beyond the publication in the Federal Register  of the agreements negotiated under the WSAs, thereby making the 
rates and terms in the agreements available to any webcasters meeting the respective eligibility 
conditions of the agreement as an alternative to the rates and terms of any determination by the 
Copyright Royalty Judges.  For this reason, questio ns regarding the rates and terms set forth in the 
agreements should be directed to the parties th at negotiated agreements under the WSAs, such as 
SoundExchange (for contact information, see http ://www.soundexchange.com) or one of the several 
webcasters with whom SoundExchange negotiated. 
 3. With regard to item 223, we would appreciate a brief overview of what is contained in the 
2007-2012 USPTO Strategic Plan.  
RESPONSE:   A link to a summary of the 2007-2012 USPTO Strategic Plan can be located on the 
web at:  http://www.uspto.gov/web/offices/com/st rat2007/stratplan2007-201 2_brochure.pdf.  In 
addition, the draft 2010-2015 USPTO Strategic Plan  has been posted on th e USPTO website at:  
http://www.uspto.gov/about/stratplan/index.jsp and the fi nal version will be released in the near term.  
The 2010-2015 Strategic Plan is designed to st rengthen the capacity of the USPTO, improve the 
quality of patents and trademarks issued a nd shorten the time it takes to get a patent. 
 
4. With regard to item 235, we would like to know how the online submission of copyright 
registration works. 
 
RESPONSE:   The Copyright Office on July 1, 2008, launched an online system for registration of 
claims to copyright.  Advantages of online filing include a lower filing fee;  the fastest processing time;  online status tracking of claims;  secure payment by credit or debit card, electronic check, or 
Copyright Office deposit account;  and the ability to up load certain categories of deposits directly into 
eCO as electronic files.  Claims may be submitted for registration electronically on the Copyright Office website at www.copyright.gov, by clicking on the eCO logo.  Registration requests can still be submitted in pape r format by mail;  however, online registration 
through the electronic Copyright Office (eCO) is the preferred way to register basic claims for literary WT/TPR/M/235/Add.1 
Page 302 
 
 
 works;  visual arts works;  performing arts work s, including motion pictures;  sound recordings;  and 
single serials.  Copyright registration claimants for each of these classes of works provide the 
following information on their applications, either with the electronic Copyright Office or with Fill-in 
Form CO. 
 
5. Finally, and based on the information contained in item 238, we would like to know if the 
administrative law judges discussed in that item in regard to the determinations as to whether an 
infringement or contravention exists have experts to make a determination about the action or good in 
question, or if they do so based solely on the info rmation the USITC has in its possession, because, in 
the final analysis, it is the USITC that determines whether or not there is a violation of Article 337, 
with a view to issuing an order denying the entry of goods.  
RESPONSE:  The administrative law judges that preside over section 337 investigations and make 
initial final determinations each have three law cler ks who work with them who have law degrees and 
frequently also have experience both in the substan tive area of intellectual property law and relevant 
technology and science.  Moreover, the administrati ve law judges are experienced trial judges who are 
expert in ensuring that there is a fully develo ped factual record upon which to predicate their 
decisions.  Because section 337 investigations are c onducted in conformance with the requirements of 
the Administrative Procedure Act, the parties involved in an investigation  have a full opportunity to 
have a hearing and to make legal and factual su bmissions to the administrative law judges, and 
ultimately to the six Commissioners who are the final decision makers in these proceedings. 
 
6. With respect to item 25, what are the criteri a used in the USTR annual review as a basis for 
determining which countries fail to adequately and effectively protect intellectual property?  
RESPONSE:   Each year, as required by U.S. law, the Office of the United States Trade 
Representative (USTR) issues a Special 301 Report cataloguing specific IPR problems in numerous countries worldwide.  The review of each tradi ng partner’s IPR regime is done on a case by case 
basis, and all relevant factors are taken into cons ideration.  USTR consid ers information submitted by 
interested stakeholders and U.S. Embassies located  in foreign capitals.  In addition, USTR actively 
encourages foreign governments to submit material wh ich can be taken into account in these reviews.  
A country is placed on the Special 301 list if it is  clear that it "denies adequate and effective 
protection of IPR or fair and equitable market access to U.S. persons that rely upon IP protection."  In 
addition to citing specific concerns, Special 301 also affords an opportunity to give credit where it is 
due, such as by improving the standing of countri es when there are significant improvements in IPR 
protection and enforcement. 
 Consistent with the goals articulated in the Presi dent’s 2010 Trade Policy Agenda, USTR enhanced its 
public engagement activities in the 2010 Special 301 process.  These activities were designed to 
ensure that Special 301 decisions are based on a r obust understanding of complicated issues involving 
intellectual property and to help  facilitate sound, well-balanced assessments of developments in 
particular countries. 
 USTR requested written submissions from the public  through a notice published in the Federal 
Register on January 15, 2010.  The 2010 review yielded 571 comments from interested parties, a significant increase from 2009.  The submissions r eceived by USTR were made available to the 
public online at www.regulations.gov, docket numbe r USTR-2010-0003.  Furthe r, on March 3, 2010, 
USTR conducted a public hearing that permitted inter ested persons to testify before the interagency 
Special 301 subcommittee about issues relevant to th e review.  The hearing included testimony from 
23 witnesses, ranging from foreign governments to industry representatives to non-governmental 
organizations.  A transcript of the hear ing is available at:  www.ustr.gov.    WT/TPR/M/235/Add.1 
 Page 303 
 
 
 MEXICO SUBSEQUENT QUESTIONS 2 
 
Issue:  Dumping, Subsidies, Safeguards and Competition Policies 
 1. In accordance with the stipulations in Sec tion 49, What will the United States do to comply 
with the WTO Panel's decisions regarding zeroing?  
RESPONSE:  The United States stopped applying the zeroing methodology in investigations 
effective on February 22, 2007, though the United States has applied zeroing in some administrative 
reviews after that date.  The Appellate Body reports on zeroing raise serious systemic concerns for the United States that go beyond the issue of zeroing.  Indeed, the United States believes that the 
Appellate Body reports create new obligations to limit the use of antidumping measures when such 
obligations were never agreed to by the WTO Me mbers.  Nevertheless, the United States takes its 
WTO obligations very seriously, and has stated pub licly that it intends to comply with the WTO 
rulings in all of the zeroing disputes.  We are ve ry actively engaged in a serious effort with our 
domestic stakeholders and our Congress to find an accep table solution.  We are not in a position at 
this time to provide details on the specific steps we will take or the timeframe to comply with the 
Appellate Body rulings.  
 
2. Regarding what the U.S. sets out in Section 50, Is the U.S. seeking the reactivation of the 
“application support requirement?  
RESPONSE:  No. 
3. As stipulated in paragraph 52 of the do cument, the definitive antidumping duties imposition 
orders reached their maximum level in 2007, due to  undergoing a constant decline during 2004-2006. 
In 2007-2008, 84% of the investigations gave rise to  orders in terms of definite antidumping duties, 
compared to 48% in 2005-2006. Of the 20 investigati ons that began in 2009, in December of that 
year, none had given rise to orders in terms of definite duties (around the middle of 2010, 4 had 
obtained that result). For that reason, the questi on is, Were resolutions not ordered during 2009, or 
instead, did the investigations go on longer and that  is why the definitive du ties were imposed until 
the first quarter of 2010?  
 
RESPONSE:  All antidumping and countervailing duty investigations are conducted in accordance 
with deadlines established by U.S. law.  All inves tigations that began in 2009 and in prior periods 
proceeded according to these deadlines .  To the extent that final determinations and/or antidumping 
and countervailing duty orders have not been issued in  some investigations that began in 2009, this is 
consistent with the deadlines established under U.S. law.  The number of antidumping and 
countervailing duty orders issued in any calendar year  is a function of a variety of factors including 
the number petitions filed, whether the petitions are file d earlier or later in the year, and the number of 
investigations with deadlines extended under provisions of U.S. law. 
 
4.  According to the stipulations of Section 61, the increase in the number of investigations regarding 
countervailing duties is mainly due to the modificati on in 2007 of the long-st anding policy from the 
U.S. Department of Commerce of not applying counte rvailing duties to countries that are classified as 
“non-market” economies.  Could the U.S. specify mo re about the policy change at the Department of 
Commerce?  Although the Department of Commerce has  the legal capacity to apply countervailing 
duties to those countries, it decided in 1984 that “the subsidies did not have measurable economic 
effects in the Soviet style economies that were under analysis at the time.” The U.S. Court of Appeals 
supported that policy in 1986.  
RESPONSE:  In 2006, the Department of Commerce (DOC ) initiated the countervailing duty (CVD) 
investigation involving Coated Free Sheet  Paper fro m China in response to a petition properly filed 
by U.S. domestic interests.  DOC determined that it was appropriate to revisit its prior practice with 
respect to the applicability of the CVD law to  countries found to be non-market economies for 
antidumping duty purposes.  In the Coated Free Shee t Paper CVD investigation,  DOC determined that WT/TPR/M/235/Add.1 
Page 304 
 
 
 there was nothing in the U.S. CVD law that preven ts applying a CVD remedy to countries that have 
been found to be non-market economies for antidum ping duty purposes.  DOC also concluded that 
China’s current economy is vastly different from the command-and-control economies at issue in the 
mid-1980s when DOC’s policy regarding non-market economies was first articulated.  Specifically, 
DOC found that the nature of the Chinese economy in recent years allows DOC to identify and 
measure countervailable subsidies.  DOC made a si milar determination with respect to Vietnam in 
2009 in the context of a CVD investigation of  Polyethylene Retail Carrier Bags from Vietnam. 
 
5 In accordance with paragraph 63 of the doc ument, in December 2009 there had been 41 
orders regarding countervailing duties, 10 more in 2007, but fewer than in 2004. About 30% of those 
orders affect China, and 20% affect India. Other cases refer to Korea (10% of the total of orders) as well as Brazil and Indonesia (7% in each case). Half of the orders  regarding countervailing duties 
were imposed on iron and steel pr oducts, and about 20% on different manufacturers. Agricultural and 
forest products as well as chemical and pharmaceutical  products in each case were 14% of the total of 
orders in terms of countervailing duties.  For th at reason, the question is, Does the U.S. have a 
database or website available where current duty info rmation can be checked, without having to resort 
to the Federal Register every day, in order to see what  is being published? If the answer is affirmative, 
could you provide the address for reference purposes?  
 
RESPONSE:  Statistics on U.S. antidumping and countervailing duty cases are available on the 
Import Administration’s website at:  http://ia.ita.doc.gov/stats/iastats1.html.  
 Issue:  Health and Phytosanitary Measures 1. In Section 99, it states that according to fe deral legislation, the states are authorized to 
establish health and phytosanitary measures, as l ong as they are compatible with the federal 
standards and regulations, including the obligations imposed by the disciplines that pertain to the 
OMC.  Does the federal government review or p revious authorize health and phytosanitary measures 
that the states issue, to ma ke sure they adhere to the guidelin es that the federal government 
establishes?   When the states issue health or phytos anitary measures for importation products that 
contrast with federal legislation, what regulation mu st be complied with for the entry of products that 
are involved or affect ed by those measures?  
 
RESPONSE:  Various regulatory agencies, as well as the Department of Justice and the USTR, 
review state laws when appropriate to do so.  Part of that review may entail an analysis of whether the 
state requirement conflicts with a federal one.  In a situation where a conflict does exist, federal law 
will prevail. 
 
2. Regarding Section 100, What articles or guide lines from the Food Quality Protection Act are 
considered for establishing the he alth and phytosanitary measures?  
 
RESPONSE:  The Food Quality Protection Act requires st ricter safety standards, especially for 
infants and children, and a complete reassessment  of all existing pesticide tolerances.  More 
information is available at:  http://www.epa.gov/p esticides/regulating/laws/fqpa.  This web site 
provides background information on FQPA's provisi ons and discusses some of the specific issues 
raised by FQPA, as well as the law's implementation status. 
 
3. Since the following definition is provided in  Section 101: “Reportable Food” is that defined 
as different than food elements and those prepared  for infants where there is a reasonable probability 
of causing health problems or de ath in humans or animals.  We request information about some 
example of products that are susceptible to Customs declaration.  
 RESPONSE:  A "reportable food" is an article of food (o ther than dietary supplements or infant 
formula) for which there is a reasona ble probability that the use of, or exposure to, such article of food  WT/TPR/M/235/Add.1 
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 will cause serious adverse health consequences or death to humans or animals.  FDA considers 
examples of recent Class I recalls to be helpful but  not comprehensive in determining if a food is 
reportable.  A Class I recall situation is one in wh ich there is a reasonable probability that the use of, 
or exposure to, a violative product will cause serious  adverse health consequences or death.  Some 
recent examples of Class I recalls include peanut-but ter contaminated with Salmonella, baby food that 
posed a choking hazard, and sheep feed containing elevated levels of copper.  Draft guidance for 
industry on the Reportable Food Registry  was notified to the WTO SPS Committee in July 2009 with an addendum for final guidance notified in Sept ember 2009.  In May 2010 the Reportable Food 
electronic portal was relocated to the Department of Health and Human Services Safety Reporting 
Portal (https://www.safetyreporting.hhs.gov) and a dditional draft guidance for industry was published 
in the 2
nd Edition Draft Guidance for Industry.  More in formation is available at:  http://www.fda.gov/ 
Food/FoodSafety/FoodSafetyPrograms/RFR/default.htm. 
 
4. In Section 107, paragraph ix, referring to He alth and Phytosanitary Measures of Part 1, 
measures that directly affect importations (P art II Commercial Policies and Practices, by 
measurements) it is stated that “the importation of  live animals in the United States is regulated by 
the APHIS,” In what way does APHIS regulate th ese importations and what is the regulation applied 
to them?  
 RESPONSE:  There are many different processes involved with importing animals and animal 
products into the United States.  More in formation is available http://www.aphis.usda. 
gov/import_export/animals/animal_impo rt/animal_imports.shtml.  Inform ation includes links to learn 
more about these processes, including the guidelin es and regulations, permits and certification, and 
associated user fees.  5. In the same Section 107, paragraph ix, referring to Health and Phytosanitary Measures of 
Part 1, measures that directly affect importations (Part III Commercial Policies and Practices, by measurements), it is stated that “the importation of live animals originating from countries affected 
by certain diseases, exemplified with EEB, Foot and Mouth Disease and Rinderpest,” What other 
illnesses besides those already mentioned are consid ered prohibited for importing live animals from 
affected countries  
 RESPONSE:  APHIS reviews information from importing countries prior to importation for the 
following: 
 
Avian influenza Bluetongue Bovine spongiform encephalopathy Brucellosis Chronic wasting disease 
Classical swine fever 
Contagious equine metritis  Equine herpes virus Equine infectious anemia 
Equine piroplasmosis 
Equine viral arteritis Foot-and-mouth Johnes Pseudorabies Scrapie 
Spring viremia carp 
Tuberculosis WT/TPR/M/235/Add.1 
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 Venezuelan equine encephalomyelitis 
Vesicular stomatitis West Nile virus 
 
6. Concerning Section 107, paragraph ix, referri ng to Health and Phytosanitary Measures of 
Part 1, measures that directly affect importations (Part III Commercial Policies and Practices, by 
measurements), state as has already been co mmented, that “the importation of live animals 
originating from countries affected by certain di seases, exemplified with EEB, Foot and Mouth 
Disease and Rinderpest.”  Since the United States of America is a member of the World Organization 
for Animal Heath (OIE), we must remember that  the OIE allows for zoning and gating, due to the 
previous, Does the U.S. accept zoning and gating for illnesses mentioned from countries that wish to 
export products to its territory that are affected by these and other illnesses?  If zoning and gating are 
accepted, what are the pro cedures to carry out the same?  
 
RESPONSE:  APHIS approaches import decisions using a science-based evaluation of the risk 
presented by imported animals and animal products. In this regard, APHIS recognizes that risk may 
be tied to climatological, geographical, and biological factors that are not always defined by national 
political boundaries.  To help ensure that our sta ndards for (1) regulating imports on a regional basis 
and (2) assessing that disease risk within define d regions are clearly defined and applied on a 
consistent and scientific basis, APHIS formed the Regionalization Evaluation Services Staff to 
coordinate the evaluations.  APHIS regionalization policies are detailed and available for review at: 
http://www.aphis.usda.gov/import_expo rt/animals/reg_request.shtml. 
 
7. Concerning Section 109, For which cases do es the APHIS apply for specific permits for the 
importation of vegetables and produce for transport am ong states? What do those permits consist of?  
and, What states are those considered to apply for specify permits ? 
 RESPONSE:  Permits are required for the importati on, transit, domestic movement and 
environmental release of organisms that impact plants, and the importation and transit of Plants and Plant Products under authority of the Plant Protection and Honeybee Acts.  More information is 
available at:  http://www.aphis.usda.g ov/plant_health/permits/index.shtml. 
 
8. Concerning Section 110, paragraph ix, referri ng to Health and Phytosanitary Measures of 
Part 1, measures that directly affect importations (Part III Commercial Policies and Practices, by 
measurements), it states that “applications to im port vegetables, animals and their products must be 
presented by the person in charge  of phytosanitary protection or the veterinary services of the 
exporting country for its U.S. approval.  A ri sk evaluation may be needed to analyze those 
applications,” What does that consist of and what aspects are relevant to take into account when 
evaluating risk, to analyze the animal impor tation applications for the first time ? 
 
RESPONSE:  Detailed information regarding U.S. importa tion policies for vegetables, animals and 
animal products are available on the internet at:  http://www.aphis.usda.gov. 
 
9. Concerning Section 112, paragraph ix, referri ng to Health and Phytosanitary Measures of 
Part 1, measures that directly affect importations (Part III Commercial Policies and Practices, by 
measurements), state that “the FSIS is in charge  of ensuring safety of meat, poultry and egg-based 
products in the U.S.The Foreign Affairs Office that de pends on the FSIS is in charge of establishing 
the standard and measures of support, including insp ections, that are applied to importation and 
exportation of these products.”  What are the heal th aspects the Foreign Af fairs Office takes into 
account to establish support standards and measures, including inspections, that are applied to the 
importation and exportation of  the mentioned products ? 
  WT/TPR/M/235/Add.1 
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 RESPONSE:  FSIS amenable products must originate fro m an eligible country and a certified 
establishment to be exported to the United States. The Animal and Plant Health Inspection Services 
(APHIS) restricts some products from entering the Un ited States because of animal disease conditions 
in the country of origin. For information on restri ctions related to animal diseases and information 
about APHIS, contact the APHIS Veterinary Se rvices, National Center for Import and Export. 
Countries become eligible by following an equivale nce determination process developer by FSIS.  
Establishments are certified by the central compet ent authority of an eligible country.  Except for 
stating the country of origin, imported products must meet the same labeling requirements as 
domestically-produced products. After filing the necessary forms for U.S. Customs and Border 
Protection, and meeting animal disease requirements of APHIS, all imported meat, poultry and processed egg products must be presented for re-inspection by FSIS at an official import facility.  
Detailed information is available at:  http ://www.fsis.usda.gov/Regulations_&_Policies/Import 
_Checklist/index.asp. 
 
Concerning Section 113, paragraph ix, referring to He alth and Phytosanitary Measures of Part 1, 
measures that directly affect importations (Part III Commercial Policies and Practices, by 
measurements), it mentions that “the United States has recognized the equivalent of 34 foreign 
systems with the U.S. systems of meat, poult ry and egg-based products,” Explain what the 
mechanisms are to recognize the equivalence of fo reign systems with the U.S. regulation systems for 
meat, poultry and/or egg-based products? (specify the process) . 
 
RESPONSE:  The U.S. makes determinati ons of equivalence by eval uating whether foreign food 
regulatory systems attain the appropriate level of protection provided by our domestic system.  Thus, 
while foreign food regulatory systems need not be identical to the U.S. system, they must employ 
equivalent sanitary measures that provide the same level of protection against food hazards as is 
achieved domestically.  FSIS evaluates foreign food regulatory systems for equivalence through 
document reviews, on-site audits , and port-of-entry reinspection of products at the time of 
importation. 
 
10. Concerning Section 113, How much time does it take to recognize the equivalence of foreign 
regulation with the U.S. one ? 
 
RESPONSE:  The time required for a science based, transp arent review to determine if a trading 
partner has an equivalent level of protection is la rgely depending upon the nature of the market access 
request, the availabity of scientif ic evidence to support the request, the submission of data by the 
trading partner.  Timeframes vary depending upon the completion of the application process, audit 
findings, etc. 
 
11. Concerning Section 115, paragr aph ix, referring to Health and Phytosanitary Measures of 
Part 1, measures that directly affect importations (Part III Commercial Policies and Practices, by 
measurements), it mentions that “In May 2009, the FSIS reported to importers  of food products that 
contain small amounts of meat, poultry or food-bas ed products, for those to whom the APHIS does 
not issue veterinary importation permits, that such  ingredients must come from an authorized 
source.”  Explain How does the FSIS ensure that the food products that contain small amounts of 
meat, poultry or egg-based products , come from an authorized source ? 
 
RESPONSE:  While FSIS statutes provide authority to exempt certain foods containing relatively 
small amounts of meat, poultry or processed egg prod uct ingredients from FSIS inspection, FSIS must 
ensure that these ingredients are not adulterated.  Accordingly, the meat, poultry, or processed egg 
product ingredients used in FSIS-exempted pr oducts must be from an eligible source , i.e., prepared 
under USDA/FSIS inspection or in a foreign establishment certified by a foreign inspection system 
approved by FSIS. Importers of FSIS-exempted pr oducts containing meat, poultry, or processed egg 
product ingredients originating from countries with an imal health restrictions must apply for and WT/TPR/M/235/Add.1 
Page 308 
 
 
 obtain a VS-permit  from USDA's Animal and Plant Health Inspection Service (APHIS).  More 
information is available at:  http://www. fsis.usda.gov/PDF/Import_Permit_Guide.pdf. 
 
12. Concerning Section 116, paragr aph ix, referring to Health and Phytosanitary Measures of 
Part 1, measures that directly affect importations (Part III Commercial Policies and Practices, by 
measurements), it mentions that “the FSIS re-insp ects at the border, all those shipments of meat, 
poultry and egg-based products after they have been  inspected by the U.S. Customs and Border 
Protection and the APHIS.” Explain in detail, What  are the re-inspection mechanisms and what types 
of personnel carry them out ? 
 RESPONSE:  After an incoming shipment has met U.S. Customs and Border Protection and APHIS 
requirements, the shipment must be reinspected by FSIS at an approved import inspection facility. 
 
FSIS import inspectors first check the documents to assure the shipment is properly certified by the 
foreign country.  Inspectors next examine each sh ipment for general conditio n and labeling and then 
conduct the inspection assignments.  
 
Port-of-entry reinspection is directed by the Automated Import Information System (AIIS), a 
centralized computer database that stores reinspec tion results from all ports-of-entry for each country 
and for each establishment. Reinspection of products  is performance-based in that better performing 
foreign establishments have their products reinspected less frequently.   13. Concerning Section 116, What do the FSIS’ rou tine “re-inspection” procedures consist of at 
the border ? 
 
RESPONSE:  Many of the procedures for product reinspec tion that FSIS follows are contained in the 
Import Inspection Manual at:  http://www.fsis.u sda.gov/regulations_&_policies/fsis_import_ 
reinspection/index.asp.  
 
14. Concerning Section 117, paragr aph ix, referring to Health and Phytosanitary Measures of 
Part 1, measures that directly affect importations (Part III Commercial Policies and Practices, by 
measurements), it mentions that “in the 12 months previous to October 2008, the FSIS inspected more 
than 1.5 million tons of meat and poultry;  of them, 25 tons were not admitted for re-inspection…” 
and that “in addition, 2,940 tons were denied because they did not comply with the U.S. importation 
regulations.”  What was the destination of those im portations that were not accepted?  And, How can 
a proper handling of the same be guaranteed, on ce it has been determined that they were not 
authorized to enter U.S. territory ? 
RESPONSE:  If a shipment does not meet U.S. requirements, the containers are stamped "U.S. 
Refused Entry," and within 45 days must be exported,  destroyed, or converted to animal food, if an 
appropriate request for diversion is approved by FDA.  More information including information on 
handling is available online at:  http://www.fs is.usda.gov/factsheets/FSIS_Import_Procedures/ 
index.asp#5.  15. Concerning Section 121, What are the crite ria the operational and administration support 
system is based on for importation (OASIS) to determine if the imported goods require a new 
evaluation by the FDA personnel ? 
RESPONSE:   The Operational and Administrative System for Import Support (OASIS) is FDA's 
internal application used to receive, screen, a nd make admissibility decisions for imported products 
regulated by FDA.  Import entries are transm itted to FDA from the U.S. Customs and Border 
Protection's (CBP) Automated Commercial System (ACS).  The screening performed by OASIS is 
based on information received from various sources, including FDA field offices and laboratories, and 
the FDA Centers and utilizes historical data related to products and firms. 
  WT/TPR/M/235/Add.1 
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 16. Concerning Section 122, What does a specific ex emption consist of and under what terms is it 
obtained ? 
RESPONSE:  An exemption from a tolerance can be grante d when it appears that the total quantity 
of the pesticide chemical in or on all raw agri cultural commodities for which it is useful under 
conditions of use currently prevailing or proposed w ill involve no hazard to human health.  In order to 
establish an exemption from a tolerance, EPA must re view toxicity and exposure data the same as for 
tolerance setting. In addition, there must be a pr actical method for detecting and measuring levels of 
the pesticide residues so regulatory officials can ensure that any r esidues are below the level found to 
be safe. 
 
17. Regarding what is set out in Section 122, What  is the procedure to register a pesticide before 
the EPA ? 
RESPONSE:  Federal law requires that before selling or di stributing a pesticide in the United States, 
a person or company must obtain registration, or license, from EPA.  Before registering a new pesticide or new use  for a registered pesticide, EPA must firs t ensure that the pesticide, when used 
according to label directions, can be used with a r easonable certainty of no harm to human health and 
without posing unreasonable risks to the environmen t. To make such determinations, EPA requires 
more than 100 different scientific studies and test s from applicants. Where pesticides may be used on 
food or feed crops, EPA also sets tolerances (maximum  pesticide residue levels) for the amount of the 
pesticide that can legally remain in or on foods.  More information is available at:  http://www.epa. 
gov/pesticides/regulating. 
 
18. Concerning Section 128, What are the labeli ng characteristics for food products obtained 
through genetic engineering ? 
 
RESPONSE:  Genetically engineered products are not required to disclose that they have been 
genetically engineered on the label.  Further, if  the genetically engineered products do not differ 
materially from their conventional counterparts th ey do not need to have any additional or special 
labeling as compared to their conventional counter part.  However, such products would require 
additional/special labeling in the case of any materi al change to the product in comparison with the 
conventional product that effects specific attribut es of the food, including the presence of a health 
concern (such as allergens), or if there was a signi ficant change in the composition, intended use, or 
nutritional content of the food.  The material chan ge would need to be indicated on the label in a 
manner that would not be misleading to the consumer.  
19. Concerning Section 101, What are the parameters to know if a food product falls within the 
definition of reportable food )?  In the same sense, we understand that the FDA is in charge of 
determining what food products must be reported,  How long does it take to make that determination ? 
RESPONSE:  A "reportable food" is an article of food (o ther than dietary supplements or infant 
formula) for which there is a reasona ble probability that the use of, or exposure to, such article of food 
will cause serious adverse health consequences or de ath to humans or animals.  Please note that food 
facilities as "responsible parties", not FDA, must  determine whether they consider food products 
"reportable".  A responsible party is required to  submit a report to FDA through the Reportable Food 
electronic portal as soon as practicable, but in no case later than 24 hours after determining that an 
article of food is a reportable food.  FDA will re view the report and res pond as appropriate. More 
information is available at:  http://www.fda.gov/ Food/FoodSafety/FoodSafetyPrograms/RFR/default. 
htm.  
20. According to Section 114, What does the evaluation process consist of to verify health 
measures that are equivalent to those applied in the U.S .? 
RESPONSE:  A full description of our equivalence procedures can be found online at 
http://www.fsis.usda.gov/regulations/equivalence_process/index.asp. 
 Issue:Public Sector Purchases  WT/TPR/M/235/Add.1 
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 1. Can you broaden the inform ation regarding what a commercial  entity or governmental NATO 
code is and why it is a requirement for an established s upplier outside the U.S. to be registered at the 
Central Contractor Registry? 
2. What are the implications for a supplier w ho is established outside of the U.S., in getting 
registered in the database of the Central Contractor Registry? Does being part of that register make a 
person obligated to pay taxes in the U.S., even before a contact is awarded with the government? 
3. Is there any other situation in which a suppli er who is established outside the U.S. becomes a 
person obliged to pay taxes in the U.S. before a contract is awarded with the government? 
 
RESPONSE to Questions 1-3:   Non-U.S. registrants complete the same registration application in 
the Central Contractor Registration (CCR) database as U.S. registrants with four exceptions.  First, 
non-U.S. registrants must first obtain a NATO CAGE Code from the appropriate source.  See 
http://www.dlis. dla.mil/Forms/Form_AC135.asp.  S econd, non-U.S. registrants that are located 
outside the United States and do not pay employ ees within the United States are not required to 
provide a Taxpayer Identification Number (TIN).  Third, non-U.S. registrants must provide the country of incorporation.  Fourth, non-U.S. regi strants doing business outside of the United States are 
not required to complete the financial inform ation section of the CCR database registration.  
Otherwise, U.S. and non-U.S. registrants complete  the same registration materials.  If a non-U.S. 
registrant has all application information readily  available, the registration process should take 
approximately one hour. For more information,  please see the CCR User’s Guide available at:  
https://www.bpn.gov/ccr/ handbook.aspx.  Registering in  the CCR does not result in any tax liability. 
 
Issue:Intellectual Property  
1. What is the reason why, as the Secretary’s report indicates, that major changes have not been 
introduced in the U.S. legislation with regard to  intellectual property during the period in question? 
 
RESPONSE:   While significant changes to intellectua l property law have been proposed during the 
past two years, the current review period follows a period in with several important pieces of 
legislation dealing with intellectual property rights were enacted. 
 
2. When an Anti-forgery Agreement is signed, it is ne cessary to reform the internal legislation of 
the U.S. with regard to intellectual property?  What are the main changes that legislation would go 
through? 
RESPONSE:   While noting that the ACTA negotiations are ongoing, the U.S. Government has 
publicly stated that we do not view the ACTA as requiring changes to U.S. law.  3. Can you describe what the Administration’s strategic plan consists of to combat of 
intellectual property robbery? 
RESPONSE:   The Administration’s Joint Strategic Plan  contains more than thirty concrete 
recommendations for improving U.S. Government effo rts to combat intellectual property theft.  These 
efforts fall into six main categories.  First, the U.S.  Government will lead by example.  Specifically, it 
will work to ensure that it does not mistakenly purchase or use illegal products.  Second, the Plan 
underscores that this Administration supports tran sparency.  That includes transparency in our 
development of enforcement policy, information sh aring, and reporting of law enforcement activities 
at home and abroad.  Third, we will improve coordination and thereby increase efficiency and 
effectiveness of law enforcement efforts at the Fede ral, state and local leve l, of personnel stationed 
overseas and of our international training efforts.  F ourth, we will work with our trading partners and 
within international organizations to better enforc e American intellectual property rights in the global 
economy.  In that regard, we will initiate a comprehens ive review of current efforts in support of U.S. 
businesses that have difficulty enforcing their intellect ual property rights in overseas markets.  Fifth, 
we must secure our supply chain.  To achieve this most important goal, we wi ll take a close look at 
the unique problems posed by websites and other entiti es that provide access to counterfeit or pirated  WT/TPR/M/235/Add.1 
 Page 311 
 
 
 products, and develop a coordinated and comprehensiv e plan to address them.  We will make sure our 
law enforcement has the authority it needs to secure the supply chain and also encourage industry to 
work collaboratively to address unlawful activity on  the internet, such as illegal downloading and 
illegal internet pharmacies.  Sixth, and finally, we will make sure we spend money wisely, a process 
we have already begun.  To do that, we have, and will continue to collect and track the amount of 
money we spend on intellectual property enforcement per year.  We will use this information to map 
out the most effective way to fight this theft.  4. Since the U.S. grants patents under the principl e of “first inventor” instead of “first 
applicant,” What are the criteria to determine that an applicant is the first inventor?  
RESPONSE:   The statutory basis used for the “first inve ntor” principle is title 35 of the United States 
Code, Section 102(g)(1).  This section provides that   
 “A person shall be entitled to a patent unless -(g)(1) during the cour se of an interference 
conducted under section 135 or secti on 291, another inventor involved therein establishes, to the 
extent permitted in section 104, that before such pe rson's invention thereof the invention was made by 
such other inventor and not aba ndoned, suppressed, or concealed, or” 
 
An “interference” is the process in  the USPTO where two or more applicants can establish that their 
invention was invented before the other inventor s’ invention, and that they had not “abandoned, 
suppressed, or concealed” their invention.   An inte rference is declared when two parties are claiming 
the “same patentable invention.” 37 Code of Fede ral Regulations (CFR) 1.601(i).  An “interference-
in-fact,” a term of art in patent law, exists when at least one claim of a first party and at least one claim of a second party define the same patentable invention. 37 CFR 1.601(j).  The “same patentable 
invention” means that one invention (“A”) is the sa me as another (“B), when a patent to invention A 
would not be granted if “B” was prior art with respect to “A”.  
Once the Office has decided that an interference pro ceeding is appropriate, the main criteria is which 
invention was “made” first.  In this context “m ade” does not necessarily mean built or “reduced to 
practice,” although it could.  “Made” as used in this part of the patent statute also means “conceived” 
(had the idea).  But it is not sufficient for an invent or to have had the idea first.  After the inventor 
conceived of the invention, the inve ntor must have diligently begun to work to reduce the invention to 
practice.  The reduction to practice could be eith er building the invention (actual reduction to  
practice) or describing the invention, and how to ma ke and use the invention, in a patent application 
(constructive reduction to practice).  To show dilige nce, the inventor needs to show activities from 
just before the other inventor(s) conception or reduction to practice up until their own reduction to 
practice.  The inventor who shows that they eith er conceived the claimed invention and diligently 
worked to reduce the invention to practice before the other inventor will be  found to be the first 
inventor. 
 
5. Considering that the validity period of a paten t can be adjusted to take administrative delays 
into account during the applica tion process, what is the maximum validity period of a patent? 
 
RESPONSE:   For applications filed after May 28, 2000, there is no limit set by the statute for the 
patent term adjustment. 
 
6. Is there any other evaluation that determin es the reasons why expediting a patent is taking 
more time than before, since presenting the application?  If there are, what are the reasons for this 
increase in processing times?  
RESPONSE:   In this context “expediting” is unders tood to mean “examining”.  Yes, the USPTO 
regularly studies the reasons why patent applic ation pendency is increasing in some areas of WT/TPR/M/235/Add.1 
Page 312 
 
 
 technology.  One main reason for this increase are sh arp increases in filings in an area of technology, 
so that the USPTO is unable to hire and train suffici ent staff to examine those applications in a timely 
manner.  USPTO is working, pursuant to its Strategic Plan, to increase patent quality and 
simultaneously decrease patent pendency time.  In itiatives to achieve these objectives include hiring 
new examiners, training and retaining them more ef fectively, promoting use of the hoteling program, 
building quality into every aspect of patent examin ation, fully leveraging and expanding the potentials 
of the electronic work environment and offering alte rnatives to the current one-size-fits-all approach 
to patent examination.  Between March and August of 2010, pendency to first office action decreased 
by one month, despite an increasing patent applica tion filing rate during that time period.  Compliance 
rates for patent quality increased  during the same time period. 
 
7. In accordance with Article 182 of th e 1988 General Law of Commerce and Competition 
(particularly Article 301), What is the procedure the USTR uses to determine if a country does not 
offer enough and efficient protection for intellectual property? RESPONSE:   Each year, as required by U.S. law, the Office of the United States Trade 
Representative (USTR) issues a Special 301 Report cataloguing specific IPR problems in numerous 
countries worldwide.  The review of each tradi ng partner’s IPR regime is done on a case by case 
basis, and all relevant factors are taken into cons ideration.  USTR consid ers information submitted by 
interested stakeholders and U.S. Embassies located in foreign capitals.  In addition, USTR actively 
encourages foreign governments to submit material wh ich can be taken into account in these reviews.  
A country is placed on the Special 301 list if it is  clear that it "denies adequate and effective 
protection of IPR or fair and equitable market access to U.S. persons that rely upon IP protection."  In 
addition to citing specific concerns, Special 301 also affords an opportunity to give credit where it is 
due, such as by improving the standing of countri es when there are significant improvements in IPR 
protection and enforcement. 
 Consistent with the goals articulated in the Presi dent’s 2010 Trade Policy Agenda, USTR enhanced its 
public engagement activities in the 2010 Special  301 process.  These activities were designed to 
ensure that Special 301 decisions are based on a r obust understanding of complicated issues involving 
intellectual property and to help  facilitate sound, well-balanced assessments of developments in 
particular countries. 
 USTR requested written submissions from the public  through a notice published in the Federal 
Register on January 15, 2010.  The 2010 review yielded 571 comments from interested parties, a 
significant increase from 2009.  The submissions r eceived by USTR were made available to the 
public online at:  www.regulations .gov, docket number USTR-2010-0003.  Further, on March 3, 
2010, USTR conducted a public hearing that permitte d interested persons to testify before the 
interagency Special 301 subcommittee about issues re levant to the review.  The hearing included 
testimony from 23 witnesses, ranging from forei gn governments to industry representatives to non-
governmental organizations.  A transcript of the hearing is available at:  www.ustr.gov. 
 
8. Could you explain the procedure followed by the U.S. Customs and Border Protection to 
impede the entry into the U.S. of infringing goods originating from sp ecifically identified entities 
(limited denial of entry orders) or any source (general denial of entry orders)? 
 RESPONSE:   CBP uses a layered, risk management-d riven approach to IPR enforcement that 
addresses the counterfeiting threat in the pre-en try, entry, and post-entry environments. 
 
At pre-entry, CBP seeks to build partnerships with the trade community on supply and distribution 
chain management programs, which will provide CBP with advance information on shipments.  This 
advance information will improve targeting effectiveness. 
  WT/TPR/M/235/Add.1 
 Page 313 
 
 
 At entry, CBP officers have ex officio authority to  examine, detain, and seize counterfeit goods at the 
border.  No denial of entry order, limited or genera l or application from a rights holder is required.  If 
a specific entity has been identif ied as an importer, or potential importer, of infringing goods, CBP 
will put identifying information into the computer system to flag suspect shipments from the importer 
for examination.  
MEXICO SUBSEQUENT QUESTIONS 3 
 
Section III. Trade policies and practices, by measures  Rules of origin  1. In paragraph 23 on page 28, it mentions that the determination of rules of origin are based 
on self-certification.  Also, in paragraph 24 it menti ons that a product is c onsidered as originating 
from the last country in which it has undergone a process that has le d to a new and different article of 
commerce with a name, character or use different from its components. Given the aforementioned, 
how is this consistent with  the provisions of the country of origin label (COOL)? 
 
RESPONSE:   COOL is currently the subject of WTO litigation.  Accordingly, we are unable to 
respond to this question. 
 
2. Paragraph 25 mentions that in July 2008 a pr oposal to establish uniform rules of origin to 
customs legislation through the replacement of  the system on a case by case basis, with an 
arrangement to the criterion of substantia l transformation for NAFTA markup standards, was 
introduced. What is the status of that proposal? 
 
RESPONSE:  The proposal is under consideration.  Once th e review is finished, a document will be 
published informing the public of the results. 
 
Quantitative restrictions, controls and licenses 
 
3. In paragraph 76, page 41 men tions that in 2008 the U.S. amended the Lacey Act to prevent 
trade in illegally obtained plants and products ma nufactured from these plants, which prohibits, 
among other things, the import of plants and plant products whose production constitutes a violation 
of a foreign law of plant protection.  In that sense, it establishes a requirement to submit a declaration 
on the imports of certain plants and plant products. 
 
 In light of the aforementioned, will the La cey Act include processed foods in the future? 
 
RESPONSE:   The prohibitions of the amended Lacey Ac t currently apply to all covered plant and 
plant products.  Under the Act, “plant” means “A ny wild member of the plant kingdom, including 
roots, seeds, parts or products thereof, and incl uding trees from either natural or planted forest 
stands.”  Therefore, the products subject to the pr ohibitions may include processed foods to the extent 
that those foods include covered plants.  However, “common food crops” are excluded from the scope 
of the amended Lacey Act.  A dr aft regulation with a definition of  common food crops was published 
in the U.S. Federal Register on August 4, 2010 (75 Fed. Reg. 46859), with a deadline for comments of 
October 4, 2010.  The document is available at either of the following websites:  
http//www.gpoaccess. gov/fr or http//www.aphis.usda.gov. 
 
The declaration requirement of the amended Lacey Act is being enforced on a phased-in basis.  
Products currently requiring a declaration are desc ribed in a notice published in the U.S. Federal 
Register on September 2, 2009.  No processed food products are included in the current schedule for 
enforcement of the plant import declaration.  WT/TPR/M/235/Add.1 
Page 314 
 
 
  Isn’t an attempt to verify compliance with foreign laws incurring an invasion of powers? 
 RESPONSE:  No.  The amended Lacey Act is an enforcemen t tool that supports the efforts of other 
countries, as well as our own states, in the conserva tion of protected plant and wildlife resources.  The 
plant import declaration of the amended Lacy Act does not require documentation of legality. 
  Would they not be incurred in th e same high costs of traceability? 
 RESPONSE:  No. The plant import declaration of the amended Lacy Act does not require 
“traceability” or documentation of legality. 
 
4. Likewise, neither in this section or in the Sanitary and Phytosanitary Measures does it 
mention the procedure to import dairy products to th e United States, which is subject to approval by 
an Inter-state Committee and whose procedure could be considered as an unnecessary obstacle to 
trade.  Could you give more information on the subject? 
 RESPONSE:   Under federal law, the U.S. Food and Drug Administration regulates the import of 
dairy products into the United States.  The FDA published a detailed guidance document for all 
importers interested in exporting to the Un ited States.  This document can be found at 
http://www.fda.gov/ICECI/ComplianceManuals/Comp liancePolicyGuidanceManual/UCM074571.  In 
addition, FDA has identified three options which a llow States to receive defined ``Grade A'' products 
produced outside of the United States.  Detailed information on these options are available at:  
http://www.fda.gov/Food/FoodSafety/Product-Specifi cInformation/MilkSafety/CodedMemoranda/ 
MemorandaofInformation/ucm080157.htm. 
 
Agriculture  
Title II (Conservation) 
 5. With the increasing demand for food worldwid e and the need to allocate a greater surface 
area for planting grain and oil seeds, is there any  consideration to reduce the amount of eligible 
surface area to participate in  the Conservation Reserve Program?   
 
RESPONSE:  The 2008 Farm Bill capped the area eligible to  participate in the Conservation Reserve 
Program at 32 million acres, starting on October 1, 2009.  This is an 18-pe rcent reduction from the 
cap established in the 2002 Farm Bill. 
Title III (Trade) 
 
6. In paragraph 21. What are the budgetary pr ojections for the Dairy Export Incentive Program 
for the fiscal year of 2011?   
 
RESPONSE:  In February 2010, USDA released the FY 2011 Budget Summary and Annual 
Performance Plan for Department’s programs, whic h included the latest budget estimates for DEIP for 
fiscal years 2010 and 2011.  This document can  be found at:  http://www.obpa.usda.gov/budsum/ 
FY11budsum.pdf.  Estimates for DEIP programming are developed based  on projections of domes tic and global dairy 
market conditions at the time the budget is prep ared and actual levels of programming during the 
course of the year can vary from those estimates.  A revised set of estimates will be made available at 
the time the FY 2012 President’s budget proposals are released in February 2011.  
7. In paragraph 23 on the Export Loan Guarantee Program (GSM-201), is there any assessment 
regarding the rate differential for th ese loans to its trade reference?  WT/TPR/M/235/Add.1 
 Page 315 
 
 
  
RESPONSE:  A fact sheet describing how the GSM 102 program works can be found at 
http://www.fas.usda.gov/info/factsheets/gsm102-03.asp.   Specific ctivity under the program can be 
found at http://www.fas.usda.gov/excredits/Monthly/2010/10_09_01.pdf.  8. In paragraph 24 concerning the Market A ccess Program (MAP), is there more information 
about the type of activities, in particular for th e U.S. farming industry and the budget allocated for 
this program for 2010 and estimated budget for 20 11?  What role does the USDA and its agencies 
play within this strategy? 
 
RESPONSE:  We suggest that Mexico review the info rmation on:  http://www.fas.usda.gov/info/ 
factsheets/mapfact.asp. 
 
Title IV (Nutrition)  
9. Paragraph 27.  Is it possible to have detailed statistical information on the amount (in volume 
and value) of the purchases of beans and pork m ade by the USDA for its food aid programs? 
 RESPONSE:  In fiscal year 2009, USDA programmed 48,200 metric tons of dried beans, valued at 
$40.1 million, for all international food aid programs.  No pork w as programmed. Detailed data can 
be found at:  http://www.fas.usda.gov/ex credits/FoodAid/Reports/reports.html. 
 
Title IX (Energy) 
 
10. What is the status of the proposal of the bi o-ethanol industry in the United States to increase 
the percentage of the mix in gasoline from 10% to 15%?  In this regard, has the USDA collaborated 
in the evaluation currently carried out by the EPA on said measure?  
 
RESPONSE:  EPA continues to conduct its evaluation of increasing the ethanol percentage in 
gasoline for different makes and years of motor vehi cles, in collaboration with the Department of 
Energy.  USDA is not directly involved in that evaluation.  
Title X (Horticulture and Organic Agriculture) 
 
11. Paragraph 34. What is the difference in this  section with the Agricultural Marketing Act of 
1937 which already establishes the figures for Marketing Orders?  What are the volume controls that 
are set for certain products such as prunes, rais ins, cranberries, etc., and how are these controls 
compatible with the WTO?  
RESPONSE:  Title X of the Food, Conservation, and En ergy Act of 2008 (P.L.110-246), the 2008 
Farm Bill, contains two provisions  related to marketing orders. Th ese provisions may be found in the 
2008 Farm Bill at:  http://frwebgate.access.gpo. gov/cgi-bin/getdoc.c gi?dbname=110_cong_public_ 
laws&docid=f:publ246.pdf.  With respect to volume controls, eight marketing orders authorize volume control regulations, but 
such regulations have only been used recently under the raisin, tart cherry, and spearmint oil 
programs. It should be noted that such regulati ons only apply to domestically grown products. 
 
Title XI (Livestock)  
12. Paragraph 39:  how has compliance with the country of origin labeling provisions been 
verified? What were the costs associated with its  implementation in the various marketing stages?   
 WT/TPR/M/235/Add.1 
Page 316 
 
 
 RESPONSE:  These questions relate to a matter that is the subject of a current WTO dispute 
settlement proceeding.  It would be in appropriate to comment on them here.  
 
Other issues related to the topic of Agriculture 
 13. Is the U.S. government considering some kind of  aid for the poultry industry in view of the 
problems in exporting to China and Russia? 
 
RESPONSE:  The United States has not provided any aid to the poultry industry in response to trade 
issues with other countries.  14. Within the American Recovery and Reinvest ment Act 2009 (ARRA-2009), what steps were 
taken to support farmers affected by the economic crisis of 2008?   
 RESPONSE:   Most of the additional funding provided by the ARRA of 2009 was directed towards 
food and nutrition programs and loans or loan guar antees for rural housing or other rural services (85 
percent of available funding for the 2009 – 2010 pe riod).  Small amounts of funding were available 
for farm loans and watershed impr ovements.  The Act re-established the Trade Adjustment Assistance 
Program, which provides training and technical assistance to farmers and fishermen adversely affected by imports.  
15. How are the provisions of the ARRA-2009 applie d with regard to the origin of steel and other 
manufactured products used in agriculture, livestoc k and bio-energy infrastructure projects in the 
U.S.?  
 
RESPONSE:   Section 1605 of the American Recovery  and Reinvestment Act of 2009 (ARRA) 
requires that only U.S.-produced iron, steel and ma nufactured goods be used in public buildings and 
public works funded by the ARRA.. This provision applies to public projects in a broad range of 
sectors and programs.  Section 1605(d) requires the "buy American" provision be applied in a manner 
consistent with U.S. obligations  under international agreements. 
 
MEXICO SUBSEQUENT QUESTIONS 4 
 
IV. DEVELOPMENT OF SOME SECTORS/(1) Fi nancial Services/(iii) Policy measures in 
response to the crisis  
• Paragraph 8 refers to the immediate measures take n to alleviate the immediate effects of the 
crisis, among which the following are mentioned: 
• “3) measures to assist the central bank;” Mexico  would like to know what the said measures 
of aid consisted of, as well as the criteria for a financial institution to receive such assistance.  
• “6) aid to certain financial institutions.” Mexico would like to know if these financial 
institutions eligible to receive such aid are those who meet the eligibility guidelines described 
in paragraph 10. 
• Mexico would also like the United States to clarify whether these immediate measures are 
temporary and what is their planned duration.  
 
RESPONSE:   “Central Bank Assistance Measures” refers  to liquidity programs established by the 
Federal Reserve in response to the financial crisis .  In light of improved functioning of financial 
markets, many of the new policy tools have expired or been closed.  These include the Money Market 
Investor Funding Facility, the Asset-Backed Commercial Paper Money Market Mutual Fund 
Liquidity Facility, the Commercial Paper Funding F acility, the Primary Dealer Credit Facility, and the 
Term Securities Lending Facility.  The temporary li quidity swap arrangements between the Federal  WT/TPR/M/235/Add.1 
 Page 317 
 
 
 Reserve and other central banks were also terminat ed, in February 2010, but in May 2010 the dollar 
liquidity swap lines were re-established with some  central banks.  Further information can be found 
at:  http://www.federalreserve .gov/monetarypolicy/bst.htm. 
 
“Assistance to individual financial institutions” gene rically refers to other assistance programs such as 
those available under the FDIC’s Temporary Liquid ity Guarantee Program and those made utilizing 
Emergency Economic Stabilization Act authorities.  
• Paragraph 10 describes the eligibility guidelines fo r financial institutions to enter into the 
programs within the framework of the TARP,  which states that “applicants must be 
established and operate in the United States and ma y not be controlled by a bank or foreign 
company (...) The American authorities also point out that this principle is rooted in the 
banking sector’s international supervision and reg ulation ....” Mexico would like to know in 
greater detail about the international regula tions upon which admissibility guidelines to the 
TARP programs are based on, and if  the United States could provide a description of how the 
measures envisaged to alleviate the immediate e ffects of the crisis are still in line with the 
commitments established by the U.S. with  respect to financial services in the WTO.  
 RESPONSE:  It is the position of the United States that the measures take in response to the crisis 
were neither designed to discriminate nor implemen ted in a way that discriminates against foreign 
service suppliers.  While there may be differential tr eatment of certain classes of suppliers, including 
foreign suppliers, different treatment is not in and of itself indicative of discrimination. 
 
As the WTO Secretariat’s report ma kes clear there were many programs under the broad authority of 
the Emergency Economic Stabilization Act often with different criteria for eligibility.  The legacy 
loan program was never implemented.  As envi saged, banks or savings associations owned or 
controlled by a foreign bank or company were not e ligible for the legacy loan program.  Eligible 
banks included any insured U.S. bank or U.S. savings association, where “U.S. bank” and “U.S. 
savings association” means a bank or savings asso ciation organized under the laws of the United 
States or any State of the United States, the Distri ct of Columbia, any territory or possession of the 
United States, Puerto Rico, Northern Mariana Islands , Guam, American Samoa, or the Virgin Islands;  
irrespective of nationality of ownership.  
Eligibility for the Capital Purchase Program was limite d to institutions for which a U.S. regulator was 
the comprehensive, consolidated supervisor.  There we re two key considerations in this determination.  
First, U.S. subsidiaries of foreign banks that belie ve that they need additional capital should initially 
look to their parent banks.  Second, it is the govern ment and financial regulator of the country in 
which the parent bank is subject to comprehensive c onsolidated supervision that are best positioned to 
determine the overall strength of th e financial conglomerate.  This principle is well established in 
international banking supervision and regulation as set out, for example, in the Basel Committee’s 
Concordat (“Principles for the Supervision of Bank’s  Foreign Establishments.”)  Thus if the parent 
bank is unable to provide capital, a determination as to whether public capital is required is best made 
by the home government. 
 
IV. DEVELOPMENT OF SOME SECTORS / 4) Telecommunications / i) Market structure 
 
• Paragraph 114 mentions that the Telecommuni cations Act of 1996 constituted an important 
reform that sought to improve competition by the following means:  the reduction of barriers 
to entry in telecommunications services;  the holders’ obligation to allow new suppliers to 
connect to their networks;  elimination of restrictions on the provision of long distance 
services by the regional operating companies of Be ll when they meet certain conditions;  and 
the adoption of rules on compensation between companies.  Could you let us know what 
obstacles were diminished for entry into  telecommunications services with the 
Telecommunications Act of 1996?  WT/TPR/M/235/Add.1 
Page 318 
 
 
  
RESPONSE:   Paragraph 114 outlines several of the importa nt barriers that were removed by the Act. 
For example, Section 253 of the Act, entitled “Removal of Barriers to Entry”  prohibits state or 
localities from adopting or maintaining statutes or regulations that would prevent a supplier from 
offering telecommunications service.  In addition, the Act removed the requirement that officers or 
directors of companies holding common carrier radio licenses be of U.S. nationality. In addition, the Act provides a broad range of pro-competitive requi rements imposed on incumbent wireline suppliers, 
including an obligation to provide number portabilit y, access to rights of way, collocation, and cost-
based interconnection.  For information on additi onal barriers that we removed, please review the 
Telecommunications Act of 1996, which is publicly available. 
 
• Paragraph 116 points out that Article 310 of the Communications Act limited the allowance of 
public wireless use licensing networks to forei gn governments as well as foreign citizens or 
companies, or any company with more than 20 percent of foreign equity.  However, the 
Federal Communications Commission (FCC) may grant licenses to U.S. companies that are 
controlled by holding companies in which i ndividuals, companies or foreign governments 
possess or have voting rights on 100 percent of the capital. The FCC gives preference to 
foreign investments from other Members of th e WTO giving the treatment of a rebuttable 
presumption that the foreign investments of t hose Members do not raise competition concerns 
in the American market.  In all cases, the F CC is empowered to impose conditions on the 
licenses, if it is in the public interest.  We would like to know if they have denied user licenses 
of public wireless networks to foreign companies.  
 
RESPONSE:   No, the Federal Communications Comm ission has never denied a petition for 
declaratory ruling to allow indirect foreign owners hip of a common carrier wireless license above the 
25% benchmark in section 310(b)(4) of the Communications Act of 1934, as amended. 
 
IV. DEVELOPMENT OF SOME SECTORS / Professional Services and Consultancy Services 
to Companies / i) introduction 
 
• Paragraph 132 refers to the H-1B visa program th at allows the entry of foreign professionals 
in “specialized occupations.”  The length of stay is three years, extendable to six, and the 
annual admissions limit of the H-1B program is 65,000 per fiscal year and another 20,000 to 
foreign nationals who have a master’s degree or a higher degree granted by American universities.  Could you tell us what the “speci alized occupations” included in the H-1B visa 
program are? 
 
RESPONSE:   There is no list of “specialty occupations” fo r the H-1B program.  The criteria used to 
determine whether or not an occupation qualifies under the program are outlined in regulation at 8 
CFR 214.2(h).  In general, a “specialty occupation” for the purposes of the H-1B program requires at least a Bachelors degree or its equivalent.  
Relevant regulations are available online at:  http://www.uscis.gov/portal/site/uscis/menuitem.f6da51a 
2342135be7e9d7a10e0dc9 1a0/?vgnextoid=fa 7e539dc4bed010VgnVCM 1000000ecd190aRCRD&vgn
extchannel=fa7e539dc4bed010VgnVC M1000000ecd190aRCRD&CH=8cfr. 
 
IV. DEVELOPMENT OF SOME SECTORS / Professional Services and Consultancy Services 
to Companies / ii) Accounting services 
 
• Paragraph 139 states that the Securities and Exchange Commission (SEC) is carrying out a 
“work plan” that could harmonize the acc ounting of publicly traded companies with 
international financial reporting standards (IFRS) for 2015.  The adoption of IFRS standards based on principles would involve a major change  for accountants and the sector, and is the  WT/TPR/M/235/Add.1 
 Page 319 
 
 
 reason why standardization bodies have for some time now devoted time to harmonizing the 
two systems, and the AICPA has worked to ease the transition.  We would like to know what 
the major change for accountants and the sector would be with the adoption of the IFRS 
standards.   
 
RESPONSE:   The major change for accountants would pr obably be with respect to training, since 
most accountants in the United States are currently trained in U.S. GAAP.  Accountants and auditors 
will need to undertake comprehensive training in IFRS, and professional associations and industry 
groups will need to integrate IFRS into training materials, testing, and certification programs. 
 
IV. DEVELOPMENT OF SOME SECTORS / Professional Services and Consultancy Services 
for Companies / iii) Legal services  
• Paragraph 143 mentions that foreign law fir ms may establish subsidiaries in the 
United States, with the same rights as U.S. co mpanies, including the right to hire national 
lawyers.  These subsidiaries can work with national or foreign lawyers who have registered as 
foreign legal consultants or who have obtained a law degree in the United States.  Could you 
tell us, what are the requirements needed to register as a foreign legal consultant? 
 
RESPONSE:   We suggest checking the requirements for the specific jurisdiction in which the FLC 
wishes to practice.  The American Bar Associati on maintains links to the FLC rules of respective 
states in the following document:  http://www.ab anet.org/cpr/mjp/for_legal_consultants.pdf. WT/TPR/M/235/Add.1 
Page 320 
 
 
 NEW ZEALAND 
 
WT/TPR/S/235 
 
Questions on Tariffs  We note on page 25 in Table III.1 of the Secretariat’ s Report that the percentage of domestic tariff 
peaks has increased over recent years.   What action is the United States contemplating to address 
tariff peaks?  
 
RESPONSE:  The U.S. simple average tariff declined from 6 percent in 1998 to the current average 
of 4.9 percent as U.S. staged tariff rate reducti ons were implemented pursuant to the Uruguay Round 
agreement.  (Virtually all U.S. tariff re duction commitments under the Uruguay Round were 
implemented by 2004). As a result, since a domestic ta riff peak is defined relativ e to the average tariff 
level (the WTO defines a domestic peak as three ti mes the overall average simple tariff), the incidence 
of domestic peaks in the U.S. schedule increased  from 1998-2004 because the overall U.S. average 
tariff declined. Furthermore, variations in the incide nce of domestic peaks can also be affected by the 
calculation of non-ad valorem tariffs into ad valo rem equivalents (AVE) for a given year, because 
product price changes and changing trade flows can ca use changes in AVEs from one year to the next. 
We note that Table III.1 in the Secretariat’s Report also shows that the incidence of international 
peaks (defined as any tariff rate at or above 15 pe rcent) in the U.S. schedule actually declined from 
7.7 percent to 5.5 percent between 1998 to 2004, and declined further to 5.3 percent in 2009.  As is the case with other Members, the incidence of  tariff peaks in the U.S. tariff schedule would be 
further reduced with a balanced, amb itious conclusion of the Doha Round. 
 We note on page 25 in Table III.1 of the Secretariat’ s Report the large percentage of non-ad valorem 
tariffs still applied by the United States.   How transparent are these tariffs and, in the interests of 
greater transparency, is the United States giving any  consideration to converting these to ad valorem 
tariffs? 
 RESPONSE:  The U.S. Harmonized Tariff Schedule is ava ilable to the public at the following 
website:  http://www.usitc.gov/tata/hts/index.htm. At this time, we are only considering conversion of 
non-ad valorem  tariffs to ad valorem  tariffs in the context of the Doha Round.  
 
Trade Remedies  
 At page 30:  paragraph 51
, under “Contingency measures”, Table III.2 clearly indicates that the 
average number of anti-dumping investigations increased significantly over the years 2007, 2008 and 
2009 when compared with the years 2005 and 2006.  Fu rthermore, paragraph 51 notes that “… of the 
43 (anti-dumping) investigations initiated in 2007 and 2008, around  95% resulted in provisional 
measures, compared with around three quarters in 2 005-06”.  Could the U.S. provide an explanation 
of why it considers the average number of anti-du mping investigations rose significantly from the 
2005-6 period to the 2007-09 period and why such a la rge percentage of investigations initiated over 
the period 2007-8 resulted in prov isional measures, when compared to the 2005-6 period. 
 
RESPONSE:   Rather than comparing random time periods of different lengths, an  examination of the 
initiations of trade remedy inves tigations over equivalent five-year  periods during the past decade 
provides a more insightful and objective review of the trend in U.S. trade remedy case filings.  Initiations of antidumping and countervailing duty inv estigations during the last five years of the 
decade (2005-2009) decreased significantly when compar ed to the first five years (2000-2004).  The 
United States also notes that during the first nine months of calendar year 2010, the Department of 
Commerce has only initiated four investigations.  WT/TPR/M/235/Add.1 
 Page 321 
 
 
 More specifically, the number of antidumping inves tigations increased over the years 2007, 2008, and 
2009, as compared to 2005 and 2006, simply becau se the number of qualified petitions for the 
imposition of antidumping duties filed during that time  also increased.  The filing of petitions is not 
determined by the U.S. government.  Any industry that believes it is being injured by competition 
from dumped imports may file an antidumping duty pe tition requesting an investigation.  In order for 
the Department of Commerce (DOC) to initiate an investigation, the petition must meet certain 
requirements under U.S. law for initiation, includin g industry support, evidence of dumping, and a 
demonstration of injury caused by the dumped imports.  When a U.S. industry files an antidumping petition that meets these requirements, DOC must initiate  an investigation.  Companies’ decisions to 
file antidumping petitions may fluctuate depending  on the state of the economy, a company’s own 
cost benefit analysis, etc.  With respect to provisional measures, such m easures are put in place only when the requirements 
mandated by U.S. law, and in accordance with the WTO Antidumping Agreement, for the imposition 
of such measures are fulfilled.  The U.S. Governme nt has no discretion with respect to the imposition 
of provisional measures if there is a preliminary finding of dumping and injury. 
 
At page 33, paragraph 68
, the TPR states that “[U]nder NAFTA, Canada and Mexico must be 
excluded from the application of global safeg uard measures, unless their imports, considered 
individually, account for a substantial share of total imports and make an important contribution to 
serious injury.”  Could the U.S. explain how it und ertakes an analysis of whether or not imports from 
Canada and Mexico, individually, fulfil this criteria,  and specifically how it makes a determination of 
whether or not such imports make an important contribution to serious injury.  
RESPONSE:   The analysis the United States applies in  determining whether imports from a NAFTA 
country account for a substantial share of total imports  and contribute importantly to serious injury or 
the threat of serious injury is based on explanati ons of those terms contained in the NAFTA itself. 
 With regard to the term “substantial share,” Ar ticle 802:2(a) of the NAFTA states the following: 
  in determining whether imports from a Part y, considered individually, account for a 
 substantial share of total imports, those impor ts normally shall not be considered to account 
 for a substantial share of total imports if that  Party is not among the top five suppliers of the 
 good subject to the proceeding, measured in terms of import share during the most recent  three-year period.  
With regard to the term “contribute importantly,” Article 802:2(b) of the NAFTA states the following: 
 In determining whether imports from a Party or Parties contribute importantly to the serious injury, or 
threat thereof, the competent investigating authorit y shall consider such factors as the change in the 
import share of each Party, and the level and change in the level of imports of each Party.  In this 
regard, imports from a Party normally shall not be d eemed to contribute importantly to serious injury, 
or the threat thereof, if the growth rate of imports from a Party during the period in which the 
injurious surge in imports occurred is appreciably lo wer than the growth rate of total imports from all 
sources.  The U.S. legislation that implements the NAFTA follows the language of the NAFTA quoted above 
and, in addition, defines the term contributed importantly to mean “an important cause, but not 
necessarily the most import cause.”  Under the U. S. implementing legislation, the USITC makes 
findings with respect to whether imports from a NA FTA country or countries account for a substantial 
share of total imports and contribute importantly to the serious injury or threat of serious injury caused by imports;  the USITC reports its findings to the President.  The U.S. implementing 
legislation is set forth in section 311 of th e NAFTA Implementation Act, 19 U.S.C. 3371.  WT/TPR/M/235/Add.1 
Page 322 
 
 
 The USITC undertook an analysis consistent with U.S. law and the NAFTA in each of the six post-
NAFTA global safeguard cases in which it has made an affirmative injury determination.  The 
analysis is included in the reports that the USITC sent to the President in those six cases, and the 
public versions of those reports are available from the USITC;  the six investigations are listed below.  
The reports show that the USITC examined informat ion in the record relating to whether Canada or 
Mexico was among the five largest country suppliers of the subject goods during the most recent three-year period as well as any other informati on and arguments regarding whether Canada and 
Mexico should be regarded as accoun ting for a “substantial share” of total imports.  The reports also 
show that the USITC examined information and ar guments in the record regarding whether imports 
from Canada and/or Mexico contribu ted importantly to the serious injury or threat of serious injury, 
including information relating to the growth rate for imports from Canada and/or Mexico relative to 
the growth rate for total imports.  Investigations in which the USITC made the fi ndings described above with respect to NAFTA 
countries: 
 Broom Corn Brooms     Inv. No. TA-201-65 August 1996 Wheat Gluten       Inv. No. TA-201-67 March 1998 Lamb Meat      Inv. No. TA-201-68 April 1999 
Certain Steel Wire Rod      Inv. No. TA-201-69 July 1999 
Circular Welded Carbon Quality Line Pi pe  Inv. No. TA-201-70 December 1999 
Steel       Inv. No. TA-201-73 December 2001  
Technical Regulations and Standards 
 
Pg 35, para 80
:  It appears that a relatively high percentage of WTO notifications are by sub-federal 
entities.  What processes exist to ensure that te chnical regulations and conformity assessment 
procedures prepared and adopted by states and sub-federal entities comply with WTO TBT 
Agreement disciplines and obligations?  Further, with  reference to Pg 37, para 86, do the state level 
administrative procedures which govern the development and adoption of technical regulations and 
conformity assessment procedures by state agenci es, allow foreign stakeholders to provide comment 
on proposed regulations?  
RESPONSE:   Most U.S. States have an administra tive procedure act similar to the federal 
Administrative Procedure Act.  Such laws allow any stakeholder, foreign or domestic, to provide 
comments on proposed regulations.  The United Stat es also notifies proposed sub-federal technical 
regulations and conformity assessment  procedures to the WTO for comme nt.  In addition, the federal 
government reminds U.S. States of our internationa l obligations through formal  mechanisms such as 
USTR’s Intergovernmental Policy Advisory Co mmittee (IGPAC), as well as informal channels. 
 
Is state-level regulation subject to a review process similar to that undertaken by the OMB for federal 
regulation? 
 
RESPONSE:   Some States have adopted regulatory review processes similar to that of OMB, and 
there has been a marked in crease in the use of other review tools over the past decade.  In 1999, 27 
States incorporated economic impact statements dur ing their regulatory review process.  In 2009, 48 
out of 50 States utilized them at differing stages in  their regulatory process.  Approximately 30 States 
utilize these statements to measure regulatory imp act on small businesses, while other States measure 
impacts on the State economy or other issues like pub lic health or the environment.  Some States 
require that these statements are published for public comment, while others only require that 
statements are included in any final published rule. 
  WT/TPR/M/235/Add.1 
 Page 323 
 
 
 Pg 35, para 81 :  The report notes that the average period fo r comment specified in U.S. notifications 
is around 40 days. As this falls short of the multila terally recommended period of 60 days, is any work 
being done to bring current practice in  line with the WTO recommendation?  
 
RESPONSE:   We are reviewing the matter, but believe that the 40-day figure may be misleading.  
The United States often notifies measures that do not need to be notified for purposes of greater 
transparency (e.g., certain voluntary measures, requ ests for information in advance of a rulemaking, 
notices of hearings where stakeholders may part icipate, proposed measures based on relevant 
international standards), as well as measures to a ddress urgent circumstances (e.g., certain interim 
final rules, rules taken to comply with a court or der).  The United States has notified hundreds of 
measures to the WTO, including more than 60 this year alone.  We will need to isolate the above-
referenced notifications from the remainder to determ ine whether there is an issue that needs to be 
addressed.    
Pg 36, para 83
:  Executive Order 12889 requires a comment period of at least 75 days unless the 
proposed technical regulations or sanitary or phytosanitary measures are necessary to address 
“urgent” problems.  The Executive Order does not define urgent problems.  Have any urgent 
problems arisen during the review period?  If so, how have they been communicated to both domestic 
and foreign stakeholders?  
RESPONSE:   An outbreak or emergency health concer n would warrant immediate action.  These 
actions have been and will continue to be notified as they arise.  None arose during the review period.  
We are reviewing our notification process to see whether we can improve such communication.   
Pg 36, para 85
:  The OMB has the responsibility to review “significant” and “economically 
significant” regulations.  In addition to assessi ng the costs and benefits of feasible regulatory 
alternatives, does the OMB assess wh ether the regulation complies with international obligations?  Is 
there a review process for regulations that do not meet the “significant” test? 
 
RESPONSE:   For all rulemakings, whether significant or not, international obligations must be taken 
into account.  Agencies are required to comply w ith all applicable laws, including laws that 
implement trade agreements to which the United States is a party, when they regulate.  For 
“significant” rules – a subset of which is “economical ly significant” rules – USTR and other agencies 
have an opportunity to review draft proposed and final rules before the rules are published in the Federal Register to determine whether any potential trade issues arise.  There are typically 600-700 “significant” rules published each year.  It would be  infeasible to conduct a similar review process for 
all federal rulemakings, which number in the thousands each year. 
 
Pg 37, para 87
:  The issue of accreditation is of major importance, particularly in relation to cross 
border, barrier-free trade in consumer goods without th e need for further compliance testing.  It is 
crucial that any accreditation scheme is robust and ha s credibility so as to ensure confidence in the 
validity of any test certificate issued under that sch eme.  It will be important that any accreditation 
regime sanction in the U.S. is compatible with in ternational accreditation issued under the aegis of 
ILAC so as to prevent duplica tion and/or possible barriers to tr ade.  Is the CPSC accreditation 
regime, referred to in paragraph 90 and on page  38, compatible with and does it recognise the ILAC 
based accreditation processes as adopted by New Zealand and other countries?  
RESPONSE:   To be accepted by the Commission, third-party testing laboratories must be 
independently accredited to ISO/IEC 17025:2005--G eneral Requirements for the Competence of 
Testing and Calibration Laboratories.  The accredita tion must be conducted by a full member of the 
International Laboratory Accr editation Cooperation--Mutual R ecognition Arrangement (“ILAC-
MRA'').  More information can be found on the CPSC website:  http://www.cpsc.gov/about/cpsia/ 
labaccred.html. WT/TPR/M/235/Add.1 
Page 324 
 
 
 Other related issues are the so called ‘golde n sample’ whereby manufacturers submitting a product 
for testing produce a carefully crafted item that is not typical of the usual product and reliance.  
There is also the issue of how long test certificates remain valid.  How will CPSC ensure that testing 
is done on representative samples of products and no t on so called ‘golden samples’? Has the CPSC 
considered prescribing timeframes fo r the validity of certificates? 
 
RESPONSE:   CPSC is issuing a proposed rule that  would establish requirements for a reasonable 
testing program and for compliance and continuing  testing for children’s products.  The proposal 
would also address labeling of consumer products to  show that the product complies with certification 
requirements under a reasonable testing program for non-children’s products or under compliance and 
continuing testing for children’s products.  The pr oposed rule would implement section 14(a) and (d) 
of the Consumer Product Safety Act (‘‘CPSA’’) , as amended by section 102(b) of the Consumer 
Product Safety Improvement Act of 2008 (‘‘CPSIA’’).  The issues of sampling and certificates are being considered as part of this rulemaking e ffort.  The proposed rules can be found here: 
http://www.cpsc.gov/businfo/frnotices/fr10/testing.pdf. 
 
Pg 37, para 91
:  The issue of risk assessment is high on  the agenda of product safety regulators 
around the world. There are a number of methodologi es used around the world, each with its own 
strengths and weaknesses.  As yet there is no one method that has universal acceptance.  A key issue 
for regulators in this area is, as far as is pr acticable, to have a common global approach to risk 
assessment of consumer products that is coheren t, practical and credible.  This would benefit 
regulators, producers and suppliers of consumer pr oducts and consumers.  In developing a risk 
assessment methodology will the CPSC consider th e issue of having a common risk assessment 
approach with other jurisdictions?  Will it al so consider establishing information sharing 
arrangements with international counterparts with  a view to enhancing risk management on a global 
scale? 
 
RESPONSE:   CPSC invites public comment – including from foreign government agencies -- and 
considers those comments in the development of its rules and policies.  It foresees establishing information sharing arrangements w ith foreign product safety agencies as a way of better responding 
to product hazards. 
 
Pg 38, para 92
:  The GAO report recommends that as part of a long term strategy for ensuring the 
safety of consumer products entering the Un ited States, the Commission considers plans for 
international engagement.  International engagement  including at the regulatory level, should be 
encouraged wherever possible.  It would, for examp le, be particularly helpful in relation to the 
development of a risk assessment methodology menti oned in paragraph 91 above.  What progress has 
been made in implementing these recommendations?  
RESPONSE:   CPSC has numerous active bilateral relati onships and is activel y engaged in product 
safety work in OECD, APEC, and in the Inte rnational Consumer Pr oduct Safety Caucus. 
 Pg 39, para 93
:  The report notes that the Commission will set the lead content limit to 100 parts per 
million (ppm) effective from August 2011.  This will be a different level from many other jurisdictions 
including the EU, Australia and New Zealand where the limit is (and has been for some time) 90 ppm. 
It is evident that lead is seen as a substance that  needs to be controlled in relation to exposure of 
children.  However, having different limits in d ifferent jurisdictions creates additional compliance 
costs (where producers have to work to two or mo re different standards) and barriers to trade.  Does 
the United States envisage an approach whereby the re is global consensus around the risk posed by 
substances such as lead, but the regulated limits  are set within an agreed  range/tolerance level? 
 
RESPONSE:   The United States would review any such proposal from New Zealand with interest. 
  WT/TPR/M/235/Add.1 
 Page 325 
 
 
 Rules of Origin 
 Pg 24, para 25
:  CBP considers that the substantial transfo rmation test has often resulted in "a lack 
of predictability and certainty for both CBP and the trade community".  The report states that in 
2008, CBP issued a proposal to establish a set of codified origin rules that rely primarily on changes 
in tariff classification and that the U.S. authoriti es are considering what action to take, if any.  Is 
there a prescribed timeframe for a public notification of the final decision?  
RESPONSE:   There is no set timeframe for public notifi cation of the final decision.  However, the 
proposal is under active consideration.  Once the review is finished, a document will be published 
informing the public of the results. 
 
Pg 24, paras 26 and 27
:  Have any problems arisen when applying product specific rules and other 
ROO provisions such as “transhipment” where diagonal accumulation has occurred?  If so, what 
actions have been taken to address such problems? 
 RESPONSE:   The CAFTA-DR “diagonal” cumulation provi sion is relatively new, only coming into 
effect in August 2008.  Only a small percentage of the CAFTA-DR claims indicate the usage of this 
provision.  If problems were detected, CBP would take  the appropriate actions as necessary to enforce 
these provisions. 
 
Government Procurement 
 Pg 17 Para 66 of the Report by the United States
 refers to USTR's Small and Medium Sized 
Enterprises initiative.  What progress has been made in encouraging Sm all and Medium Sized 
Enterprises to become more comp etitive through increased exposure to international competition? 
 
RESPONSE:  U.S. small businesses are key engines for ec onomic growth, jobs and innovation.  The 
Export Promotion Cabinet has developed recommenda tions to address the eight priorities for the 
National Export Initiative (NEI) set out in Ex ecutive Order 13534 on March 11, 2010.  The 
recommendations cover the five components of the NE I -- access to credit, especially for small and 
midsize firms;  trade advocacy and export promoti on efforts;  market access and removing barriers to 
the sale of U.S. goods and services abroad;  enforcem ent of trade rules;  and pursuing policies that 
will increase global economic growth.  Eight Priorities Identified in the NEI Executive Order 
Priority 1:  Exports by Small and Medium-Sized Enterprises (SMEs) 
Priority 2:  Federal Export Assistance Priority 3:  Trade Missions Priority 4:  Commercial Advocacy Priority 5:  Increasing Export Credit Priority 6:  Macroeconomic Rebalancing 
Priority 7:  Reducing Barriers to Trade 
Priority 8:  Export Promotion of Services  With USTR's SME initiative, which supports the goals of the NEI, we are working to better integrate 
SME issues and priorities into our trade policy and increase outreach to small businesses.  In order to 
better understand SME performance, USTR requested the U.S. International Trade Commission to 
prepare a series of reports on U.S. SMEs in interna tional trade.  See www.ustr.gov for the reports and 
further information on SMEs.  For further info rmation on the NEI priorities and recommendations, 
see the “Report To The President On The National Export Initiative:  The Export Promotion Cabinet’s 
Plan For Doubling U.S. Exports In Five Years” issued in September 2010, which can be found at:  
(http://www.whitehouse.gov/sites/defau lt/files/nei_report_9-16-10_full.pdf). WT/TPR/M/235/Add.1 
Page 326 
 
 
 Agriculture 
 Pgs 84-85, para 21
:  The Secretariat report notes that in May 2009, DEIP was made available for the 
year beginning 1 July 2008 through publication of invitations for offers to apply for bonuses for 
exports of non-fat dry milk, cheese, or butterfat  quantities.  On 6 July 2009, another announcement 
activated the program for the year beginning 1 July 2009.  The determination by USDA/CCC is based 
on an evaluation of both the export and domestic ma rkets for that commodity.  According to the 
authorities, the DEIP bonus is intended only to o ffset the differential between the export market and 
the domestic market.  
 Noting that on 6 July 2009 another announcement ac tivated the program for the year beginning 1 
July 2009, we would be grateful for an update fr om the U.S. on future plans for the programme. 
 
RESPONSE:   On July 14, 2010, USDA announced DEIP allocations for program year (July-June) 
2010/11 in conformity with provisions of the Farm Bill.  The United States utilized the DEIP in 
program year 2008/09 and early in program year 2009/10.  WT/TPR/M/235/Add.1 
 Page 327 
 
 
 NORWAY 
 1. Anti-dumping measures  
The United States is a frequent user of anti-dumping  measures.  The Secretariats’ report describe the 
periods of application for the 254 measures currently in force by the United States.  From this we note 
that 38 anti-dumping measures have been in fo rce for more than 20 years, and 71 anti-dumping 
measures have been in force between 10 and 20 yea rs, including a measure against Norway.  
 
How does the United States justify and explain the economic rationale for such extended applications 
of anti-dumping measures?  Do the authorities of the United States at regular intervals verify the 
continued existence of dumping and injury to the dom estic industry caused by dumping?  If this 
should not be the case, how can the United States conclude that the exporter continues with injurious dumping?  
RESPONSE:   Under U.S. law, and consistent with  the WTO Antidumping Agreement, antidumping 
duties remain in effect for as long as and to the ex tent necessary to counteract injurious dumping.  
Five years after the imposition of the duties, the Department of Commerce (DOC) and the U.S. International Trade Commission (USITC) undertake s unset reviews to determine whether revocation 
of the antidumping duty order would likely lead to the continuation or recurrence of dumping and 
injury.  If the determinations by both agencies are affirmative, the order remains in place;  if the 
determination by either DOC or the USITC is ne gative, the order is revoked.  These reviews are 
conducted every five years for the duration of the or der.  Thus, the reason that some antidumping duty 
orders remain in place is that the evidence of r ecord supports the conclusion that dumping and injury 
are likely to continue or recur if the order were revoked. 
 
2. Import Tolerance 
 The Food, Drug and Cosmetic Ac t states in section 512 that: 
 
“.. a use or intended use of a new animal drug sha ll not be deemed unsafe under this section if the 
Secretary establishes a tolerance for such drug and any edible portion of any animal imported into 
the United States does not contain residues exceeding such tolerance.” 
 
Import Tolerances is an important tool to allow fo r trade in foods without compromising food safety 
and public health.  Accordingly, we would appreciat e an update on the actual state of implementation 
of the provisions of Import Tolerances, the pro cedure to follow when applying for import tolerances, 
the time frame involved and the results of applications received so far.  
 RESPONSE:  Even though pesticides used in a foreign c ountry are  not subject to Environmental 
Protection Agency (EPA) registration requirement s under the Federal Insecticide, Fungicide, and 
Rodenticide Act (FIFRA), a pesticid e residue in imported food or feed must conform with a tolerance 
(an allowable residue level) or tolerance exemption established by EPA.  There is no statutory or 
regulatory distinction between an import tolerance an d any other tolerance established by EPA.  Both 
must meet all current statutory requirements, incl uding the safety standard (“reasonable certainty of 
no harm”) for pesticide residues in food, set fort h in Section 408 of the Federal Food, Drug, and 
Cosmetic Act (FFDCA), as amende d by the Food Quality Protecti on Act of 1996 (FQPA).  Import 
tolerances generally require the same types of da ta as are needed to assess dietary risk, make the 
necessary food safety determinations, and establish to lerances associated with  U.S. registrations, 
including product chemistry, residue chemistry, and t oxicology data, as well as data representative of 
actual growing conditions.  EPA needs these data to  assess the potential dietary risk and make the 
required safety finding for an import tolerance. WT/TPR/M/235/Add.1 
Page 328 
 
 
 Specific information on how to apply for an import tolerance is publicly available on EPA’s website 
or in the Federal Register.  On August 11, 2010,  EPA published a notice in the Federal Register 
outlining the process and fee structure for applying fo r an import tolerance.  This information can be 
found at http://edocket.access.gpo.gov/ 2010/2010-19720.htm.  EPA estimates that a petition can take 
from 15-21 months to complete the review depending on the data to be submitted, including whether 
or not the pesticide is a new active ingredient.  In  all, EPA has established close to 12,000 pesticide 
tolerances, some of which are import tolerances only.  4. Maritime transport services  We take note of the statement in para. 71 in th e Secretariats report that “The United States will 
continue to play a leadership role and work with  other WTO Members in various configurations in 
pursuit of a successful conclusion to the Doha Round  that opens new markets and creates new trade 
flows”.  Norway believes engagement and comm itment by more members including the U.S. on 
maritime transport services, would affect the service  negotiations positively.  We would be pleased to 
hear more specifically if U.S. have in mind an y initiatives on Maritime Transport Services.  
 In chapter 3 the implementation of bilateral free tr ade agreements are outlined.  We would be pleased 
to receive information on whether maritime trans port services are included in these agreements, and 
if so, whether any of these agreements contain pr ovisions giving access to government owned or 
controlled cargo on a reciprocal basis.  In IV(ii) the main features of maritime transpor t services are described. Ne w legislative initiatives 
and amendments are launched this year on Jon es Act, Consolidated Land, Energy, and Aquatic 
Resources Act of 2010 (Clear Act) and Oil Pollu tion Act of 1990 (OPA 90).  We would appreciate 
more information on the potential consequences of these initiatives and amendments for the ability of 
foreign companies to operate offshore drilling and pr oduction or provide oth er maritime transport 
services in the U.S..  
 RESPONSE:   With respect to bilateral free trade agre ements concluded by the United States, there 
are limited maritime transport services commitments, which include:  landside aspects of port activities, including operation and ma intenance of docks;  loading and unloading of vessels directly to 
or from land;  marine cargo handling;  operation and maintenance of piers;  ship cleaning;  
stevedoring;  transfer of cargo between vessels and trucks, trains, pipelines, and wharves;  waterfront 
terminal operations;  boat cleaning;  canal operatio n;  dismantling of vessels;  operation of marine 
railways for drydocking;  marine surveyors, except cargo;  marine wrecking of vessels for scrap;  and 
ship classification societies.  None of these agreements contain provisions committing access to 
government-owned or controlled cargo on a reciprocal basis.  
Concerning the proposed legislative initiatives, the Administration has not taken a formal position on 
the proposed legislation.   WT/TPR/M/235/Add.1 
 Page 329 
 
 
 PAKISTAN 
 
Question No. 1 
 The U.S. is granting duty free treatment on certai n products under its GSP re gime.  Presently, the 
scheme only covers 1.5% of the total U.S. imports  from the GSP beneficiary countries primarily due 
to exclusion of footwear, textiles and apparel and similar product of export interest of developing 
Countries.  It is appreciable that the U.S. is pr oviding duty free access of such products including 
textile and apparel under different schemes like AGOA , ATPA etc.  Since the GSP regime is under 
review by the U.S., is there any possibility that pr oducts of export interest of developing countries are 
included in the new GSP scheme? 
 
RESPONSE:  Nearly 70 percent of total imports enter the United States free of duty, including 
products entering under GSP and our  other preference programs.  Product coverage and other 
elements of preference programs are generally in the hands of the U.S. Congress.  The Administration 
regularly reviews the list of products that are elig ible for the GSP program, including requests to add 
products to the program, within the scope set by the Congress. 
 
Question No. 2 
 
The tariff structure of the U.S. contains tar iff peaks on products of export interest of developing 
countries e.g. textile and apparel, footwear and certain  leather products.  The share of imports of 
these products in the U.S. is not more than 5% of its  global imports but the customs duty collected by 
the U.S. on such products contributes around 40-50% of its total duty collected on imports.  How does 
such a tariff structure is viewed in the context  of U.S. government’s policy to help developing 
countries to benefit from increased trade?  
RESPONSE:   The U.S. duty structure is a result of several successive rounds of multilateral trade 
negotiations.  In 2009, United States imports of tex tiles, apparel and footwear totalled $98 billion, and 
many developing and least developed countries are s uppliers of these products to the United States.  
As is the case with other Members, the incidence of  tariff peaks in the U.S. tariff schedule would be 
further reduced with a balanced, amb itious conclusion of the Doha Round. 
 
Question No. 3 
 
According to the press reports, U.S. is currently  reviewing its trade remedy laws, especially on 
antidumping with a view to amending  those.  Would U.S. delegation share the salient features of the 
proposed legislation with the Members?   
 RESPONSE:   On August 26, 2010, the Department of Commerce (DOC) announced a Trade Law 
Enforcement Package.  The proposals which make up this package place a high priority on updating 
and refining DOC’s current antidumping and counter vailing duty practice in a fair and transparent 
manner that is consistent with the United States’  international obligations.  The proposals address a 
range of issues that have arisen in DOC’s anti dumping and countervailing duty practice.  In many 
instances, Commerce will pursue th ese proposals through a public notice and comment procedure in 
the Federal Register
, and will give stakeholders, including ot her governments, a full opportunity to 
comment on the proposed changes in practice. WT/TPR/M/235/Add.1 
Page 330 
 
 
 PERU 
 
IV.  DEVELOPMENTS IN SELECTED SECTORS  
(2)  Financial Services  
(i)  General legal framework 
 
1. Paragraph 58 states as follows:  “Branches and agencies of foreign banks have similar 
powers to banks but agencies may not accept deposits from  U.S. citizens or residents.  At the state 
level, there are limitations on the acquisition or est ablishment of a state-chartered bank, and on the 
establishment of branches or agencies.”  Peru w ould like to know what types of limitations are 
applied at the state level on the acquisition or establishment of banks established in states and on the establishment of branches or agencies.  
RESPONSE:   Current limitations at the state level are described in the United States’ schedule of 
commitments. 
 Permission to establish state-licensed branches or ag encies, or to own commercial bank subsidiaries, 
is based on a reciprocity test in the following Stat es:  California (applies also to savings and loan 
associations), Connecticut (applies also to credit uni ons),  Georgia, Illinois, Kentucky, Louisiana, 
Massachusetts, Michigan, North Carolina, Pennsylva nia, Texas, Washington.  Among the conditions 
on which agency or agency and re presentative office licenses may be granted for the following States 
is that the foreign bank is one of the five largest  banks in the home country:  Florida, Oklahoma.  
Permission for a foreign-owned bank or trust compan y to act as fiduciary, and to use satellite banking 
terminals, is based on a reciprocity test in Iowa.  Iowa also subjects the activities of foreign-owned 
savings and loan associations to a reciprocity test. 
 
(3)  Transport  
(i)  Air transport services (b)  Regulatory framework 
 2. Paragraph 83 states as follows:  “Non-U.S. citizens may not own more than 25% of the 
voting interest in a U.S. air carrier.  The Departm ent of Transportation may, on a case-by-case basis, 
allow total foreign equity investments (voting and no n-voting) above 25%, as long as actual control 
remains in the hands of U.S. citizens.”  Peru wi shes to know how the Department of Transportation 
defines “actual control” in allowing total foreign equity investments above 25%. 
 RESPONSE:   The Department decides the issue of "actual control" based on the totality of 
circumstances involved in each case.   Citizenship determinations are necessarily made on a case-by-
case basis because every case has its own unique set of facts.  
(5)  Professional and Business Services provided to Companies  
(i)  Introduction  
3. Paragraph 133 states as follows:  “The U. S.-Chile and U.S.-Singapore trade agreements 
include provisions that allow non-immigrant professionals to enter the United States temporarily to 
engage in business activities.  The numbers are limited  to 1,400 for Chile, and 5,400 for Singapore.”  
Peru wishes to know how many professionals from  Chile and Singapore applied for entry into the 
United States under the provisions of such trade agreements and how many of them were granted 
entry.  
RESPONSE:   Statistics related to visa issuance can be  found on the U.S. State Department website.  
The numbers for Chile and Singapore for the last 5 years are: 
  WT/TPR/M/235/Add.1 
 Page 331 
 
 
  
H-1B1 Issuances to National s of Singapore and Chile 
FY05-FY09 Singapore Chile 
FY05 199 76 
FY06 286 154 
FY07 416 223 
FY08 411 308 
FY09 302 319 
 
W/TPR/G/235  (3)  U.S. Trade-related Assistance within the Framework of the World Trade Organization (c)  WTO and trade facilitation   
4. Paragraph 142 reads as follows:  “More recently, U.S.  support for work in trade and 
development corridors in Africa, including through th e Global Hunger and Food Security Initiative, is 
increasing.  Through this assistance, the United States has supported the WTO Doha discussions by 
providing assistance to developing countries that seek help in responding to the regulatory proposals 
made by members in the Negotiating Group on Trade  Facilitation.”  Peru requests that the United 
States indicate in detail what specific trade-facilita tion-assistance-related actions it provides within 
the framework of the Global Hung er and Food Security Initiative. 
 
RESPONSE:   The assistance provided depends on the sp ecific needs and requests of the countries 
that are part of the Feed the Future, the U.S. program supporting food security.  Additional information, including USAID implementation pl ans, can be found at www.feedthefuture.gov. 
 
PERU SUBSEQUENT QUESTIONS 1 
 
Report of the United States Government 
 
1. In section 19 of the report of the U.S. Government it indicates that sanitary and phytosanitary 
measures, technical standards and technical regula tions should not constitute  covert or unjustifiable 
restrictions to market access.  Thus, in the Ag reements on Technical Barriers to Trade and Sanitary 
and Phytosanitary Measures of the WTO they have est ablished various obligations on each member 
country, one of which is that each member country mu st be transparent at the time of providing the 
information requested by persons wishing to expor t products to their territory.  Both agreements 
establish the obligation for services that are provid ed to all interested persons with the relevant 
documents on the technical or sanita ry requirements requested for imports. 
 2. On this point, Peru considers that the Government of the United States should provide 
information on technical requirements required by th e authorities in charge via email.  It should be 
noted that, one time the Indecopi (National Institu te for the Defense of Competition and Intellectual 
Property) had requested the service indicated above to  the competent authority in the United States to 
import seafood products, however, such information was not forwarded but instead only sent the 
addresses of U.S. health agencies, so that qu eries are carried out by the postal service. 
 
RESPONSE:   The United States wishes to thank the G overnment of Peru for its suggestion and 
wishes to inform the relevant authorities that information regarding all U.S. SPS and TBT laws, 
regulations and procedures are available online and through our WTO National Enquiry Points.   WT/TPR/M/235/Add.1 
Page 332 
 
 
 Report of the United States Government 
 
3. With regard to the report of the United States Government, Peru requests to know the 
following: 
  i. What is the expected impact of the application of the rules of competition on the  United States trade policy?  
ii. Have there been recent cases where competition policy has had a positive impact on 
increasing exports, employment, open markets and dr ive innovation, in accordance with the 
established commercial trade policy ob jectives of the United States? 
 
RESPONSE:   The rules of competition in the United Stat es largely are found in the antitrust laws and 
in the more than 100 years of ju risprudence interpreting and applying those laws.  United States trade 
policy is a complex topic, but, insofar as it promot es free, open and efficient international markets, 
United States antitrust law should support it and vice versa.  
 
We believe and expect that all of our government antitrust cases have a positive impact on the U.S. 
economy, and there are a variety of recent cases that demonstrably fit that description.  See Statement 
of Christine Varney, Assistant Attorney General,  Antitrust Division, before the Subcommittee on the 
Courts and Competition Policy, Committee on the Judiciary, U.S. House of Representatives, 
Oversight Hearing on the Federal Trade Commi ssion’s Bureau of Competition and the U.S. 
Department of Justice’s Antitrust Division, July 27, 2010;  available at:  www.justice.gov/atr/public/ 
testimony/260809.htm. 
 
Report of the WTO Secretariat 
 
4. In the report of the WTO Secretariat it notes that  in May of 2009, the Department of Justice 
identified that “inadequate supervision” would have c ontributed to the crisis and reported that it was 
producing a “change of philosophy.” On this poi nt, Peru presents the following questions: 
 
 i. What are the factors that show an inadequat e antitrust supervision during this decade in the 
 U.S.?  ii. What are the aspects that determine the new approach in the implementation of the 
 competition policies in the United States as of 2009?  
5. Also on the document in general, P eru requests the following information on: 
  i. Do the reforms envisioned in the implementa tion of competition policies in the U.S. include 
 a new approach for the treatment of exemptions?  ii. What is the recent experience?  iii. What are the policy guidelines to be applied for the aforementioned regimen in the coming 
 years?  
RESPONSE:   Questions 4 and 5 are very broad and do not lend themselves to short answers.  With 
regard to the 2009 remarks quoted by the WTO Secret ariat, we suggest examining the cited document 
– Christine Varney, Assistant Attorney General, “V igorous Antitrust Enforcement in this Challenging 
Era,” May 12, 2009;  available at:  www.ju stice.gov/atr/public/speeches/245777.htm -- and a 
contemporaneous speech by Deputy Assistant A ttorney General for Antitrust Carl Shapiro, 
“Competition Policy in Distressed Industries,” May 13, 2009;  available at:  
www.justice.gov/atr/public/speeches/245857.htm.  In addition, the very recent Congressional 
testimony of Assistant Attorney General Varney provides current information on Justice Department 
cases, activities and objectives.  See Statement of As sistant Attorney General Varney, July 27, 2010, 
cited above in the previous answer.  The Unite d States does not envision a new approach for the  WT/TPR/M/235/Add.1 
 Page 333 
 
 
 treatment of exemptions.  When possible, considera tion should be given to modifying or eliminating 
specific exemptions, and all of them should be stric tly and carefully construed.  In general, U.S. 
antitrust policies will continue to evolve in res ponse to economic conditions  and economic and legal 
scholarship.  A case in point is the revised Horizontal Merger Guidelines document recently 
completed by the Department of Justice and the Federal Trade Commission.  See Press Release on the 
issuance of the revised Horiz ontal Merger Guidelines, August 19, 2010;  available at:  
www.justice.gov/atr/public/press_releases/2010/261642.htm.  Report of the WTO Secretariat 
 
6. Indecopi presents the following comments on the fo llowing points:  (i) special measures that 
directly affect commercial imports  (anti-dumping duties, counterv ailing duties and safeguards), and 
(ii) other measures affecting trade and in vestment (grants and other government aid). 
 
7. In the Secretariat report it mentions that in  the period of 2007 and 2009, the number of anti-
dumping investigations and anti-subsidies initiated by the U.S. increased by 64% (35 studies) in 
relation to the period from 2004 to 2006.  Of th e 90 investigations initiate d between 2007 and 2009, 
77% (69 studies) and 61% (55 studies) led to the imposition of provisional and definitive measures, 
respectively.  It is worth mentioning that the tota l number of investigations initiated in the period of 
2007 and 2009, 70% (63 studies) corresponded to an ti-dumping proceedings, while the remaining 
30% (27 studies) to anti-subsidy proceedings.   
 
8. In this regard, Peru would like to know if th e increase in anti-dumping and anti-subsidies is 
due to an increase of requests made by U.S. i ndustry or if it represents the start of official 
investigations conducted by the competent authority.  
 
RESPONSE:   The increase in initiations of antidumpi ng and countervailing duty investigations 
during the 2007-2009 period is a direct result of an increase in the number of petitions filed by U.S. 
industries.  While the Department of Commerce has the authority under U.S. law and the AD and 
SCM agreements to self-initiate investigations, it rarely does so.  During the 2007-2009 period, all 
investigations initiated by the United States were pur suant to petitions filed by domestic industries. 
 
9. Also, according to the report of the Secret ariat, requests for imposition of countervailing 
duties are often accompanied by requests for an ti-dumping duties, which often leads to the 
simultaneous implementation of both measures.  Thus, about 90 percent of the 41 countervailing duty 
orders in force in December of 2009 were accompanied by anti-dumping duty rights.  
 
10. In this regard, Peru queries if the high rate of simultaneity of the anti-dumping procedures 
and countervailing measures in 2009 (90%) have also b een noted in the past and what have been the 
reasons that would explain that in 2009 90% of the orders for countervailing duties were accompanied by orders over anti-dumping duties.  P eru also whishes to know if the investigations 
leading to the implementation of anti-dumping and countervailing measures on the same imports are 
processed in parallel form, and whether any particul ar methodology is used to separate the damage 
attributable to the practice of dumping of that attributable to subsidies.  
 
RESPONSE:  There is nothing unusual about the simulta neous filing of petitions for the imposition 
of AD and CVD duties.  Such filings are permitted under U.S. law and the WTO Agreements and are 
processed concurrently.  U.S. industries, not the U.S. Government, determine whether their trade 
concerns are best addressed through an AD investig ation, a CVD investigation, or both, and file 
petitions accordingly.   
 
The United States International Trade Commission (U SITC) made final injury determinations in 
seven original countervailing duty investigations in 2009.  In six of these investigations, there was a WT/TPR/M/235/Add.1 
Page 334 
 
 
 corresponding antidumping duty investigation.  In recen t years, a substantial majority (but not all) 
petitions seeking initiation of a coun tervailing duty investigation al so sought institution of a 
corresponding antidumping investigation.  When the Department of Commerce (DOC) 
simultaneously initiates antidumping and countervailing duty investig ations concerning a particular 
product from the same country, the USITC will c onduct both investigations simultaneously, although 
it may not make its final determinations in the antidumping and countervailing duties simultaneously 
if the DOC does not do so. 
 
In each of the six countervailing duty investigati ons on which the USITC made affirmative final 
determinations in 2009, there was a corresponding an tidumping duty investigation.  In each of these 
investigations, the DOC found that the imports that were subsidized were also dumped.  
Consequently, there was no need for the USIT C to distinguish between dumped imports and 
subsidized imports in its injury analysis. 
 
Investigations leading to the application of AD and CVD measures on the same imports are conducted 
according to timeframes mandated by U.S. law that  are concurrent, but have differing deadlines. 
 
11. On the other hand, in paragraph 49 of the Report of the Secretariat it noted that in a series of 
anti-dumping investigations culminated, has been the subject of changes in the framework of the 
WTO, particularly with regard to the practice of calculating margins of dumping by the methodology 
of “zeroing.” In this regard, Ind ecopi presents the following questions: 
  i. Does the Commerce Department continue to  use the methodology of “zeroing” in the 
 analysis of their investigations and of their exams? 
 
 ii. If the answer is yes, how have the recomme ndations made by the Appellate Body of the 
 WTO in the statements issued in connection with the application of this methodology been 
 addressed or picked up? 
 RESPONSE:  The United States stopped applying the zeroing methodology in investigations 
effective on February 22, 2007;  the United States  continues to apply zeroing in administrative 
reviews.  The Appellate Body reports on zeroing rai se serious systemic concerns for the United States 
that go beyond the issue of zeroing.  Indeed, the United States believes that the Appellate Body 
reports create new obligations to limit the use of  antidumping measures when such obligations were 
never agreed to by the WTO Members.  Neverthe less, the United States takes its WTO obligations 
very seriously, and has stated publicly that it intends  to comply with the WTO rulings in all of the 
zeroing disputes.  We are very actively engaged in a serious effort with our domestic stakeholders and 
our Congress to find an acceptable solution.  We are not  in a position at this tim e to provide details on 
the specific steps we will take or the timeframe to comply w ith the Appellate Body rulings. 
 
12. In paragraph 61 of the Report of the Secretar iat it noted that the in crease in the number of 
countervailing investigations is due to, that in 2007 the policy of the Department of Commerce of the 
United States, which provided for the non-applica tion of countervailing rights to countries classified 
as “non-market.”  Economies were amended. In this  regard, the CFD inquires as to what was the 
said policy and what have been the main  changes made in relation to the same. 
 
RESPONSE:  In 2006, the Department of Commerce (DOC ) initiated the countervailing duty (CVD) 
investigation involving Coated Free Sheet Paper fro m China in response to a petition properly filed by 
U.S. domestic interests.  DOC determined that it was appropriate to revisit its prior practice with respect to the applicability of the CVD law to  countries found to be non-market economies for 
antidumping duty purposes.  In the Coated Free Shee t Paper CVD investigation,  DOC determined that 
there was nothing in the U.S. CVD law that preven ts applying a CVD remedy to countries that have 
been found to be non-market economies for antidum ping duty purposes.  DOC also concluded that  WT/TPR/M/235/Add.1 
 Page 335 
 
 
 China’s current economy is vastly different from the command-and-control economies at issue in the 
mid-1980s when DOC’s policy regarding non-market economies was first articulated.  Specifically, 
DOC found that the nature of the Chinese economy in recent years allows DOC to identify and 
measure countervailable subsidies.  DOC made a si milar determination with respect to Vietnam in 
2009 in the context of a CVD investigation of Polyethylene Retail Carrier Bags from Vietnam.   
PERU SUBSEQUENT QUESTIONS 2 
 
(1) The U.S. report declares a broad opening to reductions of the restrictions on access to the 
American market.  But that assertion contrasts with  the information furnished by the Secretariat, 
according to which new security  requirements for imports have been established and are pending 
implementation, such as advance information an d scanning of all containers before they are loaded 
aboard ship, among others.  This undercuts the comp etitiveness of exports from developing countries, 
whose producers would be hurt because, unfortunatel y, the producers in developing countries have no 
access to internal assistance such as the measures di scussed in Point II. 1) 9) by the United States.  
 
RESPONSE:   While Peru has not posed a question, the United States notes its confidence that we can 
implement security and safety measures in way that minimizes the impact on trade, and we are committed to working with our domestic and foreign partners, trade and industry, to implement these 
measures in a logical and practical manner that integrates smoothly into the global supply chain. Our overall goal is to build cooperative relationships that will strengthen and improve overa ll international 
supply chain and U.S. border security. 
 
(2) In Parts II (Trade and investment policy fram ework, 1.5) and III (Trade policies and 
practices, by measure, viii). 78, 86, and ix) 99, 100), it  is indicated that the states can issue their own 
standards for Technical Regulations and Health and Plant Health Measures, in response to which the 
following clarification is requested: 
 (a) In regard to technical re gulations, the Secretariat states that “the subfederal measures 
 reported to the WTO during the period under examination refer to protection of the 
 environment and of the life and health of persons and the safety of consumers ,” with which it 
 would be understood that the United States notifies the WTO of both federal and subfederal 
 (state-level) technical regulations.  If that is the case: 
 - When there are differences between the re quirements prescribed in the regulations 
  for a single product, which one prevails?  - Are there technical regulations that a re reported and are applied in only one or  
  several states, but not throughout the territory of the United States?  
 
RESPONSE:   Where a conflict exists between federal and non-federal SPS requirements, the federal 
requirement will prevail.  States and local govern ments do create and enforce their own measures, 
some of which are for the purposes pr ovided in Annex A(1) of the SPS Agreement.  Where this is the 
case, such measures will differ from state to state or  local jurisdiction to local jurisdiction.   
 (b) The following is stated in Point 99:  “In addition, the responsible agencies at the state level 
 can formulate and apply their own health and plant  health measures. Pursuant to the federal 
 legislation, the states are empowered to adopt  health and plant health measures provided 
 they are consistent with the federal standards and regulations, as well as with the obligations 
 imposed by the pertinen t disciplines of the WTO .” The following questions arise in regard to 
 this assertion: 
 
- Does it refer to the adoption of health and plant health measures for internal 
 application? WT/TPR/M/235/Add.1 
Page 336 
 
 
 - If they are external, does this not contradict the provisions of Article 13 of the MSF 
 Agreement?  
 If they are reported to the WTO, does this ru le then prevail when there are differences among 
 them?  
 
RESPONSE:   It is unclear what is meant by internal  and external application.  However, the 
United States acts consistent with all of its in ternational obligations, including those included in 
Article 13 of the SPS Agreement. 
 
- Point 116 indicates that the FSIS re-inspect s all shipments of meat, poultry, and egg-
 based products at the border, after they have been examined by the CBP and APHIS.  Must these products be inspected twice?  Couldn’t an integrated procedure be 
 performed by U.S. authorities?   
 
 The reply to these inquiries will make it possibl e to clearly understand the rules imposed by 
 the United States as a country, and make the trouble-free entry of our exports predictable.  
 
RESPONSE:   U.S authorities work together where possibl e to integrate procedures to ensure that 
exporters to the United States have met our science based health and safety standards and expedite 
trade facilitation.   WT/TPR/M/235/Add.1 
 Page 337 
 
 
 SINGAPORE 
 
Question 1 
 
We note from the Secretariat’s report (WT/TPR/S/ 235, page 99, para 78) that the U.S. does not 
impose legal or regulatory barriers to private ownership  of airports with commercial service “but the 
general legal complexity at federal, state and loca l level, plus restrictions on the use of revenues have 
meant that there has been little interest from the pr ivate sector”. Specifically, the Secretariat’s report 
(WT/TPR/S/235, page 99, para 80) notes the “(1) loca l government's reluctance to cede control of the 
airport to a private entity;  (2) the availability of, and access to tax exempt financing and other low 
cost financing options, and (3) air lines' opposition to airport privatiz ation and their perception that 
the loss of governmental control may produce higher co sts.” as causes for a lack of interest in airport 
privatisation.  
 Would the U.S. have any plans to address the afore-me ntioned in relation to airport privatisation in 
the near future?  RESPONSE:   As is stated in paragraph 78, "The Airpor t Privatization Pilot Program, which began in 
1997, was intended to simplify the legal complexities a nd restrictions at the federal level and to assess 
whether privatization is a feasible way to ta p private capital for airport improvement and 
development."  Thus, the Airport Privatization P ilot Program is the attempt to simplify the legal 
complexities to promote private ownership of airports.  The Airport Privatization Pilot Program is a Federal program of the U.S. Department of Tran sportation/Federal Aviation Administration (FAA).  
The FAA has no plans to make changes to the Airport Privatization Pilot Program in the near future.   
 
Question 2 
 
We read with interest that the U.S. is currently r eviewing its “model” BIT to ensure its consistency 
with “public interest and the overall U.S. economic  agenda” (WT/TPR/S/235, page 18, para 34). 
 
What is the present status of the review, incl uding expected timeline for completion, possible 
directions, and new elements likely to be introduced to the new “model” BIT? 
 RESPONSE:   The Administration has received a large am ount of input from the full range of 
stakeholders regarding many important issues in the model BIT.  We want to ensure that we have a 
full opportunity to carefully consider all such in put before completing the review.  Given that the 
review is still pending, it would not  be appropriate to discuss specifi c changes under consideration.  
We can say, however, that we will be maintaining the core investment protections of the model BIT to 
ensure that our investors can compete on a level play ing field and are treated according to the rule of 
law in key foreign markets.  In addition, the Ad ministration is committed to strengthening labor and 
environmental protections, and we are exploring how we might do so in the model BIT.  We are also 
looking for ways to enhance provisions on transparen cy and public participation, which are concerns 
of a wide range of stakeholders.  Question 3 
 
The WTO Secretariat’s Report (WT/TPR/S/235, Page  54, Para 166) mentioned that laws for 
incorporation of compani es vary across states in the U.S.  The Re port further notes that incorporation 
need not be made in the particular state where the fi rm operates.  Instead, U.S. corporations, as well 
as subsidiaries and branches of foreign corpora tions, qualify to do business outside their respective 
state of incorporation by making a filing in each state where they intend to do business. 
 WT/TPR/M/235/Add.1 
Page 338 
 
 
 We would like to enquire if different states in the U.S. impose different requirements for companies to 
do business within their boundaries.  We will also be grateful if the U.S. could share with us what 
some of these requirements are.  
RESPONSE:   Yes. Each U.S. state maintains its ow n requirements for companies doing business 
within the state.  For example, each state maintains its own rules and regulations on investment in 
hospitals and healthcare facilities, including licensing,  permits, zoning, etc.  While there is no single 
resource for this information, many of these require ments can be found on state legislative websites or 
on state foreign investment promotion boards that o ffer detailed information for foreign firms wishing 
to establish a business in the state. 
 
Question 4 
 In both the U.S. Government’s Report (WT/TPR/G/235) and the Secretariat’s Report 
(WT/TPR/S/235), it was highlighted that President  Obama had announced the goal of doubling U.S 
exports in the next five years.  The Secretariat’ s Report also underlined that as part of the new 
National Export Initiative to achieve the goal, U. S. trade policy has fo cused on enhancing export 
promotion, along with monitoring and enforcemen t of trading partners’ commitments under 
international agreements.  In addition, the Secretar iat’s Report stated that there were anti-recession 
measures that have favoured domestic suppliers of goods and services.  The Secretariat’s Report also 
underscored the importance of open and transparen t trade and investment regimes to drive 
productivity and growth of the economy, and that ex port promotion should be complemented by 
continued reduction in remaining restrictions on market access and other distorting measures. 
 In light of the above, Singapore noted that several trade-related bills have been proposed in 2009 and 
2010, including: 
  a. Foreign Manufacturers Legal Accountability  Act of 2010 (H.R. 4678) which require 
  manufacturers and producers of covered products  that are imported into the U.S. to 
  establish a registered U.S. agent or have their imports prohibited from entering the 
  U.S market;  
 b. Section 1502 of The Restoring American Financial Stability Act of 2010 (P.L. 111-
  203), which creates reporting requirement for companies on their use of designated   “conflict minerals” as part of their production process; 
 
 c. Section 725 of the Consolidated La nd, Energy, and Aquatic Resources Act of 2009 
  (H.R. 3534) which establishes “build Am erica requirements fo r offshore facilities”; 
  and 
  d. The congressional majority’s “Make it in America” legislative initiative which seeks 
  to increase American manufacturing and create American jobs, and includes the  
  “End the Trade Deficit Act (H.R. 1875)”.  
 
Singapore would like to seek clarifications with the U.S.  on the (i) rationale of the above bills in light 
of WT/TPR/G/235, WT/TPR/S/235 and the United Stat es’ WTO obligations, and (ii) how the U.S. 
ensures that these bills are consistent with U. S. commitments under international agreements, 
specifically the WTO agreements. 
 
RESPONSE:   The bills reflect a variety of rationales.  For example, the FMLAA, as reflected in bills 
pending before the U.S. Congress, reflects a desire to ensure that consumer s in the United States can 
be confident that the products they buy are safe a nd that there are procedures available under U.S. law 
to address effectively any product liability issues th ey may engender.  The United States believes  WT/TPR/M/235/Add.1 
 Page 339 
 
 
 these goals can be accomplished without imposi ng undue burdens on foreign manufacturers.  
Likewise, the Conflict Minerals reflects an effort to promote peace and security in the Democratic Republic of Congo and to curb the illicit minerals trade that contributes to ongoing conflict in the region.  This provision does not restrict market acce ss.  It includes, for companies that report to the 
Securities and Exchange Commission, disclosure re quirements with respect to the use of conflict 
minerals.  The Conflict Minerals has become law while the others remain in Congress.  We cannot 
speculate on whether the remaining bills will become  law.  In general we work with Congress to 
ensure that legislation is cons istent with our WTO obligations. 
 Question 5 
 
The U.S. in its Government’s Report (WT/ TPR/G/235, Page 32, Para 153) notes that “the 
Administration has broken new ground in activel y engaging our trading partners... to identify the 
potential for a positive agenda in areas where intern ational trade policy and efforts to address global 
climate change overlap”.  Within this context, w hat are (i) the Administration’s position regarding 
the International Reserve Allowance Program – an equi valent “carbon tariff” - that is contained in 
the draft American Power Act;  and (ii) its view of  the potential impact of th is provision on imports, 
particularly those from WTO developing country members? 
 
RESPONSE: 
 
• The United States is fully committed to open tr ade policies and robust efforts to address 
 climate change.   
 
• Climate change is a global environmental challenge, and the Obama Administration wants to 
 ensure that the U.S. response is not weakened by  the failure of other countries to take action.   
 
• The Administration believes that the most eff ective approach to address concerns with carbon 
 leakage is to negotiate a new international clim ate change agreement that ensures that all the 
 major emitters take significant actions to reduce their greenhouse gas emissions.  We are 
 committed to this goal, and our negotia tors are working hard to achieve it. 
 • We will also work to ensure that our climat e policies are consistent with our international 
 trade obligations. 
 
Question 6 
 
We appreciate U.S. leadership thus far in adv ancing the negotiations to liberalise trade in 
environmental goods and services.  In May 2010,  USTR requested the U.S. International Trade 
Commission for two reports - 
 
(i) the first report to provide advice as to th e probable economic effect on U.S. industries and on 
U.S. consumers of reducing U.S. tariffs to zero on dutiable imported environmental goods 
from all U.S. trading partners;  and  
 
(ii) the second report to (a) provide an overview of the current state of global environmental 
goods trade;  (b) develop industry, trade and ma rket information for the items proposed in 
Annex III of WTO document TN/TE/19;  and (c) prepare several case studies on the 
competitive position of selected U.S. environmen tal goods industries that produce the items in 
Annex III of WTO document TN/TE/19. 
 
As it appears that the second report would not cover products outside the TN/TE/19 compilation, how 
would USTR consider environmental goods sub sequently proposed by other WTO members? WT/TPR/M/235/Add.1 
Page 340 
 
 
 Assuming the ITC reports note that certain U.S.  industries are not competitive in certain 
environmental goods, how would this affect the USTR’s position in the ongoing CTESS negotiations 
and how would USTR balance between supporting these U.S. industries and public interest?  
 Finally, we would appreciate if U.S. could provid e an update on the progress of the ITC reports.  
 
RESPONSE:   First, the USTR has the authority to request any necessary updates to advice and 
analysis that it seeks from the USITC and could u se this authority in the case of product coverage. 
 Second, the United States has been clear that we seek an ambitious and broad result in the 
environmental goods negotiations, and one that will benefit trade, the environment and development.  
The USTR will use the USITC report to inform it s negotiating position, as well as advice from other 
U.S. government agencies, the U.S.  Congress, and the private sector. 
 
Third, the first report by the USITC is due to U STR by October 15, 2010, and the second is due to 
USTR by February 15, 2011. 
 
Question 7 
 
The U.S. in its Government’s Report (WT/TPR/G/235,  Page 16, Para 61), has indicated that 
“members of the five policy advisory committees a re appointed by USTR or in conjunction with other 
Cabinet officers”.  The environment policy adviso ry committee is called the Trade and Environment 
Policy Advisory Committee (TEPAC) and is managed by  U.S. Environmental Protection Agency (U.S. 
EPA).   
Singapore would like to enquire on the membersh ip composition of the TEPAC, how regularly 
meetings are convened and its curren t priority issues of interest.  In addition, we would like to seek 
the U.S.’ clarification if classified/privileged info rmation about the U.S.’ FTA partners is divulged to 
these private sector advisors. 
 
RESPONSE:   The TEPAC is comprised of senior leve l representatives from the business sector, 
environment and consumer non-gove rnmental organizations (NGOs) , academia, and think tanks.  
TEPAC ’s full membership can be  found on USTR’s webs ite.  The TEPAC meets several times a year 
at a senior level and more frequently at a staff-lev el, where TEPAC members’ liaisons participate.  
TEPAC has broad interests, and most recently some of  its priority areas of interest have been the 
WTO fish subsidies negotiations, trade and clim ate change, and the TPP negotiations.  All TEPAC 
members are required to have a security clearance so  that relevant classified/privileged information 
can be shared with them under agreed procedures.  WT/TPR/M/235/Add.1 
 Page 341 
 
 
 SWITZERLAND 
 
Report by the Secretariat 
I.  ECONOMIC ENVIRONMENT  
National Income and Economic Balances 
Paragraph 14  To what extent is it in the view of the U.S. delegatio n correct to state that the large fiscal deficit at the 
level of the central state absorbs to a considerabl e degree the excess liquidity that was created during 
the current financial crisis, so that the combined impact of fiscal and monetary policy on the current 
account and the exchange rate tends to net out? 
 
RESPONSE:  Conventional economic theory indicates that expansionary monetary policy tends to 
lower the foreign exchange value of a country's currency whereas expansionary fiscal policy has the 
opposite effect.  Thus, expansionary monetary and fiscal policies could in theory offset each other and 
result in an unchanged exchange rate.  In order to  calculate the effect on the U.S. dollar during the 
crisis, we would not only have to determine the relative influences of the two U.S. policies, but take 
into consideration that monetary and fiscal policie s in all systemically important countries turned 
expansionary during the crisis. 
 
We would emphasize that the U.S. does not have a current account target and hence does not make policy decisions based on their impact on the cu rrent account.  The United States is committed to 
increasing national saving by putting government finances on a sustainable trajectory once the 
recovery is assured.  Unless rebalancing toward domestic demand growth occurs in external surplus 
countries, the U.S. current account deficit likely will rise as the U.S. economy recovers. 
 
Paragraph 17 
 How widespread are “balanced budget rules” at the level of the States and the municipalities?  How did these rules act in the curren t crisis (procyclical effect?)? 
 
RESPONSE:   Balance budget rules are present in 49 of the 50 United States (the only exception 
being Vermont).  The current recession has create d significant challenges to these states that are 
prohibited from taking on long term debt for operationa l spending.  To cope during this crisis, states 
have been using their reserve emergency funds,  slashing costs by reducing staff and services, 
increasing taxes and/or fees, as well as using available federal stimulus funds.   
 
II TRADE AND INVESTMENT POLICY FRAMEWORK  
Investment Agreements and Arrangements  
Paragraph 34  
Switzerland took note of the “Report of the Advi sory Committee on International Economic Policy 
Regarding the Model Bilateral Investment Treaty” of  September 30, 2009 to the State Department 
and USTR. Switzerland understands that a new Inves tment Subcommittee was constituted this year. 
What is the reason for that?  What are the main  areas of disagreement (if any) exposed in the 
aforementioned report?  When do the U.S. author ities expect a revised Model BIT to be published? 
 
RESPONSE:   The Administration has received a large amount of input from the full range of 
stakeholders regarding many important issues in the model BIT.  We want to ensure that we have a 
full opportunity to carefully consider all such i nput before completing the review.  Given that the 
review is still pending, it would no t be appropriate to discuss specifi c changes under consideration.  
We can say, however, that we will be maintaining the core investment protections of the model BIT to 
ensure that our investors can compete on a level play ing field and are treated according to the rule of WT/TPR/M/235/Add.1 
Page 342 
 
 
 law in key foreign markets.  In addition, the Ad ministration is committed to strengthening labor and 
environmental protections, and we are exploring how we might do so in the model BIT.  We are also 
looking for ways to enhance provisions on transparen cy and public participation, which are concerns 
of a wide range of stakeholders. 
 
III. TRADE POLICIES AND PRACTICES BY MEASURE  
Measures Directly Affecting Imports Paragraph 39 
 
According to paragraph 39, a fee of 0.125% is l evied for harbour maintenance purposes. Could the 
U.S. indicate whether there is a maximum set for this fee?  If not, how does the U.S. ensure the 
harbour maintenance fee to be in compliance with  article VIII of the GATT (costs of services 
rendered)? 
 RESPONSE:   The amount of the Harbor Maintenance Tax (HMT), also called the Harbor 
Maintenance Fee, is set by statute (26 U.S.C. § 4461 and 4462).  Funds collected through this fee are used for improvements to and maintenance of ports.  Fees are structured to help offset the costs of 
maintaining the ports for commercial trade and f unds collected through this fee are intended for 
improvements to and maintenance of ports. 
 
Other Measures Affecting Investment and Trade 
Business framework and foreign investment regime Paragraph 171  Does the statement in paragraph 171 mean that any planned transaction by e.g. foreign government 
agencies, state-owned enterprises, government pe nsion funds, and sovereign wealth funds that may 
result in the control of a U.S. company is subj ect to compulsory notification, 30 days review and 45-
day investigation unless the Treasury and any other lead agency determine that there is no risk for national security?  At what stage of the procedu re do the Treasury and any other lead agency take the 
decision on whether a transaction will not impair national security? 
 
RESPONSE:  There is no compulsory CFIUS notification for any category of transactions, including 
foreign government-controlled transactions and tran sactions in specific sectors.  As noted in 
paragraph 171, CFIUS has the author ity to initiate unilaterally a review  of a covered transaction, when 
a CFIUS agency submits its own notification of a tr ansaction, but reviews are primarily triggered by a 
voluntary notice to CFIUS by the parties to the trans action.  For greater clarity, the fifth sentence in 
paragraph 171 could be revised to in clude the italicized language that follows:  “For example, foreign-
government-controlled transactions that are notified to CFIUS  and certain transactions that result in 
foreign control of U.S. "critical infrastructure" that are notified to CFIUS  are subject to an 
investigation unless the Secretary or Deputy Secret ary of the Treasury, and of any lead agency, 
determine that the transaction will not impair national security.” 
 
When CFIUS receives notice of a covered transaction that qualifies as a foreign government-controlled transaction (and this same rule applies for certain covered transactions that result in foreign 
control of U.S. "critical infrastructure"), CFIUS conducts a review, as it does with any other covered 
transaction, which must be concluded within 30 days.  Upon conclusion of the review, CFIUS is 
required to conduct a follow-on investigation, unless the Secretary or Deputy Secretary of the 
Treasury and of any lead agency conclude that th e transaction will not impair national security.  The 
investigation must be concluded within 45 days.  CFIUS may also initiate an investigation of a 
covered transaction, whether or not foreign govern ment-controlled, if:  (1) CFIUS or a member of 
CFIUS believes that the transaction threatens to impa ir U.S. national security and that threat has not 
been mitigated;  or (2) a lead agency recommends , and CFIUS concurs, that an investigation be 
undertaken.  WT/TPR/M/235/Add.1 
 Page 343 
 
 
 Government procurement  
Paragraph 190 and Box III.4 (Selected federal procurement procedures)  With regard to the requirements for the register in the Central Contractor Registration (CCR) 
database, suppliers established outside the United States must first obtain a NATO Commercial and 
Governmental Entity Code.  We understand that for s uppliers established in the USA, the registration 
is automatic and takes approximately one hour.  Could the U.S. Authorities elaborate on the 
substantial content of the differences of register requirements to be fulfilled by suppliers established 
in the U.S. and abroad? 
 
RESPONSE:  Non-U.S. registrants complete the same  registration application in the Central 
Contractor Registration (CCR) database  as U.S. registrants with four exceptions.  First, as noted in the 
question, non-U.S. registrants must first obtain a NATO CAGE Code from the appropriate source. 
See http://www.dlis.dla.mil/Forms/F orm_AC135.asp. Second, non-U.S. registrants that are located 
outside the United States and do not pay employ ees within the United States are not required to 
provide a Taxpayer Identification Number (TIN).  Third, non-U.S. registrants must provide the 
country of incorporation.  Fourth, non-U.S. regi strants doing business outside of the United States are 
not required to complete the financial inform ation section of the CCR database registration.  
Otherwise, U.S. and non-U.S. registrants complete  the same registration materials.  If a non-U.S. 
registrant has all application information readily  available, the registration process should take 
approximately one hour.  For more information, please see the CCR User’s Guide available at: 
https://www.bpn.gov/ccr/handbook.aspx.   
Paragraph 194 and Table III.8 
 
The Buy American Act allows applying preference marg ins of 12% if the lowest domestic offer is from 
a small business, while 50% margin is used for proc urements made by the Department of Defense.  Is 
it well understood that these preferential margins do no t apply to supplies from Members of the GPA? 
 
RESPONSE:   Yes.  The Buy American Act is im plemented through the Federal Acquisition 
Regulation (FAR) available at:  https://www.ac quisition.gov.  FAR part 25 addresses the Buy 
American Act and U.S. Federal pr ocurements subject to obligations  under international agreements, 
including the WTO Government Procurement Agreemen t.  FAR section 25.001(b) provides that: “The 
restrictions in the Buy American Act are not applicable in acquisitions subject to certain trade 
agreements (see Subpart 25.4). In these acquisiti ons, end products and construction materials from 
certain countries receive nondiscriminatory treat ment in evaluation with domestic offers.”  
 Competition policy Box III.5  ad Federal Aviation Act:  Is there a different treatm ent of code sharing arrangements whether they 
fall under the federal aviation act or whether they have only a U.S.-internal impact?  
RESPONSE:   We do not completely understand this ques tion.  However, the Act does not provide 
for immunity for domestic airline alliances.  ad Shipping Act of 198:  Are there any studies av ailable investigating the impact of price fixing 
arrangements tolerated by the Shipping Act on shipping costs, e.g. the Baltic Dry Index? 
 
RESPONSE:   There have been no studies addressing the issue representing the official views of the 
United States Government or any component agencies. 
 
 WT/TPR/M/235/Add.1 
Page 344 
 
 
 IV. TRADE POLICIES BY SECTOR  
Agriculture Paragraph 17 
 
The Secretariat’s report describes that within th e Federal Milk Marketing Orders (FMMOs), ten 
federal marketing orders covering 62% of the milk pr oduced in the United States are effective.  Could 
the United States explain, whether for the remaining 38%, no marketing orders were made available 
or producers did not opt for marketing orders?  Th e Secretariat’s report observes a sharp fluctuation 
of milk prices in the U.S. in recent years.  How does the U.S. explain these fluctuations given the 
measures taken in the domestic market?  
RESPONSE:  As the report states in paragraph 17, nearly  all of the remaining milk not covered by 
Federal Milk Marketing Orders (FMMO) are cove red instead by state marketing orders.  The 
FMMO’s neither support nor guarantee milk prices, as evidenced by the sharp fluctuation in milk 
prices in recent years.  The FMMO’s are desi gned to promote orderly marketing relationships 
between milk and dairy pr oducts to ensure adequate supplies of both to meet consumer demands.  The 
FMMO’s reflect actual market prices and fluctuate with market conditions.  
Paragraph 26 
 
The U.S. continues to provide large amounts of food aid as direct transfers even though there are 
more efficient ways than in-kind food aid.  Does the U.S. foresee adaptations towards a more efficient 
food aid system, i.e. cash donations, in the near futu re, especially in the light of the Doha agriculture 
negotiations? 
 RESPONSE:  The United States disagrees with the implication that our food aid system is deficient.  
For example, in fiscal year 2008, we provided more than $2.8 billion from U.S. food aid programs to 
developing countries, reaching tens of millions of people world-wide.  Once the results of the Doha 
negotiations come into force, the United States will abide by the new commitments on food aid. 
 Paragraph 33  The Secretariat remarks the focus of the U.S. on research on organic and specialty agriculture as well 
as the encouragement of biofue ls production other than maize-kernel starch.  Switzerland welcomes 
both initiatives.  Is the investment in research on organic and specialty agriculture to be continued in 
the future?  
 
RESPONSE:  For the first time in the history of the Farm Bill, the 2008 Farm Bill included a 
separate title covering horticultural (specialty) and or ganic crops (Title X).  The title provides funding 
over the life of the farm bill and beyond for sever al new and continuing programs. For additional 
information on specialty crops and organics in the 2008 Farm Bill, please see 
http://www.ers.usda.gov/FarmBill/2008/Titles/T itleXHorticulture.htm#specialitycrops. 
 Regarding future legislation, the House Agricultu re Committee’s Subcommittee on Horticulture and 
Organic Agriculture recently held hearings to revi ew specialty crop and organic agriculture programs 
in advance of the 2012 Farm Bill and will undoubted ly make recommendations, as appropriate, to the 
entire Agriculture Committee during the development of the 2012 Farm Bill.  WT/TPR/M/235/Add.1 
 Page 345 
 
 
 THAILAND 
 1. The Report by the Secretariat (WT/TPR/S/235)  IV. DEVELOPMENTS IN SELECTED SECTORS 
(1) AGRICULUTRE 
(ii) Agriculture Policies  (a) Title 1 (Commodity Programs) Average Crop Revenue Election (ACRE) Program Page 83, Paragraph 14 
 
14. The 2008 Farm Act introduced the Average Crop Revenue Election (ACRE) Program as an 
option to counter-cyclical payments.  ACRE Program  payments are also counter-cyclical but based 
on revenue (State yields and market prices compared to historic yields and prices).  Opting for the 
ACRE Program means Direct Payments are reduced by 20% and loan rates by 30%.  A total of 
128,620 farms (7.7% of total enrolled farms) have signed up 32,528,628 acres (12.8% of total base 
acres). 
 
- How does the U.S. determine which program will  be used between C ounter-Cyclical Payment 
Program and the Average Crop Revenue Election Program? Under what circumstances?   
 
RESPONSE:  As a condition to participate in the ACRE program, a producer must forego the right to 
participate in the Counter Cyclical Payment (CCP) pr ogram.  Thus it is up to the producer – and not 
the government – to determine whether to particip ate in ACRE or CCP, but he cannot do both.  In 
addition, once a producer elects to participate in  the ACRE program, that producer can no longer 
participate in the CCP program for the remainder of the Farm Bill.  
 
(iii) Agriculture tariffs and tariff quotas 
Page 90, Paragraphs 42 and 43 
 
42. Tariffs and tariff-rate  quotas for agricultural products are not covered in the Farm Act 2008.  
Based on the WTO definition of agricultural pr oducts, the Harmonized Tariff Schedule of the 
United States (HTSUS) has 1,791 tariff lines at the 8- digit national level.  Some of these lines refer to 
in-quota tariff rates with other tariff lines for th e same product giving the out-of-quota rate.  There 
are 1,595 tariff lines for out-of-quota tariff rates for agricultural products.
 
 43. For these 1,595, the average applied MFN tariff is 8.9%, which is relatively low compared 
with some other WTO Members.  However, rates vary a lot from one product group to another, from 
350% for some tobacco tariff lines to zero for 368 ta riff lines.  Of these 1,595 tariff lines, 696 have 
non-ad valorem duties.  Ethyl alcohol used as fuel  is also subject to "other duties or charges" and 
bound in HTSUS at US$0.1427 per litre. 
 - As mentioned above, the U.S. still have 695 ta riff lines for out-of-quota tariff rates with non- 
ad valorem duties, included some with “other duties or charges”, generally speaking, the non-
ad valorem is more restrictive than the ad valo rem tariff, since they usually provide high level 
of disguised protection.  Does the U.S. have any plan to simplify those no-ad valorem tariffs, 
especially in the context of DDA negotiations? 
RESPONSE:  The United States will implement whatever mo dality is finally agreed to by all the 
Parties.  WT/TPR/M/235/Add.1 
Page 346 
 
 
 Page 90, Paragraph 45 
 
45. The United States notifies the Committee on Agriculture for 44 tariff quotas covering 
171 tariff lines, mostly for dairy products, sugar pr oducts, products containi ng sugar and/or dairy 
ingredients and cotton.  The most recent notificat ion is for 2007 and 2008.  Fill rates varied 
significantly from one quota to another and have been particularly low for cotton, possibly reflecting 
the decline of the textiles and clothing industry.  They were also quite low for some dairy and other 
products.  On the other hand, in-q uota imports were close to or g reater than the quota quantity in 
several cases. 
 
- Could the U.S. provide us more detail on the fill rates of these tariff quotas products?  
Moreover, for the low fill rate products, do se U.S. considered eliminating the quantitative 
restriction on these products?  
 
RESPONSE:  On September 6, the United States submitted its TRQ fill notification for 2009.  The 
document number for that notification is G/AG/N/USA/ 75.  We would refer you to that document for 
the details on each of our TRQs.  The United States  has no current plans to unilaterally change its 
MFN tariffs or tariff quotas.  The United States would make any required changes pursuant to an 
agreement under the Doha  Development Agenda. 
 
(iv) Support levels 
Page 91, Paragraph 51  
 
51. As a result of the close link between suppor t and prices for some commodities, the Current 
Total AMS and product-specific AMS values vary with changes in market prices.  Thus, under the 
2002 Farm Act, Current Total AMS was US$12.9 billi on for 2005 before falling to US$6.3 billion in 
2007.  It should be noted that, due to the met hodologies used to calculate the product-specific AMS 
values, the value of support for dairy and sugar appea rs to be relatively constant from one year to 
another while support for other commodities varies c onsiderably.  Chart IV.1  shows the AMS support 
for some commodities which, in years of high l evels of support, is almost entirely made up of 
payments under the marketing assistance loan progra mme.  The chart shows the degree to which 
support, as measured by the Current Total AMS,  varies with prices.  It does not include 
counter-cyclical payments which, though pr ice-based, are decoupled from production 
 - Could the U.S. provide us with more deta il on the methodologies used in calculation the 
product-specific AMS value as mentioned above? 
 RESPONSE:   The details of how the product-specific AMS values are determined can be found in 
the U.S. Domestic Support notifications (DS:1) to  the CoA.  Notwithstanding, dairy and sugar AMS 
levels are calculated using “price-gap” methodologies that measure the difference between an internal 
administrative price and an external fixed historical  price.  As the administrative prices have been 
stable, external prices are fixed, and annual production does not vary significantly, there has been little year to year variation in these AMS levels.  In contrast, payments under the marketing loan 
program – which as stated in paragraph 51 make  up the majority of other commodities’ product 
specific AMS – fluctuate with market prices, and in crease  when prices fall below a particular rate.  
Thus, in years of high prices as experienced in th e last several years, the AMS levels for these 
commodities are minimal.  
2. The Report by the United States (WT/TPR/G/235) 
Comments 
 
The Trade Policy Review Report by the United States discusses and provides an overview of the trade activities and initiatives undertaken by the Obama Ad ministration, primarily presenting key facts and  WT/TPR/M/235/Add.1 
 Page 347 
 
 
 figures.  According to the report, U.S. trade poli cy is focused on increasing U.S. exports with the goal 
of doubling U.S. exports within the next 5 years under the announced National Export Initiative 
(NEI).  The report notes that the NEI will play a significant role in spurring economic growth and 
creating jobs.  The report also reiterates the Admini stration’s commitment to the rules-based global 
trading system in order to promote economic stability. 
 However, the report does not provide any clear indi cation of the Administration’s stance on trade.  
While the Administration acknowledges that conten tious issues remain on the pending U.S free trade 
agreements with Panama, Colombia, and Korea an d the Doha round of negotia tions remain stalled, 
the report fails to provide details and specifics on  how the Administration plans to address these 
issues.    It appears that trade is not a priority issue for the Administration.  The U.S. trade agenda has been 
overshadowed by the Administration’s focus on domes tic issues.  Little political capital has been 
devoted to engage in a “proactive” trade agenda and  focus is likely to be on trade monitoring and 
enforcement.    
RESPONSE:   We could not disagree more with the sugges tion that trade has not been a priority for 
the Obama Administration.  Contrary to the su ggestion in the comment, the Obama Administration 
has described its trade policy in gr eat detail in each of the past two y ears under review, in a number of 
documents that are widely available and frequently cited.  For example, please see the President’s 
2010 Trade Agenda and 2009 Annual Report, which can be found at http://www.ustr.gov/2010-trade-
policy-agenda, and the 2010 National Trade Estimate Report on Foreign Trade Barriers, which can be 
found at:  http://www.ustr.gov/about-us/press-office/re ports-and-publications/20 10.  For details on the 
National Export Initiative, please see the “ Report To The President On The National Export Initiative: 
The Export Promotion Cabinet’s Plan For Doubling U.S. Exports In Five Years ” issued in September 
2010, which can be found at:  (http://www.white house.gov/sites/default/files/nei_report_9-16-
10_full.pdf).  The United States has vigorously pursu ed the agenda outlined in these documents.  We 
have been deeply and consistently engaged in e fforts to define and close gaps among WTO members 
in the Doha negotiations.  With respect to pending  FTAs, we hope it is understood that the details and 
specifics on how the Administration plans to address these issues is a matter to be discussed between 
us and the partner concerned, as opposed to simp ly announcing our intentions in a Trade Policy 
Review. WT/TPR/M/235/Add.1 
Page 348 
 
 
 TURKEY 
 Report by the Government, WT/TPR/G/235 
 
I. THE UNITED STATES IN THE MULTILATERAL SYSTEM (1) OVERVIEW, (i) Trade Expansion, para.10 
 
“As a region, the Asia-Pacific will weigh much more prominently in American trade and world 
economic activity in the future, and it will take mu ltiple initiatives to maximize the opportunities for 
the region.”  
 
Could the U.S. clarify which specific sectors in the Asia-Pacific look more prominent for American 
trade?  
 RESPONSE:  The Asia-Pacific region, encompassing Asia and the Americas, already constitutes the 
largest share of the world economy, and that share will continue to grow in the coming decade. If the 
United States is to benefit from more exports, job expansion, and accelerated innovation through 
trade, the Asia-Pacific must take a central place in  our trade agenda.  And countries in that region 
must see the United States as a committed and engaged trading partner if we are to remain similarly at 
the center of its network of in tensifying trade relationships. 
 In December 2009, the United States announced its inte nt to enter into negotiations of a regional, 
Asia-Pacific trade agreement, known as the Tran s-Pacific Partnership (TPP) Agreement, with 
Australia, Brunei, Chile, New Zealand, Peru, Singa pore, and Vietnam.  The Administration believes 
that the TPP is the strongest vehicle for achieving economic integration across the Asia-Pacific region 
and advancing U.S. economic interests with the fastest-growing economies in the world. 
 At the same time, we will continue work with our trading partners in the Asia Pacific Economic 
Cooperation (APEC) forum to build consensus and a dvance work on critical trade and investment 
issues leading up to 2011 when the United States will  host APEC.  To this end, we are coordinating 
with the 2010 host nation, Japan, on an ambitious agenda that engages APEC’s broad membership on 
crucial trade and investment topics for the regi on’s future. Initiatives in APEC are a successfully 
demonstrated way of building a stronger and constr uctive American role in the Asia-Pacific market. 
 The APEC agenda addresses many issues that are rele vant to growing jobs through expanded exports 
and faster rates of economic growth and innovation.   For example, in 2009 APEC concluded work on 
an initiative co-sponsored by the Un ited States, aimed at enhancing th e cross-border trade of services 
that has become so vital for American exporters.  APEC members also took steps to make it cheaper, 
easier, and faster for businesses to conduct trade in  the region in order to expand exports and grow 
jobs. Specifically, we worked to simplify rules of origin and documentation, making it easier to take 
advantage of preferential trade deals in the region;  to reduce the time, cost, and uncertainty of moving 
goods and services through the region by improving l ogistics and transportation networks;  and to 
improve the transparency and accessibility of APEC  economies’ customs information and regulations. 
We believe that these new APEC work programs will stimulate the trade-driven growth of small- and 
medium-sized enterprises that particularly need less red tape and more cost-effective logistics. 
Additionally, APEC members agreed on an ambitious plan to address barriers to trade and investment 
in environmental goods and services. 
 
I. THE UNITED STATES IN THE MULTILATERAL SYSTEM 
(1) OVERVIEW, (iii) Monitori ng and Enforcement, para. 19  
 The U.S. has “increased [its] focus on certain behind-the-border barriers that pose particularly 
troublesome problems for U.S. exporters.  Thus, in  2009 the USTR announced that the Administration  WT/TPR/M/235/Add.1 
 Page 349 
 
 
 would deploy resources more effectively to id entify and confront unnecessary or unjustified barriers 
stemming from sanitary and phytosanitary (SPS) measures as well as technical regulations, 
standards, and conformity assessment  procedures (standards-related measures) that restrict U.S. 
exports of safe, high quality products.” 
 
Could the U.S. clarify whether it has taken any initia tive vis-à-vis the relevant member states towards 
tackling those barriers?  Would the U.S. also sp ecify the outcome of such initiatives, if any?  
 
RESPONSE:   The United States uses a variety of tools to tackle such barriers including formal and 
informal consultations, negotiations and, where ap propriate, litigation in formal dispute settlement 
proceedings.  As part of its efforts to identify a nd address trade barriers in the form standards-related 
measures, for the first time in 2010, USTR issued  the 2010 Report on Technical Barriers to Trade 
(TBT Report).  This report details inter alia th e processes USTR and other federal agencies use to 
track and resolve trade concerns regarding standards-related measures as well as specific measures or practices.  The 2010 TBT Report, plus a fact sheet detailing key barriers identified and successes in 
reducing TBT barriers, are available at:  www. ustr.gov/trade-topics/enforcement.  The 2011 TBT 
Report (to be issued by March 31, 2011) will descr ibe the progress the United States has achieved in 
tackling the barriers identified in the 2010 TBT Report as well as other standards-related trade issues 
addressed throughout the year . 
 
In March 2010,  U.S. Trade Representative Ron Ki rk delivered two new, related reports to Congress 
focusing specifically on sanitary an d phytosanitary barriers and technical barriers to trade that harm 
the ability of America's agricultural producers an d manufacturers to export around the world. 
Ambassador Kirk first promised a sharper focus on S PS and technical barriers to trade in a July 2009 
speech at U.S. Steel's Mon Valley Steel Works in Braddock, Pennsylvania. 
 
 The Office of the United States Trade Repr esentative has begun to use the information in 
these new reports, as well as in the National Tr ade Estimate itself, and apply all of the 
appropriate tools available to open these market s to American products.  For example, the 
United States has raised  concerns with the Turkish government regarding specific provisions 
of a proposed law and regulations concer ning products derived through agricultural 
biotechnology. 
 All three reports, plus fact sheets detailing key barriers identified and successes in reducing SPS and 
TBT barriers,are available now at www.ustr.gov/trade-topics/enforcement.   
 IV. TRADE POLICY DEVELOPMENTS SINCE  2008, (2) REGIONAL INITIATIVES, 
para. 75  “[The U.S. has] Seized the opportunities offered by current Free Trade Agreements and Trade and 
Investment Framework Agreements to discuss probl ems and launched new initiatives with a number 
of partners.  [The U.S.] promised a careful review of the North American Free Trade Agreement 
(NAFTA) and of the model text guiding our nego tiators on Bilateral Investme nt Treaties (BITs).” 
 
Could the U.S. explain what parts of NAFTA it has  placed under review and what consequences can 
be expected out of this review? 
 RESPONSE:  Oversight of the NAFTA is the responsbility of the NAFTA Free Trade Commission 
(FTC), composed of the trade minsters of the Unite d States, Canada and Mexico.  At the most recent 
NAFTA Ministerial, held in October 2009, Mini sters agreed on a wide-ranging set of activities to 
improve and advance the operation of the NAFTA and further promote trade and investment among 
the three NAFTA countries.  The joint statemen t outlining these activities is reproduced below. 
 WT/TPR/M/235/Add.1 
Page 350 
 
 
 Since the Ministers met, many of the NAFTA Working Groups and subsidiary bodies have met to 
advance their specific agendas, and will report to  Ministers at the next NAFTA FTC meeting. 
 
Other activities and decisions that have been take n in recent months include a decision by NAFTA 
labor ministers as part of broader discussions among the Parties to improve the implementation of the 
North American Agreement on Labor Cooperation (NAALC) and its Secretariat.  Acting as the 
Council of Ministers which oversee this agreement,  ministers have directed the three National 
Administrative Offices (NAOs) to begin consulta tions with the goal of establishing a consensus 
approach to improving the functioning of the Secretar iat as well as to ensure that the organization can 
more effectively and efficiently fulfill its obligati ons under the NAALC.  A report is expected in early 
2011 with recommendations as to the form and na ture of the operations of the Secretariat. 
 
JOINT STATEMENT OF THE 2009 NAFTA COMMISSION MEETING 
October 19, 2009 
 
Dallas, Texas -- Ambassador Ron Kirk, United States Trade Representative;  Gerardo Ruiz Mateos, 
Mexico’s Secretary of Economy;  and the Honorable Stockwell Day, Canada’s Minister of 
International Trade, are pleased to release the fo llowing Joint Statement, which outlines the overall 
results of the October 19, 2009 meeting of th e NAFTA Free Trade Commission (FTC), in Dallas, 
Texas. 
 
Fifteen years ago our countries launched the North Am erican Free Trade Agreement (NAFTA).  Since 
its entry into force, trade and investment flows have increased, investment has grown, and our 
economies have become more competitive.  The be nefits of expanding trade have flowed to 
businesses, farmers, workers, and consumers.  Today we met to celebrate our achievements and to lay a course for the future.  We note that the 
NAFTA partners implemented all of the tariff cuts on  schedule or, in some cases, ahead of schedule.  
As a result, trade between our countries has blossomed.  From 1993 to 2008, trade among the NAFTA countries has more than tripled, from $297 billion to $946.1 billion.  Each day the NAFTA countries 
conduct nearly $2.6 billion in trilateral trade.  We  are committed to developing new and creative ways 
to promote trade.  
Toward that end, we agreed to build upon the work at the August 2009 North American Leaders 
Summit, where Leaders agreed to “reinvigorate our tr ading relationship and to ensure that the benefits 
of our economic relationship are widely shared and sustainable.”  We asked officials to develop a 
workplan to incorporate three principles:  competitiveness, strengthening institutions, and 
communications and transparency.  Since all tariff cuts under the agreement have been implemented, 
we asked officials to pursue cooperation in other areas, including reducing unnecessary regulatory 
differences to ensure the free flow of goods, ser vices and capital through modern and efficient 
borders.  This forward-looking workplan should draw upon the work already underway, as well as 
incorporate new elements, developed in cons ultation with all relevant stakeholders.  
 
In light of the results of our Leaders’ meeting, and in order to ensure that the benefits of our economic 
relationship are widely shared and sustainable, we  agreed to seek to strengthen the relationship 
between the FTC and the North American Commi ssion for Environmental Cooperation (CEC), and 
between the FTC and the North American Commissi on for Labor Cooperation (CLC).  We realize the 
importance of effective communication as a necessar y condition for a successful coordination.  We 
agreed to establish an ad hoc  working group composed of senior tr ade officials to explore areas of 
potential collaboration between the FTC a nd the CEC.  The creation of such an ad hoc working group 
will provide a platform for further continued trila teral discussion about North American trade and the 
protection of the environment.  We designated senio r trade officials to enhance collaboration between 
the FTC and CLC and further trilateral c ooperation on trade and labor issues.   WT/TPR/M/235/Add.1 
 Page 351 
 
 
 Climate change is one of the most daunting and pressing challenges of our time and a solution 
requires ambitious and coordinated efforts by all na tions.  Given the integrated nature of our three 
economies, we underline the importance of working together.  
We instructed the Working Group on Rules of Origin (WGRO) to continue its work to liberalize the 
NAFTA rules of origin, with a view to reaching agr eement at the working level early in the new year.  
We asked the WGRO to examine the rules of orig in for environmental goods, in order to determine 
whether liberalization of the rules of origin for su ch products would facilitate additional trade, taking 
into account discussions at the WTO.  We are also pleased to note that we have recently  implemented 
a third set of liberalizing changes to the NAFTA rules of origin, as well as tec hnical rectifications to 
align the NAFTA rules of origin with the updated tariff schedules resulting from the 2007 amendments to the nomenclature of the Harmonized System.  We commend the work made by the Textiles and Apparel Working Group. Drawing upon its report to 
the Free Trade Commission, we asked the group to  explore ways to expand trade in this sector. 
 We also commend the work of the North Amer ican Steel Trade Committee, which promotes 
continued cooperation among the three governments on international steel policy matters;  serves as a 
consultative mechanism for regular exchanges of information and review of progress on matters of 
mutual interest or concern;  and works to reduce remaining distortions in the North American steel 
market. This successful sectoral initiativ e can be a model for additional areas. 
 Since 2007, officials from our three countries have wo rked together to develop a coordinated strategy 
aimed at combating counterfeiting and piracy by focusing on enhancing de tection and deterrence, 
expanding public awareness and outreach efforts, and measuring the scope and magnitude of 
counterfeiting and piracy in North America.  We commend this work and reaffirm the commitment of 
our Leaders to cooperate in the protection of inte llectual property rights to facilitate the development 
of innovative economies.   A key source for innovation, job cr eation and export growth in each of the NAFTA countries has been 
smaller, often newer firms.  As such business establish themselves and seek new markets, they are 
most likely to make their first exports to a NAFTA partner.  We instructed officials to exchange 
information on the experience of small and medium-sized enterprises (SMEs) under the NAFTA and opportunities for the NAFTA work agenda address th e needs of such businesses and their workers.  
We will receive their report at the next Ministerial meeting in 2010. 
 
We agreed to establish an ad hoc  Working Group on Communications and Outreach to promote 
greater understanding of the NAFTA and its benefits. 
 The NAFTA working groups are often the bodies through which the Commission implements the 
commitments of the NAFTA, as well as the NAFTA work program.  Through the working groups, we 
have created strong working relationships that have allowed us to address issues of mutual interest.  
As we move forward, we recognize that stre ngthening the NAFTA also means strengthening the 
working groups.  We instructed officials to review the organization and reporting procedures of the NAFTA working groups in order to ensure that they address our priorities.  
We recognize that the availability of private co mmercial dispute resolution procedures plays an 
important role in creating competitive conditions fo r trade in goods, services and capital and that the 
judiciaries of each country have an important role  to play in effective private commercial dispute 
resolution procedures.  We are encouraged by the work of the NAFTA 2022 Advisory Committee on 
Private Commercial Disputes and endorse its intent to focus forthcoming outreach activities on the judiciaries of each country to promote alternativ e dispute resolution mechanisms in the Free Trade 
Area. WT/TPR/M/235/Add.1 
Page 352 
 
 
 We are committed to multilateral trade liberaliza tion and to successfully concluding the WTO Doha 
Development Agenda.  We urge all WTO Members to demonstrate renewed energy and directly engage with each other to evaluate and close the remaining gaps in the ne gotiations.  Closing those 
gaps should proceed as quickly as possible to put th e Doha Development Agenda on a path toward a 
balanced and ambitious overall outcome that opens  new markets and creates new trade flows.  We 
will continue to work together with our APEC co lleagues at the 2009 APEC Ministers' and Leaders' 
meetings to advance the Doha Development Agen da and to accelerate APEC's work to strengthen 
economic integration in the Asia-Pacific. 
 
Finally, we agreed that Mexico will host the next NAFTA Commission meeting in 2010. 
 
IV. TRADE POLICY DEVELOPMENTS SINCE 2008 (2) REGIONAL INITATIVES, para. 77  
 
Reference is being made to “a high standard, 21
st century agreement.”  
 
Could the U.S. explain  
(a) what features such an agreement will have? (b) what kind of expectations it carries from the “high standard, 21
st century agreement.” 
 
RESPONSE:   The United States is working with the other TPP parties to shape a high-standard, 
regional agreement that responds to th e challenges that businesses face in the 21st century.  We are 
considering including innovative elements in the ag reement that will make the regulatory systems of 
the TPP countries operate together more coherently  to help address regulatory and other non-tariff 
measures that increasingly are the main problems th at businesses face operating in foreign markets 
and to help address common concerns, such as food safety.  We also are looking at including new 
elements that enhance the ability of small- and me dium-sized businesses to export.  In addition, we 
are seeking to incorporate new ideas are transpar ency, environmental protection and conservation, 
worker rights, and development. 
 
IV. TRADE POLICY DEVELOPMENTS SINCE 2008 
(3) BILATERAL FREE TRADE AGREEMENTS (FTAs) United States-Jordan Free Trade Agreement, para. 118 
 
There is a reference to the Qualifying Industrial Zones (QIZs).  
Could the U.S. clarify whether the U.S. intends to establish additional QIZs around the world? 
 
RESPONSE:  There are currently QIZs in Jordan and Eg ypt.  Establishment of QIZs in other 
countries around the world would require action by Congress.  
 
V. TRADE RELATED CAPACITY BUILDING INITIATIVES (1) MILLENNIUM CHALLENGE CORPORATION, para. 135  
 
“The Millennium Challenge Corpor ation (MCC) is a U.S. government foreign assistance agency and 
one of the largest sources of bilateral TCB assistance for eligible countries.”  
 (a) What are the quantitative or qualitative eligib ility requirements for bilateral TCB assistance? 
 
RESPONSE:  Information on MCC’s selection process can be found at:  http://www.mcc.gov/ 
pages/selection 
 
(b) Could the U.S. also clarify what kind of monitoring these aid programs are subject to? 
  WT/TPR/M/235/Add.1 
 Page 353 
 
 
 RESPONSE:  MCC tracks performance on processes and outputs at the beginning of a Compact’s 
life and continues to track high-level outcomes and impacts at the end to concretely assess how its 
activities have affected poverty and economic growth .  Additional information on MCC’s monitoring 
and evaluation process can be found at:  http ://www.mcc.gov/pages/activities/activity/monitoring-
and-evaluation. 
 
V. TRADE RELATED CAPACITY BUILDING INITIATIVES 
(3) WORLD TRADE ORGANIZATION-RELATED U.S. TRADE-RELATED ASSISTANCE para. 143 
 
“The United States provides technical support to countr ies that are in the process of acceding to the 
WTO. In 2009, WTO accession support was provided to Afghanistan, Azerbaijan, Bosnia and Herzegovina, Ethiopia, Iraq, Kazakhstan, Laos, Le banon, Liberia, Montenegro, Serbia, Tajikistan, 
and Yemen.”  
 
Could the U.S. specify if there are minimum or standard guiding principles for technical support 
provided by the U.S. to acceding countries?  
RESPONSE:  The U.S. Government does not have a one-size fits all principal that determines trade-
related technical assistance to countries wishing to accede to the WTO.  The United States has worked 
with a broad range of developing countries that sought membership and successfully acceded to the 
WTO.  The USG recognizes each accession is unique since each country's situation, policies, and 
assistance needs differ.  Accordingly, planning U.S.  Government trade-related technical assistance typically begins with the 
involvement of our local mission, a discussion with our developing country counterpart, and a review 
of the country's TRTA needs and priorities to help determine the extent to which a USG agency such 
as USAID is able to assist.  
Report by the WTO Secretariat WT/TPR/S/235 
 
I. ECONOMIC ENVIRONMENT, (I) MONETARY AND FISCAL POLICY, para. 16 
 The Secretariat’s report mentions the establis hment of “the National Commission on Fiscal 
Responsibility and Reform”.  
 
Could the U.S. provide an update on the activities of the said Commission?  
RESPONSE:  In February 2010, President Obama created  the bipartisan National Commission on 
Fiscal Responsibility and Reform to identify policies to improve the fiscal situation in the medium 
term and to achieve fiscal sustainability over the lo ng run.  It is to propose recommendations to:  
balance the budget, excluding interest payments on the debt, by 2015;  improve the long-run fiscal 
outlook, including changes to social safety program s.  It meets once a month while Congress is in 
session.  The Commission is to vote on a final report containing a set of recommendations to achieve its mission no later than December 1, 2010.  The Committee is bipartisan, consists of six current 
Senate and House members, two corporate leader s, a union Head, and four distinguished retired 
public servants. 
 
The Commission’s activities are reported on its website:  http://www.fiscalcommission.gov/.   WT/TPR/M/235/Add.1 
Page 354 
 
 
 II. TRADE AND INVESTMENT POLICY FRAMEWORK, (3) PREFERANTIAL TRADE 
AGREEMENTS AND ARRANGEMENTS, para.23 
 
The Secretariat’s report states that (other than TPP), “t he U.S. is not negotiating FTAs with any other 
partners”.   This seems to be contrary to the general trend of  the FTAs in the world.  Could the U.S. explain 
underlying reasons of this policy? 
 RESPONSE:   To the contrary, the United States in tends to seize the new opportunities that 
international growth can present in the next decade.   Notably, this includes our work in the Trans-
Pacific Partnership to craft a regional trade agreement for the 21st century, that not only addresses market-access issues, but also t ackles cross-cutting issues ranging from regulatory coherence to small 
business trade.  Approval and implementation of th e pending FTAs is also a priority.  President 
Obama has directed USTR to resolve outstandi ng issues and push for the passage of legislation 
approving our free trade agreements with South Korea, Panama and Colombia.   
III. TRADE POLICIES AND PRACTICES BY MEASURE, (1) MEASURES AFFECTING 
IMPORTS, (i) Customs Procedures, para. 15 
 
Could the U.S. share the results (particularly monitoring results) of its pilot programmes in 
Hong Kong, China, and Korea under the SFI? 
 
RESPONSE:   The SFI pilot study at the Modern Terminal in the Port of Hong Kong officially ended 
in April 2009 and the SFI pilot at the Gamman Te rminal in Busan, Korea officially ended March 
2010. 
 The implementation of SFI in Hong Kong and Bu san, Korea was on a limited basis as these ports 
represented a transshipment hub and large volume ports.  In both locations, the SFI pilot was 
deployed to one terminal and one lane to minimi ze any disruption to the overall terminal operations.  
 
The pilot programs in these locations provided valu able lessons learned concerning scanning maritime 
containers:  - at the Modern Terminal in Hong Kong, high co ncrete background radiation levels were identified 
from Natural Occurring Radiated Ma terials (NORM) which is consis tent for Asia. This required 
concrete at the scanning lane to be replaced w ith lower NORM level material. Additionally, a 
substantial amount of Hong Kong transshipments are transferred from ship-to-ship in the harbor 
where scanning equipment could not be deployed.   - at the Gamman Terminal in Busan, one of the most  important lessons learned was the need to have 
the support of the foreign government and trade.  U.S. Customs and Border Protection (CBP) was not 
able to overcome the challenge of getting the local unions to allow drivers to traverse the NII system, 
so the full scanning potential was never realized.  CBP and both the Hong Kong Government and the Repub lic of Korea (ROK) have agreed to continue 
to work together under CSI and explore alternativ e approaches toward enhancing container and trade 
security through risk management and total supply chain security.   
 
   WT/TPR/M/235/Add.1 
 Page 355 
 
 
 III. TRADE POLICIES AND PRACTICES BY MEASURE, (1) MEASURES AFFECTING 
IMPORTS, (vi) Rules of Origin, para. 23   Could the U.S. explain the general principles guiding the rules of origins app lied in its preferential 
agreements under its FTAs?  
RESPONSE:   Under our FTAs, the United States seeks to ma intain rules that are simple, transparent, 
and predictable, while ensuring that only those goods that are originating in partner countries are able 
to take advantage of the preferential benefits.  U. S. preferential rules of origin employ the “wholly 
obtained” criterion for goods that are wholly the growth, product, or manufacture of a particular 
country.  For goods that consist in whole or in part  of materials from more than one country, the U.S. 
preferential rules of origin are based on tariff-shift  method, regional value-content method, or other 
specific rules.  
III. TRADE POLICIES AND PRACTICES BY MEASURE, (1) MEASURES AFFECTING 
IMPORTS, (vi) Contingency Measures  
Anti Dumping Investigations,  para. 54-56 
 Could the U.S. clarify the reasons behind the very long duration of some AD duties, even up to 
36 years according to the Secretariat’s report?  
RESPONSE:   Under U.S. law, and consistent with  the WTO Antidumping Agreement, antidumping 
duties may remain in effect for as long as and to th e extent necessary to counteract injurious dumping.  
Five years after the imposition of the duties, the U.S. Department of Commerce (Commerce) and the 
U.S. International Trade Commission (USITC) undertak e reviews to determine whether revocation of 
the dumping order would be likely to lead to the c ontinuation or recurrence of dumping and injury.  If 
those determinations are affirmative, the order re mains in place;  if the determination by either 
Commerce or the USITC is negative, the order is revoked.  These reviews are conducted every five 
years for the duration of the order.  Thus, the reason that some antidumping orders remain in place is that the evidence of record supports the conclusion that dumping and injury are likely to continue or 
recur if the order were revoked.  
 
Safeguards,  para. 68 
 
The Secretariat’s report notes that “NAFTA partners mu st be excluded from the application of global 
safeguard measures unless their imports, considered i ndividually, account for a substantial share of 
total imports and make an important contribution to serious injury”  Could the U.S. clarify what constitutes “susbtan tial share” and “important contribution to serious 
injury”?  For instance, is there a certain th reshold to determine “substantial share”? 
 RESPONSE:   The NAFTA text itself explains the meaning of both terms.  With regard to the term 
“substantial share,” Article 802:2(a) of the NAFTA states the following: 
 In determining whether imports from a Party, cons idered individually, account for a substantial share 
of total imports, those imports normally shall not be  considered to account for a substantial share of 
total imports if that Party is not among the top five suppliers of the good subject to the proceeding, 
measured in terms of import share during the most recent three-year period.  Article 802:2(b) states the following with respect to the term “contribute importantly”:  WT/TPR/M/235/Add.1 
Page 356 
 
 
 In determining whether imports from a Party or Parties contribute importantly to the serious injury, or 
threat thereof, the competent investigating authorit y shall consider such factors as the change in the 
import share of each Party, and the level and change in the level of imports of each Party.  In this 
regard, imports from a Party normally shall not be d eemed to contribute importantly to serious injury, 
or the threat thereof, if the growth rate of imports from a Party during the period in which the 
injurious surge in imports occurred is appreciably lo wer than the growth rate of total imports from all 
sources.  
The U.S. legislation that implements the NAFTA follows the language of the NAFTA quoted above 
and, in addition, defines the term contributed importantly to mean”an important cause, but not 
necessarily the most import cause.”  The U.S. implem enting legislation is set forth in section 311 of 
the NAFTA Implementation Act, 19 U.S.C. 3371.   
IV. DEVELOPMENTS IN SELECTED SECTORS, (1) AGRICULTURE, 
(ii) Agricultural Policies, para. 26  
The Secretariat Report  on Food  Aid states that  the “Most food aid  is given under  the Food for 
Peace Act of 2008 which replaced  the Agricultura l Trade Development and Assistance Act of 1954.”  
 
It is also noted in the same paragraph that  ne arly all aid is given fully through the World Food 
Programme  or private voluntary organizations. In this respect,   (a) Turkey appreciates if the U.S. could provide information on what changes the new legislation brought about?  
 
RESPONSE:  In 2008, the United States implemented a new Farm Bill that renamed the Agricultural 
Trade Development and Assistance Act of 1954 the “Food for Peace Act”.  The new law includes a 
provision to use resources to expand international tr ade without any reference to the source of the 
trade.  Authorities for five U.S. food aid programs are included in the Food for Peace Act, and the 
objectives for each program focus on items such as improving food security, addressing famine and 
food crises, expanding economic develo pment, and meeting nutritional gaps. 
 
(b) Is there any data on  the percentage of food aid given through the World Food Programme? 
 
(c) Could the U.S. share the list of private voluntary organizations contributing to U.S. Food Aid 
operations? 
 
RESPONSE:  Regarding the information requests in (b) and (c) above, we suggest Turkey examine 
the information provided in the 2008 United States International Food Assistance Report (most recent 
year available) that can be found at:  h ttp://www.fas.usda.gov/info/speeches/042709foodaid.pdf. 
 
IV.DEVELOPMENTS IN SELECTED SECTORS, (1) AGRICULTURE 
(ii) Agricultural Policies, para. 27  
 
The Secretariat’s report states that the 2008 Farm Act provided authority  under a pilot programme 
to purchase food aid in local and regional market s in order to give USDA more flexibility in 
administering food aid programmes.  (a) Could U.S. Delegation elaborate  on the outcomes of the pilot programme introduced?  
RESPONSE:  The 2008 Farm Act authorized the Secretary of Agriculture to implement a five-year 
local and regional food procurement pilot project in  developing countries. The main objective of the  WT/TPR/M/235/Add.1 
 Page 357 
 
 
 pilot program is to use local and regional procur ement (LRP) to more quickly help meet food needs 
due to food crises. All of the projects under the pi lot program are to be completed by the end of 
FY 2011, at which point USDA will contract for an  independent evaluation of the pilot program. 
 
(b) Which agricultural crops had so far  been subj ect to local and regional procurement project under 
the aforementioned pilot programme? 
 
RESPONSE:  The implementation of field-based projects is underway and will not be completed 
until FY 2011.  A comprehensive list of eligible  commodities procured in the specific developing 
countries is therefore not yet available. 
 
IV. DEVELOPMENTS  IN SELECTED SECTORS, (1)AGRICULTURE 
(iii) Agriculture tariffs and quotas, para.45  Secretariat report mentions that the U.S. notifi es the CoA for 44 tariff quotas covering 171 tariff lines 
and that fill rates particularly for cotton have been low. 
 In that respect, comment made in the Secretariat Report on the possible reason of low fill rates for 
cotton is that -the fill rate- may reflect the decline of the textiles and clothing industry. 
 
Is there any additional comment by the U.S. about th e possible reasons of low fill rates for cotton? 
 
RESPONSE:  The United States opens its TRQ on cotton every year.  While it speculative to assign 
reasons for the lack of demand for imported cotton, we assume the lack of demand for imported cotton is due directly to market conditions.  Turk ey may be interested in the information on recent 
market conditions on cotton found in the mo st recent Cotton and Wool Outlook released on 
September 13, 2010.  This publication can be found at:  http://usda.mannlib.cornell.edu/usda/current/ 
CWS/CWS-09-13-2010.pdf.  
 
TURKEY SUBSEQUENT QUESTIONS 1 
 
Report by the Secretariat (WT/TPR/S/235) 
OVERVIEW  Paragraph 10 (overview)  
Some anti-recession measures included provisions t hat favored domestic suppliers of goods and 
services. 
 
Could the U.S. Government explain in which services  sectors these provisions are still in force? 
 
RESPONSE:  Information on U.S. trade measures taken as a result of the economic crisis is available 
in each of the Trade Policy Review Body (TPRB) m onitoring reports issued over the last two years. 
The WTO documents citation for the latest report is:  WT/TPR/OV/W/3.  
 
Para 12 (overview) 
 
Aside from anti-recession policies, new measures  affecting trade during the period under review 
involved certain measures to address security and safety concerns.   
 Could the U.S. Government provide information on how much the air cargo and maritime services is 
affected from these secur ity and safety measures? 
 WT/TPR/M/235/Add.1 
Page 358 
 
 
 RESPONSE:   The United States is confident that we can implement security and safety measures in 
way that minimizes the impact on air cargo and ma ritime services and we are committed to working 
with our domestic and foreign part ners, trade and industry, to implement these measures in a logical 
and practical manner that integrates smoothly into the global supply chain.  Our overall goal is to 
build cooperative relationships that  will strengthen and im prove overall internati onal supply chain and 
U.S. border security  
Paragraph 10 (overview) and Pa ra 24 (Financial Services) 
 
Some anti-recession measures included provisions t hat favored domestic suppliers of goods and 
services.  These measures included sizeable assistan ce to selected sectors, particularly the financial 
and automotive sectors.  The largest surplus in 2009 wa s in "other royalties and license fe es" (which represent receipts and 
payments for intellectual property rights), financial services, and business, professional and technical 
services. 
 
As there is sizeable federal assistance to the financial sector and regarding the anti-recession 
measures of favoring the domestic service suppliers,  could the U.S. Government provide information 
on how much of the surplus in financial services trade is rooted from those measures?  
 
RESPONSE:  There is no data available on the extent to  which public support for the U.S. finacial 
system flowed out to other countries.  
 
III.TRADE POLICIES AND PRACTICES BY MEASURE 
(1) MEASURES DIRECTLY AFFECTING IMPORTS (i) Customs Procedures, p ara. 12 
 
It is stated that U.S. Customs and Border Protecti on (CPB) officials are deployed to participating 
foreign ports where they identify high-risk containers. 
 
It is understood from the abovemen tioned paragraph that CBP officers observe the inspections along 
with the host country inspectors using non-intrusi ve inspection equipment, physical inspection or 
both.   
Could U.S. Delegation explain 
 - if the notion “high-risk containers” is defin ed under the Contain er Security Initiative? 
-whether the inspection of CBP officers is made solely on the basis of the features of the goods 
concerned or the origin of the importation?  
 RESPONSE:   Containers are identified as high risk through CBP’s Automated Targeting system 
(ATS).  A variety of factors are considered when determining high risk cargo including information 
provided by the partner country.  
III.TRADE POLICIES AND PRACTICES BY MEASURE 
(1) MEASURES DIRECTLY AFFECTING IMPORTS 
(iv) Tariffs, para. 28  Para. 28 reads that the “U.S. provides conditional MFN tariff treatment to several countries of the 
former Soviet Union…”  
Could U.S. explain what is meant by  “…conditional MFN Tariff treatment …”?   WT/TPR/M/235/Add.1 
 Page 359 
 
 
 RESPONSE:   As noted, the United States provides MFN ta riff treatment to several countries of the 
former Soviet Union based on whether these countries meet freedom of emigration and other conditions specified in title IV of the Trade Act of 1974 or the President has waived these conditions 
for the country in question.  All but one of these countries, Moldova, are not members of the World 
Trade Organization (WTO).  The United States invo ked Article XIII of the Agreement Establishing 
the World Trade Organization, when  Moldova became a WTO Member. 
 
III.TRADE POLICIES AND PRACTICES BY MEASURE (1) MEASURES DIRECTLY AFFECTING IMPORTS 
(v) Other charges affecting imports, para. 37-40 
 It is acknowledged that the U.S. extended th e application of the merchandise processing fee until 
October 2014, following the adoption of the American Jobs Creation Act of 2004.  Is there any time frame for the application of the harbor maintenance fee?  
 
RESPONSE:   No. 
 
III.TRADE POLICIES AND PRACTICES BY MEASURE (1) MEASURES DIRECTLY AFFECTING IMPORTS 
(viii) Technical regulations and standards 
Box III.1:  The Consumer Product Safe ty Improvement Act (CPSIA), page 38 
 
4th bullet in Box III.1 concerning laboratory accred itation requirements reads “domestic and foreign 
laboratories may be accredited to  test children’s products for co mpliance with children’s product 
safety rules. Laboratories may be accredited by  the Commission or by an independent organization 
accredited by the Commission.  The Commission may accredit as third-party conformity assessment 
bodies “firewalled” laboratories owned by manufac turers of children’s products.  There are specific 
requirements for the accreditation of government -owned laboratories.  The Commission has 
published accreditation procedures for seven product cate gories. It also maintains a list of accredited 
laboratories on its website (http://www.cpsc.gov ). 
 
1. The Consumer Product Safety Commission is not a member of International Laboratory 
Accreditation Cooperation (ILAC).  What is th e relationship between CPSC and the American 
accreditation organizations that are ILAC members? 
 RESPONSE:   The U.S. Consumer Product Safety Commission (“the Commission”) is the U.S. 
regulatory agency charged with protecting the public from unreasonable risks of serious injury or death from consumer products under the agency's ju risdiction, including products that pose a fire, 
electrical, chemical, or mechanical hazard or can in jure children.  The CPSC is not a member of the 
International Laboratory Accr editation Cooperation--Mutual R ecognition Arrangement (“ILAC-
MRA'').  For the purposes of implementing the thir d-party testing requirements contained in section 
14(a) and (d) of the Consumer Product Safety Ac t (‘‘CPSA’’), as amended by section 102(b) of the 
Consumer Product Safety Improvement Act of 2008, the Commission has issued regulations requiring 
that third-party testing laboratories be indepe ndently accredited to ISO/IEC 17025:2005--General 
Requirements for the Competence of Testing and Calibration Laboratories.  The accreditation must be conducted by a full member of the Internationa l Laboratory Accreditation Cooperation.  More 
information can be found on th e CPSC website at:  http://www.cpsc.gov/about/cpsia/labaccred.html. 
 
2. Is CPSC an umbrella organization? 
 
RESPONSE:  No, the U.S. Consumer Product Safety Co mmission (“the Commission”) is a U.S. 
regulatory agency charged with protecting the public from unreasonable risks of serious injury or WT/TPR/M/235/Add.1 
Page 360 
 
 
 death from consumer products under the agency's ju risdiction, including products that pose a fire, 
electrical, chemical, or mechanical  hazard or can injure children. 
 
3. Does CPSC automatically recognize the a ccreditations issued by ILAC members? 
 
RESPONSE:   The procedures for filing requests for recognition are contained in the Laboratory 
Accreditation Registration System for Third Party Testing Laboratories established by the U.S. 
Consumer Product Safety Commission (“the Co mmission”) at:  http://www.cpsc.gov/about/cpsia/ 
labreguserguide.pdf.  CPSC recognition of third part y testing laboratories requires, and is based on, 
accreditation by an ILAC-MRA signatory accreditation body. 
 
4. What are the differences between CPSC  and American accreditation organizations? 
 
RESPONSE:   The U.S. Consumer Product Safety Co mmission (“the Commission”) is a U.S. 
regulatory agency.  The accreditation bodies that are members of the International Laboratory 
Accreditation Cooperation--Mutual Recognition Arra ngement (“ILAC-MRA'') and are based in the 
United States are listed at:  http://www.ilac.org/membersbycategory.html . 
 
5. Does CPSC carry accreditation activities in other countries? 
 
RESPONSE:   The U.S. Consumer Product Safety Commission (“the Commission”) has issued 
requirements in addition to accreditation by an ILAC-MRA signatory accreditation body for 
recognition of firewalled and government laborat ories.  See http://www.cpsc.gov/about/cpsia/ 
labaccred.html.  CPSC verifies whether a lab m eets these additional requirements regardless of 
whether the lab is located in the United States or in other countries. 
 
III. TRADE POLICIES AND PRACTICES BY MEASURE 
(3) OTHER MEASURES AFFECTING INVESTMENT AND TRADE (v) Trade Related Intellectual Property Rights (e)  Enforcement activities, para. 237 
 
As reflected in paragraph 237 of the Secretariat Report, the U.S. announced “out of cycle reviews” 
for two countries to asses progress on specific IPR is sues before the next review begins in 2011. 
 
Could U.S. Delegation give an explanation, if there is a defined criterion for announcing out of cycle 
reviews of IPR protection in certain countries ? 
 RESPONSE:   USTR announces Special 301 Out-of-Cycle Reviews (OCRs) in circumstances where 
doing so would encourage progress on IPR issues of c oncern or where resolving an issue in the near 
term is critical.  OCRs provide an opportunity fo r heightened engagement with trading partners on 
those issues.  Successful resolution of specific IPR is sues may in some circumstances lead to a change 
in a country’s status on the Special 301 list outside of the typical time frame for the annual Special 
301 Report.  
IV. DEVELOPMENTS IN SELE CTED SECTORS, SERVICES 
 
Para 85 (S/235-(05)) 
 The United States has GATS commitments with respect to aircraft repairs and maintenance, and has 
scheduled MFN exemptions with regard to the sale and marketing of air transport services and the 
operation and regulation of CRS services.  WT/TPR/M/235/Add.1 
 Page 361 
 
 
 1. Regarding the MFN exemptions in air transpor t services, since the countries to which this 
measure applies are nearly all of the WTO membe rs, could the U.S. Government explain the main 
reason to retain this exemption?  
RESPONSE:   Under the exemption, the United States has continued to maintain bilateral and 
multilateral air services agreements, as well other accommodations, with well over one hundred 
aviation partners.  Many of these arrangements in clude provisions on selling and marketing and/or 
CRS.  Since the United States continues to negotiate  such agreements, the need for this exemption 
still exists. 
 
Para 187 (WT/TPR/M/200) 
 During the previous review meeting the representative of India noted that:  U.S. restrictions on foreign investment were particularly evident in  communications:  foreign-owned firms faced 
substantial access barriers in the U.S. communication services market, including, restrictions to 
investment, lengthy proceedings, conditionality of market access, and reciprocity-based procedures. 
 
Para 116 (S/235-(05)) 
 Since the last TPR Report on the United States in 2008, there have been no major changes to the 
regulatory authority or legal framework for telecoms.   
 Could the U.S. Government explain if there is a pl an of abolishing these restrictions in the near 
future? 
 RESPONSE:  If Turkey is referring to Section 310 with respect to common carrier radio licenses, the 
answer is no;  generally, the United States has f ound that the requirement to hold a common carrier 
radio license through a subsidiary is not a significan t impediment to full fore ign participation in the 
telecommunications sector, as evidenced by the numerous foreign licensees operating in the United States as 100% owned subsidiaries.  Could the U.S. Government provide information ab out how the construction market in the U.S. is 
affected by the financial crisis? Is there any change  in the share of foreign firms in the construction 
market?  
 
RESPONSE:   D a t a  f r o m  t h e  U . S .  C e n s u s  B u r e a u  s hows that significant shifts in the U.S. 
construction market have taken place in the time leadi ng up to, into and through the financial crisis.  
These shifts have continued into 2010.  In 2006, the total U.S. construction market peaked at $1.167 trillion, and then declined slightly in 
2007, to $1.152 trillion.  Further drop off followed in  2008, to $1.067 trillion, before taking a dramatic 
downturn in 2009 to $908 billion. 
 
The make-up, however, of the construction market shifted more significantly during 2006-2009.  In 
2006, total construction was dominated by the resi dential sector ($620 billion), when compared to 
non-residential construction ($547 billion).  During  2007, investment grew in the non-residential 
sector to $652 billion, as a precipitous decline in  residential constructio n began, dropping to 
$500 billion.  The trend continued into 2008, wh en non-residential construction topped out at 
$710 billion, and residential constr uction declined to $358 billion.  In 2009, however, both market 
components declined, with residential constr uction reaching new lows at $254 billion, and non-
residential construction moving in reverse to  $654 billion, about where it was in 2007. 
 WT/TPR/M/235/Add.1 
Page 362 
 
 
 Seasonally adjusted rates for 2010 reveal that, desp ite low mortgage interest rates, construction has 
not rebounded.  The May 2010 seasonally adjusted rate  showed total annual c onstruction to be $820 
billion;  of that, the $261 billi on seasonally adjusted rate showed  that residential construction 
remained in a deep trough, and non-residential construction was at a seasonally adjusted rate 
comparable to 2006, at $559 billion.  The United States does not track the share of foreign firms in the construction market. 
  WT/TPR/M/235/Add.1 
 Page 363 
 
 
 ADDITIONAL QUESTIONS FROM MEMBERS AND 
REPLIES PROVIDED BY THE UNITED STATES 
 
BOLIVIA 
Services 
 
Re:  Report by the Secretariat, II.  Trade and Invest ment Policy Framework,  Section 2.  Participation 
in the World Trade Organization, Paragr aph 16.  Actions under GATS Article XXI. 
 1. In December 2008, Bolivia, following GATS Article XXI procedures, removed “Hospital 
Services” from its schedule of commitments.  Cons idering that the U.S. has no investments in this 
sector or economic interests or businesses affect ed, why does the United States think its trade 
interests are affected, especially given that it is  the only WTO member that has so stated?   
 
RESPONSE:   In the U.S. view, the Trade Policy Review is not the appropriate forum to discuss 
concerns related to an Article XXI proceeding.  Under the Procedures for Implementation of Article 
XXI (S/L/80), such discussions should take place on a bilateral basis between the modifying Member 
and the affected Member.  We are willing to res pond to Bolivia’s question in that context.  
 
Bilateral Agreements – Free Trade Agreements 
 Re:  Report by the Secretariat, II.  Trade and Investment Policy Framework, Section 3.  Trade 
Agreements and Arrangements (i) Bi lateral and regional preferences, paragraphs 18, 19, and 23.  Free 
trade agreements signed with Andean countries.  2. Why does the United States promote free trade  agreements that are contrary to Andean 
policy?  
RESPONSE:  The U.S. Government defers to the And ean governments on the question of what is 
consistent with Andean policy.  The Peruvian  and Colombian governments have signed free trade 
agreements with the United States that they have indicated are consistent with their obligations with 
respect to the Andean Community.  
 
Unilateral Preferences – ATPDEA 
 
Re:  Report by the Secretariat, II.  Trade and Investment Policy Framework, Section 3.  Trade 
Agreements and Arrangements (ii) Unilateral pref erences, paragraphs 24 and 31, Andean Trade 
Promotion and Drug Eradication Act (ATPDEA).  
3. For arbitrary and unwarranted political reas ons, the United States withdrew the preferences 
Bolivia had under the Andean Trade  Promotion and Drug Eradica tion Act (ATPDEA).  The U.S. 
failed to use as a basis for th is action, among other available sources, the 2007, 2008, and 2009 
reports and factual data of the United Nations O ffice on Drugs and Crime (UNODC).  We would like 
the United States to answer a series of questions c oncerning to this withdrawal of preferences: 
 (a) Does the United States think its action is cons istent with the ATPDEA objective of helping 
combat narcotics production and trafficking?   
 
RESPONSE:  The Andean Trade Preference Act (ATPA), as amended by the ATPDEA, provides 
preferential access to the U.S. ma rket for certain products subject to a series of eligibility criteria 
being met.  Among those criteria is a requirement  that beneficiary countries meet the narcotics 
cooperation certification criteria set forth in U.S. law.  In September 2008 and each subsequent year, WT/TPR/M/235/Add.1 
Page 364 
 
 
 the U.S. Department of State has determined th at Bolivia had failed demonstrably to cooperate 
adequately with respect to counternarcotics.  
 
(b) Does the United States think its action is consistent with the ATPDEA objective of 
promoting the diversification of exports and  broader-based development in the Andean 
Region in order to provide viable economi c alternatives to narcotics trafficking?  
  
RESPONSE:   The ATPA/ATPDEA program can help pr omote economic alternatives to narcotics 
trafficking for beneficiary countries that meet the statutory eligibility criteria of the program, of which counternarcotics cooperation is an important criterion.    
 
4. Does the United States intend to continue  using preferential mechanisms like the ATPDEA 
politically?  
 
 
RESPONSE:  The U.S. Government intends to continue to implement its trade preference programs 
in accordance with the statutory requirements established by the U.S. Congress for those programs. 
 
5. If the United States has respect for and trust in multilateralism, including the United Nations, 
what problem does it have with using the fact sh eets and reports, etc., generated by the UNODC, 
among other sources, to assess degree of comp liance with ATPDEA eligibility criteria?   
 
RESPONSE:  The U.S. Government takes into account  and assesses all available information in 
determining beneficiary country compliance with the ATPA/ATPDEA eligibility criteria. 
 
Financial Crisis 
 
Re:  Report by the Secretariat, IV.  Developments in Selected Sectors, Section 2.  Financial services, 
(iv) Financial regulatory reform, paragraphs 69 and 70. 
 
6. Are the measures the United States has ad opted as a response to the financial crisis, 
including the financial reform bill passed in July  2010, an implicit acknowledgment that when not 
properly regulated, financial markets generate sp eculation, financial crises, and economic crises, 
with negative repercussions for international trade?  Inasmuch as the United States was the source of 
this crisis which affected the rest of the world, does the United States intend to keep strengthening its 
financial regulations in order to prevent a crisis of this magnitude from occurring again?   
 
RESPONSE:  The Dodd–Frank Wall Street Reform and Consumer Protection Act (Public Law 111-
203, H.R. 4173) was signed into law by President Ba rack Obama on July 21, 2010.  This legislation 
establishes new authorities and supervisory directi on with regard to the U.S. financial markets 
including:  banking, securities, insurance, deriva tives, executive compensation, consumer protection 
and corporate governance.  Following the bill’s p assage, the regulatory implementation phase began. 
While few provisions of the bill are effective immedi ately (for example, the liquidation authority), in 
general the legislation will become effective in stages.  The legislation is complex and requires 
approximately 250 rulemakings and 70 studies.  Over  the next 6 to 18 months, regulators will 
undertake an intense period of rulemaking.  Th e rulemaking process will expand upon and flesh out 
the parameters of the new regulatory framework.  The resulting regulatory regime will contain both 
new elements and elements drawn from current U.S.  financial regulation.  In addition, regulatory 
implementation will likely be a dynamic process.   Rulemaking will include opportunity for public 
comment and all interested parties are invited to submit comments.Interested persons may submit 
comments electronically through the Federal eRulemaking Portal at:  www.regulations.gov.  
Electronic submission of comments allows the commenter maximum time to prepare and submit a  WT/TPR/M/235/Add.1 
 Page 365 
 
 
 comment, ensures timely receipt, and enables the comments to be made available to the public.  
Comments submitted electronically through the www.re gulations.gov website can be viewed by other 
commenters and interested members of the public. WT/TPR/M/235/Add.1 
Page 366 
 
 
 CANADA SUBSEQUENT QUESTIONS 
 
 WT/TPR/S/235  
Part III.  Trade Policies and Practices by Measure ;  (3) Other Measures Affecting Investment and 
Trade;  (iv) Subsidies and other government assistan ce, (c) Assistance to the En ergy Sector;  page 66, 
paragraph 210:  Canada understands that the U.S. military is contri buting to research funding and testing of aviation 
biofuel.  Can the United States clarify what are the cont ributions the United States military is making to 
alternative fuels in aviation? 
 RESPONSE:  It is not the role of the Department of Defense (DOD) to support projects to create new 
fuels, rather DOD tests biofuels and additives to me et military specifications.  As one of the largest 
consumers of oil, DOD naturally is  interested in managing the availa bility and cost of fuel through 
researching the potential uses of alternative fuels or  additives, and in researching means to decrease 
the emissions of greenhouse gasses. 
 The Department has initiated several fundamental research projects through grants and contracts.  Most fundamental research projects are not limited to aviation  biofuels.  One research project, 
however, will develop computational and kinetic models that accurate ly simulate the burning of jet 
fuel.  The Department also has some applied r esearch projects to focus on military specifications.  
Some Canadian firms have participated in th ese projects.  Applied research projects regarding 
aviation biofuels focus on operational fuel qualit y issues and transportation delivery methods for 
military aircraft.  They include studies to improve product quality, cost, and testing of fuel additives 
and biofuels to meet exacting military specificati ons, such as improving fuel performance in a variety 
of climates and altitudes. 
 
FOLLOW UP QUESTION FROM CANADA:   Canada would like to thank the U.S. for their 
response.  Canada would be grateful if the U.S.  could provide a list of aviation biofuel research 
projects undertaken by the military and whether th e results of the research will be made public. 
 
RESPONSE:   The United States thanks Canada for its interest in the important area of fuel 
innovation and conservation.  Unfortunately, th e Department of Defe nse does not have a 
comprehensive list of aviation biofuel research  projects undertaken by the military, because 
contracting in  the Department of Defense is very decentra lized.  Moreover, since the relevant data 
elements are not well defined for aviation biofuels  research, the Department could not devise an 
effective strategy to mine existing databases for this information.  This situation is further complicated 
because many fundamental research efforts are funded by grants, not by contracts, and this is an 
entirely different system involving different organi zations, a different process, and different data.  
Moreover, grant authorizations and appropriations frequently are unpredictable, often depending upon 
specific legislative mandates.  
 
The decision to publicize the results of studi es depends on the nature of the research.  The 
United States is a strong supporter of the free flow of information in fundamental research, and the 
Department of Defense has several policy memo randa directing the free flow of communication 
among fundamental researchers.  Many of our science and research organizations that support 
fundamental research have a policy of publishing a ll unclassified results.  In applied research, the 
Department of Defense searches for a balance be tween protecting national security on one hand and  WT/TPR/M/235/Add.1 
 Page 367 
 
 
 supporting the free exchange of ideas on the ot her hand.  Publication is decided on a 
contract-by-contract basis depending on the nature  of the information and a determination by the 
responsible contracting officer. WT/TPR/M/235/Add.1 
Page 368 
 
 
 CHINA SUBSEQUENT QUESTIONS 4 
 
I. Trade Policies and Practices by Measure  Measures directly affecting exports 
 
1. The U.S. Export Control Reform In itiative was published on April 20, 2010. 
 Please elaborate the schedule of the three-stage reform.  What's the impact of this reform on Sino-U.S. trade?  Has the cancellation of the hi-t ech export control to China been included in this 
initiative?  
RESPONSE:  The purpose of the reform effort is to st rengthen U.S. national security by focusing 
controls on the most sensitive items while facilitating exports of less  sensitive items to destinations 
and end-users that do not pose a national security or  foreign policy concern.  The U.S. Government's 
export control reform effort is not designed to  hinder normal trade with China in uncontrolled 
dual-use items to civilian end-users for civil end-uses.   At this point, it remains premature to state how 
exports to specific groups of countries may be affected  by the results of the reform effort.  There are 
also no plans to modify the China-specific military  catch-all provision of the Export Administration 
Regulations.  The U.S. Government's prohibitions and limitations on the export to China of military 
items and certain dual-use items for military  end-use in China will remain unchanged. 
 
The U.S. Government is working on Phases 1 and 2 of the President's three-phased export control 
reform effort.  Completion of the reform process is  a multi-year effort.  The first two phases involve 
harmonizing and rationalizing the expor t control and sanctions regulations so they:  (i) control items 
consistent with contemporary national security  and foreign policy objec tives;  (ii) enhance 
transparency and predictability;  and (iii) suppor t enforcement efforts through improved coordination 
among the various law enforcement agencies responsi ble for them.  The third phase of the effort, 
which requires legislation to complete, has four parts - creating a single list of controlled items 
administered by a single licensing agency on a singl e information technology platform enforced by a 
single export enforcement coordination agency. 
 
Government procurement 
 
2. The "Buy American" provision In The American Recovery and Reinvestment Act of 2009 , 
which mandates only public projects or construc tion using U.S.-made steel and other finished 
products may obtain budgetary allo cation or other funds in the economic stimulus package unless the 
Federal Government deems that purchase of U.S.-made st eel or other finished products is too costly or 
is contrary to the public interests.  Please indicate whether such provisions are consiste nt with the GPA.  If so, please explain based on 
the relevant provisions of the GPA.  
 
RESPONSE:   The "buy American" provision in Sec tion 1605 of the American Recovery and 
Reinvestment Act of 2009 (ARRA) is applied co nsistent with U.S. obligations under the WTO 
Agreement on Government Procurement (GPA).  Th e "buy American" requirement in the ARRA is 
not applied to iron, steel and manufactured goods  from parties to the GPA where the project is 
covered by the GPA. 
  WT/TPR/M/235/Add.1 
 Page 369 
 
 
 Subsidies and other government assistance 
 
3. After the financial crisis, sma ll enterprises in the U.S. also have difficulties in obtaining loans.  
Small- and medium-sized enterpri ses are important elements in the American reindustrialization 
strategy.  What measures has the U.S. taken to support sma ll- and medium-sized enterprises?  How about the 
effects of such measures?  
 
RESPONSE:   Small businesses play a special role in U.S. job creation, innovation, and 
entrepreneurship, yet face hurdles to exporting that  can limit their ability to export.  The U.S. 
government can encourage and facilitate SME e xports by raising public awareness of export 
opportunities and available assistance, and by providing export promotion and financing services.  
To aid in this effort, the President issued Executive Order 13534 on March 11, 2010, establishing 
eight policy priorities for the NEI and creating the Export Promotion Cabinet: 
 
Eight Priorities Identified in the NEI Executive Order 
Priority 1:  Exports by Small and Medium-Sized Enterprises (SMEs) Priority 2:  Federal Export Assistance 
Priority 3:  Trade Missions Priority 4:  Commercial Advocacy 
Priority 5:  Increasing Export Credit 
Priority 6:  Macroeconomic Rebalancing Priority 7:  Reducing Barriers to Trade 
Priority 8:  Export Promotion of Services 
 The NEI is already making contributions to this progress by expanding small business export 
engagement, trade missions, and access to export fi nancing.  For further information, see the " Report 
To The President On The National Export Initiativ e:  The Export Promotion Cabinet's Plan For 
Doubling U.S. Exports In Five Years " issued in September 2010, which can be found at:  
(http://www.whitehouse.gov/sites/default/f iles/nei_report_9-16-10_full.pdf). 
 
4. Please elaborate on the U.S. preferential polici es for promoting advan ced manufacturing and 
remanufacturing sectors as well as the specific meas ures for putting information technology into full 
play to enhance the competitiveness of the U.S. manufacturing sector.  
 
RESPONSE:   While it is unclear what is meant by "pre ferential", for information concerning subsidy 
programs notified to the WTO, please see the last  U.S. subsidy notification (G/SCM/N/186/USA). 
 
5. After the financial crisis, the American steel  production capacity witnessed a rapid recovery.  
The production of crude steel has increased by 69 pe r cent compared to the same period last year.  
 
Please give a detailed description of the current situation, industrial and investment policy and 
development plan of the American steel industry after the crisis.  
 RESPONSE:   The United States does not have a steel de velopment or investment plan and has no 
ownership role in any U.S. steelmaker.  Today' s American steel industry has emerged from two 
decades of consolidation and restructuring as a modern, hi-tech, green and globally competitive 
industry. 
 Following the financial crisis in late 2008, steel de mand in the United States virtually collapsed as the 
deepening recession hit key steel-consuming industries such as motor vehicles and construction WT/TPR/M/235/Add.1 
Page 370 
 
 
 particularly hard.  U.S. steelmak ers responded to the unfavorable ma rket conditions by sharply cutting 
production and employment, as did steelmakers in  most other major steel producing economies, 
except China.  By December 2008, the U.S. steel i ndustry capacity utilization rate had fallen to just 
40 per cent, compared to 90 per cent through August 2008.  
During the first half of 2009, steel production declined by 52 per cent compared to the first half of 
2008 due to continued weak demand in the United St ates and key foreign markets.  For the entire 
year, production totaled only 59.4 million metric tons , down nearly 40 per cent from an average of 
97.7 million tons during the pre-crisis years 2004-20 07.  Shipments fell 37 per cent.  Owing to lower 
prices and volume, the industry (as represented by co mpanies accounting for 46 per cent of 2009 steel 
production) reported a net loss of $1.7 billion in 20 09, compared to net income of $4.7 billion in 
2008.  
The U.S. steel industry and steel consuming industr ies are benefiting from the infrastructure spending 
and economic growth resulting from the American R ecovery and Reinvestment Act (ARRA) that was 
enacted in February 2009.  ARRA  constituted a general stimulus package covering all parts of the 
economy.  Responding to higher domestic and fore ign demand, steelmakers  boosted production by 
69 per cent to 40.8 million tons over the same period, but this was only 80 per cent of 2008 
production levels.  Industry forecasts suggest that shipments may reach as high as 75 million tons for 
the year, a large increase over 2009, but otherwise the lowest level since 1992. 
 6. Para. 207 of page 65 of the Secretariat's report states that U.S. Treasury sign agreement with 
Chrysler and GM to ensure U.S. production volume. 
 
Has such conduct infringed the enterprises' right of  autonomy, and run counter to the principles of 
market economy?  Has America also adopted sim ilar restriction measures on other automobile 
manufacturers? 
 RESPONSE:  On December 19, 2008, the U.S. Departme nt of the Treasury (Treasury) established 
Automotive Industry Financing Program (AIFP) to help prevent a significant disruption to the 
American automotive industry that would have posed a systemic risk to the stability of the financial 
system and the economy.  Treasury made emergency loans available from the Troubled Asset Relief Program (TARP) under the AIFP to General Motors (G M) and Chrysler to enable those companies to 
conduct orderly restructurings and achieve viability.  GM and Chrysler are the only auto companies 
that participated in the AIFP.  
The Emergency Economic Stabilization Act required th at recipients of funds from the TARP have 
significant operations in the United States.  The loan agreements with GM and Chrysler stipulate that 
a certain level of manufacturing be maintained in  the United States.  For GM, this commitment is 
effective until the later of December 31, 2014, or the receipt by the U.S. Treasury of an amount equal 
to the total dollar amount of all Treasury invested cap ital.  For Chrysler, this commitment is effective 
until June 10, 2014 or the receipt by the U.S. Treasu ry of an amount equal to the total dollar amount 
of all Treasury invested capital.  The United Stat es Government only has these types of agreements 
with GM and Chrysler. 
 
The Auto Task Force, established on February 15 , 2009, to oversee the restructuring of GM and 
Chrysler, was directed by the President to refrain from intervening in the day-to-day management of 
GM and Chrysler and to act as a potential investor of taxpayer resources.  Since Chrysler's exit from 
bankruptcy on June10, 2009, and GM's exit from bankruptcy on July 10, 2009, both companies have been run as commercial enterprises by their manage ment teams reporting to independent Boards of 
Directors. 
  WT/TPR/M/235/Add.1 
 Page 371 
 
 
 Trade related IPR 
 
7. At present the U.S. Congress is revising its patent law. 
 
Please provide the main contents of the revisi on and share when the revision procedure can be 
completed.  
 
RESPONSE:   The U.S. Congress continues to consider revi sions to the patent law.  It is uncertain 
when final enactment of revisions will occur.  Major provisions under consideration include: 
 
• Transition from a first-to-invent system to a first-inventor-to-file system. 
• Direction to courts regarding assessment of  damages in patent infringement cases. 
• Codification of a standard for willful infringement. 
• Establishment of a new post-grant review proceeding. 
• Providing for pre-issuance submissions of prior art. 
• Grant of fee-setting authority to the USPTO. 
• Development of a USPTO telework test program. 
• Elimination of noncompliance with the "best mode" requirement of §112 as a defense to 
patent infringement. 
• Establishment of a 10-year pilot program in cert ain U.S. district courts to enhance judges' 
expertise in patent and plant variety protection cases. 
8. Please provide information concerning the annu al amount of patent dispute-related cases 
filed, closed, and appealed, the annual amount of  cases asking for preliminary injunction, and the 
proportion of the approved, the average duration to render decisions at Courts of first instance and 
Court of appeals, as well as the damages of patent violation judgments . 
 
RESPONSE:   The U.S. Government does not keep offi cial statistics on this matter.  We note, 
however, that the University of Houston maintains an unofficial data base that includes information 
on patent cases, including judgments on patent infri ngements.  That information is available at: 
http://www.patstats.org/Ver dicts_to_07-12-10.post.xls. 
 
9. Please explain what categories of new forms of trade mark U.S has and how many new forms 
of trade mark, such as sound mark, scent mark,  motion mark and holographic mark etc., have been 
applied and registered in the U.S. respectively.  
RESPONSE:   The United States Trademark Act of 1946 (the Lanham Act) encompasses 
non-traditional marks as eligible subj ect matter for trademark protection by not excluding them in the 
definition of a trademark:  "any word, name, symbol , or device, or any combination thereof…used by 
a person…to identify and distinguish his or her goods, including a unique product, from those 
manufactured or sold by others and to indicated  the source of the goods, even if that source is 
unknown." 15 United States Code §1127.  In clarifying the eligibility of a single color as a mark in Qualitex Co. v. Jacobson Products Co., Inc., 514 U.S. 159, 164, 34 USPQ2d 1161, 1163 (1995), the 
U.S. Supreme Court noted that "it is the source-distinguishing ability of a mark – not its ontological 
status as color, shape, fragran ce, word or sign – that permits it to serve basic purposes" of a 
trademark. 
 
Matter may not be registered by the USPTO unl ess it is used as a mark, namely, "in a manner 
calculated to project to purchasers or potential pur chasers a single source or origin for the goods in 
question."  In re Remington Products Inc., 3 US PQ2d 1714, 1715 (TTAB 1987).  See, e.g., In re WT/TPR/M/235/Add.1 
Page 372 
 
 
 Melville Corp., 228 USPQ 970, 970 n.2 (TTAB 1986) ("If matter proposed for registration does not 
function as a mark, it is not registrable in accordan ce with Sections 1 and 2 of the Act because the 
preambles of those sections limit registration to subj ect matter within the definition of a trademark.") 
 As for the number of registrations for these non-traditional marks, the USPTO does not identify 
non-traditional marks differently in the search syst em than any other types of marks, except for 
non-visual marks.  For non-visual marks where no drawing is provided, the USPTO will "code" the 
application with a mark drawing code of "6" (dra wing code 1 is a word ma rk, drawing code 2 is a 
design only mark, drawing code 3 is a word plus de sign mark, etc.).  A search of the USPTO records 
for mark drawing code 6 identifies 171 registra tions and 81 pending appli cations.  Because the 
USPTO has always accepted applications for non-trad itional marks, these types of marks (except for 
non-visual) are not separately identified and therefor e, the United States cannot provide the statistics 
requested.  
10. Please explain how long the examination peri od of the trade mark after application is and 
how long it takes from the trade mark application to the issuance of a trade mark registration 
certificate.  
 
RESPONSE:  In the third quarter of Fiscal Year 2010, pendency from application filing to first 
examination (when the examiner issues a first o ffice action indicating any substantive refusals or 
formality requirements) is 2.8 months.  Pendency from  date of filing to registration or abandonment, 
including suspended and inter partes proceedings is  13.2 months and excluding suspended and inter 
partes proceedings is 10.8 months.  
 
11. Please explain how the U.S regulates trade mark infringement in the retail and wholesale 
market.  
 
RESPONSE:  In the United States, the federal trademar k law called the Lanham Act authorizes suit 
to be brought for infringement of either registered or common law trademark rights. 15 U.S.C.  
Section 1114 and Section 1125(a), respectively.  Reme dies include injunctive relief to prohibit future 
infringement, the impoundment and destruction of goods  bearing infringing trademarks, an infringer's 
profits, the trademark owner's actual damages and c ourt costs.  Attorney's fees may be awarded in 
exceptional cases.  Where the infringement involves the use of a "counterfeit" or virtual duplicate of a 
registered mark, statutory damages of up to US$1, 000,000 may be awarded along with the imposition 
of an award of reasonable attorney's fees unless the infringer proves extenuating circumstances.  
Alternatively, treble damages are available in cases involving counterfeit marks or where 
infringement is willful.  Most states in the United States also have their own trademark statutes.  
Hence, a trademark owner generally has the option of pursuing a trademark infringement action based 
on both state and federal law and in  either state or federal court. 
 12. Please provide the statistics about trademark in fringement cases in the U.S. in 2009, 
including the number of civil trademark infringement cases, the number of criminal trademark infringement cases, and the number of people prosecu ted for criminal liability.  Please also provide 
the number of infringement cases involving right owners outside the United States.  
RESPONSE:  Statistics are unavailable concerning the number of civil trademark infringement cases 
from 2009.  Also unavailable are statistics based upon the nationality of the parties to the case.  
Statistics on federal crimin al enforcement of IP st atutes can be found at 
http://www.justice.gov/ag/annualre ports/pr2009/appd/app-e.pdf. 
 
The federal criminal law criminaliz es the conduct of a person who "traffics or attempting to traffic in 
goods or services and knowingly uses a counterfeit ma rk on or in connection with such goods or 
services …" 18 U.S.C. 2320(a).  The term "traffic" m eans "to transport, transfer, or otherwise dispose  WT/TPR/M/235/Add.1 
 Page 373 
 
 
 of, to another, for purposes of commercial advantage or private financial gain, or to make, import, 
export, obtain control of, or possess, with intent to so  transport, transfer, or otherwise dispose of …" 
18 U.S.C. 2320(e)(2).  The 2009 statistics for trafficking in counterfeit goods or services are: 
 Offense:  intentionally trafficking or attempting to traffic in goods or services and knowingly using a 
counterfeit mark on or in connection with such goods or services. 
 FY 2009 - TOTALS (All Districts) 
Referrals and Cases: 
Number of Investigative Matters Received by U.S. Attorneys:  153 Number of Defendants:  271 
Number of Cases Filed:  97 
Number of Defendants:  135 Number of Cases Resolved/Terminated:  93 
Number of Defendants:  126 
Disposition of Defendants in Concluded Cases: 
Number of Defendants Who Pleaded Guilty:  82 
Number of Defendants Who Were Tried and Found Guilty:  3 Number of Defendants Against Whom Charge Was Dismissed:  37 
Number of Defendants Acquitted:  1 
Other Terminated Defendants:  3 Prison Sentencing for Convicted Defendants (# represents defendants): 
No Imprisonment:  43 
1 to 12 Months Imprisonment:  14 13 to 24 Months:  10 
25 to 36 Months:  2 
37 to 60 Months:  10 61 + Months:  6 
Total Dollar Value of All Criminal Fines Imposed:  Not Available 
(fines can be assessed in lieu of or in addition to prison sentences)  
*This list includes data on any and all criminal cases/defendants where 18 U.S.C. 2320 was brought 
as any charge against a defendant.  Displayed defendant outcome information is based upon the 
defendant's outcome on the individua l charge.  Defendants against whom charges were dismissed may 
have been convicted of other, related offenses.  This list may not include criminal cases or matters 
involving 18 U.S.C. 2320 where the lead charge, charges filed, or charges of conviction include only a 
conspiracy to violate 18 U.S.C. 2320. 
 
Competition policy 
 13. Para. 243 of the Report by the Secretariat me ntions that "inadequate  antitrust oversight" had 
contributed to the economic crisis and that antitr ust had to be among "the frontline issues in the 
Government's broader response to the distressed economy", and that "vigorous antitrust enforcement 
is especially important in down cycles". 
 
Please cite further examples to explain what kind of  role the U.S. antitrust organs have played in the 
economic crisis.  The Department of Justice approv ed the merging of AP Air and Continental Airlines 
very recently.  Please explain whether the approv al has taken into consideration the future 
development of American aviation industry.  How w ill the potential negative impacts of the deal be 
coped with on the market competition?  
 RESPONSE:   In response to the first part of this question, we are citing to the 2009 speech quoted by 
the Secretariat Report and to a contemporaneous spe ech by another senior Antitrust Division official, WT/TPR/M/235/Add.1 
Page 374 
 
 
 as well as to the recent Congressional oversight test imony of Assistant Attorney General Varney.  
Christine Varney, Assistant Attorney General, "V igorous Antitrust Enforcement in this Challenging 
Era," May 12, 2009;  available at:  http:// www.justice.gov/atr/public/speeches/245777.htm, Carl 
Shapiro, Deputy Assistant Attorney General, "Com petition Policy in Distressed industries," May 13, 
2009;  available at:  http://www.justice.gov/atr/ public/speeches/245857.ht m, and Statement of 
Christine Varney, Assistant Attorney General, Antitrust Division, before  the Subcommittee on the 
Courts and Competition Policy, Committee on the Judiciary, U.S. House of Representatives, 
Oversight Hearing on the Federal Trade Commission's Bureau of Competition and the 
U.S. Department of Justice's Antitrust Di vision, July 27, 2010;  available at:  
http://www.justice.gov/atr/public/ testimony/260809.htm . 
 
 In response to the second part of the questi on, we are not familiar with "AP Air" or any 
arrangements that such an entity might have made with  other carriers.  In any event, this is not the 
appropriate venue to discuss individual competiti on enforcement actions.  However, if China's 
question is intended to refer to the UAL Corporatio n/Continental Airlines merger, the Department of 
Justice notes that it closed its investigation of the merger after the parties to the transaction agreed to 
transfer assets to another airline carrier in respon se to the Department's competitive concerns.  These 
transfers resolve the competitive concerns.  See the Department's August 27, 2010 press release at:  
http://www.justice.gov/atr/public/press_releases/2010/262002.htm  . 
 
14.  Para. 249 of the Report by the Secretariat me ntions that the Webb-Pome rene Act and the Export 
Trading Company Act of 1982 grant certain exporters immunity from competition law. 
 Please explain (1) which exporters enjoy such exem ption;  (2) whether the types of monopoly action 
exempted from the exporters include monopoly ag reements, abuse of market predominant position, 
and market player's concentration, and why.  
 
RESPONSE:   We do not agree that the cited statutes "exempt" conduct that would otherwise violate 
the antitrust laws, nor do we agree that the types of conduct described are allowed by these Acts.  
Moreover, the descriptions given do not all use terminology recognized under U.S. antitrust laws. 
 
 For a list of the Webb-Pomerene Associati ons currently extant, see http://www.ftc.gov/os/ 
statutes/webbpomerene/index.shtm.  With regard to  the Export Trading Company Act, there are at 
present 73 Export Trade Certificates of Review in effect 
 15. Para. 250 of the Report by the Secretariat mentions that the U.S. state laws and regulations 
that limit competition sometimes override federal competition law. 
 
Please explain why and in which states the laws an d regulations override the federal law.  Does it 
imply that some monopoly dealers might be protected under the state laws?  Or does it mean that the 
American competition policies are not prior to oth er policies, such as industry and trade policies? 
 RESPONSE:  We are unable to provide China with a list of  the state laws and regulations that might 
provide exemptions from federal antitrust law, nor are we aware of any specific document that does 
so.  The question of whether a particular sub-fede ral measure qualifies as "state action" providing an 
antitrust immunity is quite fact specific.  Thus, the status of state laws or regulations may vary from 
case to case, rather than providing a blanket, a priori  exemption.  The 2007 Antitrust Modernization 
Commission summarized the "state action" concept as follows:  "The judicial state action doctrine 
immunizes private action undertaken pursuant to a clearly articulated state policy deliberately 
intended to displace competition.  In addition, the st ate must provide sufficient 'active supervision' to 
ensure that the conduct is truly a manifestation of st ate policy rather than private interests."  Antitrust 
Modernization Commission, Report and Recommendations, 2007, at ix.   WT/TPR/M/235/Add.1 
 Page 375 
 
 
 This means that some anticompetitive behavior can be  protected by state laws.  It does not mean that 
federal antitrust laws are subordina te to state ones, nor does it deal with the generally co-equal 
relationship between federa l antitrust policies and other federal la ws and policies, such as industrial 
polices and trade policies.  Dispute Settlement 
 
16. Para. 3 on Page 5 of the Statement of the U.S.  Government mentions that "the United States 
believes that the WTO's system of dispute settlement is a vital avenue of countries to resolve difficult 
disagreements while maintaining solid working relationships." 
 
How does the U.S. understand "vital avenue"?  Do es it mean that each WTO member should respect 
and observe the recommendations and ru lings by the WTO dispute settlement?  What position does 
the U.S. hold on WTO rulings and recommendations on the use of zeroing in anti-dumping 
investigations?  RESPONSE:   The United States has come into compliance,  fully and promptly, in the vast majority 
of its disputes.  As for the remaining few instan ces where our efforts to do so have not yet been 
entirely successful, the United States has been worki ng actively towards compliance in furtherance of 
the purpose of the dispute settlement system.  The U. S. Administration will continue to work with the 
U.S. Congress and other interested parties to full y implement the recommendations and rulings of the 
Dispute Settlement Body in these disputes (includi ng the disputes to which China refers in this 
question). 
 
II. Developments in Selected Sectors 
Agriculture  
17. Para. 14, Section IV, Report by the Secretariat  Please provide detailed information on the payment under the ACRE program for 2008-2009 and 
indicate that if this program could help farmers to receive more subsidies. 
 
RESPONSE:  Producers were first eligible to sign up for ACRE program for the 2009 crop year.  
Approximately 7.7 per cent of farms that enrolled in the Direct, Countercyclical Farm and Acre 
Program chose to enroll in the ACRE program, repres enting 12.8 per cent of total base acres.  These 
are percentages of farms enrolled in the program, and of program base acres, and not the percentage 
of all farms or farmers. 
 As a condition to participate in the ACRE program, a producer foregoes the right to participate in the 
Countercyclical Payment (CCP) program.  Thus it is up to the producer – and not the government - to 
determine whether to participate in the ACRE or CCP program, but he cannot do both.  In addition, 
once a producer elects to participat e in the ACRE program, that producer can no longer participate in 
the CCP program for the remainder of the Farm Bill. 
 18. Para. 15, Section IV, Report by the Secretariat 
 
According to the domestic support notification by the U.S., cotton subsidies generally includes, decoupled direct payments, counter-cyclical paymen ts, loan deficiency payments, marketing loan 
gains, certificate exchange gains, storage payments , commodity loan interest subsidies, and other 
supports. 
 WT/TPR/M/235/Add.1 
Page 376 
 
 
 Could the U.S. explain, whether the payment under EAAP is notified as "other support" or under 
other title?  It is highly appreciated if the U.S. could provide detailed in formation about such 
payments, including the amount of the subsidies and the major beneficiaries.  
RESPONSE:  The U.S. submitted its domestic support notification for marketing year 2008 on 
September 16, 2010.  Payments under the Economic Adjustment Assi stance Program (EAAP) were 
$76.441 million and were notified as cotton product sp ecific amber box support.  Assistance is only 
available for users of upland cotton that certify that th e assistance is used to acquire, construct, install, 
modernize, develop, convert, or expand land, plant, build ings, equipment, facilities, or machinery.  
The program is available to any user of upland co tton, whether the upland cotton is from domestic or 
imported sources. 
 A list of recipients for the EAA program can be found at:  http://www.fsa.usda.gov/Internet/ 
FSA_File/upl_participants_with_payment.pdf. 
 
19. Does it belong in the Amber-box Measures that U.S. countercyclical payment of subsidy is 
related to price of each specific agricultural produc t?  Please make it clear whether it is in conformity 
with the requirement of "non-product- specific" s ubsidy that U.S. notifies its countercyclical payment 
of as non-product-spec ific support in Amber-box.  
 
RESPONSE:  CCPs are reported as non-product specific because payments are based on fixed 
historical area and yields (i.e., past production), not  current production.  Recipients are not required to 
produce any product to receive payments.  Recipien ts include producers of fruits and vegetables 
(whether because of historical production, double-c ropping, or the availability of non-base-acres).  
Because any eligible crop can be grown on the base acres, payments cannot be ascribed to a specific 
product. 
 
Financial Services 
 
20. Please describe the U.S. restrictions on foreign insurance and security companies 
establishing branches in the U.S. and indicate the rational for such restrictions.  Does the U.S. have 
any plan to lift such restrictions?  
 
RESPONSE:  U.S. branching restrictions are described in our GATS schedule.  We are not aware of 
plans to remove any of the limitations. 
 
Transport:  Air transport services 
 
21. Para. 74, Page 98, Report by the Secretariat 
 
Please provide further detailed information about the new rule entered into fo rce in April 2010, which 
are aimed at reducing and regulating flight delays.  RESPONSE:  In an important step toward improving the air travel environment for passengers, the 
U.S. Department of Transportation (DOT) published in  the Federal Register a final rule on enhancing 
airline passenger protections on April 29, 2010.  With regard to tarmac delays, the final rule prohibits 
U.S. airlines operating domestic flights from permitti ng an aircraft to sit on the tarmac for more than 
three hours without deplaning passengers.  The only exceptions are if there is a safety or security impediment to deplaning or Air Traffic Control (ATC) advises the pilot that permitting the passengers 
to disembark would significantly disrupt airport ope rations.  For international flights departing from 
or arriving at a U.S. airport, the final rule requir es U.S. carriers to set a hard time limit for the aircraft 
to return to the gate or another disembarkation poi nt to deplane passengers with the same exceptions 
for safety, security, and ATC, but without mandating a specific time frame for deplaning passengers.   WT/TPR/M/235/Add.1 
 Page 377 
 
 
 The final rule also establishes general standards re lating to passenger comfort during tarmac delays.  
More specifically, the final rule re quires carriers to provide adequate  food and drinkable water if the 
delay lasts two hours or more, as well as operable la vatories and medical attention, if necessary, while 
the aircraft is on the tarmac.  
In addition to protecting airline passengers from lengt hy tarmac delays, the final rule enhances airline 
passenger rights in other ways.  In an effort to improve carrier performance, it significantly broadens 
the definition of a chronically delayed flight and a dopts a more rigorous set of criteria for determining 
what constitutes a chronically delayed flight subject to  enforcement action.  It also requires the largest 
U.S. airlines to display on their websites detailed flight delay information for each domestic flight 
they operate, which will help cons umers make better informed decisi ons when purchasing tickets.  In 
addition, it requires U.S. airlines to adopt customer  service plans similar to those voluntarily adopted 
by Air Transport Association carriers and mandates that the carriers audit their own compliance with 
those plans.  Finally, the final rule requires U.S. airlines to designate an airline employee to monitor 
the effects of flight delays and cancellations, respond in a timely and substantive fashion to consumer 
complaints, provide information to consumers on where to file complaints, and refrain from 
retroactively applying material changes to their contr acts of carriage that could have a negative impact 
on consumers who have already purchased tickets.  
It is also noted that in June 2010, DOT publishe d in the Federal Register a notice of proposed 
rulemaking (NPRM) that proposed to expand to fore ign air carriers the requirements in the DOT final 
rule above (the final rule above applied only to U.S. airlines).  The NPRM also proposed to require 
that additional rules to protect air travelers apply equally to foreign airlines operating flights to and 
from the United States.  The comment period on the NPRM closed on September 23, 2010.  The Department will review the comments submitted and draft a final rulemaking.  If the final rule 
contains the same measures as proposed in the NPRM , there would be approximately 90 foreign air 
carriers that would be required to comply with the requirements.  Specific information about the 
expected impact (cost & benefit) of each of the measures can be found in the preliminary Regulatory 
Impact Analysis associated with the pr oposed rule, which may be accessed at:  
http://www.regulations.gov/ by enteri ng docket number "DOT-OST-2010-0140." 
 
22. Para. 83, Page 100, Report by the Secretariat) 
 
Does the U.S. Government have any plan to lift the rest riction on foreign equity investment in the U.S. 
airlines?  RESPONSE:  The restrictions on foreign equity investment in U.S. airlines are statutory and it would 
require an act of Congress to lift them.  There is no such legislation proposed at this time.  
23. Para. 76, Page 98, Report by the Secretariat 
 
As for construction, renovation a nd expansion of airports, what percen tage of total investment comes 
from the federal government, the local governme nt and FAA, respectively?  Is this proportion 
different for "large-sized hub", "medium-sized hub", "small-sized hub" and "non-hub airport"?  If so, 
please indicate the proportion fo r these categories respectively.  
 
RESPONSE:  The U.S. Federal Government provides gran ts to public-use airports in the United 
States through the Federal Aviation Administrati on's Airport Improvement Program (AIP).  AIP 
grants are for the planning and development of public-use airports in the United States.  In FY 2010 
the AIP Program awarded airports $3 billion, which made up about 20 per cent of all U.S. airport 
capital funding revenue in FY 2010.  AIP funding is particularly important to smaller airports, which 
do not always have access to the bond market.  Larger  airports tend to primarily use bond proceeds as 
well as Passenger Facility Charges (PFCs) and supple ment those with AIP funding.  Under the AIP WT/TPR/M/235/Add.1 
Page 378 
 
 
 Program, airport development projects at large airports are eligible to receive up to 75 per cent of 
eligible project costs and airport development projects at smaller airports are eligible to receive up to 
95 per cent of eligible project costs.  State and lo cal governments also provide funding towards airport 
development projects.  This funding takes the form of  grants or local matching funds to AIP grants.  
Around 10 per cent of total airport capital funding revenue comes from State and local governments, 
and this revenue is primarily gene rated from local registration and licensing fees, as well as State fuel 
taxes.  A more detailed explanation and breakdow n of airport capital financing can be found in the 
Transportation Research Board publication, "ACRP 1:  Innovative Finance and Alternative Sources of 
Revenue for Airports."  
24. Para. 75, Page 98, Report by the Secretariat 
 
Do the U.S. laws and policies allow the U.S. airpor ts to be engaged in "cross-shareholdings"?  Do 
U.S. laws and policies restrict the foreign ownership of the airports in accordance with their varying 
degrees of importance? 
 RESPONSE:   Most public airports in the U.S. are owned by States or municipalities and not through 
stock or share structures.  Consequently, cross- shareholdings are uncommon in the current airport 
governance structure.  A public entity, however, may ow n and/or operate more than one airport.  Also, 
private airports that are not eligible for Federa l grant funding may be owned by private citizens or 
corporations, and therefore be available for sharehol ding.  Most airports must have a public owner, 
such as a State or municipality, in order to be el igible for Federal grant funding.  However, a few 
privately-owned, public-use airports that relieve  general aviation traffic from large commercial 
service airports may be eligible for Federal grant funding. 
 
The U.S. Federal Aviation Administration (FAA) Pilot Program on Private Ownership of Airports, 49 U.S.C. 47134, does not restrict foreign ownership of airports that may be privatized under the 
program.  However, only a general aviation airport may be sold under the program.  
Commercial-service airports may be leased only, incl uding a 99-year lease.  The program authorizes 
the FAA (under certain conditions) to allow a public  airport owner to use proceeds from an airport 
privatization for non-airport purposes. 
 25. Para. 75, Page 98, Report by the Secretariat  Do the U.S. laws and policies allow the U.S. airpor ts to go public?  Please also explain the reasons. 
 RESPONSE:  Generally speaking, airports must be owned by a public entity in order to be eligible 
for Federal grant funding for specific, eligible aerona utical improvements.  These Federal grants are a 
significant factor in the financing of capital impr ovements at airports.  Because of this, shares of 
airports cannot be publicly traded.  Exceptions to this include the FAA's Pilot Program on Private 
Ownership of Airports and certain privately-owned,  public-use airports that relieve general aviation 
traffic from nearby commercial service airports.  The United States does not prevent privately-owned 
airports, whether opened to the public or not, from being owned by a corporation that has 
publically-traded shares.  
 
26.  Para. 80, Page 99, Report by the Secretariat 
 
Do the U.S. law and policies allo w the U.S. airlines to conduct equity investments in the U.S. 
airports?  Is there any restricti on on the shareholding ratio?  Is there any restriction on the type of 
airports that can receive investment from ai rlines?  Please also explain the reasons.  
 
RESPONSE:   There is no prohibition in U.S. law or policy against a U.S. airline conducting an 
equity investment in a U.S. airport.  The U.S. Federal Aviation Administration (FAA) Pilot Program  WT/TPR/M/235/Add.1 
 Page 379 
 
 
 on Private Ownership of Airports, 49 U.S.C. 47134 ("Program"), does not expressly prohibit an 
airline from purchasing a general aviation airport or leasing a commercial service airport.  Under the 
Program, the U.S. Secretary of Transportation must be assured that the airport will continue to be 
available for public use on reasonable terms and c onditions and without unjust discrimination and that 
approval of a privatization application will not r esult in unfair methods of competition (49 U.S.C. 
47134(c)(1), (e)).  Additionally, the FAA will review  the qualifications of the proposed operator of 
the airport, including airport management and opera tions experience (FAA, Airport privatization Pilot 
Program:  Application Procedures, 62 Federal Re gister 48,698 (Sept. 16, 1997), amended 62 FR 
63,211 (Nov. 26, 1997)). 
 At U.S. publicly-owned airports, airlines may invest  in improvements such as terminals, hangar and 
maintenance facilities, cargo buildin gs, or ground equipment support f acilities.  The investment would 
be structured through tax-exempt special facility  bonds, issued on a non-recourse basis by a public 
entity and secured by rentals of the facility and some times the credit of the airline tenant.  Airline 
consortiums may also finance terminals through the issuance of tax-exempt bonds by a public entity, 
leased by the airlines with payments  backed by the airlines.  Any f acility financed by an airline or 
airline consortium must comply with the FAA grant assurance that it "will be available for public use 
on reasonable conditions and without unjust  discrimination." (49 U.S.C. 47107(a)).  
 
27. Para. 81 & 82, Page 100, Report by the Secretariat 
 
How do U.S. government agencies, such as FAA, regulate the ground support equipments (GSE) at 
the airports?  Does the U.S. has a licensing system  that requires that such equipment to obtain 
clearance from the authorized testing organizations of the United States before they can be used at 
airports?  
 
RESPONSE:  The U.S. Federal Aviation Administration (FAA) does not regulate or license ground 
support equipment (GSE).  In the United States, GSE is the property and responsibility of the airlines, 
aeronautical services providers, or airport operator.  The FAA does advise that aircraft fueling 
facilities and equipment comply with certain Nationa l Fire Protection Association standards.  FAA 
sets standards only for moving ground equipment that is eligible for FAA grant funding, such as 
certain Aircraft Rescue and Firefighting Equipment and Snow Removal Equipment. 
 
28. Are the foreign equity investments in the U.S. airports and airlines subject to the national 
security review mechanism?  Have there  been any such cases so far? 
 RESPONSE:  CFIUS reviews only "covered transactions,"  which are defined in section 800.204 of 
the regulations (available on the U.S. Treasury  Department website at:  http://www.ustreas. 
gov/offices/international-affairs/cfius/docs/CFIUS-Fi nal-Regulations-new.pdf).  The definition of 
"covered transaction" does not depend on the sect or in which a foreign investment is made. 
 
29. Under what conditions can foreign investors hold shares of U.S. civil aviation companies and 
leasing companies?  What are the restrictions on the shareholding ratio?  
 
RESPONSE:  There are no restrictions on foreign investme nt in U.S. aviation enterprises, other than 
the restrictions on ownership and control of U.S. ai rlines described in paragraph 83 of the Secretariat 
report.  
 30. What are the sources of investment for the U.S.  medium and small-scale  civil transportation 
airports (particularly in the sparsely populated area s)?  Does the government grant subsidies?  If yes, 
what is the basis for such subsidies and how are they distributed?  Are there any preferential taxation 
schemes for the construction and operation of the medium-size and small-scale airports? 
 WT/TPR/M/235/Add.1 
Page 380 
 
 
 RESPONSE:  Small commercial service and general aviation airports in the United States finance 
their operation by revenues generated by the airport itself, and local assistance provided at the 
discretion of local governments.  The local cont ribution may come from general local taxation.  
U.S. States may provide assistance to these airports from general tax revenues or State taxes on aviation fuels. 
 
The U.S. Federal Government, through the U.S.  Federal Aviation Administration (FAA) provides 
some capital improvement grants for eligible spons ors for eligible aeronautical capital projects that 
meet specific requirements.  These Federal grants do not fund operations of airports.  The FAA does 
set aside some funds to be dedicated to smaller airports, but each airport must apply for a specific 
grant for an eligible capital improvement. 
 Local governments are generally exempt from loca l government real property taxes.  However, 
businesses operating on airports are subject  to applicable taxes, including  property and income taxes.  
Local government debt financing, typically in the form of general obligation bonds, does receive 
favorable Federal tax treatment in that the inte rest earned on local government general obligation 
bonds is not subject to U.S. Federal income tax. 
 
31. What preferential policies and taxation schemes  does the U.S. government grant to the 
development of regional aviation?  
RESPONSE:  The U.S. Department of Transportation manages programs which provide assistance to 
air carriers for service to certain small communities.  Under the Essential Air Service program (EAS) 
approximately US$200 million is spent each year to  support air services to about 155 communities.  
The Small Community Air Service Development Progr am (SCASDP) provides federal grants to small 
communities, and under this program US$7 million was available for grant awar ds in FY2009.  Under 
SCASDP, no limits are set on the amounts of individual awards.  In FY2009, grants ranged from 
US$40,000 to US$1,000,000 for a total of nearly US $7 million granted to 20 communities.  Incentives 
may also be granted at the state and local level, esp ecially for airports in small and mid-size cities.  
The Department is currently reviewing FY2010 grant applications for which US$7 million is available 
for award at the end of October. 
 
32. How does the U.S. government regulate the aircra ft leasing market?  Do the aircraft leasing 
companies enjoy any preferential policies?  
RESPONSE :  The United States Department of Transportation does not regulate the aircraft leasing 
market or extend any preferential policies in the sector. 
 
33. Please give a description of the "Fly Amer ica Act" and how it was implemented. 
 
RESPONSE:  The Fly America Act is the common term for Title 49, Section 40118 of the 
United States code, which was enacted in 1958.  The Fly America Act requires United States 
Government-financed air transporta tion of personnel and cargo to be pr ovided by U.S. carriers (except 
in very narrow, specified circumstances.) Note, how ever, that a U.S. carrier code-share on a foreign 
airline is considered as a U.S. carrier service for this purpose.  Mail may also be carried under U.S. 
carrier codes.  
In addition, personnel on United States Government-funded travel in  any domestic or international 
market where the U.S. General Services Administra tion has awarded a contract under its City Pair 
program are expected to use the U.S. carrier awarded the contract for that market.  Bidding on City 
Pair contracts is restricted to U.S. carriers that participate in the Civil Reserve Air Fleet, the program 
whereby U.S. commercial carriers commit aircraft and crew to support U.S. military uplift during 
times of conflict.  WT/TPR/M/235/Add.1 
 Page 381 
 
 
 34. Please provide information on the specific me asures adopted to strengthen international 
cooperation after the announcement of U.S. new space policies. 
 
RESPONSE:  No specific measures regarding international cooperation have been adopted since the 
announcement of U.S. new national space policy. 
 
Transport:  Maritime transport 
 
35. As the Report by the Secretariat notes in Pa ra. 94 of page 103, The United States indicates 
that it is not able to table an offer in the negotiations on Maritime Transport Services. 
 
Please explain the reason.  
RESPONSE:   The TPR is not a negotiating forum.  Requests made in the context of the DDA 
services negotiations should be taken up in that forum. 
 
36. Para. 98 of page 103 of the Report by the Secr etariat states that the United States administers 
a number of maritime transport programs, includi ng Maritime Security Program, to subsidize the 
operators of domestically flagged vessels.  Please specify the implementation period, the content of 
this program and the conditions und er which payment will be granted.  
 
RESPONSE:   The Maritime Security Program serves to maintain an active, privately-owned, 
U.S.-flag and U.S.-crewed liner fleet available to  support the Department of Defense (DOD) in a 
contingency.  MSP carriers must commit 100 per cent of their MSP vessel capacity and related intermodal transportation resources to DOD's approved Emergency Preparedness Program.  MSP 
provides DOD with assured access to commercial intermodal capacity to move ammunition and 
sustainment cargo.  The objective of the program  is to maximize DOD's use of the commercial 
intermodal transportation system to serve America in peace and war while minimizing disruption to 
commercial operations. 
 The MSP was established in 1996.  The program requires the Secretary of Transportation, in 
consultation with the Secretary of Defense, to establish a fleet of active, commercially viable, 
militarily useful, privately-owned vessels to meet national defense and other security requirements.  
Participating operators are required to make th eir ships and commercial transportation resources 
available upon request by the Secretary of Defense during times of war or national emergency.  
 
37. Para. 98 of page 104 of the Report by the Secretariat mentions the Voluntary Intermodal 
Sealift Agreement program. 
 
Please further explain the rights and obligations of  the commercial institutions involved in this 
program and measures taken by the U.S. government  to ensure the effective implementation of the 
program. 
 
RESPONSE :  The Voluntary Intermodal Sealift Agreement (VISA) program is a partnership between 
the U.S. Government and the maritime industry to  provide the Department of Defense (DOD) with 
assured access to commercial sealift and intermoda l capacity to support the emergency deployment 
and sustainment of U.S. military forces.  Interm odal capacity includes dry cargo ships, equipment, 
terminal facilities, and intermodal management services. 
 
VISA brings the carriers into the DOD planning pr ocess through participation in meetings with DOD 
and the Maritime Administration.  This enables carriers to better meet defense transportation needs 
while maintaining ongoing commercial arrangements during contingencies. WT/TPR/M/235/Add.1 
Page 382 
 
 
 The VISA program provides for a time-phased activation of state-of-the-art commercial intermodal 
equipment to coincide with DOD requirements wh ile minimizing disruption to U.S. commercial 
operations.  The VISA program can be activated in three stages as determ ined by DOD with each 
stage representing a higher level of capacity commitm ent.  In Stage III participants must commit at 
least 50 per cent of their capacity.  Dry cargo vessels enrolled in the Maritime Security Program must 
commit 100 per cent during Stage III.  VISA particip ants get priority preference when bidding on 
DOD peacetime cargo. 
 
38. Please further explain the Small Shipyard Grant  Program stated in Para. 99 of page 104, 
including but not limited to its legal bas is, policy objectives, targets and effects.  
 
RESPONSE:   Under the 2009 American Recovery and Re investment Act, the U.S. Maritime 
Administration received $100 million for the Small Shipyards Grant Program, which had been funded 
at $10 million in 2008.  This program provides 75 per cent federal funds with 25 per cent matching 
funds from the shipyard for capital improvements a nd related infrastructure improvements to foster 
efficiency, competitive operations, and quality ship co nstruction and repair.  Grant funds may also be 
used for maritime training programs to foster technical skills and operational productivity.  Two 
million dollars was designated for use in administer ing the program.  Small shipyards fall into two 
categories:  those with fewer than 600 employees,  and those with between 600 and 1200 employees. 
 
Additional information on the progr am and grant recipients can be  found at:  http://www.marad.dot. 
gov/about_us_landing_page/marad_recovery_act/r ecovery.htm;  http://www.marad.dot.gov/news_ 
room_landing_page/news_releases_summary/news_ release/dot_96_09.htm;  http://www.gpo.gov/ 
fdsys/pkg/FR-2009-03-04/pdf/E9-4532.pdf;  h ttp://www.gpo.gov/fdsys/pkg/FR-2009-04-02/pdf/E9-
7384.pdf;  http://www.gpo.gov/fdsys/pkg/FR-2010-01-13/pdf/2010-475.pdf.  
39. Para. 100 of page 104 of the Report by the S ecretariat states that "The Act (The Cargo 
Preference Act of 1954) also requires that shipments from or to the Strategic Petroleum Reserve use domestically flagged tankers for at least 50 per cent of oil transport."  
 Please describe the measures taken  by the U.S. government to en sure the implementation of this 
policy.  How is the cooperation mechanism be tween U.S. oil traders and transportation agent 
established?  
 
RESPONSE:   The U.S. Government agency in charge of maintaining the Strategic Petroleum 
Reserve is the Department of Energy (DOE).  The Department of Interior shares responsibility for the 
Reserve, as well.  DOE is the contracting agency fo r supplying oil to the Reserve and is required to 
assure implementation of the Cargo Preferen ce Act of 1954 in connection with maritime 
transportation.  The Maritime Administration m onitors compliance through monthly reports received 
from DOE.  
40. Para. 93 of page 102 of the Report by the Secret ariat states that "The FMC is responsible for 
the implementation of an alternative competiti on regime for ocean common carriers and marine 
terminal operators…." 
 
Please clarify what is the"alternative competition regime". 
 
RESPONSE:   The Shipping Act is applicable to the opera tions of common carriers and other persons 
engaged in U.S. foreign commerce.  The alternativ e competition regime refers to the exemption for 
agreements effective under the Shipping Act and th e Commission's jurisdiction from the U.S. antitrust 
laws, as contained in the Sherman and Clayton Acts.  The Commission reviews and evaluates agreements to ensure that they do not result in  an unreasonable increase in transportation cost or 
unreasonable reduction in service or otherwise violate the Shipping Act.  WT/TPR/M/235/Add.1 
 Page 383 
 
 
 41. Para. 101 of page 104 of the Report by the S ecretariat states that "U nder the Ocean Shipping 
Reform Act(OSRA) OF 1998, agreements among liner  operator and marine te rminal operators to 
…must be filed with, and examined by  the Federal Maritime Commission" . 
 
Please explain:  1. what is the legal status of such  examination?  2.  What are the criterions employed 
for the examination?  3.  Has th ere been any case of failure to pass the examination?  If yes, please 
describe the details. 
 RESPONSE:   There are two broad categories of ocean common carrier agreements filed with the 
Commission:  (1) pricing agreements, where the main focus is on rates, and (2) operational 
agreements, where the focus can range from the shar ing of vessel space to the management of an 
internet portal.  There are two types of pricin g agreements:  conference agreements and rate 
discussion agreements.  Conference agreements provi de for the collective discussion, agreement, and 
establishment of ocean freight rates and practices by groups of ocean common carriers.  Conferences 
publish a common rate tariff in which all the member  lines participate.  Rate discussion agreements 
(RDAs) also focus on rate matters, but unlike c onferences, any consensus reached under RDAs is 
non-binding on the parties.  RDAs do not have comm on rate tariffs as each party publishes its own 
tariff.  
Operational agreements include vessel-sharing agreements, joint service agreements, cooperative 
working agreements, and non-rate discussion agre ements.  Vessel-sharing agreements (VSAs) 
typically authorize some level of service cooperati on with the goal of reducing individual operating 
costs.  Under joint service agreements (JSAs), two or more carriers operate a combined service under 
a single name in a specified trading area.  Coope rative working agreements (CWAs) are non-pricing 
agreements that tend to deal w ith unique operational c onsiderations relating to acquisitions, joint 
service contracting, sharing of administrative services, or internet portal management.  Non-rate 
discussion agreements (NRDAs) provide ocean comm on carriers a vehicle for discussing matters of 
mutual interest other than rates. 
 
Marine terminals, operated by both public and priv ate entities, provide facilities, services, and labor 
for the interchange of cargo and p assengers between land and ocean carriers, and for the receipt and 
delivery of cargo from shippers and consignees.  The Bureau is responsible for reviewing and 
processing agreements between and among marine terminal operators. 
 
The systematic monitoring of common carrier activiti es and commercial conditions in the U.S. foreign 
trades is an integral part of the Commission's responsibilities under the Shipping Act.  The activities 
of certain types of agreements among marine terminal  operators are monitored in a similar fashion.  
Such monitoring helps ensure that carriers and mari ne terminal operators comply with the statutory 
standards of the Shipping Act and the requirements of  relevant Commission regulations.  To that end, 
the FMC administers monitoring programs and re searches current trade conditions, contemporary 
issues adversely affecting the industry, emerging co mmercial trends, and carrier  pricing and service. 
The Commission's monitoring program examines carrier  competition within individual U.S. trade 
lanes, including market share, concentration, ba rriers to market entry, and coordination between 
carriers or groups of carriers.  The program also examines the availability of  alternative services and 
alternative supply sources for imports, as well as  cargo volume trends, congestion bottlenecks, 
commercial pricing practices, operational cost pressu res, service offerings, vessel capacity utilization, 
capacity management programs, service cont racting activity, and shipper complaints. 
 
The Commission makes a preliminary review of each filed agreement to determine whether the 
agreement is in compliance with the requirements of  the Act.  The filed agreement will automatically 
become effective 45 days after the filing unless th e FMC requests additional information or takes 
action in court to prevent effectiv eness.  No such court action has ever been taken by the FMC to 
prevent effectiveness. WT/TPR/M/235/Add.1 
Page 384 
 
 
 42. According to the requirements set forth in th e acts such as Surface Transportation Assistance 
Act and American Recovery and Reinvestment Act of  2009, all the iron, steel and other manufactured 
products used in infrastructure tendering project a bove the 100,000 dollar threshold and funded by the 
American government must be made in USA.  The ex ceptions for such requirement are:  an immunity 
application is made by the party involved and the authorities concerned hold that preferences on 
domestic products are inc onsistent with public interest, the pr oducts involved are not produced in 
sufficient and reasonably available quantities and of a satisfactory quality;  the use of U.S. iron, steel 
and other manufactured goods would increase the cost of the overall project by more than 25 per cent.  
For rolling stock projects (covering locomotive, a nd by extension, cover the train's control, 
communication and hauling units), in spite of th e 100 per cent domestic procurement requirement, it 
is also required that the components manufactured in the USA account for more than 60 per cent of 
the total cost, and the final assembly be undertaken  in USA.  Moreover, the individual states are 
permitted to adopt more rigid Buy American provi sions.  The legislation requires that the Buy 
American provision be applied in a manner consiste nt with U.S. obligations in the international 
agreements.  Therefore, Members that are si gnatories to the WTO Government Procurement 
Agreement as well as parties to the North Am erican Free Trade Agreement enjoy corresponding 
exemption. 
 
(1) Please indicate how do the authorities identify th e public interest, and what are the major indexes 
for such identification?  
 
RESPONSE:  For the purposes of 49 USC 5323(j) and 23 USC 313 the public interest is determined 
based on the facts and circumstances surrounding the need for a waiver.  There are no indexes used 
for the identification. 
 
(2) Please describe the sources of data for the evaluation by both th e government and the applicant 
concerning the application of the two exemptions, i.e.  insufficient supply of the same type of products 
in the domestic market in America, and the price of  the same type of American products are 25 per 
cent higher than that of foreign products.  How do the relevant authorities examine the exemption 
applications? 
 
RESPONSE :  For the purposes of 49 USC 5323(j) regarding availability, the U.S. Federal Transit 
Administration (FTA) may grant a waiver based on the facts of a specific procurement (if no bidder or 
offer or certifies compliance) and may solicit public comment on the proposed waiver if it has a need 
to survey the marketplace to de termine whether the good is produced in the United States.  For the 
purposes of 23 USC 313, regarding availability, th e U.S. Federal Highway Administration (FHWA) 
solicits public comment on the proposed waiver.  For the purposes of 49 USC 5323(j) regarding a 
price differential of 25 per cent, FTA may grant a price differential waiver based on the facts of each specific procurement.  If the procurement includes a Buy America compliant bid that has a higher 
price by 25 per cent, then a waiv er may be issued.  For the purposes of 23 USC 313, regarding a price 
differential of 25 per cent, the recipient of the De partment of Transportation grant has the option of 
requiring alternate bids (i.e. 2 bids from each contr actor:  one based on foreign steel and one based on 
domestic) in the project advertisement (23 CFR 635. 410(b)(3)).  When alternate bids are used, the 
award is given to the lowest bid based on using domestic steel unless the lowest bid based on using 
foreign steel is 25 per cent less than the lowest domestic steel bid.  
 
(3) What is the exact meaning of "final assembly"  concerning the requirement for the final assembly 
of the locomotive purchase project in USA?  
 
RESPONSE:  For the purposes of 49 USC 5323(j), final assembly requirements may be found in 
Appendix D to 49 CFR 661.11.  
  WT/TPR/M/235/Add.1 
 Page 385 
 
 
 (4) Which states or regions have adopted Buy Americ an measures that are more restrictive than the 
above-mentioned two federal acts concerning th e projects funded by the federal government? 
 
RESPONSE:   The United States does not have such information. 
 
(5) If the bidder is a joint venture comprised of a company from a Member of the WTO GPA or 
NAFTA, and one from a non-party to both agreements, is it entitled to the exemption according to the 
above-mentioned provisions?  If  yes, are there any preconditions? 
 
RESPONSE:  If a good is produced in the United States by a foreign-owned or a foreign-invested 
company, or by a joint venture as described in  the question, the good is considered to be a 
U.S.-produced good.  The ownership of the manuf acturer or producer is not relevant (Federal 
Acquisition Regulation (FAR) 25.003) at:  http://www.acquisition.gov./.  
 Telecommunications  
43. Please describe of the overall d evelopment of the U.S. IT industry, as well as the newly 
adopted policies and measures and their backgrounds.  
 RESPONSE:   This question is so broad that is unclear how it could be responsibly answered in this 
context.  44. Please provide the information on the latest market composition of American communication 
market (including mobile and fixed-line telephony  and broadband), the service export data, and 
changes in the market access conditions, as well as th e policies concerning int ernet security in the 
past two years.  Please also describe the telecommunication and information projects that are 
financed or purchased by the government in the past two years.  
 RESPONSE:   Please see the following FCC Reports:  Local Telephone and Broadband Deployment 
Reports:  http://www.fcc.gov/wcb/iatd/comp.html.  
Commercial Mobile Radio Service Competition Re ports:  http://wireless.fcc.gov/index.htm?job 
=cmrs_reports.  
Broadband Resources:  http://www.broadband.gov/. 
 For government-supported teleco mmunications projects, please see the following site:  
http://www.recovery.gov/Pages/home.aspx;  http://www2.ntia.doc.gov/. 
 
45. Please describe the U.S. policy developm ents concerning the development objectives, 
investment environment, regulatory framework of  the emerging industries as Cloud Computing and 
"Internet of Objects".  
RESPONSE:   This is an evolving sector, with many di fferent aspects depending on specific sectors 
under consideration.  A general overview of some  current initiatives and work is available at:  
http://csrc.nist.gov/groups/SNS/cloud-computing.  
46. According to Google's official news release,  its cloud computing platform - Google Apps - 
passed the review by the General Service Administrati on at the end of this July to become the first 
platform licensed to provide cloud co mputing services for the U.S. government. 
 Could the U.S. kindly share the relevant requirements on providers of cloud computing services for government agencies, as well as the scope, conten t and basis of the review?  Do these requirements WT/TPR/M/235/Add.1 
Page 386 
 
 
 apply on a national treatment basis for the forei gn companies who seek to provide cloud computing 
services for the U.S.? 
 
RESPONSE:  All federal Information Technology (IT) systems, including cloud computing are 
required by the Federal Information Systems Mana gement Act (FISMA) to undergo a Certification 
and Accreditation process that examines various aspec ts of the IT system, including security, privacy, 
and data integrity.  At the end of the process, the system either passes or fails.  If the system fails the 
review, it is shut down.  If the IT system passes the review, it is given an "Authority to Operate" 
(ATO) by the Designated Agency Official/Designated Agency Authority.  This process is undertaken 
every three years.  Information on the process may be found in OMB Circular A-130, which is available at:  http://www.whitehouse.gov/omb/Circul ars_a130_a130trans4.  Under the GPA, the 
United States covers services on a reciprocal basis. 
 
Media ownership rules 
 
47.  Para. 127, Page 109, Report by the Secretariat. 
 
What are the policy regulations and review pr ocedures concerning the foreign ownership and 
shareholding of U.S. television station or radio station?  
RESPONSE:   Direct foreign ownership up to 20 per cent,  or indirect foreign ownership up to 25 per 
cent, of U.S. free-to-air television and radio broadcas ting stations is permitted, consistent with Section 
310 or the 1934 Communications Act, as amended.  
48. Before Beijing Olympic Games in 2008, CCT V of China ordered a gyroscope for aerial 
photography of the Games from a American comp any FLAIR via Chinese Radio & TV and Hong 
Kong PCL.  However, the purchase was detained by  FLAIR on the ground that a component of the 
gyroscope is on the U.S. Department of Commerce' s export embargo list of the dual-use items.  This 
has affected the aerial photography of CCTV during the Olympic Games.  Please explain whether the U.S. plans to ease the restrictions on the export of dual-use products?  
How to ensure that the normal trade will not be affected by unnecessary restrictions?  
 RESPONSE:  The U.S. Government's export control reform  effort is not designed to hinder normal 
trade with China in uncontrolled dual-use items to civilian end-users for civil end-uses.  The U.S. 
Government's prohibitions and lim itations on the export to China of military items and certain 
dual-use items for military end-use in China will remain unchanged.  
 
Energy 
 
49. As far as energy development is  concerned, please describe the U.S. policies and planning on 
petroleum, natural gas, and unconventional energies in particular.  
 
RESPONSE:   U.S. federal policies for energy development can be found in the following enacted 
statutes: 
• Energy Policy Act of 1992 
• Energy Policy Act of 2005 
• Energy Independence and Security Act of 2007 
 
Information on an extensive number of programs th at support energy development in the U.S. can be 
found through the U.S. Department of Energy :  http://www.energy.gov/organization/program_ 
offices.htm 
  WT/TPR/M/235/Add.1 
 Page 387 
 
 
 Information on the primary U.S. program for energy development of oil and gas, particularly from 
unconventional sources, can be found through the U. S. Department of Energy Office of Fossil 
Energy:  http://fossil.energy.gov/programs/oilgas/index.html. 
 
50. Please describe the variation of U.S. pr imary energy mix, and the U.S. new energy 
development plan and the analysis of its potential impacts on the conventional energies.  
 
RESPONSE:   The U.S. primary energy mix and its vari ation over time can be examined in the 
U.S. Annual Energy Review issued by the U.S. Energy Information Administration:  
http://www.eia.doe.gov/aer.  
51. Please introduce what policies and measures are made by the U.S. government to promote 
the development of such energy saving secto rs as new energies and low carbon economy. 
 
RESPONSE:   Through the American Recovery and Reinv estment Act of 2009, the United States is 
allocating approximately $90 billion to clean energy and energy efficiency programs.  These efforts 
include tax credits designed to stimulate cons umer demand for and promote clean energy and 
energy-efficient manufacturing projects, projects invol ving plug-in hybrids, all-electric vehicles and 
the infrastructure needed to power them, the in stallation of smart mete rs, and carbon capture and 
storage projects.  In 2009-2010 the U.S. Environmental Protection Agency (EPA) issued the first 
national rules to reduce greenhouse gas emissions under the Clean Air Act of 1970, as amended;  and 
initiated a national reporting system for greenhouse g as emissions.  Using the Clean Air Act, EPA has 
issued final light duty motor vehicle greenhou se gas standards and provided a framework for 
continued improvements in that sector.  In 2010-2 011, EPA will further develop the national reporting 
system for greenhouse gasses to enable  the agency to receive and verify data submitted electronically 
from covered facilities.  In 2009-2010, EPA took the first U.S. Federal regulatory steps to address the 
problem of global climate change by requiring indus tries to report their greenhouse gas emissions and 
other relevant data, and by issuing regulations that reduce greenhouse emi ssions from cars and light 
trucks and increase the United States' use of renewa ble fuels.  The U.S. Department of Energy (DOE) 
has established more stringent energy efficiency st andards for commercial and residential appliances, 
including microwaves, kitchen ranges, dishwashers,  light bulbs, and other common appliances.  DOE 
also promotes energy efficiency through the Save Energy Now Program that aims to reduce industrial 
energy intensity by 25 per cent in the next 10 years. 
 52. Please describe the U.S. polic ies for the development of cellulosic ethanol sector, and policy 
requirements for foreign investments in the advanced bio-fuel industry. 
 RESPONSE:   The U.S. Department of Energy admini sters the Cellulosic Biofuels Incentive 
Program, a reverse auction program authorized in 2005 that first received its funding in 2010.  The 
auction determines a per gallon production incen tive intended to accelerate the deployment of 
cellulosic biofuels to reach an a nnual production level of 1 billion gallons  by 2015.  To be eligible to 
participate in the auction, a biofuel producer must be located in the United States, and be able to 
produce over 10 million gallons annually. 
 
53. Please describe the measures and experiences that the U.S. has in eliminating backward 
production capacity, and establishing the index mon itoring system concerning energy consumption 
and environmental protection.  
 
RESPONSE:  As explained in the answer to China's qu estion #51, both the Environmental Protection 
Agency and the Department of Energy are involve d in promoting the adoption of clean energy and 
energy efficiency in the United States through vol untary programs, as well as through enforcement of 
regulations setting energy efficiency standards a nd protecting the environment and human health.  
The United States does not engage in industrial polic ies to develop targets for the elimination of WT/TPR/M/235/Add.1 
Page 388 
 
 
 "backward" production capacity in specific industries.  Rather, U.S. regulatory agencies set general 
energy efficiency and environmental protection standa rds that all industries must meet.  Toward this 
end, for example, EPA implements a number of monitoring, compliance and enforcement 
mechanisms (for more inform ation see http://www.epa.gov/compliance).  DOE, for example, 
maintains industrial equipment standards in a do zen categories, and offers energy assessments to 
small- and medium-sized manufacturers through Industrial Assessment Centers. 
 
54. Please clarify:  (1) Are investment subsidi es/assistance and other economic stimulus policies 
equally applied to renewable energy projects in vested by foreign companies and renewable energy 
projects invested by local companies in the U.S. ?  (2) Whether the rene wable energy projects 
receiving U.S. government financial subsidies are a llowed to purchase renewable energy equipment 
from foreign countries?  
 
RESPONSE:  
(1) Renewable energy projects receiving assistance  are evaluated on technical criteria and other 
factors set forth in each Funding Opportunity An nouncement.  No distinction is made between 
whether a company is foreign-owned or U.S.-owned.  
(2) With one exception, recipients of U.S. govern ment financial assistance for renewable energy 
projects are allowed to purchase renewable energy  equipment from any country.  The exception 
involves public projects funded by the American Recovery and Reinvestme nt Act (ARRA), which 
requires that the iron, steel and manufactured goods used in public projects funded by the ARRA be 
U.S.-produced.  However, the ARRA also provides that  this exception applies only to the extent that it 
is consistent with U.S. international obligations. 
 
55. What policies and specific meas ures are adopted by the U.S. to encourage U.S. companies to 
transfer clean energy technologies to developing countries?  Does the U.S. have clean energy 
technology export restrictions?  If so, what restrictions are in force?  
 RESPONSE:  The United States collaborates with othe r countries to develop and deploy clean 
energy technologies.  The United States also work s with countries in international fora such as the 
Asia-Pacific Economic Cooperation (APEC) forum to  build the capacity that enables countries to 
deploy clean energy technologies (e.g.
, sharing best practices, wo rkforce development, and 
information dissemination).  The United States also works to open overseas markets to U.S. 
companies, to find partners for U.S. companies, an d to develop clean energy projects, which brings 
U.S. technology to those markets.  However, U.S.  companies have emphasized to us that the most 
critical considerations for them in assessing new ma rkets for cutting-edge clean energy technologies is 
an open trade and investment regime and a strong legal framework for the protection of intellectual 
property. 
 
The United States does not impose or relax export c ontrols on items, including technology, based on 
the fact that they are "clean energy" or "green" technologies.  This means that if an item, including 
technology, is controlled for export because of its potential use in proliferation-related or military 
end-items activities, it will remain controlled even if  it is capable for use "clean energy" or "green" 
applications.  For example, many types of machine tools that are used to make components for wind 
turbines are controlled for export because they are equally capable of making components for fighter 
aircraft.  However, very few such situations exist and almost all items that are used in for "green" 
applications do not require a license for export.  Ex amples of such uncontrolled items include:  most 
pollution abatement equipment related to coal-fire d power plants, such as scrubbers and filters;  
industrial gas turbines for natural gas-fired plants;  wind turbines and hydro turbines;  and storage and 
primary batteries.   WT/TPR/M/235/Add.1 
 Page 389 
 
 
 56. In June this year, the U.S. Energy Secretar y said the U.S. would spend 32 million U.S. dollars 
to modernize the infrastructure of some hydroelect ric power stations in states, to improve energy 
efficiency and reduce the negative impact on the e nvironment.  He also called on states to further 
develop pumped storage technology in or der to better utilize water resources. 
 
(1) Does all the money come from federal funds?  W hat are the general conditions of tender for such 
reconstruction and equipment procur ement projects?  Are foreign enterprises allowed to participate 
in bidding? 
 
RESPONSE:   The hydropower modernization projects f unded through ARRA ($32 million) are cost 
shared with the industry.  For each project, the U.S. government has provided a maximum 20 per cent 
cost share - and industry partners have provided at  minimum of 80 per cent cost share.  Most industry 
partners exceeded the minimum.  
All the projects are currently at various stages of planning and construction.  Foreign enterprises with 
a legal entity and presence in the U.S. were allowed to  participate, either directly as a bidder, or as 
part of a consortium of bidders. 
 
(2) Does the federal government ha ve substantive support policies to encourage the development of 
pumped storage technology?  What are the responses of the states to this issue?  
RESPONSE:  The U.S. Government does not currently ha ve substantive support policies for the use 
of pumped storage technology.  However, the Offi ce of Energy Efficiency & Renewable Energy is 
conducting research that aims to better understa nd the potential of pumped hydro, and it is 
investigating technical assistance opportunities to accelerate projects that could support renewable 
energy integration.  Furthermore, the Bonneville Power Authority is working with the Bureau of 
Reclamation to study the feasibility of a pumped storage hydro project at the Grand Coulee dam.  
The U.S. Department of Energy has not received responses from the states on pumped storage at this 
time.  Construction services 
 
57. Almost all states in the U.S. require that ar chitects and engineers be licensed or register.  
Those registered in one state can not directly provide service in another state as registration takes 
effect only in the registration state.  This constitut es a substantial barrier to foreign service providers 
entering American construction market. 
 
Does the U.S. have any plans to adopt  measures to resolve this issue? 
 
RESPONSE:   State licensing requirements apply equally to  domestic architects and engineers, and 
should not be considered a discriminatory barrier to  foreign suppliers as suggested in the question.  
The regulators of architectural and engineering services in the United States consistently weigh the 
issue of mobility among states, with a view toward  adapting to changing market demands and in the 
public interest.  In addition, the national associat ions of the state regulatory boards now offer 
centralized services to facilitate  multi-state practice after earning an initial license.  For more 
information, please see:  Architecture:  http://www. ncarb.org/Certification-and-Reciprocity.aspx;  
Engineering:  http://www.ncees.org/Records.php.  WT/TPR/M/235/Add.1 
Page 390 
 
 
 Professional and business services 
 
58. Please kindly describe the regulations concern ing taxation-related intermediary service.  Are 
this services open to foreign investors and a re there any market a ccess restrictions?  
 
RESPONSE:   There are no market access restrictions on foreign investors in taxation-related 
intermediary services such as tax preparation.  Although not market access restrictions, for 
informational purposes the United States notes that tw o states (Georgia and Oregon) currently require 
a license to prepare personal income tax returns fo r a fee if not already licensed as a CPA.  In 
addition, foreign persons who are tax return prep arers must obtain a preparer tax identification 
number (PTIN) to be eligible to prepare tax re turns for compensation.  Generally, the Internal 
Revenue Service requires an individual to provide a social security number (SSN) to get a PTIN.  
Because foreign persons generally ca nnot get an SSN, they must file IRS Form 8946 to establish their 
identity and status as a foreign person.   WT/TPR/M/235/Add.1 
 Page 391 
 
 
 EL SALVADOR SUBSEQUENT QUESTIONS 
 
III. TRADE POLICIES AND PRACTICES, BY MEASURES 
(2) MEASURES THAT DIRECTLY AFFECT IMPORTS 
(iii) Customs regime 
 
8. In accordance with article 203 of the Port S ecurity Act, in November 2008 the CBP published 
provisions which established additional requirement s on advance information for carriers operating 
ships and new requirements for importers of goods that arrive in the United States by sea.  The 
provisions, commonly called the "10+2 Rule," came in to force in January 2009 and provided for their 
full implementation starting in January 2010.  Under the 10+2 Rule, carriers must provide the CBP with a stowage plan for the vessel no later than 48  hours after the vessel left the last foreign port 
before arriving in the United States.  If the trip ta kes less than 48 hours, the stowage plan must be 
submitted before the vessel arrives at a U.S. port.  Carriers must also send "messages on the status of 
the containers" regarding certain events that af fect the containers during the 24 hours after these 
events have been entered into their tracking system.  They are only required to record or compile data 
on the status of containers that they already record  or compile themselves and that they keep in their 
electronic tracking system.  Bulk carriers, including divided ones, are exempt from these 
requirements.  Question  Could the U.S. indicate if with the implementation of  the "10+2 Rule" it has fulfilled the goals of this 
requirement and in which way? 
 RESPONSE:   10+2 significantly increases the scope and accuracy of information gathered on the 
goods, conveyances and entities involved in the shipme nt of cargo arriving by vessel into the United 
States.  The rule is a direct response to the manda te of Section 203 of the SAFE Port Act of 2006 to 
develop a regulation that requires additional data el ements for improved high-ri sk targeting, including 
appropriate security elements of entry data to be  provided as advanced information prior to vessel 
lading. 
 
Has the U.S. considered the possibility of reviewi ng the requirements established in the "10+2 Rule" 
in order to enable trade and make sure the goals of this rule are preserved?  
 
RESPONSE:  10+2 was published as an interim final rule.  Ho wever, the vast majority of the rule has 
been finalized and only a very limited portion of the ru le is in an interim status.  CBP is currently 
conducting a "structured review" and is analyzing the following 6 flexible filing data elements: 
 
• Ship-To Party (range of responses flexibility) 
• Manufacturer (Supplier) name/address ( range of responses flexibility ) 
• Country of Origin (range of responses flexibility) 
• Commodity Harmonized Tariff Code- 6 digit level ( range of responses flexibility ) 
• Container Stuffing Location ( timing flexibility ) 
• Consolidator name/address ( timing flexibility ) 
 
(viii) Technical rules and regulations 
 81. The average time for submitting comments, which is indicated in the notifications of technical 
regulations and conformity assessment procedur es, between November 2007 and January 2010 was 
40 days, compared to the 60 days that are recommend ed at a multilateral level.  Around 30 per cent of WT/TPR/M/235/Add.1 
Page 392 
 
 
 the notifications—most of them from sub-federa l agencies—did not mention any "deadline for 
submitting comments." 
Question 
 
Could the U.S. indicate if they have a procedu re that enables them to meet the recommendations 
established by the TBT Committee with regards to  establishing the 60 day consultation period for 
technical regulation drafts? 
 RESPONSE:  We are reviewing the matter, but believe that the 40-day figure may be misleading.  
The United States often notifies measures that do not need to be notified for purposes of greater 
transparency (e.g., certain voluntary measures, requ ests for information in advance of a rulemaking, 
notices of hearings where stakeholders may part icipate, proposed measures based on relevant 
international standards), as well as measures to a ddress urgent circumstances (e.g., certain interim 
final rules, rules taken to comply with a court or der).  The United States has notified hundreds of 
measures to the WTO, including more than 60 this year alone.  We will need to isolate the 
above-referenced notifications from the remainder to de termine whether there is an issue that needs to 
be addressed.  
Could the U.S. indicate the pressing issues that exi sted in establishing the new regulations, especially 
those from sub-federal agencies that led to not determining deadline for submitting comments? 
 
RESPONSE:  See answer above.  In addition, with respect  to the notifications without a specific final 
date for comments we suspect that these notifications relate to proposed legislation.  As is the case in 
legislatures around the world, there are no formal comment periods that attach to proposed bills.  Given that each bill moves at its own pace through the legislative process – it could be days, weeks, 
months, or even longer, and many of the bills are no t enacted at all – it is often difficult to specify a 
final date for comments.  As we review the matter further, the United States would be interested in 
learning from El Salvador how it handles this issue in its notification practice.  
 84. In the case of approximately 84 per cent of th e final rules issued between January 2008 and 
April 15, 2010, a notice had been previously publis hed and a deadline for making comments had been 
given.  Only when there is "good cause" that  said requirements are "impracticable, unnecessary or 
contrary to public interest" may an agency not meet the requirements regarding the notice and the 
deadline for comments.  However, the two types of final rules issued without notice or prior 
comments (interim final rules and direct final rules)  are also subject, in general, to public comment.  
The agencies request these types of  comments for the interim final ru les and they take them into 
consideration when issuing the final rule that ends  the legislative process.  Regarding direct final 
rules, the U.S. authorities indicate that an agency must initiate a rule-making procedure that includes 
the publication of a notice and a period for comments, if it receives unfavorable comments.  
Question 
 
Could the U.S. provide further details of the reas ons or "good cause" why some agencies do not meet 
the requirements about the notice and the deadline for comments?  
 
RESPONSE:  The "good cause" provision of the U.S. Admini strative Procedures Ac t allows agencies 
to find that compliance with the required publ ic notice and comment procedure would be 
"impracticable, unnecessary, or contrary to the public in terest."  Circumstances that justify the use of 
this provision normally involve urgent problems such  as health, safety, and security emergencies that 
require immediate regulatory action.  
Could the U.S. indicate which agency verifies and endorses the "good cause" for failing to comply 
with the prior notice and period for co mments established by the TBT Committee?   WT/TPR/M/235/Add.1 
 Page 393 
 
 
  
RESPONSE:   The U.S. Administrative Procedures Act giv es the regulating agency the authority to 
find "good cause" that following the public notice and comment procedure would be "impracticable, 
unnecessary or contrary to public interest."  This finding, as well as the rule itself, is subject to 
judicial review by federal courts. 
 
(3) MEASURES THAT DIRECTLY AFFECT EXPORTS 
(vi) Financing, insurance and guarantees  
155. The United States provides financing for exports through its official export credit agency, the 
Export-Import Bank (Ex-Im Bank). The Ex-Im Bank's is  mandated to provide loans, loan guarantees 
and insurance at rates and on terms that are fully competitive with those supported by the 
governments of the key countries whose exporters compete with U.S. exporters.  The Ex-Im Bank 
accepts risks that the private sector will not or cannot  undertake, however, its help is contingent on a 
determination of a "reasonable a ssurance of repayment."  In December 2006, the activities of the 
Ex-Im Bank were renewed until September 2011.  In  the context of the National Export Initiative, 
launched in early 2010, the President directed the Ex-Im Bank to take measures to increase credit availability for small and medium companies.  
Question 
 
Could the U.S. indicate the procedure that is u sed to determine whether the loans, loan guarantees 
and insurance that the Ex-Im Bank grants meet the conditions for them to be fully competitive with 
those supported by the governments of the key countries whose exporters compete with U.S. 
exporters?  
 
RESPONSE:  The Ex-Im Bank considers all re levant data and in formation in making a determination 
as to the terms and conditions that would be cons idered fully competitive by the foreign buyer.  For 
example, if a U.S. exporter alleges that a forei gn competitor has been offered foreign export credit 
agency financing, the Ex-Im Bank will request the details  of that financing offer.  In addition, if there 
has previously been foreign competition with export credit agency financing in a particular industrial 
sector, the historical precedent may be considered a su fficient basis to make a determination.  As each 
case is different, the specific actions and process used is also likely to differ, but the core factors 
considered are the aforementioned.  
Could the U.S. indicate which markets and whic h products are granted these loans, loan guarantees 
and insurance?  
 
RESPONSE:  The countries in which Ex-Im Bank provid es financing in the form of loans, 
guarantees and insurance can be found at:  \\ds \sharedir\ustr\data\library\WTO Trade Policy 
Reviews\United States\US TPR 2010\QUESTIONS 2010\US RESPONSES\MASTER\Second Round\GROUP OF 7 TO BE APPROVED\www.exim. gov by referencing the Country Limitation 
Schedule.  With regard to the relevant products, the Ex-Im Bank can generally provide financing for 
any product, except those that are specifically proh ibited by law such as m ilitary/defense items or 
particular products the sale of which could have  an adverse economic impact on the U.S. economy.  
 
IV. EVOLUTION OF SOME INDUSTRIES 
(1) AGRICULTURE 
(ii) Agricultural policies 
Export promotion 
 24. The Foreign Agricultural Service is also r esponsible for the Market Access Program (MAP), 
which provides financial assistance through cost-shari ng to organizations authorized to carry out WT/TPR/M/235/Add.1 
Page 394 
 
 
 marketing and promotional activities abroad, such as trade fairs, market research, promotion of retail 
products to consumers, technical know-how buildin g and seminars to educate overseas customers.  
Assistance for brand promotion is limited to small-sized entities, cooperatives and producer 
associations.  The funds allocated to the Market  Access Program remained at $200 million between 
2007 and 2009.  Within the framework of the T echnical Assistance for Specialty Crops (TASC) 
Program, funds are allocated to projects related to  sanitary and phytosanitary measures and technical 
barriers to trade in the export mark ets, such as seminars and works hops, study tours, field surveys, 
pest and disease research and pre-dispatch progr ams.  The funds assigned to the TASC Program 
increased from $2 million in 2007 to $4 million in 2008 and $7 million in 2009. 
 
Question 
 Could the U.S. indicate who determines the issues and the recipients of the activities to educate the 
overseas customers through the financial assistance t hat is provided through the Market Access 
Program (MAP)?  
RESPONSE:  Under the Market Access Program (MAP) (http://www.fas.usda.gov/mos/ 
programs/map.asp), the (Commodity Credit Corporation enters into agreements with nonprofit trade 
organizations to share the costs of certain ove rseas marketing and promotion activities that are 
intended to develop, maintain or expand commerc ial export market for U.S. agricultural commodities 
and products.  MAP participants may receive as sistance for either generic or brand promotion 
activities.  To participate in the MAP, an entity shall be (1) a nonprofit U.S. agricultural trade organization;  (2) a 
non-profit state regional trade group;  (3) a U.S. ag ricultural cooperative;  or (4) a state agency. 
 
The participant must contribute (1) in the case of Ge neric promotion, at least 10 per cent of the value 
of resources provided by CCC for such generic promoti on;  or (2) in the case of Brand promotion, at 
least 50 per cent of the total cost of such brand promotions.  Could the U.S. indicate which markets and which products have been grant ed financial assistance 
through the Market Access Program (MAP)?  
 
RESPONSE:  We suggest that El Salvador review the information on: http://www.fas.usda.gov/info/ 
factsheets/mapfact.asp.  WT/TPR/M/235/Add.1 
 Page 395 
 
 
 EUROPEAN UNION SUBSEQUENT QUESTIONS 
 
III.  TRADE POLICIES AND PRACTICES BY MEASURE (1) MEASURES DIRECTLY AFFECTING IMPORTS 
(iv) Tariffs 
(b) Applied MFN Tariffs 
 
Follow up to Q10: 
 
The EU thanks the U.S. for having confirmed that the "AUSRI" also control classification at the HS 
digits level.  It appears to the EU that the "AUSRI" read together with the well known Simmon Omega  
common meaning doctrine (Simmon Omega Inc. v.  Un ited States, 83 Cust.  Ct. 1979) could have the 
practical effect of interfering with the legal inte rpretation of the HS General Interpretative rules. 
 
1. How does the U.S. reconcile the application of the HS General interpret ative rules with the 
"AUSRI" and how does it make sure that the "AUSRI" do not alter the meaning of the HS General 
Interpretative rules?  In case of conflict betwee n a HS General Interpretative rule and the AUSRI 
which one is to prevail? 
 
RESPONSE:  The AUSRI is applied in the absence of language or context that is contrary to the 
AUSRI.  In the case of conflict, the GIR would be controlling. 
 
(v) Other charges affecting imports 
WTO Secretariat's Report, page 29, paragraph 43-44 
 Follow up to Q14 
 2. The EU is looking forward to continue the discussion with the United States on existing discriminatory state laws on the bilateral level.  
Follow up to Q15 
 
3. The EU would like to recall that the tax provisions in question are clear cases of 
discrimination, inconsistent with Article III:2, first se ntence, of the GATT.  In this context, could the 
U.S. explain what steps have been taken to follow up on the conclusions reached by the Panel in its 
report adopted on 19 June 1992 in the case United States – Measures Affecting Alcoholic and Malt 
Beverages (DS23/R – 39S/206)? 
 
RESPONSE:  The United States has no basis to accept that the tax provisions in question are 
discriminatory.  The United States also notes that  total production of beer and wine by small 
producers is quite small, and these small producer s frequently face higher costs of production.  
However due to these higher production costs an y excise tax advantages offered to these producers 
have no trade distorting effect.  With respect to the GATT 1947 panel report to which the question 
refers, this topic was discussed at several meetings of the GATT Council and CONTRACTING 
PARTIES, beginning with document SR.48/2. 
 
(ix) Sanitary and phytosanitary measures 
WTO Secretariat's Report, page 42-43, paragraph 110-111 
 
Follow up to Q29 
 
4. Could the U.S. clarify which steps an app lication would go through, from the time it is 
received by the U.S. administration, until imports  of the products of concern can take place? WT/TPR/M/235/Add.1 
Page 396 
 
 
 RESPONSE:  Permits are required for the importati on, transit, domestic movement and 
environmental release of organisms that impact plants, and the importation and transit of Plants and Plant Products under authority of the Plant Protec tion and Honeybee Acts.  The specific requirements 
regarding importation, transit, etc are determined on a case by case basis depending on the necessary 
scientific evidence presented, risks involved, etc.   More information regarding specific permit 
requirements and the APHIS rulemaking process are available online at:  
www.aphis.usda.gov/plant_health/permits/index.shtm.  
Follow up to Q31 
 
5. Could the U.S. inform of the expected tim eframe for the consulta tion procedure in the 
different parts of U.S. administration?  
RESPONSE:  Consultation procedures and timeframes vary.  They are dependent upon the specific 
invasive species, data submissions, and the respective agencies involved. 
 Follow up to Q32 
 
6. Could the U.S. inform if the list of PRAs in progress published on the internet is complete?  
 RESPONSE:  The United States can ensure that the info rmation regarding the list of PRAs in 
progress is complete based upon the scientific evid ence and data submitted for its review.  This list 
reflects all import requests currently being evaluated by APHIS-PPQ that meet the requirements in Title 7, Code of Federal Regulati ons, Section 319.5.  The risk anal yses and rulemaking or other policy 
documents for each issue on this list may be in any stage of preparation, review, or clearance, but 
have not yet been released publicly.  When a risk anal ysis is released for public comment or used as a 
basis for a proposed or final regulatory ac tion, we will remove it from this list.  
http://www.aphis.usda.gov/import_export/pla nts/plant_imports/downloads/PRAlist.pdf. 
 
7. What is the timeframe for an application to be added to the list, after having been received by 
the U.S. administration?  
 
RESPONSE:  Timeframes are dependent on the informati on submitted, the specific pests involved, 
and the current number of requests under review.  
 
(3) OTHER MEASURES AFFECTING INVESTMENT AND TRADE 
(iii) Government Procurement 
WTO Secretariat's Report, page 58, paragraph 182-183  
Follow up to Q39  
The U.S. states in its response that it does not ha ve the requested data on the volume of the above 
threshold procurement covered by the U.S. GP A commitments for sub-central and other entities 
(Annex 2 and 3 entities).  8. Does the U.S. intend to collect the missing data on the above threshold procurement for the 
Annex II and Annex III entities and distribute them within  the GPA Committee, as stipulated in Article 
XIX:  5 of the GPA?  
 
RESPONSE:  The United States is exploring ways to provide more detailed information on the 
procurement of Annex 2 and Annex 3 entities.  
Follow up to Q40  WT/TPR/M/235/Add.1 
 Page 397 
 
 
 9. Does the EU understand correctly that the pr ocurement of satellites by U.S. entities other 
than the Department of Defence, co mmitted under the GPA, is covered?  
 
RESPONSE:  Yes. 
 
WTO Secretariat's Report, page 61, paragraph 192-194 
 
Follow up to Q53 
 
10. Does the EU understand correctly that a supplier registered in a jurisdiction of a GPA party 
is currently prohibited from the award of contracts, since his substantial business activity is placed in 
another jurisdiction and this supplier had history of U.S. ownership?  
 RESPONSE:  See response below.  
 
11. Would this mean that  a supplier registered in one EU Member State who would want to 
supply from a production plant based in another EU Member State would be prohibited from 
tendering, as long as it is considered by the U.S. administration as an inverted company, on the basis 
of previous (historical) U.S. ownership? 
 
RESPONSE:  See response below. 
 
12. In determining whether an entity is an inverted domestic corporation, how does the 
U.S define and measure the "historical U.S. own ership" and "lack of subs tantial business activity" 
criteria?  
 
RESPONSES TO QUESTIONS 10-12:  We refer the EU to the detailed definition of "inverted 
domestic corporation" in our res ponse to Question 52 of the EU's initial questions.  In addition, we 
would direct the EU's attention to the interim rule p ublished last year in the Federal Register (74 Fed.  
Reg. 31561, July 1, 2009), which sets out the de finition of "inverted domestic corporation" and 
provides additional information regarding implementati on of the provision.  This rule notes that the 
supplier has to certify that it is not an inverted do mestic corporation or a s ubsidiary of one to be 
allowed to submit an offer in a U.S. procurement.  A supplier, whether registered in the EU or in the 
United States, will have to determine whether it fa lls within the definition of inverted domestic 
corporation or a subsidiary of one based on its, or its corporate  parent, particular history and current 
status.  
WTO Secretariat's Report, page 62, para 195 
 
Follow up to Q54 
 
13. Could the U.S. provide a definition of "ma ss transit" as far as the GPA is concerned and 
clarify its interpretation by U.S. covered entities?  
Could the U.S. clarify the means of transport fa lling under the notion "mass transit", as far as the 
GPA coverage is concerned, e.g. motorways, int ercity/interstate trains, suburban railway networks, 
metro, tramways, buses and others?  
RESPONSE:  The United States considers "mass transit" to include the following, inter alia:  
intercity/interstate trains, suburban railway networks , metro, tramways, and buses.  The United States 
does not view motorways as a means of transport as covered under the "mass transit" provision. 
 WT/TPR/M/235/Add.1 
Page 398 
 
 
 14. Does the notion of "mass transit" refer to transport of passengers or can it be extended to 
freight?  
 RESPONSE:  The United States considers "mass transit" gene rally to refer to the transport of people. 
 
15. Can the U.S. list examples of procurement of rolling stock and buses which would not fall 
under the notion of "mass transit" and which w ould therefore be covered by the U.S. GPA 
commitments? 
RESPONSE:  The United States considers all federally assisted procurements of rolling stock and 
buses to be covered under the "mass transit" provision.  
WTO Secretariat's Report, pages 62-63, paragraph 196-198 
 Follow up to Q56 
 
16. Does the U.S. intend to collect data on the te nders awarded by the sub-federal entities within 
the SME set aside and distribute them within the GPA Committee, as stipulated in the Article XIX:5 of 
the GPA? 
 
RESPONSE:  Programs to facilitate participation by small and minority businesses vary by state.  As 
a consequence, it is not possible to provide information on the programs. 
 
(v) Trade-related intellectual property rights 
(c) Trade marks and geographical indications  
Follow up to Q76  
In its response the U.S. explains that the e nhanced protection for Napa and Sonoma wines was 
introduced by California to "protect its consum ers from deceptive practices" and that it "addresses 
demonstrated instances of consumer deception." 
 
17. Could the U.S. explain why consumer protecti on from deceptive practices is limited to these 
names?  
 
RESPONSE:   There are a variety of consumer protection statutes, both state and federal.  For 
example, the U.S. Trademark Act provides a cause of action against deceptive practices and unfair competition.  These causes of action are not limited to U.S. right holders.  Also, the Federal Alcohol Administration Act prevents the display of inform ation on labels for wines and spirits that would 
mislead consumers. 
 
18 What measures will the U.S. take to ensure that this level of protection is also afforded to 
names of viticultural significance from other WTO Members in case of demonstrated instances of 
consumer deception regarding such names? 
 
RESPONSE:   As indicated in the response to questi on 17, causes of action to address claims of 
consumer deception are generally av ailable.  Protection under the U.S. Trademark Act, for example, is 
available for geographical indications that are registered (as trademarks, certification marks or collective marks) or even for unregi stered geographical indications.  See Institut National Des 
Appellations d'Origine ("INAO") v. Brown-Forman Corp., 47 U.S.P.Q. 2d 1875 (T.T.A.B. 1998).  
Thus, where consumer decepti on is demonstrated remedies under U.S. laws are available. 
    WT/TPR/M/235/Add.1 
 Page 399 
 
 
 GUATEMALA SUBSEQUENT QUESTIONS 
 
 
Report from the Secretariat (WTO) 
 1. The report mentions that entry into the financ ial services market is allowed in all the States 
through the establishment or acquisition, by foreign entities, of subsidiaries.  However, it mentions 
there are some limitations to achieving said acquisitions or establishments at the state level in certain States.  In view of the above, could the U.S.  provide more information on such limitations? 
 
RESPONSE:   The U.S. GATS schedule describes the limitations on financial services at the 
state-level.  2. Could the U.S. provide more information on compliance with international standards and the 
system's current strength, from the perspective of formal assessments carried out by international 
bodies?  In this regard, it would be advisable to provide more information on recent assessments of 
compliance with the standards of the Basel Committ ee, among others, and their relationship with the 
trade policies for the financial industry.  RESPONSE:  In mid-September, the United States reached  agreement with their principal foreign 
counterparts, working through the Basel Committee on Banking Supervision at the request of G-20 
leaders, to substantially increase the levels of cap ital that major banks will be required to hold.  As a 
result of this agreement, and previous ones announced  over the last year, banks will have to improve 
the quality of the capital they hold, and will have to hold substantially more of it.  This agreement will 
work together with the Dodd-Frank Wall Street Re form and Consumer Protection Act to make our 
financial system more stable and more resilient.  The United States will conti nue to act consistently 
with its trade commitments.  3. Regarding financial regulation reform, the repor t indicates that the main goals are focused on 
(1) promoting meaningful supervision and regulatio n, (2) establishing comprehensive oversight of 
financial markets, (3) protecti ng consumers and investors from fi nancial abuse, (4) providing the 
Government with tools to manage financial crises and (5) a tightening of international regulations and 
improving international cooperation.   Regarding all these aspects, and in particular the last one 
mentioned, we consider that further information,  on its development and the important implications 
regarding the accessibility and openness of the U.S. fi nancial services market, is necessary in order to 
understand the new context.  We w ould be grateful if the U.S. delegation would share additional 
information in this regard. 
 RESPONSE:   The Dodd–Frank Wall Street Reform a nd Consumer Protection Act (Public Law 
111-203, H.R. 4173) was signed into law by President Barack Obama on July 21, 2010.  This legislation establishes new authorities and supervisor y direction with regard to the U.S. financial 
markets including:  banking, securities, insuran ce, derivatives, executive compensation, consumer 
protection and corporate governance.  Following th e bill's passage, the regulatory implementation 
phase began.  While few provisions of the bill are effective immediately (for example, the liquidation authority), in general the legislation will become ef fective in stages.  The legislation is complex and 
requires approximately 250 rulemakings and 70 studies.  Over the next 6 to 18 months, regulators will 
undertake an intense period of rulemaking.  Th e rulemaking process will expand upon and flesh out 
the parameters of the new regulatory framework.  The resulting regulatory regime will contain both 
new elements and elements drawn from current U.S.  financial regulation.  In addition, regulatory 
implementation will likely be a dynamic process.   Rulemaking will include opportunity for public 
comment and all interested parties are invited to submit comments.  Interested persons may submit 
comments electronically through the Federal eRulem aking Portal at:  http://www.regulations.gov/.  
Electronic submission of comments allows the commenter maximum time to prepare and submit a WT/TPR/M/235/Add.1 
Page 400 
 
 
 comment, ensures timely receipt, and enables the comments to be made available to the public.  
Comments submitted electronically through the http ://www.regulations.gov/ website can be viewed 
by other commenters and interested members of the public.  WT/TPR/M/235/Add.1 
 Page 401 
 
 
 JAPAN SUBSEQUENT QUESTIONS 
 
Regarding the answer for Japan's Question 10 (Model-matching) (p.283)  
Although the DOC claims "(n)one of the responde nts has demonstrated how using a smaller cap 
would increase the accuracy of the margin ca lculation" (Issues and Decision Memorandum in 
Comment 3), the opposite is also the case.  The De partment has not demonstrated why the application 
of the criteria of 40 per cent (i.e., greater than the existing 0 per cent cap of the family methodology) should be more accurate.  The Department has repe atedly argued that the new methodology is more 
accurate simply because it can identify one single "similar" model.  However, this statement per se  
cannot be the basis for accuracy. 
 
Please explain the view of the U.S. government in this regard.  
RESPONSE:   Under Article 2.1 of the ADA, a product is  considered as being dumped "if the export 
price of the product exported from one country to anothe r is less than the comparable price. . .for the 
like product  when destined for consumption in the expor ting country" (emphasis added).  Article 2.6 
of the ADA defines "like product" as "a product which is identical, i.e. alike in all respects to the 
product under consideration, or in the absence of such a product, another product which, although not 
alike in all respects, h as characteristics closely resembling those of the product under consideration."  
Consistent with U.S. law and the ADA, before sear ching for a "similar" model of ball bearing in the 
home market (or third country market, if applicable) to which to match the bearing sold to the U.S. 
market, Commerce seeks an identical  match.  Where identical matc hes are not available, Commerce 
then searches for a similar model ball bearing.  Th e 40 per cent cap that Commerce applies under the 
single-most-similar methodology for identifying a sim ilar match results in a match that satisfies the 
Article 2.6 definition of like product, because the match will be merchandise which, "although not 
alike in all respects, h as characteristics closely resembling those of the product under consideration."  
The "characteristics closely resembling those of the product under consideration" are the eight characteristics that Co mmerce considers under the single-most similar methodology (and that 
Commerce also considered under the family-match methodology).  Of the eight characteristics, four 
must match identically and the remaining four can be di fferent up to an aggregate total of 40 per cent.  
Accordingly, the single-most-similar methodology r esults in product matches that satisfy the WTO 
requirement to compare the export price and normal value of like products. 
 
Regarding the answer for Japan's Question 13 (Anti-Dumping measures) (p.284) 
Whether a portion of the total sales of mercha ndise purchased from unaffiliated suppliers to the 
United States is "small" or "large" should not be arbitrarily changed among different merchandise, 
countries, respondents, timing, etc.  The DOC's answer does not seem to provide a clear threshold. 
 
Japan would like further explanation in this regard. 
 
RESPONSE:   Under U.S. law, and consistent w ith the WTO Antidumping Agreement, the 
Department of Commerce may request cost inform ation from the producer of merchandise that is 
subject to an antidumping investigation or review.  In the interest of reducing the burden on exporters 
and producers, Commerce often declines to request cost information from an unaffiliated producer of 
the exported merchandise when the exporter's sales to the United States of subject merchandise 
purchased from the unaffiliated supplier are a small portion of the exporter's total sales of subject 
merchandise to the United States.  Commerce's decisi on whether to request such information depends 
upon the facts and circumstances of each particular case.  For example, in some cases exporters may 
purchase all of their product from small, unaffiliated pr oducers, such as in th e case of agricultural 
products or aquacultural products.  In these cas es, the exporter's sales purchased from each 
unaffiliated producer may be "small" as a percentage  of the exporter's total sales.  Commerce may, 
however, select one producer, or a group of producers,  to obtain a sampling of the cost of production 
of the subject merchandise, rather than request co st information from every producer that sold the WT/TPR/M/235/Add.1 
Page 402 
 
 
 product to the exporter during the period of investig ation.  Accordingly, the sales as a percentage of 
total sales may vary, as appropriate, to address the fact s and circumstances of the case.  In addition, in 
all cases, including the case of Japanese bearing prod ucers and exporters, respondents have requested 
that Commerce treat these percen tages as business proprietary info rmation.  Commerce has honored 
these requests, and thus protects such information fro m release to the public.  Finally, in each case 
Commerce gives full consideration to the facts, circumstances, and arguments of all parties to the 
proceeding before making a decision whet her to request such information. 
 
Regarding the answer for Japan's Question 17 (Concerning the Ex-Im Bank) (p.286) 
Japan would appreciate it if the U.S. could provide a b reakdown of the $153 million in U.S. exports in 
2009, with the categories of commodities, livesto ck, foodstuffs, farm equipment, chemicals, and 
supplies and services.  In addition, Japan would like to receive the same break down data for the most 
recent five-year period, if possible. 
 
RESPONSE:   As noted, in 2009, Ex-Im Bank authorized support, including insurance, for an 
estimated $153 million of exports of U.S. agricu ltural goods and services, including commodities, 
livestock, foodstuffs, farm equipment, chemicals,  supplies and services.  Comparable numbers for 
previous years are as follows:  
 2008 $1.2 billion 
 2007 $410 million  2006 $250 million 
 2005 $374 million 
 
A breakout of the above amounts is not information th at is regularly maintained or readily accessible. 
 
Regarding the answer for Japan's Question 28 (Bioethanol) (p.291) 
Japan understands the U.S.'s position on renewable fuels under the EISA and RFS2.  Although the 
EISA and RFS2 do not mandate production of corn  ethanol itself, a certain volume of general 
renewable fuels, a category for which corn ethanol can qualify, is required to be used for the U.S. fuel 
supply, so it is possible that the production of corn ethanol could increase.  If the production of corn 
ethanol increases, the global supply of corn for food would decrease, which could cause a hike in global grain prices.  Japan would like to know the view of the U.S. government regarding the effects of 
increasing production of corn ethanol (esp. from th e perspective of global food security and reduction 
of hunger).  
 RESPONSE:  U.S. corn ethanol production has had a minimal impact on food prices.  During the 
2007/08 food price increase, the primary drivers of the global increase were non-biofuel factors such 
as strong growth in foreign food demand, higher en ergy prices, foreign supply shortfalls due to 
adverse weather and export restric tions, and a weak U.S. dollar. 
 Regarding the answer for Japan's Question 36 (Small Shipyard Grant program) (p.294) 
Japan appreciates that the U.S. has provided an ove rview of the program including objectives and the 
program's total records for 2008 and 2009.  However,  Japan would like to receive further background 
information on the enlargement of the grant program from 2008 to 2009.  
RESPONSE:   The shipyard grant program remained essentially unchanged in regards to shipyard 
qualification requirements and selection criteria over the 2008-2009 period.  The source of funds was 
the key difference.  The 2008 grants were author ized under the National Defense Authorization Act 
for Fiscal Year 2006, while the 2009 grants we re primarily funded under the 2009 American 
Recovery and Reinvestment Act (ARRA).  Anothe r small difference is that there are additional 
reporting requirements (primarily rela ted to job creation) under the ARRA. 
  WT/TPR/M/235/Add.1 
 Page 403 
 
 
 PANAMA  
 
Report of the Secretariat (WT/TPR/S/235) 
 
II. FRAMEWORK OF THE TRADE AND INVESTMENT POLICY (2) Participation in the World Trade Organization  
 
PARAGRAPH 15.  The United States have not  yet complied with the resolutions and 
recommendations of the Dispute Settlement Body (DSB) concerning Section 110 5) of the U.S. 
Copyright Act, concerning certain aspects of the anti-dumping investigation of the United States on 
certain hot laminated steel products originatin g from Japan, and Section 211 of the Omnibus 
Appropriations Act of 1998.  Compliance with the resolutions and recommendations has been 
pending for 88 months in the case of the differenc es on Section 211 and on the hot laminated steel 
products, and 63 months concerning the difference on the Copyright Act (March 2010).  The United 
States have reported monthly to the DSB on the work being done in Congress to comply with the 
DSB resolutions and recommendations concerning these matters. 
 PARAGRAPH 16.  Following the findings reached in the difference presented between Antigua and 
Barbuda concerning the measures on the cross-bor der supply of gambling services, in May 2007 the 
United States announced that they adopted the proce dure provided in article 21  of GATS to modify its 
list of commitments.  The USTR has completed negotia tions in order to make, in its list attached to 
GATS, a compensatory adjustment in the case of the most affected members.  The negotiations with 
Antigua and Barbuda are still in progress.  
1.  Question:  Could the United States comment on the situations that had an impact on compliance 
with the DSB resolutions and recomme ndations concerning these matters?  
 
RESPONSE:   The United States has come into compliance,  fully and promptly, in the vast majority 
of its disputes.  As for the remaining few instan ces where our efforts to do so have not yet been 
entirely successful, the United States has been worki ng actively towards compliance in furtherance of 
the purpose of the dispute settlement system.  The U. S. Administration will continue to work with the 
U.S. Congress and other interested parties to full y implement the recommendations and rulings of the 
Dispute Settlement Body in those disputes.  
II. FRAMEWORK OF THE TRADE AND INVESTMENT POLICY 
(3) Preferred trade agreements and arrangements 
(i) Bilateral and regional preferences  
PARAGRAPH 18.  According to the President's Tr ade Policy Agenda for 2009, the United States 
"will consider proposals for new bilateral and regiona l agreements that promise to deliver significant 
benefits consistent with… national economic policies." 
 2.  Question:  To what does the United States refer when it says "significant benefits compatible 
with….national economic policies?"  
 
RESPONSE:  The core objective of U.S. trade policy is to open markets and to advance the rule of 
law through the multilateral trading system, as it has been since before the founding of the GATT.  A 
strong and vital WTO is central to that task.  The United States also pursues bilateral and regional free 
trade agreements (FTAs) that are complementary to  and compatible with advancing the goals of the 
multilateral trading system.  U.S. FTAs, because of their comprehensive duty-elimination and breadth 
of commitments, produce significant benefits for its partners, and, through th e economic growth this 
brings, for other trading partners as well.  This  also strengthens and expands the forces working WT/TPR/M/235/Add.1 
Page 404 
 
 
 towards global trade reforms.  The liberalization unde rtaken by many of our FTA partners has often 
led those Members to increased participati on in liberalizing efforts at the WTO. 
 
PARAGRAPH 19.  From the last Examination of th e United States, free trade agreements have been 
enacted with Costa Rica, Oman and Peru.  In addition, the United States has valid free-trade 
agreements with:  Australia, Ba hrain, Canada, Chile, El Salva dor, Guatemala, Honduras, Israel, 
Jordan, Morocco, Mexico, Nicaragua, the Domini can Republic and Singapore.  These agreements 
have several characteristics in common, including  concerning the coverage and scope of the 
elimination of tariffs (table Annex 2).  Most of them are supported by original rules based on changes 
of tariff classification (chapter III 1) iii)).  The free trade agreements signed with Colombia in 2006 
and with Korea and Panama in 2007 ha ve not yet been examined by Congress. 
 
3.  Question:  Given that trade agreements have pro ven to be a very useful instrument to dynamize the 
exchange of goods and services and to attract invest ments between the member countries to an 
agreement, could the United States comment, when is  it expected that the Trade Promotion Treaty 
between the United States and Panama will be examined by Congress? 
 
RESPONSE:   The Panama free trade agreement is an impor tant trade priority for the Administration, 
and the President has signaled his commitment to  successfully address the outstanding issues related 
to the agreement in order to be able to move it forward for Congressional consideration. 
 As the Government of Panama knows, we are seek ing to address concerns w ith certain aspects of 
Panama's labor regime and its tax transp arency rules.  This work is ongoing. 
 
II. FRAMEWORK OF THE TRADE AND INVESTMENT POLICY 
(3) Preferred trade agreements and arrangements 
(ii) Unilateral preferences 
 
PARAGRAPH 25.  In the framework of the GSP prog ram, the United States grants duty-free entry to 
certain products originating from developing countri es entitled to this benefit.  In December 2009, 
Congress extended the GSP program until December 31, 2010.  The list of GSP beneficiaries appears 
in General Note 4 of the U.S. Harmonized Tariff System.  
4.  Question:  Given the special interest for Pa nama in the GSP program, could the United States 
comment on the possibility of ext ending the program  beyond 2010? 
 
RESPONSE :  The U.S. Congress must enact legislation to extend the GSP program beyond its 
December 31 expiration.  Both the House of Represe ntatives and the Senate are currently working on 
this legislation.  
III. TRADE POLICIES AND PRACTICES, BY MEASURES 
(1) Measures that directly affect imports 
(vi) Special trade measures 
 
PARAGRAPH 48.  From the previous Examination of  the United States, no significant modifications 
have been introduced in the laws on anti-dumping an d compensatory fees, which appear in Title 19 of 
the United States Code (articles 1671-77).  Title 19 of  the Code of Federal Regulations contains the 
corresponding regulations.  The International Trad e Administration of the U.S. Department of 
Commerce and the United States Internationa l Trade Commission (USITC) deal with the 
administration of the laws on anti-dumping and compensatory fees.  In the conference report accompanying the Consolidated Appropriations Act of 2010, the Secretary of Commerce was asked to 
collaborate with the Secretaries of the Department of Homeland Security and the Department of the  WT/TPR/M/235/Add.1 
 Page 405 
 
 
 Treasury in carrying out an analysis of the advant ages and inconveniences related to the prospective 
and retrospective systems of anti-dumping and compensatory fees.  
5.  Question:  "What modification or modifications  have been made in the laws on anti-dumping and 
compensatory fees, but are not considered important?  
 
RESPONSE:  The United States did not implement any changes in its AD and CVD legislation 
during the review period.  
PARAGRAPH 55.  Of the 254 orders on anti-dumpi ng fees and suspension agreements in force in 
December 2009, approximately 57 per cent had been in force for less than 10 years, 28 per cent 
between ten and twenty years and 15 per cent for mo re than 20 years.  The average duration of an 
order on anti-dumping fees is between 9 and 10 years.  
6.  Question:  "What are the reasons that support the duration of 9 to 10 years of the anti-dumping 
fees applied?  
 
RESPONSE:  Under U.S. law, and consistent with the WTO Antidumping Agreement, antidumping 
duties remain in effect for as long as and to the ex tent necessary to counteract injurious dumping.  
Five years after the imposition of the duties,  the Department of Commerce (DOC) and the 
U.S. International Trade Commission (USITC) u ndertake sunset reviews to determine whether 
revocation of the antidumping duty order would like ly lead to the continuation or recurrence of 
dumping and injury.  If the determinations by both agencies are affirmative, the order remains in 
place;  if the determination by either DOC or th e USITC is negative, the order is revoked.  These 
reviews are conducted every five years for the duration of the order.  Thus, the reason that some 
antidumping duty orders remain in place is that th e evidence of record supports the conclusion that 
dumping and injury are likely to continue or recur if the order were revoked.  
 PARAGRAPH 60.  The number of antidumping duty investigations initiated has almost tripled, on the average, between 2004-2006 and 2007-2009 (table III. 4).  All investigations initiated in 2007 and 
2008 led to orders on final fees, versus 40 per cent in  2005-2006.  Of the 14 inv estigations initiated in 
2009, 11 led to the application of provisional measure s and 2 to the imposition of orders on final fees. 
 
7.  Question:  What are the reasons for the initiation of antidumping and countervailing duty 
investigations almost tripling in number in the periods between 2004-2006 and 2007-2009? 
 RESPONSE:  The increase in the number of trade remedy investigations from 2007 to 2009 is due to 
the increase in the number of properly documente d petitions for the impos ition of countervailing 
and/or antidumping duties filed during that time period.   The filing of petitions is not determined by 
the U.S. Government.  Any industry that believes it is being injured by competition from dumped or subsidized imports may file an antidumping duty or countervailing dut y petition requesting an 
investigation.  In order for the U.S. Department of Commerce (DOC) to initiate  an investigation, the 
petition must meet certain requirements under U.S.  law for initiation including industry support, 
evidence of dumping or subsidies, and a demonstratio n of injury caused by the dumped or subsidized 
imports.  When a U.S. industry files an antidumping or countervailing duty petition that meets these requirements, DOC must initiate an investigation.   Companies' decisions to file antidumping and 
countervailing duty petitions may de pend on the state of the economy, a company's own cost-benefit 
analysis, etc. 
 PARAGRAPH 61.  The increase in the number of count ervailing duty investigations is mainly due to 
the 2007 modification of the long time policy of the U.S. Department of Commerce not to apply countervailing duties to countries classified by it as "non-market" economies.  Even though the 
Department of Commerce has legal powers to appl y countervailing duties to said countries, in 1984 it WT/TPR/M/235/Add.1 
Page 406 
 
 
 decided that "the subsidies did not have measura ble economic effects in the Soviet-style economies 
that were then under examination."  The Federal C ourt of Appeals of the United States supported this 
policy in 1986. 
 
8.  Question:  What modifications were made in  2007 in the long time policy of the Department of 
Commerce, targeted at countries classified as "non-market" economies?  
 
RESPONSE:  In 2006, the Department of  Commerce (DOC) initiated the countervailing duty (CVD) 
investigation involving Coated Free Sheet Paper fro m China in response to a petition properly filed by 
U.S. domestic interests.  DOC determined that it was appropriate to revisit its prior practice with 
respect to the applicability of the CVD law to  countries found to be non-market economies for 
antidumping duty purposes.  In the Coated Free Shee t Paper CVD investigation, DOC determined that 
there was nothing in the U.S. CVD law that preven ts applying a CVD remedy to countries that have 
been found to be non-market economies for antidum ping duty purposes.  DOC also concluded that 
China's current economy is vastly different from the command-and-control economies at issue in the 
mid-1980s when DOC's policy regarding non-market economies was first articulated.  Specifically, 
DOC found that the nature of the Chinese economy in recent years allows DOC to identify and 
measure countervailable subsidies.  DOC made a si milar determination with respect to Vietnam in 
2009 in the context of a CVD investigation of Polyethylene Retail Carrier Bags from Vietnam. 
 
PARAGRAPH 65.  The average duration of an order in matters of compensatory fees is nearly nine years.  From the 41 orders valid in December 2009, 5 had been in force for about 23 years and affected the following products:  heavy parts ma de of foundry iron for construction from Brazil, 
pistachio nuts from Iran, stainless steel kitchen appliances from Korea and carbon-steel welded pipes from Turkey.  In 2007 and 2008,  20 compensatory fees were examined for extinction. 12 were 
revoked, versus 10 in 2005-2006. 
 
9.  Question:  What are the reasons that support the duration of 9 years for the antidumping 
measures?  
 RESPONSE:  Under U.S. law, and consistent with the WTO Antidumping Agreement, antidumping 
duties remain in effect for as long as and to the ex tent necessary to counteract injurious dumping.  
Five years after the imposition of the duties,  the Department of Commerce (DOC) and the 
U.S. International Trade Commission (USITC) u ndertake sunset reviews to determine whether 
revocation of the antidumping duty order would like ly lead to the continuation or recurrence of 
dumping and injury.  If the determinations by both agencies are affirmative, the order remains in 
place;  if the determination by either DOC or th e USITC is negative, the order is revoked.  These 
reviews are conducted every five years for the duration of the order.  Thus, the reason that some antidumping duty orders remain in place is that th e evidence of record supports the conclusion that 
dumping and injury are likely to continue or recur if the order were revoked.  
 
PARAGRAPH 66.  The applications for imposition of countervailing duties are often accompanied by 
applications for imposition of anti-dumping dutie s, which frequently leads to the simultaneous 
application of both.  About 90 per cent of the 41 countervailing duty orders in effect in December 
2009 were accompanied by antidumping orders.  10.  Question:  What support in the WTO agreeme nts is used for the double imposition of trade 
remedy measures?  
 
RESPONSE:  There is nothing unusual about the simulta neous filing of petitions for the imposition 
of AD and CVD duties.  Such filings are permitted under the WTO Agreements and U.S. law.  U.S. 
industries, not the U.S. Government, determine whether their trade concerns are best addressed 
through an AD investigation, a CVD investigation,  or both, and file petitions accordingly.  Any  WT/TPR/M/235/Add.1 
 Page 407 
 
 
 industry that believes it is being injured by comp etition from dumped and/or subsidized imports may 
file an antidumping and/or countervailing duty petiti on requesting an investigation.  However, in 
order for the Department of Commerce (DOC) to in itiate an investigation, the petition must meet 
strict requirements under U.S. law for initiation, including industry support, evidence of dumping 
and/or subsidization, and a demons tration of injury caused by the du mped and/or subsidized imports.  
When a U.S. industry files an antidumping and/or countervailing duty petition that meets these requirements, DOC must initiate an investigation.  PARAGRAPH 69.  From the previous Examination done in 2008, the United States has not applied 
any global measures nor has it initiated any investiga tions.  It has applied the special safeguard for 
agriculture based on price to certain ag ricultural products (chapter IV 1)). 
 
11.  Question: 
 
A. What support is there for not having initiated investigations in matters of global safeguard, 
but rather an increase in the record s of investigations of dumping a nd countervailing duty measures? 
 
RESPONSE:  Historically, most U.S. safeguard investigations and virtually all U.S. countervailing 
duty investigations have been c onducted on the basis of a petition f iled by or on behalf of a U.S. 
industry.  In the case of investigations based on industry petitions, the industry makes the decision as 
to the statute under which a petition is filed, pr esumably after taking into account a number of 
considerations, including the evidence at hand and the likelihood that a particular statute will provide 
effective relief.  
B. Can you specify to what agricultural products  the special safeguard for agriculture based on 
price was applied?  
 
RESPONSE:  The most recent United States notification (G /AG/N/USA/74) regarding the use of the 
special safeguard provisions under the WTO Agreem ent on Agriculture was made for calendar year 
2009 on August 2, 2010.  This document ma y be found online at:  http://www.wto.org/. 
 III. TRADE POLICIES AND PRACTICES, BY MEASURES (1) Measures that directly affect imports (vii) Quantitative restrictions, controls and licenses 
 
PARAGRAPH 74.  For reasons of "public interest," cont rols are applied to the imports of natural gas.  
The imports of basic products of the steel mills are subject to automatic licens es, regardless of their 
origin.  This prescription, established in December 2002 as part of a safeguard measure, was extended 
twice, in 2005 and 2009, according to new legal provisions unrelated to the safeguard measure.  
According to U.S. authorities, the license requisite does not limit the quantity or value of the import of 
steels but is designed to provide to the Governme nt and the public quick and reliable statistical 
information on these imports.  Licenses are issued free of charge for the persons who previously 
registered with the United States Department of Commerce;  the registration process is free of charge 
and can be done online.  
12.  Question:  Could the United States clarify whet her there is any requisite for the registration of 
persons with the Department of Commerce for automatic licenses?  
 
RESPONSE:   In order to apply for a steel import license on the U.S. Department of Commerce Steel 
Import Monitoring and Analysis System website, the first step is to open an account.  This account 
serves as registration.  Importers, importing agents or  brokers may apply for the license.  Foreigners 
may apply for a license, as long as they have a str eet address in the United States for contact purposes.  
There is no fee to open an account or to obtain a license. WT/TPR/M/235/Add.1 
Page 408 
 
 
 III. TRADE POLICIES AND PRACTICES, BY MEASURES 
(1) Measures that directly affect imports (vii) Technical Standards and Regulations 
 
PARAGRAPH 83.  The procedures for the preparation of technical regulations and the procedures for 
evaluation of conformity by federal bodies are estab lished in the Administrative Procedure Act.  In 
the process of adoption of technical regulations a nd conformity evaluation procedures, the competent 
body is obligated to publish a notice of the draft regul ation and offer the persons interested, regardless 
of their nationality or residence, the opportunity  to make observations.  With few exceptions, 
Executive Order 12889 requires that the term to make observations be at least 75 days with respect to 
"any proposed federal technical regulation or any fe deral sanitary or phytosanitary measure of general 
application."  The term to present observations must be, as far as possible, 30 days as a minimum for draft technical regulations applicable to perishable  goods;  the period of 75 days is not required when 
the draft technical regulations or sanitary or phytosanitary measures are necessary to address "urgent" 
problems.  Executive Order 12889 does not define the urgent problems.  According to the 
Administrative Procedure Act, the technical regulation or final conformity evaluation procedure must be published at least 30 days before the date of thei r enactment;  it is possible to reduce the term if the 
final measure makes a current measure more lenient.   Notices of draft regulations are published in the 
Federal Register. 
 
13.  Question:  As of what moment does the t erm for the citizen to present observations start? 
 
RESPONSE:   Any stakeholder, foreign or domestic, can submit comments on a proposed rulemaking 
during the time period specified in the relevant noti ce, which will appear in the U.S. Federal Register. 
 
PARAGRAPH 84.  In the case of approximately 84 per cent of the final rules issued between January 
2008 and April 15, 2010, a notice had been previously  published, and the term to make observations 
was given.  A body is authorized not to comp ly with prescriptions on the notice and term for 
observations only if there is "sufficient justifi cation" that such prescriptions are "unrealizable, 
unnecessary or contrary to general interest."  Howeve r, the two types of final rules issued without 
notice or prior observations (final provisional rules and direct final rules) are also generally the object 
of observations from the public.  The bodies request this type of observation for the provisional final 
rules and take them into account when issuing the fi nal rule with which the regulatory procedure ends.  
Concerning the direct final rules, the U.S. authori ties indicate that the body must initiate a regulatory 
procedure that includes the publication of a notice and a term for observations, if it receives 
unfavorable comments. 
 
14.  Question: 
 
A. What is the procedure for a citizen to request a modification or derogation to a regulation, or 
can he only make observations? 
 
RESPONSE:  Any stakeholder, foreign or domestic, can submit comments, including a request for a 
modification or derogation, on an interim final rule or direct final rule.  A time period for providing 
comments will be specified in a notice published in th e Federal Register, usually the same notice that 
announces the interim final or direct final rule.  Under U.S. law, the regulator must take those 
comments into account in deciding whether to modify  the interim final rule or direct final rule.  
 
B. What is the term of the competent body to  respond to a question or observation made by the 
citizen? 
  WT/TPR/M/235/Add.1 
 Page 409 
 
 
 RESPONSE:  The regulator in question will respond to all significant comments submitted during 
the comment period in the text of the final rule.  There is no set time period for when final rules are 
issued;  it differs in each case.  III. TRADE POLICIES AND PRACTICES, BY MEASURES (1) Measures that directly affect imports (ix) Sanitary and Phytosanitary Measures 
 
PARAGRAPH 111.  The APHIS assesses the plague-free situation of a zone, applying the criteria of 
the IPPC standard for the establishment of plague-fr ee zones, which was incorporated by reference in 
the applicable regulations.  In December 2009, AP HIS had 120 ongoing risk analyses in 41 countries 
or regions.  Based on the results of the risk assessment, APHIS can authorize imports, subject to compliance with sanitary and phytosanitary prescrip tions.  These are mostly published as regulations 
and must comply with the procedural requisites set forth in article ix) of the Administrative Procedure 
Act.  The legislation has not established any limit fo r the duration of the approval process of imports 
of plants, animals and derivative products done fo r the first time.  Normally, this process lasts 
between two and three years.  
15.  Question: 
 
A. Based on the obligations of Transparency of the Sanitary and Phytosanitary Regulations of the Agreement on the application of Sanitary and Phytosanitary Measures of the World Trade 
Organization and the concept of undue delays in th e preparation and establishment of phytosanitary 
regulations, why is it that no defined terms are established for administrative processes after the 
completion of the plague risk analysis, for the publication and enactment of the regulations 
established for the products exported for the first time to that country?  
 
RESPONSE:  Completion of the administrative rule making process is determined by the volume of 
information submitted to agencies for considera tion through the public co mment period.  Under 
federal law, U.S. agencies are required to revi ew all scientific evidence and comments submitted for 
their consideration.  As a result, the timeframe varies on a case by case basis given the number of 
comments received, if new scientific data is submitted for evaluation, etc.  
 
B. We would also like to know, what are the technical and scientific criteria that determine the 
duration of an application for approv al of imports of plants, animals and derivative products entering 
the United States for the first time? 
 
RESPONSE:   The time required for a science based, tran sparent review is largely depending upon 
the nature of the market access request and the availability of scientific evidence to support the 
request, among other factors.  
III. TRADE POLICIES AND PRACTICES, BY MEASURES 
(3) Other measures that affect trade and investments 
(i) Legal framework of the companies and the foreign investment regimen 
 
PARAGRAPH 166.  Foreign companies may establis h a branch or incorporate themselves as an 
affiliate in the United States.  There are no prescriptions  in matter of incorporation at federal level.  
The laws on the incorporation of companies vary from one state to another.  A company need not 
incorporate itself in the state where it does business.   U.S. companies or the affiliates of foreign 
companies are authorized to do business outside the State where they were incorporated, by 
presenting a declaration in each State where they propose to operate.  The branches of foreign 
companies must also comply with this requisite.  Prescriptions in matters of authorization applicable WT/TPR/M/235/Add.1 
Page 410 
 
 
 in the states do not distinguish between U.S. comp anies and the affiliates and branches of foreign 
companies.  
 16.  Question:  Can it be explained how the Unite d States controls foreign investments between them, 
in the various States? 
 
RESPONSE:   In general, each state's laws outside the areas of general company law, real estate, 
banking, and insurance (areas in which Congress has sp ecifically delegated regulatory authority to the 
states) apply equally to all persons and companies doi ng business in that state.   Outside of these areas, 
differences in the treatment of domestic and foreign investors at the state or local level are minor and 
can frequently be eliminated through incorpor ation in a particular state or locality. 
 PARAGRAPH 168.  Section 721 of the Defense Pr oduction Act of 1950, as amended by the Foreign 
Investment and National Security Act of 2007 (FINSA), authorizes the Committee of Foreign 
Investments in the United States (CFIUS), an in terinstitutional committee established by law and 
presided by the Secretary of the Treasury, to co nduct examinations of the "covered transactions," 
namely mergers, acquisitions or absorptions that "c ould result in foreign control of a person engaged 
in interstate commerce in the United States."  The CFIUS is authorized to execute "risk mitigation 
agreements" with the parties intervening in a tran saction, in order to address the risks to national 
security, if the law does not have any other provision  of adequate and appropriate powers to resolve 
these risks.  In addition, the President may susp end or prohibit a transaction covered, when he 
considers that there is convincing evidence that th e foreign person exercising control over the U.S. 
company may take measures that would impair national security.  
17.  Question:  What are "covered transactions ," and what are the parameters to execute "risk 
mitigation agreements" for the various foreign investments?  
 
RESPONSE:   Section 721(a)(3) of the Defense Production Act of 1950, as amended by the Foreign 
Investment & National Security Act of 2007 (availa ble on the U.S. Treasury Department's website at 
http://www.ustreas.gov/offices/international-affairs/cf ius/docs/Section-721-Amend.pdf), provides as 
follows: 
 "Covered transaction.—The term `c overed transaction' means any me rger, acquisition, or takeover 
that is proposed or pending after August 23, 1988, by or with any fo reign person which could result in 
foreign control of any person engaged in interstate commerce in the United States." 
 
In addition, the Discussion of the Final Rule, publ ished with the CFIUS regulations (available on the 
U.S. Treasury Department's website at:  http:// www.ustreas.gov/offices/international-affairs/cfius/ 
docs/CFIUS-Final-Regulations-new.pdf), includes th e following discussion of the ways in which the 
regulations provide additional in formation about what types of transactions constitute "covered 
transactions." 
 
"Section 800.207—Covered Transaction .  The Proposed Rule defined '' covered transaction'' consistent 
with the definition of that term in section 721.  The Proposed Rule provided additional clarity about 
what transactions are covered by section 721 in numerous other provisions, including §§ 800.301 and 
800.302 and the definitions of ''control,'' ''foreign person,'' and a ''U.S. business.'' 
 
PARAGRAPH 169.  During the period under examinati on, the Department of Treasury reviewed the 
regulations intended to apply the CFIUS procedures.  According to the Department of Treasury, the 
regulation reviewed "is clearer, reflects the evolution of commercial practices in recent years and introduces new improvements based on the experience required with the prior regulations."  
  WT/TPR/M/235/Add.1 
 Page 411 
 
 
 18.  Question: 
 
A. Can you explain what effects this regulation had on foreign investments? 
 RESPONSE:   The Foreign Investment & National Security Act of 2007 and the executive order and 
regulations implementing that act have reinforced CFIUS's ability to carry out its important national 
security responsibilities in a manner that is consis tent with the longstanding U.S. commitment to 
welcoming foreign investment.  Executive Order 11858, as amended by the President on January 23, 
2008 (available on the U.S. Treasury Department's website at:  http://www.ustreas.gov/offices/ 
international-affairs/cfius/docs/EO-11858-Ame nded.pdf), requires that CFIUS carry out its 
responsibilities in a manner consistent with the U.S.  open investment commitment, and we take that 
requirement very seriously.  We provided the foreign investment community and any other interested parties notice and 
opportunity for public comment on our proposed regul ations, and we received numerous comments.  
The Discussion of the Final Rule, published with the final regulations (available on the U.S. Treasury 
Department's website at:  http://www.ustreas.gov/ offices/international-affairs/cfius/docs/CFIUS-
Final- Regulations-new.pdf) notes that these comment s were helpful to us and describe the changes 
that we made to the final regulations based on t hose comments, after fully considering all comments 
received.  
 
PARAGRAPH 170.  Pursuant to Section 721, the objective of the procedures of CFIUS is "to determine the effect of such transactions on the na tional security of the United States."  Section 721 
does not define national security, but opens an illustrativ e list of the factors that need to be taken into 
account when assessing whether a transaction involves risks to national security.  Pursuant to the 
provisions of the Foreign Investment and National Security Act, in December 2008 the Department of 
Treasury published guidelines on the types of tr ansactions examined by CFIUS which led to 
"considerations of national security" (see table III.2).  
B. Was it possible to reinforce "natio nal security" with its implementation?  
 RESPONSE:   Yes, we believe that the Foreign Invest ment & National Security Act of 2007 and the 
executive order and regulations implementing that act have reinforced CFIUS's ability to carry out its 
important national security responsibilities in a manner that is consistent with the longstanding U.S. 
commitment to welcoming foreign investment.  19.  Question:  Could the type of considera tions applied to national security be indicated?  
 
RESPONSE:  Treasury published official guidance on Dece mber 8, 2008, in the Federal Register 
(also available on the U.S. Treasury Department 's website at:  http://www.ustreas.gov/offices/ 
international-affairs/cfius/docs/CFIUSGuidance.pdf),  regarding the types of transactions that CFIUS 
has reviewed and that have presented national securi ty considerations.  The statute governing CFIUS 
requires CFIUS to review covered transactions no tified to it "to determine the effects of the 
transaction[s] on the national security of the United States," but does not define "national security," 
other than to note that the term includes issues relating to homeland security.  Instead, the statute 
provides an illustrative list of factors for CFIUS a nd the President to consider in assessing whether the 
transaction poses national security risks. 
 
The guidance referenced above includes extensive di scussion of the types of transactions that CFIUS 
has reviewed and that have presented national securi ty considerations.  These transactions are divided 
into two major types, followed by discussion of each:  (1) transactions that have presented national 
security considerations because of the nature of the U.S.  Business over which control is being WT/TPR/M/235/Add.1 
Page 412 
 
 
 acquired and (2) transactions that have presented national security considerations because of the 
identity of the foreign pe rson that is acquiring control of a U.S. business. 
 
This discussion in the guidance is necessarily illust rative and does not purport to describe all national 
security considerations that CFIUS may identify an d analyze in reviewing a transaction, however.  
Furthermore, the fact that a transaction presents na tional security considerations does not mean that 
CFIUS will necessarily determine that the transac tion poses national security risk, and the guidance 
does not identify the types of transactions that pose national security risk.  In addition, the guidance 
should not be interpreted to suggest that the U.S.  Government encourages or discourages the types of 
transactions described in the guidance.  PARAGRAPH 177.  The states of the United States also apply restrictions to direct foreign investment, mostly in the sectors of insurance and real estate.  According to a recent study of the 
Government Accountability Office, 28 states imposed restrictions on foreign ownership of insurance 
companies.  The same study indicates that 37 states impose measures that affect foreign ownership of 
real estate.  These measures cover everything from prescription and registration matters to the prohibition of owning certain types of land;  15 states  had laws that restricted foreign ownership of 
agricultural lands.  20.  Question:  Please explain what impac t has the restriction on certain specific sectors 
(transportation, communications , insurance, etc.) on foreign investments already made?  
 
RESPONSE:   The United States has an open investment  policy, which has had an extremely 
beneficial impact on the economy.  Although sector-specific limitations may exist in a number of states, they tend to be narrow and have minimal impact on overall investment. 
 
III. TRADE POLICIES AND PRACTICES, BY MEASURES 
(3) Other measures that affect trade and investments (ii) State Commerce, public companies and privatization 
 PARAGRAPH 179.  Congress has created "Government  corporations" in order to reach certain 
objectives of public policy.  Under Title 15 of the United States Code, a Government corporation is defined as "a corporation owned by the Government  of the United States or controlled by it."  The 
Government Corporation Control Act establishes that  the term "Government Corporation" means "a 
corporation of the Government with mixed property  and a company fully owned by the Government."  
This Act lists 28 entities including the Federal Depo sit Insurance Corporation, the Tennessee Valley 
Authority and the Federal Prison Industries of the Depa rtment of Justice, which are subject to budget, 
audit and debt management practices specified in said Act.  
21.  Question:  Can you please expand on the term "government corporations?" 
 RESPONSE:   Paragraph 179 of the report refers to a federa l statute, codified at 31 USC 9101, and to 
certain entities known as "government corporations" listed in that statute.  Contrary to the report, the 
statute does not define "government corporations " as "corporations owned or controlled by the 
Government of the United States" – that language was taken from a different title of the U.S. Code. 
Also, 31 USC 9101 does not create the "government cor porations" listed therein.  Rather, the statute 
sets out budgeting and oversight rules that apply to specific entities, listed in the statute, that have 
been created by the federal government to fulfill specific public purposes.  For example, the statute 
applies to the Federal Home Loan Banks.  These are cooperatives that lending institutions use to 
finance housing and economic development in local communities.  A number of the entities listed in 
31 USC 9101 no longer exist.  For example, the Pe nnsylvania Avenue Development Corporation was 
created in 1973 for the purpose of redeveloping an  area of Washington, DC, and was dissolved in  WT/TPR/M/235/Add.1 
 Page 413 
 
 
 1996.  Further information on the statute referred to  in paragraph 179 of the report may be found at:  
http://uscode.house.gov/download/pls/31C91.txt <h ttp://uscode.house.gov/download/pls/31C91.txt> 
 
III. TRADE POLICIES AND PRACTICES, BY MEASURES 
(3) Other measures that affect trade and investments 
(iii) Public Procurement 
 
PARAGRAPH 185.  In February 2010, the United States communicated that it intended to amend 
Appendix 1 of the GPA in order to include Canada  in the commitments on sub-federal procurement 
included in Annex 2.  Previously, these commitments a pplied to all parties to the GPA except Canada.  
The amendment also exempts Canada from certain prescriptions in matters of national content in seven programs related to construction services fina nced with stimulus funds.  These commitments, 
which were added to Annex 3 of the GPA, apply only to Canada.  The changes introduced by the 
United States in its commitments under the GPA were the result of a bilateral agreement reached with 
Canada in early 2010.  The United States offered the same exemptions to the other Parties to the GPA, 
subject to negotiation of mutual commitments.  
 
22.  Question:  What criteria does the United St ates use to determine th e access of the products, 
providers and services to the U.S. market for count ries which are not a party to the Government 
Procurement Agreement?  
 
RESPONSE:  The Trade Agreements Act of 1979 generally  prohibits Federal Government agencies 
from purchasing goods and services covered by th e WTO Agreement on Government Procurement 
(GPA) from any country that is not a party to  the GPA or a free trade agreement with the 
United States, or is not a Least-Developed Country.  For goods and services not covered by the GPA, 
the Buy American Act and other restrictions appl y alike to goods and services from other countries. 
 
III. TRADE POLICIES AND PRACTICES, BY MEASURES 
(3) Other measures that affect trade and investments (v) Intellectual property rights related to trade (c) Factory or trademarks and geographic indications 
 
PARAGRAPH 227.  The registration of a factory or trademark with USPTO is not essential to obtain legal protection since the rights are acquired by th e use of the mark in commercial operations.  
However, the registration gives additional rights, in cluding the following:  impossibility to challenge 
after five years of non-controversial use;  legal pr esumption of ownership, and the right to use the 
mark in connection with the goods or services identifi ed in the registration.  Factory or trademarks 
used exclusively in a state can be registered in th e register of the authorities of that state.  The 
presentation of an application at USPTO can be based on the use of the mark in trade or the intent to 
use it, but the registration of a factory or trademar k with USPTO requires, with certain exceptions, its 
real use in trade operations that may be regulat ed by the United States Congress (for example, trade 
operations interstate or between th e United States and another country). 
 
23.  Question:  Can the United States specify th e exceptions referred to in the previous paragraph?  
 
RESPONSE:   Applications filed by foreign nationals via Paris Convention or Madrid Protocol do not 
have to demonstrate "use in commerce" in th e United States or between the United States and a 
foreign nation in order to obtain a trademark regi stration in the United States.  However, "use in 
commerce" must be demonstrated to maintain the re gistration, that is, the foreign registrant must 
provide a specimen of use of the mark in commerce between the 5
th and 6th year of the registration and 
at every 10th year of the registration term. 
 WT/TPR/M/235/Add.1 
Page 414 
 
 
 See the Trademark Manual of Examining Procedure (TMEP) at:  http://tess2.uspto.gov/tmdb/ 
tmep/0900.htm#_T901.  901 Use in Commerce 
 
In an application based on use in commerce under §1(a) of the Trademark Act, 15 U.S.C. §1051(a), the applicant must use the mark in commerce on or in connection with all the goods and services 
listed in the application as of the application filing date.  See 37 C.F.R. §2.34(a)(1)(i).  The application 
must include a statement that the mark is in use in  commerce, verified in an affidavit or declaration 
under 37 C.F.R. §2.20.  If the verification is not filed w ith the original application, it must also allege 
that the mark was in use in commerce on or in connection with the goods or services listed in the 
application as of the application filing date. 37 C.F.R. §2.34(a)(1)(i).  See TMEP §§804
 et seq.  
regarding verification.  
In an application based on "intent-to-use" under §1(b)  of the Trademark Act, 15 U.S.C. §1051(b), the 
applicant typically begins use in commerce after the filing date.  The application must include a 
verified statement that the applicant has a bona fide  intention to use the mark in commerce on or in 
connection with the goods or services listed in the a pplication as of the application filing date.  Prior 
to registration, the applicant must actually use th e mark in commerce on or in connection with all the 
goods or services specified in the application and file  an allegation of use (i .e., either an amendment 
to allege use under 15 U.S.C. §1051(c) or a statement of use under 15 U.S.C. §1051(d)).  See TMEP 
§902 . (http://tess2.uspto.gov/tmdb/tmep/0900.htm.) 
 A §1 applicant must use the mark in commerce even  if the applicant asserts §44(d) or §44(e), 15 
U.S.C. §1126(d) or §1126(e), as a second basis for filing.  See TMEP §§806.02
 et seq . regarding 
filing on more than one basis. 
 Applicants relying solely  on a foreign registration as the basis for registration under §44(e) of the 
Trademark Act are not required to assert actual u se of the mark prior to registration in the 
United States.  TMEP §1009
.  See Crocker National Bank v.  Canadian Imperial Bank of Commerce , 
223 USPQ 909 (TTAB 1984).  However, to retain a va lid registration, the registrant must file an 
affidavit or declaration of use of the mark in  commerce under 15 U.S.C. §1058 at the appropriate 
times, and establish use in commerce or excusable nonuse.  See TMEP §§1604  et seq. regarding the 
affidavit or declaration of continued use or excusable nonuse.  
Similarly, applicants requesting an extension of protection of an international registration to the 
United States under §66(a) of the Trademark Act are not required to assert actual use of the mark prior to registration in the United States.  However, to retain a valid registration, the registrant must 
file an affidavit or declaration of use of the mark in commerce under 15 U.S.C. §1141k at the appropriate times, and establish use in commerce or excusable nonuse.  See TMEP §1613
. 
 IV.  DEVELOPMENT OF CERTAIN SECTORS (1) Agriculture (iii) Tariff and tariff-rate quotas on agricultural products 
 
PARAGRAPH 45.  The United States notified the Committee on Agriculture of 44 tariff-rate quotas 
covering 171 tariff lines, mostly dairy products, sugar products, products c ontaining sugar and/or 
dairy ingredients and cotton.  The most recent notification corresponds to 2007 and 2008.  The 
utilization rates varied considerably from one tariff ra te quota to another and were particularly low for 
cotton, possibly due to the retrogression of the textil e and clothing industry.  They were also rather 
low for some dairy and other products.  On the othe r hand, imports within the tariff rate quota were 
near the quota level or exceeded it in several cases. 
  WT/TPR/M/235/Add.1 
 Page 415 
 
 
 24.  Question: 
 
A. What tariff-rate quotas had the highest utilization rates? 
 RESPONSE:   U.S. Response:  The United States would direct Panama's attention to 
G/AG/N/USA/75, dated September 15, 2010, for the level of utilization or fill rates of U.S. 
agricultural Tariff Rate Quotas (TRQs).  
B. What method or methods are used fo r the assignment of tariff-rate quotas?  
 
RESPONSE:   TRQ allocations are based on commitments made in the Uruguay Round and in 
previous negotiations under the GATT (now incorp orated into the WTO).  In cases where country 
allocation are not directly contained in commitme nts made in previous ne gotiations, allocation are 
made consistent with GATT Article XIII.  For mo re specific information, the United States would 
direct Panama's attention to G/AG/N/USA/2/add.3,  dated October 5, 2001, for most products and to 
G/AG/N/USA/71, dated February 5, 2010, for sugar and sugar-containing products. 
 PARAGRAPH 46.  The United States has reserved the right to use the special safeguard for 
agriculture in 189 tariff lines, mostly dairy products , sugar products, products containing sugar and/or 
dairy ingredients and cotton.  The special safeguard  based on quantity was used for the last time in 
2003.  However, the safeguard based on price was app lied much more often.  It was used 61 times in 
2007 and 53 in 2008.  The special safeguard for ag riculture was applied in almost all cases to very 
small quantities, for example, to 4 kg of cream (butte rfat) with a content of fatty materials in excess of 
45 per cent and to 3 kg of powdered cocoa with a c ontent of more than 65 per cent sugar, but it was 
also used in significant quantities from the commercial point of view, for example, on 327 tons of 
milk-based beverages and on 2,598 tons of frozen de-boned beef. 
 
25.  Question:  Does the United States intend to eliminate the special safeguard based on quantity?  
 
RESPONSE:   The United States has no current plans to unilaterally eliminate the quantity-based 
special agricultural safeguard.  The United States would, of course, make any required changes 
pursuant to an agreement under the Doha Development Agenda. 
 
IV. EVOLUTION OF CERTAIN SECTORS 
(2) Financial services (iii) Policy measures in response to the crisis  
 
PARAGRAPH 59.  The Gramm-Leach-Bliley Act (for modernization of financial services) of 1999 
(GLBA) is the main legislative instrument governi ng the consolidated financial sector.  The Financial 
Services Regulatory Relief Act of 2006 introduced ch anges in U.S. legislation on financial services 
that affect the banking, securities and insurance sect ors.  Pursuant to the McCarran-Ferguson Act of 
1945 (Title 15 of the United States Code, Chapter 20),  the insurance sector is mainly regulated at the 
level of the states.  The Federal Reserve is the ma in regulatory body of financial conglomerates that 
include a bank.  The activities of the affiliates of financial holding  companies are regulated by several 
different regulatory bodies.  The supervision of th e banking sector is carried out both by federal and 
state regulatory bodies.  26.  Question:  In what states is it not permitte d to establish affiliates or operate as branches of 
insurance companies?  
 
RESPONSE:   State insurance limitations regarding the operation of a branch are described in the 
U.S. GATS schedule. 
 WT/TPR/M/235/Add.1 
Page 416 
 
 
 PARAGRAPH 66.  In order to comply with the obj ectives of EESA, the Treasury established various 
programs in the framework of TARP and defined guidelines for admissibility for each of them.  According to the application guidelines of the Ca pital Purchase Program, the most important in 
TARP, and the Capital Assistance Program of TA RP, "the applicants must be established and 
operating in the United States and may not be contro lled by a foreign bank or company."  Similarly, 
according to the "summary of terms" of the Program  for Prior Loans of TARP, the banks or savings 
associations that own a bank or foreign company or ar e under its control are not eligible to participate 
in this program.  According to U.S. authorities, th e basic ground of this approach was the following:  
U.S. affiliates of foreign banks that need additiona l capital should resort first to their parent banks;  
and that the financial regulatory body of the country  where the parent bank is subject to complete 
consolidated supervision is in the best condition to determine the global st rength of the financial 
conglomerate.  U.S. authorities also indicate that this principle stems from the international supervision and regulation of the banking sector, as  stated, for example, by the Basil Committee 
Concordat. 
 
27.  Question:  Could the United States indicate  what financial aid policies will be created or 
implemented for foreign investment?  
 
RESPONSE:   None. 
 
IV. DEVELOPMENT OF CERTAIN SECTORS. 
(1) Financial Services  
(iv) Financial Regulation Reform 
 
PARAGRAPH 70.  The proposal is centered on five ma in objectives:  (1) promoting solid supervision 
and regulation of financial companies;  (2) establis hing complete supervision of financial markets;  
(3) protecting consumers and investors against financ ial abuses;  (4) providing the Government with 
the necessary instruments to manage the financial crises;  and 5) making international regulatory 
standards stricter and improving in ternational cooperation.  The legi slation has not been approved by 
Congress (June 2010). 
 
28.  Question: 
 
A. Does the new regulation mod ify the access to foreign financi al institutions concerning the 
possibility of establishment or cross-bor der activities that they may carry out?  
 
RESPONSE:   The regulations will be written over the next several months.  The Dodd–Frank Wall 
Street Reform and Consumer Protection Act (Public  Law 111-203, H.R. 4173) was signed into law by 
President Barack Obama on July 21, 2010.  Th is legislation establishes new authorities and 
supervisory direction with regard to the U.S. financial markets including:  banking, securities, 
insurance, derivatives, executive compensation, c onsumer protection and corporate governance.  
Following the bill's passage, the regulatory implemen tation phase began.  While few provisions of the 
bill are effective immediately (for example, the liqui dation authority), in general the legislation will 
become effective in stages.  The legislation is complex and requires approximately 250 rulemakings 
and 70 studies and regulators are commencing an inte nse period of rulemaking over the next 6 to 
18 months.  The rulemaking process will expand upon and flesh out the parameters of the new 
regulatory framework.  The resulting regulatory regi me will contain both new elements and elements 
drawn from current U.S. financial regulation.  In addition, regulatory implementation will likely be a 
dynamic process.  Rulemaking will include opportunity  for public comment and all interested parties 
are invited to submit comments.  Interested pe rsons may submit comments electronically through the 
Federal eRulemaking Portal at:  www.regulations.gov.  Electronic submission of comments allows the commenter maximum time to prepare and submit a comment, ensures timely receipt, and enables the 
comments to be made available to the public .  Comments submitted electronically through the  WT/TPR/M/235/Add.1 
 Page 417 
 
 
 www.regulations.gov website can be viewed by ot her commenters and interested members of the 
public.  
B. Can you please explain section 5 concerning international cooperation and what impact it 
has on foreign investment in connection with national security?  
RESPONSE:   The national security reviews carried out by  the Committee on Foreign Investment in 
the United States (CFIUS) focus solely on genuine national security concerns raised by individual 
foreign investment transactions, not implications for broader economic or national policy, including 
international cooperation issues.  
 
IV. EVOLUTION OF CERTAIN SECTORS. 
(3. Transportation (i) Air transport services (a) Main characteristics 
 
PARAGRAPH 78.  There are no legal or regulatory obs tacles to private ownership of airports with 
commercial services, but the general legal complexity from the federal, state and local viewpoint, as well as the restrictions in the use of income, have cau sed the interest of the private sector to be scarce.  
The Airport Privatization Pilot Program, which star ted in 1997, had the objective of assessing whether 
privatization was a viable method of obtaining pr ivate capital for the improvement and development 
of airports.  However, the program has a limite d scope, since it only provides for one big airport 
center, and in September 2006, a public entity, the C ity of Chicago, presented an application (that is 
still valid) for the International Midway Airport of Ch icago.  Of the other seven airports provided in 
the program: 
 
− one is no longer in the program (Stewart In ternational Airport in Newburgh, New York); 
− three have withdrawn their applications (San  Diego Brown Field in California, Rafael 
Hernandez Airport in Puerto Rico and New Orleans Lakefront in Louisiana); 
− one has had its application cancelled (Internationa l Airport of Niagara Falls in New York);  
and 
− two preliminary applications have been approve d (Luis Muñoz Marin International Airport in 
Puerto Rico and Louis Armstrong New Orleans International Airport in New Orleans). 
 29.  Question:  Could the United States explain:  To what does it refer, when it indicates that there is 
general legal complexity for the privatization of  the airports from the federal, state and local 
viewpoint, as well as in the restrictions in the use of income?  
 
RESPONSE:  Chapter 4, Paragraph 162 of the WTO Secretariat Report for the 2008 Trade Policy 
Review of United States (WT/TPR/S/200 5 May 2008) provides answers and remains up-to-date.  The 
text is as follows: 
 There are no legal barriers that prevent U.S. airports with commercial service from being privately-owned.  Also, federal financial assistance is available both to private and public owners of 
commercial service airports.  However, legal restri ctions complicate financing and reduce profitability 
as well as incentives to privately owned airports.  First, U.S. state or local governments or local 
airport authorities can obtain funding from loca l and state tax revenues and may impose and use 
passenger facility charges to fund airport developm ent;  these sources of revenue are not available to 
private airport owners.  Second, there are U.S. Fe deral government policy and statutory limits on the 
use of airport revenue:  a federally funded public or private airport, for example, may not use proceeds 
from the sale of the airport for non-airport purposes;  i.e., the airport revenue must be used for the 
capital and operating costs of the airport.  Once a privately owned airport accepts federal assistance, WT/TPR/M/235/Add.1 
Page 418 
 
 
 such as grants of federal funding under the Airp ort Improvement Program (AIP) or transfers of 
federally owned land, the airport may only use ai rport revenue (federal a nd non-federal) as noted 
above.  If airport property is sold, the proceeds of the sale are considered airport revenue, so a city 
cannot sell its airport to a private operator and use the proceeds for general government purposes.  
This is a disincentive for local governments to transfer an airport to a private operator. 
 
IV. DEVELOPMENT OF CERTAIN SECTORS 
(3) Transportation 
(i) Air transport services 
(b) Regulatory Framework  
 
PARAGRAPH 83.  It is still mandatory for U.S. air carriers to be in the hands of U.S. citizens.  Foreign citizens cannot own more than 25 per cent of the voting interest in a U.S. air carrier.  The 
Department of Transportation may, depending on th e case, authorize total foreign capital investments 
(with and without voting rights) above 25 per cent, if  the real control stays in the hands of U.S. 
citizens.  In all cases, the president and two-thirds  of the board of directors and other management 
officers must also be U.S. citizens.  Restricti ons to foreign ownership of airlines based in the 
United States were introduced for the first time in the Air Commerce Act of 1926 and in the Civil 
Aviation Act of 1938, where 75 per cent of national ownership was established. 
 
30.  Question:  Can the United States explain:  In what cases is it possible to authorize total foreign 
capital investments (with or without voting rights ) above 25 per cent, while keeping real control in 
U.S. hands?  
 
RESPONSE:   The Department of Transportation may, on a case-by-case basis, allow total foreign 
equity investments above 25 per cent (voting up to  25 per cent and additional non-voting) as long as 
actual control remains in the hands of U.S. citizen s and there is an Open Skies aviation relationship 
between the U.S. and the home country of the forei gn investor.  The president and two-thirds of the 
board of directors and other managing officers must be U.S. citizens.  The Department decides the 
issue of "actual control" based on the totality of circumstances involved in each case.  Citizenship 
determinations are necessarily made on a case-by-case basis because every case has its own unique set 
of facts.  PARAGRAPH 87.  On June 24, 2010, the second ph ase of the Air Transport Agreement between the 
United States and the E.U. was signed.  Concerni ng the ownership of U.S. and E.U. airlines, the 
agreement provides the possible expansion of opportun ities in the future, subject to confirmation that 
mutual investment is authorized.  The Joint U.S. – E.U.  Committee, which meets at least once a year, 
has the mandate of examining the novelties and impr oved cooperation, as well as making the relevant 
recommendations in this regard.  Restrictions ar e maintained in coastal navigation in the United 
States, and internal transport services may only  be rendered by U.S. carriers, except in limited 
circumstances.  In addition, the crews used in national passenger and cargo air services must be U.S. 
nationals or resident foreigners, a nd other restrictions also apply. 
 
31.  Question:  Is there any future plan aimed at ext ending this plan to foreign airlines that already 
operate in U.S. airports?  
 RESPONSE:  It is not clear to what "plan" this question is referring.  
 
IV. DEVELOPMENT OF CERTAIN SECTORS 
(3) Transportation (ii) Maritime Transportation  
  WT/TPR/M/235/Add.1 
 Page 419 
 
 
 PARAGRAPH 97.  The United States has current bilate ral maritime agreements with Brazil (signed in 
September 2005), China (December 2003), Russia (June 2001) and Vietnam (March 2007).  It also has an exchange of notes with Japan (November 1997) on port services, which produces the effects of 
an agreement. 
 
32.  Question:  Do any of the agreements with the countries men tioned allow rendering ship services 
under the flag of said countries? 
 
RESPONSE:   Provisions on rendering services at the port are found in Article 6 of the U.S.-China 
agreement, Article 2 of the U.S.-Vietnam agreem ent, and throughout the U.S.-Japan exchange of 
letters and memorandum of consultation:  http://www.marad.dot.gov/documents/U.S.-Chin a_Maritime_Agreement _%28English%29__2003.pdf 
http://www.marad.dot.gov/documents/IA_Vietnam-English.pdf http://www.marad.dot.gov/documents/ExchangeLettersJapan.pdf 
http://www.marad.dot.gov/documents/MemoConsultationJapan.pdf 
 
IV. DEVELOPMENT OF CERTAIN SECTORS 
(4) Telecommunications (iii) Authority in charge of policy and regulation  
 
PARAGRAPH 116.  Since the last examination of  the United States in 2008, there have been no 
important changes in the regulatory regime or in the legal framework of telecommunications.  Section 
310 of the Communications Act limits the granting of  operating licenses for wireless public networks 
to foreign governments, as well as to foreign citizen s or companies or to any company with more than 
20 per cent foreign capital.  However, the FCC may grant licenses to U.S. companies controlled by 
holding  companies, in which foreign persons, companies or governments own or have voting rights 
on 100 per cent of the capital.  The FCC gives pref erence to the foreign i nvestments of other WTO 
Members, which are given the treatment of refuta ble presumption that the foreign investments of 
these members do not create competition concerns in  the U.S. market.  In all cases, the FCC is 
authorized to impose conditions on licenses, if doing so is in public interest. 
 
33.  Question: 
 
A. Could the United States clarify the pref erence to the investments of other WTO Members?  
 RESPONSE:   As noted above, service suppliers of WT O Members are accorded a presumption in 
favor of entry which is not accorded to non-WTO Members.  Suppliers of non-WTO members may be 
required to demonstrate that their home market pr ovides for effective competitive opportunities for 
U.S. suppliers before a U.S. license is issued, a step suppliers of WTO member are not required to 
take.  B. Furthermore, could the United States spec ify what conditions the FCC is authorized to 
impose on licenses for "public interest?" 
 
RESPONSE:   Public interest factors relevant to a par ticular license vary dependent on the nature of 
the applicant (whether for a WTO member country or not;  whether the license relates to a merger or 
acquisition;  the various factors, including competition -related issues relevant to a specific transaction;  
and the advice the FCC may or may not receive from other agencies relating to national security, law enforcement, foreign policy, or trade policy.)  
  
 WT/TPR/M/235/Add.1 
Page 420 
 
 
  
 
IV. DEVELOPMENT OF CERTAIN SECTORS 
(5) Professional Services and Services rendered to companies 
(i) Introduction  
 
PARAGRAPH 131.  As indicated in the previous Examination of the Trade Policies of the United 
States, the various states have competence for re gulation, granting licenses and supervisions of 
professions practiced within their respective jurisd ictions, and the federal government does not assess 
by itself diplomas or credits, nor does it recognize de grees.  Even though there is no license system at 
federal level to replace state regulations, and the various regulatory systems can establish different 
conditions for access to markets between the stat es, certain professions are subject to national 
qualification examinations recognized in most states  as part of the process of granting licenses.  In 
addition, there is considerable convergence betw een the states concerning certain professions.  In 
cases such as accounting, architecture and engineer ing services, there are sole examinations of 
professional entities recognized at national level.  In many cases, the states also resort to independent 
institutions, including professional associations, to establish and enforce regulations and standards. 
 
34.  Question: 
 
A. In paragraph No. 131, is it mentioned that sole national examinations are recognized for 
accounting, architecture and engineering services?  
 
RESPONSE:  Yes. 
 B. Is there any project to recognize natio nal examinations for other professions?  
 
RESPONSE:   The listing of the national examinations fo r accounting, architecture, and engineering 
was illustrative;  other professions also offer national examinations.  The decision to offer 
national-level examinations is one taken by the state licensing boards and not the federal government, 
and for any profession it is necessary to check with the individual state licensing board for specific 
examination requirements.  State regulatory author ities consistently evaluate options for serving the 
public interest, and there has been a general trend toward the adoption of national exams. 
 Several websites offer a convenient way to find general examination requirements for different 
professions and state-specific qualification requirements.  General examination requirements for each 
profession may be found in the Department of Labor's Occupational Outlook Handbook:  
http://www.bls.gov/oco.  State-specific licensing in formation may be found using the database at 
Career OneStop:  http://www.careeronestop.org/Educ ationTraining/KeepLearning/GetCredentials. 
aspx.  
In addition, the Council on Licensure, Enforcement and Regulation (CLEAR
) is a national association 
of state and provincial licensing authorities.  The we bsite provides extensive information, directories, 
and links to licensing boards and national pr ofessional associations:  http://www.clearhq.org/. 
 PARAGRAPH 132.  The H-1B visa program allows the entry of foreign professionals in "specialized 
professions."  The duration of the stay is three y ears, which can be extended to six, and the annual 
admission for the H-1B program is 65,000 per fisca l year and another 20,000 foreign citizens who 
have a master's or higher degree granted by U.S. uni versities.  In addition, workers with H-1B visa 
whose employment is requested by a higher edu cation institution or thei r affiliated or related 
non-profit entities, or a non-profit research institution or a government research  organization or who 
are employed in one of these entities, are not subject to this limit .  In recent years, the demand for 
H-1B visas has been high, and the limits were reached soon after the opening of the application  WT/TPR/M/235/Add.1 
 Page 421 
 
 
 process on April 1 each year;  for example, on Ap ril 8, 2008, the United States Citizen and 
Immigration Services (USCIS) announced that they had already reached the limit for the fiscal year 2009.  However, the interest diminished in 2009 , and the limits of the fiscal year 2010 were not 
reached until December 2009. 
 
35.  Question:  Are there any other limits for workers with H-1B visas, whose employment is 
requested by a higher education institution or its affiliate or related non-profit entities or research 
institutions or a government research organization or who are employed in one of these entities?  
 RESPONSE:   H-1B petitions that meet these conditions are exempt from the numerical limitations. 
 Paragraph 132.  The AICPA and NASBA, through the Board for the Evaluation of International Aptitude Degrees, have negotiated mutual recognitio n agreements with accounting entities of various 
countries, among which stand the Chartered Accountan ts of Australia, the Australian Institute of 
Chartered Accountants, the Canadian Institute of Chartered Accountants, the Mexican Institute of 
Public Accountants, the School of Accountancy of Ireland and the New Zealand Institute of Chartered 
Accountants.  Professionals who have a good reputati on in these institutions may apply to sit for the 
International Qualification Examination (IQEX) inst ead of taking the Uniform CPA Examination.  
The candidates who pass it may apply for the license of certified public accountant in the states that 
have adopted the mutual recognition agreements. 
 
36.  Question:  Can candidates originating from countries that do not have mutual recognition 
agreements negotiated with the United States ta ke the examinations and the corresponding requisites 
to render accounting services?  
 RESPONSE:   Candidates from any country that meet th e requirements may sit for the Uniform CPA 
exam.  About ten per cent of all sitters for the ex am are foreign educated.  Only accountants covered 
by an MRA may take the IQEX instead of the Uniform CPA exam. WT/TPR/M/235/Add.1 
Page 422 
 
 
 SINGAPORE SUBSEQUENT QUESTIONS 
 
Question 1 
 
We note from the WTO Secretariat's report (WT/TPR/ S/235, para 139), that the U.S. is looking at 
reforming export controls.  Could the U.S. prov ide illustrations of upcoming changes and the impact 
they might have on countries and companies, in par ticular, on U.S. subsidiaries based overseas?  
 
RESPONSE:  The United States is reforming its export control system to strengthen U.S. national 
security by focusing controls on the most sensitiv e items while facilitating exports of less sensitive 
items to destinations and end-users that do not pose a national security or foreign policy concern. 
 
Completion of the reform process is a multi-year ef fort.  The U.S. Government is working on Phases 
1 and 2 of the President's three- phased export control reform effort .  The first two phases involve 
harmonizing and rationalizing the expor t control and sanctions regulations so they:  (i) control items 
consistent with contemporary national security and foreign policy objectives;  (ii) enhance 
transparency and predictability;  and (iii) suppor t enforcement efforts through improved coordination 
among the various law enforcement agencies responsi ble for them.  The third phase of the effort, 
which requires legislation to complete, has four parts - creating a single li st of controlled items 
administered by a single licensing agency on a singl e information technology platform enforced by a 
single export enforcement coordination agency.  At this point, it remains premature to state how e xports to specific groups of countries or companies 
may be affected by the results of the reform effort. 
 
Question 2 
 
We note from the WTO Secretariat's report that the U.S. has in place assistance programmes for the 
financial and automotive sectors.  Could the U.S. provide more information on these programmes, in 
particular, the consistency of th ese programmes that favour domestic  suppliers of goods and services, 
with WTO commitments?  
 RESPONSE:   It is the position of the United States that  the measures taken in response to the crisis 
were neither designed to discriminate nor implemen ted in a way that discriminates against foreign 
service suppliers.  While there may be differential treatment of certain classes of suppliers, including 
foreign suppliers, different treatment  is not in and of itself indicative of discrimination.  As the WTO 
Secretariat's report makes clear there were many programs under the broad authority of the Emergency Economic Stabilization Act often with different criteria for eligibility. 
 
The United States considers the agreements reached with the relevant automobile companies to be 
compatible with its WTO obligations.  Without char acterizing the nature of the assistance provided to 
the U.S. automotive sector, we note that GATT III (8) (b) permits the payment of subsidies 
exclusively to domestic producers. 
 
Question 3 
 
We note with interest that the WTO Secretariat's report (WT/TPR/S/235, para 27) highlights the benefits of diagonal cumulation under the CAFTA.  Ha s the U.S. found this method of cumulation to 
be beneficial to the parties?  Also, would the U. S. be considering instituting diagonal cumulation in 
other FTAs?  
 
  WT/TPR/M/235/Add.1 
 Page 423 
 
 
 RESPONSE:   The CAFTA-DR "diagonal" cumulation provisi on on woven apparel is  relatively new, 
only coming into effect in August 2008, and only a sm all percentage of claims  for treatment under the 
CAFTA-DR indicate the usage of this provision.  The United States has not made any decision 
whether to institute similar provisions in other FTAs. WT/TPR/M/235/Add.1 
Page 424 
 
 
 THAILAND SUBSEQUENT QUESTIONS 
 
1.  The Report by the Secretariat (WT/TPR/S/235) 
 
II.  TRADE AND INVESTMENT POLICY FRAMEWORK 
(1) TRADE POLICY FORMULATION  Page 12, Paragraph 5 
 5.  Under the U.S. federal structure of government , state governments have c onsiderable independent 
regulatory authority.  
 - Could the U.S. ensure that the U.S. obligations and commitments under the GATT/WTO 
Agreements be effective to the U.S. State govern ments when dealing with importation and border 
measures?  
 
RESPONSE:   Where the United States has undertaken commitments that apply to its State 
governments, including with regard to importa tion of goods and border measures, the Federal 
government has means to work with State governme nt officials to ensure compliance with the 
relevant obligations.  The Office of the U.S. Trad e Representative has an offi ce dedicated to working 
with state governments and consults with desi gnated representatives of these governments on a 
regular basis on trade matters, including re levant obligations under the WTO Agreement.  
 
(2) PARTICIPATION IN THE WORLD TRADE ORGANIZATION 
 
Page 13, Paragraph 11 
 
11.  According to the USTR, the past nego tiating process has not generated meaningful 
market-opening results.  Thus, the USTR supports "a different approach to the end game in order to 
gain a stronger outcome". 
 
 – Please illustrate "a different approa ch to the end game" in details. 
 
RESPONSE:   During the March 26, 2010, stock -taking meeting in Geneva, there was broad 
agreement among Members that the road ahead shoul d focus on engagement in various formats, 
including direct bilatera l engagement and small -group horizontal discussions to help bridge 
negotiating gaps.  From the U.S. perspective, th is was an important step forward from previous 
approaches.  The United States has initiated and partic ipated in multiple, detailed bilateral discussions 
aimed at establishing a negotiating "playing field" which we hope will set the stage for more intense 
and targeted give -and-take negotiations.  This work, in conjunction with on -going work in the 
Negotiating Groups and other configur ations, can help us to build momentum across all areas of the 
Doha Round negotiations.  III. TRADE POLICIES AND PRACTICES BY MEASURE (1) MEASURES DIRECTLY AFFECTING IMPORTS (i) Customs procedures 
 
Page 21, Paragraph 9 
 9.  Under the 10+2 rule, importers of merchandise a rriving in the United States by vessel must provide 
CBP with an "importer security filing" consisting of  ten elements of information.  The first eight, 
which must be provided at least 24 hours before th e cargo is loaded on the vessel, are:  name and  WT/TPR/M/235/Add.1 
 Page 425 
 
 
 address of the seller;  name and address of the buyer;   importer of record number or foreign trade zone 
applicant identification number;  consignee number;  name and address of the manufacturer or supplier;  name and address of the "ship-to party";  country of origin;  and HS code.  The other two 
elements, which must be provided at least 24 hours prio r to the vessel's arrival at a U.S. port, are the 
"container stuffing location" and the name and address of the consolidator.  Bulk cargo is not subject 
to the importer security filing.  All filings unde r the 10+2 rule must be done through a CBP-approved 
EDI system.  
 - The Importer Security Filing rule or the "10+2" rule creates obstacles for exporters by 
requiring them to provide a number of informati on, which can, in turn, impose unnecessary trade 
barriers.  Does the U.S. have any plan to amend this rule? 
 
RESPONSE:   The United States has no plans to amend the rule.  We will continue to work with our 
domestic and foreign partners, trad e and industry, to implement the requirements in a logical and 
practical manner that integrates smoothly into the global supply chain.  Internal and external reviews 
have concluded that more complete advance sh ipment data would produce more accurate and 
effective cargo risk assessments.  In this way, resources can be focused on true threats and legitimate 
cargo can speed through the system as quickly as possible  
(viii) Technical regulations and standards 
 
Page 35, Paragraph 77 
 
77.  There have been no major changes, during the review period,...However, Congress may define 
specific parameters for technical regulations or conformity assessment procedures, or even establish 
technical regulations and conformity assessment procedures legislatively. 
  - Please provide more clarification on how the Congress may define specific parameters (and 
for what purposes).  
 
RESPONSE:   This is decided on a case-by-case basis by the U.S. Congress.  The U.S. Constitution 
(Article I, Section 1) gives Congress the power to make laws. 
 
IV.  DEVELOPMENTS IN SELECTED SECTORS 
(1) AGRICULTURE (ii) Agriculture Policies 
Average Crop Revenue Election (ACRE) Program  
Page 83, Paragraph 14 
 
14.  The 2008 Farm Act introduced the Averag e Crop Revenue Election (ACRE) Program as an 
option to counter-cyclical payments.  ACRE Program payments are also counter-cyclical but based on 
revenue (State yields and market prices compared to  historic yields and prices).  Opting for the ACRE 
Program means Direct Payments are reduced by 20 pe r cent and loan rates by 30 per cent.  A total of 
128,620 farms (7.7 per cent of total enrolled farms)  have signed up 32,528,628 acres (12.8 per cent of 
total base acres).   - Are ACRE program payments dec oupled from the current production? 
 - Paragraph 14 indicates that ACRE program payments are also counter-cyclical but based on revenue (State yields and market prices compa red to historic yields and prices).  Does it 
mean that ACRE program payments should be classifie d as a kind of amber box spending due to the 
link between payments and market prices? 
 - Could the U.S. provide an example of how the ACRE program payments are triggered? WT/TPR/M/235/Add.1 
Page 426 
 
 
 RESPONSE:   ACRE payments are issued when two c onditions are met for a commodity.  The first 
condition is met when the Actual State Revenue fa lls below the State ACRE Guarantee.  The second 
condition is met when the Actual Farm Revenue falls below the Farm ACRE Guarantee.  The State 
ACRE Guarantee is determined by multiplying  90 per cent multiplied by  the Benchmark State Yield 
multiplied by  the ACRE Guarantee Price.  The Benchmark State Yield is the simple average of yields 
per planted acre for the most recent 5 crop years, excluding the high and low yields.  The ACRE Guarantee Price is the 2-year simple average of th e national marketing year price.  The Actual State 
Revenue is the Actual State Yield multiplied by  the ACRE Price.  The ACRE Price is the higher of 
the:  (a) national loan rate, after being reduced by  30 per cent, or (b) national average market year 
price.  The ACRE program only began in 2009, and thus has not yet been notified to the WTO under the 
Agreement on Agriculture.  It is premature to specu late about how this new program will be notified 
in the future.  ACRE will be notified cons istent with the appropriate WTO criteria.  
 
The ACRE program is understandably complex.  A si mple comparison of the ACRE program with the 
alternative Direct and Counter-cyclical progr am along with examples of how ACRE program 
payments are triggered can be found at:  http ://www.fsa.usda.gov/Internet/FSA_File/acrebkgrd.pdf . 
 Food Aid 
 
Page 86, Paragraph 26 
 
86.  Most food aid donated by the United States is provided as direct transfers (i.e. as in-kind commodities) rather than as cash for local or regi onal purchases.  Direct transfers have been criticized 
as being less efficient than cash for local or regional purchases.  A declining amount of food aid is 
monetized by private voluntary organizations to ge nerate proceeds for development activities or to 
cover their administrative and distribution expenses.  The GAO has stated that food aid donations by 
the United States could be made more efficient if some legal requirements were relaxed, such as the 
obligation to carry 75 per cent of food aid in U.S.-flagged ships. 
 
 - Paragraph 26 cites the GAO study having stated that food aid donations by the United 
States could be made more efficient  if some legal requirements were relaxed, such as the obligation to 
carry 75 per cent of food aid in U.S.-flagged ships.  What are the policy objectives in establishing 
such requirement?  
 
RESPONSE:   The Cargo Preference Act, P.L.83-644 (August 26, 1954), as amended, sets forth 
permanent legislation concerning the transportation of waterborne cargoes in U.S.-flag vessels.  The 
law's objective is to help maintain a U.S. merchant marine.  
 
2.  The Report by the United States (WT/TPR/G/235) 
 
I.  THE UNITED STATES IN THE MULTILATERAL SYSTEM 
(1) Overview  Page 6, Paragraph 4 
 
4.  The United States emphasized that "A soun d Doha agreement that provides meaningful 
liberalization in all three core market access areas – agriculture, goods, and services could boost the 
world economy, support many good jobs, assist poor er countries, and reinforce confidence in a 
rules-based trading system.  A weak agreement w ould not serve these interests and ultimately would 
weaken the WTO. 
  WT/TPR/M/235/Add.1 
 Page 427 
 
 
  - In emphasizing that "A so und Doha agreement that provides meaningful liberalization in all 
three core market access areas – agriculture, goods, and services could boost the world economy…", 
what are goods referred to? 
 RESPONSE:   In this case, "goods" refers to indus trial products as negotiated in the NAMA 
Negotiating Group.  
 - We understand that the other key area of agriculture negotiations also include substantial 
reduction of domestic support and elimination of export subsidies.  These kinds of government 
supports have always been key policy measures of  many country Members both developed, developing 
and least-developed countries.  However, as we a ll aware that the United States and other developed 
Members have provided very large amount of money especially on domestic support comparing to all 
developing country Members, these policy instruments c ould strongly distort world price and lead to 
unfair trade practices.  Does the United States c onsider the area of domestic supports and export 
subsidies in agriculture as important and meaning ful liberalization as th e market access area?  
Please Clarify.  
RESPONSE:   Throughout the Doha negotiations, the United States has been a strong advocate of the 
multilateral elimination of the agricultural export s ubsidies listed in Article 9 of the Agreement on 
Agriculture.  We also recognize that trade-distor ting domestic supports are areas that can affect 
agricultural markets.  However, cuts in trade-distor ting supports alone won't l ead to reform in global 
agricultural markets.  Economic studies converge in  concluding that import barriers -- not domestic 
subsidies -- represent the lion's share of the distortions in global agricultural markets.  
 Why are agricultural market access barriers much more significant than domestic subsidies in 
distorting agricultural markets?  The degree of a de veloped country's support to its agriculture sector 
that is provided through market access barriers is  much higher than the support provided by domestic 
subsidies, and even more so in developing countr ies.  Economists estimate that more than 80-90 per 
cent of total global support is provided by market access barriers.  Trade barriers distort both production and
 consumption because they directly affect producer and consumer prices.  Domestic 
subsidies may affect production in some cases by  providing incentives to increase production, but as 
many of these programs do not directly affect consumer prices, the impact on world agricultural 
markets is much less.  Market access barriers are much more prevalent across countries and 
commodities, and hence generate larger costs to the world trading system than do domestic support 
measures.  
The mandate for the WTO Doha Development Agenda negotiations calls for subs tantial reductions in 
trade-distorting domestic support and reductions of, w ith a view to phasing out, all forms of export 
subsidies.  However, the mandate also calls for these commitments to be accompanied by substantial 
improvements in market access.  
Page 7, Paragraph 9 
 
9.  The Obama Administration is convinced that a trade policy focused on the largest opportunities for 
increasing American exports and jobs, on opening markets and boosting innovation, and based on the 
principles of a rules-based global trading system ca n contribute powerfully to the goal of sustainable 
economic growth that provides the benefits of trad e at home while also advancing global recovery.  
This will be done consistently w ith our goals for American values,  including the rights of workers, 
environmental sustainability, and political accountabilit y.  This Administration is committed to the 
hard work necessary to harness trad e policy as an engine of growth and prosperity for the United 
States and for the world.  WT/TPR/M/235/Add.1 
Page 428 
 
 
  - Please clarify how the Obama Administration policies and goals could advance global 
recovery and be best for the rest of the world esp ecially developing and least-developed economies. 
 
RESPONSE:   A successful conclusion to the Doha r ound – one that will provide meaningful new 
market access – will advance global recovery for al l participants.  The United States is committed to 
achieving an ambitious and balanced conclusion to the Doha Round that opens new markets and 
generates new trade flows for all countries.  This  is how trade can best contribute to long-term 
economic growth and development. 
 
3.  Other question 
 
The Endangered Species Act of 1973 creates an export obstacle for Thailand's leather and crocodile-related products to the U.S. because Thai crocodiles are raised in farms that are correctly 
registered as "breeding farms" according to the Appendix 1 of CITES, and these farms have CITES 
Export Permits. 
  - Is the U.S. considering to review the Act?  
 RESPONSE:  No.  We have no plan to review the ESA.  The United States and Thailand have 
previously discussed this issue in bilateral meetings.  The ESA prohi bits trade in endangered species 
and is consistent with CITES Article XIV (permitting "stricter domestic measures").  A review of the 
status of species is possible under the ESA and down-listing or de-listing is possible if the wild population is found to have recovered.  WT/TPR/M/235/Add.1 
 Page 429 
 
 
 TRINIDAD AND TOBAGO 
 
Report by the World Trade Organization (WTO) Secretariat 
Section I:  Economic Environment 
 
1. In paragraph 28, pages 10-11 of the Secretariat Report details the United States of America 
(USA) Foreign Direct Investment (FDI) and Outward Direct Investment (ODI).  Can the USA please 
provide: 
• Additional statistical information on Foreign Direct Investment (FDI) and Outward 
Direct Investment (ODI) by industry in  respect to merchandise trade for the years 
2007-2009; 
 
RESPONSE:   U.S. outward and inward FDI for 2009 and prior years can be found at the Bureau of 
Economic Analysis website www.bea.gov.  The 20 08 and 2009 data can be found in the September 
2010 issue of Survey of Current of Business h ttp://www.bea.gov/scb/index.htm, and data for 2007 can 
be found in the September 2009 issue. 
 
• Further elaboration on:  (i) investment flows , with inclusion of Greenfield projects, 
(iii) mergers and acquisitions;  and (iii)  domestic investment for the reporting 
period?  
 
RESPONSE:  Further information regarding the complexion of  foreign investment into and out of the 
United States can be found at the website of th e Bureau of Economic Analysis (www.bea.gov/), 
which the central government repository fo r U.S. foreign investment statistics. 
 
Section III-Trade Policies and Practices by Measure 
 2. Paragraph 81, pages 35-36, indicated that the average time period given by sub-federal 
entities for comments on technical regulations notifica tions by WTO Members is forty (40) days.   
 
Can the USA clarify the national policy regarding th e various timeframes provided by sub-federal 
entities for final date for comments?  
 RESPONSE:   We are reviewing the matter but believe th at the 40-day figure may be misleading.  
The United States often notifies measures that do not need to be notified for purposes of greater 
transparency (e.g., certain voluntary measures, requ ests for information in advance of a rulemaking, 
proposed measures based on relevant international standards), as well as measures to address urgent 
circumstances (e.g., certain interim final rules, ru les taken to comply with a court order).  The 
United States has notified hundreds of measures to th e WTO, including more than 60 this year alone.  
We will need to isolate the above-referenced notif ications from the remainder to determine whether 
there is an issue that needs to be addressed.  3. Paragraph 83 on page 36 discussed  the institutionalization of regul ation in relation to the date 
of publication of the technical regulati on or conformity assessment procedure. 
 
Could the USA elaborate on the timeframe allowed for compliance of these new regulations by a trading partner?  
 
RESPONSE:   Paragraph 83 notes that, under the Admini strative Procedure Act (APA), a final 
technical regulation or conformity assessment procedur e must be published at least 30 days prior to its 
effective date;  a shorter period is possible if the final measure relaxes an existing measure.  It is 
important to note that the 30-day figure in the APA applies to all
 federal rules, not just the subset that WT/TPR/M/235/Add.1 
Page 430 
 
 
 constitutes technical regulations and conformity asse ssment procedures.  Time periods for compliance 
with technical regulations and conformity assessment  procedures are often much longer than 30 days 
– for example, the effective date for certain automo tive regulations may be two years or more – so the 
APA minimum is not very instructive as to the ac tual length of compliance periods for technical 
regulations and conformity assessment procedures, which necessarily vary from case-to-case.  The United States is, of course, aware of the TBT Committee's recommendation that a "reasonable 
interval" between publication of technical regulations  and their entry into force shall normally be not 
less than six months, except where this would be ineffective in fulfilling th e legitimate objective, and 
seeks to follow that recommendation where feasible and appropriate. 
 4. Referring to Paragraph 87 and 88 on page 37 of the Secretariat Report, c an the USA please 
clarify the national policy for goods entering the Un ited States of America (USA) that are certificated 
and accredited from international assessment bodi es other than "private-sector conformity 
assessment bodies"?  
 
RESPONSE:   It is difficult to answer the question as posed since members of international systems 
of conformity assessment are themselves often privat e sector bodies.  There is no single answer to this 
question;  the type of conformity assessment scheme depends on factors such as the sector, the regulator, the level of risk, and the legitimate object ive.  However, U.S. regulators are encouraged to 
utilize international standards, guides, or recomme ndations as a basis for their conformity assessment 
procedures, as well as international systems of conformity assessment, where relevant, effective, and appropriate, and they often do so.  5. Paragraphs 175 and 177 on pa ge 56-57 outlined the additiona l reporting requirements for 
foreign investor to the United States of America.  Can the USA please elaborate on these (i) reporting 
and registration requirements;  and (ii) Federal Level FDI restrictions?  
 
RESPONSE:   The United States maintains several reporting requirements with respect to FDI.  These 
reporting requirements, which are administered by the Department of Commerce, are maintained only 
for purposes of data collection and analysis and in ge neral apply only after the investment is made or 
established.  Information submitted by specific fore ign investors is not re leased to the public, but 
aggregate data generated by the reports may be ma de available.  For additional information, see 
www.bea.gov/international.  In general, each state's laws outside the areas of  general company law, real estate, banking, and 
insurance (areas in which Congress has specifically de legated regulatory authority to the states) apply 
equally to all persons and companies doing business in that state.  Outside of these areas, differences 
in the treatment of domestic and foreign investor s at the state or local level are minor and can 
frequently be eliminated through incorporation in a particular state or locality.  Available details regarding the a pplicable reporting requirements can be found in the citations to 
which the United States' additional resp onses refer, as well as at www.bea.gov. 
 
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