WORLD TRADE ORGANIZATION  
ORGANISATION MONDIALE DU COMMERCE  
ORGANIZACIÓN MUNDIAL DEL COMERCIO WT/TPR/M/160/Add.1 
27 September 2006 
 (06-4592) 
Trade Policy Review Body 
22 and 24 March 2006 Original:  English/Spanish 
                 anglais/espagnol                  inglés/español 
  
TRADE POLICY REVIEW 
UNITED STATES 
Minutes of Meeting
 
Addendum  
Chairperson:  H.E. Ms. Claudia Uribe (Colombia) 
 This document contains the advance writte n questions, and replies provided by the 
United States.1 
__________________________________________________________________________________  
Organe d'examen des politiques commerciales 
22 et 24 mars 2006 
 
EXAMEN DES POLITIQUES COMMERCIALES 
ÉTATS UNIS 
Compte rendu de la réunion
 
Addendum  
Présidente:  S.E. Mme Claudia Uribe (Colombie) 
 
 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 
22 y 24 de marzo de 2006 
 
EXAMEN DE LAS POLÍTICAS COMERCIALES 
ESTADOS UNIDOS 
Acta de la reunión
 
Addendum  
Presidenta:  Excma. Sra. Claudia Uribe (Colombia) 
 
 En el presente documento figuran las pre guntas presentadas anticipadamente por escrito, 
junto con las respuestas facilitadas por los Estados Unidos.1 
                                                      
1In English and Spanish only./En anglais et espagnol seulement./En inglés y español solamente. 
 
          WT/TPR/M/160/Add.1 
Page 3 
 
 
ADVANCE WRITTEN QUESTIONS BY MEMBERS 
 
CUBA  Pregunta a formular a la delegación de Estados Un idos de América en ocasión de la reunión del 
8vo Examen de la Política Comercial de ese país:  
 
"La delegación de Cuba presenta en esta ocasión un informe sobre un grupo de medidas que viene aplicando el Gobierno de los Estados Unidos de  América  contra nuestro país desde enero de 
2004 a la fecha, las cuales  refuerzan el bloque o económico, comercial y financiero que desde 1962 
ese Gobierno mantiene contra Cuba, así como su marcado carácter extraterritorial, lo cual realiza en 
abierto desafío a la exigencia de la Asamblea Ge neral de las Naciones Unidas -- respaldada por la 
inmensa mayoría de sus Estados miembros -- de que se ponga fin a esa ilegal política; lo que confirma  
el más absoluto desprecio del Gobierno de los Esta dos Unidos de América a las Naciones Unidas, al 
multilateralismo y al Derecho Internacional. 
 
En este contexto, nuestra delegación desea preguntar  a la delegación de los Estados Unidos de 
América, que se autodefine como defensor del Sist ema Multilateral de Comercio,  cómo puede explicar 
la aplicación de tales medidas, cuando no existe duda alguna de que todas ellas son violatorias de las 
reglas de la OMC y contrarias a los compromi sos que  su país adoptó como miembro de 
esta  Organización? 
Informe sobre Medidas aplicadas por lo s Estados Unidos de América a Cuba
 
Desde el anterior Examen realizado en enero del 2004 hasta la fecha, el  gobierno de Estados Unidos de 
América (E.U.A) no sólo ha mantenido, sino que ha reforzado e intensificado las prohibiciones y 
restricciones del bloqueo económico, comercial y fina nciero, que de manera unilateral ha impuesto a 
Cuba por más de cuarenta años, y que ha ocasi onado inconmensurables afectaciones a la economía, 
al comercio de bienes y servicios , y a la población del país. 
El perjuicio económico directo causado al pueblo cubano por la aplicación del bloqueo a partir de 
cálculos conservadores preliminares, supera lo s 82 mil millones de dólares; un promedio de 
1 782 millones de dólares anuales. En el 2004 superó los 2 mil 764 millones de dólares y las afectaciones directas sólo al comercio exterior alcanzaron la cifra de 822,6 millones de dólares. 
Cuba es el único Miembro de la OMC sometido a sanciones tan lesivas, abarcadoras y de tal 
complejidad, que su alcance extraterritorial afecta a  otros miembros de la OMC  en sus relaciones 
comerciales tanto con Cuba como con los propios E. U.A. Incontables ejemplos han sido recogidos en 
el Informe que cada año Cuba presenta al Secret ario General de las Naciones Unidas, y que ha 
motivado que por decimocuarta ocasión consecutiva en el año 2005, la Asamblea General de las 
Naciones Unidas con el apoyo casi unánime de su s Estados miembros (182) exija poner fin a esa 
política irracional e incongruente con los principi os que propugnan la OMC, las Naciones Unidas y 
otros organismos internacionales. 
Tal y como lo refleja en su Informe la Secretar ia de la OMC (WT/TPR/S/160), durante el período 
objeto de examen, E.U.A redujo o flexibilizó sus controles y restricciones al comercio con alrededor de una docena de países (varios de Europa, Iraq y Libia); si n embargo, en el caso de Cuba por el contrario, 
los ha recrudecido e intensificado aún más.  L as notorias y repudiadas leyes Torricelli (1992) y Helms-
Burton (1996), junto a más de una decena de otr as leyes que conforman la madeja del bloqueo, 
mantienen plena vigencia.  
En junio del 2004, el gobierno de E.U.A. puso en vi gor nuevas regulaciones de la OFAC (Oficina para 
el Control de Bienes Extranjeros,  encargada de administrar las san ciones económicas y comerciales) 
del Departamento del Tesoro, y se establecieron por parte del Departamento de Comercio criterios y WT/TPR/M/160/Add.1 
Page 4  
 
controles más rigurosos con respecto a los paquetes de regalo y el equipaje de los viajeros procedentes 
de E.U.A. hacia Cuba, como parte de la aplicación de las medidas anunciadas por el Presidente Bush contra Cuba el 6 de mayo/04, en consonancia con las recomendaciones de la llamada Comisión de 
Ayuda a una Cuba Libre. 
Las regulaciones del Departamento del Tesoro están di rigidas a hacer más estrictas las restricciones de 
viajes desde E.U.A. a Cuba, tanto para los estadounide nses como para los cubanos que allí residen, así 
como otros aspectos relacionados con los viajes y el envío de remesas. Se trata de reducir así  los ingresos que Cuba obtendría por los viajes y las remesas, con las consiguientes afectaciones a la economía cubana en general y al comercio de servici os en particular que, en los últimos años se ha 
convertido en una importante fuente de recu rsos para el desarrollo económico de Cuba. 
El reforzamiento de las restricciones a los viajes estuvo dado por la eliminación de categorías que hasta 
esa fecha eran permitidas, la exigencia de la obten ción de una licencia específica para otras categorías 
que antes requerían una licencia general, la reducci ón del monto permisible de gastos en Cuba a los 
viajeros autorizados; y la prohibición de importa r productos cubanos por parte de los visitantes que 
viajan a Cuba (excepto algunos muy específicos que califiquen como materiales informativos o 
culturales). De ahí que: 
 
1. Se eliminó la categoría de  Fully-Hosted Travel (Viajes por invitación, sin costo alguno 
para el viajero), la cual   había sido aceptada desde 1982, sin que por espacio de más de dos décadas se 
considerarse una violación de las regulaciones de la OFAC.   De manera que los ciudadanos de E.U.A.  
u otras personas sujetas a la jurisdicción de ese pa ís, no podrán viajar a Cuba como invitados del 
gobierno de Cuba o de algún nacional cubano ( o de un tercer país), a menos que obtengan para ello 
una licencia específica de la OFAC.   Acuden así a una nueva interpretación, según la cual a un cuando los viajeros hacia, desde, o dentro de 
Cuba acepten bienes y servicios sin costo alguno para ellos, de todas formas se involucran en 
actividades prohibidas en las que Cuba o un nacional de  Cuba tiene un interés, como el pago de gastos 
(transacciones) relacionados con el viaje (impuest os de aeropuerto, tarifas de atraque y otras). 
 En esta misma regulación se establece la prohibición de realizar pago alguno para viajar a Cuba a un transportista aéreo de un tercer país que implique la existencia de un inter és cubano, a menos que el 
viaje se realice bajo una licencia específica o general. 
 
2. Se establecen nuevas limitaciones a los viajes para visitar familiares en Cuba.   Las nuevas 
regulaciones además de restringir la categoría de  familiares (nacionales cubanos) que pueden ser 
visitados en Cuba (a sólo familiares cercanos como esposa/o, hijos, nietos, padres, abuelos o 
hermanos), limitan el número de  visitas a una cada tres años, al amparo de una licencia específica y 
para una estancia de sólo 14 días (en lugar de una cada doce meses y sin duración establecida, tal y 
como regía con anterioridad). No se autorizarán visitas adicionales, y no se prevé la emisión de 
licencias en situaciones de emergencia. Con anteriorid ad estas visitas se realizaban al amparo de una 
licencia general o automática.   En el caso de visitas desde E.U.A. a nacionales no cubanos que se encuentran en Cuba al amparo de 
una licencia del gobierno de E.U.A. (tales como estudiantes universitarios), se establecen una serie de 
requisitos para la emisión de una licencia específica  para los eventuales viaj eros, entre los cuales se 
mencionan la existencia de una s ituación de emergencia que motive el viaje, conocimiento previo por 
parte de la Sección de Intereses de E.U.A. en la Habana y consulta con el Departamento de Estado 
previa a la emisión de dicha licencia específica. 
 
3. Se limitan los viajes de ciudadanos bajo la jurisdicción de E.U.A. para participar en 
ciertos eventos profesionales en Cuba, con la aclaración de que la licencia general (o automática) 
para autorizar transacciones vinculad as a los viajes a Cuba para ciertas investigaciones profesionales en          WT/TPR/M/160/Add.1 
Page 5 
 
 
Cuba, no se extenderá para transacciones relacionadas con conferencias o reuniones profesionales en Cuba, las cuales no serán categorizadas como investig ación profesional.  En este caso, el investigador 
debe solicitar una licencia específica de OFAC.  
4. Se establecen nuevos requisitos a los viajes pa ra participar en actividades educacionales 
en Cuba, al requerir que los eventuales viajeros obt engan una licencia específica para estas 
actividades, restringiendo aun más las posibilidad es de obtenerla a determinadas instituciones y 
eliminándola en el caso de las instituciones de enseñanza secundaria. La duración de esta licencia se 
reduce de dos a un año, y para ciertas actividades  la estancia en Cuba no puede ser menor de 
10 semanas.  
 
5. Se restringen los viajes para asistir a competencias deportivas organizadas por 
federaciones internacionales, al eliminar la posibilidad de la licencia general para participar en estas 
competencias, y se instaura el requisito de una li cencia específica, solicitada y analizada caso a caso. 
Las nuevas regulaciones eliminan la posibilidad de autorizar la participación en talleres y eventos 
clínicos relacionados o no con el deporte. 
 6. Se limita el monto para los gastos en Cuba de los  viajeros autorizados, en el caso de las 
visitas familiares a Cuba. La cantidad autorizada a gastar diariamente se reduce a sólo 50 dólares para 
cubrir pagos relacionados con el vi aje, más una cantidad adicional de 50 dólares por viaje, para gastos 
de transportación interna en Cuba. Con anterioridad, este monto se correspondía con el per diem de 
167 dólares, establecido por el Departamento de  Estado para el viaje de sus empleados. 
 La OFAC mantiene la discreción de emitir licencias  específicas para autorizar gastos mayores. Como 
política, esa entidad no es proclive a utilizar con frecuencia esta posibilidad, todo lo contrario. 
 
7. Se elimina la importación de productos (o mercanc ías) cubanos por los visitantes, 
suprimiendo la posibilidad de que los viajeros autorizados a visitar Cuba adquieran y lleven consigo, 
para uso personal en su viaje de regreso, mercan cías cubanas por un valor de 100 dólares, como se 
establecía con anterioridad, con la única excepción de los productos que clasifican como materiales 
informativos.  
En octubre del 2004, el Departamento  de Estado de E.U.A. anunció el establecimiento de un “Grupo de 
Persecución de Activos Cubanos” para investigar y detener nuevas vías de movimiento de divisas hacia 
y desde Cuba, mencionando en particular al sector  del turismo cubano, que se ha constituido en una 
fuente principal de ingresos para Cuba. Sin d udas, esta medida constituye una de las mejores 
demostraciones del recrudecimiento y la intensidad  del bloqueo que han caracterizado los dos años 
transcurridos desde el anterior Examen.  
 
Respecto a las restricciones en las remesas envi adas desde E.U.A a nacionales cubanos, las 
regulaciones de OFAC establecen:  
1. Remesas a familiares  - Se modificaron las regulaciones que establecían una licencia general 
para enviar 300 dólares trimestrales por parte de cual quier persona sujeta a la jurisdicción de E.U.A.  
(mayor de 18 años) a cualquier hogar de un nacional c ubano, para establecer el envío al amparo de esa 
licencia general, sólo cuando las remesas son para mi embros de la familia inmediata del remitente, 
entiéndase sólo esposa/o, hijos, niet os, padres, abuelos o hermanos.  
 
Además, se especifica que las remesas no pueden ser enviadas a funcionarios del Gobierno Cubano y 
del Partido Comunista de Cuba. En adición, se  redu ce la cantidad total de las remesas trimestrales que 
un viajero autorizado puede traer consigo de 3000 dólares a sólo los 300 dólares antes señalados.   2. Remesas de Organizaciones No Gubernamenta les de E.U.A. a Grupos/Organizaciones e 
Individuos miembros de ellos en Cuba . Se define más claramente la política de licencias específicas WT/TPR/M/160/Add.1 
Page 6  
 
para autorizar remesas de organizaciones gubernamen tales, no gubernamentales e individuos sujetos a 
la jurisdicción de E.U.A. a los llamados grupos pr o democracia, o sociedad civil independiente, y 
organizaciones religiosas, o a miembros individual es de estos grupos u organizaciones en Cuba. 
 En contraste con las disposiciones para las remesa s familiares, en este caso  no se ponen límites en la 
cantidad y la frecuencia para el envío de tales re mesas, lo cual demuestra el marcado fin político (no 
comercial) de estas regulaciones.   3. Transacciones relacionadas co n las Remesas realizadas por bancos y otras instituciones .  
Se elimina la licencia general (automática) que au toriza a esas instituciones a transferir las remesas 
familiares trimestrales o las rem esas destinadas a pagar los gastos  para emigrar de Cuba. Estas 
instituciones tienen que solicitar y obtener, según las nuevas regulaciones, una licencia específica para 
prestar este servicio.   En el caso de otras transacciones no relacionadas con las remesas se continúa aplicando una licencia 
general para las instituciones involucradas en ellas.  
 Adicionalmente a este reforzamiento de las restricciones a los viajes, las remesas, los paquetes de regalo y los equipajes, en febrero del 2005, con aplicación en marzo de ese mismo año, tuvo  lugar una 
nueva interpretación de las regulacione s para la aplicación de la Ley  pa ra la Reforma de las Sanciones 
Comerciales y el Incremento de las Exportaciones de l 2000, referidos a las ventas a Cuba de productos 
agrícolas y del sector salud, y en específico a los pagos realizados por la empresa cubana 
responsabilizada con estas transa cciones desde noviembre del 2001. Esa reinterpretación de los 
requerimientos a la forma de pago al contado y por anticipado
, supone costos y riesgos adicionales 
para Cuba, en un contexto de prolongada y perm anente hostilidad política por parte del gobierno de 
E.U.A. hacia Cuba; e igualmente afecta a los exportadores de ese país. 
Esta nueva restricción en los pagos se suma a las ya conocidas como el requisito a los exportadores 
estadounidenses de productos agrícolas de solicitar li cencias para viajar a Cuba y para exportar sus 
productos; la ausencia de relaciones bancarias directas  entre los dos países; la prohibición a los barcos 
que participan en la transportación de estos producto s desde E.U.A., a tomar cargas en Cuba hacia otros 
destinos; y la prohibición a los barcos c ubanos a participar en los embarques.  
En el ámbito de la propiedad intelectual, mes tras mes y durante 4 años, en las sesiones del OSD 
(Órgano de Solución de Diferencias)  se revisa el tema del sucesivo incumplimiento por parte de E.U.A. 
de las recomendaciones de ese Órgano sobre la Secci ón 211 de la Ley Federal de Asignaciones del 
Presupuesto de los E.U.A., de 1998, relativo al regist ro, la renovación o la observancia en los E.U.A. de 
marcas de fábrica o de comercio , nombres de comercio y nombres comerciales relacionados con 
activos nacionalizados en Cuba.  Tal y como recoge el  Informe de la Secretaria, desde julio de 1999, la 
Unión Europea impugnó ante la OMC esta legislación,  que viola las obligaciones de trato nacional y 
trato NMF contraídas por E.U.A. en el marco del Acuerdo sobre los ADPIC. Este reiterado 
incumplimiento por parte de E.U.A. lo desacredita al desconocer a la OMC y sus principios y normas, 
al tiempo que sienta un precedente muy negativo para la credibilidad y la efectividad del mecanismo de 
solución de diferencias.  
Como es conocido, tradicionalmente E.U.A. hace caso omiso a las preguntas y reclamos que Cuba 
presenta en este ejercicio sobre su política de bloque o económico, comercial y financiero. Sin embargo, 
Cuba se siente en el derecho y la obligación moral de una vez más demandar de E.U.A. una respuesta a 
la única pregunta coherente y consecuente en este caso: ¿cuándo el gobierno de E.U.A., actuando en 
correspondencia con lo que predica sobre el libre come rcio y el respeto a las normas y principios que lo 
rigen, cambiará esta política de bloqueo y eliminará to das las restricciones que impone a Cuba y a otros 
países al aplicarla?           WT/TPR/M/160/Add.1 
Page 7 
 
 
La demanda reiterada de respu esta a esta pregunta está sustentada  en las cuantiosas afectaciones 
directas al comercio de bienes y servicios y a la pr opiedad intelectual, a las que se hacía referencia 
desde un inicio y algunas de las cuales, las más recientes, se han explicado de forma más 
pormenorizada. Esta vez, Cuba espera de los representantes de E.U.A. una respuesta. 
COLOMBIA 
I. Medidas que afectan las importaciones 
 A) Régimen Aduanero 
 
1. En el anterior Examen, se nos comentaba que  el Sistema Automatizado Comercial (ACS) sería 
reemplazado por el Entorno Comercial Automatizado (A CE). En el Informe de la Secretaría para el 
presente Examen, literal a), título i), párrafos 12 a 17,  se comenta que ha habido avances en el proceso 
de transición entre un régimen y otro, que se traduce en la creación de 400 cuentas y la habilitación del 
Puerto Blaine de Washington.   
a) Sobre el particular, Colombia está interesada en conocer la experiencia con el Nuevo Sistema 
ACE y la programación de los puertos terrestres, ma rítimos y aéreos que serán habilitados en el corto 
plazo.  b) En el diseño del  Sistema ACE, se acogen lo s lineamientos y recomendaciones de la OMA, en 
especial, sobre el Modelo de Datos Aduaneros?  
 
c) El acceso de los usuarios al Sistema ACE acarrea costos? Cuáles son los requisitos para suscribir una cuenta?  2. Los párrafos 18 a 24, literal b) título i), refere ntes a la transmisión electrónica de información 
sobre carga, menciona que el reglamento de la Le y de Comercio Exterior de 2002 se encuentra en 
vigencia desde enero de 2004. De otra parte, se menciona el Sistema Automatizado de Polarización 
(ATS), como uno de los principales instrumentos u tilizados por la Oficina de Aduanas y Protección en 
Fronteras (CBP), para el análisis de información y riesgo de la carga. 
 a) Qué otros instrumentos está empl eando la CBP para dicho propósito? 
 
b) Es posible obtener información adicional sobre el ATS? Se encuentra plenamente vigente el 
requisito del envío de manifiestos automatizados en  lugar de las comunicaciones en papel? Si no, a 
partir de que fecha entrará en vigencia?  
c) Se menciona que la aplicación del reglamento de la Ley de Comercio Exterior traerá costos 
“sustanciales” para los transportistas aéreos. Existe una estimación sobre el incremento mencionado? En el caso del transporte marítimo y terrestre se co menta que los sobrecostos son insignificantes, toda 
vez que los conductores ya utilizan este sistema. Có mo ha sido la utilización de este sistema por parte 
de este tipo de transportistas y como han logrado la racionalización de los costos? 
 
3. En relación con el literal c) sobre la Inic iativa de Seguridad de los Contenedores (CSI): 
 a) Colombia está interesada en conocer cuáles s on los requisitos para obten er la calificación de 
puerto CSI?   
b) Existe algún programa de ayuda para los paí ses en desarrollo?  Al analizar los países cuyos 
puertos han sido calificados como CSI observamos que si bien ha habido incremento desde el anterior 
Examen en el 2004, a la fecha solamente 35 países gozan de esta calificación.  WT/TPR/M/160/Add.1 
Page 8  
 
c) En el párrafo 27 se comenta que la carga d estinada a los Estados Unidos que ya ha sido 
inspeccionada en un puerto CSI no es inspeccionada a su llegada, salvo que exista nueva información 
que altere el análisis inicial de los riesgos.  Podrían suministrarnos estadísticas que reflejen el 
porcentaje de carga inspeccionada al llegar a los Es tados Unidos a pesar de provenir de un puerto CSI? 
 B) Otros gravámenes que afectan las importaciones  
 
En el párrafo 66, título iii) de la Sección III, se co menta que el gravamen por tramitación de mercancías 
valoradas en más de 2000 dólares de EE.UU. fue am pliado hasta septiembre de  2014, como resultado 
de la adopción de la Ley de Cr eación de Empleos de 2004. Adiciona lmente, en el párrafo 67, se 
comenta que la mencionada Ley dispuso que el S ecretario del Tesoro debía realizar no más de 
septiembre de 2005, un estudio de todos  los gravámenes percibidos por el Departamento de Seguridad 
Interior y formular recomendaciones sobre los gravám enes que han de eliminarse y la cuantía de los 
que han de mantenerse.   
a) Colombia está interesada en conocer si el referido estudio se llevó a cabo. En caso afirmativo, 
cuáles fueron las conclusiones?   b) El estudio examinó también el gravamen de  mantenimiento de puert os que se cobra a las 
importaciones? Se tomó en cuenta que en el caso de las exportaciones ya no se cobra dicho gravamen en cumplimiento de la Decisión de la Corte Suprema, que sostuvo que el gravamen presentaba 
“indicios de un impuesto” y que el valor de la car ga (base gravable) no “tenía una correlación fiable 
con los servicios, instalaciones y beneficios federales de los puertos”?  C) Antidumping, Subvenciones y Salvaguardias : 
 
1. Se menciona en la parte introductoria de la Se cción III (párrafo 9) del In forme de la Secretaría 
que la ayuda gubernamental a los productos nacional es puede consistir en desembolsos financieros. 
Adicionalmente, en el mismo párrafo se relaci onan 45 programas federales y 330 programas 
subfederales de subvención vigentes en 2003 según la última notificación de Estados Unidos.  Sería 
posible obtener mayor información sobre el modo en el que opera esta ayuda? Cuáles son los criterios 
para otorgarla? 
 
2. Salvaguardias: De acuerdo con el párrafo 103, literal a) título v), la Ley de Comercio Exterior 
de 1974 limita el derecho máximo aplicable, al increm ento en un 50% ad valorem del tipo vigente (si lo 
hubiere). ¿Esto significa que si se determinara la viab ilidad de adoptar una medi da de salvaguardia a un 
producto desgravado, el aumento del arancel podría ser ilimitado, dado que la restricción de la Ley 
mencionada se refiere explícitamente a productos c on nivel arancelario superior a 0%?  Podría 
interpretarse que los productos desgravados no podrían ser objeto de medidas de salvaguardia 
arancelarias? 
 
D) Normas y reglamentos técnicos  
1. En el numeral 118, literal a) título vii) del in forme de la Secretaría de la OMC, se menciona 
que ninguna de las notificaciones realizadas por Es tados Unidos entre julio de 2003 y junio de 2005 
guardaba relación con medidas subfederales propuestas.  También se informa que hay procedimientos en vigor para notificar esas medidas, pero que no se ha identificado ninguna.  A pesar de  esto último, 
¿es posible que haya reglamentos subfederales sin notificar? 
 
2. Se ha tenido en cuenta el trato diferenc iado y más favorable para  países en desarrollo 
miembros que dispone el numeral  12.1 del artículo 12 del Acuerdo sobre Obstáculos Técnicos al 
Comercio, en la aplicación de la Ley contra el Bioterrorismo y cómo se lleva a cabo esa aplicación?           WT/TPR/M/160/Add.1 
Page 9 
 
 
3. En el numeral 129 del literal b) título vii) se informa que las autoridades estadounidenses han indicado que el Gobierno de Estados Unidos no mantie ne estadísticas centralizadas sobre la medida en 
que los reglamentos técnicos estadounidenses se ba san en normas internacionales. ¿El Gobierno de 
Estados Unidos ha contempla do la posibilidad de implementar un sistema centralizado? 
 
4. En el numeral 131 del literal b), título vii)  se indica que los reglamentos publicados en 
aplicación de la Ley Federal de Inspección de la Carne y la Ley de Inspección de los Productos de 
Aves de Corral, requieren que el nombre del país de origen figure en inglés en los contenedores 
inmediatos de todos los productos de carne y av es de corral que entran en Estados Unidos. Sin 
embargo, cuando los productos carne o productos de aves de corral importados a granel, se elaboran en 
Estados Unidos no es necesario que el producto ela borado o su contenedor estén etiquetados. ¿El 
gobierno de Estados Unidos tiene in tención de modificar dichas leyes en cuanto a la exigencia de 
etiquetado exclusivamente para productos importados? 
 5. En el numeral 136, literal b),  título vii)  se menciona que la Ley de Acuerdos de 
Comercialización de Productos Agrícolas de 1937 requiere que los productos básicos importados 
satisfagan los mismos requi sitos, o requisitos comparables, de grado, tamaño, calidad y madurez que 
los establecidos para los productos nacionales en el marco de órdenes de comercialización federales. 
 Al respecto, ¿Cuáles son los intereses legítimos qu e defiende la  mencionada Ley al fijar dichos 
requisitos? 
 
6. En el numeral 146, literal b) título vii), se informa que las autoridades estadounidenses han 
presentado a la OMC cinco notificaciones concernientes a acuerdos que conllevan la aceptación por Estados Unidos de evaluaciones de la conformida d con reglamentos estadounidenses realizadas en el 
extranjero.  ¿Con cuáles sectores se relacionan dichas notificaciones? 
 
E) Reglamentaciones ambientales relacionadas con el comercio 
 
1. En el párrafo 172 del titulo ix), se afirma que  "El Gobierno de los Estados Unidos presentó una 
apelación para anular la decisión del Tribunal en a gosto de 2005", en refere ncia a la decisión del 
Tribunal del Distrito del Norte de California de re vocar la decisión del Secr etario de Comercio de 
modificar la definición de "dolphin safe".  Hasta do nde conoce el Gobierno de Colombia, la apelación 
al fallo del tribunal aún no ha sido presentada.  Tampoco tenemos conocimiento de que la decisión 
misma de apelar haya sido tomada recientemente.  Sobre el particular, el Gobierno de Colombia qui siera recibir mayor ilustración sobre los siguientes 
aspectos: 
 a. La decisión de apelar el fallo del Tribunal de l Distrito del Norte de California en torno al 
cambio de definición de "dolphin safe" ya ha sido adoptada?  b. De ser así, cuándo se espera presentar la apelación? 
 
c. De no ser así, contempla el gobi erno de Estados Unidos alguna fe cha en particular para tomar 
la decisión y presentar la apelación?  d. Contempla el Gobierno de Estados Unidos  la posibilidad de no presentar apelación? 
 
e. Si la respuesta anterior es afirmativa, c ontempla Estados Unidos algún tipo de ajuste a su 
definición de atún "dolphin safe"?  En particular, contempla Estados Unidos la posibilidad de cambiar 
el enfoque de la misma, de uno basado en la moda lidad de pesca del atún a uno basado en las prácticas 
utilizadas en su pesca? 
 WT/TPR/M/160/Add.1 
Page 10  
 
f. Específicamente, contempla Estados Unidos implementar una definición ajustada al criterio 
que utiliza el Acuerdo Internacional para la Protec ción y Conservación de los Delfines - APICD - (del 
cual Estados Unidos es Parte),  en la cual se define  al atún "dolphin safe" como aquel que fue capturado 
en lances en los que no murió ni fue gravemente herido ningún delfín? 
 
II. Otras medidas que afectan la producción y el comercio 
 A) Contratación pública 
 
De acuerdo con el párrafo 247, litera l c) referente a las condiciones de acceso en la materia, uno de los 
objetivos de la política de contrat ación pública de los Estados Unidos es el de aumentar la participación 
de los diferentes tipos de pequeñas empresas en la c ontratación pública.  El Departamento de Comercio 
determina anualmente los mecanismos de contra tación y los factores de aplicación, destinados a 
favorecer las pequeñas empresas. Sin embargo, estos mecanismos y factores de aplicación pueden disminuir las posibilidades de contratación para los pr oveedores extranjeros que pueden participar en la 
contratación pública de Estados Unidos. Por ejemplo,  el monto de US$100.000 para reservar contratos 
exclusiva y automáticamente a las pequeñas empres as, podría ser mayor de acuerdo con una decisión 
administrativa del DOC.   Dada esta situación, se ha pensado en que los mecan ismos de contratación y los factores de aplicación 
sean establecidos de una manera más sólida para que estos no cambien anualmente y así darle una 
mayor certeza a los proveedores extranjeros sobre la contratación a la cual pueden acceder? 
 
B) Derechos de propiedad intelect ual relacionados con el comercio 
 1. Derechos de Autor 
 La expedición de la “Ley sobre la lealtad en la  concesión de licencias sobre obras musicales de 1998”
1 
por parte del Congreso de los Estados Unidos, en virtud de la cual se enmienda el artículo 110 (5) 
relativo a las limitaciones de los derechos exclus ivos, esto es, referido a ciertas utilizaciones que no 
requieren el previo y expreso consentimiento del titul ar del derecho ni el pa go de una remuneración, 
sigue constituyendo motivo de preoc upación para los autores colombianos.  La preocupación se debe a 
que, no obstante la declaración parc ial del Grupo Especial de la OMC2, la ley mencionada permitiría 
igualmente la utilización de un vasto catálogo de obras e interpretaciones del repertorio musical 
colombiano con altos márgenes de audiencia en el territorio de los Estados Unidos.  Con base en lo anterior, nos permitimos formular a la delegación de los Estados Unidos las siguientes 
preguntas: 
 a) No obstante la determinación del Grupo Especial  de la OMC en relación con el artículo 110 (5) 
(A), ¿Estados Unidos modificará dicha disposición en razón al perjuicio que se causa a los titulares de derecho de autor de otros países con esta limitación?  
 
b) ¿Cuándo Estados Unidos va a modificar el contenido del artículo 110 (5) (B) acorde con el 
laudo arbitral de la OMC proferido el 15 de enero de 2001?  
 
2. Patentes, marcas y observancia  
a) Existe en Estados Unidos un Plan Estratégico en  materia de propiedad intelectual que recoja en 
un solo documento las políticas y directrices en la  materia a nivel tanto federal como estatal? 
                                                     
 
1 “Fairness in Music Licensing Act” 
2 A través de esta declaración el Grupo Especial de la OMC decidió que solamente el literal (B) del 
artículo 110 (5) no se ajustaba a los requerimientos del artículo 13 de los ADPIC.          WT/TPR/M/160/Add.1 
Page 11 
 
 
b) Cuáles son los incentivos legales que tiene en la actualidad el Gobierno de los Estados Unidos 
para la promoción de la propiedad inte lectual como instrumento de desarrollo? 
 c) Existe alguna política o acciones encaminadas hacia el uso de lo s documentos de patente como 
fuente de información tecnológica para las PYMES (pequeñas y medianas empresas)? 
 
d) Existen políticas o acciones encaminadas hacia el aprovechamiento de las invenciones que 
entran al dominio público?  e) Cómo funciona el registro suplementari o de marcas? Qué signos pueden acceder a dicho 
registro? 
 f) Cuál es el ámbito espacial de validez de las marc as registradas en el registro suplementario? 
 g) La figura del “trade dress” está regulada en la normativa estadounidense? En caso afirmativo, 
¿cómo funciona? 
 
III. Políticas Comerciales por Sectores  A) Agricultura  
Capítulo IV.2) iii) Programas internos. 
 Notamos que las notificaciones que debe hacer anualm ente Estados Unidos al Comité de Agricultura 
están atrasadas.  Al haber notificado hasta el a ño comercial 2000 a 2001.  ¿Podría decirnos Estados 
Unidos cuáles son los problemas que enfrenta para  hacer las notificaciones pendientes y cuándo estima 
que las va a efectuar? 
 Capítulo IV.2)  iii)  literal f)  Otros programas  ¿Podría especificarnos con más detalle en qué consis ten las órdenes de mercadeo aplicadas a frutas, 
verduras, cultivos especiales y leche? 
 
¿Qué se entiende por “reserve pools” (párrafo 41) y cómo opera?  ¿En el caso de los requerimientos mínimos por produc to, tales como grado, tamaño, calidad y madurez, 
han sido notificados estos programas y normas al Co mité de Obstáculos Técnicos al Comercio y de 
haberlo sido, cuándo? 
 Capítulo IV.2.i) párrafo 13 y 4b Créditos a la exportación, seguros y garantías 
 Se refiere a los cambios pendient es en los programas de garantías de créditos a la exportación en 
cumplimiento de las deci siones del Órgano de Apelación.  Podr ía confirmarnos cuándo comenzarán a 
regir los cambios anunciados en estos programas y si los mismos ya fueron aprobados?  ¿Qué 
productos se han beneficiado de estos programas?  
 
Podría indicar Estados Unidos en que consiste la metodología que se  empleará para que las primas de 
los programas de garantía de crédito a la exportación estén basadas en el riesgo y cubran los costos de 
largo plazo? 
 Capítulo IV.2.ii) párrafo 17 Medidas en frontera  Tomando como referencia el cuadro AIV.1 sobr e contingentes arancelario s, en cuanto a las 
importaciones de “carne de bovino fresca, refrigerada o congelada”, podrían los EEUU informar la tasa WT/TPR/M/160/Add.1 
Page 12  
 
de utilización correspondiente a “otros” en  los años  2002 y 2003 y en el caso de que su utilización sea 
baja explicar la razones de dicho comportamiento?  
B) Servicios profesionales seleccionados 
 
El documento preparado por la Secretaría no pres enta información relacionada con los servicios 
profesionales y su regulación. No obstante, estamos in teresados en formular las siguientes inquietudes: 
 1. En su examen de política comercial del 2004, Estados Uni dos señalaba que "Conforme a la 
legislación de los Estados Unidos, la reglamentació n de las profesiones es competencia de los estados, 
que, por lo general, constituyen juntas de con cesión de licencias encar gadas de administrar los 
procedimientos en materia de licencias o de registr o.  Los profesionales titulado s en el extranjero que 
están autorizados a ejercer su actividad en una jurisd icción de los Estados Unidos deben cumplir 
todas las leyes y reglamentos aplicables de dicha jurisdicción.  La inexistencia de un régimen 
reglamentario uniforme de alcance nacional sup one que en cada Estado se aplican distintas 
condiciones de acceso al mercado, aplicándose en mu chos casos un trato de reciprocidad;  esto hace 
aún más compleja la entrada en el mercado tanto para los proveedores nacionales como extranjeros.  
Las autoridades han indicado, sin embargo, que la formulación de normas modelo por las 
organizaciones profesionales está impulsando la uniformidad y la armonización."   
 
a) Queremos conocer en detalle los avances que se han logrado en la formulación de normas 
modelo para lograr la uniformidad y la armoniza ción en la reglamentación de las profesiones en los 
estados de Estados Unidos.  b) Igualmente, los Estados Unidos en su ex amen de política comercial de 2004 mencionaban 
que en su país "el comercio internacional de servicios profesionales se ve obstaculizado todavía por 
una reglamentación nacional compleja" , y señalaban que los principal es obstáculos se presentaban en 
materia de normas relacionadas con exigencia de pr esencia local, nacionalidad, residencia y exigencia 
de forma jurídica.  Frente a la afirmación planteada, nos gustaría c onocer cuales han sido las acciones emprendidas por los 
Estados Unidos para tratar de reducir y/o eliminar esos obstáculos al comercio de servicios. En 
particular frente a los servicios jurídicos;  de  contabilidad, auditoría y teneduría de libros;  
asesoramiento fiscal;  arquitectónicos;  de ingeniería;  integrados de ingeniería;  y de planificación 
urbana y arquitectura paisajista.   
Evolución de la Política Comercial y de Inversiones 
 
Podría indicar y describir los casos en los que los Estados Unidos han utilizado el concepto de 
“seguridad nacional” que está en los párrafos 4, 7, 44 de la Sección II del Informe de la Secretaría 
“Evolución de la Pochiullítica Comercial y de Invers iones”, como excepción a sus compromisos dentro 
de la OMC?  
En los párrafos 5 a 8 de la Sección II del Informe de la Secretaría “Evolución de la Política Comercial y 
de Inversiones” se describen las instituciones que le ayudan al Ejecutivo de los Estados Unidos a 
formular sus políticas comerciales y de inversión.  ¿P odría explicar cómo participan los gobiernos de 
niveles diferentes al federal en la formulación de esas políticas?  
En el párrafo 11 de la Sección II del Informe de la  Secretaría “Evolución de la Política Comercial y de 
Inversiones” se indica que “Las negociaciones comerc iales multilaterales son una prioridad para la 
Administración en su propósito de abrir los mercados  y reforzar las normas”.  A lo que se añade que 
“La Administración considera que las cuestiones re lacionadas con… la ampliación del acceso a los 
mercados para el comercio de manufacturas y servi cios… pueden servir de ba se para una negociación 
que reportaría beneficios significativos a los interese s de los Estados Unidos y la economía mundial”.           WT/TPR/M/160/Add.1 
Page 13 
 
 
Por lo anterior, se afirma que “la Administración ha  decidido atribuir la máxima prioridad a impulsar el 
PDD de la OMC y llevar las negociaciones a una c onclusión satisfactoria antes del fin de 2006”.  
Dentro de esa política, ¿podría indicar cómo se to marán en cuenta dentro de esas negociaciones los 
intereses de aquellos Miembros que export an recursos humanos más que capital? 
 
En el párrafo 21 de la Sección II del Informe de la  Secretaría “Evolución de la Política Comercial y de 
Inversiones” se indica que, “Las autoridades observaron que los Estados Unidos presentarían los informes pertinentes sobre contratación pública cuando se hubiera terminado la sustitución de su 
sistema de recolección de datos sobre contratación”.  ¿Podría indicar cuándo y cómo estarán disponibles esos informes? 
 
En el párrafo 64 de la Sección IV del Informe de la Secretaría “Políticas Comerciales por Sectores” se 
indica que “Con respecto a los bancos extranjeros que tienen sucursales o agencias en los Estados 
Unidos, con arreglo a la Ley citada deben aplicár seles criterios de "buena capitalización" y "buena 
administración" comparables con los que rigen para los bancos estadounidenses, "aplicándose 
debidamente el principio de trato nacional e iguald ad de oportunidades".”  ¿Podría explicar en qué 
consisten los citados criterios?  
CHILE 
II. Evolución de la Política Comercial y de Inversión
 
 
5.- Régimen de Inversión Extranjera  
 
1.- ¿Puede Estados Unidos proveer una lista con l as medidas restrictivas aplicadas a nivel estatal, de 
acuerdo a lo indicado en el párrafo 43?  
2.- De acuerdo a lo señalado en el párrafo 44 del in forme de la Secretaria ¿Puede Estados Unidos 
proporcionar una lista de las medidas que pueden ser ejercidas bajo el Defense Production Act of 1950,  
que puedan afectar la Inversión extranjera en Esta dos Unidos? ¿Cómo se compatibilizan estas medidas 
con los Acuerdos Bilaterales de  Inversión (BIT),  y los TLC suscritos por Estados Unidos?  
 
III.  Políticas y Prácticas Comerciales, por Medidas
 
 
2.- Medidas que afectan directamente a las Importaciones  
 i.a) Regimenes Aduaneros
 
 
1.- Respecto a la introducción del Entorno Comercia l Automatizado (ACE), y tal como se señala en el 
párrafo 15 del informe ¿existe alguna estimación y/o evaluación de los beneficios que traería al año 
2009, cuando el ACE esté plenamente operacional?   2.- ¿De acuerdo a lo indicado en el párrafo 17 de l Informe, existe alguna medición del impacto 
económico del reglamento de la Ley de Comercio Exterior?  
 
i.b) Transmisiones Electrónicas de Información de Carga
 
 
1.- ¿De acuerdo a lo indicado en el párrafo 19 del In forme, cuáles son los criterios y la metodología 
para asignar los niveles de riesgo a cada expedición?  
 
2.- ¿Existen instancias público y/o privadas para eval uar y analizar en conjunto todos los cambios que 
se han introducido en los últimos 4 años, en relación al  régimen aduanero y la seguridad de las cargas y 
contenedores?  WT/TPR/M/160/Add.1 
Page 14  
 
iv. b) Medidas Antidumping y Compensatorias
 
 
El párrafo 73 del Informe de la Secretaría señala que en EE.UU. las determinaciones relativas al daño 
son efectuadas por el USITC y las determinaciones sobre dumping/subsidios las realiza el USDOC. Asimismo, las determinaciones preliminares del USITC son efectuadas en forma previa a las 
determinaciones preliminares sobre dumping/subsidios del USDOC. 
 1.- ¿Cómo considera EE.UU. que se satisface lo establecido en el párrafo 5.7 del artículo 5 del AD, en cuanto a que las pruebas de la existencia del dum ping y del daño se examinarán  simultáneamente en el 
momento de decidir si se inicia o no una investigación? 
 
2.- Informe indica en el párrafo 12 de las Observaci ones Recapitulativas  que en los años  2004 y 2005 
las investigaciones antidumping inic iadas se han reducido y que esta circunstancia debiera mitigar las 
preocupaciones de los exportadores extranjeros. ¿Cuá l sería la causa de esa reducción: a) que la 
autoridad ha adoptado una política al respecto; o b) que las industrias domésticas han presentado un 
menor número de casos para investigarse? 
 3.- Los párrafos 75 y 76 del Informe indican que se  han dictado nuevas directrices en materia de 
fianzas continuadas aplicables a importadores y para  impedir elusiones. ¿Estas nuevas directrices 
tienen carácter de legislación vinculante? ¿Son ést as aplicables únicamente al caso de la Enmienda 
Byrd o también tienen  incidencia general en la normativa antidumping? 
 
4.- ¿La “aclaración y mejora” de las disposicion es de los Acuerdos relativos al antidumping y a 
subsidios y derechos compensatorios, a que se refier e el párrafo 80 del informe, implica la posibilidad 
que ciertas disposiciones de tales Acuerdos  sean efectivamente modificadas o derogadas? 
 
5.- En el evento de la determinación de la exis tencia de dumping respecto de la madera blanda 
procedente del Canadá (WT/DS264/AB/R), el Ór gano del Apelación recomendó que Estados Unidos 
pusiera su medida en conformidad con las obligaciones del AD, dado que actuó de manera 
incompatible con el párrafo 4.2 del artículo 2 del Ac uerdo Antidumping al determ inar la existencia de 
márgenes de dumping sobre la base de un método que incorpora la práctica de la "reducción a cero".  
Para cumplir con lo señalado, EE.UU. modificó la metodología de cálculo cambiando el método 
utilizado de promedio con promedio al de  transacción por transacción. (párrafo 87) 
 ¿Considera EE.UU. que esta modificación significa la no aplicación futura de zeroing, independiente del método empleado? En caso contrario, ¿cómo se justifica técnicamente  la aplicación de zeroing en 
el marco del nuevo método, a la luz de los argumentos del Órgano de Apelación? 
 
En el caso indicado anteriormente, actualmente se estima que el método de transacción por transacción 
es el adecuado, ¿cuál es la razón de que no se haya utilizado dicho método desde el principio?  
iv. d) Acuerdos de Suspensión
 
 
1.- De acuerdo a lo señalado por el párrafo 93 del In forme, la legislación de Estados Unidos permitiría 
suspender un procedimiento de investigación en AD y en CVD en determinadas circunstancias y 
siempre se llegue un acuerdo con el exportador para eliminar los efectos perjudiciales. ¿Quiere ello 
decir que se trata de suspensiones fuera de los c asos en que los respectivos Acuerdos autorizan un 
compromiso? 
 
iv. f) Exámenes a Efectos de Extinción de órdenes  
 
1.- Para las revisiones EE.UU. considera de minimis  cualquier subsidio compensable o margen de 
dumping inferior a 0,5%, en tanto que las tasas de minimis  en las investigaciones de inicio son de 1%          WT/TPR/M/160/Add.1 
Page 15 
 
 
para los subsidios (2% para los PED) y de 2% para los márgenes de dumping (3% para los PED). 
(párrafo 96)  ¿Cómo se justifica la necesidad de  contar con diferentes estándares de minimis  para las investigaciones 
de inicio y las revisiones posteriores de las medidas? 
 
v) Salvaguardias
 
 
1.- El párrafo 103 del informe seña la que, de acuerdo a la  ley, una  medida de salvaguardia puede 
revestir diversas formas como aranceles, restricci ones cuantitativas, cuotas-arancelarias, licencias de 
importación y otras medidas. Dada la variedad  de posibilidades para aplicar una medida de 
salvaguardia, ¿qué criterios se utilizar  para determinar la imposición de una forma de medida u otra, y 
así observar la exigencia del artículo 5 del AS respec to a que la salvaguardia sólo debe aplicarse en la 
medida necesaria para prevenir o reparar el daño gr ave y facilitar el reajuste, ya que la aplicación de 
medida en lugar de otra, para el caso concre to, podría resultar innecesariamente más restrictiva? 
 
vii) Normas y Reglamentos  Técnicos  
 
1.- ¿Puede Estados Unidos señalar cuál es el proced imiento que se sigue a nivel federal para informarse 
de los proyectos de reglamentos técnicos y/o proced imientos de evaluación de  la conformidad de los 
Estados, autoridades locales o municipales para determinar si procede o no la notificación a la OMC? 
¿Se ha efectuado alguna evaluación respecto a si los estados, autoridades locales o municipales aplican 
los procedimientos de transparencia que se requieren  para efectos de las notificaciones a la OMC? 
 2.- ¿Cuál es la experiencia de Estados Unidos r especto a los Acuerdos de Reconocimiento Mutuo que 
ha suscrito?  ¿Cuáles son los costos de su im plementación? ¿Qué requisitos deben cumplir los 
organismos que evalúan la conformidad para ser designados por la autori dad del país exportador? 
¿Cómo se administran los incumplimientos? ¿Exist e la posibilidad de que terceros países puedan 
incorporarse?  3.- ¿Cuál es el procedimiento de notificación y de comentarios respecto de reglamentos técnicos que 
son establecidos mediante leyes, y por lo tanto con participación directa del Congreso? 
 
4.- ¿En relación a materias de OTC, que productos requieren de certificación, rotulado o cumplimiento de otros requisitos como autorizaciones previa s? ¿Deben contar estos productos con dichas 
certificaciones y autorizaciones en el momento de la importación y previo a su desaduanamiento?  viii.a) Medidas Sanitarias y Fitosanitarias
 
 
1.-En el párrafo 149 del informe se señala que en  el Acuerdo con Australia se estipulan plazos 
definidos para la implementación del  Capítulo Medidas Sanitarias y Fitosanitarias  (MSF) de ese 
documento y la formación del Comité MSF. ¿Puede Estados Unidos compartir su experiencia en la 
realización de dicho Comité?  
 
2.- ¿De acuerdo a lo indicado en el párrafo 158 del informe, cuál es la situación actual de 
reconocimiento de los sistemas regulator ios en carne bovina con Argentina? 
 3.- Estados Unidos ha utilizado los Marketing Orders , establecidos bajo el Agricultural Marketing 
Agreement  Act (AMAA) de 1937. Esta práctica se vuelve,  en algunos casos, especialmente dañina con 
la introducción de modificaciones, como la propuesta de modificación del Marketing Order 925 para 
uvas de mesa, la que afectaría seriamente a Chile. ¿Puede Estados Unidos explicar los criterios utilizados para la creación y/o modificación de un Marketing Order?, ¿Cómo se asegura que no se 
convierta en una medida discriminat oria y/o una barrera al comercio? 
 WT/TPR/M/160/Add.1 
Page 16  
 
IV.  Políticas Por Sectores
 
 2.- Agricultura
 
 
1.- De acuerdo al párrafo 3 del informe de la Secretaría, la estimación del total de pagos 
gubernamentales a la agricultura se incrementa significativamente (60%) en 2005 respecto del año 
anterior, revirtiendo la tendencia decreciente de los últimos años, y alcanzando valores cercanos a los 
registrados en 2000-2001, los más altos de la última década.  El último periodo en que Estados Unidos notificó los montos destinados a Ayuda Domestica fue para el 
periodo 2000-2001. ¿Cuándo planea Estados Unidos actualizar dicha información por medio de su 
notificación a la OMC?    2.- De acuerdo a los antecedentes del Departamen to de Agricultura de EE.UU., ¿esta alza corresponde 
a circunstancias particulares del a ño 2005 o debe esperarse que continúe en el futuro? De ser resultado 
de circunstancias particulares de 2005,  ¿cuáles son estas circunstancias? 
  3.- ¿Qué productos específicos han sido los princi pales beneficiados con el aumento de los 
desembolsos gubernamentales de 2005?    
3.- Servicios Financieros
 
 
1.- El marco o régimen legal para el  comercio de servicios y las invers iones de Estados Unidos (a nivel 
federal), ha demostrado ir más allá de los estándares OMC - GATS. En efecto, el régimen de inversiones es implementado de manera no discrim inatoria y con muy pocas excepciones (estando la 
mayoría de ellas cubiertas por las excepciones ge nerales de GATS). Sin embargo, y aún cuando las 
regulaciones para el comercio de servicios a nivel fe deral son bastante liberales, a nivel estatal tienden 
a imponer un numero de restricciones, generalmente  relacionadas con requisitos de nacionalidad, 
residencia, licenciamiento, etc.  ¿Tiene Estados Unidos contemplado avanzar más en  la implementación de las obligaciones derivadas 
del  Art. III del GATS a nivel estatal? ¿Pueden estas medidas ser presentadas de una manera más 
sistemática para facilitar el comercio? 
NEW ZEALAND 
1.  Trade Policy Developments
 (WT/TPR/S/160, p vii, para 4)  
 
The Secretariat notes that the United States has made progress in implementing several WTO (Dispute Resolution) rulings calling for changes to U.S. legisl ation, but a few rulings have not yet been fully 
implemented. 
• Could the U.S. please provide a proposed timeline outlining future phases of implementation of 
WTO rulings, as well as background information on  the extent to which these have/have not 
been implemented? 
2.  Participation in the WTO  (WT/TPR/S/160, p.16 para 21 and WT/TPR/S/160, p. 88 para 23.) 
 
The Secretariat notes that a few notification ob ligations were outstanding as at October 2005, 
particularly on domestic support to agriculture, st ate trading activities, and statistics for government 
procurement. 
• When will the US provide notification of its  domestic support since that provided in 2004 
covering the marketing years 2000 and 2001?          WT/TPR/M/160/Add.1 
Page 17 
 
 
• What measures has the US put in  place to ensure that the requi red notifications occur in a 
timely manner in future? 
3.  Customs procedures and rules of origin   (WT/TPR/S160, p.27 para 24) 
 
• Did the cost estimates from meeting the 24 hour rule (for cargo transported by vessel) include 
the cost of the time of keeping containers on the wharf before shipment? 
4.  Tariffs  (WT/TPR/S/160, p.31 para 47 and p.32 para 49). 
 The Secretariat notes that the aver age applied tariff for agriculture in 2004 was 9.7%, and remained 
virtually unchanged with respect to 2002.  The aver age applied tariff rate for non-agricultural products 
was 4% in 2004, down from 4.2% in 2002.  The pr oducts subject to the highest ad valorem of 
ad valorem equivalent rates were tobacco (350%),  whey (284%), sour cream (177%), and peanuts 
(164%);  in the non-agricultural sector, the hi ghest rate was applied to footware (58%). 
 
• What is the US justification for maintaining hi gh tariff protection in sectors like agricultural 
food products? 
 
5.  Other charges affecting imports  (WT/TPR/S/160, p.35 paras 66 and 67) 
 The Secretariat report notes that imports valued at more than US$2,000 are subject to a merchandise 
processing fee collected by Customs and Border Protection (CBP).  The fee is set at 0.21% of the 
import value; the statutory minimum and maximum are US$25 and US$485. 
 
• Will the US be changing this fee so it reflects the approximate cost to CBP of processing the 
entry of imported merchandise? 
The Secretariat report notes that the American J obs Creation Act of 2004 requires the Secretary of 
Treasury to conduct a study of all the fees collect ed by the Department of Homeland Security, by 
September 2005, and make recommendations concerning fees to be eliminated and the rate of fees to 
be retained.  
• Has this study been completed?  Will the merchandise processing fee be eliminated? 
6.  Sanitary and phytosanitary measures  (WT/TPR/S/160, p. 55-56) 
 
Following the detection of BSE in the US in Decem ber 2003, the US promulgated interim final rules 
outlining new measures that had to be followed to “help further protect consumers against the agent 
thought to cause BSE”.  
• Could the US advise when it intends to publish th e final rules and whether these will take full 
account of third countries’ BSE status? 
7.  Trade-related intellectual property rights  (WT/TPR/S/160, p.81 paras 272-275) 
• How does the US consider that the retrospective a pplication of extensions to the copyright term 
encourage creativity and innovation? 
8.  Agriculture: Legal Framework and Overall support  (WT/TPR/S/160, p.85 paras 10-11)  
The Secretariat notes that payments to US agricu ltural producers amounted to US$13.3 billion in 2004; 
preliminary estimates by the Department of Ag riculture predict government payments for 2005 to WT/TPR/M/160/Add.1 
Page 18  
 
increase to close to US$21.4 billion and that provisi onal data for 2004 suggests an increase in the PSE 
to US$46.5 billion, or 18% of gross farm receipts, reversing the downward trend registered since 1999. 
 
• What is the US justification for increasing levels of support for the agricultural sector? 
• What program does the US have for reducing this level of support and ensuring that the 
subsidies provided become less trade distortin g over time, independent of the current WTO 
negotiations? 
9.  Border measures  (WT/TPR/S/160, p.87 para 18) 
 The Secretariat report notes that access to tariff quotas is on a first come, first served basis, except for 
dairy products and sugar.  Access to dairy is gr anted to “historical“ importers, “preferred importers” 
designated by the country of origin, and on the basis of a lottery.  One or more methods may be used. 
 
• What plans does the US have to simplify access to dairy tariff quotas? 
10.  Export subsidies  (WT/TPR/S/160, p.92 para 46) 
 
The Secretariat report notes that between Oct ober 2003 and September 2004, total cash bonuses under 
the Dairy Export Incentive Program (DEIP) amounted to slightly less than US$2.7 million.  Almost two thirds of the total was for exports of non-fat dry milk (skim milk powder). 
• Does the US intend to continue to us the DEIP? 
11.  Food aid  (WT/TPR/S/160 p. 93, paras 53-57) 
The Secretariat report notes that the United States provided 56% of global food aid (by volume) 
delivered in 2004. 
• To what extent does USDA expect food aid donations to continue and to what volume? 
Several WTO Members have raised concerns over aspects of US food aid, including the effect of 
monetisation requirements on domestic markets,  and the use of proceeds from monetisation. 
• What work has been undertaken  since the last US Trade Policy Review to minimise the 
potential disruptions on trade caused by food aid?  
AUSTRALIA 
AGRICULTURE 
 Transparency
 
Could the US give an indication of when it expe cts to submit overdue notifications to the WTO 
concerning domestic support commitments for the marketing years 2002, 2003, 2004 and 2005?  As 
part of this trade policy review process, could the United States please provide a preliminary indication of support provided under each categor y of domestic support (green, amber and blue boxes) for these 
three years? 
Attempts to fill the peanut quota established unde r the Australia-United States Free Trade Agreement 
have brought into focus the range of US regulator y agencies involved with importing certain types of 
products. Has the US considered introducing one poin t of contact to provide importers with access to 
comprehensive information on import requirements, covering administrative, quarantine, food safety 
and other requirements applying to impor ts of food and agricultural products?          WT/TPR/M/160/Add.1 
Page 19 
 
 
US Farm Bill  
Given US budgetary constraints, does the US envisa ge reductions in support for current programs in 
the next Farm Bill that will cut into current applied levels of spending? 
Milk Protein Concentrates  
Australia is concerned about attempts to intro duce legislation through the US Congress that would 
severely restrict imports of casein and milk protein concentrates by creating new tariff barriers.  How 
does the US envisage the application of this legi slation within its current WTO market access 
commitments?  
Food Aid  
Can the US give up to date figures on food aid programs, and is it possible to indicate what proportion 
of programs that are concessional or in fully grant form are monetised? 
Export Credits  
Can the US give a breakdown of export credit program s for agricultural products with repayment terms 
of longer than 180 days and an indication of the size by total dollar value on a program by program basis? 
TRADE IN SERVICES 
 Maritime Services
 
Does the United States plan to make new commitments on maritime transport services in its revised 
services offer? If not, why not? 
Air Transport Services  
 
The global market for auxiliary air transport servi ces (including aircraft maintenance, reservations, 
ticketing sales and promotion, as well as ground hand ling) is estimated to be worth $US90 billion 
annually.  In each of the sectors of the market, th ere is a strong trend towards the provision of these 
services by specialist providers, thus further high lighting the distinction between these services and 
bilateral traffic rights which are not covered by the GATS.  Given this trend, and US providers’ 
interests in better and more transparent access to  this expanding market, does the United States 
envisage removing its MFN exemption relating to co mputer reservation systems services, and making 
commitments in air transport related services such as cargo handling in the transport sector, and other supporting services for air transport in its revised services offer?  If not, why not?  
Professional Services
 
The Australian Government retains concerns about the obstacles to the export of professional services 
posed by the fragmented nature of licensing and regi stration arrangements in the United States.  In its 
last trade policy review, the US Government point ed to a trend towards greater harmonisation and 
uniformity of these rules.  Can the US Government  outline the progress that h as been made since its 
last TPR in achieving harmonisation through model rules and the like, including uniformity in the 
application of licensing and registration arrangements across the United States? WT/TPR/M/160/Add.1 
Page 20  
 
GENERAL 
 
US –FSC Dispute
 
 
The Appellate Body ruled in February 2006 that th e United States has failed to fully implement the 
Dispute Settlement Body recommendations and rulings in the United States - Tax Treatment for 
Foreign Sales Corporations  dispute.  What steps is the United States considering to bring its regime 
into compliance with the Appellate Body ruling? 
 
CHINESE TAIPEI  
Secretariat Report: WT/TPR/S/160 
 
II. DEVELOPMENTS IN TRADE AND INVESTMENT POLICY 
 
(4) PREFERENTIAL AND OTHER ARRANGEMENTS  
 
(i) Introduction 
 
Question 1 (pages 16-17, paragraphs 21-22)  
The US has recently been actively pursuing FTA nego tiations, which reflects its strategy of increasing 
leverage for promoting multilateral trade liberaliza tion.  Could the US please elaborate on its own 
guidelines for choosing FTA negotiating partners?  We note also that partners in the three FTAs that ha ve entered into force since the last US Trade Policy 
Review are all APEC members.  Given that APEC’s  concept of “open regionalism” would facilitate 
efforts to advance freer trade under a multilateral framewo rk, is it the US’ intention to continue to give 
priority to FTA talks with APEC economies in the future? 
 
(ii) Free-trade agreements  
Question 2 (page 18, paragraph 30) 
 
Under a dispute settlement regime, normally a comp laining party is allowed to suspend the party 
complained against from the benefits arising from a preferential agreement. 
 The Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu would appreciate knowing: a) 
the reason for the US and Chile in corporating provisions for “monetary assessment” to back up dispute 
panel decisions, and b) how these “monetary assessment” provisions are implemented?  Question 3 (page 19, paragraph 31)  
We note with interest the non-market access requirements in the US-Australia FTA on 
pharmaceuticals, such as the transparency pro cedure in listing pharmaceuticals for reimbursement 
under the Australian Pharmaceutical Benefit System.    We would appreciate knowing whether such requirement s are specific to Austra lia, or whether the US 
intends to pursue similar requirements, either in  the FTA context or bilaterally, with its trading 
partners.  Additionally, could the US please describ e the problems encountered that prompted it to 
pursue such requirements. 
          WT/TPR/M/160/Add.1 
Page 21 
 
 
III. TRADE POLICIES AND PRACTICES BY MEASURE 
 (2) MEASURES DIRECTLY AFFECTING IMPORTS 
 
(i) Customs procedures and rules of origin 
 
Question 4 (page 25, paragraph 14)  
As indicated in the report, users will be able to  interface not only with the Customs and Border 
Protection Agency (CBP), but also with other government agencies involved in import (and export) procedures through the Automated Commercial Environment (ACE).   We are interested in knowing more about the ACE, as follows:  
(a) How do users interface with other government agencies involved in import (and 
 export) procedures?  (b) What are the other government agen cies with which users can interface?  
(c) What are the differences between ACE and the Automated Commercial System 
 currently used by CBP to process imports? 
 
Question 5 (page 26, paragraph 21)  
 
Importers may request that their names and addresses (and those of their shippers) appearing in vessel 
cargo declarations be treated as confidential.  To this  end, importers must file a certification with the 
CBP.  Certifications are valid for two years and can  be renewed.  The press may copy but not publish 
certified information.  Since importer information is usually viewed as confid ential in the context of trade practices, could the 
US please explain the purpose of allowing the press to copy but not publish the confidential, certified 
information and under what circumstances the press would be allowed by the CBP to do so? 
 
(iii) Other charges affecting imports 
 
Question 6 (page 35, paragraphs 66-67) 
 Imports valued at more than US$ 2,000 are subject to a merchandise processing fee collected by the 
CBP.  Originating imports under the free-trade agr eements concluded between the United States and 
Australia, Canada and Mexico, Chile, Israel, and Si ngapore are exempt.  The American Jobs Creation 
Act of 2004 requires the Secretary of the Treasury to  conduct a study of all the fees collected by the 
Department of Homeland Security by September 2005, and make recommendations concerning fees to 
be eliminated and the rate of fees to be retained.  If the merchandise processing fee is intended to cove r the service cost to the CBP of processing the 
entry of imported merchandise, why is it that im ports under these particular FTAs are exempt from this 
fee?  Is this exemption possibly compensated by the fee that might have been “over-collected” on 
goods imported from non-FTA partner countries?  Furthermore, what are the results and 
recommendations of the Secretary of the Treasury study?  WT/TPR/M/160/Add.1 
Page 22  
 
(iv) Anti-dumping and countervailing actions 
 
Question 7 (pages 39-40, paragraphs 81-83) 
 Anti-dumping measures have been the main means by which the US government has protected its 
domestic market from unfair trade.  According to the data in the Secretariat report and USDOC’s website, the US initiated about 44 anti-dumping inv estigations per year between 2000-2004.  During 
the same period, it terminated only 20 cases, resu lting in an increase in the total number of anti-
dumping measures in force over the said period.  Ho wever, the trend in recent years of decreasing 
incidences of anti-dumping investigation initiations is a positive sign of less frequent use of the anti-
dumping remedy by US domestic industries.  One rationale for justifying the use of anti-dumpi ng measures is that exporters may adopt a dumping 
strategy to exploit foreign markets if their own dom estic market were protected by tariff and non-tariff 
barriers.  Accordingly, does the US think that th e freer trade that could result from the Doha Round 
would reduce the need to use anti-dumping measures ?  What experiences does the US have in this 
context with countries with whic h it has an FTA relationship? 
 Question 8 (page 43, paragraph 97)  
 
Some of the factors or criteria that the USDOC nor mally relies upon in determining the likelihood of 
the continuation or recurrence of dumping in sunset reviews are illustrated in the report.  However, 
according to the requirements of Article 11.3 of the WTO Anti-dumping Agreement, the investigating 
authority shall review the likelihood of continuation or recurrence of injury as well. 
 
Could the US please explain what factors or criteria the USITC considers or relies upon in making a determination of the likelihood of injury? 
 
(viii) Sanitary and phy tosanitary measures 
 
Question 9 (page 56, paragraphs 157-158)  
It is stated in the report that “FSIS has specific responsibility for the safety of meat, poultry and egg products.”  However, in the recent investigation into the improper shipment of veal to Japan in January 
2006, the Investigation Report concludes that mist akes were made by FSIS inspection personnel. In 
addition, the inspection programme personnel at the establishment were not sufficiently aware of the 
Export Verification programme, and should not have  certified or approved the shipment of such 
product to Japan.  
Since we import a considerable amount of meat, poultry and egg products from the US every year, 
could the US please indicate what steps will be ta ken to ensure that meat, poultry and egg products 
meet all the US and the importing c ountry’s food safety requirements? 
 
As further indicated in the report, “Upon request, FSI S conducts on-site audits to evaluate whether a 
country’s regulatory system attains the same le vel of protection as the US…to ensure continued 
compliance, FSIS conducts periodic audits.”  As on -site audit/inspection is the right of the importing 
country, we believe that when the importing coun try has concerns about imported products, it may 
exercise the same rights as those of the US.  In th is respect, we would appreciate it if the US could 
explain the reasons for the request to replace BAPHIQ  audit/inspections of US pet food facilities with 
audit/inspections by APHIS. 
          WT/TPR/M/160/Add.1 
Page 23 
 
 
(4) OTHER MEASURES AFFECTING PRODUCTION AND TRADE 
 (iii) Government Procurement 
 
Question 10 (page 74, paragraphs 240-241)  
We understand that US policy with respect to mark et access of government procurement is to grant 
reciprocal national treatment, while maintaini ng a number of domestic purchasing requirements for 
procurement not covered by the GPA, NAFTA, th e WTO plurilateral Agreement on Trade in Civil 
Aircraft, and bilateral trade agreements.  Fo r procurement not covere d by the above-mentioned 
agreements, the Buy American Act restricts the purchase of supplies and construction materials by 
government agencies to those defined as “domestic e nd-products”, in accordance with a two-part test, 
i.e. manufactured in the United States, and the cost of domestic components exceeds 50% of the cost of 
all components. 
 (a) Are there any domestic purchasing requirement s for services procurement not covered by the 
 GPA, NAFTA, the WTO plurilateral Agreement on Trade in Civil Aircraft, and bilateral trade 
 agreements? 
(b) What is the rule of origin applied in order to  define “domestic end-prod ucts”?  Is it tariff shift 
 or added-value rules? (c) How does this rule of origin differ from t hose applied to the “designated countries”, including 
 parties to the GPA, NAFTA, and other b ilateral agreements that cover government 
 procurement? 
 
Question 11 (page 76, paragraph 246) 
As indicated, the US Administration is encouraging t hose States that have not participated in the GPA 
to consider voluntarily covering their procurement u nder a few FTAs under a new reciprocity policy, to 
benefit from new export opportunities.  
 
As a member ready to join the GPA, we would like to know whether the said reciprocity policy will be pursued in the GPA Negotiations on Extension of  Coverage and Elimination of Discriminatory 
Measures and Practices so that signatories to  this Agreement may mutually benefit. 
 
(iv) Trade related intellectual property rights 
 
Question 12 (page 82, paragraphs 277-278)  
Under Section 337 of the US Tariff Act of 1930, certa in unfair practices related to IPRs are considered 
unlawful import practices.  Secti on 337 investigations are initiated by the USITC.  If the USITC 
determines that a Section 337 violation exists, it can issue exclusion orders or cease and desist orders, 
or both.  
Between 1 January 2003 and 30 Apr il 2005, 54 new Section 337 investig ations were initiated, of which 
47 involved allegations of patent infringement. Section 337 inves tigations may be initiated merely on 
the basis of a complaint from an interested party against foreign companies.  It is our understanding 
that, once the ITC decides to initiate  such an investigation, the comp anies being investigated can incur 
excessively high legal costs in responding to charges.  We trust, therefore, that objective criteria are 
used in the process of determining whether or not to  accept a complaint and to initiate an investigation 
on patent infringement. 
 WT/TPR/M/160/Add.1 
Page 24  
 
In this context, it would be appreciated if the United states could:  (a) Please provide details of the criteria used by the ITC to determine whether or not  to initiate an 
 Investigation. 
(b) Please provide the figures on the total number of complaints filed involving patent  infringement between 1 January, 2003, and 30 April, 2005, and the number of complaints 
 rejected during that same period.  
 
IV. TRADE POLICIES BY SECTOR 
 
(3) FINANCIAL SERVICES  (ii) Legislative and regulatory framework  
Question 13 (pages 96-97) 
 
In addition to corporate income tax, foreign bank  branches in the US are also required to pay a 30-
percent “Branch Profit Tax” if the earnings of a fo reign bank are not reinvested in a US trade or 
business.  We consider that this measure seriously  affects the equality of competitive opportunity and 
imposes an unfair burden on the operations of our banks in the US.  Does the US have plans to 
eliminate this additional “Branch Profit Tax”. 
 
Question 14 (page 97, paragraph 69) 
 A foreign bank is required to establish an insured ba nking subsidiary (except for foreign bank branches 
engaged in insured deposit-taking activities as of 19 December 1991) in order to accept or maintain 
domestic retail deposits of less than US$ 100,000.  Th is restriction on a foreig n bank’s operation would 
appear to seriously restrict the funding resources of a foreign bank branch and affect its ability to 
compete with domestic banks on an equal footing. 
 
Would the US please consider lifting this restrictio n and treating foreign bank branches on an equal 
footing with domestic banks in this respect?  (4) TELECOMMUNICATIONS SERVICES 
 
Question 15 (pages 102-104, paragraphs 96-100) 
 
As indicated in the report, public interests relying on an “open entry” standard should be taken into 
consideration for applications by a foreign supplier from a WTO Member.  Could the US please describe the criteria for determining “public intere sts”, and illustrate how these criteria for licensing 
requirements and procedures are based on objective a nd transparent principles so as not to constitute 
unnecessary barriers to trade in telecommunications services?  As indicated in paragraph 97 on page 103, the US implemented its WTO commitments for satellite 
services through the DISCO II Order adopted in No vember 1997. These commitments allowed foreign 
satellite operators to provide satellite services to the US  market.  Accordingly, for Mode 1 to Mode 3 of 
satellite-based mobile communications services, are there any limitations or requirements for market 
access and national treatment under the US regulator y regime?  If none, what measures does the FCC 
undertake to ensure the rights of consumers w hose services are provided by foreign satellite-based 
mobile communications services operators?           WT/TPR/M/160/Add.1 
Page 25 
 
 
(5) MARITIME TRANSPORT 
 
(ii) Main features and competition policy consideration 
 
Question 16 (page 108, paragraph 118) 
 As mentioned in the Report, the United States has not tabled an offer with respect to Maritime 
Transport Services in its initial offer on services in the Doha Development Agenda.  Does the US plan 
to make an offer in the Maritime Transport Servi ces sector, and if so, could it please indicate by when?   
 
GUATEMALA 
• El artículo V del AGCS define que un ACR por el que se liberalice el comercio de servicios 
estará condicionado, entre otros, a tener una cobertura sectorial sustancial. 
La nota del pie de página del literal a) del párra fo 1 de este artículo establece que para cumplir 
esta condición en los Acuerdos, no deberá establecerse la exclusión a priori  de ningún modo de 
suministro.  
1. Con base en lo anterior, ¿Podría los Estados Un idos explicar la forma en que ha interpretado e 
implementado esta disposición al momento de negociar y acordar un ACR? 
 2. En el mismo sentido, pero para el caso de me rcancías, ¿Podría los Estados Unidos explicar la 
forma en que interpreta e implementa la frase ‘lo es encial de los intercambios comerciales‘ contenida 
en el artículo XXIV del GATT?  SWITZERLAND 
Report by the Secretariat 
 I. Recent Economic Developments  
(2) Output and employment 
 Para. 6  of the Secretariat’s report suggests that the pe rsonal savings rate has become negative in the 
course of 2005. This savings rate is low by intern ational standards and also well below its long-run 
trend. Could the authorities of the United States pleas e provide their assessment of the causes for such a 
development ? Since normally a negative savings rate can only be sustained on a transitory basis and 
given that GDP growth has already slowed down markedly in the fourth quarter of 2005, what are the risks that the US economy slips into recession in the coming months ? Also do the U.S. authorities 
share the view of the Secretariat that low interest rates have discouraged domestic savings ? Is such an 
assessment consistent with the fact that, at the same  time, substantial foreign capital has been attracted 
to the U.S. as a result of the progressive increase in the federal funds rate since mid-2004?  The 
Secretariat suggests further that the Administrati on adopted measures aiming at raising the personal 
savings rate such as lower tax rates on dividends a nd capital gains. Could the U.S. authorities provide a 
preliminary assessment of their experience with these instruments and, if any, are they considering 
additional measures to raise the personal savings rate?  
(4) Fiscal policy 
 Para. 18:   Could the U.S. authorities comment on the view s expressed by the IMF that there is a case 
for a bolder reduction of the deficits, that recent fiscal consolidati on reflects mainly cyclical gains, and 
that U.S. budget projections assume unprecedented co mpression of non-defense discretionary spending 
and take no account of funding or operations in Iraq and Afghanistan after 2006 while the growing 
scope of the Alternative Minimum Tax may overstate  in the longer run the dynamics of fiscal revenue WT/TPR/M/160/Add.1 
Page 26  
 
if it has to be corrected at some stage?  Are the current fiscal trends  consistent with a halving of the 
deficit by the end of the decade ? Should the str ong growth of the U.S. economy continue beyond 2005, 
would the U.S. authorities be prepared to enhance th eir efforts toward balancing the budget by the end 
of the present decade?  II. Developments in Trade and Investment Policy  
(2) Institutional and Policy Framework 
 (ii) Policy objectives
 
 
Para. 9  of the Secretariat’s report indicates that th e United States continues to pursue a policy of 
advancing open markets and the rule of law as part  of a broader global security objectives.  Also, the 
United States considers that opening foreign mark ets to U.S. products and services will enhance 
economic growth and prosperity.  Based on the Secret ariat’s report, there is, however, no indication in 
this strategy that while foreign markets are to ope n to U.S. products and services, the U.S. market 
should also open in parallel for foreign products a nd services to ensure both mutual benefit from trade 
liberalization for all parties involved and increased efficiency for the U.S. economy itself. Could the 
U.S. authorities comment on this apparent dichotomy in U.S. trade policy?  (iii) Legislative developments
 
 
Para. 14:   Section 125 of the Uruguay Round Agreemen ts Act mandates that, beginning March 1st, 
2000, and every five years thereafter, the report on WTO activities, transmitted by the President to 
Congress, must include an analysis of the value of continued U.S. participation in the WTO. Following 
the submission of the report, Congress can withdraw  its approval of the WTO Agreement. Could the 
U.S. authorities indicate if they have any plans to amend this section of the Uruguay Round 
Agreements Act as it could create uncertainty among WTO Members over the long-term political 
commitment of the United States to the multilateral trading system?  (4) Preferential and Other Arrangements  
(iii) Unilateral preferences and other trade arrangements
 
 Para. 39:  This paragraph states that the President of  the United States determines annually which sub-
Saharan African countries are eligib le for benefits. Does this relate only to the provision of technical 
assistance or to all benefits of the AGOA? 
 
(5) Foreign Investment Regime  Paras. 44 and 45:   We note with satisfaction that no acquis ition has been blocked or divested under the 
Exon-Florio amendment and that during 2004 th ere were only two out of 50 cases (acquisitions, 
mergers, takeovers, etc.) where investigations were initiated by the CFIUS (Committee on Foreign 
Investment in the United States). Also, no action was taken as a result of these investigations. This is 
certainly of great importance for a sound and liberal FD I policy. However, the lack of a clear definition 
of "national security" and the wide discretion in th e interpretation of the concept of national security 
(by the President) may cause legitimate concerns as discussions in other international fora have shown. 
We welcome the fact that the CFIUS determines if a formal investigation under Exon-Florio is 
warranted and that, in practice, it initiates investiga tions only in a li mited number of cases. This creates 
- under these circumstances and to some extent - a predictability for potential investors although the 
length of time taken to complete a review process (and in some cases also substantial restructuring of the proposed acquisition will be asked for as a conditi on for approval) could be quite costly for the 
parties involved. In addition, concerns about a possible abuse of the discretion mentioned above to  
disguise protectionism and discrimination of foreign investors cannot be overseen. In this latter  respect,          WT/TPR/M/160/Add.1 
Page 27 
 
 
we would appreciate to know what the United Stat es have done so far in order to avoid such 
discriminatory and market distorting effects wh en applying the discretion mentioned above. 
 More generally, could the U.S. authorities explain on the basis of what precise criteria decisions are 
being taken by the CFIUS to accept or block FDI ? Could they also elaborate on what their concept of 
“national security” entails? 
 
Paras. 46 and 47:   The United States have - in addition to its membership to WTO and OECD (Code 
of Liberalization and National Treatment Instrument) - concluded a number of treaties relating to trade 
and investment, namely bilateral investment treati es containing pre-establishment elements (BIT), free 
trade agreements (e.g. Singapore, Chile), NAFTA an d trade and investment framework agreements. Do 
the U.S. authorities foresee to con tinue to follow a multi-layered approach to international investment 
arrangements, and if so, which will be its guiding principles?  
III. Trade Policies and Practices by Measure 
 
(2) Measures Directly Affecting Imports  (iv) Anti-dumping and countervailing actions
 
 
(a) Legislation and administration 
 
Para. 73:  The Secretariat’s report i ndicates that although the U.S. Department of Commerce 
(USDOC) has the authority to self-initiate AD and C VD investigations, it seldom does. Could the U.S. 
authorities explain under which conditions, USDOC might be self-initiating AD or CVD investigations? 
 
(ix) Trade-related e nvironmental regulations
 
 Para. 170:  This paragraph suggests that the United St ates applies trade measures to enforce U.S. 
environmental provisions, notably those governin g the use of marine resources and states some 
examples of the fishing industry. Could the Unite d States please expand on whether there are other 
areas, apart from the fishing industry, where trad e measures are applied in order to enforce U.S. 
environmental provisions? Are there trade measures wh ich are applied in order to enforce multilateral 
environmental agreements to which the US is a Member?  Para. 172:   According to the Secretary of Commerce,  the intentional chase and encirclement of 
dolphins was not having a "significant adverse impa ct" on any depleted dolphin stocks in the eastern 
tropical Pacific. As a result, the definition of dolphi n-safe would have changed to allow tuna caught by 
chase and encirclements of dolphins to be consider ed dolphin-safe. Could the United States elaborate 
on the actual status of the U.S. Government appeal of August 2005 to reverse the U.S. District Court's 
decision for the Northern District of California of August 2004?  
Para. 175:   Could the United States give an update on the status of two-fleet rule which is mentioned 
in para. 175 ? Does the U.S. Government intend to a bolish this two-fleet rule which might constitute a 
trade barrier for foreign manufacturers?  (4) Other Measures Affecting Production and Trade 
 
(ii) Competition policy
 
 Para. 212:  The Secretariat’s report indicates that in addition to the federal legislation there is also 
antitrust legislation in nearly all States. Could the U.S. authorities clarify the respective roles of State 
versus federal antitrust legislations and why there would be a need to have such legislations both at the WT/TPR/M/160/Add.1 
Page 28  
 
federal and state levels, all the more since apparen tly not all the States felt the need to have antitrust 
legislation ? As a matter of fact, para. 224  suggests that the United States should "clarify assignments 
of responsibility among different enforcement official s, particularly between the federal and state 
levels." Indeed, discrepancies between federal and state law can lead to serious problems such as forum 
shopping , where plaintiffs choose where to sue dependi ng on the expected payoffs in court. From an 
international trade perspective, th is raises the question whether forei gn parties generally have the same 
rights under state antitrust law as they do under federal antitrust law. In other words, is there a danger 
for foreign companies to be discriminated under stat e antitrust law ? Furthermore it would certainly be 
desirable to diminish forum shopping opportunitie s. What measures will be taken to limit the 
opportunities for forum shopping in antitrust law? 
 
(iii) Government procurement
 
 
Access conditions 
 Para. 250: According to para. 250 the sanctions deci ded by the United States against countries 
considered to discriminate against U.S. products  and services in their government procurement 
practices are supposed to apply also to end-produc ts and construction materials not covered by the 
GPA. Independently of the issue of sanctions, would it be possible for the United States to elaborate on the nature of products which are considered by the United States as materials - i.e. goods - not covered 
by the GPA? 
 
IV. Trade Policies by Sector 
 
(2) Agriculture 
 
(ii) Border Measures
 
 Para. 18:   For the United States the best TRQ allocation method seems to be “first-come-first-served”. 
At the same time, an exception is made for some  products (dairy, sugar) in the allocation of TRQs. 
What is the rationale for this exception?  
(iii) Domestic Programs
 
 Paras. 24, 26:  On counter-cyclical payments:  How will the (new) counter-cyclical payments be 
notified in the context of the implementation of the cotton case?  
Table IV.1, p. 89: This table presents federal government pa yments. Do any programs exist at sub-
federal level? Have they been notified to WTO a nd under what “color”? Also, in view of the large 
variety of farm structures over the country, do th e United States have any instruments (federal/sub-
federal) for the specific promotion of small farmers?  (v) Food Aid
 
 
Para. 54:  Could the U.S. authorities provide more deta ils on the McGovern-Dole International School 
Feeding program?  Paras. 55 and 57:  Could the U.S. authorities explain how Section 416(b) of the Agricultural Act of 
1949 is in compliance with Art. 10.4 (b) and (c) AoA?  In particular, could the authorities explain how 
the United States ensure compliance with the FAO Principles of Surplus Disposal? 
          WT/TPR/M/160/Add.1 
Page 29 
 
 
(3) Financial Services  (ii) Legislative and Regulatory Framework
 
 
(c) Securities services 
 Para. 76:  The Secretariat’s report states that  “Foreign and domestic broker-dealers who wish to solicit 
business with U.S. persons are generally required to  register with the SEC although foreign broker-
dealers are exempt from registration requirements under certain circumstances.”. Could the U.S. 
authorities provide concrete examples of what is meant by “certain circumstances”? 
 
INDIA 
Weight Restriction
 
 
Q.1 The present practice of limiting weight for 20 f oot  containers to 21 MT only is causing 
hardship and adding to cost of shipment resulting in higher value of the export product.  Can the US 
raise this limit to 27 MT, which is the practice followed by several other countries?  
Byrd Amendment
 
 
Q.2 On February 1, 2006, the US Congress approve d the repeal of Byrd amendment with a 
transition clause that the repeal would be effectiv e from October 1, 2007.  While India welcome the 
action taken by US, we understand that  the transition clause also provides that the collected AD & CVD margins up to October 1, 2007 continue to be distributed after this date. US authorities are 
requested to clarify its stand  Additional Bonding requirements
 
 
Q.3 US customs introduced a new provision requiring continuous bond from US importers of 
agriculture and aquaculture products liable to antidumping duty since July 2004.  As per the new 
requirements, the bond should cover one year’s antic ipated antidumping duty and it should be given in 
addition to cash deposit of antidumping duty at the time  the concerned shipments enter into US. Due to 
the additional bonding requirement imposed by US customs, India’s shrimp exports have been 
adversely affected. The magnitude  of financial burden faced by Indian  exporters has increased 
tremendously. This is a non-tariff barrier. Would US agree to repeal this additional burden? 
 
Tariff peaks on Apparel items  
 Q.4 US currently maintains tariff peaks going up to  32 % for apparel products under HS 61 and 62. 
Such high tariffs affect  India’s principal item of  export interest particularly as the list of countries 
which receives concessionary/zero tariff access under FTA  or other arrangements is increasing.  U.S is 
requested to clarify its stand on eliminating the tariff escalation?  Generalized System of Preferences
 
 
Q.5 At a public hearing held in Washington on Nove mber 3, 2005, the relevance and importance of 
continuing the GSP programme beyond December, 2 006 was brought to the knowledge of the office of 
USTR.  It was submitted that the benefits of the scheme be continued to be made available to all 
developing countries even beyond 2006 in a fair and non - discriminatory way.  The current status of 
these schemes may be indicated and whether any changes are contemplated.  WT/TPR/M/160/Add.1 
Page 30  
 
Services Offer
 
 
Q.6 US has recently raised the cap on H1b visas by 20,000 (over and above a nnual limit of 65,000) 
for professional students obtaining degrees from US uni versities. However, the existing restrictions on 
visas for business professionals are affecting the levels of market requirement in various sectors. Some 
of Indian business visitors, including those coming for participation in trade fairs, etc., have also had 
difficulties in getting their visas issued in a timely manner. What action would be taken by the US to grant visas to business professionals without any hassle?  
ISSUES RELATING TO H 1 B VISAS
 
 
Q.7 The cap on H 1B visas continues to be 65,000 per annum.  This was increased by adding 
another 20,000 H 1B visas for those who have a US de gree.  Both these caps have been exhausted.  
Will the US review its decision in continuing with th is cap on H 1B visas and let market forces dictate 
the number? 
 
Q.8 It has been noticed that issuing visas takes inor dinately long time.  In addition, the visa fees are 
also being increased frequently.  Further, on s ite / offshore outsourced projects have specific 
requirements wherein individuals provide service in the US under a specific contract with the US 
organization.  For such service suppliers an altern ative visa mechanism needs to be explored.  This 
should be a sub-sect of the overall H 1B visa mechan ism wherein the eligibility for stake would be one 
year or a period of contract wh ichever is lesser.  Will the US consider setting up a separate visa 
mechanism to address the specific requirements of  on site/ offshore outsourced projects, wherein 
Contractual Service Suppliers and Independent Prof essionals visit US to provide a service under the 
specific contract to the US organization?  Location issues of H IB visa
 
 
Q.9 Currently when Indian professionals go to USA on a H IB visa, it allows them to work only in 
a particular State of US. H IB visa is valid for thr ee years and is extendable for further three years. In 
this period if the assignment changes to another St ate, specific permission for change of location is 
required from immigration and Natu ralization Services (INS) of USA and this is time consuming 
process. At times a professional is required to work  on projects in different States within the same 
month. India does not have such locational restri ction. Would US government consider making the  
H IB visa  applicable for wo rking any where in the USA? 
 
Totalization Agreement/Social Security contribution  
 Q.10  For Indian IT professionals working in US, soci al security costs constitute a significant portion 
of compensation costs to the Indian software co mpanies executing projects abroad. US receive about 
USD 500 million per year by way of social security contributions from Indian software companies/employees. However, the benefits availe d are insignificant as almost all the software 
professionals return to India or migrate to other locati ons before they are eligible for the benefit. Would 
US authorities consider the following suggestions: 
 (i) Employees of Indian companies working tempor arily in the US under the HIB visa scheme are 
 exempted from paying Social security, or (ii) Deductions made towards social security from employees of Indian companies are refunded 
 upon their return from the US. 
 
Requirement of Underwriter Laboratories (UL) Approval
 
 
Q.11  Manufactures and exporters of PTFE(Teflon)  Insulated Wires & Cables (PIWC) and 
PTFE(Teflon) Sleeves/Tubling have reported that for any reasonable business with a U.S. buyer in their          WT/TPR/M/160/Add.1 
Page 31 
 
 
product area, there is a requirement of UL approval.  However, the required technical specifications are 
not readily available and even the UL website doe s not contain much details . Can the U.S consider 
providing UL specifications and test requirements freely or at minimal co st?  Can US government 
allow the testing to be done at Indian laborator y/Test Center administered by the Government 
Departments? 
 
Buy America Act  
 
Q.12  The Act mandates that American made products mu st be used in all c onstruction using Federal 
dollars. Preference is  given to  works and other government procurement contracts for bids that 
include locally produced steel. This  practice is notably common at the sub-federal level and many 
States such as Connecticut, Louisiana, Maine, Mich igan, Illinois, Maryland, New York, Pennsylvania, 
Rhode Island and West Virginia, have such requireme nts that also apply to private contractors and sub-
contractors. With a view to ensuring  that  market  access is not denied to exporters of castings, iron and 
steel and non-ferrous metal from developing countries like India, whether necessary remedial  action 
could be  taken by  amending the Buy America Act? 
 
SPS Measures  
 
Q.13  ISPM:  15  – Wooden Pallets used for Export of Bulk tea as prepared by the International Plant 
Protection Convention (IIPC)  of the FAO became effective from 1st March, 2005. 
 
This requires that Phytosanitary Measures in respect  of movement of wood packaging material in the 
form of pallets/packages, must fully meet the Standards of NIL risk against possible introduction 
and/or spread of quarantine pets associated with wood  packaging material in u se in international trade. 
Further this, the ISPM:  15 has adopted various measures of treatment like Heat Treatment(HT), 
Methyl Bromide (MB) Fumigation, etc.  The pallet must also contain a logo of the approved treatment 
of wood packaging material and assigned mark /code number of the National Plant Protection 
Organization(NPPO)  approved producer  of the wood packaging material. 
 The Plant Protection Adviser to the Govt. of India,  Ministry Agriculture, has already initiated the 
process of the accredition of Agencies  to meet the aforesaid requirements in respect of tea industry in 
North Eastern Region, West Bengal, Himachal Prades h as well as South India.  Would US Government 
consider granting more time for Indian tea to  conform to the aforesaid specified guidelines? 
 Q.14  The US Food and Drug Administration (FDA) insist for registration of any consignment of tea 
exported to USA.  Would U.S. authorities consid er relaxing the FDI regi stration requirement for 
samples of tea sent to potential importers based in USA? 
 
Equivalency of Standards under National Programme  for Organic Production of Government of 
India with National with National Organic programme of USA. 
 
Q.15  After the implementation of National Programme for Organic Production(NPOP) by 
Government of India in 2001, Agricultural and Processed Food Products Export Development 
Authority (APEDA) had sent the NPOP document to  USDA with a request to acknowledge Indian 
organic standards for equivalence with Nati onal Organic Programme (NOP) of the USA. 
 After the video-conference, on 16 February 2006 th e Agriculture Marketing Service (AMS) of USDA 
have recognized India’s accreditation system and the certification of organic agriculture products by 
agencies accredited under NPOP for import of organic products into the US.  Would U.S. now take early action to reach a final decision on determination of  equivalency of Indian 
organic Standards with those of US NOP Standards? 
 WT/TPR/M/160/Add.1 
Page 32  
 
The US Federal Regulations
 
 
Q.16  Imports into the USA are regulated under the Federal regulations, ofte n referred to as 21 CFR 
123. They require that the purchaser/importer of th e products should be able to demonstrate to the 
authorities that the products have been produced in a safe and acceptable manner i.e. are in, compliance 
with quality assurance system that incorporates HA CCP, Standard Sanitary Operating Procedures 
(SSOP) and Good Manufacturing Practices (GMP). Th ese increased number of sanitary procedures act 
as a non-tariff barriers/ technical barrier to Indian e xports to USA. In order to remove these non-tariff 
barriers, would U.S take steps to streamline the same?  High Domestic Support
 
 
Q.17  Chart IV.1 of the Secretariat Report (WT/TPR/S /160 dated 15 Feb 2006) brings out that US 
Government payments to agricultural producers ar e on a continuous rise since the Farm Act 2002, 
barring a small decline in 2004.  Further,  Government  payments for 2005 are expected to increase to 
close to US $ 21.4 billion.  This increase is being driven inter alia by an almost four-fold increase in 
counter-cyclical payments and a seven-fold increase in ad hoc emergency payments against those in 
2004.  Similarly, the OECD’s Producer Support Estimate (PSE) which was 15% as a share of gross farm receipts in 2003, provisionall y increased to 18% of gross farm receipts in 2004, reversing the 
downward trend registered since 1999.  Such larg e increases in trade-distorting domestic support by 
Government to agriculture producers are a cause for c oncern, and are against the letter and spirit of the 
objective of substantial progressive reduction in  support and protection embodied in the WTO’s 
Agreement on Agriculture.  India also notes with concern the concentration of domestic support, as 
also measured by the share of PSE in  the gross receipts, in sugar, milk, wheat and other grains, which 
adversely impacts poor and vulnerable, but otherwi se competitive, farmers in developing countries.  
Are these trends symbolic of US policy and approach  to protect and support its agriculture sector, and 
how does the US propose to address the concerns of globally competitive producers, including in 
developing countries?  
Specific Programmes
 
 
Q.18  Paragraph 24 of the Secretariat Report notes the concerns already raised by Members regarding 
inter alia  increases in expenditure under the State Pr ogramme on Agriculture, the Emergency Food 
Programme, and non-product specific support, the expanding scope of G overnment guarantees under 
US Crop Insurance Programmes, and the high level of specific support on cotton and soybean.  The classification of Crop Market Loan Assistance Paym ents under non-specific categories has also been 
questioned.  Could the US provide the justificati on for such classification, and the rationale for the 
increases in expenditures reflected across a broad range of US support programmes? 
 As regards its Farm Insurance Programmes, the US G overnment offers subsidized insurance, including 
through premiums, for natural disasters and price fl uctuations. Further, the USDA evidently covers 
underwriting costs and defrays the administrative costs of companies that sell farm insurance.  Could 
the US Government clarify under what heading such  subsidies and underwriting of costs are accounted 
for and notified to the WTO? 
 
Complex Tariff Structure
 
 
Q.19  The Secretariat Report also draws attention to  the barriers to market access in US, applied 
inter allia  through non-ad valorem duties (10.6% of total lines), TRQs (around 195 tariff lines are 
subject to tariff quotas), tariff protection of up  to 350% and tariff escalation across a number of 
agriculture products.  Nearly 91% of the out-of-quot a tariffs are non-ad valorem compared to almost 
28% of in-quota tariffs (Para 16 of Secretariat Re port).  Products such as tobacco, whey, sour cream 
and peanuts, receive tariff protection in the range of  50-350%.  Quotas, coupled with high out-of-quota 
tariffs, are protectionist, and the non ad valorem tariffs erode export competitiveness and disadvantage          WT/TPR/M/160/Add.1 
Page 33 
 
 
low cost exports of developing countries.  Does the US propose to simplify its tariffs and to convert all 
residual quotas to a tariff-only regime?  
Country-specific Allocations of Tariff Quotas
 
 Q.20  Country-specific allocations of tariff quotas have been maintained by the US under Uruguay 
Round Scheduled commitments and new ones have been  negotiated by the US with trading partners 
more recently.  The selective allocation of tari ff quotas and institution and maintenance of country-
specific allocations is discriminatory and undermines the fundamental principle of MFN.  Does the US 
propose to shift to a regime of global quotas with MFN-based allocations? 
 
Q.21  The US practice of deputing their own offi cials (from APHIS/USDA) for certification of 
Quarantine Treatment Facility (such as hot water treatment/vapor heat treatment etc.) in other countries 
increases the cost of exports fo r the countries concerned. This practice makes low volume exports 
completely unviable and serves as a barrier to tr ade. Would the US   consider evolving a practice 
wherein these requirements could be based on certification by the exporting countries, after 
establishing the necessary equivalence in standards?  
ARGENTINA 
Sobre la base del documento WT/TPR/S/160
, la República Argentina desea formular las siguientes 
preguntas: 
 
1. En la página 18, párrafo 14 , se menciona que el 9 de j unio de 2005, la Cámara de 
Representantes reafirmó por 338 votos a favor y 86 en c ontra la participación de los Estados Unidos en 
la OMC, lo que supuso el rechazo de la Resolución conjunta Nº 27.1 Pregunta: ¿El Congreso de los 
EEUU continuará revisando en forma quinquenal la participación de los EEUU a la OMC?  
 
2. En la página 19, párrafo 17,  se menciona el debate de la Comisión de Medios y Arbitrios 
Pregunta: ¿Podría los EEUU indicar si es posible obtener esa información? 
 
3. En la página 20, párrafo 20,  se mencionan los cumplimientos pendientes de hacer por parte de 
los EEUU Pregunta: ¿Los EEUU consideran que las modific aciones solicitadas por el OSD en el caso 
Algodón fueron plenamente instrumentadas?; ¿por qu é se omite mencionar dichas reformas dentro de 
las que se encuentran pendientes? 
 
4. En la página 31 párrafo 8  se menciona que los EEUU toman medidas para garantizar el 
suministro interno suficiente Pregunta: ¿Podrían enumerar las medidas tienen como objetivo 
“garantizar el suministro interno suficiente”? ¿Estas medidas se orientan a la producción interna 
exclusivamente? 
 
5. En la página 35, párrafo 29 , el informe menciona que desde marzo de 2005 entraron en vigor 
nuevas directrices de seguridad para importadores en el marco de la Asociación Aduanera y Comercial 
contra el Terrorismo (C-TPAT). En este sentido, el informe menciona que los participantes en la C-
TPAT se benefician de una menor frecuencia de las inspecciones de su carga por la CBP y, además, 
que esta asociación se creó mediante una orden del Ejecutivo, pero no se ha publicado ningún 
reglamento para su funcionamiento.  Pregunta: ¿Cuál es la razón y el fundamento por el cual los 
participantes de la C-TPAT obtienen tal beneficio? y, por otro lado , ¿tienen previsto las autoridades 
publicar algún tipo de reglamento que transparente este mecanismo? 
 
6. En la página 37, párrafo 34  se menciona que los Estados Unidos aplican normas de origen 
preferenciales en el marco de va rios acuerdos bilatera les de libre comercio concertados después de 
1997 que aún no se han notificado a la OMC (octubre de  2005). Atento a la necesidad de transparencia WT/TPR/M/160/Add.1 
Page 34  
 
Pregunta: ¿cuándo los EEUU realizarán la notificación a la OMC?; ¿Son acuerdos dentro del marco 
de negociaciones de Acuerdo generales o sólo relaci onados con normas de origen? ¿incluyen aspectos 
relacionados con etiquetado y medi das sanitarias?; ¿Son los acuerdos preferenciales sobre normas de 
origen compatibles con las normas de la OMC? 
 7. En la página 37, párrafo 37
, el informe menciona que, por lo general, las normas de origen no 
preferenciales aplican los criterios de “íntegrament e obtenido” y “transformación sustancial”, pero que 
organismos distintos de la CBP (Oficina de Aduanas y Protección en Frontera) pueden adaptar e 
interpretar con más detalle esos criterios para aj ustarlos a las necesidades y fines del contexto 
específico en el que se aplican las normas no preferenciales.  Pregunta: ¿Podrían brindar más 
información acerca de cuáles son esos criterios , así como también las necesidades y contextos 
específicos a los que se refieren? 
 
8. En la página 39, párrafo 48,  el informe menciona que los dere chos específicos representan casi 
un 11% del total de líneas arancelarias. Teniendo en  cuenta el mayor nivel de protección que estos 
proporcionan, especialmente a los productos de menor valor.  Pregunta: ¿Existe la intención de los 
Estados Unidos de eliminar en el corto o me diano plazo la aplicación de este tipo de derechos?  
 
9. En la página 47, párrafo 77,  el informe menciona que algunos aspectos del sistema 
antidumping y compensatorio impugnados en la OMC se resolvieron en el período objeto de examen, 
como por ejemplo, la impugnación de la Ley Antidumping de 1916.  Pregunta: ¿Podrían informarnos 
que aspectos del sistema impugnados  en la OMC no han sido resueltos en este periodo o aún no hayan 
sido plenamente implementados?  
 
10. En la página 61, párrafo 116 , el informe indica que las restricciones cuantitativas con fines 
comerciales en vigor afectan principalmente al sector de los textiles y el vestido. Pregunta: ¿Qué otros 
sectores se encuentran actualmente afectados a este tipo de restricciones?  
11. En la página 81, párrafo 195,
 el informe hace referencia a que los Estados Unidos mantienen 
un programa de devolución de derechos , a través del cual se reembol san derechos de aduana y algunos 
impuestos y gravámenes interiores resultantes de la importación.  Pregunta: ¿Podrían brindarnos 
mayor información acerca de esos im puestos y gravámenes interiores? 
 
12. En la página 82, párrafo 199,  el informe menciona que en la última notificación plena de los 
Estados Unidos (Octubre de 2005) presentada en el marco del párrafo 1 del artículo XVI del GATT de 
1994 y el artículo 25 del Acuerdo sobre Subvenciones y Medidas Compensatorias, se enumeran 375 programas de subvenciones, mientras que en la an terior notificación (2002) la cantidad había sido de 
220.  Preguntas: ¿Podrían indicar en que consiste n tales programas? ¿Que productos específicos se 
encuentran afectados por estas subvenciones? 
 
13. En la página 85, párrafo 210,
 el informe hace referencia al  Programa de Asistencia a las 
Empresas para el Ajuste al Comercio, que forma parte de un programa más amplio que presta también 
asistencia a los trabajadores y los agricultores. Si bi en se detallan los plazos de vigencia y el monto de 
la ayuda del programa, no surge sobre que bases se aplica y que industrias son las beneficiadas por 
dicho programa.  Pregunta: ¿Podrían explicar de manera  más detallada estos últimos puntos? 
 14. En la página 100, párrafo 262,
 el informe menciona que, en uno de sus informes anuales, la 
Comisión Federal de Comercio (FTC) indica, con respecto al sistema de patentes en los Estados 
Unidos, que existe preocupación sobre la calidad  de las patentes y las normas y procedimientos 
jurídicos ya que pueden tener efectos anticompetitivos y aumentar los costos. En este informe, la FTC 
recomendó una serie de modificaciones tales como nuevos procedimientos administrativos que permitan el examen de las patentes, la oposición a las mismas con posterioridad a su concesión, el 
aumento de la participación de terceros en los ex ámenes, la mejora de determinadas normas jurídicas 
utilizadas para evaluar si una patente es obvia;  la consideración del posible perjuicio a la competencia          WT/TPR/M/160/Add.1 
Page 35 
 
 
antes de ampliar el alcance de materia patentable.  Pregunta: ¿Dichas recomendaciones fueron 
implementadas y, si fuera el caso, cual fue su resultado 
 
15. En relación con lo menciona do en la página 112, párrafo 27  Pregunta: ¿Prevén los EEUU 
presentar las rectificaciones de las notificaciones, pasando los pagos directos de la caja verde a la 
caja ámbar conforme lo estableció el OSD en el panel de Algodón? ¿Cuál es el monto total y los años 
en que dichos pagos se han producido? 
 
16. En relación con lo establecido en la página 117, párrafo 47  Pregunta: ¿cuál ha sido en los 
últimos 10 años el volúmen de exportaciones sujeto  a créditos, garantías y seguros a la exportación? 
¿Cuál ha sido la suma entregada en virtud de eso s programas en los últim os 10 años? ¿Y a cuánto 
asciende el subsidio? 
 
17. En relación con el pá rrafo 53 de la página 118  Pregunta: ¿De qué medidas dispone los EEUU 
para asegurar que la ayuda alimentaria prestada mediante sus planes  no se encuentre directa o 
indirectamente vinculada a sus exportaciones? 
 
18. En la página 143, párrafo 140,  el informe menciona la impl ementación del  Fondo de Capital 
para la Construcción y del Fondo de Reserva para la  Construcción, por el cual los propietarios o 
arrendatarios estadounidenses de buques pueden obtener  ventajas fiscales para construir buques que 
reúnan las condiciones prescritas.  Pregunta: ¿Podrían brindar más info rmación sobre el tipo de ayuda 
que proporcionan estos fondos? 
 
19. En relación con la aprobación por parte de lo s Estados Unidos de la importación de bienes 
agrícolas, la Argentina observa con preocupación la existencia de demoras injustificadas en los 
procedimientos de aprobación de productos agr opecuarios o en los reconocimientos de las 
regionalizaciones realizadas. Si bien la Argentina reconoce el derecho de los Miembros de adoptar 
niveles de protección más elevados del que se lograría mediante la aplicación de normas internacionales, resalta el hecho de que en estos casos debe existir evidencia científica suficiente. 
Pregunta: ¿Pueden los EEUU explicar sobre cuáles evidencias científicas justifican el excesivo tiempo 
que dedican a investigar la existencia o no de  determinada patología?; ¿podrían los EEUU acortar 
esos plazos teniendo en cuenta los est ándares internacionales (OIE-CIPF-Codex)? 
 
20. Teniendo en cuenta que los pagos directos son subsidios di storsivos y dado que no se redujeron 
otros subsidios distorsivos. al sumar todos estos subsidios, Pregunta: ¿los EEUU podrían confirmarse 
han superado el límite consolidado de la caja ámbar? 
 21. Pregunta: ¿Realizan los EEUU evaluaciones previas del impacto de las ayudas alimentarias, 
que no sean realizadas en emergencia, de modo ta l de asegurar que no dañen o menoscaben el 
comercio de terceros países o a los productores de l país receptor? En su caso ¿cuáles son esas 
evaluaciones? 
 
KOREA 
Trade Policies and Practices by Measure 
 
Measures directly affecting imports- Antidumpi ng and Countervailing actions – Legislation and 
administration (Byrd Amendment)  
 1. We welcome the news in paragraph 79 on page 38 of the Secretariat Report that Legislation to 
repeal the Byrd Amendment was passed by both  houses in Congress and would be soon presented to 
the President for signature.  Despite the ongoing US le gislative developments to comply with the WTO 
adjudication against the Byrd Amendment, it is re ported that a certain Korean exporter, who was 
determined to have committed dumping in a prel iminary anti-dumping investigation by the U.S. WT/TPR/M/160/Add.1 
Page 36  
 
government, was asked to pay for the anti-dumping bond required by the Byrd Amendment. We also note from other sources that the amendment will be ineffective only after October 2007 in accordance 
with the recently drafted transitional clause. 
 
 We would like to know what is a specific ti meframe that the US government is planning to 
 complete the process for repealing the Byrd Am endment. Please confirm that the legislation to 
 repeal the Amendment includes transitiona l clause mentioned above. If so, does the US 
 government have any plans to rectify the distortions caused by it during the transitional period, 
 like the Korean export’s case?   
 Measures directly affecting imports- Standa rd and technical regulations -standards 
 
 
2. We note that the U.S. distributors of home a ppliances require the UL sign to be marked on the 
products. It takes 6 months to 1 year to complete  such certification procedure, thereby working as a 
barrier to many foreign exporters. According to Pa ra 137-138 on page 52 of the Secretariat’s report, 
under the Trade Agreements Act of 1979, U.S. federa l government agencies are required to “take into 
consideration” international sta ndards when developing standards, and if appropriate, to base the 
standards on international standards. And the Act al so call upon the U.S. President to take reasonable 
measures to promote the observance by State agenci es and private persons of requirements equivalent 
to those imposed on federal agencies in carrying out standards-related activities.  
 
 Please provide us with information to what extent such requirements or standards as UL 
 certification are based on standards developed by international organizations. Does the U.S. 
 government have any future plans to recognize fo reign quality certification to be equivalent to 
 that of UL Mark? 
 
3. With regard to the development of voluntar y consensus standards described in para. 141 on 
page 53 of the Secretariat report, please explain what  is a criteria for government agencies to choose to 
participate in the development of certain standards a nd what is the role of the agencies in the process?  
 
Trade Policies by Sector 
 Financial Services – Legislative and regulatory framework-Banking services
 
 
4. We understand as described in in para 69 on page 97 of the Secretariat report that the US 
maintains a general policy of national treatment towa rds foreign banks with some exceptions reserved 
as market access restrictions in the GATS. We note that  there are some restrictions on foreign bank's 
retail financing business. Please explain what is the reason for imposing such restrictions and provide 
us with information on whether there are further restrictions on sales activities, namely on the amount 
of net liability and etc, related to fo reign bank's retail financing business. 
 
Financial Services – Legislative and re gulatory framework- Securities services  
 
5. Paragraph 79 on page 99 in the Secretariat Report indicates that foreign investment advisors 
are subject to monitoring by the SEC concerning th e compliance with the Investments Advisers Act of 
1940. 
  Please provide us with information in more  detail regarding the monitoring process on 
 investment advisors residing outside the U.S.  Does the SEC consider related provisions of the 
 country of the advisor's residency when it m onitors the compliance of foreign investment 
 advisors residing outside the U.S. with the Act ? Are there any preliminary MOUs signed by 
 the SEC and foreign supervisors?  
          WT/TPR/M/160/Add.1 
Page 37 
 
 
Financial Services – Legislative and re gulatory framework- Insurance services  
 6. With regard to paragraph 88 on page 101 of the Secretariat report, it is known that the U.S. 
allows cross-border transactions in insurance servi ces.  Please provide us with information on how 
significant is the cross-border transactio n out of the total insurance services. 
 
7. The Paragraph 90 on page 101 of the Secretariat report indicates that NAIC is in the process of 
streamlining and consolidating insu rance supervisory systems from di fferent states.  When will this 
process be finalized?  What's the ultimate  objective of this consolidation work? 
 Telecommunication Services – Institu tional framework and market access
 
 
8. Regarding paragraph 96 on page 102 of the S ecretariat’s report, please clarify whether resellers 
who provide services by leasing equipments from ba sic telecommunication carriers should also have a 
common carrier radio license to supply wireless services.   Does the foreign participation limit (Section 
310(b)(3) of the Communication Act) also apply to resellers supplying wireless services?  Please provide the number of the companies that have r eceived authorization to exceed the 25% foreign-
ownership benchmark of Section 310(b)(4) of th e Communication Act?  How many resellers are 
included among those companies?  
Telecommunication Services – Selected regulatory i ssues - public interest analysis and regulatory 
standards  
 
9. With regard to the para 99 on page 104 of the Secretariat’s report, what are the requirements 
for a foreign company to obtain a submarine cable  landing license? Should the foreign company have 
commercial presence in the U.S.?  EUROPEAN COMMUNITIES 
I.
 RECENT ECONOMIC DEVELOPMENTS  
WT/TPR/S/160-1 
 
In paragraph 4, it is stated that “government sp ending…trended downwards un til the first quarter of 
2005.” This analysis seems slightly misleading to us, as the figures in table 2 suggest that spending 
continued to grow in absolute terms (only the rate of growth declined). Could the US please clarify the 
correct facts?  
II.
 DEVELOPMENTS IN TRADE AND INVESTMENT POLICY  
1. TRADE IN GOODS  
(2) MEASURES DIRECTLY AFFECTING IMPORTS  
Leather and Footwear  
 
WT/TPR/S/160-3; p. 32, para. 48-52 
 
 The share of non-ad valorem tariff lines has declined  from 12.2% of all lines in 2002 to 10.6% in 2004.  
Although slightly more than half of comparable non- ad valorem tariff lines reco rded declined between 
2002 and 2004, on average non-ad valorem tariffs conti nue to afford higher protection than ad valorem 
duties.  In 2004, the average of ad valorem e quivalents of non-ad valorem tariff rates was 10.7%, 
compared with 4.3% for ad valorem duties.  Non-ad  valorem tariff rates apply mainly to agricultural 
products, footwear and headgear, watches, and precision tools. 
 
• Within the schedule, the non-ad valorem duties are hi gher than the ad valorem duties.  What are the 
US’ plans to shift to ad valorem rates? 
 WT/TPR/M/160/Add.1 
Page 38  
 
Some 5.5% of all tariff lines had MFN rates exceeding 15% in 2004.  The products subject to the highest ad valorem or ad valorem equivalent rate s were tobacco (350%), whey (284%), sour cream 
(177%), and peanuts (164%);  in the non-agricultural sector, the highest rate was applied to footwear 
(58%). 
 
• Footwear is subject to particularly high tariff p eaks. We would like to the reason for maintaining 
such high rates on footwear imports considering th e limited footwear industry in the US ? What are 
the US  plans to dismantle such peaks? 
 
Textiles and Clothing
 
 
WT/TPR/S/160-3; p. 30, para. 3 
 
The MID for textile and apparel creates discrimin ation compared to other manufactured products 
exported to the US, as it is by far more stringent than for other products. These measures are having a 
severe and unjustifiable impact upon the EU industry' s ability to sell its tex tile and apparel products 
into the US market. 
 
Contrary to common and accepted practice of identif ying the vendor as the manufacturer since the 80's 
through a codification system, the new MID for te xtile and apparel is in breach of commercial 
confidentiality rules. The MID structure allows an y importer or buyer to access the exact address of the 
manufacturer of a product, through the obligation, for the first data entry of the new MID, to provide on 
the invoice the complete address of the manufacturer in order to check whether the syntax of the MID 
is correct. 
 
• What are  the objectives the new 'MID' requirement seeks to serve? 
 
•  Could the US inform WTO Members on the methods  it used prior to the introduction of the 'MID' 
in order to identify the origin of textile and apparel products? 
 
•  Could the US  confirm that prior to the introduction of the 'MID' a mere certificate of origin was 
sufficient  for customs clearance without any refe rence to the name and address of manufacturer? 
 
• Could the US  confirm that the 'MID' requirement is imposed on US  based importers in the sense 
that it is them who must provide all the necessar y information (name pf manufacturer, address, etc) 
as a condition for importation? 
 
According to the Federal Register, Volume 70, No. 192 of October 5, 2005, Rules and Regulations, 
page 58014, 'importers must be able to demonstrat e to CBP their use of reasonable care in determining 
the manufacturer'.  
 
• Could the US  inform the body as to the exact met hods to be used to verify that the importer has 
constructed the 'MID' correctly and according to the relevant instructions a nd, thus, has determined 
accurately the manufacturer? 
 
•  Is it correct that for the first entry of the new 'MID' US based importers are bound to provide on the 
invoice the complete address of the manufacturer of the product in order to allow US customs 
services to verify that the construction of the 'MID ' is correct according to the relevant rules and 
instructions? 
 
According to the Federal Register as above, 'if an en try filed for such merchandise fails to include the 
MID properly constructed from the na me and address of the manufacturer, the port director may reject 
the entry or take other appropriate action'.          WT/TPR/M/160/Add.1 
Page 39 
 
 
• Can the US inform whether the port direct or is bound under circumstances of incorrect 
construction of the 'MID' to prohibit customs cl earance of the relevant goods?  Also can the US 
inform the body on what other action may be take n by the port director in such circumstances? 
 
• Could the US  explain why same requirements as the 'MID' do not apply to other products but only 
to textile and apparel products? 
 
• Could the US  inform whether the 'MID' requirement  applies to textile and  apparel products from 
all countries without exception? If not, could the US  specify those countries that are excluded from 
this particular measure, the reason for any such  exclusion, and the compatibility of any such 
exclusion with WTO rules? 
 
• Could the US finally explain how this MID require ment is compatible with rules on protection of 
commercially confident information? 
 
Foreign investment regime  WT/TPR/S/160,  page 22 
• Paragraph 44: How do the US view the implementation of the Exon-Florio statute, which aims to 
ensure that national security concerns are resp ected in takeovers and mergers involving foreign 
firms? How do the US view the prospects for further legislation? 
 
Competition policy 
 
In Chapter IV (Trade Policies by Sector ) paragraphs 102-103 the Secretariat Report  summarises the 
“international settlements policy of the Federal Communications Commission (FCC). The FCC policy 
is a unilateral approach to deal with a problem wh ich is in fact global: the fact that operators in 
countries which have not yet or were late in liber alizing their markets will use their dominant position 
as regards the termination of international calls  on these countries to “overcharge” their services. 
 
• Why did the FCC not initiate discussions with other jurisdictions in order to set up a joint approach 
to this global problem? 
 
In Chapter IV paragraphs 108- 112 the Secretariat Report  refers to the December 2004 approach of the 
FCC as regards access obligations imposed on the incumb ent local exchange carriers (ILEC).  In this 
regard the FCC has not imposed any access obligation to the high-frequency portion of the local loop 
used for line sharing, relying on the state of  intermodal competition for broadband services (see 
paragraph 111 of the report). 
 
• Does this approach not favour a duopolistic market  structure and limit the opportunities for foreign 
undertakings - who cannot reach an attractive deal  with neither of both the ILEC and the cable 
operators - to enter the US market? 
 2.
 TRADE IN SERVICES  
Environmental services 
• Could the US  clarify the origin (legislation, re gulation, other) and scope of footnote 38 in its 
schedule, that limits commitments to certain activities despite the US use of CPC codes? 
•  In particular, could the US  confirm which sp ecific services are actually covered for each CPC as a 
result of the limitation of the footnote?  WT/TPR/M/160/Add.1 
Page 40  
 
Legal services  
 
• The US requires a Foreign Legal Consultant (FLC) to have X years of experience in practising law 
preceding his or her registration as an FLC.  Could the US explain what requirements have to be 
met by US citizens (either lawyers or not) in or der to provide advice on foreign and international 
law? 
 
• Could the US please provide a reply to the following question raised in the last TPRM exercise and 
not yet answered: 
 According to the report by the WTO Secretariat (pages 156 to 162 of 2004 TPRM) , the Federal 
Government has the power to negotiate framework ag reements with trading partners with respect to 
professional and business services under which mutual recognition arrangements (MRAs) are 
negotiated, but the MRAs are negotiated by repr esentatives of the professions and other competent 
authorities (members of state licensing boards, national associations of state boards or other such organizations). The report mentions a number of arrangements that have already been concluded or that 
are being discussed. 
 
• Could the US indicate whether, in the negotiati on of such MRAs, these representatives of the 
professions and other competent authorities do exercise powers delegated to them by central, regional or local governments or authorities within the meaning of article I.3.(a)(ii) of the GATS so 
that the arrangements can be considered as mutu al recognition agreements concluded by the US as 
a member of the WTO? 
 
• If the answer to the preceding question is negativ e, could the US indicate whether, once it notifies 
those arrangements under Article VII of the GATS, the US, by way of such notification, become, 
as a WTO member, bound by those arrangements under international law? 
 
• If the answer to the two preceding questions is nega tive, taking into account that the US are able, as 
a WTO member, to undertake commitments in r espect of professional and business services and in 
developing disciplines on domestic regulation under article VI of the GATS, could the US indicate 
which are the reasons that prevent them from ne gotiating, as a WTO member, MRAs in respect of 
professional and business services under article VII of the GATS? 
 
Telecom services  
• The US  may wish to provide some basic informa tion on the latest developments in their domestic 
regulatory framework for different types of ser vices.  More specifically, we refer to recent 
regulations on grouping of telecommunications ser vices into different categories (basic-information 
services).  In particular, what type of services are covered in each category and what type of 
regulations are applied for each category. As th ese distinctions are being reflected in the US 
Revised Offer it will be particularly useful to  provide such information to ensure a better 
understanding of what is applied in each case. 
 
Although according to the US, there is no precedent fo r the US not to grant an application for an 
authorisation for the provision of telecommunicati ons services, the requirement to conduct a public 
interest analysis of applications involves the a pplication of a condition for issuing a licence which 
could raise questions on the level of objectivity and transparency, and on whether such level 
corresponds to the expectations of the applicants.  The latter need to be ensured that as long as they 
fulfil certain conditions required for granting a licen ce that such licence will be granted to them. In 
order to have a clear view of which conditions apply before an application is filed, conditions need to 
be objective, not ambiguous, and transparent.           WT/TPR/M/160/Add.1 
Page 41 
 
 
• The public interest analysis requirement raises the question as to whether it provides all necessary 
safeguards to applicants and effectively eliminates any risk for reaching arb itrary decisions in the 
course of examining an application for a licence. 
 
Construction services  
 
• What is the US regulatory regime applicable to dredging works? In which conditions may a foreign 
dredging company undertake dredging works in the US? (S5160-4). 
 
Energy services  
 
The report also suggests adopting measures at the se ctoral level to enhance competition, including in 
telecoms and electricity.  
 
• What is the US regulatory framework for transmission, distribution and supply of electricity? 
 
• What does the US plan to enhance competition in that sector? (S5160-3 § 224). 
 
Maritime Transport 
 
• Could the United States provide some information re garding the waivers that have been granted to 
foreign vessels for maritime transport services in domestic water-borne trade? 
 
• As it appears from the report (page 109), about 98% of international maritime  transport of the US 
is carried on foreign-flag vessels.  Could you c onfirm that within the framework of the current 
legislatory framework the United States do not appl y restrictive measures with regard to market 
and/or national treatment?  If this is not the case could the United Stat es specify which market 
access and/or national treatment limitations are applied within the meaning of Articles XVI and XVII GATS? 
 
Postal and Courier services 
 
• Could the United States specify the regulatory provisions regarding the treatment of parcels and 
packages and the extent to which foreign operators are allowed to provide the activity of collection, 
sorting, transport and delivery of parcels and packages. 
 
• Could the United States specify the regulatory provisions regarding the treatment of outbound 
letters and the extent to which fo reign operators are allowed to pr ovide the activity of collection, 
sorting, transport and delivery of outbound letters. 
 
• Could the United States specify the regulatory provisions regarding the delivery of hybrid mail and 
the extent to which foreign operators are allowed to provide this activity. 
 
3.
 GOVERNMENT PROCUREMENT  
WT/TPR/S/160, page 71ff 
 
Paragraph 231 :  In 2003, the General Accounting Office has expressed concerns as to reliability of the 
data contained in the FDPS (Federal Procurement Da ta System);  these concerns seem to have been 
reiterated in 2005 for the FDPS-NG (Federal Procurem ent Data System-New Generation) and seem to 
exist since the system was put into operation. 
 WT/TPR/M/160/Add.1 
Page 42  
 
• In these circumstances, what measu res have been taken to ensure reliability of the data? (Sources: 
http://www.gao.gov/new.items/d05960r.pdf
 and http://www.gao.gov/new.items/d04295r.pdf ). 
 
• Paragraph 231 :  What is the situation of State procurement as to statistical reporting?  How are 
obligations reported? Could the US  provide data for contracts awarded to Small businesses at State 
level?  
 
In paragraph 236 , it is mentioned that several FAR amen dments were adopted to implement new 
legislation (Veterans Benefit Act of 2003, the C onsolidated Appropriations Act of 2005, and the 
Services Acquisition Reform Act of 2003).  
• What is the purpose and content of these am endments? Do they apply to GPA covered 
procurements? 
 
In paragraph 237 , it is stated that US regulations allow fo r the preparation of list of suppliers by a 
federal government agency provided that the agen cy prepares a written justification explaining the 
circumstances for the need of such list.  
• Can the US  explain the justifications which should be given in order to allow a federal agency to 
use and maintain such lists?  Would a supplier who is not on a list but who fulfils all the requirements to participate in a particular procur ement covered by that lis t be allowed to tender? 
Furthermore, it is indicated that a number of 37 States covered by the GPA use lists of qualified 
suppliers when tendering for certain types of proc urement;  Can the US indicate how many states 
and which ones use such lists?  Can the US also  indicate the type of procurement concerned? 
 
In paragraph 238  (Central Contractor Registration (CCR)): 
• it is indicated that "as of August 2005, there were some 373,000 government vendors registered 
with the CCR, of which 10,030 were foreign firms":  are these foreign firms established in the US  
or outside the US? 
 
• Can a foreign company established outside of the US  acquire rapidly, easily and at no/low cost the 
information needed to register?  Can the US id entify the information an d describe the process to 
acquire them? does it also encompass any type of business certificates/attestations? If so, how is it 
stored in the register? is this informa tion public? if not, who has an access to it? 
 
• Is any type of electronic signature required al ong the process of registration? If yes, what kind? 
How long does the registration take before becoming operational in the case of a company which is 
a newcomer on the US market? At state level does a similar system exist? If yes, in how many 
States and which ones? 
 In paragraph 241 : it is indicated that the Buy Amer ican Act does not apply to services. 
 
• Does this mean that there are no restrictions for fo reign service providers to participate in a service 
procurement in the US? If not, can the US explain the types of restrictions applied and the rules 
applied to determine the origin of a service?   
 
• In paragraph 246 , can the US provide more information on  the so called "new reciprocity policy"? 
 In paragraph 247 , it is stated that "The Small Business Act (P.L. 85-536), as amended, requires, in 
principle, each contract with an anticipated valu e greater than US$2,500 but less than US$100,000 to 
be reserved exclusively for small business concerns". 
          WT/TPR/M/160/Add.1 
Page 43 
 
 
• Are there any measures in favour of small businesses fo r contracts with an anticipated value greater 
than US100,000?  
 
4. INTELLECTUAL PROPERTY RIGHTS  
TRIPS and Public Health 
In paragraph 252 , the US refer to a number of FTAs it has al ready concluded and indicates that it is 
committed to a policy of promoting increased IPR protection.   
• Can the US explain how IP provisions of bilatera l agreements concluded for instance with Chile, 
Jordan and Singapore enable those countries to ma ke use of the flexibilities provided for in the 
Doha Declaration on the TRIPS Agreement and Public Health? 
 
In paragraph 260 , the report recalls that the US  is supportive of the solution agreed in August 2003 
that waived the export restriction in TRIPS Artic le 31(f), under certain conditions, so medicines 
purchased under compulsory licences could be supplie d to countries that have insufficient or no 
capacity for pharmaceuticals.   
• Can the US indicate which steps it has already taken to allow US manufacturers of generic 
pharmaceuticals to produce patented medicines for e xport to countries in need without sufficient 
capacity to produce them? 
 
Patents 
In paragraph 255, the report states that patents are gr anted by the US PTO using the first-to invent rule 
that the US is the only WTO Member to use. 
 
• Can the US indicate which steps it has already take n in order to introduce the first-to-file rule for 
patent registration in order to align its pate nt system with that of other WTO Members? 
 
Geographical Indications 
Method of implementing the TRIPS provisions on GIs in the US: 
 under section d) “Geographical Indications” of the “T rade-related intellectual property rights” section 
of the report by the Secretariat, it is stated that the United States offers protection for GIs through its 
trade mark system, including collective and certification marks. 
• Please explain the way in which  trade marks, in cluding collective and certification marks, protect 
holders of geographical indications against uses of their geographical indications on goods not 
originating in the place indicated by the geographi cal indication in question. In particular, please 
explain this with respect to situations in which the geographical indication is used on goods of the 
same class not originating in the place indicated by the geographical indication in question together 
with the true origin of the goods, or the geographical indication is used in translation, or accompanied by expressions such as “kind”, “type” or the like. 
• Could you please provide an example of a GI protected  in the US  that has b een able to prevent the 
US from the of the GI in translation on goods not originating in the place indicated by the GI? 
• Please indicate the type of characteristics of a product that certification marks may be able to 
certify. Please provide figures (in percentage with  respect to the total number certification marks 
granted) on how many certification marks registered in the US   are used to certify regional or other 
origin. WT/TPR/M/160/Add.1 
Page 44  
 
• Could you please provide an example of a GI protected through a certification mark in the US and 
corresponding to an area located in the US, summarizing the qualities, reputation or other 
characteristics of the good that are essentially attr ibutable to its geographical origin and which 
justify that the indication in question is not simply a certification mark of regional origin, but a geographical indication? Please provide informa tion as well on how the link between the regional 
origin and the qualities or characteristics of the goods are ascertained. 
• Is it possible for consumers in the US to distinguish  certification marks of regional origin where the 
goods certified do not have specific qualities, re putation or other characteristics essentially 
attributable to their geographical origin, from certification marks used to protect geographical 
indications? 
• We understand that recognized viticultural areas ar e also available as methods of protection of 
geographical indications in the US. Are all rec ognized viticultural areas in the US geographical 
indications? Could you please provide inform ation on the qualities, reputation or other 
characteristics of the wines that are considered to grant recognition as recognized viticultural areas 
in the US ? 
Proposal for a multilateral system of notificati on and registration of GIs for wines and spirits:  
the report by the Secretariat refers  in its section d) “Geographica l Indications”, under “Trade-related 
intellectual property rights”, to a proposal submitted by the US  for a multilateral system of notification 
and registration of GIs for wines and spirits, which we  understand is contained in  its latest version in 
TN/IP/W/10  
• Please explain how the voluntary nature of your pr oposal for a multilateral system of notification 
and registration of GIs for wine and spirits can be in line with Article II.2 of the Marrakesh 
Agreement establishing the WTO, which states that the agreements and associated legal 
instruments included in Annexes 1, 2 and 3 of th e Agreement, which include the TRIPS Agreement 
in Annex 1 C, shall be binding on all Members. 
• Please explain how your proposal ensures the reliability of the information made available on the 
searchable database of GIs. In particular, pl ease indicate how the system would deal with the 
possible notification of an identical name by tw o or more Members, and also how it would deal 
with absence of information with regard to the wa y in which the notified GIs are protected in their 
country of origin, including the question of the date in which the GI obtained protection and the 
date, if any, in which protection will expire. 
• Please explain the way in which your proposal in tends to ensure that both administrative and 
judicial authorities take account of the inform ation posted on the searchable database proposed. 
Please explain as well how administrative and judici al authorities would act if they ascertained that 
the information available on the searchable da tabase of GIs was unreliable, inaccurate or 
incomplete. 
5.
 TRADE POLICY STRATEGY  
Trade policies 
 
Bilateral, regional and global trad e liberalisation is vital for pr omoting prosperity, growth and 
development to the benefits of the world at larg e.  The EC considers that the WTO and multilateral 
liberalisation is the most certain way for promo ting global interests for industrialised countries and 
developing countries at large.            WT/TPR/M/160/Add.1 
Page 45 
 
 
• How does US judge the relative importance and we ight of bilateral/FTA policies and further 
development of the WTO system in terms of its own trade and development needs? 
 
• To what extent has the US analysed and compared  the efficiency and level of economic benefits 
delivered by bilateral trade agreements by comp arison with multilaterally agreed liberalisation? 
What have been the specific results of such analysis? 
 
• The EC would like to know more about the US’ strategy for RTAs. In particular, the EC notes that 
the US appears to follow a rather homogenous m odel for RTAs irrespective of the levels of 
development of its counterparts which includes ve ry long transition periods, including for the US 
itself, and with no, or very limited, asymme try in commitments between the US and its less 
developed partners. The EC would also appreciat e if the US could confirm their obligation to 
"provide a full explanation to the Council for Tr ade in Goods of the need for a longer period". 
 Sustainable development/trade and social development  
The EC welcomes the US’s emphasis on sustainable economic growth and sust ainable development. 
Looking at the overall policies of the US: 
 
• What plans do the US have for adoption of polic y strategies in order to enhance sustainable 
development? Does the issue of trade and sust ainable development fit into the US’ overall 
development strategies? 
• How do the US  assess the possib ilities for increasing trade and development while ensuring 
environmental sustainability? Do the US curre ntly have a specific plan addressing this? 
The EC welcomes the detailed information provided on trade and labour issues. 
• The bilateral FTAs of the US systematically incl ude provisions related to social issues and labour 
rights. Do the US already have some experi ence to share with these provisions and their 
enforcement? 
• Are the US taking initiatives aimed at ensuring r espect for Core Labour Standards and promoting 
decent work in Export Processing Zones (EPZs) in third countries? 
• Are the US promoting Corportate Social Responsibility (CSR) initiatives in third countries? Do 
these initiatives include the promotion of Core Labour Standards? 
The importance of linking trade with sustainable dom estic policies, and in particular employment 
related matters and core labour st andards, was confirmed by the Final Report of the World Commission 
on the Social Dimension of Globalisation of February 2004. 
• How do the US  assess the conclusions of the report with regard to trade policy? 
• How will the US contribute to the folllow-up of  the recommendations of the World Commission? 
• How will the US contribute, including with its trade policies, to the promotion of fair globalisation 
and the promotion of decent work for all (as defi ned by the ILO) in line with the September 2005 
UN Summit (§47)? WT/TPR/M/160/Add.1 
Page 46  
 
MEXICO 
II EVOLUCIÓN DE LA POLÍTICA COMERCIAL Y DE INVERSIONES / 3) Participación en 
la OMC. 
 
1. Respecto de lo señalado en el párrafo 21, podría Estados Unidos explicar ¿porqué se ha 
retrasado en llevar a cabo las notificaciones de ayuda interna? 
 
II EVOLUCIÓN DE LA POLÍTICA COMERCIAL Y DE INVERSIONES / 4) Acuerdos 
Preferenciales y de otra índole / ii) Acuerdos de Libre Comercio. 
 2. En el párrafo 28 se menciona que Estados Uni dos y Jordania negociaron un TLC en el cual la 
liberalización del sector servicios se dio bajo un en foque de “listas positivas”. México está interesado 
en conocer la razón por la cual se utilizó este enfoque para este TLC, ya que en el documento se 
menciona que Estados Unidos ha negociado sus acuerdos comerciale s bajo el enfoque de “listas 
negativas”. 
 
3. ¿Cuál es la posición del Gobi erno de Estados Unidos respecto a la disconformidad que hay por 
parte de algunos sectores económicos y sociales que se oponen a la creación del Área de Libre 
Comercio para las Américas?  
III. POLÍTICAS Y PRÁCTICAS COMERCIALES POR MEDIDAS / 2) Medidas que afectan 
directamente las importaciones / i) Régimen aduanero y normas de origen / c) Iniciativa de 
Seguridad de los Contenedores.  4. El párrafo 25 de la sección 2) “Medidas que afectan directamente a las importaciones” señala que la “Iniciativa de Seguridad de los Contenedor es” (CSI) “consiste en la selección e inspección de 
contenedores de alto riesgo destinados a los Estados Unidos en el puerto de partida y la utilización de 
sellos que evidencian la manipulación”. El mismo pá rrafo da información sobre el funcionamiento de 
la CSI y sobre el número de puertos marítimos extran jeros que participan en la iniciativa (35 al 14 de 
abril de 2005). Recientemente (principios de marzo de 2006), en la página web de la CSI encontramos 
información complementaria en el sentido de que la  iniciativa se extenderá pronto a numerosos puertos 
alrededor del mundo (“ numerous other ports around the world”).  Al respecto, México desea preguntar 
si es posible tener más información sobre cuáles puertos marítimos se unirían a esta iniciativa. 
 5. En términos del procedimiento bajo la CSI,  el párrafo 25 explica que la revisión de los 
contenedores se lleva a cabo con “equipo de inspecci ón no intrusivo, inspección física o ambas cosas”. 
Sobre el particular: a) ¿Podrían los Estados Unidos dar más información sobre el tiempo que requiere el 
procedimiento, según el método utilizado, en el d espacho de mercancías?; b) ¿Opera de la misma 
forma para las mercancías en tránsito?; c) ¿Cuáles son las lecci ones que se podrían aprender en cuanto 
a la eficiencia de los sistemas automatizados de  manejo de riesgo establecidos en los puertos 
anfitriones, en términos de evaluación del riesgo? , y d) ¿Cómo se inscribe todo lo anterior en las 
negociaciones sobre facilitación del comercio?  III. POLÍTICAS Y PRÁCTICAS COMERCIALES POR MEDIDAS / 2) Medidas que afectan 
directamente las importaciones / ii) Aranceles /  b) Tipos arancelarios NMF aplicados. 
 6. Respecto de lo mencionado en el párrafo 49, ¿Podría Estados Unidos indicar si el motivo del 
arancel de 350% al tabaco es para proteger la sal ud humana, por cuestiones de recaudación, o por mera 
política comercial? 
           WT/TPR/M/160/Add.1 
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III. POLÍTICAS Y PRÁCTICAS COMERCIALES, POR MEDIDAS / 2) MEDIDAS QUE 
AFECTAN DIRECTAMENTE A LAS IMPORTACIONES / iv) Medidas Antidumping y 
Compensatorias /  a) Legislación y aplicación. 
 7. Sobre la Unidad de Análisis y Asesoramiento ( Petition Counseling and Análisis Unit ) descrita 
en el párrafo 72, podrían lo s Estados Unidos responder si: 
  a) Esta asesora a las empresas estadouni denses que presentan solicitudes de inicio; 
facilitándoles datos de comercio y de aranceles.(según el sitio web del ITA) ¿Cuál es el presupuesto de 
ésta unidad? ¿Mantiene esta unidad un directorio de  empresas estadounidenses, disponible para que lo 
consulten las empresas interesadas en presentar una solicitud? 
  b) En ese mismo sitio de Internet, en la se cción de preguntas frecuentes, menciona la sección 
771(4)(E) de la Ley de Comercio de  los Estados Unidos, según la cual los cosechadores o recolectores 
de productos agrícolas pueden hacer una solicitud en  contra de un producto agrícola terminado, en 
conjunción con los procesadores de dicho producto terminado
3.¿Podría Estados Unidos explicar cómo 
funciona esta disposición, y en cuantos casos de pr oductos agrícolas se ha utilizado? ¿Cuáles de éstas 
se han traducido en la imposición de de rechos en las determinaciones definitivas? 
 8. El párrafo 73 menciona que el Departamento de Comercio de los Estados Unidos está facultado 
para iniciar investigaciones por su propia iniciativa,  pero rara vez lo hace ¿Podría Estados Unidos 
decirnos cuántos inicios se han realizado bajo la iniciativa del Departamento de Comercio? ¿Cuáles de 
éstos se han traducido en la imposición de derechos en las determinaciones definitivas? 
 9. Sobre la Enmienda Byrd (párrafos 74, 77, 78, 79) ¿Hasta qué fecha se distribuirán las cuotas 
antidumping y compensatorias recolectadas? ¿Dis pone Estados Unidos de información sobre los 
montos recolectados y distribuidos en el 2005? ¿Qué  fuente de información o fuentes de información 
oficiales están disponibles para que el  público pueda consultar estos datos? 
 10. Los párrafos 81 al 84 y el cuadro III.3 pr esentan estadísticas útiles y relevantes sobre la 
aplicación de medidas Antidumping. En particular, al final del el párrafo 83 me nciona que el valor de 
las importaciones afectadas por las medidas antidum ping entre 1980 y 2003 representa el 0.4% de las 
importaciones totales. Existe un número de estudios académicos que confirman la intuición de que el 
comercio de las mercancías sujetas a este tipo de  medida se reduce significativamente no sólo durante 
su vigencia, sino también incluso a partir del momento en que se inician las investigaciones, lo que se 
denomina comúnmente como el “Chilling Effect” de l Antidumping. Para tener una idea más real del 
efecto de tales medidas, creo que sería útil contar con información sobre el comercio de los productos 
sujetos a estas medidas, antes y después de su aplicación. Para lo s productos que están actualmente 
sujetos a cuotas antidumping y compensatorias, y qu e no estuvieron sujetos a dichas cuotas en ningún 
momento durante el periodo 1996-2001, ¿Podría fac ilitarnos Estados Unidos las importaciones anuales 
para el total de dichos prod uctos en el periodo 1996-2005? 
 
III. POLÍTICAS Y PRÁCTICAS COMERCIALES, POR MEDIDAS / 2) MEDIDAS QUE 
AFECTAN DIRECTAMENTE A LAS IMPORTACIONES / iv) Medidas Antidumping y Compensatorias /  c) Acuerdos de suspensión. 
 11. El párrafo 94 menciona que, al 31 de diciem bre de 2004, Estados Unidos mantenía vigentes 
dos compromisos de precios, esto comparado con 273 órdenes de imposición de  derechos antidumping. 
Los compromisos de precios son una alternativa de  solución a las cuotas Antidumping, que ha sido 
                                                     
 
3 “U.S. trade law does have a provision permitting ha rvesters of an agricultural product in certain 
situations to file a petition against a finished agricultural product in conjunction with the processors of that 
product. For more inform ation please see Section 771(4)(E) of th e Act.” la dirección de la página: 
http://ia.ita.doc.gov/pcp/pcp-faq.html. WT/TPR/M/160/Add.1 
Page 48  
 
poco aprovechada, y si es aplicada correctamente, elimina el daño cau sado a la industria doméstica por 
la práctica del dumping, a la vez que se minimiza n los efectos perjudiciales del antidumping para los 
Miembros exportadores. ¿Cuáles s on las razones más frecuentes por la que esta alternativa es 
rechazada por los Estados Unidos? ¿Qué condicion es se deben cumplir para que se pueda ofrecer un 
compromiso de precios? 
 
III. POLÍTICAS Y PRÁCTICAS COMERCIALES, POR MEDIDAS / 2) MEDIDAS QUE 
AFECTAN DIRECTAMENTE A LAS IMPORTACIONES / vii) Normas y reglamentos técnicos 
/ a) Participación de la OMC y acuerdos comerciales preferenciales. 
 
12. Respecto de lo mencionado en el párrafo 118, ¿podría Estados Unidos explicar con más detalle 
las razones por las que no se han identificado (y por  lo tanto, notificado) medidas subfederales 
propuestas?  13. Por lo que se refiere al párrafo 121, ¿podr ía Estados Unidos exp licar si los capítulos 
correspondientes a obstáculos técnicos al comercio  en los Acuerdos de Libre Comercio que ha 
celebrado recientemente o se encuentra negociando, ap lican al sector de bienes y también al de los 
servicios? En caso de que la respuesta sea negati va, ¿podría Estados Unidos explicar porqué no 
consideró procedente establecer reglas para las norma s y reglamentos técnicos aplicables a los servicios 
en dichos capítulos? (a diferencia del patrón seguido  en el capítulo XI del Tratado de Libre Comercio 
para América del Norte). 
 
III. POLÍTICAS Y PRÁCTICAS COMERCIALES, POR MEDIDAS / 2) MEDIDAS QUE 
AFECTAN DIRECTAMENTE A LAS IMPORTACIONES / vii) Normas y reglamentos técnicos 
/ b) Reglamentos técnicos. 
 
14. En cuanto a lo descrito en el párrafo 122,  ¿podría Estados Unidos indicar si pretende 
comunicar regularmente a los Miembros del Com ité de Obstáculos Técnicos al Comercio los 
Programas Reglamentarios Unificados y Planes de Reglamentación?  15. Con relación a lo señalado por el párrafo 123, ¿ podría Estados Unidos señalar si la expedición 
y elaboración de Leyes por parte del Congreso se encuen tra también sujeta a los principios de la Ley de 
Procedimiento Administrativo, cuando dichas leyes s on o contienen reglamentos técnicos, tal y como 
se encuentran definidos por el Acuerdo sobre Obstáculos Técnicos al Comercio? 
 16. Respecto de lo señalado en el párrafo 125, ¿podría Estados Unidos explicar si existe la 
obligación de elaborar manifestaciones de impacto regulatorio antes de proponer el desarrollo de un 
reglamento técnico? De ser así, ¿podría Estados Un idos explicar si dichas manifestaciones de impacto 
regulatorio están disponibles para el público (incluye ndo nacionales extranjeros) y en qué lugar?  En el 
caso de los análisis de costo-beneficio que se debe n presentar a la Oficina de información y Asuntos 
Reglamentarios de la OMC están disponibles para su  consulta y, en su caso, observaciones por parte 
del público?  
17. Por lo que se refiere al párrafo 126, México desearía conocer con más detalle ¿qué se entiende 
por “examen por homólogos”?  18. En cuanto a lo previsto por el párrafo 129, ¿ podría Estados Unidos indicar si tiene previsto en 
el futuro elaborar estadísticas sobre el grado de armonización de sus reglamentos técnicos con las 
normas internacionales? 
          WT/TPR/M/160/Add.1 
Page 49 
 
 
III. POLÍTICAS Y PRÁCTICAS COMERCIALES, POR MEDIDAS / 2) MEDIDAS QUE 
AFECTAN DIRECTAMENTE A LAS IMPORTACIONES / vii) Normas y reglamentos técnicos 
/ c) Normas. 
 19. Por lo que se refiere a lo señalado por el párra fo 140, ¿podría Estados Unidos explicar en qué 
casos los gobiernos pueden elaborar normas y cuál es la razón por la que 25 organismos públicos 
federales utilizan normas elaboradas por gobiernos?  20. Respecto del acuerdo entre los Estados Uni dos y las CE sobre practicas de elaboración y 
etiquetado de vino, descrito en el párrafo 143: 
 
 a) ¿podría Estados Unidos indicar cuáles serán  las implicaciones de ese acuerdo (en particular, 
de los reconocimientos de términos semi-genéricos  y términos regulados) pa ra las importaciones de 
vino de terceros países a su territorio?, y  
 b) ¿podría Estados Unidos indicar cuándo se tiene previsto iniciar la segunda fase de 
negociaciones y qué otras cuestiones comerciales relacionadas con el vino se abordarán en ellas?  
III. POLÍTICAS Y PRÁCTICAS COMERCIALES, POR MEDIDAS / 2) MEDIDAS QUE 
AFECTAN DIRECTAMENTE A LAS IMPORTACION ES / viii) Medidas sanitarias y 
fitosanitarias /  c) Ley contra el Bioterrorismo. 
 
21. ¿Podrían los Estados Unidos informar si existe n anteproyectos de modificación a la Ley contra 
el Bioterrorismo, o bien respecto de los regl amentos publicados por la FDA para aplicar las 
prescripciones de dicha Ley?  IV POLÍTICAS COMERCIALES, POR SECTORES / 3) Servicios financieros / ii) Marco 
legislativo y reglamentario b) Servicios bancarios. 
 
22. En el párrafo 68 se menciona a la Ley de Actividades Bancarias Internacionales de 1978 como 
la norma principal por la que se rigen las opera ciones de los bancos extranjeros en territorio 
estadounidense. Adicionalmente, tamb ién se menciona a la Ley Riegle -Neal sobre Bancos y Sucursales 
Interestatales de 1994, la cual pe rmite establecer sucursales en di stintos Estados mediante fusión o 
mediante el establecimiento de sucursales nuev as. México está interesado en conocer con mayor 
amplitud y detalle el contenido de dichas leyes. ¿E xistirá alguna página en Internet en donde se puedan 
consultar ambas leyes?   
23. En el párrafo 71 se menciona lo siguiente: “ …Además, existen pocas limitaciones al 
establecimiento de una sucursal o agencia federal por un banco extranjero…” México quisiera saber 
cuáles son esas “pocas limitaciones” a las que se hace referencia.  24. En el párrafo 73 se hace referencia a la ley "USA Patriot" que establece medidas nuevas y más 
amplias para prevenir, detectar y enjuiciar los actos  de blanqueo de dinero y terrorismo. ¿Podría dicha 
ley propiciar situaciones de trato discriminatorio  entre nacionales estadounidenses y extranjeros en 
cuanto a la prestación y establecimiento de servicios bancarios?  
IV POLÍTICAS COMERCIALES, POR SECTORES / 3) Servicios financieros / ii) Marco 
legislativo y reglamentario c) Serv icios relacionados con los valores. 
 
25. En el párrafo 76 se señala que los corredores y agentes extranjeros est án exentos en ciertas 
circunstancias de la prescripción de registro. México  está interesado en saber a que se refiere la frase 
“en ciertas circunstancias”.   WT/TPR/M/160/Add.1 
Page 50  
 
IV POLÍTICAS COMERCIALES, POR SECTORES / 3) Servicios financieros / ii) Marco 
legislativo y reglamentario d) Servicios de seguros. 
 
26. El párrafo 88 señala que trece Estados de la  Unión Americana no tienen un mecanismo que 
autorice la entrada inicial de compañías de seguros  no estadounidenses en calidad de sucursales;  pero 
podrían otorgar tales derechos si la compañía de seg uros ha obtenido licencia en otro Estado del país. 
¿Existe algún plan para eliminar ese trato diferencia do entre Estados para las compañías de seguros no 
estadounidenses?  
IV POLÍTICAS COMERCIALES, POR SECTORES / 5) Transporte Marítimo / i) Principales 
características y consideraciones de política de competencia.  
27. En el párrafo 118 se menciona que ESTADOS UN IDOS no incluyó los servicios de transporte 
marítimo en su oferta inicial de servicios. México está interesado en conocer la razón de dicha exclusión.  
 
IV POLÍTICAS COMERCIALES, PO R SECTORES / 5) Transporte Marítimo / iii) Comercio 
internacional por vía acuática. 
 
28. En el párrafo 122 se señala que los Esta dos Unidos han negociado acuerdos marítimos 
bilaterales con cuatro países. México quisiera c onocer la cobertura y alcance de dichos acuerdos.  
 
29. ¿Existe alguna limitación o trato discrimina torio para empresas extranjeras que busquen 
invertir en empresas estadounidenses que se dedican  al comercio internacional por vía acuática? 
 30. En el párrafo 126 se menciona que existe un Programa de Seguridad Marítima, el cual da 
apoyo financiero a la marina mercante estadouniden se, con el fin de asegurar que cierto número de 
buques de la flota comercial son aptos para us o militar y están disponibles para operaciones de 
transporte marítimo en tiempo de guerra o en situ aciones de excepción. México considera que dicho 
Programa podría causar distorsiones al comercio mar ítimo internacional, ya que con base en el apoyo 
financiero mencionado se podría pone r en desventaja a otras nacion es que estén compitiendo en este 
sector y que buscan condiciones de acceso no discrimin atorias. En este sentido, México solicita una 
explicación más amplia sobre este asunto. 
 
IV POLÍTICAS COMERCIALES, POR SECTORES / 5) Transporte Marítimo / v) Construcción 
naval y reparación de buques. 
 31. En el párrafo 138 se menciona que no hay restri cciones a la inversión extranjera en astilleros o 
instalaciones de reparación de buques de los Estados  Unidos, pero las prestaciones de determinados 
programas pueden estar supeditadas a prescripciones de nacionalidad. México está interesado en conocer si existe algún plan para  cambiar este trato diferenciado. 
 
IV POLÍTICAS COMERCIALES, POR SECTORES / 6) Servicios de Transporte Aéreo / i) 
Características principales. 
 
32. El párrafo 144 señala que los aeropuertos estadounidenses con servicios comerciales son 
propiedad del gobierno estatal o local. No obstante, existen algunos servicios aeroportuarios tales como 
las operaciones en las terminales y las zonas de aparca miento, el transporte en tierra, el mantenimiento 
de edificios, la publicidad, la manipulación de los equi pajes, la construcción y la ingeniería, los cuales 
pueden prestarse mediante contratación externa y cont ratos de gestión.  En este sentido, México está 
interesado en conocer si dichos servicios pueden se r prestados por nacionales extranjeros y si existe 
algún límite para la participación de inversionist as extranjeros en compañías proveedoras de estos 
servicios. 
          WT/TPR/M/160/Add.1 
Page 51 
 
 
IV POLÍTICAS COMERCIALES, POR SECTORES / 6) Servicios de Transporte Aéreo / ii) 
Marco reglamentario. 
 
33. El párrafo 148 señala que el Departamento de Transporte de ESTADOS UNIDOS permite, en 
ciertas circunstancias, que ciudadanos extranjeros s ean propietarios de hasta el 49 por ciento de las 
acciones de una compañía aérea sumando acciones sin derecho y con derecho a voto. México quisiera 
una explicación más amplia de la expresión “en ciertas circunstancias”. 
 
JAPAN 
Report by the Secretariat (WT/TPR/S/160) 
I. DEVELOPMENTS IN TRADE AND INVESTMENT POLICY 
(1) INSTITUTIONAL AND POLICY FRAMEWORK (i) Institutional and recent changes Q1. The Exon-Florio provision (p.14, para.7) 
 The Exon-Florio provision (Section 721 of the Defense Production Act of 1950) provides a mechanism 
to review and, if the President finds necessary, to rest rict foreign direct investment that might threaten 
the national security of the United States. In gene ral, the Government of Japan fully understands the 
necessity of regulations for national security r easons.  The Government of Japan has concerns, 
however, about the provision from the following viewpoints: (1) the lack of predictability for investors 
due to an ambiguous definition of “national security”; (2) the lack of legal stability due to the 
possibility that completed transactions can also be subj ect to future investigation; and (3) the lack of 
due process, illustrated by non-disclosure of the fact s, such as the reasons for the commencement of 
investigation or the final decisions by the President . The Government of Japan is also concerned that 
this provision could impede investment activities of Japanese companies bey ond the extent necessary 
for its original purpose. The Government of Japan  urges the Government of the United States, in 
implementing the Exon-Florio provision, not only to comply with the WTO rules but also to take 
necessary measures to ensure transparency and fairness,  to the maximum extent possible, in the process 
from the notification to the Committee on Foreign Invest ment in the United States to the final decision 
by the President.  In these respects, please indicate the specific views of the Government of the United 
States.  (ii) Legislative developments Q2. Deficit Reduction Act of 2005 (p.15, paras.13 to14)  
Regarding the controversial, Defic it Reduction Act of 2005, Democrats have argued that the Act is not 
constitutional because the bill the House cleared on 1 February differed from the version passed by the 
Senate on 21 December and said that it would ulti mately go to court.  The Act includes a provision 
repealing the Byrd Amendment, which was determined  inconsistent with WTO rules, and the program 
for cotton.  In this regard, please indicate the futu re perspective for the Act and the measures taken by 
the Government of the United States. 
 
Q3. Product Liability Law (p.15, paras.13 to 14) 
 
The Product Liability Law in the United States c onstitutes a heavy burden for Japanese and U.S. 
companies doing business in the United States, beca use of a large amount of damages and soaring 
liability insurance premiums. The Government of Japa n welcomes the efforts made by the Government 
of the United States to achieve the tort reform. Howe ver, the tort reform is focused on some specific 
areas such as asbestos litigation reform, medical lia bility reform, and Protection of Lawful Commerce 
in Arms, and has not made any tangible progress on th e reform of product liability, which constitutes a 
majority of lawsuits.  The Government of Japan th erefore urges the Government of the United States, 
as a part of the tort reform, to support and encourag e the reform currently underway in many States to 
limit product liability, and to promote the reform of  product liability law at the federal level by placing WT/TPR/M/160/Add.1 
Page 52  
 
limits on the amount of damages, and by shorte ning the limitation period, which has already been 
attempted by relevant bills submitted to the Congre ss.  In these respects, pl ease indicate the specific 
views of the Government of the United States. 
 
(2) PARTICIPATION IN THE WTO 
Q4. Bills that are inconsistent with the WTO (p.15 to 16, paras.15 to 21) 
 When legislative bills which if enacted will be a pparently WTO-inconsistent are submitted, the U.S. 
administration should try to convince the legislative bran ch not to pass such bills.  In this regard, please 
indicate the specific views of the Government of the United States. 
 
Q5. Compliance with WTO recomm endations (p.16, para.20) 
 
There are dispute settlement cases in which the United States is yet to secure full implementation of the 
DSB recommendations and rulings, well beyond the reasonable period of time granted under the DSU.  
This is a regrettable situation in the sense that the United States, a key Member of the WTO who is 
expected by many to demonstrate an exemplary manner, is in fact compromising the credibility of the dispute settlement mechanism of the WTO.  In this  regard, please indicate the specific views of the 
Government of the United States. 
 
Q6. Submission of the report required in the WTO (p.16, para. 21) 
 (1) There has been no submission, since 2000, of th e annual report in accordance with Article 7(3) of 
the WTO Import Licensing Agreement.  Please provi de information on obligations regarding new 
import licensing other than those contained in the notice of amendment under Article 5(1) of the 
Agreement. 
 (2) Japan also requests the U.S. to  submit the latest annual report expe ditiously.  In this regard, please 
indicate the specific views of the Government of the United States. 
 
II. TRADE POLICIES AND PRACTICES BY MEASURE 
(1) MEASURES DIRECTLY AFFECTING IMPORTS 
(i) Customs procedures and rules of origin Q7. Maritime transport security (p.26, para.18)  
As a part of initiatives for counter-terrorism, the United States has enforced the regulations 
implementing the advance electronic submission of  cargo information under the Trade Act of 2002, 
and obliged to submit to the U.S. customs authoriti es the manifest of the international sea container 
bound for the United States to the U.S. customs author ities no later than 24 hours prior to loading.  As a 
result, the deadline for delivery of containers to  the yard, which had been commonly set around 24 
hours prior to loading, has been moved up by 48 hours.  This has decrea sed the efficiency of 
distribution and imposed a huge burden on the operators including those with excellent compliance 
records.  The Government of Japan urges the Govern ment of the United States to take measures for the 
deregulation of the advance presentation of electr onic cargo information (such as establishing deadline 
extension) and the expansion of be nefits to the participants of the Customs-Trade Partnership Against 
Terrorism (C-TPAT), such as their exemption fro m the 24-hour rule and a reduced number of 
inspections, in consideration of the compatibility  between thorough security measures and efficient 
distribution.  In these respects, please indicat e the specific views of the Government of the 
United States. 
 
Q8. Labeling requirements of origin for watch es and clocks (p.29 to 30, paras.34 to 40) 
 
Japan has long requested the Government of the U.S. to simplify its labeling requirements of origin for 
watches and clocks.  However, they have not been improved.  Please indicate the specific views of the          WT/TPR/M/160/Add.1 
Page 53 
 
 
Government of the U.S. on when the system of its  labeling requirements of origin for watches and 
clocks will be simplified.  (ii) Tariffs Q9. Complicated tariff system on garments, cl ocks and watches (p.31 to 32, paras.46 to48) 
 
(1) The tariffs of some products in the U.S. are ve ry complicated.  For example, they levy tariffs on 
ensembles based on the tariffs of each garment in the ensembles, not the bound tariff rate themselves.  
They also levy tariffs on completed watches and clocks  based on the tariffs of their parts and therefore, 
tariffs are different for each watch and clock de pending on their compositions.  Japan would like to 
know why the U.S. uses a complicated tariff system li ke this for some products  and would like to know 
the background for using this system. 
 (2) Japan has been informed that the tariff system of watches and cl ocks is linked with their labeling 
system of origins, and there was a case that the U.S.  abolished the obligation to indicate prices of parts 
used in digital watches on the invoice, when the tariff of digital watches itself was eliminated.  
Therefore, we understand that the elimination of tari ffs for watches and clocks  would imply elimination 
of their labeling system of origin.  In this regard , please indicate the specific views of the Government 
of the United States.  (iii) Anti-dumping and countervailing actions Q10. Continued Dumping and Subsidy Offset Act (p.36, para.74)  
The Government of Japan welcomes that in February 2006 the Deficit Reduction Omnibus 
Reconciliation Act 2005, which contains the provisi ons repealing the CDSOA, was approved by the 
U.S. congress and was signed into law by the President of the U.S. Though this is a significant step 
forward, Japan deeds that the U.S.  has not fully taken the actions necessary to implement the rulings 
and recommendations by the WTO Dispute Settlement Body (DSB) because the Act decrees that duties 
on entries of goods made and filed before October 1, 2007 shall be distributed; thus the repeal of the 
CDSOA will not have immediate effect and is post poned by a transitional clause.  This means that, 
although the CDSOA was repealed on its face, in substa nce it will remain in force for some time by 
virtue of the transitional clause.  Therefore, Japan  urges the U.S. to immediately bring it fully in 
compliance with the DSB’s recommendations and rulings .  Japan also urges the U.S. to terminate the 
aforementioned distribution immediately.  In these r espects, please indicate the specific views of the 
Government of the United States. 
 
Q11. Lawsuit related to the Anti-Dumping Act of 1916 （p.38, para.77)  
 
The Anti-dumping Act of 1916 was repealed on Dece mber 3, 2004.  However, the Government of 
Japan is concerned about the ongoing lawsuit agai nst a Japanese company under the Anti-dumping Act 
of 1916.  The Government of Japan urges the Governme nt of the United States to work on the judicial 
authorities, through actions such as filing Amicus Curiae Brief, to prevent damages being inflicted 
upon the Japanese company by a judgment based on the Act that was found inconsistent with the WTO 
agreement and repealed already.  In this regard, pl ease indicate the specific views of the Government of 
the United States. 
 
Q12. Anti-Dumping measures on Certain Hot-Ro lled Steel Products from Japan (DS184) (p.39, 
paras. 82 to 83) 
 
With regard to the dispute regarding the anti- dumping measures on certain hot-rolled steel products 
from Japan, the measures taken by the United States were found inconsistent with the WTO Agreement 
in August 2001. However, the Government of the United States has not fully implemented the WTO 
Dispute Settlement Body (DSB)’s recommendations a nd rulings that called for certain legislative WT/TPR/M/160/Add.1 
Page 54  
 
amendments.  More specifically, the United States’  Tariff Act of 1930 requires the inclusion of 
margins, concerning the companies under investigati on, established in part based on “facts available” 
in calculating “all others’ rate”.  We are aware that  a bill has been introduced in the US House of 
Representatives (H.R.2473) that seeks to implemen t the DSB’s recommendations and rulings with 
respect to the U.S. anti-dumping statute in May 2005.  Please explain the present status of the discussions in the Congress. 
 
Q13. Softwood lumber from Canada （p.40, para.85 and p.42,para.92) 
 
Japan and the United States are among the main impo rt countries of softwood (coniferous) lumber from 
Canada.  We recognize from this report that the United States is in consultations with Canada 
concerning the review of CVD (countervailing duti es) orders on certain softwood lumber products 
from Canada as of October 2005, and the WTO panel in November 2005 found that the USITC’s 
Section 129 injury determination was not inc onsistent with the AD (Anti-dumping) and SCM 
(Subsidies and Countervailing Measures) agreement.  In this regard, please indicate the present status 
as well as the future prospects of these negotiations. 
 
Q14. Zeroing (p.40 to 41 paras.87 to 88) 
 
The Panel procedure is on-going for the case under whic h Japan challenges the “zeroing” procedures of 
the United States.  The zeroing procedures in orig inal investigations have been already found 
inconsistent with the WTO Agre ement by the Appellate Body in EC—Anti Dumping Duties on Imports 
of Cotton-type Bed Linen from India  and United States—Final Dumping Determination on Softwood 
Lumber from Canada .  In addition, the Panel report for the case where the EC challenged the 
United States’ zeroing methodologies was issued and ci rculated to the Members in October 2005.  In 
the report, the Panel found that the U.S. zeroing methodologies in original investigations were 
inconsistent with the WTO Agreement on both an “ as such” and “as applied” basis.  The Government 
of Japan deems zeroing procedures, not only in the original investigations but in any anti-dumping 
proceedings, inconsistent with the WTO Agreement, and urges the Government of the United States 
not to apply zeroing procedures in any anti-dumping proceedings.  In this regard, please indicate the 
specific views of the Government of the United States. 
 
Q15. Model-Matching on administrative reviews (p.43, para.95) 
 (1) In calculating dumping margins, one needs to cl assify different models of the product in question 
and its domestic “like product”, and then determine a domestic product m odel that is “identical” to or 
“closely resembling” the export product model (so-calle d “model-matching”).  In the annual review of 
anti-dumping measures on ball bearings imported fro m Japan in FY2003/2004, the Department of 
Commerce announced without any convincing r easons the revision of the model matching 
methodology that had been used without any signifi cant problems in the past fourteen anti-dumping 
reviews.  The new methodology proposed by the De partment of Commerce, which compares prices of 
dissimilar products, will reduce the predictability of the results of  anti-dumping investigations, and 
impose excessive burdens on Japanese exporters to submit an enormous amount of domestic sales and 
price data. In addition, the Government of Japan is deeply concerned that reviews through the new 
methodology are applied retroactively to the transact ions prior to the introduction of the methodology.  
Japan would like to ask the Government of the Unite d States why the retroactive application to imports 
before entry into force of the new methodology can be allowed, taking into account the basic principle 
of non-retroactivity. 
 (2) Also, Japan urges the U.S. to fully recognize the evident unfairness of the new methodology that 
causes the aforementioned problems, and to rescind the revision of the methodology.  In this regard, 
please indicate the specific views of the Government of the United States.           WT/TPR/M/160/Add.1 
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Q16. Changed circumstances review of the determination of the past administrative review (p.43, 
para.95)  
With regard to the changed circumstances review  of the revoked order on large newspaper printing 
presses and components thereof (LNPPs) initiated by  the Department of Commerce (the DOC) in 
May 2005, it was announced in the final determinat ion on 2 March 2006 that the DOC, (1) revised the 
margin of Tokyo Kikai Seisakusho(TKS) for the 1997- 1998 review to apply a rate of 59.67 percent, 
(2) rescinded the anti-dumping duty order for TK S in January 2002, and (3) will reopen for 
reconsideration a sunset review in 30 days.  The revocation of the order on LNPPs in 2002 was based on the fact that the domestic industry withdrew its interest in the sunset review proceedings , and this is not at all relevant to the reason why 
the new sunset review will be initiated,  which is "TKS's deliberate misconduct".  
 
In addition, if the revoked order is restored by th e reconsideration, it will affect not only the company 
subject to the changed circumstances review, but al so other Japanese exporters.  This would seriously 
undermine the predictability of the normal business tran sactions of the exporters.  The Government of 
Japan is also concerned with this aspect.  With resp ect to reconsidering the sunset review based on the 
irrelevant reason of the revocation of the order in the past sunset review by the Government of the 
United States, please indicate the reason why it is cons istent with Article 11.3 of the AD Agreement. 
 
Q17. Sunset Reviews (p.43, paras. 96-101) 
 
The United States sunset review procedures, by thei r related legislations, re gulations, policy bulletins 
and in their actual implementations, maintain anti-du mping measures in principle, and terminate them 
only in exceptional cases. Although the WTO Dispute Se ttlement Body rejected Japan’s claim for the 
corrosion-resistant carbon steel flat products case, Ja pan still deems the United States’ sunset review 
procedures not consistent with the WTO Anti-dum ping Agreement.  Indeed, many anti-dumping 
measures are not terminated in five years and remain  in force for a long time.  We understand that the 
anti-dumping duty on polychloroprene rubber has continue d for more than 30 years and users in the 
United States complain about this long-term measure .  Japan urges the United States to terminate anti-
dumping measures within five years, in principle,  even before anti-dumping negotiations under WTO 
Doha Development Agenda strengthen regulations related to the sunset legislation.  In this regard, 
please indicate the specific views of the Government of the United States. 
 
(iv) Quantitative restrictions and controls 
Q18. On-sale License of Alcoholic Beverages in the State of California (p.47 to 48, para. 113 ) 
 
In the State of California, on-sale licenses that perm it the sale of wine for consumption on the premises 
where sold also authorize the sale of soju, an imported Korean alcoholic  beverage which contains no 
more than 24 percent of alcohol by volume and is  derived from agricultural products.  However, these 
on-sale licenses do not permit the sale of shochu , an imported Japanese alc oholic beverage derived 
from agricultural products, for consumption on the premises where sold.  The Government of Japan 
therefore urges the Government of the United States to permit the sale of shochu  with the on-sale 
license as is permitted for soju.  In terms of alcohol  content, the Government of Japan also urges the 
Government of the United States to permit the sale of shochu  that contains 24 percent or more and not 
more than 26 percent of alcohol by volume with th e on-sale license.  In these respects, please indicate 
the specific views of the Government of the United States. 
 WT/TPR/M/160/Add.1 
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(v) Standards and technical regulations 
Q19. Certificate of Label Approval  on Alcoholic Beverages Imported into the United States (p.50, 
para.130) 
 According to Part 4 Section 40, Part 5 Section 51 , and Part 7 Section 31 of the Code of Federal 
Regulation, Title 27, no imported alcoholic beverages in containe rs shall be released from the 
United States Customs custody for consumption unl ess there is a certificate of label approval (ATF 
Form 5100.31).  Due to the regulations, even the al coholic beverages intended for use as samples for 
tasting must have the certificate of label approval prior to the import into the United States, which 
stands as a high barrier for Japanese people to co nduct promotion campaigns of Japanese alcoholic 
beverages in the United States.  The Government of Japan urges the Government of the United States 
to allow imported alcoholic beverages which will be u sed as samples for tasting to be imported into the 
United States without certificate of label approval.  In this regard, please indicate the specific views of the Government of the United States. 
 
Q20. Automobiles Labelling Act (p.50, para.130) 
 
Automobiles weighing less than 8,500 pounds, which are sold in the U.S., are obliged to labelling, such 
as the percentage of U.S. or Canadian parts, the final assembling ratio, the final place of assembly and the place of manufacture of the engine and transm ission.  This is aimed at stimulating the U.S. 
consumers' spirit of "buy American", while placi ng much burden on the automobile manufacturers by 
creating various kinds of labels based  on dates and types.  In addition, the real state of the procurement 
rate is not properly calculated: for example, the procurement ratio does not reflect the labour cost of the 
assembly lines. Regarding this Labelling Act, in  March 2003, the Association of International 
Automobile Manufacturers (AIAM) submitted a report to the Congress which pointed out some 
problems such as: 1) the labelling rule does not provide enough information which support consumers 
to make better choice of purchase; and 2) consumers are not quite interested in the labelling rule.  In 
these respects, Japan would like to  know whether the U.S. plans to review the labelling rule. 
 
Q21. Metric System (p.52, para.137) 
 
The metric system is adopted as the internati onal standard unit system by the International 
Organization for Standardization and other interna tional organizations in developing international 
standards and criteria.  While most countries ha ve adopted the metric system, the United States 
continues to use the unit of the yard and pound de spite its accession to the Metre Convention.  This 
causes not only inconveniences in dail y life but also obstacles in international trade. Given that the 
Agreement on Technical Barriers to Trade (TBT) recommends reducing technical barriers on trade by 
adopting international units, it is not in accordan ce with the WTO agreements, including the TBT 
Agreement, that the United States is not taking n ecessary measures to promote the metric system.  The 
Government of Japan therefore urges the Government  of the United States to ensure thorough adoption 
of the metric system in public and private sectors of  the United States.  We also urge the Government 
of the Untied States to provide information on its policy measures to promote the adoption of the metric system.  In these respects, please indicat e the specific views of the Government of the 
United States. 
 Q22. Container’s Weight Limit (p.52, para.137)  
A large number of countries, including Japan, approve the limits of the maximum weight to 30.48 metric tons by container in transport freights, which is based on the international cargo standard 
provided by the International Organization for Standa rdization.  On the other hand, the U.S. federal 
weight laws set weight standards not for cargoes or the boxes in which they move, but for the total 
vehicle combination and its relative axle weights.  The maximum gross vehicle weight on interstate 
highways is 80,000 pounds (36.3 metric tons) except where lower gross vehicle weight is dictated by the bridge formula.  A freight tonn age can be calculated by subtracting (1) the weight of the tractor (the          WT/TPR/M/160/Add.1 
Page 57 
 
 
average weight is from 9 to 12 metric tons); (2) the weight of the container trailer (the average weight 
is from 4 to 6 metric tons); and (3) the weight of  the container itself (the average weight is around 
3 metric tons) from the maximum gross vehicle wei ght.  As a result of calculation, the remaining 
weight is from 15 to 20 metric tons, which is belo w the maximum freight tonnage (30.48 metric tons) 
provided by the International Organization for Standa rdization, by 10 to 15 metric tons (22 to 33 
thousand pounds).  The Government of Japan urges the Government of the United States to recognize 
that the container’s weight limit set by the federal we ight laws is inconsistent with the ISO regulation, 
hampers the efficiency of logistics, causes a deliver y delay by U.S. transport agencies, and increases 
transport costs.  Concerning the regulation of weight  standards, we also urge the Government of the 
United States to raise the upper limit of the maxi mum gross vehicle weight by 10 pounds from the 
present 8 pounds, in order to conform to the intern ational cargo standard.  In these respects, please 
indicate the specific views of the Government of the United States. 
 
(vi) Sanitary and phytosanitary measures 
Q23. The Bioterrorism Act (p.57, paras.161 to 164) 
 
(1) With regard to the Public H ealth Security and Bioterrorism Preparedness and Response Act of 2002 
(the“Bioterrorism Act”), the Government of Japan  urges that an excessive burden should not be 
imposed on exporters or individual senders of f ood beyond the level required by the purpose of the 
Bioterrorism Act, that is, the protection of the Unite d States from the threat of bioterrorism.  In this 
regard, please indicate the specific views of the Government of the United States.  (2) In particular, the Government of Japan has urge d the Government of the United States not to oblige 
non-commercial senders of food for non-commercia l purposes and retail stores or other commercial 
shippers on behalf of non-commercial individuals, if  the non-commercial nature of the shipped food is 
clearly declared on the parcel, to be subject to th e prior notice requirement under the forthcoming final 
rule.  Please explain how the Government of the United States considers our request.  (3) The Government of Japan urges the Government of the United States to establish a contact point at 
which Japanese nationals, particularly small- and me dium-sized food processors and individuals, could 
inquire in Japanese about the latest status of the re lated rules and guidelines and procedures to be taken 
on the registration of food facilities, including the prior notice requirement.  In this regard, please 
indicate the specific views of the Government of the United States.  
(4) The Government of Japan urges the Government of the United States to inform food processors, the 
Japan Post, commercial transport service providers a nd Japanese nationals in general of any future 
changes in the rules without delay through appropria te means.  In this regard, please indicate the 
specific views of the Government of the United States.  
(5) The Government of Japan urges the Government  of the United States to shorten the time for 
procedures such as issuance of licences for importati on.  In this regard, please indicate the specific 
views of the Government of the United States.  
(vii) Trade-related environmental regulations 
Q24. Ensuring consistency of environmental regulations across States (p.58 to 60, paras.169 to 
175)  
Many companies are incurring unnecessarily high costs in meeting environmental regulations that are 
at variance from State to State, for example in the area of regulations rela ted to global warming and 
recycling.  With regard to ensuring consistency of environmental regulations across States, please 
indicate the specific views of the Government of the United States. 
 WT/TPR/M/160/Add.1 
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Q25. CAFE (p.59, para.175) 
 
The Energy Policy and Conservation Act of 1975 requi res automobile manufacturers to calculate the 
corporate average fuel economy (CAFÉ), which shoul d clear certain thresholds for the purpose of 
environmental protection.  When calculating CAFÉ figures, it is necessary to compute the rate of domestic manufacturing for each line, and to obtain the standards of fuel consumption for domestic and 
imported automobiles respectively.  However, as au tomobiles obtain standards in their own category, 
the differentiation of domestic a nd imported vehicles sometimes bri ngs out negative effects on the 
improvement of fuel efficiency itself, which was the initial goal.  Companies specializing in imported 
and fuel inefficient large-sized cars and sports -type cars experience disadvantages.  Automobile 
industries, not only Japanese but also American, have  been claiming that this measure may distort 
sound investment activities by private companies a nd have demanded improvement.  Japan would like 
to know whether the Government of the United Stat es has a concrete plan on tightening or loosening 
the existing regulation.  (2) MEASURES DIRECTLY AFFECTING EXPORTS (i) Export restrictions and controls Q26. Re-export Control (p.60, paras. 176 to188) 
 
(1) The US requires export licenses on the re-exports of  U.S.-origin items even if they have already 
received export licenses from exporting countries. Such a regulation could be recognized as an 
extraterritorial application of U.S. domestic law, which is impermissible under the general international 
law. In response to the questions by Japan in the TP R of the U.S. in January 2004, the U.S. answered 
on page 113 of WT/TPR/M/126/Add.3 that U.S. re-e xport controls are required under the federal law 
and reflect a long-standing Congressional require ment, and both export and re-export controls are 
necessary to protect U.S. national security and fore ign policy interests. However, Japan finds little 
reason for the U.S. to control re-exports from countries , including Japan, that carry out effective export 
controls not only by participating in all the intern ational export control regimes, but also by having 
introduced a catch-all system for weapons of mass d estruction and their means of delivery.  The U.S. 
should exclude those countries from application of U. S. re-export control.  In this regard, please 
indicate the specific views of the Government of the United States. 
 (2) As Japan mentioned in the previous TPR a nd in the Regulatory Reform and Competition Policy 
Initiative between Japan and the U.S., it still remains a serious problem that importers (re-exporters) of 
U.S. origin items are prevented from taking appr opriate procedures for export control compliance 
because they are not provided with  sufficient information on U.S. or igin items by U.S. exporters. 
Lacking sufficient information on these items, importe rs (re-exporters) face difficulties in identifying 
the items correctly and determining whether they are subject to the U.S. regulations. As a transitional 
measure pending exclusion of countries carrying ou t effective export controls from U.S. re-export 
control, the U.S. should oblige its exporters to provi de importers (re-exporters) of U.S. origin items 
with sufficient information on these items, including ECCNs. Japan notes that the U.S. Department of 
Commerce issued its ‘Best Practices for Transit, Transshipment, and Re-export of Items Subject to the 
Export Administration Regulations (hereinafter refe rred to as ‘Best Practices’)’in November 2003 in 
which it recommended US exporters to communicate  the appropriate ECCNs or other classification 
information to the end-user and to the ultimate cons ignee.  However, this ‘Best Practices’ approach is 
not legally binding and has not made a substantial change in U.S. e xporters’ behavior. In response to 
the questionnaire from Japan in the TPR of the Un ited States in January 2004, the U.S. showed its 
concern about making ECCNs notifications by U.S. exporters obligatory as follows: One concern we 
(the U.S.) note is that the original classification of an export may not be accurate for re-export transactions.  In addition, the classification of the product may change if a U.S.  origin item is altered 
after receipt.  Thus, if a re-exporter used the origin al classification supplied by the exporter, it may be 
incorrect（Page 114, WT/TPR/M/126/Add.3.  Japan requir es further explanation on this.  If an item 
not subject to EAR when exported is altered (manufac tured, processed) into an item subject to EAR in          WT/TPR/M/160/Add.1 
Page 59 
 
 
the importing country, is the importer (re-exporte r) required to get the license from the U.S. 
government?  Or, if an item not listed in EAR (an item classified as EAR 99) is altered (manufactured, 
processed) into an item listed in EAR in the importi ng country, is the importer (re-exporter) required to 
get the license from the Government of the United States? 
 (3) It is indispensable for re-exporters to get inform ation on U.S. origin items from U.S. exporters to 
comply with U.S. re-export control because it is not easy  for them to identify the characteristics of U.S. 
origin items and the items incorporated into othe r products.  It is unacceptable that only re-exporters 
take responsibility for failures in compliance with U. S. re-export control while U.S. exporters are not 
obliged to provide sufficient information of U.S. or igin items that is necessary for compliance with 
U.S. re-export control.  The U.S. should oblige U.S. exporters to provide impor ters (re-exporters) with 
sufficient information on the U.S. origin items as so on as possible. In addition, the U.S. export control 
authority should make it a condition of approval of export license applications by U.S. exporters that 
they provide importers (re-exporte rs) with appropriate information,  including ECCNs, and exclude 
importers (re-exporters) from the application of th e U.S. re-export control in the case that such 
information is not provided. In this regard, please indicate the specific views of the Government of the United States. 
 
Q27. Sanction Measures (p. 61, para.183) 
 
The sanction measures taken by the U.S. based on rela ted acts (the Iran and Libya Sanctions Act, the 
Cuban Liberty and Democratic Solidarity Act, the Burmese Freedom and Democracy Act as well as 
local and municipal sanctions acts) discourage, significantly and unreasonably, investment into, and the 
establishment of economic relations with, the countri es targeted by these laws, which affect not only 
U.S. private enterprises, but also those world-wide.  In  legal terms, they constitute an extraterritorial 
application of domestic laws, which is not permi ssible under the general international law and may 
cause a problem of inconsistency with WTO agr eements.  Moreover, fairness, transparency and 
predictability have not been observed in their appli cations.  Japan, therefore, strongly requests the U.S. 
to ensure the consistency of these acts with interna tional laws, and to implement them prudently.  In 
this regard, Japan would like to know whether there has been any progress on discussions in the 
Congress about the amendment of the Iran and Libya Sanctions Act for promoting Iran’s liberalization 
(Iran Freedom Support Act), which was proposed both to  the Senate and the House last year.  In 
addition, please provide the latest information on all effective sanctions acts instituted by the states and 
local municipalities.   
 
Q28. Export restrictions (p.61, para.186) 
 
Japan, as one of the major wood-products importi ng countries, is concerned about the log export 
restriction by the U.S.  The U.S. has explained to  Japan that the export prohibition measure aims to 
protect wildlife such as spotted owls.  Japan, howev er, regards this measure as a quantitative export 
restriction for protecting domestic saw millers, whic h should be rectified in accordance with the WTO 
rules.  First of all, the protection of spotted owls and other wildlife must be realized through restricting 
harvests but not through export bans. Secondly, only export restrictions have been introduced, while no 
regulations have been established for the domestic trad e of logs, and the U.S. is even requesting Japan 
to expand wood product imports, whic h are processed from logs.  It s hould be noted that Japan raised 
this point in the previous TPR meetings of the U.S.   In this regard, please indicate the current specific 
views of the Government of the United States.   (ii) Section 301 and related actions Q29. Unilateral measures (p. 62, paras.189 to190)  
Japan is concerned that Section 301 of the Trade Act of 1974 and the related provisions such as “Special 301” and “the Telecommunications Trade Act of 1988” could be inconsistent with the U.S. 
obligations under the WTO contingent upon operations by the U.S.  Japan would therefore like to WT/TPR/M/160/Add.1 
Page 60  
 
request the U.S. to have regard towards consis tency with the WTO rules on the occasion of operating 
the unilateral measures cited above.  In this re gard, please indicate the specific views of the 
Government of the United States. 
 
(iii) Export assistance 
Q30. Tax Treatment for Export Companies (ETI regime; formerly FSC regime) (p.64, paras.196 
to 198 
 
As stated in the Report by the Secretariat, th e WTO compliance panel in September 2005 concluded 
that the U.S. maintains prohibited FSC/ETI subs idies through the transition and grandfathering 
measures of the American Job Act of 2004, and ther efore, continues to fail to implement fully the 
operative DSB recommendations.  We are aware that  Appellate Body in February 2006 upheld such 
Panel’s findings.  Please explain how the U.S. plans to implement the DSB’s recommendations. 
 
(4) OTHER MEASURES AFFECTING PRODUCTION AND TRADE 
(i) Competition policy 
Q31. Competition Policy (p.67, para.212)  
How many lawyers/economists are employed in DOJ and FTC respectively? 
 
Q32. Extraterritorial reach of the U. S. Antitrust Law (p. 70, para.223) 
 
A lawsuit of which has identical issue to the Hoff man-Laroche Ltd. v Empagran S.A. is ongoing before 
the US Court of Appeals for the Eighth Circuit.  The Government of Japan has concern that the 
Japanese company could be suffered unforeseeable dama ges by the extraterritorial reach of the U.S. 
Antitrust Law if the jurisdiction of the U.S. Court is  admitted in this case.  The Government of Japan 
requests the Government of the United States to ta ke appropriate action such as filing Amicas Curiae 
Brief.   
 
Q33. Matters contained in the Recommendati ons by the Government of Japan to the 
Government of the United States regarding Regulatory Reform and Competition Policy, 
7 December 2005 (p.71, para. 227)  
(1) There is a mechanism whic h ensures dialogue between the governments of Japan and the 
United States, i.e. the Regulatory Policy Initiatives, as mentioned in paragraph 227 of the Report by the 
Secretariat.  Under the mechanism, the recommendations were exchanged between the two 
governments in December 2005 and the consultati on has begun regarding the matters contained 
therein.  However, the Government of Japan consider s it appropriate to readdress several issues at this 
TPR meeting.  In order to avoid unnecessary nega tive influence on the smooth movement of natural 
persons and economic activities such as trade and inv estment, the Government of Japan is requesting 
information on several issues on immigration control/c onsular affairs (please see attached papers.).  
With regard to immigration control and consular affairs in attached papers, please indicate the specific 
views of the Government of the United States respectively.  
(2) The Government of Japan also requests the Government of the United States to disseminate 
appropriate information in advance to the affected pa rties should there be any institutional changes.  In 
this regard, please also indicate the sp ecific views of the United States. 
 
Q34. Government Procurement – general p.72, para 231 
 
What is the “procurement by U.S. agencies outside  the United States”?  Please provide some examples 
which are categorized under this “procurement  by U.S. agencies outside the United States”. 
          WT/TPR/M/160/Add.1 
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Q35. Buy American Act (p.74, paras.240-246) 
 
The Buy American Act of 1933 provides the US legal basis for discriminating against foreign products 
at the federal level of the Govern ment of the United States. The existing Buy American Act, which was 
amended by the Uruguay Round Agreements Act, allo ws the President to refrain from applying the 
“Buy American” restriction to countries that: ha ve acceded to the 1994 Agreement; and provide 
appropriate reciprocal procurement opportunities fo r U.S. products and U.S. suppliers. Japan would 
like to request the U.S. to abolish Buy American Ac t, which accords a favourable treatment to the U.S. 
products for government procurements  not covered by the GPA, from the viewpoint of full application 
of the principle of non-discriminatory treatment.  Shou ld it, however, be necessary to maintain this Act, 
the Government of Japan requests the Government of the United States to implement it in a manner 
consistent with the WTO rules.  In this regard, please indicate the specific views of the Government of 
the United States.   (ii) Trade-related intellectual property rights Q36. Bilateral intellectual property agreements (p.76, para.252)  
The Government of Japan has faithfully implemented the "Japanese Actions to be taken by the Patent 
Office", confirmed by the Japan Patent Office (JPO) and the United States Patent and Trademark Office (USPTO) in the Framework Talks.  However, the United States has never entirely implemented the introduction of an early publication system without exceptions, nor the improvement of re-examination.  Japan strongly requests the United States to implement these items completely and 
promptly.  In this regard, please indicate the specifi c views of the Government of the United States. 
 
Q37. “Submarine patents” (p.76, paras.252 and 255) 
 
The early publication system in the United States pr ovides exceptions whereby patent applications filed 
in the United States, but not filed overseas, or matt ers included in a patent application filed in the 
United States, but not included in the corresponding a pplication filed overseas, cannot be laid open at 
the request of the applicant.  It is, therefore, po ssible for a patent application to become a "Submarine 
Patent".  This system creates serious social and economic loss due to investments in R&D, as the 
information on the existence of another application already on file for the same invention is not 
available. Any pending applications, already filed w ith the USPTO at the time of the amendment of the 
law in 1994, continue to benefit from the former pate nt terms (i.e. a 17-year patent term from the date 
of the patent grant).  Therefore, it is still possibl e for additional submarine patents to arise.  Japan 
strongly requests the United States to implement 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 all applications except those not pe nding, or those not able to be laid open, after a 
period of 18 months from the earliest filing date. In this regard, please indicate the specific views of the Government of the United States.   
Q38. Extension of the patent term (p.76, paras.252 and 255) 
 
The USPTO provides that patent protection may be extended to compensate for any amount of 
processing delays and USPTO-caused delays.  This exte nded patent term is guaranteed for at least a 17-
year patent term.  The Government of Japan would like to point out that there is a possibility of 
deliberate delays being caused, and that under the U.S.  current conditions of not having an adequate 
early publication system, there would be other opport unities of creating submarine patents through the 
extension of patent terms.  In this regard, please indicate the specific views of the Government of the 
United States.   WT/TPR/M/160/Add.1 
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Q39. "First-to-Invent" system (p.76, para.255) 
 
The United States is the only country to use the "first-to-invent" system, which, with regard to the 
patent system, makes the United States rather uni que.  This system, however, lacks certainty and 
predictability in the sense that a patentee’s status can be overturned by the appearance of the prior 
inventor afterwards.  This will provide extra burden to inventors who are required to prepare and keep 
documentary evidence to prove the date of inventi on.  Many countries, including Japan, have pointed 
out that this issue creates a barrier for foreign co mpanies when trying to penetrate the U.S. business 
community.  Although the practice of maintaining the first-to-invent system is not necessarily against the TRIPS Agreement, Japan again requests the United States to adopt the first-to-file system and also 
to improve all aspects of the patent systems that restri ct trade in the United States.  This is due to the 
necessity of maintaining a transparent and stable  system, as well as reducing the burdens borne by 
users through the difference in systems.  In this  regard, please indicate th e specific views of the 
Government of the United States.  Q40. Priority in the Paris Convention (Hilmer Doctrine) (p.76, para.255)  
The United States has a unique legal principle called “H ilmer Doctrine”, which reasons that the effect 
of elimination subsequent applica tions by third persons on the gr ound of items on specification being 
prior art retoacts only to the filing date in the United States.  Foreign applicants usually file 
applications, first in their own count ry and subsequently in the United States, thereby claiming priority 
under the Paris Convention.  Due to the "Hilmer" doc trine, such foreign applicants cannot prevent the 
patent grant from conflicting with a pplications filed before the actual  filing date of any subsequent 
applications in the United States, even during the priority period, and thereby may suffer from this 
disadvantage. This is against Article 4B of the Pa ris Convention, which stresses that acts by a third-
party in the priority period "cannot give rise to  any third-party right or any right of personal 
possession".  This is also inconsistent with Ar ticle 2.1 of the TRIPS Agreement which requires 
compliance with Article 4 of the Paris Convention.  In this regard, please indicate the specific views of 
the Government of the United States.   
Q41. Language discrimination in internationa l applications under the PCT (p.76, para.255) 
 
Article 102 (e) of the Patent Act provides that a PCT international application has the effect of 
eliminating other applications filed subsequent to the application’s in ternational filing date only when 
the application designates the United States and is in ternationally published in English.  When a PCT 
international application is publis hed in another language however, it does not have the effect of 
eliminating subsequent applications. Thus, Article  102 (e) is discriminatory against languages other 
than English. In Japan and Europe, internationa l applications are not discriminated on account of 
language. Therefore, it is unfair that the same treat ment is not guaranteed in the United States. The 
limitation of the effect of elimin ating subsequent applications by Article 102 (e) narrows the advantage 
of the moratorium on submitting translations under the PCT system, and is significantly disadvantageous to applicants, who need to transl ate documents into English. The Government of 
Japan requests that the Government of the United States abolish the language discrimination based on 
Article 102 (e).  In this regard, please indicate th e specific views of the Government of the United 
States.   Q42. Unity of invention (p.76, para.255)  
The Government of Japan understands that the USPTO has been implementing a public comment 
procedure and is trying to harmonize its patent system  with the international system of Patent Law.  
However, with regard to the unity of invention, under the current U.S. patent system, the scope of 
inventions that can be included in a single applica tion is, according to what we have been pointed out 
so far, narrower than that under the systems of the JPO and the European Patent Office (EPO).  Thus, a 
patentee is obliged to submit multiple applications, thereby increasing the burden.  The Government of          WT/TPR/M/160/Add.1 
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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. In these respects, please indicate the specific views 
of the Government of the United States.  Q43. Information Disclosure Requirement of  Prior Art Documents (p.76, para.255) 
 
All applicants for United States patents ought to di sclose all important prior art documents of which 
they know to the U.S. Patent and Trademark Offi ce (USPTO) until the time that they obtain the patents 
for which they have applied. In addition, they ought to submit English translations, in whole of in part, 
of prior art documents if such documents are not in English. The Government of Japan therefore 
requests that the Government of the United States ta ke measures to reduce the burden on foreign patent 
applicants, including eliminating the requirement to  submit English translations and shortening the 
period of the information disclosure requirement.  In this regard, please indicate the specific views of 
the Government of the United States.  Q44. Section 211 of the US Omnibus Appropriations Act of 1988 (p.80, para.267)  
Please indicate the prospect of the amendment of Section 211 of the Omnibus Appropriations Act. 
 
Q45. Copyright (p.81, para.273) 
 
(1) With regard to the Digital Millennium Copyright  Act, we understand that in the United States there 
is currently a significant development of busin esses in broadcasting / transmitting over computer 
networks, such as webcasting or broadcasting/tr ansmitting using IP multicasting technology.  Japan 
would like to know whether U.S. law provides for lim itations/exceptions to the copyright of performers 
and phonogram producers that make these broadcasts /transmissions over computer networks possible 
without obtaining authorizations to broad cast/transmit from relevant performers and phonogram 
producers. 
 
(2) Do lines 6 and 7 of paragraph 273 mean th at producers of phonograms do not have any right 
concerning terrestrial digital broadcasting? 
 
(3) With regard to “live musical performances” in  line 8 of paragraph 273, Article 14 of the TRIPS 
Article 14 calls for protection against unauthorized fixation of not only live “musical” performances 
but also of all types of live performances, incl uding performances such as the recitation of poems.  
Please explain how the United States law protects against the unauthorized fixation of live 
performances other than live musical performances. 
 (4) Concerning lines 1 to 3 of paragraph 274, please explain how broadcasting and cablecasting 
organizations obtain authorizati on from relevant right holders (copyright holders, performers, 
producers of phonograms and broadcasting organiza tions) in order to make simultaneous re-
transmissions of regular terrestrial broadcasting. Do broadcasting and cablecasting organizations need 
to negotiate with the relevant right holders to obtai n authorization to make the re-transmission, or is 
there a system of statutory or compulsory licen ses that enables them to make the re-transmission 
without having to negotiate with relevant right holders for authorization?  How is the amount of 
remuneration decided in each case?   Does the amount have to be negotiated as well or is it 
automatically decided through some system of st atutory remuneration?  Are the same questions 
applicable where the transmission is made over the Internet and if so, how would the responses be different?  WT/TPR/M/160/Add.1 
Page 64  
 
III. TRADE POLICIES BY SECTOR 
(1) FINANCIAL SERVICES (i) Legislative and regulatory framework Q46. Registration Requirements for Foreign Issuers in Case of Business Reorganization (p.98 
para.75, 77)  
In the fourth year dialogue of the Regulator y Reform and Competition Policy Initiative, the 
Government of Japan requested the Government of  the United States to abolish the Rule 145 of the 
Securities Act of 1933 or mitigate it.  This rule pr ovides that when new stocks  are issued in a business 
reorganization and if U.S. residents come to hold more  than 10% of the shares of the target company, 
the acquiring company should submit registration form s, including financial statements based on the 
United States Generally Accepted Accounting Principles (GAAP) to the Securities Exchange 
Commission (SEC).  This rule is applied even to non-American companies, which issue new stocks due 
to their business reorganization by merger with othe r non-American companies outside the territory of 
the United States. 
 
In the fourth Report to the Leaders on the Regulat ory Reform and Competition Policy Initiative, the 
Government of the United States answered that SEC had carefully considered the desirable and 
appropriate level of U.S. owners hip for the purpose of exemption and in the interest of investor 
protection, and that SEC had adopted a more tailo red relief measure for non-American companies to 
address conflicting regulatory manda tes and offering practices. The Government of the United States 
also mentioned in the report that non-American comp anies of which American residents’ ratio became 
more than 10% due to merger are encouraged to raise specific concerns with SEC.  
However, the rule obviously places excessive bur den on Japanese companies which have never 
reported their financial statements based on USGAAP  and reorganized themselves by merger with 
other Japanese companies, just b ecause the U.S. ownership of stocks exceeds 10 percent, even taking 
into account the need of investor protection. As a basis for this opinion, Japanese laws do not require 
non-Japanese companies, which reorganized themselv es by merger with other non-Japanese companies 
either to file registration formats for issuing new st ocks or to disclose their financial statements based 
on the Japanese GAAP, even if non-residents’ sh areholding ratio exceeds 10% of the total. 
 The Government of Japan therefore urges the G overnment of the United States to abolish this 
registration requirement that is applied to non-Ameri can companies.  In this regard, please indicate the 
specific views of the Government of the United States. 
 
Q47. Regulations on Sales and Offers of Forei gn Investment Trusts (p.98-99 para.78-81) 
 
In the fourth year dialogue of the Regulator y Reform and Competition Policy Initiative, the 
Government of Japan requested the Government of the United States not to apply Section 7 (d) of the 
Investment Company Act of 1940 and SEC Rule 7d-1 entitled “Specification of Conditions and 
Arrangements for Canadian Management Inv estment Companies Requesting Order Permitting 
Registration.” to non-Canadian foreign investment tr usts which publicly offer their shares within the 
territory of the United States.  If not, the Governme nt of Japan requested the Government of the United 
States to abolish the following three conditions:  
 (1) At least a half of directors of investment trusts must be American citizens and reside in the 
United States. 
(2) Assets of investment trusts are required to be  entrusted to banks in the United States;  and 
(3) Investment trusts are required to use United States Certified Public Accountants. 
 
The Government of Japan recognizes that this rule is  still applied to other foreign investment trusts 
besides Canadian ones, places excessive burden on fore ign investment trusts, and substantially limits 
foreign investment trusts’ entry to the U.S. capital market.          WT/TPR/M/160/Add.1 
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In the fourth Report to the Leaders on the Regulat ory Reform and Competition Policy Initiative, the 
Government of the United States answered that SEC had issued the orders to investment trusts from 
five countries, Canada, Australia , Bermuda, South Africa and the United Kingdom, had also granted 
limited exemptive relief from the Rule to a Canadian investment trust, and rema ined willing to consider 
applications for this rule.  
The Government of Japan, however, is aware that these are just rare and exceptional measures during 
the period between 1950s and 1970s and most of past  applicants were not given such orders and 
relieves. It is difficult for the G overnment of Japan to understand that the Government of the United 
States ensures enough opportunities for foreign investment trusts to enter into the U.S. investment trust 
business by citing a very few exceptional measures. In  addition, even though the Government of the 
United States answered that SEC re mains willing to consider applicati ons for 7 (d) orders, it is still 
difficult for the Government of Japan to interpre t that the Government of the United States fully 
understood the need of exceptional relief for foreign investment trusts. 
 
Furthermore, in terms of costs, it is also very h eavy burden for investment trusts of foreign countries, 
which are geographically distant from the United Stat es, to fulfill all of the three conditions listed 
above. 
 Therefore, the Government of Japan urges the Govern ment of the United States not to apply Rule 7d-1 
to Japanese investment companies or to abolish at least these three conditions.  In this regard, please 
indicate the specific views of the Government of the United States. 
 
Q48. Qualification of Financial Holding Companies (p.95-96 para.62-66) 
 To engage in the securities business in the United States with the scope comparable to that of U.S. 
securities companies, including underwriting stocks and corporate bonds, forei gn banks are required to 
obtain the status of Financial Holding Companies (FHCs). In determining wh ether foreign banks are 
comparable to U.S. banks in terms of capital and ma nagement, an injection of public funds into their 
capitals is taken into consideration as one of negativ e factors. Because of this criterion, Japanese banks 
are having difficulty in gaining the status of FHCs , and the business scope of securities subsidiaries of 
these banks is substantially limited in the United States.  
In the fourth year dialogue of the Regulator y Reform and Competition Policy Initiative, the 
Government of Japan requested the abolishment of th is criterion. However, in the fourth Report to the 
Leaders, the Government of United States answered th at the criterion is not the only factor but one of 
several factors that may be taken into account to determine comparability of capital, and that the same 
criteria for U.S. bank subsidiaries under FHCs are applied to foreign banks. 
 
Compared to the situation several years ago, the problem of non-performing loan at Japanese banks is 
substantially diminishing and their financial conditi ons have dramatically improved. In light of the 
current situation, the Government of Japan urg es the Government of the United States to ensure 
Japanese banks obtain the status of FHCs, regardless of public fund injection.  In this regard, please 
indicate the specific views of the Government of the United States. 
 
Q49. Deregulation of Investment into Initial Equity Public Offering by Foreign Investment 
Trusts (p.98 para.75-76) 
 The National Association of Securities Dealers (NASD) Rule No. 2790 basically prohibits NASD 
members and other persons associated with  these members from conducting the following: 
 
(a) Selling initially publicly offered stocks to accounts in which “restricted pers ons”, such as security 
brokers, dealers and portfolio mana gers, have beneficial interests 
(b) Purchasing these stocks in accounts in which these members and persons have beneficial interests WT/TPR/M/160/Add.1 
Page 66  
 
This rule stipulates two conditions  of exceptional treatments for foreign investment trusts as follows: 
 (1) Such foreign investment trusts are listed on fo reign stock exchanges or authorized by foreign 
authorities for public sale;  and (2) No “restricted person” owns more than 5% of the shares of the foreign investment trusts. 
 
However, in the Japanes e securities business, securities compan ies and banks are entrusted by 
investment trusts to sell trust funds to their domestic  investors, and it is those securities companies and 
banks, not investment trusts, that have information about  the investors. In addition, it is very difficult 
even for these securities companies and banks to check if th e second condition mentioned above is 
always fulfilled because of the enormous number of inv estors.  As a result of this regulation, Japanese 
investment trusts have difficulties in investing their funds into initially publicly offered stocks in the 
United States.  Therefore, the Government of Japan urges the Go vernment of the United States to take necessary 
measures to enable Japanese investment trusts that do  not have any intention to sell their shares to, and 
trade initially publicly offered stocks for the benefits of, “restricted pe rsons” to invest their funds into 
these stocks.  In this regard, please indicate the speci fic views of the Government of the United States. 
 
Q50. Securities services (p98, para.76) 
 
(1) With respect to cross border trade, how does SEC supervise the foreign companies dealing with 
cross border trade?  
(2) It is indicated that there are situations where some foreign broker-dealers are exempt from 
registration requirements.  Please provide the criteria for foreign broker-dealers to obtain exemption. 
 
(3) In the previous TPR, Japan requested the Gove rnment of the United States to relax disclosure 
requirements in the issuance of new stocks as the re organization.  The response of the U.S. was that 
they noted Japan’s concern and statement on the ma tter. Therefore, we would like to know whether 
there has been any progress and the review by the Government of the United States on this 
requirement. 
 
Q51. Harmonization and Unification of the State-Based Regulatory Systems or Transition to the 
Federal Regulatory System (p.100-102 para.86, 88-91)  
Due to the State-based insurance regulation and supe rvision in the United States, foreign insurers who 
wish to conduct insurance business in the United Stat es are required to obtain bu siness licenses in each 
State in which they wish to operate. Moreover, insure rs are required to apply for approvals of products 
and premium rates and notify important matters in e ach supervisory authority of the States in which 
they wish to sell insurance products.   
As a result, insurers are obliged to be subject to examinations in every single State in compliance with 
the laws of each State to obtain licenses and approva ls. In addition, Japanese insurers operating in some 
States have been faced with cases in which examin ations for licensing and approval took excessively 
long time compared with the standard period.  Th ese regulations cause unfair burden on insurers and 
prevents them from responding customer needs in a timely manner. 
 
Under these circumstances, the Government of Japan requested the Government of the United States to 
realize harmonization and unification of the State-b ased regulatory and supervis ory systems in terms of 
both procedural and substantial requirements in the fourth year dialogue of the Regulatory Reform and 
Competition Policy Initiative.  It also requested  to expedite examina tions and enhance their 
transparency in each State. In addition, to reso lve these problems, the Government of Japan also 
presented its demand that actions for reviewing the cu rrent regulatory system should be undertaken not          WT/TPR/M/160/Add.1 
Page 67 
 
 
only by the National Association of Insurance Co mmissioners (NAIC) but also by the Federal 
Government and that they should inform the Gove rnment of Japan of the progress they achieved. 
 To our disappointment, however, the harmonization and unification of the State-based insurance 
regulations have not been realized yet.  There has not been any progress in harmonization or unification 
of State-based procedure for license and approval.  Examinations of these licenses and approvals also 
have not been expedited.  In  addition, neither NAIC nor the Federal Government has provided 
information on the measures taken in response to th e previous requests from the Government of Japan. 
 Furthermore, the Government of Japan is aware that  even in the United States there is criticism against 
the current State-based system and growing voices fo r abolishing the current system and introducing 
the federal regulatory system by establishing the Optional Federal Charter.  Therefore, the Government of Japan urges both the Government of the United States and NAIC to 
realize the following: 
 
(a) To harmonize and unify the State-based insurance supervisory systems, or to shift to the federal 
regulatory system (Harmonization and unification can be realized by taking substantial measures by 
which, for instance, an insurer w ho has obtained license of a particular line of business or approval of a 
new product in one State is deemed to be eligible for the same business or product in other States);  
(b) To play a role in promoting harmonization a nd unification of regulations of the State-based 
supervisory system or shift to the federal regulator y system and to present practical timeframe of these 
reforms to the Government of Japan; and (c) To provide information about the progress of the unifying or the shifting to the Government of 
Japan in a timely manner to ensure  transparency of its process.  
 
In these respects, please indicate the specific view s of the Government of the United States. 
 
Q52.  Elimination of Reinsurance Collateral Requirement (p.100-102 para.86, 88-91) 
 
Under the current reinsurance regulations of the Unit ed States, overseas (re)in surers are, without any 
exception, required to post a trust account equiva lent to 100 percent of credit amount within the 
country, or to submit a letter of credit for collate ral, when they conduct reinsurance businesses with 
U.S. ceding companies on a cross-border basis.  These requirements incur tremendous burden on 
overseas insurers in reinsurance business.  In additi on, the Government of Japan is aware that the 
revision of this requirement has been discussed in the United States by NAIC in response to the 
concern raised by European insurers.  However, it se ems that a substantial plan of taking measures to 
abolish these requirements has not been presented by NAIC yet. 
 Therefore, the Government of Japan urges the Govern ment of the United States to take the following 
measures:   
(a) To eliminate these requirements in order to ensure that Japanese (re)insurers should not be 
discriminated against; and (b) To present a practical timeframe towards el imination of these requirements and to provide 
information about its progress in a timely manner to  the Government of Japan in order to ensure 
transparency of its process. 
 In these respects, please indicate the specific view s of the Government of the United States. 
 
Q53. Abolishment of Trusteed Surplus Requirement (p.100-102 para.86, 88-91) 
 
Under the state-based regulatory system, the Trust eed Surplus Requirement is imposed on not only 
foreign insurance companies but also alien insuran ce companies’ branches in the United States. This WT/TPR/M/160/Add.1 
Page 68  
 
regulation requires them to hold their major assets, which consist of deposits to the State authorities 
and Trusteed Assets, exceeding their net liability at banks or trust companies within the United States.  
 However, this requirement virtually means that th ese insurance companies have to deposit enormous 
proportion of their assets to these banks and trust comp anies.  The Government of Japan believes that 
this restriction excessively blocks flexible fund i nvestment of these insura nce companies and causes a 
loss of many of their opportunities to gain profits.  Therefore, the Government of Japan urges the Gove rnment of the United States and NAIC to abolish 
the Trusteed Surplus Requirement applied to alien in surance companies’ branches in the United States.  
In this regard, please indicate the specific vi ews of the Government of the United States. 
 
(2) TELECOMMUNICATIONS SERVICES 
(i) Institutional framework and market access 
Q54. A major supplier in the mobile telecommunica tion market (p. 102 to 103, paras.93 to 98) 
 
Does the United States assume a “major supplier” to be defined in the Reference Paper developed in 
the Negotiating Group on Basic Telecommunication for the mobile telecommunication market?  If so, 
please explain how the United States guarantees oblig ations (competitive safeguards, interconnection) 
applied to “major suppliers” on interior regulatio ns.  In these respects, please indicate the specific 
views of the Government of the United States.  
 
Q55. Foreign investment restriction on radio stations (p.103, para.96) 
 
Paragraph 96 states that common carrier radio licences cannot be granted to or held by non-US citizens, 
corporations not organized under the laws of the Unite d States, or foreign governments.  It is also 
stated that licences cannot be granted to U.S. corpor ations of which more than 20% of the capital stock 
is owned of record or voted by any of these entitie s.  However, these statements are followed by a 
qualification that licences may be granted to compan ies set up in the United States that are controlled 
by holding companies set up in the United States and in which foreign individuals, corporations, or 
governments own of record or vote more than 25% of  the capital stock, unless the FCC finds that such 
ownership is inconsistent with th e public interest.  Please explain the reasons why the United States 
maintains such a low-level, i.e., 20%, as the limita tion of FDI despite the fact that foreign indirect 
investment has been 100% liberalized.  (ii) Selected regulatory issues Q56. Public interest analysis and safeguards on regulations (p.104, paras. 99 to 100) 
 It is stated in paragraph 99 that “under the Co mmunications Act of 1934, the FCC must conduct a 
public interest analysis when evaluating applications  to: obtain authority to provide facilities-based or 
resold international services under Section 214;  r eceive authorization to exceed the 25% foreign-
ownership benchmark of Section 310( b)(4);  or obtain submarine cable landing licences.”  It is not 
disclosed how long it generally takes for the United St ates to conduct the “public interest analysis” and 
there are cases where the investigations have been extended over long periods of time.  For example, in 
the case of the assignment of management authorit y from the time of the Global Crossing to New GX, 
more than 1 year passed from the application (Aug. 2002) to when the approval was filed (Oct. 2003).  Japan is concerned that the lack of  transparency in the “public interest analysis” will have a detrimental 
effect on foreseeability.  In this regard, please indicate the specific views of the Government of the 
United States.  
Q57. Unbundled network element (p.106, para.111) 
 Although there is a statement in paragraph 111 that “the FCC has pursued a policy of creating 
incentives to broadband deployment since 2003, by no t requiring the incumbent local exchange carriers          WT/TPR/M/160/Add.1 
Page 69 
 
 
to unbundle new facilities that are designed to prov ide broadband services to residential customers, 
such as fiber-to-the-home loops, fiber-to-the-cur b loops, the high-frequency portion of the loop used 
for line sharing, and hybrid loops”, the government  of Japan is concerned that revision of these 
unbundling regulations would lead to a reduction on the scope of the unbundling obligations specified 
in the section 2.2 of the Reference Paper developed in the Negotiating Group on Basic 
Telecommunication and adversely affect these obligati ons.  In this regard, please indicate the specific 
views of the Government of the United States. 
 
Q58. Distinction between Telecommunication serv ice and Information service (p.106, para.111) 
 The United States adopts the distinction under th e Communications Act of 1934 (as amended) as 
follows: “Telecommunication service” is to be s ubject to obligations of unbundled access and 
responsibility for universal service fund, while “Inf ormation service” is not to be subject to those 
regulations.  This distinction has, however, become  ambiguous due to developm ent of technology.  The 
Government of Japan therefore requests the Governme nt of the United States to clarify the distinct 
criteria so that foreign suppliers can foresee the typ es of services classified and what regulations should 
be imposed.  In this regard, please indicate the speci fic views of the Government of the United States.  
 
(3) MARITIME TRANSPORT 
(i) Main features and competition policy considerations 
Q59. Harbor Maintenance Tax (HMT) (p.108, para116-119)  
At the meeting of the Automobile Consultati on Group (ACG) in January 2003, Japan took up the 
Harbor Maintenance Tax as an issue of great con cern to the Japanese automobile industry and claimed 
that the HMT clearly discriminates against imported cars.  Japan would like to know whether the U.S. 
has a plan to review the taxation system cited above. 
 
Q60. Maritime transport and competition polic y (1) and International water-borne trade (1) 
(p.108 para.116 and p.110 para.129) 
 (1) Though approximately 98% of the U.S. ocean-borne  foreign trade is carried on foreign-flag vessels, 
the amount of cargo coming within the scope of the U. S. cargo reservation is not negligible considering 
that the United States is the largest cargo owner c ountry.  Japan requests the U.S. to abolish the Cargo 
Preference Measures, such as the requirement to use U.S. vessels to export Alaskan oil, which is 
commercial cargo.  These protectionist measures are inconsistent with the principle of national treatment, and are also against the Ministerial Decision on the Negotiations on Maritime Transport Services of the WTO, which prescribes that particip ants should not apply any protectionist measures 
during the negotiations.  In this regard, please indicate the specific views of the Government of the 
United States.  
 (2) Since the repeal of the aforementioned rule, th e FMC requires Japanese and U.S. carriers to report 
to it on the progress of port situations in Japan.  Ef forts have been made and signs of progress have 
been seen in various aspects: the "prior consultation system" has improved significantly (and the 
improved system has been implemented steadily);  and the Port Transportation Business Law was 
revised to abolish the supply-demand adjustment rest riction and thus has realized new entries into port 
transport business.  Progress has also been made toward the introduction of port terminal service operations on a 24-hour/364-day basis.  Japan st rongly urges the FMC to fully understand these 
positive developments.  Despite significant improvement  in the port situation of Japan however, the 
FMC introduced in August 2001 a new order, which not only increased the number of items to be reported, but also expanded the scope of the carrier s subject to the reporting requirements.  The order 
includes requirements which go beyond the extent de emed appropriate to be imposed upon carriers.  
For example, it directly requires Japanese carriers to  submit translated copies of Japanese laws and 
instructions concerned, causing a unfair and excessive burden on the carriers.  Should it be the case that 
the FMC decided to expand the range of the reporting requirements in order to judge whether or not it WT/TPR/M/160/Add.1 
Page 70  
 
should impose unilateral sanctions, that would vi olate the Treaty of Friendship, Commerce and 
Navigation between the United States and Japan, and Japan would deem it as a regrettable and serious abuse of the FMC's mandate.  Japan, therefore, strongly  requests the U.S. to withdraw the order.  In this 
regard, please indicate the specific views of the Government of the United States.  
 
Q61. Maritime transport and competition policy (2) (p.108, para 119) 
 The Federal Maritime Commission (FMC) is authorized  by Section 19 (1) (b) of the Merchant Marine 
Act of 1920 (the Jones Act) to make rules and regul ations affecting shipping in foreign trade.  The 
FMC imposed a unilateral sanction against Japan ese carriers in September 1997.  Although the 
sanction was removed in May 1999, the FMC still requir es carriers to report to it on the situation of the 
ports in Japan.  The rule (repealed in May 1999), which provided grounds for unilateral sanctions, was 
a violation of the Treaty of Friendship, Comme rce and Navigation between Japan and the United 
States, according to national treatment and most-favored-nation treatment .  Japan, therefore, requests the U.S. to work more closely with the FMC to en sure that such unilateral measures will no longer be 
taken.  Japan is concerned about the impact of the Jones Act and any othe r related legislation on 
shipping trade, and submitted a list of questions (W T/GC/W/520) at the Review of the General Council 
last December.  Please provide information about th e current situation regarding the responses to the 
questions. 
 
Q62. Domestic water-borne trade (p.108, para.120) 
 The supply of cargo services between two points within the United States is reserved for the ships built 
in the United States. Japan requests the United St ates to abolish such a requirement. Though we 
understand that naval ships should be constructed in the U.S. fo r security reasons, shipping companies 
should be allowed to operate vessels constructed in foreign countries, c onsidering, in particular, that, 
civil airlines, the domestic railway companies and road transport operators are now allowed to use 
aircrafts, trains and trucks made in foreign countr ies, respectively. Japan would like to know the reason 
why the U.S. government imposes a construction requirement only on maritime transport.  Q63. Merchant Shipping Act of 1920  (Jones Act) (p.108-109, para120-121) 
 
At the meeting of WTO General Council in Dece mber 2003, Japan requested the United States to 
provide information on the progress made on the revi sion of the Jones Act, and the U.S. submitted 
responses to this request.  Japan would like to know  whether there has been any further progress on the 
revision of the Jones Act, and whether the U.S. is planning to revise the Act in the future.   
 
Q64. International water-borne trade (2) (p.109, para.122) 
 The Ocean Shipping Reform Act of 1998 includes a provision allowing the discriminatory treatment of 
Japanese and other foreign shipping firms, by maki ng it possible to impose un ilateral regulations on 
pricing and other practices.  As the pricing practi ce is the foundation of a free shipping activity on a 
commercial basis, unilateral regulations by the FM C on the pricing practice obviously intervenes with 
such a free shipping activity, thereby discriminating fo reign firms.  Furthermore, an amendment to the 
Act in 1998 explicitly stipulates the right of the Fede ral Government to undertake this intervention.  
Japan requests the United States to confirm that in  the future the FMC shall not impose unilateral 
regulations on shipping activities on a commercial basis, conducted by Japanese and other foreign 
shipping firms, without having a regard to the reality  of the market.  In this regard, please indicate the 
specific views of the Government of the United States.  
Q65. International water-borne trade (3) (p.110, paras.126 to127) 
 According to the Maritime Security Program (MSP) , a new ten-year program  began on 1 October 2005 
which gives an increased subsidy to the maximum of  60 ships.  Japan requests the Government of the          WT/TPR/M/160/Add.1 
Page 71 
 
 
United States to abolish this program.  It is obvious that the provision of such an enormous amount of subsidy distorts conditions for free and fair competiti on in the international maritime market.  In this 
regard, please indicate the specific views of the Government of the United States.  Q66. International water-borne trade (4) (p.110, para.126)  
According to paragraph 126 on pa ge 110, a number of programmes are in place to allow the eventual 
use of the U.S. commercial fleet for defence purposes.  Has there ever been a case where the U.S. made 
use of the U.S. commercial fleet for such a purpose in time of war or nati onal emergency and if so, 
please provide specific examples and explain under what circumstances it was necessary to do so.   
 
Q67. Port services (P.111, para. 134) 
 
Paragraph 134 on page 111 states that the U.S. intends to resolve the problem of port congestion in the U.S. with the MARADSs Port Development Program.  Please provide information on the content of the 
program specifically.  
 (Attached paper) 
 
Immigration control/consular affair s (Matters contained in the Re commendations by the Government 
of Japan to the Government of the United States regarding Regulatory Reform and Competition Policy, 
7 December 2005 ) 
 
1. Visa Process 
 The Government of Japan urges the Government of the United States to: 
 (a) Resume visa revalidation at the Department of State, in particular; 
  (i) Take necessary measures to use equipmen ts to collect biometric identifiers in the 
  United States for visa revalidation applican ts, such as equipments at airports for the 
  implementation of the US-VISIT program; 
  (ii) Consider the resumption of domestic revalidation only for certain categories of 
  visas whose bearers’ status is more reliably guaranteed;   (b) Commence the revalidation of E visas in third countries, and (since there is no statutory 
 prohibition of the revalidation of E visas in count ries other than the United States and bearers’ 
 home countries, and in some reported cases revalid ation applications were rejected only due to 
 insufficient staff,) reinfor ce the ability to process visa revalidation at the United States 
 establishments in Canada and Mexico, including reviewing the level of staffing at these places; 
 and  (c) Shorten the time for visa revalidation in Japan , Canada and Mexico and clarify how long it 
 takes to revalidate visas, and secure the issue of  revalidated visas in a few days after interview 
 by establishing an organizational setup to prio ritize the revalidation process and by completing 
 a part of the examination of applications before interviews. 
 
2. Driver’s License 
(1) Real ID Act 
 The Government of Japan urges the Government of the United States to: 
 (a) Regard the term of validity of non-immigran t visas, which are valid for a longer time, as the 
 “period of time of applicant’s authorized stay ” so that an excessive burden will not be placed 
 on Japanese nationals when States implement the Act;  (b) Confine the “official purposes” in the Act to  the minimum that are genuinely necessary, and 
 clarify it so that foreigners do not always need to carry passports with them in case several 
 States do not comply with the Act or issue non-complying licenses as an option;  (c) Guide and monitor State Governments and related Federal authorities as much as possible 
 in the scope of the Federal Government’s aut hority, including by informing them of U.S. WT/TPR/M/160/Add.1 
Page 72  
 
 immigration policies so that State Government s can change their regulations about driver’s 
 licenses smoothly; and   (d) Issue the Federal regulations as soon as possi ble in order to alleviate the concerns among 
 Japanese nationals which arise fro m the uncertainty about the actual impact of the Act, and to 
 avoid confusion as to the implementation of the Act in each State.   (2) Improvement of State Rules 
 (a) Improvement of Term of Validity of International Driver’s License 
 A number of Japanese nationals drive with inte rnational driver’s licenses in the United States 
 until they obtain local State li censes, since it normally takes a long time to obtain the latter. 
 However, many States require foreigners to  obtain State licenses upon the fixation of their 
 residence in the State and void their internati onal licenses.  In other states, international 
 licenses lose effect in a relatively short period, six months for example. Furthermore, the State 
 of North Carolina does not allow foreigners to  drive with international licenses at all. 
 Therefore, the Government of Japan urges th e Government of the United States to request 
 relevant State authorities to accept one-year term of validity of international driver’s licenses 
 issued by Japanese authorities, in  accordance with the spirit of th e Convention on Road Traffic, 
 to which the United States is also a signatory. 
 (b) “Sponsor” Requirement in Driving Test in the State of Massachusetts 
 The regulations of the State of Massachusetts pr ovide that the applicant of driver’s license be 
 accompanied for a driving test by a “sponsor” who is 21 years or older with a valid driver’s 
 license issued in the United States and with a minimum of one year of driving experience. It is 
 often difficult to find an appropriate sponsor fo r a foreigner immediately after his or her arrival 
 at the country, and therefore this requirement in Massachusetts has been causing inconvenience 
 for Japanese nationals to obtain driver’s licenses in  the State. It is possible but also costly to 
 ask an agent to provide a sponsor.  The Governme nt of Japan understands that Massachusetts is 
 the only State that requires a “sponsor” for driving tests. It urges the Government of the Untied 
 States to request the State authorities to abolis h the rule, or otherwise mitigate the requirement 
 to avoid excessive burden imposed upon foreigners. 
 (c) Issuance of “Driver’s Certificat e” in the States of Tennessee and Utah 
 Driver’s Certificates issued  in Tennessee and Utah do not have a “photo ID” function that 
 driver’s licenses have, and therefore cause da ily inconveniences to Japanese people in the 
 United States. The Government of Japan urges the Government of the United States to request 
 these States to abolish the measures.  (d) Restriction of Driving Test Location in the State of Rhode Island 
 In the State of Rhode Island it used to be possi ble to take driving test s near the applicant’s 
 residence. However, the recent change in the rule  requires foreigners to take driving test at a 
 specified location, which is often far away from their residence. The Government of Japan 
 urges the Government of the United States to re quest the State to enable foreigners to take 
 driving tests near their residence as in the past. 
 3. Immigration Control by Use of Biometric Identifiers at Port of Entry and Departure 
 The Government of Japan urges the Government of the United States to: 
 (a) Collect information on the time required for passengers to pass immigration control, and 
 take necessary measures to make it shorter;  
 (b) Protect personal information collected th rough the US-VISIT program stringently, and 
 publicize the measures taken for the informati on protection as much as possible in order to 
 alleviate Japanese nationals’ concerns about the fact that their fingerprint information is 
 scanned and possessed by the Government of the United States; and  (c) Make further outreach efforts to prom ote better understanding of  the program by the 
 Japanese public, especially when changes in pro cedures are expected to cause confusion, for 
 example, when the US-VISIT program is e xpanded in terms of the number of implementing 
 points of entry and departure, and when radi o frequency identification (RFID) technology or 
 other new technology is introduced.          WT/TPR/M/160/Add.1 
Page 73 
 
 
4. Suspension of Visa Waiver Program for Holders of Non Machine-Readable Passport 
 The Government of Japan urges the Government of the United States to: 
 (a) Make further efforts to inform relevant sector s, including travel agencies, of the fact that a 
 holder of a non machine-readable passport cannot enter the United States without a visa, so that 
 travel agencies confirm the passport of a trav eler is machine-readable when the traveler 
 reserves or purchases an airplane ticket, a nd prevent in advance a holder of a non machine-
 readable passport from being rejected to travel to the United States on the very day of 
 departure; and 
 (b) Waive visa requirement for the nationals of  the VWP countries who have travel documents 
 that are valid only for their return to the hom e country as an exceptional case, and continue to 
 waive visa requirement, after October 26, 2006, fo r those who have urgent passports issued at 
 overseas establishments of Japan (valid for a y ear) or the travel documents without biometrics 
 identifiers, even though the Government of the United States has decided that holders of non 
 biometrics passports issued after October 26, 2006, are required to obtain visas to enter the 
 United States. 
 
5. Social Security Number 
 
The local agents of the Social Security Admi nistration (SSA) issue Social Security Number 
(SSN) after confirming that an applicant is elig ible to obtain SSN by checking his or her entry 
record on the database provided on-line by the Department of Homeland Security. Though the 
Government of Japan is aware that the SSA and the Department of Homeland Security continue efforts to expedite the process to veri fy immigration status, it still takes one to two 
months for SSA to issue SSNs for foreigners. Since SSNs are required as identification on a 
variety of occasions when Japanese nationals star t living in the United States, for example, in 
opening bank accounts and in contracting for credit cards, the delay in issuing SSNs causes 
them significant inconvenience. 
 Accordingly, the Government of Japan urges the Government of the United States to take 
 necessary measures to expedite the issuance of SSNs. 
 
6. Individual Taxpayer Identification Number 
  The Government of Japan urges the Government of the United States to: 
 (a) Reconsider the rule to enable the applica tion for ITIN at any time before the Federal tax 
 return filing;  
 (b) Request the relevant authorities of States that require the presentation of either SSN or ITIN  for administrative procedures, such as applica tion for driver’s license or filing for dependent 
 family deduction, to accept documentation which certifies their ineligibilit y to obtain SSN as a 
 substitute to ITIN;  and  (c) Shorten the time to issue ITIN to a lleviate the inconveniences of Japanese dependant 
 family. 
 
7. Permission to Stay 
  (a) At present, it takes two to three months to extend permission to stay (I-94), and in the mean 
 time, it is not virtually impossible for Japanese  workers in the United States to leave and re-
 enter the country, which creates impediment to their business. The Government of Japan urges 
 the Government of the United Stat es to expedite the extension process. 
 (b) The Government of Japan urges the Governme nt of the United States to extend the term of 
 validity of I-94. In particular, the term of valid ity of I-94 issued to E visa bearers is two years 
 at maximum, and one year in some cases, in which case the bearer has to extend his or her I-94  every year. The Government of Japan therefore urges the extension of the term of I-94 issued  to E visa bearers. 
 WT/TPR/M/160/Add.1 
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Report by the United States (WT/TPR/G/160) 
III. TRADE POLICY DEVELOPMENTS, 2003-2005 (2) REGIONAL INITIATIVES Q1. U.S. - EU Initiative to Enhance Transatlan tic Economic Integration and Growth (p.15-16, 
paras. 50-51) 
 The Initiative, issued at the June 2005 U.S.-EU Summ it, reaffirms the importance of the U.S. – EU 
regulatory cooperation and agrees on the establishm ent of the high-level Regulatory Cooperation 
Forum as part of its implementation. (1)Please provide information on the implementati on of the Forum, including on the area of early 
warning regulatory cooperation. 
(2) Please also explain the implementation of the Work Plan, submitted in November 2005, in 
accordance with the said Initiative, in cluding information in the areas of intellectual property rights and 
regulatory cooperation.  Q2. Agreement on Mutual Recognition between the United States of America and the European Community (p. 15-16, paras. 50-51)  
Regarding the Agreement on Mutual Recognition be tween the United States of America and the 
European Community, please provide information on the following: (1) the state of the implementation of the agreemen t and the kind of difficul ties experienced in the 
process of implementation; 
(2) the evaluation by the U.S. of the implementati on of the agreement from the view point of cost-
benefit performance, taking into account matters such as the number of cases of application of the agreement in each sectoral area per year and administrative costs of the implementation;  
and 
(3) whether any further extension of sectoral coverage of the agreement is expected and if so, the areas 
concerned.   
Q3. African Growth and Opportunity Act (p.16, para. 53) 
 
Concerning the extension to September 2007 of the AGOA’s special provision under which less-developed beneficiary countries are permitted to u se regional or third country fabric in apparel 
imported into the United States under AGOA, is there any possibility of excessively promoting fabric 
exports to Africa from a particular third-country?  
Q4. U.S. - Australia Free Trade Agreement (p. 20, para.74) 
 With regard to the coverage of the United States – Australia Free Trade Agreement, it is noted in the 
attached letter that both parties of the agreement confirmed that no provision of the agreement shall be construed as imposing any obligation on a pa rty regarding its immigration measures. 
(1) Please explain how matters relating to immigrati on measures have been dealt with and how this 
matter will be treated in the FTA to be concluded in the future by the U.S. 
(2) What are the commitments on trade in services ma de under the United States – Australia Free Trade 
Agreement that are not included in the sche dules of specific commitments under the GATS? 
(3) Please explain the details of the arrangements such as preferential tariff-rate quotas and safeguards 
on certain procedures.  Q5. U.S. - Thailand Free Trade Negotiations (p.21, para. 80) 
 
(1) Are negotiations of the U.S. - Thailand FTA expected  to be concluded by the end of TPA in spite of 
the suspension of the negotiation sch edule due to the dissolution of the Thai House of Representatives?  
If such is not the case, does the Government of th e United States intend to continue negotiations to 
complete this FTA after the TPA time limit?          WT/TPR/M/160/Add.1 
Page 75 
 
 
(2) Please explain whether the Government of the Un ited States intends to pu rsue full coverage of 
FTAs with all countries, as “comprehensiveness” is not  mentioned in some FTAs such as those with 
Oman and Bahrain.  
TURKEY 
 
WT/TPR/S/160 
Part I/Recent Economic Develo pments, paragraph 12, 15, 18: 
 1. In the Secretariat Report, unde r paragraph 12, it is stated  that higher oil prices, the lagged 
effect of previously expansionary monetary and fi scal policies, and the depreciation of the Dollar vis-a-
vis the Euro may have had an effect on inflation.   On the other hand, in paragraph 15, it is explained that the US Administration has been conducting a policy of fiscal stimulation by proj ecting 1.35 trillion US Dollar tax cut over FY 2001-
2011 and projecting an overall 5.6 trillion US Dollar  federal government surplus over the same period.  
  Furthermore, it is mentioned in the paragraph 18 that the IMF considers that despite recent 
measures towards fiscal consolidation, there is a case for bolder reduction of the deficits including 
measures to bolster revenue. 
 
 Can the contradictory nature of the combinati on of anti-inflationary and supply side policy 
mix, and also the concerns expressed during this revi ew process by US authorities about a potential for 
lower growth in the face of a unilateral reduction  in  the fiscal imbalance be considered as a sign of  
possible policy change  in the future budgetary projections? 
 
WT/TPR/S/160 
Part II/ Developments in Trade and Investment Policy, paragraph 3: 
 
2. The Secretariat report states that the United St ates grants unilateral preferences to developing 
countries  under a number of schemes and that these preferences may be conditional on compliance 
with various US policy objectives.   
  Could United States explain if all conditions are applied in the same manner to all countries in 
granting unilateral preferences?  
 Could United States explain how the complian ce of these conditions with the various policy 
objectives can be assured?  
WT/TPR/S/160 
Part II/ Developments in Trade and Investment Policy, paragraphs 4,7,44: 
 3. The Secretariat report indicates that, with some sector-specific restrictions, the United States  
maintains a policy of national treatment  for foreign direct investment.   According to the Secretariat report,  these restri ctions  to national treatment apply with respect 
to certain official support programs and in a number  of limited cases Forei gn Direct Investment is 
subject to reporting requirements or review to  take account of national security concerns. 
  Moreover; paragraph 7 of the report adds th at the Omnibus Trade and Competitiveness Act of 
1988 authorizes the President to restrict FDI that threatens national security.  The Secretariat Report, paragraph 44 furt her  explains that under the “Exon-Florio 
amendment”, the president may take action with resp ect to foreign acquisitions, mergers or takeovers WT/TPR/M/160/Add.1 
Page 76  
 
on the ground of “national security” and that  even the amendment does not define what the “national security” is, it sets out certain factors to be considered.     Could US outline what  these certain factors  are that might be  considered in the President’s 
assessments for the any possible  “national security” actions   and how all these  concerns affect the 
inflow of FDI to the US? 
 
WT/TPR/S/160 
Part II/ Developments in Trade and Investme nt Policy, (iii) Legislative Developments, 
paragraph 14 
 
4. In the paragraph 14 of the Secretariat Repor t, it is mentioned that on 2 March 2005, House 
Joint Resolution 27 to withdraw the approval of the Congress  from the Agreement establishing the WTO was introduced  and referred to the Committee on Ways and Means.   
 It is further stated in the same paragraph that the Administration strongly opposed H.J 
Resolution 27.    Could US Delegation kindly refer to the reasons  of the submission of H.J Resolution 27 that 
envisages withdrawal of the approval of the C ongress from the Agreement establishing the WTO? 
 WT/TPR/S/160 Part II/ Developments in Trade and Investment Policy, (3) Participation in the WTO, paragraph 15 
 
5. In the Secretariat report, under paragraph  15, it is stated that the US authorities reaffirmed 
their strong support  of the multilateral trading system  which they consider to be at the core of US 
international trade relations.   On the other hand, since 2001, the US has b een very ambitious in pursuing to sign new free 
trade agreements especially with  the developing countries.  
 
 Could US Delegation kindly elaborate how the US strikes a balance her FTA policies with the 
Doha Development Agenda  Negotiating Strategy. 
 
WT/TPR/S/160 
Part II/ Developments in Trade and Investment Policy, (4) Preferential and Other Arrangements, 
(ii) Free Trade Agreements, paragraph 31  
6. Paragraph 31 of the Secretariat Report states that  the US-Australia FTA is the first US FTA  to 
include non-market access provisions relating to public  health and pharmaceuticals. According to the 
report the US-Australia FTA requires Australia to apply transparent procedures  in    listing new 
pharmaceuticals for reimbursement. 
 
 Could US explain if the US has undertaken  commitments with regard to her public health policies under the said FTA or the mentioned  non-m arket access commitments in those areas   are 
unilaterally taken by Australia?           WT/TPR/M/160/Add.1 
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WT/TPR/S/160 
Part II/ Developments in Trade and Investment Policy,  4) Preferential and Other Arrangements, 
(iii) Unilateral preferences and oth er trade arrangements, paragraph 37 
 
7. As mentioned in the Secretariat report, paragr aph 37, the US grants unilateral preferences to 
GSP-eligible exports from benefi ciary developing countries and th e current GSP will be put force 
through 31 December 2006.   We would appreciate if the US Delegation could provide information on the preparation of the 
next GSP scheme. 
 
 We understand from the Secretariat report that th e granting of preferences may be subject to 
compliance with various US policy objectives.   In this respect we would also  like to learn   how this compliance mechanism operates and if 
beneficiary countries are allowed to be informed  in  advance  of any possible new requirements of US 
policy objectives.   Is there a commonality of requirements between  the GSP schemes and those other unilateral 
preferences extended  by the US to some  countries under specific trade arrangements? 
 WT/TPR/S/160 Part II/ Developments in Trade and Investment Policy, (5) Foreign  Investment Regime, paragraph 47  
8. In the Secretariat report, under paragraph 47, it is stated that under the Middle East Free Trade 
Initiative (MEFTA), the US offered to negotiate  new trade and investment framework agreements with 
countries in the region and to d eepen those already in place. 
  Could US Delegation give more informa tion on their projection on this issue? 
 
WT/TPR/S/160 
Part III/Trade Policies and Practices by Measure, (1) Overview, paragraph 3 
 
9. In the aftermath of unfortunate terrorist act  of September 11, the concept of security has 
increasingly been playing an important role in th e US trade policy decision making process. In this 
regard, Secretariat report makes references to or contains quite amount of information on security –
related trade policy measures. 
  For example, paragraph 3 of the Secretariat repor t mentions that since its previous review the 
US has taken additional steps to incorporate security  considerations into its import procedures, notably 
by promulgating regulations in relation to the Trade Act of 2002 and the Bioterrorism Act. 
 
 Could US Delegation make a general assessment on the effect of the security related measures 
on the bilateral commercial relations of  the US with her trading partners? 
 
WT/TPR/S/160 
Part III/Trade Policies and Practi ces by Measure, paragraph 6, 129 
 10. In the Secretariat Report, under paragraph 5,  it is written that the United States has made 
numerous notifications under the TBT and SPS Agreemen ts but there is no inform ation on the extent to 
which U.S. standards are based on standards developed by international organizations. WT/TPR/M/160/Add.1 
Page 78  
 
 In the paragraph 129 of the Secretariat report, it  is further stated that the US authorities have 
indicated that the US Government does not maintain centralized statistics  on the extent to which US 
technical regulations are based on international standards.   Even it seems that no specific information is available, could US  Delegation give general 
indicative information about the extent that these st andards are in conformity with the ones developed 
by international organizations?  
WT/TPR/S/160 
Part III/Trade Policies and Practices by Measure,  (viii) sanitary and phytosanitary measures, 
paragraph 155, 156  
11. It is mentioned in the Secretariat report that  in general  import of plants, animals, and their 
products require an import permit issued by the Anim al and Plant Health Inspection Service (APHIS). 
 
 It is further explained in the report of the WTO Secretariat that  the assessment of APHIS and 
the issuance of an import licence can take several years.    We understand from the paragraph 156 that the whole process from APHIS’  determination to 
assess the risk to the issuance of an import licence  to  some extent depends on the regulations and that 
if the regulations allow imports of a product from a particular area import permits are issued without 
any additional risk assessments for a particular shipment. 
  Is there a maximum  period of time set for  the  issuance of import permits?    Could US Delegation explain what kind of fact ors are examined in the APHIS’ process to issue 
import licence? 
 
WT/TPR/S/160 
Part IV/Trade Policies By Sector, (2) Agri culture (i) Legal Framework and Overall Support, 
paragraph 10, 20, 25, 26, 29 
 12. According to the Secretariat report, payments to US agricultural producers amounted to 13.3 
billion US Dollars in 2004 and  preliminary estimat es by the Department of Agriculture predict 
government payments for 2005  to increase to  close to 21.4 billion US Dollars.   The report mentions that  the projected incr ease largely would be driven  by an increase in 
counter–cyclical payments and ad hoc emer gency payments with respect to 2004. 
  As also highlighted by the Secretariat, in thei r report,  counter-cyclical payment is one of the 
main domestic support instruments introduced  by the 2002 Farm Bill. According to the paragraph 26, 
total amount of direct and counter-cyclical payments  and loan programs accounted for %62 on average 
of total government payments to agricultural producers in 2003-04.  
 
 It is known that the latest US notificati on  on domestic support does not include support 
granted under any of the programs c overed by the  2002 Farm Bill. 
  When does US intends to make necessary notif ication for the  counter-cyclical payments and 
the other support instruments of s upport under the Farm Bill of 2002?  
  It is noted from the Secretariat report that th e counter-cyclical payments  program covers  the 
same commodities as the direct payments program.            WT/TPR/M/160/Add.1 
Page 79 
 
 
 Under these conditions, how could  US achieve   to meet its domestic support obligations 
stemming from WTO Agreement on Agriculture?   
WT/TPR/G/160 
Part III/Trade Policy Developments, (8)Agricultural Issues, paragraph 116 
 
13. Paragraph 116 of the Government Report reads that the Commodity Credit Corporation total net direct payments in 2003 were 12.9 billion US Dollar and these net direct payments are notified as a 
mix of blue and green box measures.  
 As it is known, different pre-conditions are defi ned  in the Agreement on Agriculture to ensure 
that  each supporting instruments are assumed to be  justifiable under one of the three domestic support 
boxes.   Against this, could US delegation explain, how  CCC net direct payments could be notified as a 
mix of blue and green box measures, unless the nature of  those net direct payments had  been different 
from each other?   The report further states that if the Secretar y of Agriculture determines that the AMS ceiling 
will be exceeded, the 2002 Farm Bill has a provisi on by which the Secretary shall, to the maximum 
extent practicable adjust expenditur es to avoid exceeding allowable levels. 
 
 Is this specific flexibility extended to the S ecretary of Agriculture under the 2002 Farm Bill 
can be assumed as a kind of “escape clause” giving room for manoeuvre to the US to meet her obligations in notifications even in practice those commitments are not seemed to be met? 
 WT/TPR/S/160 Part III/Trade Policies and Practices by Measu re, (iii) Other Charges affecting imports, 
paragraphs 66, 68, 69 
 
14. Paragraph 66 states that the US imposes mercha ndise  processing fee for the imports valued at 
more than 2000 US Dollar amounting to 0.21% of  the import value.  We understand from the 
Secretariat report that the application of th e merchandise processing fee has been extended until 
September 2014.   Furthermore, it is mentioned in the paragraph 68   that water-born imports valued at more than 
2000 US Dollar and unloaded at a port receiving fede ral funds for maintenance are subject to a harbour 
maintenance fee whereas exported cargo is exempted  following the decision by the US Supreme Court. 
 Could US Delegation explain the rationale of these  charges  and its consis tency with the relevant 
GATT Articles?  
WT/TPR/S/160 
Part III/Trade Policies and Practices by Meas ure, (iv) Anti-Dumping and Countervailing 
Actions, (f) Sunset Reviews 
 
15. Turkey considers the fact that, within the c ontext of sunset review mechanism, continuous 
prolongation of the implementation periods of the AD and CV duties by the U.S. authorities creates 
serious market access barriers, problems and uncer tainties for Turkish companies and for Turkey-US 
bilateral trade relations.   Turkish Delegation would like to kindly ask wh ether the US Government considers reviewing 
these procedures.  
 WT/TPR/M/160/Add.1 
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WT/TPR/S/160 
Part III/Trade Policies and Practices by Measu re, (3) Measures Directly Affecting Exports 
 
16. The Secretariat report, paragraph 187, touches upon on the Transshipment Country Export 
Control Initiative (TECI) which is aimed to avoid di version of sensitive items to illicit purposes.  The 
initiative is very much in line with the 1540 num bered United Nations Security Council Resolution 
which stipulates that states should establish effectiv e controls over transit and transshipment for the 
commodities of proliferation concern. Moreover Pro liferation Security Initiative foresees transit and 
transshipment controls.   
 On the other hand, GATT 1994 Article V on Freedom  of Transit stipulates that there should be 
freedom of transit through the territory of each contracting party.   In this regard, can US Delegation elaborate more on the scope of the transit/transshipment 
controls executed by the US and their impacts on trade? 
 
BRAZIL 
1. Chapter III, paragraph 03
:  “Most non-tariff restrictions are maintained for non-commercial 
purposes, including a ban on imports of marine ma mmal products, shrimp, and tuna from countries 
found not to be in compliance with U.S. environmen tal provisions.” What are the objective criteria and 
procedures that the U.S. Government establishes in  order to identify which countries among those who 
export the above mentioned products do not meet th e U.S. environmental provisions? What procedures, 
if any, are in place in order to ensure that such  provisions will not be used for commercial purposes? 
 2. Chapter III, paragraph 74
:  Concerning the implementation of the DSB decision on 
United States – Continued Dumping and Subsidy Offset Act of 2000 (CDSOA) - WT/DS217 and 
WT/DS234, could the US Government indicate the estimated amount that will still be collected as 
duties imposed on goods imported into the United States until the final and complete repeal of the Byrd 
Amendment? For how long does the US Administration intend to continue distributing duties collected 
under CDSOA to US companies?  3. Chapter III, paragraph 76
:  The Secretariat´s report points out that there are new guidelines to 
prevent circumvention.  Which are the objective crite ria that the U.S. Customs and Border Protection 
uses in order to define those “sudden changes” in th e declared values, claimed country of origin, or 
declared classification?  4. Chapter III, paragraph 81
:  In table III.3, the report shows statistics of anti-dumping 
investigations in the period 1980-2004. However,  it does not give information on the number of 
applications for anti-dumping which were made in the mentioned peri od. Would it be possible for the 
United States to provide such statistics for 2004 and 2005?  In the same table III.3, the Secretariat´s 
report provides the number of preliminary and final determinations for 2004.  According to the ANNEX II of the Anti-dumping Agreement, the authoriti es can make determinations on the basis of the 
facts available if information is not supplied within a reasonable time or if an interested party does not 
cooperate. What is the proportion of anti-dumping determinations based on facts available during 2004 
and 2005? Would it be possible to identify a trend on such proportion?  5. Chapter III, paragraph 82
:  The report informs that 38 out of 71 of the investigations initiated 
during the period 2002-2003, or 54%, resulted in the a pplication of provisional measures.  That rate 
rose to 92% in 2004 (24 out of 26 investigations).  Those provisiona l measures are related to critical 
circumstances that may arise as a result of the co nditions listed in Article 7 of the Anti-dumping 
Agreement, so they should be applied only on an exceptional basis.  To what factor does the U.S. 
Department of Commerce attribute this high percen tage of incidence of provisional measures in 2004? 
What would be the domestic and/or external fact ors that explain those critical circumstances?          WT/TPR/M/160/Add.1 
Page 81 
 
 
6. Chapter III, paragraphs 150-160 :  The United States is deemed to attach importance to the 
pursuit of sound scientifical basis in SPS matters. Nevertheless, the Office of Management and Budget 
(OMB) can adopt measures based on “economic impact ”.  What is the rationale behind taking into 
account economic concerns in SPS decisions?  
7. Chapter  III, paragraph 156
:  "The process from APHIS' determination  to assess the risk 
presented by imports of a particular product to the issuance of an import licence can  take  several 
years, depending on the quality of the data  received  for  the  risk  assessment,  among  other factors." 
Nevertheless, many delays have been registered in the certification process of Brazilian meat. Until the 
end of 2005, Brazil was taking more than three year s to certificate fresh meat .  According to APHIS 
staffers, the delay was due to lack of human resour ces, since many were been deployed to tackle the 
BSE threat. What are the American government pl ans to prevent those delays from undermining the 
credibility of the certification process?  8. Chapter III, paragraphs 191-194
:  “the United States provides export financing through its 
official export agency, the Ex-Im Bank”. The Bank is  mandated to provide “credit at rates and terms 
that are fully competitive with those supported by governments in the principal countries whose 
exporters compete with U.S. exporters. Ex-Im Bank  accepts risks that private sector is unwilling or 
unable to take.” In a recent paper (TN/RL/GEN/94) , presented at the Negotiating Group on Rules, the 
US proposed the expansion of the prohibited categor y of subsidies on the Agreement on Subsidies and 
Countervailing Measures (ASCM). According to the doc ument, some “forms of egregious government 
intervention such as (...) funding of companies or projects that would not otherwise receive 
conventional commercial financing” should be the fi rst candidates for inclusion in an expanded “red 
box”. 
(i) Does the US consider that the export fina ncing, as currently provided by the Ex-Im Bank, 
could be understood as a form of “egregious gove rnment intervention”, in the terms of its 
proposal (TN/RL/GEN/94)? What would differentiate the practice of Ex-Im Bank when 
accepting “risks that private sector is unwilli ng or unable to take” from the ones the US 
describes in its proposal? 
(ii) In addition, in paragraph 194, the report st ates that “close to 40% of total Ex-Im Bank 
exposure is in the aircraft sector” – out of US$13 .3 billion in support activities, in 2004. Could 
the US Government please provide additional details on their support (guarantees, insurance 
and credits) to the mentioned sector, in cluding terms and rates of financing?  
9. Chapter III, paragraph 195 :  A number of assistance measures for export promotion are in place 
in the US, among them a duty drawback program.  The report does not provide detailed information 
about the actual operation of the program. It states simply that “customs duties and certain internal 
taxes and fees resulting from importation are refunde d following the export of either the imported 
product or the article manufactured from the im ported product”. Regarding the US drawback 
programme, is it possible to receive information on:  (i ) criteria for firms to be eligible for the program; 
(ii) refundable taxes and fees and ex tent of refunds;  (iii) mechanisms for the refund, including time 
periods?  10. Chapter III, paragraph 252
:  Regarding the American policy of promoting increased IPR 
protection through free trade agreements, could the US Government exp Could the US Government 
also specify: a) the advantages, favors, privileges or immunities granted to the nationals of other 
countries by means of the 22 bilateral intellectual property agreements or memoranda of understanding 
which it has already signed ; and b) exemplif y how it intends to confer immediately and 
unconditionally the same benefits to the nationals  of all other WTO Members according to the 
provisions of article 4 of the TRIPS Agreement?  la in the adequacy of such agreements with the WTO 
intellectual property system?   WT/TPR/M/160/Add.1 
Page 82  
 
11. Chapter III, paragraph 254
:  Could the US Government indicat e in its balance of payments for 
intellectual-property-related trade the total share of royalties and license fees received from Brazil? 
 12. Chapter III, paragraph 258
:  "The Cooperative Research and Technology Enhancement 
(CREATE) Act of 2004 (P.L.108-447) provides that  patentability is not precluded on the basis of 
obviousness where subject matter that qualifies as prio r art is developed by a person different from the 
person claiming the invention, under certain  conditions". What are those conditions? 
 13. Chapter III, paragraphs 265-268
:  There are various examples of trade marks registrations 
being granted to foreign generic names, such as th e case of "cupuaçu", settled in the U. S. when the 
firm pursuing the mark withdraw it voluntarily. What measures does the USPTO take in order to 
prevent inadequate registration of generic names as  trade marks? Are there any established criteria to 
grant trade marks registrations of foreign words?  14. Chapter III, paragraph 269
:  What are the criteria or conditions for a geographical indication of 
foreign origin to be protected through the trade mark system in the United States? Is there any 
difference between a collective mark (or a certificat ion mark) and a geographical indication? Do they 
have the same rights? How the US legislation or juri sprudence deals with confli cts related to the usage 
of the same sign as a mark and a geographical indication?  15. Chapter III, paragraph 275
:  “The Artists' Rights and Theft Prevention Act of 2005 (ART Act), 
Title I of the Family Entertainment and Copyri ght Act of 2005 (Public Law No: 109-9), amended the 
U.S. Federal criminal code to prohibit the unaut horized, knowing use or attempted use of a video 
camera or similar device to transmit or make a copy of a copyrighted audiovisual work from a 
performance of such work in a movie theatre.” Do es it apply only to audiovisual works in a movie 
theatre or it is also applicable to other copyrigh ted works, like for instance,  live performance shows? 
Does the enforcement of the above mentioned rule requ ire the intention of the supposed infringer to use 
or to allow the use of his/her copy for another unauth orized copies? In that case, is any kind of private 
copy allowed?  16. Chapter III, paragraph 276
:  Could the United States i) clarif y the criteria used in its "Special 
301" legislation in order to identify countries with  alleged inadequate and ineffective intellectual 
property protection; ii) explain why countries w ith a better law enforcement record against 
counterfeiting and piracy can be worse labeled than those countries with less significant commitment in 
these areas; iii) explain if and how the information a nd allegations provided by the US private sector in 
the petitions that initiate the "Special 301" ra nking process are checked and confirmed by the US 
Government; and iv) elucidate what precautions are taken by the US competent authorities in order to 
prevent the infliction of image damage on countries me ntioned in the "Special 301" lists vis-a-vis the 
capacity of those countries of attracting foreign direct investment?  17. Chapter IV, paragraph 02
:  With regard to the implementation of the DSB rulings and 
recommendations on United States – Subsidies on Up land Cotton – WT/DS 267, it is stated that, in 
July 2005, the US Department of Agriculture announced it had sent to Congress proposed statutory 
changes to comply with the panel and Appellate Body decisions on this  dispute. Brazil understands that 
the changes proposed by the Department of Agricultu re included, besides the repeal of the Step 2 
Program, the repeal of the statutory cap of 1% of the guaranteed value of the transaction on the fee charged to the exporter under the Commodity Cred it Corporation Programs (GSM 102 – General Sales 
Manager, and SCGP – Supplier Credit Guarantee Program), as well as the elimination of the GSM 103 
Program. However, to Brazil’s knowledge, the last tw o proposals have not been approved by the US 
Congress, since the 2005 Deficit Reduction Act c ontemplated, among the proposed measures, only 
repeal of the Step 2 Program. In this regard, does the US Government intend to submit legislative 
proposals for the elimination of both the statutory cap of 1% and the GSM 103 Program in the near future? 
          WT/TPR/M/160/Add.1 
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18. Chapter IV, paragraph 23 :  "The latest U.S. notification  on  domestic  support  covers the 
marketing years 2000  and 2001". When does the U.S. intend to notify its domestic support for the period after the Farm Act of 2002? Is there any early  assessment available of those levels of support? 
 19. Chapter IV, paragraph 28
: "... if producers plant and harvest fruit, vegetables, or wild rice, 
direct payments are eliminated or reduced." How th e U.S. plan to comply with the WTO panel finding 
that deemed this rule not eligible to green box criteria?  20. Chapter IV,  paragraph 38
:  "The  Fair and Equitable Tobacco Reform Act of 2004 terminated  
all production quotas and other price  support mechan isms for tobacco beginning with the 2005 crop 
year." Is there any preliminary assessment on the imp act of the Act over the U.S. tobacco exports and 
imports?  21. Chapter IV, Paragraph 2
:  In the dispute US – Upland Cotton, the panel, as confirmed by the 
Appellate Body, found that the effect of the so  called “price contingency subsidies (Market Loan 
Programme Payments, STEP 2 payments, Market Loss Assistance Payments, and Counter-Cyclical 
Payments) is significant prices suppression within the meanings of  Article 6.3(c) of the Agreement on Subsidies and Countervailing Measures (SCM). Conse quently such subsidies must be withdrawn or 
have their adverse effects removed, pursuant to Artic le 7.8 of the SCM Agreement. What has the U.S. 
done to comply with this obligation?  
22. Chapter IV, paragraphs 25 and 26
:  As shown in Table IV.1, the data for all domestic 
programmes are available for market years 2002, 2003  and 2004. What is the reason for not updating 
your notification on this pillar?  23. Chapter IV, paragraphs 62-92
:  US commitments in the financial sector, with respect to 
national treatment, are limited to the Federal level, while the establishment of financial institutions is 
also subject to State level regulation. Is there any administrative or regulatory evolution that might favor new commitments regarding measures that are less burdensome for foreign financial services suppliers?  
ADDITIONAL QUESTIONS FROM BRAZIL 
 1. Chapter I, paragraph 37
:  Since July 2005, it amounts to 57 tariff lines graduated for Brazil 
under the US SGP. On those lines, 46 of them di d not reach any competitive limits in 2004 and 2005 
(CNL 50% or US$115 million in 2004 and US$120 million in 2005). On the other 11 lines, it was 
reached the percentage CNL on 3 of them, but not surpassing the established value limit to obtain the 
waiver de minimis  (US$15 million in 2004 and US$17,5 milli on in 2005).  Why does not exist an 
automatic review mechanism for graduation in th e USA GSP Program?  Why do some products are 
eligible for this preferential treatment if ther e is not any import of this products by USA? 
 
2. Page 68 - paragraph 213 :  “The Sherman Act outlaws all contracts, combinations, and 
conspiracies that restrain trade among the stat es or with foreign countries, as well as the 
monopolization of any part of the trade or co mmerce among the states or with foreign countries.  
However, the Sherman Act and FTC Act do not apply to  conduct involving trade  or commerce, other 
than import trade or commerce, with foreign nations  unless the conduct has a direct, substantial, and 
reasonably foreseeable effect on domestic or import commerce or on export trade or commerce.  
Where jurisdiction is based on export trade or comm erce the antitrust laws apply to that conduct only 
for injury to export business in the United States ." In this way, what are the US domestic enforcements 
against foreign export cartels? 
 
3. Page 68 - paragraph 213 :  With respect to exclusions and exemptions, a number of US statutes 
permit immunity from antitrust laws in some specifi ed cases.  Immunity, for instance, is provided to WT/TPR/M/160/Add.1 
Page 84  
 
certain activities in the agriculture sector under the Capper-Volstead Agricultural Producers' 
Associations Act , which allows collective action in the processing, preparing for market, handling, and 
marketing of agricultural products, and the Agricultural Marketing Agreement Act of 1937, which 
authorizes marketing agreements with producers a nd processors of agricultural commodities. Although 
not registered in the TPR, it is well known that many other sectors are exempted from US antitrust 
laws. As stressed in paragraph 224, an OECD Re port notes that competition policy in US could be 
improved by measures such as terminating the an titrust immunity of government enterprises and 
eliminating anomalous exemptions. What are these specific sectors? Do DOJ and (or) FTC have an updated and transparent list of exclusions, includi ng those related to jurisprudence outcomes? 
 
4. Page 68 - paragraph 214 :  “Foreign individuals or companies are granted national treatment 
with respect to private lawsuits and may sue for the same amount; foreign states, however, may recover 
only an amount equal to the damage inflicted plus the cost of the lawsuit.”  What exactly is assured to 
foreign companies on that basis? Does such treatme nt follow a specific interpretation of the GATT 94, 
article III, regarding National Treatment? 
 
5. Page 74 - paragraph 243 : “The Trade Agreements Act of 1979 waives the application of the 
Buy American Act to the end-products of d esignated countries, which now include […] least-
developed countries.” Would it be possible to bring some evaluation of the results of such policy, 
including statistic data on the number and value of  contracts awarded to suppliers of the least-
developed Countries?  6. Page 75 - paragraph 245
: The Department of Defense also wa ives the restrictions of the Buy 
American Act/Balance of Payments Program for the acquisition of defense equipment produced in any 
"qualifying country" (countries with which ther e is a reciprocal procurement agreement or 
Memorandum of Understandi ng). Is there statistical data on the contracts awarded under this 
mechanism?  7.
 Page 75 - paragraph 246 :  “The U.S. Administration has adopted a new reciprocity approach to 
sub-federal procurement in two FTAs under negotiation. The Administration has written to Governors 
requesting that state governments consider volunt arily covering their procurement under the U.S.-
Panama and U.S.-Andean FTAs under a new reci procity policy, to benefit from new export 
opportunities.” Would this approach cause any me thodological innovation on the commitments under 
these FTAs, or would the sub-federal agencies be  listed in an annex to the FTAs, as usual? 
 
8. “Appendix Table”, page 137 : At NAFTA trade, Article 401 (originating goods), letter D), is 
stated that goods can be obtained or produced in the territory of one or more  of the Parties. We 
understand that it means full cumulation. Why you call this mechanism a bilateral cumulation instead 
of full cumulation in the box located on page 137 (same line of NAFTA)?  9. We would like to know the meaning of the maximum range of 15% settled for bilateral 
cumulation in some free trade agreements. Actually in order to clarify this clause we would really 
appreciate if you could provide us an example.  10. How the USA customs are sure that all requirements to meet if full cumulation are accomplished? Which are the main steps to be sure about this? 
 
11. How the USA customs are sure that all requireme nts to meet if "de minimis" rules for textiles 
are accomplished? Which are the main steps to be sure if HS 50-63 total weight of fibres or yarns 
doesn’t exceed 7% of total weight?          WT/TPR/M/160/Add.1 
Page 85 
 
 
CANADA 
 WTO Secretariat Report (WT/TPR/S/160) 
 
Summary Observations, (2) Trade Policy Developments, Paragraph 5; and Part II. Developments in 
Trade and Investment Policy, (2) Institutiona l and Policy Framework, (iii) Legislative 
Developments, Paragraph 13:  
The Secretariat Report sets out its understanding of the ultimate deadlines for the completion of 
negotiations in order for amending le gislation to be considered by Congress under the Bipartisan Trade 
Promotion Authority Act (TPA).  The Secretariat doc ument refers to both April 1 and July 1, 2007 as 
the deadline for signing  a new agreement. 
 1. Could the United States delegation clarify the deadline dates set out in the TPA Act including, e.g., subsection 2103(b)(1)(C), which gives the Presi dent authority to enter into a trade agreement 
before June 1, 2007, and subsection 2103(c)(1)( B), which appears to limit the time by which 
implementing legislation may be introduced in Congress to qualify for Congressional TPA procedures? 
 
Summary Observations, (3) Market Ac cess in Goods, Paragraph 13: 
 
The Secretariat Report refers to the status of U.S. le gislation containing a clau se to prospectively repeal 
the Byrd Amendment ( Deficit Reduction Act of 2005 ).  The effective date of repeal under this 
legislation is October 1, 2007.  The United States has claimed that it has "taken the actions necessary to implement the rulings and 
recommendations in these disputes".  Canada believes pr ospective repeal is only the first step towards 
compliance, as we understand that antidumping and countervailing duties collected up to September 
30, 2007, will remain subject to disbursement, that is to say, even after the effective date of repeal. 
 The Dispute Settlement Understanding requires Me mbers to bring inconsistent measures into 
compliance with the WTO Agreement promptly; wh ere immediate compliance is not possible, a 
Member has a reasonable period of time (RPT) in whic h to do so. In this case, the RPT ended over two 
years ago, and October 1, 2007, the effective date of repeal, is almost 4 years later. 
 2. Could the United States confirm when disbur sements pursuant to the Byrd Amendment will 
cease?  
 
Summary Observations, (6) Access Conditio ns in Services, Paragraph 27. 
 
The Secretariat Report notes that in December 2004, th e FCC adopted new regulations that redefine the 
extent to which incumbent firms are required to ma ke elements of their network available to other 
carriers.   
3. Could the U.S. provide more info on the new regulations and their impact for carriers? 
 
Part III. Trade Policies and Practices by Measure,  (2) Measures Directly Affecting Imports, (i) 
Customs procedures and rules of Origin, (e) Rules of Origin, Paragraph 35: 
 The report by the Secretariat indicates that non-pr eferential rules of origin  may be used for anti-
dumping and countervailing measures.   4. Can the United States clarify the circumstanc es under which rules of origin may be used for 
such measures?. In particular, Canada is interested  in U.S. views on whether rules of origin may be 
applied for investigative or administrative purposes,  i.e., whether they may used to determine the WT/TPR/M/160/Add.1 
Page 86  
 
imports under consideration in the period of investig ation or for use in enforcing an order or both. 
Further, would such origin rules be  used as an absolute standard against which imports may be assessed 
regarding their origin, or as a guide, or as one cr iterion of many for making such a determination? 
 
Part III. Trade Policies and Practices by Meas ure, (2) Measures Directly Affecting Imports, 
(i) Customs Procedures and rules of origin, (e) Rules of Origin, Paragraph 37-39: 
 
5. Has the U.S. removed the discrepancy between  its country of origin marking rules for non-
originating steel flanges from NAFTA countries and those flanges processed in the US from imported 
forgings from non-NAFTA countries? 
 
Part III. Trade Policies and Practices by Measure, (2) Measures Directly Affecting Imports, (iv) 
Anti-dumping and countervailing actions, (a) Legi slation and administration, Paragraph 72: 
 
The Secretariat Report notes that the ITA’s AD/ CVD Petition Counselling and Analysis Unit assists 
U.S. companies regarding trade remedy laws.  
 6. Can the United States provide a general outlin e of the services available to U.S. companies, 
including any legal services, provided by this unit?  Are smaller firms given preference in terms of such 
services?  Further, does the Intern ational Trade Commission still operate a similar unit that used to be 
called the Trade Remedy Assistance Office? 
 
Part III. Trade Policies and Practices by Measure, (2) Measures Directly Affecting Imports, (iv) 
Anti-dumping and countervailing actions, (a) Legi slation and administration,  Paragraph 75: 
 
In July 2004, new guidelines for determining c ontinuous bonding requirements for importers of 
agriculture/aquaculture products subject to  anti-dumping/countervail were issued.  
 7. Canada would appreciate any comments by the U.S. as to their experience regarding the new 
bonding requirements. How often have they been used and have they been effective in ensuring that 
final duties assessed are paid? Have the new guid elines designed to prevent circumvention been 
effective? 
 
Part III. Trade Policies and Practices by Measure,  (2): Measures Directly Affecting Imports, (iv) 
Anti-Dumping and Countervailing Actions, (b) Anti-Dumping, Paragraph 84:  
8. Does the U.S. have any explanation or opinion as to the reason why almost two thirds of the actions taken against imports from the U.S. are by th ree countries:  China, Mexico and India?  Has this 
trend continued?  
Part III. Trade Policies and Practices by Measure, (2) Measures Directly Affecting Imports, (iv) 
Anti-dumping and countervailing actions, (c) Countervailing duties, Paragraph 91:  
 The Secretariat Report says that in June 2003, the USDOC modified the manner in which it analyses 
whether a subsidized, government-owned company rema ined subsidized after it was “privatized”.  In 
October 2003, the USDOC issued revised final determin ations in 12 specific cases that were at issue. 
 9. What were the results of these revisions? 
 
Part III.  Trade Policies and Practices by Measur e: (4) Other Measures Affecting Production and 
Trade; (iv) Trade-related intellectual prop erty rights, (b) Patents, Paragraph 255. 
 
U.S. patent law is codified in Title 35 of the U. S. Code (35 U.S.C.), as amended.  The Secretariat 
Report notes that the United States “is the only WT O Member to use the first-to-invent rule”.          WT/TPR/M/160/Add.1 
Page 87 
 
 
10. Would the United States consider us ing instead the first-to-file rule”? 
 
Part III. Trade Policies and Practices by Measure, (4) Other Measures Affecting Production and 
Trade; (iv) Trade related and intellectual pr operty rights, (b) Patents, Paragraph 258. 
 The Secretariat Report notes that the “ Cooperative Research and Technology Enhancement (CREATE) 
Act of 2004  (…) provides that patentability is not precluded on the basis of obviousness where subject 
matter that qualifies as prior art is developed by a person different from the person claiming the 
invention, under certain conditions”.   
11. Would the United States please provide more details with respect to this matter? 
 
Part III. Trade Policies by Practice and Measure, (4) Other Measures Affecting Production and 
Trade; (iv) Trade related and intellectual prop erty rights, © Trade marks, Paragraph 265. 
 The Secretariat Report notes that trade mark protect ion in the United States arises from the actual use 
of the mark and that additional protection is provided by federal and state laws.  
 12. Could the United States provide more details on these state trade mark laws? 
 
Part III. Trade Policies by Practice and Measure, (4) Other Measures Affecting Production and 
Trade; (iv) Trade related and intellectual propert y rights, (f) Enforcement Activities, Paragraph 279. 
 
The Secretariat Report says that the Intellectual Property Protection and Courts Amendment Act of 
2004 (P.L. 108-482) amended federal criminal code provisions regard ing trafficking in counterfeit 
labels.   
13. Can the U.S. provide more details on the Intellectual Property Protection and Courts 
Amendment Act of 2004 , more specifically with respect to  trafficking in counterfeit labels? 
 
Part IV. Trade Policies by Sector, (2) Agricultu re, (iii) Domestic programmes, Paragraphs 23-26: 
 
Table IV.1 forecasts large government payments fo r 2005, totalling $21.4 b illion, including certain 
expenditures that might be exempt from Current Total AMS on green box grounds.  The cotton panel (referred to in para. 12) conclude d that payments under the Direct Payments program do not fully 
conform with paragraph 6(b) of A nnex 2 (para. 7.388 of the cotton pa nel report).  Thus, the $5.0 billion 
in Direct Payments for 2005 is not exempt on green box grounds.  Adding market price support for 
dairy and sugar to the sum of non-exempt payments establishes the Current Total AMS.  Market price 
support amounted to about $5.5 billion for dairy and s ugar for 2000 and 2001, with a similar amount in 
2005.  In light of these facts, the Current Total AMS for 2005 would seem to have exceeded the 
$19.1 billion commitment.  Section 1601(e) of the 2 002 Farm Act (referred to in para.25) requires an 
adjustment of expenditures in order to  pre-empt a breach of commitments. 
 
14. Since pre-emptive steps were not taken to ad just expenditures for 2005, can the United States 
advise what processes are in place to addr ess a possible breach of the 2005 commitment? 
 
Part IV. Trade Policies by Sector, (2) Ag riculture, (v) Food aid, Paragraphs 54-55: 
 As part of the Doha Developm ent Agenda negotiations, Members are working to discipline the 
commercial-displacing effects of food aid that is non-humanitarian in nature and driven by donor interests.  15. In this context, can the United States pleas e provide an explanation of the rationale for 
maintaining long-term concessional sales of US co mmodities as food aid, the market development WT/TPR/M/160/Add.1 
Page 88  
 
objectives of US Public Law 480 (Food for Peace) food aid programs, and the surplus disposal objectives of Section 416(b) programs?  
Part IV. Trade Policies by Sector, (2) Agriculture, (v) Food aid, Paragraphs 56: 
 
16. Can the United States please explain the discrepancy between the noted monetization rate of 
30% of PL 480 Title II food aid and USAID’s annual US International Fo od Assistance Reports, which 
are mandated by Congress, and report that the mone tization rates for Title II food aid were 47% in 
1998, 52% in 1999, 53% in 2000, 65% in 2001 and 63% in 2002
4.  Such variance in monetization rates 
which point towards an increasing trend in Title II mone tization is a concern, in particular given that 
the practice of monetizing food aid has significant po tential to displace commercial imports and local 
production in recipient developing country markets, and has similar trade-distorting effects as export 
subsidies.   
Part IV. Trade Policies by Sector, (2) Agriculture, (v) Food aid, Paragraphs 57: 
 
17. Can the United States please explain how such open-market sales of food aid through both 
Title II and the surplus disposal program, Secti on 416(b), do not have a “disruptive impact upon 
production, prices, and marketing of the same or like products with the importing country,” when the 
FAO Principles of Surplus Disposal and Consultativ e Obligations are widely recognized as failing to 
accurately determine a recipient country’s capacity  to import food, thereby potentially displacing 
commercial sales? 
 
Part IV. Trade Policies by Sector, (3) Financial S ervices, (ii) Legislative and regulatory framework, 
(c) Securities services, Paragraph 78 and 84  
Paragraph 78 states that a foreign investment company  may not publicly offer shares in the U.S. unless 
it is authorized to do so by the Security Excha nge Commission (SEC).  Paragraph 84 states that, if 
certain conditions are met, the Commodity Futures Trade Commission (CFTC) exempts from registration foreign Futures Commission Merchant s (FCM), which in our understanding includes 
foreign commodities and futures exchanges.   
 
18. Does the SEC envisage permitting a similar treatment  that is afforded by the CFTC that would 
effectively allow securities listed on foreign securities exchanges to be directly  traded in the U.S. 
without having to register with the SEC and with limited involvement of a registered-broker dealer, 
conditional to certain requirements that would ensu re market integrity and investor protection?  
 Part IV. Trade Policies by Sector, (3) Financial S ervices, (ii) Legislative and regulatory framework, 
(c) Securities services, Paragraph 80 
 
Paragraph 80 says that an offshore hedge fund must regi ster with the SEC if it has more than 14 clients 
who are residents in the U.S. regardless of the amount of assets under management while U.S. advisers 
only need to register if they have more than  US$30 million in assets and more than 14 clients. 
 
19. Could the United States provide the policy ratio nale behind this national treatment difference? 
 
                                                     
 
4 USAID’s US International Food Assistance Reports, Jan. 1999 (p.83), Jan. 2000 (p.73) , Jan, 2001 
(p.48), Sept. 2002 (p.51), Feb. 2004 (p.48).           WT/TPR/M/160/Add.1 
Page 89 
 
 
Part IV. Trade Policies by Sector, (4) Telecommu nication services, (ii) Selected regulatory issues, 
(a) Public interest analysis and regul atory safeguards , Paragraph 99. 
 
The Secretariat report mentions that when evaluating applications the FCC must conduct a public 
interest analysis and that in the case of the WTO members this analysis relies on an “open entry” 
standard. 
 20. Is the U.S. considering incorporating explicitl y a reference to the open entry standard into its 
legislation?  Part IV. Trade Policies by Sector, (4) Telecommu nication services, (ii) Selected regulatory issues, 
(a) Public interest analysis and regul atory safeguards, Paragraph 100. 
 
In its report, the Secretariat notes that the public interest analysis involves considerations for policy 
concerns such as national security, law enforcemen t, foreign policy, or trade policy issues.  
 
21. Could the U.S. provide further explanations on what type of foreign policy or trade issues may be raised in examining a license application?  
Part IV. Trade Policies by Sector, (4) Telecommu nication services, (ii) Selected regulatory issues, 
(a) Public interest analysis and regul atory safeguards, Paragraph 105. 
 
The Secretariat Report notes that besides the men tioned regulatory safeguards, the FCC reserves the 
right to attach other conditions to an authorization or license.  22. Could the U.S. provide more inform ation on these other possible conditions? 
 
Part IV. Trade Policies by Sector, (5) Maritime Tr ansport, iii) International water-borne trade, 
Paragraph 123 
 
23. Is the United States contemplating changes to the Shipping Act  or the Ocean Shipping Reform 
Act in light of the recent announcement by the Europ ean Commission (EC) that th ey intend to repeal 
Regulation 4056/86 which provides Liner Shipping C onferences with an exemp tion against certain EC 
regulations dealing with anti-competitive behaviour? 
 
Part IV.  Trade Policies by Sector, (6) Air Transport Services, (ii) Regulatory framework, 
Paragraph 149. 
 "The provision of domestic air services is permitted only to U.S. carriers. Crews engaged in domestic 
air passenger and freight service must be U.S. nationals  or resident aliens. The "wet" leasing of aircraft 
(with crew and, typically, maintenance, and insurance)  to U.S. carriers is restricted to U.S. companies 
and U.S. citizens."  
24. What is the rationale behind prohibiting U.S. air carriers from leasing aircraft and crew from 
non-U.S. air carriers for international services, es pecially when the model U.S. Open Skies text 
suggests such operations are permitted? WT/TPR/M/160/Add.1 
Page 90  
 
ADDITIONAL QUESTIONS FROM CANADA 
 WTO Secretariat Report (WT/TPR/S/160) 
 
Summary Observations, (2) Trade Policy Developments, Paragraph 5; and Part II. Developments in 
Trade and Investment Policy, (2) Institutiona l and Policy Framework, (iii) Legislative 
Developments, Paragraph 13:  
The Secretariat Report sets out its understanding of the ultimate deadlines for the completion of 
negotiations in order for amending legislati on to be considered by Congress under the Bipartisan Trade 
Promotion Authority Act  (TPA).  The Secretariat document refers to both April 1 and July 1, 2007 as 
the deadline for signing a new agreement.   A similar comment appears in the US Government Report
 
(WT/TPR/G/160)  at Part I, the United States in the Multilateral System, Paragraph 4 . 
 
1. Could the United States delegation clarify the deadline dates set out in the TPA Act including 
e.g., subsection 2103(b)(1)©) which gives the President authority to enter into a trade agreement before 
June 1, 2007, and subsection 2103(c)(1)(B), whic h appears to limit the time when implementing 
legislation may be introduced in Congress to qualif y for Congressional TPA procedures, i.e., it appears 
to require that the implementing Bill be presented to Congress prior to July 1? 
 
Part III. Trade Policies and Practices by Measu re, (2): Measures Directly Affecting Imports, (vii) 
Standards and technical regulations, (a) WTO pa rticipation and preferential trade agreements, 
Paragraph 121:  
 
The Secretariat Report notes that the three free-trade agreements which entered into force between mid 
2003 and mid 2005 (Australia, Chile  and Singapore) contain provisions on technical barriers to 
trade. Canada understands that there are additiona l agreements awaiting entry into force (Bahrain, 
Morocco, etc.) identical or similar provisions are found. A number of the provisions in these 
agreements create additional obligations on the par ties, over and above those contained in the WTO 
TBT Agreement.   2. Can the United States provide a list of the "T BT-plus" provisions and an explanation as to why 
each provision is included?  Will any of these "TBT -plus" provisions require increased "accountability" 
between the parties regarding measures or actions taken in the TBT area? 
 
Part III. Trade Policies and Practices by Measu re, (2): Measures Directly Affecting Imports, (vii) 
Standards and technical regulations, (b) Technical regulations, Paragraph 123:  
 
The Secretariat Report makes reference to the Administrative Procedure Act  (APA) and the rules 
outlined under the APA which U.S. federal government  agencies are required to follow. These include 
a requirement for agencies to publish a noti ce of proposed rulemaking (NPRM) in the Federal Register .  
Canada understands that evaluations by the G overnment Accounting Office (GAO) of agencies’ 
performance under the APA have identified a signifi cant number of final actions which have been 
published without an associated NPRM.  Further, that agencies may not construe the "good cause" 
exception narrowly as a rationale for not publishing an NPRM.  3. Can the United States provide a more detailed explanation of how the APA operates, including 
a discussion of direct final and interim final rulema king procedures, as well as the scope of the law's 
exceptions and examples of how they have been invoked by agencies? 
          WT/TPR/M/160/Add.1 
Page 91 
 
 
Part III. Trade Policies and Practices by Measu re, (2): Measures Directly Affecting Imports, 
(vii) Standards and technical regulations, (b) Technical regulations, Paragraph 125  
 
Executive Order 12866 of September 1993 requires th e Office of Management and Budget (OMB) to 
review all “significant” rules by federal governme nt agencies (excluding independent regulatory 
agencies) prior to their publication in the Fe deral Register as proposed or final rules.  
 4. Can the United States provide a list of which agencies are covered under Executive Order 
12866?  Can the U.S. provide the highlights of the guidance document for agencies on regulatory analysis published in September 2003 by the Office of Management and Budget (OMB) and the 
Council of Economic Advisors and how its contents differ in key areas from the earlier (1996) "best 
practices" document? 
 
Part III. Trade Policies and Practices by Measu re, (2): Measures Directly Affecting Imports, (vii) 
Standards and technical regulations, (b) Technical regulations, Paragraph 125: 
 The Regulatory Flexibility Act  requires federal government agencies to analyze the anticipated effects 
of a proposed rule on small entities and identify alte rnative approaches unless they certify that the rule 
will not have a “significant economic impact on a substantial number of small entities.”  5. Can the United States comment on the effectiveness of the Regulatory Flexibility Act  (RFA) 
since the Government Accountability Office (GAO) has frequently cited the need to clarify key terms 
under the RFA; noted that agencies' compliance with RFA varied widely from one agency to another; 
and, also found that agencies had different  interpretations of RFA's requirements? 
 
Part III. Trade Policies and Practices by Measu re, (2): Measures Directly Affecting Imports, (vii) 
Standards and technical regulations, (b) Technical regulations, Paragraph 126: 
 
The Secretariat Report notes that under the Final Info rmation Quality Bulletin for Peer Review, which 
became effective in June 2005, scientific findings that represent the official position of a federal 
government agency and that could eventually serve as the basis for the formulation and adoption of a 
technical regulation are subject to peer review. At  the time of the last Trade Policy Review of the 
United States, Canada noted that there was concern raised by several members of the U.S. House of 
Representatives with the OMB's draft Bulletin proposi ng to regulate scientific information in federal 
agencies using a more uniform standard of peer review.  6. Is the Final Information Quality Bulletin for Peer Review changed in any significant way(s) 
from the draft Bulletin? If so, how and to what intended effect? 
 
Part III. Trade Policies and Practices by Measu re, (2): Measures Directly Affecting Imports, 
(vii) Standards and technical regulations, (b) Technical regulations, Paragraph 129: 
 
The Secretariat Report says that U.S. authorities have indicated that the U.S. Government does not maintain centralized statistics on the extent to which U.S. technical regulations are based on 
international standards.  7. Does the U.S. intend to develop a capacity to  be able to identify when U.S. technical 
regulations are based on international standards?  For example, through a RIAS tool and reporting 
capacity?  If "yes", is there a timetable in place for its development? 
 WT/TPR/M/160/Add.1 
Page 92  
 
Part III. Trade Policies and Practices by Measu re, (2): Measures Directly Affecting Imports, 
(vii) Standards and technical regulations, (c) Standards, Paragraph 137: 
 
The Secretariat Report says that compliance with sta ndards is not a legal requirement, but in practice 
the U.S. market often provides strong incentives fo r imported and domestic pr oducts to meet certain 
standards.  Under the Trade Agreements Act  of 1979, federal government ag encies are required to "take 
into consideration" international standards when de veloping standards, and if appropriate, to base the 
standards on international standards.
5 
 8. Could the U.S. explain what is meant by “take into consideration" inte rnational standards when 
developing standards, as well as the reference to "b asing" standards on international standards, when 
appropriate?  Does the U.S. view this language as fully capturing the intent and spirit of the TBT 
obligation in Article 2.4 of the TBT Agreement?  Why is language which spells out the obligation in 
considerable detail, for example, “use avai lable international standards, guidelines and 
recommendations as the basis for technical regulations and conformity assessment procedures where 
they achieve the intended regulatory objective” not u sed?  Does the existing language help explain the 
relatively low level of adoption of interna tional standards by domestic regulators? 
 
Part III. Trade Policies and Practices by Measu re, (2): Measures Directly Affecting Imports, 
(vii) Standards and technical regulations, (c) Standards, Paragraph 137  
 Based on the Secretariat's report, it appears that the Trade Agreements Act of 1979  has a somewhat 
different interpretation of the requi rement to use international standards as the basis of technical 
regulations.  Under the Act, recognized excep tions for not using international standards 
include legitimate objectives listed under Article 2. 2 of the TBT Agreement (e.g., deceptive practices, 
protection of human health).  The TBT Agreemen t, Article 2.4, notes fundamental circumstances 
(fundamental climatic and geographical factors or  fundamental technological problems) related to 
fulfilling a legitimate objective, not the legitimate objective itself, as an acceptable basis upon which a 
Member is forgiven the requirement to use an international standard. 
 9. Could the U.S. confirm the interpreta tion contained in the Secretariat's report  or otherwise 
clarify the operation of the Act?  Part III. Trade Policies and Practices by Measu re, (2): Measures Directly Affecting Imports, 
(vii) Standards and technical regulations, (c) Standards, Paragraph 140: 
 
The Secretariat Report says that according to OMB Ci rcular A-119, the heads of federal government 
agencies must provide OMB (through NIST) with the reasons for using government standards rather 
than voluntary consensus standards. According to  the latest NIST annual report, at least 72 
government-developed standards were being used by  25 federal government agencies.  At the same 
time, federal agencies have adopted nearly 2500 private-sector standards, which include voluntary 
consensus standards.  
10. Can the United States explain the difference between government-developed standards and 
private sector standards?  Are government standards developed under the same rules and procedures as 
private standards?  Are these procedures openly ava ilable for public scrutiny?  Have all government 
standards developers adopted the TBT Code of Good Practice? 
 
                                                     
 
5 19 USC 2532.  In addition to legislation, regulatory guidance issued by the Office of Management and 
Budget includes obligations to consider  the trade impact and evaluate the merits of using relevant international 
standards.  See WTO document G/TBT/W/258, 26 October 2005.          WT/TPR/M/160/Add.1 
Page 93 
 
 
Part III. Trade Policies and Practices by Measu re, (2): Measures Directly Affecting Imports, 
(vii) Standards and technical regulations, (d ) Conformity Assessment, Paragraph 144: 
 
11. To what extent do U.S. government regulat ors use international standards and guides for 
conformity assessment?  Part III. Trade Policies and Practices by Measu re, (2): Measures Directly Affecting Imports, 
(vii) Standards and technical regulations, (d ) Conformity Assessment, Paragraph 145: 
 
Unlike in Paragraph 142, which make s reference to the membership of ANSI in IAF, there is no 
reference to the participation of U.S. labor atory accreditation bodies in the global conformity 
assessment system.  12. To what extent do U.S. regulators accept tests and certification to U.S. requirements by conformity assessment bodies which have foreign accr editation?  Could the U.S. elaborate on the 
bodies and fora in which they participate?  
 
Part III. Trade Policies and Practices by Measu re, (2): Measures Directly Affecting Imports, 
(vii) Standards and technical regulations, (d ) Conformity Assessment, Paragraph 146: 
 
13. Could the U.S. explain how it implements the equivalency provision of the TBT Agreement 
(Article 6.1)? Could the US elaborate on the sectors covered by the five agreements which have been 
notified? Are these based on bilateral recognition or MRAs? 
 
Part III. Trade Policies and Practices by Measure,  (4):  Other Measures Affecting Production and 
Trade, (i) Other government support including su bsidies, (a) Overall support, Paragraph 199 and 
Table III.7  
The Secretariat Report notes that as of October 2005, the last U.S. full notification under Article XVI:1 of the GATT 1994 and Article 25 of the SCM Agreemen t dated back to October 2003.  At that time, 
the U.S. notified WTO Members of three federal tax concessions specifically benefiting the timber industry in the amount of $470 million. 
 
14. Can the U.S. provide the current status of th ese subsidies?  Does the U.S. intend to eliminate 
them?  
 
U.S. Government Report (WT/TPR/G/160)
 
 
Part III. Trade Policy Developments, 2003-2005,  (8) Agricultural Issues, Paragraph 116. 
 
The U.S. Government Report identifies The Co mmodity Credit Corporation (CCC) as the entity 
responsible for managing U.S. farms programs through loans, purchases, payments, and other 
operations.  CCC total net direct pa yments in 2003 were $12.9 billion.  
 
15. Given that the US Administration must be m onitoring expenditures so as to ensure that it is 
complying with its domestic support obligations throu gh, if need be, policy adjustments decided by the 
Secretary of Agriculture, can the United States provide information on the amount of CCC expenditures in 2004 and 2005 in support of agriculture?  WT/TPR/M/160/Add.1 
Page 94  
 
PERU 
 Marco Institucional y Normativo 
 
1. En la página 18, en el numeral 14, Esta dos Unidos menciona que el Congreso evalúa 
quinquenalmente el retiro de la OMC, en esencia la  firma del Acuerdo de la Ronda Uruguay. En este 
sentido, ¿Estados Unidos también considera evalua r quinquenalmente la conveniencia de mantener 
vigentes los acuerdos bilaterales que ha firmado?  
Normas de Origen 
 
2. Dado que Estados Unidos considera que los acuerdos bilaterales representan un elemento 
importante para promover la libera lización comercial y la eficiencia en la producción de sus socios 
comerciales, ¿qué planes tiene para la armonización  de los regímenes de origen de los diferentes 
acuerdos y la posibilidad de acumulación en tre países con los que tenga acuerdos?. 
 
Medidas Sanitarias y Fitosanitarias 
 
3. En la página 68, numeral 149, se señala que Es tados Unidos en sus acuerdos de libre comercio 
con Australia y Chile en el Capítulo de Medidas Sanitarias no aplica el mecanismo de solución de controversias de los acuerdos. ¿Cuál es la razón para sustraer del mecanismo de solución de 
controversias de estos acuerdos bilaterales alguna c ontroversia en materia sanitaria y fitosanitaria? 
Asimismo, ¿por qué el Acuerdo de  Libre Comercio con Singapur no contiene ningu na disposición 
específica sobre medidas sanitarias y fitosanitarias?  4. En la página 70, numeral 153, se señala que no existen directrices específicas para zonas libres 
de plagas para cereales, material de vivero o madera. Teniendo en cuenta la importancia de estos rubros 
para países en desarrollo, ¿Estados Unidos ha pen sado en la elaboración de directrices específicas para 
el reconocimiento de zonas libres de plagas para cer eales, material de vivero o madera en el corto 
plazo?  5. En la página 72, numeral 160, se menciona que la FDA tiene la responsabilidad primaria de la 
inocuidad de todos los demás productos alimen ticios y de los medicamentos veterinarios, sin 
especificar en términos generales sus funciones en cada caso. ¿Podría explicar cuáles son las funciones 
y responsabilidades de la FDA en materia de inocui dad alimentaria y de medi camentos veterinarios?.  
 6. En la página 73, numeral 164, solo se menciona  los análisis de los ef ectos económicos tras la 
entrada en vigor de la Ley contra el Bioterrorism o. ¿Se realizan estos análisis todavía?. ¿Se han 
efectuado análisis sobre el impacto en la segurid ad para la salud humana o la seguridad nacional 
estadounidense de la aplicación de la Ley contra el Biot errorismo con la finalidad de modificar o, en su 
caso, suprimir algunas de sus exigencias?  7. En el documento se señala que la política ge neral del APHIS es evaluar los riesgos basándose 
en “el riesgo de enfermedad asociado con la región desde la que se exportan (los animales y productos 
de animales), en vez de basarse en la condición  de “libre de enfermedades” o “no libre de 
enfermedades” determinada país por país”. Podría e xplicar la racionalidad y preferencia del criterio de 
riesgo en relación al nivel adecuado de protección? ¿Podría afirmar que la utilización de dicho criterio 
no afecta o demora las decisiones respecto a solic itudes de regionalización y de reconocimiento de 
zonas libres de  plagas o enfermedades? ¿Por qué? 
 
Reglamentaciones Ambientales Relacionadas con el Comercio 
 
8. En la página 74, numeral 169, se menciona la interrelación de la EPA con otras agencias 
estadounidenses y gobiernos extranjeros sin referirse a sus funciones que están vinculadas al tema          WT/TPR/M/160/Add.1 
Page 95 
 
 
comercial. ¿Podría detallarse aque llas funciones de la EPA que tie nen influencia en la relación 
comercial con otros países?.   9. En el caso de la cooperación en temas ambien tales que Estados Unidos otorga a otros socios 
comerciales, ¿podría precisarse qué entidad está a ca rgo de supervisar esta cooperación?. ¿Cómo se ha 
manifestado en el incremento del flujo comercial con sus socios la cooperación para el tema comercio – 
ambiente otorgada por Estados Unidos , y qué ejemplos podría citarse?.  
 
APEC 
 10. En la página 27, numeral 42, se hace referenc ia a los Planes de Acción Individual en el APEC 
como un mecanismo de medición del progreso alcanza do por los Miembros. ¿Cuá l sería la importancia 
que Estados Unidos otorga a los Planes de Acción Co lectiva en el foro APEC y en qué temas considera 
que el trabajo en APEC puede ayudar a acelerar  el progreso de la Ronda Doha de OMC?. 
 ALCA 
 
11. En la página 2, en el numeral 36, Estados Unidos señala que  continúa insistiendo en la creación 
de un Área de Libre Comercio de las Américas (ALCA) pero que a fines del 2005 las negociaciones estaban bloqueadas. ¿Cuáles serían las alternativas que Estados Unidos prop ondría para reanudar las 
negociaciones con miras a la conformación del ALCA , teniendo en cuenta su experiencia en las 
negociaciones bilaterales y regionales de acuerdos de lib re comercio y la sensibilidad de los países en 
desarrollo expresada en esas negociaciones?. Concreta mente, ¿qué pasos estaría considerando para 
retomar las reuniones y qué acciones propondría?. Asimismo, ¿esas acciones incluirían impulsar la definición de un programa de trabajo y un calendario?  Agricultura 
 
12. De acuerdo a los párrafos 11 y 20 del Informe,  en el 2004, la ayuda a los productores habría 
aumentado de 35600 millones a 46, 500 millones de dólares y para el ano 2005, las estimaciones del Departamento de Agricultura prevén un aumento en  los pagos oficiales directos a los productores, 
impulsados en gran medida por los pagos anticíclicos y los pagos de urgencia.  
 
13 ¿Cómo se condice esta situación con el mandato  de Doha? ¿Se ha pensado en corregir esa 
situación para la próxima Ley de Seguridad Agríco la e Inversión rural? ¿Cómo se podría argumentar 
que dichas medidas y el monto desembolsado no causan una mayor distorsión de la producción y el comercio y que afectan los precios internacionales?  
 
14. ¿Cual es la razón por la cual la ultima notif icación de EEUU sobre la ayuda interna no incluye 
la ayuda otorgada con arreglo a cualquiera de los pr ogramas comprendidos en la Ley de Agricultura de 
2002  15. Respecto a los pagos de urgencia ad hoc, el informe señala que para el 2005 habrían 
aumentado en siete veces y que los pagos anticiclic os se habrían cuadruplicado. Podría EEUU indicar 
en que rubros estuvieron concentrados  dichos aumentos tanto para los pagos anticiclicos como para los 
pagos de urgencia. En cual de los compartime ntos del Acuerdo sobre la Agricultura, los EEUU 
clasifican los pagos de ur gencia ad hoc? ¿Por qué? 
 Propiedad Intelectual 
 
16. Conforme a lo señalado en el informe en lo s puntos 262 y 263 del informe, existe preocupación 
por el tema de la calidad de las patentes en lo s Estados Unidos. ¿En líneas generales, tanto el USTR 
como el USPTO tienen alguna estrategia para enfrentar este problema? 
 WT/TPR/M/160/Add.1 
Page 96  
 
17. Como se conoce, el problema de la biopiraterí a viene creciendo en los últimos años de manera 
preocupante. En la OMC se han hecho diversas prop uestas para modificar el acuerdo de los ADPIC a 
fin de incluir, en adición a las obligaciones ya exis tentes de divulgar en el artículo 29° del Acuerdo 
ADPIC, la obligación de divulgar el origen de los recu rsos genéticos y material biológico en el sistema 
de patentes, así como la evidencia de consentim iento informado previo y evidencia del acceso y 
distribución de beneficios. En el punto 263 del in forme se señala que un análisis hecho por las 
Academias nacionales encuentra “rasgos de la le gislación estadounidense que impiden la divulgación 
de la información contenida en las patentes y que el evan el costo y la incertidumbre de los litigios sobre 
validez e infracción de las patentes”. ¿Están los Esta dos Unidos haciendo algo para mejorar el sistema 
de divulgación existente? ¿Existe alguna estrategia para  combatir el fenómeno de la biopiratería, dentro 
o fuera del sistema de patentes? 
 
INDONESIA 
 
1. Anti dumping (page 39 of the Report)
 
 
It is the fact that the US is one of the most active countries using antidumping actions to protect its 
domestic industries from unfair imports products.  The Report says that at the end of 2004 AD orders 
were applied to imports from 44 countries and of so me 273 AD duty orders, 55% were applied on iron 
and steel products and the rest were applied on chem icals, pharmaceuticals, ag riculture and forestry 
products. Based on our observation, for a quite lengthy  time, most of the US antidumping actions are 
focused on import of steel and iron products to protect inefficient domestic industries in the US market.  
Indonesia is seeking further clarification on this observation.   2. Other Charges affecting Imports. (page 35)
 
 
In the Report, it was said that import valued at USD 2,000 are subject to a merchandise processing fee 
and the fee is set at 0.21% of the import value. As this policy is exempted from those countries which have bilateral free trade agreement with the US, ho w the US reconciles this policy with Article III 
(National Treatment) and Article XI (General elim ination of quantitative restrictions)  of the GATT 
1994?  
3. Technical Regulation and Standards (page 48 – 54)
 
 It is widely recognized that technical regulation, standards and phytosanitary are useful to protect 
human, animal and plant life and health (Article XX of the GATT 1994).  In the Report, it is said that 
for that purpose, the US has used a specific technical regulation and phytosanitary other than developed 
by international organizations. In this context, In donesia is seeking further explanation as to how the 
US could comply with the guidance in the said ag reements to follow the standards developed by 
international organizations (althoug h this is not a mandatory).  
 4.  The US Administration is issuing a comprehensive Report on yearly basis in implementing Section 182 of the US Trade Act of 1974. The Repor t contains  countries which are deemed not  
complied with certain WTO Agreements such as TR IPS, Import Licensing procedures, etc. In the 
Report the US government has placed some countries, including Indonesia in a Priority Watch List  as 
countries which are not implementing the TRIPS Agreem ent in full.  Through this report, the US is 
strongly urging the countries concerned to improve, to  amend and/or to revoke their polices which are 
deemed not consistent with WTO Agreements. Indonesia wish to have  an  explanation as to what 
extend this Priority Watch List could be justified under the WTO rules and disciplines. 
          WT/TPR/M/160/Add.1 
Page 97 
 
 
CHINA 
 
CHAPTER 1:  RECENT ECONOMIC DEVELOPMENTS 
 
“Twin Deficits”  
 
Question: （p.6 para.17 ，p.7-10. para.19 －25) 
Besides urging other economies to ac celerate their growth to improve import in trade in goods and 
services, what domestic approaches has the U.S. taken   to tackle the “twin deficits” issues? How do 
these measures take effect? 
Does the U.S. have any plans to cope with the “t win deficits” without implementing any protectionist 
measures which erode multilateralism and the trad e relationship with other trading partners? 
Does the U.S. deem the depreciation of US Dollar against other major currencies would serve as a way 
to improve its current account deficit? 
 
CHAPTER 2:  DEVELOPMENTS IN TRADE AND INVESTMENT POLICY 
 
(3) Participation in the WTO  
 
Question:  (p.16 para.21) 
Are there any unfulfilled obligations regarding WTO transparency principle and notification by the 
United State Government? If yes, why does the Unite d State Government fail to have implemented 
these obligations?   
For the sake of transparency, would the U.S. expl ain to other Members why it took the U.S. about 
10 months to fully respond in writin g to Members’ written questions raised during last review instead 
of 4-6 weeks as agreed under TPRM? What measures will the U.S. take to avoid this delay of responses 
from happening again? 
 
(4) Preferential and Other Arrangements  
 Question:  (p.17 para.23) 
As to the U.S. active pursuit of regional and bilatera l free trade arrangements, would the U.S. elaborate 
on how to ensure a complementary approach when applying to both the multilateral system of the 
WTO and its regional and bilateral initiatives to lessen  the effect of discrimination creation and trade 
diversion by those arrangements?  How will the U.S. evaluate the “spaghetti bowl” e ffect of FTA arrangements on multilateral trading 
system as reflected in the Sutherland’s Report ?  
 
Question:  (p.21 para.42) 
As an active player in both WTO and APEC, what st rategy does the U.S. take to enhance the policy 
synergy in those two different arenas?    (5) Foreign Investment Regime
 
 
Question:  (p.22 para. 44-45) 
In spite of a generally liberal foreign investment regime, the U.S. notably maintains restrictions on 
foreign direct investment to some extent and aler ts on foreign mergers and acquisitions of domestic 
companies based on the so-called national security reasons. As the U.S. responded in the previous 
review that factors to be considered in nationa l security review changed with each acquisition and 
merger transaction under the Exon-Florio Amendment  and the transparency of its review process is 
rather limited. 
Although it varies from case to case, could the U.S. elaborate on what the major factors are 
generally concerned by its authorities during a foreign merger and acquisition review?  WT/TPR/M/160/Add.1 
Page 98  
 
Does the U.S recognize the possibility of discreti onary power abuse by relevant authorities under 
the Exon-Florio Amendment  due to lack of transparency in the review process? 
Could the U.S. enlighten us on what have been done to keep its national security review as transparent, predictable and fair as possible? 
 
Question: (p.22 para. 44-45) 
In 2005, CNOOC, an oil company from China, offe red the highest bidding price for its intended 
acquisition of Unocal, a California oil producer. Bu t eventually CNOOC withdrew its filing under huge 
political pressure from the U.S. side.  What are the U.S. comments on its surging dome stic complaints from its industrial community 
about the damages on U.S. business environm ent and commercial interests by the political 
pressure imposed upon this case? 
 
Taxation System
 
 Foreign company’s branches in the U.S. or US co mpanies with more than 25% foreign share are 
required by the U.S. to register and keep records of  transactions with affiliated companies. The records 
should be stored in places designated by tax de partment, while further explanations to these 
transactional records must be annually updated and re gistered. Otherwise, companies are subject to 
different punishment.  
Does this requirement apply equally to  domestic companies of the U.S.? 
Does this requirement impose extra burden to forei gn invested enterprises and complicate their 
business operation in the U.S. as well? 
Please provide the rationale of this requirement and clarify its consistency with WTO national 
treatment? 
 
CHAPTER 3:  TRADE POLICIES AND PRACTICES BY MEASURE 
 
(2) Measures Directly Affecting Imports
 
 
Tariff  
 
Question:  (p.32 para.49) 
At present in the U.S., 7% of tariff headings are thr ee-time higher than the simple average rate of all 
tariff headings, while 4% of tariff headings are 15%  or higher. High tariffs and tariff peaks mainly 
concentrate in textile and clothing, footwear and other travel products which account for a major part of 
export for developing countries. However, the U.S. implement low tariffs on products of higher prices, 
while implementing high tariff on products of low price. 
Please clarify its policy-making intention of such  tariff structure and evaluate its impact on 
export from developing countries to the U.S.  
Custom Clearance
 
 
Question:  (p.27 para.22, p.35 para. 66-69) 
According to the Secretariat Report, Paragraph 343 of the Trade Act (2002) stipulates that CBP must 
receive advance information pertaining to any cargo before the cargo is brought into (or sent from or 
pass through) the U.S. by any mode of commercia l transportation. Otherwise the CBP may impose 
punishment by a fine. However, the U.S. refuses to provide information on the accumulated number of 
fines collected.  Please clarify .  
What recommendations were made concerning fees to  be eliminated and the rate of fees to be 
retained? 
Does the U.S. Customs impose “harbor maintenance fe e” on the basis of  its actual expenditure 
on maintenance? As the maintenance fee is desi gned for harbor maintenance, why does it apply 
only to imported products but not to exported products of the U.S.?          WT/TPR/M/160/Add.1 
Page 99 
 
 
For the importation of some products, such as textile, clothing and footwear, does the U.S. 
Customs require more specific information than other products?  Please clarify the consistency of the said inform ation requirements and the rationale for the two 
fees with Article 8 of GATT 1994. The U.S. will fully deploy the Automated Commerc ial Environment (ACE) as part of its customs 
modernization program by 2009. The ACE will re place the current Automated Commercial System. 
Will the ACE further simplify customs procedures by reducing instead of increasing trade barriers to foreign exporters, esp. to those sma ll and medium ones from developing Members, 
which often do not have mu ch capacity of E-Commerce?  
On what conditions does the U.S. Customs requi re commercially confidential information on 
processing procedures of textile and clothing? What is the rationale for such requirement? 
What measures does the U.S. Customs take to  protect such commercially confidential 
information on processing procedures? Would the U.S. Customs extend the payment period of customs duty for clothing up to 210 days? 
If importer fails to keep the imported clothing products within payment period of customs duty 
to enable the Customs to determine final tariff, wh at would be the amount of fine imposed by the 
Customs? 
How would the U.S. evaluate the impact of a prolonged payment period on import of clothing?  
Would the U.S. consider shortening the payment peri od to such an extent so as not to negatively 
affect trade? 
 
Question: (p.55 para.150) 
Perishable goods are reported to be more frequen tly damaged than before due to cumbersome and 
sometimes excessive inspection and approval proce dures for goods entering the U.S. even though 
increasingly detailed cargo information was submitted to CBP as requested. Typically, fresh lychee in 
air-conditioned containers are to be unloaded and ex posed in open air for 5 hours during a entry-of port 
inspection and to wait for another 5 or even 7 days to finish all the clearance procedures, which often 
leads to great commercial losses to exporters.  What measures would be taken to improve U.S. Cu stoms sampling and inspection procedures in this 
respect? 
 
Export Restrictions
 
 
Question:( p.60 para.176) 
The U.S. restricts seriously export of hi-tech products to China. Such restrictions deprive many U.S. hi-
tech companies of its due right to export to Chin a. According to China’s statistics, the U.S. ranked 
No. 2 in 2001 as one of the largest hi-tech products exporters to China.  However U.S. exports dropped 
to No. 6 in that ranking in 2005, with its share of the total hi-tech imports of China falling from 16.5% 
in 2001 to only 8.1% in 2005.  
Has any U.S. institutions conducted any study on the impact of its export restrictions on its 
current trade deficit with other Members? If yes,  would the U.S. Government share the outcome 
of these studies with Members? Does the U.S. regard its current export restrictions on hi-tech products to China as one of the 
major causes in US-Sino trade deficit?   
Would the U.S. intend to review its current export  restriction policy with a view to fostering a 
healthier and more comprehensive US-Sino trade relations? 
 
Export Licensing
 
 
Questions: (p.60 para.178) 
It takes at least three months, even one year in so me cases for the United State Government to issue an 
export license after receiving an application. This pe riod is considerably longer than those in many 
other countries like Germany and Japan. Moreover , export licenses are issued with many other 
additional conditions.  WT/TPR/M/160/Add.1 
Page 100  
 
Why does it take so long for the U.S. to issue an export license? 
 Sanction
 
 
When the U.S. sanctioned foreign companies in  name of weapon proliferation, were there any 
evidence presented to the sanctioned co mpany to justify the U.S. intentions? 
 
Anti-dumping  
 
Question: (p.36-44) 
The U.S. has granted market economy status to so me countries since last review, As a full WTO 
Member, China has made enormous progress in the development of its market economy. Regardless of 
the actual situation of China’s economy, the U.S. fails to recognize the market economy status of 
China.  
In examining different cases for market economy st atus, does the U.S. realize that it has adopted 
double standard, which simply consti tutes discrimination against China? 
 
Question: p.38 para. 77-79, p.40 para. 85, para, 87-88, p.42. para. 92, p.44 para. 101 etc.) As mentioned in the Secretariat report, the U.S. h as yet to fully implement and comply with several 
other recommendations and rulings of the Dispute Settle ment Body after its recent efforts to repeal the 
Byrd Amendment  far beyond “the reasonable period of tim e”. Notwithstanding, Members have been 
showing great patience and understa nding to wait and see the U.S. government working with the U.S. 
Congress to achieve full compliance in this regard. Ho wever, it will not be fair for Members to see the 
U.S. industries taking the U.S. administrative or c ongressional problems as, a buffer or even a leverage 
against competition from foreign industries. 
Does the U.S. government intend to redouble its e fforts with the Congress to secure effective 
compliance, which will help not only to uphold U.S. credibility in the WTO but also to preserve 
its business environment of competition in the long run? 
 
Separate Rate Policy on ADP
 
 
Question:  (p. 38) 
The Department of Commerce (DOC) of the U.S. adopt s a “Separate Rate policy” in the Anti-dumping 
investigations involving so-called “non-market ec onomy (NME)” factors. This Separate Rate policy 
assumes that all the enterprises in the NME country are controlled by the government and therefore 
have to accept the nationwide rate, unless an enterprise  can prove that its exports are not controlled by 
the government. 
Please provide the legal foundation of the Separa te Rate policy and its consistency with the 
WTO/ADP Agreement. 
How would the DOC guarantee the legitimate rights of exporters from members not being 
recognized as market economies are not further jeopardized? 
 
During the period under review, DOC of the U.S. ha s modified the application procedures for separate 
rates, which largely increase the difficu lty in application for separate rates. 
According to the new Separate Rate policy, does the investigating authority request every 
respondent to fill out the application individually, re gardless the fact that some of them might be 
affiliated, commonly owned or foreign owned? Does the investigating authority of the U.S. request the exporters to provide the Customs Form 7501, which, however, is possessed by the importers of the U.S.?  
How would the investigating authority of the U.S. guarantee the burden of proof is reasonably 
set? 
Due to the differences of domestic regulations in registration of enterprises and custom clearance in 
various Members, and due to the difference in opera tions of various exporters, especially those small-
and-medium-sized enterprises of the developing Me mbers, some exporters applying for separate rates          WT/TPR/M/160/Add.1 
Page 101 
 
 
may not be able to provide all the documents requ ested by the investigating authority. In such 
circumstances, would the investigating authority consider handling the requests of documents in a 
flexible manner? 
What is the time limit to submit the requested documents when applying for separate Rate? 
Would the investigating authority consider this ti me limit adequate for the exporters, especially 
those small-and-medium-sized enterprises of no n-English-speaking developing Members, to 
prepare and submit all the requested documents? If not, would the investigating authority consider to extend the time limit accordin g to Article 6.1 of WTO/ADP Agreement? 
Would the U.S. consider to adjust or even abolish this separate rate policy? 
Would the investing authority of the U.S. take measures to guarantee the maximized justice in 
the implemention of this separate rate policy?  
New Sampling Method of the Administrate Review of Anti-dumping Measures
 
 
Question:  (p.43 para.95) 
DOC of the U.S. has adopted a new probability-proportional-to-size sampling method to select the 
mandatory responding enterprises in the administrate review of Anti-dumping measures since May 2005. According to this new method, some large e xporters might not be able to be selected and 
therefore be forced to subject to an unknown averag e rate. While in contrast, those small enterprises 
which lack adequate resources and are not ready to  undertake the whole process of review might be 
selected to be the mandatory respondents. In additi on, due to the uncompetitive cost and price of these 
small enterprises, the dumping margin are likely to be  higher than normal, therefore the average duties 
are also likely to be increased unfairly.  
Will this new sampling method increase the uncertainty and difficulty of the administrative 
review of the anti-dumping cases? 
What is the justification of this new method?  What is the legal basis of this new method?  What 
is the consistency of this new method with the WTO/ADP Agreement? 
 
The Prices of Market-based Purchase of Input
 
 
During the period under review, the investigating au thority of the U.S. has made changes in using 
market-economy prices to value the factors of pr oduction in NME antidumping cases. The new practice 
requires that the majority (i.e.,over 50%) of the particular input was purchased from market-economy 
suppliers so that this purchased pri ce to be used to value all consumption of a particular input, whereas 
in the original method, this proportion was only 15-20%. 
What is the reason and legal basis of this increa se from 15-20% to 50% of the market-economy 
prices in the calculation of the prices of the input? 
Please explain the consistency of this change with the WTO rules. 
 
The actual market-based prices of cer tain input shall be regarded as “best available information” so 
long as this market–based price is reliable. And the investigating Authority’s d ecision of whether to use 
an NME respondent’s actual purchase prices should no t focus on the quantity of these purchases but on 
their bona fide nature.  
Please explain why the investigating authority use surrogate values when actual, market-
economy prices are available.  What is the consis tency of this practice with the Article 2.4 of 
WTO/ADP Agreement? 
 The Federal Circuit has held that where “input pr ices are market determined, accuracy, fairness, and 
predictability are enhanced by usin g those prices., using surrogate va lues when market-based values are 
available would, in fact, be contrary to the intent of the law.” 
How will the investigating authority comment on this decision? 
 WT/TPR/M/160/Add.1 
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Sunset Review
 
 
Question: (p.43 para. 96) 
What measures would the U.S. take, in line with sunset clause, some anti-dumping measures which had lasted for a long period of time? 
 
Subsidy
 
Agricultural Subsidy  
 
Question: (p.85-93) 
Comparing to the FY 2004, did FY 2005 witness the in crease of subsidies to support export of 
agricultural products or the expansion of domestic support itself pursuant to the Farm Security 
and Rural Investment Act of 2002 ?  
If so, how would the U.S. interpret the practice  to try to comply with DSB rulings to reduce 
agriculture subsidy on the one hand and to cont inue to expand its subsidy support to its 
agricultural products on the other? 
When those supported output finds its way into markets, will it further affect the already distorted international trade in agricultural products? 
 
Other Subsidies
 
 
Question: (p.66 para. 204) As estimated, the U.S will provide to its enterprises through the American Job Creation Act of 2004  a 
total of USD76 billion in form of domestic subsid y, which is far over the amount of USD50 billion 
paid under the former Foreign Sales Corporation Repeal and Ex traterritorial Income Exclusion Acts.  
How does U.S. comment on the above conclusion? 
 Pursuant to the American Job Creation Act of 2004,  a transitional period is provided to enable the U.S. 
to continue its grant of export subsidy to the U.S. enterprises till the end of 2006 before U.S. 
completely abolishing its WTO-inconsistent tax rebate and exemption pr actices conducted under the 
former  Extraterritorial Income Exclusion Acts . 
Please explain why the U.S. cannot promptly  comply with the relevant DSB rulings? 
Are these tax rebate and exemption only granted to  domestic enterprises? If yes, how is this 
practice consistent to the National  Treatment principle of the WTO? 
 
TBT/SPS
 
 
Question: （p.50 para. 129 ） 
Would the U.S. throw some light on to wh at extent its SPS regulations are based upon 
international standards?  The Secretariat report states that the U.S. maintains no centralized 
statistics on TBT related to such matters, please explain why? 
 
Comment Period for Notifications  
 The U.S. sometimes fails to strictly comply w ith WTO SPS/TBT agreements by giving other Members 
sufficient period to comment on its own notifications. For instance, the U.S. non-urgent notification on 
Digital TV Tuner Requirements （G/TBT/N/USA/128 ）granted only 20 days from July 8-27, 2005 for 
comments. China has officially requested U.S. to  extend its comment period but this request was 
abruptly refused.  
Will the U.S. elaborate on why it failed to co mply with the min. 60 days comment period 
requirements pursuant to the TBT Agreement in th is case?  Why the reasonable request from 
China to extend the comment period of this impo rtant notification was refused by the U.S.?           WT/TPR/M/160/Add.1 
Page 103 
 
 
What is the U.S. prepared to do  now to make up for that? Does U.S. intend to terminate its 
enforcement of the DTV Tuner requirements?  
 
CR Safety Requirements on Lighters  
 
In 2004 U.S. announced to raise the import price ce iling of gas refillable lighters subject to the 
compulsory CR device requirements of 1993 from USD2. 00 to USD2.25. The fact is when the U.S. set 
its former safety standards in 1993, the internati onal standard (ISO9994:2002) on the safety of lighter 
products had already existed. However the U.S. refused to adopt the said international standards while 
insisting on linking lighter’s price to its  safety. By raising the price ceiling for lighter products subject 
to this CR regulation, the U.S. has successfu lly impeded lighters export from other members. 
Please explain the scientific reason behind the U. S. linkage between the safety of lighters and 
their prices? Deviating from prevailing International standards,  how could the U.S. justify the consistence of 
the its CR regulations with Article 2.4 of TBT Agreement.    Has the U.S. notified to the WTO the latest am endment to its 1993 regulation? If not yet, why? 
When does the U.S. plan to fulfill its obligation of notification? 
Please throw some light on how often the U.S.  undertakes a review on its current technical 
regulations to seek improvement? 
 
Digital TV Tuner Requirements
 
 
Pursuant to the U.S. notification on Digital TV Tuner Requirements （G/TBT/N/USA/128 ）, the U.S. 
proposes to advance the date on which all new te levision receiving equipment must include the 
capability to receive over-the-air DTV broadcast sign als from July 1, 2007, to a date no later than 
December 31, 2006. The costs incurred with the new television receiving equipment sometimes are 
even higher than that of the TV set itself. In a ddition, over 80% of the U.S. consumers are receiving 
digital TV programs through cable or satellite TV services while only a fraction of them now take 
advantage of Digital TV products in the U.S. Thus  the U.S. finds it difficult to decide when analog 
television service is to end.  
Under situations mentioned above, will the U.S. cl arify its justification to advance the date of 
implementation of such a compulsory regulation? 
Does the U.S. believe that DTV Tuner requi rements will cause extra cost to both the 
manufacturers and the consumers? Have any U.S. authorities conducted a review on the tr ade implications of this regulation?  If yes, 
what are the findings?  
Energy Conservation Standards
 
 The Energy Conservation Standards for Certain C onsumer Products and Commercial and Industrial 
Equipment （G/TBT/N/USA/154 ）notified in 2005 by the U.S. ma de technical amendment to its 
former energy conservation standards coveri ng 15 products including washing machine.  
Some of the amendments, including the test conditions for the lumen maintenance rate of 
medium base compact fluorescent lamp, do not follow current international standards. Would 
the U.S. explain why the international standa rds can simply not satisfy its requirements? 
When this regulation will be put into force? Will it  strictly respect the transparency principle of 
the TBT Agreement? 
 
Energy Efficiency Labeling Regulations on 7 Categories of Products
 
 
Draft regulations notified by the U.S (G/TBT/N/USA/151 ）on energy efficiency labeling with regard 
to 7 categories of products including washing machin es stipulated that: “Labels for most appliances 
must provide the product's estimated annual operating cost.  Manufacturers must calculate these costs WT/TPR/M/160/Add.1 
Page 104  
 
using national average cost figures for energy (e .g., electricity, natural gas, etc.) published by 
Department of Energy.” 
Does the U.S. recognize that estimated annual op erating cost has just too many uncertainties 
behind its calculation, which ca n mislead consumers instead? 
Does the U.S. believe that the above provisions in the draft regulation are in line with the Article 
2.2 of the TBT Agreement and do not cause unnecessary obstacles to trade? 
 
Automatic Detention System for Impo rted Food Inspection and Quarantine
 
 
Pursuant to the Federal Food, Drug and Cosmetic (FDC) Act ，FDA of the U.S. will conduct automatic 
detention to imported food products wi th potential problems up to 30 days. 
Does the U.S. require the representativeness of  the samplings in undertaking of the overall 
inspection during the automatic detention? The inspection results from the FDA or laboratori es recognized by FDA will serve as the final 
evidence to trigger the Automatic Detention System. If the Inspection authorities of an exporter 
disagree with the U.S. inspection conclusions, do they have the right to request a review? What 
are the procedures to apply for a review? 
Usually inspection cost is borne by the FDA,  then why inspection cost incurred during the 
automatic detention shall be fu lly borne by the importer?  
Will the U.S. justify the consistency between it s automatic detention regulation and the Article 
2.2 of the TBT Agreement?  
Bioterrorist Act
 
 
Since its enforcement of Bioterrorist Act, ha s the U.S. conducted any study to analyze the 
negative impact of the Act on normal tr ade. If yes, what are the findings? 
What measures would the U.S. take to strictly ho nor the principles embodied in the Article 5.4 of 
the SPS Agreement as “Members should take into account the objective of minimizing negative 
trade effects” thus to  eliminate the excessive impact of the Act and its implementing measures on 
trade? 
 
IPR protection  
Section 337 of the Tariff Act of 1930  
 
Question (p. 82 para. 227) 
Section 337 of the Tariff Act of 1930 has provided dom estic industries of the U.S. with dual remedy, 
giving discriminatory treatment to foreign enterprises.  Please explain its consistency with WTO 
national treatment principle.  
The General Exclusion Orders are comparatively low in  standard and lack further specific standard for 
judgment, with considerable uncertainty.  Would the U.S. clarify the sp ecific standard for judgment 
under the General Exclusion Orders? 
Section 337 of the Tariff Act of 1930 gives Internati onal Trade Commission the right to automatically 
initiate the implementing procedure of process investigation.  Would the U.S. explain the rationale of 
this provision and its consistency with the TRIPS Agreement ? 
 
CHAPTER 4:  TRADE POLICIES BY SECTOR 
 
(2) Agriculture  
 
Question:  (p.85 para. 11) 
As to U.S. support to its agricultural commodities a nd producers, the Secretariat’s report refers to the 
OECD’s analysis: "while support is lower than the 1986-88 average, it is above the levels of the mid-
90s, and the most production and trade distorting form s of support are still significant, contributing to          WT/TPR/M/160/Add.1 
Page 105 
 
 
depressing world prices". Meanwhile the OECD also f ound out that the U.S. provisional data for 2004 
suggests an increase in the Producer Support Estimate (PSE)… reversing the downward trend registered since 1999. 
Does the U.S. agree with the above analysis of the OECD? 
Would it undermine the US credibility in the cou rse of the ongoing agricultural negotiation of 
DDA when its PSE of 2004 was increased against the expectation by other Members of a 
downward trend globally? 
 
Question:  (p.86 para.12) 
In March 2005, the WTO DSB concluded that th e US export credit guarantees for unscheduled 
commodities such as upland cotton and soybeans are prohi bited export subsidies.  It seems, in July 
2005, the US authorities were proposing to eliminate a support program for cotton. 
Would the U.S. efforts to make statutory change to export credit guarantees also cover soybeans?  
What is the US timetable to make the change for full WTO compliance? 
 
Question:  (p.88 para.25 )  
The latest U.S. notification on domestic support covers the marketing years 2000 and 2001. Among 
other things, Members would like to see a no tification on its domestic support granted under 
programmes encompassed by the 2002 Farm Act. When does the U.S. plan to notify to the WTO its  updated domestic support? What difficulties does the 
U.S. face to fully implement its notif ication obligation in this regard? 
 
(3)Financial Services
 
 Banking
 
 
Question (p. 96 para. 67) Regarding CCS(Comprehensive and consolidated  supervision) and the calculation capital 
adequacy, would the U.S. further explain and clar ify the requirements on CCS and its calculation 
measures of capital adequacy when it examines  and approves foreign banks’ applications of 
establishment of branches in the U.S.?  
Question (p. 97 para. 70-71) There are also strict restrictions on foreign banks ’ acquisition, merger or holding of American banks. 
These restrictions considerably affect  foreign banks’ business in the U.S. 
Would the U.S. provide data in the last two ye ars concerning:  foreign banks’ applications of 
establishing more operational outlets which have been approved;  applications of establishing branches or representative offices which have been approved; acquisitions, mergers or holding of 
American banks? 
 
Question (p. 96 para. 67) 
In the U.S., branches of foreign banks are not entitled to draw small deposits under 100 thousand 
dollars. They have to engage in  such deposit business via their companies in the U.S.. Branches of 
foreign banks established after Dec. 19
th, 1991 cannot join the FDIC, which means deposits in foreign 
banks are not under the protection of the Federa l Deposit Insurance Law. The stipulations above 
considerably restrict foreign banks’ development in the U.S.. Are the above stipulations and measures consistent with WTO MFN treatment and national treatment? What are the reasons for those rest rictive measures taken by the U.S. in this regard?  Is there a 
plan to eliminate or reduce the restrictions? 
 WT/TPR/M/160/Add.1 
Page 106  
 
Insurance
 
 
Question (p.100 para. 86) 
Legislations on market access are inconsistent in  each and every state, with different insurance 
regulation structures and different requirements on registration, solvency, operation, etc. They 
constitute significant barriers to fo reign enterprises on market access. 
 
China is glad to see the effort of the U.S. to wards consistent supervision. Please provide a 
timetable of the process of consistent supervision. 
Does the U.S. give the same treatment to foreign  and domestic insurers in the operation of 
insurance business such as registered capital, taxat ion, administration fee, etc? Would the U.S. 
clarify whether its stipulations in these aspect s are consistent with the national treatment 
principle of the WTO? Please explain the reason for which some states of the U.S. do not permit the entrance of foreign 
state-owned insurance companies. 
Please explain the reason for which some states of the U.S. do not permit the provision of services 
of foreign state-owned reinsurance companies. 
 
(4)Telecommunication Services
 
 
Question (p. 102-107) 
Under American laws （54.709(a)(1) of Title 47 of the U. S. Code of Federal Regulations,  for 
international and domestic telecommunication fees, universal service fund shall be paid. 
Would the U.S. explain how it s universal service fund operates? 
Would the U.S. clarify the definition and scope of “domestic end user”? 
For example, if a foreign company which is regist ered and conducts its business mainly outside the 
U.S. only leases circuit on the side of the U.S. fo r its telephone communicati ons with its companies 
within the territory of the U.S., is this foreign company an “American domestic end user” so that it 
has to pay Universal Connectivity Charge wh ich corresponds to the universal service fund?  
 
Question (p. 102-107) 
When foreign telecommunications enterprises apply for the reduction and exemption of income tax in 
settlement of voice services on revenue generated within  the territory of the U.S., there is no clear 
definition on “revenue generated with in the territory of the U.S.”. 
Would the U.S. clarify the definition and scope of  “revenue generated within the territory of the 
U.S.”?  
For instance, in international telecommunication voi ce service settlement, foreign telecommunications 
company and American telecommunications company provide half-circuit respectively on the side of 
their own countries to form a complete circuit, provide voice or broad band services between the two 
countries, and the two parties offset the balance due in accordance with inbound and outbound volume 
or traffic between the two countries.  Is the net income of the foreign telecommunications company 
(namely, the charge paid by the American telecommunications company to the foreign 
telecommunications company) regarded as the “rev enue generated within the territory of the 
U.S.”?  
 
Question (p. 103 papa.96) 
The U.S. does not grant Common Carrier Radio Licenses to nor does it permit the holding of Common 
Carrier Radio Licenses by the following forms of FD I: foreign governments or their representatives; 
non-American citizens or their representatives; comp anies established not under American laws; over 
20% of stock or right to vote belongs to foreign governments or their representatives, non-American 
citizens or their representatives or compan ies established not under American laws. 
What are the policy concerns over the restrictions above of the U.S.? 
          WT/TPR/M/160/Add.1 
Page 107 
 
 
(5) Maritime Transport  
 
Question (p. 108) 
Merchant Marine Act, 1920 puts lim itations on foreign vessels’ enga gement in transport business in 
near ocean and within the U.S.; transport of projects whose expenses are born by the Federal 
Government must be carried by American vessels.  
Members are much concerned about this in previo us reviews. What are the reasons for the U.S. 
to adopt such strict protective policy? 
 
Restrictions on Reallocation of Empty Containers  
 
Protection of transport along the coast of the U. S. under Jones Act affects reallocation of empty 
containers of foreign vessel companies. 
Please explain the rationale of stipulations  on reallocation of empty containers under Jones Act.  
These stipulations under Jones Act  have put extra burdens on foreign maritime companies, 
putting them at a disadvantage in their competit ion with the US domestic companies. What are 
the comments of the U.S. on this? 
 
Contradiction between Federal Laws and Stat e Laws in Maritime Transport Legislation  
 The American Constitution stipulates that federal laws  supersede legislations of each and every state, 
yet in maritime transport legislation, especially in oil pollution and environmental protection, each state 
acts on their own, with standards usually higher than relevant stipulations of international conventions 
approved by the Federal Government, which forces vessel owner to make extra arrangements in vessel apparatus and responsibility guara ntee, which considerably increase the cost and expenditure. 
What are the comments of the U.S. on it? 
 
Other Professional Services
 
 The different regulations on professional services in each state have proven to be obstacles to trade in 
professional services such as accounting, architecture,  engineering, and legal services.  The U.S. 
promised at last review that its Federal Govern ment would continue to work with all states to 
encourage the elimination of any remaining measur es that are inconsistent with GATS disciplines. 
Would the U.S. enlighten Members on its latest achievements in this regard? 
 
Visa
 
 A recent report issued by the American Chamber of Commerce in China in Feb. 2005 reflects that 
“…U.S. visa policy continues to place U.S. compani es at a disadvantage. …One in six respondents has 
lost significant sales or business relationships becau se of visa issues…Many manufacturers fear that 
customers, particularly capital equipment purchaser s, are developing a preference for EU suppliers 
because of difficulties in getting visas to travel to the U.S.” 
Has the U.S. Government ever recognized the worries and losses reflected above from the U.S. 
companies in China regarding its current visa policy? 
Does the U.S. have any plan to improve its visa policy and the efficiency of visa procedures for 
the sake of trade facilitation?  
ISRAEL  
Israel appreciates and welcomes the reports prepared by the WTO Secretariat and the United States.  
Israel appreciates and respects the active role th e United States has been taking in the multilateral 
trading system.  Israel has a great interest in th e TPR of the United States as it is Israel's most 
significant trading partner.  While Israel has an inte rest in various aspects of the US economy and trade 
policy, we would like to address two main subjects:  IPR's and standardization.  WT/TPR/M/160/Add.1 
Page 108  
 
1. Israel would be interested to know the cr iteria used by the US for placing countries on 
SECTION 301 OF THE 1974 TRADE ACT.  2. Do WTO Members who abide by the provisions  of the TRIPS Agreement appear on the "301 
lists"? 
 
3. What type of protection does US copyright law grant to producers of sound recordings in respect of the public performance and broadcasts of their sound recordings?  4. As tariff duties have been reduced significantly  over the years, standards requirements have 
become a significant barrier to the free flow of goods  around the world.  What is the United States view 
on concluding Mutual Recognition Agreements (MRA's ) in order to alleviate the problems created by 
Members' different standards requirements?  Would the US be willing to conclude MRA's in laboratory 
testing as an interim solution of this matter in sectors such as IT equipment and drugs.  HONG KONG, CHINA  
Rules of Origin
 
(WT/TPR/S/160, P. 30, Para. 37)  
1. In paragraph 37 (page 30) of the Secretariat Re port, it is said that the general standards for 
determining non-preferential rules of origin may be adapted and interpreted further by agencies other 
than Customs and Border Protection (CBP) to fit th e needs and purposes of the particular context in 
which non-preferential rules are applied.  Although  the Agreement on Rules of origin allows the 
introduction of changes to Members’ non-preferential rules of origin or new non-preferential rules of 
origin, Article 2(e) of the Agreement requires that  “their rules of origin are administered in a 
consistent, uniform, impartial, a nd reasonable manner” during the tran sitional period.  We would like 
to know how the US ensures that the further adap tation and interpretation of its non-preferential rules 
of origin by its different agencies can be applie d in a consistent and uniform manner and how to 
prevent contradictory outcomes of such  further adaptation and interpretation.  
 
Anti-dumping
 
(WT/TPR/S/160, P. 39, Paras. 81 - 82 and Table III.3) 
 2. Note that in 2004, while the number of investig ations initiated is lower than that of 2002 or 
2003, the incidence of provisional measures is much increased from 54% in 2002 and 2003 to 92%, i.e. 
24 out of the 26 AD investigations initiated resulted in the application of provisional measures.  Can 
the US please clarify if there is a change in po licy or practice or any other reason for the significant 
increase.  (WT/TPR/S/160, P. 42 - 43, Paras. 93 - 94)  3. Note that suspension agreements were entered in to in respect of certain AD cases. Grateful to 
know if this option is invariably offered to the exporting sides in all AD cases. If not, what are the 
criteria for offering or adopting this option? 
 
Export Assistance
 
(WT/TPR/S/160, P. 63, Para. 194 and Table III.6) 
 
4. There is an increasing trend in the amounts authorised by the Export-Import Bank in support 
for export activities (from US$9.2 billion in fiscal year  2001 to US$13.3 billion in fiscal year 2004).  
What are the reasons for the increase?  Does th e US envisage the rising trend to continue?   
           WT/TPR/M/160/Add.1 
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THAILAND 
 
WTO Secretariat Report (WT/TPR/S/160) 
 Part II. Developments in Trade and Investment Policy
, (3) Participation in the WTO 
 
1. Thailand commends the United States for its high level of compliance with WTO notification 
obligations.  Paragraph 21  of the Report states that some notifications were outstanding as at October 
2005, including the notification on domestic support for agriculture, with the latest notification of 
March 2004 covering marketing years 2000 and 2001.  When does the United States intend to notify its 
agriculture domestic support for subsequent ma rketing years to the Committee on Agriculture? 
 Part II. Developments in Trade and Investment Policy
, (5) Foreign Investment Regime 
 2. Paragraph 44  of the report provides some information about the Exon-Florio Amendment, 
which grants the President wide discretion in ta king action against FDI transactions by, among other 
things, suspending or prohibiting proposed transa ctions, as well as divestment of a completed 
transaction.  Please provide more details on this law,  including all instances of implementation since its 
enforcement and information on how we can obtain a copy of the Amendment and all related laws and 
regulations.  Also, how does the United States view this provision in light of the ongoing negotiations 
in the Working Party on GATS Rules on Article X:  Emergency Safeguard Me asures, and how does the 
United States plan to address this issue in that context? 
 Part II. Developments in Trade and Investment Policy
, (4) Preferential and Other Arrangements, (ii) 
Free-Trade Agreements   
3. According to paragraph 28  of the Report, the US-Jordan FTA services liberalization section 
utilizes a positive-list approach.  To date, what othe r FTAs has the United States signed that use this 
approach?  In which other FTAs under negotiations is th e US considering using, or has agreed to use, 
this approach?  4. Could the United States please provide informa tion on its preferential regime given to non-
immigrant workers entering the US in connecti on to bilateral/regional trade arrangements? 
 5. Which types of visa are given as a result of  NAFTA, US-Singapore, US-Chile, US-Australia 
and other agreements, for which workers from othe r WTO Members are not eligible?  What are the 
quota numbers in each type and how do they affect the quota given to other WTO Members? 
 
6. Could the United States please provide progr ess reports on FTA initiatives not yet included in 
the report, such as those with Malaysia and South Korea?  Part III. Trade Policies and Practices by Measure
, (2) Measures Directly Affecting Imports, (i) Customs 
Procedures and Rules of Origin 
 
7. Thailand understands that the US Custom s and Border Protection requires certain WTO 
Members to adhere to the 24-hour Advance Manifest  Rule.  Could the US elaborate on this Rule, and 
the criteria for exempting Members from the Rule?  
Part III. Trade Policies and Practices by Measure
, (2) Measures Directly Affecting Imports, (iii) Other 
charges affecting imports  8. In paragraph 67 , the Secretariat reports that Congress intended for the merchandise 
processing fee (MPF) to approximate the cost to Customs and Border Protection (CBP) of processing 
the entry of imported merchandise valued at over US $2,000.  Bearing in mind that merchandise valued WT/TPR/M/160/Add.1 
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at US$2,001 should be subject to an MPF of about US$4.2, please clarify how the pre-determined statutory minimum of US$25, as well as the statutory maximum of US$485, follow Congressional intention and the principles of GATT Article VIII:  Fees and Formalities connected with Importation 
and Exportation.  
9. The United States has operated a harbour maintenance fee, or HMF, ( paragraphs 68 and 69 ) 
since 1987.  The HMF is an ad valorem  levy of 0.125% collected by the CBP on port use. Between 
1987 and 1998 the HMF was applied to imports, expor ts, and domestic freight.  The tax burden on 
exports and national freight is comparatively lo w because ship-owners voluntarily pay the tax on a 
quarterly basis.  With regard to domestic frei ght, there are three exceptions:  (1) payments under 
US$10,000 per quarter; (2) traffic in Alaska, Hawaii a nd territorial dependents;  and (3) the landing of 
fish from ships and some freight shipments of Alaskan crude oil;  however these exceptions do not apply to imports.  The tax has not been collected on exports since 1998 because the US Supreme Court ruled that the portion of the HMF levied on exported cargo violated the Export Clause of the Constitution, which bans taxes on exports. 
 
The HMF appears to impose a tax that exceeds US commitments in its schedules of concessions, and 
when compared to domestic products, imports are accorded less favorable treatment.  The HMF may also levy charges that exceed  fees for harbour maintenance. 
 In light of the above, please clarify the HMF in te rms of WTO consistency, particularly GATT Articles 
II, III and VIII.  Please also explain why imported cargo is subject to the harbour maintenance fee 
while exported cargo is exempt ( paragraph 69 ), considering SCM Agreement obligations regarding 
export subsidies.  Part III. Trade Policies and Practices by Measure
, (2) Measures Directly Affecting Imports, (iv) Anti-
Dumping and Countervailing actions, (a ) Legislation and administration  
 10. Paragraph 75  of the Report identifies certain meas ures that the United States has taken to 
determine continuous bond requirements for importers  of agriculture/aquaculture merchandise subject 
to AD or CVD cases.  US law provides that Customs and Border Protection (CBP) may require a bond or other security “[i]n any case in which bond or other secu rity is not specifically required by law . . . .” 
(19 USC §1623(a)).  Because US AD/CVD statutes al ready provide for security of AD/CVD payments 
by requiring importers to post cash deposits in th e amount of estimated AD/CVD duties on entries of 
subject merchandise after issuance of the or der (19 USC §§ 1671e(a)(3) and 1673e(a)(3)), we are 
concerned that this measure impos es an additional burden on  agri culture/aquaculture exporters, and 
could be WTO inconsistent.  Co uld the United States please elaborate on the justification of CBP’s 
authority to impose additional bond requireme nts on AD/CVD orders, in particular only on 
agriculture/aquaculture merchandise?  11. When calculating the continuous bond am ount, does the United States take into account 
whether the covered imports are from deve loping or least developed countries? 
 
12. Paragraph 76  of the Report describes new conti nuous bond guidelines, which include a 
requirement for CBP to increase the continuous bond under certain circumstances after the Department 
of Commerce (DOC) issues a preliminary affirmative determination.  The Amendment to Bond 
Directive 99-3510-004, posted on the CBP website listed in footnote 64, does not list all of the 
circumstances that would mandate the CBP to incr ease the bond, providing only that, “If, at any time 
after DOC issues a preliminary affirmative determ ination in an agriculture/aquaculture case, CBP 
detects sudden changes in declared  values, claimed country of orig in, or declared classification, etc.
, 
CBP will consider such changes to reflect an in creased risk” (emphasis added).  To enhance the 
transparency and predictability of the application of continuous bonds, coul d the United States provide 
a complete list of all circumstances that would mandate CBP to increase a continuous bond?  Please          WT/TPR/M/160/Add.1 
Page 111 
 
 
provide how authorities calculate the amount of incr eased continuous bond liability.  In addition, are 
there any circumstances under which the CBP must decrease  the bond, and if so, what are they? 
 13. According to paragraph 76 , would the United States consider applying the increase in 
continuous bond liability (using the same formula as  paragraph 75) to other merchandise (apart from 
agriculture/aquaculture merchandise) if it is determin ed to be in circumvention?  Please describe how 
circumvention is determined.  Has the United Stat es ever considered applying its continuous bond 
requirements to other merchandise apart from agri culture/aquaculture merchandise?  Please identify 
any other types of merchandise that has been, is, or would likely to be, under consideration for 
continuous bond application. 
 
14. Please describe any progress the US government has made on considering   alternative means 
to resolve the problem of uncollected AD/CVD re venue and to relieve the difficulties and burden 
incurred by foreign exporters.  
Part III. Trade Policies and Practices by Measure
, (2) Measures Directly Affecting Imports, (iv) Anti-
Dumping and Countervailing actions, (b) Anti-dumping  
 15. The United States has recently begun using “sa mpling” to select mandatory respondents in AD 
and CVD administrative reviews.  Thailand is concerned about the WTO-consistency of this 
methodology because, among other things, the use of  selection frequency as a “weighting” factor may 
lead to a sample rate that is not statistically va lid, and it appears the United States will include margins 
based on “facts available” in calculating an  “all others” rate for other respondents. 
 16. Please describe in detail the “probability-pr oportional-to-size” methodology the Department of 
Commerce used to select respondents in the Brak e Rotors from China an d Softwood Lumber from 
Canada administrative reviews. 
 17. Will dumping margins that were calculated, in whole or in part, based on “facts available” be 
included in the “all others” rate applicable to res pondents that were not individually reviewed during 
the administrative review?   
18. The Appellate Body and the panel in the soft wood lumber dispute between the United States 
and Canada ruled that the United States vi olated Article 2.4.2 of the AD Agreement  by not taking into 
account all comparable export transactions when th e U.S. Department of Commerce (DOC) calculated 
the overall margin of dumping. Does the U.S. inte nd to terminate the application of its zeroing 
methodology in calculating dumping margins in all a nd every stages (investigation, reviews, and the 
sunset review) of future AD cases? 
 19. Thailand also seeks clarification on whet her application of the zeroing methodology in 
calculating dumping margins is required by US law.  If so, please provide all information on such laws 
and provisions.  
Part III. Trade Policies and Practices by Measure
, (2) Measures Directly Affecting Imports, (iv) Anti-
Dumping and Countervailing actions, (c) Countervailing duties  
 20. Does the United States intend to revise or rep eal its existing policy of not applying CVD orders 
against products from Non-Market Economy countries (NMEs) such as China, or would it simply 
consider changing the status of NME countries to market economies?  ( Paragraph 89 ) 
 21. Please explain in detail the criteria used in “same person” methodology.  Is it identical to 
“affiliated parties” test? ( Paragraph 91 ) 
 WT/TPR/M/160/Add.1 
Page 112  
 
Part III. Trade Policies and Practices by Measure
, (2) Measures Directly Affecting Imports, (iv) Anti-
Dumping and Countervailing actions, (d) Suspension Agreements  
 22. The threshold of “substantially all of th e imports,” which the US AD Act sets at 85%, 
consequently prevents the acceptance of a Suspension Agreement proposed by an individual exporter.  
Please clarify this provision in light of Ar ticle 8.1 of the AD Agreement that allows any
 exporter to 
voluntarily revise its prices or to cease exports at dumped price.   23. Please explain how the United States determines the “reference price” or agreed price in Suspension Agreements, as there may be more than one  signatory with a different level of dumping or 
subsidization? 
 24. Please provide details on all AD and CVD Suspension Agreements into which the 
United States has entered, and the reasons for which some were terminated. ( paragraph 94 ) 
 
Part III. Trade Policies and Practices by Measure
, (2) Measures Directly Affecting Imports, 
(v) Safeguards, (a) Global safeguards  
 25. Please explain how the United States determines and quantifies all relevant factors that cause  
serious injury, and how the United States isolates in jury caused by non attribution factors from the 
injury determination, pursuant to Article  4.2(b) of the Agreement on Safeguards.  ( paragraph 102 ) 
 
26. How does the United States determine which saf eguard measures, such as ad valorem rate 
increases, tariff quotas, import licensing, quantitative rest rictions, or other measures, are to be used for 
a particular case? ( paragraph 103 ) 
 
27. Please explain how the United States applie s safeguards in the form of import licensing 
measures, and also provide examples of “other measures” ( paragraph 103 ) that the United States has 
used or might use as a safeguard measure.  28. Please provide details on the calculation me thodology the United States uses to determine 
safeguard duty rates and quantitative restrictions. 
 
Part III. Trade Policies and Practices by Measure
, (2) Measures Directly Affecting Imports, (vii) 
Standards and technical regulations  
 29. Paragraph 131  states that the United States requires immediate containers of imported 
processed meat and poultry products to be marked w ith the country of origin in English, whereas 
imported meat and poultry processed in the United States are not subject to this requirement.  Please clarify how this complies with the national treatment principles of the TBT Agreement.  30. Current US regulations concerning food labeli ng, such as the mandatory labeling of products 
containing transfat, food allergens, and country of or igin labeling, are stringent and quite costly.  For 
example, the United States allows importation of  egg products only from FSIS certified facilities 
(paragraph 158 ) and such products must also include food allergen labeling.  These requirements 
burden exporters with factory certification and exam ination costs as well as labeling costs.  Does the 
United States intend to simplify this process in th e near future in order to facilitate trade? 
 
Part III. Trade Policies and Practices by Measure
, (2) Measures Directly Affecting Imports, (viii) 
Sanitary and phytosanitary measures, (c) The Bioterrorism Act  
 31. As the Bioterrorism Act of 2002 has entere d into force for over 3 years, when does the 
United States intend to publish info rmation regarding the economic impact, particularly on trade, of 
this regulation?  We would especially appreciat e information regarding the indicators listed in          WT/TPR/M/160/Add.1 
Page 113 
 
 
paragraph 164 , such as the value of imports refused entr y into the United States due to lack of 
compliance with the regulations.  Part IV. Trade Policies by Sector
, (2) Agriculture 
 
32. Paragraphs 10 and 11  mention an increasing amount of payments and Producer Support 
Estimate (PSE) to US agricultural producers.  According to the Doha Mandate, WTO member 
countries are obliged to reduce their domestic s upports substantially.  Please explain why the United 
States has increased payments to its agricultural pr oducers in 2005, and how the United States intends 
to comply with the mandate. 
 
33. In light of the United States’ recently proposed  changes to eliminate its support program for 
cotton, as indicated in paragraphs 12 and 13 , does the United States also intend to eliminate its 
support program for other products?  Is the United Stat es considering using a risk-based fee structure in 
its export credit guarantee program for other produc ts, such as soybean, sugar, corn, and rice? 
 
34. How does the US notify the counter-cyclical payments, the direct payments and the ad hoc emergency payments to WTO as domestic support pr ogram in 2004 and 2005?  In which categories 
(Amber, Blue, or Green Box), and how much are these supports?  35. Under the Export Credit Guarantee Program (GSM 102) described in paragraphs 47 to 52 , 
how much funding/financing does the United States allocate, in any given year, for programs with 
credit terms between 180 days and three years? Ho w does the United States plan to eliminate credit 
terms longer than 180 days, as agreed in the Hong Kong Ministerial Declaration?    36. Under food aid programs ( paragraphs 53 to 57 ), how much does the US expend on: (1) non-
emergency food aid; (2) Food for Progress program; and (3) Monetized Food Aid? 
 
ECUADOR 
 ARANCELES: 
 Se evidencia un contraste entre los aranceles promedio s relativamente bajos y lo s picos arancelarios en 
el sector agrícola que parecen ser una caracterís tica de la política comercial de estados unidos y 
aparecen como una contradicción con lo señalado en el párrafo 9, página 17 del informe de la secretaría 
acerca de que “el principal objetivo de los estados unidos en las negociaciones comerciales internacionales es la eliminación de los obstáculos al comercio de bienes y servicios y a las inversiones 
extranjeras  así como la difusión de un sistema de comercio basado en normas”. 
 Asimismo, si se considera el promedio de los arancel es para los productos no agrícolas es del 4% en el 
2005, mientras que para los productos agrícolas es más del doble. ¿Cuál es la justificación de los 
estados unidos para mantener altos aranceles de protección en sectores de productos de alimentación agrícolas? 
 
De la estructura arancelaria de los Estados Un idos de América se desprende que los derechos 
específicos dificultan la competitividad para los bienes procedentes del Ecuador como país en 
desarrollo. ¿Están los Estados Unidos considerando la  reducción de dichos aranceles?  Si así fuera, en 
qué tiempo y de qué forma? 
 
Podrían los Estados Unidos explicar qué grado de diferenciación existe entre los niveles arancelarios 
NMF vigentes en Estados Unidos y sus ni veles NMF consolidados en la OMC? 
 ¿Cuál es el alcance de la leyenda “bound in WTO” que  consta en el “Usito Tariff Database? significa 
acaso que el derecho arancelario tiene el mismo ni vel de “MFN duty rate” vigente o uno diferente? WT/TPR/M/160/Add.1 
Page 114  
 
ACUERDOS DE LIBRE COMERCIO: 
 
En el informe de la Secretaría de la OMC se señ ala un incremento sustancial de acuerdos de libre 
comercio de Estados Unidos con una serie de países y subregiones. dentro de ellos, se informa que “los 
Estados Unidos mantienen negociaci ones para establecer acuerdos de libre comercio con Colombia, 
Ecuador y el Perú”...”las autoridades de los Estados  Unidos consideran que los ALC de los Estados 
Unidos pueden promover la innovación, facilitar a los países participantes medios para la creación de 
capacidad comercial y para que perfeccionen las técn icas de negociación, y promover la inversión, la 
creación de empleo y el perfeccionamiento de las normas comerciales.  También consideran que los 
ALC son un medio para hacer avanzar la prepar ación y negociación de acuerdos multilaterales” 
(párrafo 23, página 21). 
 Al respecto, teniendo en consideración que el Ec uador está por suscribir un ALC con los Estados 
Unidos en estas próximas semanas. pueden lo s Estados Unidos prove er información sobre 
proyecciones económicas, de inversión, y comercio que sustenten esas afirmaciones? es decir, tienen 
los Estados Unidos estudios que estim en y cuantifiquen los beneficios de un ALC con nuestro país para 
señalar lo mencionado en el informe de la Secretaría?  ¿Podrían los estados unidos elaborar sobre cómo mi ran la suscripción de acuerdos bilaterales como 
complementarios de las negociaci ones comerciales multilaterales? 
 EROSION DE PREFERENCIAS: 
 
La multiplicidad de ALC en diversas partes del planet a en los útimos años, así como por los posibles 
resultados relativamente ambiciosos  de la ronda de negociaciones en la OMC en materia liberalización 
y de acceso a los mercados producirá erosión de las preferencias de los miembros que tengan dichos 
acuerdos ¿qué percepción tienen los Estados Unidos sobre las dificultades para algunos países por la 
erosión de sus preferencias? consideran que este tema debe ser tratado en la OMC? si ello es afirmativo, ¿qué propuestas consideran adecuadas dent ro de las negociaciones de la OMC para tratar 
esa dificultad?  
INVERSIONES: 
 
El informe de la Secretaría señala “los estados unidos tienen tratados de inversión vigentes con 39 
países. entre las principales características de los trat ados bilaterales de invers ión de los Estados Unidos 
cabe citar: amplia cobertura; el trato nacional y trato NMF con respecto a las inversiones tanto anteriores como posteriores al establecimiento, con sujeción a las excepciones sectoriales acordadas; la 
observancia de ciertas normas de trato y protección con respecto a las inversiones abarcadas, las 
normas relativas a la expropiación y la compensación; la libre transferencia de fondos; la prohibición 
de determinados requisitos obligatorios en materia de  resultados; la solución de  diferencias a través del 
arbitraje internacional.” (páarfo 46, página 160).   Tomando en cuenta que entre el ecuador y los Es tados Unidos desde 1996 está vigente un tratado 
bilateral de promoción y garantía de las inversiones, y que dentro de las negociaciones de un acuerdo 
de libre comercio entre los dos países se incluy e un capítulo correspondiente a inversiones y al 
tratamiento para las ied, el Ecuador solicita inform ación acerca de la percepción que tienen los Estados 
Unidos sobre la convivencia de ese acuer do bilateral  en relación con un ALC.  
¿Han  considerado los estados unidos la eventu al denuncia del acuerdo bilateral de promoción y 
garantía de inversiones con el ecuador? 
 Podrían los estados unidos ofrecernos amplia inform ación sobre lo que para su gobierno califica como 
inversión y la forma en que se integra una lista ilus trativa acerca de lo que comprende el acto de la 
inversión? es procedente una defini ción enmarcada en forma taxativa? 
          WT/TPR/M/160/Add.1 
Page 115 
 
 
COMERCIO Y SEGURIDAD: 
 
LEY DE BIOTERRORISMO  Desde la pomulgación de la ley sobre bioterrorismo por parte del presidente de los Estados Unidos de 
América en junio de 2002, podrían informar sobre la s acciones emprendidas para evitar que esa ley sea 
un obstáculo no arancelario para el comercio?  Tienen los Estados Unidos de Amèrica una evaluaci òn sobre el impacto comercial para los países de 
América Latina desde la institucionalizaciòn de la ley de bioterrorismo y sobre los cambios en el 
comportamiento de sus importaciones que puedan ser atribuidos como efectos de dicha ley? 
 Según parece, la ley de bioterrorismo autorizó al rededor de US$ 600 millones al gobierno federal para 
su ejecución y preparación de las disposiciones aproba das por el congreso estadounidense.  Al respecto, 
tomando en consideración que este monto supera sustan cialmente cualquier posibilidad de apoyo que el 
Ecuador pueda dar a la comercialización de su s exportadores, puede la delegación de los 
Estados Unidos informarnos qué programas de asisten cia técnica y financiera han establecido para que 
los exportadores de países en desarrollo de Améric a Latina estén preparados para cumplir todos los 
requisitos de esa ley, a fin de continuar sus e xportaciones sin mayores alteraciones comerciales? 
 ¿Cuánto tiempo más tiene previsto estados unidos mantener la ley de  bioterrorismo? tiene previsto 
Estados Unidos hacer una revisión de esa ley? si la respuesta es afirmativa, cuándo? 
  
PROPIEDAD INTELECTUAL: 
 
Considerando las negociaciones en la omc, dentro del consejo de los a dpic, y sobre la base del mandato 
del párrafo 2.39 de la declaración de Hong Kong, el Ecuador desea conocer las razones por las cuales a 
los Estados Unidos no les parece apropiado el en foque sobre el develamiento de origen como un 
enfoque para promover una mayor transparencia y clar idad en la concesión de patentes? qué propuestas 
alternativas ofrece? 
 
PREGUNTAS ADICIONALES DEL ECUADOR  
1. En el párrafo 6, Cap. III, pág. 30, del Informe de la Secretaría, se manifiesta que la 
normalización desempeña un papel importante por lo que respecta a la garantía de la seguridad y calidad de los productos en los Estados Unidos .  Los Estados Unidos han presentado numerosas 
notificaciones en el marco de los Acuerdos OTC y M SF, pero no hay información sobre la medida en 
que las normas estadounidenses se basan en normas elaboradas por organizaciones internacionales. 
¿Podrían los Estados Unidos señalar en qué no rmas nacionales o internacionales se basan las 
notificaciones presentadas en el marco de los Acuerdos OTC y MSF?  
 
2. ¿Cómo juzgan los Estados Unidos la impo rtancia de los Tratados de Libre Comercio 
Bilaterales frente al mayor desarrollo del sistema de la OMC? 
 
3. En el Reporte de la Secretaría de la OM C no se hace mención a la biodiversidad ni a los 
conocimientos tradicionales. ¿Podrían los Estados Unidos indi car cómo la biodiversidad y los 
conocimientos tradicionales son protegid os en la legislación estadounidense? 
 
4. En el párrafo 29, cap. III, pág. 34, se señala que  no se ha publicado ningú n reglamento para el 
funcionamiento de la Asociación Aduanera y Comercial contra el Terrorismo la C-TPAT. ¿Podrían los 
Estados Unidos indicar si se prevé publicar un reglamento para el funcionamiento de la C-
TPAT? ¿De qué manera son aplicables las directr i c e s  d e  l a  C - T P A T  m i e n t r a s  n o  e x i s t a  u n  
reglamento?  WT/TPR/M/160/Add.1 
Page 116  
 
5. Según el párrafo 48, cap. III, pág. 48, la participación de las líneas arancelarias no ad valorem  
ha disminuido del 12,2 por ciento de las líneas en 2002 al 10,6 por ciento en 2004.  ¿Podrían los 
Estados Unidos especificar en cuánto ha disminuido  la participación de las líneas arancelarias no 
ad valorem, desagregados para productos agrícolas y no agrícolas, en los últimos 5 años?  
 6. Dados los recientes resultados en el OSD sobre el cálculo de dumping y la publicación del 
Departamento de Comercio de los Estados Unidos (DOC) sobre la propuesta para enmendar la 
metodología de cálculo de dumping utilizado por esa institución, en el Federal Register  (vol. 71, no. 
43) del 6 de marzo pasado, ¿qué metodología alternativa al “zeroing” propondrían los EE.UU a fin 
de cumplir con las normativas de la OMC sobre antidumping?  
 
7. En lo que corresponde a la derogatoria de  la Ley de Compensación por Continuación del 
Dumping o Mantenimiento de las Subvenciones (CDSOA) de 2000, conocida también como Enmienda Byrd: ¿Podrían los Estados Unidos explicar por qué la  derogatoria de la En mienda Byrd no entró 
en vigor automáticamente?, y ¿Por qué se perm itirá que las empresas sigan recibiendo la 
recaudación por aranceles de dumping de las entradas que se realicen hasta el 1 de octubre del 
2007?  
 
8. Según el párrafo 164, pág. 73 del Reporte de la Secretaría, la FDA realizó análisis de los 
efectos económicos de las disposici ones de la Ley contra el Bioterrorismo antes de su entrada en vigor
, 
como exige la legislación federal. La Secretaría no pudo comprobar los efectos en el comercio de esas 
disposiciones tras su entrada en vigor, debido principalmente a la falta de información sobre 
importantes indicadores, por ejemplo el valor de las importaciones rechazadas por no cumplir esas disposiciones. ¿Podrían los Estados Unidos indicar si luego de su entrada en vigor han efectuado 
algún estudio sobre los efectos económicos de las di sposiciones de la Ley contra el Bioterrorismo?  
 9. El Informe de la Secretaría no contiene info rmación detallada sobre las disposiciones que rigen 
la elaboración, modificación o cancelación de medidas sanitarias y fitosanitarias por parte de las autoridades estatales. ¿Podrían los Estados Unidos señalar qué  disposiciones rigen la elaboración, 
modificación o cancelación de medidas sanitarias y fitosanitarias y qué principios deben observar 
las autoridades en la elaboración de los reglament os sanitarios y fitosanitarios? ¿Cuál es el plazo 
normal de entrada en vigor de dichos reglamentos?  
 
10. ¿Podrían los Estados Unidos señalar qué procedimiento siguen para asegurarse que las 
medidas sanitarias y fitosanitarias que aplican se encuentren conformes a lo acordado en el 
Acuerdo de la OMC sobre la Aplicación de Medida s Sanitarias y Fitosanitarias (Acuerdo MSF)?  
 
Otras Preguntas 
 
• En el párrafo 131, pág. 64 del Reporte de la  Secretaría se indica que los reglamentos 
publicados en aplicación de la Ley Federal de In spección de la Carne y la Ley de Inspección de 
los Productos de Aves de Corral requieren que el no mbre del país de origen figure en inglés en 
los contenedores inmediatos de todos los producto s de carne y aves de corral que entran en los 
Estados Unidos. Cuando carne o productos de av es de corral importados a granel se elaboran 
en los Estados Unidos, no es necesario que el  producto elaborado o su contenedor estén 
etiquetados. ¿Podrían los Estados Unidos explicar por qué se aplican estos reglamentos a 
esos productos extranjeros y no a los nacionales,  en contradicción al principio de “Trato 
Nacional” de la OMC? 
 
• En el párrafo 19. pág. 33, del Reporte de la Secretaría, se indica que uno de los principales 
instrumentos utilizados por la Oficina de Aduanas y Protección en Frontera (CBP) para 
identificar cargas de alto riesgo es el Sistema Automatizado de Polarización (ATS).  Se trata de un sistema informático que analiza la información sobre carga mediante el uso de normas          WT/TPR/M/160/Add.1 
Page 117 
 
 
ponderadas, asignando un nivel de riesgo a cada expedición. ¿Podrían los Estados Unidos 
detallar el funcionamiento del Sistema Automati zado de Polarización, especialmente en lo 
que respecta al método de asignación de ri esgos para cada expedición? ¿Cuáles son los 
otros instrumentos utilizados por la CBP para  identificar cargas de alto riesgo y cómo 
funcionan? 
 
• Según el párrafo 23, pág. 34, la CBP exige a lo s participantes en el Sistema de Manifiestos 
Automatizados (incluidos los transportistas, im portadores, agentes de aduanas o servicios de 
entrega urgente) que presenten la información sobre carga que sea "raz onablemente necesaria" 
para la identificación de expediciones de alto riesgo. ¿Podrían los Estados Unidos explicar 
exactamente qué se debería entender por información “razonablemente necesaria”? 
 
• En el párrafo 26, pág. 35, se señala que en la CSI sólo pueden participar  puertos que tengan un 
tráfico "regular, directo y sustancial" de contenedores a puertos marítimos de los Estados Unidos. ¿Podrían los Estados Unidos precisar qué se debe entender por puertos que 
tengan un tráfico "regular, directo y sustancial" de contenedores a puertos marítimos de 
los Estados Unidos? 
 
• En el párrafo 50, pág. 40, se indica que los contingentes arancelarios comprenden un poco más 
del 2 por ciento de las líneas arancelarias. ¿Podrían los Estados Unidos especificar en qué 
líneas arancelarias existen contingentes arancelarios? 
 
• Según el párrafo 51, pág. 40, a raíz de la R onda Uruguay, los Estados Unidos consolidaron 
todas las líneas arancelarias de los capítulos 1 a 97, excepto dos líneas dedicadas al petróleo 
crudo. ¿Podrían los Estados Unidos indicar si consolidarán dichas líneas arancelarias? 
 
• Según el párrafo 120, pág. 62, entre julio de 2003 y julio de 2005 varios Miembros de la OMC 
expusieron en el Comité de Obstáculos Técnicos  al Comercio preocupaciones relativas a la Ley 
contra el Bioterrorismo, y el programa de etique tado del país de origen autorizado por la Ley 
Estadounidense de Agricultura de 2002. ¿Podrían los Estados Unidos señalar hasta cuando 
se ha previsto imponer esta serie de medidas? 
 
• Según los párrafos 191 y 192, pág. 79, el Ex-Im Ba nk tiene el mandato de  facilitar garantías, 
seguros y créditos a tipos y en condiciones que sean plenamente competitivos con los apoyados 
por los gobiernos de los principales países cuyo s exportadores compiten con los de los Estados 
Unidos. ¿Podrían los Estados Unidos explicar en  qué medida el mandato del Ex-Im Bank, 
de “…facilitar garantías, seguros y créditos a tipos (de interés) y en condiciones que sean 
plenamente competitivos con los apoyados po r los gobiernos de los principales países 
cuyos exportadores compiten con los de lo s Estados Unidos de América…”,  son 
compatibles con el Acuerdo sobre Subvenciones y Medidas Compensatorias de la OMC?  
 
• Según el párrafo 206, pág. 84, en la Ley para la  Creación de Empleo en los Estados Unidos de 
2004 se establece una deducción fiscal escalonad a del 9 por ciento para empresas de 
producción de determinados sectores. ¿Podrían los Estados Unidos indicar cómo tales 
deducciones son compatibles con el Acuerdo sobre Subvenciones y Medidas 
Compensatorias de la OMC?  
 Pregunta para coordinación y presentación con ot ros Países Miembros  interesados (México, El 
Salvador). 
 
• En relación con el trabajo de los migrantes  en los Estados Unidos ¿Podrían los Estados 
Unidos explicar cómo hacen cumplir sus leyes laborales, pago de salarios mínimos vitales 
y los derechos de los trabajadores, para no  crear competencia desleal (dumping social)?  WT/TPR/M/160/Add.1 
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SOUTH AFRICA 
 SECTION III:  TRADE POLICIES AND PRACTICES BY MEASURE 
 
1. Paragraph 138 of WT/TPR/S/160 (page 52) calls  upon the President to “take such reasonable 
measures as may be available to promote the observa nce by state agencies and private persons, in 
carrying out standard-related activities,  of requirement equivalent to those imposed on federal agencies, 
and of procedures that provide for notification, pa rticipation, and publication with respect to such 
activities”.  
 Can the US please give an example of a case where Federal standards differ with State 
standards; and if such, which standard will prevail?   
SECTION IV: TRADE POLICIES BY SECTOR 
 2. The delay with submitting notifications to the WTO COA is a concern. This is mentioned in 
various instances in the secretariat’s report WT/TPR/S /160. As at 8 March 2006, the members’ website 
of the WTO contains the following as the US’ latest notifications:   Market Access:  the last notification was G/AG/N/USA/54, for the year 2002/2003  
Domestic support:  the last notification was G/AG/N/USA/51, for the years 2000 and 2001  (i.e. pre-
Farm Act 2002)   Export competition:  the last notification was G/AG/N/USA/53, for the year 2002   
When does the US intend to submit the outstanding notifications? 
What steps is the US taking to ensure that notif ications are submitted within prescribed timelines?  
 3. WT/TPR/S/160: IV (2) (ii) 18: “… any impor ter, including manufacturers of like products, can 
apply for a license…”   
The US’s market access notifications indicate underfill of  most quotas.  To what extent is this due to 
the allowance for US manufacturers of like products also to apply for licenses?   Is there a sanction of such manufacturers if they sh ould receive a license but not utilize it?  If yes, what 
do such sanctions entail? 
 
To what extend do administrative procedures c ontribute to the low fill rates of USA TRQs? 
 4. WT/TPR/S/160: IV (2) (iii) 27 – direct payments: “… payments are based on historical acreage and yields…”  
On which years’ acreage and yields are these payments based?  
 5. WT/TPR/S/160: IV (2) (iii) 29 – counter-cycli cal payments: “… payments are also based on 
historical acreage and yields…”  
On which years’ acreage and yields are these payments based? 
 Are these historical acreages and yields changed from time-to-time?   6. WT/TPR/S/160:  IV (2) (iii) 31 – loan progra mmes (commodity or mark eting assistance loans)          WT/TPR/M/160/Add.1 
Page 119 
 
 
What products, and in what volumes, were forfe ited in the years 2003, 2004 and 2005? What 
percentages of the total US crop did these constitute?  7. WT/TPR/S/160: IV (2) (iii) 32 – loan programmes (marketing loans)  
What amounts of loans, for which products and what volumes of each, were repaid at the “repayment 
rate” in the years 2003, 2004 and 2005? What percen tages of the total US crop did these constitute?  
 8. WT/TPR/S/160: IV (2) (iii) 33 – loan progr ammes (loan deficiency payments programme) 
 
What amounts of subsidies, for which products and what volumes of each, did producers collect in the 
years 2003, 2004 and 2005? What percentages of the total US crop did these apply to?  
 9. WT/TPR/S/160: IV (2) (iii) 43 – other progra mmes (Trade Adjustment Assistance for Farmers 
programme): “… payments in 2004, amounted to US$11 million…” 
 
Which products, and in what volumes, be nefited from these payments in 2004?  
 10. WT/TPR/S/160: IV (2) (iv) 51 – export cr edits, insurance and guarantees (Facility Guarantee 
Programme): “…The export credit guarantee for sales of manufactured goods and services is only extended to projects that are expected to benefit the export of U.S. agricultural products.  The U.S. 
authorities note that the Commodity Credit Corporat ion has issued one guarantee under this programme 
since 1997.…”  Could the US provide details on the guarantee that wa s issued (country and products that benefited)?  
 
11. WT/TPR/S/160: V Food Aid:  The USA provides emergency food aid through various 
programmes and the USA efforts in this regard ar e very laudable.  The USA also provides food aid 
under various non-emergency programmes and the impact of these programmes on agricultural 
production and production capacity in recipient an d countries neighbouring recipient countries is not 
always clear.  
Can the USA provide an assessment on what the impact on prices and production quantities is in 
developing countries of non-emergency food aid?  The non-emergency food aid strives to obtain certain laudable objectives in developing countries.  Can 
the USA provide an assessment on alternative me thods to obtain these objectives than through the 
provision of non-emergency food aid? 
 Can the USA provide the membership with statis tics on the provision of non-emergency food aid and 
also provide a break down of products and beneficiary countries and/or regions? 
 
COSTA RICA 
 
Medidas que afectan directamente las importaciones
 
 i) Regimen aduanero 
 1. En el párrafo 16 se indica que los importa dores y los agentes de aduanas que utilizan el 
Entorno Comercial Automatizado (ACE) pueden efectuar pagos de derechos y gravámenes a la Oficina 
de Aduanas y Protección en frontera (CBP) por periodicidad mensual en vez de hacerlo por cada expedición.  Sírvase ampliar lo referente al mecanis mo a través del cual funciona ese pago mensual, las 
exigencias que se requieren al respecto tanto para lo s importadores como para los agentes de aduanas y 
cuáles son los controles que existen al efecto. WT/TPR/M/160/Add.1 
Page 120  
 
2. En el párrafo 19 se hace alusión a un sistema de  control de riesgo para las mercancías, a través 
de un sistema informático que analiza la informac ión sobre la carga mediante el uso de normas 
ponderadas, asignando un nivel de riesgo a cada expedici ón.  Sírvase agregar lo concerniente a la forma 
de funcionamiento del control de riesgo.  
3. En el párrafo 20 se señala que tras la adopción de  la Ley de Comercio Exterior, la declaración 
de carga del buque debe enviarse a la CBP en formato electrónico por medio del Sistema de 
Manifiestos Automatizados; y ya no se aceptan co municaciones en papel.  Sírvase indicar el 
planeamiento que se hizo al respecto, señalando si la eliminación de la presentación de documentos se 
hizo por etapas en las aduanas o si entró a regir de  manera uniforme y general simultáneamente en todo 
el país; si entró para todos los regímenes al mi smo tiempo o se efectúo en forma gradual; si hubo algún 
periodo que coexistieran la presentación virtual y en pa pel, cuál fue su experiencia en este proceso  y 
las precauciones que tomaron al respecto.  4. En el párrafo 25 se hace referencia a la Inic iativa de Seguridad de los Contenedores (CSI) el 
cual consiste en la selección e inspección de cont enedores de alto riesgo destinados a Estados Unidos 
en el puerto de partida y la utilización de sellos que  evidencian la manipulación.  Para tales efectos 
destacan funcionarios de la CBP a los puertos par ticipantes donde identifican los contenedores de alto 
riesgo.  Sírvase ampliar sobre las obligaciones y res ponsabilidades de los funcionarios de la CBP en 
esos puertos, el período a través del cual se dest acan en el puerto de partida, los controles y 
coordinaciones que existen en relación con sus supe riores en Estados Unidos.  Asimismo sobre la 
responsabilidad y obligaciones de los funcionarios del país anfitrión y en especial lo referente a su 
potestad de seleccionar las cargas que serán objeto de revisión.  
iii) Otras cargas que afectan a las importaciones 
 5. En el párrafo 66 se señala que las import aciones valoradas en más de 2.000 dólares Estados 
Unidos están sujetas a un gravamen por tramitación de mercancías recaudado por el Servicio de Aduana y Protección de Fronteras, con las excepciones que ahí se indican.  Sírvase ampliar la forma en 
como controlan aquellos supuestos en que las merc ancías formen parte de dos o más importaciones que 
se efectúen con el propósito de evadir el pago de l gravamen fijado y cuál es la sanción en caso de 
incumplimiento. 
 
Otras medidas que afectan a la producción y el comercio
 
 
i) Política en materia de competencia 
 
6. En caso hipotético de un cárte l internacional o una fusión. ¿Es posible para autoridades de 
otros países establecer con Estados Unidos un mecanis mo de notificación, intercambio de información, 
asistencia mutua, recolección de pruebas,  etc; pa ra comunicar prácticas anticompetitivas en materia de 
seguros, telecomunicaciones, otros? De ser esto posible ¿cuál es el procedimiento a seguir?   
ii) Derechos de propiedad intelect ual relacionados con el comercio 
 
7. El párrafo 255 del Informe de la Secretaría se refiere al plazo de protección a las patentes de 
invención otorgado por la legislación estadounidense.  Por favor sírvanse expli car en detalle si las 
disposiciones que prevén la posibilid ad de extender o compensar el pl azo de protección de las patentes 
abarcan todos los tipos de patentes o se encuentran limitados para algunos tipos específicos de patentes.  
 
8. En el párrafo 261 del Informe de la Secretar ía se hace referencia a la cantidad de patentes 
solicitadas y otorgadas en Estados Unidos en el 2004.  Por favor sírvanse i ndicar cuántas de estas 
patentes otorgadas han sido revocadas, así como  las principales causas para su revocación. 
 
          WT/TPR/M/160/Add.1 
Page 121 
 
 
Agricultura  
 
i) Medidas en frontera (págs 109-111) 
 
9. En el informe de la Secretaría, párrafo 16 del capítulo IV sobre políticas comerciales por 
sectores, en este caso sobre la Agricultura (págin as 109-110), se indica que “alrededor de 195 líneas 
arancelarias están sujetas a contingentes arancelarios.  Cerca del 91 por ciento de los aranceles fuera de 
contingente son aranceles no expresados ad valorem, frente a casi un 28 por ciento de los aranceles 
dentro de los contingentes”.  De esta forma, ¿c onsidera Estados Unidos que el establecimiento de 
aranceles no ad valorem, es una medida justa para el comercio multilateral y que no es más restrictiva 
que la utilización de aranceles ad valorem? 
 
iii) Programas de Ayuda Interna (págs 111-116) 
 
10. ¿Por qué Estados Unidos a ún no ha notificado la aplicaci ón de su actual Farm Bill?  
11. ¿Cuándo planea Estados Unidos notificar sus ayud as internas en la agri cultura para los años 
faltantes? ¿Podrá hacerlo durante este año, antes de  finalizar las negociaciones de la Ronda Doha?  
12. ¿Incluirá, en sus próximas notificaciones, un detalle del uso de la exención de minimis? 
 
v) Ayuda Alimentaria (págs. 118-119) 
 Si bien la ayuda alimentaria puede representar un  recurso para el desarrollo para algunos países 
también puede ser un obstáculo para otros.  De esta forma, Costa Rica está interesada en conocer la 
opinión de Estados Unidos, como unos de los prin cipales países que brinda este tipo de ayuda con 
relación a los siguientes puntos:   
13. ¿Tiene los Estados Unidos c onocimiento de cuándo la ayuda que brinda se convierte en un 
obstáculo para el desarrollo de un país, sea este receptor de la donación o posible exportador del 
producto donado?   14. De ser afirmativo, ¿qué medidas posee para corregir las distorsiones que estos programas de 
ayuda alimentaria puedan provocar en el comercio multilateral?  
 
15. ¿Considera Estados Unidos que la monetizaci ón de la ayuda alimentaria es una práctica 
necesaria para que un país en desarrollo pue da lograr sus objetivos de desarrollo? 
 
NORWAY 
 
General questions: 
 
1. As described in paragraph 13 of the Secretar iats report, chapter II, the Bipartisan Trade 
Promotion Authority Act (TPA) is effective until 1 July 2007. Are there currently any legislative 
procedures in progress to further extend the TPA, or  to establish new and similar legislation?  
 
2. In paragraph 44 of the report it is stated that  FDI into the United States is subject to reporting 
requirements under the International Investment and Trade in Services Act. We would be pleased to 
have more information on this act and its objectives,  more specifically about what the requirements are 
and what the potential consequences are of om itting to fulfill the reporting requirements. 
 
Anti-dumping and countervailing measures: 
 
3. Norway continues to be concerned with the United States' active use of trade remedies, as 
referred to in the Secretariat’s re port. Norwegian exports of fish and fish products are effectively 
hindered by the anti-dumping and countervailing measures imposed on fresh, whole Norwegian WT/TPR/M/160/Add.1 
Page 122  
 
salmon. In our view, there is no basis for this measu re, which was imposed in 1991, and continued after 
a “Sunset review” in January 2006. Norway is concerned with the US practice relating to “Sunset reviews”, which appears to be a purely mechanical pr ocedure considering the fact that the Department 
of Commerce has never lifted any AD-measures where American economic interests have been involved. We would like to know what the United St ates intend to do in order to update the “Sunset 
review”-practice in order to make it a functional review mechanism?  
 
Maritime transport services: 
 
4. In addition to information on the US flagged a nd controlled fleet as provided in para 117 of the 
Secretariats report, chapter IV, could you provide updated information on the size of the so-called 
Jones Act fleet and its average age?  5. According to information by MARAD
6 the volume of cargo transported in US domestic ocean 
trades was slightly reduced from 2000 to 2004 both in metr ic tons and metric ton miles.  How does this 
development compare to changes in the volumes tran sported by road and rail in the same period? 
 6. In paragraph 122 of the Secretariats report  there is some information on bilateral maritime 
agreements.  We would like to know if any of th ese agreements contains provision giving access to 
government owned or controlled cargo on a reciprocal b asis.  We would also like to know if any of the 
free trade agreements that the United States is a pa rty to contain provisions on maritime transport, 
which gives access to government owned or controlled cargo on a reciprocal basis.) 
 7. Paragraph 130-131of the Secretariats report contain information on the food aid programme 
and the cost of using US flagged vessels.  We would like to know how much the extra cost of using US 
flagged vessels, including the ”Excess 20%” referred to in paragraph 131, amounts to in USD annually 
and as a percentage of the amount spent on food aid. 
 8. Is participation in the Voluntary Interm odal Sealift Agreement (VISA) programme as 
described in paragraph 128 of the Secretar iats report limited to US flagged vessels? 
 9. In footnote 127 to paragraph 129 it is said that ”agencies may opt for higher percentages” than 
50% of gross tonnage to be transported by US flagge d vessels.  We would like to know if any agencies 
have used this option, and if so which agen cies and the percentage they have opted for. 
 10. The Trade Policy Review document from 2003 contained information on restrictions on 
transport of Alaskan crude oil for exports.  We woul d like to know if Alaskan crude oil is exported, and 
if so still subject to the requirement to be carried by US flagged vessels? 
 
Intellectual property: 
 
11. In its annual report, the US Patent Office (USPTO) has stated its focus on increasing patent 
quality.  Patent quality is also one of the issues identified in a recent report by the Federal Trade 
Commission (FTC) reviewing the U.S. patent syst em. We would like to ask the US Government 
whether there are any concrete legislative, orga nizational or other measure s under preparation or 
execution in order to broaden the range of Prior Art search conducted by the USPTO when examining 
patent applications, particularly prior art in mo re languages than up to now, and searches in more 
databases and publications than hitherto , e.g. in developing countries, in order to improve the quality of 
US patents?  We also note with great interest the recommendations cited in the Secretariats report’s 
from the report by the FTC on the working of the US patent system, in particular the one on new 
administrative procedures to allow post-grant review of  and opposition to patents. We point to the fact 
that such procedures exist in e.g. Norway and the EPO , and are applied with success. What is the status 
                                                     
 
6 “US Domestic Ocean Trades 2004” published in January 2006          WT/TPR/M/160/Add.1 
Page 123 
 
 
of the work to introduce post-grant review procedures  in the US patent system, and what would be the 
time frame for introducing such procedures?  
Government Procurement: 
 12. Only 37 American states take part in the WTO agreement on Governme nt Procurement (GPA). 
This constitutes a considerable de facto market obs tacle for foreign companies. We would like to know 
what measures might be taken by the federal authorities in order to increase the number of states participating, and give us an up date on whether there are more states considering joining the GPA? 
 Agriculture: 
 
13. Page 56, paragraph 158 in the Secretariats re port states that the United States has recognized 34 
foreign systems as equivalent to the U.S. meat, poultr y, and/or egg products regulatory systems.  All 
Nordic countries are included in this list except Norw ay, and we ask the United States to give us an 
explanation for this. 
 
PHILIPPINES  DEVELOPMENTS IN TRADE AND INVESTMENT POLICY  
1. We note from the Secretariat report that the United States views the Trade Promotion Authority 
as an essential instrument to attain ing its trade objectives. While it ha d been allowed to lapse in the 
past, it has also been renewed several times thereafter.   Is there any possibility that the TPA will be extende d or renewed soon after its  expiry in July 2007? 
 
Is the United States intending to expand the existing trade negotiating objectives embodied in the current TPA legislation?  2. The United States has concluded an FTA with  one ASEAN member, and is negotiating with 
two other ASEAN members. Does the US have plans to  pursue a regional FTA some time in the future  
 
3. The US Generalized System of Preferences (GSP) programme is set to expire on 31 December 2006. We also understand that a five-year extensi on is being proposed. We cannot emphasize enough 
the need for a timely, multi-year extension of the GSP.  Certainty and predictability is vital for business 
planning, both by exporters in developing countri es and US importers who re ly on duty-free consumer 
goods or inputs for their industrial needs. What ar e the views of the United States on this matter? 
 
TRADE POLICIES AND PRACTICES BY MEASURE 
 
Sanitary and Phytosanitary Measures
 
 
4. The Philippines notes that the Animal and Plan t Health Inspection Service regulates the import 
of plants, animals and their products into the Unite d States by issuing import permits.  We also note 
from paragraph 156 of the Secretariat report that the process from risk assessment to issuance of an 
import license can take several years.  The Philippines would appreciate it if the United States can make a clarification of the procedure as well as indicating the average length of time before import 
permits are normally issued? 
 WT/TPR/M/160/Add.1 
Page 124  
 
TRADE POLICIES BY SECTOR 
 
Agriculture – Legal Framework and Overall Support
 
 5. Can the United States provide Members an upda te on the 2007 Farm Bill that is now being 
crafted? Can Members expect that the reforms being introduced into the Farm Bill shall adhere to those 
being called for in the DDA negotiations?  Agriculture – Border Measures
 
 
6. The Philippines would appreciate an ela boration on how the tobacco quota system is 
implemented. How do interested Members access the annual quota for tobacco in the United States? 
 
SINGAPORE  
WT/TPR/S/160 Para 99-100 
 
On the issue of foreign ownership control, we unde rstand that there is a proposed legislation known as 
the "Barton Bill" now under consideration by the US  House of Representatives.  News reports on this 
have indicated that there is a provision in the Bill that would expand the current foreign ownership 
restrictions in US communications laws by making them applicable to certain Internet, Broadband and 
VOIP (voice over Internet Protocol) services.  We w ould appreciate if the US could share information 
on this Bill and in particular, on the motivations  for such a proposal.  Wh ile many countries are 
considering the issue of imposing light-touch re gulation on services such as VOIP, the general 
direction of the market is that of allowing liberal  FDI limits on the provision of services such as these. 
 
WT/TPR/S/160 Para 109-112 
 
There have been recent consolidations and others  possibly in the Works (AT&T/SBC, Verizon/MCI, 
and AT&T/Bellsouth).  We would appreciate if  the US could comment on action taken to ensure that 
conditions of Competition are preserved in the US market, particularly in the following areas: 
 
(a) access to bottleneck network elements, given market consolidation and recent relaxation of 
rules for incumbent local phone carriers to provide unbundled access to network elements; 
 (b) provision of services such as IP transit, long distance transmission and local loop, as these 
services are input to international capacity services  and hence there have been some concern over 
possible anti-competitive conduct by merged entities in favor of affiliates; and  (c) provision of bundled services (i.e., fixed and mobile telephony, broadband internet access, 
together with cable television) by merged entities and the risk of anti-competitive bundles that may 
impede competition in individual service markets.  TRINIDAD AND TOBAGO  Report by the Secretariat (WT/TPR/S/160)  
III. Trade Policies and Practices by Measure  
I. Paragraph 77, page 38 indicates that certai n aspects of the AD and CVD system challenged in 
the WTO were resolved during the period under review.   Can the United States indicate when it envisages that all aspects of its AD and CVD 
system, which has been challenges in the WTO, will be resolved?          WT/TPR/M/160/Add.1 
Page 125 
 
 
II. According to paragraph 195, page 64, the United States maintains a duty drawback programme.  Customs duties and certain internal taxes and fees resulting from importation are refunded 
following the export of either the imported produc t or the article manufactured from the imported 
product.   Can the United States provide additional details on this program and its realised benefits?  
III. In paragraph 210, page 67, it is  noted that financial assistance to business is available through 
the Trade Adjustment Assistance Programme for Firms, which is part of a broader programme that also 
provides assistance to workers and farmers.  Th e Trade Act of 2002 extended Trade Adjustment 
Assistance until September 2007 and made availabl e US$80 million over five years to assist firms 
affected by import competition.  
 Can the United States outline key elements of its Trade Adjustment Assistance Program 
as well as other related broader programs and their benefits? 
 IV. Trade Policies by Sector (WT/TPR/S/160)  
IV. In December 2004, the Federal Reserve appr oved a new rating system for BHCs, including 
FHCs.  The revised rating system, which b ecame effective 1 January 2005, emphasizes risk 
management, introduces a more comprehensive framewo rk for analysing and rating financial factors, 
and provides a framework for assessing and rating the potential impact of the parent holding company and its non-depository subsidiaries on the subsidiary depository instituti on(s).  Under the new system, a 
composite rating and the risk management component  forms the basis to classify a BHC or FHC as 
"well managed". 
 
 Can the United States provide additional information on this new rating system? WT/TPR/M/160/Add.1 
Page 126  
 
REPLIES PROVIDED BY THE UNITED STATES 
TO ADVANCE WRITTEN QUESTIONS 
 
I.  RECENT ECONOMIC DEVELOPMENTS  
 
[China ] 
 “Twin Deficits”  Question:  p.6 para.17; p.7-10. para.19-25 
Besides urging other economies to ac celerate their growth to improve import in trade in goods and 
services, what domestic approaches has the U.S. take n to tackle the “twin deficits” issues? How do 
these measures take effect? 
 
Does the U.S. have any plans to cope with the “t win deficits” without implementing any protectionist 
measures which erode multilateralism and the trad e relationship with other trading partners? 
 
Does the U.S. deem the depreciation of US Dollar against other major currencies would serve as a way 
to improve its current account deficit? 
 
ANSWER: Open trade policy does not in and of itself provide the tools to deal directly with 
aggregate trade imbalances.  The WTO is not the fo rum which deals with the tools affecting aggregate 
or global trade imbalances, or macro fiscal policies of member countries.  However, from a U.S. perspective, these global imba lances are improperly viewed as a “twin deficits” 
phenomenon.  Empirically, the relationship between the two deficits is weak.  More importantly, this 
relationship is not the correct framework through which to view the problem.  
 The current imbalances in trade and payments are global in nature, with the United States 2005 deficit 
on the current account of $805 billion offset by curre nt account positions of other countries summing to 
a surplus of $805 billion.  There are three majo r areas for action by the United States and other 
countries for a healthy reduction in U.S.  deficits and other country surpluses. 
 
First, higher rates of U.S. saving would contribute importantly.  The growth of the U.S. federal budget 
deficit earlier in the decade was part of counte r-cyclical policy measures to support U.S. economic 
growth in the face of the 2001 recession, the aftermath of the terrorist attacks in the United States in on 
September 11, 2001 and generally weak conditions in the global economy.  The U.S. federal budget 
deficit peaked in 2004 at 3.6 percent of GDP, declined to 2.6 percent in 2005 as strong economic 
expansion restored solid growth to government receipts.  The most recent U.S. budget projects a 
decline in the federal deficit to 1.4 percent of GDP in 2009, 70 percent below its peak share in 2004.  In 
addition to public sector saving, the decline in pers onal saving has also contributed to reduced overall 
saving and its improvement could also contribute to  reducing current U.S. and global imbalances. 
 
Second, as mentioned in the question itself, strong growth performance on the part of a number of our 
trade partners, where growth has been modest, w ould help moderate the current imbalances.  The 
achievement of stronger growth would obviously have  intrinsic benefits to the countries in which it 
occurs as well as help to reduce global trade imbalances.  
Third and finally, countries have rates of saving well in excess of domestic investment opportunities, 
whether the source of the excess saving be in the priv ate sector or official government saving.  The 
United States, however, firmly believes that impr ovements in the fundamental conditions limiting 
attractive investment opportunities in those count ries where saving far surpasses investment would 
make an extremely valuable contribution to the long -term reduction in the size of current global trade 
and payment imbalances.          WT/TPR/M/160/Add.1 
Page 127 
 
 
[European Communities]  
 
In paragraph 4, it is stated that “government sp ending…trended downwards un til the first quarter of 
2005.” This analysis seems slightly misleading to us, as the figures in table 2 suggest that spending 
continued to grow in absolute terms (only the rate of growth declined). Could the US please clarify the 
correct facts? 
 ANSWER:  While Table 2 shows the correct figures, the United States believes that past quarter-to-
quarter movements in federal outlays are irrelevant to the issues in the U.S. Trade Policy Review.  In order to be responsive to the European Communitie s’ interest, the following information is provided 
about U.S. federal outlays during the period unde r review and the forecast period to 2009.  
 In recent years, outlays have been steady at roughly 20 percent of GDP (2003:  20.0 percent; 2004:  19.9 percent; and 2005: 20.1 percent).  In the 2007 budge t, outlays are projected to peak at 20.8 percent 
of GDP due to the advent of a new prescription drug benefit under the federal Medicare program and 
unanticipated spending associated with relief and rec overy efforts in response to last fall’s hurricanes, 
Katrina and Rita.  Thereafter, ou tlays decline to 20.1 percent of GDP in 2007, 19.4 percent in 2008 and 
19.1 percent in 2009.  This restraint on the outla y side together with modest increases in receipts 
relative to GDP, from actual levels of 16.3 pe rcent of GDP in 2004 and 17.5 percent in 2005 to a 
projected level of 17.7 percent in 2009 produce the reduction in the federal budget deficit form its 
recent 2004 peak of 3.6 percent of GDP to 1.4 percent in 2009. 
 
[Switzerland] (2) Output and employment 
 Para. 6  of the Secretariat’s report suggests that the pe rsonal savings rate has become negative in the 
course of 2005. This savings rate is low by intern ational standards and also well below its long-run 
trend. Could the authorities of the United States pleas e provide their assessment of the causes for such a 
development? Since normally a negative savings rate  can only be sustained on a transitory basis and 
given that GDP growth has already slowed down markedly in the fourth quarter of 2005, what are the risks that the US economy slips into recession in the coming months? Also do the U.S. authorities share 
the view of the Secretariat that low interest ra tes have discouraged domestic savings? Is such an 
assessment consistent with the fact that, at the same  time, substantial foreign capital has been attracted 
to the U.S. as a result of the progressive increase  in the federal funds rate since mid-2004? The 
Secretariat suggests further that the Administrati on adopted measures aiming at raising the personal 
savings rate such as lower tax rates on dividends a nd capital gains. Could the U.S. authorities provide a 
preliminary assessment of their experience with these instruments and, if any, are they considering 
additional measures to raise the personal savings rate? 
 
ANSWER:  The United States largely agrees with the Secr etariat’s analysis contained in paragraph 
6, regarding the decline in U.S. personal saving rate , while noting one factual error in the paragraph.  
The measures taken by the Administration aimed at part in encouraging saving were taken in 2003, not 
in 2005 as indicated in the text.  We also refer Sw itzerland to footnote 3 on page 3 reporting U.S. views 
that the personal saving rate may be under reported.  Adjusting for the factors mentioned in footnote 3, 
analysts find that the U.S. personal saving rate is decidedly positive, although the trend is still down.  
 With regard to the questions by Switzerland, there a ppears to be little risk of the U.S. economy slipping 
into recession.  The slowdown in the of GDP growth to  1.6 percent in 2005’s fourth quarter reflected 
unusual factors such as the loss of oil and gas production in the region of the Gulf of Mexico in the 
wake of destruction caused by hurricanes Katrina and Rita.  Even with that slow down in the fourth 
quarter, 2004-2005 year-over-year growth was 3.5 pe rcent.  Looking forward, the widely followed 
Blue Chip consensus of economic fo recasters currently projects U.S. real GDP growth increasing at an 
annual rate of 4.7 percent in the first quarter of 2006, followed by 7 additional quarters (to the end of 
the forecast period) at roughly 3 pe rcent annualized growth per quarter. 
 WT/TPR/M/160/Add.1 
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As U.S. personal and overall saving rates have declin ed and the current account deficit increased there 
has been a distinct secular improvement in U.S. economic performance, from about the time of the 
beginning of implementation of the Uruguay Round.  Since 1994, U.S. real output has expanded by 42 percent, in part due to a 15.8 percent increase in employment (up by 18.3 milli on) and in part due to 
substantial improvement in U.S. productivity growth .  Output per hour worked in the U.S. private 
business sector increased by 34 percent, led by a 61 percent rise in manufacturing productivity.  Within 
the period since 1994, the productivity growth trend has been strongest in the period since 2000.  Enhanced economic growth has he lped increase the attractiveness of  the United States to non-U.S. 
capital, both for countries with an excess of savi ng over domestic investment and for investors seeking 
higher rates of return.  As net foreign capital flows to the United States have continued to increase, the 
U.S. current account deficit has, since 1995, grown in every year except one.  Increased levels of 
foreign capital inflow have helped to keep U.S. inter est rates low. This has di rectly lowered the return 
on saving, and increased the incentive to consume.  Further, for both business and consumers it has 
raised the incentive to invest in longer-term produc tive assets.  These developments would be reflected 
in U.S. domestic data as declini ng rates of household and overall gross saving, which indeed has been 
the case, and in large increase in the stock of produc tive U.S. capital, which has also been the case. 
 Switzerland also asks about our experience with th e impact on saving of reductions in tax rates on 
dividends and capital gains, and if we are considering additional measures to increase the personal 
saving rate. 
 
Two of the three main components of U.S. domestic  saving—personal, corporat e, and public savings—
have trended down over the last ten years.  The pe rsonal saving rate has declined from 3.4 percent of 
GDP in 1995 to -0.3 percent of GDP in 2005, and is mirrored by a rise in consumption.  U.S. corporate saving has remained relatively stable at between 18 and 19 percent of GDP.  Public sector saving 
declined from a surplus of 2.4 percent of GDP in 2000 to a deficit equivalent to 3.6 percent of GDP in 
2004, due to tax law changes and to defense costs.  (Data for 2005 is not yet available.)   One reason for the low personal saving rate is thought  to be the high levels of household wealth in 
recent years that have reduced the need for saving.  In 2005, household net worth rose back to about 
564 percent of disposable personal income – highe r than any year except 1998-2000, which were 
artificially increased by the stock market bubble. This measure of household net worth, obtained from 
the Federal Reserve’s Flow of Funds Accounts, is the difference between household assets—including 
defined-benefit pension we alth—and household liabilities.  Higher net worth allows consumers to save 
less currently while still maintaini ng high levels of future  consumption, which will occur out of their 
higher wealth. 
 
On the business side, the Federal Reserve’s fourth quarter Flow of  Funds showed a continued wide 
negative financing gap (capital expenditures minu s internal funds) for the non-farm non-financial 
corporate sector.  The financing gap in recent decad es has usually been strong ly positive, but in the 
current expansion capital expenditures have been almost entirely finan ced by internal funds.  In the 
third and fourth quarters, internal funds shot upward as U.S. corporations took advantage of a 
temporary tax break to repatriate foreign earnings.  The tax benefit expired at the end of 2005.   
 The Bush Administration has focused in particular on reform of the U.S. tax base and on the taxation of savings or the return to savings, such as interest , dividends, and capital gains in defining steps to 
increase savings and investment.  The broader goals of any comprehensive tax reform should be the 
creation of a system that is simple, is fair, a nd promotes economic growth.  In the U.S., a key goal 
would be to keep any income fro m being taxed twice, as is currently the case with dividend income.  
 The President’s Tax Reform Panel has sought to desi gn a revenue-neutral and distribution- neutral tax 
plan to achieve these goals. In their 2005 report, the panel proposed two prototypes for reform: a 
Simplified Income Tax (SIT) and a Growth and Investment Tax (GIT).  Both had similar          WT/TPR/M/160/Add.1 
Page 129 
 
 
recommendations for simplifying taxation.  While the SIT plan is a simplified version of the current 
income tax system, the GIT plan moves to a modifi ed consumption tax that retains some income tax 
elements.  The two plans diverge primarily in their taxation of business and capital income, using 
different bases for business taxation.  Either of these two recommendations represents a significant step 
forward in making the U.S. tax system simpler, fa irer, and growth enhancing, but each would involve 
substantial transition costs. 
 Other policy reforms can also reduce impediments to  personal saving. Under current law, interest 
income is taxed, creating a savings disincentive for households (although this disincentive is mitigated 
to some extent by policies that afford favorable tax treatment to various types of retirement accounts 
(e.g., IRA and 401(k)).  However, restrictions on these accounts limit their value as retirement-saving 
vehicles.  To make these accounts more eff ective, Congress passed legislation that increases 
contribution limits and makes retirement assets more portable.  In addition, the Administration has 
proposed simplifying the retirement account system in two important ways: (1) creating a single Retirement Savings Account (RSA) to replace the three types of Investment Retirement Accounts 
(IRAs) currently in place; and (2) creating a Lifetime Savings Account (LSA) that could be used for a 
variety of purposes, including retirement saving.  Lack of financial literacy may be another impediment to saving.  Th e Department of the Treasury is 
actively engaged in campaigns to improve financial lite racy.  In addition, the President has instructed 
the Federal Deposit Insurance Corporation (FDIC), the Small Business Administration (SBA), and the 
Treasury Department to work with consumer groups to ensure that financial literacy is widespread. 
 If the United States is successful in increasing savi ng, U.S. demand for other countries’ savings will 
fall.  The size and persistence of U.S. net capital in flows reflects a number of U.S. economic strengths -
- including its high growth rate and competitive ec onomy.   Countries that are net capital importers 
have more potentially profitable domestic investme nt opportunities than they can fund with their 
supply of domestic saving.  They import foreign saving through net sales of assets to foreign investors.  
In contrast, net capital exporters have excess supp lies of domestic saving.  The large U.S. foreign 
capital inflows reflect expectations by foreign in vestors that they will realize a higher return by 
investing in the U.S. than they will earn by investing in their own countries.   
The recent rise in U.S. net capital inflows betw een 2002 and 2004 in part reflects global economic 
conditions and policies, such as weak growth or less favorable investment conditions that led to greater 
net capital outflows from these countries.  In both  instances, global capital flows provide important 
benefits for net capital importers as well as net cap ital exporters. Net capital importers like the United 
States benefit because they can maintain a level of domestic investment they would otherwise have to 
reduce given their levels of domestic saving. Net cap ital exporters benefit because they can earn higher 
returns on the saving they invest ab road than they expect to earn by investing in their own countries. 
 
[Switzerland] (4) Fiscal policy 
 Para. 18 : Could the U.S. authorities comment on the view s expressed by the IMF that there is a case 
for a bolder reduction of the deficits, that recent fiscal consolidati on reflects mainly cyclical gains, and 
that U.S. budget projections assume unprecedented co mpression of non-defense discretionary spending 
and take no account of funding or operations in Iraq and Afghanistan after 2006 while the growing 
scope of the Alternative Minimum Tax may overstate  in the longer run the dynamics of fiscal revenue 
if it has to be corrected at some stage ? Are the current fiscal trends consistent with a halving of the 
deficit by the end of the decade? Should the str ong growth of the U.S. economy continue beyond 2005, 
would the U.S. authorities be prepared to enhance th eir efforts toward balancing the budget by the end 
of the present decade?   ANSWER:  Between 2004 and 2005 the U.S. federal budge t deficit fell from 3.6 percent of GDP to 
2.6 percent of GDP.  Underlying the decline was a bett er than 14 percent increase in federal receipts in WT/TPR/M/160/Add.1 
Page 130  
 
2005, reflecting healthy growth of the U.S. econo my.  The United States is committed to policies 
(including an increasingly open global market place) that support economic growth.  In the President’s 
2007 budget, released last month, the federal budget defic it is projected to fall further, to 1.4 percent of 
GDP in 2009.  This 1.4 percent deficit is well below the 40-year historical average of 2.3 percent.  Underlying this federal budget bala nce improvement is a projected 18 percent increase in outlays 
between 2005 and 2009 and a 26 percent increase in re venues, made possible by sustained growth of 
the U.S. economy. The 2007 budget can be found at http://www.gpoaccess.gov/usbudget/fy07/
 
browse.html . 
 
[Turkey] 
 1.  In the Secretariat Report, under paragraph 12, it is  stated that higher oil prices, the lagged effect of 
previously expansionary monetary and fiscal polici es, and the depreciation of the Dollar vis-à-vis the 
Euro may have had an effect on inflation.  
On the other hand, in paragraph 15, it is explaine d that the US Administration has been conducting a 
policy of fiscal stimulation by projecting 1. 35 trillion US Dollar tax cut over FY 2001-2011 and 
projecting an overall 5.6 trillion US Dollar  fe deral government surplus over the same period. 
 Furthermore, it is mentioned in the paragraph 18 that  the IMF considers that despite recent measures 
towards fiscal consolidation, there is a case for bolde r reduction of the deficits including measures to 
bolster revenue. 
 Can  the contradictory nature of the combination of  anti-inflationary and supply side policy mix, and 
also the concerns expressed during this review process by US authorities about a potential for lower 
growth in the face of a unilateral reduction  in the fi scal imbalance be considered as a sign of  possible 
policy change  in the future budgetary projections? 
 ANSWER:  The United States believes that fiscal policy has moved in an appropriately counter-
cyclical fashion to limit the scope of the 2001 recession and its aftermath.  The current policy focus – maintaining spending restraint and ensuring that low,  growth-enhancing tax rate s are maintained -- is a 
solid basis for future sustained, healthy growth of th e U.S. economy.  At the peak of the previous U.S. 
business cycle in 2000 the federal budget was in mod est surplus.  In face of recessionary pressures in 
2001, countercyclical fiscal measures supported demand in, and renewed growth of, the economy with 
the federal deficit peaking at 3.6 percent of GDP in 2004.  With healthy growth restored, including growth of federal receipts, the budget deficit declin ed to 2.6 percent of GDP and is projected to fall 
further to 1.4 percent of GDP in 2009. 
 
The independent U.S. Federal Reserve has the prime responsibility for U.S. monetary policy and has as 
a primary objective, U.S. price stability.   The recent record of the United States with respect to prices 
stability has been good, with 2.3 percent increases in consumer pr ices in 2003 and 2004, and a 3.4 
percent increase in 2005.  Figures for 2005 were, of c ourse, influenced by the sharp rise in petroleum 
and energy prices.  “Core” inflation data for the United States, which exclude volatile food and energy 
prices, show a 2.2 percent price increase in 2005.   The United States believes that one of the benefits 
of the WTO, open markets and freer trade, makes a vital contribution to domestic price stability.           WT/TPR/M/160/Add.1 
Page 131 
 
 
II. DEVELOPMENTS IN TRADE AND INVESTMENT POLICY  Institutional and Policy Framework
 
 
[Colombia] 
 Section II, paragraphs 5 and 8, of  the aforementioned report, describ e the institutions that help the 
Executive of the United States to formulate its invest ment and trade policies.  Please explain how other 
non-federal levels of government are i nvolved in formulating such policies. 
 
ANSWER:  With the passage of the NAFTA Implem entation Act in 1993 and the Uruguay Round 
Agreements Act in 1994, the United States created expanded consultative pro cedures between federal 
trade officials and state and local government s. Under both agreements, USTR’s Office of 
Intergovernmental Affairs and Pub lic Liaison is designated as the “Coordinator for State Matters.” 
IAPL carries out the functions of informing the states, on an ongoing basis, of trade related matters that 
directly relate to or that may have a direct effect on them.  U.S. territories may also participate in this 
process.  IAPL also serves as a liaison point in th e Executive Branch for state and local government 
and federal agencies to transmit information to inter ested state and local governments, and relay advice 
and information from the states on trade-related matt ers.  This is accomplished through a number of 
mechanisms:  
a. State Point of Contact System 
For day-to-day communications, pursuant to the NAFTA and Uruguay Round implementing legislation 
and Statements of Administrative Action, USTR created a State Single Point of Contact (SPOC) system.  The Governor’s office in each State designates a single contact point to disseminate information received from USTR to relevant state and local offices and assist in relaying specific 
information and advice from the states  to USTR on trade-related matters. 
 b. Intergovernmental Policy Advisory Committee For advice from states and localities on trade policy matters, USTR has established an 
Intergovernmental Policy Advisory Committee on Trade (IGPAC). It is one of the four policy advisory 
committees discussed above. The IGPAC is comprised of representatives from all three branches of 
government and associations. Appointed on a bipar tisan basis, the Committe e makes recommendations 
to the USTR and the Administration on trade policy matters from the perspective of state and local 
governments.   c. Meetings of State and Local Associations and Local Chambers of Commerce 
USTR officials participate frequently in meetings of  state and local government associations to apprise 
them of relevant trade policy issues and solicit their views. For example, in 2005 the Acting U.S. Trade 
Representative addressed a joint plenary session of the National Conference of State Legislatures and the National Association of Attorneys General to disc uss the overall trade agenda and particular issues 
of interest to states.  USTR officials also address gatherings of state and local officials and local and 
regional chambers of commerce around the country. 
  
d. Consultations Regarding Specific Trade Issues USTR initiates consultations with particular stat es and localities on issues arising under the WTO and 
other U.S. trade agreements, and frequently responds  to requests for information from state and local 
governments. 
 
[Colombia] 
 
In Section II, paragraph 11 of this same report, it is stated that multilateral trade negotiations are a 
priority for the Administration in its effort to open markets and strengthen rules.  It furthermore states 
that the Administration considers that the issues related to broadening market access for trade in WT/TPR/M/160/Add.1 
Page 132  
 
manufactured goods and services could be the basi s for negotiations that would yield significant 
benefits to U.S. interests and the world economy.   Based on the foregoing, it is asserted that the 
Administration has decided to make promoting the WTO’s DDA [Doha De velopment Agenda] and 
satisfactorily concluding the negotiatio ns before 2006 a top priority.  As part of such policy, please 
state how the interests of those Members that expor t human resources rather than capital will be taken 
into account. 
 ANSWER:  The tremendous potential of the DDA negotia tions to promote economic growth in all 
countries can be realized only through deeper liberalization across sectors, especially key 
infrastructure-building sectors, and modes of supply.  The U.S. believes that this potential cannot be 
realized by focusing narrowly on a single mode of supply, such as the export of human resources.  We 
note the interest shown by developing countries in the cross-border plurilateral negotiations.  
 It is also important to recognize that the servi ces negotiations in the DDA cover the temporary 
movement of foreign service suppliers, and explicitly exclude labor and permanent migration.  In this 
respect, we feel that all WTO Members benefit from our commitments on Mode 4, which are among 
the best in the WTO and apply to all of the more  than 100 committed subsectors in the U.S. schedule. 
 
[India] 
 
Q.6 US has recently raised the cap on H1b visas by 20,000 (over and above a nnual limit of 65,000) 
for professional students obtaining degrees from US uni versities. However, the existing restrictions on 
visas for business professionals are affecting the levels of market requirement in various sectors. Some of Indian business visitors, including those coming for participation in trade fairs, etc., have also had 
difficulties in getting their visas issued in a timely manner. What action would be taken by the US to grant visas to business professionals without any hassle? 
 
ANSWER:  The United States greatly benefits fro m the international mobility of business 
professionals.  International business professionals he lp create competitive markets for suppliers and 
consumers alike and allow trade partners to more ef ficiently provide each other with services.  Services 
are essential to the U.S. economy, comprising about  78 percent of the U.S. GDP, and the U.S. 
government continues to implement polices and prac tices that facilitate the international trade in 
services. 
 As of August 2005, U.S. diplom atic posts in India processed nearly 400,000 nonimmigrant visas, a 
gain of about 2 percent over the same period the pr evious year.  India is one of the largest source 
countries in the world for student visas, H-1B, and L visas and the demand is expected to continue to 
rise significantly in the years ahead. 
 The Department of State has instructed visa-adjudica ting posts in India to emphasize the importance of 
facilitating business travel, and to establish mechanisms  to expedite appointments for business travelers 
with urgent needs.   
Among the programs envisioned by the U.S. include expanding the Business Executive Program, 
increasing the number of daily visa appointments, a nd opening new consulates and consular sections. 
 
[India] 
 
Q.7 The cap on H 1B visas continues to be 65,000 per annum.  This was increased by adding 
another 20,000 H 1B visas for those who have a US de gree.  Both these caps have been exhausted.  
Will the US review its decision in continuing with th is cap on H 1B visas and let market forces dictate 
the number?           WT/TPR/M/160/Add.1 
Page 133 
 
 
ANSWER:  The H-1B cap is codified in U.S. immigration law.  Therefore, the U.S. Congress has 
the authority to determine the annual H-1B cap.  A nd, although temporary entry issues are domestically 
sensitive, both the executive and legislative branch es have expressed great support for international 
trade generally and the facilitative movement of business travelers.   Although we cannot predict 
whether Congress will raise the cap, Congress is keenly aware of the visa concerns of our trading 
partners and our domestic employers. 
 
[India] 
 
Q.8 It has been noticed that issuing visas takes inor dinately long time.  In addition, the visa fees are 
also being increased frequently.  Further, on s ite / offshore outsourced projects have specific 
requirements wherein individuals provide service in the US under a specific contract with the US 
organization.  For such service suppliers an altern ative visa mechanism needs to be explored.  This 
should be a sub-sect of the overall H 1B visa mechan ism wherein the eligibility for stake would be one 
year or a period of contract wh ichever is lesser.  Will the US consider setting up a separate visa 
mechanism to address the specific requirements of  on site/ offshore outsourced projects, wherein 
Contractual Service Suppliers and Independent Prof essionals visit US to provide a service under the 
specific contract to the US organization?  ANSWER:  First, with regard to delays in visa i ssuance, please see response to question 6 above.  
Next, in regard to increases in vi sa fees, some fees are set by the U.S. Congress; all others reflect the 
cost of service and any reciprocal fees charged to U.S.  citizens.  Finally, in regard to creating a separate 
visa mechanism to address specific requirements of on site/offshore outsourced projects, again, only the U.S. Congress has the authority to establish vi sa categories.  The Departments of State, Homeland 
Security, and Labor implement visa categories that Congress establishes.  Currently, business travelers 
who are eligible may enter the U.S. in visa classi fications that include: B-1; H-1B; and L.  As 
demonstrated by the initiatives outlined above in  response to question 6, the U.S. Government 
continues to seek new ways to address the fac ilitative movement of legitimate business travelers. 
 
[India] 
 
Q.9 Currently when Indian professionals go to USA on an  H IB visa, it allows them to work only in 
a particular State of US. H IB visa is valid for thr ee years and is extendable for further three years. In 
this period if the assignment changes to another St ate, specific permission for change of location is 
required from immigration and Natu ralization Services (INS) of USA and this is time consuming 
process. At times a professional is required to work  on projects in different States within the same 
month. India does not have such locational restri ction. Would US government consider making the 
H IB visa applicable for working any where in the USA? 
 ANSWER:  The U.S. Department of Labor must certify a U.S. employer's statement in its Labor 
Condition Application (LCA) that the prevailing wage  for each H-1B worker will be paid.  Prevailing 
wage determinations are made on a state-by-state basis for the occupation involved.  If the H-1B 
worker moves to work in anothe r state, the original certificatio n is no longer valid as wages differ 
between states. The employer must file a new LCA because the terms of employment for the H-1B 
worker have changed.  In practice, the certification office at the U.S. Labor Department accepts electronic filing for all LCAs.  The certification usually takes less than 30 minutes.  The new certification is then communicated to the 
U.S. Department of Homeland Security.  We are not aware of problems that have arisen under the 
current system.  If the H-1B worker will be employed  to work in several states, the employer can file 
an LCA giving the information for those states a nd receive certification to work in each state. 
 WT/TPR/M/160/Add.1 
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[India] 
 
Q.10  For Indian IT professionals working in US, soci al security costs constitute a significant portion 
of compensation costs to the Indian software co mpanies executing projects abroad. US receive about 
USD 500 million per year by way of social security contributions from Indian software 
companies/employees. However, the benefits availe d are insignificant as almost all the software 
professionals return to India or migrate to other locati ons before they are eligible for the benefit. Would 
US authorities consider the following suggestions?  
(i) Employees of Indian companies working te mporarily in the United States under the 
HIB visa scheme are exempted from paying Social security, or 
(ii)       Deductions made towards social security from employees of Indian companies are 
refunded upon their return from the United States. 
 ANSWER:  The terms of withholding social security taxes are established through the negotiation 
of bilateral taxation agreements.  Countries inter ested in this issue may address the appropriate 
authority within the U.S. government, th e U.S. Social Security Administration. 
 
[Peru] 
 Institutional and Regulatory Framework 
1. On page 18, paragraph 14, the United States mentions that every five years the Congress 
evaluates whether or not to withdraw its support of the WTO—in essence, [withdrawing from] the Uruguay Round Agreement.  In this regard, does the United States plan to review, every five years, 
whether or not to maintain in force the bilateral agreements it has signed?  
 
ANSWER:  The provision of the Uruguay Round Agreem ents Act referred to in the question (and 
paragraph 14 of the TPR) provides for Congressional revi ew and oversight only to U.S. Membership in 
the World Trade Organization.  There is no similar provision for periodic review of FTAs.  Under our FTAs, the Parties, through a Joint Committee or Joint Commission, oversee  the operation of the 
Agreement.  
 [Switzerland]  
(ii) Policy objectives
 
 Para. 9  of the Secretariat’s report indicates that th e United States continues to pursue a policy of 
advancing open markets and the rule of law as part  of a broader global security objectives. Also, the 
United States considers that opening foreign mark ets to U.S. products and services will enhance 
economic growth and prosperity. Based on the Secret ariat’s report, there is, however, no indication in 
this strategy that while foreign markets are to ope n to U.S. products and services, the U.S. market 
should also open in parallel for foreign products a nd services to ensure both mutual benefit from trade 
liberalization for all parties involved and increased efficiency for the U.S. economy itself. Could the 
U.S. authorities comment on this apparent dichotomy in U.S. trade policy? 
 ANSWER:  For over 70 years, trade liberalization has b een a cornerstone of U.S. economic policy.  
In a speech before the United Nations on Septembe r 14, 2005, President Bush reaffirmed this 
commitment when he called on all countries to join  the United States in an ambitious undertaking, 
saying, “The United States is ready to eliminate all tariffs, subsidies and other barriers to the free flow 
of goods and services as other nations do the same.”          WT/TPR/M/160/Add.1 
Page 135 
 
 
Legislative developments  
 
[Canada]  
 Summary Observations, (2) Trade Policy Developments, Paragraph 5; and Part II. Developments in 
Trade and Investment Policy, (2) Institutional and Po licy Framework,  (iii) Legislative Developments, 
Paragraph 13: 
 
The Secretariat Report sets out its understanding of the ultimate deadlines for the completion of 
negotiations in order for amending le gislation to be considered by Congress under the Bipartisan Trade 
Promotion Authority Act (TPA).  The Secretariat doc ument refers to both April 1 and July 1, 2007 as 
the deadline for signing  a new agreement.  
 1. Could the United States delegation clarify the deadline dates set out in the TPA Act including, e.g., subsection 2103(b)(1)(C), which gives the Presi dent authority to enter into a trade agreement 
before June 1, 2007, and subsection 2103(c)(1)( B), which appears to limit the time by which 
implementing legislation may be introduced in Congress to qualify for Congressional TPA procedures? 
 ANSWER:  At the request of the Administration, Co ngress extended TPA in 20 05, but it expires on 
July 1, 2007.  Any agreement undertaken accord ing to this authority must be signed before 
July 1, 2007.  The law also requires the Administ ration to notify Congress of the intention to sign an 
agreement 90 days before the projected signing date.  The law further requires notification of Congress 
180 days prior to signature of the range of proposals advanced in the negotiations that may be in the final agreement and could require ch anges in trade legislation.  TPA extends past July 1 to cover the 
passage of required implementing legislation for agreem ents finalized before that date.  Thus, the DDA 
negotiations must be substantively complete by December 2006 for the Administration to meet its 
reporting obligations, and a ministerial conference sim ilar to that held in 1994 in Marrakech will have 
to convene not later than June 2007.  
[Japan] 
 
Q2. Deficit Reduction Act of 2005 (p.15, paras.13 to14) Regarding the controversial, Defic it Reduction Act of 2005, Democrats have argued that the Act is not 
constitutional because the bill the House cleared on 1 February differed from the version passed by the 
Senate on 21 December and said that it would ulti mately go to court.  The Act includes a provision 
repealing the Byrd Amendment, which was determined  inconsistent with WTO rules, and the program 
for cotton.  In this regard, please indicate the futu re perspective for the Act and the measures taken by 
the Government of the United States.  
ANSWER:  The Deficit Reduction Act of 2005 was signe d by the President on February 8, 2006 
and is now in force.  
[Japan] 
 
Q3. Product Liability Law (p.15, paras.13 to 14) 
The Product Liability Law in the United States c onstitutes a heavy burden for Japanese and U.S. 
companies doing business in the United States, beca use of a large amount of damages and soaring 
liability insurance premiums. The Government of Japa n welcomes the efforts made by the Government 
of the United States to achieve the tort reform. Howe ver, the tort reform is focused on some specific 
areas such as asbestos litigation reform, medical lia bility reform, and Protection of Lawful Commerce 
in Arms, and has not made any tangible progress on th e reform of product liability, which constitutes a 
majority of lawsuits.  The Government of Japan th erefore urges the Government of the United States, 
as a part of the tort reform, to support and encourag e the reform currently underway in many States to 
limit product liability, and to promote the reform of  product liability law at the federal level by placing WT/TPR/M/160/Add.1 
Page 136  
 
limits on the amount of damages, and by shorte ning the limitation period, which has already been 
attempted by relevant bills submitted to the Congre ss.  In these respects, pl ease indicate the specific 
views of the Government of the United States. 
 
ANSWER:  The Administration strongly supports legal reform as a cornerstone for a 
comprehensive economic expansion program.  The Ad ministration is firmly committed to alleviating 
the undue burden on the business community fro m inappropriate tort litigation and unreasonable 
awards.  It has supported a number of bills that seek these goals. 
 
[Norway] 
 
1.  As described in paragraph 13 of the Secretariats  report, chapter II, the Bipartisan Trade Promotion 
Authority Act (TPA) is effective until 1 July 2007. Are there currently any legislative procedures in 
progress to further extend the TPA, or to establish new and similar legislation?  
 ANSWER: The Administration expects to seek renewal of Trade Promotion Authority and 
continue the important effort to forge stronger trad e ties around the world.  However, given the difficult 
struggle to restore this authority in 2002, there are no guarantees TPA will continue beyond the 
expiration date. 
 
[The Philippines] 
 
1.  We note from the Secretariat report that the United States views the Trade Promotion Authority as 
an essential instrument to attaining its trade objectives. While it had been allowed to lapse in the past, it 
has also been renewed several times thereafter.  
 
¾ Is there any possibility that the TPA will be  extended or renewed soon after its expiry 
in July 2007? 
¾ Is the United States intending to expand the existing trade negotiating objectives 
embodied in the current TPA legislation? 
 ANSWER: The Administration expects to seek renewal of Trade Promotion Authority and 
continue the important effort to forge stronger trad e ties around the world.  However, given the difficult 
struggle to restore this authority in 2002, there are no guarantees TPA will continue beyond the 
expiration date. 
 Participation in the WTO
 
 
[Argentina] 
 
1. On page 18, paragraph 14  mentions that on June 9, 2005 the U.S. House of Representatives 
reaffirmed by 338 votes in favor and 86 against the participation of the United States in the WTO, 
which implied a rejection of Joint Resolution No. 27.1. Question: Will the U.S. Congress continue to 
review the participation of the Unite d States in the WTO every five years?  
 ANSWER:  Yes, as required by the Uruguay Round Ag reements Act, the Congress will continue to 
review U.S. participation in the WTO every five years.  
[Argentina] 
 
2. On page 19, paragraph 17
 mentions the debate of the Ways and Means Committee. 
Question: Could the United States indicate whether it is possible to obtain that information? 
          WT/TPR/M/160/Add.1 
Page 137 
 
 
ANSWER:  The transcript of the debate is located at http://waysandmeans.house.gov/hearings.asp?  
formmode=view&id=4307  
 
[Argentina] 
 
3. On page 20, paragraph 20 , mention is made of the commitments that the United States still has 
pending. 
Question: Does the United States consider that the changes requested by the DSB [Dispute Settlement 
Body] in the Cotton Case were fully implemented?  Why does the United States fail to mention said 
reforms among those still pending?  
 
ANSWER:  The DSB recommendations and rulings in the dispute United States – Subsidies on 
Upland Cotton (“Cotton ”), WT/DS267, resulted from two sets of findings, one regarding prohibited 
subsidies and one regarding actionable subsidies.  The actions taken by the United States over the last 
year address both.  The United States has overhaule d the Commodity Credit Corporation (CCC) Export 
Credit Guarantee Programs, including the Supplier Credit Guarantee Program (SCGP), which were found to have provided prohibited export subsidies.   U.S. reforms include imposing a new risk-based 
fee structure on two of the guarantee programs and ceasing to accept applications under a third 
program.  The United States has also enacted legisla tion repealing, as of the end of the current cotton 
marketing year (specifically, as of August 1, 2006 ), the upland cotton user marketing certificate 
program (known as the “Step 2” program) for both e xporters and domestic mills.  The Step 2 program 
was found to constitute both a prohibited export subs idy and import substitution subsidy and payments 
under the program in 1999-2002 were part of the meas ure found to have been causing “adverse effects” 
during that period. 
 
With respect to the citation to paragraph 20, we note that the referenced paragraph appears to be in the 
Secretariat’s report, not the report prepared by the United States.  Accordingly it would be necessary to 
inquire of the Secretariat concerni ng questions about that paragraph. 
 
[China]  
Question: (p.16 para.21) 
Are there any unfulfilled obligations regarding WTO transparency principle and notification by the United State Government? If yes, why does the Unite d State Government fail to have implemented 
these obligations? 
For the sake of transparency, would the U.S. expl ain to other Members why it took the U.S. about 
10 months to fully respond in writin g to Members’ written questions raised during last review instead 
of 4-6 weeks as agreed under TPRM? What measur es will the U.S. take to avoid this delay of 
responses from happening again? 
 
ANSWER: Several notifications were in preparati on when the Secretariat Report was being 
drafted.  On October 20, 2005, the United States s ubmitted its new and full notification pursuant to 
Article XVII:4(a) of the GATT 1994 and Paragraph 1 of the Understanding on the Interpretation of 
Article XVII.  Updated U.S. notifications under Ar ticles 1.4, 7.3, and 8.2 of the WTO Agreement on 
Import Licensing Procedures were recen tly submitted to the Secretariat. 
 
The relevant reports on government procuremen t will be submitted when the replacement of our 
procurement data system is complete.  The new sy stem, the Federal Procurement Data System, will be 
accessible at www.fpds.gov
.  The United States fully intends to notify its domestic support 
commitments under current farm programs.  We not e that these notifications are extremely data 
intensive and that we are as current as many other WTO Members. 
 
At our last TPR, the United States did respond to many of the questions submitted by Members - it 
was the final package of responses th at came afterwards.  Together with other Members, we took steps WT/TPR/M/160/Add.1 
Page 138  
 
during last year's TPR appraisal to agree on a new timeline to improve the ex change of questions and 
responses.  Under this new timeline, a Member being reviewed is to have more time - two weeks rather 
than one week - to consider questions and prep are responses before their TPR begins.  This new 
timeline will considerably improve the excha nge of questions and responses.  In this 
review, we provided preliminary responses to all of  the Members that met the two-week deadline and 
to many of those that did not. 
 
[Colombia] 
 
Section II, paragraph 21, of the Secretariat’s report on “Developments in Trade and Investment Policy” indicates that officials commented that the United States would submit the pertinent reports regarding 
government procurement when they had finished repl acing their data-gathering system on procurement.  
When and how will said reports be available?  ANSWER:  The United States is presently updating its Federal Procurement Data System (FPDS).  
Procurement data is available in FPDS at the beginni ng of each fiscal year and all reports are available 
by accessing https://www.fpds.gov
. 
 
[Japan] 
 
Q4. Bills that are inconsistent with the WTO (p.15 to 16, paras.15 to 21) When legislative bills which if enacted will be a pparently WTO-inconsistent are submitted, the U.S. 
administration should try to convince the legislative bran ch not to pass such bills.  In this regard, please 
indicate the specific views of the Government of the United States. 
 
ANSWER:  Since entry into force of the Uruguay R ound Agreements in 1995, a central theme of 
U.S. policy has been to ensure the effective and timely implementation of our WTO commitments.  The Administration consults frequently with Congr ess on this matter and both branches of government 
take this very seriously. 
 
[Japan] 
 
Q5. Compliance with WTO recomm endations (p.16, para.20) 
There are dispute settlement cases in which the United States is yet to secure full implementation of the 
DSB recommendations and rulings, well beyond the reasonable period of time granted under the DSU.  
This is a regrettable situation in the sense that the United States, a key Member of the WTO who is 
expected by many to demonstrate an exemplary manner, is in fact compromising the credibility of the 
dispute settlement mechanism of the WTO.  In this  regard, please indicate the specific views of the 
Government of the United States.  
[Japan] 
 
Q6. Submission of the report required in the WTO (p.16, para. 21)  
(1) There has been no submission, since 2000, of th e annual report in accordance with Article 7(3) of 
the WTO Import Licensing Agreement.  Please provi de information on obligations regarding new 
import licensing other than those contained in the notice of amendment under Article 5(1) of the 
Agreement. 
 
(2) Japan also requests the U.S. to  submit the latest annual report expe ditiously.  In this regard, please 
indicate the specific views of the Government of the United States. 
 
ANSWER: Updated U.S. notifications under Articles 1.4,  7.3, and 8.2 of the WTO Agreement on 
Import Licensing Procedures have been submitted to the Secretariat and will be circulated shortly. 
          WT/TPR/M/160/Add.1 
Page 139 
 
 
[Mexico] 
 
1. Concerning paragraph 21, could the United States  explain the delay in issuing the notifications 
of domestic support? 
 
ANSWER: The United States fully intends to notif y its domestic support commitments under 
current farm programs.  We note our notifications ar e extremely data intensive and are as current as 
those of many other WTO members.  
 
[New Zealand] 
 
1. Trade Policy Developments  (WT/TPR/S/160, p vii, para 4)  
The Secretariat notes that the United States has made progress in implementing several WTO (Dispute Resolution) rulings calling for changes to U.S. legisl ation, but a few rulings have not yet been fully 
implemented. 
 Could the U.S. please provide a proposed timeline outlining future phases of implementation of WTO 
rulings, as well as background information on the extent to which these have/have not been implemented? 
 
ANSWER:  The Administration continues to work with the U.S. Congress on legislation 
implementing DSB recommendations and rulings in the Section 211 , Section 110  and Hot-Rolled Steel  
disputes.  The legislative schedule is controlled by Congress, and it is not possible to provide a precise 
schedule for completion of remaining steps.  Howe ver, we note that Congress has over the past two 
years undertaken major legislativ e implementation efforts in the FSC, 1916 Act , CDSOA  and Cotton  
disputes, and it is now in a position to focus on the remaining cases.  The Administration and Congress will be exploring possible legislative vehicles.  
[New Zealand] 
 
2.  Participation in the WTO (WT/TPR/S/160, p.16  para 21 and WT/TPR/S/160, p. 88 para 23.) 
 The Secretariat notes that a few notification ob ligations were outstanding as at October 2005, 
particularly on domestic support to agriculture, st ate trading activities, and statistics for government 
procurement. 
 
When will the US provide notification of its domest ic support since that provi ded in 2004 covering the 
marketing years 2000 and 2001?  What measures has the US put in place to ensure th at the required notifications occur in a timely 
manner in future? 
 
ANSWER:   Pursuant to Article XVII:4(a) of the GATT 1994 and Paragraph 1 of the Understanding 
on the Interpretation of Article XVII, the United St ates made a full and new notification of its state 
trading enterprises for 2004 in document G/STR/N/10/ USA.  The Unites States is current in fulfilling 
its notification requirements with respect to state trading enterprises.   
 
The United States is presently updating its Federal Procurement Data System (FPDS).  Procurement 
data is available in FPDS at the beginning of each fi scal year and all reports are available by accessing 
https://www.fpds.gov
. 
 The United States continues to meet its domestic  support obligation, as we have done since the 
commitments were undertaken in 1995.  Moreover, internal controls are in place to ensure that 
outcome. WT/TPR/M/160/Add.1 
Page 140  
 
[Switzerland] 
 
Para. 14 : Section 125 of the Uruguay Round Agreements  Act mandates that, beginning March 1
st, 
2000, and every five years thereafter, the report on WTO activities, transmitted by the President to 
Congress, must include an analysis of the value of continued U.S. participation in the WTO. Following 
the submission of the report, Congress can withdraw  its approval of the WTO Agreement. Could the 
U.S. authorities indicate if they have any plans to amend this section of the Uruguay Round Agreements Act as it could create uncertainty among WTO Members over the long-term political 
commitment of the United States to the multilateral trading system?  
ANSWER:  The Administration is not aware of any plans to amend the URAA in this respect. This 
provision presents the opportunity for a thorough review of the operation of the WTO and to 
demonstrate its benefits to the United States and world trade.  This process gives the Members of 
Congress skeptical of the WTO a chance to air thei r views, and offers WTO supporters a chance to 
discuss ways that the WTO may be able to function more effectively.   The measure does not require 
the United States to withdraw from the WTO.   
 
[Thailand] 
 
1. Thailand commends the United States for its high level of compliance with WTO notification 
obligations.  Paragraph 21  of the Report states that some notifications were outstanding as at October 
2005, including the notification on domestic support fo r agriculture, with the latest notification of 
March 2004 covering marketing years 2000 and 2001.  When does the United States intend to notify its agriculture domestic support for subsequent ma rketing years to the Committee on Agriculture? 
 
ANSWER: As noted above, the United States fully intends to notify its domestic support 
commitments under current farm programs.  We note our  notifications are extremely data intensive and 
are as current as those of many other WTO members.   
 
[Turkey] 
 
2.  In the paragraph 14 of the Secretariat Report,  it is mentioned that on 2 March 2005, House Joint 
Resolution 27 to withdraw the approval of the Congress from the Agreement establishing the WTO was introduced and referred to the Committee on Ways and Means.  
 
It is further stated in the same paragraph that th e Administration strongly opposed H.J Resolution 27.  
 
Could US Delegation kindly refer to the reasons of the submission of H.J Resolution 27 that envisages 
withdrawal of the approval of the Congress from the Agreement establishing the WTO?  ANSWER: The joint resolution may be introduced  by any Member of Congress once the 
Administration submits its annual report on the WTO.  It should be noted that the resolution is non-
binding.  If it were to pass both the House and Senate, it would not require the United States to 
withdraw from the WTO.  Only the President of the United States can make that decision under our 
Constitution. 
 
Preferential and Other Arrangements
 
 
[China]  
Question: (p.17 para.23)  
As to the U.S. active pursuit of regional and bilateral free trade arrangements, would the U.S. 
elaborate on how to ensure a complementary approach when applying to both the multilateral          WT/TPR/M/160/Add.1 
Page 141 
 
 
system of the WTO and its regional and bilateral initiatives to lessen  the effect of discrimination 
creation and trade diversion by those arrangements?  
How will the U.S. evaluate the “spaghetti bowl ” effect of FTA arrangements on multilateral 
trading system as reflected in the Sutherland’s Report ?  
 
ANSWER: The core of U.S. trade policy is to open mark ets 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 St ates also pursues bilateral and regional free trade 
agreements (FTAs) that are complementary to and co mpatible with advancing the goals and obligations 
of the multilateral trading system.  U.S. FTAs, b ecause of their comprehensive duty-elimination and 
breadth of commitments, produce significant benefits for its partners, and thus  strengthen and expand 
the forces working towards global trade reforms.  Fu rthermore, the liberalization undertaken by many 
of our FTA partners has often led those Members to increased participation in liberalizing at the WTO. 
 
[Chinese Taipei] 
 
Question 1 (pages 16-17, paragraphs 21-22) 
The US has recently been actively pursuing FTA nego tiations, which reflects its strategy of increasing 
leverage for promoting multilateral trade liberaliza tion.  Could the US please elaborate on its own 
guidelines for choosing FTA negotiating partners?  
ANSWER:  In considering potential FTA partners, the United States considers a range of factors, 
including how the FTA fits with our larger goal of advancing free trade around the world, the likely 
economic benefit to the United States, and a country’s  commitment to open markets and to the rule of 
law.  These criteria are not applied in a mechanistic manner:  considerations that weigh heavily in the 
case of one country may be outweighe d by other considerations in th e case of other countries.  In 
addition, the U.S. government seeks input from both Congress and the private sector. 
 
We note also that partners in the three FTAs that ha ve entered into force since the last US Trade Policy 
Review are all APEC members.  Given that APEC’s  concept of “open regionalism” would facilitate 
efforts to advance freer trade under a multilateral framewo rk, is it the US’ intention to continue to give 
priority to FTA talks with APEC economies in the future? 
 
ANSWER:  The United States is willing to consider ente ring into negotiations for an FTA with any 
country that meets its criteria, as described above.  
[Chinese Taipei] 
 Question 2 (page 18, paragraph 30) 
Under a dispute settlement regime, normally a comp laining party is allowed to suspend the party 
complained against from the benefits arising from a preferential agreement.  The Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu would appreciate knowing: a) 
the reason for the US and Chile in corporating provisions for “monetary assessment” to back up dispute 
panel decisions, and b) how these “monetary assessment” provisions are implemented?  ANSWER:  In the US-Chile FTA, for commercial disput es, the United States and Chile agreed to 
allow a defending party that does not implement an  adverse report to choose between suspension of 
benefits and payment of monetary assessments.  In some cases, a monetary assessment might be more 
appropriate than a suspension of benefits.  There have been no disputes under the US-Chile FTA's 
dispute settlement provisions.  Therefore, the Par ties do not yet have any experience implementing the 
provisions, beyond what is provided in the text itself.  
 WT/TPR/M/160/Add.1 
Page 142  
 
[Chinese Taipei] 
 
Question 3 (page 19, paragraph 31) 
We note with interest the non-market access requirements in the US-Australia FTA on 
pharmaceuticals, such as the transparency pro cedure in listing pharmaceuticals for reimbursement 
under the Australian Pharmaceutical Benefit System.   
 We would appreciate knowing whether such requirement s are specific to Austra lia, or whether the US 
intends to pursue similar requirements, either in  the FTA context or bilaterally, with its trading 
partners.  Additionally, could the US please describ e the problems encountered that prompted it to 
pursue such requirements? 
 
ANSWER: The United States has dealt with market access issues related to pharmaceutical 
products through global, regional, and bilateral trade negotiations for many years.  In previous FTAs, 
we have negotiated the elimination of duties on exports of pharmaceutical products and strong IPR 
provisions relating to pharmaceuticals.   For many ye ars other pharmaceutical issues have been part of 
our various trade dialogues.    As the Australian Government’s own studies had shown, measures to enhance transparency and 
accountability of its Pharmaceutical Benefit Scheme (P BS) process were warranted.    The United States 
also pursued specific non-tariff market access pharma ceutical provisions in the United States-Australia 
FTA negotiations based on the guidance that the U.S. Congress provided in the Trade Act of 2002. 
 
[Ecuador] 
 
The WTO Secretariat’s report indicates a substantia l increase in free trade agreements between the 
United States numerous countries and sub-regions.  Th e report states that “the United States is also 
conducting negotiations to create FTAs with:  …Colom bia, Ecuador, and Peru,”  among other countries.  
Furthermore, “the U.S. authorities hold the view  that U.S. FTAs can promote innovation, provide 
participating countries with trade capacity bu ilding to develop negotia ting skills, and promote 
investment, job creation, and higher business standa rds.  They also consider them as a means to 
advance work and negotiations of multilateral agreements.” 
 
Bearing in mind that Ecuador is about to sign an FTA with the United States in the upcoming weeks, 
can that United States provide information rega rding economic projections, as well as trade and 
investment-related forecasts, to support these assertio ns?  In other words, does the United States have 
[reports] that estimate and quantify the benefits of an FTA for our country that allow it to justify the 
statement appearing in the Secretariat’s report?   
 ANSWER:  Our statement was based on statistical analys is of trade data and the feedback we have 
received from countries that have a free trade agreement with us.  We encourage Ecuador to talk to our 
trading partners about their experiences and benefits.  [Ecuador]  
Could the United States elaborate on how believes the signing of bi-lateral agreements to be 
complementary to multilateral trade agreements?  
ANSWER:  The core of U.S. trade policy is to open ma rkets and to advance the rule of law through 
the multilateral trading system, as it has been since before the founding of the GATT.  U.S. free trade 
agreements (FTAs), because of their comprehensiv e duty-elimination and breadth of commitments, 
produce significant benefits for its partners, and thus strengthen and expand the forces working towards 
global trade reforms.  Furthermore, the liberaliza tion undertaken by many of our FTA partners has 
often led those Members to increased participation in liberalizing at the WTO.           WT/TPR/M/160/Add.1 
Page 143 
 
 
Regional and bilateral agreements that are fully consistent with WTO rules and objectives can both 
support and expand trade liberalization in the mul tilateral trading system. Without exception, the 
regional initiatives in which the United States is involved look to the WTO as a solid foundation upon which to build.  These initiatives are recognition of th e desirability of increasing freedom of trade by 
the development, through voluntary agreements, of closer integration between the economies of the 
countries party to such agreements, as long as the agreements do not result in increasing the external 
barriers of the parties.  Such agreements challe nge the multilateral system to keep pace with the 
interests and needs of Members, and contribute to the WTO system by introducing innovation and 
strengthened disciplines.  These agreements can become  models for future multilateral liberalization in 
new areas, such as agriculture, services, invest ment, and environmental and labor standards. 
 
[Ecuador] 
 
The multiplicity of FTAs in different parts of the globe in recent years, as well as the relatively 
ambitious goals for the WTO r ound of negotiations on market de regulation and access will cause 
erosion of preferences for those members with agreements  in this regard.  What is the U.S. stance as to 
the difficulties erosion of preferences poses for some countries?  Does the U.S. believe that this should 
be handled under the aegis of the WTO?  If so, wh at proposals are considered appropriate within the 
WTO negotiations to discuss this difficulty?    ANSWER:  The issue of preference erosion has b een noted in the Hong Kong Ministerial 
Declaration as an issue to be examined in both th e agriculture and non-agricultural negotiations in the 
Doha Round.  As a result, we are working with ot her Members to determine the scope of the problem 
and how solutions like Aid for Trade can help t hose countries that make face adjustment due to 
multilateral liberalization. We look forward to worki ng with Ecuador and other Members on this issue 
as negotiations progress.  [Turkey]  
5.  In the Secretariat report, under paragraph 15, it is stated that the US authorities reaffirmed their 
strong support of the multilateral trading system wh ich they consider to be at the core of US 
international trade relations. 
 
On the other hand, since 2001, the US has been ve ry ambitious in pursuing to sign new free trade 
agreements especially with the developing countries.  
 
Could US Delegation kindly elaborate how the US strikes a balance her FTA policies with the Doha 
Development Agenda Negotiating Strategy? 
 
And  [European Communities]  
Bilateral, regional and global trad e liberalization is vital for promoting prosperity, growth and 
development to the benefits of the world at larg e. The EC considers that the WTO and multilateral 
liberalization is the most certain way for promo ting global interests for industrialized countries and 
developing countries at large.   
• How does US judge the relative importance and we ight of bilateral/FTA policies and further 
development of the WTO system in terms of its own trade and development needs?  
 
ANSWER:  The core of U.S. trade policy is to open ma rkets 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 St ates also pursues bilateral and regional free trade WT/TPR/M/160/Add.1 
Page 144  
 
agreements (FTAs) that are complementary to and co mpatible with advancing the goals and obligations 
of the multilateral trading system.  U.S. FTAs, b ecause of their comprehensive duty-elimination and 
breadth of commitments, produce significant benefits for its partners, and thus  strengthen and expand 
the forces working towards global trade reforms.  Fu rthermore, the liberalization undertaken by many 
of our FTA partners has often led those Members to increased participation in liberalizing at the WTO. 
 
• To what extent has the US anal yzed and compared the efficiency and level of economic benefits 
delivered by bilateral trade agreements by comp arison with multilaterally agreed liberalization? 
What have been the specific results of such analysis?  
 
ANSWER:  There is little doubt in the economic litera ture that the economic benefits resulting 
from ambitious multilateral trade reforms, particular ly in market access, far outweigh the benefits 
which can be generated through bilate ral trade agreements.  It is our hope the European Union will join 
us in leading the way in contributing significant im provements in new market access, particularly in 
agriculture, that will enable the Doha Development Ag enda to generate the greatest gains possible for 
the global economy.  
 
• The EC would like to know more about the US’ strategy for RTAs. In particular, the EC notes that 
the US appears to follow a rather homogenous m odel for RTAs irrespective of the levels of 
development of its counterparts which includes ve ry long transition periods, including for the US 
itself, and with no, or very limited, asymme try in commitments between the US and its less 
developed partners. The EC would also appreciat e if the US could confirm their obligation to 
"provide a full explanation to the Council for Trad e in Goods of the need for a longer period".  
 ANSWER:  The United States considers FTAs which cont ain comprehensive duty- elimination and 
a wide scope of non-tariff trade reforms to be the “gold standard.”  We see no better model on which to 
base FTAs.  U.S. FTAs are not cookie-cutter agreem ents.  The United States negotiates each agreement 
individually with each partner, to take account of the specific circumstances and needs of the trading 
relationship.   A fundamental aspect of each of the U.S. FTAs is the elimination of duties on substantially all the trade.  For a small number of  sensitive products, in order to eliminate tariffs 
completely, the United States has agreed to an ex tended transition period, rather than abort the 
elimination process at an earlier date or extend a sm all amount of market access for a finite period of 
time.   All U.S. FTAs are notified to the WTO in accordance with the terms of reference of the Committee on 
Regional Trade Agreements established by consensus following the completion of the Uruguay Round 
Agreements (WT/L/127), with agreed-upon proce dures which operationalize the terms of the 1994 
Understanding on Article XXIV.   U.S. FTAs are co nsidered at length in the CRTA following referral 
from the Council on Trade in Goods.  The reports s ubmitted to the CRTA by the United States pursuant 
to the agreed procedures in the CRTA are exemplary in the provision of an explicit accounting of the 
timetable for duty elimination on each and a ll tariff lines (e.g., WT/REG160/3; WT/REG160/4; 
WT/REG161/3; WT/REG161/4;), and ha ve provided a model of clarity and depth of explanation that 
some Members have chosen to replicate in their submissions.  
 
 
[Guatemala] 
 
Article V of the GATS states that a regional trade ag reement (RTA) to liberalize trade in services shall 
be conditioned upon, inter alia , having substantial sectoral coverage. 
 The footnote for paragraph 1(a) of said article esta blishes that in order to meet this condition, 
agreements should not provide for the a priori exclusion of any mode of supply. 
 
With respect to the foregoing, can the United Stat es explain how it has interpreted and implemented 
this provision when negotiating and entering into RTAs?          WT/TPR/M/160/Add.1 
Page 145 
 
 
ANSWER:  Consistent with Article V, our FTAs cover all modes of supply.  The chapter on cross-
border trade in services in our FTAs encompasses cr oss-border supply, consumption abroad, presence 
of natural persons, and for certain  obligations, commercial presence.  The FTA chapter on investment 
covers rights for investors in manufacturing, services, and certain financial services, including commercial presence.  Financial services, typically c overed in a separate chapter, cover cross-border 
supply, consumption abroad, commercial presence and investment rights, and presence of natural 
persons with regard to services within the scope of regulated financial institutions.  
 Also in this regard, but with respect to goods, can the United States explain how it interprets and 
implements the phrase “with respect to substantially all the trade” [ lo esencial de los intercambios 
comerciales ] contained in Article XXIV of the GATT? 
 ANSWER:  The United States sets a very high standa rd for the “substantially all the trade” 
requirement.  Consistent with that standard, ou r FTAs are far-reaching and comprehensive, both in 
terms of the trade flows and tariff lines. 
 
[Mexico] 
 
2. Paragraph 28 indicates that the United States and Jordan negotiated an FTA in which the liberalization of services follows a “positive list” appr oach.  Mexico would be interested in learning 
why this approach was used in this FTA, since the document mentions that the United States has 
negotiated its trade agreements b ased on a “negative list” approach. 
 ANSWER: The United States-Jordan FTA, signed in 2000,  was the third such free trade agreement 
concluded by the United States.  It is the only U. S. free trade agreement that uses the positive list 
approach in services liberalization.  Since that tim e U.S. policy has been to negotiate FTAs on the basis 
of a negative list approach, and all sub sequent FTAs have used this model. 
 
[Mexico] 
 
3.  What is the position of the U.S. Government regarding the dissatisfaction on the part of certain 
economic and social sectors that are opposed to the establishment of a Free Trade Area for the 
Americas? 
 ANSWER:  President Bush reinforced his message that our free trade agenda is part of our agenda 
for a freer world when, in his State of the Union address, he declared, “In a complex and challenging 
time, the road of isolationism and protectionism may seem broad and inviting -- yet it ends in danger 
and decline.”  Economic isolationism will not ma ke any country safer nor help it to reach its 
development goals.  The United States negotiates free trade agreements wh en the President believes that they are in the 
interest of the people.  The governments in the We stern Hemisphere have been working steadfastly 
over the last ten years to complete a trade arrange ment in our hemisphere is good for jobs, is good for 
quality of life, and is good for democracy.  To spread  this message to all the peoples of the hemisphere, 
the governments participating in the FTAA process created a committee to work on promoting dialogue with civil society throughout the Americas.  Th e United States looks forward to continuing this 
dialogue with civil society and encourages our partners to do likewise.  WT/TPR/M/160/Add.1 
Page 146  
 
[Peru] 
 
Asia Pacific Economic Cooperation (APEC)
 
10. On page 27, paragra ph 42, the report mentions the Individu al Action Plans as a means to measure 
progress made by the member countries.  How much priority does the United States attach to the 
Collective Action Plans of the APEC Forum, on what  issues does the U.S. believe that the work of 
APEC could contribute to accelerating progress of the WTO’s Doha Round?  ANSWER:  The United States believes that the Collec tive Action Plans are a vehicle for progress 
in trade and investment liberalization.  In N ovember 2005, APEC Leaders issued a strong political 
statement of support for the DDA negotiations, which called for, inter alia , breaking the impasse in 
agricultural negotiations, particularly with respect to  the market access pillar.  In June 2005, APEC 
Trade Ministers unanimously endorsed an ambiti ous tariff-reducing formula (“Swiss formula”) for 
non-agricultural goods.  APEC has also worked to adva nce the DDA negotiations in  areas such as tariff 
elimination for information technol ogy products and trade facilitation. 
 
[Peru] 
 
Free Trade Agreement of the Americas (FTAA)
 
11. On page 2, paragraph 36 of the report, the Un ited States indicates it is continuing to press for a 
Free Trade Area of the Americas (FTAA), but that nego tiations stalled in late 2005.  What alternatives 
would the U.S. propose to resume the negotiations toward establishing the FTAA, bearing in mind its 
regional and bilateral experience negotiating free trade agreements and the sensitivity on the part of the 
developing countries expressed in such negotiations?  Specifically, what steps would the U.S. consider with a view to resuming negotiations and what ac tions would it propose?  Moreover, would these 
actions include promoting the developmen t of a program and timetable for work?  
 
ANSWER:  The United States is looking forward to consulting with its trading partners in the 
Western Hemisphere on the Free Trade Area of the Americas (FTAA) process.  As one of the next steps in the process, Colombia is undertaking c onsultations among all the FTAA participants on the 
process.  We will be participating in these consulta tions.  We also welcome a discussion with Peru, as 
with our other FTAA partners, on how best to chart a way forward. 
 
[The Philippines] 
 
2.  The United States has concluded an FTA with  one ASEAN member, and is negotiating with two 
other ASEAN members. Does the US have plans to pur sue a regional FTA some time in the future with 
all of ASEAN? 
 ANSWER:  The United States is working to enhance its trade and investment relations with 
ASEAN countries under President Bush’s Enterprise fo r ASEAN Initiative (EAI).  Under the EAI, the 
United States offered the prospect of bilateral FT As with ASEAN countries that:  (1) have Trade and 
Investment Framework Agreements (TIFAs) with the United States; (2) are WTO members, and (3) are 
committed to economic reforms and openness.  Th e United States and each ASEAN partner jointly 
determine if and when they are ready to launch FT A negotiations.  The ultimate goal of the EAI is to 
link these bilateral FTAs into a network of FTAs.   Under the EAI, the United States concluded and im plemented our FTA with Singapore, launched an 
FTA with Thailand, and conclude d a TIFA and then launched an FTA with Malaysia.  The United 
States also negotiated a TIFA with Brunei and has stepped up its engagement  under its existing TIFAs 
with Indonesia and the Philippines.  In addition,  the United States supported Cambodia’s efforts to 
accede to the WTO and then launched TIFA negotia tions with the Cambodian Government; and is 
working to help Vietnam and Laos accede to th e WTO.  Finally, the United States and ASEAN          WT/TPR/M/160/Add.1 
Page 147 
 
 
Members are negotiating a TIFA, which will serve as the framework for further work between them to 
support ASEAN integration.  
[The Philippines] 
 3.  The US Generalized System of Preferences (GSP) programme is set to expire on 31 December 
2006. We also understand that a five-year extensi on is being proposed. We cannot emphasize enough 
the need for a timely, multi-year extension of the GSP.  Certainty and predictability is vital for business 
planning, both by exporters in developing countri es and US importers who re ly on duty-free consumer 
goods or inputs for their industrial needs. What ar e the views of the United States on this matter? 
 
ANSWER:  The President has included reauthorization of the GSP program for five years in the 
budget that he presented to the Congress earlier this year.  
[Thailand] 
 
3. According to paragraph 28  of the Report, the US-Jordan FTA services liberalization section 
utilizes a positive-list approach.  To date, what othe r FTAs has the United States signed that use this 
approach?  In which other FTAs under negotiations is th e US considering using, or has agreed to use, 
this approach?  
ANSWER:   The United States-Jordan FTA, signed in 20 00, was the third such free trade agreement 
concluded by the United States.  It is the only U. S. free trade agreement that uses the positive list 
approach in services liberalization.  Since that tim e U.S. policy has been to negotiate FTAs on the basis 
of a negative list approach, and all s ubsequent FTAs have used this model.  
 
[Thailand]  
4. Could the United States please provide informa tion on its preferential regime given to non-
immigrant workers entering the US in connecti on to bilateral/regional trade arrangements? 
 ANSWER: In the past, the United States has included in  some of its FTAs certain non-immigrant 
categories available to all countries (business visito rs and intra-corporate transferees) and certain 
categories available only to countries that have b ilateral agreements with the United States (Treaty 
Trader/Investor).  The NAFTA, US-Chile and US-S ingapore FTAs also include special provisions for 
professionals that are available only to  Canada, Mexico, Chile and Singapore.  
 [Thailand] 
 
5. Which types of visa are given as a result of  NAFTA, US-Singapore, US-Chile, US-Australia 
and other agreements, for which workers from othe r WTO Members are not eligible?  What are the 
quota numbers in each type and how do they affect the quota given to other WTO Members?  
ANSWER: There are two admission categories available to U.S. FTA partners that are not 
available to other countries. The NAFTA allows for the mobility of certain professionals under the 
admission category of NAFTA-TN. There is no numerical  limitation, and this program does not in any 
way affect the numerical limitations of other non-immigrant categories.   
The US - Chile and US - Singapore FTAs allow for the mobility of professionals under the admission 
category of H-1B1. In the case of Chile, the annua l numerical limitation is 1,400, and in the case 
of Singapore the annual numerical limitation is 5, 400.  The numbers for the H-1B1 program have a 
small affect on the global H-1B program, since H-1B1 numbers are counted against the global H-1B limitation. In practice, the affect has been very  small since actual use of the Chile and Singapore WT/TPR/M/160/Add.1 
Page 148  
 
numbers has yet to exceed a few hundred per year.  In the WTO, the United States has committed to 
allow up to 65,000 H-1Bs per year and in practice has exceeded that number. 
 There are no temporary entry provisions in th e US-Australia FTA, or any other U.S. FTA. 
 [Thailand] 
 
6. Could the United States please provide progr ess reports on FTA initiatives not yet included in 
the report, such as those with Malaysia and South Korea?  
ANSWER: On February 2, 2006, Ambassador Portman notified Congress of the United States’ 
intent to negotiate a free trade agreement with the Republic of Korea.  The first round of negotiations 
will be held the week of June 5 in Washington, D.C. and the Parties have agreed to meet at six to eight 
week intervals thereafter.  The aim is to conclude the negotiations by the end of this year.  On March 
8th, Ambassador Portman notified Congress of the Un ited States’ intent to negotiate an FTA with 
Malaysia.  The first round of negotiations will be du ring the month of June in Malaysia.  The Parties 
will continue to meet at six to eight week interval s throughout the year, with the goal of completing the 
negotiations in December.  
[Turkey] 
 
6.  Paragraph 31 of the Secretariat Report states that the US-Australia FTA is the first US FTA to 
include non-market access provisions relating to public  health and pharmaceuticals. According to the 
report the US-Australia FTA requires Australia to apply transparent procedures in listing new 
pharmaceuticals for reimbursement.  
Could US explain if the US has undertaken commitm ents with regard to her public health policies 
under the said FTA or the mentioned non-market access commitments in those areas   are unilaterally 
taken by Australia?  ANSWER:  Both the United States and Australia comm itted to principles in the Pharmaceutical 
Annex to the United States-Australia FTA including:  to recognize the important role that innovative 
pharmaceuticals products play in delivering high quality health care; to support research and 
development and technology transfer; to promote of timely and affordable access to innovative 
pharmaceuticals through transparent, expeditious, and accountable procedures that do not impede 
application of appropriate quality, safety, and effi cacy standards; and to maintain regulations and 
policies that recognize the value of innovative pha rmaceuticals through the operation of competitive 
markets or procedures to value the objectivel y demonstrated therapeutic significance of a 
pharmaceutical.  The transparency provisions of the Pharmaceutical Annex apply to both the United States and Australia 
to the extent that each government’s federal health care authorities operate or maintain procedures for 
listing new pharmaceuticals or indications for re imbursement purposes or for setting the amount of 
reimbursement for pharmaceuticals under its federal healthcare programs.  These provisions do not 
cover pharmaceutical formulary development and mana gement, which are subject to the Chapter on 
Government Procurement and not the provisions of A nnex-C.  Programs implemented at the U.S. state 
level are not covered by the Pharmaceutical Annex.  
Unilateral preferences and other trade arrangements
 
 
[Brazil] 
 
1.  Chapter I, paragraph 37 : Since July 2005, it amounts to 57 tariff lines graduated for Brazil under the 
US GSP. Of those lines, 46 of them did not reach  any competitive limits in 2004 and 2005 (CNL 50%          WT/TPR/M/160/Add.1 
Page 149 
 
 
or US$115 million in 2004 and US$120 million in 2005). On the other 11 lines, it was reached the percentage CNL on 3 of them, but not surpassing the established value limit to obtain the waiver de 
minimis  (US$15 million in 2004 and US$17.5 million in  2005). Why does not exist an automatic 
review mechanism for graduation in the USA GSP Pr ogram?  Why are some products eligible for this 
preferential treatment if there is not any import of this products by USA? 
 
ANSWER:  Products from beneficiary developing countri es that are no longer eligible for duty-free 
treatment because they were exported in excess of the competitive need limitations may be 
redesignated if they meet the criteria for redesignati on specified in the statute.   The petition process 
outlined in the regulations allows the interagency group responsible fo r evaluating eligibility to collect 
the information necessary for it to make recommendations  to the President on whether the criteria have 
been met.  
[China]  
 Question: (p.21 para.42)  
As an active player in both WTO and APEC, wh at strategy does the U.S. take to enhance the 
policy synergy in those two different arenas? 
 
ANSWER:  As an active participant in the WTO and APEC , the United States’ policy is to work to 
ensure our bilateral and regional trading relationships are complementary to and compatible with 
advancing the goals and ob ligations of the multilateral trading sy stem.  The goals of APEC are, of 
course, consistent with and supportive of the trade-li beralizing goals of the WTO.  For example, APEC 
has worked to advance tariff elimination in the IT sector and supported the launch of the DDA trade 
facilitation negotiations.  In addition, at critical j unctures, APEC Leaders and Ministers have conveyed 
strong political messages to suppor t the successful conclusion of the DDA.  These statements 
have reaffirmed the critical importance of achieving real new market opportunities in the DDA negotiations on agricultural market access and in NAMA.  
 
[India] 
 
Q.5 At a public hearing held in Washington on Nove mber 3, 2005, the relevance and importance of 
continuing the GSP programme beyond December, 2 006 was brought to the knowledge of the office of 
USTR. It was submitted that the benefits of the sc heme be continued to be made available to all 
developing countries even beyond 2006 in a fair and non - discriminatory way. The current status of 
these schemes may be indicated and whether any changes are contemplated.  ANSWER: See response to Q.7.  Reauthorization of the GSP program, including any changes to 
the existing program, is currently under consideration by Congress. 
 
[Switzerland] 
 
Para. 39 : This paragraph states that the President of the United States determin es annually which sub-
Saharan African countries are eligib le for benefits. Does this relate only to the provision of technical 
assistance or to all benefits of the AGOA? 
 ANSWER:  The President's annual review to determ ine which sub-Saharan African countries are 
eligible for AGOA benefits invol ves an assessment of country eligibility for preferential tariff 
treatment available under the statute, and is not limited to technical assistance.  WT/TPR/M/160/Add.1 
Page 150  
 
[Turkey] 
 
2.  The Secretariat report states that the United St ates grants unilateral preferences to developing 
countries under a number of schemes and that th ese preferences may be conditional on compliance 
with various US policy objectives. 
 
Could United States explain if all conditions are appl ied in the same manner to all countries in granting 
unilateral preferences?  ANSWER: Yes, all statutory criteria are applied in  the same manner in determining country 
eligibility for tariff preferences. 
 
Could United States explain how the compliance of these conditions with the various policy objectives 
can be assured? 
 
 ANSWER:  Each U.S. preference program is administ ered in accordance with the law, including 
the eligibility criteria.   [Turkey] 
 
7.  As mentioned in paragraph 37 of the Secretariat report, the US grants unilateral preferences to GSP-
eligible exports from beneficiary developing countries and the curren t GSP will be put force through 31 
December 2006.  
We would appreciate if the US Delegation could pr ovide information on the preparation of the next 
GSP scheme.  We understand from the Secretariat report that th e granting of preferences may be subject to 
compliance with various US policy objectives.  
 
In this respect we would also like to learn how th is compliance mechanism operates and if beneficiary 
countries are allowed to be informed in advance of any possible new requirements of US policy 
objectives. 
 Is there a commonality of requirements between  the GSP schemes and those other unilateral 
preferences extended by the US to some countries under specific trade arrangements? 
 
 
ANSWER: The President has included, in his 2007 federal budget request, reauthorization of the 
GSP program for a five-year period.  The President’s  request is under consideration by the Congress.  
 
Information on the operation of the U.S. GSP program can be found on the USTR website at 
www.ustr.gov .  Proposed legislation, including any legislation proposing new requirements for 
eligibility under the GSP program, is  made available to the public online at:  http://thomas.loc.gov. 
 
The GSP, AGOA, ATPA, and CBI programs each have different eligibility requirements.  Information 
on the eligibility requirements for these programs can be found at www.ustr.gov.  Foreign Investment Regime
 
 
[Chile] 
 
In reference to paragraph 43, can the United States pr ovide a list of the restrictive measures applied at 
the state level?          WT/TPR/M/160/Add.1 
Page 151 
 
 
ANSWER: The United States does not maintain an inve ntory of restrictive measures affecting 
foreign investment in each of our 50 States.  The principle area of restrictive measures of which the 
United States is aware affects insurance and banking investment.  States do regulate foreign 
participation in these service industries.  Generally speaking, however, States want to attract foreign 
investment and treat foreign investors in a non-di scriminatory manner.  If anything, States compete 
with one another to attract fore ign investment.  Restrictive measures are therefore relatively rare.  
 
[Chile]  
With regard to paragraph 44 of the Secretariat’s report, can the United States provide a list of the 
actions that can be taken under the Defense Produc tion Act of 1950, which could affect foreign 
investment in the U.S.?  How compatible are these ac tions with the Bilateral Investment Treaties (BIT) 
and the Free Trade Agreements (FTAs) signed by the United States? 
 
ANSWER:  Under the Exon-Florio provision of the Defense Production Act of 1950, on the basis 
of recommendations made to the President by the Committee on Foreign Investment in the United 
States (CFIUS), or on his own authority, the President may, after making certain required findings, suspend or prohibit transactions that involve foreign mergers or acquisitions.  Under this authority, the 
President could, for example, order a reduction in th e level of foreign ownership in a U.S. company, 
block entirely a foreign merger or acquisition, or orde r divestiture of foreign interests in a merger or 
acquisition, either in whole or part.  Where a propos ed transaction is notified to CFIUS pursuant to the 
Exon-Florio provision and where the transaction in fact raises national security concerns among the 
CFIUS agencies, those agencies may negotiate miti gation measures with the parties to the proposed 
transaction.  As they address the national security  concerns, such mitigation measures usually will 
obviate the need for action by the President.  
The Exon-Florio provision is  fully consistent with  the obligations contained in Bilateral Investment 
Treaties (BITs) and Free Trade Agreements (FTA s) by virtue of the essential security exception 
contained in the these investment and trade agreements. 
 
[China]  
Question:  (p.22 para. 44-45)  
In spite of a generally liberal foreign investment regime, the U.S. notably maintains restrictions on 
foreign direct investment to some extent and aler ts on foreign mergers and acquisitions of domestic 
companies based on the so-called national security reasons. As the U.S. responded in the previous 
review that factors to be considered in nationa l security review changed with each acquisition and 
merger transaction under the Exon-Florio Amendment  and the transparency of its review process is 
rather limited. 
 
Although it varies from case to case, could the U.S. elaborate on what the major factors are 
generally concerned by its authorities during a foreign merger and acquisition review?  
Does the U.S recognize the possibility of discretio nary power abuse by relevant authorities under 
the Exon-Florio Amendment  due to lack of transparency in the review process? 
Could the U.S. enlighten us on what have been done to keep its national security review as 
transparent, predictable and fair as possible?   
ANSWER:  Avoiding Discriminatory and Market Distorting Effects 
 
CFIUS implements Exon-Florio in the context of an open U.S. investment policy and, therefore, 
attempts to provide a process that encourages forei gn direct investment in the United States while, at 
the same time, ensuring that legitimate national secur ity interests are protected.  The vast majority of 
transactions submitted to CFIUS proceed without initiati on of an investigation within thirty days of the 
initial notification, and since 1988, only a single tr ansaction subject to Exon-Florio has been blocked WT/TPR/M/160/Add.1 
Page 152  
 
by the President.  Some companies seek to with draw their notifications voluntarily, which CFIUS 
generally permits them to do.  Vo luntary withdrawal often reflects a decision not to proceed with the 
notified transaction.  However, the vast majority of transactions submitted to CFIUS or reviewed by 
CFIUS on its own initiative are in fact carried out.  Factors Considered under Exon-Florio 
 
In implementing the Exon-Florio provision since its  enactment in 1988, CFIUS has addressed national 
security issues raised by foreign acquisitions of U.S. companies.  CFIUS thoroughly considers all 
information about a proposed transaction as it pertai ns to national security.  The Exon-Florio statute 
contains a list of factors, among others, that the President or his designee ( i.e., CFIUS) may consider 
(50 U.S.C. App. § 2170(f)) in evaluating the eff ects of a proposed transaction on national security.  
These are:   
 domestic production needed for project ed national defense requirements; 
 
 the capability and capacity of domestic industries to meet national defense 
requirements, including the availab ility of human resources, products, 
technology, materials, and other supplies and services; 
 
 the control of domestic industries and commercial activity by foreign citizens 
as it affects the capability and capacity of th e U.S. to meet the requirements of 
national security; 
 
 the potential effects of the transaction on the sales of military goods, 
equipment, or technology to a country th at supports terrorism or proliferates 
missile technology or chemical  and biological weapons; and 
 
 the potential effects of the transaction on U.S. technological leadership in areas 
affecting U.S. national security. 
 It is not possible to discuss in detail the factors taken into consideration by CFIUS in conducting a 
national security review under Exon-Florio beyond tho se listed in the Exon-Florio statute.  This is 
because the factors that are relevant may be different for each transaction. 
 
Definition of National Security 
 “National security” is not defined in the statute or  in the implementing regul ations.  As noted above, 
factors relevant to a review of the national secur ity implications of a proposed transaction will vary 
depending on the specifics of the transaction.  More over, a definition of the term “national security” 
would not necessarily result in guidance sufficiently de tailed to be helpful to the parties to a proposed 
transaction.  The statute lays out a broad set of factors that may be considered, but this is not an exhaustive list. Each transaction has unique char acteristics and agencies are not constrained in 
examining facets of a transaction that could impact national security. 
 
[China]  
 
Question: (p.22 para. 44-45)  
In 2005, CNOOC, an oil company from China, offe red the highest bidding price for its intended 
acquisition of Unocal, a California oil producer. Bu t eventually CNOOC withdrew its filing under huge 
political pressure from the U.S. side.            WT/TPR/M/160/Add.1 
Page 153 
 
 
What are the U.S. comments on its surging dome stic complaints from its industrial community 
about the damages on U.S. business environm ent and commercial interests by the political 
pressure imposed upon this case? 
 
ANSWER: We do not believe that the outcome of one proposed foreign acquisition would 
undermine the overall positive environment in the Unite d States for foreign investors. There now is a 
debate on reforming the process for reviewing the potential effect on national security of proposed 
foreign acquisitions.  The United States will contin ue to welcome foreign investment because it can 
bring in new technology, managerial skills, new production techniques and it creates good jobs for 
American workers.  
 
[China] 
 
Taxation System  
Foreign company’s branches in the U.S. or US co mpanies with more than 25% foreign share are 
required by the U.S. to register and keep records of  transactions with affiliated companies. The records 
should be stored in places designated by tax de partment, while further explanations to these 
transactional records must be annually updated and re gistered. Otherwise, companies are subject to 
different punishment. 
 
Does this requirement apply equally to  domestic companies of the U.S.? 
 
ANSWER: U.S. tax law requires taxpayers to retain and report the information necessary to show 
correct U.S. tax liability.  If a taxpayer (whether fo reign or domestic) engages in transactions with an 
entity that is not subject to U.S. tax jurisdiction and is therefore not subject to U.S. information 
retention and reporting rules, then special reporting rules apply to the taxpayer so that the necessary 
information will be available to U.S. tax authorities. 
 
Does this requirement impose extra burden to forei gn invested enterprises and complicate their 
business operation in the U.S. as well?  
ANSWER:  No.  The reporting rules are intended to make sure that tax authorities can properly 
determine the tax liability of domestic corporations and foreign corporations engaged in a trade or 
business in the United States. 
 
Please provide the rationale of this requirement and clarify its consistency with WTO national 
treatment?  
ANSWER: These rules put domestic and foreign corporations that do business with foreign 
affiliates on the same footing as domestic corpora tions that do business with domestic affiliates. 
 
[Colombia] 
 
Please list and describe the cases in which the United St ates has used the concept of “national security” 
that appears in Section II, paragraphs 4, 7, and 44 of the Secretariat’s report on “Developments in 
Trade and Investment Policy,” as an ex ception to their WTO commitments.   
 ANSWER:  Since 1988, the President has blocked only one transaction on national security 
grounds under the Exon-Florio statute, which ha d no implications for U.S. WTO commitments.  
Therefore, there have been no cases in whic h the United States has used the concept of 
"national security" found in the Exon-Florio st atute as an exception to its WTO commitments. 
 WT/TPR/M/160/Add.1 
Page 154  
 
[Ecuador] 
 
The Secretariat’s report indicates that, “the United Stat es has bilateral investment treaties in force with 
39 other countries.  Among the main characteristics of  U.S. bilateral investment treaties are:  a broad 
coverage; national and MFN treatment both pre- and post-establishment, subject to agreed sectoral 
exceptions; the observance of certain standards of treatment and protection w ith regard to covered 
investments; rules concerning expropriation and comp ensation; free transfer of funds; prohibition of 
certain mandatory performance requirements; settling of disputes through international arbitration.” 
(Paragraph 46, Page 160).  
 Bearing in mind that a bilateral investment treaty [BIT] to promote and guarantee investments 
between Ecuador and the United States that has been in effect since 1996, and that as part of the free 
trade agreement negotiations between the two countri es a chapter on investment and the treatment of 
FDI [foreign direct investments] is  included, Ecuador requests informa tion regarding the U.S. stance on 
the co-existence of such bi-lateral treaty and an FTA. 
 
 Has the United States considered the eventu al termination of the bilateral treaty for the 
promotion and guarantee of i nvestments with Ecuador? 
  Can the United States provide us  with in-depth information on what its government defines as 
investment and the manner in which it draws up an illust rative list as regards what is considered to be 
an act of investment?  Is a restrictive definition appropriate? 
 ANSWER:  The United States has recently concluded free trade agreements (FTAs) with two 
countries – Morocco and Honduras – that is each a party to a bilateral investment treaty (BIT) with the 
United States.  In each negotiation, the parties had to decide how to address  the relationship between 
the BIT and the FTA under negotiation.  In each case, th e parties agreed to keep their BIT in force but 
to suspend dispute settlement under the BIT, except  for two categories of disputes: (1) disputes 
involving investments covered by the BIT as of the date  of entry into force of the FTA; and (2) disputes 
that arose prior to entry into force of the FTA that  are otherwise eligible to be submitted for settlement 
under the BIT.  Disputes coming under either of th ese categories may be s ubmitted for settlement under 
the BIT for a period of ten years after the entry into force of the FTA.  Alternatively, such disputes may 
be brought under the FTA.  The United States h as been discussing a similar approach with Ecuador 
during the negotiation of the U.S.-Andean Trade Promotion Agreement (USA-TPA). 
 As Ecuador’s USA-TPA negotiators are aware, the United States embraces a broad definition of 
investment in its BITs and FTA investment chapters.  The investment definition that the United States 
proposes in these agreements includes an open-ended lis t of the characteristics that an investment may 
have and of the forms that an investment may take.  This wording is intended to ensure that a wide 
range of current and future forms of investment will  be covered by the obligations of the relevant BIT 
or investment chapter.   
[European Communities] 
 
Paragraph 44: How dos the US view the implementa tion of the Exon-Florio statute, which aims 
to ensure that national security concerns ar e respected in takeovers and mergers involving 
foreign firms? How does the US view th e prospects for further legislation? 
 
ANSWER:  Implementation of the Exon-Florio Statute 
 
In implementing the Exon-Florio provision since its inception in 1988, CFIUS has addressed national 
security issues raised by foreign acquisitions of U.S. companies.  CFIUS thoroughly considers all 
information about a proposed transaction as it pertai ns to national security.  The Exon-Florio statute          WT/TPR/M/160/Add.1 
Page 155 
 
 
contains a list of factors, among others, that the President or his designee ( i.e., CFIUS) may consider 
(50 U.S.C. App. § 2170(f)) in evaluating the ef fects of a proposed transaction on national security. 
 It is important to note that only a single tran saction has been blocked under Exon-Florio.  CFIUS 
implements Exon-Florio in the context of an open U.S. investment policy and, therefore, attempts to 
provide a process that does not discourage foreign dir ect investment in the United States, while, at the 
same time, protecting legitimate national security inte rests.  Some companies seek to withdraw their 
notifications voluntarily, which CFIUS generally pe rmits them to do.  Voluntary withdrawal often 
reflects a decision not to proceed with the notifie d transaction.  However, the vast majority of 
transactions submitted to CFIUS or reviewed by CFIU S on its own initiative are, in fact, carried out.  
 Prospects for Further Legislation 
 
The Exon-Florio provision is flexible enough to  allow for the full range of national security 
considerations when reviewing pr oposed foreign acquisitions of U.S. companies.  It provides for a 
thorough national security review by agencies that are members of CFIUS in a manner that is 
consistent with the promotion of foreign investment  in the United States.  At present, there are a 
number of pieces of proposed legislation under consid eration in the U.S. Congress that would modify 
the Exon-Florio provision.  CFIUS member agenci es are working constructively with the relevant 
congressional committees to seek to ensure that th e law will continue to permit thorough national 
security reviews in a manner that does not harm the long-standing policy of being open to foreign 
investment in the United States. 
 
[India] 
 
Q.10  For Indian IT professionals working in US, soci al security costs constitute a significant portion 
of compensation costs to the Indian software co mpanies executing projects abroad. US receive about 
USD 500 million per year by way of social security contributions from Indian software companies/employees. However, the benefits availe d are insignificant as almost all the software 
professionals return to India or migrate to other locati ons before they are eligible for the benefit. Would 
US authorities consider the following suggestions?  
(i) Employees of Indian companies working temporarily in the US under the HIB visa 
scheme are exempted from paying Social security, or 
(ii)  Deductions made towards social security from employees of Indian companies are 
refunded upon their return from the US. 
 
ANSWER:  The terms of withholding social security taxes are established through the negotiation 
of bilateral taxation agreements.  Countries inter ested in this issue may address the appropriate 
authority within the U.S. government, th e U.S. Social Security Administration. 
 
[Japan] 
 
Q1.  The Exon-Florio provision (Section 721 of  the Defense Production Act of 1950) provides a 
mechanism to review and, if the President finds necessary, to restrict foreign direct investment that might threaten the national security of the United States. In general, the Government of Japan fully 
understands the necessity of regulations for national security reasons.  The Government of Japan has 
concerns, however, about the provision from the follo wing viewpoints: (1) the lack of predictability for 
investors due to an ambiguous definition of “national security”; (2) the lack of legal stability due to the 
possibility that completed transactions can also be subj ect to future investigation; and (3) the lack of 
due process, illustrated by non-disclosure of the fact s, such as the reasons for the commencement of 
investigation or the final decisions by the President . The Government of Japan is also concerned that 
this provision could impede investment activities of Japanese companies bey ond the extent necessary 
for its original purpose. The Government of Japan  urges the Government of the United States, in WT/TPR/M/160/Add.1 
Page 156  
 
implementing the Exon-Florio provision, not only to comply with the WTO rules but also to take necessary measures to ensure transparency and fairness,  to the maximum extent possible, in the process 
from the notification to the Committee on Foreign Invest ment in the United States to the final decision 
by the President.  In these respects, please indicate the specific views of the Government of the United 
States.  ANSWER:  Predictability  
 
While national security is not defined in the Exon-Fl orio statute or the implementing regulations, there 
is general guidance in the Preamble of the regulati ons regarding the application of the statute.  (31 
C.F.R. Pt. 800, App. A (2005).)  In general, it is e xpected that those considering a particular transaction 
would use their judgment and discretion in reaching a de cision as to whether or not to file a notice.  
Exon-Florio does not define “national security,” in recognition of the fact that factors implicating 
national security will vary according to the details of the transaction.  
The text and legislative history of Exon-Florio make clear that the focus of Exon-Florio is on 
transactions that could threaten to impair the national security of the United States.  Although neither the statute nor the Conference Report defines “national security,” the conferees explained that it is to be interpreted broadly and without limitation to par ticular industries.  There is no exemption from 
investigation for any foreign merger  or acquisition of a U.S. company in any industrial sector.  The 
Office of International Investment in the Depart ment of Treasury, upon request, informally provides 
guidance and meets with parties to  discuss aspects of a transaction relevant to the decision whether to 
file a notice with CFIUS.  Legal Stability  
 
Transactions notified under Exon-Florio and subject to a national security review will not be reviewed 
a second time unless CFIUS determines that the partie s made a material omission or misrepresentation 
of the facts provided to the Committee.  There is no time limit on the authority of the President to take action under Exon-Florio with regard to transactions that were not notified to CFIUS.  The only 
limitation on his authority with respect to such non -notified transactions is that whatever action the 
President might deem appropriate under this aut hority must be based on the facts, conditions, or 
circumstances existing at the time the transaction was concluded.  The Exon-Florio provision authorizes the President to suspend or prohibit any merger, acquisition or 
takeover of a U.S. company by a foreign investor if  he finds: (1) there is cr edible evidence that the 
foreign acquirer might take action that threatens th e U.S. national security; and (2) existing laws and 
regulations, other than the Interna tional Emergency Economic Powers Ac t or Exon-Florio itself, are not 
adequate and appropriate to addr ess this threat.  The President re tains this authority indefinitely
 for 
non-notified transactions.   With respect to a notified transaction, the President will not exercise his authority where either of two conditions is met:  (1) CFIUS completes its review of the proposed 
transaction without proceeding to an investigation,  or (2) CFIUS undertakes an investigation of the 
proposed transaction, at the conclusion of which the President decides to take no action.  ( See 31 C.F.R. 
§ 800.601(d).)  (The foregoing statement does not apply to instances in which a party to a transaction 
has submitted false or misleading material informati on to CFIUS, or to instances in which a party has 
omitted material information requested by CFIUS.  See 31 C.F.R. § 800.601(e).)  
 
Due Process and Disclosure 
 
CFIUS shares with parties to a proposed transaction the reasons for initiating an investigation, to the 
extent permitted by U.S. law, and consistent with  its mandate to advise the President on matters of 
national security.  Sometimes the reason for an investig ation is based on information that is “classified” 
under U.S. law.  In such cases, it may not be possible to reveal the reasons for an investigation without          WT/TPR/M/160/Add.1 
Page 157 
 
 
compromising classified information.  Similar consid erations may pertain to the reasons for the final 
determination by the President.   Because implementation of the Exon-Florio provision involves questions of national security, there is a 
limit on the extent to which the process can be tr ansparent vis-à-vis the parties to the proposed 
transaction.  Because parties are encouraged to volu ntarily notify potentially qualifying transactions to 
CFIUS, and because their notifications may contain business confidential information, there is a limit 
on the extent to which the process can be transparen t vis-à-vis the public in general.  In fact, Exon-
Florio notifications are subject to strict confidentiality rules.  ( See 50 U.S.C. App. § 2170(c).)  CFIUS 
endeavors to provide the parties to a proposed transaction with ample opportunity to present their 
arguments during the course of its initial review an d, if necessary, during its investigation, both to 
provide due process and to ensure that the most co mplete and accurate information is obtained to 
inform the decision making process.  
Compliance with WTO Rules 
 
The United States is living up to its responsibilities and has implemented a regime that is predictable, 
stable, and that provides an appropriate opportunity  for participation in the review process.  The 
implementation of Exon-Florio is c onsistent with U.S. obligations under WTO agreements that provide 
for essential security exceptions.  [Norway] 
 
2. In paragraph 44 of the report it is stated that FDI into the United States is subject to reporting 
requirements under the International Investment and Trade in Services Act. We would be pleased to 
have more information on this act and its objectives,  more specifically about what the requirements are 
and what the potential consequences are of om itting to fulfill the reporting requirements. 
 ANSWER:  The International Investment and Trade in  Services Survey Act or IITSSA (90 Stat. 
2059, 22 U.S.C. 3101 et seq.) as am ended, authorizes the President or his designate (currently the 
Director of the Office of Management and Budget)  to order the collection of limited statistics on 
foreign direct and portfolio investment in the Unite d States and U.S. direct and portfolio investment 
abroad, as well as data on U.S. foreign trade in ser vices.  The Director of Office of Management and 
Budget has delegated to the U.S. Department of Commerce the responsibility to collect statistics on 
direct investment and U.S. foreign trade in service s, and to the U.S. Department of the Treasury the 
responsibility to collect portfolio investment statistics.  
When Congress passed IITSSA in 1976, it recognized that “international investment significantly 
affects the economies of the United States and other nations” and that improved investment data were 
needed to evaluate the possible effects on “nationa l security, commerce, employment, inflation, general 
welfare, and foreign policy of the United States.”  Congress further noted that U.S. services industries accounted for a substantial part of the U.S. labor force and gross national product and that trade in 
services “is an important issue for international negotiations.” 
 
The IITSSA requires reports of all foreign investment  in a U.S. business ente rprise in which a foreign 
person owns 10% or more of the voting interest, unl ess the investment is under $1 million, is under 200 
acres, or is real estate intended for personal u se.  The data reporting requirements are detailed at: 
 
http://www.osec.doc.gov/ogc/occic/invest.html
 
 The following website contains more detailed inform ation about the requirements as well as links to 
filing forms:  
http://www.bea.gov/bea/surveys/fdiusurv.htm
 WT/TPR/M/160/Add.1 
Page 158  
 
Failure to report under the Survey Act may result in civ il or criminal penalties.  Willful failure to report 
can result in fines up to $10,000, imprisonment of up to one year, or both.  However, legislation 
enacted after the IITSSA, such as the Paperwork Reducti on Act, has stressed that minimal costs are to 
be imposed on data respondents.  Congress has under scored that by collecting such data there is no 
intent to deter foreign investment in the United Stat es, U.S. investment abroad, or trade in services.  
 
[Switzerland] 
 
Paras. 44 and 45:  We note with satisfaction that no acquis ition has been blocked or divested under the 
Exon-Florio amendment and that during 2004 th ere were only two out of 50 cases (acquisitions, 
mergers, takeovers, etc..) where investigations were initiated by the CFIUS (Committee on Foreign 
Investment in the United States). Also, no action was taken as a result of these investigations. This is 
certainly of great importance for a sound and liberal FD I policy. However, the lack of a clear definition 
of "national security" and the wide discretion in th e interpretation of the concept of national security 
(by the President) may cause legitimate concerns as discussions in other international fora have shown. 
We welcome the fact that the CFIUS determines if a formal investigation under Exon-Florio is 
warranted and that, in practice, it initiates investiga tions only in a li mited number of cases. This creates 
- under these circumstances and to some extent - pr edictability for potential investors although the 
length of time taken to complete a review process (and in some cases also substantial restructuring of the proposed acquisition will be asked for as a conditi on for approval) could be quite costly for the 
parties involved. In addition, concerns about a pos sible abuse of the discretion mentioned above to 
disguise protectionism and discrimination of foreign investors cannot be overseen. In this latter respect, 
we would appreciate to know what the United Stat es have done so far in order to avoid such 
discriminatory and market distorting effects when  applying the discretion mentioned above.   
 More generally, could the U.S. authorities explain on the basis of what precise criteria decisions are 
being taken by the CFIUS to accept or block FDI? Co uld they also elaborate on what their concept of 
“national security” entails?  
 
ANSWER:  Avoiding Discriminatory and Market Distorting Effects 
 
CFIUS implements Exon-Florio in the context of an open U.S. investment policy and, therefore, 
attempts to provide a process that encourages forei gn direct investment in the United States while, at 
the same time, ensuring that legitimate national secur ity interests are protected.  The vast majority of 
transactions submitted to CFIUS proceed without initiati on of an investigation within thirty days of the 
initial notification, and since 1988, only a single tr ansaction subject to Exon-Florio has been blocked 
by the President.  Some companies seek to with draw their notifications voluntarily, which CFIUS 
generally permits them to do.  Vo luntary withdrawal often reflects a decision not to proceed with the 
notified transaction.  However, the vast majority of transactions submitted to CFIUS or reviewed by 
CFIUS on its own initiative are in fact carried out.  
Factors Considered under Exon-Florio 
 In implementing the Exon-Florio provision since its  enactment in 1988, CFIUS has addressed national 
security issues raised by foreign acquisitions of U.S. companies.  CFIUS thoroughly considers all 
information about a proposed transaction as it pertai ns to national security.  The Exon-Florio statute 
contains a list of factors, among others, that the President or his designee ( i.e., CFIUS) may consider 
(50 U.S.C. App. § 2170(f)) in evaluating the eff ects of a proposed transaction on national security.  
These are:  
 
 domestic production needed for project ed national defense requirements; 
          WT/TPR/M/160/Add.1 
Page 159 
 
 
 the capability and capacity of domestic industries to meet national defense 
requirements, including the availability of human resources, products, technology, materials, and other supplies and services; 
 
 the control of domestic industries and co mmercial activity by foreign citizens 
as it affects the capability and capacity of th e U.S. to meet the requirements of 
national security; 
 
 the potential effects of the transaction on the sales of military goods, 
equipment, or technology to a country that supports terrorism or proliferates 
missile technology or chemical  and biological weapons; and 
 
 the potential effects of the transaction on U.S. technological leadership in areas 
affecting U.S. national security. 
 
It is not possible to discuss in detail the factors taken into consideration by CFIUS in conducting a 
national security review under Exon-Florio beyond tho se listed in the Exon-Florio statute.  This is 
because the factors that are relevant may be different for each transaction. 
 
Definition of National Security 
 “National security” is not defined in the statute or  in the implementing regul ations.  As noted above, 
factors relevant to a review of the national secur ity implications of a proposed transaction will vary 
depending on the specifics of the transaction.  More over, a definition of the term “national security” 
would not necessarily result in guidance sufficiently de tailed to be helpful to the parties to a proposed 
transaction.  The statute lays out a broad set of factors that may be considered, but this is not an 
exhaustive list. Each transaction has unique char acteristics and agencies are not constrained in 
examining facets of a transaction that could impact national security.  
[Switzerland] 
 
Paras. 46 and 47 : The United States have - in addition to its  membership to WTO and OECD (Code of 
Liberalization and National Treatmen t Instrument) - concluded a numbe r of treaties relating to trade 
and investment, namely bilateral investment treati es containing pre-establishment elements (BIT), free 
trade agreements (e.g. Singapore, Chile), NAFTA an d trade and investment framework agreements. Do 
the U.S. authorities foresee to con tinue to follow a multi-layered approach to international investment 
arrangements, and if so, which will be its guiding principles? 
 
ANSWER:  The United States will continue to pursue a multi-level approach to the negotiation of 
disciplines on and market access for foreign investment.  Over the last three years, the United States 
has concluded negotiations on free-trade agreements (FTAs) with Chile, Singapore, five countries in 
Central America and the Dominican Republic, Austra lia, Morocco, Oman, Peru, and Colombia.  These 
FTAs all include investment chapters with high standa rds of investor protection and substantial market 
access opportunities for investors.  The United States plans to pursue similar disciplines and market 
access in the FTAs currently under negotiation with Th ailand and Panama and in the FTAs with Korea 
and Malaysia that we intend to begin negotiating later this year. 
 The U.S. government is also negotiating bilateral investment treaties (BITs) on the basis of a model 
text that is substantially similar to the investment  chapters of recent FTAs.  A BIT with Uruguay was 
concluded in 2005, and another BIT, w ith Pakistan, is under negotiation.  
 As in all of its investment negotiations since NAF TA, the United States plans to seek agreement with 
its current and prospective FTA and BIT negotiating partners on several core principles.  These include 
national and most-favored nation treatment for the full life-cycle of investment (i.e., from pre-WT/TPR/M/160/Add.1 
Page 160  
 
establishment to dissolution); coverage of all in vestment, direct and portfolio; the customary 
international law minimum standard of treatment; international law discip lines on expropriation and 
compensation for expropriation; unimpeded transfers, at market rates of exchange, into and out of a host country; disciplines on performance requirements; the ability to employ senior management of an 
investor’s choice, without regard to nationality; bi nding investor-state arbitration; a negative listing 
approach to market access (i.e., benefits apply to all investors and investments unless a reservation 
against a particular obligation is ta ken with respect to particular inv estors or investments in a party’s 
schedule of non-conforming measures); and transp arency of investment-related measures and 
procedures.  [Thailand]  
2.  Paragraph 44 of the report provides some info rmation about the Exon-Florio Amendment, which 
grants the President wide discretion in taking ac tion against FDI transactions by, among other things, 
suspending or prohibiting proposed transactions, as  well as divestment of a completed transaction. 
Please provide more details on this law, including a ll instances of implementation since its enforcement 
and information on how we can obtain a copy of the Amendment and all related laws and regulations.  
Also, how does the United States view this provi sion in light of the ongoing negotiations in the 
Working Party on GATS Rules on Article X: Em ergency Safeguard Measures, and how does the 
United States plan to address this issue in that context?   
ANSWER:  More information about the Exon-Florio  amendment (50 U.S.C. App 2170), related 
regulations, and implementation may be obtaine d through the official CFIUS website at  
http://www.ustreas.gov/offices/international-affairs/exon-florio/
. 
 There is no connection between GATS Article X (Eme rgency Safeguard Measures) and Exon-Florio. 
 
[Turkey] 
 
3.  The Secretariat report indicates that, with some  sector-specific restrictions, the United States 
maintains a policy of national treatment for foreign direct investment.  According to the Secretariat 
report, these restrictions to national treatment appl y with respect to certain official support programs 
and in a number of limited cases Foreign Direct Invest ment  is subject to reporting requirements or 
review to take account of national security concerns. Moreover; paragraph 7 of the report adds that the 
Omnibus Trade and Competitiveness Act of 1988 authorizes the President to restrict FDI that threatens national security. The Secretariat Report, paragraph 44 further  explains that under the “Exon-Florio 
amendment”, the president may take action with resp ect to foreign acquisitions, mergers or takeovers 
on the ground of “national security” and that  even the amendment does not define what the “national 
security” is, it sets out certain factors to be consid ered.  Could US outline what these certain factors are 
that might be considered in the President’s assessme nts for the any possible “national security” actions 
and how all these concerns affect the inflow of FDI to the US?  
ANSWER:  Factors Considered under Exon-Florio 
 
The Exon-Florio statute, section 721 of the Defe nse Production Act of 1950 (50 U.S.C. App. § 2170), 
lists certain factors, among others, that the Presi dent may consider in assessing the national security 
impact of a foreign acquisition of a U.S. company.  CFIUS is guided in its review by the factors listed 
in the Exon-Florio statute.  These factors are: 
 
 domestic production needed for project ed national defense requirements; 
 
 the capability and capacity of domestic industries to meet national defense 
requirements, including the availability of human resources, products, 
technology, materials, and other supplies and services;          WT/TPR/M/160/Add.1 
Page 161 
 
 
 the control of domestic industries and co mmercial activity by foreign citizens 
as it affects the capability and capacity of th e U.S. to meet the requirements of 
national security; 
 
 the potential effects of the transaction on the sales of military goods, 
equipment, or technology to a country that supports terrorism or proliferates 
missile technology or chemical  and biological weapons; and 
 
 the potential effects of the transaction on U.S. technological leadership in areas 
affecting U.S. national security. 
 
CFIUS also evaluates other issues, including: 
 
 the record of the acquiring foreign entit y as to compliance with U.S. laws and 
regulations; 
 
 the identity of the shareholders and others with influence over the foreign 
entity, including foreign governments; 
 
 the plans and intentions of the foreign acquirer for the U.S. target company; 
 
 the risk of diversion of sensitive technology of the U.S. target company; and 
 
 whether the U.S. company is the last or sole producer of products or provider 
of services important to the national security. 
 
If, at the end of the initial 30-day review period, CFIUS members still have national security concerns, 
CFIUS can initiate a 45-day investigation.  The CFIUS review is limited to the national security c oncerns that might arise with respect to a foreign 
acquisition of a U.S. company.  The vast majority of transactions notified to CFIUS or reviewed by CFIUS on its own initiative are carried out.  Sin ce 1988, only a single transaction subject to Exon-
Florio has been blocked by the President. 
 
[Turkey] 
 
8.  In the Secretariat report, under paragraph  47, it is stated that under the Middle East Free Trade Initiative (MEFTA), the US offered to negotiate new trade and investment framework agreements with 
countries in the region and to d eepen those already in place. 
 Could US Delegation give more informati on on their projection on this issue? 
 ANSWER:  The Middle East Free Trade Area (MEFTA ) initiative as currently envisioned seeks to 
engage step by step with countries in North Africa, the Levant and the Gulf in deepening our trade and 
investment relationship. Through Trade and Inv estment Framework Agreement discussions, bilateral 
FTA discussions and other forms of engagement th e United States is working to construct a region-
wide FTA by 2013. WT/TPR/M/160/Add.1 
Page 162  
 
III. TRADE POLICIES AND PRACTICES BY MEASURE  Overview
 
 
[Turkey]  
 9.  In the aftermath of unfortunate terrorist ac t of September 11, the concept of security has 
increasingly been playing an important role in th e US trade policy decision making process. In this 
regard, Secretariat report makes references to or contains quite amount of information on security –
related trade policy measures. 
 
For example, paragraph 3 of the Secretariat report me ntions that since its previous review the US has 
taken additional steps to incorporate security consid erations into its import procedures, notably by 
promulgating regulations in relation to the Tr ade Act of 2002 and the Bioterrorism Act. 
 
Could US Delegation make a general assessment on th e effect of the security related measures on the 
bilateral commercial relations of the US with her trading partners?  ANSWER:  In reference to the Bioterrorism Act, the U.S. Food and Drug Administration (FDA) 
has encouraged public comment at every stage of the bioterrorism regulati ons' development.  FDA 
developed and published proposed re gulations which were open to public comment from both domestic 
and foreign parties.  We also conducted numerous out reach meetings directed at foreign stakeholders, 
both within the United States to foreign embassy offi cials in Washington and via videoconference.  We 
received numerous comments from foreign government s, industries, and trade associations on both 
rules.  We reviewed each comment that was su bmitted during the comment period and developed the 
final rule, taking the comments into account.  In the case of the prior notice and registration regulations, 
we are allowing for several opportunities for interest ed individuals to provide comments even as we 
begin implementing the interim final rule to make su re that we minimized any negative effect on trade 
while ensuring our food safety and security.  We  have published a compliance policy guide that 
describes the U.S. strategy for maintaining an unint errupted flow of imports while improving their 
safety in accordance with the Public  Health Security and Bioterrorism Preparedness and Response Act 
of 2002 (Bioterrorism Act) requirements.  FDA includ ed an economic impact analysis in the proposed 
rules for affected entities to review and provide comm ent, and made revisions to the rules based on the 
comments we received to further minimize the impact to trade consistent with the requirements in the 
Act.  Both interim final rules include a regulatory impact analysis.  The United States is very sensitive to the impact th at U.S. Customs and Border Protection's (CBP) anti-
terrorism efforts have on the flow of trade and its resulting effect on the economies of the U.S. and our 
trading partners.  Due to the volume of containers  being shipped on a daily basis, the impact of 
terrorists using sea containers to conceal weapons of mass destruction would have an immediate and 
devastating impact on global trade and the global economy.  Greater cooperation and communication between government agencies responsible for home land security has provided a stronger defense 
against terrorist acts, and has not negatively imp acted the swift and effective transportation of 
merchandise.  The United States recognizes the poten tial for trade disruption and has taken every 
possible step to ensure that legitimate trade is not disrupted.  
[Cuba] 
 
“The Cuban delegation presents on this occasion a report regarding measures of an overtly 
extraterritorial nature that the Government of th e United States of America has instituted against our 
country from January 2004 to the present.  Such  measures intensify the economic, commercial and 
financial embargo that the U.S. Government has main tained against Cuba since 1962, in open defiance 
of the demand by the United Nations General Asse mbly – supported by the immense majority of its          WT/TPR/M/160/Add.1 
Page 163 
 
 
Member States – that it end this illegal policy.  Indeed, this policy confirms the United States of 
America’s most absolute disdai n for the United Nations, multilate ralism and international law. 
 In this context, our delegation wishes to ask the delegation of the United States of America, which 
defines itself as a champion of multilateral trade, to  explain the application of such measures when 
there is no doubt that all of them violate WTO rules and are contrary to the commitments that their 
country adopted as a member of this Organization.  
Report on US Measures Applied with regard to Cuba
 
-  Since the last Review of January 2004, heretofo re, the government of the United States of America 
(USA) has not only maintained, but also strengthened and intensified the prohibitions and restrictions 
of the economic, commercial and fina ncial embargo that it has unilaterally imposed on Cuba for more 
than forty years.  Said embargo has caused  immeasurable harm to Cuba’s economy, its trade in goods 
and services , and to this nation’s people. 
 
-  Based on conservative, preliminary calculations , the direct economic damage to Cuba from the 
embargo’s application exceeds $US82 billion, an aver age of $US1.782 billion annually.  In 2004, this 
amount exceeded $US2.764 billion and the direct e ffect on foreign trade alone reached $US822.6 
million.   -  Cuba is the only Member of the WTO subject to sanctions of such a harmful, comprehensive, and 
complex nature, whose extraterritorial scope affect s other WTO members in their trade relations both 
with Cuba, as well as with the USA.  Countless ex amples have been included in the report that Cuba 
presents to the United Nations Secretary-General ea ch year, and which led the United Nations General 
Assembly, with the almost unani mous support of its Member States (182), to demand in 2005 for the 
fourteenth consecutive time an end to this irrationa l policy that is inconsistent with the principles 
advocated by the WTO, the United Nations, and other international bodies. 
 -  As the WTO Secretariat stat es in its report (WT/TPR/S/160), during the review period, the USA 
reduced or relaxed restrictions on trade with about  a dozen countries (several in Europe, Iraq and 
Libya); however, in the case of Cuba it has, to the co ntrary, intensified them even more.  The notorious 
and reprehensible Torricelli (1991) and Helms-Burton (1996) laws, along with more than a dozen other 
laws that form the basis of the embargo, continue to be in force. 
 -  In June 2004, the US government put new Depart ment of the Treasury OFAC (Office of Foreign 
Assets Control, charged with administering econom ic and commercial sancti ons) regulations into 
effect, and established more rigorous  Department of Commerce standard s and controls with regard to 
gift parcels and the baggage of travelers going from the USA to Cuba.  Such actions are part of the 
application of measures against Cuba announced by President Bush on May 6, 2004, in keeping with 
the recommendations of the so-called Commission for Assistance to a Free Cuba.  -  The Department of the Treasury regulations are aimed at tightening restrictions for travel from the USA to Cuba, both for Americans and for Cubans who live there, as well as for other travel-related 
aspects and remittances.  An effort is thus being made to reduce revenues that Cuba would otherwise 
receive from tourism and remittances, with the r esulting effects on the Cuban economy in general and 
on trade in services in particular, which in recent year s has become an important source of financing for 
Cuban economic development.  
-  Tightened travel restrictions have come about as the result of eliminating categories that until that 
time were permitted, the requirement of having to ob tain a specific license for other categories that 
previously required a general license, the reduction in  the amount authorized travelers are permitted to 
spend in Cuba, and the prohibition on importing Cuban pr oducts by visitors who travel to Cuba (except 
for a very specific few that qualify as informational or cultural materials).  In this regard, the following 
are specific examples: WT/TPR/M/160/Add.1 
Page 164  
 
1. - The Fully-Hosted Travel categor y (travel by invitation, at no cost to the traveler) has been 
eliminated.  Said category had been accepted since 1982, without being considered a violation of 
OFAC regulations for more than two decades.  Ther efore, American citizens and other persons subject 
to the jurisdiction of the United States cannot travel to Cuba as guests of the government of Cuba or of 
any Cuban national (or of a thir d-country national), unless they obtain a specific license from OFAC. 
 
The United States has thus made a new interpretation,  according to which even when travelers to, from, 
or in Cuba accept goods and services at absolutely no cost to them, they nevertheless engage in 
prohibited activities in which Cuba or a Cuban nati onal have an interest, such as the payment of 
expenses (transactions) related to travel (a irport taxes, mooring fees, and others). 
 
This same regulation also prohibits making any payment for travel to Cuba to a third-country air carrier 
in which Cuba has an interest, unless such travel is carried out under a specific or general license. 
 2. - New travel restrictions on visiting relatives in Cuba have been established.   In addition to 
restricting the category of relatives (Cuban nationals) who can be visited in Cuba (to include only close 
family such as a spouse, children, grandchildren, parents, grandparents or siblings ), the new regulations 
limit the number of visits to one every three years,  require a specific license and are for only a two-
week stay (instead of one visit a year with no sti pulated duration, as applied previously).  Additional 
visits will not be authorized, and there is no prov ision for issuing licenses in emergency situations.  
 
Previously, these visits were carried out with a general or automatic license. 
 In the case of visits from the USA to non-Cuban nati onals who are in Cuba with a license from the US 
government (such as university students), a series of requirements for issuing a specific license for such travelers has been established.  Emergency situations may give rise to a trip, with the knowledge of the 
US Interests Section in Havana and in consultation with the Department of State prior to the issuance 
of said specific license.  
3. – Travel to Cuba to participate in some prof essional events has been limited for citizens under 
US jurisdiction.  Specifically , the general (or automatic) license authorizing transactions regarding 
travel to Cuba for some kinds of professional resear ch will not be issued for transactions related to 
conferences or professional meetings in Cuba, whic h will not be categorized as professional research.  
In this case, the researcher must request a specific license from OFAC. 
 
4. – New travel requirements to participate in  educational activities in Cuba have been 
established , by requiring that such travelers obtain a specific license for these activities.  The 
possibility of obtaining said license has been restrict ed to only specific institutions and eliminated in 
the case of secondary education institutions.  The effective period of said license has been reduced 
from two years to one, and for some activities, the stay in Cuba cannot be less than ten weeks. 
 
5. -  Travel to attend sports competitions or ganized by international federations has been 
restricted, by eliminating  general licenses to participate in th ese competitions and requiring specific 
licenses that are requested and analyzed on a case- by-case basis.  These new regulations do away with 
the possibility of authorizing participation in worksh ops and clinics, may they be sports-related or not. 
 6. - The amount authorized travelers can spend in Cuba has been limited  in the case of family 
visits to Cuba.  The daily expenditure amount author ized has been reduced to only $50 to cover travel-
related expenses, plus an add itional $50 per trip for domestic tr ansportation expenses in Cuba. 
Previously, this amount was equal to $US167 per diem  established by the Department of State for its 
employees’ travel.  OFAC may, at its discretion, issue specific licenses to  authorize greater expenditures.  As a policy, this 
agency is not inclined to use this pow er frequently, rather quite the contrary.          WT/TPR/M/160/Add.1 
Page 165 
 
 
7. – The Import of Cuban products (or goods) by visitors has been eliminated , doing away with the 
possibility that travelers authorized to visit Cuba acquire and take with them, for personal use on their 
return trip, Cuban goods for a value of up to $U S100, as had been set forth previously.  The only 
exception to such rule is for products that are classified as info rmational materials. 
 
-  In October 2004, the US Department of St ate announced the establishment of a Cuban Assets 
Targeting Group to investigate and put a stop to ne w channels used to move currency to and from 
Cuba.  The aforementioned Department specifically  mentioned Cuba’s tour ism industry, which has 
become a principal source of revenue in Cuba.  Undoubtedly, this measure highlights the tightening grip of the embargo that has characterized the two-year period since the last Review. 
 
- With respect to the restrictions on remittanc es sent from the USA to Cuban nationals, the 
OFAC regulations stipulate the following: 
 
1. - Remittances to Relatives  – The regulations authorizing a general license for any person (18 years 
or older) subject to US jurisdiction to send $US300 per quarter to any household of a Cuban national 
have been changed such that, under the general license, a remittance may only [be made] to the 
sender’s immediate family members, i.e.—solely a spouse, children, grandchildren, parents, 
grandparents or siblings.  Such regulations also specify that remittances ca nnot be made to employees of the Cuban government 
or of the Communist Party of Cuba.  Furthermore,  the total amount of quarterly remittances that an 
authorized traveler can bring with him or he r has been reduced from US$3,000 to just US$300. 
 
2. – Remittances from US Non-governmental Organizations to Groups/Organizations and their 
Individual Members in Cuba .  The specific license policy fo r authorizing remittances from 
government organizations, non-governme ntal organizations and individuals subject to US jurisdiction 
to the so-called pro-democracy groups, independent  civil society, religious organizations, or to 
individual members of these groups or organizati ons in Cuba has been more clearly defined. 
 In contrast with the dispositions for family remitta nces, in this case no limits have been set on the 
quantity and frequency of such rem ittances, which demonstrates the overtly political (not commercial) 
objective of these regulations. 
 3. – Transactions related to Remittan ces Made by Banks and Other Institutions .  The general 
(automatic) license authorizing such institutions to tr ansfer quarterly family remittances or remittances 
earmarked to pay expenses to emigrate from Cuba  has been eliminated. According to the new 
regulations, these institutions have to request a nd obtain a specific license to offer this service. 
 In the case of other transactions not related to rem ittances, a general license c ontinues to apply to the 
institutions involved in them.  -  In addition to tightening restrictions on tr avel, remittances, gift parcels and baggage, a new 
interpretation to enforce the regulations of the Trad e Sanctions Reform and Export Enhancement Act of 
2000 took place in February 2005, with implementation thereof in March of that year.  Such Act refers 
to sales to Cuba of agricultural and health-related products, and specifically to payments made by the 
Cuban business responsible for these transactions sin ce November 2001.  That reinterpretation of the 
requirements for the method of payment to be cash in advance
 entails additional costs and risks to 
Cuba in a context of prolonged and permanent po litical hostility on the part of the US government 
toward Cuba, and likewise affects that country’s exporters.  -  This new restriction on payments is in addition to those already known, such as the requirement that 
American exporters of agricultura l products request licenses to trav el to Cuba and to export their 
products, the absence of direct banking relations be tween the two countries, the prohibition on boats WT/TPR/M/160/Add.1 
Page 166  
 
that participate in the transportation of those produc ts from the US from loading or unloading freight in 
Cuba for other destinations, and the prohibition on Cuban boats from participating in the loading or 
unloading.  -  As regards intellectual property, month after m onth during four years of Dispute Settlement Body 
(DSB) sessions, the issue of the constant non-fulfill ment of the Body’s recommendations as to Section 
211 of the 1998 Omnibus Appropriations Act with rega rd to the registration, renewal and compliance 
in the USA of trademarks or service marks and trade names related to nationalized assets in Cuba has been reviewed.  As the Secretar iat’s Report says, since July 1999, the European Union has challenged 
this legislation before the WTO for violating the obligations of national treatment and MFN treatment 
assumed by the US in the framework of the TRIPs Agreement.  This reiterated non-compliance on the 
part of the USA discredits it with this failure to recognize the WTO and its principles and rules while it 
also sets a very negative precedent for the credib ility and effectiveness of its dispute settlement 
mechanism.   
-  As is already known, the USA has traditionally ig nored the queries and protests that Cuba presents in 
this exercise on its economic, commercial and financia l embargo.  Nevertheless, Cuba feels it is its 
right and its moral obligation to once again demand a response from the USA to the only coherent and 
rational question in this case:  When will the US government, acting in keeping with what it preaches 
about free trade and respect for the rules and princi ples that apply thereto, change this policy of 
embargo and eliminate all the restrictions that it has placed on Cuba and on other countries through its 
implementation?  
 -  The reiterated demand for a response to this ques tion is based on the numerous direct effects on the 
trade in goods and services and on intellectual propert y, which have been referred from the outset and 
the most recent of which have been explained in detail.  This time, Cuba awaits a reply from the 
representatives of the USA." 
 ANSWER:  The embargo is only one part of the Unite d States' multifaceted Cuba policy, intended 
to bring about a peaceful transition to democracy on  the island.  The United States maintains that the 
embargo is a bilateral issue that has no place in multilateral fora.  The embargo is not a blockade; 
embargo regulations apply only to persons or  entities subject to U.S. jurisdiction.  
 
With regard to the DSB's recommendations in the section 211 case, the United States will continue to 
work with the other party to that dispute in seeking to resolve it in accordance  with the rules of this 
Body.  Measures Directly Affecting Imports  
Customs Procedures and Rules of Origin
 
 
[Argentina] 
 
5. On page 35, paragraph 29 , the report mentions that since March 2005 new security guidelines have 
gone into effect for importers within the frame work of the Customs Trade Partnership against 
Terrorism (C-TPAT).  In this regard, the report mentions that C-TPAT participants benefit from a 
lesser frequency of inspection of their cargo by CBP [Customs and Border Protection] and that in addition this partnership was created by Executive Or der, but that no regulations have been published 
for its operation.  
 
Question: What are the reason and the basis upon which C-TPAT participants obtain this benefit?  
And, further, do authorities anticipate publishing so me kind of regulations to make this mechanism 
more transparent?  
          WT/TPR/M/160/Add.1 
Page 167 
 
 
ANSWER:  The Customs-Trade Partnership Against Terrorism program is a voluntary, incentives-
based security program through which members of the U.S. trade community commit to strengthen 
their international supply chains, from point of stuffing, through the shipment of the cargo to the United States.  In exchange for this enhanced supply chain security, shipments from C-TPAT importers 
are considered lower risk for security concerns, and are afforded fewer cargo inspections.  The program 
is voluntary, not mandatory, and as such is not  governed by U.S. government regulations. 
 Eligibility for the program is gauged against the cl early defined minimum security criteria for each 
enrollment sector.  These baseline security criteria are published on the CBP website.  An applicant 
must complete a comprehensive security self-assessme nt where they review their internal security 
practices against these criteria.  Measures are outlined  to CBP, and deficiencies are addressed.  Once 
CBP determines that the applicant has demonstrat ed that they are meeting the minimum security 
criteria, the member is accepted into the program a nd benefits are afforded.  Once accepted into the 
program, specially trained CBP Supply Chain Security  Specialists conduct an onsite validation of the 
submitted profile to verify the accuracy of the mate rials provided.  This validation includes a foreign 
site visit back to the point of stuffing.  Members found to have weak supply chain security as a result of 
the validation may be suspended or removed from the program.  
 
[Argentina] 
 
6. On page 37, paragraph 34
, mention is made that the United States applies preferential rules of origin 
under several bilateral free trade agreements signed af ter 1997 that have yet to be notified to the WTO 
(October 2005). For the sake of transparency:   
Question:  When will the United States notify the WT O?  Are these agreements w ithin the framework of 
general agreement negotiations or are they related onl y to rules of origin? Do they include aspects 
related to labeling and sanitary measures?  Are the preferential agreements on rules of origin 
compatible with the rules of the WTO? 
 
ANSWER: The United States is in the process of notifying all of its free trade agreements signed 
after 1997 that have entered into force as of March 1,  2006.  The rules of origin chapters and product-
specific rules of origin were concluded within th e framework of comprehensive free trade agreement 
negotiations.  The rules of origin chapters of thes e agreements do not deal with country of origin 
labeling or sanitary measures.  All United States preferential agreements are fully consistent and compatible with the rules of the WTO.  
[Argentina] 
 7. On page 37, paragraph 37
, the report mentions that, in general,  the non-preferential rules of origin 
apply the criteria of "wholly obtained" and "substan tial transformation," but that agencies outside of 
CBP (Customs and Border Protection) may adapt and in terpret those criteria in greater detail to adjust 
them to the needs and purposes of the specific cont ext in which non-preferential rules are applied. 
 Question: Could you provide more information abou t what those criteria are and about the specific 
needs and contexts to which they refer?  
ANSWER:  In the context of an anti-dumping and c ountervailing duty order, the Department of 
Commerce may develop different criteria and reach diffe rent determinations (in relation to the scope of 
the antidumping/countervailing duty order) than what would be applied by the CBP for other origin 
determination purposes.  
 WT/TPR/M/160/Add.1 
Page 168  
 
[Brazil] 
 
8.  “Appendix Table”, page 137
: At NAFTA trade, Article 401 (originating goods), letter D), is stated 
that goods can be obtained or produced in the territory of one or more  of the Parties.  We understand 
that it means full cumulation. Why you call this m echanism a bilateral cumulation instead of full 
cumulation in the box located on page 137 (same line of NAFTA)? 
 
ANSWER:  The reference in the table to bilateral is  an error, NAFTA allo ws for full cumulation 
among all three NAFTA Parties. 
 
[Brazil] 
 
9.  We would like to know the meaning of the ma ximum range of 15% settled for bilateral cumulation 
in some free trade agreements. Actua lly in order to clarify this clause we would really appreciate if you 
could provide us an example. 
 
ANSWER:  In the U.S. – Israel FTA and the U.S. –Jordan FTA, for the purpose of satisfying the 35 
percent domestic content requirement, the costs or value of materials from one Party which are used in the production of a good in the other Party, may be counted up to 15 percent of the appraised value of 
the final good.  [Brazil]  
10.  How the USA customs are sure that all require ments to meet if full cu mulation are accomplished? 
Which are the main steps to be sure about this?  
ANSWER:  See Response to Brazil #11 below. 
 
[Brazil] 
 
11.  How the USA customs are sure that all requireme nts to meet if "de minimis" rules for textiles are 
accomplished? Which are the main steps to be sure if  HS 50-63 total weight of fibers or yarns doesn’t 
exceed 7% of total weight? 
 ANSWER:  This rule permits up to 7% (in some ag reements, 10% in other agreements) foreign 
fibers or yarns in an originating good.  Originating textile goods are us ually either fiber forward or yarn 
forward.  When CBP conducts a veri fication on a textile product, it ve rifies that the good has met either 
the fiber forward or yarn forward rule of origin by reviewing documentation such as raw material 
invoices, purchase orders, bills of lading, and other production records.  If the production records indicate the use of foreign fibers or yarns in an  originating good, the documentation identifying the 
fiber content of yarns or fabrics usually indicates th e percentage of each fiber by weight.  Furthermore, 
the foreign fibers or yarns are usually of a fiber cont ent different than the rest of the yarns and can be 
isolated by fiber content testing by CBP laborat ories.  A CBP import specialist would review the 
documentation received during the verification, ascerta in if laboratory testing was necessary, and use 
those tools to ascertain the percentage of foreign fibe rs or yarns present in an originating textile good.   
 
[Canada] 
 
Part III. Trade Policies and Practices by Measu re, (2) Measures Directly Affecting Imports, 
(i) Customs procedures and rules of Origin, (e) Rules of Origin, Paragraph 35:  
 
The report by the Secretariat indicates that non-pr eferential rules of origin  may be used for anti-
dumping and countervailing measures.  
          WT/TPR/M/160/Add.1 
Page 169 
 
 
4. Can the United States clarify the circumstanc es under which rules of origin may be used for 
such measures?  In particular, Canada is interested  in U.S. views on whether rules of origin may be 
applied for investigative or administrative purposes,  i.e., whether they may used to determine the 
imports under consideration in the period of investiga tion or for use in enforcing an order or both.  
Further, would such origin rules be  used as an absolute standard against which imports may be assessed 
regarding their origin, or as a guide, or as one cr iterion of many for making such a determination? 
 ANSWER:  The general standards of substantial tr ansformation may be adapted and further 
interpreted by agencies other than CBP to fit the needs and purposes of the particular context in which 
non-preferential rules are applied.  For example, in  determining whether certain merchandise originates 
in a country subject to an antidumping or counter vailing duty order, the Department of Commerce may 
develop different criteria and reach different de terminations (in relation to the scope of the 
antidumping/countervailing duty order) than what w ould be applied by the CBP for other origin 
determination purposes.  [Canada]  Part III. Trade Policies and Practices by Measu re, (2) Measures Directly Affecting Imports, 
(i) Customs Procedures and rules of origin, (e) Rules of Origin, Paragraph 37-39:   
5. Has the U.S. removed the discrepancy between  its country of origin marking rules for non-
originating steel flanges from NAFTA countries and those flanges processed in the US from imported 
forgings from non-NAFTA countries?  
 
ANSWER:  The United States is aware of the discrep ancy with regard to the marking rules 
applicable to flanges.  Appropriate amendments to  the 19 CFR Part 102 Regulation have been prepared 
and are under review. 
 
[Chile] 
 
Customs Procedures
 
2.  With reference to paragraph 17 of the re port, has the economic impact of the regulations 
promulgated under the Trade Act of 2002 been measured? 
 ANSWER:  The economic impact of the regulations rela ted to the advanced electronic transmission 
of cargo information (a requirement of the Trade Ac t of 2002) has been analyzed by U.S. Customs and 
Border Protection in the Regulatory Impact Analysis  of the Advance Electronic Filing Rule, which can 
be found at http://www.cbp.gov/xp/cgov/impor t/communications_to_trade/advance_info/. 
 Electronic Transmission of Cargo Information
 
 1.  With regard to paragraph 19 of the report, wh at are the criteria and methodology used for assigning 
a level of risk to each shipment? 
 
ANSWER:  The Automated Targeting System (ATS) is  CBP's primary decision support tool for 
vetting risks for cargo.  ATS utilizes various algorithms to vet relative risks for shipments for different 
issues based on historical data and enforcement r ecords.  Algorithms are designed to detect unusual 
shipments as well as shipments that match high-risk  parameters.  Risks are also addressed utilizing 
targeting criteria of the Automated Commercial System  (ACS) that targets specific shipments for exam 
that match specified criteria.  
  WT/TPR/M/160/Add.1 
Page 170  
 
2.  Are there public and/or private authorities to ass ess and analyze the overall changes that have been 
introduced in the last 4 years, with regard to  customs procedures, as well as cargo and container 
security?  ANSWER:  Numerous U.S. Government agencies and private-sector representatives have analyzed 
the changes to U.S. customs laws and regulations .  These regulatory and private-sector advisory 
processes provide important contributions to the de velopment and implementati on of border initiatives. 
 
[Chile] 
 
(i)(a)  Customs Procedures 
As noted in paragraph 15 of the report regard ing the introduction of the Automated Commercial 
Environment (ACE), has any estimate and/or assessment been done of the benefits that ACE would offer when it is fully operational in 2009?  
 
ANSWER:  The Automated Commercial Environment (ACE) is the new U.S. trade processing 
system designed to consolidate and automate bor der processing to significantly enhance border security 
and foster U.S. economic security through lawful international trade and travel.  The CBP automation transition to account-based proc essing began in October 2003 with the launch of 
the ACE Secure Data Portal.  This customized We b page provides a single on-line access point to many 
legacy CBP systems and enables CBP employees and trade entities such as importers, the ability to 
view account data.  The current business process links the filing of an “entr y” with the payment of duty. With ACE, CBP is 
moving away from paying duties and fees one entry at a time to the payment of entries on a periodic 
basis.  In July 2004, CBP implemented the ACE monthly statement capability, which enabled CBP, for 
the first time, to collect payment of duties and fees monthly, and pr ovide monthly account statements.  
The ACE monthly statement and payment capability is  the keystone of a transition from a transaction-
based collection process to an integrated, account-based system. 
 The promise of ACE also includes what will be an unprecedented integration of data and 
communication abilities among CBP, the trade community , and other federal agencies with trade 
responsibilities.  CBP continues to develop and deploy ACE capabilities, automating time-consuming 
and labor-intensive transactions, a nd moving goods through the ports, onto markets faster, and at lower 
cost.  In addition, it will simplify dealings between  CBP, the trade community, and other government 
agencies.  Among other capabilities, CBP personnel w ill have automated tools and better information 
to decide – before a shipment reaches U.S. borders  – what cargo should be targeted because it poses a 
potential risk, and what cargo should be e xpedited because it complies with U.S. laws. 
 
[Chinese Taipei] 
 
Question 4 (page 25, paragraph 14)  As indicated in the report, users will be able to  interface not only with the Customs and Border 
Protection Agency (CBP), but also with other government agencies involved in import (and export) procedures through the Automated Commercial Environment (ACE).   We are interested in knowing more about the ACE, as follows: 
 
a)  How do users interface with other government agencies involved in import (and export) procedures? 
 
ANSWER:  Use of ACE is being expanded to othe r U.S. government agencies through the 
International Trade Data System.  As part of identifying requirements for ACE, CBP is conducting          WT/TPR/M/160/Add.1 
Page 171 
 
 
workshops with these agencies to he lp ensure ACE has the needed cap abilities, and that they support 
agency business processes and interagency coordination.   To facilitate the single window for the trade, 
agency “integration points” with ACE are being built into ACE the ACE development schedule, and 
related capabilities will become operational in conjunc tion with the fielding of ACE between now and 
the end of development in mid-2010.  
 
b)  What are the other government ag encies with which users can interface? 
 ANSWER:  The Federal agencies that currently participate in ACE include: 
 
HHS – Food and Drug Administration (FDA), Departme nt of Transportation (DOT) – Federal Motor 
Carrier Safety Administration (FMCSA), U.S. Depart ment of Agriculture (USDA) – Animal and Plant 
Health Inspection Service (APHIS), Federal Co mmunications Commission (FCC), U.S. International 
Trade Commission (ITC), DOT – Maritime Administ ration (MARAD), Department of Defense (DOD) 
– US Army Corps of Engineers (USACE), Depart ment of Commerce (DOC) – International Trade 
Administration and Bureau of Census (Census) , USDA – Agricultural Marketing Service (AMS), 
Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Bureau of Labor Statistics (BLS), DOT 
– Bureau of Transportation Statistics (BTS), En vironmental Protection Agency (EPA), Federal 
Maritime Commission (FMC), Food Safety Inspection Service (FSIS), DOC – Foreign Trade Zones 
Board, DOT – National Highway Traffic Safety Administration (NHTSA), Office of Foreign Assets 
Control (OFAC)U.S. Fish and Wildlife Service, DOD – U.S. Transportation Command, DOT – Federal 
Aviation Administration (FAA)Transportation Security  Administration (TSA)Information Analysis and 
Infrastructure Protection, DHS, Homeland Security  Advanced Research Projects Agency, DHS – 
Alcohol and Tobacco Tax and Trade Bureau (TTB), DOC – NOAA / National Marine Fisheries 
Service, Office for Law Enforcement – Internal Revenue Service.  c)  What are the differences between ACE and the Automated Commercial System currently used by 
CBP to process imports?  
 ANSWER:  The primary difference between ACE and ACS is in the efficiency and effectiveness of 
transmitting, accessing, analyzing, and sharing trad e data.  ACE is providi ng significantly improved, 
automated technologies that will enable CBP officers a nd other users to do their jobs better and faster, 
with benefits for both the government and the trade community. 
 
ACE consolidates seven different cargo processing syst ems – including ACS – into a single Secure 
Data Portal; augments CBP screening and targe ting capabilities; and provides a single, Web-based 
window for the collection and use of trade data.  ACE will enable CBP to  make decisions on cargo 
admittance early – before and at the border – and be tter detect, deter, and mitigate terrorist and other 
threats, while facilitating the movement of lawful tr ade.  Both government and trade entities will have a 
national account view of their trade activity, vice a port-by-port or transaction-by-transaction view.  Among other benefits are reduced paper processing;  manpower savings; simplif ied and expedited cargo 
release; and a quicker time-to-market cycle for goods .  ACE ultimately will enable CBP and other U.S. 
government agencies with border enforcement res ponsibilities to enhance their ability to access a large 
volume of information; analyze data and turn it into useful information, and share information quickly.  
 
[Chinese Taipei] 
 
Question 5 (page 26, paragraph 21) 
Importers may request that their names and addresses (and those of their shippers) appearing in vessel 
cargo declarations be treated as confidential.  To this  end, importers must file a certification with the 
CBP.  Certifications are valid for two years and can  be renewed.  The press may copy but not publish 
certified information.  WT/TPR/M/160/Add.1 
Page 172  
 
Since importer information is usually viewed as confid ential in the context of trade practices, could the 
US please explain the purpose of allowing the press to copy but not publish the confidential, certified 
information and under what circumstances the press would be allowed by the CBP to do so? 
 ANSWER:  Technically, the statement that "(T)he press may copy but not publish certified 
information" is not correct.  Title 19, United St ates Code (U.S.C.), section 1431(c) provides for the 
public disclosure of certain manifest informati on and in subsection (3) permits CBP to adopt 
regulations to establish procedures both for the dissemi nation of this information and for the protection 
of other non-public information also contained on the manifest.  19 CFR 103.31 contains procedures 
for importers, consignees, or U.S. shippers to requ est confidential treatment of their name and address 
from the manifest information that is subject to discl osure.  The regulation restricts the press to copying 
information that it may publish and clearly states th at the press may not publish information which has 
been granted confidential treatment.  Lastly, the press may lose their ability to examine and copy from 
manifests if they are found to have made "any impr oper use of any information or data obtained from 
such manifests." 
 
[Colombia] 
 
1.  In the previous review, we were told that  the Automated Commercial System (ACS) would be 
replaced by the Automated Commercial Environment (ACE).  The Secretariat’s report regarding this review, subparagraph a), Title I), paragraphs 12 to 17, states that progress had been made in the 
transition from one system to another, reflected in the creation of 400 accounts and the modernization 
of Port Blaine in Washington.   a) In light of this, Colombia is interested in l earning about the experience with the new ACE system 
and scheduling for the land, marine and air por ts to be modernized over the short term. 
 
ANSWER:  ACE is being cooperatively developed w ith other federal agencies and the trade 
community to provide advance electronic trade information, risk-based targeting, and account 
management of trade entities.  Initial ACE capabiliti es have been fielded, including electronic truck 
manifest capabilities that are now operational at 39 land border ports.  This capability provides CBP Officers at our ports with a consolidated view of information on the cargo, truck, and driver crossing 
our borders, enabling the officers to make faster, bette r, earlier decisions on authorizing trucks to cross 
our borders.  CBP is scheduled to complete the de ployment of automated truck manifest and supporting 
capabilities by early 2007.  CBP has also begun planning for the development of:  (1) entry summary, accounts, and revenue capabilities; and (2) automated ma nifest for all modes of transportation.  ACE 
development is scheduled to be completed in mid-2010. 
 
b) In the ACE System design, are the World Customs Organization (WCO) guidelines and recommendations used in particular regarding the customs data model? 
 ANSWER:  Automated Commercial Environment (ACE)/ International Trade Data System data 
elements identified before 2005 are harmonized w ith the WCO model.  Data harmonization is an 
ongoing process that is part of ACE development and ITDS activities.  To this extent, ACE is 
consistent with, and supports the WCO Framework, the WCO Cust oms Data model, and corresponding 
UN/EDIFACT messages.  c) Is there a fee for user access to the ACE System ?  What are the requirements to set up an account? 
 
ANSWER:  There is no fee for becoming an ACE account; however each account must have 
Internet access.  To become an ACE account, an ACE application mu st be completed and mailed with 
the required information.  The applica tion can be downloaded and printed from 
www.cbp.gov/modernization
.  Applicants must ensure that the fo rm is complete and that pages 1, 8, 
and 11, are signed.  Appl ications must be mailed to the following address:          WT/TPR/M/160/Add.1 
Page 173 
 
 
ACE Secure Data Portal - ACE Application U.S. Customs and Border Protection Attn: Beauregard Building, Room A-314-3 7681 Boston Boulevard Springfield, VA 22153 
 
For questions on applying to ACE, e-mail CBP at ACENow@dhs.gov
. 
 
[Colombia]  
3.  Concerning subparagraph c) on the Container Security Initiative (CSI): 
 a) Colombia is interested in learning the requirements for obtaining the status of CSI port.    
ANSWER: To be eligible for the expansion phase of CS I, a candidate nation must commit to the 
following minimum standards: 
1. The Customs Administration must be able to in spect cargo originating, transiting, exiting, or 
being transshipped through a country.  NII equipm ent (including equipment with gamma or X-ray 
imaging capabilities) and radiation detection equipment must be available and utilized for conducting 
such inspections.  This equipment is necessary in  order to meet the objective of quickly screening 
containers without disrupting the flow of legitimate trade. 
2. The seaport must have regular, direct, and subs tantial container traffic to ports in the 
United States. 
3. Commit to establishing a risk management system to identify potentially high-risk containers, 
and automating that system. This system should incl ude a mechanism for validating threat assessments 
and targeting decisions and identifying best practices. 
4. Commit to sharing critical data, intelligence, and risk management information with the 
United States Customs and Border Protection in orde r to do collaborative targeting, and developing an 
automated mechanism for these exchanges. 
5. Conduct a thorough port assessment to ascertain vulnerable links in a port’s infrastructure and 
commit to resolving those vulnerabilities.  
6. Commit to maintaining integrity programs to prevent lapses in employee integrity and to 
identify and combat breaches in integrity. 
 
b) Is there an assistance program for developing countries?  Analysis of countries with CSI ports 
reveals that although the number has increased sinc e the previous review in 2004, to date only 35 
countries have this status.  
 
ANSWER:  There is no specific assistance program within CSI for developing countries.  
 c) Paragraph 27 states that cargo intended for the United  States that has already been inspected in a CSI 
port is not inspected upon arrival, unless there is new information that changes the original risk 
analysis.  Can you provide statistics that reflect the percentage of cargo inspected upon arrival in the 
United States despite coming from a CSI port?  ANSWER:  Statistics on cargo just from CSI ports are not available. 
 WT/TPR/M/160/Add.1 
Page 174  
 
[Colombia] 
 
2.  Paragraphs 18 to 24, subpara graph b) Title I), referring to the electronic transmission of cargo 
information, states that the regulations of the Fore ign Trade Act of 2002 have been in effect since 
January 2004.  The Automated Targeting System (ATS) is also mentioned as one of the main 
instruments used by the Customs and Border Protec tion Office (CBP) for analysis of information and 
cargo risk.  a) What other instruments is CBP using for this purpose?  
ANSWER: The Automated Targeting System (ATS) is CBP's primary tool vetting risks for cargo. 
Risks are also addressed utilizing targeting criteria of the Automated Commercial System (ACS).  ACS 
is an older, legacy system and the system of record  for ATS (i.e. source system), but its criteria provide 
an effective targeting mechanism.  An effective t ool for macro-analysis of trade information is the 
Trend analysis and Analytical selectivity Program (TAP).  This system provides the capability to 
generate and analyze profiles of trade data (entry summary) and provides the facility to analyze 
changes in their patterns over time.  CBP is  also engaged under its  Automated Commercial 
Environment (ACE) Project in research and design efforts to develop new methods of targeting and 
analysi s. 
 b) Is it possible to obtain additional information on the ATS?  Is the requirement in full effect to send 
automated manifests instead of paper communi cations?  If not, when does it take effect? 
 ANSWER: ATS utilizes various targeting algorithms to ve t relative risks for shipments based on 
historical data and enforcement records.  Automa ted manifesting requirements under the Trade Act are 
now fully implemented. 
 
c) It is stated that applications of the Foreign Tr ade Act regulation shall entail “substantial” costs for air 
carriers.  Is there an estimate of this increase?  Fo r land and marine transport, it is said that the extra 
costs are insignificant, while the driv ers are already using this system.  How has this system been used 
by this type of carrier and how were the costs kept down? 
 
ANSWER:  CBP conducted and published the Trade Act Impact Analysis, which can be found on 
its website at:  http://www.cbp.gov/xp/cgov /import/communications_to_trade/advance_info/ 
 The document is entitled "Regulatory Impact Analysis (RIA) - Advance Electronic Filing Rule".  [Costa Rica] 
 
1.  Paragraph 16 states that importers and broke rs using the Automated Commercial Environment 
(ACE) can make payments of duties and fees to Customs and Border Protection (CBP) on a monthly 
rather than shipment-by-shipment basis.  Pleas e describe the mechanism by which this monthly 
payment is made, the requirements for both importers  as well as customs brokers in this regard, and 
what controls exist for this purpose. 
 ANSWER:  Periodic Monthly payment is a feature of the Automated Commercial Environment 
(ACE) that simplifies the processing and payment of duties and fees, and promotes account based processing.  Participating trade members may elect to remit payment of duties and fees for eligible 
shipments released over a one month period on the 15th work day of the following month.  Additional 
information can be found on the CBP website at the following URL:  
http://www.cbp.gov/xp/cgov/to olbox/about/modernization/
 
          WT/TPR/M/160/Add.1 
Page 175 
 
 
[Costa Rica] 
 
2.  Paragraph 19 mentions a risk control system fo r goods that uses a computer system to analyze cargo 
information through the use of weighted rules and assigns a level of risk to each shipment.  Please 
explain how this risk control works. 
 
ANSWER:  The Automated Targeting System (ATS) is  CBP's primary decision support tool for 
vetting risks for cargo.  ATS utilizes various algorithms to vet relative risks for shipments for different 
issues based on historical data and enforcement record s.  Algorithms are designed to identify relatively 
unusual shipments as well as shipments that match specific high-risk parameters.  Risks are also 
addressed utilizing targeting criteria of the Automate d Commercial System (ACS) that targets specific 
shipments for exam that matches specified criteria.  
[Costa Rica] 
 
3.  Paragraph 20 points out that following the adopt ion of the Trade Act regulations, the vessel cargo 
declaration must be sent to CBP in electronic fo rmat through the Sea Automated Manifest System; 
paper submissions will no longer be accepted.  Please elaborate on the approach used in this regard, 
specifying the following:  whether the eliminati on of document submission in customs was done in 
stages or was implemented in a uniform and gene ral manner simultaneously in the entire country; 
whether there was a period when both the paper and electronic submissions existed; what the 
experience was as to this process; and, the pr ecautions that were taken in this regard. 
 ANSWER:  CBP implemented the Trade Act requirement s in a phased enforcement approach.  The 
official date for the implementation of the final rule  itself was January 5, 2004.  However, within the 
final rule there are various implementation dates for each mode of transportation.  Carriers and/or 
automated NVOCCs were required to submit an el ectronic cargo declaration to CBP for all vessels 
loading on or after March 4, 2004.  Any vessel that  began the entire voyage on  or after March 4, 2004 
had to comply with the spec ified advanced timeframes. 
 On July 6, 2004 CBP mandated all vessels require d to make entry in accordance with Customs 
regulations at 19 CFR, Part 4 and scheduled to arrive  at anchor or at a dock in any harbor within the 
Customs territory of the U.S. to be in complian ce with the Trade Act Regulations.  There were no 
exceptions or waivers to the automation requirement  for electronic transmission of cargo declaration 
data mandated by the Trade Act.  The Port Director s were given permission to deny the unlading of 
cargo to vessel carriers that did not provide an electr onic cargo declaration and continued to arrive with 
only a paper Inward Cargo Declarations (CBP Form  1302) in violation of the Trade Act Regulations. 
 
[Costa Rica] 
 
4.  Paragraph 25 makes reference to the Contai ner Security Initiative (CSI), which involves the 
screening and inspection of U.S.-bound, high-risk cont ainers at the port of departure and the use of 
tamper-evident seals.  Under the CSI, CBP officers are deployed to participating ports, where they 
identify high-risk containers.  Please elaborate on the duties and responsibilities of the CBP officers in 
these ports, the period they shall be deployed to  ports of departure, and the supervision and 
coordination that exist vis-à-vis their superiors in the United States.  Furthermore, please describe the duties and responsibilities of host country officials, es pecially as regards their authority to select cargo 
that will be subject to inspection. 
 
ANSWER:  CBP and ICE officers are deployed from 6 months to 1 year on Temporary Duty 
(TDY).   ICE Special Agent – assists and advises the CBP Attaché or Senior Representative. WT/TPR/M/160/Add.1 
Page 176  
 
• Conducts outreach with foreign officials from the trade and shipping industries 
on key aspects of the CSI program. 
• Coordinates with the host nation counterpart in the day-to-day operations of 
the team. 
• Prepares weekly reports, reporting all incidents to the Attaché. 
 
CBP Targeter – conducts initial ta rgeting of all Bills of Lading 
• Observes of all non-intrusive and physical examinations  
• Records daily, weekly and monthly statistical information  
 
Intelligence Research Specialist – analyzes Bills  of Lading in support of the Targeter. 
• Coordinates intelligence information with host country officials and sharing 
that information with the Officers when relevant to targeting efforts  
• Disseminates intelligence information in  accordance with existing procedures  
 
Host government can target containers they rega rd as a threat to their own security concerns. 
 
[European Communities] 
 
The MID for textile and apparel creates discrimin ation compared to other manufactured products 
exported to the US, as it is by far more stringent than for other products. These measures are having a 
severe and unjustifiable impact upon the EU industry' s ability to sell its tex tile and apparel products 
into the US market. 
 Contrary to common and accepted practice of identif ying the vendor as the manufacturer since the 80's 
through a codification system, the new MID for te xtile and apparel is in breach of commercial 
confidentiality rules. The MID structure allows an y importer or buyer to access the exact address of the 
manufacturer of a product, through the obligation, for the first data entry of the new MID, to provide on 
the invoice the complete address of the manufacturer in order to check whether the syntax of the MID 
is correct.  ANSWER:  The comment period for the interim regulations has now closed and the only 
government to submit comments was the Governme nt of Switzerland.  Neither the European 
Commission nor any EU Member State   submitted co mments or concerns.  We are surprised to read 
that the new requirement of U.S. importers is having “a severe and unjustifiable impact” upon the EC 
industry’s ability to sell its textile and apparel produc ts into the U.S. market.  We would appreciate 
further information clarifying this assertion.    
• What are the objectives the new 'MID' requirement seeks to serve? 
 ANSWER:  The objectives are to assist in the enforcemen t of U.S. textile laws and to facilitate the 
movement of trade into the U.S.  The MID allowed CBP to eliminate the paper textile declaration and 
thus allow electronic processing of entries.   
• Could the US inform WTO Members on the methods it used prior to the introduction of the 'MID' 
in order to identify the origin of textile and apparel products? 
 ANSWER:  The U.S. required a paper textile declaration for all importations of all textile products.  
The “Declaration of manufacturer, producer, exporter, or importer of textiles and textile products” was 
a requirement of 19 CFR 12.130(f).  In additi on, under the MFA/WTO quota system many producer 
countries signed a bilateral agreement with the U.S. th at led to the issuance of an export license which 
provided information regarding the manuf acturer/producer of the merchandise. 
          WT/TPR/M/160/Add.1 
Page 177 
 
 
• Could the US confirm that prior to the introductio n of the 'MID' a mere certificate of origin was 
sufficient for customs clearance without any refe rence to the name and address of manufacturer? 
 ANSWER:  A “mere certificate of origin” was never used for any imports.  It is not recognized as a 
required entry document for U.S. Customs and Bord er Protection entry purposes.  A MID has been a 
requirement for all importations, tex tiles and non-textile for quite some time.  A textile declaration was 
required until October 4, 2005.  
• Could the US confirm that the 'MID' requirement is imposed on US based importers in the sense 
that it is them who must provide all the necessar y information (name of manufacturer, address, etc) 
as a condition for importation? 
 
ANSWER:  Yes, it is the U.S. importer that must provide the information for entry purposes.  
According to the Federal Register, Volume 70, No. 192 of October 5, 2005, Rules and Regulations, 
page 58014, 'importers must be able to demonstrat e to CBP their use of reasonable care in determining 
the manufacturer'.  
• Could the US inform the body as to the exact methods  to be used to verify that the importer has 
constructed the 'MID' correctly and according to the relevant instructions a nd, thus, has determined 
accurately the manufacturer? 
 ANSWER: Where CBP officials have reason to believe that the MID may be incorrect, these 
officials will request and review documents  such as invoices to verify information. 
 
• Is it correct that for the first entry of the new 'MID' US based importers are bound to provide on the 
invoice the complete address of the manufacturer of the product in order to allow US customs services to verify that the construction of the 'MID ' is correct according to the relevant rules and 
instructions? 
 ANSWER:  No.  The textile and apparel MID require ment is for the importer to provide the 
Manufacture Identification Code on appropriate entry documentation.  There is no requirement that the 
name and address of the manufacturer appear on a commercial invoice.  According to the Federal Register as above, 'if an en try filed for such merchandise fails to include the 
MID properly constructed from the name and address of  the manufacturer, the port director may reject 
the entry or take other appropriate action. 
 
• Can the US inform whether the port direct or is bound under circumstances of incorrect 
construction of the 'MID' to prohibit customs clea rance of the relevant goods? Also can the US 
inform the body on what other action may be take n by the port director in such circumstances? 
 
ANSWER:  The CBP Port Director has the authority, but is not bound to prohibit customs 
clearance.  Relating to the MID issue, the Port Director may assess penalties against U.S. importers 
failing to use reasonable care in providing accurate information.  
• Could the US explain why same requirements as the 'MID' do not apply to other products but only 
to textile and apparel products? 
 
ANSWER:  As there was a regulatory requirement for importers to submit a textile declaration 
traditionally filled out by the manufacturer, it was a ppropriate to eliminate the need for the paper 
document thereby expediting the facilit ation of legitimate trade.  CBP worked closely with the U.S. 
importing community which supports the elimination of  the textile declaration and the use of the MID WT/TPR/M/160/Add.1 
Page 178  
 
as it is now constructed.  CBP will conduct a thr ough review of formal comments on our interim 
regulation before determining if  the requirement should be app lied to other/all commodities. 
 
• Could the US inform whether the 'MID' requirement  applies to textile and apparel products from all 
countries without exception? If not, could the US specify those countries that are excluded from 
this particular measure, the reason for any such  exclusion, and the compatibility of any such 
exclusion with WTO rules? 
 ANSWER:  The MID requirement applies to all countries.  There are no exceptions. 
 
• Could the US finally explain how this MID require ment is compatible with rules on protection of 
commercially confident information? 
 
ANSWER:  The U.S. Government and its employees are prohibited from disclosing business 
confidential information pursuant to the Trade Secr ets Act (18 USC 1905).  All information contained 
in the entry process is considered confidential and as su ch U.S. officials use this information for official 
use only. 
 
[Hong Kong China] 
 
Rules of Origin 
(WT/TPR/S/160, P. 30, Para. 37) 
 
1. In paragraph 37 (page 30) of the Secretariat Re port, it is said that the general standards for 
determining non-preferential rules of origin may be adapted and interpreted further by agencies other 
than Customs and Border Protection (CBP) to fit th e needs and purposes of the particular context in 
which non-preferential rules are applied.  Although  the Agreement on Rules of origin allows the 
introduction of changes to Members’ non-preferential rules of origin or new non-preferential rules of 
origin, Article 2(e) of the Agreement requires that  “their rules of origin are administered in a 
consistent, uniform, impartial, a nd reasonable manner” during the tran sitional period.  We would like 
to know how the US ensures that the further adap tation and interpretation of its non-preferential rules 
of origin by its different agencies can be applie d in a consistent and uniform manner and how to 
prevent contradictory outcomes of such  further adaptation and interpretation.  
 
ANSWER: In terms of administering rules of origin, the centralized operation of the U.S.  CBP 
ensures consistency and uniformity, consistent with Article 2(e) of the Agreement on Rules of Origin. 
 [Japan ] 
 
Q7. Maritime transport security (p.26, para.18) 
As a part of initiatives for counter-terrorism, the United States has enforced the regulations 
implementing the advance electronic submission of  cargo information under the Trade Act of 2002, 
and obliged to submit to the U.S. customs authoriti es the manifest of the international sea container 
bound for the United States to the U.S. customs author ities no later than 24 hours prior to loading.  As a 
result, the deadline for delivery of containers to  the yard, which had been commonly set around 24 
hours prior to loading, has been moved up by 48 hours.  This has decrea sed the efficiency of 
distribution and imposed a huge burden on the operators including those with excellent compliance 
records.  The Government of Japan urges the Govern ment of the United States to take measures for the 
deregulation of the advance presentation of electr onic cargo information (such as establishing deadline 
extension) and the expansion of be nefits to the participants of the Customs-Trade Partnership Against 
Terrorism (C-TPAT), such as their exemption fro m the 24-hour rule and a reduced number of 
inspections, in consideration of the compatibility  between thorough security measures and efficient          WT/TPR/M/160/Add.1 
Page 179 
 
 
distribution.  In these respects, please indicat e the specific views of the Government of the 
United States.  
ANSWER:  The requirement to provide CBP with a dvanced electronic cargo information does not 
require the cargo be positioned or stored at the wharf.   With regard to the above statement, “This has 
decreased the efficiency of distribution and imposed  a huge burden on the operators”, CBP notes it has 
also heard from members of the trade community w ho have stated that the requirement of submitting 
advanced information has allowed better e fficiency in planning for cargo movements. 
 
[Japan] 
 
Q8. Labeling requirements of origin for watch es and clocks (p.29 to 30, paras.34 to 40) 
Japan has long requested the Government of the U.S. to simplify its labeling requirements of origin for 
watches and clocks.  However, they have not been improved.  Please indicate the specific views of the 
Government of the U.S. on when the system of its  labeling requirements of origin for watches and 
clocks will be simplified.  
ANSWER:  The United States takes note of Japan’s comment regarding the simplification of 
labeling requirements for country of origin mark ings for watches and clocks.  The United States 
believes that its country-of-origin marking requirements are clear and simple as drafted. 
 
The question refers to the Special Marking Requirement s set forth in Additional U.S. Note 4 to Chapter 
91, Harmonized Tariff Schedule of the United States (HTSUS).  The Note prescribes that watch and clock movements, and watch and clock cases be mark ed with the name of the country of manufacture 
and the name of the manufacturer or purchaser.  If applicable, the number of jewels also must be 
indicated by specified marking methods.   The United States recalls that, partly at Japan’s request, these 
requirements were modified in 1999 to permit ma rking of these parts by means of indelible ink. 
 
[Mexico] 
 4.  Paragraph 25, in Section 2, Measures Direc tly Affecting Imports, indicates that the “Container 
Security Initiative” (CSI) involves the screening and in spection of U.S.-bound, high-risk containers at 
the port of departure and the use of tamper-evident  seals.”  The same paragraph provides information 
on the operation of the CSI and on the number of fore ign seaports that participate in the Initiative (35 
as of April 14, 2005).  Recently (early Marc h 2006), on the CSI website we found additional 
information to the effect that the Initiative will soon be extended to “numer ous other ports around the 
world.”  In this regard, Mexico would like to ask  whether it would be possible to have additional 
information on which seaports will join the CSI.  ANSWER:  As of April 19, 2006 CSI is operational in  44 ports.  The additional ports added after 
4/14/05 are; Shanghai, Shenzhen, Kaohsiung, Chin a; Santos, Brazil, Colombo, Sri Lanka; Buenos 
Aires, Argentina, Lisbon, Portugal; Salalah, Oman; and Puerto Cortes, Honduras.  We have signed a 
Declaration of Principles with Pakistan to have a CSI port in Karachi and Qasim.  
[Mexico] 
 5.  With respect to procedure under the CSI, paragra ph 25 explains that the inspection of containers is 
conducted “using non-intrusive inspection equipment, phys ical inspection, or both.”  In this regard, (a) 
Could the U.S. provide further information on the amount of time this procedure requires, depending 
on the method used, in clearing goods? (b) Does the procedure operate in the same way for goods in 
transit? (c) What lessons can be learned regarding the effectiveness of the automated risk management 
systems set up at host ports, in terms of risk assessment? and (d) What part does all of this play in 
negotiations on trade facilitation? 
 WT/TPR/M/160/Add.1 
Page 180  
 
ANSWER:  Non-intrusive inspection, physical inspec tion, or both, is conducted by the host 
government.  As a general rule the time needed to conduct these examinati ons is dependent upon how 
the port terminals are laid out, as well as the process th at is in place to transport the container to be 
examined, in relation to the location of the NII equipment. 
 
[New Zealand] 
 
3. Customs procedures and rules of origin
 (WT/TPR/S160, p.27 para 24)  
 Did the cost estimates from meeting the 24 hour rule (for cargo transported by vessel) include the cost 
of the time of keeping containers on the wharf before shipment? 
 ANSWER: No, CBP does not require that the cargo or container to be at the wharf in order to 
transmit the required cargo information to CBP.  [Peru]  Rules of Origin 
Given the United States’ view that bilateral agreem ents are an important means for promoting trade 
liberalization and production efficiency with respect  to its trading partners, what are its plans for 
harmonizing the various rules-of-origin regimes of the different agreements and the possibility of 
accumulation among countries with which it has agreements? 
 
ANSWER:  Plurilateral FTAs of the United States allo w cumulation for all products and between 
all participating countries.  These provisions can generate new commercial opportunities that 
encourage economic growth and integration.  In the context of these FTAs, consideration is given to all 
methods that may help achieve these objectives, in  a manner consistent with WTO commitments. 
 
[Thailand] 
 
7.  Thailand understands that th e US Customs and Border Protection requires certain WTO Members to 
adhere to the 24-hour Advance Mani fest Rule.  Could the US elaborate on this Rule, and the criteria for 
exempting Members from the Rule? 
 ANSWER:  The requirement to provide CBP with adva nced electronic cargo information applies to 
all vessel carriers and automated NVOCCs transporti ng cargo on board a vessel destined for the U.S.  
The requirement to provide the cargo information 24 hour s prior to loading pertains to all containerized 
cargo with no exceptions.  Bulk and break bulk carriers are required to provided their electronic cargo 
information either 24 hour prior to arrival or at the time of departure to the U.S. depending on the 
voyage sailing time.  Tariffs
 
 [Argentina]  
8. On page 39, paragraph 48,
 the report mentions that specific duties represent almost 11 percent of 
total tariff lines.  Taking into account the greater level of protection that these provide, especially for 
products of lesser value: 
 
Question: Does the United States intend to eliminate the use of this kind of duty in the short or medium 
term?  
 
ANSWER: The number of non-ad valorem tariff lines in the U.S. schedule has continued to 
decline, as noted in paragraph 48 of Chapter III. Th e share of non-ad valorem tariff lines declined from          WT/TPR/M/160/Add.1 
Page 181 
 
 
12.2 percent in 2002 to 10.6 percent in 2004.  The United States has committed to bind all NAMA tariff concessions in the Doha Round in ad valorem terms.  Similarly to many countries the United States main tains non-ad valorem tariff rates on a number of 
agricultural products for historical reasons.  We continue to support multilateral agricultural tariff 
reductions in the Doha negotiations  and will be engaged on these topics as long as there continues to be 
ambition among other members for multilateral liberalization.  
 
[China] 
 
Question: (p.32 para.49) At present in the U.S., 7% of tariff headings are thr ee-time higher than the simple average rate of all 
tariff headings, while 4% of tariff headings are 15%  or higher. High tariffs and tariff peaks mainly 
concentrate in textile and clothing, footwear and other travel products which account for a major part of 
export for developing countries. However, the U.S. implement low tariffs on products of higher prices, 
while implementing high tariff on products of low price. 
 
Please clarify its policy-making intention of such  tariff structure and evaluate its impact on 
export from developing countries to the U.S.  
 
ANSWER: With regard to U.S. policy-making intentions  on tariffs, we note that the United States 
is fully engaged at all levels to achieve the mandate of paragraph 16 of the Doha Declaration.  To this 
end, the United States has been among the leaders in the efforts to achieve an ambitious market  access 
outcome in the NAMA negotiations on the basis of  reciprocal and mutually beneficial tariff 
concessions.  We strongly support the use of a Swiss formula, which would have a harmonizing effect 
on tariffs.  
[Ecuador] 
 
A contrast can be seen between the relatively low aver age tariffs and the tariff peaks for the agricultural 
sector that seem to be a characteristic of U.S. trade policy.  Moreover, such peaks contradict what is set 
forth in paragraph 9, page 17 of the WTO Secretar iat’s report which states that “…the main U.S. 
negotiating objective with respect to international trade is the removal of trade barriers in goods, 
services, and foreign investment as well as the ex tension of the rules-based trading system.” 
 
Likewise, if the average tariff rate  for non-agricultural products in 2005 is considered to have been 4%, 
while for agricultural products it was more than doubl e that rate, what is the U.S. justification for 
maintaining high protectionist tariff rates on food products?   ANSWER: The United States, like all WTO Members, has certain sensitive products to which 
higher tariff rates are applied.  However, compared  to the rest of the world, the United States has 
relatively open markets for agricultural imports. The average U.S. MFN applied tariff for agricultural 
products (WTO definition) is 9.7 percent (includi ng the ad valorem equivalent of non-ad valorem 
rates), which is substantially lower than the aver age for the rest of the world of over 60 percent.  We 
continue to support multilateral tari ff reductions in the Doha negotia tions and will be engaged on this 
topic as long as there continues to be ambition am ong other Members for multilateral liberalization that 
results in real new market access.  Tariffs in sensitive sectors are incl uded in this approach — the U.S. 
has repeatedly stated its willingness to reduce and eliminate tariffs in sensitive sectors if other WTO 
Members are willing to do the same.  WT/TPR/M/160/Add.1 
Page 182  
 
[Ecuador] 
 
A consequence of the U.S. tariff schedule is that  specific duties reduce th e competitiveness of good 
from Ecuador as a developing country.  Is the United States considering lowering such tariffs?  If so, 
when and how? 
 
ANSWER: The number of non-ad valorem tariff lines in the U.S. schedule has continued to 
decline, as noted in paragraph 48 of Chapter III. Th e share of non-ad valorem tariff lines declined from 
12.2 percent in 2002 to 10.6 percent in 2004.  The United States has committed to bind all NAMA tariff concessions in the Doha Round in ad valorem terms. 
 
Similarly to many countries, the United States ma intains non-ad valorem tariff rates on a number of 
agricultural products for historical reasons.  We continue to support multilateral agricultural tariff 
reductions in the Doha negotiations  and will be engaged on these topics as long as there continues to be 
ambition among other members for multilateral liberalization.  
 [Ecuador] 
 
Could the United States explain the extent of the differences between the MFN [Most-Favored-Nation] 
tariff rate levels in effect in the United States and U.S. bound MFN tariff rate levels in the WTO? 
 
ANSWER:  The U.S. MFN tariff rate levels refer to U.S. applied rates.  At the end of a WTO 
round, applied rates are typically “staged down” over several years until they reach the final bound rate 
levels.  For the Uruguay Round, the final year of stag ing for virtually all U.S. products was 2004.  For 
these products, the U.S. applied MFN rate is equal to the final bound rate.  There is one rate line, HTS  
3404.20.00 which continues to stage down until January 1, 2009 when it reaches a rate of zero. There 
are also a handful of HTS items which are bound in WTO at a higher rate than the current MFN rate.  
These include a lemon item in certain circumstances, certain petroleum items in certain circumstances, 
and a body stampings item.  
[Ecuador] 
 What is the scope of the category “Bound in WTO” that appears in the USITO [United States 
Information Technology Office] Tariff Database?  Does this mean that the tariff duty has the same 
MFN duty rate in effect or a different one?    ANSWER:  The indication "Bound in WTO" does not address the applied rate of the tariff; rather it 
means that the United States has bound th e final staging of the tariff rate.  Virtually all U.S. tariff lines 
are bound, however those that are not are marked in  the U.S. tariff database; there are two unbound 
items that are marked with a “U” and a few items with ceiling rates that are marked with a “C.”  
[European Communities] 
 
WT/TPR/S/160-3; p. 32, para. 48-52 The share of non-ad valorem tariff lines has declined from 12.2% of all lines in 2002 to 10.6% in 2004.  
Although slightly more than half of comparable non- ad valorem tariff lines reco rded declined between 
2002 and 2004, on average non-ad valorem tariffs conti nue to afford higher protection than ad valorem 
duties.  In 2004, the average of ad valorem e quivalents of non-ad valorem tariff rates was 10.7%, 
compared with 4.3% for ad valorem duties.  Non-ad  valorem tariff rates apply mainly to agricultural 
products, footwear and headgear, watches, and precision tools. 
 
• Within the schedule, the non-ad valorem duties are hi gher than the ad valorem duties.  What are the 
US’ plans to shift to ad valorem rates?           WT/TPR/M/160/Add.1 
Page 183 
 
 
ANSWER:  The number of non-ad valorem tariff lines in the U.S. schedule has continued to 
decline, as noted in paragraph 48 of Chapter III. Th e share of non-ad valorem tariff lines declined from 
12.2 percent in 2002 to 10.6 percent in 2004.  The United States has committed to bind all NAMA tariff concessions in the Doha Round in ad valorem terms.  
Some 5.5% of all tariff lines had MFN rates exceeding 15% in 2004.  The products subject to the 
highest ad valorem or ad valorem equivalent rate s were tobacco (350%), whey (284%), sour cream 
(177%), and peanuts (164%); in the non-agricultural sector, the highest rate was applied to footwear 
(58%).  
Similarly to many countries the United States main tains non-ad valorem tariff rates on a number of 
agricultural products for historical reasons.  We continue to support multilateral agricultural tariff 
reductions in the Doha negotiations  and will be engaged on these topics as long as there continues to be 
ambition among other members for multilateral liberalization.  
• Footwear is subject to particularly high ta riff peaks. We would like to know the reason for 
maintaining such high rates on footwear imports considering the limited footwear industry in 
the US? What are US plans to dismantle such peaks? 
 
ANSWER: The U.S. has repeatedly stated its strong inte rest in participating in ambitious market 
access negotiations in the Doha Round Non-agricu ltural Market Access group, on the basis of 
reciprocal and mutually beneficial tariff concessions. 
 
[India] 
 
Q.4 The US currently maintains tariff peaks going up to 32% for apparel products under HS 61 and 
62. Such high tariffs affect India’s principal item of  export interest particularly as the list of countries 
which receives concessionary/zero tariff access under FTA  or other arrangements is increasing. U.S is 
requested to clarify its stand on eliminating the tariff escalation?  ANSWER:  The U.S. has repeatedly stated its strong in terest in participating in ambitious market 
access negotiations in the Doha Round Non-agricu ltural Market Access group, on the basis of 
reciprocal and mutually beneficial tariff concessions. 
 
[India] 
 
Q.19  The Secretariat Report also draws attention to the barriers to market access in US, applied inter 
alia through non-ad valorem duties (10.6% of total lines), TRQs (around 195 tariff lines are subject to 
tariff quotas), tariff protection of up to 350% an d tariff escalation across a number of agriculture 
products.  Nearly 91% of the out-of-quota tariffs are non-ad valorem compared to almost 28% of in-quota tariffs (Para 16 of Secretariat Report).  Products  such as tobacco, whey, sour cream and peanuts, 
receive tariff protection in the range of 50-350%.  Quotas, coupled with high out-of-quota tariffs, are 
protectionist, and the non ad valorem tariffs er ode export competitiveness and disadvantage low cost 
exports of developing countries.  Does the US propo se to simplify its tariffs and to convert all residual 
quotas to a tariff-only regime?  ANSWER:  The United States, like all WTO members, has a small number of specific domestic 
sensitivities where slightly higher tariff rates are some times applied.  In addition, similar to many other 
countries the United States maintains non-ad valorem ta riff rates on a number of products for historical 
reasons.  We continue to support multilateral tariff reductions in th e Doha negotiations and will be 
engaged on these topics as long as there continues to be ambition among other members for multilateral liberalization.  Tariffs in sensitive sectors are incl uded in this approach — the U.S. has repeatedly 
stated its willingness to reduce and eliminate tari ffs in sensitive sectors if other WTO members are WT/TPR/M/160/Add.1 
Page 184  
 
willing to do the same.  In addition, we recognize the additional administrative requirements associated 
with the use of TRQs, and strongly support the wo rk being done to improve disciplines on TRQ 
administration in the Agriculture negotiations.  
[India] 
 Q.20  Country-specific allocations of tariff quotas have been maintained by the US under Uruguay 
Round Scheduled commitments and new ones have been  negotiated by the US with trading partners 
more recently.  The selective allocation of tari ff quotas and institution and maintenance of country-
specific allocations is discriminatory and undermines the fundamental principle of MFN.  Does the US 
propose to shift to a regime of global quotas with MFN-based allocations? 
 ANSWER:  The United States allocates in-quota qu antities under WTO tariff-rate quotas according 
to commitments made in the WTO.  The United States cannot unilaterally globalize these allocations 
without the agreement from the countries which hold the allocations.  The United States proposed in 
the Doha Development Agenda that WTO member s provide any increases in in-quota quantities on a 
most favored nation basis, while providing special co nsideration to developing countries that have little 
or no access to existing TRQs.  Regarding TRQs resu lting from bilateral and regional trade agreements, 
the quantities are in addition to quan tity commitments made under the WTO. 
 
[Japan] 
 
Q9. Complicated tariff system on garments, clocks and watches (p.31 to 32, paras.46 to 48) 
(1) The tariffs of some products in the U.S. are very  complicated.  For example, they levy tariffs on 
ensembles based on the tariffs of each garment in the ensembles, not the bound tariff rate themselves.  
They also levy tariffs on completed watches and clocks based on the tariffs of their parts and therefore, 
tariffs are different for each watch and clock de pending on their compositions.  Japan would like to 
know why the U.S. uses a complicated tariff system like this for some produc ts and would like to know 
the background for using this system.  (2) Japan has been informed that the tariff system of watches and cl ocks is linked with their labeling 
system of origins, and there was a case that the U.S.  abolished the obligation to indicate prices of parts 
used in digital watches on the invoice, when the tariff of digital watches itself was eliminated.  
Therefore, we understand that the elimination of tari ffs for watches and clocks  would imply elimination 
of their labeling system of origin.  In this regard , please indicate the specific views of the Government 
of the United States.  
ANSWER:  The U.S. has repeatedly stated its strong in terest in participating in ambitious market 
access negotiations in the Doha Round Non-agricu ltural Market Access group, on the basis of 
reciprocal and mutually beneficial tariff concessions.   
[Mexico] 
 6.  Concerning paragraph 49, could the United States indicate whether the reason behind the 350% 
tariff on tobacco involves the protection of human h ealth, the collection of tax revenues, or simply 
trade policy?  ANSWER:  The tobacco tariff and tariff-rate quota (TRQ) were established by Presidential 
proclamation in September 1995 in accordance with  authority provided by Congress and following 
negotiations with affected trading partners unde r GATT Article XXVIII. The TRQ replaced domestic 
content provisions that had been in effect since January 1, 1994.           WT/TPR/M/160/Add.1 
Page 185 
 
 
[New Zealand] 
 
4. Tariffs (WT/TPR/S/160, p.31 para 47 and p.32 para 49). 
The Secretariat notes that the aver age applied tariff for agriculture in 2004 was 9.7%, and remained 
virtually unchanged with respect to 2002.  The aver age applied tariff rate for non-agricultural products 
was 4% in 2004, down from 4.2% in 2002.  The products subject to the highest ad valorem of ad 
valorem equivalent rates were tobacco (350%), whey  (284%), sour cream (177%), and peanuts (164%); 
in the non-agricultural sector, the highest rate was applied to footwear (58%). 
 What is the US justification for maintaining high tariff protection in sectors like agricultural food 
products? 
 ANSWER:  The United States, like all WTO Members, has certain sensitive products to which 
higher tariff rates are applied.  We continue to  support multilateral tariff reductions in the Doha 
negotiations and will be e ngaged on this topic as long as there continues to be ambition among other 
Members for multilateral liberalization that results in  real new market access.  Tariffs in sensitive 
sectors are included in this approach — the U.S. has repeatedly stated its  willingness to reduce and 
eliminate tariffs in sensitive sectors if other WTO Members are willing to do the same. 
 
Other Charges Affecting Imports
 
 [China]
 
 
Custom Clearance  
 Question: (p.27 para.22, p.35 para. 66-69) 
According to the Secretariat Report, Paragraph 343 of the Trade Act (2002) stipulates that CBP must 
receive advance information pertaining to any cargo before the cargo is brought into (or sent from or 
pass through) the U.S. by any mode of commercia l transportation. Otherwise the CBP may impose 
punishment by a fine.  However, the U.S. refuses to  provide information on the accumulated number of 
fines collected .  Please clarify. 
 
What recommendations were made concerning fees to  be eliminated and the rate of fees to be 
retained? 
 
ANSWER: We would be pleased to answer this ques tion, but require an explanation of what 
specifically should be clarified and what  “recommendations” are being referenced. 
 
Does the U.S. Customs impose “harbor maintenance f ee” on the basis of its actual expenditure on 
maintenance? As the maintenance fee is designed for harbor maintenance, why does it apply only 
to imported products but not to exported products of the U.S.?   
 
ANSWER: The harbor maintenance fee is set by stat ute, 26 US.C. § 4461 and 4462.  It is only 
applied in association with port use for the movement  of domestic shipments between ports, as well as 
imported shipments. 
 
For the importation of some products, such as textile, clothing and footwear, does U.S. Customs 
require more specific information than other products?  
 
ANSWER:  U.S. importers are required to submit a Manufacturer’s Identification Code (MID) on 
all (textile and apparel) importations.  The MID has allowed CBP to eliminate the paper textile 
declaration and thus allow electronic processing of en tries.  Additionally, many products have specific 
labeling requirements pursuant to 19 CFR 141.86. 
 WT/TPR/M/160/Add.1 
Page 186  
 
Please clarify the consistency of the said inform ation requirements and the rationale for the two 
fees with Article 8 of GATT 1994. 
 
ANSWER:  The question presupposes an inconsistenc y with Article VIII of the GATT 1994. 
 
The U.S. will fully deploy the Automated Commerc ial Environment (ACE) as part of its customs 
modernization program by 2009. The ACE will re place the current Automated Commercial System. 
Will the ACE further simplify customs procedures by reducing instead of increasing trade barriers to foreign exporters, esp. to those sma ll and medium ones from developing Members, 
which often do not have much  capacity of E-Commerce?  
 ANSWER: A key objective of ACE is to facilitate tr ade through use of new technologies that will 
save time and money, reduce labor intensive procedures, and make trade processing more efficient for 
all trade entities. 
 
On what conditions does U.S. Customs require commercially confidential information on 
processing procedures of textile and clothing? What is the rationale for such requirement?  What 
measures does U.S. Customs take to protect such  commercially confidential information on 
processing procedures? 
 ANSWER: Information on processing procedures of tex tiles and clothing may be relevant to 
verifying claims of origin. The U.S. Governme nt and its employees are prohibited from disclosing 
sensitive information pursuant to the Trade Secrets Act (18 USC 1905).  All information contained in 
the entry process is considered confidential and as su ch U.S. officials use this information for official 
use only. 
 
Would the U.S. Customs extend the payment period of customs duty for clothing up to 210 days? 
 
ANSWER:  The time for tendering estimated duties and fees is set by statute (19 USC § 1505). 
 
If importer fails to keep the imported clothing products within payment period of customs duty 
to enable the Customs to determine final tariff, wh at would be the amount of fine imposed by the 
Customs? 
 ANSWER: If an importer is found in violation of U. S. laws or regulations, penalties will be 
assessed based upon the nature of the violation.  Th e following citations will provide information on 
penalties, 19 CFR 162.73 and 19 USC 1592.   
 
How would the U.S. evaluate the impact of a prolonged payment period on import of clothing?   
ANSWER: The question is hypothetical and therefore difficult to answer.  However, evaluation of 
any such impact would likely require a financ ial study or cost/benefit analysis, or both. 
 
Would the U.S. consider shortening the payment peri od to such an extent so as not to negatively 
affect trade?  
ANSWER:  The United States provides importers with numerous options with respect to the 
tendering of duties, and importers can choose among these options to maximize efficiency.  [Chinese Taipei] 
 
Question 6 (page 35, paragraphs 66-67) Imports valued at more than US$2,000 are subject to a merchandise processing fee collected by the CBP.  Originating imports under the free-trade agr eements concluded between the United States and          WT/TPR/M/160/Add.1 
Page 187 
 
 
Australia, Canada and Mexico, Chile, Israel, and Si ngapore are exempt.  The American Jobs Creation 
Act of 2004 requires the Secretary of the Treasury to  conduct a study of all the fees collected by the 
Department of Homeland Security by September 2005, and make recommendations concerning fees to 
be eliminated and the rate of fees to be retained.  
If the merchandise processing fee is intended to cove r the service cost to the CBP of processing the 
entry of imported merchandise, why is it that im ports under these particular FTAs are exempt from this 
fee?  Is this exemption possibly compensated by the fee that might have been “over-collected” on 
goods imported from non-FTA partner countries?  Furthermore, what are the results and 
recommendations of the Secretary of the Treasury study? 
 
ANSWER:  The merchandise processing fee (MPF) is a charge collected in connection with the 
importation of goods.  In providing for the eventu al duty-free preferential access of goods under the 
FTAs with the countries listed, the United States agr eed to eliminate both the existing duty and the 
MPF.   We keep the revenues collected by appli cation of the MPF in a separate account from which 
they are eventually disbursed for the processing of  imports only from countries subject to the fee.  
Processing for imports from preferential trading partners is funded separately.  The Treasury 
Department has not yet completed its study of Customs Fees.  
[Colombia] 
 Paragraph 66, Title III) of Section III, states that the assessment for processing goods appraised at over 
2000 US dollars was extended to September 2014, as a result of adoption of the Jobs Creation Act of 2004.  Furthermore, paragraph 67 states that the af orementioned Act provides that the Department of 
the Treasury was to prepare a study by September 2005 at the latest of all assessments collected by the 
Department of Homeland Security and make recommendations on the assessments to be eliminated and 
those to be maintained.   a) Colombia is interested in learning whether this study was done.  If it was, what were the 
conclusions?  
b) Did the study also examine the maintenance as sessment on ports covering imports?  Was it taken 
into account that for exports this assessment was not coll ected pursuant to the decision by the Supreme 
Court, which held that the assessment presented “signs of a tax” and that the value of the cargo (tax 
base) did not “have a reliable correlation to the fede ral services, facilities and benefits of the ports?” 
 
ANSWER:  The Treasury Department Study has not yet been completed. 
 
[Costa Rica] 
 
5.  Paragraph 66 states that imports valued at more than US$2,000 are s ubject to a merchandise 
processing fee collected by Customs and Border Pr otection (CBP), with the exceptions indicated 
therein.  Please explain how CBP detects those inst ances in which goods are imported in two or more 
loads in order to avoid paying the stipulated fee and what is the sanction in the case of non-compliance.   
 ANSWER:  CBP detects fraud in relation to MPF by reviewing entry summary documentation to 
ensure that shipments are properly valued.  If the CBP review identifies that goods imported into the 
United States were intentionally separated into mu ltiple shipments to avoid be assessed the MPF, the 
importer would be subject to penalty action.  WT/TPR/M/160/Add.1 
Page 188  
 
[Indonesia] 
 
2.  Other Charges affecting Imports. (page 35)
 
In the Report, it was said that import valued at USD 2,000 are subject to a merchandise 
processing fee and the fee is set at 0.21% of the im port value. As this policy is exempted from those 
countries which have bilateral free trade agreement wi th the US, how the US reconciles this policy with 
Article III (National Treatment) and Article XI (General elimination of quantitative restrictions) of the GATT 1994?  ANSWER:  The exemptions for the merchandise processing fee in the particular FTAs mentioned 
were negotiated as part of those FTAs in accordance with GATT Article XXIV. 
 
[New Zealand] 
 
5.  Other charges affecting imports
 (WT/TPR/S/160, p.35 paras 66 and 67) 
 
The Secretariat report notes that imports valued at more than US$2,000 are subject to a merchandise 
processing fee collected by Customs and Border Protection (CBP).  The fee is set at 0.21% of the import value; the statutory minimum and maximum are US$25 and US$485.  Will the US be changing this fee so it reflects the approximate cost to CBP of processing the entry of 
imported merchandise? 
 The Secretariat report notes that the American J obs Creation Act of 2004 requires the Secretary of 
Treasury to conduct a study of all the fees collect ed by the Department of Homeland Security, by 
September 2005, and make recommendations concerning fees to be eliminated and the rate of fees to 
be retained. 
 Has this study been completed?  Will the merchandise processing fee be eliminated?  ANSWER:  The Merchandise Processing Fee does correspond to the cost of processing imports.  
The Treasury Department has not completed its study.  The United States has no intention of 
eliminating the Merchandise Processing Fee. 
 
[Thailand] 
 
8.  In paragraph 67 , the Secretariat reports that Congress intended for the merchandise processing fee 
(MPF) to approximate the cost to Customs and Border Protection (CBP) of processing the entry of 
imported merchandise valued at over US$2,000.  Bearing in mind that merchandise valued at 
US$2,001 should be subject to an MPF of about US$4.2, please clarify how the pre-determined statutory minimum of US$25, as well as the statutory maximum of US$485, follow Congressional intention and the principles of GATT Article VIII:  Fees and Formalities connected with Importation 
and Exportation. 
 
ANSWER:  Setting minimum and maximum amounts ensures that the customs clearance of very 
high and very low value items, the processing of whic h do not involve substantially different costs, 
would not pay unduly different import fees.  [Thailand]  
9.  The United States has operated a harbor maintenance fee, or HMF, ( paragraphs 68 and 69 ) since 
1987.  The HMF is an ad valorem  levy of 0.125% collected by the CBP on port use. Between 1987 and 
1998 the HMF was applied to imports, exports, and dom estic freight.  The tax burden on exports and 
national freight is comparatively low because ship-own ers voluntarily pay the tax on a quarterly basis.           WT/TPR/M/160/Add.1 
Page 189 
 
 
With regard to domestic freight, there are three exceptions: (1) payments under US$10,000 per quarter; 
(2) traffic in Alaska, Hawaii and territorial dependent s; and (3) the landing of fish from ships and some 
freight shipments of Alaskan crude oil; however th ese exceptions do not apply to imports.  The tax has 
not been collected on exports since 1998 because the US  Supreme Court ruled that the portion of the 
HMF levied on exported cargo violated the Export Clause of the Constitution, which bans taxes on 
exports. 
 The HMF appears to impose a tax that exceeds US commitments in its schedules of concessions, and 
when compared to domestic products, imports are accorded less favorable treatment.  The HMF may also levy charges that exceed  fees for harbor maintenance. 
 
In light of the above, please clarify the HMF in te rms of WTO consistency, particularly GATT Articles 
II, III and VIII.  Please also explain why imported car go is subject to the harbor maintenance fee while 
exported cargo is exempt ( paragraph 69 ), considering SCM Agreement obligations regarding export 
subsidies. 
 
ANSWER:  The provision that applied the fee to export shipments was ruled unconstitutional by 
the United States Supreme Court. The fee’s rate of 0.125 percent ad valorem  on the value of 
commercial cargo loaded or unloaded on vessels usi ng federally maintained harbor projects is 
negligible. 
 
[Turkey] 
 
14.  Paragraph 66 states that the US imposes merchandise  processing  fee for the imports valued  at   
more than 2000 US Dollar amounting to 0.21% of the import value. We understand from the 
Secretariat report that the application of th e merchandise processing fee has been extended until 
September 2014. 
 
Furthermore, it is mentioned in the paragraph 68  th at water-born imports valued at more than 2000 US 
Dollar and unloaded at a port receiving federal f unds for maintenance are subject to a harbor 
maintenance fee whereas exported cargo is exempted  following the decision by the US Supreme Court. 
 
Could US Delegation explain the rationale of these ch arges and its consistency with the relevant GATT 
Articles?  ANSWER: The fee corresponds to the cost of processing imports. 
 
Trade Remedies
 
 
[Argentina] 
 
9. On page 47, paragraph 77,  the report mentions that some aspects of the antidumping and 
countervailing systems being challenged in the WTO we re resolved during the period under review, for 
example, the challenging of the Antidumping Act of 1916.  
Question:  Could you tell us what aspects of the system challenged in the WTO have not been resolved 
during this period or that have not been fully implemented?  
 ANSWER:  The United States has complied with the vast majority of DSB recommendations and 
rulings in these disputes, in nearly all cases within  the “reasonable period of time” for doing so.  In 
some cases, the question of implementation is pending before a compliance panel.  The United States continues its efforts to complete implementati on of DSB recommendations and rulings involving 
legislation in the Hot-Rolled Steel  dispute (DS184).  The United States has already completed 
implementation of non-legislative recommenda tions and rulings in that dispute.  WT/TPR/M/160/Add.1 
Page 190  
 
[Brazil] 
 
2.  Chapter III, paragraph 74
: Concerning the implementation of the DSB decision on United States – 
Continued Dumping and Subsidy Offset Act of  2000 (CDSOA) - WT/DS217 and WT/DS234, could 
the US Government indicate the estimated amount that will still be collected as duties imposed on 
goods imported into the United States until the final a nd complete repeal of the Byrd Amendment? For 
how long does the US Administration intend to continue distributing duties collected under CDSOA to US companies?  
ANSWER:  Subsection (a) of section 7601 of the Defi cit Reduction Act provides that the CDSOA 
is repealed “effective upon the date of enactment of this Act”.  Subsection (b) provides that “[a]ll duties 
on entries of goods made and filed before October 1,  2007, that would, but for subsection (a) of this 
section, be distributed under [the Continued Dump ing and Subsidy Offset Act of 2000 (“the CDSOA”)] 
shall be distributed as if [the CDSOA] had not been repealed by subsection (a).” 
The total amount of CDSOA disbursements each fiscal  year for the past five years has ranged from 
$226 million (FY 2005) to $330 million (FY 2002). 
 
[Brazil] 
 
3.  Chapter III, paragraph 76
: The Secretariat´s report points out that there are new guidelines to 
prevent circumvention. Which are the objective crite ria that the U.S. Customs and Border Protection 
uses in order to define those “sudden changes” in th e declared values, claimed country of origin, or 
declared classification? 
 
ANSWER:  The guidelines in place are not merely to prev ent circumvention, but also to protect the 
revenue from the risk of non-collection resulting from ra te fluctuations.  To detect circumvention, CBP 
closely monitors import transactions, including chan ges in average unit values of the imported shrimp 
and increases in shrimp imports from non-dumping countries.  
[Brazil] 
 
4.  Chapter III, paragraph 81
: In table III.3, the report shows statistics of anti-dumping investigations in 
the period 1980-2004. However, it does not give in formation on the number of applications for anti-
dumping which were made in the mentioned period. Would it be possible for the United States to provide such statistics for 2004 and 2005? In the same  table III.3, the Secretariat´s report provides the 
number of preliminary and final determinations  for 2004. According to the ANNEX II of the Anti-
dumping Agreement, the authorities can make determinations on the basis of the facts available if 
information is not supplied within a reasonable time or  if an interested party does not cooperate. What 
is the proportion of anti-dumping determinations based on facts av ailable during 2004 and 2005? 
Would it be possible to identify a trend on such proportion?   ANSWER:  During Fiscal Year (FY) 2004 (October 1, 2003-September 30, 2004) there were 33 
anti-dumping petitions filed with the U.S. Depart ment of Commerce.  During FY 2005 (October 1, 
2004-September 30, 2005) there were 10 anti-dumping pe titions filed with the U.S. Department of 
Commerce.  The need for investigating authorities to rely on th e facts available can occur under a wide range of 
circumstances and may involve only a small amount  of information.  The United States does not 
maintain statistics on the number of instances in which the facts available had to be used.  However, as 
many respondents fail to report some amount of inform ation, or report some inaccurate information, it 
is common to fill such gaps with the facts available.           WT/TPR/M/160/Add.1 
Page 191 
 
 
[Brazil] 
 
5.  Chapter III, paragraph 82 :  The report informs that 38 out of 71 of the investigations initiated during 
the period 2002-2003, or 54%, resulted in the applica tion of provisional measures. That rate rose to 
92% in 2004 (24 out of 26 investigations). Th ose provisional measures are related to critical 
circumstances that may arise as a result of the co nditions listed in Article 7 of the Anti-dumping 
Agreement, so they should be applied only on an exceptional basis. To what factor does the U.S. 
Department of Commerce attribute this high percen tage of incidence of provisional measures in 2004? 
What would be the domestic and/or external fact ors that explain those critical circumstances? 
 
ANSWER:  In accordance with Article 7 of the Anti dumping Agreement, the United States applies 
provisional measures only if a preliminary determin ation has been made of dumping and consequent 
injury.  These determinations are made by the Department of Commerce and the International Trade Commission, respectively.  If the preliminary injury  determination by the ITC is negative, then the 
investigation is terminated and no provisional measur es are applied.  If the ITC's injury determination 
is affirmative but Commerce's preliminary dumping determination is negative, then no provisional 
measures are applied at that time, though measures ma y be applied if there is an affirmative final 
determination.  Furthermore, any provisional measures applied initia lly are rescinded if the ITC makes 
a final determination of a threat of material injury (except where material injury would have been found 
but for the initial imposition of provisional measures) or  of material retardation of the establishment of 
an industry.  Thus, provisional measures are applie d only if necessary to prevent injury being caused 
during the investigation. 
 The data cited in the question reflect the determinati ons of the two agencies and the fact that there were 
a higher proportion of negative preliminary determin ations among investigatio ns initiated in 2002 and 
2003 than in 2004.  In addition, of the investig ations initiated in the 2 002-2003 period, six were 
terminated upon withdrawal of the petitions before preliminary determinations by both agencies were 
made.  
[Canada] 
 Summary Observations, (3) Market Access in Goods, Paragraph 13
: 
The Secretariat Report refers to the status of U.S. le gislation containing a clau se to prospectively repeal 
the Byrd Amendment (Deficit Reduction Act of 2005) . The effective date of repeal under this 
legislation is October 1, 2007.   
The United States has claimed that it has "taken the actions necessary to implement the rulings and 
recommendations in these disputes". Canada believes pr ospective repeal is only the first step towards 
compliance, as we understand that antidumping and countervailing duties collected up to September 
30, 2007, will remain subject to disbursement, that is  to say, even after the effective date of repeal.  
 The Dispute Settlement Understanding requires Me mbers to bring inconsistent measures into 
compliance with the WTO Agreement promptly; wh ere immediate compliance is not possible, a 
Member has a reasonable period of time (RPT) in whic h to do so. In this case, the RPT ended over two 
years ago, and October 1, 2007, the effective da te of repeal, is almost 4 years later.  
 2.  Could the United States confirm when disbursem ents pursuant to the Byrd Amendment will cease?  
 
ANSWER:  Subsection (a) of section 7601 of the Defi cit Reduction Act provides that the CDSOA 
is repealed “effective upon the date of enactment of this Act”.  Subsection (b) provides that “[a]ll duties 
on entries of goods made and filed before October 1,  2007, that would, but for subsection (a) of this 
section, be distributed under [the Continued Dump ing and Subsidy Offset Act of 2000 (“the CDSOA”)] 
shall be distributed as if [the CDSOA] had not been repealed by subsection (a).” WT/TPR/M/160/Add.1 
Page 192  
 
[Canada] 
 
Part III. Trade Policies and Practices by Measure, (2 ) Measures Directly Affecting Imports, (iv) Anti-
dumping and countervailing actions , (a) Legislation and administration, Paragraph 72:  
 The Secretariat Report notes that the ITA’s AD/ CVD Petition Counseling and Analysis Unit assists 
U.S. companies regarding trade remedy laws.   
6.  Can the United States provide a general outline  of the services available to U.S. companies, 
including any legal services, provided by this unit?  Are smaller firms given preference in terms of such 
services?  Further, does the Intern ational Trade Commission still operate a similar unit that used to be 
called the Trade Remedy Assistance Office?  ANSWER:  The AD/CVD Petition Counseling and Analysis Unit (PCAU) is part of the U.S. 
Department of Commerce’s Import Administration, which is the administering authority for the 
initiation of antidumping and countervailing duty inv estigations.  Among the responsibilities of the 
PCAU is to provide information to U.S. comp anies with respect to U.S. antidumping and 
countervailing duty laws.  This includes providing info rmation as to the statutory requirements for a 
petition, as well as explaining the process of filing a petition.  However, PCAU neither encourages nor 
discourages the filing of such petitions, and does not provide any legal services.  The PCAU also 
informs U.S. companies about publicly available trade statistics.  All U. S. companies, regardless of size 
or legal representation, are give n equal treatment by the PCAU. 
 The U.S. International Trade Commission still main tains a Trade Remedy A ssistance Office, which 
assists small businesses seeking information about U.S. trade laws. 
 
[Canada] 
 
Part III. Trade Policies and Practices by Measure, (2 ) Measures Directly Affecting Imports, (iv) Anti-
dumping and countervailing actions , (a) Legislation and administration, Paragraph 75:  
 
In July 2004, new guidelines for determining c ontinuous bonding requirements for importers of 
agriculture/aquaculture products subject to anti-dumping/countervail were issued. 
 7.  Canada would appreciate any comments by th e U.S. as to their experience regarding the new 
bonding requirements. How often have they been used and have they been effective in ensuring that 
final duties assessed are paid? Have the new guid elines designed to prevent circumvention been 
effective?   ANSWER:  U.S. Customs and Border Protection (CBP) has applied the bonding directive to the 
antidumping duty orders on certain frozen warm-wat er shrimp.  The U.S. Department of Commerce 
has not yet assessed antidumping duties in these cases, so it is unclear at this juncture whether the 
guidelines have been effective at protecting Customs’  revenue from the risk of non-payment due to rate 
fluctuations.  However, the amende d guidelines have been effective in ensuring revenue protection in 
instances of circumvention.   CBP is closely monito ring import trends and the operation of the directive 
and is prepared to make adjustments as appropriate. 
          WT/TPR/M/160/Add.1 
Page 193 
 
 
[Canada] 
 
Part III. Trade Policies and Practices by Measure, (2 ): Measures Directly Affecting Imports, (iv) Anti-
Dumping and Countervailing Actions, (b) Anti-Dumping, Paragraph 84 : 
 
8.  Does the U.S. have any explanation or opinion as to the reason why almost two thirds of the actions 
taken against imports from the U.S. are by three c ountries: China, Mexico and India? Has this trend 
continued?  ANSWER:  China, Mexico, and India are among the Unite d States' largest trading partners and are 
significant users of the trade remedy rules.  It is not  clear that there is any particular “trend” in this 
regard, but the most recent note posted by the WTO Secretariat (G/ADP/N/140) regarding antidumping actions reported under Article 16.4 of the Antid umping Agreement lists recent actions involving 
imports from the United States brought by Canada (2), Korea, and Pakistan.  [Canada]  
Part III. Trade Policies and Practices by Measure, (2 ) Measures Directly Affecting Imports, (iv) Anti-
dumping and countervailing ac tions, (c) Countervailing duties, Paragraph 91:   [DOC] 
 The Secretariat Report says that in June 2003, the USDOC modified the manner in which it analyses 
whether a subsidized, government-o wned company remained subsidized  after it was “privatized”. In 
October 2003, the USDOC issued revised final determin ations in 12 specific cases that were at issue.  
 9.  What were the results of these revisions?   
ANSWER:  Of the 12 countervailing duty orders refe rred to by Canada, as a result of USDOC's 
application of its new methodology, two counterva iling duty orders were revoked in full, one was 
revoked with respect to one of the two exporters involved, and the cash deposit rates in five were 
lowered or set to zero.  The remaining four count ervailing duty orders, all of  which involved sunset 
reviews, remained in place, although one order wa s subsequently revoked in the course of a changed 
circumstances review.  In addition, as a result of findings made by a panel under Article 21.5 of the 
DSU, the USDOC is re-examining its determinations  with respect to two of the sunset reviews. 
 
[Chile] 
 
(iv)(b) Anti-dumping and Countervailing Actions
 
Paragraph 73 of the Secretariat’s report states that in the United States, the United States International 
Trade Commission (USITC) makes determinations rela ted to injury while those regarding dumping or 
subsidization are made by the U.S. Departme nt of Commerce (USDOC).  Likewise, USITC 
preliminary determinations are made prior to those USDOC makes on dumping or subsidization. 
 1.  What does the United States consider complies with the provisions of Article 5.5.7 of the Anti-
dumping (AD) Agreement as regards simultaneously examining the evidence that dumping and injury 
exist when deciding whether to  initiate an investigation? 
 
ANSWER:  Under U.S. statute, petitioners are require d to file a petition for the imposition of anti-
dumping duties simultaneously with both the Depart ment of Commerce (DOC) and the International 
Trade Commission (ITC).  The DOC examines the entire petition, both the dumping and injury 
allegations, and is the administering authority fo r initiation of the investigation.  The ITC also 
examines the injury allegations in the petition, and may consult with DOC with  respect to the injury 
information provided in the petition for pur poses of initiation of the investigation. 
 WT/TPR/M/160/Add.1 
Page 194  
 
2.  Paragraph 12 of the report’s Summary Obser vations states that in 2004 and 2005 anti-dumping 
investigation initiations decreased and this  should ease concerns among foreign exporters.   Is the cause 
of this decrease because (a) authorities have adopted a policy in this regard; or (b) domestic industry 
has submitted fewer cases for investigation? 
 
ANSWER:  Anti-dumping investigation initiations have  decreased because domestic industries 
have submitted fewer cases for investigations.  3.  Paragraphs 75 and 76 of the report indicate that new guidelines have been issued regarding 
continuous bond requirements for importers and in order to prevent circumvention.  Are these new 
guidelines legally binding?  Are su ch guidelines solely applicable in the case of the Byrd Amendment 
or do they also have repercussions for anti-dumping regulations in general?   
 
ANSWER:  The CBP directive provides port directors with discretion to review continuous bond 
requirements and obtain larger bonds where necessary to protect against the risk of non-payment of 
duties.  The August 2005 supplement to the directiv e specifies the objective criteria that CBP relies 
upon when determining the risk of non-collection of customs revenue that is lawfully due, as well as 
modifying the amount of the continuous bond required.  The guidelines are potentially applicable to any antidumping or countervailing duty order where CBP 
determines that there is a risk of non-payment of duties, whether due to fluctuations in antidumping 
rates, transshipment, undervaluation, or other factor s.  CBP will assess that risk based on the criteria 
specified in the August 2005 supplement.  To date, th e guidelines have been applied to the antidumping 
duty orders on certain frozen warm-water shrimp. 
 
4.  Does the “clarification and improvement” of the provisions of the Anti-dumping (AD) and Subsidies and Countervailing Measures (SCM) Agreemen ts referred to in paragraph 80 of the report 
imply that some provisions of such agreem ents may actually be amended or repealed?  
 
ANSWER:  The mandate in Paragraph 28 of the Doha  Ministerial Declaration for the Rules 
Negotiations provides for negotiations aimed at clarifying and improving disciplines under the WTO 
Antidumping and Subsidies Agreements while preserving the basic concepts, principles and 
effectiveness of these Agreements and their instru ments and objectives, and taking into account the 
needs of developing and least-developed particip ants.  In its submissions to the WTO Rules 
Negotiating Group, the United States has submitted a number of proposals that provide suggestions for 
clarifications and improvements to the Agreements , in accordance with the Doha mandate.  Whether 
the Rules negotiations lead to amendments or repeal of any of the provisions of the Agreements is up to 
the full Membership of the WTO. 
 5.  In the Final Dumping Determination on So ftwood Lumber from Canada (WT/DS264/AB/R), the 
Appellate Body recommended that the United States  bring its practices into line with AD obligations, 
given that it acted in manner inconsistent with Ar ticle 2.4.2 of the AD Agreement when determining 
the existence of dumping margins based on a method th at includes the practice of “zeroing.”  In order 
to comply with the foregoing, the U.S. changed the calculation methodology used from the weighted 
average-to-weighted average methodology to the transaction-to-transaction methodology (paragraph 
87).   Does the United States consider this change to mean  that zeroing will not be applied in the future, 
regardless of the method used?  Otherwise, in li ght of the Appellate Body’s arguments, how can 
zeroing be technically justified in the context of the new method?  With regard to the foregoing, the current wisdom is  that the appropriate method is the transaction-to-
transaction method.  Why, therefore, hasn’t said method been used from the outset?           WT/TPR/M/160/Add.1 
Page 195 
 
 
ANSWER:  To the extent that the AD Agreement requires dumping to be offset by non-dumped 
transactions, it does so only in the context of comp arisons between weighted average normal values 
and the weighted average of prices of all comparable  export transactions during an investigation.  The 
United States discussed the many reasons why any off set obligation may not properly be applied to any 
other comparison methodology in its submissions to the panel and Appellate Body (as appropriate) in 
the various disputes on this issue (DS264, DS294, and DS322).  As a routine matter, the United States 
makes its submissions publicly available on th e internet (http://www.ustr.gov/Trade_Agreements/ 
Monitoring_Enforcement/Dispute_Settlement/WTO/Section_Index.html).  With respect to the second part of Chile’s questio n, the reasons for the use of the transaction-to-
transaction comparison methodology were detailed in the implementation determination to which Chile 
refers.  See Notice of Determination Under Section 12 9 of the Uruguay Round Agreements Act; 
Antidumping Measures Concerning Certai n Softwood Lumber Pr oducts From Canada , 70 Fed. Reg.  
22,636 at 22,645 to 22,646 (Dep’t Commerce May 2, 2005). 
 
[Chile] 
 
(iv)(d)  Suspension Agreements
 
1.  Pursuant to paragraph 93 of the report, the U.S. legislation would allow for AD and Countervailing 
Duty (CVD) investigations to be suspended under specific circumstances, provided that an agreement 
is reached with the exporter to elim inate injurious effects.  Does this mean that such suspensions are in 
addition to those cases in which the resp ective agreement authorizes a compromise? 
 ANSWER:  Section 734(b) of the Tariff Act, as am ended (the Act), allows for suspension 
agreements which eliminate completely sales at less  than fair value or under which exports of the 
subject merchandise cease.  Exporters of the subject merchandise who account fo r substantially all of 
the imports of that merchandise agree either to cease exports within six months after the date on which 
the investigation is suspended or to revise their pri ces to eliminate completely any amount by which the 
normal value of the merchandise exceeds the export pr ice (or the constructed export price).  Section 
734(c) of the Act allows for suspension agreements, wh ich eliminate completely the injurious effect of 
exports to the United States.  If the administering au thority determines that extraordinary circumstances 
are present in a case, it may suspend an investigation upon the acceptanc e of an agreement to revise 
prices from exporters of the subject merchandise who acc ount for substantially all of the imports of that 
merchandise if the agreement will eliminate complete ly the injurious effect of exports to the United 
States.  In addition, the suppression or undercutting of price levels of domestic products by imports of 
that merchandise must be prevented and, for each  entry of each exporter, the amount by which the 
estimated normal value exceeds the export price (or constructed export price) must not exceed 15 
percent of the weighted-average amount by wh ich the estimated normal value exceeded the export 
price (or the constructed export price) for all less- than-fair-value entries of the exporter examined 
during the course of the investigation. 
 
[Chile]  
(iv)(f)  Sunset Reviews
 
1. For purposes of reviews, the U.S. considers as de minimis  any countervailable subsidy or 
dumping margin that is less than 0.5%, while de minimis  rates for initial investigations are 
1% for subsidies (2% for developing countries) and 2% for dumping margins (3% for developing countries) – (paragraph 96). 
 
How is it possible to justify the need to have different de minimis  standards for initial investigations 
and subsequent reviews of measures?    ANSWER:  In United States – Countervailing Duties on Certain Corrosion-Resistant Carbon    
Steel Flat Products from Germany , WT/DS213/AB/R, the Appellate Body found that the de minimis  WT/TPR/M/160/Add.1 
Page 196  
 
standards of Article 11.9 of the SCM Agreement do not  apply to sunset reviews.  In so finding, the 
Appellate Body stated that “limiting the application of [an express de minimis ] standard to the 
investigation phase alone, does not lead to irrational or absurd results.”  Id., para.  89.  In addition, the 
Appellate Body offered several reasons justifications for having different de minimis standards for 
investigations and subsequent reviews of measures.  First, the Appellate Body found that there was not 
a clear “rationale” behind the 1 percent standard of Ar ticle 11.9 that must also apply in the context of a 
sunset review.   Id., para.  84.  Second, the negotiators of the SCM Agreement may ha ve believed that 
automatic termination of a duty was not desirable merely because, after the investigation phase, the 
level of subsidization fell below de minimis.  Id., para.  86.  Third, “original investigations and sunset 
reviews are distinct processes with different purposes.”  Id., para.  87.  The United States agrees with 
the Appellate Body’s observations, and notes that the panel in United States – Anti-Dumping Duty on 
DRAMS from Korea , WT/DS99/R, found that the de minimis  standard of Article 5.8 of the 
Antidumping Agreement does not apply to asse ssment proceedings under Article 9.3.  
 
[Chile] 
 
(v)  Safeguards
 
1.  Paragraph 103 of the report states that, by la w, safeguard measures may include tariffs, quantitative 
restrictions, tariff quotas, import licensing, and other measures.  Given the range of possibilities for applying safeguard measures, what criteria are u sed in determining whether to impose one kind of 
measure versus another in order to comply with Ar ticle 5 of the Safeguards Agreement which stipulates 
that safeguards must only be applied to the extent ne cessary to prevent or remedy  serious injury and to 
facilitate adjustment, given that applying one measure instead of another in a particular case could be 
unnecessarily more restrictive?  ANSWER:  As reflected in the question, Section 203(a)(3) of the Trade Act of 1974 identifies a 
number of specific safeguard actions that the President  can take, such as an increase in duties, a tariff 
rate quota, or imposition of quantitative restrictions, following an affirmative determination of serious 
injury, or threat thereof, by the U.S. International Trade Commission (USITC). 
 Section 203(a)(1)(A) provides that, after receiving the re port by the USITC, the President shall take all 
appropriate and feasible action within his power whic h the President determines will facilitate efforts 
by the domestic industry to make a positive adjust ment to import competition and provide greater 
economic and social benefits than costs.  As to th e criteria for determining what action to take, Section 
203(a)(2) sets forth a list of factors that the President must take into account in this decision.  The first 
item specified for the President to take into account is the USITC’s recommendation and report, 
containing the USITC’s recommendation as to the action that would address the serious injury, or 
threat thereof, to the domestic industry and be most  effective in facilitating the efforts of the domestic 
industry to make a positive adjustment to import competition.   Among the other statutory factors to be taken into account are the probable effectiveness of th e various possible safeguard actions to facilitate 
positive adjustment to import competition, the econom ic and social costs of the various possible 
safeguard actions relative to their economic and soci al benefits, and various factors related to the 
national economic interest of the United States. 
 
[China] 
 Question: (p.36-44) 
The U.S. has granted market economy status to some countries since last review.  As a full WTO 
Member, China has made enormous progress in the de velopment of its market economy.  Regardless of 
the actual situation of China’s economy, the U.S. fails to recognize the market economy status of 
China.  In examining different cases for market  economy status, does the U.S. realize that it has 
adopted double standard, which simply constitutes discrimination against China? 
          WT/TPR/M/160/Add.1 
Page 197 
 
 
ANSWER: Section 771(18) of the 1930 Tariff Act, as am ended, (the Act) provides the definition 
of a non-market economy (NME) for the purposes of the U.S. antidumping and countervailing law, as well as the criteria that the U.S. Department of Commerce (the Department) must consider when making a determination regarding a country’s market  economy status.  The Department must apply the 
same criteria with respect to determining China’s NME status as it does to determining the NME status 
of other countries.  A country determined to be an  NME is treated as such un til that determination is 
revoked. See Section 771(18)(C)(i).  Provided there is  a request from the government of the NME and 
a procedural and substantive basis on which to pr oceed with a review of a country’s non-market 
economy status, it is the Department’s practice to con duct such a determination in an open, transparent 
process in a quasi-judicial proceeding. 
 
The United States notes that not all non-market economi es are the same, and that  different non-market 
economies follow different reform paths, each with a unique set of initial conditions.  The criteria listed 
in Section 771(18) all refer to “the extent” to whic h certain indicators are present in the country under 
review.  In evaluating these criteria, the Department considers not just whether the country has receded 
from central planning, but also whether market  forces have taken root in the economy. 
 
[China] 
 Question: p.38 para. 77-79, p.40 para. 85, para, 87-88, p.42. para. 92, p.44 para. 101 etc.) 
As mentioned in the Secretariat report, the U.S. h as yet to fully implement and comply with several 
other recommendations and rulings of the Dispute Settle ment Body after its recent efforts to repeal the 
Byrd Amendment  far beyond “the reasonable period of time ”. Notwithstanding, Members have been 
showing great patience and understa nding to wait and see the U.S. government working with the U.S. 
Congress to achieve full compliance in this regard. Ho wever, it will not be fair for Members to see the 
U.S. industries taking the U.S. administrative or c ongressional problems as, a buffer or even a leverage 
against competition from foreign industries. 
 Does the U.S. government intend to redouble its efforts with the Congr ess to secure effective 
compliance, which will help not only to uphold U.S.  credibility in the WTO but also to preserve its 
business environment of competition in the long run?  
ANSWER: The U.S. compliance record in WTO dispute settlement is very good.  As the top user 
of the dispute settlement system, both as complainan t and respondent, the United States has been called 
upon to implement in numerous disputes.  The United  States has complied with the vast majority of 
DSB recommendations and rulings in these disputes, in nearly all cases within the “reasonable period 
of time” for doing so.  U.S. efforts to comply have been extensive and persiste nt and will continue in 
that manner.  Over the past two years, these efforts have paid off in legislation implementing DSB 
recommendations and rulings regarding FSC, the 1916 Act, CDSOA and Cotton.   Over the past two 
years, these efforts have paid off in legislation implementing DSB recommendations and rulings in the 
FSC, 1916 Act, CDSOA and Cotton disputes, and Congress is now in a position to focus on the 
remaining cases. 
 
[China] 
 
Separate Rate Policy on ADP
 
 
Question: (p. 38) The Department of Commerce (DOC) of the U.S. adopt s a “Separate Rate policy” in the Anti-dumping 
investigations involving so-called “non-market ec onomy (NME)” factors. This  Separate Rate policy 
assumes that all the enterprises in the NME country are controlled by the government and therefore 
have to accept the nationwide rate, unless an enterprise  can prove that its exports are not controlled by 
the government. WT/TPR/M/160/Add.1 
Page 198  
 
Please provide the legal foundation of the Separa te Rate policy and its consistency with the 
WTO/ADP Agreement.  
How would the DOC guarantee the legitimate rights of exporters from members not being 
recognized as market economies are not further jeopardized? 
 ANSWER: As part of its longstanding practice in proceedings involving non-market economy 
(NME) countries, the U.S. Department of Commerc e begins with a rebuttable presumption that all 
companies within the country are essentially operating units of a single, government-wide entity, and 
thus should receive a single antidumping duty rate (i.e.
, an NME-wide rate).  The presumption of state 
control flows directly from the designation of a country as an NME, as defined by Section 771(18) of the Act.  See
 also  Sigma Corp. v. United States , 117 F. 3d 1401 (Fed. Cir. 1997).  The Department of 
Commerce recognizes, however, that some firms may ope rate independently of th e government in their 
export activities.  Firms  that can affirmatively dem onstrate this independence are eligible to receive a 
“separate rate.”  When China acceded to the WTO, it accep ted Commerce’s NME methodology, 
including the presumption of state control and the se parate rates test, under Article 15 of its Protocol 
until 2016 or until China no longer warrants designati on as an NME.  Commerce determines eligibility 
for a separate rate in the same manner today as upon China accession in 2001.  
 All exporters from WTO Members that the Depart ment of Commerce has designated as being non-
market economy countries have an opportunity to dem onstrate that they operate independently of the 
government in their export activities, and so the De partment of Commerce in no ways jeopardizes their 
legitimate rights. 
 
[China] 
 
During the period under review, DOC of the U.S. ha s modified the application procedures for separate 
rates, which largely increase the difficulty  in application for separate rates. 
 
According to the new Separate Rate policy, does the investigating authority request every 
respondent to fill out the application individually, re gardless the fact that some of them might be 
affiliated, commonly owned or foreign owned?  
Does the investigating authority of the U.S. re quest the exporters to provide the Customs Form 
7501, which, however, is possessed by the importers of the U.S.?   
How would the investigating authority of the U.S. guarantee the burden of proof is reasonably set? 
 Due to the differences of domestic regulations in registration of enterprises and custom clearance in 
various Members, and due to the difference in opera tions of various exporters, especially those small-
and-medium-sized enterprises of the developing Me mbers, some exporters applying for separate rates 
may not be able to provide all the document s requested by the investigating authority.  In such 
circumstances, would the investigating authority consider handling the requests of documents in 
a flexible manner? 
 
What is the time limit to submit the requested documents when applying for separate Rate? Would the investigating authority consider this ti me limit adequate for the exporters, especially 
those small-and-medium-sized enterprises of no n-English-speaking developing Members, to 
prepare and submit all the requested documents? If not, would the investigating authority consider to extend the time limit according to Article 6.1 of WTO/ADP Agreement? 
Would the U.S. consider to adjust or even abolish this separate rate policy? 
Would the investing authority of the U.S. take measures to guarantee the maximized justice in the implementation of this separate rate policy? 
          WT/TPR/M/160/Add.1 
Page 199 
 
 
ANSWER: The U.S. Department of Commerce requires ev ery respondent to fill out the application 
individually.  The Department requests that exporte rs provide, insofar as they are able, Customs Form 
7501.  The Department of Commerce requires that fi rms submit various documents to the Department 
demonstrating that the exporter in question qualifies fo r a separate rate.  If firms can show that these 
documents are not available, Commerce may accept alternative documentation or an affidavit. 
 
[China] 
 
New Sampling Method of the Administrate Review of Anti-dumping Measures  
 Question: (p.43 para.95) 
DOC of the U.S. has adopted a new probability-proportional-to-size sampling method to select the mandatory responding enterprises in the administ rate review of Anti-dumping measures since May 
2005. According to this new method, some large e xporters might not be able to be selected and 
therefore be forced to subject to an unknown averag e rate. While in contrast, those small enterprises 
which lack adequate resources and are not ready to  undertake the whole process of review might be 
selected to be the mandatory respondents. In additi on, due to the uncompetitive cost and price of these 
small enterprises, the dumping margin are likely to be higher than normal, therefore the average duties 
are also likely to be increased unfairly. 
 
Will this new sampling method increase the uncertainty and difficulty of the administrative 
review of the anti-dumping cases?  
 
ANSWER: As discussed below, the Department of Commerce has the authority under both the 
U.S. antidumping law and consistent with the WT O Antidumping Agreement to limit its examination 
when it is impracticable to exam ine each respondent firm individually.  Whether the Department 
employs sampling or chooses the firms that account for the largest volume of exports under review, all firms in an antidumping review should be prepared to  participate fully.  The Department cannot select 
firms to participate in a review based on which of th em are better prepared to participate.  In certain 
circumstances, the Department has granted special consideration to help sm aller firms who are not 
represented by counsel, e.g., extra guidance in submitting information, extended deadlines, etc. 
 
What is the justification of this new method? What  is the legal basis of this new method? What is 
the consistency of this new method with the WTO/ADP Agreement? 
 ANSWER: When it is impracticable for the Department  of Commerce to examine each respondent 
firm individually in an antidumping duty investiga tion or administrative review, both the Antidumping 
Agreement and the U.S. statute and regulations allow for limiting the number of respondent firms 
through either a statistically valid sample or by c hoosing those that account for the largest volume of 
exports of subject merchandise under investigation or review. See
 Section 777A of the Act and Article 
6.10 of the Antidumping Agreement.  Under U.S.  Antidumping law, and consistent with the 
Antidumping Agreement, the Department has the au thority to determine which of these two methods 
by which it limits the number of firms as well as wh ich statistically-valid sampling methodology to use. 
 [China]  
The Prices of Market-based Purchase of Input
 
 
During the period under review, the investigating au thority of the U.S. has made changes in using 
market-economy prices to value the factors of production in NME antidumping cases. The new practice requires that the majority (i.e., over 50%) of the particular input was purchased from market-economy 
suppliers so that this purchased pri ce to be used to value all consumption of a particular input, whereas 
in the original method, this proportion was only 15-20%. WT/TPR/M/160/Add.1 
Page 200  
 
What is the reason and legal basis of this increa se from 15-20% to 50% of the market-economy 
prices in the calculation of the prices of the input?  
Please explain the consistency of this change with the WTO rules.  
ANSWER:  The Department of Commerce has not yet changed how it uses market-economy input 
prices in NME antidumping cases.  While Commerc e has requested public comment on various 
potential changes to how it does this, the Department  is still considering the comments it has received. 
 
[China] 
 
The actual market-based prices of cer tain input shall be regarded as “best available information” so 
long as this market–based price is reliable. And the i nvestigating Authority’s decision of whether to use 
an NME respondent’s actual purchase prices should no t focus on the quantity of these purchases but on 
their bona fide nature.  
 
Please explain why the investigating authority use surrogate values when actual, market-economy 
prices are available. What is the consistency of  this practice with the Article 2.4 of WTO/ADP 
Agreement?   ANSWER: Where an NME producer purchases inputs from market economy suppliers and pays in 
a market economy currency, the Department normally uses the actual price paid by the NME producer 
for these inputs to value the input in question, where possible.  See
 Section 773(c)(1) of the Act; 19 
CFR 351.408(c)(1).   The Department requires that the quantity of the input be “meaningful”, because 
sales of small quantities cannot be relied upon to constitute a representa tive price and so constitute the 
“best available information” under section 773(c)(1 ) of the Act.  Additionally, the Department 
disregards market economy input purchases when the prices for such inputs may be distorted or when 
the facts of a particular case otherwise demonstrate that market economy input purchase prices are not the best available information.  Provided that conditions described above do not hold, the Department will normally use market-economy input prices in its calculations of normal value in NME cases. 
 ADA Article 2.4 does not speak to the use of mark et-economy inputs in NME cases, which is one 
component of Commerce’s NME methodology.  Wh en China acceded to the WTO, it accepted 
Commerce’s NME methodology under Article 15 of China’s Protocol until 2016 or until China no longer warrants designation as an NME.  
[China] 
 
The Federal Circuit has held that where “input pr ices are market determined, accuracy, fairness, and 
predictability are enhanced by using those prices., using surrogate values when  market-based values are 
available would, in fact, be contrary to the intent of the law.”  How will the investigating authority comment on this decision? 
 
ANSWER:  The statement quoted above was originally made by the U.S. Department of Commerce 
itself in Final Determination of Sales at Less Than  Fair Value: Oscillating Fans and Ceiling Fans from 
the People's Republic of China , 56 FR 55271, 55274-75 (October 25,  1991). The Federal Circuit 
repeated and affirmed this statement in Lasko Metal Prods. Inc. vs. United States , 43 F.3d (Fed. Cir. 
1994).  The logic of these statements, that the Department will use market-economy input prices when they are available and not distorted, still forms the basis of the Department’s methodology in this area 
today.           WT/TPR/M/160/Add.1 
Page 201 
 
 
[China] 
 
Sunset Review  
 
Question: (p.43 para. 96) What measures would the U.S. take, in line with sunset clause, some anti-dumping measures which had 
lasted for a long period of time? 
 
ANSWER:  Under U.S. law, which is consistent with the WTO Antidumping Agreement, the 
United States conducts a sunset review every five ye ars that an antidumping measure is in place.  The 
United States will revoke the measure, unless as a resu lt of the sunset review the Department of 
Commerce finds that revocation would be likely to lead to continuation or recurrence of dumping and 
the U.S. International Trade Commission finds that revocation would be likely to lead to continuation 
or recurrence of injury, the United States will revoke the measure.  
[Chinese Taipei] 
 
Question 7 (pages 39-40, paragraphs 81-83) Anti-dumping measures have been the main means by which the US government has protected its 
domestic market from unfair trade.  According to the data in the Secretariat report and USDOC’s website, the US initiated about 44 anti-dumping inv estigations per year between 2000-2004.  During 
the same period, it terminated only 20 cases, resu lting in an increase in the total number of anti-
dumping measures in force over the said period.  Ho wever, the trend in recent years of decreasing 
incidences of anti-dumping investigation initiations is a positive sign of less frequent use of the anti-
dumping remedy by US domestic industries. 
 
One rationale for justifying the use of anti-dumpi ng measures is that exporters may adopt a dumping 
strategy to exploit foreign markets if their own dom estic market were protected by tariff and non-tariff 
barriers.  Accordingly, does the US think that th e freer trade that could result from the Doha Round 
would reduce the need to use anti-dumping measures ?  What experiences does the US have in this 
context with countries with whic h it has an FTA relationship? 
 ANSWER:  It is premature at this point to specula te as to whether freer trade resulting from the 
Doha Round will reduce the need for Members to use tr ade remedies.  As the Un ited States stated in an 
October 2002 submission (TN/RL/W/27) to the WT O Negotiating Group on Rules, trade liberalization 
resulting from the Uruguay Round has led to increased trade overall, but has left markets more open to 
the effects of unfair trade practices, while eliminati ng some of the less transparent means that Members 
had previously used to deal with these problems, so it is not surprising that trade remedies have become 
important to a broader universe of WTO Members.  As further emphasized in the same U.S. submission, it is essential that Members address directly the subsidies and other trade-distorting practices that lead to unfair trade; addressing these ro ot causes directly can help to minimize the need 
for Members to resort to trade remedy measures.   
 The United States has FTAs with a number of countr ies, including with some of our largest trading 
partners.  The existence of an FTA generally does not affect our rights and obligations under the WTO 
with respect to the application of antidumping a nd countervailing duty measures, and our experiences 
have been largely the same with FTA partners as w ith countries with which we do not have an FTA.   
 WT/TPR/M/160/Add.1 
Page 202  
 
Question 8
 (page 43, paragraph 97)  
Some of the factors or criteria that the USDOC nor mally relies upon in determining the likelihood of 
the continuation or recurrence of dumping in sunset reviews are illustrated in the report.  However, 
according to the requirements of Article 11.3 of the WTO Anti-dumping Agreement, the investigating 
authority shall review the likelihood of continuation or recurrence of injury as well.    
Could the US please explain what factors or criteria the USITC considers or relies upon in making a 
determination of the likelihood of injury? 
 
ANSWER:  U.S. law directs the U.S. International Trade Commission to consider numerous factors 
in making determinations of likelih ood of continuation or recurrence of material injury in five-year 
reviews.  Specifically, the U.S. statute directs th e ITC to consider the likely volume, likely price 
effects, and likely impact on the domestic industry if the order under review is revoked.  19 U.S.C. § 
1675a(a).  With respect to likely subject import volum e, the statute directs the ITC to consider: (1) 
likely increases in production capacity or existing unused  capacity in the exporting country; (2) existing 
and likely increases in inventories of subject mercha ndise; (3) the existence of barriers to importation 
to subject merchandise in countries other than th e United States; and (4) the potential for product 
shifting.  With respect to likely price effects of the subject imports, the statute directs the ITC to 
consider: (1) the likelihood of significant underse lling and (2) the likelihood of significant price-
depression or -suppression.  With respect to likely impact of subject imports on the domestic industry, the statute directs the ITC to consider likely declines or negative effects in output, sales, market share, 
profits, productivity, return on investments, utiliza tion of capacity, cash flow, inventories, employment, 
wages, growth, ability to raise capital, and inv estments, and likely negative effects on the existing 
development and production effects of the industry.  The statute further directs the ITC to consider 
generally: (1) its prior injury determinations; (2) wh ether any improvement in the state of the domestic 
industry is related to the order(s) under review; (3 ) whether the domestic industry is vulnerable to 
material injury upon revocation of the order(s) under reviews; and (4) any Commerce findings on duty 
absorption.  The ITC may consider the magnitude of the margin of dumping or net countervailable 
subsidy determined by U.S. Department of Comme rce, and is directed to consider information 
regarding the nature of any countervailable subsidy.   
 
[Colombia]  
2. Safeguards: In accordance with paragraph 103, su bparagraph a) Title V), the Foreign Trade Act of 
1974 limits the maximum applicable duty to an increase  of 50% ad valorem of the current rate (if any 
exists).  Does this mean that if it is determined that it is feasible to adopt a safeguard measure for a 
product with reduced taxes, the tariff increase co uld be unlimited, since the restriction of the 
aforementioned Act refers explicitly to products with tariff levels a bove 0%?  Could it be interpreted 
that the reduced tax products could not be  eligible for tariff safeguard measures? 
 
ANSWER:  Section 203(e)(3) of the Trade Act of 1974 states that “no action may be taken under 
this Section which would increase a rate of duty to (or impose a rate) which is more than 50 percent ad 
valorem  above the rate (if any) existing at the time the action is taken.”  The reference to “if any” in 
Section 203(e)(3) thus makes clear that this provis ion contemplates and may apply to a product even 
where there is no rate of duty existing at the time the action is taken.  In such a case, the rate of duty 
may not be raised to a rate above 50 percent ad valorem .  It is accordingly not correct that that the 
increase in tariff could be unlimited for such a product,  nor is it correct that such products would not be 
eligible for a tariff safeguard measure.  Furthermore,  it is not correct that the increase in tariff under a 
safeguard measure could be unlimited for a product s ubject to reduced tariffs, nor is it correct that 
products subject to reduced tariffs could not be eligible for tariff safeguard measures. 
          WT/TPR/M/160/Add.1 
Page 203 
 
 
[Hong Kong China] 
 
Anti-dumping  
(WT/TPR/S/160, P. 39, Paras. 81 - 82 and Table III.3) 
 2. Note that in 2004, while the number of inves tigations initiated is lower than that of 2002 or 
2003, the incidence of provisional measures is much  increased from 54% in 2002 and 2003 to 92%, i.e. 
24 out of the 26 AD investigations initiated resulted in the application of provisional measures.  Can 
the US please clarify if there is a change in po licy or practice or any other reason for the significant 
increase?  
ANSWER:  In accordance with Article 7 of the Anti dumping Agreement, the United States applies 
provisional measures only if preliminary determinati ons have been made  of  dumping and consequent 
injury.  These determinations are made by the Department of Commerce and the International Trade 
Commission, respectively.  The data cited in the question do not reflect any change in policy or 
practice; they reflect the determinations of the two agencies and the fact that there was a higher 
proportion of negative preliminary determinations among investigati ons initiated in 2002 and 2003 
than among those initiated in 2004.  In addition, of the investigations initiate d in the 2002-2003 period, 
six were terminated upon withdrawal of the petiti ons before preliminary determinations by both 
agencies were made. 
 
[Hong Kong China] 
 (WT/TPR/S/160, P. 42 - 43, Paras. 93 - 94) 
 3. Note that suspension agreements were entered into in respect of certain AD cases. Grateful to 
know if this option is invariably offered to the exporting sides in all AD cases. If not, what are the 
criteria for offering or adopting this option?   
 ANSWER:  The opportunity to request a price undertaking is provided for in U.S. law and 
regulations and is available in all investigations .  When a request for an undertaking is made in 
accordance with U.S. law and regulations, the Departme nt of Commerce gives it serious consideration.  
Whether an undertaking is entered into in any pa rticular case depends upon whether the parties are 
willing to enter into an undertaking that meets the cond itions of U.S. law (which are consistent with the 
requirements of the Antidumping Agreement), a nd whether the undertaking is practical and 
administrable.  [India]  
Byrd Amendment:   
Q.2 On February 1, 2006, the US Congress approve d the repeal of Byrd amendment with a 
transition clause that the repeal would be effec tive from October 1, 2007. While India welcomes the 
action taken by US, we understand that the trans ition clause also provides that the collected AD & 
CVD margins up to October 1, 2007 continue to be distributed after this date. US authorities are 
requested to clarify its stand. 
 
ANSWER:  Subsection (a) of section 7601 of the Defi cit Reduction Act provides that the CDSOA 
is repealed “effective upon the date of enactment of this Act”.  Subsection (b) provides that “[a]ll duties 
on entries of goods made and filed before October 1,  2007, that would, but for subsection (a) of this 
section, be distributed under [the Continued Dump ing and Subsidy Offset Act of 2000 (“the CDSOA”)] 
shall be distributed as if [the CDSOA] had not been repealed by subsection (a).” 
 WT/TPR/M/160/Add.1 
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[India] 
 
Q.3 US customs introduced a new provision requiring continuous bond from US importers of 
agriculture and aquaculture products liable to antidumping duty since July 2004. As per the new requirements, the bond should cover one year’s antic ipated antidumping duty and it should be given in 
addition to cash deposit of antidumping duty at the time  the concerned shipments enter into US. Due to 
the additional bonding requirement imposed by US customs, India’s shrimp exports have been 
adversely affected. The magnitude of financial burden faced by Indian exporters has increased 
tremendously. This is a non-tariff barrier. Would US agree to repeal this additional burden?  
 
ANSWER:  CBP introduced the new bonding guidelines to  address the very real threat of non-
collection of antidumping and countervailing duties.  Ov er the past several years, CBP has been unable 
to collect from the importers of record $500 million in antidumping and countervailing duties that are lawfully due.  Approximately 78 percent of th at amount stems from anti dumping and countervailing 
duty orders in the agriculture and aquaculture sector.  CBP is closely monitoring import trends and the 
operation of the directive and is prepar ed to make adjustments as appropriate.
 
 
[Indonesia] 
Anti dumping (page 39 of the Report)  
 
1. It is the fact that the US is one of the most active countries using antidumping actions to protect 
its domestic industries from unfair imports products.  The Report says that at the end of 2004 
AD orders were applied to imports from 44 countries and of some 273 AD duty orders, 55% 
were applied on iron and steel products a nd the rest were applied on chemicals, 
pharmaceuticals, agriculture and forestry pr oducts. Based on our observation, for a quite 
lengthy time, most of the US antidumping actions are focused on import of steel and iron 
products to protect inefficient domestic industries in the US market.  Indonesia is seeking 
further clarification on this observation.  
 ANSWER:  The United States applies its AD/CVD laws in a manner consistent with its obligations 
under the WTO, and provides relief only for those i ndustries that have been found to be injured by 
reason of dumped imports or unfairly subsidized merc handise.  The particular sectors identified above 
have been the subject of anti-dumping orders from a number of WTO Members, and not merely the 
United States.  
[Japan] 
 
(iii) Anti-dumping and countervailing actions 
Q10. Continued Dumping and Subsidy Offset Act (p.36, para.74)  
The Government of Japan welcomes that in February 2006 the Deficit Reduction Omnibus 
Reconciliation Act 2005, which contains the provisi ons repealing the CDSOA, was approved by the 
U.S. congress and was signed into law by the President of the U.S. Though this is a significant step forward, Japan deeds that the U.S.  has not fully taken the actions necessary to implement the rulings 
and recommendations by the WTO Dispute Settlement Body (DSB) because the Act decrees that duties 
on entries of goods made and filed before October 1, 2007 shall be distributed; thus the repeal of the 
CDSOA will not have immediate effect and is post poned by a transitional clause.  This means that, 
although the CDSOA was repealed on its face, in substa nce it will remain in force for some time by 
virtue of the transitional clause.  Therefore, Japan  urges the U.S. to immediately bring it fully in 
compliance with the DSB’s recommendations and rulings .  Japan also urges the U.S. to terminate the 
aforementioned distribution immediately.  In these r espects, please indicate the specific views of the 
Government of the United States.  
ANSWER:  The Senate voted to approve the Deficit Reduction Act, which includes a provision 
repealing the Continued Dumping and Subsidy O ffset Act, by a vote of 51 to 50 (with the Vice          WT/TPR/M/160/Add.1 
Page 205 
 
 
President breaking the tie) on December 31, 2005.  The House of Representatives voted to approve the 
Act on February 1, 2006, by a vote of 216 to 214.  The President signed the Act into law on February 8, 
2006, and, at that point, the United States took al l actions necessary to implement the rulings and 
recommendations of the DSB.   
 The immediate termination of distributions to aff ected domestic producers would require a separate and 
additional act of Congress. 
 
[Japan] 
 
Q11. Lawsuit related to the Anti-Dumping Act of 1916 （p.38, para.77)  
The Anti-dumping Act of 1916 was repealed on Dece mber 3, 2004.  However, the Government of 
Japan is concerned about the ongoing lawsuit agai nst a Japanese company under the Anti-dumping Act 
of 1916.  The Government of Japan urges the Governme nt of the United States to work on the judicial 
authorities, through actions such as filing Amicus Curiae Brief, to prevent damages being inflicted 
upon the Japanese company by a judgment based on the Act that was found inconsistent with the WTO 
agreement and repealed already.  In this regard, pl ease indicate the specific views of the Government of 
the United States. 
 
ANSWER:  The United States takes note of Japan’s request .  In this regard, we note that Japan has 
filed its own amicus  brief in which it asked the appeals court to require proof of predatory intent under 
the 1916 Act.  However, during the WTO dispute settlement proceedings, Japan asserted that the 1916 
Act did not
 require predatory intent, in an attempt to show that the 1916 Act is an impermissible 
“specific action against dumping”, rather than a comp etition law.  We also note that the Japanese 
company at issue here has been found to ha ve engaged in deliberate misconduct during the 
antidumping proceedings (e.g., by making secret rebate deals with customers to conceal dumping). 
 [Japan]  
 
Q12. Anti-Dumping measures on Certain Hot-Ro lled Steel Products from Japan (DS184) (p.39, 
paras.82 to 83)  
With regard to the dispute regarding the anti- dumping measures on certain hot-rolled steel products 
from Japan, the measures taken by the United States were found inconsistent with the WTO Agreement 
in August 2001. However, the Government of the United States has not fully implemented the WTO 
Dispute Settlement Body (DSB)’s recommendations a nd rulings that called for certain legislative 
amendments.  More specifically, the United States’  Tariff Act of 1930 requires the inclusion of 
margins, concerning the companies under investigati on, established in part based on “facts available” 
in calculating “all others’ rate”.  We are aware that  a bill has been introduced in the US House of 
Representatives (H.R.2473) that seeks to implemen t the DSB’s recommendations and rulings with 
respect to the U.S. anti-dumping statute in May 2005.  Please explain the present status of the 
discussions in the Congress.  
ANSWER:  The Administration is currently working w ith the U.S. Congress to identify appropriate 
legislative vehicles to complete implementation in DS184.  [Japan]  
Q13. Softwood lumber from Canada （p.40, para.85 and p.42, para.92 ） 
Japan and the United States are among the main impo rt countries of softwood (coniferous) lumber from 
Canada.  We recognize from this report that the United States is in consultations with Canada 
concerning the review of CVD (countervailing duti es) orders on certain softwood lumber products 
from Canada as of October 2005, and the WTO panel in November 2005 found that the USITC’s Section 129 injury determination was not inc onsistent with the AD (Anti-dumping) and SCM WT/TPR/M/160/Add.1 
Page 206  
 
(Subsidies and Countervailing Measures) agreement.  In this regard, please indicate the present status 
as well as the future prospects of these negotiations. 
 
ANSWER: On July 1, 2006, the United States and Ca nada reached a bilatera l agreement to settle 
this dispute.  [Japan] 
 
Q14. Zeroing (pp .40-41 paras. 87-88)  
The Panel procedure is on-going for the case under whic h Japan challenges the “zeroing” procedures of 
the United States.  The zeroing procedures in orig inal investigations have been already found 
inconsistent with the WTO Agre ement by the Appellate Body in EC—Anti Dumping Duties on Imports 
of Cotton-type Bed Linen from India  and United States—Final Dumping Determination on Softwood 
Lumber from Canada .  In addition, the Panel report for the case where the EC challenged the United 
States’ zeroing methodologies was issued and circulat ed to the Members in October 2005.  In the 
report, the Panel found that the U.S. zeroing methodologi es in original investigations were inconsistent 
with the WTO Agreement on both an “as such” and “as applied” basis. The Government of Japan 
deems zeroing procedures, not only in the original investigations but in an y anti-dumping proceedings, 
inconsistent with the WTO Agreement, and urges th e Government of the United States not to apply 
zeroing procedures in any anti-dumping proceedings.  In this regard, please indicate the specific views 
of the Government of the United States. 
 ANSWER:  As Japan is aware, the Panel in DS322 (the dispute between Japan and the United 
States) is in the process of completing its work.  Th e United States has made clear its specific views on 
this issue in its submissions before the Panel in DS322, as well as in its submissions to the Appellate 
Body in the appeal of DS294, to whic h Japan has had access as a third party. 
 [Japan]  Q15. Model-Matching on administrative reviews (p.43, para.95) 
(1) In calculating dumping margins, one needs to cl assify different models of the product in question 
and its domestic “like product”, and then determine a domestic product m odel that is “identical” to or 
“closely resembling” the export product model (so-ca lled “model-matching”). In  the annual review of 
anti-dumping measures on ball bearings imported fro m Japan in FY2003/2004, the Department of 
Commerce announced without any convincing r easons the revision of the model matching 
methodology that had been used without any signifi cant problems in the past fourteen anti-dumping 
reviews.  The new methodology proposed by the De partment of Commerce, which compares prices of 
dissimilar products, will reduce the predictability of the results of anti-dumping investigations, and 
impose excessive burdens on Japanese exporters to submit an enormous amount of domestic sales and 
price data. In addition, the Government of Japan is deeply concerned that reviews through the new 
methodology are applied retroactively to the transact ions prior to the introduction of the methodology.  
Japan would like to ask the Government of the Unite d States why the retroactive application to imports 
before entry into force of the new methodology can be allowed, taking into account the basic principle 
of non-retroactivity.  
 (2) Also, Japan urges the U.S. to fully recognize the evident unfairness of the new methodology that 
causes the aforementioned problems, and to rescind the revision of the methodology.  In this regard, please indicate the specific views of the Government of the United States.  
ANSWER:  The U.S. Department of Commerce (Co mmerce) explained fully its reasons for 
revising its model-matching methodology in this case in the Federal Register notice of final results 
published on September 16, 2005.  [70 FR 54711]  As not ed in the final results, all parties were given 
ample notification that Commerce was consideri ng a modification.  Commerce solicited extensive 
comments from interested parties regarding this  new methodology and made revisions to the          WT/TPR/M/160/Add.1 
Page 207 
 
 
methodology to incorporate many of those comments and further improve the methodology.  Both the new methodology and the U.S. administrative review  process are consistent with U.S. obligations 
pursuant to the Antidumping Agreement.  [Japan]  Q16. Changed circumstances review of the determinat ion of the past administrative review (p.43, 
para.95)  
With regard to the changed circumstances review  of the revoked order on large newspaper printing 
presses and components thereof (LNPPs) initiated by the Department of Commerce (the DOC) in May 
2005, it was announced in the final determination on 2 March 2006 that the DOC, (1) revised the 
margin of Tokyo Kikai Seisakusho(TKS) for the 1997- 1998 review to apply a rate of 59.67 percent, (2) 
rescinded the anti-dumping duty order fo r TKS in January 2002, and (3) will reopen for reconsideration 
a sunset review in 30 days.  
The revocation of the order on LNPPs in 2002 was based on the fact that the domestic industry 
withdrew its interest in the sunset review proceedings , and this is not at all relevant to the reason why 
the new sunset review will be initiated,  which is "TKS's deliberate misconduct". 
 In addition, if the revoked order is restored by th e reconsideration, it will affect not only the company 
subject to the changed circumstances review, but al so other Japanese exporters.  This would seriously 
undermine the predictability of the normal business tran sactions of the exporters.  The Government of 
Japan is also concerned with this aspect.  With resp ect to reconsidering the sunset review based on the 
irrelevant reason of the revocation of the order in the past sunset review by the Government of the 
United States, please indicate the reason why it is cons istent with Article 11.3 of the AD Agreement. 
 
ANSWER:  As Japan knows, the United States conducts its sunset reviews on an order-wide basis, 
and the Appellate Body has agreed that order-wide s unset reviews are consistent with Article 11.3 of 
the AD Agreement.  The Department of Commerce ta kes into account company-specific revocations in 
sunset reviews.  Therefore, a company-specific re vocation that was based on misconduct is germane to 
the sunset review's order-wide determination.  Japan  may recall that the U.S. Court of Appeals for the 
Third Circuit concluded that TKS concealed rebates, destroyed docu ments and misled the Department 
in its antidumping duty proceeding.  Article 11.3 does not prohibit Members from ensuring that determinations are conducted on the basis of an accu rate factual record.  To  the extent Japan is 
suggesting the contrary, the United States respectfully disagrees.  [Japan]  Q17. Sunset Reviews (p.43, paras. 96-101) [DOC] 
The United States sunset review procedures, by thei r related legislations, re gulations, policy bulletins 
and in their actual implementations, maintain anti-du mping measures in principle, and terminate them 
only in exceptional cases. Although the WTO Dispute Se ttlement Body rejected Japan’s claim for the 
corrosion-resistant carbon steel flat products case, Ja pan still deems the United States’ sunset review 
procedures not consistent with the WTO Anti-dum ping Agreement.  Indeed, many anti-dumping 
measures are not terminated in five years and remain  in force for a long time.  We understand that the 
anti-dumping duty on polychloroprene rubber has continue d for more than 30 years and users in the 
United States complain about this long-term measure .  Japan urges the United States to terminate anti-
dumping measures within five years, in principle,  even before anti-dumping negotiations under WTO 
Doha Development Agenda strengthen regulations related to the sunset legislation.  In this regard, 
please indicate the specific views of the Government of the United States.  
ANSWER:  The United States’ procedures on sunset reviews are consistent with its WTO 
obligations and have been upheld in several WTO di sputes.  We disagree with Japan’s characterization 
of U.S. sunset review procedures.  Of the 378 sunset  reviews completed by the end of 2005, almost half WT/TPR/M/160/Add.1 
Page 208  
 
(188) have resulted in the revocation of the antidum ping or countervailing duty order.  Thus, Japan’s 
contention that antidumping and countervailing duty orders are terminated only in “exceptional cases” 
under U.S. sunset procedures is not an accurate characterization. 
 
[Korea] 
 1. We welcome the news in paragraph 79 on page 38 of the Secret ariat Report that Legislation to repeal 
the Byrd Amendment was passed by both houses in Congress and would be soon presented to the 
President for signature. Despite the ongoing US legi slative developments to comply with the WTO 
adjudication against the Byrd Amendment, it is re ported that a certain Korean exporter, who was 
determined to have committed dumping in a prel iminary anti-dumping investigation by the U.S. 
government, was asked to pay for the anti-dumping bond required by the Byrd Amendment. We also 
note from other sources that the amendment will be ineffective only after October 2007 in accordance 
with the recently drafted transitional clause.  
 
We would like to know what is a specific timeframe  that the US government is planning to complete 
the process for repealing the Byrd Amendment. Please  confirm that the legislation to repeal the 
Amendment includes transitional clause mentioned above. If so, does the US government have any 
plans to rectify the distortions caused by it during the transitional period, like the Korean export’s case? 
 
ANSWER:  Subsection (a) of section 7601 of the Defi cit Reduction Act provides that the CDSOA 
is repealed “effective upon the date of enactment of this Act”.  Subsection (b) provides that “[a]ll duties 
on entries of goods made and filed before October 1,  2007, that would, but for subsection (a) of this 
section, be distributed under [the Continued Dump ing and Subsidy Offset Act of 2000 (“the CDSOA”)] 
shall be distributed as if [the CDSOA] had not been repealed by subsection (a).” 
 
The President signed the Act into law on February 8, 2006, and the Administration will implement the 
Act.  It is not clear what distortions Korea refers to in its question.  Neither the CDSOA nor section 
7601 of the Deficit Reduction Act requires the payment of any anti-dumping bond.  
 
[Mexico] 
 
7.  Regarding the Petition Counseling and Analysis Unit described in paragraph 72, could the United 
States indicate whether: 
  (a) Said Unit provides guidance to U.S. co mpanies on submitting their initial petitions; it 
supplies them with trade and tariff data (according to the ITA website).  What is the budget of this unit?  
Does it maintain a directory of U.S. companies and if  so, if it available for consultation by companies 
interested in submitting an application? 
 ANSWER:  The Petition Counseling Analysis Unit (PCAU) is a small unit, and there is no separate 
specific line item for it in the budget of Departme nt Commerce’s Import Administration.  The PCAU 
maintains a database of companies it has counseled but, as with all specific information concerning pre-
petition counseling; it is strictly confidentia l and not available for public disclosure. 
  (b) The same Internet website, in the section on Most Frequently Asked Questions, 
mentions section 771(4)(E) of the U.S. Trade Act, “permitting harvesters of an agricultural product in 
certain situations to file a petition against a fi nished agricultural product in conjunction with the 
processors of that product.”  Could the United Stat es explain how this provision works, and in how 
many cases involving agricultural products it has been  used?  Which cases resulted in the imposition of 
duties in the final determinations?  ANSWER: Section 771(4)(E) of the Trade Act provides that, under certain circumstances set forth 
in the statute, in an investigation involving a processed agricultural product produced from a raw          WT/TPR/M/160/Add.1 
Page 209 
 
 
agricultural product, the producers or growers of the raw agricultural product may be considered part of 
the industry producing the processed product.  The De partment of Commerce applied this provision in 
the initiation of  antidumping investigations on Certain Frozen and Canned Warmwater Shrimp from 
Brazil, Ecuador, India, the People’s Republic of China, Thailand, and the Socialist Republic of 
Vietnam, as well as the initiation of an antidumping i nvestigation on Certain Orange Juice from Brazil. 
 
[Mexico] 
 
8.  Paragraph 73 indicates that although the USDOC has the authority to self-initiate investigations, it 
seldom does.  Could the United States tell us how many investigations have been initiated by the 
Department of Commerce?  Which of these cases resulted in the imposition of duties in the final 
determinations?  ANSWER: Under U.S. law, the Department of Commerce has the legal authority to self-initiate an 
antidumping or countervailing duty investigation wh en it has the  factual basis to show that an 
investigation is warranted.  The WTO Antidumpi ng and Subsidies Agreements, like the predecessor 
Tokyo Round Antidumping and  Subsidies Codes, lim it self-initiation to instances in which there are 
“special circumstances.”  While the U.S. statute do es not define what “special circumstances” are, the 
Department has exercised its authority to self-initi ate in a manner consistent with the concept of 
“special circumstances.”  Since the WTO Agreement entered into force, the Department has not self-
initiated a single antidumping or coun tervailing duty investigation.  Pr ior to entry into force of the 
WTO Agreement, the Department self-initiated cases on the following three occasions:  Steel from 
various countries in 1979-82; Semiconductors from Ja pan in 1986; and Softwood lumber from Canada 
in 1991.  In the case of Softwood Lumber, a di spute settlement panel established under the Tokyo 
Round Subsidies Code found that th e Department’s self-initiation w as not inconsistent with the 
provisions of the Code.  All of these cases re sulted in the imposition of duties in the final 
determinations. 
 
[Mexico] 
 
9.  Regarding the Byrd Amendment (paragraphs 74,  77, 78, and 79), until what date will antidumping 
and countervailing duties that have been collected be distributed?  Does the United States have any 
information on the amounts collected and distributed in 2005?  What official source or sources of 
information are available to the public fo r consultation with regard to these data? 
 ANSWER: Subsection (a) of section 7601 of the Defi cit Reduction Act provides that the CDSOA 
is repealed “effective upon the date of enactment of this Act”.  Subsection (b) provides that “[a]ll duties 
on entries of goods made and filed before October 1,  2007, that would, but for subsection (a) of this 
section, be distributed under [the Continued Dump ing and Subsidy Offset Act of 2000 (“the CDSOA”)] 
shall be distributed as if [the CDSOA] had not been repealed by subsection (a).” 
 
Information from U.S. Customs and Border Protection on the amounts collected and distributed for fiscal year 2005 under the CDSOA is available at the following website: 
 
www.cbp.gov/xp/cgov/import/add_cvd/cont_dump/cdsoa_05/ 
 
[Mexico] 
 10.  Paragraphs 81-84 and Table III.3 offer useful  and relevant statistics on the application of 
antidumping measures.  The end of paragraph 83, in particular, mentions that the value of imports 
affected by antidumping measures between 1980 and 2003 accounts for 0.4% of total imports.  Are 
there any academic studies available that would conf irm the impression that trade in goods subject to 
antidumping measures drops significantly not only while such measures are in effect but also even as 
soon as the investigations begin, i.e., the so-called “chilling effect” of antidumping measures?  To give WT/TPR/M/160/Add.1 
Page 210  
 
us a more realistic idea of the effect of such measur es, I believe it would be u seful to have information 
on trade in goods subject to such measures, before a nd after they are applied.  With respect to goods 
that are currently subject to antidumping and counter vailing duties, but which were not subject to any 
such duties between 1996-2001, could the U.S. provide  us with figures on the annual imports of all 
such products for the period between 1996-2005? 
 
ANSWER: The United States does not have available the specific, detailed trade data mentioned.  
As a general matter, antidumping and countervailin g duty measures address unfairly traded goods, and 
should not have a “chilling effect” on fairly traded goods.  [Mexico] 
 
11.  Paragraph 94 notes that, as of December 31, 2004, the United States had two price undertakings in place, compared with 273 orders to impose anti dumping duties.  The price undertakings are an 
alternative solution to antidumping duties; they ar e infrequently applied, but if applied properly, 
eliminate the harm caused to the domestic indus try due to dumping, while minimizing the harmful 
effects of antidumping measures on exporting members.   What are the most common reasons why this 
alternative solution is not used by the United States?  What conditions must be met in order for a price 
undertaking to be offered?  ANSWER:  The opportunity to request a price undertaking is provided for in U.S. law and 
regulations and is available in all investigations .  When a request for an undertaking is made in 
accordance with U.S. law and regulations, the Departme nt of Commerce gives it serious consideration.  
Whether an undertaking is entered into in any pa rticular case depends upon whether the parties are 
willing to enter into an undertaking that meets the cond itions of U.S. law (which are consistent with the 
requirements of the Antidumping Agreement), a nd whether the undertaking is practical and 
administrable. 
 
[Norway] 
 
3: Norway continues to be concerned with the Unite d States' active use of trade remedies, as referred to 
in the Secretariat’s report. Norwegian exports of fish  and fish products are effectively hindered by the 
anti-dumping and countervailing measures imposed on fresh, whole Norwegian salmon. In our view, 
there is no basis for this measure, which was imposed in 1991, and continued after a “Sunset review” in 
January 2006. Norway is concerned with the US pr actice relating to “Sunset reviews”, which appears 
to be a purely mechanical procedure considering th e fact that the Department of Commerce has never 
lifted any AD-measures where American economic inte rests have been involved. We would like to 
know what the United States intend to do in order to  update the “Sunset review”-practice in order to 
make it a functional review mechanism?   ANSWER:  We disagree with Norway’s characterizati on that the United States’ sunset review 
procedures are a "purely mechanical procedure."  Of  the 378 U.S. sunset reviews completed by the end 
of 2005, almost half (188) have resulted in the revocation of the antidumping or countervailing duty 
order.  The United States’ procedures on sunset revi ews are consistent with its WTO obligations and 
have been upheld in several WTO disputes.  
[Switzerland] 
 
Anti-dumping and countervailing actions
 
(a) Legislation and administration 
Para. 73 : The Secretariat’s report indicates that alth ough the U.S. Department of Commerce (USDOC) 
has the authority to self-initiate AD and CVD inves tigations, it seldom does. Could the U.S. authorities 
explain under which conditions, USDOC might be  self-initiating AD or CVD investigations? 
          WT/TPR/M/160/Add.1 
Page 211 
 
 
ANSWER:  The U.S. Department of Commerce (the De partment) has the legal authority to self-
initiate an antidumping or countervailing duty inves tigation under U.S. law when it has the factual 
basis to show that an investigation is warrant ed.  The WTO Antidumping and Subsidies Agreements 
limit self-initiation to instances in which there are “special circumstances,” and the Agreement on 
Agriculture contains provisions relevant to initia tion of CVD investigations  on agricultural products. 
 
While the U.S. statute does not define what “special circumstances” are, the Department has interpreted 
this provision narrowly and as a result has self-in itiated cases on only the following three occasions in 
the last 20 years (out of almost 1,000 total cases): (1) steel from various countries in 1979-82; (2) semiconductors from Japan in 1986; and (3) softwood lumber from Canada in 1991.  U.S. law requires 
that certain requirements be met before an AD or CVD case can be initiated, both for self-initiated and 
petition-based cases: e.g., there must be evidence of dum ping or subsidies; and there must be evidence 
that the U.S. industry is suffering injury by reas on of the imports.  If the necessary requirements for 
self-initiation are met, self-initiation may be an approp riate response in certain cases, but it would have 
to be examined in the light of the facts of the partic ular situation.  In this regard, we note that a GATT 
dispute panel found that the 1991 self-initiati on in softwood lumber satisfied the “special 
circumstances” requirement of th e Tokyo Round Subsidies Code. 
 
[Thailand] 
 
10.  Paragraph 75  of the Report identifies certain measur es that the United States has taken to 
determine continuous bond requirements for importers  of agriculture/aquaculture merchandise subject 
to AD or CVD cases.  US law provides that Customs and Border Protection (CBP) may require a bond or other security “[i]n any case in which bond or other secu rity is not specifically required by law . . . .” 
(19 USC §1623(a)).  Because US AD/CVD statutes al ready provide for security of AD/CVD payments 
by requiring importers to post cash deposits in th e amount of estimated AD/CVD duties on entries of 
subject merchandise after issuance of the or der (19 USC §§ 1671e(a)(3) and 1673e(a)(3)), we are 
concerned that this measure imposes an additiona l burden on agriculture/aqu aculture exporters, and 
could be WTO inconsistent.  Co uld the United States please elaborate on the justification of CBP’s 
authority to impose additional bond requireme nts on AD/CVD orders, in particular only on 
agriculture/aquaculture merchandise?  
ANSWER:  The cash deposits that are made at time of  entry are merely estimated AD/CVD duties.  
The US antidumping and countervailing duty laws pr ovide for the final assessment of AD/CVD duties 
after the completion of an administrative review .  CBP introduced the new bonding guidelines to 
address the very real threat of non-collection of antidumping and countervailing duties.  Over the past several years, CBP has been unable to collect from the importers of record $500 million in antidumping 
and countervailing duties that are lawfully due.  Ap proximately 78 percent of that amount stems from 
antidumping and countervailing duty orders in the ag riculture and aquaculture sector.  CBP’s bonding 
guidelines fully comply with U.S. law, as well as U.S. WTO obligations.  
 
[Thailand] 
 
11.  When calculating the continuous bond amount, do es the United States take  into account whether 
the covered imports are from devel oping or least developed countries? 
 ANSWER: In formulating the bonding guidelines, CBP has provided a list of objective criteria that 
it considers when determining the risk of non-pa yment of antidumping and countervailing duties in 
particular categories of merchandise and with respect to particular cases.  The requirement to pay 
customs duties that are lawfully due extends to all importers, regardless of the source of the merchandise.  The criteria, which are contained in  the August 2005 supplement to the CBP directive, 
provide discretion for CBP to consider such factors as the source of the merchandise.  WT/TPR/M/160/Add.1 
Page 212  
 
[Thailand] 
 
12.  Paragraph 76  of the Report describes new continuo us bond guidelines, which include a 
requirement for CBP to increase the continuous bond under certain circumstances after the Department 
of Commerce (DOC) issues a preliminary affirma tive determination.  The Amendment to Bond 
Directive 99-3510-004, posted on the CBP website lis ted in footnote 64, does not list all of the 
circumstances that would mandate the CBP to incr ease the bond, providing only that, “If, at any time 
after DOC issues a preliminary affirmative determ ination in an agriculture/aquaculture case, CBP 
detects sudden changes in declared  values, claimed country of orig in, or declared classification, etc.
, 
CBP will consider such changes to reflect an in creased risk” (emphasis added).  To enhance the 
transparency and predictability of the application of continuous bonds, coul d the United States provide 
a complete list of all circumstances that would mandate CBP to increase a continuous bond?  Please 
provide how authorities calculate the amount of incr eased continuous bond liability.  In addition, are 
there any circumstances under which the CBP must decrease  the bond, and if so, what are they? 
 
ANSWER:  It is extremely difficult to foresee all th e circumstances that could prompt CBP to 
modify bond amounts.  Therefore, in formulating the bonding guidelines, CBP provided a list of objective criteria that it would consider when determining the risk of non-payment of antidumping and countervailing duties in particular categories of me rchandise and with respect to particular cases.  
These criteria include previous collection problems with  a particular case or industry and the similarity 
to previous cases or industries where CBP has expe rienced problems with uncollected revenue. Also 
included is a provision for higher bonds if CBP detects high-risk activity that may indicate 
circumvention of the lawful payment of the anti dumping and/or countervailing duties.  The guidelines 
specify that CBP will monitor bond amounts to de termine whether circumstances have changed such 
that a particular bond amount should be adjusted up or down or eliminated entirely.  The formulas on 
bond calculations are contained within the guidelines.  
 
[Thailand] 
 
13.  According to paragraph 76 , would the United States consider applying the increase in continuous 
bond liability (using the same formula as para graph 75) to other merchandise (apart from 
agriculture/aquaculture merchandise) if it is determin ed to be in circumvention?  Please describe how 
circumvention is determined.  Has the United Stat es ever considered applying its continuous bond 
requirements to other merchandise apart from agri culture/aquaculture merchandise?  Please identify 
any other types of merchandise that has been, is, or would likely to be, under consideration for 
continuous bond application.  
ANSWER: To detect circumvention, CBP closely m onitors import transactions, including changes 
in average unit values of the imported shrimp, suspic ious shifts in shrimp import volume from non-
dumping countries, and mis-classification. 
The guidelines are potentially applicable to any antidumping or countervailing duty order where CBP 
determines that there is a risk of non-payment of duties, whether due to fluctuations in antidumping 
rates, transshipment, undervaluation, or other fact ors.  CBP will assess that risk based on the objective 
criteria specified in the August 2005 supplement to the CBP directive.  To date, the guidelines have 
been applied to the antidumping duty orde rs on certain frozen warmwater shrimp. 
 
[Thailand] 
 14.  Please describe any progress the US government h as made on considering alternative means to 
resolve the problem of uncollected AD/CVD revenue and to relieve the difficulties and burden incurred 
by foreign exporters.           WT/TPR/M/160/Add.1 
Page 213 
 
 
ANSWER: CBP is monitoring import trends and the opera tion of the directive and is prepared to 
make adjustments as appropriate.  Additionally, CBP  is continually looking at ways to focus its 
bonding policy so that it is adequately addressing the highest areas of risk for revenue loss.  
 
[Thailand] 
 
15.  The United States has recently begun using “sa mpling” to select mandatory respondents in AD and 
CVD administrative reviews.  Thailand is concer ned about the WTO-consistency of this methodology 
because, among other things, the use of selection frequency as a “weighting” factor may lead to a 
sample rate that is not statistically valid, and it appears the United States will include margins based on 
“facts available” in calculating an “all others” rate for other respondents. 
 ANSWER: When limiting its selection of respondents through the use of sampling, while there are 
other valid approaches, in two recent cases the Department of Commerce has chosen to use a 
“probability-proportional-to-size” or “PPS” sampling methodology.  PPS sampling gives each 
respondent a chance of being selected that is propor tional to its export volume.  Thus, although larger 
exporters have a greater chance of being selected, each respondent has some chance of being selected.  
This methodology is reflective of the Department ’s aim to calculate an antidumping duty rate 
applicable to companies in the sampling pool that  were not selected for individual examination that 
approximates the average margin of dumping of all the exports in the sampling pool.  
When the Department employed sampling in  the past, it has included any zero or  de minimis  dumping 
margins and any dumping margins based on facts ava ilable in the antidumping duty rate that were not 
selected for individual examination (We believe this  is what Thailand intended to refer to when it 
referenced the “all-others rate” although the two con cepts are distinct).  The most recent antidumping 
administrative reviews involving sampling are ongoing, and the Department has not issued final 
decisions. Therefore, rates for the non-selected comp anies in the  sampling pool in these reviews have 
not yet been calculated.  However, the sampling me thod applied in those reviews will be consistent 
with U.S. law and the WTO Antidumping Agreement.  
[Thailand] 
 16.  Please describe in detail the “probability-propo rtional-to-size” methodology the Department of 
Commerce used to select respondents in the Brak e Rotors from China an d Softwood Lumber from 
Canada administrative reviews.  ANSWER:  This issue is fully explained on the public  record of these cases.  See Extension of 
Time Limit for Preliminary Results of Antidumpi ng Duty Administrative Review and New Shipper 
Review, 70 FR 75448 (December 20, 2005) citing to th e November 16, 2005, Memorandum to the File 
from Erin Begnal, Antidumping  Duty Administra tive Review:  Brake Rotors from the People's 
Republic of China (November 16, 2005, Sampli ng Memorandum) and  Certain Softwood Lumber 
Products from Canada: Extension of the Time Limit for the Preliminary Results of Antidumping Duty 
Administrative Review, 71 FR 2023 (January 12, 2006) and the December 15, 2005 Memorandum to 
the file.  For further details, see answer to question 15 above. 
 
[Thailand] 
 
17.  Will dumping margins that were calculated, in whole or in part, based on “facts available” be 
included in the “all others” rate applicable to res pondents that were not individually reviewed during 
the administrative review?  ANSWER: See answer to Thailand’s question number 15 above.  
 WT/TPR/M/160/Add.1 
Page 214  
 
[Thailand] 
 
18.  The Appellate Body and the panel in the so ftwood lumber dispute between the United States and 
Canada ruled that the United States violat ed Article 2.4.2 of the AD Agreement  by not taking into 
account all comparable export transactions when th e U.S. Department of Commerce (DOC) calculated 
the overall margin of dumping. Does the U.S. inte nd to terminate the application of its zeroing 
methodology in calculating dumping margins in all a nd every stages (investigation, reviews, and the 
sunset review) of future AD cases? 
 
ANSWER: The United States fully implemented the re commendations and rulings of the Dispute 
Settlement Body in the Softwood Lumber Antidumpi ng dispute (DS264), within the reasonable period 
of time.  After similar findings by the panel in th e dispute regarding offsets for non-dumped sales with 
the EC (DS294), and months prior to adoption of that report, the U.S. Department of Commerce 
announced that it would abandon the use of zeroing in investigations when using the average-to-
average comparison methodology.  This announcement was published in the Federal Register on March 
6, 2006 (71 Fed.Reg. 11189). 
 The Appellate Body has only recently released its report in the United States' dispute with the EC 
(DS294), in which it found that the United States' methodology in assessment proceedings pursuant to 
Article 9.3 is inconsistent with the AD Agreement.  The United States is still carefully reviewing that 
report and considering its options. 
 
[Thailand] 
 
19.  Thailand also seeks clarification on whether a pplication of the zeroing methodology in calculating 
dumping margins is required by US law.  If so, please provide all information on such laws and 
provisions. 
 ANSWER: U.S. law neither requires nor prohibits off sets for non-dumped transactions.  This issue 
was addressed and clarified by the U.S. Court of Appeals for the Federal Circuit in Timken Co. v. 
United States, 354 F.3d 1334, 1342 (Fed. Cir.), cert.denied  125 U.S. 412 (Nov. 1, 2004). 
 [Thailand] 
 
20.  Does the United States intend to revise or repe al its existing policy of not applying CVD orders 
against products from Non-Market Economy countries (NMEs) such as China, or would it simply 
consider changing the status of NME countries to market economies? ( Paragraph 89 ) 
 
ANSWER: In the 1986 Georgetown Steel 
case, the U.S. Department of Commerce argued that the 
countervailing duty law, as it existed at that time, did not apply to non-market economies, and its 
position was upheld. See Georgetown Steel Corp. v.United States , 801 F.2d 1308 (Fed. Cir. 1986).  It is 
possible that the United States will revisit the underlying rationale of the Georgetown  decision and 
reassess the policy of not applying coun tervailing duties to non-market economies.  
 
[Thailand] 
 
21.  Please explain in detail the criteria used in “sa me person” methodology. Is it identical to “affiliated 
parties” test? ( Paragraph 91 ) 
 
ANSWER: The "affiliated parties" test primarily pertains to the USDOC's attribution 
methodology, under which the Department examines to what extent two or more entities are related to 
each other, based on legal, fiduciary, ownership or control factors, in orde r to assess whether and to 
what extent subsidy benefits may be  attributable across those entities.  It has no direct connection to the 
"same person" methodology that the Department used to analyze the effect of a change in ownership          WT/TPR/M/160/Add.1 
Page 215 
 
 
(including privatization) to subsid y benefits conferred prior to the sale of the company.  Under that 
methodology, the Department examined certain fact ors -- continuity of business operations, continuity 
of production facilities, continuity of assets and li abilities, and retention of personnel -- to assess 
whether the entity that resulted from the change of ownership continued to be the "same person" as the 
prior entity and, therefore, continued to benefit from subsidies conferred prior to the change in 
ownership.   
 Following litigation that challenged various aspect s of the "same person" methodology, as of June 
2003, the Department abandoned that methodolog y and now examines whether the change in 
ownership occurred at arm's length and for fair ma rket value.  Under the arm's-length test, the 
Department examines whether the ch ange in ownership occurred between  unrelated parties, each acting 
in its own interest, or between related parties such that the terms of the transaction are those that would 
exist if the transaction had been ne gotiated between unrelated parties.  In this regard, the Department 
may look for guidance to the standards of affiliatio n used in its attribution methodology.  Under the 
fair-market-value test, the Department examines sever al aspects of the change in ownership transaction 
to determine whether the seller acted in a manner consistent with the normal sales practices of private, 
commercial sellers in order to maximize its profit fro m the transaction.  The Department first considers 
whether an appropriate benchmark price exists, ag ainst which the price of the transaction may be 
compared.  If not, the Department examines various factors, including whether:  the seller relied on an objective analysis in determining the sale price, imposed artificial barriers to the transaction which 
unduly restricted the bidding, the seller accepted the hi ghest offer and received payment in cash or cash 
equivalent, or provided discounts or imposed any post-sale commitments from the buyer which 
distorted the price that buyers were willing to pay.   If the Department determines that the change in 
ownership was at arm's length and for fair market value, then it will normally find that non-recurring, 
allocable subsidy benefits remain with the seller and do not benefit the new entity. 
 [Thailand] 
 
22.  The threshold of “substantially all of the imports,” which the US AD Act sets at 85%, 
consequently prevents the acceptance of a Suspension Agreement proposed by an individual exporter.  
Please clarify this provision in light of Ar ticle 8.1 of the AD Agreement that allows any
 exporter to 
voluntarily revise its prices or to cease exports at dumped price.  
 
ANSWER: Article 8.3 of the Antidumping Agreement provides that Members need not enter into 
price undertakings when their acceptance is consid ered impractical, or for other reasons, including 
reasons of general policy.  U.S. law reflects a ge neral policy of not discrim inating among exporters by 
entering into agreements with some while others f ace the discipline of an antidumping measure.  This 
also reflects a determination that such uniform app lication of either an antidumping measure or price 
undertaking will be more practical to administer.  
 
[Thailand] 
 
23.  Please explain how the United States determin es the “reference price” or agreed price in 
Suspension Agreements, as there may be more than one  signatory with a different level of dumping or 
subsidization?  ANSWER: The basis for determining reference pri ces may vary from agreement to agreement 
depending upon the type of agreement and the ability of the parties to come to agreement.  In 
agreements designed to eliminate injury, the parties may be able to agree upon certain reference prices 
that may be uniformly applied so as to eliminate comp letely the injurious effect of the subject imports.  
In other cases, the agreements may reflect formulae that  will be applied to individual exporter’s data to 
establish exporter-specific reference prices that will eliminate dumping.  Ultimately, case-specific factors must be taken into account so that each ag reement addresses the particular circumstances of the 
parties to the agreement and the U.S. domestic industry injured by the imports. WT/TPR/M/160/Add.1 
Page 216  
 
[Thailand] 
 
24.  Please provide details on all AD and CVD Suspension Agreements into which the United States has entered, and the reasons fo r which some were terminated. (paragraph 94)  
 
ANSWER: The suspension agreements into whic h the United States has entered are 
publiclyavailable through their publication in th e Federal Register, through the Department of 
Commerce’s public reading room and through its webs ite (http://ia.ita.doc.gov/).  Additionally, when a 
suspension agreement is terminated, notice of that  termination and the reason for the termination 
(which may be pursuant to a 5-year sunset review or based on a finding of a violation) are also 
published and publicly available through these same sources.  
 
[Thailand] 
 
Trade Remedies - Safeguards
 
 
25.  Please explain how the United States determines and quantifies all relevant factors that cause  
serious injury, and how the United States isolates in jury caused by non attribution factors from the 
injury determination, pursuant to Article 4.2(b) of the Agreement on Safeguards.  ( paragraph 102 ) 
 
ANSWER: Under Section 202(c)(1) of the Trade Act of 1974, the U.S. International Trade 
Commission (USITC) is required when making a safe guard determination to take into account all 
economic factors which it considers relevant, in accordance with  Article 4.2 of the Agreement on 
Safeguards, which provides that the competent author ities shall evaluate all relevant factors of an 
objective and quantifiable nature having a bearing on th e situation of the industry.  In addition, Section 
202(c)(2)(B) requires USITC to examine factors other than imports which may be a cause of serious 
injury, or threat of serious injury, to the domestic industry.  While both Section 202(c)(1) of the U.S. 
statute and Article 4.2 of the Agreement  on Safegua rds identify specific factors to be examined, the 
determination of what additional factors are relevant requires analysis by the USITC based on the facts of the particular investigation.  However, there is  no requirement in U.S. law or in the Agreement on 
Safeguards that the USITC “quantify” all relevant factors.  Similarly, while the USITC examines 
factors other than imports that may be a cause of injury , or threat thereof, to the domestic industry, and, 
in accordance with Article 4.2(b) of the Agreement on Safeguards, ensures that a ny injury caused to the 
domestic industry by such other factors at the same ti me is not attributed to increased imports, there is 
no requirement in U.S. law or in the Safeguards Ag reement that the USITC “i solate” any injury caused 
by such other factors.  
 [Thailand] 
 
26.  How does the United States determine which safeguard measures, such as ad valorem rate 
increases, tariff quotas, import licensing, quantitative rest rictions, or other measures, are to be used for 
a particular case? ( paragraph 103 ) 
 
ANSWER: Section 203(a)(1)(A) of the Trade  Act of 1974 provides that, after receiving the report 
containing an affirmative determinati on of serious injury, or threat thereof, by the U.S. International 
Trade Commission (USITC), the President shall take all appropriate and feasible action within his 
power which the President determines will facilitate efforts by the domestic industry to make a positive 
adjustment to import competition and provide greater ec onomic and social benefits than costs.  Section 
203(a)(3) identifies a number of specific safeguard actions that the President can take, such as an 
increase in duties, a tariff rate quota, or imposition of quantitative restrictions.  As to the criteria for determining what action to take , Section 203(a)(2) sets forth a list of factors that 
the President must take into account in this decision.   The first item specified for the President to take 
into account is the USITC’s recommendation and report, containing the USITC’s recommendation as          WT/TPR/M/160/Add.1 
Page 217 
 
 
to the action that would address the serious injury, or  threat thereof, to the domestic industry and be 
most effective in facilitating the efforts of the domestic industry to make a positive adjustment to 
import competition.   Among the other statutory factors to be taken into account is the probable effectiveness of the various possible safeguard ac tions to facilitate positive adjustment to import 
competition, the economic and social costs of the va rious possible safeguard actions relative to their 
economic and social benefits, and various factors related to the national economic interest of the 
United States.  
[Thailand] 
 27.  Please explain how the United States applies safe guards in the form of import licensing measures, 
and also provide examples of “other measures” ( paragraph 103 ) that the United States has used or 
might use as a safeguard measure.  ANSWER:  With regard to import licensing measures,  Section 203(a)(3)(F) of the Trade Act of 
1974 authorizes the President to “proclaim procedures necessary to allocate among importers by the 
auction of import licenses quantities of the article  that are permitted to be imported into the 
United States.”  To date, none of the safeguard me asures applied by the United States have involved 
the auctioning of import licenses for a quantity of goods. 
 
With regard to “other measures,” the U.S. safegua rd law describes the types of action the President 
may take.  U.S. law authorizes the President, among other things, to “take any other action which may 
be taken by the President under the authority of la w and which the President considers appropriate and 
feasible” (section 203(a)(3)(I) of the Trade Act of 1974).  Because the use of this authority is within the 
President’s discretion, we cannot provide examples of measures that the President “might” take under this authority. 
 
[Thailand] 
 
28.  Please provide details on the calculation methodology the United States uses to determine 
safeguard duty rates and quantitative restrictions. 
 
ANSWER: There is no specific calculation methodology that the United States uses to determine 
safeguard duty rates and quantitative restrictions, but there are specific  statutory requirements that 
must be complied with.   In determining a safeguard  duty rate, Section 203(e)(3) of the Trade Act of 
1974 provides that “no action may be taken under this Section which would increase a rate of duty to 
(or impose a rate) which is more than 50 percent ad valorem  above the rate (if any) existing at the time 
the action is taken.”  With respect to quantitativ e restrictions, Section 203(e)(4) provides that “any 
action taken under this section procla iming a quantitative restriction shall permit the importation of a 
quantity or value of the article which is not less th an the average quantity or value of such article 
entered into the United States in th e most recent 3 years that are representative of imports of such 
article and for which are data are available, unless the President finds that the importations of a different quantity or value is clearly justified in order to prevent or remedy the serious injury.” 
 
[Turkey] 
 
15.  Turkey considers the fact that, within the context of sunset review mechanism, continuous 
prolongation of the implementation periods of the AD and CV duties by the U.S authorities creates 
serious market access barriers, problems and uncer tainties for Turkish companies and for Turkey-US 
bilateral trade relations.   Turkish Delegation would like to kindly ask whethe r the US Government considers reviewing these 
procedures.  WT/TPR/M/160/Add.1 
Page 218  
 
ANSWER:  The United States’ procedures on sunset reviews are consistent with its WTO 
obligations and have been upheld in several WTO di sputes.  We disagree with the   characterization 
that under the United States’ sunset review proce dures there is a “continuous prolongation of the 
implementation periods of AD and CV duties.”  Of  the 378 U.S. sunset reviews completed by the end 
of 2005, almost half (188) have resulted in the revocation of the antidumping or countervailing duty 
order.  
 Quantitative Restrictions
 
 
[Argentina] 
 10. On page 61, paragraph 116, the report indicates that the current quantitative trade restrictions 
mainly affect the textiles and apparel sector.   Question: What other sectors are currently subject to restrictions of this type? 
 
ANSWER:  We are aware of no other quantitative restricti ons in effect other than those indicated in 
the Secretariat Report. 
 
[Japan]  
Q18. On-sale License of Alcoholic Beverages in the State of California (p.47 to 48, para. 113) In the State of California, on-sale licenses that permit the sale of wine for consumption on the premises 
where sold also authorize the sale of soju, an imported Korean alcoholic  beverage which contains no 
more than 24 percent of alcohol by volume and is  derived from agricultural products.  However, these 
on-sale licenses do not permit the sale of shochu , an imported Japanese alcoholic beverage derived 
from agricultural products, for consumption on the pr emises where sold.  The Government of Japan 
therefore urges the Government of the United States to permit the sale of shochu  with the on-sale 
license as is permitted for soju.  In terms of alcohol content, the Government of Japan also urges the 
Government of the United States to permit the sale of shochu  that contains 24 percent or more and not 
more than 26 percent of alcohol by volume with th e on-sale license.  In these respects, please indicate 
the specific views of the Government of the United States. 
 
ANSWER: California passed a bill including soju, a traditional Korean alcohol, as a product that 
can be sold in establishments with on-sale liquor licenses for beer and wine. The bottle must read 
“soju” and “derivatives” like shochu are specifically excluded.  Both California state law and federal 
regulations define wine as having 24 percent alcohol content or less.  It appears that soju has no more 
than 24 percent alcohol content by volume, while sh ochu, in most cases, has 25 to 26 percent alcohol 
content by volume.  Consequently, shochu must be labeled and regulated as a distilled spirit and is 
taxed as a distilled spirit at $13.50 per proof gallo n, which is higher than the tax on wine. 
 
The Japanese government appears to suggest that Fede ral law should allow shochu to be regulated as a 
wine.  The definitions used for Federal regulator y purposes are statutory.  “Wines” containing more 
than 24 percent alcohol by volume are regulated  (and taxed) as distilled spirits (26 U.S.C. 
§§ 5001(a)(3) and 5041(a)).  Federal tax rates on al coholic beverages are statutory and therefore any 
change in the rates would require amendment by Congress.  
Shochu is sold in the United States at restaurants which are licensed to sell liquor (distilled spirits).  
However, under Section 2 of the 21st Amendment of th e U.S. Constitution, a State has wide latitude to 
regulate the sale and distribution of alcohol beverag es within the State.  Accordingly, the State of 
California may set regulations on whether shochu or other alcohol beverages may be sold at certain 
licensed establishments.          WT/TPR/M/160/Add.1 
Page 219 
 
 
Standards and Technical Regulations  
 
[Canada] 
 (vii) Standards and technical regulations, (a ) WTO participation and preferential trade 
agreements, Paragraph 121:  
The Secretariat Report notes that the three free-trade agreements which entered into force between mid 
2003 and mid 2005 (Australia, Chile a nd Singapore) contain provisions on technical barriers to trade.  
Canada understands that there are additional agreem ents awaiting entry into force (Bahrain, Morocco, 
etc.) identical or similar provisions are found. A num ber of the provisions in these agreements create 
additional obligations on the parties, over and a bove those contained in the WTO TBT Agreement.  
 2. Can the United States provide a list of the "T BT-plus" provisions and an explanation as to why 
each provision is included?  Will any of these "TBT -plus" provisions require increased "accountability" 
between the parties regarding measures or actions taken in the TBT area? 
 
ANSWER:  The U.S. approach to the Chapters on T echnical Barriers to Trade in our Free Trade 
Agreements since NAFTA has been to affirm th e obligations in the WTO TBT Agreement.  Any 
additional obligation in the Chapter is “TBT-plus.”  Provisions, such as those to enhance transparency 
and oblige governments to provide a response to sign ificant comments received in response to notices 
on proposed regulations, should contribute to great er accountability in the regulatory decision-making 
process. 
 
[Canada]  
Part III. Trade Policies and Practices by Measu re, (2): Measures Directly Affecting Imports, (vii) 
Standards and technical regulations, (b) Technical regulations, Paragraph 123: 
 
The Secretariat Report makes reference to the Administrative Procedure Act  (APA) and the rules 
outlined under the APA which U.S. federal government  agencies are required to follow. These include 
a requirement for agencies to publish a noti ce of proposed rulemaking (NPRM) in the Federal Register .  
Canada understands that evaluations by the G overnment Accounting Office (GAO) of agencies’ 
performance under the APA have identified a signifi cant number of final actions which have been 
published without an associated NPRM.  Further, that agencies may not construe the "good cause" 
exception narrowly as a rationale for not publishing an NPRM.  3. Can the United States provide a more detailed explanation of how the APA operates, including 
a discussion of direct final and interim final rulema king procedures, as well as the scope of the law's 
exceptions and examples of how they have been invoked by agencies?  ANSWER:  The recent U.S. submission to the TBT Co mmittee on U.S. regulatory practice includes 
summary information on the APA as well as links to further information on it (see G/TBT/W/258).  [Canada]  
Part III. Trade Policies and Practices by Measure, (2): Measures Directly Affecting Imports, (vii) 
Standards and technical regulations, (b) Technical regulations, Paragraph 125: 
 
Executive Order 12866 of September 1993 requires th e Office of Management and Budget (OMB) to 
review all “significant” rules by federal governme nt agencies (excluding independent regulatory 
agencies) prior to their publication in the Fe deral Register as proposed or final rules.  
 4. Can the United States provide a list of which agencies are covered under Executive Order 
12866? Can the U.S. provide the highlights of the guidance document for agencies on regulatory WT/TPR/M/160/Add.1 
Page 220  
 
analysis published in September 2003 by the Office of Management and Budget (OMB) and the 
Council of Economic Advisors and how its contents differ in key areas from the earlier (1996) "best 
practices" document?  ANSWER: Executive Order 12866 applies to federal gove rnment agencies defined in 44 U.S.C. 
3502 (1):  “the term ‘agency’ means any execu tive department, military department, Government 
corporation, or other establishment in the executiv e branch of the Government (including the Executive 
Office of the President)…” with certain exceptions fo r independent regulatory agencies, as defined in 
44 U.S.C. 3502(10).  Information on Executive Order re views completed by agency is available online 
at http://www.reginfo.gov
.  We suggest that Canada make use of  information on this site if there are 
questions about a specific agency or regulation. 
 
[Canada] 
 
Part III. Trade Policies and Practices by Measure, (2): Measures Directly Affecting Imports, (vii) 
Standards and technical regulations, (b) Technical regulations, Paragraph 125: 
 
The Regulatory Flexibility Act  requires federal government agencies to analyze the anticipated effects 
of a proposed rule on small entities and identify alte rnative approaches unless they certify that the rule 
will not have a “significant economic impact on a substantial number of small entities.”  
5. Can the United States comment on the effectiveness of the Regulatory Flexibility Act  (RFA) 
since the Government Accountability Office (GAO) has frequently cited the need to clarify key terms 
under the RFA; noted that agencies' compliance with RFA varied widely from one agency to another; 
and, also found that agencies had different  interpretations of RFA's requirements? 
 
ANSWER: U.S. agencies continue to make progress in improving the effectiveness of the 
Regulatory Flexibility Act.  The Office of Advo cacy of the Small Business Administration recently 
released Report on the Regulatory Flexibility Act FY  2005.  The report discusses in great detail agency 
compliance with the RFA and the progress that the O ffice of Advocacy has made over the last year in 
increasing the RFA’s effectiveness.  For example, agencies are increasing the number of submissions 
of draft rules to Advocacy for RFA review and the number of regulatory alternatives considered.  For 
more details, the report may be found at:  http://www.sba.gov/advo/laws/flex/05regflx.html  
 
[Canada]  
Part III. Trade Policies and Practices by Measure, (2): Measures Directly Affecting Imports, (vii) Standards and technical regulations, (b) Technical regulations, Paragraph 126: 
 
The Secretariat Report notes that under the Final Info rmation Quality Bulletin for Peer Review, which 
became effective in June 2005, scientific findings that represent the official position of a federal 
government agency and that could eventually serve as the basis for the formulation and adoption of a 
technical regulation are subject to peer review. At  the time of the last Trade Policy Review of the 
United States, Canada noted that there was concern raised by several members of the U.S. House of 
Representatives with the OMB's draft Bulletin proposi ng to regulate scientific information in federal 
agencies using a more uniform standard of peer review.  6. Is the Final Information Quality Bulletin for Peer Review changed in any significant way(s) 
from the draft Bulletin? If so, how and to what intended effect? 
 
ANSWER:  Yes, significant changes were made to the final Bulletin published in 2005 compared 
to the draft published in 2003 and  revised draft pub lished in 2004.  The two drafts and final Bulletin 
are available on the OMB website as well as an explana tion of the changes made and the ways the final          WT/TPR/M/160/Add.1 
Page 221 
 
 
version took into account the public comments receive d.  The public comments are also on the website.  
See htp://www.whitehouse.gov/omb/in foreg/infopoltech.html#iq. 
 
[Canada]  
Part III. Trade Policies and Practices by Measure, (2): Measures Directly Affecting Imports, 
(vii) Standards and technical regulations, (b) Technical regulations, Paragraph 129: 
 
The Secretariat Report says that U.S. authorities have indicated that the U.S. Government does not 
maintain centralized statistics on the extent to which U.S. technical regulations are based on 
international standards.  
 7. Does the U.S. intend to develop a capacity to  be able to identify when U.S. technical 
regulations are based on international standards?  For example, through a RIAS tool and reporting 
capacity? If "yes", is there a timetable in place for its development? 
 
ANSWER: At this time, the United States has no plans to invest scarce resources in attempting to 
track the extent to which final regulations are b ased on international standards and sees little merit in 
doing so.  The U.S. system emphasizes transparen cy and openness in the development of technical 
regulations.  Legislation implementing the Ur uguay Round Agreements and additional guidance 
provided to regulators encourage regulatory authorities to consider the use of relevant international 
standards that may be effective and appropriate fo r meeting their regulatory objectives.  From our 
perspective, the provisions for transparency in the U.S. system, and the accountability of regulatory 
authorities to respond to significant comments receiv ed on proposals, are meaningful in preventing 
unnecessary barriers to trade.  In our estimation, attempting to compile data on the extent to which U.S. regulations are based on internati onal standards would not necessarily contribute to the prevention of 
unnecessary obstacles to trade.  We have found the verac ity of other Member’s calculation of the extent 
to which their own regulations are based on interna tional standards difficult to verify (or refute). 
 
[Canada]  
Part III. Trade Policies and Practices by Measure, (2): Measures Directly Affecting Imports, (vii) Standards and technical regula tions, (c) Standards, Paragraph 137: 
 The Secretariat Report says that compliance with sta ndards is not a legal requirement, but in practice 
the U.S. market often provides strong incentives fo r imported and domestic pr oducts to meet certain 
standards.  Under the Trade Agreements Act  of 1979, federal government ag encies are required to "take 
into consideration" international standards when de veloping standards, and if appropriate, to base the 
standards on international standards.
7   
 8. Could the U.S. explain what is meant by “take into consideration" inte rnational standards when 
developing standards, as well as the reference to "b asing" standards on international standards, when 
appropriate? Does the U.S. view this language as fully capturing the intent and spirit of the TBT 
obligation in Article 2.4 of the TBT Agreement?  Why is language which spells out the obligation in 
considerable detail, for example, “use avai lable international standards, guidelines and 
recommendations as the basis for technical regulations and conformity assessment procedures where they achieve the intended regulatory objective” not used?  Does the existing language help explain the 
relatively low level of adoption of interna tional standards by domestic regulators? 
 
                                                     
 
7 19 USC 2532.  In addition to legislation, regulatory guidance issued by the Office of Management and 
Budget includes obligations to consider  the trade impact and evaluate the merits of using relevant international 
standards.  See WTO document G/TBT/W/258, 26 October 2005. WT/TPR/M/160/Add.1 
Page 222  
 
ANSWER: It is not clear to us what further explanati on is needed other than a plain reading of the 
language to understand what is intended by “take into consideration” and “basing” in this context.  The 
United States views its implementing legislation as consistent with the TBT Agreement, and as has 
been noted, this is complemented by other legisl ation and regulatory guidan ce.  We do not understand 
why Canada’s suggested wording, “use availa ble international standards, guidelines and 
recommendations as the basis for technical regulations and conformity assessment procedures where 
they achieve the intended regulatory objective”, which differs from TBT Article 2.4, would be 
considered preferable.  The WTO does not prescribe how a Member is to implement its obligations 
domestically.  We believe that U.S. regulators are ab le to explain the justification for departing from 
relevant international standards, if they exist.  [Canada]  
Part III. Trade Policies and Practices by Measure, (2): Measures Directly Affecting Imports, 
(vii) Standards and technical regula tions, (c) Standards, Paragraph 137: 
 
Based on the Secretariat's report, it appears that the Trade Agreements Act of 1979  has a somewhat 
different interpretation of the requi rement to use international standards as the basis of technical 
regulations. Under the Act, recognized exceptions for not using international standards include 
legitimate objectives listed under Article 2.2 of the TBT Agreem ent (e.g., deceptive practices, 
protection of human health).  The TBT Agreemen t, Article 2.4, notes fundamental circumstances 
(fundamental climatic and geographical factors or  fundamental technological problems) related to 
fulfilling a legitimate objective, not the legitimate objective itself, as an acceptable basis upon which a 
Member is forgiven the requirement to use an international standard. 
 9. Could the U.S. confirm the interpretation cont ained in the Secretariat's report or otherwise 
clarify the operation of the Act? 
 ANSWER: Para. 137 contains selective references to the provisions of Title IV of the Trade 
Agreements Act of 1979.  We would note that pa ra. 137 comes under the heading of “standards” and 
not “technical regulations” which are the subject of th e Articles referenced by Canada.  That being said, 
we would note that the TBT Agreement must be read in context.  Its preamble is explicit in stating that 
“…no country should be prevented from taking measures necessary … for the protection of human, 
animal or plant life or health, of the environmen t, or for the prevention of deceptive practices…” 
 
[Canada]  
Part III. Trade Policies and Practices by Measure, (2): Measures Directly Affecting Imports, 
(vii) Standards and technical regula tions, (c) Standards, Paragraph 140: 
 The Secretariat Report says that according to OMB Ci rcular A-119, the heads of federal government 
agencies must provide OMB (through NIST) with the reasons for using government standards rather than voluntary consensus standards. According to  the latest NIST annual report, at least 72 
government-developed standards were being used by  25 federal government agencies. At the same 
time, federal agencies have adopted nearly 2500 private-sector standards, which include voluntary 
consensus standards.   10. Can the United States explain the difference between government-developed standards and 
private sector standards?  Are government standards developed under the same rules and procedures as 
private standards?  Are these procedures openly ava ilable for public scrutiny? Have all government 
standards developers adopted the TBT Code of Good Practice?           WT/TPR/M/160/Add.1 
Page 223 
 
 
ANSWER:  We would note that OMB A-119 is a domestic  policy applicable to regulations as well 
as government procurement.  The measures covere d go beyond the scope of the WTO TBT Agreement 
and its Code of Good Practice for voluntary standards development. 
 
[Canada] 
 
Part III. Trade Policies and Practices by Measure, (2): Measures Directly Affecting Imports, (vii) 
Standards and technical regulations, (d ) Conformity Assessment, Paragraph 144:  
 
11. To what extent do U.S. government regulat ors use international standards and guides for 
conformity assessment? 
 ANSWER: The U.S. Code of Federal Regulations does not distinguish between technical 
regulations and conformity assessment procedures,  nor does it track which regulations require 
conformity assessment procedures, or their relati onship to international standards and guides. 
 [Canada]  
Part III. Trade Policies and Practices by Measure, (2): Measures Directly Affecting Imports, (vii) 
Standards and technical regulations, (d) Conformity Assessment, Paragraph 145: 
 
Unlike in Paragraph 142, which make s reference to the membership of ANSI in IAF, there is no 
reference to the participation of U.S. labor atory accreditation bodies in the global conformity 
assessment system.  12. To what extent do U.S. regulators accept tests and certification to U.S. requirements by 
conformity assessment bodies which have foreign accr editation? Could the U.S. elaborate on the bodies 
and fora in which they participate?  ANSWER: See response to Question 11, above.  The United States is represented in most 
international fora, though not always through govern ment representation.  We have both government 
and private bodies, for example, that are participants in the ILAC MLA.  Should Canada have 
questions about U.S. participation in a particular body, that information could be obtained through the 
U.S. inquiry point and is usually availa ble on the website of the relevant body. 
 
[Canada]  
Part III. Trade Policies and Practices by Measure, (2): Measures Directly Affecting Imports, 
(vii) Standards and technical regulations, (d) Conformity Assessment, Paragraph 146: 
 13. Could the U.S. explain how it implements the equivalency provision of the TBT Agreement 
(Article 6.1)? Could the US elaborate on the sectors covered by the five agreements which have been 
notified? Are these based on bilateral recognition or MRAs?  
 
ANSWER: The United States has not attempted to impose a horizontal definition of ‘equivalency’ 
on U.S. regulators to implement the provisions of th e TBT Agreement.  The recognition of equivalent 
technical regulations is determined by the regulatory authority.  Notifications made pursuant to Article 
10.7 of the TBT Agreement contain information on the sectors covered a well as information on where 
to obtain a copy of the text of the Agreement should Canada wish to analyze them further.  We do not 
understand the distinction between “bilateral recognition” and “mut ual recognition agreements.”  WT/TPR/M/160/Add.1 
Page 224  
 
[Chile] 
 
Q1.  Can the United States explain what procedure is  followed at the federal level to keep abreast of 
draft bills on technical regulations and/or confor mity assessment procedures of state, municipal, and 
local authorities to determine whether WTO notifica tion is appropriate or not?  Has any assessment 
been done to determine whether state, municipal, and local authorities apply transparency procedures 
required for WTO notifications?    Answer: There is no obligation for the United States to notify proposals of municipal 
governments or other authorities below the state level of government.  In order to comply with our 
obligations to notify proposals of state authorities  (the “level directly below that of the central 
government”), the U.S. notification authority has subscribed to a privat e database which includes 
information on state regulatory proposals and provides a basis for identifying notifications to be made to WTO members.  It is our understanding that U.S. states have in place procedures similar to the Administrative Procedures Act which guides U.S. fede ral agencies in their development of technical 
regulations. 
 
[Chile]
 
 
Q2.  What has been the experience of the United States regarding the Mutual Recognition Agreements 
that it has signed?  What are their implementation co sts?  What requirements must the institutions that 
perform conformity assessment fulfill in order to be  designated by authorities of the exporting country?  
How is non-compliance handled?  May third-countries join?  ANSWER:  The U.S. government is party to a limite d number of agreements which may or may 
not fit within Chile’s definition of “mutual rec ognition agreements.”  Our experiences with such 
agreements have been varied.  For example, agre ements which require a counterpart authority to 
demonstrate the competence of its bodies to assess conf ormity to the other Party’s technical regulations 
tend to require a significant amount of resources  and commitment (e.g., negotiations, confidence 
building, and implementation) on both sides.  Im plementation costs and operational aspects related to 
such agreements vary according to sector and specifi c approach selected for mutual recognition.  Many 
of the observations made by Canada in its paper submitted to the WTO Committee on Technical 
Barriers to Trade on its experience with mutual r ecognition agreements (G/TBT/W/167) are reflective 
of our own experience.  The United States believes that MRAs are only one option of many for achieving the acceptance of conformity assessment results when those are required by regulation.  
[Chile] 
 Q3.  What is the procedure for notification and co mmentary regarding technical regulations established 
through legislation, and therefore, with  the direct participation of Congress? 
 ANSWER:   The U.S. Congress generally does not issue technical regulations. Rather, it delegates 
that authority to Federal agenci es within the Executive Branch.  
 
[Chile] 
 
Q4.  As regards the World Trade Organization (WTO ), which products require certification, labeling, 
or compliance with other prior authorization require ments?  Must these products have such certification 
and authorization when imported or prior to clearing customs? 
 ANSWER: This is a very general question and, as su ch, difficult to answer.  The United States 
does not have a single or monolithic approach to c onformity assurance.  Some regulatory authorities do 
rely on testing and certification, others do not.  Wh ere testing or certification is required, it is not 
necessarily a condition for Customs clearance.           WT/TPR/M/160/Add.1 
Page 225 
 
 
[China] 
 
Comment Period for Notifications  
 
The U.S. sometimes fails to strictly comply w ith WTO SPS/TBT agreements by giving other Members 
sufficient period to comment on its own notifications. For instance, the U.S. non-urgent notification on 
Digital TV Tuner Requirements （G/TBT/N/USA/128) granted only 20 days from July 8-27, 2005 for 
comments. China has officially requested U.S. to  extend its comment period but this request was 
abruptly refused. 
 
Will the U.S. elaborate on why it failed to co mply with the min. 60 days comment period 
requirements pursuant to the TBT Agreement in th is case?  Why the reasonable request from 
China to extend the comment period of this import ant notification was refused by the U.S.? What 
is the U.S. prepared to do now to make up for that? Does U.S. intend to terminate its 
enforcement of the DTV Tuner requirements?  
 
ANSWER:  As reported by the U.S. Representative to the March 2006 meeting of the TBT 
Committee, on November 3, 2005, the Federal Communications Commission (FCC) modified its 
digital tuner requirements to advance DTV transiti on.  China’s written comments submitted to the FCC 
in response to G/TBT/N/USA/128 were considered in  making that decision and responses to them are 
contained in the Commission’s “Second Report and Order” (FCC 05-190).  A copy of the “Second 
Report and Order” was provided to the PRC in bila teral meetings held on Ma rch 14, 2006 and is also 
available at www.fcc.gov . 
 
[China] 
 
CR Safety Requirements on Lighters  
 
In 2004 U.S. announced to raise the import price ce iling of gas refillable lighters subject to the 
compulsory CR device requirements of 1993 from USD2. 00 to USD2.25. The fact is when the U.S. set 
its former safety standards in 1993, the internati onal standard (ISO9994:2002) on the safety of lighter 
products had already existed. However the U.S. refu sed to adopt the said international standards while 
insisting on linking lighter’s price to its safety. By raising the price ceiling for lighter products subject 
to this CR regulation, the U.S. has successfu lly impeded lighters export from other members. 
 Please explain the scientific reason behind the U. S. linkage between the safety of lighters and 
their prices? Deviating from prevailing International standards,  how could the U.S. justify the consistence of 
the its CR regulations with Article 2.4 of TBT Agreement?  
Has the U.S. notified to the WT O the latest amendment to its 1993  regulation?  If not yet, why? 
When does the U.S. plan to fulfill its obligation of notification? 
Please throw some light on how often the U.S.  undertakes a review on its current technical 
regulations to seek improvement? 
 ANSWER:  The Consumer Product Safety Commission (CPSC) Safety Standard for Cigarette 
Lighters (16 CFR 1210) requires that disposable  and novelty lighters meet specified safety 
requirements for child resistance.  The ISO 9994 sta ndard does not include safety provisions for child 
resistance and thus does not address the hazard of children playing with lighters as does the CPSC 
standard.  To date, the 1993 regulation has not b een amended.  Any proposed amendment would be 
notified in accordance with our TBT obligations.  Th e 1993 regulation contains an automatic inflation 
adjustment provision for the price ceiling, which a pplies to all disposable lighters subject to the 
standard, both import and domestic.  In 2004, the CPSC informed the public of the current level of the 
ceiling through a January 5, 2004 press release and again in a Federal Register Notice, 69 FR 19762 WT/TPR/M/160/Add.1 
Page 226  
 
(April 14, 2004).  In response to questions the Chinese delegation has raised bilaterally and in meetings 
of the TBT Committee, the U.S. has provided substa ntial documentation to provide information on the 
scientific justification and basis for the Commission ’s decision.  In short, the strongest reported 
determinant of whether consumers tend to leav e lighters in household locations accessible to young 
children is the replacement value of the lighters.  Th is value is based primarily on the monetary cost of 
the product – its retail price – to c onsumers.  Generally, people tend mo re often to keep track of higher 
priced lighters, whereas very low-priced lighters tend  to be treated as disposable.  The CPSC regulation 
primarily addresses the risk of fires started by ch ildren under age 5:  during 1988-90, an annual average 
of 150 deaths, about 1,100 serious injuries and n early $70 million in property damage resulted from 
such fires. The total cost to the public from the se child-play fires was estimated at about $385 million 
per year.  During that same period, no child-play fire deaths associated with luxury lighters were 
identified.  In 2005, the CPSC began a substantive re view of its Safety Standard for Cigarette Lighters 
which included solicitation of comments from the public to ensure the standard is still current and 
consistent with Commission policies and goals.  Th e review is ongoing.  Staff is working on their 
recommendations that then have to be subm itted to the Commission for consideration. 
 [China] 
 
Digital TV Tuner Requirements
 
 
Pursuant to the U.S. notification on Digital TV Tuner Requirements G/TBT/N/USA/128, the U.S. 
proposes to advance the date on which all new te levision receiving equipment must include the 
capability to receive over-the-air DTV broadcast sign als from July 1, 2007, to a date no later than 
December 31, 2006. The costs incurred with the new television receiving equipment sometimes are 
even higher than that of the TV set itself. In a ddition, over 80% of the U.S. consumers are receiving 
digital TV programs through cable or satellite TV services while only a fraction of them now take 
advantage of Digital TV products in the U.S. Thus  the U.S. finds it difficult to decide when analog 
television service is to end.   Under situations mentioned above, will the U.S. cl arify its justification to advance the date of 
implementation of such a compulsory regulation?  
ANSWER: The date for compulsory transition to digital broadcast television is now February 17, 
2009.  Setting the date de pended on numerous factors, including technical and economic feasibility of 
the transition; as is evident, there is now signifi cant advance notice of this requirement.  Since 
digitalization should enable the analog spectrum to be put to other uses, there are numerous benefits of 
making the transition as soon as possible.  
On November 30, 2005, the FCC amended its rules to  move the date on which all TV receivers must 
include the capability to receive digital television si gnals forward four months to March 1, 2007 and to 
apply the tuner requirement to all television receivers, regardless of their size.  This action is intended 
to further the Commission’s efforts to ensure that consumers are able  to receive off-the-air digital 
broadcast television services as soon as possible. 
 
The digital television reception requirement, which is  also often termed the DTV tuner requirement, is 
being implemented on a schedule that applies it first to large screen receivers and then to progressively smaller screen sets and other devices that receive TV signals, such as VCRs and digital video recorders.  This phase-in plan is intended to allow manufact urers to realize increasing economies of scale with 
production volume, so that digital tuner costs will be lo wer when the tuners are re quired in smaller sets.  
On July 1, 2004, the tuner require ment was applied to 50% of large sets (screen sizes 36” and larger), 
and last July (July 1, 2005), the tuner requirement was applied to all large sets and to 50% of mid-size 
sets (25”- 36”).  Beginning March 1, 2006, DTV tune rs will be required in all mid-size sets as well.  
With the change adopted in this Second Report and Or der, the final step in the phase-in plan will now          WT/TPR/M/160/Add.1 
Page 227 
 
 
require that all new TV sets in all size ranges a nd other TV receivers include a DTV tuner beginning 
March 1, 2007. 
 
Does the U.S. believe that DTV Tuner requi rements will cause extra cost to both the 
manufacturers and the consumers? 
 
ANSWER: A digital tuner provides additional functionalit y to a TV, and it is reasonable to assume 
that adding such functionality could increase the co st of a TV.  Whether any additional cost is 
significant or not will depend on the efficiency of manufacturers and the extent to which they can 
achieve economies of scale.  The new legislation incl udes provisions for consumer subsidies for digital 
to analog converters.  
 
Have any U.S. authorities conducted a review on the trade implications of this regulation? If yes, 
what are the findings?  
ANSWER:   We are confident this regulation is full y consistent with our trade obligations. 
 
[China]  
 
Energy Efficiency Labeling Regulations on 7 Categories of Products
 
 
Draft regulations notified by the U.S (G/TBT/N/USA/151)  on energy efficiency labeling with regard to 
7 categories of products including washing machines stipulated that: “Labels for most appliances must 
provide the product's estimated annual operating cost . Manufacturers must calculate these costs using 
national average cost figures for energy (e.g., electric ity, natural gas, etc.) published by Department of 
Energy. ”  
Does the U.S. recognize that estimated annual op erating cost has just too many uncertainties 
behind its calculation, which ca n mislead consumers instead? 
Does the U.S. believe that the above provisions in the draft regulation are in line with the Article 
2.2 of the TBT Agreement and do not cause unnecessary obstacles to trade? 
 
ANSWER: Through the Energy Policy Act of 2005, Congress required the Federal Trade 
Commission (FTC) to examine the effectiveness of cu rrent energy efficiency labeling requirements for 
consumer products.  In response to that directiv e, the FTC published the notice seeking comment on 
the effectiveness of the Appliance Labeling Rule and suggestions for improvements to the energy 
labeling program.  The FTC also requested comments about the overall costs and benefits of the Rule 
and its overall regulatory and economic impact.  It specifically asked for information on whether the 
current energy descriptors are understandable to c onsumers, whether the FTC should consider requiring 
estimated annual operating costs as the primary d escriptor on EnergyGuide labels, and on the costs and 
benefits of requiring operating costs as the primary descriptor.  This notification is an “Advance Notice 
of Proposed Rulemaking.”  In the U.S. system, such  notices are made before the text of a proposed 
regulation exists and is an opportunity for a regul atory agency to gather additional information to 
inform any future action, such as to propose an amendment to the Appliance Labeling Rule.  
Technically, the United States is not obliged to  notify its “advance notices” pursuant to the TBT 
Agreement but does so for the benefit of WTO members.  Should the FTC decide to amend the 
Appliance Labeling Rule, it will publish notice of its proposal at which point the U.S. will submit an 
addendum to the original notification and provide an opportunity for comment.  The final date for 
comment on the advance notice was January 13, 2006 .  It is our understanding that the FTC is 
considering the comments it has received, including t hose submitted by China, and has not yet made a 
determination as to future actions.  WT/TPR/M/160/Add.1 
Page 228  
 
[China] 
 
Energy Conservation Standards
 
 The Energy Conservation Standards for Certain C onsumer Products and Co mmercial and Industrial 
Equipment （G/TBT/N/USA/154 ）notified in 2005 by the U.S. made technical amendment to its 
former energy conservation standards covering 15 pr oducts including washing machine.  Some of the 
amendments, including the test conditions for the lu men maintenance rate of medium base compact 
fluorescent lamp, do not follow current international standards.  
Would the U.S. explain why the international st andards can simply not satisfy its requirements?  
 
ANSWER:  The energy efficiency standards were  set by Congress in the Energy Policy and 
Conservation Act of 2005 (Public Law 109-58).  They were  not initiated by regulation.  The regulations 
DOE has adopted/is adopting are for the purpose of implementing the standards set by law. 
 
When this regulation will be put into force?  
 ANSWER:  The standards for medium base compact fluorescent lamps went into effect on January 
1, 2006.  All medium base compact fluorescent lamps manufactured for sale in the U.S. or imported as of that date must meet the EPACT 2005 energy efficiency requirements.  The standards are found in section 135(c) of the Energy Policy Act of 2005 (Pub.  L. 109-58) and section 430.32(u) of 10 CFR Part 
430.  Will it strictly respect the transparency principle of the TBT Agreement? 
 
ANSWER:  Yes. 
 
[Colombia] 
 1.  Numeral 118, subparagraph a) Title VII of the report from the WTO Secretar iat states that none of 
the notices made by the United States between July  2003 and June 2005 were  related to proposed 
subfederal measures.  It also reports that there are procedures in force to report these measures, but 
none has been identified.  Despite this, is it possibl e that there are unreported sub-federal regulations? 
 
ANSWER:  As noted in the Secretariat report, the United States has in place procedures to notify 
state level proposals (“…level directly below that of  the central government.”).  The U.S. notification 
authority has subscribed to a private database wh ich includes information on state regulatory proposals 
and provides a basis for identifying notifications to be made to WTO Members.  The Secretariat report 
failed to identify two notifications we have made concerning California: 
 
G/TBT/N/USA/155 (11/23/2005)—California Sena te Bill on organic aquaculture products;  
and, G/TBT/N/USA/159 (12/14/2005)—California Heavy Du ty Smoke Emissions Test and Heavy-Duty 
Vehicle Emissions Control System Inspections.  (Note,  due to a clerical error,  the agency responsible 
erroneously reads NCSCI/NIST, which is our notifica tion authority.  It should have read “State of 
California.”)  
[Colombia] 
 
2.  Has the separate and more favorable treatment  for member developing countries in accordance with 
numeral 12.1 of Article 12 of the Agreement on Techni cal Barriers to Trade been taken into account in 
application of the Bioterrorism Act and how is this applied? 
          WT/TPR/M/160/Add.1 
Page 229 
 
 
ANSWER:  The Public Health Security and Bioterro rism Preparedness and Response Act of 2002 
(the Bioterrorism Act or BTA) (PL 107-188), wa s enacted to enable FDA to respond quickly to 
terrorist threats against the U.S. food supply and other food-related emergencies as a result of 9/11.  The Act applies to all foreign and U.S. facilities that manufacture, process, pack, or hold food for human or animal consumption in the United Stat es.  FDA considered the impact on developing 
countries and other small entities in its final regul atory impact analysis where it examined the 
economic implications of the BTA as required the Re gulatory Flexibility Act (5 U.S.C. 601-612).  The 
Regulatory Flexibility Act requires agencies to analy ze regulatory options to lessen the economic effect 
of a rule on small entities if a rule could have si gnificant economic impact on a substantial number of 
small entities. In response to comments from dom estic and foreign public and private sector 
stakeholders FDA made substantial changes to th e proposed interim and final BTA rules to assist 
affected entities minimize trade disruptions.  FDA c ontinues to exercise its enforcement discretion in 
the months following the effective date of the ru les (December 12, 2003), and has focused instead on 
educating affected parties both domestic and foreign.  
In addition, domestic and foreign food businesses were alerted to the general requirements of the rule 
by the proposed and interim rules published in the Fe deral Register and FDA's outreach.  This advance 
notification provided ample time fo r effected entities to understand a nd prepare to comply with the 
final rules.  FDA conducted extensive outreach efforts to publicize the BTA regulations internationally.  
FDA sent officials to countries several times to brie f government officials and to listen to their 
concerns, including satellite downlink public meeti ngs on the BTA regulations which were broadcast 
throughout the Americas, Caribbean Basin, Europe, A frica, and Asia.  Extensive information about the 
rules has been made available on the FDA’s website at: www.cfsan.fda.gov
.  FDA also notified to the 
BTA to the WTO SPS and TBT Committees (G/SPS/N/USA/691/Add.5 and G/TBT/N/USA/32/Add.3) and countries were encouraged to comment through th eir Enquiry Points or directly through responses 
to the U.S. Federal Register notices in a timely manner.  
 
[Colombia] 
 
3. Numeral 129 of subparagraph b) Title VII) states that United States authorities indicated that the 
Government of the United States does not keep centr alized statistics on the extent to which the US 
technical regulations are based on international sta ndards.  Has the Government of the United States 
considered the possibility of implementing a centralized system? 
 ANSWER:  The U.S. system emphasizes transparency  and openness in the development of 
technical regulations.  Uruguay Round implementing legislation and additiona l guidance provided to 
regulators encourage regulatory authorities to consider  the use of relevant international standards that 
may be effective and appropriate for meeting their regulatory objectiv es.  From our perspective, the 
provisions for transparency in the U.S. system, and the accountability of regulatory authorities to respond to significant comments received on proposal s, are meaningful in preventing unnecessary 
barriers to trade.  In our estimation, attempting to compile data on the extent to which U.S. regulations 
are based on international standards would not n ecessarily contribute to the prevention of unnecessary 
obstacles to trade.  We have found the veracity of other Member’s calculation of the extent to which 
their own regulations are based on internationa l standards difficult to verify (or refute). 
 
[Colombia] 
 
4. Numeral 131 of subparagraph b), Title VII) says th at the regulations published in application of the 
Federal Meat Inspection Act and the Poultry Product s Inspection Act require that the name of the 
country of origin appear in English on the imme diate containers of all meat and poultry products 
entering the United States.  However, when the bul k imported meat or poultry products are processed 
in the United States it is not necessary for the processed product or its container to be labeled.  Does the 
Government of the United States intend to amend su ch laws regarding the requirement of labeling 
exclusively for importer products? WT/TPR/M/160/Add.1 
Page 230  
 
ANSWER:  This will not change.  If imported meat or poultry products are further processed in the 
United States, i.e., removed from their containers a nd packaging, and cut up or processed in any way, 
country of origin labeling is no longer required on the newly produced  products or subsequent products 
made from them.  For example, if canned hams fro m Denmark (labeled as “Product of Denmark” on 
entry to the United States) are shipped to a manufact uring establishment in the United States, and made 
into ham salad, the country or origin of the ham is not required on the labeling of the ham salad 
product.  However, what will change are COOL requ irements for round and muscle cuts of beef, lamb 
and pork.  The Farm Security and Rural Inv estment Act of 2002 (PL 107-171) amended the 
Agricultural Marketing Act of 1946 to require that USDA's Agricultural Marketing Service to issue 
interim voluntary guidelines for country-of-origin labeling (COOL) by September 30, 2002, followed 
by regulations for a mandatory COOL program by  September 2004.  Commodities covered under the 
COOL program include ground and muscle cuts of beef , lamb and pork, farm-raised and wild fish and 
shellfish, perishable agricultural commodities (i.e., fr esh and frozen fruits and vegetables), and peanuts.  
Mandatory COOL requirements for meat, along with  fresh and frozen fruits and vegetables, were 
scheduled to go into effect on September 30, 2006.  However, the U.S. House of Representatives action 
moved the required implementation date for meat labe ling to September 30, 2007.  Poultry and poultry 
products are not yet covered by this program.  
 
[Colombia] 
 
5. Numeral 136, subparagraph b), Title VII) states that  the Agricultural Marketing Act of 1937 requires 
that the basic products imported meet the same requ irements, or comparable requirements, of grade, 
size, quality and maturity as those established for do mestic products within th e framework of federal 
marketing orders.   What are the legitimate interests defended by  this Act in setting these requirements? 
 
ANSWER:  Marketing agreements and orders are legal instruments authorized by the Agricultural 
Marketing Agreement Act of 1937 a nd in subsequent amendments.  The Secretary of Agriculture is 
vested with the power to exercise  the use of these instruments to regulate the marketing of eligible 
commodities -- fruits, vegetables, specialty crops, and milk -- in certain clearly specified ways.  The 
U.S. believes that these regulations fully comply with World Trade Organization requirements.  The 
grade, size, quality, and maturity requirements specify minimums only, do not limit the volumes of 
such commodities which may be imported, do not appl y a tariff or quota to such imports, and are in 
effect only during the same periods of time as domestic production is regulated.  These requirements 
are limited to grade, size, quality, and maturity .  Domestic production is often required to meet 
additional requirements related to  pack and container, container marking, volume controls, and 
assessments to fund administrative costs for marketing order operations.  
 
[Colombia] 
 
6. Numeral 146, subparagraph b) Title VII) says that  the United States authorities have submitted five 
notices to the WTO regarding agreements involving acceptance by the United States of evaluations of 
compliance with United States regulations done abroad.  What sectors do these notices pertain to? 
 ANSWER: TBT Article 10.7 requires at least one party to an agreement “related to technical 
regulations, standards or conformity assessment pro cedures” to notify other Members “of the products 
to be covered by the agreement and a brief descripti on of the Agreement.”  The United States has made 
the following notifications under Article 10.7: 
 G/TBT/10.7/N/20 (1 March 1999):  US –EC Agre ement on the Mutual Recognition in six sectors 
(telecommunications equipment; electromagnetic comp atibility; electrical safety; recreational craft, 
pharmaceutical GMPs and medical devices). 
          WT/TPR/M/160/Add.1 
Page 231 
 
 
G/TBT/10.7/N/36 (18 April 2002):  Japanese Recognition of U.S. Organic Standards for Plant-Based 
Agricultural Products.  G/TBT/10.7/N/46 (21 July 2004):  US – EC Agreement on the Mutual Recognition of Certificates of Conformity for Marine Equipment. 
 
G/TBT/10.7/N/49 (3 March 2006):  US – EEA EFTA St ates (Norway, Iceland, and Liechtenstein) 
Mutual Recognition Agreement in three sector s (telecommunication equipment, electromagnetic 
compatibility, and recreational craft).  
G/TBT/10.7/N/50 (3 March 2006): US – EEA EFTA St ates (Norway, Icela nd, and Liechtenstein) 
Agreement on the Mutual Recognition of Certifi cates of Conformity for Marine Equipment. 
 In addition, Brazil submitted two notifications  on agreements to which we are party: 
 
G/TBT/10.7/N/41 (12 December 2002): Plurilatera l Mutual Recognition Arrangement on Calibration 
and Testing Laboratory Accreditation Procedures.  G/TBT/10.7/N/42 (8 January 2003):  Plurilateral Re cognition Arrangement for Accreditation Bodies of 
Testing and Calibration Laboratories (Inmetr o, Brazil; SCC, Canada; A2LA, U.S.). 
 
Additional information is contained in the notif ications, including contact points for additional 
information or copies of the texts. 
 
[India]  
Q.1 The present practice of limiting weight for 20 foot containers to 21 MT only is causing 
hardship and adding to cost of shipment resulting in higher value of the export product. Can the US 
raise this limit to 27 MT, which is the practice followed by several other countries? 
 
ANSWER: Vehicle weight limits in the U.S. are regulated to protect infrastructure as well as to 
promote safety.  The same vehicle weight limits that a pply to containers used in international trade are 
those that apply to all vehicles traveling on public roads in the U.S.  Federa lly regulated gross-vehicle-
weight (GVW) limits are determined by the number of axles on the vehicle and the spacing of those 
axles along the length of the vehicle.  Federal wei ght limits, which are capped at 80,000 pounds, apply 
to the Interstate Highway System with some gra ndfathered exceptions in st ates which allowed higher 
weights before the Federal limits went into effect.  Weight limits off the Interstate System are regulated 
by the individual States.  In addition to regulating weights off the Interstate System, the individual 
States also have the option to classify containers moving in international commerce as nondivisible 
loads, making them eligible for State issued overw eight permits that would allow transport over the 
Interstate System.  Regarding limiting the weight of 20 foot containers, there is no Federal highway weight regulation that 
would limit the weight of a 20 foot container to 21 metric tons (46,300 pounds).   Assuming a weight of 
28,000 pounds for a tractor/chassis combination, the overall GVW limit of 80,000 pounds would allow 
a container weighing up to 52,000 pounds if loaded on a 5-axle vehicle with at least 39 feet between the 
tandem axle on the power unit and the tandem axle on the chassis. 
 
[India] 
 Q.11 Manufactures and exporters of PTFE(Teflon)  Insulated Wires & Cables (PIWC) and 
PTFE(Teflon) Sleeves/Tubing have reported that for an y reasonable business with a U.S. buyer in their 
product area, there is a requirement of UL approval.  However, the required technical specifications are WT/TPR/M/160/Add.1 
Page 232  
 
not readily available and even the UL website doe s not contain much details . Can the U.S consider 
providing UL specifications and test  requirements freely or at mini mal cost? Can US government allow 
the testing to be done at Indian laboratory/ Test Center administered by the Government Departments?  
 
ANSWER: We would need more information to fully r espond to India’s question.  It is possible 
that the products are being sold for use in a workpl ace environment, and subject to certification by an 
OSHA-accredited Nationally Recognized Testing Laborat ory (NRTL).  There are 37 different types of 
products for which OSHA requires NRTL approval, and the largest of these types is electrical products 
and equipment.  These requirements seek to prev ent accidents through assuring the safety of products 
used by American workers.  Requirements for ap proval apply to private employers, most federal 
government places of employment, and some state and local government places of employment.  If this is the case, then it is a misnomer that “UL appr oval” is required.  Any NRTL with OSHA-recognized 
scope for wire and cable could test and certify the products and apply its own mark (as opposed to the 
UL mark), and UL is one of 18 organizations recogni zed as an NRTL.  Thus, it is a misnomer that “UL 
approval” is required.  Recognition is open to bodies located in ot her countries.  And, an NRTL may be 
approved by OSHA to use outside parties to do part of its testing or evaluation activities.  Organizations interested in applying for th e NRTL designation must apply to the OSHA NRTL 
Program.  The requirements for recognition as an NRTL are contained in 29 CFR 1910.7 and 
information is available on OSHA’s website (www.osha.gov).  As India should be aware, UL is a private body and maintains ownership of the standards it develops.  
The U.S. government is not in a position to provide its documents free of charge and/or on its behalf. 
 
[India] 
 
Q.16 Imports into the USA are regulated under the Federal regulations, ofte n referred to as 21 CFR 
123. They require that the purchaser/importer of th e products should be able to demonstrate to the 
authorities that the products have been produced in a safe and acceptable manner i.e. are in, compliance 
with quality assurance system that incorporates HA CCP, Standard Sanitary Operating Procedures 
(SSOP) and Good Manufacturing Practices (GMP). Th ese increased number of sanitary procedures act 
as a non-tariff barriers/ technical barrier to Indian e xports to USA. In order to remove these non-tariff 
barriers, would U.S take steps to streamline the same?  
 
ANSWER:   The U.S. government has instituted several laws and procedures to ensure the safety of 
its food supply.  The U.S. food safety system is  based on strong, flexible, science-based laws and 
industry’s legal responsibility to produce safe foods. C oordinated interactions among federal authorities 
having complementary and interdependent food safet y missions, in partnership with their state and 
local government counterparts, provide a comprehens ive and effective system.  The system is guided 
by the following principles: (1) only safe and wholesome foods may be marketed; (2) regulatory decision-making in food safety is science-based; (3 ) the government has enforcement responsibility; 
(4) manufacturers, distributors, importers and others are expected to comply and are liable if they do 
not; and (5) the regulatory process is transparent and accessible to the public.  In the United States, all 
imported foods are required to meet the same st andards and technical regulations as domestically 
produced foods.  The procedures and requirements for importation can very depending on the product 
and its characteristics. The U.S. regulatory system  encourages participation by regulated industry, 
consumers, and other stakeholders.  The food safety standards and technical regulations that apply to 
domestically produced foods also apply to importe d foods.  The public notice and comment process 
embodied in the Federal Register was designed to  help develop the most streamlined approach 
consistent with these objectives.            WT/TPR/M/160/Add.1 
Page 233 
 
 
[Indonesia] 
 
3.  Technical Regulation and Standards (page 48 – 54)  
It is widely recognized that technical regulation, standards and phytosanitary are useful to protect 
human, animal and plant life and health (Article XX of the GATT 1994). In the Report, it is said that 
for that purpose, the US has used a specific technical regulation and phytosanitary other than developed 
by international organizations. In this context, In donesia is seeking further explanation as to how the 
US could comply with the guidance in the said agreements to follow the standards developed by international organizations (althoug h this is not a mandatory).  
 
ANSWER:  U.S. legislation implementing the WTO ag reements (the Uruguay Round Agreements 
Act) and additional policy guidance buttress U.S. co mmitments in the WTO to consider the use of 
relevant international standards as a basis for th eir technical regulations.  Additional details are 
provided in a recent communication the United St ates presented to the Committee on Technical 
Barriers to Trade (G/TBT/W/258). 
 
[Israel] 
 
Q4.  As tariff duties have been reduced significan tly over the years, standards requirements have 
become a significant barrier to the free flow of go ods around the world. What is the United States view 
on concluding Mutual Recognition Agreements (MRA's ) in order to alleviate the problems created by 
Members' different standards requirements? Would th e US be willing to conclude MRA's in laboratory 
testing as an interim solution of this matter in sectors such as IT equipment and drugs.  ANSWER:  The U.S. government is party to a limited number of agreements which may or may 
not fit within Israel’s definition of “mutual reco gnition agreements.”  Our experiences with such 
agreements have been varied.  For example, agr eements which require a counterpart authority to 
demonstrate the competence of its bodies to assess conf ormity to the other Party’s technical regulations 
tend to require a significant amount of resources  and commitment (e.g., negotiations, confidence 
building, and implementation) on both sides.  Im plementation costs and opera tional aspects related of 
such agreements vary according to sector and specifi c approach selected for mutual recognition.  Many 
of the observations made by Canada in its pa per submitted to the WTO Committee on Technical 
Barriers to Trade on its experience with mutual re cognition agreements (G/TBT/W/167) are reflective 
of our own experience.  The United States believes that MRAs are only one option of many for 
achieving the acceptance of conformity assessment resu lts when those are required by regulation.  We 
do not see MRAs as necessarily alleviating the pr oblems resulting from different standards, as 
suggested by Israel.  Further information is needed  to better understand Isra el’s perspective and to 
respond to the specific questions regarding possible MRAs for IT equipment and drugs.  
 
[Japan] 
 Q19. Certificate of Label Approval  on Alcoholic Beverages Imported into the United States (p.50, 
para.130)  According to Part 4 Section 40, Part 5 Section 51 , and Part 7 Section 31 of the Code of Federal 
Regulation, Title 27, no imported al coholic beverages in containers shall be released from the United 
States Customs custody for consumption unless there is a certificate of label approval (ATF Form 5100.31). Due to the regulations, even the alcoholic  beverages intended for use as samples for tasting 
must have the certificate of label approval prior to  the import into the United States, which stands as a 
high barrier for Japanese people to conduct promo tion campaigns of Japanese alcoholic beverages in 
the United States.  The Government of Japan urg es the Government of the United States to allow 
imported alcoholic beverages which will be used as sa mples for tasting to be imported into the United 
States without certificate of label approval.  In th is regard, please indicate the specific views of the 
Government of the United States. 
 WT/TPR/M/160/Add.1 
Page 234  
 
ANSWER: The Federal Alcohol Administration (FAA) Act at 27 U.S.C.§ 205(e) requires that “no 
person shall remove from customs custody, in bot tles, for sale or any other commercial purpose, 
distilled spirits, wine or malt beverages unless . . . he obtained and has on his possession a certificate of 
label approval (COLA) . . . .”   
There is a very limited exemption to the COLA requirement for certain commercial samples but, 
because of its narrow nature, is not often used.  TTB regulations at 27 C.F.R. § 27.74 exempt 
commercial samples used to solicit orders from foreign countries from the FAA Act COLA 
requirements, subject to the following limitations:  
The exemption applies to one sample of each alc ohol beverage admitted during a calendar quarter for 
each person. That is, each importer may bring in one sample of an alcohol beverage without a COLA.  
 No sample of beer shall contain more than 8 oun ces, for wine no more than 4 ounces, and for distilled 
spirits no more than 2 ounces. 
 
The health warning statement must be affixe d to the sample.  See 27 U.S.C. § 215(a). 
 Other limited exceptions include those for trade fa irs approved by the U.S. Department of Commerce 
pursuant to the Trade Fair Act of 1959, in which importers may bring in al cohol beverage products 
without a COLA for display but not for tasting, and for quality control purposes, in which importers 
may bring in a limited number of alcohol beverage produc ts without a COLA for laboratory testing. 
 
[Japan] 
 
Q20. Automobiles Labelling Act (p.50, para.130) Automobiles weighing less than 8,500 pounds, 
which are sold in the U.S., are obliged to labelling, such as the percentage of U.S. or Canadian parts, 
the final assembling ratio, the final place of assembly and the place of manufacture of the engine and transmission.  This is aimed at stimulating the U.S. consumers' spirit of "buy American", while placing 
much burden on the automobile manufacturers by cr eating various kinds of labels based on dates and 
types.  In addition, the real state of the procurem ent rate is not properly calculated: for example, the 
procurement ratio does not reflect the labour cost of  the assembly lines. Regarding this Labelling Act, 
in March 2003, the Association of International Au tomobile Manufacturers (AIAM) submitted a report 
to the Congress which pointed out some problems such as: 1) the labelling rule does not provide 
enough information which support cons umers to make better choice of  purchase; and 2) consumers are 
not quite interested in the labelling rule.  In these respects, Japan would like to know whether the U.S. 
plans to review the labelling rule.  
Answer: The American Automobile Labeling Act (AALA) requires passenger motor vehicles to 
be labeled with information about the country of orig in of the vehicle and its parts.  The requirements 
are solely informational; they apply in the same way and to the same extent, regardless of where a 
vehicle is manufactured.  While there are cost s associated with calculating country-of-origin 
information, the National Highway Traffic Safety Administration, in implementing the AALA, has 
sought to minimize cost impacts to the extent c onsistent with ensuring that consumers are provided 
with the information required by the Congress.  We do not believe these informational requirements are 
burdensome.  While the calculation of the U.S./Can adian parts content does not, per the AALA, include 
final assembly, this fact is explained in a note in cluded on the label.  Moreover, the final assembly 
point of the vehicle is included separately on the label. 
 
[Japan]  
Q21. Metric System (p.52, para.137) The metric system is adopted as the international standard unit 
system by the International Organization for Standa rdization and other intern ational organizations in          WT/TPR/M/160/Add.1 
Page 235 
 
 
developing international standards and criteria.  Wh ile most countries have adopted the metric system, 
the United States continues to use the unit of th e yard and pound despite its accession to the Metre 
Convention.  This causes not only in conveniences in daily life but also obstacles in international trade. 
Given that the Agreement on Technical Barriers to Trade (TBT) recommends reducing technical 
barriers on trade by adopting inte rnational units, it is not in acco rdance with the WTO agreements, 
including the TBT Agreement, that the United Stat es is not taking necessary measures to promote the 
metric system.  The Government of Japan theref ore urges the Government of the United States to 
ensure thorough adoption of the metric system in pub lic and private sectors of the United States.  We 
also urge the Government of the Untied States to provide information on its policy measures to 
promote the adoption of the metric system.  In thes e respects, please indicate the specific views of the 
Government of the United States. 
 
ANSWER:  The transition to the metric system is voluntary but the federal government currently 
has an effort underway to encourage the use of the metric system.  Ther e is also an effort to amend the 
Federal Fair Packaging and Labeling Act that would give manufacturers the option to continue to label 
the products covered by the Act in dual units (that is, in inch-pound and metric units as they are doing 
now) or to label products in only me tric units.  A number of sectors have voluntarily chosen to label in 
metric, and use the metric system extensively.  Cu rrently 46 states permit metric-only labeling.  NIST 
is working with the remaining states (Alabama, Ha waii, New Jersey and New York) to encourage them 
to go voluntarily metric-only as quickly as possible.  For information regarding the U.S. metric system 
activities, please visit NIST’s website at h ttp://ts.nist.gov/ts/htdocs/200/202/mpo_home.html.  
 
[Japan] 
 
Q22. Container’s Weight Limit (p.52, para.137) A large number of countries, including Japan, 
approve the limits of the maximum weight to 30.48 metric tons by container in transport freights, 
which is based on the international cargo standard provided by the International Organization for 
Standardization.  On the other hand, the U.S. fede ral weight laws set weight standards not for cargoes 
or the boxes in which they move, but for the total vehicle combination and its relative axle weights.  
The maximum gross vehicle weight on interstate hi ghways is 80,000 pounds (36.3 metric tons) except 
where lower gross vehicle weight is dictated by the bridge formula.  A freight tonnage can be 
calculated by subtracting (1) the weight of the tractor  (the average weight is from 9 to 12 metric tons); 
(2) the weight of the container trailer (the average we ight is from 4 to 6 metric tons); and (3) the weight 
of the container itself (the average weight is ar ound 3 metric tons) from the maximum gross vehicle 
weight.  As a result of calculation, the remaining we ight is from 15 to 20 metric tons, which is below 
the maximum freight tonnage (30.48 metric tons) provided by the International Organization for 
Standardization, by 10 to 15 metric tons (22 to 33  thousand pounds).  The Government of Japan urges 
the Government of the United States to recognize that  the container’s weight limit set by the federal 
weight laws is inconsistent with the ISO regula tion, hampers the efficiency of logistics, causes a 
delivery delay by U.S. transport agencies, and incre ases transport costs.  Concerning the regulation of 
weight standards, we also urge the Government of the United States to raise the upper limit of the 
maximum gross vehicle weight by 10 pounds from the present 8 pounds, in order to conform to the 
international cargo standard.  In these respects, pleas e indicate the specific views of the Government of 
the United States. 
 
ANSWER: Vehicle weight limits in the U.S. are regulated to protect infrastructure as well as to 
promote safety.  The same vehicle weight limits that a pply to containers used in international trade are 
those that apply to all vehicles traveling on public roads in the U.S.  Federa lly regulated gross-vehicle-
weight (GVW) limits are determined by the number of axles on the vehicle and the spacing of those 
axles along the length of the vehicle.  Federal wei ght limits, which are capped at 80,000 pounds, apply 
to the Interstate Highway System with some gra ndfathered exceptions in st ates which allowed higher 
weights before the Federal limits went into effect.  Weight limits off the Interstate System are regulated 
by the individual States.  In addition to regulating weights off the Interstate System, the individual 
States also have the option to classify containers moving in international commerce as nondivisible WT/TPR/M/160/Add.1 
Page 236  
 
loads, making them eligible for State issued overw eight permits that would allow transport over the 
Interstate System.  To return to the initial point that vehicle weight limit s in the U.S. are regulated to protect infrastructure 
as well as to promote safety, it is the gross weight of the vehicle, not the weight of the contents, which 
determines the impacts of weight on vehicle stability and control and on infrastructure.  In the case of 
infrastructure, as axle-load weights increase, paveme nt damage increases exponentially.  In the case of 
bridges, overall gross vehicle weight is the prim ary consideration - heavier vehicles cause more 
bending moment stress on bridges, increasing the risk of bridge failure.  [Korea] 
 
2. We note that the U.S distributors of home app liances require the UL sign to be marked on the 
products. It takes 6 months to 1 year to complete  such certification procedure, thereby working as a 
barrier to many foreign exporters. According to Pa ra 137-138 on page 52 of the Secretariat’s report, 
under the Trade Agreements Act of 1979, U.S. federa l government agencies are required to “take into 
consideration” international sta ndards when developing standards, and if appropriate, to base the 
standards on international standards. And the Act al so call upon the U.S. President to take reasonable 
measures to promote the observance by State agenci es and private persons of requirements equivalent 
to those imposed on federal agencies in carrying out standards-related activities.  
 
Please provide us with information to what extent such requirements or standards as UL certification 
are based on standards developed by international organizations. Does the U.S. government have any 
future plans to recognize foreign quality certifica tion to be equivalent to that of UL Mark? 
 
ANSWER:  Without further information, it is difficult to  know whether Korea’s concerns relate to 
market place demands or government regulation.  To the extent they are the latter, the U.S. Department 
of Labor’s, Occupational Health a nd Safety Administration (OSHA), currently requires that certain 
categories or types of products or equipment be “a pproved” (i.e., tested and certified) by third-party 
organizations it calls “Nationally Recognized Tes ting Laboratories” (NRTLs).  There are 37 different 
types of products for which OSHA requires NRTL appr oval, and the largest of these types is electrical 
products and equipment.  These requirements seek  to prevent accidents through assuring safety of 
products used by American workers.  Requirements for approval apply to private employers, most federal government places of employment, and some state and local government places of employment.  
Organizations interested in applying for th e NRTL designation must apply to the OSHA NRTL 
Program.  The requirements for recognition as an NRTL are contained in 29 CFR 1910.7 and information is available on OSHA’s website (www.os ha.gov).  Each NRTL has a scope of recognition 
which specifies the particular types of products or equipment it is capable of  approving and the test 
standards used for the approval.  NRTLs can use an  appropriate international test standard for its 
approvals.  UL is one of 18 orga nizations recognized as an NRTL.  Recognition is open to bodies 
located in other countries.  And, an NRTL may be approved by OSHA to use outside parties to do part 
of its testing or evaluation activities.  While the home appliance distributors mentioned in the question 
may specify that only products with the UL mark are acceptable to them, from the standpoint of the 
OSHA requirements, the mark of any NRTL that ca n approve these types of products is acceptable to 
OSHA.  
If the U.S. distributors’ products are being sold for use in a workplace environment, and subject to 
certification by an OSHA-accredited NRTL, then a Ko rean certification body could seek to become an 
accredited NRTL, but OSHA must consider whether r eciprocal opportunities are available to U.S. 
certification bodies in Korea.  
Based on information provided by UL, it is our unde rstanding that turnaround times in excess of 2-10 
weeks generally indicate that a product failure has o ccurred, that the original submittal was incomplete 
or required rework, or that the product was “new a nd unusual.”  UL home appliance standards typically          WT/TPR/M/160/Add.1 
Page 237 
 
 
are developed and maintained using an Ameri can National Standards Institute (ANSI)-accredited 
process which ensures transparency, openness, impartiality and consen sus, effectiveness, relevance, 
coherence, etc. 
 
[Korea] 
 3. With regard to the development of voluntary con sensus standards described in para. 141 on page 53 
of the Secretariat report, please explain what is a criteria for government agencies to choose to 
participate in the development of certain standards a nd what is the role of th e agencies in the process? 
 ANSWER:  Essentially, it is the respon sibility of U.S. regulators to assess whether participation in 
voluntary, private-sector, consensus standards bodies is  in the public interest and is compatible with 
their missions, authorities, priorities, and budget resources.  Agency representatives serving as 
members of voluntary, private-sector, consensus st andards bodies participate on an equal basis with 
other members, consistent with the procedures of th ose bodies.  The purpose of agency participation in 
voluntary, private-sector, consensus standards bodies is (1) to eliminate the necessity for development 
or maintenance of separate, Government-unique standa rds; and, (2) to further such national goals and 
objectives as increased use of the metric system of measurement; use of environmentally sound and 
energy efficient materials, products, systems, servic es, or practices; and improvement of public health 
and safety.  Guidance on federal participation in  the development and use of voluntary consensus 
standards (OMB Circular No. A-119) is available at www.whitehouse.gov/omb/circulars/a119. 
 
[Mexico] 
 
12. Concerning paragraph 118, could the U.S. expl ain in greater detail why proposed subfederal 
measures have not been identified (and, therefore, notified)?  ANSWER: As noted in the Secretariat report, the Un ited States has in place procedures to notify 
state level proposals (“…level directly below that of  the central government.”).  The U.S. notification 
authority has subscribed to a private database wh ich includes information on state regulatory proposals 
and provides a basis for identifying notifications to be made to WTO members.  The Secretariat report 
failed to identify two notifications we have made concerning California: 
 G/TBT/N/USA/155 (11/23/2005)—California Sena te Bill on organic aquaculture products;  
and, 
G/TBT/N/USA/159 (12/14/2005)—California Heavy Du ty Smoke Emissions Test and Heavy-Duty 
Vehicle Emissions Control System Inspections.  (Note,  due to a clerical error,  the agency responsible 
erroneously reads NCSCI/NIST, which is our notifica tion authority.  It should have read “State of 
California”). 
 
[Mexico] 
 
13. Regarding paragraph 121, could the United St ates indicate whether the Chapters on technical 
barriers to trade in the Free Trade Agreements c oncluded recently or under negotiation apply to the 
goods sector as well as the services sector?  If they do not apply, could the United States explain why it 
did not consider it appropriate to establish rules fo r the standards and technical regulations applicable 
to services in those Chapters (unlike the patte rn followed in Chapter XI of the NAFTA)? 
 ANSWER: The Chapters on Technical Barriers to Tr ade in recent Free Trade Agreements to 
which the U.S. is a party are limited to goods cons istent with the scope of the WTO Agreement on 
Technical Barriers to Trade.  As Mexico is awar e, the NAFTA text was under negotiation at the same 
time as the Uruguay Round.  Since the advent of the WTO, our approach has been to affirm the existing WTO obligations and, where possible, to build upon them.  WT/TPR/M/160/Add.1 
Page 238  
 
[Mexico]  
14. With regard to paragraph 122, could the Un ited States indicate whether it intends to send on a 
regular basis the Unified Regulatory Agenda and the Regulatory Plans to the Members of the Committee on Technical Barriers to Trade? 
 
ANSWER: We take note of Mexico’s suggestion.  As Mexico is aware, there is no specific 
obligation for Members to submit such information to the WTO.  The Unified Regulatory Agenda and 
the Regulatory Plan is already made public and av ailable through various means, including in a 
searchable, electronic format at http://www.reginfo. gov/public/.  We did not want to unnecessarily 
burden the Secretariat with the information. 
 
[Mexico]  
15. Regarding paragraph 123, could the United St ates indicate whether the laws drafted and issued 
by Congress are also bound by the principles of the Ad ministrative Procedure Act, when such laws are 
or contain technical regulations, as defined by the Agreement on Technical Barriers to Trade?  ANSWER: The Administrative Procedures Act establishes rules to guide federal agencies and is 
not binding on the U.S. Congress.  However, bills  proposed in Congress are made public, interested 
parties have an opportunity to express their views to members of Congress, as well as their staffs and 
the staff of committees, debates are published in  the Congressional Record, and committees issue 
reports explaining the intent of the legisla tion, often on an article-by-article basis. 
 That said, Congress generally does not issue technical regulations. Rather, it delegates that authority to 
Federal agencies within  the Executive Branch.  
 [Mexico]  
16. Concerning paragraph 125, could the United Stat es explain whether there is a requirement to 
draft regulatory impact statements before proposing the establishment of a technical regulation?  If so, 
could the United States explain whether such regulat ory impact statements are available to the public 
(including foreign nationals) and where?  Are the assessments of benefits and costs that must be 
submitted to the OMB's Office of Information and Re gulatory Affairs available for consultation and, 
where appropriate, can the public comment on them? 
 
ANSWER: Presidential Executive Order 12866, “Regulat ory Planning and Review”, sets out an 
overarching regulatory philosophy and principles to gui de agencies in developing effective an efficient 
rules.  Before recommending Federal regulatory action,  an agency must demonstrate that the proposed 
action is necessary.  The Executive Order requires each ag ency to identify the problem that it intends to 
address (including, where applicable, the failures of private markets or public institutions that warrant 
new agency action) as well as assess the significance of  that problem.  It requires that agencies assess 
both costs and benefits (quantitativ e and qualitative) of an intended regulation and propose or adopt a 
regulation only  upon making a reasoned determination th at the benefits of the intended rule justify its 
costs.  The Order states that, in choosing among a lternative regulatory approaches, agencies should 
select those approaches that maximize net benefits.  The President relies on the Office of Management and Budget (OMB), an agency of the Executive O ffice of the President, to oversee and coordinate 
Federal regulatory policy, including implementation of this Executive Order.  OMB Circular A-4, 
Guidelines for the Conduct of Regulatory Analysis, st andardizes the way benefits and costs of Federal 
regulatory actions are measured and report ed.  (The full text is available at www.omb.gov
, and further 
information on the approach to regulation is contained in G/TBT/W/258.)  Regulatory impact 
statements for economically significant (generally  rules with over $100 million in impact) proposed 
regulations are made public by the agencies.  Public  comments on them are invited as part of the notice          WT/TPR/M/160/Add.1 
Page 239 
 
 
and comment process.  A good place to search for them is:  http://www.regulations.gov/fdmspublic/  
component/main . 
 
[Mexico]  
17. Regarding paragraph 126, Mexico would like a more detailed explanation of what is meant by 
“peer review.”  ANSWER: As stated in the referenced Final Informa tion Quality Bulletin for Peer Review, “peer 
review is a form of deliberation involving an ex change of judgments bout the appropriateness of 
methods and the strength of the author’s inferences.  Peer review involves the review of a draft product 
for quality by specialists in the field who were not i nvolved in producing the draft.  The peer reviewer’s 
report is an evaluation or critique that is used by th e authors of the draft to improve the product.  Peer 
review typically evaluates the clarity of hypotheses, the validity of the research design, the quality of 
data collection procedures, the robustness of the met hods employed, the appropriateness of the methods 
for the hypotheses being tested, the extent to whic h the conclusions follow from the analysis, and the 
strengths and limitations  of the overall product.”  
 
[Mexico] 
 
18. Concerning paragraph 129, could the United States say whether it plans in the future to develop 
statistics on the degree of alignment of its techni cal regulations with international standards? 
 ANSWER: The U.S. system emphasizes transparency  and openness in the development of 
technical regulations.  Uruguay Round implementing legislation and additiona l guidance provided to 
regulators encourage regulatory authorities to consider  the use of relevant international standards that 
may be effective and appropriate for meeting their regulatory objectiv es.  From our perspective, the 
provisions for transparency in the U.S. system, and the accountability of regulatory authorities to respond to significant comments received on proposal s, are meaningful in preventing unnecessary 
barriers to trade.  In our estimation, attempting to compile data on the extent to which U.S. regulations 
are based on international standards would not n ecessarily contribute to the prevention of unnecessary 
obstacles to trade.  We have found the veracity of other Members’ calculation of the extent to which 
their own regulations are based on internationa l standards difficult to verify (or refute). 
 
[Mexico] 
 
19. With respect to paragraph 140, could the Un ited States indicate in what cases governments can 
develop standards and why 25 federal governme nt agencies are using government-developed 
standards?  ANSWER: Unfortunately, the Secretariat report does not  make clear that OMB Circular A-119, 
which directs federal agencies to adopt “voluntary consensus standards,” applies to both regulations 
and procurement specifications.  Agencies may st ill need to rely on government-unique standards 
where there are no applicable voluntary consensus standards, or where use of voluntary consensus 
standards is inconsistent with U.S. law or otherw ise impractical.  Agencies are required to report uses 
of government-unique standards in lieu of voluntary consensus standards and to indicate their reasons 
for doing so.  As noted in footnote 174, the reports are available at http://standards.gov/NTTAA/index.
 
cfm?do=NTTAReports.main . 
 
[Mexico] 
 
20.  Regarding the US-EC Agreement on wine-maki ng practices and labeling of wine, referred to in 
paragraph 143: WT/TPR/M/160/Add.1 
Page 240  
 
 (a) Could the United States indicate the imp lications of this Agreement (especially 
regarding the recognition of semi-generic terms an d regulated terms) for wine imports from third 
countries to the United States? and   (b) Could the United States tell us when the second phase of negotiations will begin and 
what other wine-related trade issues w ill be addressed in those negotiations? 
 ANSWER:  (a) As this is an agreement on trade in wi ne between the EC and the United States, the 
primary effect of the agreement is with respect  to wine imported from the EC and not from third 
countries.  However, the implementation of obligations  with respect to wine sold on the U.S. market, 
including U.S. wine, could have an equal impact  on wine imports from third countries, depending on 
the obligation and how it is implemented.  (b)  The Agreement commits us to launch phase two ne gotiations within 90 days of the signing of the 
first phase agreement which was March 10, 2006.  Th e parties are free to raise any wine trade issue 
they want in phase two.  Nothing has been ruled out. 
 
[South Africa] 
 
1.  Paragraph 138 of WT/TPR/S/160 (page 52) ca lls upon the President to “take such reasonable 
measures as may be available to promote the observa nce by state agencies and private persons, in 
carrying out standard-related activities,  of requirement equivalent to those imposed on federal agencies, 
and of procedures that provide for notification, pa rticipation, and publication with respect to such 
activities”.   
Q.  Can the US please give an example of a case where Federal standards differ with State 
standards; and if such, which standard will prevail?  
 
ANSWER: Para. 138 of WT/TPR/S/160 is describing the part of U.S. law that was designed to 
implement the obligations to “take such reas onable measures as may be available” to central 
governments (Members) for implementing relevant TBT Articles (3, 4, 7, 8, 9) to ensure compliance by 
sub-central and non-governmental bodies.  U.S. legi slation (TAA of 1979, as amended by the URAA) 
specifically prohibits U.S. agencies from using st andards, technical regulations or conformity 
assessment procedures as unnecessary obs tacles to trade.  Under U.S.  law, unnecessary obstacles to 
trade are not created if the demonstrable purpose is to achieve a legitimate domestic objective (e.g., 
protection of health, safety, or the environment) and if such activity does not operate to exclude 
imported products which fully meet the legitimate obj ectives.  Section 402 speci fically obliges agencies 
to ensure that imported products are treated no less favorably than like domestic or imported products. 
 There are relatively few standards developed by govern ment agencies in the Unite d States; instead, this 
is a function of market demand and there are a number of non-governmental bodies which develop standards to meet those needs.  
The U.S. Constitution prevents States from crea ting unnecessary obstacles to interstate commerce. 
Federal laws and regulations may e ither expressly or impliedly preempt State law.  Express statutory 
preemption exists when Congress adopts language sp ecifically providing that States cannot adopt or 
maintain any regulation that diffe rs from the Federal regulations.  Federal law may also impliedly 
preempt State law if (1) Congress has fully occupied th e particular field of regulation in question;  or 
(2) the State law conflicts with any Federal law or interferes with the objectives of Federal law . 
 
[Thailand] 
 
29.  Paragraph 131  states that the United States requires immediate containers of imported processed 
meat and poultry products to be marked with the coun try of origin in English, whereas imported meat          WT/TPR/M/160/Add.1 
Page 241 
 
 
and poultry processed in the United States are not subj ect to this requirement.  Please clarify how this 
complies with the national treatment principles of the TBT Agreement.   ANSWER: It is unclear what question is being asked.  The question appears to be premised on the 
assumption that the United States requires imported pro cessed meat and poultry pr oducts to be marked 
with the country of origin, whereas it does not requi re imported unprocessed meat  and poultry products 
to be marked.  If that is the case, that assumption is incorrect.  Under 19 CFR section 134.11, "every 
article of foreign origin (or its container) imported in to the United States shall be  marked  . . . in such 
manner as to indicate to an ultimate purchaser in the United States the English name of the country of 
origin of the article, at the time of importation into  the Customs territory of the United States."  This 
requirement applies regardless of whether the article has been processed or not.  
 
[Thailand] 
 
30. Current US regulations concerning food labeli ng, such as the mandatory labeling of products 
containing transfat, food allergens, and country of or igin labeling, are stringent and quite costly.  For 
example, the United States allows importation of  egg products only from FSIS certified facilities 
(paragraph 158 ) and such products must also include food allergen labeling.  These requirements 
burden exporters with factory certification and exam ination costs as well as labeling costs.  Does the 
United States intend to simplify this process in th e near future in order to facilitate trade? 
 
ANSWER: We believe that trans fat and food allergen labeling are necessary to protect and 
promote the public health of U.S. consumers, and accordingly U.S. law requires that this information 
be on labels of food products marketed in the United States.  The Food and Drug Administration does 
not require pre-approval or certification of food labe ls before a product can be imported into the U.S., 
but any food products that do not bear the necessary information would not be in compliance with U.S. 
requirements and could be refused at the port of entry. 
 
[Turkey] 
 Q10.  In the Secretariat Report, under paragraph 5, it is written that the United States has made 
numerous notifications under the TBT and SPS Agreemen ts but there is no inform ation on the extent to 
which U.S. standards are based on standards developed by international organizations.  
 In the paragraph 129 of the Secretariat report, it is further stated that the US authorities have indicated 
that the US Government does not maintain centrali zed statistics on the extent to which US technical 
regulations are based on international standards.  Even it seems that no specific information is ava ilable, could US delegati on give general indicative 
information about the extent that these standards are in conformity with the ones developed by international organizations? 
 
ANSWER:  The U.S. system emphasizes transparen cy and openness in the development of 
technical regulations.  Legislation implemen ting the Uruguay Round Agreements and additional 
guidance provided to regulators encourage regulat ory authorities to consider  the use of relevant 
international standards that may be effective and a ppropriate for meeting thei r regulatory objectives.  
From our perspective, the provisions for transparen cy in the U.S. system, and the accountability of 
regulatory authorities to respond to significant comme nts received on proposals,  are meaningful in 
preventing unnecessary barriers to trade.  In our estim ation, attempting to compile data on the extent to 
which U.S. regulations are based on international standards would not necessarily contribute to the 
prevention of unnecessary obstacles to trade.  We have found the veracity of other Member’s 
calculation of the extent to which their own regulati ons are based on international standards difficult to 
verify (or refute). 
 WT/TPR/M/160/Add.1 
Page 242  
 
Sanitary and Phytosanitary Measures
 
 
[Argentina] 
 
19. Regarding the approval by the United States of  agricultural imports, Argentina has observed with 
great concern the existence of unjustified delays in  the procedures for approving agricultural products 
and in the recognition of regionalization schemes  implemented. Although Argentina recognizes the 
right of Members to adopt levels of protection th at exceed those that would be achieved through the 
application of international standards, it must highli ght the fact that there must be sufficient scientific 
evidence in these cases. 
 
Question:  Can the United States explain what scienti fic evidence justifies the excessive amount of time 
it dedicates to investigate whether a determined pathology exists or not? Could the United States shorten those time periods, taking into account international standards (OIE-CIPF-Codex)? 
 
ANSWER: The United States does in fact explain the sci entific evidence that justifies its decision-
making process.  For example, USDA-APHIS conducts scientific risk assessments as its foundation for 
making decisions on what import restrictions are necessary. The two WTO-recognized international 
standard-setting organizations have  developed guidance for performing plant pest risk analyses and 
animal and animal product import risk analyses. APHIS also continues to develop new methodologies and guidelines for conducting effective risk assess ments, and makes these guidelines available to 
interested parties. Examples include guidance on performing risk assessment for commodities and 
organisms and weed-initiated pest risk assessment.   Many APHIS activities demonstrate its support for 
the regionalization concept. APHIS maintains a Regionalization Import Requests Web Site where 
visitors can see requests that APHIS has received to establish regions in vari ous countries for export to 
the U.S. of various commodities. From this site vi sitors can not only see what types of requests were 
made and when, but can also review risk assessment documentation developed to evaluate the requests.  
For further details on the statutory and executive guida nce related to the U.S. government rulemaking 
process, please see the following website: http:// www.whitehouse.gov/omb/circulars/a004/a-4.pdf. 
 
[Brazil] 
 
6.  Chapter III, paragraphs 150-160
. The United States is deemed to attach importance to the pursuit of 
sound scientifical basis in SPS matters. Nevertheless,  the Office of Management and Budget (OMB) 
can adopt measures based on “economic impact”. What  is the rationale behind taking into account 
economic concerns in SPS decisions?  
ANSWER:  U.S. Federal regulatory development is subject to statutory and executive mandates 
whether these regulations target sanitary and phyt osanitary considerations or non-health related 
regulatory matters. For example, economic and environmental analyses may be required to accompany 
the narrow sanitary considerations under review.  With regard to economic analysis of rulemaking, we  note that U.S. regulatory agencies are required to 
assess the potential economic costs and benefits of it s proposed rules and its potential effects on small 
entities, in accordance with Executive Order 12866 and the Regulatory Flexibility Act.  However all 
SPS measures must have a scientific basis.  For fu rther details on the statutory and executive guidance 
related to the Federal government rulemaking  process, please see the following website:  
http://www.whitehouse.gov/omb/circulars/a004/a-4.pdf 
 
[Brazil] 
 
7.  Chapter  III, paragraph 156
: "The process from APHIS' determination  to assess the risk presented 
by imports of a particular product to the issuan ce of an import licence can  take  several years, 
depending on the quality of the data  received  fo r  the  risk  assessment,  among  other factors."          WT/TPR/M/160/Add.1 
Page 243 
 
 
Nevertheless, many delays have been registered in the certification process of Brazilian meat. Until the 
end of 2005, Brazil was taking more than three year s to certificate fresh meat. According to APHIS 
staffers, the delay was due to lack of human resour ces, since many were been deployed to tackle the 
BSE threat. What are the American government pl ans to prevent those delays from undermining the 
credibility of the certification process?  
ANSWER: Many APHIS activities show support for the regionalization concept. APHIS maintains 
a Regionalization Import Requests Web Site where visitors can see requests that APHIS has received to establish regions in various countri es for export to the U.S. of various commodities. From this site 
visitors can not only see what types of requests were made and when, but can also review risk 
assessment documentation developed to evaluate the requests.   
 For further details on the statutory and executiv e guidance related to the Federal government 
rulemaking process, please see the following website :  http://www.whitehouse.gov/omb/circulars/a004/ 
a-4.pdf 
 
With respect to Brazil’s specific request to APHIS to promulgate animal health import measures that 
would allow Brazilian fresh beef to enter the United States, Brazilian authorities requested a suspension 
of the consideration of this request in October 2005. 
 
[Chile] 
 1.  Paragraph 149 of the report states that in the FTA  with Australia definite timeframes are stipulated 
for implementing the Sanitary and Phytosanitary (SPS) Measures Chapter th ereof and establishing a 
Committee on SPS Measures.  Can the United States sh are its experience regarding the establishment 
of said Committee?  
ANSWER:  The AUSFTA entered into force on January 1, 2005, obligating the United States and 
Australia to establish a Committee on SPS Matters with in 45 days after that date.  The SPS Committee 
was established and met on February 14, 2005.  Th e second meeting of the Committee was held on 
March 6, 2006 .   
 
2.  With reference to pa ragraph 158 of the report, what is the cu rrent situation regarding the recognition 
of the Argentine regulatory system for beef? 
 
ANSWER:  Argentina is currently eligible to export cooked beef and beef products to the United 
States, as it meets the USDA-FSIS criteria to do so. 
 
http://www.fsis.usda.gov/PDF/Argentina_establishments.pdf
 
 Since February 19, 2001, Argentina has been ineligib le to export fresh (uncooked) beef to the United 
States following the confirmation of foot-and-mouth disease (FMD) in Argentina.  Specifically, USDA/APHIS took regulatory action to prohibit the importation of fresh beef as an emergency 
measure to protect the livestock of the United States from foot-and-mouth disease. Argentina continues 
to experience detections of FMD, thereby pr eventing Argentina from meeting USDA/APHIS's 
safeguarding standards with respect to this cattle  disease which is not present in the United States. 
 http://www.aphis.usda.gov/vs/ncie/country.html#FMD-R
 
 
3.  The United States has used Marketing Or ders, established under the Agricultural Marketing 
Agreement Act (AMAA) of 1937.  Th is practice has become, in some cases, especially harmful with 
the introduction of changes, such as the proposed change to Marketing Order 925 for table grapes, 
which would seriously affect Chile.  Can the United States explain the criteria used to create and/or WT/TPR/M/160/Add.1 
Page 244  
 
change a Marketing Order?  How can it ensure that  it does not become a discriminatory measure and/or 
trade barrier? 
 
ANSWER: Federal marketing orders ar e legal instruments author ized by the Agricultural 
Marketing Agreement Act of 1937,  as amended (AMAA).  Marketing orders allow fruit and vegetable 
growers to work together to solve marketing problems that they cannot solve individually, by helping 
balance the availability of quality product with th e need for adequate returns to producers and the 
demands of consumers.  Orders may provide fo r one or more of the following activities: quality 
regulation; quantity regulation; r esearch and development; promotion and advertising; and marketing 
information collection.  
 
Section 8e of the AMAA provides that when certa in domestically produced commodities are regulated 
under a Federal marketing order, imports of the comm odity must meet the same  or comparable grade, 
size, quality and maturity requirements.  Currently, there are 14 imported commodities subject to regulation:  avocados; dates; grapefruit; table grap es; hazelnuts; kiwifruit; olives; onions; oranges; Irish 
potatoes;  plums; raisins;  tomatoes;  and walnuts.   Imports are regulated only during the period of time 
that the applicable domestic commodity is being shipped and regulated.  Section 8e quality requirements are intended to:  de velop dependable markets for products by ensuring 
consumer satisfaction and encouraging repeat purch ases; promote buyer satisfaction and increase sales 
by ensuring that only acceptable quality products are in  the U.S. marketplace; and help avoid market 
disruptions associated with poor quality offerings .  Domestic industries operating under marketing 
order programs strongly support section 8e regulations.  Section 8e im port regulations subject imported 
products to the same standards as domestic products.  
 
[China] 
 
Question (p.50 para. 129) 
Would the U.S. throw some light on to wh at extent its SPS regulations are based upon 
international standards?  The Secretariat report states that the U.S. maintains no centralized 
statistics on TBT related to such matters, please explain why?  
 
ANSWER:  The U.S. system emphasizes transparen cy and openness in the development of 
technical regulations.  Legislation implemen ting the Uruguay Round Agreements and additional 
guidance provided to regulators encourage regulat ory authorities to consider  the use of relevant 
international standards that may be effective and ap propriate for meeting their regulatory objectives.  
From our perspective, the provisions for transparen cy in the U.S. system, and the accountability of 
regulatory authorities to respond to significant comme nts received on proposals, are meaningful in 
preventing unnecessary barriers to trade.  In our estim ation, attempting to compile data on the extent to 
which U.S. regulations are based on international standards would not necessarily contribute to the 
prevention of unnecessary obstacles to trade.  We  have found the veracity of other Members’ 
calculation of the extent to which their own regulati ons are based on international standards difficult to 
verify (or refute). 
 
Sanitary and phytosanitary (SPS) re gulatory measures are subject to the same level of transparency and 
openness as those of other technical regulations (see a bove).  Consistent with our obligations under the 
WTO SPS Agreement, in particular SPS Article 3,  the United States bases its SPS regulations on 
international standards and guidelines where they  exist and as appropriate.  As noted above, the 
United States does not maintain statistics in this re gard, but in our implementation of the obligations 
under the SPS Agreement the United States remains an  active participant in the three recognized 
international standards-setting bodies for human (COD EX), plant (IPPC) and animal (OIE) standards 
and guidelines affecting international commerce           WT/TPR/M/160/Add.1 
Page 245 
 
 
[China] 
 
Automatic Detention System for Im ported Food Inspection and Quarantine  
 
Pursuant to the Federal Food, Dr ug and Cosmetic (FDC) Act FDA of the U.S. will conduct automatic 
detention to imported food products wi th potential problems up to 30 days. 
 Does the U.S. require the representativeness of  the samplings in undertaking of the overall 
inspection during the automatic detention?  
ANSWER: A representative sample is always needed whether it will be tested by FDA or by a 
private lab.  This includes samples taken in response to an import alert recommending Detentions without Physical Examination (DWPE)  (formerly automatic detention). 
 The inspection results from the FDA or laboratori es recognized by FDA will serve as the final 
evidence to trigger the Au tomatic Detention System . If the Inspection authorities of an exporter 
disagree with the U.S. inspection conclusions, do they have the right to request a review? What 
are the procedures to apply for a review? 
 ANSWER: Import alerts recommending DWPE may be issued as a result of sampling or other 
evidence that indicates that future en tries appears to be violative.  An importer always has the right to a 
hearing to contest any detention action by FDA.  A Notice of Detention and Hearing is provided to an 
importer when a detention is initiated.  This no tice provides an opportunity for the introduction of 
testimony or the filing of a statement in writing with in 10 days following the date of detention shown 
on the notice. This information can be found in  FDA’s Regulatory Procedures manual Chapter 9. 
 
Usually inspection cost is borne by the FDA,  then why inspection cost incurred during the 
automatic detention shall be fu lly borne by the importer?  
 
ANSWER: When FDA performs an inspection, FDA bears the cost except when that inspection is 
performed in connection with the reconditioning of a violative product. When a product is detained 
under an import alert, the importer may submit a pr ivate lab analysis to overcome the appearance of a 
violation for that product. This cost is voluntarily incurred by the importer. 
 
Will the U.S. justify the consistency between it s automatic detention regulation and the Article 
2.2 of the TBT Agreement?  
ANSWER: U.S. FDA’s detention process is fully c onsistent with Article 2.2 of the TBT 
Agreement.  The process is not more trade restric tive than necessary for the protection of human health 
and safety and provides a process for products that have  been detained to enter into the US market.  
Importers are provided with advance notice via import alerts of all products recommended for 
detentions without physical exam and are made awar e of the process for gaining entry.  Importers are 
provided written notice and an opportunity to contest the detention and to provide evidence that the product is not violative.  [China] 
 
Bioterrorist Act
 
 
Since its enforcement of Bioterrorist Act, ha s the U.S. conducted any study to analyze the 
negative impact of the Act on normal tr ade. If yes, what are the findings? 
 
What measures would the U.S. take to strictly ho nor the principles embodied in the Article 5.4 of 
the SPS Agreement as “Members should…take into account the objective of minimizing negative WT/TPR/M/160/Add.1 
Page 246  
 
trade effects” thus to  eliminate the excessive impact of the Act and its implementing measures on 
trade? 
 ANSWER: In reference to the Public Health Security  and Bioterrorism Preparedness and Response 
Act of 2002 (Bioterrorism Act), the U.S. Food and Drug Administration (FDA) has encouraged public 
comment at every stage of the bioterrorism regul ations' development.  FDA developed and published 
proposed regulations which were open to public comme nt from both domestic and foreign parties.  We 
also conducted numerous outreach meetings directed at  foreign stakeholders, both within the U.S. to 
foreign embassy officials in Washington and via videoconference.  We received numerous comments 
from foreign governments, industries, and trade a ssociations on both rules.  We reviewed each 
comment that was submitted during the comment pe riod, and developed the final rule, taking the 
comments into account.  In the case of the prior notic e and registration regulations, we are allowing for 
several opportunities for interested individuals to  provide comments even as we begin implementing 
the interim final rule to make sure that we mini mized any negative effect on trade while ensuring our 
food safety and security.  We have published a complia nce policy guide that describes the U.S. strategy 
for maintaining an uninterrupted flow of imports while improving their safety in accordance with the 
Public Health Security and Bioterrorism Prepar edness and Response Act of 2002 (Bioterrorism Act) 
requirements.  FDA included an economic impact anal ysis in the proposed rul es for affected entities to 
review and provide comment, and made revisions to the rules based on the comments we received to 
further minimize the impact to trade consistent with  the requirements in the Act.  Both interim final 
rules include a regulatory impact analysis. 
 
[China]  
Question: (p.55 para.150)  
 
Perishable goods are reported to be more frequen tly damaged than before due to cumbersome and 
sometimes excessive inspection and approval proce dures for goods entering the U.S. even though 
increasingly detailed cargo information was submitted to CBP as requested. Typically, fresh lychee in 
air-conditioned containers are to be unloaded and ex posed in open air for 5 hours during a entry-of port 
inspection and to wait for another 5 or even 7 days to finish all the clearance procedures, which often 
leads to great commercial losses to exporters.  
What measures would be taken to improve U.S. Customs sampling and inspection procedures in 
this respect? 
 
ANSWER:  It is the importer of record’s responsibilit y to arrange for examination and release of 
commercial goods entering the United States.  In formation on this process can be found in Importing 
into the United States, A Guide for Commercial Importers  at the following website: 
 http://www.cbp.gov/linkhandler/cgov/toolbox/pub lications/trade/iius.ctt/iius.doc#EntryProc
 
 
The “Entry Process” section of the Guide states that “[w]hen a shipme nt reaches the United States, the 
importer of record (i.e., the owner, purchaser, or  licensed customs broker designated by the owner, 
purchaser, or consignee) will file entry documents fo r the goods with the port director at the goods’ 
port of entry.  Imported goods are not legally entere d until after the shipment has arrived within the 
port of entry, delivery of the merchandise has been authorized by Customs, and estimated duties have 
been paid.  It is the importer of record's respons ibility to arrange for examination and release of the 
goods, and delays can be minimized by following the Guide.  Goods may be entered for consumption, entered for wa rehouse at the port of arrival, or they may be 
transported in-bond to another por t of entry and entered there under the same conditions as at the port 
of arrival.” 
          WT/TPR/M/160/Add.1 
Page 247 
 
 
Information on the agricultural quarantine insp ection can be found at the following website: 
 http://www.cbp.gov/xp/cgov/import/commercial_enfo rcement/agric_quar_insp/agri_ins_overview.xml  
 
[Chinese Taipei] 
 Question 9 (page 56, paragraphs 157-158) 
It is stated in the report that “FSIS has specifi c responsibility for the safety of meat, poultry and egg 
products.” However, in the recent investigation into the improper shipment of veal to Japan in January 
2006, the Investigation Report concludes that mist akes were made by FSIS inspection personnel. In 
addition, the inspection programme personnel at the establishment were not sufficiently aware of the 
Export Verification programme, and should not have certified or approved the shipment of such 
product to Japan.  Since we import a considerable amount of meat, poultry and egg products from the US every year, 
could the US please indicate what steps will be ta ken to ensure that meat, poultry and egg products 
meet all the US and the importing country’s food safety requirements?  ANSWER:
 FSIS employees continuously inspect all U.S. slaughter and egg product 
establishments during hours of operation, and inspect all U.S. meat and poultry processing 
establishments daily. These inspections are conduct ed by food technologist, inspectors, and/or 
veterinarians, depending on the specific activity in volved.  In addition, FSIS has local and national 
supervisors and managers who vis it establishments unannounced and at  a frequency that is dependent 
upon the compliance of the establishment or whether a ny incidents have occurred at an establishment.  
FSIS also employs Regional and National Consumer  Safety Officers and Compliance Officers who 
respond to and investigate compliance and food safety i ssues that are found at every level of inspection, 
at US ports/borders, and at foreign ports/borders.  Consequently, FSIS ensures compliance with U.S. 
domestic and importing country requir ements via multiple layers of inspection and supervision: from 
the inspector/veterinarian in each est ablishment, to the local supervisors, to the Regional managers and 
investigators, to the National Office personnel.  As further indicated in the report, “Upon request, FSI S conducts on-site audits to evaluate whether a 
country’s regulatory system attains the same leve l of protection as the US to ensure continued 
compliance, FSIS conducts periodic audits.” As on-s ite audit/inspection is the right of the importing 
country, we believe that when the importing coun try has concerns about imported products, it may 
exercise the same rights as those of the US.  In th is respect, we would appreciate it if the US could 
explain the reasons for the request to replace BAPHIQ  audit/inspections of US pet food facilities with 
audit/inspections by APHIS.   
 ANSWER:  If FSIS determines that a foreign inspection system is equivalent to the U.S. inspection 
system, it then promulgates a rule which, when co mpleted, results in the listing of the country in 
Federal Regulations (9CFR 327.2 for m eat and 9CFR 381.196 for poultry) as eligible to import into the 
United States. FSIS will then periodically conduct on-s ite audits of a sub-set of the establishments 
authorized by the exporting country in order to veri fy the maintenance of the system as equivalent to 
the U.S. inspection system.  In similar fashion,  USDA-APHIS has requested that BAPHIQ judge the 
U.S. system equivalent with respect to pet food inspections and that BAPHIQ conduct periodic on-site 
audits of a sub-set of U.S. pet food establishments to verify the maintenance of the U.S. system as 
equivalent to the Chinese Taipei inspection system for pet food.  [Ecuador]  
Please state what action has been taken since the promulgation of the Bioterrorism Act of 2002  by the 
President of the United States of America in June 2002 so as to prevent su ch law from becoming a non-
tariff barrier to trade. WT/TPR/M/160/Add.1 
Page 248  
 
 Has the United States of America done an assessment on the impact on trade with Latin 
American countries of the implementation of the Bioterrorism Act and on the changes in import 
patterns considered to stem from such law?   It seems that the Bioterrorism Act author ized approximately US$600 million to the federal 
government for its implementation a nd the preparation of its provisions, adopted by the U.S. Congress.  
Bearing in mind that this amount substantially ex ceeds any possible support that Ecuador can give to 
its exporters for marketing, can the United States delegation inform us whic h technical and financial 
assistance programs have been created so that expor ters from developing countries in Latin America 
can be prepared to comply with all the requisites of said Act and thus continue their exports without 
significant obstacles to trade? 
  How much longer does the United States contempl ate keeping the Bioterrorism Act in effect?  
Does the United States foresee amending the aforementioned law?  If so, when?  
ANSWER:  The Public Health Security and Bioterro rism Preparedness and Response Act of 2002 ( 
the Bioterrorism Act or the Act) (PL 107-188) , authorizes the U.S. Food and Drug Administration 
(FDA), after public notice and an opportunity for domes tic and international st akeholders to comment, 
to develop rules for implementing the provisions of the Act, including section 307 (Prior Notice of Imported Food Shipments).  FDA and U.S. Customs and Border Protection jointly issued the Prior 
Notice Interim Final Rule in October 2003, which allo wed affected parties an additional opportunity to 
comment on the interim final rule’s provisions.  The rule took effect on December 12, 2003, as required 
by the Bioterrorism Act.  FDA is carefully considering all comments it received during the open 
comment period on the interim final rule as it devel ops the final rule, including those comments filed 
by the Government of Japan.  FDA is working to develop provisions that are consistent with the 
Bioterrorism Act, its legislative history and objectives, while at the same time minimizing the impact 
on trade to the extent feasible.    FDA has consid ered its international trade obligations under various 
World Trade Organization (WTO) agreements, North America Free Trade Agreement (NAFTA), and other international agreements th roughout the rulemaking processes,  and the regulations implementing 
the Act are consistent with our international ob ligations.  The Bioterrorism risk assessment was 
conducted to fulfill these obligations. It can found at the following website:  
http://www.cfsan.fda.gov/~dms/rabtact.html
 
 The U.S. Food and Drug Administration (FDA) has not conducted an assessment on import patterns.  However, in making decisions on what a rule should require in light of statutory requirements, U.S. 
government agencies use economic analysis – including the analysis of costs and benefits of various 
regulatory approaches.   U.S. government agencies pr epare a draft economic analysis that estimates the 
cost to affected stakeholders and the benefits th e public will receive from a proposed rule.  The agency 
publishes the analysis in the Federal Register as part of the preamble to the proposed rule and solicits 
comments on the analysis as well as comment s on the substantive provisions being proposed.  
Substantive provisions are revised in the rule and/or  the economic analysis, as appropriate, in light of 
the comments received and are then published in the final rule and economic analysis in the Federal 
Register .  The FDA followed this process for each of the Bioterrorism regulations. 
 The FDA did not receive appropriated funds specifically  targeted to Bioterrorism Act promulgation.  
FDA directed extensive outreach to both domestic a nd international stakeholders after publication of 
the interim final rule (October 10, 2003; 68 FR 58974).  Outreach activities included the following: 
 
• Dissemination of materials to guide aff ected domestic and international food 
facilities through the new processes established to implement prior notice requirements;          WT/TPR/M/160/Add.1 
Page 249 
 
 
• Numerous domestic and internationa l outreach meetings with the food 
industry, trade organizations, and State and foreign government regulators;  
• A series of videoconferences and a satellite downlink video broadcast to more 
than 1,000 sites around the world; 
• Materials provided for and events targeted to the media;  
• Presentations by FDA officials and exhibits at professional and trade 
conferences and meetings to inform industry and state and local government representatives of the new requirements;  
• Presentations by USDA’s Foreign Agricultural Service (FAS) and U.S. 
embassy officials, who disseminated materials and answered questions in various countries; 
• Cooperative arrangements with CBP and other Federal agencies to ensure that 
information on the interim final regulations and their requirements was disseminated to affected companies and individuals;  
• Issuance of several guidance documents (all available on the Internet) that 
explain the prior notice requirements, including, “Prior Notice of Imported 
Food: Questions and Answers,” “What You Need to Know About Prior Notice 
of Imported Food Shipments,” and numerous web-based tutorials for PNSI.  Many of these guidance documents are available in foreign languages; e.g., Arabic, French, Hindi, Japanese, Malay, Portuguese, and Spanish; 
• Training in new or revised procedures for its field personnel, as well as CBP 
field personnel.  FDA included an initial transition period in the December 
2003 prior notice CPG for more than eight months, during which the agencies 
emphasized education to achieve compliance, rather than refusal of articles of food with inadequate prior notice.  
• Shortly after publication of the interim final rule, FDA began disseminating at 
U.S. ports flyers and posters summarizing the new requirements and informing representatives of affected entities how to provide prior notice to FDA; and   
• FDA also provided (and continues to pr ovide) online assistance and a help 
desk after the interim fina l rule became effective. 
 
Specifics regarding each of these activities are included on FDA’s website:  http:///www.fda.gov.  
 There is no basis for revoking any of the Bioterrori sm Act regulations.  The Bioterrorism Act is a 
statute, and there is no indication that Congress intends  to revoke it.  At present, the only regulation 
that FDA is considering amending is the prior no tice interim final rule.  FDA is considering the 
extensive comments it received and is in the cour se of determining what changes, if any, are 
appropriate as it develops the final rule. 
 
[India] 
 Q.13 ISPM: 15 – Wooden Pallets used for Export of Bulk tea as prepared by the International Plant 
Protection Convention (IIPC) of the FAO became effective from 1
st March, 2005. 
 This requires that Phytosanitary Measures in respect  of movement of wood packaging material in the 
form of pallets/packages, must fully meet the Standards of NIL risk against possible introduction 
and/or spread of quarantine pets associated with wood  packaging material in u se in international trade. 
Further  this, the ISPM : 15 has adopted various  measures of treatment like Heat Treatment(HT), 
Methyl Bromide (MB) Fumigation, etc. The pallet mu st also contain a logo of the approved treatment 
of wood packaging material and assigned mark /code number of the National Plant Protection 
Organization(NPPO)  approved producer of the wood packaging material.  
 WT/TPR/M/160/Add.1 
Page 250  
 
The Plant Protection Adviser to the Govt. of India,  Ministry Agriculture, has already initiated the 
process of the accredition of Agencies  to meet the aforesaid requirements in respect of tea industry in 
North Eastern Region, West Bengal, Himachal Prades h as well as South India.  Would US Government 
consider granting more time for Indian tea to  conform to the aforesaid specified guidelines? 
 
ANSWER:  We welcome the question from India concerning its bulk tea exports to the 
United States that are shipped on wood packagin g materials.  The United States has remained 
concerned that the varying implementation rules of  importing countries could cause a severe disruption 
of trade.  The United States has sought a commitment by all countries to adhere to IPPC standard making procedures and avoid modifications from the I PPC standards in all but emergency situations.  
The United States has implemented IPPC standard ISPM-15.  We believe it is critical that all WTO 
members focus on the smooth and effective implemen tation of ISPM-15 to ensure that it meets its 
objectives with minimal disruption of trade.  
[India] 
 Q.14 The US Food and Drug Administration (FDA) insist for registration of any consignment of tea 
exported to USA. Would U.S. authorities consider  relaxing the FDI registration requirement  for 
samples of tea sent to potential importers based in USA?  ANSWER: There are no exemptions from prior notice re quirements for samples of food, including 
animal feed, for research and development.  For more details, please refer to www.cfsan.fda.gov
. 
 
[India]  
Q.15 After the implementation of National Programme for Organic Production(NPOP) by 
Government of India in 2001, Agricultural and Processed Food Products Export Development 
Authority (APEDA) had sent the NPOP document to  USDA with a request to acknowledge Indian 
organic standards for equivalence with Nati onal Organic Programme (NOP) of the USA.  
 After the video-conference, on 16 February 2006 th e Agriculture Marketing Service (AMS) of USDA 
have recognized India’s accreditation system and the certification of organic agriculture products by 
agencies accredited under NPOP for import of organic products into the US. Would U.S now take early 
action to reach a final decision on determination of e quivalency of Indian organic Standards with those 
of US NOP Standards?  ANSWER: AMS’ assessment and side-by-side evaluati on of India’s NPOP for an equivalency 
determination under NOP Option #3 found that India’ s National Organic Program (NPOP) could not 
fulfill the objectives of the NOP and its implementi ng regulations.  The recognition by AMS of the 
Government of India’s NPOP conformity assessment program under NOP Option #2 provides India with access to the U.S. organic markets.  Under  NO P Option #2  the Government of India will be able 
to accredit  certification bodies in India to certify Indian produced organic products based on the 
requirements of the U.S. National Organic technica l standards (this is also a requirement under NOP 
Option #1)  and an assessment against ISO 17011.   
 India’s request for a full equivalence determinati on would be a much longer process and would require 
significant changes to the Government of India’s NPOP before the United States could determine if 
there was a sufficient basis to begin simultaneous, yet independent technical discussions to examine 
each other’s organic production and inspection rules.   AMS determined that India’s NPOP was an 
export standard designed to facilitate the export of India’s organic products to any foreign market.   
India’s NPOP has a very flexible structure that c ontains very vague language  designed to accommodate 
a wide array of market requirements.  Critical U. S. NOP requirements such as a mandatory organic 
system plan; prohibition of sewage sludge; use of 100 percent organic livestock feed; and 
determination of commercial availability were either not addressed in India’s NPOP or allow          WT/TPR/M/160/Add.1 
Page 251 
 
 
certification agents to make the ultimate decision to  take action to enforce requirements on a case-by-
case basis.  India’s NPOP is an export standard b ased on technical standards that were considered by 
AMS to be less rigorous than the NOP.  
[India] 
 Q.21  The US practice of deputing their own offi cials (from APHIS/USDA) for certification of 
Quarantine Treatment Facility (such as hot water treatment/vapor heat treatment etc.) in other countries 
increases the cost of exports fo r the countries concerned. This practice makes low volume exports 
completely unviable and serves as a barrier to tr ade. Would the US   consider evolving a practice 
wherein these requirements could be based on certification by the exporting countries, after 
establishing the necessary equivalence in standards ?  ANSWER:  Preclearance inspections, tr eatments and/or other mitigation measures are conducted in 
foreign countries under the direct supervision of qualified APHIS personnel in accordance with 
phytosanitary procedures specified by the Agency. These procedures ar e designed to identify and/or 
mitigate against the risk of exotic pest introductions through action taken in foreign countries. Integrity 
checks to ensure compliance with the program guide lines may also be conducted at the U.S. port of 
entry. Proposals for agricultural commodity preclear ance programs are typically developed jointly by 
the host country’s plant protection service and partic ipating industry. If requested, APHIS will provide 
appropriate host country officials with assistance in  work plan development. Reconsideration of an 
existing preclearance program would involve dial ogue between APHIS, the host country’s plant 
protection service and participating industry.  
 
[Japan] 
 
Q23. The Bioterrorism Act (p.57, paras.161 to 164)  (1) With regard to the Public H ealth Security and Bioterrorism Preparedness and Response Act of 2002 
(the“Bioterrorism Act”), the Government of Japan  urges that an excessive burden should not be 
imposed on exporters or individual senders of f ood beyond the level required by the purpose of the 
Bioterrorism Act, that is, the protection of the Unite d States from the threat of bioterrorism.  In this 
regard, please indicate the specific views of the Government of the United States. 
 
ANSWER:  The Public Health Security and Bioterro rism Preparedness and Response Act of 2002 
(the Bioterrorism Act or the Act) (PL 107-188), authorizes the U.S. Food and Drug Administration 
(FDA), after public notice and an opportunity for dom estic and international st akeholders to comment, 
to develop rules for implementing the provisions of the Act, including section 307 (Prior Notice of Imported Food Shipments).  FDA and U.S. Customs and Border Protection jointly issued the Prior 
Notice Interim Final Rule in October 2003, which allo wed affected parties an additional opportunity to 
comment on the interim final rule’s provisions.  The rule took effect on December 12, 2003, as required by the Bioterrorism Act.  FDA is carefu lly considering all comments it received during the 
open comment period on the interim final rule as it develops the final rule, including those comments 
filed by the Government of Japan.  FDA is working to develop provisions that are consistent with the 
Bioterrorism Act, its legislative history and objectives, while at the same time minimizing the impact 
on trade to the extent feasible.  
(2) In particular, the Government of Japan has urge d the Government of the United States not to oblige 
non-commercial senders of food for non-commercia l purposes and retail stores or other commercial 
shippers on behalf of non-commercial individuals, if  the non-commercial nature of the shipped food is 
clearly declared on the parcel, to be subject to th e prior notice requirement under the forthcoming final 
rule.  Please explain how the Government of the United States considers our request.   
ANSWER:  The United States is considering the Governme nt of Japan’s concern that the final prior 
notice rule should not require individual shippers of  foods to notify FDA of imports prior to shipping WT/TPR/M/160/Add.1 
Page 252  
 
foods, as is currently required by the interim final rule.  The United States notes that FDA’s 
“Compliance Policy Guide”, (December 2003, most recently revised in March 2005) states that “FDA 
and CBP should typically consider not taking any regu latory action when an article of food is imported 
or offered for import for non-commercial purposes w ith a non-commercial shipper” and that such 
articles are not typically refused entry by FDA an d CBP, even without prior notice, regardless of 
whether the food is sent by international mail or home-delivery services.  See  
 http://www.cfsan.fda.gov/~pn/cpgpn5.html
. 
 (3) The Government of Japan urges the Government of the United States to establish a contact point at 
which Japanese nationals, particularly small- and me dium-sized food processors and individuals, could 
inquire in Japanese about the latest status of the re lated rules and guidelines and procedures to be taken 
on the registration of food facilities, including the prior notice requirement.  In this regard, please 
indicate the specific views of the Government of the United States.  
(4) The Government of Japan urges the Government of the United States to inform food processors, the 
Japan Post, commercial transport service providers a nd Japanese nationals in general of any future 
changes in the rules without delay through appropria te means.  In this regard, please indicate the 
specific views of the Government of the United States.    
ANSWER:  Recognizing the importance of inform ing Japanese food processors, Japan Post, 
commercial express delivery service providers, and the ge neral public of the latest status of the rules 
and related guidance documents, the United States will strive to update the website of the Embassy in 
Tokyo without delay as FDA issues new rules and/or guidance documents under the Bioterrorism Act.  
The U.S. Embassy in Tokyo also plans to estab lish contact points at the Embassy and Consulates-
General in Japan, at which Japanese nationals, i ndividual food shippers and small and medium-sized 
food processors could inquire in Japanese about Bioterro rism Act rules and how to comply with them.  
Japanese nationals also will be able to inquire at these contact points about FDA’s enforcement policies 
related to the Bioterrorism Act rules, which info rmation FDA provides in compliance policy guides and 
question and answer guidance documents.  
(5) The Government of Japan urges the Government  of the United States to shorten the time for 
procedures such as issuance of licences for importati on.  In this regard, please indicate the specific 
views of the Government of the United States. 
 
ANSWER:  The FDA does not issue import permits.  If this question is referring to facility 
registration, as stated in the registration rule, regist ration generally takes 1 hour or less.  If this question 
is referring to timeframes for prior notice, no response can be made at this time since these timeframes are part of on-going rulemaking. 
 
[Mexico] 
 21. Could the United States tell us whether there are any preliminary draft amendments to the 
Bioterrorism Act, or any draft amendments to th e regulations published by the FDA to enforce the 
provisions of the Act? 
 
ANSWER: The Bioterrorism Act has not been amende d by Congress and the U.S. Food and Drug 
Administration (FDA)  has no current plans to amend the Registration of Food Facilities Final Rule, the 
Establishment and Maintenance of Records Final Rule , or the Administrative Detention Final Rule (21 
CFR Part 1, Subparts H, J, and K, respectively).  FDA currently is developing the Prior Notice Final 
Rule as expeditiously as possible, which will r espond to the numerous comments received suggesting 
various amendments to the Prior Notice Interi m Final Rule (21 CFR Part 1, Subpart I). 
          WT/TPR/M/160/Add.1 
Page 253 
 
 
[Peru] 
 
3.  On page 68, paragraph 149, the report states th at in the United States’ fre e trade agreements with 
Australia and Chile there is no dispute settleme nt mechanism applicable to the chapter on SPS 
measures.  What is the rationale for removing from  the dispute settlement mechanism any sanitary and 
phytosanitary-related dispute from these bilateral agreements?  Moreover, why are there no specific 
SPS provisions in the Free Trade Agreement with Singapore?  ANSWER: In bilateral and regional Free Trade Agreem ents, the United States views the WTO as 
the appropriate forum for settling SPS disputes.   An y SPS concerns arising under the FTA could be 
pursued through WTO Dispute Settlement mechanism,  if necessary.  With regard to the SPS 
Agreement with Singapore, because there is little to no agricultural production in Singapore, SPS 
provisions were unnecessary.  
[Peru] 
 
4.  On page 70, paragraph 153, the report states that no specific guidelines exist regarding pest-free areas for grains, nursery stock, or lumber.  Bear ing in mind the importance of these commodities for 
the developing countries, has the United States given any thought to preparing specific guidelines for the recognition of pest-free areas for grains, nur sery stock, and lumber in the short term? 
 
ANSWER: USDA/APHIS (The United States Department of Agriculture, Animal and Plant Health 
Inspection Service) is committed to conducting pest risk analyses in accordance  with the International 
Plant Protection Convention’s Intern ational Standard for Phytosanit ary Measures (ISPM) No. 11, "Pest 
Risk Analysis for Quarantine Pest s,'' and its supplements.  APHIS also continues to develop new 
methodologies and guidelines for cond ucting effective risk assessments, and makes these available to 
interested parties. Examples include guidance on conducting risk assessments for commodities and 
organisms, and for weed-initiated pest risk assessmen t.  Peru and other WTO Members are welcome to 
petition USDA/APHIS for recognition of pest free areas or area of low prevalence.  
 
[Peru] 
 5.  On page 72, paragraph 160, the report states that the FDA has primary responsibility for the safety 
of all other foods, and of veterina ry drugs, but does not specify, in general terms, its functions in each 
case.  Could you explain the FDA’s functions and responsibilities in terms of food safety and veterinary drugs?  
ANSWER:  The U.S. Food and Drug (FDA) is a scientific regulatory agency responsible for the 
safety of the nation's domestically produced and im ported foods, cosmetics, drugs, biologics, medical 
devices, and radiological products.  FDA is part of the Executive Branch of the United States 
Government within the Department of Health a nd Human Services (DHHS) and the Public Health 
Service (PHS).   
FDA's responsibility in the food area generally cove rs all domestic and im ported food except: meat, 
poultry, and frozen, dried and liquid eggs, which are under the authority of the U.S. Department of 
Agriculture (USDA's Food Safety and Inspection Serv ice (FSIS); the labeling of alcoholic beverages 
(above 7 percent alcohol) and tobacco, which are regul ated by the U.S. Department of the Treasury's 
Bureau of Alcohol, Tobacco, and Firearms (ATF); a nd, the establishment of tolerances for pesticide 
residues in foods and ensuring the safety of drinki ng water, which are the responsibility of the U.S. 
Environmental Protection Agency (EPA).  The Center for Food Safety and Applied Nutrition (CFSAN) in addition to a nationwide field force, 
carry out the mission of the FDA to promote and protect  the public's health by ensuring that the nation's 
food supply is safe, sanitary, wholesome, and honestly labeled, and that cosmetic products are safe and WT/TPR/M/160/Add.1 
Page 254  
 
properly labeled. Program areas that are regulated at CFSAN include: infant formula; seafood, plant 
and dairy foods; beverages and bo ttled water; acidified and low acid  canned foods; cosmetics and color 
additives; dietary supplements; foods ingredients and packaging; foodborne illnesses; food labeling and 
nutrition; HACCP; inspections, compliance and reca lls; pesticides; chemical contaminants; and 
biotechnology. 
 
In addition to these responsibilities, CFSAN also pr ovides technical assistance for domestic and foreign 
industry, government and consumers.  Members of C FSAN participate in and lend their expertise to the 
Codex Alimentarius Commission, the World Trade Organization and other organizations that are 
tasked with designing international policy on globa l food trade issues.  CF SAN works closely with 
U.S. Department of Agriculture, Environmenta l Protection Agency, and Executive Office of the 
President, Office of the United States Trade Repres entative in working groups and committees for 
Sanitary and Phytosanitary Measures and Technical Barri ers to Trade in order to ensure that U.S. food 
regulations are in compliance with dom estic and international obligations. 
 
FDA’s Center for Veterinary Medicine (CVM) is responsible for ensuring that animal drugs and 
medicated feeds are safe and effective for their inte nded uses and that food from treated animals is safe 
for human consumption. Before a new animal drug can be marketed in the United States, it must be approved by the FDA on the basis of quality, safety and efficacy. When the drug is for use in food-producing animals, not only must the safety to the animal be demonstrated, but also the safety of food products derived from the treated animals that are intended for human consum ption.  Once approved 
products are on the market, the Center monitors th e use of the products through surveillance and 
compliance programs.  One of CVM's highest food safety priorities is monitoring for the development of antimicrobial resistance.  In addition, CVM assu res the safety of the food supply through elimination 
of violative residues in meat and milk, as well as in other animal products.  CVM is also responsible for 
the safety of food by reviewing the safety of food additives used in animal feeds and in monitoring a 
wide range of feed contaminants such as Salmonella and heavy metals. 
 Both CFSAN and CVM are consumer protection organi zations that foster public and animal health by 
approving safe and effective products for humans and animals and by enforcing other applicable 
provisions of the Federal Food, Drug, and Cosm etic Act and other domes tic and international 
authorities.  CFSAN and CVM are committed protecting the safety of the food supply throughout the 
United States. 
 
[Peru] 
 
6.  On page 73, paragraph 164, the report only makes mention of economic impact analyses following 
the entry into force of the Bioterrorism Act.  Are these analyses still ongoing?  Has an impact analysis 
been conducted to determine the effects of applying the Bioterrorism Act on the safety to human health 
or U.S. national security, with a view to amending, or where necessary, repealing any of its provisions? 
 ANSWER:  U.S. government agencies use economic an alyses – including costs and benefits of 
various regulatory approaches, in making decisions  on what rules should require in light of the 
statutory requirements.  As part of developing rul es under U.S. law, U.S. government agencies prepare 
a draft economic analysis to accompany a proposed rule  that estimates the cost to affected stakeholders 
and the benefits received from the rule.  The agency  publishes the analysis in the Federal Register as 
part of the preamble to the proposed rule and ta ke comment on the analysis along with comment on the 
substantive provisions being proposed.    Substan tive provisions are revised in the rule and/or the 
economic analyses in light of the comments received, as appropriate.  The final rule, including the final 
economic analysis, is then published in the Federal Register.  The U.S. Food and Drug Administration 
(FDA) engaged in this process for each of the Biot errorism regulations.  Since FDA just completed 
most of these rulemakings, it does not see a need to revise the rules.           WT/TPR/M/160/Add.1 
Page 255 
 
 
[Peru] 
 
7. The report indicates that APHIS’ general polic y is to evaluate hazards based on “the disease 
risk associated with the region from which [animals and animal products] are exported, rather than on 
‘disease free’ or ‘non-disease free’ statuses determin ed on a country-by-country basis.”  Could you 
explain the rationale and preference for the risk criteria with respect to the appropriate level of 
protection?  Could you confirm that the use of said criteria would not affect or delay decisions regarding requests for regionalization and recognition of pest- or disease-free areas?  Why so? 
 
ANSWER: After the WTO SPS Agreement entered into force, APHIS modified its traditional 
country-based import restrictions.  APHIS applies a science-based evaluation of the risk presented by 
imported animals and animal pr oducts, and recognizes that risk may be based on climatological, 
geographical, and biological factors that are not always defined by national political boundaries. 
 In support of its activities regarding regionali zation, APHIS maintains a Regionalization Import 
Requests web site where visitors can review re quests received by APHIS for the establishment of 
export-eligible regions in various countries for specific commodities.  From this s ite visitors can review 
not only that types of requests were made and wh en, but they can also review risk assessment 
documentation developed to evaluate the requests.  In addition, USDA/APHIS employs scientific risk assessment as its foundation for making decisions on 
import restrictions. With regard to animal and anim al import risk analysis, APHIS bases its decisions 
on the guidance set forth under the WTO-recognized international standard-setting bodies.   Whenever USDA/APHIS promulgates an  import decision through rule maki ng, it is obligated to adhere 
to the procedural requirements specified in the Administrative Procedure Act and various executive 
orders and other documents. For fu rther details on the statutory and executive guidance related to the 
Federal government rulemaking process, please see the following website: http://www.whitehouse.gov/omb/circulars/a004/a-4.pdf
 
 
[The Philippines] 
 4.  The Philippines notes that the Animal and Plan t Health Inspection Service regulates the import of 
plants, animals and their products into the United Stat es by issuing import permits.  We also note from 
paragraph 156 of the Secretariat report that the pr ocess from risk assessment to issuance of an import 
license can take several years. The Philippines w ould appreciate it if the United States can make a 
clarification of the procedure as well as indicating the average length of time before import permits are 
normally issued? 
 ANSWER:  There is no maximum period of time set fo r the issuance of import permits; however, 
for plants, animals and products deri ved from them that are currently e ligible for entry into the United 
States, the issuance of an import permit is fairly routine, provided sufficient information is submitted 
with the request.  Moreover, only a select group of products regulated by USDA-APHIS is required to 
have a permit as a condition of entry into the United States.  Links to this information can be found at: 
 http://www.aphis.usda.gov/ppq/permits/index.html
 
 If a commodity is not already eligible for entr y to the United States, USDA-APHIS bases import 
restriction decisions on scientific risk assessment , including any decisions on whether the issuance of 
an import permit is required.  For further details on the federal government rulemaking process, please 
see the following website:  http://www.whitehouse.gov/omb/circulars/a004/a-4.pdf
 
 WT/TPR/M/160/Add.1 
Page 256  
 
[Thailand] 
 
31. As the Bioterrorism Act of 2002 has entere d into force for over 3 years, when does the 
United States intend to publish info rmation regarding the economic impact, particularly on trade, of 
this regulation?  We would especially appreciat e information regarding the indicators listed in 
paragraph 164 , such as the value of imports refused entr y into the United States due to lack of 
compliance with the regulations.  ANSWER: U.S. government agencies use economic analys is, including the analysis of costs and 
benefits of various regulatory approaches, in making decisions on what rules should require in light of 
the statutory requirements.  As part of developi ng rules under U.S. law, an agency prepares a draft 
economic analysis to accompany a proposed rule that estimates the cost to a ffected stakeholders and 
the benefits we will receive from the rule.  Th e agency then publish es the analysis in the Federal 
Register as part of the preamble to the proposed rule and reviews comments on the analysis as well as 
on the substantive provisions being proposed.  Substan tive provisions are revised in the rule and/or the 
economic analyses in light of the comments received, as appropriate, and the final version of each is 
then published in the Federal Register .  The U.S. Food and Drug Administration (FDA) engaged in this 
process for each of the Bioterrorism regulations. 
 
[Turkey]  
11.  It is mentioned in the Secretariat report that  in general  import of plants, animals, and their 
products require an import permit issued by the Anim al and Plant Health Inspection Service (APHIS). 
 It is further explained in the report of the WTO Secretariat that  the assessment of APHIS and the issuance of an import licence can take several years.  
 
We understand from the paragraph 15 6 that the whole process from APHIS’  determination to assess 
the risk to the issuance of an impor t licence  to some extent depends on the regulations and that if the 
regulations allow imports of a product from a partic ular area import permits are issued without any 
additional risk assessments for a particular shipment.  
Is there a maximum period of time set for the  issuance of import permits?  
 ANSWER: There is no maximum period of time set for the issuance of import permits; however, 
for plants and animals (and the products derived fro m them) that are currently allowed entry to the 
United States, the period of time to obtain an import permit is not lengthy provided that the initial 
request for the permit provides sufficient informa tion upon which to base a determination to issue a 
permit. Moreover, only a select category of all pro ducts regulated by USDA-APHIS are required to 
have a permit as a condition of being eligible to enter the United States. 
 Could US Delegation explain what kind of factors are examined in the APHIS’ process to issue import 
licence? 
 
ANSWER: APHIS does not issue import licenses.  Fo r further information regarding import 
permits for plants, animals and their pr oducts please visit the following website:   
http://www.aphis.usda.gov/permits/permit_index.shtml  
Trade-related envir onmental regulations
  
 
[Brazil] 
 
1.  Chapter III, paragraph 03 : “Most non-tariff restrictions are maintained for non-commercial 
purposes, including a ban on imports of marine ma mmal products, shrimp, and tuna from countries          WT/TPR/M/160/Add.1 
Page 257 
 
 
found not to be in compliance with U.S. environmental provisions. ” What are the objective criteria and 
procedures that the U.S. Government establishes in  order to identify which countries among those who 
export the above mentioned products do not meet th e U.S. environmental provisions? What procedures, 
if any, are in place in order to ensure that such  provisions will not be used for commercial purposes? 
 
ANSWER:  U.S. laws relating to the conservation a nd protection of fish, shrimp, or marine 
mammal products are applied on the basis of objective criteria; commercial interests are not a factor in 
determining whether exports from a particular country comply with U.S. law.  For example, the Marine 
Mammal Protection Action provides that any nation that  harvests tuna with purse seine vessels greater 
than 400 short tons (362.8 metric tons) carrying capacity in the eastern tropical Pacific Ocean (ETP) 
and seeks to export such tuna and tuna products to the United States must meet the criteria for an 
affirmative finding.  These criteria are then set out in U.S. regulations (50 CFR 216.24(f)(9)).  
 
[Colombia] 
 
Paragraph 172 of Title IX) says that "the Government of the United States filed an appeal to nullify the 
decision by the Court in August 2005", in reference to the decision by the US District Court for the Northern District of California to revoke the decisi on by the Secretary of Trade to amend the definition 
of "dolphin safe."  As far as the Government of Colo mbia knows, the appeal of the court ruling has not 
yet been handed down.  We do not even know whet her the decision to appeal was made recently. 
 
The Government of Colombia would thus like to  receive further illustration of the following: 
 a.  Has the decision to appeal the ruling by the Northern California District Court regarding the 
amended definition of "dolphin safe" been adopted?    
ANSWER:  The United States has appealed the district  court ruling of August 10, 2004 to the 
United States Court of Appeals for the Ninth Circuit.   The United States filed its notice of appeal on 
October 6, 2004, filed its opening brief on August 25, 2005, and filed its reply brief on February 3, 
2006.  Briefing has now been completed.  The court will hear oral argument before deciding the case; 
that oral argument has not yet been scheduled.    
b. If so, when is the appeal expected? 
 ANSWER:  See above. 
 c. If not, does the Government of the United States have  any specific date in mind to make the decision 
and file the appeal? 
 ANSWER:  See above. 
  d.  Is the Government of the United States considering the possibility of not filing an appeal?  
ANSWER:  See above. 
 e.  If the answer to the above question is yes, is th e United States considering any sort of adjustment of 
its definition of "dolphin safe" tuna?   In particul ar, is the United States considering the possibility of 
changing the approach from one based on the method of fishing for the tuna to one based on the 
practices used in the fishing?   
 ANSWER:  Not applicable, above answer was negative. 
 f.  Specifically, is the United States considering implementing a definition adapted to the criteria used 
by the Agreement on the International Dolphin C onservation Program - APICD - (to which the United WT/TPR/M/160/Add.1 
Page 258  
 
States is a Party), in which "dolphin safe" tuna is defined as that caught by casting seine nets in which 
no dolphins were killed or seriously injured?  ANSWER:  See above. 
 [Japan]  Q24. Ensuring consistency of environmental regulations across States (p.58 to 60, paras.169 to 175) 
Many companies are incurring unnecessarily high costs in meeting environmental regulations that are 
at variance from State to State, for example in the area of regulations rela ted to global warming and 
recycling.  With regard to ensuring consistency of environmental regulations across States, please 
indicate the specific views of the Government of the United States. 
 ANSWER:  The mission of the U.S. Environmental Protection Agency is to protect human health 
and the environment through the development and enfo rcement of environmental laws and regulations.  
EPA’s authority to establish federal regulations to  protect human health and the environment comes 
from the statutes passed by Congress.  This is th e case for other federal agencies responsible for 
environmental protection, such as the U.S. Depart ment of Interior and the National Oceanic and 
Atmospheric Administration (NOAA).  EPA may delegate environmental programs to states that have 
demonstrated the ability to effectively implement ea ch program.   When a state implements an EPA-
delegated program, it must adopt regula tions at least as protective as th e federal standards, but can also 
choose to establish more stringent regulations.  This approach is grounded in our constitutionally 
established federal system of government, in which states maintain significant powers to enact and 
implement regulations and programs accordi ng to their own conditions and needs. 
 
[Japan] 
 Q25. CAFE (p.59, para.175) 
The Energy Policy and Conservation Act of 1975 requi res automobile manufacturers to calculate the 
corporate average fuel economy (CAFÉ), which shoul d clear certain thresholds for the purpose of 
environmental protection.  When calculating CAFÉ figures, it is necessary to compute the rate of domestic manufacturing for each line, and to obtain the standards of fuel consumption for domestic and 
imported automobiles respectively.  However, as au tomobiles obtain standards in their own category, 
the differentiation of domestic a nd imported vehicles sometimes bri ngs out negative effects on the 
improvement of fuel efficiency itself, which was the initial goal.  Companies specializing in imported 
and fuel inefficient large-sized cars and sports -type cars experience disadvantages.  Automobile 
industries, not only Japanese but also American, have  been claiming that this measure may distort 
sound investment activities by private companies a nd have demanded improvement.  Japan would like 
to know whether the Government of the United Stat es has a concrete plan on tightening or loosening 
the existing regulation. 
 
ANSWER:  NHTSA recently proposed new CAFE leve ls and a reformed CAFE structure that 
affects Model Year 2008 through 2011 light-dut y trucks.  The proposal can be found at: 
http://www.nhtsa.dot.gov/cars/rules/ rulings/LightTrucksRuling-2008-
2001/ProposedRulemaking/CAFE-LigthTrucks-PR-24Aug05.pdf . 
 
NHTSA plans to issue the final rule on or before April 1, 2006.  
[Peru] 
 
On page 74, paragraph 169, the report mentions  the EPA’s interaction with federal government 
agencies and foreign governments, but does not ment ion the EPA’s trade-relate d functions.  Could you 
elaborate on the functions of the EPA that affect trade with other countries?          WT/TPR/M/160/Add.1 
Page 259 
 
 
ANSWER:  The mission of the Environmental Protecti on Agency is to protect human health and 
the environment through the development and enforc ement of environmental laws and regulations.  
EPA's regulatory functions can, in some instances, effect trade with other countries.  For example, 
regulatory action on a high risk chemical that is  produced both domestically and internationally may 
impact international trade.  Where EPA is deve loping regulations or rules that might impact 
international trade, EPA publishes draft regulations/r ules in the Federal Register in advance to seek 
public comments, and EPA consults closely with th e Office of the U.S. Trade Representative (USTR) 
and other interested agencies in the development of such regulations and rules.  In addition to its 
regulatory functions, EPA particip ates in policy development across many subject areas of the U.S. 
government, including trade policy.  For example, EPA participates in the interagency coordination 
process to prepare for meetings of several WTO committees, including the SPS, TBT, and CTE 
committees.  
[Peru] 
 
With respect to [technical] cooperation on environmen tal issues that the United States provides to other 
trading partners, can you indicate which agency is in  charge of supervising such cooperation?  What 
has been the impact of trade-related environmenta l cooperation provided by the United States in terms 
of increased trade flow with its trading partners and what examples could you cite in this regard? 
 
ANSWER:  In most cases, including recently concluded U.S. Free Trade Agreements (FTAs), the 
State Department is in charge of supervising e nvironmental cooperation with  those FTA partners.  
However, in the case of the NAFTA and the No rth American Agreement on Environmental 
Cooperation (NAAEC), it is the Environmental Prot ection Agency that supervises cooperation.  
 Environmental cooperation is intende d to strengthen the capacity of the United States trading partners 
to develop and implement standards for the protectio n of the environment and human health.  Increased 
trade flow with trading partners is the goal of  the free trade agreement but not necessarily of the 
cooperation activities.  Improved envi ronmental protections and standa rds that are mutually supportive 
with increased trade and economic activity are at the heart of cooperation activities.  There may be 
some instances where increased trade flow could result from environmental cooperation projects in a 
particular sector.  The United States has cooperativ e mechanisms with  several trading partners but does 
not track increased trade flow that  may result from such activities. 
 
[Switzerland] 
 
Para. 170: This paragraph suggests that the Unite d States applies trade measures to enforce U.S. 
environmental provisions, notably those governin g the use of marine resources and states some 
examples of the fishing industry. Could the Unite d States please expand on whether there are other 
areas, apart from the fishing industry, where trad e measures are applied in order to enforce U.S. 
environmental provisions? Are there trade measures wh ich are applied in order to enforce multilateral 
environmental agreements to which the US is a Member?  
ANSWER:  Apart from the fishing industry, trade measures may be applied in order to enforce 
U.S. environmental provisions concerning wild plan ts and animals and certain toxic, hazardous, or 
ozone depleting substances.  There are instances where the United States may apply trade measures in order to enforce U.S. laws 
implementing multilateral environmental agreements (M EAs) to which the United States is a party.  
For example, the United States implements its trade-related and other commitments under the 
Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) through 
national legislation, the Endange red Species Act of 1973 (ESA).  
 WT/TPR/M/160/Add.1 
Page 260  
 
[Switzerland] 
 
Para. 172: According to the Secretary of Commerce, the intentional chase and encirclement of dolphins 
was not having a "significant adverse impact" on a ny depleted dolphin stocks in the eastern tropical 
Pacific. As a result, the definition of dolphin-safe would have changed to allow tuna caught by chase 
and encirclements of dolphins to be considered dolphin-safe. Could the United States elaborate on the 
actual status of the U.S. Government appeal of August 2005 to reverse the U.S. District Court's 
decision for the Northern District of California of August 2004 ?  ANSWER:  The United States has appealed the district  court ruling of August 10, 2004 to the 
United States Court of Appeals for the Ninth Circuit.   The United States filed its notice of appeal on 
October 6, 2004, filed its opening brief on August 25, 2005, and filed its reply brief on February 3, 
2006.  Briefing has now been completed.  The court will hear oral argument before deciding the case; 
that oral argument has not yet been scheduled.  [Switzerland]  
Para. 175: Could the United States give an update on the status of two-fleet rule which is mentioned in 
para. 175 ? Does the U.S. Government intend to abo lish this two-fleet rule which might constitute a 
trade barrier for foreign manufacturers ?  
ANSWER:  The final rule for Model Year 2008 – 2011 light truck Corporate Average Fuel 
Economy (CAFE) standards will be published by the Department of Transportation’s National 
Highway Traffic Safety Administration (NHTSA) on or before April 1, 2006.  However, this 
rulemaking does not address the so-called “two fleet ru le”.  NHTSA can not abolish the two-fleet rule 
because it has no statutory authority to do so. 
 
Measures Directly Affecting Exports 
 
Export Controls and Restrictions
 
 
[Argentina] 
 
Q. 4. On page 31, paragraph 8, mention is made that the United States is taking measures to ensure 
sufficient domestic supply.  Question:  Could you list the measures whose objective is "to ensure sufficient domestic supply?"  Are 
these measures geared exclusivel y toward domestic production? 
 ANSWER: The Export Administration Act implements measures that "restrict the export of goods 
where necessary to protect the domestic economy from the excessive drain of scarce materials and to 
reduce the serious inflationary impact of foreig n demand."  Shortages in domestic production could 
lead to such restrictions.  However, these measu res are not geared exclusively toward domestic 
production capacity; but, also consider the scarcity of  certain commodities that are natural resources.  
Such measures include, for example, restrictions on th e export of U.S. origin crude oil, natural gas, 
certain refined petroleum products, and certain raw timber.  
[China] 
 
Question: (p.60 para.176) 
The U.S. restricts seriously export of hi-tech products to China. Such restrictions deprive many U.S. hi-
tech companies of its due right to export to China. According to China’s statistics, the U.S. ranked No 
2 in 2001 as one of the largest hi-tech products expor ters to China. However U.S. exports dropped to          WT/TPR/M/160/Add.1 
Page 261 
 
 
No. 6 in that ranking in 2005, with its share of th e total hi-tech imports of China falling from 16.5% in 
2001 to only 8.1% in 2005.   
Has any U.S. institutions conducted any study on the impact of its export restrictions on its 
current trade deficit with other Members? If yes,  would the U.S. Government share the outcome 
of these studies with Members? 
 Does the U.S. regard its current export restrictions on hi-tech products to China as one of the major causes in US-Sino trade deficit?  
Would the U.S. intend to review its current export  restriction policy with a view to fostering a 
healthier and more comprehensive US-Sino trade relations? 
 
ANSWER:  The United States does not regard its curre nt national security and foreign policy dual-
use export controls as a significant factor in the U.S. -Sino trade deficit.  This is because dual-use export 
controls apply to only a small portion of overall U.S.  exports.  In 2005, the U.S. exported a total of 
$41.8 billion in goods to the People’s Republic of Ch ina.  In contrast, in 2005 the U.S Government 
issued 1,337 export licenses valued at $2.4 billion for e xports to China.  Moreover, there are very few 
denials of export license applications for China, on ly 47 denials valued at $13 million.  Thus, export 
controls are not a major factor in the U.S. trade deficit with China.   
The United States just completed a comprehensive review  of U.S. trade policy with respect to China.   
 
[China] 
 Questions: (p.60 para.178) 
It takes at least three months, even one year in so me cases for the United State Government to issue an 
export license after receiving an application. This pe riod is considerably longer than those in many 
other countries like Germany and Japan. Moreover , export licenses are issued with many other 
additional conditions.  
 
Why does it take so long for the U.S. to issue an export license? 
 ANSWER: The export licensing process involves referral of every application to other government 
agencies (State, Defense and Energy) for their re view and input.  In addition, the intelligence 
community is consulted for any pertinent informati on on foreign end users of controlled U.S. goods.  In 
some cases, a pre-license check may be requested as  a condition of granting the license.  According to 
BIS statistics, the average processing time to obtain a license to export goods or technologies to China 
was 55 days in calendar year 2005, down from 77 days in 2004 and 81 days 2003. 
 
[China]  When the U.S. sanctioned foreign companies in  name of weapon proliferation, were there any 
evidence presented to the sanctioned co mpany to justify the U.S. intentions? 
 
ANSWER:  The United States has a regular and ongoing dialogue with China on nonproliferation 
matters.  This dialogue has included discussion of the imposition of nonproliferation sanctions on 
Chinese entities.  [Japan]  Q26. Re-export Control (p.60, paras. 176 to188) 
(1) The US requires export licenses on the re-exports of  U.S.-origin items even if they have already 
received export licenses from exporting countries. Such a regulation could be recognized as an WT/TPR/M/160/Add.1 
Page 262  
 
extraterritorial application of U.S. domestic law, which is impermissible under the general international 
law. In response to the questions by Japan in the TP R of the U.S. in January 2004, the U.S. answered 
on page 113 of WT/TPR/M/126/Add.3 that U.S. re-e xport controls are required under the federal law 
and reflect a long-standing Congressional require ment, and both export and re-export controls are 
necessary to protect U.S. national security and fore ign policy interests. However, Japan finds little 
reason for the U.S. to control re-exports from countries , including Japan, that carry out effective export 
controls not only by participating in all the intern ational export control regimes, but also by having 
introduced a catch-all system for weapons of mass d estruction and their means of delivery.  The U.S. 
should exclude those countries from application of U. S. re-export control.  In this regard, please 
indicate the specific views of the Government of the United States.  
ANSWER: The U.S. Government recognizes that the many governments have implemented 
extensive export control systems, however the United States continues to be convinced that both export 
and re-export controls are necessary to protect U.S. na tional security and foreign policy interests.  U.S. 
re-exports controls are required under federa l law and reflect a long-standing Congressional 
requirement.  
 
(2) As Japan mentioned in the previous TPR a nd in the Regulatory Reform and Competition Policy 
Initiative between Japan and the U.S., it still remains a serious problem that importers (re-exporters) of 
U.S. origin items are prevented from taking appr opriate procedures for export control compliance 
because they are not provided with  sufficient information on U.S. or igin items by U.S. exporters. 
Lacking sufficient information on these items, importe rs (re-exporters) face difficulties in identifying 
the items correctly and determining whether they are subject to the U.S. regulations. As a transitional 
measure pending exclusion of countries carrying ou t effective export controls from U.S. re-export 
control, the U.S. should oblige its exporters to provi de importers (re-exporters) of U.S. origin items 
with sufficient information on these items, including ECCNs. Japan notes that the U.S. Department of 
Commerce issued its ‘Best Practices for Transit, Transshipment, and Re-export of Items Subject to the 
Export Administration Regulations (hereinafter refe rred to as ‘Best Practices’)’in November 2003 in 
which it recommended US exporters to communicate  the appropriate ECCNs or other classification 
information to the end-user and to the ultimate cons ignee.  However, this ‘Best Practices’ approach is 
not legally binding and has not made a substantial change in U.S. e xporters’ behavior. In response to 
the questionnaire from Japan in the TPR of the Un ited States in January 2004, the U.S. showed its 
concern about making ECCNs notifications by U.S. exporters obligatory as follows: One concern we 
(the U.S.) note is that the original classification of an export may not be accurate for re-export 
transactions.  In addition, the classification of the product may change if a U.S.  origin item is altered 
after receipt.  Thus, if a re-exporter used the origin al classification supplied by the exporter, it may be 
incorrect（Page 114, WT/TPR/M/126/Add.3.  Japan requir es further explanation on this.  If an item 
not subject to EAR when exported is altered (manufac tured, processed) into an item subject to EAR in 
the importing country, is the importer (re-exporte r) required to get the license from the U.S. 
government?  Or, if an item not listed in EAR (an item classified as EAR 99) is altered (manufactured, 
processed) into an item listed in EAR in the importi ng country, is the importer (re-exporter) required to 
get the license from the Government of the United States? 
 
ANSWER:  To clarify, in the United States' orig inal response to Japan's TPR question from 
January 2004 on making it obligatory for U.S. export ers to provide Japanese importers with the ECCN 
of the item being exported, the United States replied in  part, "We note one concern is that the original 
classification of an export may not be accurate for re-export transaction.  In addition, if a U.S.-origin 
item is altered after receipt, which may change the cl assification of the product.  Thus, if a re-exporter 
used the original classification supp lied by the exporter, it may be inco rrect."  An example of this is 
when a dual-use focal plane array license, classified under ECCN 6A002.a.3, is exported to Japan and 
integrated into a thermal imagi ng camera; the re-exported camera w ould be classified under 6A003.b.4.  
          WT/TPR/M/160/Add.1 
Page 263 
 
 
If an item, not subject to the EAR, is exported to Japan, it would not be subject to U.S. EAR-based re-
export regulations.  If an item classified EAR 99 is alte red into an item list in the EAR, it would require 
a U.S. re-export license only if the newly manufact ured item dose not qualify for the de minimis 
exception to the EAR.  The Department of Commerce 's Bureau of Industry and Security website has 
"Guidance on Re-exports and Other Offshore Tr ansactions Involving U.S.-Origin Items."   
 
This guidance is available at http://www.bis.doc.gov/Licensing/ReExportGuidance.htm .  BIS has also 
translated this guidance into Japanese, and posted the translated text of the guidance on its web site at 
http://www.bis.doc.gov/InternationalProgr ams/Foreign_Language/DOC042203_Japanese.htm .  BIS 
also offers seminars to explain U.S. regulations  and provides extensive telephone, email, and one-on-
one counseling. 
 
(3) It is indispensable for re-exporters to get inform ation on U.S. origin items from U.S. exporters to 
comply with U.S. re-export control because it is not easy  for them to identify the characteristics of U.S. 
origin items and the items incorporated into othe r products.  It is unacceptable that only re-exporters 
take responsibility for failures in compliance with U. S. re-export control while U.S. exporters are not 
obliged to provide sufficient information of U.S. or igin items that is necessary for compliance with 
U.S. re-export control.  The U.S. should oblige U.S. exporters to provide impor ters (re-exporters) with 
sufficient information on the U.S. origin items as so on as possible. In addition, the U.S. export control 
authority should make it a condition of approval of export license applications by U.S. exporters that 
they provide importers (re-exporte rs) with appropriate information,  including ECCNs, and exclude 
importers (re-exporters) from the application of th e U.S. re-export control in the case that such 
information is not provided. In this regard, please indicate the specific views of the Government of the 
United States. 
 ANSWER:  The U.S. Government appreciates the Govern ment of Japan's suggestion to require an 
exporter to share certain information with re-exporte rs to assist in complying with their obligations 
under U.S. export control regulations.  We are willing to discuss the suggestion that this becomes obligatory, as the United States encourages exporters to  communicate with their customers.  We again, 
however, note our concerns that the original classifica tion of an export may not be accurate for the re-
export transaction.  [Japan]  Q27. Sanction Measures (p. 61, para.183) 
The sanction measures taken by the U.S. based on re lated acts (the Iran and Libya Sanctions Act, the 
Cuban Liberty and Democratic Solidarity Act, the Burmese Freedom and Democracy Act as well as 
local and municipal sanctions acts) discourage, significantly and unreasonably, investment into, and the 
establishment of economic relations with, the countri es targeted by these laws, which affect not only 
U.S. private enterprises, but also those world-wide.  In  legal terms, they constitute an extraterritorial 
application of domestic laws, which is not permi ssible under the general international law and may 
cause a problem of inconsistency with WTO agr eements.  Moreover, fairness, transparency and 
predictability have not been observed in their appli cations.  Japan, therefore, strongly requests the U.S. 
to ensure the consistency of these acts with interna tional laws, and to implement them prudently.  In 
this regard, Japan would like to know whether there has been any progress on discussions in the 
Congress about the amendment of the Iran and Libya Sanctions Act for promoting Iran’s liberalization 
(Iran Freedom Support Act), which was proposed both to  the Senate and the House last year.  In 
addition, please provide the latest information on all effective sanctions acts instituted by the states and 
local municipalities. 
 ANSWER:  Undersecretary of State Burns addressed this  issue in testimony to the International 
Relations Committee of the House of Repres entatives on March 8, 2006.  Please refer to 
http://www.state.gov/p/us/rm/2006/62779.htm
 for the full text of his remarks. 
 WT/TPR/M/160/Add.1 
Page 264  
 
We would appreciate further details from Japan as to  the specific state and municipality sanctions acts 
that are of concern.  
[Japan] 
 
Q28. Export restrictions (p.61, para.186)  
Japan, as one of the major wood-products importi ng countries, is concerned about the log export 
restriction by the U.S.  The U.S. has explained to  Japan that the export prohibition measure aims to 
protect wildlife such as spotted owls.  Japan, howev er, regards this measure as a quantitative export 
restriction for protecting domestic saw millers, whic h should be rectified in accordance with the WTO 
rules.  First of all, the protection of spotted owls and other wildlife must be realized through restricting 
harvests but not through export bans. Secondly, only export restrictions have been introduced, while no 
regulations have been established for the domestic trad e of logs, and the U.S. is even requesting Japan 
to expand wood product imports, whic h are processed from logs.  It s hould be noted that Japan raised 
this point in the previous TPR meetings of the U.S.   In this regard, please indicate the current specific 
views of the Government of the United States. 
 
ANSWER:  Based on statutory requirements (the Forest  Resource and Conservation Act (16 U.S.C. 
620 - 620j)), the United States currently mainta ins a ban on the export of unprocessed timber 
originating from all public lands, including both st ate and federal lands, located West of the 100th 
meridian in the continental United States.  The purpose of the statute is to provide relief for shortages 
in unprocessed timber supplies, consistent with Ar ticle XI:2(b) of the General Agreement on Tariffs 
and Trade 1994.  
[Turkey] 
 
16.  The Secretariat report, paragraph 187, touch es upon on the Transshipment Country Export Control 
Initiative (TECI) which is aimed to avoid diversion of sensitive items to illicit purposes. The initiative 
is very much in line with the 1540 numbered United Nations Security Council Resolution which 
stipulates that states should establish effective c ontrols over transit an d transshipment for the 
commodities of proliferation concern.  Moreover Pro liferation Security Initiative foresees transit and 
transshipment controls. 
 
On the other hand, GATT 1994 Article V on Freedom of  Transit stipulates that there should be freedom 
of transit through the territory of each contracting party. 
 
In this regard, can US Delegation elaborate more on the scope of the transit /transshipment controls 
executed by the US
 and their impacts on trade? 
 ANSWER:  The TECI is a multi-faceted, cooperative initiative that seeks to strengthen the trade 
compliance and export control systems of those countries and companies that constitute global transshipment hubs. By working to strengthen tho se systems, the United States seeks to enhance 
security and confidence in international trade flows.  It is entirely consistent with UN Resolution 1540 
and the GATT. 
 Special 301 and Related Actions
 
 
[Indonesia] 
 
4. The US Administration is issuing a comprehensive Report on yearly basis in implementing Section 182 of the US Trade Act of 1974. The Re port contains countries which are deemed not  
complied  with certain WTO Agreements such as TR IPs, Import Licensing procedures, etc. In the 
Report the US government has placed some countries, including Indonesia in a Priority Watch List  as 
countries which are not implementing the TRIPs Agreem ent in full. Through this report, the US is          WT/TPR/M/160/Add.1 
Page 265 
 
 
strongly urging the countries concerned to improve, to  amend and/or to revoke their policies which are 
deemed not consistent with WTO Agreements. Indonesia wish to have an explanation as to what extend 
this Priority Watch List could be justified under the WTO rules and disciplines.  ANSWER:  Pursuant to Section 182 of the Trade Ac t of 1974, as amended by the Omnibus Trade 
and Competitiveness Act of 1988 and the Uruguay R ound Agreements Act (enacted in 1994), under 
Special 301 provisions, USTR must identify those countr ies that deny adequate and effective protection 
for IPR or deny fair and equitable market acces s for persons that rely on intellectual property 
protection.  Countries that have the most onerous or egregious acts, policies, or practices and whose 
acts, policies, or practices have the greatest adverse impact (actual or potential) on the relevant U.S. 
products must be designated as “Priority Foreign Coun tries.”  USTR has also created a “Priority Watch 
List” and “Watch List” under Special 301 provisions.   Placement of a trading partner on the Priority Watch List or Watch List indicates that particular problems exist in that country with respect to IPR 
protection, enforcement, or market access for pers ons relying on intellectual property.  Countries 
placed on the Priority Watch List are the focus of increased bilateral attention concerning the problem 
areas.  The Special 301 analysis is based on a complex review process, including consultations among 
different government agencies, including U.S. emb assies in the countries concerned, and with the 
private sector and foreign governments.  Each c ountry is evaluated on its particular factual 
circumstances based on information obtained by the U.S. Government, including that provided by the 
foreign governments concerned and that gathered by U.S. embassies in the country concerned.  Foreign 
governments are welcome to provide any information that they feel may be relevant to the Special 301 
review.  Among the factors considered in identifying such countries is whether a country’s intellectual 
property regime meets internationally recognized sta ndards of protection.  Identifying countries that 
deny adequate and effective protection for IPR or de ny fair and equitable market access for persons that 
rely on intellectual property protection is not inconsistent with WTO rules and disciplines.  
 [Israel] 
 
1. Israel would be interested to know the cr iteria used by the US for placing countries on 
SECTION 301 OF THE 1974 TRADE ACT.   ANSWER:  Pursuant to Section 182 of the Trade Ac t of 1974, as amended by the Omnibus Trade 
and Competitiveness Act of 1988 and the Uruguay R ound Agreements Act (enacted in 1994), under 
Special 301 provisions, USTR must identify those countr ies that deny adequate and effective protection 
for IPR or deny fair and equitable market acces s for persons that rely on intellectual property 
protection.  Countries that have the most onerous or egregious acts, policies, or practices and whose 
acts, policies, or practices have the greatest adverse impact (actual or potential) on the relevant U.S. 
products must be designated as “Priority Foreign Coun tries.”  USTR has also created a “Priority Watch 
List” and “Watch List” under Special 301 provisions.   Placement of a trading partner on the Priority Watch List or Watch List indicates that particular problems exist in that country with respect to IPR 
protection, enforcement, or market access for pers ons relying on intellectual property.  Countries 
placed on the Priority Watch List are the focus of increased bilateral attention concerning the problem 
areas.  The Special 301 analysis is based on a complex review process, including consultations among 
different government agencies, including U.S. emb assies in the countries concerned, and with the 
private sector and foreign governments.  Each c ountry is evaluated on its particular factual 
circumstances based on information obtained by the U.S. Government, including that provided by the 
foreign governments concerned and that gathered by U.S. embassies in the country concerned.  Foreign 
governments are welcome to provide any information that  they feel may be relevant to the Special 301 
review.  Among the factors considered in identifying such countries is whether a country’s intellectual 
property regime meets internationally recognized sta ndards of protection.  Identifying countries that 
deny adequate and effective protection for IPR or de ny fair and equitable market access for persons that 
rely on intellectual property protection is not inconsistent with WTO rules and disciplines. 
 WT/TPR/M/160/Add.1 
Page 266  
 
[Israel] 
 
2. Do WTO Members who abide by the provisions of the TRIP'S Agreement appear on the "301 
lists"  ?  
ANSWER:  As discussed above in response to questi on 1, under the Special 301 provisions, USTR 
identifies those countries that deny adequate and effec tive protection for  IPR or deny fair and equitable 
market access for persons that rely on intellectual property protection.  Among the factors considered in 
identifying such countries is whether a country’s intellectual property regime meets internationally 
recognized standards of protection. 
 
[Japan] 
 Q29. Unilateral measures (p. 62, paras.189 to190) 
Japan is concerned that Section 301 of the Trade Act of 1974 and the related provisions such as “Special 301” and “the Telecommunications Trade Ac t of 1988” could be inconsistent with the U.S. 
obligations under the WTO contingent upon operations by the U.S.  Japan would therefore like to request the U.S. to have regard towards consis tency with the WTO rules on the occasion of operating 
the unilateral measures cited above.  In this re gard, please indicate the specific views of the 
Government of the United States.  
ANSWER:  Section 301 of the Trade Act of 1974 and the other provisions cited by Japan are fully 
consistent with U.S. obligations under the WTO.  As Japan is aware because it was a third party in the 
case, the one WTO dispute challenging section 301 resulted in a specific finding of no WTO inconsistencies.  The releva nt panel report was adopted by the DSB on January 27, 2000. 
 
Export Assistance
 
 
[Argentina] 
 
11. On page 81, paragraph 195,  the report makes reference to the fa ct that the United States maintains a 
duty drawback program, whereby customs duties and some domestic taxes and charges resulting from 
the importation are reimbursed.  
 
Question: Could you provide us with more in formation about those domestic taxes and charges?  
 
ANSWER:  Generally, the claim is limited 99 percent of  the duty paid.  If an Internal Revenue Tax 
is imposed under the HTSUS subheading on the merc handise in addition to the duty, that tax is 
considered to be a duty and  equally eligible for drawback.  Drawback of 100 percent of the domestic 
alcohol tax applies on the export of flavor extracts and medicinal or toilet preparations.  Under the 
unused merchandise drawback provision, 99 percent of  the duty, import tax and import fees paid are 
eligible.  [Australia]  
The Appellate Body ruled in February 2006 that th e United States has failed to fully implement the 
Dispute Settlement Body recommendations and rulings in the United States - Tax Treatment for 
Foreign Sales Corporations  dispute.  What steps is the United States considering to bring its regime 
into compliance with the Appellate Body ruling? 
 ANSWER: Congress, in a major legislative accomplishmen t, has repealed the FSC and ETI rules. 
We were pleased that the Appellate Body in its most  recent review of our le gislation found that we had 
largely complied with the WTO's findings on this is sue.  We remain aware of our WTO obligations. 
          WT/TPR/M/160/Add.1 
Page 267 
 
 
[Brazil]  
 
Chapter III, paragraphs 191-194 :  “the United States provides expor t financing through its official 
export agency, the Ex-Im Bank ”. The Bank is mandated to provide “ credit at rates and terms that are 
fully competitive with those supported by governme nts in the principal countries whose exporters 
compete with U.S. exporters. Ex-Im Bank accepts  risks that private sector is unwilling or unable to 
take.” In a recent paper (TN/RL/GEN/94), presented at the Negotiating Group on Rules, the US 
proposed the expansion of the prohibited categor y of subsidies on the Agreement on Subsidies and 
Countervailing Measures (ASCM). According to the document, some “ forms of egregious government 
intervention such as (...) funding of companies or projects that would not otherwise receive 
conventional commercial financing ” should be the first candidates for inclusion in an expanded “red 
box”.   
(i)  Does the US consider that the export financing, as currently provided by the Ex-Im Bank, could be understood as a form of “egregious gove rnment intervention”, in the terms of its 
proposal (TN/RL/GEN/94)? What would differentiate the practice of Ex-Im Bank when 
accepting “risks that private sector is unwilli ng or unable to take” from the ones the US 
describes in its proposal?  
 ANSWER:  Given their unique role in international trad e, official export credits have long been the 
subject of special multilateral disciplines.  Official  export financing in the United States is provided 
consistent with relevant rules under the WTO Agreement on Subsidies and Countervailing Measures 
and the OECD Arrangement on Guidelines for Officially  Supported Export Credits.  With regard to the 
U.S. proposal on prohibited subsidies (TN/RL/GEN/ 94, January 16, 2006) in the Negotiating Group on 
Rules, footnote 6 of that proposal states the U.S. position in the negotiations th at "the consistency of 
any new rules with the export credit rules might also need to be considered."   
 
(ii) In addition, in paragraph 194, the report st ates that “close to 40% of total Ex-Im Bank 
exposure is in the aircraft sector” – out of US$ 13.3 billion in support activities, in 2004. Could 
the US Government please provide additional details on their support (guarantees, insurance 
and credits) to the mentioned sector, incl uding terms and rates of financing? 
 
ANSWER:  Programmatic details of the Export-Import Ba nk of the United States can be found at  
http://www.exim.gov . 
 
 
[Brazil] 
 
9.  Chapter III, paragraph 195 : A number of assistance measures for export promotion are in place in 
the US, among them a duty drawback program. The report does not provide detailed information about 
the actual operation of the program. It states simply that “ customs duties and certain internal taxes and 
fees resulting from importation are refunded following the export of either the imported product or the 
article manufactured fr om the imported product ”. Regarding the US drawback programme, is it 
possible to receive information on: (i) criteria for fi rms to be eligible for the program; (ii) refundable 
taxes and fees and extent of refunds; (iii) mech anisms for the refund, including time periods? 
 ANSWER: (i)  The criteria for the different types of drawback depend on the statutory provision 
under which the drawback claim is made.   
Generally the importer, a person who receives the imported merchandise from the importer or the 
exporter is entitled to claim drawback. If the importer and exporter are different persons, they will need 
to cooperate with each other to make the claim. Th e claimant needs to show a link between the import 
and export merchandise. For manufacturing drawback, th e claimant must show that imported duty-paid 
merchandise was used by the manufacturer to prod uce articles and exported within five years from WT/TPR/M/160/Add.1 
Page 268  
 
importation. If the claim is made under the substitu tion provision the claimant must show that the 
export article was made within three years after receipt of the imported merchandise, that the imported merchandise was used during the same three-year pe riod and that the substitute merchandise could be 
used interchangeably in the manufacturing process to  make the export article.  For drawback based on 
the use of domestic tax-paid alcohol, the claimant must show that the exported flavor extracts or 
medicinal or toilet preparations were made with that alcohol.  
 (ii)  The refundable duties and taxes also depend on  the statutory provision under which the claim is 
made.   
Generally, the claim is limited 99 percent of the dut y paid. If an Internal Revenue Tax is imposed under 
the HTSUS subheading on the merchandise in addition to  the duty, that tax is considered to be a duty 
and  equally eligible for drawback. Drawback of 100 percent of the domestic alcohol tax applies on the 
export of flavor extracts and medicinal or toilet pr eparations. Under the unused merchandise drawback 
provision, 99 percent of the duty, import tax and import fee paid are eligible.  
 
(iii)  Finally, the time periods applicable to the claim depend on the statutory provision under which the 
claim is made.  For a manufacturing drawback claim, the period from im port to export is five years. In addition, there 
is a three-year period from receipt by the manufacturer to production of a manufactured article if the 
claim is made under the substitution manufacturing provi sion. There is a three-year period from import 
to export for other types of drawback.  The claim must be filed within three years after the export of the article on which the claim is made.   [Hong Kong China]  
Export Assistance
 
(WT/TPR/S/160, P. 63, Para. 194 and Table III.6)  4. There is an increasing trend in the amounts authorised by the Export-Import Bank in support for export activities (from US$9.2 billion in fiscal year 2001 to US$13.3 billion in fiscal year 2004).  What 
are the reasons for the increase?  Does the US envisage the rising trend to continue?  
 
ANSWER: Ex-Im Bank is demand-driven, so it is difficult to predict how much activity it will 
have in any one year.  However, Ex-Im Bank has al ways strived to increase its activity from one year 
to the next. Unless there is a global economic downt urn, Ex-Im Bank activity is generally in the $12-
13 billion range.  Ex-Im Bank's activity reached a lo w of $9.2 billion in FY01 due a slowing of the 
global economy.  However, Ex-Im Bank's activity in FY00 was $12.6 billion and $13.1 billion in 
FY99.  These were more typical than FY01.  
 
[Japan] 
 
Q30. Tax Treatment for Export Companies (ETI regime; formerly FSC regime) (p.64, paras.196 
to 198） 
As stated in the Report by the Secretariat, th e WTO compliance panel in September 2005 concluded 
that the U.S. maintains prohibited FSC/ETI subs idies through the transition and grandfathering 
measures of the American Job Act of 2004, and ther efore, continues to fail to implement fully the 
operative DSB recommendations.  We are aware that  Appellate Body in February 2006 upheld such 
Panel’s findings.  Please explain how the U.S. plans to implement the DSB’s recommendations.           WT/TPR/M/160/Add.1 
Page 269 
 
 
ANSWER: Congress, in a major legislative accomplishment,  has repealed the FSC and ETI rules.  
We were pleased that the Appellate Body in its most  recent review of our legislation found that we had 
largely complied with the WTO's findings on this is sue.  We remain aware of our WTO obligations. 
 
Other Measures Affecting Production and Trade 
 Other Government Support Including Subsidies
 
 
[Argentina] 
 12. On page 82, paragraph 199, the report mentions  that the most recent full notification by the 
United States (October 2005), presented under Artic le XVI(1) of the GATT of 1994 and Article25 of 
the Agreement on Subsidies and Countervailing Measu res, includes a list of 375 subsidy programs, 
whereas the previous notification (2002) contained only 220.  
Questions:  Could you indicate of what these programs consist?  What specific products are affected by 
these subsidies? 
 
ANSWER: Programs notified in the United States' subsidy notification include programs at both 
the federal and sub-federal level.  These program s provide assistance in the form of income tax 
concessions and grants, as well as other forms of assi stance.  Industries benefiting from these programs 
include agriculture, the energy sector, and fisheries.  Programs at the state level also provide aid to rural 
and under-developed regions.  For more details rega rding each of these programs, please refer to the 
United States Subsidies Notification (WTO document G/SCM/N/95/USA).  
[Argentina] 
 13. On page 85, paragraph 210, the report makes reference to the Trade Adjustment Assistance for 
Firms Program, which is part of a broader program that also provides assistance to workers and farmers. Although the program's period of effectivene ss and the amount of aid available are included, it 
is unclear what the basis for its application is and what industries benefit from it.    
Question:  Could you explain these last points in greater detail? 
 ANSWER:  The Trade Adjustment Assistance (TAA) Program, as set out in the Trade Act of 1974 
as amended, provides technical assistance to help U.S. firms experiencing a decline in sales and employment, resulting in important part from the increase in imports of like or directly competitive 
articles.  The Secretary of Commerce is respons ible for administering the TAA Program and has 
delegated the statutory authority and responsibility for this program under the Trade Act of 1974 to the 
Department of Commerce’s Economic Developmen t Administration (“EDA”).  EDA regulations 
implementing the TAA Program may be accessed via EDA’s Internet website at: http://www.eda.gov/InvestmentsGrants/Lawsreg.xml
 
 
Although trade adjustment for firms is a small progr am ($12.8 million in FY 06), a broad spectrum of 
industries has received trade adjustment assistance from the program, including, for example:  electrical equipment, lawn and garden produc ts, printing machinery, and telecommunications 
equipment.  A list of those industries that have availed themselves of the TAA for Firms program is 
available at http://taacenters.org/industries.html
.   
 WT/TPR/M/160/Add.1 
Page 270  
 
[Canada] 
 
Part III. Trade Policies and Practices by Measu re, (4): Other Measures Affecting Production and 
Trade, (i) Other government support including su bsidies, (a) Overall support, Paragraph 199 and 
Table III.7 
 
The Secretariat Report notes that as of October 2005, the last U.S. full notification under Article XVI:1 of the GATT 1994 and Article 25 of the SCM Agreemen t dated back to October 2003.  At that time, 
the U.S. notified WTO Members of three federal tax concessions specifically benefiting the timber 
industry in the amount of $470 million.   
 
14. Can the U.S. provide the current status of these subsidies?  Does the U.S. intend to eliminate them?  
 ANSWER:  The three identified provisions are part of our domestic tax law.  The United States has 
no present plans to modify the specific provisions. 
 
[China] 
 
Other Subsidies 
 Question:  p.66 para. 204) 
As estimated, the U.S will provide to its enterprises through the American Job Creation Act of 2004  a 
total of USD76 billion in form of domestic subsid y, which is far over the amount of USD50 billion 
paid under the former Foreign Sales Corporation Repeal and Ex traterritorial Income Exclusion Acts.  
 
How does U.S. comment on the above conclusion? 
 
ANSWER: China does not identify the provision(s) of the American Jobs Creation Act of 2004 
(“AJCA”) that allegedly results in a “domestic s ubsidy.”  If China is referring to section 102 of the 
AJCA and the creation of an income tax deduction re lating to income attributable to U.S. production 
activities, the United States does not agree that this tax deduction constitu tes a subsidy.  However, even 
assuming for purposes of argument that the tax de duction could constitute a subsidy, any such 
“subsidy” would not be specific pursuan t to Article 2 of the SCM Agreement.  
 
[China] 
 Pursuant to the American Job Creation Act of 2004,  a transitional period is provided to enable the U.S. 
to continue its grant of export subsidy to the U.S. enterprises till the end of 2006 before U.S. 
completely abolishing its WTO-inconsistent tax rebate and exemption pr actices conducted under the 
former  Extraterritorial Income Exclusion Acts . 
 
Please explain why the U.S. cannot promptly  comply with the relevant DSB rulings? 
Are these tax rebate and exemption only granted to  domestic enterprises? If yes, how is this 
practice consistent to the National Treatment principle of the WTO?  
 
ANSWER:  With respect to the first question, Congress,  in a major legislative accomplishment, has 
repealed the FSC and ETI rules.  The Appellate Body , in its most recent review of our legislation, 
found that we had largely complied with the WTO's fi ndings on this issue.  We remain aware of our 
WTO obligations.  With respect to the second question, the FSC Repeal and Extraterritorial Income Exclusion Act of 2000 
did not provide for a “tax rebate” or an “exemption,” but instead provided an exclusion from gross 
income for extraterritorial income.  While the Un ited States is unsure as to what China means by          WT/TPR/M/160/Add.1 
Page 271 
 
 
“domestic enterprises,” the United States notes that foreign corporations can earn extraterritorial 
income eligible for the exclusion.  
[Colombia] 
 The introduction to Section III (paragraph 9) of the Secretariat’s Report states that government 
assistance for domestic products could consist of financ ial outlays. In addition, the same paragraph lists 
45 federal programs and 330 subfeder al subsidy programs in effect in 2003 according to the most 
recent notice from the United States.  Would it be pos sible to obtain further information about how this 
assistance works?   What are the criteria used for approving it? 
 
ANSWER:  Programs notified in the United States' subsidy notification include programs at both 
the federal and sub-federal level.  These program s provide assistance in the form of income tax 
concessions and grants, as well as other forms of assi stance.  Industries benefiting from these programs 
include agriculture, the energy sector, and fisheries.  Programs at the state level also provide aid to rural 
and under-developed regions, assistance for worker training and aid for minority-owned businesses.  
For more details regarding these programs, please refer to the United States Subsidies Notification 
(WTO document G/SCM/N/95/USA).  Competition Policy
 
 [Brazil] 
 
2.  Page 68 - paragraph 213
: “The Sherman Act outlaws all contracts, combinations, and conspiracies 
that restrain trade among the states or with forei gn countries, as well as the monopolization of any 
part of the trade or commerce among the states or with foreign countries.  However, the Sherman Act 
and FTC Act do not apply to conduct involving tr ade or commerce, othe r than import trade or 
commerce, with foreign nations unless the con duct has a direct, substantial, and reasonably 
foreseeable effect on domestic or import comm erce or on export trade or commerce.  Where 
jurisdiction is based on export trade or commerce the antitrust laws apply to that conduct only for 
injury to export business in the United States ." In this way, what are the US domestic enforcements 
against foreign export cartels? 
 
ANSWER:  We do not fully understand the question.  If Brazil is asking whether United States law 
reaches the activities of U.S. export associations ha ving adverse effects only in foreign markets, the 
answer is “no.”  Claims for anticompetitive injury in  foreign markets that is independent of, or not 
directly related to, anticompetitive harm in th e United States, are beyond U.S. jurisdiction. 
 
[Brazil] 
 
3.  Page 68 - paragraph 213 : With respect to exclusions and ex emptions, a number of US statutes 
permit immunity from antitrust laws in some specifi ed cases.  Immunity, for instance, is provided to 
certain activities in the agriculture sector under the Capper-Volstead Agricultural Producers' 
Associations Act , which allows collective action in the processing, preparing for market, handling, and 
marketing of agricultural products, and the Agricultural Marketing Agreement Act of 1937, which 
authorizes marketing agreements with producers a nd processors of agricultural commodities. Although 
not registered in the TPR, it is well known that many other sectors are exempted from US antitrust laws. As stressed in paragraph 224, an OECD Re port notes that competition policy in US could be 
improved by measures such as terminating the an titrust immunity of government enterprises and 
eliminating anomalous exemptions. What are these specific sectors? Do DOJ and (or) FTC have an updated and transparent list of exclusions, includi ng those related to jurisprudence outcomes? 
 ANSWER:  The vast bulk of the U.S. economy is subject  to standard antitrust enforcement.  Any 
exceptions to the application of the antitrust laws ar e narrowly and strictly construed.  In addition, in WT/TPR/M/160/Add.1 
Page 272  
 
some cases specialized regulatory agencies with sector-s pecific responsibilities apply competition rules 
analogous to the federal antitrust laws, and the an titrust agencies retain an advisory, competition 
advocacy role.  The Justice Department and the FTC monitor the scope of antitrust exemptions closely 
pursuant to their competition advocacy  roles in the U.S. Government.  There is a wealth of public 
information available relating to U.S. antitrust exemptions.   See, e.g., ABA Section of Antitrust Law, 
Antitrust Law Developments (5th ed. 2002).  The Antitrust Modernization Commission (AMC) (see 
www.amc.gov
) established by the U.S. Congress in 2002 is now studying the advisability of  
modifying or dropping specific antitrust exemptions  and its study group pl an, dated May 6, 2005, 
(available at http://www.amc.gov/pdf/meetings/ImmunitiesExemptionsStudyPlan.pdf  ) includes a 
recent list of exemptions.  The FTC’s Chairman and its Associate Director  for Policy and Coordination 
for the Bureau of Competition both provided testim ony to the AMC on this issue, supporting a critical 
review of exemptions to assist in the promotion of vigorous competition and the health of the U.S. 
economy.  See http://www.ftc.gov/speeches/majoras/060321antitrustmodernization.pdf   
and http://www.ftc.gov/os/2005/12/051202statutory.pdf .  With regard to the OECD document cited at 
224 of the Secretariat Report, Brazil is invited to  examine its specific recommendations directly. 
 
[Brazil] 
 
4.  Page 68 - paragraph 214: “Foreign individuals or companies are granted national treatment with 
respect to private lawsuits and may sue for the sa me amount; foreign states, however, may recover only 
an amount equal to the damage inflicted plus the co st of the lawsuit.” What  exactly is assured to 
foreign companies on that basis? Does such treatme nt follow a specific interpretation of the GATT 94, 
article III, regarding National Treatment?  ANSWER:  Foreign companies suffering proven antitrust damages in United States courts may 
recover to the same extent as domestic companies or individuals – i.e., treble damages and reasonable 
attorneys’ fees.   Such treatment predates the 199 4 Uruguay Round Agreements and is consistent with 
them, including Article III of the GATT.  
[Costa Rica] 
 
6.  Supposing that there was an international carte l or merger, is it possible for foreign authorities to 
create a mechanism with the United States for notifi cation, information exchange, mutual assistance, 
evidence gathering, etc., in order to inform e ach other of anti-competitive practices regarding the 
insurance, telecommunications, or other sectors?  If th is is possible, what is the procedure to follow? 
 ANSWER:  Yes it is quite possible.  When appropriate, United States antitrust authorities will 
engage in informal discussions and activities with their foreign counterparts and may also consider 
negotiation of formal consultation and cooperation agreements.  See  
www.usdoj.gov/atr/public/interna tional/int_arrangements.htm
 for more information.  The procedure to 
follow is to contact the U.S. Department of Ju stice’s Antitrust Division and the Federal Trade 
Commission.   [Japan]  Q31. Competition Policy (p.67, para.212) 
How many lawyers/economists are employed in DOJ and FTC respectively?  
ANSWER  The Antitrust Division of the U.S. Department of Justice currently employs 353 
lawyers and 54 economists in its Washington secti ons and various field offices around the country.  
The FTC currently employs 511 lawyers, of which 223 work on the competition mission, and 71 
economists, of which 56 are dedicated to the agency’s competition mission. 
          WT/TPR/M/160/Add.1 
Page 273 
 
 
[Japan]  
 
Q32. Extraterritorial reach of the U. S. Antitrust Law (p. 70, para.223) 
A lawsuit of which has identical issue to the Hoff man-Laroche Ltd. v Empagran S.A. is ongoing before 
the US Court of Appeals for the Eighth Circuit.  The Government of Japan has concern that the 
Japanese company could be suffered unforeseeable dama ges by the extraterritorial reach of the U.S. 
Antitrust Law if the jurisdiction of the U.S. Court is  admitted in this case.  The Government of Japan 
requests the Government of the United States to ta ke appropriate action such as filing Amicas Curiae 
Brief.    
ANSWER:  Japan has not identified the antitrust lawsuit to which it makes reference, nor has Japan 
posed an actual question to the United States here.  Rather, Japan “requests the Government of the 
United States take appropriate action such as filing Amicas Curiae Brief” in the unidentified case.  In appropriate cases, e.g., the Supreme Court and D.C. Circuit phases of the Empagran
 case, the U.S. 
Government has filed and will continue  to file amicus briefs.  In deciding whether to make such filings, 
the Government of the United States looks at a broa d range of considerations , depending upon the case.  
More specifically, factors that it may consider includ e the extent to which relevant legal issues are of 
recurring importance to the interpretation and administ ration of the law, and whether the court is likely 
to issue a decision of precedential significance.  Japan can and does file its own amicus briefs in U.S. 
judicial proceedings of interest to  it.  With respect to the Empagran  case, the U.S. and Japanese briefs 
supported similar lines of argument.  
[Japan] 
 
Q33. Matters contained in the Recommendati ons by the Government of Japan to the 
Government of the United States regarding Regulatory Reform and Competition Policy, 
7 December 2005 (p.71, para. 227) 
(1) There is a mechanism which ensures dialogue between the governments of Japan and the United 
States, i.e. the Regulatory Policy Initiatives, as mentioned in paragraph 227 of the Report by the Secretariat.  Under the mechanism, the r ecommendations were exchanged between the two 
governments in December 2005 and the consultation has begun regarding the matters contained therein.  
However, the Government of Japan considers it appr opriate to readdress several issues at this TPR 
meeting.  In order to avoid unnecessary negative infl uence on the smooth movement of natural persons 
and economic activities such as trade and investme nt, the Government of Japan is requesting 
information on several issues on immigration control/c onsular affairs (please see attached papers.).  
With regard to immigration control and consular a ffairs in attached papers, please indicate the specific 
views of the Government of the United States respectively.  (2) The Government of Japan also requests the Government of the United States to disseminate 
appropriate information in advance to the affected pa rties should there be any institutional changes.  In 
this regard, please also indicate the specific views of the United States. 
 
ANSWER:  Japan’s views are duly noted. 
 
[Switzerland] 
 
Para. 212 : The Secretariat’s report indicates that in add ition to the federal legislation there is also 
antitrust legislation in nearly all States. Could the U.S. authorities clarify the respective roles of State 
versus federal antitrust legislations and why there would be a need to have such legislations both at the 
federal and state levels, all the more since apparen tly not all the States felt the need to have antitrust 
legislation ? As a matter of fact, para. 224  suggests that the United States should "clarify assignments 
of responsibility among different enforcement official s, particularly between the federal and state 
levels." Indeed, discrepancies between federal and state law can lead to serious problems such as forum 
shopping , where plaintiffs choose where to sue dependi ng on the expected payoffs in court. From an WT/TPR/M/160/Add.1 
Page 274  
 
international trade perspective, th is raises the question whether forei gn parties generally have the same 
rights under state antitrust law as they do under federal antitrust law. In other words, is there a danger 
for foreign companies to be discriminated under stat e antitrust law? Furthermore it would certainly be 
desirable to diminish forum shopping opportunitie s. What measures will be taken to limit the 
opportunities for forum shopping in antitrust law? 
 
ANSWER:  State antitrust enforcement is rooted in principles of federalism, a system – as in 
Switzerland – in which both federal and state govern ments strive to protect and enhance the public 
welfare in their respective territo ries.  States may challenge antic ompetitive conduct under the federal 
antitrust laws – either on their own behalf as an in jured consumer or on behalf of their residents as 
parens patriae  – or under their own state antitrust laws.  We are unaware of any instance, however, 
where the states have discriminated against foreign pa rties in their enforcement of the federal or state 
antitrust laws.  Although almost all states have their own antitrust laws, as a practical matter, most of 
these statutes are similar in substance to the fede ral antitrust laws.  Moreover, even where the state 
statutes differ, they are generally interpreted by state courts consistently with federal law.  Federal and 
state antitrust enforcers also work closely togeth er to ensure maximum consistency in antitrust 
enforcement and to minimize any unnecessary burden on private parties.  There are certain instances 
where the enforcers decide that investigation and enfo rcement are more appropriate solely at the federal 
level or at the state level; there are other instances where each enforcer has its own separate interest in 
participating.  In the latter situ ation, the federal and state antitrus t enforcement agencies have devoted 
substantial efforts to ensure effective coordination of  parallel federal-state investigations, and generally 
the process works well.  The Antitrust Modernizati on Commission, which was created by the U.S. 
Congress to examine whether the need exists to mode rnize antitrust laws, is currently studying the role 
of state antitrust enforcement in a federal system and how it can best work in harmony with federal enforcement to serve the public interest.  
Government Procurement
 
 
[Brazil] 
 
5.  Page 74 - paragraph 243 :  “The Trade Agreements Act of 1979 waives the application of the Buy 
American Act to the end-products of designated countries, which now include […] least-developed 
countries .” Would it be possible to bring some evaluation of the results of such policy, including 
statistic data on the number and value of contr acts awarded to suppliers of the least-developed 
Countries?  ANSWER:  U.S. Federal procurement da ta is available in the Fede ral Procurement Data System 
(FPDS) at the beginning of each fiscal year and all reports are available by accessing 
https://www.fpds.gov.  
[Brazil] 
 
6.  Page 75 - paragraph 245
:  The Department of Defense also waives the restrictions of the Buy 
American Act/Balance of Payments Program for the acquisition of defense equipment produced in any 
"qualifying country" (countries with which ther e is a reciprocal procurement agreement or 
Memorandum of Understandi ng). Is there statistical data on the contracts awarded under this 
mechanism?   
ANSWER:  As stated above, U.S. Federal procurement data is available in FPDS, which includes 
Department of Defense procurement data.           WT/TPR/M/160/Add.1 
Page 275 
 
 
[Brazil] 
 
7.  Page 75 - paragraph 246:  “The U.S. Administration has adopted  a new reciprocity approach to sub-
federal procurement in two FTAs under negotiati on. The Administration has written to Governors 
requesting that state governments consider volunt arily covering their procurement under the U.S.-
Panama and U.S.-Andean FTAs under a new recipr ocity policy, to benefit from new export 
opportunities .” Would this approach cause any methodological innovation on the commitments under 
these FTAs, or would the sub-federal agencies be  listed in an annex to the FTAs, as usual? 
 ANSWER: Sub-federal entities covered by the FTA w ould be listed in an annex to the FTA. 
 [Chinese Taipei]  
Question 10 (page 74, paragraphs 240-241) 
We understand that US policy with respect to mark et access of government procurement is to grant 
reciprocal national treatment, while maintaini ng a number of domestic purchasing requirements for 
procurement not covered by the GPA, NAFTA, th e WTO plurilateral Agreement on Trade in Civil 
Aircraft, and bilateral trade agreements.  Fo r procurement not covere d by the above-mentioned 
agreements, the Buy American Act restricts the purchase of supplies and construction materials by 
government agencies to those defined as “domestic e nd-products”, in accordance with a two-part test, 
i.e. manufactured in the United States, and the cost of domestic components exceeds 50% of the cost of 
all components. 
 a)  Are there any domestic purchasing requirements for services procurement not covered by the GPA, 
NAFTA, the WTO plurilateral Agreement on Trad e in Civil Aircraft, and bilateral trade 
agreements? 
 
ANSWER:  There are domestic purchasing requirements for certain service procurements not 
covered by the GPA or other agreements.  For ex ample, domestic purchasing requirements apply to 
research and development services and transportation services. 
 
b)  What is the rule of origin applied in order to define “domestic end-products”?  Is it tariff shift or 
added-value rules?  
 ANSWER:  The U.S. Government defines “domestic end product” to mean: 
(1) An unmanufactured end product mined or produced in the United States; or  
(2) An end product manufactured in the United States,  if the cost of its components mined, produced, 
or manufactured in the United States exceeds 50 percen t of the cost of all its components.  Components 
of foreign origin of the same class or kind as tho se that the agency determines are not mined, produced, 
or manufactured in sufficient and reasonably availa ble commercial quantities of a satisfactory quality 
are treated as domestic.  Scrap generated, collected , and prepared for processing in the United States is 
considered domestic.  
 
c)  How does this rule of origin differ from t hose applied to the “designated countries”, including 
parties to the GPA, NAFTA, and other bilateral agreements that cover government procurement? 
 ANSWER:  “Designated country end product” means a WTO GPA country end product, an FTA 
country end product, a least devel oped country end product, or a Caribbean Basin country end product.  
Under the trade agreements, the test the United Stat es Government uses to determine country of origin 
is “substantial transformation” ( i.e., transforming an article into a new and different article of 
commerce, with a name, character, or use distinct from the original article).  Specifically, an article is a 
product of a country or instrumentality only if (1) it  is wholly the growth, product, or manufacture of 
that country or instrumentality, or (2) in the case of an article which consists in whole or in part of 
materials from another country or instrumentality, it has been substantially transformed into a new and WT/TPR/M/160/Add.1 
Page 276  
 
different article of commerce with a name, character, or use distinct from that of the article or articles from which it was so transformed (See the Code of Federal Regulations, Title 48, Section 25.003 and 
Title 19, Section 177.22).  
[Chinese Taipei] 
 Question 11 (page 76, paragraph 246) 
As indicated, the US Administration is encouraging t hose States that have not participated in the GPA 
to consider voluntarily covering their procurement u nder a few FTAs under a new reciprocity policy, to 
benefit from new export opportunities.  
 
As a member ready to join the GPA, we would like to know whether the said reciprocity policy will be pursued in the GPA Negotiations on Extension of  Coverage and Elimination of Discriminatory 
Measures and Practices so that signatories to  this Agreement may mutually benefit. 
 
ANSWER:  As described in response to the EC ques tion above, the United States is applying the 
reciprocity policy only with respect to two FTAs (t he U.S.-Andean FTA and the U.S.-Panama FTA).  
 
[Colombia] 
 In accordance with paragraph 247, subparagraph c) re garding the conditions for relevant access, one of 
the objectives of the United States government procur ement policy is the participation of the various 
types of small businesses.  The Department of  Commerce annually determines the procurement 
methods and the application factors, intended to favor small businesses.  Nevertheless, these 
mechanisms and application factors can reduce the procurement possibilities for foreign suppliers that 
can participate in United States government procurem ent.  For example, the amount of US$100,000 to 
reserve contracts exclusively and automatically for small businesses could be higher in accordance with 
an administrative decision by the DOC.  Given this situation, has establishing the procuremen t mechanisms and application factors in a more 
stable manner been considered so they do not change  annually and thus provide greater certainty to the 
foreign suppliers about contracts to which they can have access? 
 ANSWER:  The small business set aside program is mandated by the Small Business Act 
(15 U.S.C.§  631, et seq. ), and may be modified by the Congress.   The Small Business Act reserves 
contracts between $2,500 and $100,000  for small business concerns.  The Department of Commerce 
does not set the dollar values at which contracts are reserved for small business concerns. 
 
[European Communities]  
Paragraph 231: In 2003, the Gene ral Accounting Office has expressed concerns as to reliability of the 
data contained in the FDPS (Federal Procurement Data System); these concerns seem to have been 
reiterated in 2005 for the FDPS-NG (Federal Procurem ent Data System-New Generation) and seem to 
exist since the system was put into operation.  
• In these circumstances, what measures have been taken to ensure reliabilit y of the data? (Sources: 
http://www.gao.gov/new.items/d05960r.pdf
 and http://www.gao.gov/new.items/d04295r.pdf ). 
 
ANSWER:  The U.S. Government has dedicated res ources to operate and manage the Federal 
Procurement Data System (FPDS), which accounts fo r over US$ 300 billion in expenditures.  There is 
currently a joint effort by the General Services Ad ministration (GSA) and the Department of Defense 
(DoD) to resolve GAO concerns as to reliability of the data.  GSA is also tracking all transitions for the 
largest federal procuring agencies as they migrat e to machine-to-machine interfacing with FPDS.           WT/TPR/M/160/Add.1 
Page 277 
 
 
Procurement data is available in FPDS at the beginni ng of each fiscal year and all reports are available 
by accessing https://www.fpds.gov . 
 
• Paragraph 231: What is the situation of State procurement as to statistical reporting? How are 
obligations reported? Could the US   provide da ta for contracts awarded to Small businesses at 
State level?  
 
ANSWER:  As required under Article XIV:5 of the GPA,  the United States submits statistical data 
on estimated U.S. state government expenditure .  The methodology for estimating state-level 
government procurement is to use basic state governme nt finance data collected by the United States 
Census Bureau to develop an approximation of expenditures on government procurement. 
 The United States does not have data on contracts awarded to small businesses by states.  
[European Communities] 
 
In paragraph 236, it is mentioned that several FAR amendments were adopted to implement new 
legislation (Veterans Benefit Act of 2003, the C onsolidated Appropriations Act of 2005, and the 
Services Acquisition Reform Act of 2003).   
• What is the purpose and content of these am endments? Do they apply to GPA covered 
procurements? 
 
ANSWER:  The Veterans Benefit Act of 2003 (15 U. S.C. 657f) created the procurement program 
for small business concerns owned and controlled by service-disabled veterans (commonly referred to 
as the “Service-Disabled Veteran-owned Small Business (SDVOSB) Procurement Program”).  The GPA does not apply to this program.  
The Consolidated Appropriations Act of 2005 (Pub. L. 108-447) provides an exemption from the Buy 
American Act for acquisitions of information technol ogy that are commercial items funded by the Act.  
The amendment applies to procurements of informat ion technology that are commercial items covered 
by the GPA.  The Consolidated Appropriations Act of 2005 also requires that contracting officers shall not purchase products or services offered by Federal Prison Industries (FPI) unless the agency making 
the purchase determines that the offered product or  service provides the best value to the buying 
agency, pursuant to Government-wide procurement regulations.  The GPA does not apply to this program.  The Services Acquisition Reform Act (SARA) of 2003 (Pub. L. 108-136) provides that architectural 
and engineering services cannot be offered under a General Services Administration (GSA) multiple-
award schedule contract or under government-wide task-and-delivery-order contracts unless performed 
under the supervision of a licensed, professional archit ect or engineer and awarded pursuant to quality-
based selection procedures.  The SARA also prohi bits agencies from including a requirement in a 
solicitation that would preclude an offeror from permitting its employees to telecommute or from 
unfavorably evaluating an offeror’s proposal that  includes telecommuting unless it would adversely 
affect agency requirements, such as security.  This  amendment may apply to procurements covered by 
the GPA and is consistent with the GPA.  
 
[European Communities]  
In paragraph 237, it is stated that US regulations allow for the preparation of list of suppliers by a 
federal government agency provided that the agen cy prepares a written justification explaining the 
circumstances for the need of such list.  WT/TPR/M/160/Add.1 
Page 278  
 
• Can the US explain the justifications which should be given in order to allow a federal agency to 
use and maintain such lists? Would a supplier who is not on a list but who fulfils all the 
requirements to participate in a particular procur ement covered by that lis t be allowed to tender? 
Furthermore, it is indicated that a number of 37 States covered by the GPA use lists of qualified 
suppliers when tendering for certain types of proc urement; Can the US   indicate how many states 
and which ones use such lists? Can the US also indicate the type of procurement concerned? 
 ANSWER:  Qualification and listing in a Qualified Pr oducts List, Qualified Manufacturers List, or 
Qualified Bidders List is the process by which produ cts are examined and tested for compliance with 
specification requirements, or by which manufacturers or potential offerors are provided an opportunity 
to demonstrate their abilities to meet the standards sp ecified for qualification.  The head of a federal 
procuring agency (or designee) must prepare a writt en justification before establishing a qualification 
requirement.  This justification includes: (i) the n ecessity for establishing the qualification requirement 
and specifying why the qualification requirement must  be demonstrated before contract award; (ii) 
estimation of the likely costs for testing and evaluati on that will be incurred by the potential offeror to 
become qualified; and (iii) all requirements that a pot ential offeror (or its product) must satisfy in order 
to become qualified.  Only those requirements th at are the least restrictive to meet the purposes 
necessitating the establishment of the qualification requirements are specified.  Please see the Federal Acquisition Regulation (FAR) Part 9.2 for furthe r information on qualification requirements and 
qualification lists.   Where a potential offeror that is not on a qualified list can demonstrate to the satisfaction of the 
contracting officer that the potential offeror (or its product) meets the st andards established for 
qualification and listing or can meet them before th e date specified for award of the contract, the 
potential offeror may submit an offer.  However, a contracting officer does not have to delay a 
proposed award in order to provide a potential offero r with an opportunity to demonstrate its ability to 
meet the standards specified for qualification and inclusion on a list. 
 
An example of a qualified manufacturers list fo r semiconductor devices can be accessed at  
http://www.dscc.dla.mil/programs/qmlqpl/QPLdetail.asp?QPL=19500
.  Other examples can be 
accessed at the website for the Defense Supply Ce nter Columbus, Sourcing Qualifications Unit: 
http://www.dscc.dla.mil/programs/qmlqpl/ . 
 
Each U.S. State establishes and maintains its own procurement laws, regulations, and policies.  For 
information on state procurement practices, please re fer to individual State procurement websites.  
Websites for each State may be found at http://www.naspo.org/directors/ . 
 
[European Communities] 
 In paragraph 238 (Central Contractor Registration (CCR)): 
• it is indicated that "as of August 2005, there were some 373,000 government vendors registered 
with the CCR, of which 10,030 were foreign firms" : are these foreign firms established in the US  
or outside the US? 
 
ANSWER:  The list includes foreign firms without regard to place of establishment.   
 
• Can a foreign company established outside of the US  acquire rapidly, easily and at no/low cost the 
information needed to register ? Can the US  identify the information an d describe the process to 
acquire them? does it also encompass any type of business certificates/attestations? If so, how is it 
stored in the register? is this informa tion public? if not, who has an access to it? 
 
ANSWER:  Please see the CCR Handbook, publicly available at http://www.ccr.gov/handbook.asp
 
for questions regarding registration.  All information required to register is included in this handbook.           WT/TPR/M/160/Add.1 
Page 279 
 
 
The information contained in the CCR is used in conf idence by contracting officers, and is not publicly 
available.  For information on how suppliers apply for represen tations and certifications, please see the On-line 
Representations and Certifications Application (ORCA) website at https://orca.bpn.gov/
.  ORCA 
records are considered public information. 
 
• Is any type of electronic signature required al ong the process of registration? If yes, what kind? 
How long does the registration take before becoming operational in the case of a company which is 
a newcomer on the US market ? At state level does a similar system exist? If yes, in how many 
States and which ones? 
 ANSWER:  An electronic signature is not require d in the registration process.  New CCR 
registrations usually take appr oximately 48 hours to process. 
 
As noted above, each U.S. State establishes and ma intains its own procurem ent laws, regulations, 
policies, and procedures.  For information on stat e procurement practices, please refer to individual 
State procurement websites.  
 
[European Communities] 
 In paragraph 241, it is indicated that the Buy American Act does not apply to services.  
 
• Does this mean that there are no restrictions for fo reign service providers to participate in a service 
procurement in the US ? If not, can the US explai n the types of restrictions applied and the rules 
applied to determine the origin of a service?   
 
ANSWER:  The Trade Agreements Act of 1979, as amende d, (19 U.S.C.§ 2501, et seq.) generally 
prohibits federal procurments of  goods and services from suppliers from countries which are not party 
to the GPA or an FTA, or are not a least developed country.  The Federal Acquisition Regulation, Part 25.402(a)(2),  requires contracting officers to determine the 
origin of a service by the country in which the firm providing the service is established.  
 [European Communities]  
In paragraph 246, can the US provide more inform ation on the so called "new reciprocity policy"? 
 ANSWER:  The U.S. Administration is applying a ne w sub-federal reciprocity approach to sub-
federal procurement in two FTAs that it is nego tiating (the U.S.-Panama and U.S.-Andean Free Trade 
Agreements).  This approach does not apply to pr evious commitments that U.S. States have made 
under the GPA.  Additional information on the policy may be found in State Government Procurement 
and Free Trade Agreements: A New Sub-Federal Reciprocity Approach That Preserves State 
Sovereignty and Provides Direct Benefits to States, available at http://www.ustr.gov/assets/.  
[European Communities] 
 
In paragraph 247, it is stated that "The Small Bu siness Act (P.L. 85-536), as amended, requires, in 
principle, each contract with an anticipated valu e greater than US$2,500 but less than US$100,000 to 
be reserved exclusively for small business concerns".  
• Are there any measures in favour of small businesses fo r contracts with an anticipated value greater 
than US100,000?  WT/TPR/M/160/Add.1 
Page 280  
 
ANSWER:  Yes, procurements may be set-aside for procurements above $100,000, in accordance 
with Note 1 of the General Notes of the United States. 
 
[India]  
Buy America Act
 
Q.12 The Act mandates that American made products must be used in all c onstruction using Federal 
dollars. Preference is given to works and other govern ment procurement contracts for bids that include 
locally produced steel. This practice is notably co mmon at the sub-federal level and many States such 
as Connecticut, Louisiana, Maine, Michigan, Illi nois, Maryland, New York, Pennsylvania, Rhode 
Island and West Virginia, have such requirements that also apply to private contractors and sub-
contractors. With a view to ensuring  that  market  access is not denied to exporters of castings, iron and 
steel and non-ferrous metal from developing countries like India, whether necessary remedial  action could be  taken by  amending the Buy America Act? 
 
ANSWER:  The Trade Agreements Act (TAA) (19 U.S.C. §  2501, et seq .) generally prohibits 
federal agencies from purchasing products and services of  a country that is neither a party to a trade 
agreement with the United States (the WTO Agre ement on Government Procurement (GPA), NAFTA 
or a bilateral FTA) nor a least developed country.   Moreover, based on Congressional mandates, U.S. 
obligations under the GPA and FTAs do not apply to r estrictions attached to federal funds for mass 
transit and highway projects.  [Japan]  
Q34. Government Procurement - general （p.72, para 231 ） 
What is the “procurement by U.S. agencies outside  the United States”?  Please provide some examples 
which are categorized under this “procurement  by U.S. agencies outside the United States”. 
 ANSWER:  U.S. Military facilities and U.S. Embassies  procure goods (e.g., air conditioning or 
heating equipment) and services (e.g., engineering or janitorial services) in support of their operations 
outside the United States.   
 
[Japan]  Q35. Buy American Act (p.74, paras.240-246) 
The Buy American Act of 1933 provides the US legal basis for discriminating against foreign products 
at the federal level of the Govern ment of the United States. The existing Buy American Act, which was 
amended by the Uruguay Round Agreements Act, allo ws the President to refrain from applying the 
“Buy American” restriction to countries that: ha ve acceded to the 1994 Agreement; and provide 
appropriate reciprocal procurement opportunities fo r U.S. products and U.S. suppliers. Japan would 
like to request the U.S to abolish Buy American Ac t, which accords a favourable treatment to the U.S. 
products for government procurements  not covered by the GPA, from the viewpoint of full application 
of the principle of non-discriminatory treatment.  Shou ld it, however, be necessary to maintain this Act, 
the Government of Japan requests the Government of the United States to implement it in a manner 
consistent with the WTO rules.  In this regard, please indicate the specific views of the Government of 
the United States.   
ANSWER:  For procurements covered by the WTO G overnment Procurement Agreement (GPA), 
the United States Government has waived the a pplication of the Buy American Act and other 
discriminatory provisions for eligible goods.  In such  cases, offers of eligible products receive equal 
consideration with domestic offers. 
          WT/TPR/M/160/Add.1 
Page 281 
 
 
[Norway] 
 
12: Only 37 American states take part in the WTO agreement on Governme nt Procurement (GPA). 
This constitutes a considerable de facto market obs tacle for foreign companies. We would like to know 
what measures might be taken by the federal authorities in order to increase the number of states 
participating, and give us an up date on whether there are more states considering joining the GPA? 
 ANSWER:  The coverage of states under the WTO GP A is based on negotiations under the GPA. 
 
[Switzerland] 
 Para. 250 : According to para. 250 the sanctions deci ded by the United States against countries 
considered to discriminate against U.S. products  and services in their government procurement 
practices are supposed to apply also to end-produc ts and construction materials not covered by the 
GPA. Independently of the issue of sanctions, would it be possible for the United States to elaborate on 
the nature of products which are considered by the United States as materials - i.e. goods - not covered 
by the GPA?    ANSWER:  Goods procurements valued under the GPA threshold, presently US$193,000, are not 
covered by the GPA.  Additionally, the United St ates’ Annex 1 to the GPA states agency-specific 
goods procurements not covered by the GPA. 
 
The use of “construction materials” is  a domestic term that refers to goods related to construction.  The 
Federal Acquisition Regulation (FAR) Part 25.003, defines construction materials as: “an article, 
material, or supply brought to the construction site by a contractor or subcontractor for incorporation 
into the building or work.  The term also incl udes an item brought to the site preassembled from 
articles, materials, or supplies. However, emergency life safety systems, such as emergency lighting, 
fire alarm, and audio evacuation systems, that are discrete systems incorporated into a public building 
or work and that are produced as complete systems,  are evaluated as a single and distinct construction 
material regardless of when or how the individual parts or components of those systems are delivered 
to the construction site.  Materials purchased directly  by the Government are supplies, not construction 
material.” 
 
Intellectual Property Rights
 
 
[Argentina] 
 
14. On page 100, paragraph 262,  the report mentions that in one of  its annual reports, the Federal Trade 
Commission (FTC) notes that with regard to the U.S.  patents system, there is concern regarding the 
quality of patents and the legal standards and proc edures since they can have anticompetitive effects 
and increase costs. In this report, the FTC recommended a series of changes, such as new administrative procedures that allow for the post-gran t review and opposition to patents, an increase in 
the participation of third parties in the review pro cess, a tightening of specific legal standards used to 
evaluate whether a patent is "obvious," and the consideration of the possible harm to competition 
before extending the scope of th e patentable subject matter. 
 
Question:  Were said recommendations implemen ted and, if they were, what was the result? 
 
ANSWER:  No.  The FTC recommendations are currently under consideration by the United States 
government.  In addition, a bill that addresses post gr ant opposition has been introduced into the 1
st 
Session of the 109th Congress.  
 WT/TPR/M/160/Add.1 
Page 282  
 
[Brazil] 
 
10.  Chapter III, paragraph 252
: Regarding the American policy of promoting increased IPR protection 
through free trade agreements, could the US Govern ment explain the adequacy of such agreements 
with the WTO intellectual property system? Could the US Government also specify: a) the advantages, 
favors, privileges or immunities granted to the nationa ls of other countries by means of the 22 bilateral 
intellectual property agreements or memoranda of understanding which it has already signed; and b) 
exemplify how it intends to confer immediately and unconditionally the same benefits to the nationals 
of all other WTO Members according to the provisions of article 4 of the TRIPS Agreement?  
ANSWER:  The free trade agreements that the Unite d States has negotiated do not affect any 
obligations that the United States has vis-à-vis other WTO Members, including the MFN obligation 
under Article 4 of the TRIPS Agreement.  The United States will continue to meet its MFN obligations 
under Article 4 of the TRIPS Agreement.  [Brazil]  
11.  Chapter III, paragraph 254
: Could the US Government indicate in its balance of payments for 
intellectual-property-related trade the total share of royalties and license fees received from Brazil? 
 ANSWER: Yes.  It is published in the Survey of Current Business (a monthly publication of the 
Bureau of Economic Analysis of the Dept of Commerce), October Issue for 2004 data.  
 The article citation is below, page 56 is the most recent data for royalties and license fees:  
$647 million in 2004 (page 56), up from $580 million in 2003 (page 54). http://www.bea.gov/bea/ARTICLES/2005/10October/1005_xborder.pdf
 
 
[Brazil] 
 
12.  Chapter III, paragraph 258 : "The Cooperative Research and Technology Enhancement (CREATE) 
Act of 2004 (P.L.108-447) provides that patentability  is not precluded on the basis of obviousness 
where subject matter that qualifies as prior art is  developed by a person different from the person 
claiming the invention, under certain conditions ". What are those conditions? 
 ANSWER:  See the response to Canada’s question #11 below. 
 
[Brazil] 
 13.  Chapter III, paragraphs 265-268
. There are various examples of trade marks registrations being 
granted to foreign generic names, such as the case of "cupuaçu", settled in the U. S. when the firm 
pursuing the mark withdraw it voluntarily. What me asures does the USPTO take in order to prevent 
inadequate registration of generic names as trade marks? Are there any established criteria to grant 
trade marks registrations of foreign words?  
 
ANSWER:  Applications for U.S. trademark registra tion consisting of proposed marks that are 
merely descriptive or generic for the goods/services w ill be refused registration.  If an application 
consists of foreign words, the examining attorney wi ll require the applicant to provide a translation of 
the wording and, if necessary, a transliteration. The examining attorney will examine the English 
translation in the same manner as a regular filed a pplication for an English word mark, and if it is 
generic, it would be refused registration.  The United States' trademark system provides opportun ities for any interested party to oppose or cancel 
a trademark registration if that party believes that it will be damaged by the registration or continued 
existence of a registration.          WT/TPR/M/160/Add.1 
Page 283 
 
 
[Brazil] 
 
14.Chapter III, paragraph 269 : What are the criteria or conditions for a geographical indication of 
foreign origin to be protected through the trade mark system in the United States? Is there any 
difference between a collective mark (or a certificat ion mark) and a geographical indication? Do they 
have the same rights? How the US legislation or juri sprudence deals with confli cts related to the usage 
of the same sign as a mark and a geographical indication?  ANSWER:  The United States provides robust protection for geographical indications of both 
domestic and foreign origin. Geographi cal indications of foreign origin are examined and protected in 
the same manner as U.S. GIs through the trademar k system as trademarks, certification marks or 
collective marks.   Not all collective marks or certification marks ar e geographical indications.  Collective marks and 
certification marks are a means in which GIs can be  protected.  All trademarks, collective marks, 
certification marks have the same exact rights in that U.S. law provides that the owner of the 
trademark, collective mark or certification mark has the exclusive right to prevent confusing uses of the 
mark by unauthorized third parties.  See 15 U.S.C. §§ 1114 and 1125.  
[Brazil] 
 
15.Chapter III, paragraph 275
: “The Artists' Rights and Theft Preven tion Act of 2005 (ART Act), Title I 
of the Family Entertainment and Copyright Act of 2005 (Public Law No: 109-9), amended the U.S. 
Federal criminal code to prohibit the unauthorized, k nowing use or attempted use of a video camera or 
similar device to transmit or make a copy of a copyrighted audiovisual work from a performance of 
such work in a movie theatre.”  Does it apply only to audiovisual works in a movie theatre or it is also 
applicable to other copyrighted works, like for instance, live performance shows? Does the 
enforcement of the above mentioned rule require th e intention of the supposed infringer to use or to 
allow the use of his/her copy for another unauthorized copies? In that case, is any kind of private copy 
allowed?  ANSWER:  The ART Act is limited to audiovisual wo rks recorded in a motion picture exhibition 
facility.  Recording live musical performances w ithout the consent of the performer(s) involved 
violates section 1101 of the US copyright law.  Un der the ART Act, any unauthorized recording of the 
audiovisual work in a motion picture exhibition fac ility, even if the intended use is personal and non-
commercial, is prohibited.  For an exhibition in a theater, the producer has only authorized the viewing of a performance of the audiovisual work; often,  the producer has not yet even authorized the 
distribution of copies of the audiovisual work for home viewing. 
 
[Brazil] 
 
16.  Chapter III, paragraph 276
: Could the United States i) clarify the criteria used in its "Special 301" 
legislation in order to identify countries with alle ged inadequate and ineffective intellectual property 
protection; ii) explain why countries with a better law enforcement record against counterfeiting and 
piracy can be worse labeled than those countries with less significant commitment in these areas; iii) 
explain if and how the informati on and allegations provided by the US private sector in the petitions 
that initiate the "Special 301" ranking process are checked and conf irmed by the US Government; and 
iv) elucidate what precautions are taken by the US  competent authorities in order to prevent the 
infliction of image damage on countries mentioned in the "Special 301" lists vis-a-vis  the capacity of 
those countries of attracting foreign direct investment?  ANSWER:  Pursuant to Section 182 of the Trade Ac t of 1974, as amended by the Omnibus Trade 
and Competitiveness Act of 1988 and the Uruguay R ound Agreements Act (enacted in 1994), under 
Special 301 provisions, USTR must identify those countr ies that deny adequate and effective protection WT/TPR/M/160/Add.1 
Page 284  
 
for IPR or deny fair and equitable market acces s for persons that rely on intellectual property 
protection.  Countries that have the most onerous or egregious acts, policies, or practices and whose 
acts, policies, or practices have the greatest adverse impact (actual or potential) on the relevant U.S. 
products must be designated as “Priority Foreign Coun tries.”  USTR has also created a “Priority Watch 
List” and “Watch List” under Special 301 provisions.   Placement of a trading partner on the Priority 
Watch List or Watch List indicates that particular problems exist in that country with respect to IPR 
protection, enforcement, or market access for pers ons relying on intellectual property.  Countries 
placed on the Priority Watch List are the focus of increased bilateral attention concerning the problem 
areas.  The Special 301 analysis is based on a complex review process, including consultations among different government agencies, including U.S. emb assies in the countries concerned, and with the 
private sector and foreign governments.  Each c ountry is evaluated on its particular factual 
circumstances based on information obtained by the U.S. Government, including that provided by the 
foreign governments concerned and that gathered by U.S. embassies in the country concerned.  
Enforcement is one aspect of intellectual property protection that is evaluated, among several other 
areas.  Foreign governments are welcome to provide any information that they feel may be relevant to 
the Special 301 review. 
 
[Canada] 
 Part III.  Trade Policies and Practices by Measure:  (4) Other Measures A ffecting Production and 
Trade; (iv) Trade-related intellectual prop erty rights, (b) Patents, Paragraph 255. 
 
U.S. patent law is codified in Title 35 of the U. S. Code (35 U.S.C.), as amended. The Secretariat 
Report notes that the United States “is the only WTO Member to use the first-to-invent rule”.  
 
10. Would the United States consider usin g instead the first-to-file rule”? 
 
ANSWER:  Elimination of the first-to-invent rule was part of a bill submitted in the first session of 
the 109
th Congress and is, therefore, under consideration. 
 The U.S. Administration has for some time indicated its willingness to consider switching to the first-
to-file rule as part of substantive patent la w harmonization in the World Intellectual Property 
Organization. 
 For additional information, see the reply to Question #39 from Japan.  
[Canada] 
 
Part III. Trade Policies and Practices by Measure,  (4) Other Measures A ffecting Production and 
Trade; (iv) Trade related and intellectual pr operty rights, (b) Patents, Paragraph 258. 
 
The Secretariat Report notes that the “ Cooperative Research and Technology Enhancement (CREATE) 
Act of 2004  (…) provides that patentability is not precluded on the basis of obviousness where subject 
matter that qualifies as prior art is developed by a person different from the person claiming the 
invention, under certain conditions”.   
11. Would the United States please provide more details with respect to this matter? 
 
ANSWER:  The USPTO published final rules implem enting the CREATE Act at: 1300 Off. Gaz. 
Patent Office 70 (Nov. 8, 2005), 70 Fed. Reg. 54 259 (Sept. 14, 2005), and the text is posted at: 
http://www.uspto.gov/web/offices/com/sol/og/2005/week45/patcrea.htm
 
 The final rule explains the conditions under which s ubject matter can be disqualified as prior art to 
overcome an obviousness rejection:          WT/TPR/M/160/Add.1 
Page 285 
 
 
“the applicant must provide a statement in compliance with Sec. 1.104(c)(4) to the effect that the prior 
art and the claimed invention were made by or on the behalf of parties to a joint research agreement, within the meaning of 35 U.S.C. 103(c)(3), which was in effect on or befo re the date the claimed 
invention was made, and that the claimed invention was made as a result of activities undertaken within 
the scope of the joint research agreement. 35 U.S.C. 103(c)(3) defines a "joint research agreement" as a 
written contract, grant, or cooperative agreement entere d into by two or more persons or entities for the 
performance of experimental, developmental, or resear ch work in the field of the claimed invention, 
that was in effect on or before th e date the claimed invention (under examination or reexamination) was 
made. The statement should either be on or begin on a separate sheet and must not be directed to other 
matters (Sec. 1.4(c)). The statement must be signed in accordance with Sec. 1.33(b). 
 
In addition to providing a statement, the applicant must also amend the specification to disclose the 
names of the parties to the joint research agreement in compliance with Sec. 1.71(g)(1). If the applicant 
disqualifies the subject matter relied upon by the examiner in accordance with the CREATE Act and 
the procedures set forth in this final rule, the ex aminer will treat the application under examination and 
the 35 U.S.C. 102(e), (f), or (g) prior art as if they are commonly owned for purposes of 35 U.S.C. 
103.”  
[Canada] 
 Part III. Trade Policies by Practice and Measure, (4) Other Measures Affecting Production and Trade; 
(iv) Trade related and intellectual prope rty rights, © Trade marks, Paragraph 265 . 
 The Secretariat Report notes that trade mark protect ion in the United States arises from the actual use 
of the mark and that additional protection is provided by federal and state laws.  
 
12. Could the United States provide more details on these state trade mark laws? 
 
ANSWER:  State trademark laws vary from state to state within the United States.  It is possible to 
obtain state trademark registrations which are territorial in nature.   
 
[Canada] 
 
Part III. Trade Policies by Practice and Measure, (4) Other Measures Affecting Production and Trade; 
(iv) Trade related and intellectual property rights, (f) Enforcement Activities, Paragraph 279. 
 
The Secretariat Report says that the Intellectual Property Protection and Courts Amendment Act of 
2004 (P.L. 108-482) amended federal criminal code provisions regard ing trafficking in counterfeit 
labels.  
 
13. Can the U.S. provide more details on the Intellectual Property Protection and Courts 
Amendment Act of 2004 , more specifically with respect to  trafficking in counterfeit labels? 
 
ANSWER:  The Intellectual Property Protection and C ourts Amendments Act of 2004 is composed 
of three parts and relates to anti-counterfeiting, fra udulent online identity usage, and the U.S. court 
system.    Title I of the Act, entitled “Anti-Counterfeiting Pr ovisions,” broadens 18 U.S.C. § 2318, which 
prohibited the knowing trafficking in a counterfeit la bel affixed or designed to be affixed to a 
phonorecord or a copy of a computer program or motion picture.  The Act provides a private right of action for violations of § 2318 by any copyright owner who is injured, or threatened with injury, by a 
violation.  The court can award the injured party act ual damages and additional profits of the violator, 
or statutory damages.  Actual damages are calculate d by multiplying the retail value of a copy of the 
work to which the unlawful label is attached by  the number of copies to which unlawful labels are WT/TPR/M/160/Add.1 
Page 286  
 
affixed.  Statutory damages can range from $2,500 to $25,000 for each violation.  The damages can be 
trebled for repeat violators.  The Act also extends § 2318 to all literary, pictorial, graphic, sculptural, or visual art works, in addition 
to phonorecords, computer programs, and motion pictures.  In addition, the Act also applies to an 
“illicit label,” which is defined as a genuine certificate, licensing document, registration card, or similar 
labeling component that is used by the copyright owner to verify that a copy of work is not counterfeit 
or infringing of any copyright and that is distributed  with a copy to which it is not authorized to be 
affixed. 
 
[China] 
 
IPR protection  
Section 337 of the Tariff Act of 1930  
 Question (p. 82 para. 227) 
Section 337 of the Tariff Act of 1930 has provided dom estic industries of the U.S. with dual remedy, 
giving discriminatory treatment to foreign enterprises. Please explain its consistency with WTO 
national treatment principle. 
 ANSWER: A GATT dispute settlement panel report a dopted in November 1989 found, among 
other things, that former ITC procedures in investiga tions to determine whether there is a violation of 
section 337 were inconsistent with  the national treatment rule because importers and producers of 
imported products may have been required to defend claims in both the ITC and in district court, 
possibly at the same time, wherea s infringement claims against domestic goods can be heard only in 
district court. 
 
Section 321 of the Uruguay Round Agreements Act amended the relevant provisions of U.S. law, 
bringing U.S. procedures into conformity with na tional treatment obligations under GATT 1994, while 
providing for the effective enforcement of intellectua l property rights at the border.  The amendments 
to section 337 provided the means to prevent infring ement proceedings being pursued against imported 
goods in both forums at the same time.  A district court hearing an infringement case is required to stay 
its proceedings, at the request of a respondent in a s ection 337 proceeding, in respect of any claim that 
involves the same issues as those pending before the ITC.  
 
The General Exclusion Orders are comparatively low in  standard and lack further specific standard for 
judgment, with considerable uncertainty.  Would the U.S. clarify the specific standard for judgment 
under the General Exclusion Orders?  
ANSWER: The standards for issuing general exclusion orders can be found in section 337(d)(2), 
which provides:  
 
(2) The authority of the Commission to order an ex clusion from entry of articles shall be limited to 
persons determined by the Commission to be viol ating this section unless the Commission determines 
that --  
(A) a general exclusion from entry of articles is ne cessary to prevent circumvention of an exclusion 
order limited to products  of named persons; or 
 (B) there is a pattern of violation of this section and it is difficult to identify the source of infringing products. 
          WT/TPR/M/160/Add.1 
Page 287 
 
 
Section 337 of the Tariff Act of 1930 gives Internati onal Trade Commission the right to automatically 
initiate the implementing procedure of process investigation. Would the U.S. explain the rationale of 
this provision and its consistency with the TRIPS Agreement? 
 ANSWER:  Section 337 is one of several means by which the United States makes remedies 
available for infringements of intellectual property ri ghts, consistent with relevant provisions of the 
TRIPS Agreement.  The Commission has authority to  institute section 337 i nvestigations on its own 
motion.  Under section 337(b)(1), the Commission sh all investigate alleged violations of section 337 
“on complaint under oath or upon its initiative.”  The Commission has used its authority to self-
institute investigations sparingly; the most r ecent such case occurred more than 20 years ago. 
 
[Chinese Taipei] 
 
Question 12 (page 82, paragraphs 277-278)  Under Section 337 of the US Tariff Act of 1930, certa in unfair practices related to IPRs are considered 
unlawful import practices.  Secti on 337 investigations are initiated by the USITC.  If the USITC 
determines that a Section 337 violation exists, it can issue exclusion orders or cease and desist orders, 
or both.   
Between 1 January 2003 and 30 Apr il 2005, 54 new Section 337 investig ations were initiated, of which 
47 involved allegations of patent infringement. Sect ion 337 investigations ma y be initiated merely on 
the basis of a complaint from an interested party against foreign companies.  It is our understanding 
that, once the ITC decides to initiate  such an investigation, the comp anies being investigated can incur 
excessively high legal costs in responding to charges.  We trust, therefore, that objective criteria are 
used in the process of determining whether or not to  accept a complaint and to initiate an investigation 
on patent infringement.  In this context, it would be appreciated if the United states could:  a)  Please provide details of the criteria used by the ITC to determine whether or not to initiate an 
investigation. 
 ANSWER:  After a complaint is filed with the ITC, the Office of Unfair Import Investigations 
examines the complaint for sufficiency and complia nce with the applicable rules, and makes a 
recommendation to the Commission regarding institution of the requested investigation.  ITC rules 
require, for example, the pleading of facts in sup port of the allegations in the complaint, and the 
submission of considerable supporting data.  b)  Please provide the figures on the total num ber of complaints filed involving patent 
infringement between 1 January, 2003, and 30 April,  2005, and the number of complaints rejected 
during that same period.  
 
ANSWER:  All or nearly all patent-based complaints filed with the ITC during this period resulted 
in the institution of an investigation.  In most cases, however, the Office of Unfair Import 
Investigations requested that th e complainant provide additional information in support of the 
complaint prior to the ITC’s vote on institution. 
 
[Colombia] 
 
Approval of the “Fairness in Music Licensing Act of 1998”
8 by the Congress of the United States, 
amending Article 110 (5) relative to the limits of excl usive rights, that is, referring to certain uses not 
requiring the prior express consent of the holder of the right or payment of any compensation, 
                                                      
8 “Fairness in Music Licensing Act” WT/TPR/M/160/Add.1 
Page 288  
 
continues to be a cause for concern by Colombian author s.  The concern is due to the fact that, despite 
the partial statement by the Special Group of the WTO
9, the aforementioned act shall also allow use of 
a broad catalogue of works and interpretations fro m the Colombian musical repertoire with large 
audiences within the territory of the United States.  
1) Based on the above, we have the following qu estions for the United States delegation: 
a) The decision by the Special Group of the WTO re garding Article 110 (5) (A) notwithstanding, will 
the United States amend said provision due to the ha rm caused to the copyright holders from other 
countries with this limitation?  
 
b) When will the United States amend the contents of Article 110 (5) (B) in accordance with the WTO 
arbitration decision handed down on January 15, 2001?   ANSWER:  As Members know, the legislative process is in the hands of the U.S. Congress.  The 
Administration, however, is working closely with the U.S. Congress, and conferring with the European 
Communities, in order to reach a mutually  satisfactory resolution of this matter. 
 
[Colombia] 
 
a) Is there a strategic plan in the United States rega rding intellectual property that brings together 
in one document the relevant policies and directives at the federal and state level? 
 
ANSWER:  While there is no single document bringing together relevant policies and directives at 
the federal and state level with regard to inte llectual property, the United States has for decades 
pursued the strategic goal of improving the protection of intellectual property at home and abroad, with 
bipartisan support of the U.S. Congress.  Numerous statutes, Executive Orders, and regulations have 
been promulgated to achieve this broad objective.  In addition, the USPTO has a Strategic Plan that 
addresses patents and trademarks at the national level.  
b) What are the current legal incentives offered by the Government of the United States to 
promote intellectual property as a development instrument? 
 
ANSWER:  The United States provides incentives for economic, social and cultural development 
that are built into balanced U.S. intellectual propert y systems.  U.S. intellectual property laws foster 
innovation and creativity, and help to ensure that  the competitive struggle is fought within certain 
bounds of fairness.  The patent system delivers to  society a wealth of knowledge in every patent 
application upon publication.  In return for the valu able rights conferred by a patent, the patent law 
demands a complete disclosure of each invention.  This disclosure promotes the development and 
improvement of technology, and discourages the duplication of unnecessary research.  Copyright protection effectively combats the propensity of people  to copy rather than create, while leaving ideas 
themselves in the public domain.  The protection of trademarks and service marks preserves the 
investment of the owners of marks in their intell ectual creation by ensuring that no other merchant can 
mimic the marks and by providing incentives for mercha nts to invest in good will and strive to improve 
their products.  Trademark protection also preven ts the unjust enrichment of counterfeiters by 
precluding use of marks that may cause confusion, deception and mistake, and thereby also serving an importing consumer protection function.  Trade secr et laws also encourage creative behavior and 
operate as an incentive to innovation.  These laws pr otect against the misappropriation of trade secrets 
and against additional inequitabl e conduct.  The incentives provide d under the intellectual property 
laws of the United States nurture new ventures and technological progress.  These developments in turn 
enhance the competitiveness of businesses and serve soci ety as a whole with the fruits of intellectual 
labor. 
                                                     
 
9  Through this statement the Special Group of the WTO decided th at only subparagraph (B) of Article 
110 (5) did not meet the requirements of Article 13 of the ADPIC.          WT/TPR/M/160/Add.1 
Page 289 
 
 
c) Are there any policies or actions aimed at using the patent documents as a source of 
technological information for the small- and medium-scale businesses? 
 
ANSWER:  Yes.  The USPTO publishes patents and trademarks via its Web site ( www.uspto.gov ) 
so that they will be available as a source of t echnological information for all, including small and 
medium scale businesses.  The USPTO’s Patent a nd Trademark Depository Library Program (PTDLP) 
administers a nationwide network of public, stat e and academic libraries designated as Patent and 
Trademark Depository Libraries authorized by 35 U.S.C. 12 to: 
• Disseminate Patent and Tr ademark Information; and 
• Support Diverse Intellectual Property Needs of the Public  
 The dissemination of patents to the public has long been  one of the primary missions of the U.S. Patent 
and Trademark Office. The premise of our patent syst em lies in its mutual benefit to both the inventor 
and our country. In return for full public disclosure, a U.S. patent offers certain rights to an inventor for 
up to twenty years, during which time the invent or may exclude all others from making, using, 
importing or selling his or her invention. The patent is published and disseminated to the public so that 
others may study the invention and improve upon it.  The constant evolution of science and technology, 
spurred by the monetary incentive the U.S. patent sy stem offers to inventors, strengthens our nation's 
economy. New inventions lead to new technologies, create new jobs, and improve our quality of life. 
Strong trademark protection can be as important as a strong patent portfolio to a successful business. 
Unlike patents, trademark registrations are renewabl e for as long as the product or service they identify 
is offered for sale. The rise of global communication networks and easily accessible commercial markets significantly increases the importance of obtai ning trademark protection for even the smallest 
companies.  
 
In addition, so called “small entity status” is ava ilable for individuals, small businesses, and non-profit 
organizations under U.S. patent la w and regulations, making them elig ible for a 50 percent reduction of 
many patent fees charged by the USPTO, fac ilitating their use of the U.S. patent system  
 
d) Are there policies or actions aimed at us ing inventions entering the public domain? 
 
ANSWER: Yes.  According to U.S. law, a patent term  extends for 20 years from the date of filing 
(35 U.S.C. 154(a)(2)).  After the expiration of a patent, the public is free to use it.  Consistent with this 
practice, the United States Food and Drug Administ ration allows third parties to obtain marketing 
approval of a product immediately after the expiration of an innovator’s patent on the product.  For 
additional. Information, see re ply to sub-question (c) above. 
 
e) How does the supplemental trademark regist er work?  Who can access that register? 
 
ANSWER:  The Supplemental Register is a secondary tr ademark register for the USPTO. It allows 
for registration of certain signs that do not meet  the requirements for registration on the Principal 
Register, but are capable of distinguishing an a pplicant’s goods/services.  Signs registered on the 
Supplemental Register can be accessed at www.uspto.gov
. 
 
f)  What is the scope of validity of the tradem arks registered in the supplemental register? 
 ANSWER:  Signs registered on the Supplemental Register receive protection from conflicting 
marks, but are excluded from receiving the advant ages of certain sections of the Trademark Act of 
1946. The excluded sections are listed in 15 U.S.C. §1094. 
 
g)  Is the “trade dress” figure regulated by United States law?  If so, how does it work? 
 WT/TPR/M/160/Add.1 
Page 290  
 
ANSWER:  Trade Dress can be protected under U.S. trademark law if it is non-functional and 
distinctive. For additional information, refer to Section 1202.02 of the Trademark Manual for 
Examining Procedure (TMEP).  
[Costa Rica] 
 
7.  Paragraph 255 of the Secretariat’s report mentions  the term of protection granted by U.S. legislation 
to patents for inventions.  Please explain in detail whether the patent term extension or adjustment  
provisions set forth include all kinds of patent s or are limited to specific kinds of patents. 
 
ANSWER:  Patent term extension or adjustment is ava ilable for any patent that has a 20-year term 
measured from the filing date of the application, so  both Utility and Plant applications are eligible for 
patent term adjustment.  Design patents have a 14 y ear term that is measured from the date of grant, 
and thus are not entitled to patent  term extension or adjustment. 
 [Costa Rica] 
 
8.  Paragraph 261 of the Secretariat’s report makes re ference to the number of patents filed and granted 
in the United States in 2004.  Please state how many of the patents granted we re revoked, as well as the 
main reason therefor.  
ANSWER:  To clarify our process, the term "revoked" is  not used in U.S. patent practice, but a 
U.S. Patent can be re-evaluated by the USPTO  through re-examination or re-issue procedures and 
under these all, some, or none of the claims can be confirmed. (Also see answer to question 7 (Costa Rica)).  Additionally, U.S. fe deral courts can evaluate patent claims and find that all, some or 
none of the claims are valid, invalid or unenforceable .  In 2004, the USPTO granted a total of 195,611 
patents.  Requests for reexamination of a patent, howev er, may be made for any patent that is currently 
in force, or approximately 1,670,000 U.S. pate nts.  According to the USPTO's annual report, 
http://www.uspto.gov/web/offices/co m/annual/2004/060413a_table13a.html
, 441 requests for 
reexamination were received in 2004. Of these, 41 0 requests were accepted for reexamination.  The 
number of applications that did not have any claims confirmed is not available, but historically, about 
10% of the reexamined patents have no claims confirmed.  In addition, it is very rare for a court to fully 
invalidate an entire patent.  We do not maintain  statistics on court patentability determinations. 
 
[Ecuador] 
 
Regarding proposals made before the WTO TRIPS C ouncil, and pursuant to the mandate of paragraph 
239 of the Ministerial Declaration made in Hong Ko ng, Ecuador wishes to know that reason why the 
United State does not consider the disclosure of origin to be appropriate for promoting more 
transparency and clarity in granting patents.  What alternative proposals can the United States proffer? 
 ANSWER:  The U.S. has provided several communications to the WTO where our objections to 
new patent disclosure requirements are clearly stated, including because of the potential detrimental 
impact on the patent system.  These communicati ons can be found on the WTO website, IP/C/W/434, 
IP/C/W/449, and IP/C/W/469.  In the United States, pa tent applications are required to disclose how to 
make and use the claimed invention.  Where the origin of genetic or other material used in an invention 
is necessary to be able to make and use the inventio n, then U.S. practice does equire disclosure of the 
origin of the genetic material.  Additionally, in the United States a patent applicant has a "duty to 
disclose" any information that is material to pate ntability, and the United States suggests that such a 
duty to disclose is an appropriate mechanism to ensu re transparency and clarity in granting patents. 
 The patent system is a critical incentive mechanis m for promoting the research and development of 
new inventions of legally obtaine d or accessed material.  This is what ultimately results in new 
inventions that enhance living conditions, includi ng life-saving medicines, higher crop yields, and          WT/TPR/M/160/Add.1 
Page 291 
 
 
better treatments for diseases.  As described extens ively in our TRIPS Council communications, patent 
disclosure requirements unrelated to patentability dete rminations will not create  clarity in patents or 
meaningfully increase transparency.  Furthermore, such disclosure requirements will likely create legal 
uncertainty, disincentives for innovation and other negative consequences to the patent system as 
described in our communications to the TRIPS C ouncil. Alternative mechanisms from new patent 
disclosure requirements that may lead to improved  patent quality and transparency, as well as 
appropriate access to biological resources and equitable benefit sharing as a result of use of that material can also be found in the U.S. TRIPS Council communication referenced above.  
 
[European Communities] 
 
TRIPS and Public Health 
In paragraph 252 , the US refer to a number of FTAs it has al ready concluded and indicates that it is 
committed to a policy of promoting increased IPR protection.   
• Can the US explain how IP provisions of bila teral agreements concluded for instance with 
Chile, Jordan and Singapore enable those countri es to make use of the flexibilities provided for 
in the Doha Declaration on the TR IPS Agreement and Public Health? 
 ANSWER:  Our free trade agreements (FTAs) contai n the flexibility needed to address public 
health crises, including flexibility in areas iden tified by the Doha Declaration as existing TRIPS 
flexibilities.  For example, many recent U.S. free trade agreements have no provisions relating to 
compulsory licenses.  Previously concluded FTAs, such as the United States -Singapore FTA, contain 
provisions on compulsory licenses that specificall y permit use for public health emergencies and 
government use.  In the U.S. view, the intellectual property provisions  of the bilateral Free Trade Agreements that the 
United States has entered into, including with Chile, Jordan, and Singapore, are sufficiently flexible to 
not affect the ability of the parties to take necessa ry measures to protect public health by promoting 
access to medicines for all, a nd do not prevent the effective utilization of the August 2003 
TRIPS/health solution.  In paragraph 260 , the report recalls that the US  is supportive of the solution agreed in August 2003 
that waived the export restriction in TRIPS Artic le 31(f), under certain conditions, so medicines 
purchased under compulsory licences could be supplie d to countries that have insufficient or no 
capacity for pharmaceuticals.   
• Can the US  indicate which steps it has already taken to allow US manufacturers of generic 
pharmaceuticals to produce patented medicin es for export to countries in need without 
sufficient capacity to produce them? 
 ANSWER:  We continue to strongly support the TRIPS/health solution.  At the 2005 Hong Kong 
Ministerial Conference we became the first WT O member to formally accept this solution as a 
permanent part of the WTO TRIPS Agreement.  Th e United States is the foremost contributor of 
pharmaceutical aid to countries in need. The President’s  Emergency Plan for AIDS Relief is a five-year 
$15 billion commitment to combat disease in over 100 countries worldwide (the largest commitment 
ever made by any nation).  WT/TPR/M/160/Add.1 
Page 292  
 
[European Communities] 
 Patents 
In paragraph 255, the report states that patents are gr anted by the US PTO using the first-to invent rule 
that the US is the only WTO Member to use.  
 
• Can the US  indicate which steps it has already ta ken in order to introduce the first-to-file rule 
for patent registration in order to align its pa tent system with that of other WTO Members? 
 ANSWER:  See the response to Canada’s question #10 concerning paragraph 255 of the Secretariat 
Report. 
 
[European Communities] 
 Geographical Indications Method of implementing the TRIPS provisions on GIs in the US: 
under section d) “Geographical Indications” of the “T rade-related intellectual property rights” section 
of the report by the Secretariat, it is stated that the United States offers protection for GIs through its 
trade mark system, including collective and certification marks. 
• Please explain the way in which trade marks, including collective and certification marks, 
protect holders of geographical indications agai nst uses of their geographical indications on 
goods not originating in the place indicated by the geographical indication in question. In particular, please explain this with respect to s ituations in which the geographical indication is 
used on goods of the same class not originati ng in the place indicated by the geographical 
indication in question together with the true or igin of the goods, or the geographical indication 
is used in translation, or accompanied by expressions such as “kind”, “type” or the like. 
ANSWER:  U.S. owners of certification and collective marks have the ability under U.S. law to 
stop confusing uses of their signs, which could includ e signs that mislead or confuse consumers as to 
the geographical origin of the goods.  In the context of  a certification or collective mark that relates to 
the geographical origin of the goods concerned, this would permit such owners to prevent the confusing 
or misleading use of indications on related goods that do not originate in the place indicated by the geographical indication in question.   [European Communities]  
Any interested party may use the administrative trad emark structures to oppose or cancel a registered 
GI if that party believes that it will be damage d by the registration or continued existence of a 
registration. 
• Could you please provide an example of a GI protected  in the US  that has been able to prevent 
the US from the of the GI in translation on goods not originating in the place indicated by the 
GI? 
ANSWER:  Under U.S. law and practice, a translation of  a term into a language other than English 
may be found confusing in relation to the corresponding English term, such that the owner of the sign 
in the English language would be able to stop its use in translation.  Please refer to the Trademark 
Manual of Examining Procedure (TMEP) 1207.01(b) (vi).           WT/TPR/M/160/Add.1 
Page 293 
 
 
[European Communities] 
 
• Please indicate the type of characteristics of a product that certification marks may be able to 
certify. Please provide figures (in percentage with respect to the total number certification marks granted) on how many certification marks registered in the US   are used to certify 
regional or other origin. 
ANSWER:  A certification mark is any word, name, sy mbol, device, or any combination, used, or 
intended to be used, in commerce with the owner’s permission by so meone other than its owner, to 
certify regional or other geographic origin, material , mode of manufacture, quality, accuracy, or other 
characteristics of someone's goods or services, or that the work or labor on the goods or services was performed by members of a union or other organization. 
 
Figures are not maintained as to the percentage of cer tification marks registered in the U.S. used to 
certify regional or other origin.  
[European Communities] 
 
• Could you please provide an example of a GI prot ected through a certifica tion mark in the US 
and corresponding to an area located in the US, summarizing the qualities, reputation or other characteristics of the good that are essentially attr ibutable to its geographical origin and which 
justify that the indication in question is not simp ly a certification mark of regional origin, but a 
geographical indication? Please provide inform ation as well on how the link between the 
regional origin and the qualities or characteristics of the goods are ascertained. 
ANSWER:  The certification mark owner sets the criteria that must be met in order to qualify for 
the certification mark with respect to a good.  To the extent those criteria consist of characteristics that 
are essentially attributable to the geographical origin of the good – such that it constitutes a 
geographical indication under the TR IPS Agreement – the certificati on mark provides protection for a 
geographical indication.  To the extent it does not co nsist of such characteristics, the certification mark 
is not a geographical indication.  Certification marks are not themselves specifically denominated at the 
United States Patent and Trademark Office as “GI” or “non-GI”.  
[European Communities] 
 
• Is it possible for consumers in the US to dis tinguish certification marks of regional origin 
where the goods certified do not have specific qualities, reputation or other characteristics essentially attributable to their geographical orig in, from certification marks used to protect 
geographical indications? 
ANSWER:  Under the certification mark system, the consumer comes to associate particular 
characteristics with the good accompanied by the ma rk.  Where those characteristics are essentially 
attributable to the geographical origin of the good , including where the certification mark owner has 
specified criteria that are essentially attributable to the goods’ geographic origin, the consumer is 
distinguishing geographical indications  from other certification marks. 
 
[European Communities] 
 
• We understand that recognized viticultural areas are also available as methods of protection of 
geographical indications in the US. Are all rec ognized viticultural areas in the US geographical 
indications? Could you please provide informat ion on the qualities, reputation or other 
characteristics of the wines that are considered  to grant recognition as recognized viticultural 
areas in the US ? WT/TPR/M/160/Add.1 
Page 294  
 
ANSWER:  Signs that comprise American Viticultu ral Areas (AVAs) can also function as GIs 
provided that they meet the GI definition under TRIPS.  
[European Communities] 
 
Proposal for a multilateral system of notificati on and registration of GIs for wines and spirits:   
the report by the Secretariat refers  in its section d) “Geographica l Indications”, under “Trade-related 
intellectual property rights”, to a proposal submitted by the US  for a multilateral system of notification 
and registration of GIs for wines and spirits, which we  understand is contained in  its latest version in 
TN/IP/W/10 
 
• Please explain how the voluntary nature of your proposal for a multilateral system of 
notification and registration of GIs for wine and spirits can be in line with Article II.2 of the 
Marrakesh Agreement establishing the WTO, whic h states that the agreements and associated 
legal instruments included in Annexes 1, 2 and 3 of the Agreement, which include the TRIPS 
Agreement in Annex 1 C, shall be binding on all Members. 
ANSWER: The mandate for the negotiations for a multilateral system of notification and 
registration of GIs for wine and spirits is in TRI PS Article 23.4.  The language in Article 23.4 referring 
to the facilitation of the protection of geographical  indications eligible for protection “in those 
Members participating in the system” makes it clear that WTO Members should be free to decide 
whether or not to participate in the system and ther eby to seek the facilitation of the protection of their 
GIs under it.  
• Please explain how your proposal ensures the reliability of the information made available on 
the searchable database of GIs. In particular, please indicate how the system would deal with 
the possible notification of an identical name by two or more Members, and also how it would deal with absence of information with regard to  the way in which the notified GIs are protected 
in their country of origin, including the question of the date in which the GI obtained protection 
and the date, if any, in which protection will expire 
ANSWER:  The multilateral system for notification a nd registration would be voluntary and would 
not create extra-territorial rights. WTO Members would be able to use the information contained in the 
database when making decisions regarding the regist ration and protection of trademarks and GIs in 
accordance with its national laws.  
• Please explain the way in which your proposal in tends to ensure that both administrative and 
judicial authorities take account of the informa tion posted on the searchable database proposed. 
Please explain as well how administrative and judicial authorities would act if they ascertained 
that the information available on the searchable database of GIs was unreliable, inaccurate or 
incomplete. 
 ANSWER:  Please see above answer. 
 [Israel] 
 
3. What type of protection does US copyright law grant to producers of sound recordings in respect of the public performance and broadcasts of their sound recordings?  
ANSWER:  To the extent that a producer of a sound recording is an author, that producer is a 
copyright owner under U.S. law and, therefore, has the exclusive rights provided by Section 106 of the Copyright Law. With respect to the public perfo rmance and broadcast of a sound recording, as 
provided by Section 106(6), the producer has the exclusive right to perform the copyrighted work          WT/TPR/M/160/Add.1 
Page 295 
 
 
publicly by means of a digital audio transmission.  Section 114 sets out the scope of these exclusive 
rights. A "digital transmission" is a defined term unde r Section 101 of the law and is a transmission in 
whole or in part in a digital or other non-analog format.   
[Japan] 
 
Q36. Bilateral intellectual property agreements (p.76, para.252) 
The Government of Japan has faithfully implemented the "Japanese Actions to be taken by the Patent 
Office", confirmed by the Japan Patent Office (JPO) and the United States Patent and Trademark 
Office (USPTO) in the Framework Talks.  However, the United States has never entirely implemented 
the introduction of an early publication system without exceptions, nor the improvement of re-examination.  Japan strongly requests the United States to implement these items completely and 
promptly.  In this regard, please indicate the specifi c views of the Government of the United States.  
 
ANSWER:  The provisions for the adoption of an "early  publication" system in the United States 
that were originally sent to the U.S. Congress (in the 104th Congress) 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 
bill in the 104
th Congress.  The United States made every effo rt 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 provision to publish, within  18 months, most patent applications filed in the 
United States.  The law also added new opportunities fo r third parties to participate in reexaminations, 
including determinations made by the patent examiner to the Board of Patent Appeals and 
Interferences, in accordance with the understanding reached  as part of the Framework Talks.  The U.S. 
Congress more recently passed legislation that would provide for third party appeals to the Federal 
Circuit in inter partes reexamination.  (See Section 13106 of 5P.L. 107-273.)  
 
[Japan] 
 
Q37. “Submarine patents” (p.76, paras.252 and 255) 
The early publication system in the United States pr ovides exceptions whereby patent applications filed 
in the United States, but not filed overseas, or matt ers included in a patent application filed in the 
United States, but not included in the corresponding a pplication filed overseas, cannot be laid open at 
the request of the applicant.  It is, therefore, po ssible for a patent application to become a "Submarine 
Patent".  This system creates serious social and economic loss due to investments in R&D, as the 
information on the existence of another application already on file for the same invention is not 
available. Any pending applications, already filed w ith the USPTO at the time of the amendment of the 
law in 1994, continue to benefit from the former pate nt terms (i.e. a 17-year patent term from the date 
of the patent grant).  Therefore, it is still possibl e for additional submarine patents to arise.  Japan 
strongly requests the United States to implement 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 all applications except those not pe nding, or those not able to be laid open, after a 
period of 18 months from the earliest filing date. In this regard, please indicate the specific views of the 
Government of the United States. 
 
ANSWER: As explained in response to the prior question, legislation was submitted to the U.S. 
Congress that would have provided for publication without exception, but the legislation that became law provided exceptions.  Because average patent pe ndency in the United States is approximately two 
years, the possibility of submarine patents occurri ng based on applications pending on June 8, 1995, 
has greatly diminished over time and will continue to  do so.  The USPTO is actively studying ways to 
reduce the length of time an application is pending be fore it is granted, and means to further promote 
publication (e.g., tying a petition to make special to early  publication of the patent application).  It is WT/TPR/M/160/Add.1 
Page 296  
 
hoped that these efforts will eliminate any applications  that are not published within 18 months of their 
filing date.  Because most patent applications filed in the Un ited States are published within 18 months, we believe 
that experience with our publication system will dem onstrate over time that the need for exceptions 
will be proven to be unwarranted.  Moreover, continuing efforts to further reduce patent pendency in 
the United States will help to alleviate any problems that these exceptions may cause. 
 
[Japan] 
 
Q38. Extension of the patent term (p.76, paras.252 and 255) 
The USPTO provides that patent protection may be extended to compensate for any amount of 
processing delays and USPTO-caused delays.  This exte nded patent term is guaranteed for at least a 17-
year patent term.  The Government of Japan would like to point out that there is a possibility of 
deliberate delays being caused, and that under the U.S.  current conditions of not having an adequate 
early publication system, there would be other opport unities of creating submarine patents through the 
extension of patent terms.  In this regard, please indicate the specific views of the Government of the 
United States. 
 
ANSWER: If an applicant deliberately delays the pro cessing of a patent application, these delays 
can be considered a “failure to engage in reasona ble efforts to conclude prosecution” and used to 
reduce any patent term adjustment due to USPTO de lays.  As a result applicants are encouraged to 
promptly and completely reply to Office actions so as to not incur a “failure to engage in reasonable 
efforts to conclude prosecution” reduction. 
 
[Japan] 
 
Q39. "First-to-Invent" system (p.76, para.255) 
The United States is the only country to use the "first-to-invent" system, which, with regard to the 
patent system, makes the United States rather uni que.  This system, however, lacks certainty and 
predictability in the sense that a patentee’s status can be overturned by the appearance of the prior 
inventor afterwards.  This will provide extra burden to inventors who are required to prepare and keep 
documentary evidence to prove the date of inventi on.  Many countries, including Japan, have pointed 
out that this issue creates a barrier for foreign co mpanies when trying to penetrate the U.S. business 
community.  Although the practice of maintaining the first-to-invent system is not necessarily against the TRIPS Agreement, Japan again requests the United States to adopt the first-to-file system and also 
to improve all aspects of the patent systems that restri ct trade in the United States.  This is due to the 
necessity of maintaining a transparent and stable  system, as well as reducing the burdens borne by 
users through the difference in systems.  In this  regard, please indicate th e specific views of the 
Government of the United States.   ANSWER:  Although the U.S. first-to-invent patent syst em is unique, it is clearly compatible with 
the TRIPS Agreement, it has worked well and, indeed , has certain advantages.  For example, the U.S. 
system is very fair in that it rewards the first inventor
 who files a patent application, rather than 
rewarding the first person to file an application re gardless of whether that first applicant to file an 
application was, indeed, the first inventor.  
From a purely statistical viewpoint there would seem to be little difference in result between a first-to-
invent patent system and a first-to-file patent syst em.  More than 99.9 percent of patent applications 
filed in the U.S. raise no dispute as to priority of  invention.  Even when such disputes arise, the 
inventor who filed first prevails in a significant majority of these cases.  The actual effect of a switch to first-to-file system, thus, is likely to have little or no actual significance based upon these statistical 
findings.          WT/TPR/M/160/Add.1 
Page 297 
 
 
 With regard to the alleged burden imposed by a firs t-to-invent system due to the use of documentary 
evidence to prove the date of invention, it should be kept in mind that inventors in most first-to-file 
systems also maintain such  evidence in order to be able to asser t "prior user rights" or derivation.  
Documentary and other objective evidence is required to establish prior user rights in cases where an 
earlier inventor wishes to continue us ing an invention that was patented by another party that filed first, 
and obtained, a patent on that invention.  Such ev idence is also required to prove inventorship where 
the first person to file derived the invention from th e true inventor and is not entitled to the patent. 
 
[Japan] 
 
Q40. Priority in the Paris Convention (Hilmer Doctrine) (p.76, para.255) 
The United States has a unique legal principle called “H ilmer Doctrine”, which reasons that the effect 
of elimination subsequent applica tions by third persons on the gr ound of items on specification being 
prior art retoacts only to the filing date in the United States.  Foreign applicants usually file 
applications, first in their own count ry and subsequently in the United States, thereby claiming priority 
under the Paris Convention.  Due to the "Hilmer" doc trine, such foreign applicants cannot prevent the 
patent grant from conflicting with a pplications filed before the actual  filing date of any subsequent 
applications in the United States, even during the priority period, and thereby may suffer from this 
disadvantage. This is against Article 4B of the Pa ris Convention, which stresses that acts by a third-
party in the priority period "cannot give rise to  any third-party right or any right of personal 
possession".  This is also inconsistent with Ar ticle 2.1 of the TRIPS Agreement which requires 
compliance with Article 4 of the Paris Convention.  In this regard, please indicate the specific views of 
the Government of the United States.  
 
ANSWER: The concerns of the Hilmer Doctrine, if an y, 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 subsequently file d non-provisional applications.  It should also be 
noted that this issue is under discussion in the ongo ing substantive patent la w harmonization talks in 
WIPO.  The effective date of a patent application as a prio r art reference under the so-called "Hilmer" doctrine 
is not inconsistent with the obliga tions of Article 4B of the Paris Convention, as it does not affect the 
ability of an applicant to obtain a patent where the applicant has made a priority claim that establishes 
an effective filing date prior to the effective prior art date of the patent.  Note that WIPO's Patent 
Cooperation Treaty explicitly allows countries to  apply the Hilmer doctrine in Article 64.4. 
 
[Japan] 
 
Q41. Language discrimination in internationa l applications under the PCT (p.76, para.255) 
Article 102 (e) of the Patent Act provides that a PCT international application has the effect of 
eliminating other applications filed subsequent to the application’s in ternational filing date only when 
the application designates the United States and is internationally published in English. When a PCT 
international application is publis hed in another language however, it does not have the effect of 
eliminating subsequent applications. Thus, Article  102 (e) is discriminatory against languages other 
than English. In Japan and Europe, internationa l applications are not discriminated on account of 
language. Therefore, it is unfair that the same treat ment is not guaranteed in the United States. The 
limitation of the effect of elimin ating subsequent applications by Article 102 (e) narrows the advantage 
of the moratorium on submitting translations under the PCT system, and is significantly 
disadvantageous to applicants, who need to transl ate documents into English. The Government of 
Japan requests that the Government of the United States abolish the language discrimination based on WT/TPR/M/160/Add.1 
Page 298  
 
Article 102 (e).  In this regard, please indicate the specific views of the Government of the United States.  
 
ANSWER:  A bill has been introduced be fore the first session of the 109th Congress, but when or if 
this Congress will take action on this bill is unknown. 
 [Japan] 
 
Q42. Unity of invention (p.76, para.255) 
The Government of Japan understands that the USPTO has been implementing a public comment 
procedure and is trying to harmonize its patent system  with the international system of Patent Law.  
However, with regard to the unity of invention, under the current U.S. patent system, the scope of 
inventions that can be included in a single applica tion is, according to what we have been pointed out 
so far, narrower than that under the systems of the JPO and the European Patent Office (EPO).  Thus, a 
patentee is obliged to submit multiple applications, thereby increasing the 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. In these respects, please indicate the specific views 
of the Government of the United States.  ANSWER: The U.S. Patent and Trademark Office has been studying the implementation of unity 
of invention for national applications for many ye ars.  There are serious implementation concerns, 
including revenue, resource allocation and labor mana gement.  These concerns must be viewed in the 
context of the difficulties in coping with applica tion filings that continue to increase year-to-year, 
especially in high-technology areas.  There are also c oncerns that the current unity standard may not be 
the best approach to the issue of  limiting the claiming of multiple inventions in single applications, 
especially in those emerging technologies.  To that end, the United States, in the ongoing discussions of 
WIPO's Standing Committee on the Law of Patents (SCP), has supported the formation of a Working 
Group to further study this issue.  
[Japan] 
 Q43. Information Disclosure Requirement of  Prior Art Documents (p.76, para.255)  
All applicants for United States patents ought to di sclose all important prior art documents of which 
they know to the U.S. Patent and Trademark Offi ce (USPTO) until the time that they obtain the patents 
for which they have applied. In addition, they ought to submit English translations, in whole of in part, 
of prior art documents if such documents are not in English. The Government of Japan therefore 
requests that the Government of the United States ta ke measures to reduce the burden on foreign patent 
applicants, including eliminating the requirement to  submit English translations and shortening the 
period of the information disclosure requirement.  In this regard, please indicate the specific views of 
the Government of the United States.            WT/TPR/M/160/Add.1 
Page 299 
 
 
ANSWER:  An applicant is required to submit is info rmation that is known to be material to 
patentability. The public interest is best served, and the most effective patent examination occurs when, 
at the time an application is being examined, the O ffice is aware of and evaluates the teachings of all 
information material to patentability. Each individu al associated with the filing and prosecution of a 
patent application has a duty of ca ndor and good faith in dealing with the Office, which includes a duty 
to disclose to the Office all information known to th at individual to be material to patentability as 
defined in this section. The duty to disclose informat ion exists with respect to each pending claim until 
the claim is cancelled or withdrawn from considera tion, or the application becomes abandoned. The 
Office believes that this policy best serves the public in terest by ensuring that all known prior art that is 
material to patentability is brought to the examiner ’s attention. While tran slations “ought” to be 
submitted, they are only required to be submitted if they are readily available, otherwise a concise 
explanation of the relevance, as it is  presently understood, is acceptable. 
 
[Japan] 
 
Q44. Section 211 of the US Omnibus Appropriations Act of 1988 (p.80, para.267) 
Please indicate the prospect of the amendment of Section 211 of the Omnibus Appropriations Act. 
 
ANSWER:  As we have noted in meetings of the WTO Dispute Settlement Body, several 
legislative proposals relating to section 211 that would implement the DSB’s recommendations and 
rulings in this dispute have been introduced in the current Congress, both in the U.S. Senate and the 
U.S. House of Representatives.  As Members know, th e legislative process is in the hands of the U.S. 
Congress.  The Administration is, however, wo rking closely with Congress concerning the 
recommendations and rulings in this dispute.  
 
[Japan] 
 
Q45. Copyright (p.81, para.273) 
(1)  With regard to the Digital Millennium Copyright  Act, we understand that in the United States there 
is currently a significant development of bus inesses in broadcasting /transmitting over computer 
networks, such as webcasting or broadcasting/tr ansmitting using IP multicasting technology.  Japan 
would like to know whether U.S. law provides for lim itations/exceptions to the copyright of performers 
and phonogram producers that make these broadcasts /transmissions over computer networks possible 
without obtaining authorizations to broad cast/transmit from relevant performers and phonogram 
producers. 
 
ANSWER:  Section 106(6) of the United States Copyright Law grants the copyright owner the 
exclusive right to perform sound recordings publicly by means of digital audio transmission.  Section 
114 sets out the scope of these exclusive right s.  A statutory license is available if 
broadcasters/webcasters have radio style transmissi ons that have satisfied certain criteria (e.g., non-
interactive, broadcast schedule not published, do es not exceed in the performance complement).  If a 
broadcaster/webcaster does not satisfy the criteria of eligibility for the statutory license, it will need to 
obtain the authorization of the copyright owner.  Under United States Copyright Law, there are a number of exceptions and limitations to a copyrigh t holder’s exclusive rights, such as the section 107 
limitation for fair use, which may also be applicable. 
 (2)  Do lines 6 and 7 of paragraph 273 mean th at producers of phonograms do not have any right 
concerning terrestrial digital broadcasting? 
 ANSWER:  Section 106(6) of the United States Copyright Law grants the copyright owner the 
exclusive right to perform sound recordings publicly by  means of digital audio transmission.  However, 
a non-subscription Federal Communications Commission (FCC) licensed digital broadcast transmission is exempt (Section 114).  Otherwise,  as with webcasters, sound recording copyright WT/TPR/M/160/Add.1 
Page 300  
 
owners have a performance right vis-à-vis cable a nd satellite digital broadcasts, as well as subscription 
FCC licensed digital broadcasts.  
(3)  With regard to “live musical performances” in line 8 of paragraph 273,  Article 14 of the TRIPS 
Article 14 calls for protection against unauthorized fixation of not only live “musical” performances 
but also of all types of live performances, incl uding performances such as the recitation of poems.  
Please explain how the United States law protects against the unauthorized fixation of live 
performances other than live musical performances. 
 
ANSWER:  Although there is no explicit federal legislation protecting non-musical live 
performances, the United States protects against unaut horized fixations of live performances such as 
recitations of poetry or plays because, under 106(1) , (2) and (4) of the United States Copyright Law, 
the copyright owner of the play or the poem has th e exclusive right to authorize the public performance 
of the copyrighted work, to prepare derivative wo rks based on the copyrighted work and to reproduce 
the copyrighted work.  In addition, state laws often provide protection in this area.  (4)Concerning lines 1 to 3 of paragraph 274, please explain how broadcasting and cablecasting 
organizations obtain authorizati on from relevant right holders (copyright holders, performers, 
producers of phonograms and broadcasting organiza tions) in order to make simultaneous re-
transmissions of regular terrestrial broadcasting. Do broadcasting and cablecasting organizations need 
to negotiate with the relevant right holders to obtai n authorization to make the re-transmission, or is 
there a system of statutory or compulsory licen ses that enables them to make the re-transmission 
without having to negotiate with relevant right holders for authorization?  How is the amount of 
remuneration decided in each case?   Does the amount have to be negotiated as well or is it 
automatically decided through some system of st atutory remuneration?  Are the same questions 
applicable where the transmission is made over the Internet and if so, how would the responses be different?  
ANSWER:  Depending on the very detailed requirements set forth in the law (section 111 of the 
Copyright Act), a cablecasting organization might be  eligible for a statutory license to retransmit 
simultaneously regular terrestrial broadcasting wit hout having to negotiate with the relevant rights 
holders for authorization.  The basic principle of the compulsory license offered under section 111 is to 
permit simultaneous cable retransmissions of signals  of broadcast stations licensed by the Federal 
Communications Commission (FCC) if such retr ansmission “is permissible under the rules, 
regulations, or authorizations of the FCC.”  The li cense is generally unavailable if the content of the 
program or of any accompanying commercials is “willfully altered by the cable system through 
changes, deletions, or additions.”  The remuneration payable is set forth in the law (fee adjustments for 
section 111 are through negotiations or proceedings be fore the Copyright Royalty Judges).  Failure to 
comply with the reporting, payment, and other cond itions of the compulsory license scheme can result 
in liability for infringement.  Satellite  broadcasters may be eligible for a similar statutory license under 
section 119. Neither license referenc es retransmissions on the Internet. 
 
[Norway] 
 11: In its annual report, the US Patent Office (USPTO ) has stated its focus on increasing patent quality.  
Patent quality is also one of the issues identifie d in a recent report by the Federal Trade Commission 
(FTC) reviewing the U.S. patent system. We would like to ask the US Government whether there are 
any concrete legislative, organizational or other measures under preparation or execution in order to 
broaden the range of Prior Art search conducted by  the USPTO when examining patent applications, 
particularly prior art in more languages than  up to now, and searches in more databases and 
publications than hitherto, e.g. in developing countri es, in order to improve the quality of US patents? 
We also note with great interest the recommendations  cited in the Secretariats report’s from the report 
by the FTC on the working of the US patent system, in particular the one on new administrative procedures to allow post-grant review of and oppositi on to patents. We point to the fact that such          WT/TPR/M/160/Add.1 
Page 301 
 
 
procedures exist in e.g. Norway and the EPO, and are applied with success. What is the status of the 
work to introduce post-grant review procedures in the US patent system, and what would be the time frame for introducing such procedures?  ANSWER:  With respect to searching for Prior Art,  the USPTO has extensive search capabilities 
and provides patent examiners with access to a wide variety of patent and Non Patent Literature (NPL), 
which exceeds the requirements of PCT Minimum Do cumentation (patent and NPL) and many other 
Intellectual Property Offices. While some resources are in paper, a vast majority of resource materials are in electronic form.  In fact, the examiners ha ve direct access from their desktops to over 1000 NPL 
databases to assist them in their search for Prior Art.  The USPTO works continuously to expand the 
prior-art available to examiners by providing t echnology-focused resources, including resources on 
traditional knowledge historic texts and sections devoted to dictionaries, glossaries, and formularies.  A 
number of these tools are also multilingual, which enables the examiners to enhance their search 
strategies with synonyms and additional names for substances.  Examiners also have access to onsite translators and other translation services to aid in translating any pertinent foreign language document. 
The USPTO’s current priority is to load electroni c copies of the PCT Minimum Documentation patent 
documents for access in the Office’s search databases.   In addition, the USPTO will be adding 
electronic copies of KIPO documents to our collection this calendar year so that they will be available 
before they become part of the PCT Minimum Documentation on January 1, 2007.  With respect to post-grant review, under current U.S.  Law, post-grant review of patent claims is 
available when person requests the reexamination of a patent by ex parte  reexamination (35 U.S.C. § 
302) or inter partes  reexamination (35 U.S.C.§ 311). E x parte  reexamination is a mechanism for a third 
party or patent owner to obtain reex amination of a patent.  Under an inter partes  reexamination 
procedure, the third party could participate in the examination stage of the reexamination proceeding, 
appeal to the USPTO’s administrative Board of  Patent Appeals and Interferences (BPAI) and 
participate in the patent owner's appeal to the BP AI.  There are also other mechanisms in which post-
grant review of a patent can be sought at the USPTO (See 35 U.S.C. §§ 135 & 251 and 37 C.F.R 
§1.520).   In addition, a post-grant opposition syst em is under consideration in the United States. 
Several bipartisan bills were recently submitted in  Congress that, if enacted, would create a post-grant 
opposition system in the United States.   [Peru]  
16.  According to paragraphs 262 and 263 of the repor t, concerns have been raised with respect to 
patent quality in the United States.  In general te rms, do both USTR and USPT O have a strategy to 
address this problem? 
 
ANSWER:  Through both WIPO and the WTO, the U.S. Government has been working to improve 
the quality of patent examination in the U.S. and else where.  The U.S. supports efforts within WIPO to 
harmonize patent laws, especially in the area of prior art, in order to promote work sharing efforts and 
similar application of prior art in vari ous countries.  Additionally, the USPTO 21
st Century Strategic 
Plan is a comprehensive domestic plan to update and modernize patent and trademark examination that 
emphasizes quality examination throughout.  The plan can be found at www.uspto.gov. 
 
[Peru] 
 
17.  As you are aware, the problem of biopiracy has b een growing at an alarming rate in recent years.  
The WTO has developed various proposals to amend the TRIPS Agreement with a view to including, 
in addition to the existing disclosure obligations sti pulated in Article 29 of the TRIPS Agreement, the 
obligation to disclose the origin of genetic resource s and biological material in the patents system, as 
well as evidence of previous informed consent an d proof of access and distribution of benefits.  
Paragraph 263 of the report indicates that a National Academies report found “feat ures of U.S. law that 
inhibit the dissemination of information contained in patents and that raise the cost and uncertainty of WT/TPR/M/160/Add.1 
Page 302  
 
litigation over patent validity and infringement.”  Is the United States doing anything to improve the 
existing system of disclosure?  Is there a strategy in place to combat biopiracy from both inside and outside the patent system?  ANSWER: The allegation that “the problem of biopiracy has been growing at an alarming rate in 
recent years,” has not been substantiated.  The U. S. strongly believes that the best way to combat 
purported biopiracy or misappropriation of biological resources is at the time of access to the material.  Upon access to the biological material, a contract can be entered into between the user and the provider 
setting forth use restrictions, equitable benefit shar ing provisions, dispute settlement mechanisms, and 
regular reporting requirements, for example.  The U.S. position on these issues can be found in U.S. 
communications to the WTO in documents IP/C/W/ 393, IP/C/W/434, IP/C/W/449, and IP/C/W/469. 
 As to improving the existing system of disclosure, the National Academies report that was referenced 
by Peru is:  A Patent System for the 21st Cent ury (2004).  This report is available on the National 
Academies’ website at:  http://newton.nap.edu/html/patentsystem/
.  The report explains that one feature 
of U.S. laws that inhibits dissemination of inform ation is the provision that allows applicants for 
patents to opt out of publication (in certain limited in stances).  As explained in response to questions 36 
and 37 of the Government of Japan , the USPTO is working to promote disclosure of patent application 
information by permitting expedited examination only if applicant h as the application published early, 
and also by working to decrease examination time and thereby have patents issue and publish earlier.  
The second feature of U.S. law that the National Academies suggested may discourage dissemination 
of information is the legal doctrine of willful infri ngement, because “awareness of a patent subjects the 
accused infringer to the possibility of having to pay triple the amount of damages awarded by a jury 
finding infringement.”  A Patent System for the 21st Century
 at page 64.  Because willful infringement 
requires more than awareness of the disclosure of a patent and actually requires some amount of 
understanding that the patent is actually infringed by  a particular activity, we do not believe the legal 
doctrine of willful infringement discourages dissemi nation.   The United States Supreme Court has 
addressed “willful” actions, citing conventional defin itions such as “voluntary,” “deliberate,” and 
“intentional.”   See McLaughlin v. Richland Shoe Co ., 486 U.S. 128, 133 (1988).  A successful willful 
infringement action would include more than a bare showing that a competitor was aware of a patent. 
 
IV.  TRADE POLICIES BY SECTOR 
 
Agriculture  
 
[Argentina] 
 15. As regards page 112, paragraph 27:
  
Question:  Does the United States anticipate presenting the corrections to the notifications, moving the 
direct payments from the green box to the amber box as established by the DSB in the Cotton Panel? 
What is the total amount and in wh ich years were said payments made? 
 
ANSWER: We are fully cognizant of the findings in the Brazil cotton case, but the panel made 
clear that it made no findings with respect to dom estic support notifications.  Direct payments have 
been made every year since 2002.  The payment level is  fixed by legislation.  After a partial payment of 
$1.6 billion in 2002, annual payment le vels have been about $5.3 billion. 
 [Argentina]  
16. As regards page 117, paragraph 47:
 
Question:  In the last 10 years what has been the volume of exports subject to export credits, 
guarantees, and insurance?  What is the amount that  has been provided through these programs in the 
last 10 years?  And how high does the subsidy go?          WT/TPR/M/160/Add.1 
Page 303 
 
 
 
ANSWER: Between 1996 and 2005, the guarantee value of sales under GSM-102 and GSM 103 
programs averaged about $3 billion per annum.  This is  equivalent to about 4.7 percent of average total 
annual U.S. agricultural exports during the relevant period. 
 
[Argentina]  
17. As regards page 118, paragraph 53:
 
Question: What measures does the Unit ed States have at its disposal to  ensure that plan-based food aid 
is not directly or indirectly linked to its exports? 
 
ANSWER: All U.S. agencies providing food aid must fulfill a wide range of regulatory 
requirements before any food aid transaction can be authorized.  These requirements ensure that food 
aid is targeted to those in need and fulfills all WTO obligations.  As a result, more than 60 percent of 
United States food aid is delivered to countries classified as Least Developed Countries by the 
United Nations, with the United States providing ov er 50 percent of all aid to the world’s hungry 
people.  
[Argentina] 
 
20. Taking into account that direct payments cons titute distortionary subsidies and given that other 
distortionary subsidies were not reduced, wh en all those subsidies are added together: 
 Question:  Could the United States confirm if it has surpassed the bound limit of the amber box  ANSWER:  The United States has intended to meet its  domestic support obligations since those 
commitments were undertaken in 1995 and fully intends  to do so in the future.  Moreover, internal 
controls are in place to ensure that outcome.  Furt her, we would note that in the Cotton dispute, the 
panel found that direct payments did not c ontribute to serious prejudice (price suppression or 
depression).  
[Argentina] 
 21. Question:  Does the United States conduct prelim inary impact assessments for non-emergency food 
aid in order to ensure that it does not harm or impair the trade of third-party countries or the producers of the receiving country? If it does, what are those assessments?  
ANSWER: For each non-emergency food aid donation, the United States conducts an analysis to 
assure that the FAO Principals of Surplus Dispo sal are adhered to through the Usual Marketing 
Requirement analysis. 
 
[Australia]  
Transparency
  
Could the US give an indication of when it expe cts to submit overdue notifications to the WTO 
concerning domestic support commitments for the marketing years 2002, 2003, 2004 and 2005?  As 
part of this trade policy review process, could the United States please provide a preliminary indication of support provided under each categor y of domestic support (green, amber and blue boxes) for these 
three years?  
ANSWER: The United States fully intends to notif y its domestic support commitments under 
current farm programs.  We note our notifications ar e extremely data intensive and are as current as 
those of many other WTO members. WT/TPR/M/160/Add.1 
Page 304  
 
 
[Australia] 
 
Attempts to fill the peanut quota established unde r the Australia-United States Free Trade Agreement 
have brought into focus the range of US regulator y agencies involved with importing certain types of 
products. Has the US considered introducing one poin t of contact to provide importers with access to 
comprehensive information on import requirements, covering administrative, quarantine, food safety 
and other requirements applying to impor ts of food and agricultural products? 
 ANSWER: We can appreciate potential challenges in dealing with multiple regulatory agencies 
with respect to peanut imports.  As each agency’s ju risdiction is determined by statute, a certain degree 
of such overlap is unavoidable.  However, consis tent with our WTO obligations, the U.S. Enquiry 
Points (SPS and TBT) provide single points of reference for official requests on product import 
requirements.  
 
[Australia] 
 
US Farm Bill
  
Given US budgetary constraints, does the US envisa ge reductions in support for current programs in 
the next Farm Bill that will cut into current applied levels of spending? 
 
ANSWER: It is too early to speculate about the shape of the next Farm Bill.  The Administration’s 
fiscal year 2007 budget proposal calls for additiona l budget cuts for agricultural support programs, but 
that proposal has not yet been addressed by Congress. 
 
[Australia] 
 
Milk Protein Concentrates   
Australia is concerned about attempts to introdu ce legislation through the U.S. Congress that would 
severely restrict imports of casein and milk protein concentrates by creating new tariff barriers.  How does the US envisage the application of this legi slation within its current WTO market access 
commitments?  
 
ANSWER: It is premature to speculate on draft legislation that has not become, and may never 
become law.  
 [Australia]  
Food Aid
 
 Can the US give up to date figures on food aid programs, and is it possible to indicate what proportion of programs that are concessional or in fully grant form are monetised? 
 
ANSWER: The most recent available data are for fiscal year 2004.  In that year, 98 percent of U.S. 
food aid was in fully grant form and only 2 percent w as in the form of concessional loans.  In the same 
period, 25 percent of total U.S. food aid was monetized.  Preliminary data for fiscal year 2005 show that concessional loans accounted for an even smaller share, just a little  over 1 percent, of total U.S. 
food aid.   
 
[Australia]  
Export Credits
 
          WT/TPR/M/160/Add.1 
Page 305 
 
 
Can the US give a breakdown of export credit program s for agricultural products with repayment terms 
of longer than 180 days and an indication of the size by total dollar value on a program by program basis?  ANSWER: The USDA currently administers only one export credit guarantee program with 
repayment terms available for longer than 180 days  – the GSM 102 program.  Registrations under the 
GSM-102 credit guarantee program valued nearly $2.2 billion in fiscal year 2005.  Approximately 97.5 percent of the transactions had repa yment terms of longer than 180 days. 
 
[Brazil] 
 
17.  Chapter IV, paragraph 02
: With regard to the implementation of the DSB rulings and 
recommendations on United States – Subsidies on Upland Cotton  – WT/DS 267, it is stated that, in 
July 2005, the US Department of Agriculture announced it had sent to Congress proposed statutory 
changes to comply with the panel and Appellate Body decisions on this  dispute. Brazil understands that 
the changes proposed by the Department of Agricultu re included, besides the repeal of the Step 2 
Program, the repeal of the statutory cap of 1% of the guaranteed value of the transaction on the fee charged to the exporter under the Commodity Credit Corporation Programs (GSM 102 – General Sales 
Manager , and SCGP – Supplier Credit Guarantee Program ), as well as the elimination of the GSM 
103 Program. However, to Brazil’s knowledge, the l ast two proposals have not been approved by the 
US Congress, since the 2005 Deficit Reduction Act contemplated, among the proposed measures, only 
repeal of the Step 2 Program. In this regard, does the US Government intend to submit legislative 
proposals for the elimination of both the statutory cap of 1% and the GSM 103 Program in the near future?  ANSWER: Yes. The U.S. government is working with  the Congress on legislation to repeal the 
1 percent fee cap and the GSM-103 program.  In the meantime the use of the GSM-103 program has 
been suspended. 
 
[Brazil]  
18.  Chapter IV, paragraph 23
: "The latest U.S. notification on do mestic support covers the marketing 
years 2000 and 2001".  When does the U.S. intend to notify its domestic support for the period after the 
Farm Act of 2002? Is there any early assessment  available of those levels of support? 
 ANSWER:  The United States fully intends to no tify its domestic support commitments under 
current farm programs.  We note our notifications ar e extremely data intensive and are as current as 
those of many other WTO members. 
 
[Brazil] 
 
19.  Chapter IV, paragraph 28
: "... if producers plant and harvest fru it, vegetables, or wild rice, direct 
payments are eliminated or reduced." How the U.S.  plan to comply with the WTO panel finding that 
deemed this rule not eligible to green box criteria?  
 ANSWER:  We are fully cognizant of the findings in th e Brazil cotton dispute, but the panel made 
clear that it made no findings with respect to domestic support notifications.  [Brazil]  
20.  Chapter IV,  paragraph 38
: "The Fair and Equitable Tobacco Reform Act of 2004 terminated all 
production quotas and other price support mechanisms for tobacco beginning with the 2005 crop year." Is there any preliminary assessment on the impact  of the Act over the U.S. tobacco exports and 
imports?  WT/TPR/M/160/Add.1 
Page 306  
 
 ANSWER: The Tobacco Reform Act had no specific provisions affecting trade.  Data through 
2005 indicate U.S. imports of tobacco and tobacco produc ts have been remarkably stable over the past 
four to five years at $1.1 – $1.3 billion annually.  Exports have declined sharply in recent years, from 
about $4 billion in 2001 to only $2.3 billion in 2005.  Over the longer term, as domestic tobacco prices 
decline with the removal of price supports, U.S.  tobacco exports may become more competitive on 
world markets.  
 
[Brazil] 
 
22.  Chapter IV, paragraphs 25 and 26
: As shown in Table IV.1, the data for all domestic programmes 
are available for market years 2002, 2003 and 2004. What is the reason for not updating your 
notification on this pillar? 
 
ANSWER:  The United States fully intends to no tify its domestic support commitments under 
current farm programs.  We note our notifications ar e extremely data intensive and are as current as 
those of many other WTO members.  
[Canada] 
 
Part IV. Trade Policies by Sector, (2) Agriculture , (iii) Domestic programmes, Paragraphs 23-26: 
 
Table IV.1 forecasts large government payments fo r 2005, totalling $21.4 b illion, including certain 
expenditures that might be exempt from Current Total AMS on green box grounds.  The cotton panel (referred to in para. 12) conclude d that payments under the Direct Payments program do not fully 
conform with paragraph 6(b) of A nnex 2 (para. 7.388 of the cotton pa nel report).  Thus, the $5.0 billion 
in Direct Payments for 2005 is not exempt on green box grounds.  Adding market price support for 
dairy and sugar to the sum of non-exempt payments establishes the Current Total AMS.  Market price 
support amounted to about $5.5 billion for dairy and s ugar for 2000 and 2001, with a similar amount in 
2005.  In light of these facts, the Current Total AMS for 2005 would seem to have exceeded the 
$19.1 billion commitment.  Section 1601(e) of the 2 002 Farm Act (referred to in para.25) requires an 
adjustment of expenditures in order to  pre-empt a breach of commitments. 
 
14. Since pre-emptive steps were not taken to ad just expenditures for 2005, can the United States 
advise what processes are in place to addr ess a possible breach of the 2005 commitment? 
 ANSWER: The panel in the Brazil cotton case made clear that it made no findings with respect to 
domestic support notifications.  The United States has intended to meet its dom estic support obligations 
since these commitments were undertaken in 1995 and fully intends to do so in the future.  Moreover, 
internal controls are in pl ace to ensure that outcome.  
 
[Canada]  
Part IV. Trade Policies by Sector, (2) Agriculture, (v) Food aid, Paragraphs 54-55: 
 As part of the Doha Developm ent Agenda negotiations, Members are working to discipline the 
commercial-displacing effects of food aid that is non-humanitarian in nature and driven by donor interests. 
 
15. In this context, can the United States pleas e provide an explanation of the rationale for 
maintaining long-term concessional sales of US co mmodities as food aid, the market development 
objectives of US Public Law 480 (Food for Peace) food aid programs, and the surplus disposal objectives of Section 416(b) programs?           WT/TPR/M/160/Add.1 
Page 307 
 
 
ANSWER: The United States is fully committed to  the Doha Round Framework Agreement 
requirement that food aid does not cause commercial disp lacement.  Food aid surplus disposal is not an 
objective of U.S. food aid programs.  Long-term concessional sales can be a useful feature of food aid programs in extraordinary circumstances.   In recent years, only 1-2 percent of U.S. food aid is provided 
in less than fully grant form.  
 [Canada]  
Part IV. Trade Policies by Sector, (2) Agriculture, (v) Food aid, Paragraphs 56: 
 
16. Can the United States please explain the discrepancy between the noted monetization rate of 
30% of PL 480 Title II food aid and USAID’s annual US International Fo od Assistance Reports, which 
are mandated by Congress, and report that the mone tization rates for Title II food aid were 47% in 
1998, 52% in 1999, 53% in 2000, 65% in 2001 and 63% in 2002
10.  Such variance in monetization 
rates which point towards an increasing trend in Title II monetization is a concern, in particular given 
that the practice of monetizing food aid has signi ficant potential to displace commercial imports and 
local production in recipient developing country mark ets, and has similar trade-distorting effects as 
export subsidies. 
 
ANSWER: An increasing proportion of U.S. food aid is being provided to meet emergency 
situations, while the share of non-emergency food aid provided through Title II is declining.  Thus, 
while the proportion of Title II food aid that is m onetized has increased, the proportion of all U.S. food 
aid that is monetized is actually decreasing.  I ndeed, the most recent data for fiscal year 2004 shows 
that only 25 percent of overall U.S. food aid was monetized. 
 
[Canada] 
 Part IV. Trade Policies by Sector, (2) Agriculture, (v) Food aid, Paragraphs 57: 
 17. Can the United States please explain how such open-market sales of food aid through both 
Title II and the surplus disposal program, Secti on 416(b), do not have a “disruptive impact upon 
production, prices, and marketing of the same or like products with the importing country,” when the 
FAO Principles of Surplus Disposal and Consultativ e Obligations are widely recognized as failing to 
accurately determine a recipient country’s capacity  to import food, thereby potentially displacing 
commercial sales? 
 
ANSWER: The United States requires all cooperating s ponsors to conduct rigorous analysis to 
assure that food aid positively supports food security.  In addition to the analysis required by the FAO, 
the United States analyzes additional data regarding production, consumption, and trade to ensure that 
there is no commercial disruption.  
 
[Canada]  
The U.S. Government Report identifies The Co mmodity Credit Corporation (CCC) as the entity 
responsible for managing U.S. farms programs through loans, purchases, payments, and other 
operations. CCC total net direct paym ents in 2003 were $12.9 billion.  
 15. Given that the US Administration must be m onitoring expenditures so as to ensure that it is 
complying with its domestic support obligations throu gh, if need be, policy adjustments decided by the 
Secretary of Agriculture, can the United States provide information on the amount of CCC expenditures in 2004 and 2005 in support of agriculture?  
                                                     
 
10 USAID’s US International Food Assistance Re ports, Jan. 1999 (p.83), Jan. 2000 (p.73) , Jan, 
2001 (p.48), Sept. 2002 (p.51), Feb. 2004 (p.48).  WT/TPR/M/160/Add.1 
Page 308  
 
 
ANSWER:  Net CCC expenditures can be found at http://www.fsa.usda.gov/dam/bud/CCC%20  
Estimates%20Book/estimatesbook.htm  
Please note that these data are on a fiscal year basis whereas the U.S. reports its WTO commitments on 
a marketing year basis.  The data do not take into  account WTO notification categories for amber, blue, 
green, de minimis , etc. 
 
[Chile] 
 
1. According to paragraph 3 of the Secretariat’s report, the estimate of total government payments 
to agriculture has significantly incr eased (60%) in 2005 as compared to the previous year, reversing the 
decreasing trend of recent years and reaching levels close to those recorded in 2000-2001, which were 
the highest of the last decade.  The last peri od for which the United States reported on the amounts 
allocated for domestic aid was the 2000-2001 period.  When does the United States plan on updating said information by means of notification before the WTO?  
ANSWER:  The United States fully intends to no tify its domestic support commitments under 
current farm programs.  We note our notifications ar e extremely data intensive and are as current as 
those of many other WTO members.    
 
[Chile] 
 
2.  With respect to the data of the U.S. Department  of Agriculture, is this increase due to circumstances 
particular to 2005 or should this be expected to cont inue in the future?  If this is due to circumstances 
particular to 2005, what were such circumstances?  ANSWER:  2005 was a difficult year for U.S. agriculture, particularly as a result of the devastating 
hurricane season.  The fall hurrican es in the Gulf severely disrupted transportation and commodity 
markets, resulting in very low regional crop prices.  In addition to Louisian a, hurricanes also caused 
extensive damage to agriculture in Florida and othe r southern states.  High energy prices also caused 
economic distress.   
 
[Chile] 
 3.  What specific products have been those to  benefit most from the 2005 increase in government 
outlays?  ANSWER:  As a result of these highly disruptive natura l disasters, U.S. disaster assistance to a 
wide range of products increased.  Marketing loan payments to corn also increased as a result of low 
prices in affected areas.   
 
[China] 
 Subsidy 
Agricultural Subsidy  
Question: (p.85-93) 
Comparing to the FY 2004, did FY 2005 witness the in crease of subsidies to support export of 
agricultural products or the expansion of domestic support itself pursuant to the Farm Security 
and Rural Investment Act of 2002 ?  
If so, how would the U.S. interpret the practice  to try to comply with DSB rulings to reduce 
agriculture subsidy on the one hand and to cont inue to expand its subsidy support to its 
agricultural products on the other?          WT/TPR/M/160/Add.1 
Page 309 
 
 
When those supported output finds its way into markets, will it further affect the already 
distorted international trade in agricultural products? 
 
ANSWER: 2005 was a difficult year for U.S. agriculture, particularly as a result of the devastating 
hurricane season.  The fall hurrican es in the Gulf severely disrupte d transportation and commodity 
markets, resulting in very low regional crop prices.  In addition to Louisian a, hurricanes also caused 
extensive damage to agriculture in Florida and ot her southern states. High energy prices also caused 
economic distress.  The panel in the Brazil cotton cas e made clear that it made no findings with respect 
to domestic support notifications.  The United Stat es fully intends and has intended to meet its 
domestic support obligations since the commitments  were undertaken in 1995. Moreover, internal 
controls are in place to ensure that outcome.  In  addition, in October 2005, the United States made a 
bold and ambitious proposal to the WTO to substa ntially reduce trade-distorting domestic support and 
border measures.  To date, we have not heard that other WTO members are willing to reciprocate.  Our 
offer stands and we look forward to working with other WTO members and their contributions towards 
achieving a meaningful WTO outcome on agriculture.  
 
[China] 
 
Legal framework and overall support 
Question:  (p.85 para. 11) 
As to U.S. support to its agricultural commodities an d producers, the Secretariat’s report refers to the 
OECD’s analysis: "while support is lower than the 1986-88 average, it is above the levels of the mid-
90s, and the most production and trade distorting form s of support are still significant, contributing to 
depressing world prices". Meanwhile the OECD also f ound out that the U.S. provisional data for 2004 
suggests an increase in the Producer Support Estimate (PSE)… reversing the downward trend 
registered since 1999.  Does the U.S. agree with the above analysis of the OECD?  Would it undermine the US credibility in the cou rse of the ongoing agricultural negotiation of 
DDA when its PSE of 2004 was increased against the expectation by other Members of a 
downward trend globally?  
ANSWER: We would note that the PSE includes an estim ate of all types of government transfers 
to producers, including those classifi ed as green box in the WTO.  A large share of U.S. government 
payments is decoupled from production and thus are minimally trade distorting. In October 2005, the 
United States made a bold and ambitious proposal to  the WTO to substantially reduce trade-distorting 
domestic support and border measures,  and we look to other WTO members being willing to 
contribute with similar ambition. This proposal w ould go a long way to address concerns of developing 
countries about developed country  support and protection.  
 
[China] 
 Question:  (p.86 para.12) 
In March 2005, the WTO DSB concluded that th e US export credit guarantees for unscheduled 
commodities such as upland cotton and soybeans are pr ohibited export subsidies.  t seems, in July 
2005, the US authorities were proposing to eliminate a support program for cotton. 
 
Would the U.S. efforts to make statutory change to  export credit guarantees also cover soybeans? What 
is the US timetable to make th e change for full WTO compliance? 
 
ANSWER: The statutory changes proposed affect all co mmodities that are eligible for export credit 
guarantees.  The statutory changes would eliminate the current limit of 1 percent on fees charged for 
the export credit guarantee programs and the auth ority for the GSM-103 program.  A timeline for 
statutory changes will depend upo n further Congressional review. WT/TPR/M/160/Add.1 
Page 310  
 
 
[China] 
 
Domestic programmes  
Question:  (p.88 para.25 ) 
The latest U.S. notification on domestic support covers the marketing years 2000 and 2001. Among 
other things, Members would like to see a no tification on its domestic support granted under 
programmes encompassed by the 2002 Farm Act.  
When does the U.S. plan to notify to the WTO its  updated domestic support? What difficulties does the 
U.S. face to fully implement its notif ication obligation in this regard? 
 
ANSWER: The United States fully intends to notif y its domestic support commitments under 
current farm programs.  We note our notifications ar e extremely data intensive and are as current as 
those of many other WTO members.   
[Colombia]  
Chapter IV.2) iii)  Domestic Programs. 
 We see that the notices the United States is to ma ke annually to the Agricultural Committee are running 
behind.  They have been issued up to the 2000-2001 commercial year.  Could the United States tell us 
what problems it is facing in making the pending notices and when it estimates they will be made? 
 ANSWER:  The United States fully intends to no tify its domestic support commitments under 
current farm programs.  We note our notifications ar e extremely data intensive and are as current as 
those of many other WTO members.    
 
[Colombia] 
 
Chapter IV.2)  iii)  subparagraph f)   Other Programs 
 
Could it be specified in greater detail what the mark eting orders applied to fruits, vegetable, special 
crops and milk consist of? 
 ANSWER:  Detailed information on U.S. marketing orde rs, including the full texts of these orders, 
are publicly available through the Internet.  Information on  Federal Marketing Orde rs applied to fruits, 
vegetables, and special crops can be found in the following website: 
http://www.ams.usda.gov/fv/moabmotab.htm#Fruits#Fruits
.  Information on Federal Marketing orders 
for milk can be found at http://www.ams.usda.gov/dairy/orders.htm  
 
[Colombia]  
What is meant by “reserve pools” (paragraph 41) and how do they work? 
 ANSWER:  There are currently two Federal marketi ng orders utilizing reserve pool authority, 
California Raisins and Tart Cherries.  They operate as follows: 
• The marketing order for Tart Cherries (No. 930) authorizes volume controls that 
provide for a reserve pool in times of heavy cherry supplies.  Under the order, 
reserve cherries may be released to ha ndlers for free use; used in diversion 
programs; exported; or carried over as a hedge against a short crop the next year.           WT/TPR/M/160/Add.1 
Page 311 
 
 
• The marketing order for California Raisins (No. 989) authorizes volume control 
measures in the form of free and reserve tonnage.  Tonnage is released gradually 
through the season by preliminary, interim,  and final percentages. Under the order, 
free raisins can be used in any market.  R eserve raisins may be sold to handlers for 
free use; used in diversion programs; expor ted to authorized countries; carried over 
to the next crop year; sold to government agencies; or disposed to other outlets 
noncompetitive with free raisins.  All of these outlets have been used in recent years.  The order also authorizes minimum grade and size regulations, and minimum requirements are currently in effect.  Grade and size requirements 
established under the order are also applied to imported raisins.  
 
[Colombia] 
 
Regarding the minimum product requirements, such as grade, size, quality and maturity, have these 
programs and standards been reported to the Comm ittee on Technical Barriers to Trade and, if so, 
when? 
 
ANSWER:  Information on U.S. marketing orders is r outinely published in the Federal Register.  
This publication is available online at www.gpoaccess.gov
. 
 
[Colombia]  
Chapter IV.2.i) paragraph 13 and 4b Credits  for Export, Insurance and Guarantees 
 
This refers to the pending changes in the expor t loan guarantee programs in compliance with the 
decisions by the Appeals Body.  Could you conf irm for us when the changes announced in these 
programs will take effect and whether they have al ready been approved?  What  products have benefited 
from these programs?  
ANSWER:  Effective July 1, 2005, the United States introduced risk based fees for both the GSM-
102 and the Supplier Credit Guarantee Program (SCGP) .  The changes were ef fective immediately and 
applied to all agricultural commodities and products .  The U.S. government is working with the 
Congress on legislation to repeal the one percent lim it on fees for the GSM-102 and the SCGP and to 
eliminate statutory authority for the GSM-103 program .  The GSM-103 program has been suspended.   
In February 2006, Congress passed legislation elim inating, as from August 2006, the user marketing 
certificate or “Step 2” program.     All U.S. agricultural commodities or products are eligible for the GSM-102 and the SCGP.  The 
primary use of the programs has been for bulk co mmodity exports: wheat, corn, soybeans, protein 
meals, vegetable oils, cotton and rice.  
 
[Colombia] 
 
Could the United States indicate what the methodology cons ists of that will be used to ensure that the 
premiums from the export loan guarantee programs are based on the risk and cover the long-term 
costs? 
 ANSWER:  An annual portfolio analysis is conducte d based on actuarial data from a previous 
period.  The aim of the analysis is to determine if premium revenue are sufficient to cover operating 
costs and losses.  The portfolio analysis also looks at program activity by country risk level and tenor 
and the level of losses incurred, net of recoveries or  other risk mitigation measures.  A gap analysis 
determines if premium levels need to be increas ed and, prospectively, how the increase should be WT/TPR/M/160/Add.1 
Page 312  
 
spread across the country risk range .  If necessary, the analysis may weight the impact of other risk 
mitigation actions aimed at meeting the break-even goal.  
 
[Colombia] 
 
Chapter IV.2.ii) paragraph17  Border Measures 
 Using chart AIV.1 on tariff contingencies as a refere nce, regarding imports of  “fresh, refrigerated or 
frozen bovine meat,” could the US advise of the usage rate corresponding to “others” for the years 
2002 and 2003 and if the usage is low, explain the reasons for this behavior? 
 
ANSWER: Of the 64,805-ton beef tariff-rate Quota (TRQ) reserved for other countries, 22,462 
tons (35 percent of TRQ) and 26,214 tons (40 pe rcent of TRQ) were imported in 2002 and 2003, 
respectively.  Other than U.S. sanitary requirement s, there were no restrictions placed on in-quota 
imports under this TRQ.  T hus, any underutilization was due to market conditions.  
  [Costa Rica] 
 
9.  Paragraph 16 of Chapter IV of the Secretariat’ s report on trade policy by sectors, specifically with 
regard to Agriculture (pages 109-110), states that “around 195 tariff lines are subject to tariff quotas.  
Close to 91% of out-of-quota tariffs are non- ad valorem , compared with almost 28% of in-quota tariffs.  
In this manner, does the United States believe that the establishment of non- ad valorem  tariffs is a fair 
measure for multilateral trade and that it is  not more restrictive than the use of ad-valorem  tariffs? 
 ANSWER:  The number of non-ad valorem tariff lines in the U.S. schedule has continued to 
decline, as noted in paragraph 48 of Chapter III. Th e share of non-ad valorem tariff lines declined from 
12.2 percent in 2002 to 10.6 percent in 2004.  The United States has committed to bind all NAMA tariff concessions in the Doha Round in ad valorem terms.  Some 5.5% of all tariff lines had MFN rates exceeding 15% in 2004.  The products subject to the 
highest ad valorem or ad valorem equivalent rate s were tobacco (350%), whey (284%), sour cream 
(177%), and peanuts (164%); in the non-agricultural se ctor, the highest rate was applied to footwear 
(58%). 
 
Similarly to many countries the United States main tains non-ad valorem tariff rates on a number of 
agricultural products for historical reasons.  We continue to support multilateral agricultural tariff 
reductions in the Doha negotiations  and will be engaged on these topics as long as there continues to be 
ambition among other members for multilateral liberalization. 
 
[Costa Rica] 
 
10.  Why has the United States still not given notifica tion regarding the application of its current Farm 
Bill? 
 ANSWER: The United States fully intends to notif y its domestic support commitments under 
current farm programs.  We note our notifications ar e extremely data intensive and are as current as 
those of many other WTO members.  [Costa Rica] 
 
11.  When does the United States intend on giving notif ication with regard to its domestic agricultural 
aid for years that are missing.  Will it be able to do so this year, before the Doha Round negotiations 
are completed?          WT/TPR/M/160/Add.1 
Page 313 
 
 
 ANSWER: As noted above, the United States fully intends to notify its domestic support 
commitments under farm programs.  
[Costa Rica] 
 
12.  Will it include, in its upcoming notifications, details on the use of de minimis  exemptions? 
 ANSWER:  The U.S. will include de minimis exemptions, as it has always done, in future 
notifications. 
 
[Costa Rica] 
 
Although food aid may constitute a resource for the development of some countries it may also be an 
obstacle for others.  In light of this, Costa Rica is  interested in knowing the United States’ opinion as 
one of the principal donor countries of this kind of aid, specifically as regards the following points: 
 
13.  Does the United States have knowledge as to when  the aid it provides becomes an obstacle for a 
country’s development, be such c ountry the exporter of the donated product or the recipient thereof.   
 ANSWER:  The United States conducts an analysis of the impact that any non-emergency food 
donation may have on local production or commercial sal es displacements.  The analysis is conducted 
every year at the outset of the programming cycle and becomes a basis for selecting potential countries and for making final determinations on program sel ections.  The analysis includes production, supply 
and demand data dating from the most current year to  the past five years.  Also, the USG takes into 
consideration information brought to its attenti on during the programming cycle that may adversely 
impact local production or sales in a country.  All proposals for food aid are fully analyzed to assure 
appropriateness and non-disruption of the commodity in accordance with the Food Aid Convention. 
 
[Costa Rica]  
 
14.  If so, what measures are available to correct th e distortions that such food aid programs may cause 
to multilateral trade? 
 ANSWER:  In cases where a donation is reported by the recipient country to adversely impact 
production or marketing in a country, the United States may redirect the donation to a country that would not be adversely affected. 
 
[Costa Rica]  
 
15.  Does the United States believe that food aid m onetization is a necessary practice so developing 
countries can achieve their development objectives?  
ANSWER:  The United States is increasing its food d onations to respond to food emergency 
situations while decreasing the share on non-emer gency food assistance.  Total monetization under 
USG food donations is actually decreasing.  Non-em ergency food donation programs remain a highly 
effective and viable approach to addressing long er term development goals, especially in the 
agricultural sector. While direct feed programs tend to be small and the impact is for a short period of 
time, activities funded through monetization typically stimulate business activity and tend to have a 
more significant economic multiplier effect on the economy of a country.  WT/TPR/M/160/Add.1 
Page 314  
 
[India] 
 
Q.17 Chart IV.1 of the Secretariat Report (WT/TPR/S /160 dated 15 Feb 2006) brings out that  US 
Government payments to agricultural producers ar e on a continuous rise since the Farm Act 2002, 
barring a small decline in 2004.  Further,  Government  payments for 2005 are expected to increase to 
close to US$21.4 billion.  This increase is being driven inter alia by an almost four-fold increase in 
counter-cyclical payments and a seven-fold increase in ad hoc emergency payments against those in 
2004.  Similarly, the OECD’s Producer Support Estimate (PSE) which was 15% as a share of gross farm receipts in 2003, provisionall y increased to 18% of gross farm receipts in 2004, reversing the 
downward trend registered since 1999.  Such larg e increases in trade-distorting domestic support by 
Government to agriculture producers are a cause for c oncern, and are against the letter and spirit of the 
objective of substantial progressive reduction in  support and protection embodied in the WTO’s 
Agreement on Agriculture.  India also notes with concern the concentration of domestic support, as 
also measured by the share of PSE in  the gross receipts, in sugar, milk, wheat and other grains, which 
adversely impacts poor and vulnerable, but otherwi se competitive, farmers in developing countries.  
Are these trends symbolic of US policy and approach  to protect and support its agriculture sector, and 
how does the US propose to address the concerns of globally competitive producers, including in developing countries? 
 
ANSWER: In October 2005 the United States made a bold and ambitious proposal to the WTO to 
substantially reduce trade-distorti ng domestic support and border meas ures.  To date, we have not 
heard that other WTO members are willing to recipro cate.  The U.S. proposal would go a long way to 
address concerns of developing countries about developed country agricultural support.  Our 
conditional offer stands and we look forward to working with other WTO Members to achieve a 
meaningful WTO outcome on agriculture. 
 
[India] 
 
Q.18  (a) Paragraph 24 of the Secretariat Report notes the concerns already raised by Members 
regarding inter alia  increases in expenditure under the State Programme on Agriculture, the 
Emergency Food Programme, and non-product specific support, the expanding scope of Government 
guarantees under US Crop Insurance Programmes, and th e high level of specific support on cotton and 
soybean.  The classification of Crop Market Loan  Assistance Payments under non-specific categories 
has also been questioned.  Could the US provide the justification for such classification, and the 
rationale for the increases in expenditures reflected  across a broad range of US support programmes? 
 ANSWER: We believe the question is referring to pa yments under the Market Loss Assistance 
programs.  Those payments were classified as non- product specific because payments were not tied to 
the production of a particular crop and no production was re quired to receive the payments.  Marketing 
Loan Gains and Loan Deficiency Payments, by co ntrast, have been properly reported as amber box.  
 (b) As regards its Farm Insurance Programmes, th e US Government offers subsidized insurance, 
including through premiums, for natural disasters and price fluctuations. Further, the USDA evidently 
covers underwriting costs and defrays the administrativ e costs of companies that sell farm insurance.  
Could the US Government clarify under what head ing such subsidies and underwriting of costs are 
accounted for and notified to the WTO? 
 
ANSWER: The United States notifies benefits to producers under crop insurance programs as the 
net indemnities received by farmers and ranchers (i .e., total indemnities less producer payments).  
These benefits are notified as non-product specifi c amber box. The USDA shares in the underwriting 
gains and losses with the private companies that prov ide the insurance, under the terms of the Standard 
Re-Insurance Agreement.   
          WT/TPR/M/160/Add.1 
Page 315 
 
 
[Norway] 
 
13: Page 56, paragraph 158 in the Secretariats report states that the United States has recognized 34 
foreign systems as equivalent to the U.S. meat, poultr y, and/or egg products regulatory systems.  All 
Nordic countries are included in this list except Norw ay, and we ask the United States to give us an 
explanation for this. 
 ANSWER:  Countries whose meat, poultry, or egg pro ducts inspection system is determined 
equivalent to that of the U.S. Food Safety Insp ection Service (FSIS) can export these products to the 
United States.  Inspections by APHIS and FSIS are required before equivalenc e determination can be 
made.  As noted, Sweden, Finland, Iceland, and De nmark are currently eligible to export meat products 
to the United States.  Norway has not maintained th at eligibility over the years and would have to re-
submit information pertaining to their inspection sy stem and endure a satisfactory systems audit in 
order to once again export to the United States.    Consistent with the WTO SPS agreement, we 
welcome products that comply with United States' scientifically based food safety requirements.  For 
more information on the United States process for evaluating the equivalence of foreign meat and 
poultry food regulatory systems, please visit th e following website: http://www.fsis.usda.gov/ 
ppde/ips/EQ/EQProcess.htm. 
 
[Peru]  
10. According to paragraphs 11 and 20 of the report, the Producer Support Estimate (PSE) for the 
United States increased from US$35.6 billion in  2004 to US$46.5 billion in 2005.  Preliminary 
estimates by the Department of Agriculture predict an increase in direct government payments to 
producers, driven largely by counter-cyclical  payments and ad hoc  emergency payments. 
 
And  
 11. How is this situation consistent with the Doha mandate?  Has any thought been given to 
correcting this situation in the next Farm Security  and Rural Investment Act?  How can it be argued 
that the above-mentioned measures and the amount  disbursed do not cause a major distortion in 
production and trade or affect international prices? 
 
ANSWERS:  We would note that the PSE includes an est imate of all types of government transfers 
to producers, including those classifi ed as green box in the WTO.  A large share of U.S. government 
payments is decoupled from production and thus is  minimally trade distorting.  As a result of 
hurricanes and other natural disasters, there was an increase in disaster assistance in 2005. 
 [Peru]  
12. Why is it that the United States, most recent notification on domestic support does not include 
aid provided under any of the programs in the Agricultural Act of 2002? 
 
ANSWER:  The United States fully intends to no tify its domestic support commitments under 
current farm programs.  We note our notifications ar e extremely data intensive and are as current as 
those of many other WTO members.  
[Peru] 
 
13. With respect to ad hoc emergency payments, th e report indicates that there would be an almost 
seven-fold increase in such paymen ts and a four-fold increase in count er-cyclical payments for 2005.  
Can the United States indicate the categories where th ese increases were concentrated in terms of both WT/TPR/M/160/Add.1 
Page 316  
 
counter-cyclical payments and emergency paymen ts? Under which sections of the Agreement on 
Agriculture does the United States classify  ad hoc emergency payments and why? 
 ANSWER: Counter-cyclical payments for owners of corn base acres are projected to increase in 
crop year 2005-06, partly reflecting the low prices as a result of Hurricane Katrina last fall.  Emergency 
or disaster payments are generally notified as gr een box disaster payments or may be non-product 
specific amber box, depending on program criteria.  
 
[The Philippines] 
 5.  Can the United States provide Members an update on the 2007 Farm Bill that is now being crafted? 
Can Members expect that the reforms being introduced  into the Farm Bill shall adhere to those being 
called for in the DDA negotiations?  ANSWER: It is too early to speculate about the shape of the next Farm Bill.  The Administration’s 
fiscal year 2007 budget proposal calls for additiona l budget cuts for agricultural support programs, but 
that proposal has not yet been addressed by Congress.  
[The Philippines] 
 
6.  The Philippines would appreciate an elaboration on how the tobacco quota system is implemented. 
How do interested Members access the annual quota for tobacco in the United States? 
 ANSWER:  The tobacco TRQ was based on historical shipments of leaf tobacco to the United 
States.  The top 9 countries were given quota allotments.  According to the TRQ rules, a country is not required to fill its quota in any given year and th e unused quota is not reallocated.  If a quota country 
does not fill its quota, it does not lose its allotment.  A non-country specific quota is set at 3,000 metric 
tons and is administered on a first come/first-serve  basis.  Only Congress can change TRQ allotments. 
 
[South Africa]  
2.  The delay with submitting notifications to th e WTO COA is a concern.  This is mentioned in 
various instances in the secretariat’s report WT/TPR/S/160. As at 8 March 2006, the members’ 
website of the WTO contains the following as the US’ latest notifications:  
 
¾ Market Access: the last notification was G/AG/N/USA/54, for the year 2002/2003 
¾ Domestic support: the last notification was G/AG/N/USA/51, for the years 2000 and 
2001  (i.e. pre-Farm Act 2002)  
¾ Export competition: the last notification was G/AG/N/USA/53, for the year 2002  
 
• When does the US intend to submit the outstanding notifications?  
• What steps is the US taking to ensure that  notifications are submitted within prescribed 
timelines?  
 
ANSWER: The United States fully intends to notif y its domestic support commitments under 
current farm programs.  Of all c ountries with large AMS levels, the United States’ notifications are as 
current as those of many other WTO members.   [South Africa] 
 
3. WT/TPR/S/160: IV (2) (ii) 18: “… any impor ter, including manufacturers of like products, can 
apply for a license…”  
• The US’s market access notifications indicate underfill of most quotas. To what extent is 
this due to the allowance for US manufacturers of like products also to apply for licenses?           WT/TPR/M/160/Add.1 
Page 317 
 
 
• Is there a sanction of such manufacturers if th ey should receive a license but not utilize it? 
If yes, what do such sanctions entail? 
• To what extend do administrative procedures contribute to the low fill rates of USA 
TRQs?  
 
ANSWER:  TRQs were designed to provide access for foreign suppliers to the U.S. market, 
replacing previous market access provisions that effe ctively barred access for foreign commodities into 
the U.S. market.  All importers are given equal access into the U.S. market w ithin their respective quota 
allotments.  According to the TRQ rules, a country is  not required to fill its quota in any given year and 
the unused quota is not reallocated.  If a quota co untry does not fill its quota, it does not lose its 
allotment.  There does not appear to be a connec tion between the administration of the TRQ and low 
fill rates.  
[South Africa] 
 4. WT/TPR/S/160: IV (2) (iii) 27 – direct payments: “… payments are based on historical acreage 
and yields…” 
• On which years’ acreage and yields are these payments based? 
 ANSWER:  Time period on which base acres and yiel ds varied depended on whether producers 
chose to update their bases and yields. 
 
Farmers had two options for designating base acres:  Choose base acres equal to contract acreage for the co mmodity that would otherwise have been used 
for 2002 Production Flexibility Contract (PFC) paymen ts plus average oilseed plantings in crop years 
(CY) 1998-2001, so long as base acres do not exceed available cropland, or  
 Update base acres to reflect the 4-year average of acres planted, plus those "prevented from planting" 
due to weather conditions , during CY 1998-2001. 
 Owners of farms had a one-time opportunity to select a method for determining base acreage. An 
owner who failed to make an election was considered to have selected 2002 PFC contract acres and, for 
oilseed base, the 4-year av erage of oilseed plantings. 
 Program payment yields are unchanged for those crops  previously covered und er the PFC program. For 
soybeans and other oilseeds, which were added to th e program, payment yields are the farm’s average 
yields for 1998-2001, multiplied by the national aver age yield for 1981-85, divided by national average 
yield for 1998-2001. Peanut payment yields are based on the farm’s average yields for 1998-2001.  
[South Africa] 
 
5. WT/TPR/S/160: IV (2) (iii) 29 – counter-cycli cal payments: “… payments are also based on 
historical acreage and yields…” 
• On which years’ acreage and yields are these payments based? 
• Are these historical acreages and yields changed from time-to-time?  
 ANSWER:  As with Direct Payments, farmers had two options for designating base acres:  
Choose base acres equal to contract acreage for the co mmodity that would otherwise have been used 
for 2002 PFC payments plus average oilseed pl antings in 1998-2001, so long as base acres do not 
exceed available cropland, or Update base acres to re flect the 4-year average of acres planted, plus 
those "prevented from planting" due to weather conditions, during the 1998-2001 crop years.   WT/TPR/M/160/Add.1 
Page 318  
 
Owners of farms had a one-time opportunity to select a method for determining base acreage. An owner who failed to make an election shall be considered to have selected 2002 PFC contract acres and, for oilseed base, the 4-year  average of oilseed plantings. 
 Three options were available to farmers to determine program payment yields for each individual crop 
that apply only for counter-cyclical income support payments: 
 Use current program yields,  Update yield by adding 70 percent of the differe nce between program yields and the farm’s average 
yields for the period 1998-2001 to program yields, or 
 Update yield to 93.5 percent of 1998-2001 average yields.  Producers are not allowed to adjust bases or yields du ring the life of the 2002 Farm Act.  There is no 
provision in place to allow for any adjustment. 
 
[South Africa] 
 
6. WT/TPR/S/160: IV (2) (iii) 31 – loan progra mmes (commodity or mark eting assistance loans) 
• What products, and in what volumes, were forfeited in the years 2003, 2004 and 2005? 
What percentages of the total US crop did these constitute? 
 ANSWER:  Complete data can be found at:  http: //www.fsa.usda.gov/pscad/SelectLoanforfnat.asp 
The main commodities are presented below.  Please note that the figures below are preliminary and 
may be subject to change. 
 
2003 (1,000 units)   Forfeiture  Production  %  Wheat (bu)    2,481     2,345,000  0.1 Corn (bu)    1,038   10,089,000  ** Rice (cwt)    4,258        199,900  2.1 Soybeans (bu)       122     2,454,000  ** 
Upland cotton (bales)           15          18,260  0.1 
 2004 (1,000 units)   Forfeiture  Production  %  Wheat (bu)     9,754    2,158,000  0.5 
Corn (bu)              24,679              11,807,000  0.2 
Rice (cwt)        758       232,400  ** Soybeans (bu)           486    3,124,000  ** Upland cotton (bales)             8         23,250  **  
2005 (1,000 units) to date  Forfeiture  Production  % 
 Wheat (bu)     6,799   2,105,000  0.3 Corn (bu)               40,238             11,112,000  0.4  ** = less than 0.1%. 
          WT/TPR/M/160/Add.1 
Page 319 
 
 
[South Africa] 
 
7. WT/TPR/S/160: IV (2) (iii) 32 – loan programmes (marketing loans) 
• What amounts of loans, for which products a nd what volumes of each, were repaid at the 
“repayment rate” in the years 2003, 2004 and 2005? What percentages of the total US 
crop did these constitute?  
 
ANSWER:  Complete data on quantities that received a marketing loan gain (MLG) can be found 
at http://www.fsa.usda.gov/pscad/select82RNat.asp  Data for the main commodities are presented below.   Please note that the figures below are preliminary 
and may be subject to change. 
 
2003 (1,000 units)   MLG  Production   %  Wheat (bu)     15,035   2,345,000    0.8 Corn (bu)               251,055            10,089,000    2.5 Rice (cwt)     91,132      199,900  45.6 
Soybeans (bu)         4,657   2,454,000    0.2 
Upland cotton (bales)        2,812        18,260  15.4 2004 (1,000 units)   MLG  Production   %  Wheat (bu)     40,902  2,158,000    0.5 Corn (bu)            1,266,045            11,807,000  10.7 
Rice (cwt)               146,383     232,400  63.0 
Soybeans (bu)        53,185  3,124,000    1.7 Upland cotton (bales)      17,514       23,250  75.3  2005 (1,000 units) to date   MLG  Production   % 
 
Wheat (bu)       5,854  2,105,000    0.3 Corn (bu)               614,335            11,112,000    5.5 Rice (cwt)              117,494     223,200  52.6 Soybeans (bu)         6,470  3,086,000    0.2 Upland cotton (bales)    11,793       23,900  49.3 
 
[South Africa] 
 
8. WT/TPR/S/160: IV (2) (iii) 33 – loan progr ammes (loan deficiency payments programme) 
• What amounts of subsidies, for which products and what volumes of each, did producers 
collect in the years 2003, 2004 and 2005? What  percentages of the total US crop did these 
apply to?  
 ANSWER:  Complete data on loan deficiency payments (LDP) can be found at 
http://www.fsa.usda.gov/pscad/select82RNat.asp and 
http://www.fsa.usda.gov/pscad/selecteldp_l dpApplicationsummTotalCmdy_Cnt_Amt.
asp  The main commodities are presented below.  Please note that these figures are preliminary and may be subject to change. 
 WT/TPR/M/160/Add.1 
Page 320  
 
2003 (1,000 units)      LDP  Production   %  Wheat (bu)    493,648   2,345,000  21.1 Corn (bu)    873,917  10,089,000    2.5 Rice (cwt)    108,606       199,900  54.3 
Soybeans (bu)                0    2,454,000    0 
Upland cotton (bales)           645         18,260    3.5  2004 (1,000 units)      LDP  Production   %  
Wheat (bu)      411,376  2,158,000   19.1 
Corn (bu)               9,616,815           11,807,000   81.5 Rice (cwt)        84,865     232,400   36.5 Soybeans (bu)               1,415,325  3,124,000   45.3 Upland cotton (bales)           4,786         23,250   20.6 
 
2005 (1,000 units) to date      LDP  Production   %  Wheat (bu)      107,817   2,105,000    5.1 Corn (bu)               9,872,400 11,112,000  88.8 Rice (cwt)        77,929      223,200  34.9 
Soybeans (bu)        368,653   3,086,000  11.9 
Upland cotton (bales)            3,211        23,900  13.4  
[South Africa] 
 9. WT/TPR/S/160: IV (2) (iii) 43 – other progra mmes (Trade Adjustment Assistance for Farmers 
programme): “… payments in 2004 amounted to US$11 million…” 
• Which products, and in what volumes, benefited from these payments in 2004? 
 ANSWER:  Trade Adjustment Assistance Payments fo r Fiscal Year 2004, as of April 2006, are 
shown below.  
 
Program  
Crop Year 
Market Year  
Amount Paid to Date 
ME Blueberries ‘02 $207,658.80 
AK Salmon ‘02 $6,286,608.18 WA Pacific Salmon ‘02 $129,065.38 SC Shrimp ‘02 $162,310.58 Farm-raised Catfish ‘02 $512,604.32 GA Shrimp ‘02 $160,111.17 TX Shrimp ‘02 $4,632,498.57 AL Shrimp ‘02 $22,635.92 FL Fresh Lychees ‘03 $74,522.36   (cont'd)         WT/TPR/M/160/Add.1 
Page 321 
 
 
 
Program  
Crop Year 
Market Year  
Amount Paid to Date 
AZ Farm Shrimp ‘02 $1,000.00 
NC Shrimp ‘02 $97,403.09 FL Shrimp ‘03 $279,598.14 Total  $12,584,727.89 
 
[South Africa] 
 
10. WT/TPR/S/160: IV (2) (iv) 51 – export cr edits, insurance and guarantees (Facility Guarantee 
Programme): “…The export credit guarantee for sales of manufactured goods and services is 
only extended to projects that are expected to benefit the export of U.S. agricultural products.  
The U.S. authorities note that the Commodity Credit Corporation has issued one guarantee 
under this programme since 1997.…” 
• Could the US provide details on the guarantee that was issued (country and products that 
benefited)?  
 
ANSWER:  The Commodity Credit Corporation issued a Facility Guarantee to Mexico in fiscal 
year 1999 for grain elevator handling equipment, in the amount of USD 4,782,426.  
[South Africa] 
 
11. WT/TPR/S/160: V Food Aid: The USA provides emergency food aid through various 
programmes and the USA efforts in this regard are very laudable. The USA also provides food 
aid under various non-emergency programmes and the impact of these programmes on agricultural production and production capacity  in recipient and countries neighbouring 
recipient countries is not always clear. 
• Can the USA provide an assessment on what the impact on prices and production quantities is 
in developing countries of non-emergency food aid? 
 ANSWER:  The United States conducts an analysis of the impact that any non-emergency food 
donation may have on local production or commercial sal es displacements.  The analysis is conducted 
every year at the outset of the programming cycle and becomes a basis for selecting potential countries 
and for making final determinations on program sel ections.  The analysis includes production, supply 
and demand data dating from the most current year to  the past five years.  Also, the USG takes into 
consideration information brought to its attenti on during the programming cycle that may adversely 
impact local production or sales in a country.  All proposals for food aid are fully analyzed to assure appropriateness and non-disruption of the commodity in accordance with the Food Aid Convention.  
 
• The non-emergency food aid strives to obtain  certain laudable objectives in developing 
countries. Can the USA provide an assessment  on alternative methods to obtain these 
objectives than through the provision of non-emergency food aid? 
 ANSWER:  The USG has an interest in enhancing the va riety of tools at our disposal to achieve 
objectives in developing countries.  The USG has many development programs through USAID or the 
Millennium Challenge Account that are not reliant  on food donations.  These programs provide for 
funds to assist countries in developing and achievi ng their priority economic goals.  While these 
programs are available, non-emerge ncy food donation programs remain a highly effective and viable 
approach to addressing longer term development goa ls, especially in the agricultural sector. While WT/TPR/M/160/Add.1 
Page 322  
 
direct feed programs tend to be small and the imp act is for a short period of time, activities funded 
through monetization typically stimulate business activity and tend to have a more significant economic multiplier effect on the economy of a country.  
• Can the USA provide the membership with st atistics on the provision of non-emergency food 
aid and also provide a break down of products  and beneficiary countries and/or regions? 
 ANSWER: The Table below shows U.S. Food Aid Provided through Monetization Programs 
during the U.S. Fiscal Year 2005.  
Recipient Country Commodity  Quantity (Metric Tons) 
Afghanistan Soybean Oil 47,500 
Afghanistan Vegetable Oil 5,650 
Total Afghanistan 53,150 
      
Azerbaijan Nonfat Dry Milk 500 
      
Bangladesh Crude De-Gummed Vegetable 
Oil  16,800 
Bangladesh Soft White Wheat bulk 16,000 
Bangladesh Nonfat Dry Milk 1,550 
Total Bangladesh 34,350 
      
Benin Rice bagged 4,500 
   
Bolivia Wheat 26,000 
Bolivia Wheat Flour 14,458 
Total Bolivia 40,458 
      
Burkina Faso Rice bagged 11,960 
   
Cambodia Soybean Oil 1,200 
Cambodia Vegetable Oil 2,000 
Total Cambodia 3,200 
      
Cameroon Rice 22,000 
   
CapeVerde Corn bulk w/bnt 18,070 
   
Chad Wheat Flour Bread 5,240 
  (cont'd)         WT/TPR/M/160/Add.1 
Page 323 
 
 
Recipient Country Commodity  Quantity (Metric Tons) 
Congo, Democratic Rep. of Hard Red Winter Wheat 27,000 
   
Ecuador Wheat 34,000 
      
El Salvador Wheat 30,000 
      
Ethiopia Vegetable Oil 4 Liter 2,400 
      
Georgia Nonfat Dry Milk 2,500 
      
Ghana Northern Spring Wheat bulk 31,400 
      
Guatemala Crude De-Gummed Vegetable 
Oil  15,090 
Guatemala Soybean Meal 15,050 
Guatemala Wheat 30,000 
Total Guatemala 60,140 
      
Guinea Bread Enriched Flour 4,180 
Guinea Vegetable Oil 20 Liter 3,070 
Total Guinea 7,250 
      
Guinea-Bissau Soybean Oil 540 
      
Haiti Crude De-Gummed Vegetable 
Oil  5,200 
Haiti Hard Red Winter Wheat bulk 70,000 
Total Haiti 75,200 
      
Honduras Corn 48,000 
Honduras Northern Spring Wheat bulk 22,334 
Honduras Rice 16,400 
Honduras Small Red Beans 1,600 
Honduras Soybean Meal 4,000 
Honduras Wheat 18,570 
Total Honduras 110,904 
    (cont'd)WT/TPR/M/160/Add.1 
Page 324  
 
Recipient Country Commodity  Quantity (Metric Tons) 
India Crude De-Gummed Vegetable 
Oil  5,650 
      
Indonesia Nonfat Dry Milk 3,140 
      
Iraq Corn 21,250 
Iraq Soybean Meal 8,750 
Total Iraq 30,000 
      
Jordan Wheat 53,750 
      
Kazakhstan Nonfat Dry Milk 8,080 
      
Kenya Hard Red Winter Wheat bulk 22,020 
Kenya Wheat 20,580 
Total Kenya 42,600 
      
Lebanon Wheat 10,000 
      
Madagascar Crude De-Gummed Vegetable 
Oil  4,830 
Madagascar Hard Red Winter Wheat bulk 7,600 
Madagascar Nonfat Dry Milk 1,000 
Madagascar Soybeans 30,000 
Madagascar Wheat 6,000 
Total Madagascar 49,430 
      
Malawi Crude De-Gummed Vegetable 
Oil  3,090 
      
Mauritania Hard Red Winter Wheat bulk 11,750 
Mauritania Rice 10,000 
Mauritania Soft Red Winter Wheat 24,000 
Total Mauritania 45,750 
      
Moldova Bread Enriched Flour 1,000 
      
Mongolia Hard Red Winter Wheat 25,000 
    (cont'd)         WT/TPR/M/160/Add.1 
Page 325 
 
 
Recipient Country Commodity  Quantity (Metric Tons) 
Mozambique Northern Spring Wheat bulk 30,000 
Mozambique Soybean Oil 9,000 
Total Mozambique 39,000 
      
Nicaragua Crude Vegetable Oil 16,200 
Nicaragua Northern Spring Wheat bulk 23,310 
Total Nicaragua 39,510 
      
Niger Rice bagged 2,800 
Niger Vegetable Oil 208 Liter 600 
Niger Wheat 2,450 
Total Niger 5,850 
      
Nigeria Soybean Meal 9,000 
      
Pakistan Nonfat Dry Milk 1,000 
Pakistan Soybeans 70,000 
Total Pakistan 71,000 
      
Peru Crude De-Gummed Vegetable 
Oil  10,150 
    
Philippines Nonfat Dry Milk 2,000 
Philippines Wheat 18,600 
Total Philippines 20,600 
      
Rwanda Vegetable Oil 4 Liter 3,720 
      
Senegal Rice bagged 2,750 
      
Sierra Leone Rice bagged 6,500 
Sierra Leone Hard Red Winter Wheat bulk 3,000 
Total Sierra Leone 9,500 
      
Southern Africa Crisis Hard Red Winter Wheat bnt 2,100 
    (cont'd)WT/TPR/M/160/Add.1 
Page 326  
 
Recipient Country Commodity  Quantity (Metric Tons) 
Sri Lanka Bread Enriched Flour 13,380 
Sri Lanka Wheat 25,000 
Total Sri Lanka 38,380 
      
Tajikistan Vegetable Oil 4 Liter 1,990 
Tajikistan Wheat Flour 4,900 
Total Tajikistan 6,890 
      
Uganda Vegetable Oil 4 Liter 3,230 
Uganda Hard Red Winter Wheat 52,100 
Total Uganda 55,330 
      
West African Region Rice bagged 630 
West African Region Vegetable Oil 208 Liter 1,080 
Total West African Region 1,710 
      
Zambia Hard Red Winter Wheat bnt 7,000 
Grand Total 1,174,742 
 
[Switzerland] 
 
(ii) Border Measures  
Para. 18 :  For the United States the best TRQ allocation method seems to be “first-come-first-served”. 
At the same time, an exception is made for some  products (dairy, sugar) in the allocation of TRQs. 
What is the rationale for this exception? 
 ANSWER:  There are a number of reasons a system other than first-come, first-serve that may be 
used by the United States.  The implementing legislation for the Uruguay Round Commitments specifies that in implementing tariff-rate quotas "the President shall take such action as may be 
necessary to ensure that imports of agricultural products do not disrupt the orderly marketing of 
commodities in the United States."  In some instances, import licenses and other measures are used to 
meet that objective.  In other cases, the U.S. Gove rnment has decided it is appropriate to use systems 
other than first-come, first-serve in order to meet  trade agreement obligatio ns, such as the commitment 
to allow countries to designate the importers for some  U.S. cheese TRQ quantities,  or, as in the case of 
our sugar TRQ, to allocate control of country quotas, and thereby the quota rents, to the exporting 
countries.  
 
[Switzerland] 
 
(iii) Domestic Programs
 
Paras. 24, 26 : On counter-cyclical payments: How will the (new) counter-cyclical payments be 
notified in the context of the implementation of the cotton case?  ANSWER: We are fully cognizant of the findings in the Brazil cotton case, but the panel made 
clear that it made no findings with respect to domestic support notifications.           WT/TPR/M/160/Add.1 
Page 327 
 
 
[Switzerland] 
 
Table IV.1, p. 89 : This table presents federal government pa yments.  Do any programs exist at sub-
federal level? Have they been notified to WTO a nd under what “color”? Also, in view of the large 
variety of farm structures over the country, does th e United States have any instruments (federal/sub-
federal) for the specific promotion of small farmers? 
 ANSWER:  The United States notifies some state-le vel credit programs as amber box non-product 
specific.  The United States also notifies as a single green box program a group of state-level programs that provide general services.  At the federal leve l, there is an extensive program of support and 
outreach for small farms.  This program is also  notified as a green box (general services) program. 
 
[Switzerland] 
 
(v) Food Aid
 
Para. 54 :  Could the U.S. authorities provide more de tails on the McGovern-Dole International School 
Feeding program? 
ANSWER:  The McGovern-Dole International Food for Education and Child Nutrition (FFE) 
program was authorized by the Farm Security and Ru ral Investment Act of 2002 and is administered by 
the Foreign Agricultural Service.  The legislati on called for the use of $100 million in Commodity 
Credit Corporation funds in FY 2003, with future  funding from Congressional appropriations.  The FY 
2004 appropriation totalled about $ 50 million, the FY 2005 appropriati on totalled $91 million, and the 
FY 2006 appropriation totalled $100 million.  In im plementing FFE, is the United States draws on the 
experience gained from the $300 million pilot Global Food for Education initiative, which was funded 
in 2001 and 2002. Under the pilot program, the Un ited States donated about 800,000 metric tons of 
commodities to provide nutritional school meals for n early 7 million children in 38 countries.  Under 
the first four years of the FFE program, the United States has funded a total of 63 programs in 31 
countrie s assisting approximately 9 million beneficiari es with about 365,000 tons of commodities. 
 
[Switzerland]  
Paras. 55 and 57 :  Could the U.S. authorities explain how Section 416(b) of the Agricultural Act of 
1949 is in compliance with Art. 10.4 (b) and (c) AoA?  In particular, could the authorities explain how 
the United States ensure compliance with the FAO Principles of Surplus Disposal? 
 ANSWER:  For each non-emergency food aid donation, th e United States conducts an analysis to 
ensure that the FAO Principals of Surplus Dis posal are adhered to thr ough the Usual Marketing 
Requirement analysis.  The United States notifies all such transactions in  accordance with the 
guidelines of the Committee on Surplus Disposal.  
 
[Thailand] 
 
32.  Paragraphs 10 and 11  mention an increasing amount of payments and Producer Support Estimate 
(PSE) to US agricultural producers.  According to the Doha Mandate, WTO member countries are 
obliged to reduce their domestic supports substa ntially.  Please explain why the United States has 
increased payments to its agricultural producers in 2005, and how the United States intends to comply 
with the mandate.  
ANSWER: 2005 was a difficult year for U.S. agriculture, particularly as a result of the devastating 
hurricane season.  The fall hurrican es in the Gulf severely disrupted transportation and commodity 
markets, resulting in very low regional crop prices.  In addition to Louisian a, hurricanes also caused 
extensive damage to agriculture in Florida and ot her southern states. High energy prices also caused 
economic distress.  The United States fully intend s and has intended to meet its domestic support WT/TPR/M/160/Add.1 
Page 328  
 
obligations since the commitments were undertaken in  1995.  Moreover, internal controls are in place 
to ensure that outcome.  In a ddition, pursuant to the Doha Ministerial Declaration’s call for 
comprehensive negotiations aimed at achieving, am ong other things, substan tial reductions in trade-
distorting domestic support, in October 2005, the Un ited States made a bold and ambitious proposal to 
the WTO to substantially reduce trade-distorting dom estic support and border measures.  To date, we 
have not heard that other WTO members are willing to  reciprocate.  Our offer stands and we look 
forward to working with other WTO members to achieve a meaningful WTO outcome on agriculture. 
 
[Thailand] 
 33.  In light of the United States’ recently proposed  changes to eliminate its support program for cotton, 
as indicated in paragraphs 12 and 13 , does the United States also intend to eliminate its support 
program for other products?  Is the United States c onsidering using a risk-based fee structure in its 
export credit guarantee program for other products , such as soybean, sugar, corn, and rice? 
 
ANSWER:  On July 1, 2005, a risk-based fee stru cture was implemented for the export credit 
guarantee programs for all eligible agricultura l commodities, including the ones mentioned. 
 
[Thailand] 
 
34.  How does the US notify the counter-cyclical payments, the direct payments and the ad hoc 
emergency payments to WTO as domestic support pr ogram in 2004 and 2005?  In which categories 
(Amber, Blue, or Green Box), and how much are these supports?  ANSWER:  The United States fully intends to no tify its domestic support commitments under 
current farm programs.  We note our notifications ar e extremely data intensive and are as current as 
many other WTO members. 
 
[Thailand] 
 
35.  Under the Export Credit Guarantee Program (GSM 102) described in paragraphs 47 to 52 , how 
much funding/financing does the United States alloca te, in any given year, for programs with credit 
terms between 180 days and three years? How does the United States plan to eliminate credit terms 
longer than 180 days, as agreed in the Hong Kong Ministerial Declaration?    ANSWER:  Registrations under the GSM-102 credit guara ntee program valued nearly $2.2 billion 
in FY 2005; approximately 97.5 percent of the tr ansactions had repayment terms of longer than 180 
days.  The elimination of programs longer than 180 days  is a matter that is currently being negotiated 
among members and no convergence has been reached on this issue.   
[Thailand] 
 
36.  Under food aid programs (paragraphs 53 to 57), how much does the US expend on: (1) non-
emergency food aid; (2) Food for Progress program; and (3) Monetized Food Aid? 
 ANSWER:  In FY04 the United States provided about  $915 million in non-emergency food aid of 
which about $195 million was Food for Progress.  In  that year pproximately $548 million of the 
$2.2 billion in food aid was monetized. 
 
[Turkey] 
 
12.  According to the Secretariat report, paym ents to US agricultural producers amounted to 
13.3 billion US Dollars in 2004 and preliminary estim ates  by the Department of Agriculture predict 
government payments for 2005  to increase to  close to 21.4 billion US Dollars.          WT/TPR/M/160/Add.1 
Page 329 
 
 
The report mentions that the projected increase larg ely would be driven by an increase in counter–
cyclical payments and ad hoc emergency payments with respect to 2004.  As also highlighted by the Secret ariat, in their report, counter-cyclical payment is one of the main 
domestic support instruments introduced by the 2002 Farm Bill. According to the paragraph 26, total 
amount of direct and counter-cyclical payments a nd loan programs accounted for %62 on average of 
total government payments to agricultural producers in 2003-04.   It is known that the latest US notification on domestic support does not include support granted under 
any of the programs covered by the 2002 Farm Bill. 
 
When does the US intend to make necessary notific ation for the counter-cyclical payments and the 
other support instruments of support under the Farm Bill of 2002?  
 ANSWER:  The United States fully intends to no tify its domestic support commitments under 
current farm programs.  We note our notifications ar e extremely data intensive and are as current as 
those of many other WTO members.  
[Turkey] 
 
It is noted from the Secretariat report that the c ounter-cyclical payments program covers  the same 
commodities as the direct payments program. 
 Under these conditions, how could US achieve  to meet its domestic support obligations stemming 
from WTO Agreement on Agriculture?   
ANSWER: The United States has intended to meet its domestic support obligations since those 
commitments were undertaken in 1995 and fully intends  to do so in the future.  Moreover, internal 
controls are in place to ensure that outcome. 
 
[Turkey]  
WT/TPR/G/160 
Part III/ Trade Policy Developments , (8)Agricultural Issues, paragraph 116  
13.  Paragraph 116 of the Government Report reads that the Commodity Credit Corporation total net 
direct payments in 2003 were 12. 9 billion US Dollar and these net direct payments are notified as a mix 
of blue and green box measures.  
 As it is known, different preconditions are defined in  the Agreement on Agriculture to ensure that each 
supporting instruments are assumed to be justifiabl e under one of the three domestic support boxes.  
 Against this, could US delegation explain,   how CCC net direct payments could be notified as a mix of 
blue and green box measures, unless the nature of th ose net direct payments had been different from 
each other?  
 
ANSWER: The CCC is a financing agency within the De partment of Agriculture that administers 
a wide range of activities and programs.  The use of the term “net direct payments” encompasses a 
number of such programs, which differ in their WTO classifications.  
 WT/TPR/M/160/Add.1 
Page 330  
 
[Turkey] 
 
The report further states that if the Secretary of  Agriculture determines that the AMS ceiling will be 
exceeded, the 2002 Farm Bill has a provision by which the Secretary shall, to the maximum extent 
practicable adjust expenditures to avoid exceeding allowable levels. 
 
Is this specific flexibility exte nded to the Secretary of Agricultu re under the 2002 Farm Bill can be 
assumed as  a kind of  “escape clause”  giving  room fo r maneuver to the US to meet her obligations in 
notifications even in practice  those commitments are not seemed to be met?  
ANSWER:  This provision was included in the 2002 Fa rm Bill to ensure that the United States 
would meet its WTO domestic support obligations.  Thus far, the Secretary of Agriculture has not 
needed to invoke this provision in order for the United States to meet its commitments.  
 Financial Services
 
 
[Brazil] 
 
23.  Chapter IV, paragraphs 62-92 : US commitments in the financial sector, with respect to national 
treatment, are limited to the Federal level, while the establishment of financial institutions is also 
subject to State level regulation. Is there any admi nistrative or regulatory evolution that might favor 
new commitments regarding measures that are less burdensome for foreign financial services 
suppliers?   ANSWER:  U.S. commitments with respect to nationa l treatment apply on both the federal and 
state level. 
 
[Canada] 
 Part IV. Trade Policies by Sector, (3) Financial S ervices, (ii) Legislative and regulatory framework, 
(c) Securities services, Paragraph 78 and 84  
Paragraph 78 states that a foreign investment company  may not publicly offer shares in the U.S. unless 
it is authorized to do so by the Security Excha nge Commission (SEC).  Paragraph 84 states that, if 
certain conditions are met, the Commodity Futures Trade Commission (CFTC) exempts from registration foreign Futures Commission Merchant s (FCM), which in our understanding includes 
foreign commodities and futures exchanges.  
18. Does the SEC envisage permitting a similar treatment  that is afforded by the CFTC that would 
effectively allow securities listed on foreign securities exchanges to be directly  traded in the U.S. 
without having to register with the SEC and with limited involvement of a registered-broker dealer, 
conditional to certain requirements that would ensu re market integrity and investor protection? 
 
ANSWER:  There are no current plans to implement a similar exemption.  All exchanges operating 
in the United States and securities listed on such exch anges must be registered with the SEC.  These 
requirements are applied to domestic and foreign exch anges and issuers on a national treatment basis.  
The United States approach to foreign investment funds also is to provide national treatment.  
Generally, foreign and domestic investment companies mu st register with the SEC in order to publicly 
offer securities to US investors, unless an exemption applies.  A foreign investment company must 
obtain an order from the SEC under Section 7(d) of the Investment Company Act of 1940 in order to 
register.  Section 7(d) is a prudential standard that  ensures that US investors receive the same essential 
investor protections whether they acquire shares in  a non-US fund or in a US-based fund.  Alternative 
mechanisms for accessing US mark ets include establishing and registering mirror funds in the 
United States, or conducting a private placement.          WT/TPR/M/160/Add.1 
Page 331 
 
 
[Canada] 
 Part IV. Trade Policies by Sector, (3) Financial Servi ces, (ii) Legislative and regulatory framework, (c) 
Securities services, Paragraph 80  
Paragraph 80 says that an offshore hedge fund must regi ster with the SEC if it has more than 14 clients 
who are residents in the U.S. regardless of the amount of assets under management while U.S. advisers 
only need to register if they have more than  US$30 million in assets and more than 14 clients. 
 19. Could the United States provide the policy ratio nale behind this national treatment difference? 
 
ANSWER:  A domestic or foreign investment adviser must register with the SEC under the 
Advisers Act if it serves as the investment adviser to  a registered investment company.  If a domestic 
adviser does not serve as the adviser to a registered investment company, it must register with the SEC 
if it has at least $30 million in assets under management, unless it has fewer than 15 clients during the 
course of the preceding 12 months and it does not hold itself out as an investment adviser to the public. 
 Even though a domestic adviser (which does not ser ve as the investment adviser to a registered 
investment company) with less than $30 million in assets under management does not have to register 
with the SEC under the Advisers Act, the adviser must  concern itself with registration as an investment 
adviser under the various state laws, despite the fact th at it may have fewer than 15 clients.  49 of the 
50 U.S. states have investment adviser regulations.  Domestic advisers would generally prefer to 
register with the SEC under the Advisers Act rather than have to concern themselves with multiple sets 
of regulation under various state laws.  A foreign investment adviser that must register  with the SEC under the Advisers Act only has to 
concern itself with complying with the Advisers Act; it does not have to concern itself with multiple 
sets of regulation under various state laws that dome stic advisers (which cannot register with the SEC 
under the Advisers Act) must confront.  Additiona lly, in some cases, foreign advisers to offshore 
private funds that must register with the SEC unde r the Advisers Act are essentially only subject to 
some of the provisions of the Advisers Act, not to the Advisers Act in its entirety.  Domestic 
investment advisers cannot avail themselves of th is “reduced” or “lighter” regulation under the 
Advisers Act.  See
 Registration under the Advisers Act of Certain Hedge Fund Advisers , Investment 
Advisers Act Release No. 2333 (Dec. 2, 2004), foot notes 210-222 and accompanying text.  A copy of 
this release can be found at http://www.sec.gov/rules/final/ia-2333.htm . 
 
[Chile] 
 1. The legal framework for trade in services and i nvestment in the United States (at the federal 
level) has been shown to go beyond the standards of  the WTO General Agreement on Trade in Services 
(GATS).  Indeed, the investment regime is implem ented in a non-discriminatory manner and with very 
few exceptions (the majority of which are cove red by GATS general excep tions).  Nonetheless, 
although federal regulations for trade in services ar e quite liberal, states tend to impose a number of 
restrictions, generally related to requirements such as nationality, residency, and licensing. 
 Has the United States considered making further progress at a state level in the implementation of obligations set forth in Article III of the GATS?  Can such measures be presented in a more systematic 
way to facilitate trade? 
 
ANSWER:  While it is true that the United States do es maintain some state level regulations 
affecting certain financial services, the U.S. states generally are very welcoming of foreign investment in financial services.  The United States has taken an active part in preparing offers for the ongoing 
GATS Doha negotiations, including some impr ovements relating to state-level measures. 
 WT/TPR/M/160/Add.1 
Page 332  
 
[China] 
 Question (p. 96 para. 67) Regarding CCS(Comprehensive and consolidated  supervision) and the calculation capital 
adequacy, would the U.S. further explain and clar ify the requirements on CCS and its calculation 
measures of capital adequacy when it examines  and approves foreign banks’ applications of 
establishment of branches in the U.S.?  
ANSWER:  The Board considers a variety of factors in determining that a foreign bank is subject to 
comprehensive supervision or regulation on a conso lidated basis by its home country supervisor.  
These factors are consistent with the Basel Committ ee’s “Minimum standards for the supervision of 
international banking groups and their cross-border establishments.”    The Board is required to determine that foreign bank is supervised or regulated in manner that its home 
country supervisor receives sufficient informati on on the worldwide operations of the foreign bank 
(including the relationships to any affiliates) to asse ss the foreign bank’s overa ll financial condition and 
compliance with law and regulation.  In making th is determination, the Board assesses, among other 
factors, the extent to which the home country su pervisor (1) ensures that the bank has adequate 
procedures for monitoring and controlling its activiti es worldwide; (2) obtains information on the 
condition of the bank and its subsid iaries and offices through regular ex amination reports, audit reports, 
or otherwise; (3) obtains information on the dealin gs with and relationship between the bank and its 
affiliates, both foreign and domestic; (4) receives from the bank financial reports that are consolidated 
on a worldwide basis or comparable information that permits analysis of the bank’s financial condition 
on a worldwide consolidated basis; (5) evaluates pr udential standards, such as capital adequacy and 
risk asset exposure, on a worldwide basis.  Thes e are indicia of comprehensive, consolidated 
supervision, and other elements may inform the Board’s determination. 
Capital adequacy assessments are an essential component  of the Board’s analysis.  They also are an 
integral part of the Board’s analysis, since all of other the factors considered by the Board may impact 
these assessments.  The Board is required to find th at the foreign bank meets the Basel minimum risk-
based capital standards or their equivalent (4 percent tier 1 risk-based capital ratio; 8 percent total risk-
based capital ratio).  For a foreign bank from a country  that adheres to the Basel Accord, the Board (1) 
confirms that home country supervisors administer the Basel guidelines within the scope of discretion 
permitted by the Accord; and (2) determines that th e foreign bank, at a minimum, meets the Basel 
guidelines as administered by home country superv isors.  In cases where the home country capital 
standard differs from the Basel Accord, the Board considers (1) information regarding the capital 
standard applied in the home country; (2) info rmation sufficient to evaluate the capital position 
adjusted as appropriate for accounting and structural  differences; and (3) to the extent possible, 
information comparable to the Basel format.  Fa ctors considered by the Board in making capital 
equivalency determinations  include, but are not limited to (1) composition of capital; (2) accounting 
standards; (3) long-term debt ratings; and (4 ) reliance on government support to meet capital 
requirements. 
 
[China] 
 
Question (p. 97 para. 70-71) 
There are also strict restrictions on foreign banks ’ acquisition, merger or holding of American banks. 
These restrictions considerably affect  foreign banks’ business in the U.S. 
 
Would the U.S. provide data in the last two ye ars concerning: foreign banks’ applications of 
establishing more operational outlets which have been approved; applications of establishing 
branches or representative offices which have been approved; acquisitions, mergers or holding of 
American banks?           WT/TPR/M/160/Add.1 
Page 333 
 
 
ANSWER: 38 applications or prior notices by foreign banks to acquire U.S. banks or establish 
U.S. branches, agencies, or representative offi ces have been approved since January 2004. 
 
[China]  
Question (p. 96 para. 67) In the U.S., branches of foreign banks are not entitled to draw small deposits under 100 thousand 
dollars. They have to engage in  such deposit business via their comp anies in the U.S. Branches of 
foreign banks established after Dec. 19
th, 1991 cannot join the FDIC, which means deposits in foreign 
banks are not under the protection of the Federa l Deposit Insurance Law. The stipulations above 
considerably restrict foreign banks’ development in the U.S. 
 
Are the above stipulations and measures consistent with WTO MFN treatment and national treatment?  
What are the reasons for those restrictive measu res taken by the U.S. in this regard? Is there a 
plan to eliminate or reduce the restrictions?  
ANSWER:  The stipulations and measures are consistent with the WTO commitments of the 
United States.  New branches of all foreign banks are provided the same treatment.  Taking insured 
deposits creates a liability for the United States gove rnment.  There are no plans to eliminate this 
measure.  
 
[China]  Question (p.100 para. 86) 
Legislations on market access are inconsistent in  each and every state, with different insurance 
regulation structures and different requirements on registration, solvency, operation, etc.  They 
constitute significant barriers to fo reign enterprises on market access. 
 
China is glad to see the effort of the U.S. to wards consistent supervision.  Please provide a 
timetable of the process of consistent supervision. 
 
Does the U.S. give the same treatment to foreign  and domestic insurers in the operation of 
insurance business such as registered capital, taxat ion, administration fee, etc? Would the U.S. 
clarify whether its stipulations in these aspect s are consistent with the national treatment 
principle of the WTO? 
 
Please explain the reason for which some states of the U.S. do not permit the entrance of foreign 
state-owned insurance companies.  Please explain the reason for which some states of the U.S. do not permit the provision of services 
of foreign state-owned reinsurance companies. 
 
ANSWER:  We appreciate your acknowledgment of the e fforts made by the U.S. states to ensure 
consistent supervision of insurance companies.  The U.S. state insurance regulators, working through 
their coordinating body the National Association of  Insurance Commissioners (NAIC), already have 
taken a number of steps to make the insurance co mpany licensing process as uniform as possible. For 
example, the NAIC has developed, and all states have agreed to participate in, a Uniform Certificate of 
Authority Application process that provides significan t standardization of the filing requirements that 
U.S. state regulators use in considering the licen sing of a company that chooses to do business in more 
than one state.  In addition, the NAIC accredita tion program provides a mechanism to ensure the 
consistent ongoing supervision of companies that have  been licensed to do business in the U.S. market, WT/TPR/M/160/Add.1 
Page 334  
 
including on issues such as solvency requirements.  The NAIC and the U.S. states also have specific 
initiatives underway relating to life insurance and re lated products; and for prod ucers (agents/brokers). 
 The U.S. provides the same treatment to foreig n and domestic insurance subsidiaries regarding 
minimum capital requirements, taxation and filing (adm inistration) fees.  Foreign branches are required 
to meet certain specific prudential requirements rega rding their establishment since they are not subject 
to the regulatory requirements for subsidiaries.  Some  of the U.S. states do not permit the entrance of 
foreign state-owned insurance and reinsurance comp anies for various reasons, including the difficulty 
of collecting court approved claims from such companies when those co mpanies go insolvent. 
 
[Chinese Taipei] 
 
Question 13 (pages 96-97) In addition to corporate income tax, foreign bank  branches in the US are also required to pay a 30-
percent “Branch Profit Tax” if the earnings of a fo reign bank are not reinvested in a US trade or 
business.  We consider that this measure seriously  affects the equality of competitive opportunity and 
imposes an unfair burden on the operations of our banks in the US.  Does the US have plans to 
eliminate this additional “Branch Profit Tax”?  
ANSWER:  No, there are no plans to eliminate this tax. 
 
[Chinese Taipei] 
 Question 14 (page 97, paragraph 69) 
A foreign bank is required to establish an insured ba nking subsidiary (except for foreign bank branches 
engaged in insured deposit-taking activities as of 19 December 1991) in order to accept or maintain 
domestic retail deposits of less than  US$ 100,000. This restriction on a foreign bank’s operation would 
appear to seriously restrict the funding resources of a foreign bank branch and affect its ability to 
compete with domestic banks on an equal footing.  
 Would the US please consider lifting this restrictio n and treating foreign bank branches on an equal 
footing with domestic banks in this respect? 
 ANSWER:  As noted in the question, foreign banks ma y establish U.S. subsidiary banks to take 
insured retail deposits.  As a policy matter, the Un ited States does not permit branches of foreign banks 
to take such deposits in order to protect the de posit insurance fund.  The United States has no current 
plans to change this policy.  [Colombia]  
Section IV, paragraph 64, of the Secretariat’s repor t on “Trade Policies by Sector,” states that in 
keeping with the Law mentioned therein, banks havi ng branches or agencies in  the United States shall 
be subject to standards of “solid capital requireme nts” and “good governance” comparable to those that 
apply to U.S. banks, duly implementing thereby the principle of national treatment and equal 
opportunities.  Please explain what the aforementioned standards consist of. 
 ANSWER:  With respect to the well-capitalized a nd well-managed standards for becoming an 
FHC, the Gramm-Leach-Bliley ("GLB") Act requires capital and management standards for a foreign 
bank that are comparable to the standards applied to  a U.S. bank owned by a FH C, giving due regard to 
the principle of national treatment and equality of competitive opportunity. These prudential standards 
are applied on a non-discriminatory basis.  In assessing a foreign bank's financial strength, the Federal Reserve Board considers a number of factors, including the composition of capital, accounting 
standards, long-term debt ra tings, and government support. 
          WT/TPR/M/160/Add.1 
Page 335 
 
 
[Japan] 
 Q46. Registration Requirements for Foreign Issu ers in Case of Business Reorganization (p.98 
para.75, 77) 
In the fourth year dialogue of the Regulatory Reform and Competition Policy Initiative, the 
Government of Japan requested the Government of  the United States to abolish the Rule 145 of the 
Securities Act of 1933 or mitigate it. This rule prov ides that when new stocks are issued in a business 
reorganization and if U.S. residents come to hold more  than 10% of the shares of the target company, 
the acquiring company should submit registration form s, including financial st atements based on the 
United States Generally Accepted Accounting Principles (GAAP) to the Securities Exchange 
Commission (SEC). This rule is applied even to non-American companies, which issue new stocks due 
to their business reorganization by merger with othe r non-American companies outside the territory of 
the United States. 
 In the fourth Report to the Leaders on the Regulat ory Reform and Competition Policy Initiative, the 
Government of the United States answered that SEC had carefully considered the desirable and 
appropriate level of U.S. owners hip for the purpose of exemption and in the interest of investor 
protection, and that SEC had adopted a more tailo red relief measure for non-American companies to 
address conflicting regulatory manda tes and offering practices. The Government of the United States 
also mentioned in the report that non-American comp anies of which American residents’ ratio became 
more than 10% due to merger are encouraged to raise specific concerns with SEC. 
 
However, the rule obviously places excessive bu rden on Japanese companies which have never 
reported their financial statements based on USGAAP  and reorganized themselves by merger with 
other Japanese companies, just b ecause the U.S. ownership of stocks exceeds 10 percent, even taking 
into account the need of investor protection. As a basis for this opinion, Japanese laws do not require 
non-Japanese companies, which reorganized themselv es by merger with other non-Japanese companies 
either to file registration formats for issuing new st ocks or to disclose their financial statements based 
on the Japanese GAAP, even if non-residents’ sh areholding ratio exceeds 10% of the total. 
 
The Government of Japan therefore urges the G overnment of the United States to abolish this 
registration requirement that is applied to non-Ameri can companies.  In this regard, please indicate the 
specific views of the Government of the United States. 
 
ANSWER:  The United States notes Japan’s statement on this issue.  However, the United States 
believes a specific issue raised in a bilateral forum would be more appropriately followed up in that 
forum. 
 
[Japan] 
 Q47. Regulations on Sales and Offers of Forei gn Investment Trusts (p.98-99 para.78-81) 
In the fourth year dialogue of the Regulator y Reform and Competition Policy Initiative, the 
Government of Japan requested the Government of the United States not to apply Section 7 (d) of the 
Investment Company Act of 1940 and SEC Rule 7d-1 entitled “Specification of Conditions and 
Arrangements for Canadian Management Inv estment Companies Requesting Order Permitting 
Registration.” to non-Canadian foreign investment tr usts which publicly offer their shares within the 
territory of the United States.  If not, the Governme nt of Japan requested the Government of the United 
States to abolish the following three conditions:  
 (1) At least a half of directors of investment trusts must be American citizens and reside in the United States. 
(2) Assets of investment trusts are required to be entrusted to banks in  the United States; and 
(3) Investment trusts are required to use United States Certified Public Accountants. 
 WT/TPR/M/160/Add.1 
Page 336  
 
The Government of Japan recognizes that this rule is  still applied to other foreign investment trusts 
besides Canadian ones, places excessive burden on fore ign investment trusts, and substantially limits 
foreign investment trusts’ entry to the U.S. capital market. 
 
In the fourth Report to the Leaders on the Regulat ory Reform and Competition Policy Initiative, the 
Government of the United States answered that SEC had issued the orders to investment trusts from 
five countries, Canada, Australia , Bermuda, South Africa and the United Kingdom, had also granted 
limited exemptive relief from the Rule to a Canadian investment trust, and rema ined willing to consider 
applications for this rule.  
 The Government of Japan, however, is aware that these are just rare and exceptional measures during 
the period between 1950s and 1970s and most of past  applicants were not given such orders and 
relieves. It is difficult for the Government of Japan to understand that the Government of the 
United States ensures enough opportunities for forei gn investment trusts to enter into the U.S. 
investment trust business by citing a very few ex ceptional measures. In addition, even though the 
Government of the United States answered that SEC remains willing to consider applications for 7 (d) 
orders, it is still difficult for the Government of Japan to interpret that the Government of the 
United States fully understood the need of excep tional relief for foreign investment trusts.  
 Furthermore, in terms of costs, it is also very h eavy burden for investment trusts of foreign countries, 
which are geographically distant from the United Stat es, to fulfill all of the three conditions listed 
above. 
 
Therefore, the Government of Japan urges the Govern ment of the United States not to apply Rule 7d-1 
to Japanese investment companies or to abolish at least these three conditions.  In this regard, please 
indicate the specific views of the Government of the United States. 
 
ANSWER:  The United States notes Japan’s statement on this issue.  However, the United States 
believes a specific issue raised in a bilateral forum would be more appropriately followed up in that 
forum. 
 
[Japan] 
 
Q48. Qualification of Financial Holding Companies (p.95-96 para.62-66) 
To engage in the securities business in the United Stat es with the scope comparable to that of U.S. 
securities companies, including underwriting stocks and corporate bonds, forei gn banks are required to 
obtain the status of Financial Holding Companies (FHCs). In determining wh ether foreign banks are 
comparable to U.S. banks in terms of capital and ma nagement, an injection of public funds into their 
capitals is taken into consideration as one of negativ e factors. Because of this criterion, Japanese banks 
are having difficulty in gaining the status of FHCs , and the business scope of securities subsidiaries of 
these banks is substantially limited in the United States. 
 In the fourth year dialogue of the Regulator y Reform and Competition Policy Initiative, the 
Government of Japan requested the abolishment of th is criterion. However, in the fourth Report to the 
Leaders, the Government of United States answered th at the criterion is not the only factor but one of 
several factors that may be taken into account to determine comparability of capital, and that the same 
criteria for U.S. bank subsidiaries under FHCs are applied to foreign banks.  
 
Compared to the situation several years ago, the problem of non-performing loan at Japanese banks is 
substantially diminishing and their financial conditi ons have dramatically improved. In light of the 
current situation, the Government of Japan urg es the Government of the United States to ensure 
Japanese banks obtain the status of FHCs, regardless of public fund injection.  In this regard, please 
indicate the specific views of the Government of the United States. 
          WT/TPR/M/160/Add.1 
Page 337 
 
 
ANSWER:  The United States notes Japan’s statement on this issue.  However, the United States 
believes a specific issue raised in a bilateral forum would be more appropriately followed up in that 
forum. 
 
With respect to the well-capitalized and well-mana ged standards for becoming an FHC, the Gramm-
Leach-Bliley (“GLB”) Act requires capital and mana gement standards for a foreign bank that are 
comparable to the standards applied to a U.S. bank owned by a FHC, giving due regard to the principle 
of national treatment and equality of competitive o pportunity.  These prudential standards are applied 
on a non-discriminatory basis.  In assessing a forei gn bank’s financial strengt h, the Federal Reserve 
Board (Board) considers a number of factors,  including the composition of capital, accounting 
standards, long-term debt ratings, and government support.  The Board will continue to review changes 
in the financial strength of Japanese banks in or der to assess comparability with the FHC standards 
applied to U.S. banks.  
 
[Japan] 
 
Q49. Deregulation of Investment into Initial Equity Public Offering by Foreign Investment 
Trusts (p.98 para.75-76) 
The National Association of Securities Dealers (NASD) Rule No. 2790 basically prohibits NASD 
members and other persons associated with  these members from conducting the following: 
 (a) Selling initially publicly offered stocks to accounts in which “restricted pers ons”, such as security 
brokers, dealers and portfolio mana gers, have beneficial interests 
(b) Purchasing these stocks in accounts in which these members and persons have beneficial interests 
 This rule stipulates two conditions  of exceptional treatments for foreign investment trusts as follows: 
 
(1) Such foreign investment trusts are listed on fo reign stock exchanges or authorized by foreign 
authorities for public sale; and 
(2) No “restricted person” owns more than 5% of the shares of the foreign investment trusts 
 However, in the Japanese secur ities business, securities companies and banks are entrusted by 
investment trusts to sell trust funds to their domestic  investors, and it is those securities companies and 
banks, not investment trusts, that have information about  the investors. In addition, it is very difficult 
even for these securities companies and banks to check if th e second condition mentioned above is 
always fulfilled because of the enormous number of inv estors.  As a result of this regulation, Japanese 
investment trusts have difficulties in investing their funds into initially publicly offered stocks in the 
United States. 
 
Therefore, the Government of Japan urges the Go vernment of the United States to take necessary 
measures to enable Japanese investment trusts that do  not have any intention to sell their shares to, and 
trade initially publicly offered stocks for the benefits of, “restricted pe rsons” to invest their funds into 
these stocks.  In this regard, please indicate the speci fic views of the Government of the United States. 
 
ANSWER:  The United States notes Japan’s request, but Japan is asking for treatment better than 
national treatment.  The United States further notes that the rules referred to in Japan’s statement are those of another self-regulatory organization.  [Japan]  Q50. Securities services (p98, para.76) 
(1) With respect to cross border trade, how does SEC supervise the foreign companies dealing with 
cross border trade?  
 WT/TPR/M/160/Add.1 
Page 338  
 
ANSWER:  The SEC generally does not supervise or ove rsee the operations of listed companies.  
All companies, foreign and domestic, that publicly offer securities in the United States are required to register those securities with the SEC unless a va lid exemption is available under the US federal 
securities laws.  Foreign funds and advisers that im plicate, respectively, the Investment Company Act 
of 1940 and the Advisers Act must register with the SEC.  As registered entities, they are subject to 
periodic review by the SEC’s Office of Compliance Inspections and Examination, and are responsible 
for compliance with the relevant federal securities la ws.  In addition, foreign funds and advisers may be 
subject to possible SEC enforcement proceedings for non-compliance with the relevant federal 
securities laws.  Broker-dealers and foreign exchange s operating in the United States are also required 
to register with the SEC and are subject to full SEC oversight. 
 (2) It is indicated that there are situations where some foreign broker-dealers are exempt from 
registration requirements.  Please provide the criteria for foreign broker-dealers to obtain exemption. 
 ANSWER:  There is an exception from registration for cross-border supply of broker-dealer 
services if the broker-dealer meets the conditions  contained in Rule 15a-6 under the Securities 
Exchange Act of 1934 – generally permitting foreign broker-d ealers to effect transactions for large 
institutional investors (under an arrangement with  a U.S. broker-dealer) and market professionals.  
Under these circumstances, the foreig n suppliers receive better than national treatment because they do 
not have to register as broker-dealers (unlike broker- dealers that are located in the United States).  A 
foreign-owned broker-dealer established in the United States could not avail itself of the safe harbor in 
Rule 15a-6 exception.  
 
(3) In the previous TPR, Japan requested the Gove rnment of the United States to relax disclosure 
requirements in the issuance of new stocks as the re organization.  The response of the U.S. was that 
they noted Japan’s concern and statement on the ma tter. Therefore, we would like to know whether 
there has been any progress and the review by the Government of the United States on this 
requirement. 
 ANSWER:  There has been no change with regard to this requirement. 
 
[Japan] 
 
Q51. Harmonization and Unification of the State-Based Regulatory Systems or Transition to the 
Federal Regulatory System (p.100-102 para.86, 88-91) 
Due to the State-based insurance regulation and supe rvision in the United States, foreign insurers who 
wish to conduct insurance business in the United Stat es are required to obtain bu siness licenses in each 
State in which they wish to operate. Moreover, insure rs are required to apply for approvals of products 
and premium rates and notify important matters in e ach supervisory authority of the States in which 
they wish to sell insurance products.  
 
As a result, insurers are obliged to be subject to examinations in every single State in compliance with 
the laws of each State to obtain licenses and approva ls. In addition, Japanese insurers operating in some 
States have been faced with cases in which examin ations for licensing and approval took excessively 
long time compared with the standard period.  Th ese regulations cause unfair burden on insurers and 
prevents them from responding customer needs in a timely manner. 
 Under these circumstances, the Government of Japan requested the Government of the United States to 
realize harmonization and unification of the State-b ased regulatory and supervis ory systems in terms of 
both procedural and substantial requirements in the fourth year dialogue of the Regulatory Reform and 
Competition Policy Initiative. It also requested to expedite examinations and enhance their 
transparency in each State. In addition, to reso lve these problems, the Government of Japan also 
presented its demand that actions for reviewing the cu rrent regulatory system should be undertaken not          WT/TPR/M/160/Add.1 
Page 339 
 
 
only by the National Association of Insurance Co mmissioners (NAIC) but also by the Federal 
Government and that they should inform the Gove rnment of Japan of the progress they achieved. 
 To our disappointment, however, the harmonization and unification of the State-based insurance 
regulations have not been realized yet. There has not been any progress in harmonization or unification 
of State-based procedure for license and approval. Examinations of these licenses and approvals also 
have not been expedited. In addition, neither  NAIC nor the Federal Government has provided 
information on the measures taken in response to th e previous requests from the Government of Japan. 
 Furthermore, the Government of Japan is aware that  even in the United States there is criticism against 
the current State-based system and growing voices fo r abolishing the current system and introducing 
the federal regulatory system by establishing the Optional Federal Charter.  Therefore, the Government of Japan urges both the Government of the United States and NAIC to 
realize the following:  
 
(a) To harmonize and unify the State-based insurance supervisory systems, or to shift to the federal 
regulatory system (Harmonization and unification can be realized by taking substantial measures by 
which, for instance, an insurer w ho has obtained license of a particular line of business or approval of a 
new product in one State is deemed to be eligible for the same business or product in other States);  
(b) To play a role in promoting harmonization a nd unification of regulations of the State-based 
supervisory system or shift to the federal regulator y system and to present practical timeframe of these 
reforms to the Government of Japan; and (c) To provide information about the progress of the unifying or the shifting to the Government of 
Japan in a timely manner to ensure  transparency of its process.  
 
In these respects, please indicate the specific view s of the Government of the United States. 
 ANSWER:  The U.S. state insurance regulators, working through their coordinating body the 
National Association of Insurance Commissioners (NAIC), already have taken a number of steps to 
make the insurance company licensing process as uniform as possible. For example, the NAIC has 
developed, and all states have agreed to participat e in, a Uniform Certificate of Authority Application 
process that provides significant standardization of th e filing requirements that U.S. state regulators use 
in considering the licensing of a company already estab lished in one U.S. state.  In addition, U.S. state 
insurance regulators continue to coordinate regarding solvency regulation of companies licensed to do 
business in the U.S. market.  The NAIC and the U. S. states also have specific initiatives underway 
relating to life insurance and related pro ducts; and for producers (agents/brokers). 
 [Japan]  Q52.  Elimination of Reinsurance Collateral Requirement (p.100-102 para.86, 88-91) 
Under the current reinsurance regulations of the Unit ed States, overseas (re)in surers are, without any 
exception, required to post a trust account equiva lent to 100 percent of credit amount within the 
country, or to submit a letter of credit for collate ral, when they conduct reinsurance businesses with 
U.S. ceding companies on a cross-border basis.  These requirements incur tremendous burden on 
overseas insurers in reinsurance business. In addition, the Governme nt of Japan is aware that the 
revision of this requirement has been discussed in the United States by NAIC in response to the 
concern raised by European insurers. However, it s eems that a substantial plan of taking measures to 
abolish these requirements has not been presented by NAIC yet.  Therefore, the Government of Japan urges the Govern ment of the United States to take the following 
measures:  
 WT/TPR/M/160/Add.1 
Page 340  
 
(a) To eliminate these requirements in order to ensure that Japanese (re)insurers should not be 
discriminated against; and (b) To present a practical timeframe towards el imination of these requirements and to provide 
information about its progress in a timely manner to  the Government of Japan in order to ensure 
transparency of its process. 
 In these respects, please indicate the specific view s of the Government of the United States. 
 
ANSWER:  There is no discrimination.  The U.S. Stat es maintain such collateral requirements as a 
prudential requirement on any supp lier of reinsurance that does not choose to be regulated under the 
U.S. system.  The NAIC and the U.S. regulators c ontinue to consider the views expressed by various 
interested persons on this issue.  You are probably aware that many U.S. primary insurance companies 
strongly support these prudential requirements as a means to ensure the payment of reinsurance 
recoverables by non-US regulated reinsurers. 
 
[Japan] 
 
Q53.  Abolishment of Trusteed Surpl us Requirement (p.100-102 para.86, 88-91) 
Under the state-based regulatory system, the Trust eed Surplus Requirement is imposed on not only 
foreign insurance companies but also alien insuran ce companies’ branches in the United States. This 
regulation requires them to hold their major assets, which consist of deposits to the State authorities 
and Trusteed Assets, exceeding their net liability at banks or trust companies within the United States. 
 However, this requirement virtually means that th ese insurance companies have to deposit enormous 
proportion of their assets to these banks and trust comp anies.  The Government of Japan believes that 
this restriction excessively blocks flexible fund i nvestment of these insura nce companies and causes a 
loss of many of their opportunities to gain profits.  Therefore, the Government of Japan urges the Gove rnment of the United States and NAIC to abolish 
the Trusteed Surplus Requirement applied to alien in surance companies’ branches in the United States.  
In this regard, please indicate the specific vi ews of the Government of the United States. 
 
ANSWER:  U.S. state regulators maintain such requirements on foreign branches as a prudential 
measure. 
 
[Korea] 
 
Financial Services – Legislative and regulatory framework-Banking services 
 
4.  We understand as described in pa ra 69 on page 97 of the Secretariat report that the US maintains a 
general policy of national treatment towards forei gn banks with some exceptions reserved as market 
access restrictions in the GATS. We note that ther e are some restrictions on foreign bank's retail 
financing business. Please explain what is the reason fo r imposing such restrictions and provide us with 
information on whether there are further restricti ons on sales activities, namely on the amount of net 
liability and etc, related to forei gn bank's retail financing business.  
 ANSWER:  U.S. bank subsidiaries of foreign banks recei ve national treatment with respect to their 
retail business.  U.S. branches of foreign banks ge nerally may not take insu red domestic retail deposits 
but have no restrictions on retail activity on the asset side (e.g., loans to retail customers are permitted, 
subject to the same requirements that apply to U.S.  banks, such as the loan-to-one borrower limits that, 
for U.S. branches, are based on the capital of the foreign bank).  The prohibition on insured retail deposit-taking activity by U.S. branches of foreign banks is designed to protect the U.S. deposit 
insurance system.          WT/TPR/M/160/Add.1 
Page 341 
 
 
[Korea] 
 
Financial Services – Legislative and re gulatory framework- Securities services  
 
5. Paragraph 79 on page 99 in the Secretariat Report  indicates that foreign investment advisors are 
subject to monitoring by the SEC concerning the compliance with the Investments Advisers Act of 
1940.  
 
Please provide us with information in more detail regarding the monitoring process on investment 
advisors residing outside the U.S.  Does the SEC c onsider related provisions of the country of the 
advisor's residency when it monitors the compliance of foreign investment advisors residing outside the 
U.S. with the Act? Are there any preliminary MOUs signed by the SEC and foreign supervisors?  
 ANSWER:  A foreign investment adviser not established  in the United States is exempt from the 
requirement for registering with the SEC if: 
 
(a) (1)  It has fewer than 15 US clients during th e course of the preceding 12 months, and (2) it 
does not hold itself out as an investment adviser to the US public; or  (b) It is a US banking subsidiary of a foreign bank. 
 
A foreign investment adviser cannot rely on either of these exemptions if it is the investment adviser to 
a registered investment company.  If required to register, the foreign investment a dviser may register with the SEC no matter how few 
clients it has (domestic investment advisers gene rally must have assets under management of $25 
million or serve as the investment adviser to a regi stered investment company).  Foreign investment 
advisers registered with the SEC are generally tr eated like any other domestic investment adviser 
registered with the SEC.  (For purposes of registration, it does not matter whether the foreign investment adviser is located in the US or abroad.)  In some cases, a foreign investment adviser to an 
offshore private fund that must register as an invest ment adviser under the Investment Advisers Act of 
1940 (the ‘Advisers Act’) would essentially only be subj ect to certain of the provisions of the Advisers 
Act.  See Registration under the Advisers Act of Certain Hedge Fund Advisers, Investment Advisers 
Act Release No. 2333 (Dec. 2, 2004), footnotes 210- 222 and accompanying text.  A copy of this 
release can be found at http://www.sec.gov/rules/final/ia-2333.htm
. 
 
When monitoring investment advisers registered with the SEC under the Advisers Act (whether a 
domestic or foreign investment adviser), the SEC con cerns itself with whether the adviser is complying 
with the relevant provisions of the Advisers Act.  The SEC has entered into memoranda of understandi ng with the Securities and Futures Commission of 
Hong Kong (October 5, 1995) and the Financial Serv ices Authority of the United Kingdom (March 14, 
2006) that facilitate the exchange of confidential supervisory information relating to investment 
advisors, among other things.  
[Korea] 
 Financial Services – Legislative and re gulatory framework- Insurance services
 
 
6. With regard to paragraph 88 on page 101 of the Secretariat report, it is known that the U.S. allows 
cross-border transactions in insurance services. Pl ease provide us with information on how significant 
is the cross-border transaction out of  the total insurance services.  
 WT/TPR/M/160/Add.1 
Page 342  
 
ANSWER:  The amount of cross-border transactions varies by sector as is the case in most 
countries.  For example, some types of insurance like reinsurance often are provided on a cross-border 
basis.  According to the Bureau of Economic Anal ysis, in 2004, U.S. cross-border insurance premiums 
(imports), mostly reinsurance, totaled $67.1 billion.  
7. The Paragraph 90 on page 101 of the Secretariat report indicates that NAIC is in the process of 
streamlining and consolidating insu rance supervisory systems from di fferent states. When will this 
process be finalized? What's the ultimate objective of this consolidation work?  
 ANSWER:  Progress has been made although there is no specific deadline for completion.  The 
objective of the work is to make the U.S. in surance market as competitive as possible while 
maintaining sound prudential regulation. 
 
[Mexico] 
 
22.  Paragraph 68 indicates that the International Ba nking Act of 1978 (IBA) is the main legislation 
governing the operation of foreign banks in the Unite d States.  Also mentioned is the Riegle-Neal 
Interstate Banking and Branching Act of 1994, which allows interstate branching by merger or by 
de novo  establishment of branches.  Mexico is inter ested in learning in greater detail about the 
provisions of these laws.  Can the texts of both these laws be consulted on the Internet?  ANSWER:  The general and permanent laws of the Un ited States are consolidated, codified by 
subject matter, and updated in the United States Code. The Office of Law Revision Counsel in the U.S. 
House of Representatives prepares the Code for pub lication and its Web site, with the Code, can be 
found at http://uscode.house.gov/. The IBA has been primarily placed in Title 12, Chapter 32 of the 
U.S. Code (12 USC § 3101 et. seq.) and can be downl oaded from the above site which also has a table 
showing whether any amendments to the Code have  been enacted by recent laws. Another Internet 
source for the IBA is in a 2001 congressional publi cation on the compilation of basic banking laws 
(http://financialservices.house.gov/ media/pdf/bankcomp.pdf).  
 
The Riegle-Neal Act amended a number of banking la ws which are scattered throughout title 12 of the 
U.S. Code. The enrolled text of the Act, sent to President for his signature in 1994, can be found in 
html on the Library of Congress database at http ://thomas.loc.gov/cgi-bin/query/z?c103:H.R.3841.enr: 
with a link to the U.S. Government Printing Office display in PDF at  
http://frwebgate.access.gpo.gov/cgi-
bin/getdoc.cgi?dbname=103_cong _bills&docid=f:h3841enr.txt.pdf .  
 The Government Printing Office Web site (h ttp://www.gpoaccess.gov/) has both the United States 
Code and all U.S. public and private laws from 1995 to the present. The Library of Congress database 
(http://thomas.loc.gov/bss/d109/d109laws.html) has the te xt of all acts presented to the President from 
1989 to the present and a summary of each act from 1973 to the present. Another helpful site displaying U.S. banking law is presented by th e Federal Deposit Insurance Corporation at 
http://www.fdic.gov/regulations/laws/rules/8000-100.htm l. Two other free Internet sites having the 
Code is one at Cornell Law School (http://www4.l aw.cornell.edu/uscode/) and one on Findlaw 
(http://www.findlaw.com/casecode/uscodes/). Current u pdated displays of the U.S. Code on the 
Internet are only available on commercial sites su ch as Lexis.com, Westlaw.com, LoisLaw.com, 
TheLaw.net, PotomacPub.com and VersusLaw.com.  
[Mexico] 
 23.  Paragraph 71 states that “additionally, there ar e relatively few limitations on the establishment of 
an initial federal branch or agency by a foreign ba nk.”  Mexico would like to know exactly what those 
“few limitations” are that the paragraph refers to. 
          WT/TPR/M/160/Add.1 
Page 343 
 
 
ANSWER:  The limitations refer to the limited number of  states that prohibit federal branches or 
agencies.  These states include Alabama, Maryland , Kansas, North Dakota and Wyoming, which are 
generally not of commercial interest to foreign banks .  We note that the “limitations” are in addition to 
the prudential requirements for a foreign bank to open a branch or agency.  [Mexico] 
 
24.  Paragraph 73 refers to the USA Patriot Act that  establishes new and enhanced measures to prevent, 
detect, and prosecute money laundering and terrori sm.  Could this law encourage discriminatory 
treatment, favoring U.S. nationals over foreign nati onals in the supply and establishment of banking 
services? 
 ANSWER:  These laws apply both to domestic and foreign financial institutions. 
 
[Mexico] 
 
25.  Paragraph 76 indicates that foreign broker-deal ers are exempt from registration requirements under 
certain circumstances.  Mexico is interested in knowing what is meant by the phrase “under certain 
circumstances.”  ANSWER:  There is an exception from registration for cross-border supply of broker-dealer 
services if the broker-dealer meets the conditions  contained in Rule 15a-6 under the Securities 
Exchange Act of 1934 – generally permitting foreign broker-d ealers to effect transactions for large 
institutional investors (under an arrangement with  a U.S. broker-dealer) and market professionals.  
Under these circumstances, the foreig n suppliers receive better than national treatment because they do 
not have to register as broker-dealers (unlike broker- dealers that are located in the United States).  A 
foreign-owned broker-dealer established in the United States could not avail itself of the safe harbor in 
Rule 15a-6 exception.  
[Mexico] 
 
26.  Paragraph 88 notes that thirteen states do not have a mechanism for licensing initial entry of a non-
U.S. insurance company as a branch ; however, they could accord such  rights if the company has been 
licensed in another state.  Is th ere any plan to eliminate such separate treatment among states for non-
U.S. insurance companies?  ANSWER:  The U.S. offer reflects some liberalization in this area.  The remaining U.S. states have 
not usually been of great interest to foreign supp liers of insurance.  Ho wever, such states have 
expedited the entry of foreign branches by showi ng willingness to accord such rights if the company 
has been licensed in another U.S. state.  
[Switzerland] 
 
Para. 76 : The Secretariat’s report states that “Foreign and domestic broker-dealers who wish to solicit 
business with U.S. persons are generally required to  register with the SEC although foreign broker-
dealers are exempt from registration requirements under certain circumstances.”. Could the U.S. 
authorities provide concrete examples of what is meant by “certain circumstances”?  
ANSWER:  There is an exception from registration for cross-border supply of broker-dealer 
services if the broker-dealer meets the conditions  contained in Rule 15a-6 under the Securities 
Exchange Act of 1934 – generally permitting foreign broker-d ealers to effect transactions for large 
institutional investors (under an arrangement with  a U.S. broker-dealer) and market professionals.  
Under these circumstances, the foreig n suppliers receive better than national treatment because they do 
not have to register as broker-dealers (unlike broker- dealers that are located in the United States).  A WT/TPR/M/160/Add.1 
Page 344  
 
foreign-owned broker-dealer established in the Unite d States could not avail it self of the safe harbor 
exception in Rule 15a-6.  Telecommunications Services
 
 [Canada]  Summary Observations, (6) Access Cond itions in Services, Paragraph 27. 
 
The Secretariat Report notes that in December 2004, th e FCC adopted new regulations that redefine the 
extent to which incumbent firms are required to ma ke elements of their network available to other 
carriers.   3. Could the U.S. provide more info on the new regulations and their impact for carriers? 
 
ANSWER:  On December 15, 2004, the FCC adopted an Order revising its unbundling rules in 
response to judicial review of its previ ous order.  This order is available at 
http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC- 04-290A1.pdf and a summary of this Order is 
available at http://hraunfoss.fcc.gov/edocs_pub lic/attachmatch/DOC-255344A1.pdf
.  An archive of the 
critical FCC orders concerning unbundling rules and opinions from judicial review of those orders is available at http://www.fcc.gov/wcb/cpd/trienni al_review/triennialremand.html
. 
 
[Canada] 
 Part IV. Trade Policies by Sector, (4) Telecomm unication services, (ii) Selected regulatory issues, 
(a) Public interest analysis and regul atory safeguards, Paragraph 99. 
 The Secretariat report mentions that when evaluating applications the FCC must conduct a public 
interest analysis and that in the case of the WTO members this analysis relies on an “open entry” 
standard.  20. Is the U.S. considering incorporating explicitl y a reference to the open entry standard into its 
legislation? 
 
ANSWER:  No. 
 
[Canada] 
 
Part IV. Trade Policies by Sector, (4) Telecommunica tion services, (ii) Selected regulatory issues, (a) 
Public interest analysis and regulatory safeguards, Paragraph 100. 
 
In its report, the Secretariat notes that the public interest analysis involves considerations for policy 
concerns such as national security, law enforcemen t, foreign policy, or trade policy issues.  
 
21. Could the U.S. provide further explanations on what type of foreign policy or trade issues may be raised in examining a license application?  ANSWER:  Trade policy issues that might arise would depend on the service being offered, the 
country involved, whether or not the country is a WTO member, etc.  One trade policy issue, for 
example, would be whether it would be appropriate to  condition or deny a license to a country that (a) 
was not a WTO member, and (b) did not offer reciprocal market access.           WT/TPR/M/160/Add.1 
Page 345 
 
 
[Canada] 
 Part IV. Trade Policies by Sector, (4) Telecommunica tion services, (ii) Selected regulatory issues, (a) 
Public interest analysis and regulatory safeguards, Paragraph 105. 
 The Secretariat Report notes that besides the men tioned regulatory safeguards, the FCC reserves the 
right to attach other conditions to an authorization or license.   22. Could the U.S. provide more inform ation on these other possible conditions? 
 
ANSWER:  In its 1997 Foreign Participation Order, 12 FCC Rcd 23891 (1997), the FCC adopted 
an open entry standard for foreign investment from WTO Member countries.  This standard includes a 
rebuttable presumption that no competition concerns are raised by such investment.  In adopting this 
presumption, the FCC stated that it could not rule out  the possibility that, in ex ceptional circumstances, 
foreign entry into the U.S. market  may pose a competitive risk that would require imposing conditions 
other than those that are codified  in the FCC’s rules, such additional reporting requirements, prior 
approval for circuit additions, or ot her measures designed to ensure that a carrier with market power 
does use that power to harm U.S. consumers.  Th e Commission to date has not been presented with a 
case that has required it to impose any additional requirements.  
[China] 
 
Question (p. 102-107) 
Under American laws （54.709(a)(1) of Title 47 of the U. S. Code of Federal Regulations ，for 
international and domestic telecommunication fees, universal service fund shall be paid. 
 
Would the U.S. explain how it s universal service fund operates? 
 
ANSWER:  Established pursuant to Section 254 of th e Communications Act of 1934, as amended, 
the universal service fund (USF) is intended to ensu re the delivery of afford able telecommunications 
services to all regions of the nation at reasonable rate s for those living in rural or high-cost areas, low-
income consumers, rural health care facilities, and public and private schools and libraries.  Providers 
of interstate telecommunications services cont ribute to the USF based on a percentage of 
telecommunications interstate and international e nd-user revenues, known as the contribution factor.  
The contribution factor changes four times a year and is increased or decreased depending on the needs 
of the USF. 
 There are four USF programs that receive support:  
• High-Cost Program – USF supports eligible  carriers providing telecommunications 
services in rural or high cost areas to ma intain rates comparable to urban rates. 
• Low-Income Program – USF supports discounts on installation and monthly 
service charges for low-income customers. 
• Rural Health Care Program – USF supports  discounts for eligible rural health care 
providers for telecommunications services and monthly Internet service charges. 
• Schools and Libraries Program – USF suppor ts discounts for eligible schools and 
libraries for telecommunications services, Internet access, and internal connections. 
 
In addition, below are links that provide de tailed information on the operation of the USF: 
 WT/TPR/M/160/Add.1 
Page 346  
 
Link to the FCC’s  general USF webpage, which al so provides links to FCC webpages that provide 
information on the USF contribution met hodology and the four USF programs:  
http://www.fcc.gov/wcb/universal_service/quarter.html  
 Link to the website of the Universal Service Admi nistrative Company, which administers the USF:  
http://www.universalservice.org/default.aspx
. 
 
[China]  Would the U.S. clarify the definition and scope of “domestic end user”? 
For example, if a foreign company which is regist ered and conducts its business mainly outside the 
U.S. only leases circuit on the side of the U.S. fo r its telephone communicati ons with its companies 
within the territory of the U.S., is this foreign co mpany an “American domestic end user” so that it has 
to pay Universal Connectivity Charge whic h corresponds to the universal service fund? 
 
ANSWER:  Section 254(d) of the Communications Act of 1934, as amended, states that “[e]very 
telecommunications carrier that provides interstate telecommunications services shall contribute, on an 
equitable and nondiscriminatory basis, to the sp ecific, predictable, and sufficient mechanisms 
established by the Commission to preserv e and advance universal service.”  47 U.S.C. § 254(d).  In the 
First Report and Order, the Commission stated that  the base of contributors to the fund should be 
construed broadly and should therefore include fo reign telecommunications revenues of interstate 
carriers.  See Federal-State Board on Universal Service, Report and Order 12 FCC Rcd 8776, 9173, 
para. 779 (1997) (available at http://hraunfoss.fcc.gov/edocs_publ ic/attachmatch/FCC-97-157A1.pdf
.).  
The Commission also stated that “[f]oreign co mmunications are defined as ‘communication or 
transmission from or to any place in the United States  from a foreign country, or between a station in 
the United States and a mobile station outside the United States.’  Communications that are billed to 
domestic end users should be included in the revenue base, including country direct calls.”  Id.  Under 
the Commission’s rules carriers that  contribute to the USF may (but are not required) to pass through 
interstate telecommunications related charges onto th eir end users.  See 47 C.F.R. § 54.712.  See also, 
Federal-State Joint Board on Universal Service, Report and Order, CC Docket No. 94-45, FCC 02-329, 
paras. 40-63 (2002) (available at http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-02-
329A1.pdf ).  
 
[China] 
 Question (p. 102-107) 
When foreign telecommunications enterprises apply for the reduction and exemption of income tax in 
settlement of voice services on revenue generated within  the territory of the U.S., there is no clear 
definition on “revenue generated with in the territory of the U.S.”. 
 
Would the U.S. clarify the definition and scope of  “revenue generated within the territory of the 
U.S.”?  
For instance, in international telecommunication voi ce service settlement, foreign telecommunications 
company and American telecommunications company provide half-circuit respectively on the side of 
their own countries to form a complete circuit, provide voice or broad band services between the two countries, and the two parties offset the balance due in accordance with inbound and outbound volume 
or traffic between the two countries. Is the net income of the foreign telecommunications company 
(namely, the charge paid by the American telecommunications co mpany to the foreign 
telecommunications company) regarded as the “revenue  generated within the territory of the U.S.”? 
 ANSWER:  This question is confusing, and seems to  be a tax issue, not a telecommunications 
regulatory issue.  If China can confirm that it is a tax issue, we will contact the appropriate authorities 
for an answer. 
          WT/TPR/M/160/Add.1 
Page 347 
 
 
[China] 
 Question (p. 103 papa.96) 
The U.S. does not grant Common Carrier Radio Licenses to nor does it permit the holding of Common 
Carrier Radio Licenses by the following forms of FD I: foreign governments or their representatives; 
non-American citizens or their representatives; comp anies established not under American laws; over 
20% of stock or right to vote belongs to foreign governments or their representatives, non-American 
citizens or their representatives or compan ies established not under American laws. 
 
What are the policy concerns over the restrictions above of the U.S.? 
 ANSWER:  The Communications Act restrictions date from 1934, and reflect concerns the 
Congress had relating to foreign cont rol over a national resource, radio spectrum.  As the U.S. market 
developed, the United States implemented means to lib eralize market access consistent with the law, 
permitting full participation by foreign entities of WTO members in the telecommunications services 
sector whether by wire or radio.   
 
[Chinese Taipei] 
 
Question 15 (pages 102-104, paragraphs 96-100) 
As indicated in the report, public interests relying on an “open entry” standard should be taken into 
consideration for applications by a foreign supplier from a WTO Member.  Could the US please 
describe the criteria for determining “public intere sts”, and illustrate how these criteria for licensing 
requirements and procedures are based on objective a nd transparent principles so as not to constitute 
unnecessary barriers to trade in telecommunications services?  
ANSWER:  In its Foreign Participation Order, 12 FCC Rcd 23891 (1997), adopted in 1997, 
following the conclusion of the WTO Basic Tele communications Agreement, the FCC established 
specific requirements and procedures for auth orizing foreign entry into the U.S. basic 
telecommunications services market.  The open entr y standard for foreign investment from WTO 
Member countries consists of a rebuttable presumption that no competition concerns are raised by such 
investment.  The FCC’s public interest analysis  also takes into account national security, law 
enforcement, foreign policy and trad e policy concerns that may be raised by a particular investment.  
The Commission publishes all of its decisions on applications for authorization to provide basic 
telecommunications services and for authorization to exceed the 25 percent foreign ownership benchmark in section 310(b)(4) of the Communications Act.  Further, FCC decisions are subject to 
judicial review, and U.S. law directs a reviewing c ourt to hold unlawful and set aside agency action, 
findings, and conclusions found to be arbitrary, capri cious, an abuse of discretion, or otherwise not in 
accordance with law.    As indicated in paragraph 97 on page 103, the US implemented its WTO commitments for satellite 
services through the DISCO II Order adopted in No vember 1997. These commitments allowed foreign 
satellite operators to provide satellite services to the US  market.  Accordingly, for Mode 1 to Mode 3 of 
satellite-based mobile communications services, are there any limitations or requirements for market 
access and national treatment under the US regulator y regime?  If none, what measures does the FCC 
undertake to ensure the rights of consumers w hose services are provided by foreign satellite-based 
mobile communications services operators?  
ANSWER:  Apart from the MFN exception the United States maintains for DBS, DTH, and DARS, 
there are no market access or national treatment limitations for WTO members.   Foreign satellite-based mobile communications servi ce operators are subject to the same general 
consumer protection rules as U.S.-based operators.  The FCC does not regulate satellite service rates, WT/TPR/M/160/Add.1 
Page 348  
 
terms and conditions which are subject to contract ual arrangements between sa tellite service providers 
and their customers.  
[European Communities] 
 
In Chapter IV (Trade Policies by Sector ) paragraphs 102-103 the Secretariat Report  summarizes the 
“international settlements policy of the Federal Communications Commission (FCC). The FCC policy 
is a unilateral approach to deal with a problem wh ich is in fact global: the fact that operators in 
countries which have not yet or were late in liber alizing their markets will use their dominant position 
as regards the termination of international calls  on these countries to “overcharge” their services.  
• Why did the FCC not initiate discussions with other jurisdictions in order to set up a joint approach 
to this global problem? 
 ANSWER:  The issue had been discussed at length in  the International Telecommunications Union 
(ITU) and other fora.  It did not appear that th ere was any political willingness among jurisdictions to 
address the issue in a meaningful ma nner, perhaps since, at the time, most operators were government-
owned entities.  The FCC invited comments by all inte rested parties, including foreign governments, in 
developing its rules.  Unfortunately, few government  or companies took advantage of this process to 
articulate reasonable bases for addressing the practices these rules address.  In Chapter IV paragraphs 108- 112 the Secretariat Report  refers to the December 2004 approach of the 
FCC as regards access obligations imposed on the in cumbent local exchange carriers (ILEC). In this 
regard the FCC has not imposed any access obligation to the high-frequency portion of the local loop 
used for line sharing, relying on the state of  intermodal competition for broadband services (see 
paragraph 111 of the report).  
• Does this approach not favor a duopolistic market  structure and limit the opportunities for foreign 
undertakings - who cannot reach an attractive deal  with neither of both the ILEC and the cable 
operators - to enter the US market? 
 
ANSWER:  The U.S. broadband market is still an em erging and changing market.  U.S. policies 
and rules are premised on evidence of vigorous inte rmodal competition between wireline carriers, cable 
services operators, and new broadband technologies and services that are entering the market, such as 
broadband over powerline (BPL), mobile wireless  broadband services, fixed wireless broadband 
services (e.g. WiMax), and satellite broadband services. 
 The FCC continues to require incumbent carriers to  provide competitors with unbundled access to the 
entire copper loop facility, which can be used to provide  broadband services.  As part of this obligation 
to unbundle the entire loop, incumbent carriers must  also facilitate line-splitting (i.e., the sharing of 
such unbundled loop by two competitors). 
 
In addition, competitors may negotiate and enter in to commercial agreements with incumbent carriers 
to obtain network access, including access to the hi gh-frequency portion of loops , to offer broadband 
services.  Several competitors, including Covad Communications, are pursuing such strategies.  
See: http://www.covad.com/companyinfo/pressroom/p r_2005/122805_news.shtml (COVAD deal with 
VZ and MCI); and http://www.covad.com/co mpanyinfo/pressroom/pr_2005/050505_news.shtml 
(COVAD extension of agreement with AT&T (formerly dba SBC)).  The US may wish to provide some  basic information on the latest developments in their domestic 
regulatory framework for different types of services. More specifically, we refer to recent regulations 
on grouping of telecommunications services into different categories (basic-information services). In 
particular, what type of services are covered in each category and what type of regulations are applied          WT/TPR/M/160/Add.1 
Page 349 
 
 
for each category. As these distinctions are bei ng reflected in the US Revised Offer it will be 
particularly useful to provide such information to ensure a better understanding of what is applied in 
each case.    ANSWER:  The Communications Act defines telecommunications services as “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, regardless of the facilities used” and it defines information services as 
“the offering of a capability for generating, acquiri ng, storing, transforming, processing, retrieving, 
utilizing, or making available information via te lecommunications, and includes electronic publishing, 
but does not include any use of any such capability for the management, control, or operation of a 
telecommunication system or the management of a telecommunications service.”  
 Telecommunications services are subject to Title II of the Communications Act whereas information 
services are subject only to the FCC’s ancillary jurisdiction under Title I of the Communications Act.  Most recently, the FCC determined that “wire line broadband Internet access services” should be 
classified as information services.  The FCC ha d earlier determined that cable modem services 
provided by cable operators should be classified as information services.  In addition, the FCC updated 
many of its existing rules related to informati on services to respond to market and technological 
changes marked by growth in the use of the Inte rnet and the availability of Internet services from 
multiple broadband networks, including cable, wi reless, satellite and power-line networks. 
 (Broadband Access to the Internet Over  Wireline Facilities Order available at 
http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-05-150A1.pdf)  (High-Speed Access to the Internet Over  Cable and Other Facilities available at 
http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-02-77A1.pdf)  
 
Although according to the US, there is no precedent fo r the US not to grant an application for an 
authorization for the provision of telecommunicati ons services, the requirement to conduct a public 
interest analysis of applications involves the a pplication of a condition for issuing a license which 
could raise questions on the level of objectivity and transparency, and on whether such level 
corresponds to the expectations of the applicants. The latter need to be en sured that as long as they 
fulfill certain conditions required for granting a licen se that such license will be granted to them. In 
order to have a clear view of which conditions apply before an application is filed, conditions need to 
be objective, not ambiguous, and transparent.   
• The public interest analysis requirement raises the question as to whether it provides all necessary 
safeguards to applicants and effectively eliminates any risk for reaching arb itrary decisions in the 
course of examining an application for a license. 
 ANSWER:  U.S. regulatory decisions are subject to judicial review.  U.S. law directs a reviewing 
court to hold unlawful and set aside agency action,  findings, and conclusions found to be arbitrary, 
capricious, an abuse of discretion, or otherwise not in accordance with law. 
 
[Japan] 
 Q54. A major supplier in the mobile telecommunica tion market (p. 102 to 103, paras.93 to 98) 
Does the United States assume a “major supplier” to be defined in the Reference Paper developed in 
the Negotiating Group on Basic Telecommunication for the mobile telecommunication market?  If so, 
please explain how the United States guarantees oblig ations (competitive safeguards, interconnection) 
applied to “major suppliers” on interior regulatio ns.  In these respects, please indicate the specific 
views of the Government of the United States.  
 WT/TPR/M/160/Add.1 
Page 350  
 
ANSWER:  This question is unclear, and may reflect  a misunderstanding on how the Reference 
Paper relates to domestic markets.  The Reference Pape r is designed to discipline, inter alia, abuses of 
market power.  In sectors subject to specific commitments, including the mobile sector, the 
United States has adopted Reference Paper commi tments, including commitments to maintain 
measures to prevent anticompetitive practices and ensu re interconnection with ma jor suppliers.  As far 
as the United States is aware, th ere is no evidence of anticompetitive practices or failure to provide 
interconnection in the U.S. mobile market.  The United States maintains general competitive sa feguards through its anti-trust laws, which are 
applicable to all telecommunications operators, including mobile companies.  With respect to 
interconnection, mobile companies are subject to a ge neral obligation to interconnect, either directly or 
indirectly.  Rates for transport and termination on mobile networks are arrived at through interconnection 
agreements between carriers.  In the case of inte rconnection between mobile carriers and incumbent 
local exchange carriers (LEC), if  the carriers cannot negotiate a co mmercial arrangement, either party 
can seek mediation or arbitration from a state regulat or, pursuant to sections 251, 252, and 332 of the 
Communications Act.  If a dispute goes to arbitration, the regulator will set rates for transport and termination based on the incumbent LEC's forward l ooking incremental cost of termination, with a 
presumption that both the incumbent carrier and the m obile carrier will charge the same transport and 
termination rates.  In the case of interconnec tion between mobile carries and non-incumbent 
telecommunications carriers, rates for transport a nd termination are commercially negotiated. Thus, 
mobile interconnection rates are not directly regulat ed in the United States, and there does not appear 
any reason to do so.  In the case of interconnecti on with incumbents, there has been no evidence that 
mobile carriers have charged excessive termination rates,  particularly given the fact that mobile carriers 
are subject to a receiving party pays regime.  No r is there any evidence that mobile carriers have 
charged excessive termination rates in interconnec tion agreements which they  have negotiated with 
non-incumbent carriers.  In fact, in this latter ca se, the negotiated rate generally ranges from zero 
(under a bill-and-keep arrangement) to a fraction of a cent per minute.  Thus, U.S. mobile termination 
rates are among the lowest in the world.   
 
[Japan] 
 
Q55. Foreign investment restriction on radio stations (p.103, para.96) 
Paragraph 96 states that common carrier radio licenses ca nnot be granted to or held by non-US citizens, 
corporations not organized under the laws of the Unite d States, or foreign governments.  It is also 
stated that licenses cannot be granted to U.S. corpor ations of which more than 20% of the capital stock 
is owned of record or voted by any of these entitie s.  However, these statements are followed by a 
qualification that licenses may be granted to compan ies set up in the United States that are controlled 
by holding companies set up in the United States and in which foreign individuals, corporations, or 
governments own of record or vote more than 25% of  the capital stock, unless the FCC finds that such 
ownership is inconsistent with th e public interest.  Please explain the reasons why the United States 
maintains such a low-level, i.e., 20%, as the limita tion of FDI despite the fact that foreign indirect 
investment has been 100% liberalized. 
 
ANSWER:  This is the way our law is written.  Th ese limits, however, do not appear to have 
constrained foreign entry, given the large amount of  foreign investment in U.S. telecommunications 
markets. 
 
[Japan]  Q56. Public interest analysis and safeguards  on regulations (p.104, paras.99 to 100) 
It is stated in paragraph 99 that “under the Co mmunications Act of 1934, the FCC must conduct a 
public interest analysis when evaluating applications  to: obtain authority to provide facilities-based or          WT/TPR/M/160/Add.1 
Page 351 
 
 
resold international services under Section 214;  r eceive authorization to exceed the 25% foreign-
ownership benchmark of Section 310(b)(4);  or ob tain submarine cable landing licenses.”  It is not 
disclosed how long it generally takes for the United St ates to conduct the “public interest analysis” and 
there are cases where the investigations have been extended over long periods of time.  For example, in 
the case of the assignment of management authorit y from the time of the Global Crossing to New GX, 
more than 1 year passed from the application (Aug. 2002) to when the approval was filed (Oct. 2003).  
Japan is concerned that the lack of  transparency in the “public interest analysis” will have a detrimental 
effect on foreseeability.  In this regard, please indi cate the specific views of the Government of the 
United States.  
 
ANSWER:  The time taken to complete a review  of a license application depends on the 
complexity of the case involved.  Processing times range from no time (i.e. notification only) for domestic long-distance service to 14 days for routine,  international Section 214 authorizations to up to 
one year or longer for applications in connection w ith large, complex mergers or acquisitions, such as 
the case Japan cited as an example.  The FCC has established as an internal guideline of a 180-day 
timetable for its own review of major transactions.  More routine transactions are generally acted upon 
in a much shorter time frame, usually 30 to 60 days after the application is placed on Public Notice.  
Timing of the process often depends on how quickly applicants can provide information necessary to complete such a review.  The key feature of the U. S. licensing regime has been a constant effort to 
streamline and deregulate, where appropriate.  [Japan]  Q57. Unbundled network element (p.106, para.111) 
Although there is a statement in paragraph 111 that “the FCC has pursued a policy of creating 
incentives to broadband deployment since 2003, by no t requiring the incumbent local exchange carriers 
to unbundle new facilities that are designed to prov ide broadband services to residential customers, 
such as fiber-to-the-home loops, fiber-to-the-cur b loops, the high-frequency portion of the loop used 
for line sharing, and hybrid loops”, the government  of Japan is concerned that revision of these 
unbundling regulations would lead to a reduction on the scope of the unbundling obligations specified 
in the section 2.2 of the Reference Paper developed in the Negotiating Group on Basic 
Telecommunication and adversely affect these obligati ons.  In this regard, please indicate the specific 
views of the Government of the United States.   
ANSWER:  We disagree. The Reference Paper obliga tion relating to unbundling is designed to 
ensure unbundled access to services (e.g. end-offi ce level switching rather than tandem-level 
switching) that permit two distinct networks to in terconnect, not access to a facility an operator leases 
to extend its own network.   
 [Japan]  Q58. Distinction between Telecommunication serv ice and Information service (p.106, para.111) 
The United States adopts the distinction under th e Communications Act of 1934 (as amended) as 
follows: “Telecommunication service” is to be s ubject to obligations of unbundled access and 
responsibility for universal service fund, while “Inf ormation service” is not to be subject to those 
regulations.  This distinction has, however, become  ambiguous due to developm ent of technology.  The 
Government of Japan therefore requests the Governme nt of the United States to clarify the distinct 
criteria so that foreign suppliers can foresee the typ es of services classified and what regulations should 
be imposed.  In this regard, please indicate the speci fic views of the Government of the United States.  
 
ANSWER:  The Communications Act defines telecommunications services as “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, regardless of the facilities used” and it defines information services as WT/TPR/M/160/Add.1 
Page 352  
 
“the offering of a capability for generating, acquiri ng, storing, transforming, processing, retrieving, 
utilizing, or making available information via te lecommunications, and includes electronic publishing, 
but does not include any use of any such capability for the management, control, or operation of a telecommunication system or the management of a telecommunications service.”   
Telecommunications services are subject to Title II of the Communications Act whereas information 
services are subject only to the FCC’s ancillary jurisdiction under Title I of the Communications Act.  Most recently, the FCC determined that “wire line broadband Internet access services” should be 
classified as information services.  The FCC ha d earlier determined that cable modem services 
provided by cable operators should be classified as information services.  In addition, the FCC updated 
many of its existing rules related to informati on services to respond to market and technological 
changes marked by growth in the use of the Inte rnet and the availability of Internet services from 
multiple broadband networks, including cable, wi reless, satellite and power-line networks. 
 
(Broadband Access to the Internet Over  Wireline Facilities Order available at 
http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-05-150A1.pdf) 
 (High-Speed Access to the Internet Over  Cable and Other Facilities available at 
http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-02-77A1.pdf)  
 
[Korea] 
 
Telecommunication Services – Institu tional framework and market access
 
 
8. Regarding paragraph 96 on page 102 of the Secretariat’s report, please clarify whether resellers who 
provide services by leasing equipments from basic telecommunication carriers should also have a common carrier radio license to supply wireless services.   Does the foreign participation limit (Section 
310(b)(3) of the Communication Act) also apply to resellers supplying wireless services?  Please 
provide the number of the companies that have r eceived authorization to exceed the 25% foreign-
ownership benchmark of Section 310(b)(4) of th e Communication Act? How many resellers are 
included among those companies?  
 ANSWER:  Section 310 (b)(3) does not apply to carriers that merely resell the wireless services of 
other basic telecommunications carriers.  Section 310(b)(3) applies to carriers that hold a common 
carrier radio license or that lease a common carrier radio license.  The United States does not collect 
statistics on the number of wireless resellers in the ma rket.  With respect to re quests to exceed the 25 
percent foreign ownership benchm ark in section 310(b)(4) of the Communications Act, the FCC has 
not denied any requests to date to exceed the benchm ark.  In 2005, the FCC granted 9 such requests. 
 [Korea]  
Telecommunication Services – Selected regulatory i ssues- public interest analysis and regulatory 
standards  
 9. With regard to the para 99 on page 104 of the Secretariat’s report, what are the requirements for a 
foreign company to obtain a submarine cable la nding license? Should the foreign company have 
commercial presence in the U.S.?  ANSWER:  The specific requirements for filing an application to obtain a cable landing license 
from the FCC are set forth in the sections 1.767 and 1.768 of the FCC rules, which can be viewed on 
the FCC web site at http://www.fcc.gov/ib/pd/pf/telecomrules.html
.  A foreign company does not need 
to establish a commercial presence in the Unite d States to obtain such an authorization. 
          WT/TPR/M/160/Add.1 
Page 353 
 
 
The application can be filed via the Internet using the International Bureau Filing System (IBFS).  The 
FCC will act upon an application which is eligible for streamlined processing within 45 days after the 
application is placed on Public Notice.   More in formation about the FCC’s cable landing licenses can 
be found on the FCC web site at: http://www.fcc.gov/ib/pd/pf/scll.html.  
Maritime Services
 
 
[Argentina] 
 
18. On page 143, paragraph 140,  the report mentions the implementation of the Capital Construction 
Fund and the Construction Reserve Fund, whereby U. S. owners and lessees of ships may obtain fiscal 
benefits to build ships that meet prescribed conditions.   
Question:  Could you provide more informati on on the type of aid that these funds offer?  
 
ANSWER:  The Capital Construction Fund (CCF) program  is designed to encourage owners of 
U.S. flagged vessels to accumulate  sufficient capital to acquire additional U.S. flagged vessels by 
offering tax incentives to do so. Vessel owners that meet the requirements under the CCF rules, may 
claim an income tax deduction for contributions to  a CCF, pay no tax on CCF earnings and withdraw 
funds on a tax free basis to acquire new U.S. flagged vessels. For further information on the basic rules, 
restrictions and penalties associated with Cap ital Construction Funds, please visit the following 
website: http://www.marad.dot.gov/TitleXI/ccf.html. 
 
The Construction Reserve Fund (CRF), authorized by Section 511 of the Merchant Marine Act of 
1936, as amended (the Act), is a financial assistance program which provides tax deferral benefits to 
U.S.-flag operators. Eligible parties can defer the gain attributable to the sale or loss of a vessel, 
provided the proceeds are used to expand or modern ize the U.S. merchant fleet. The primary purpose 
of the CRF is to promote the construction, recons truction, reconditioning, or acquisition of merchant 
vessels which are necessary for national defense and to  the development of U.S. commerce. For more 
information on eligibility requirements for the CRF, the program's benefits, and restrictions on the 
Fund's use, please visit the following website: http://www.marad.dot.gov/TitleXI/crf.html. 
 
[Australia] 
 Does the United States plan to make new commitments on maritime transport services in its revised 
services offer? If not, why not?  ANSWER:  The United States has submitted offers and requests covering a number of sectors 
based upon consultations with our domestic c onstituencies and reflecting our commercial and 
economic interests in the WTO negotiations.  Decisions  concerning the substance of any future offers 
will be assessed in the context of the negotiations.  
[Canada] 
 
Part IV. Trade Policies by Sector, (5) Maritime Transport, iii) Internati onal water-borne trade, 
Paragraph 123:  
 
23.  Is the United States contemplating changes to the Shipping Act or the Ocean Shipping Reform Act 
in light of the recent announcement by the European Commission (EC) that they intend to repeal 
Regulation 4056/86 which provides Liner Shipping C onferences with an exemp tion against certain EC 
regulations dealing with anti-competitive behaviour? 
 ANSWER:  No changes are under active consideration at this time. 
 WT/TPR/M/160/Add.1 
Page 354  
 
[China] 
 Question (p. 108) 
Merchant Marine Act, 1920 puts lim itations on foreign vessels’ enga gement in transport business in 
near ocean and within the U.S.; transport of projects whose expenses are born by the Federal 
Government must be carried by American vessels.  
 
Members are much concerned about this in previo us reviews.  What are the reasons for the U.S. 
to adopt such strict protective policy?  
ANSWER: To encourage a strong U.S. merchant mari ne for both national defense and economic 
security, the nation's domestic waterborne commerce is reserved for vessels built in the United States, 
crewed and owned by American citizens, and regist ered under the American fl ag. U.S. cabotage laws 
governing the domestic transportati on of passengers and cargo by water are generally known as the 
Jones Act. The Act does not prevent foreign compani es from investing in Jones Act carriers as long as 
they meet U.S. regulations regarding ownership.   
 Another important aspect of the Jones Act is that  it helps sustain vessels and a skilled, dependable 
civilian seagoing labor force that are critical for strategic sealift and other military support services in a war or in national disasters. The Jones Act con tinues to be the foundation for America's domestic 
shipping policy. 
 
For similar policy considerations, several U.S. laws require that all military cargoes and a percentage of 
civilian agency cargoes financed by  the government of the United Stat es must be carried on U.S.-flag 
ships. These are not commercial cargoes, and the U. S. does not reserve commercial cargo for U.S.-flag 
vessels.  [China] 
 
Protection of transport along the coast of the U. S. under Jones Act affects reallocation of empty 
containers of foreign vessel companies. 
 
Please explain the rationale of stipulations  on reallocation of empty containers under Jones Act.  
 
These stipulations under Jones Act  have put extra burdens on foreign maritime companies, putting 
them at a disadvantage in their competition with the US domestic companies.   
 
What are the comments of the U.S. on this?  
ANSWER:  Based on reciprocal privileges to U.S.-f lag vessels, the repositioning of intermodal 
equipment, e.g. empty containers, chassis, and stra ddle bars, between U.S. ports  is allowed on foreign-
flag vessels, if the equipment is owned or leased by the owner or operator of the transporting vessel for 
use in handling his cargo in the foreign trade, (Section 27, 46 App. U.S.C. 883). 
 
[China] 
 
The American Constitution stipulates that federal laws  supersede legislations of each and every state, 
yet in maritime transport legislation, especially in oil pollution and environmental protection, each state 
acts on their own, with standards usually higher than relevant stipulations of international conventions 
approved by the Federal Government, which forces vessel owner to make extra arrangements in vessel apparatus and responsibility guara ntee, which considerably increase the cost and expenditure. 
What are the comments of the U.S. on it?           WT/TPR/M/160/Add.1 
Page 355 
 
 
ANSWER:  The United States does assert primacy at the federal level for matters related to 
interstate and foreign commerce. From time to  time individual states have enacted laws which 
challenge that federal primacy, and our  courts have consistently ruled in  favor of that primacy, negating 
the state laws. 
 
[Chinese Taipei] 
 
Question 16 (page 108, paragraph 118) 
As mentioned in the Report, the United States has not tabled an offer with respect to Maritime 
Transport Services in its initial offer on services in the Doha Development Agenda.  Does the US plan 
to make an offer in the Maritime Transport Servi ces sector, and if so, could it please indicate by when? 
 ANSWER:  The United States considers that there shoul d be no a priori exclusion of sectors from 
these negotiations.  Accordingly, we are consideri ng how to respond to requests over the course of the 
DDA negotiations. 
 
[European Communities] 
 
Could the United States provide some information re garding the waivers that have been granted to 
foreign vessels for maritime transport services in domestic water-borne trade?  
ANSWER:  The Jones Act, which was enacted as Sec tion 27 of the Merchant Marine Act of 1920 
and is codified at 46 U.S.C. App. § 883, requir es that all merchandise, including that owned by the 
United States Government, a State or a subdivision of a State transported between ports of the United 
States by vessels must be transported by vessels built or rebuilt in the United States and owned by citizens of the United States.  If the vessel is owne d by a corporation, partnership or association, a 
controlling interest of not less than 75 percent must be owned by citizens of the United States.   To 
operate between ports of the United States, includi ng Alaska, Hawaii, the Great Lakes and the inland 
waterways, vessels must have been issued a Coastwise endorsement on their certificate of 
documentation.    The Jones Act can only be waived based on needs of national defense.  Recently, due to the disruption 
of production and deliveries of oil between United St ates ports as a result of the devastation caused by 
hurricane Katrina, waivers were granted from the J ones Act for deliveries of those products by foreign-
built and foreign-owned tankers.  Waivers of th e Jones Act on a case-by-case basis are permitted 
during a period of actual or imminent shortage of energy supplies when such  waivers may be necessary 
to help mitigate the shortage and are deemed necessary in the interest of national defense. United States 
Customs and Border Protection (CBP), in the Depart ment of Homeland Security, consider the Waiver 
of Navigation and Vessel Inspection Law, Pub. L.  81-891, 64 Stat 1120, as its authority to grant 
waivers under the Jones Act.  
• As it appears from the report (page 109), about 98% of international maritime  transport of the US 
is carried on foreign-flag vessels. Could you conf irm that within the framework of the current 
legislatory framework the United States do not appl y restrictive measures with regard to market 
and/or national treatment? If this is not the case could the United States specify which market access and/or national treatment limitations are applied within the meaning of Articles XVI and XVII GATS? 
 ANSWER:  The United States has a relatively open mariti me regime.  With respect to Articles XVI 
and XVII, the following laws are noted:  
The Shipping Act of, 1916:      SEC. 1. (46 App. U.S.C. 801 (2002)).  SEC.  2 (a) - (c).  Corporation, Partnership, or  WT/TPR/M/160/Add.1 
Page 356  
 
Association as Citizen (46 App. U.S.C. 802) The Merchant Marine Act, 1920, section 19, the Shi pping Act of 1984, the Foreign Shipping Practices 
Act of 1988 and Public Law 89-777.  
[Japan] 
 Q59. Harbor Maintenance Tax (H MT)  (p.108, para116-119) 
At the meeting of the Automobile Consultati on Group (ACG) in January 2003, Japan took up the 
Harbor Maintenance Tax as an issue of great con cern to the Japanese autom obile industry and claimed 
that the HMT clearly discriminates against imported cars.  Japan would like to know whether the U.S. 
has a plan to review the taxation system cited above. 
 ANSWER:  The Harbor Maintenance Tax (HMT) was established by Title XIV of the Water 
Resources Development Act (WRDA) of 1986 (P.L. 99-66 2) and subsequent legislation.  Currently, the 
HMT is applied as a 0.125 percent ad valorem fe e on the value of all imported commercial cargo 
unloaded from vessels at ports where federal funds are used to maintain harbor access.  The U.S. 
Government is currently reviewing the HMT issue.   
[Japan] 
 
Q60.  Maritime transport and competition policy (1) and International water- borne trade (1) (p.108 
para.116 and p.110 para.129) 
 (1) Though approximately 98% of the U.S. ocean-borne  foreign trade is carried on foreign-flag vessels, 
the amount of cargo coming within the scope of the U. S. cargo reservation is not negligible considering 
that the United States is the largest cargo owner c ountry.  Japan requests the U.S. to abolish the Cargo 
Preference Measures, such as the requirement to use U.S. vessels to export Alaskan oil, which is 
commercial cargo.  These protectionist measures are inconsistent with the principle of national treatment, and are also against the Ministerial Decision on the Negotiations on Maritime Transport Services of the WTO, which prescribes that particip ants should not apply any protectionist measures 
during the negotiations.  In this regard, please indicate the specific views of the Government of the United States.  
 
ANSWER:  Since 1904 Congress has enacted a series of such laws, which require exporters and 
importers to use U.S.-flag vessels to transport a cer tain percentage of any oceanborne cargoes and that 
are financed, directly/indirectly, by the U.S. Government, under the following statutes: 
• The Cargo Preference Act of 1954 as amended; 
• The Military Cargo Preference Act of 1904 as amended; 
• Public Resolution 17 of the 73rd Congress (1934); and • P.L. 105-383, the Coast Guard Authorization Act of 1998; 
 The cargo preference laws result in meeting the Na tional security objective by assuring that sufficient 
sealift capability and intermodal transportation infr astructure exist to support vital homeland and 
National security interests. These laws help sustai n the assured sealift capability of the 118 U.S.-flag 
vessels and the related mariner positions that are vita l to our National security and are fully compliant 
with the United States’ obligations to the WTO.  Lifting the prohibition against exporting Alaskan oil yi elds economic benefits, a nd is consistent with 
International Energy Agency recommendations.  Eliminating the prohibition has had on balance a 
beneficial trade liberalizing effect.  The last Alaskan  crude oil to be exported was in April 2000. Since 
that time all Alaskan crude oil production has moved to the U.S. West Coast market for refining and 
domestic consumption. The United States does not believe  that the legislation raises any difficulty with 
obligations in the WTO with respect to th e negotiations on maritime transport services. 
          WT/TPR/M/160/Add.1 
Page 357 
 
 
(2) Since the repeal of the aforementioned rule, the FMC requires Japanese and U.S. carriers to report 
to it on the progress of port situations in Japan.  Efforts have been made and signs of progress have 
been seen in various aspects: the "prior consu ltation system" has improved significantly (and the 
improved system has been implemented steadily); and the Port Transportation Business Law was revised to abolish the supply-demand adjustment rest riction and thus has realized new entries into port 
transport business.  Progress has also been made toward the introduction of port terminal service 
operations on a 24-hour/364-day basis.  Japan st rongly urges the FMC to fully understand these 
positive developments.  Despite significant improvement  in the port situation of Japan however, the 
FMC introduced in August 2001 a new order, which not only increased the number of items to be reported, but also expanded the scope of the carrier s subject to the reporting requirements.  The order 
includes requirements which go beyond the extent de emed appropriate to be imposed upon carriers.  
For example, it directly requires Japanese carriers to submit translated copies of Japanese laws and 
instructions concerned, causing an unfair and excess ive burden on the carriers.  Should it be the case 
that the FMC decided to expand the range of the re porting requirements in order to judge whether or 
not it should impose unilateral sanc tions, that would violate the Treaty of Friendship, Commerce and 
Navigation between the United States and Japan, and Japan would deem it as a regrettable and serious 
abuse of the FMC's mandate.  Japan, therefore, strongly  requests the U.S. to withdraw the order.  In this 
regard, please indicate the specific views of the Government of the United States.   ANSWER:  The Government of the United States remains concerned that the progress in 
improvement of the port situation has not extended to any meaningful opening of Japanese port 
services to foreign companies.  In particular, the port  operations of foreign liner carriers remain subject 
to the non-transparent aims of the Japan Harbor  Transport Association (JHTA) and costly and 
inefficient legal requirements for levels of labor an d equipment to be used by stevedoring companies 
are maintained by the Ministry of Land, Infrastru cture and Transport (MLIT).  The effects of these 
practices on our mutual trade and the degree to whic h the Government of Japan has acted to improve 
conditions pursuant to commitments made in th e government-to-government agreement reached in 
1997 remain a matter of concern to be addressed by the FMC.  The August 9, 2001 FMC order required a limited number of carriers serving the U.S. trades with Japan to report only once on their experiences in using Japanese ports; except for the Japanese and U.S 
carriers, the named carriers are not currently required to report.  The Japanese and U.S. carriers 
continue to file periodic reports.  The requirement that  such reports be filed in  the English language is 
not extraordinary.  
[Japan] 
 
Q61.  Maritime transport and competiti on policy (2) (p.108, para 119) 
The Federal Maritime Commission (FMC) is authorized  by Section 19 (1) (b) of the Merchant Marine 
Act of 1920 (the Jones Act) to make rules and regul ations affecting shipping in foreign trade.  The 
FMC imposed a unilateral sanction against Japan ese carriers in September 1997.  Although the 
sanction was removed in May 1999, the FMC still requires carriers to re port to it on the situation of the 
ports in Japan.  The rule (repealed in May 1999), which provided grounds for unilateral sanctions, was 
a violation of the Treaty of Friendship, Comme rce and Navigation between Japan and the United 
States, according to national treatment and most-favored-nation treatment .  Japan, therefore, requests the U.S. to work more closely with the FMC to en sure that such unilateral measures will no longer be 
taken.  Japan is concerned about the impact of the Jones Act and any other related legislation on 
shipping trade, and submitted a list of questions (W T/GC/W/520) at the Review of the General Council 
last December.  Please provide information about th e current situation regarding the responses to the 
questions.  ANSWER:  The United States takes note of Japan's view s on the FMC action and its relation to the 
FCN.  The U.S. responses to Japan's questions su bmitted following last December's General Council WT/TPR/M/160/Add.1 
Page 358  
 
meeting (WT/GC/W/520) are being finalized and will be submitted to the WTO Secretariat in the near 
future.  
[Japan] 
 
Q62. Domestic water-borne trade (p.108, para.120) 
The supply of cargo services between two points within the United States is reserved for the ships built 
in the United States. Japan requests the United St ates to abolish such a requirement. Though we 
understand that naval ships should be constructed in the U.S. for security reasons, shipping companies 
should be allowed to operate vessels constructed in foreign countries, c onsidering, in particular, that, 
civil airlines, the domestic railway companies and road transport operators are now allowed to use 
aircrafts, trains and trucks made in foreign countr ies, respectively. Japan would like to know the reason 
why the U.S. government imposes a construction requirement only on maritime transport.  ANSWER:  As previously explained it is critical for U.S. shipbuilders to build commercial ships 
for this trade if a viable industrial base is to be maintained to meet future National defense 
requirements.  
[Japan] 
 
Q63. Merchant Shipping Act of 1920 (J ones Act) (p.108-109, para120-121) 
At the meeting of WTO General Council in Dece mber 2003, Japan requested the United States to 
provide information on the progress made on the revi sion of the Jones Act, and the U.S. submitted 
responses to this request.  Japan would like to know  whether there has been any further progress on the 
revision of the Jones Act, and whether the U.S. is planning to revise the Act in the future.    
ANSWER:  There have been no actions to revise the Jones Act, and the U.S. is not currently 
planning to revise the Act.  
[Japan] 
 
Q64. International water-borne trade (2) (p.109, para.122) 
The Ocean Shipping Reform Act of 1998 includes a provision allowing the discriminatory treatment of 
Japanese and other foreign shipping firms, by maki ng it possible to impose unilateral regulations on 
pricing and other practices.  As the pricing practi ce is the foundation of a free shipping activity on a 
commercial basis, unilateral regulations by the FM C on the pricing practice obviously intervenes with 
such a free shipping activity, thereby discriminating fo reign firms.  Furthermore, an amendment to the 
Act in 1998 explicitly stipulates the right of the Fede ral Government to undertake this intervention.  
Japan requests the United States to confirm that in  the future the FMC shall not impose unilateral 
regulations on shipping activities on a commercial basis, conducted by Japanese and other foreign 
shipping firms, without having a regard to the reality  of the market.  In this regard, please indicate the 
specific views of the Government of the United States.  
ANSWER:  The Government of the United States has in the past pointed out that the language 
added in 1998 to the Merchant Marine 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 an d unfair competitive practices of carriers in U.S. 
trades.  The Government of the United States has no plans to change this policy mandated by U.S. law. 
 
[Japan] 
 
Q65. International water-borne trade (3) (p.110, paras.126 to127) 
According to the Maritime Security Program (MSP) , a new ten-year program  began on 1 October 2005 
which gives an increased subsidy to the maximum of 60 ships.  Japan requests the Government of the          WT/TPR/M/160/Add.1 
Page 359 
 
 
United States to abolish this program.  It is obvious that the provision of such an enormous amount of subsidy distorts conditions for free and fair competiti on in the international maritime market.  In this 
regard, please indicate the specific views of the Government of the United States.  ANSWER:  The MSP is intended to ensure that an active U.S. merchant fleet and the trained 
personnel needed to operate both active and reserve  vessels will be available to meet our national 
security requirements for sealift capacity.  The M SP has been highly successful in meeting this 
important national priority and remains key to our ability to meet global security contingencies.  The 
MSP has proved its utility once again by providing U.S. -flag vessels in support of recent U.S. military 
operations in Iraq.  As we have stated before, the MSP supports are national security requirements, 
therefore, it will not be abolished. 
 
[Japan] 
 
Q66. International water-borne trade (4) (p.110, para.126) 
According to paragraph 1 26 on page 110, a number of programmes are in place to allow the eventual 
use of the U.S. commercial fleet for defense purposes.  Has there ever been a case where the U.S. made 
use of the U.S. commercial fleet for such a purpose in time of war or nati onal emergency and if so, 
please provide specific examples and explain under what circumstances it was necessary to do so.  ANSWER:  These programs create a "contract-for-logistics" approach. Rather than just calling on 
specific ships, it enables the Department of De fense (DOD) to capitalize on the whole origin-to-
destination system. This system of integrated ser vices includes freight consolidation, truck and rail 
services, 24-hour monitoring and in-transit visibility,  customs clearances, and flexible routing and 
scheduling options. More important, these program s afford the U.S. military access to a modern 
commercial fleet and associated intermodal system. This access gives military planners the ability to 
get supplies rapidly from factories and military installa tions in the U.S. to as close to the war zone as 
possible, in order to marry up with troops. Furtherm ore, the programs maintain ships in standby status 
for use by DOD in the event of a contingency. Th e programs were activated during the Persian Gulf 
war, and in support of operations in Haiti, Soma lia, Croatia. Also, 6 months  ago the programs were 
activated during “Hurricane Katrina” in support of relief efforts in the United States Gulf Coast. 
 [Japan]  
Q67. Port services (P.111, para. 134) 
Paragraph 134 on page 111 states that the U.S. intends to resolve the problem of port congestion in the U.S. with the MARAD’s Port Development Program.  Please provide information on the content of the 
program specifically.  
 ANSWER:  The Safe, Accountable, Flexible, Efficien t Transportation Equity Act: A Legacy for 
Users (SAFETEA-LU) was enacted August 10, 2005, as Public Law 109-59. TEA-21 authorizes 
transportation programs for the 5-year peri od 2005-2009. SAFETEA-LU provides funding totaling 
over $2.8 billion to fund transportation projects of national interest to improve transportation at 
international borders, ports of entry, and in trade co rridors. The bill contains a pilot program  “Freight 
Intermodal Distribution” that provides $30 million th rough 2009 for grants to facilitate intermodal 
freight transportation initiatives at the state and lo cal level to relieve congestion and improve safety, 
and to provide capital funding to address infrastruct ure and freight distribution needs at inland ports 
and intermodal freight facilities. 
 
[Mexico] 
 
27.  Paragraph 118 indicates that the United States has not tabled an offer with  respect to maritime 
transport services in its initial offer on services.  Mexico is interested in learning why maritime 
transport services have been excluded. WT/TPR/M/160/Add.1 
Page 360  
 
ANSWER:  The United States has submitted offers and requests covering a number of sectors.  
With respect to offers, we have consulted with our domestic constituencies, and our offers reflect our 
commercial and economic interests in the WTO negotia tions.  As specified in the Doha Ministerial 
Declaration, these are initial offers and may be suppl emented or changed at any time in the course of 
the negotiations.  We do not believe that this pr events the United States from participating in 
consultations with other countries, should other countr ies wish to raise questions with respect to U.S. 
measures in this or any other sector.  We must note that there are several countries that have not 
submitted comprehensive requests or offers coveri ng all sectors in this round of GATS negotiations. 
 
[Mexico] 
 
28.  Paragraph 122 indicates that the United States has negotiated bilateral maritime agreements with 
four countries.  Mexico would like to know the coverage and scope of those agreements. 
 ANSWER:  The scope and coverage under the United States bilateral Maritime Agreements in 
general provide that U.S. ship operators will ha ve fair access to these countries’ cargo business while 
the foreign carriers seeking access to U.S. markets will be assured equal treatment, under the agreement. These agreements provide for competiti on in shipping that will benefit both countries. 
These agreements generally require both sides to pr ovide equal treatment for the other’s carriers in 
maritime-related services and facilities, including shi pping taxes.  The United States has made these 
agreements public at the following website: http://www.marad.dot.gov/programs/index.html. 
 
[Mexico] 
 
29. Is there any restriction or any discriminatory treatment vis-à-vis foreign companies seeking to invest in U.S. firms engaged in international water-borne trade? 
 
ANSWER:  The United States has a relatively open mar itime regime. However, with respect to 
foreign companies seeking to invest  in U.S. firms engaged in inte rnational water-borne trade the 
following laws apply:   The Shipping Act of, 1916: 
SEC. 1. (46 App. U.S.C. 801 (2002)). 
SEC.  2 (a) - (c).  Corporation, Partnership, or  Association as Citizen (46 App. U.S.C. 802)  As relates to Articles XVII, the following laws are noted: 
The Merchant Marine Act, 1920, section 19, the Shi pping Act of 1984, the Foreign Shipping Practices 
Act of 1988 and Public Law 89-777.  
[Mexico] 
 
30.  Paragraph 126 refers to the existence of a Maritime Security Program that provides financial 
support to the U.S. merchant marine, to ensure that  a certain number of military useful vessels from the 
commercial fleet are available for maritime transport operations in time of war or  national emergencies.  
Mexico believes that this Program could cause distortions  in international maritime trade, given that the 
financial support in question could place other nati ons competing in this sector and seeking non-
discriminatory terms of access at a disadvantage.  In  this regard, Mexico requests a fuller explanation 
on this subject. 
 ANSWER:  The re-enactment of the Maritime Securi ty Program (MSP) in 2005 was driven by a 
national policy consideration that in national mili tary or civilian emergencies, no reliable ocean 
transportation alternative exists as a replacement for U.S.-flag ships with U.S. citizen crews.  The MSP 
is intended to ensure that an active U.S. merchant fleet and the trained personne l needed to operate both          WT/TPR/M/160/Add.1 
Page 361 
 
 
active and reserve vessels will be available to meet our national security requirements for sealift 
capacity.  The MSP has been highly successful in mee ting this important national priority and remains 
key to our ability to meet global security contingencies.  The MSP has proved its utility by providing 
assured access to U.S.-flag vessels in support of U.S.  military operations and national disasters.  As we 
have stated before, the MSP supports our national se curity requirements, therefore, it will not be 
abolished. 
 
[Mexico] 
 
31.  Paragraph 138 indicates that there are no restric tions on foreign investment in U.S. shipyards or 
ship repair facilities, but benefits under certa in programs may be cont ingent upon nationality 
requirements.  Mexico is interested in learning if th ere is any plan to change this separate treatment. 
 ANSWER:  The construction of vessels under the: 1)  Construction Reserve Fund (Section 511 of 
the Merchant Marine Act of 1936, as amended); 2) the Capital Cons truction Fund (Section 607); or 3) 
the Federal Ship Financing Guarantee Program (Titl e XI) requires that owners of vessels engaged in 
the coastwise trade be Section 2  (Shipping Act of 1916) citizens or documentation citizens if engaged 
in non-contiguous trade.  Currently, there is no pending legislation to change these requirements. 
 
[Norway] 
 4: In addition to information on the US flagged and controlled fleet as provided in para 117 of the 
Secretariats report, chapter IV, could you provide updated information on the size of the so-called 
Jones Act fleet and its average age? 
 
ANSWER: As of year-end 2004 the U.S.-flag oceangoi ng fleet included 196 vessels (9.3 million 
DWT). Of this, 103 vessels (5.3 million DWT) were Jones Act vessels (U.S.-built) eligible for 
domestic trades.  From 2001 to 2004, the U.S. flag privately-owned oceangoing merchant fleet declined by 25 vessels (0.8 million DWT). Over the same period, the Jo nes Act fleet declined by 28 vessels (1.1 million 
DWT), including 21 (0.8 million DWT) tankers. 
 
As of year-end 2004, 53 percent of the U.S.-flag fl eet (DWT) was older than 20 years. For the Jones 
Act segment, 66 percent of the fleet was older than 20 years. 
 
[Norway] 
 
5: According to information by MARAD
11 the volume of cargo transported in US domestic ocean 
trades was slightly reduced from 2000 to 2004 both in metr ic tons and metric ton miles.  How does this 
development compare to changes in the volumes tran sported by road and rail in the same period? 
 
ANSWER: Trucking, both for-hire and private, continued its dominance of the freight transport 
industry in 2002 in value, weight, and ton-miles of cargo carriage.  From 1993 to 2002, value increased 
to $6.7 trillion—up from $4.7 trillion. And trucks move d about 58 percent of the total freight tonnage 
in 2002, up from 54 percent in 1993. During this time pe riod, truck ton-miles grew by 56 percent as rail 
ton-miles increased by 30 percent and water declined by 7 percent.  
Rail's relatively low share of shipment value an d weight compared to other transportation modes 
reflects the large quantities of low value-per-ton goods like coal, ores, and grains shipped by rail.  Its 
relatively high share of ton-miles, second only to trucking, reflects the heavy weight and the longer 
length of haul of most products moved by rail (e.g., cereal grains and coal travelled an average of 450 
                                                     
 
11 “US Domestic Ocean Trades 2004” published in January 2006 WT/TPR/M/160/Add.1 
Page 362  
 
miles per ton).  The average value per ton of singl e-mode rail shipments increased from $176 in 1993 
to $205 in 2002.  
 
[Norway] 
 6: In paragraph 122 of the Secretariat’s report th ere is some information on bilateral maritime 
agreements.  We would like to know if any of th ese agreements contains provision giving access to 
government owned or controlled cargo on a reciprocal b asis.  We would also like to know if any of the 
free trade agreements that the United States is a pa rty to contain provisions on maritime transport, 
which gives access to government owned or controlled cargo on a reciprocal basis.) 
 
ANSWER: The scope and coverage under the United St ates bilateral Maritime Agreements in 
general provide that U.S. ship  operators will have fair and equal access to these countries’ cargo 
business while the foreign carriers, from all countri es, seeking access to U.S. markets will be assured 
equal treatment, under the agreement. These agreements  ensure competitive conditions in shipping that 
will benefit both countries. There are no special pref erences for any country’s national-flag carriers to 
transport cargoes that are financed, directly / indir ectly, by the U.S. Government. The United States has 
made these agreements public at the followi ng website: http://www.marad.dot.gov/programs/ 
index.html 
 
[Norway] 
 
7: Paragraph 130-131of the Secretariats report cont ain information on the food aid programme and the 
cost of using US flagged vessels.  We would like to know how much the extra cost of using US flagged 
vessels, including the ”Excess 20%” referred to in pa ragraph 131, amounts to in USD annually and as a 
percentage of the amount spent on food aid.  
ANSWER: The expenditures averaged 0.03% during fiscal years 1999 to 2003. 
 "Excess 20 percent" is applicable if the total ob ligations incurred by United States Department of 
Agriculture (USDA) and Commodity Credit Corpora tion (CCC) for ocean freight and Ocean Freight 
Differential (OFD) on exports of agricultural co mmodities. The Department of Transportation, 
Maritime Administration must reimburse CCC for any excess, if applicable. Some years will have no 
"Excess 20 percent.”   According to The Government Accountability Office (GAO) food aid programs had an annual average 
budget of $1.97 billion during fiscal years 1999 to 2003.  [Norway] 
 
8: Is participation in the Voluntary Intermodal S ealift Agreement (VISA) programme as described in 
paragraph 128 of the Secretariats re port limited to US flagged vessels? 
 
ANSWER: Yes, it is limited to U.S. flag vessels.  Applicants to the program must meet the 
requirements of Section 2, Shipping Act, 1916, as am ended (46 App. U.S.C. 802).  Also, applicants 
must meet the requirements of 46 U.S.C. 12102 for purposes of documenting vessels under the U.S. flag and for compliance with 46 U.S.C. 12102.   [Norway] 
 
9: In footnote 127 to paragraph 129 it is said th at”agencies may opt for higher percentages” than 50% 
of gross tonnage to be transported by US flagged vessels.  We would like to know if any agencies have 
used this option, and if so which agencies and the percentage they have opted for. 
          WT/TPR/M/160/Add.1 
Page 363 
 
 
ANSWER: The Act requires that at least 50% of the gross tonnage of all government-generated 
cargo be transported on privately owned, U.S.-flag  commercial vessels. Federal Agencies are free to 
use U.S. flag vessels as they wish once they meet the requirements. However, it is not mandated by 
law, policy or regulation.  
 
[Norway]  
10: The Trade Policy Review document from 2003 cont ained information on restrictions on transport 
of Alaskan crude oil for exports.  We would like to k now if Alaskan crude oil is exported and if so still 
subject to the requirement to be carried by US flagged vessels?  
ANSWER: Lifting the prohibition against exporting Alaskan  oil in 1995, which is still in effect, 
removed a significant distortion of the oil market, wh ich yields economic benef its, 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.  The last Alaskan crude oil to be exported was in April 2000. Since that time all Alaskan crude 
oil production has moved to the U.S. West Coast ma rket for refining and domestic consumption.  
 Air Transport Services
 
 
[Australia] 
 The global market for auxiliary air transport servi ces (including aircraft maintenance, reservations, 
ticketing sales and promotion, as well as ground hand ling) is estimated to be worth $US90 billion 
annually.  In each of the sectors of the market, th ere is a strong trend towards the provision of these 
services by specialist providers, thus further high lighting the distinction between these services and 
bilateral traffic rights which are not covered by the GATS.  Given this trend, and US providers’ 
interests in better and more transparent access to  this expanding market, does the United States 
envisage removing its MFN exemption relating to co mputer reservation systems services, and making 
commitments in air transport related services such as cargo handling in the transport sector, and other supporting services for air transport in its revised services offer?  If not, why not? 
 
ANSWER:  The United States terminated most of its rules on the regulation of computer 
reservations systems in 2004, and has adopted a polic y of not including computer reservation systems 
provisions in new air services agreements.  While our a pproach is evolving, it must stay consistent with 
remaining U.S. laws and regulations extending to the activities of computer reservation systems, including the International Air Transportation Fair Competitive Practices Act of 1974, as amended, and 
the International Air Transportation Competition Act of 1979.  We are still consulting internally as to 
whether our evolving approach could allow us  to consider new GATS commitments and/or 
modification of our existing MFN exemptions.  With respect to other supporting services for air trans port, we must note that the United States attaches 
particular importance to the exclusion of most such services from the scope of application of GATS 
obligations by the Annex on Air Transport Services.  Paragraph 3 of the Annex currently applies GATS 
obligations to three listed subsectors: computer reservation systems, selling and marketing of air 
transport services, and aircraft maintenance and repair services.  We do not share the view that evolution of the marketplace in any air services sector  or the changing nature of the service providers 
therein are on their own sufficient to effect a change in the scope of this exclusion. 
 
With respect to selling and marketing of air trans port services, the United States continues to include 
provisions on these services in bilateral air servi ces agreements and hence we do not currently 
anticipate taking GATS commitments in this sector.    WT/TPR/M/160/Add.1 
Page 364  
 
With respect to ground handling, we do not believe th at Members can take commitments at this time.  
Our views on this subject can be referenced in the Communication from Canada, Japan and the 
United States entitled Trade in Air Transport Services
 (TN/S/W/33). 
 [Canada ] 
 
Part IV.  Trade Policies by Sector, (6) Air Trans port Services, (ii) Regulatory framework, Paragraph 
149.  
 
"The provision of domestic air services is permitted only to U.S. carriers. Crews engaged in domestic 
air passenger and freight service must be U.S. nationals  or resident aliens. The "wet" leasing of aircraft 
(with crew and, typically, maintenance, and insurance)  to U.S. carriers is restricted to U.S. companies 
and U.S. citizens."   24. What is the rationale behind prohibiting U.S. air carriers from leasing aircraft and crew from 
non-U.S. air carriers for international services, es pecially when the model U.S. Open Skies text 
suggests such operations are permitted?  ANSWER:  The prohibition on U.S. carriers leasing aircraft with crew from foreign carriers for 
international operations is grounded in FAA regulations and is purely safety-related. 
 
The U.S. model open-skies text qualifies the gran t of rights to enter into cooperative marketing 
arrangements, including leasing, by  stating that all participants in such arrangements (i) hold the 
appropriate authority and (ii) meet the require ments normally applied to such arrangements. 
 In the case of wet leasing, the “requirements norma lly applied to such arrangements” include FAA 
regulations.  While FAA regulations allow U.S. air carriers to wet lease from other U.S. air carriers and 
to wet lease to foreign air carriers, U.S. air carri ers are prohibited from wet leasing from a foreign air 
carriers for both their domestic and international ope rations. (14 CFR 119.3)   The concerns giving rise 
to this prohibition deal with the ability of the FAA both to determine ope rational control and to 
exercise adequate oversight responsibility. For example, if an air carrier wet leas es an aircraft and crew 
a question arises as to who has operational control of the aircraft -- the operator that possesses the 
aircraft or the lessor for whom the crew works.  In most cases the laws and safety policies of the 
foreign crew’s carrier and country will be different than those in the United States. 
 
[Mexico] 
 32.  Paragraph 144 indicates that [most] U.S. airports  with commercial services are owned by state or 
local governments, although some airports are operated through outsourcing and management 
contracts; this type of arrangement is common in the provision of more limited scope airport services 
such as terminal and parking area operations, ground transport, building maintenance, advertising, 
baggage handling, and cons truction and engineering.  In this  regard, Mexico would like to know 
whether such services can be offered by foreign na tionals and if there is any restriction on the 
participation of foreign investors in companies that supply such services. 
 ANSWER:  There are no restrictions in the United States on the participation of foreign investors in 
companies that supply airport services such as tho se mentioned in paragraph 144.  Such companies 
would have to comply with all applicable security re quirements.  Participation by foreign nationals in 
the supply of these services in the United States w ould be governed by U.S. labor and immigration 
laws, as well as applicable licensing and certification requirements for specific occupations.           WT/TPR/M/160/Add.1 
Page 365 
 
 
[Mexico] 
 
33. Paragraph 148 indicates that the U.S. Department  of Transportation allows foreign citizens to 
own up to 49% of an airline's stock, in any combination of non-voting and voting shares.  Mexico would like a fuller explanation of what is meant by the expression “on a case-by-case basis.” 
 
ANSWER : As is stated in paragraph 148, any foreign ownership in a U.S. carrier is limited to a 
maximum of 25% of voting shares.  In addition, the president and at least two thirds of the board of 
directors and other managing officers must be U.S.  citizens.  Paragraph 148 then, however, goes on to 
state that on a case-by-case basis, DOT has allowed fo reign citizens to own up to 49% of an airline's 
stock by using non-voting shares above 25%, provided th at actual control remains in the hands of U.S. 
citizens and an open-skies agreement exists betwee n the United States and the homeland of the foreign 
investor (e.g. KLM's investment in Northwest in  the early 1990s).  The case-by-case examination is 
necessary to determine that actual control re mains in the hands of U.S. citizens.   
 
Professional Services
 
 
[Australia] 
 
The Australian Government retains concerns about the obstacles to the export of professional services 
posed by the fragmented nature of licensing and regi stration arrangements in the United States.  In its 
last trade policy review, the US Government point ed to a trend towards greater harmonization and 
uniformity of these rules.  Can the US Government  outline the progress that h as been made since its 
last TPR in achieving harmonization through model rules and the like, including uniformity in the application of licensing and registration arrangements across the United States?  
ANSWER:  The greatest activity with respect to mode l rules and common approaches appears to be 
in the area of legal services, where various juri sdictions are considering adopting model rules on 
foreign legal consultancy and temporary practice.  As there are more than 150 licensed professions in 
the United States, providing further detail here would be  difficult.  We would be happy to direct you to 
the appropriate organizations should you require specific information.  
 [China] 
 
The different regulations on professional services in each state have proven to be obstacles to trade in professional services such as accounting, architectur e, engineering, and legal services. The U.S. 
promised at last review that its Federal Govern ment would continue to work with all states to 
encourage the elimination of any remaining measur es that are inconsistent with GATS disciplines. 
 
Would the U.S. enlighten Members on its latest achievements in this regard? 
 
ANSWER: The fact that regulatory policies may differ at the state level is not inconsistent with 
GATS disciplines.  In reality, there is a high degr ee of commonality across the states.  For example, a 
single national examination is recognized by st ate authorities for accounting, architectural, and 
engineering services.  
The Federal Government continues to encourage states to pursue regulatory policies that minimize 
trade effects.  We recognize that residency and local presence requirements remain in a number of 
states where regulators remain concerned with enforc ement.  However, such requirements have been 
eliminated for over 75 percent of the U.S. mark et for accounting, architectural, engineering, and 
foreign legal consultancy services, a market  valued at over $300 billion per year. 
 WT/TPR/M/160/Add.1 
Page 366  
 
Visas
 
 
[China]  
A recent report issued by the American Chamber of Commerce in China in Feb. 2005 reflects that 
“…U.S. visa policy continues to place U.S. compani es at a disadvantage. …One in six respondents has 
lost significant sales or business relationships becau se of visa issues…Many manufacturers fear that 
customers, particularly capital equipment purchaser s, are developing a preference for EU suppliers 
because of difficulties in getting visas to travel to the U.S.”  
 
Has the U.S. Government ever recognized the worries and losses reflected above from the U.S. 
companies in China regarding its current visa policy?  Does the U.S. have any plan to improve its visa policy and the efficiency of visa procedures for 
the sake of trade facilitation? 
 
ANSWER:  At the highest levels of the U.S. Governme nt, there is an appreciation that the United 
States greatly benefits from the international m obility of business professionals.  International 
professionals help create competitive markets for suppliers and consumers alike and allow trade 
partners to more efficiently provide each other with goods and services.   
 
The U.S. Government understands completely the im portance that business travel plays in the U.S.-
China bilateral commercial relationship.  All U. S. diplomatic posts in China operate Business 
Facilitation programs.  Visa issuance by U.S. dipl omatic posts in China grew around 25% in both 2004 
and 2005.   
The Department of State has instructed all vi sa adjudicating posts in China to emphasize the 
importance of facilitating business travel, and to est ablish mechanisms to expedite appointments for 
business travelers with urgent needs. Some recen t and planned initiatives include the following: 
 *    Consulates in China facilitate business travel ma inly through programs affiliated with local chapters 
of the American Chamber of Commerce.  Beijing, Shanghai and Guangzhou work with local chapters 
to implement programs for facilitating the issuance of U.S, business visas to employees, and in some 
cases customers and clients, of American compan ies.  Select non-American multinationals and 
presidents and vice presidents of large state-owned enterprises that are invited by U.S. businesses also benefit. AmCham members schedule appointments through the call center and are given special slots so they are given an appointment within 48 hours. 
 
*     In Beijing, 17 large non-American multinati onal companies including, BP, Nortel, and Nokia and 
Samsung, have been invited to participate in th e AmCham business facilitation program.  Posts have 
been meeting with organizers of trade shows in th e U.S. to establish mechanisms for verifying the 
identities of Chinese exhibitors at these shows.  
*    Business facilitation is also being extende d to small businesses, businesses just starting out in 
China, and businesses without a significant presence in  China.  The Department of State's Business 
Facilitation Center is available to assist those businesses by explaining the visa process to U.S. 
companies that invite current and prospective Chin ese business clients/partners to the U.S.  A business-
visa group in Washington D.C. works to communicate  information between U.S. businesses and U.S. 
diplomatic posts in China to  facilitate visa applications. 
 *     An agreement was recently reached with Ch ina to increase the length of visa validity (reciprocity) 
for business travelers, tourists, students and exchange visitors.           WT/TPR/M/160/Add.1 
Page 367 
 
 
The U.S. Government continues to seek new ways to facilitate the movement of legitimate business 
travelers to the United States.  The Department of State is open to suggestions for improvements to the 
visa –issuing process from U.S. companies and conven tion organizers interested in inviting Chinese 
employees of American firms, as well as Chinese part ners and customers, to visit the United States. 
 [Colombia]  
The document prepared by the Secretariat does not contain information related to professional services 
and their regulation.  Nonetheless, we are in terested in expressing the following concerns: 
 
1. In its 2004 trade policy review, the United States indicated that "pursuant to legislation in the United 
States, the regulation of the professions falls within  state jurisdiction and, in general, consists of 
licensing boards in charge of administering the li censing or registration procedures.  Professionals 
with foreign degrees who are authorized to carry out their activity within a United States jurisdiction 
must comply with all of the applicable laws and regula tions of that jurisdiction.  The nonexistence of a 
uniform regulatory system with a national scope assu mes that in each State separate market access 
conditions apply, often applying reciprocal treatment;  this makes it even mo re complex for domestic 
and foreign suppliers to enter the market.  The authorities have indicated, however, that the 
formulation of model standards for professional  organizations is driving uniformity and 
harmonization."   
 a) We would like to learn in detail about the pr ogress that has been made in formulating model 
standards to achieve uniformity and harmonization in  regulating the professions in the states of the 
United States.  ANSWER:  The greatest activity with respect to mode l rules and common approaches appears to be 
in the area of legal services, where various juri sdictions are considering adopting model rules on 
foreign legal consultancy and temporary practice.  As there are more than 150 licensed professions in 
the United States, providing further detail here would be  difficult.  We would be happy to direct you to 
the appropriate organizations should you require specific information.  
 b) The United States in its 2004 trade policy review mentioned that in its country "the international 
trade in professional services is still hindered by complex domestic legislation,"  and indicated that the 
main barriers were standards related to the need  for local presence, nationality, residency and legal 
form requirement. In light of this statement, we would like to know what actions were undertaken by the United States to 
attempt to reduce and/or eliminate these barriers to  trade in services, especially regarding legal, 
accounting, auditing and bookkeeping services; tax consulting; architectural; engineering; integrated 
engineering services; and urban pl anning and landscape design.  
 ANSWER:  We continue to encourage all regulatory bodies to adopt policies that minimize adverse 
effects on trade.  In general, the United States ha s few nationality requirements; however, requirements 
related to residency or local presence do remain in  certain sectors where regulators consider that a 
physical presence is necessary in order to protect the public. 
 
[Japan] 
 Immigration control/consular a ffairs (Matters contained in the Recommendations by the 
Government of Japan to the Government of the United States regarding Regulatory Reform and 
Competition Policy, 7 December 2005 )  
1. Visa Process 
The Government of Japan urges the Government of the United States to: 
  (a) Resume visa revalidation at the Department of State, in particular; WT/TPR/M/160/Add.1 
Page 368  
 
(i) Take necessary measures to use equipments to  collect biometric identifiers in the United 
States for visa revalidation applicants, such  as equipments at airports for the 
implementation of the US-VISIT program; 
(ii) Consider the resumption of domestic reva lidation only for certain categories of visas 
whose bearers’ status is more reliably guaranteed;  
(b) Commence the revalidation of E visas in third countries, and (since there is no statutory 
prohibition of the revalidation of E visas in count ries other than the United States and bearers’ 
home countries, and in some reported cases revalida tion applications were rejected only due to 
insufficient staff,) reinforce the ability to process visa revalidation at the United States 
establishments in Canada and Mexico, including re viewing the level of staffing at these places; 
and 
(c) Shorten the time for visa revalidation in Jap an, Canada and Mexico and clarify how long it 
takes to revalidate visas, and secure the issue of  revalidated visas in a few days after interview 
by establishing an organizational setup to prio ritize the revalidation process and by completing 
a part of the examination of a pplications before interviews. 
 
2. Driver’s License 
(1) Real ID Act 
The Government of Japan urges the Government of the United States to: 
(a) Regard the term of validity of nonimmigrant visas, which are valid for a longer time, as the 
“period of time of applicant’s authorized stay” so that an excessive burden will not be placed 
on Japanese nationals when States implement the Act; 
(b) Confine the “official purposes” in the Act to  the minimum that are genuinely necessary, and 
clarify it so that foreigners do not always need  to carry passports with them in case several 
States do not comply with the Act or issue non-complying licenses as an option; 
(c) Guide and monitor State Governments and related Federal authorities as much as possible in 
the scope of the Federal Government’s author ity, including by informing them of U.S. 
immigration policies so that State Governments can change their regulations about driver’s 
licenses smoothly; and  
(d) Issue the Federal regulations as soon as possi ble in order to alleviate the concerns among 
Japanese nationals which arise fro m the uncertainty about the actual impact of the Act, and to 
avoid confusion as to the implementation of the Act in each State.   
(2) Improvement of State Rules 
(a) Improvement of Term of Validity of International Driver’s License 
A number of Japanese nationals drive with intern ational driver’s licenses in the United States 
until they obtain local State li censes, since it normally takes a long time to obtain the latter. 
However, many States require foreigners to obtain State licenses upon the fixation of their 
residence in the State and void their internati onal licenses.  In other states, international 
licenses lose effect in a relatively short period, si x months for example. Furthermore, the State 
of North Carolina does not allow foreigners to  drive with international licenses at all. 
Therefore, the Government of Japan urges th e Government of the United States to request 
relevant State authorities to accept one-year term of validity of international driver’s licenses 
issued by Japanese authorities,  in accordance with the spir it of the Convention on Road 
Traffic, to which the United States is also a signatory. 
(b) “Sponsor” Requirement in Driving T est in the State of Massachusetts 
The regulations of the State of Massachusetts provi de that the applicant of driver’s license be 
accompanied for a driving test by a “sponsor” who is 21 years or older with a valid driver’s license issued in the United States and with a mi nimum of one year of driving experience. It 
is often difficult to find an appropriate sponsor  for a foreigner immediately after his or her 
arrival at the country, and therefore this re quirement in Massachuse tts has been causing 
inconvenience for Japanese nationals to obtain driv er’s licenses in the State. It is possible but 
also costly to ask an agent to provide a spons or.  The Government of Japan understands that 
Massachusetts is the only State that requires a “sponsor” for driving tests. It urges the          WT/TPR/M/160/Add.1 
Page 369 
 
 
Government of the Untied States to request th e State authorities to abolish the rule, or 
otherwise mitigate the requirement to a void excessive burden imposed upon foreigners. 
(c) Issuance of “Driver’s Certificate” in the States of Tennessee and Utah 
Driver’s Certificates issued in Tennessee and Utah do not have a “photo ID” function that 
driver’s licenses have, and therefore cause da ily inconveniences to Japanese people in the 
United States. The Government of Japan urg es the Government of the United States to 
request these States to abolish the measures. 
(d) Restriction of Driving Test Location in the State of Rhode Island 
In the State of Rhode Island it used to be possi ble to take driving tests near the applicant’s 
residence. However, the recent change in the rule  requires foreigners to take driving test at a 
specified location, which is often far away fro m their residence. The Government of Japan 
urges the Government of the United States to reque st the State to enable foreigners to take 
driving tests near their r esidence as in the past.  
 3. Immigration Control by Use of Biometric Identifiers at Port of Entry and Departure 
The Government of Japan urges the Government of the United States to: 
(a) Collect information on the time required for passengers to pass immigration control, and take 
necessary measures to make it shorter;   
(b) Protect personal information collected through the US-VISIT program stringently, and 
publicize the measures taken for the informati on protection as much as possible in order to 
alleviate Japanese nationals’ concerns about the fact that their fingerprint information is 
scanned and possessed by the Government of the United States; and 
(c) Make further outreach efforts to promote be tter understanding of the program by the Japanese 
public, especially when changes in procedures are expected to cause confusion, for example, 
when the US-VISIT program is expanded in te rms of the number of implementing points of 
entry and departure, and when radio frequency identification (RFID) technology or other new 
technology is introduced. 
4. Suspension of Visa Waiver Program for Holders of Non Machine-Readable Passport 
The Government of Japan urges the Government of the United States to: 
(a) Make further efforts to inform relevant sector s, including travel agencies, of the fact that a 
holder of a non machine-readable passport cannot  enter the United States without a visa, so 
that travel agencies confirm the passport of a tr aveler is machine-readab le when the traveler 
reserves or purchases an airplane ticket, and prevent in advance a holder of a non machine-
readable passport from being rejected to travel to the United States on the very day of 
departure; and 
(b) Waive visa requirement for the nationals of  the VWP countries who have travel documents 
that are valid only for their return to the home  country as an exceptional case, and continue to 
waive visa requirement, after October 26, 2006, fo r those who have urgent passports issued at 
overseas establishments of Japan (valid for a yea r) or the travel documents without biometrics 
identifiers, even though the Government of the United States has decided that holders of non 
biometrics passports issued after October 26, 2006, are required to obtain visas to enter the 
United States. 
 5. Social Security Number 
The local agents of the Social Security Administ ration (SSA) issue Social Security Number (SSN) 
after confirming that an applicant is eligible to obtain SSN by checking his or her entry record on 
the database provided on-line by the Department of Homeland Security. Though the Government 
of Japan is aware that the SSA and the Departme nt of Homeland Security continue efforts to 
expedite the process to verify immigration status, it still takes one to two months for SSA to issue 
SSNs for foreigners. Since SSNs are required as identification on a variety of occasions when 
Japanese nationals start living in the United Stat es, for example, in opening bank accounts and in 
contracting for credit cards, the delay in i ssuing SSNs causes them significant inconvenience. 
Accordingly, the Government of Japan urges th e Government of the United States to take 
necessary measures to expedite the issuance of SSNs. WT/TPR/M/160/Add.1 
Page 370  
 
6. Individual Taxpayer Identification Number 
The Government of Japan urges the Government of the United States to: 
(a) Reconsider the rule to enable the application fo r ITIN at any time before  the Federal tax return 
filing;  
(b) Request the relevant authorities of States that require the presentation of either SSN or ITIN 
for administrative procedures, such as applicati on for driver’s license or filing for dependent 
family deduction, to accept documentation which cer tifies their ineligibility to obtain SSN as a 
substitute to ITIN; and 
(c) Shorten the time to issue ITIN to allevi ate the inconveniences of Japanese dependant family. 
 
7. Permission to Stay 
(a) At present, it takes two to three months to ex tend permission to stay (I-94), and in the mean 
time, it is not virtually impossible for Japanese workers in the United States to leave and re-
enter the country, which creates impediment to  their business. The Government of Japan urges 
the Government of the United States to expedite the extension process. 
(b) The Government of Japan urges the Governme nt of the United States to extend the term of 
validity of I-94. In particular, the term of validit y of I-94 issued to E visa bearers is two years at 
maximum, and one year in some cases, in which case the bearer has to extend his or her I-94 
every year. The Government of Japan therefore urges the extension of the term of I-94 issued 
to E visa bearers. 
 ANSWER:  Japan’s views on these matters are duly noted. 
 Environmental Services
 
 
[European Communities] 
 
• Could the US clarify the origin (legislation, re gulation, other) and scope of footnote 38 in its 
schedule, that limits commitments to certain activities despite the US use of CPC codes? 
• In particular, could the US confirm which speci fic services are actually covered for each CPC as a 
result of the limitation of the footnote?  
ANSWER:  We assume that the EC is referring to footnote 39 in the U.S. revised offer.  The origin 
of this footnote is in the United States’ GA TS schedule of commitments (GATS/SC/90), where it 
appears as footnote 19.  In its schedule, the United St ates does not use CPC codes.  However, as part of 
its revised offer, the United States included CPC codes to better clarify U.S. commitments in 
environmental services. 
Given that the EC’s questions appear  to relate to the U.S. revised o ffer in environmental services, and 
that the questions also appear to touch upon schedu ling and classification issues in this sector more 
generally, it would be appropriate to discuss these ques tions in the services negotiations, rather than in 
the context of the U.S. TPR.  Legal Services
 
 
[European Communities] 
 
• The US requires a Foreign Legal Consultant (FLC) to have X years of experience  in practicing 
law preceding his or her registration as an FLC. C ould the US explain what requirements have to 
be met by US citizens (either lawyers or not ) in order to provide advice on foreign and 
international law? 
          WT/TPR/M/160/Add.1 
Page 371 
 
 
ANSWER:  In general, only licensed lawyers can practi ce law.  While there may be variations in 
how the practice of law is defined across different  jurisdictions, this would mean that a license 
recognized by a given jurisdiction would be required in  order to practice foreign or international law in 
that jurisdiction.  So absent an FLC rule, both U.S. and foreign citizens would need to be fully licensed 
in order to advise on foreign or international law.  In states that have FLC rules, both foreign and U.S. 
citizens who fulfill the required criteria may pr actice the law for which they are qualified. 
 
• Could the US please provide a reply to the following question raised in the last TPRM exercise and 
not yet answered: 
 According to the report by the WTO Secretariat (pages 156 to 162 of 2004 TPRM) , the Federal 
Government has the power to negotiate framework ag reements with trading partners with respect to 
professional and business services under which mutual recognition arrangements (MRAs) are negotiated, but the MRAs are negotiated by repr esentatives of the professions and other competent 
authorities (members of state licensing boards, national associations of state boards or other such organizations). The report mentions a number of arrangements that have already been concluded or that 
are being discussed. 
 
• Could the US indicate whether, in the negotiati on of such MRAs, these representatives of the 
professions and other competent authorities do exercise powers delegated to them by central, regional or local governments or authorities within the meaning of article I.3.(a)(ii) of the GATS so 
that the arrangements can be considered as mutu al recognition agreements concluded by the US as 
a member of the WTO? 
 
ANSWER:  The MRAs referenced are private party agreements.  The negotiators are not acting 
under governmental authority.  Subsequent to th e conclusion of the agreement, each individual 
authority makes a determination of whether to acc ept and implement policies consistent with the 
agreement. 
 
• If the answer to the preceding question is negativ e, could the US indicate whether, once it notifies 
those arrangements under Article VII of the GATS, the US, by way of such notification, become, 
as a WTO member, bound by those arrangements under international law? 
 ANSWER:  The United States has provided information concerning private party arrangements, but 
we have not formally notified any a rrangements pursuant to Article VII. 
 
• If the answer to the two preceding questions is nega tive, taking into account that the US are able, as 
a WTO member, to undertake commitments in r espect of professional and business services and in 
developing disciplines on domestic regulation under article VI of the GATS, could the US indicate 
which are the reasons that prevent them from ne gotiating, as a WTO member, MRAs in respect of 
professional and business services under article VII of the GATS? 
 
ANSWER:  The Federal government of the United States is not the competent authority with 
respect to regulation of the professions.  Construction Services
 
 
[European Communities] 
 
What is the US regulatory regime applicable to dredging works? In which conditions may a foreign 
dredging company undertake dredging works in the US? (S5160-4) 
 WT/TPR/M/160/Add.1 
Page 372  
 
ANSWER:  With respect to foreign dredging company undertaking dredging works, the following 
laws are relevant:  Pursuant to title 46, United States Code Appendi x, section 292 (46 U.S.C. App. 292, known as the 
"dredging statute"), a vessel may engage in dredging  in the navigable waters of the United States only 
when it is coastwise-qualified (i.e., U.S.-built, ow ned and documented with a coastwise endorsement 
from the U.S. Coast Guard).  When a vessel is operate d in knowing violation of this statute, the penalty 
provision provided therein states that the vessel and equipment are liable to seizure by and forfeiture to 
the United States Government.  This statute also provides an exception to the coastwise restriction 
requirements in that a U.S.-flag v essel documented with a registry  endorsement from the U.S. Coast 
Guard may engage in the dredging of gold in Al aska.  Foreign-flag vessels may only engage in 
dredging in the navigable waters of the United States if the dredging statute is waived by the Secretary 
of Homeland Security for national defense purposes pursuant to the Act of December 27, 1950 (Pub. 
L.81-891, 64 Stat. 1120).  Energy Services
 
 
[European Communities] 
 
The report also suggests adopting measures at the se ctoral level to enhance competition, including in 
telecoms and electricity.   
• What is the US regulatory framework for transmission, distribution and supply of electricity?  
 ANSWER:  The more than 3.170 traditional electric utilities in the United States are regulated by 
local, State, and Federal authorities.  Electric utilities include investor-owned, publicly owned, 
cooperatives, and Federal utilities.  Power marketers are also considered elect ric utilities – these entities 
buy and sell electricity, but usually do not own or operate generation, transmission, or distribution 
facilities.  
 Generally, interstate activities (those that cross Stat e lines) are subject to Federal regulation, while 
intrastate activities are subject to State regulation.  Wholesale rates (sales and purchases between electric utilities), licensing of hydroelectric facilities, questions of nuclear safety and high-level nuclear 
waste disposal, and environmental regulation are Federal concerns.  Approval for most plant and 
transmission line construction and retail  rate levels are State regulatory functions.  (For further details, 
see the Department of Energy publication, Electric Power Industry Overview,
 
http://www.eia.doe.gov/cneaf/electricity/page/prim2/toc2.html.  
 Relevant measures addressing electric power and traditional sources of energy in the EPAct 2005 
include granting greater powers to the Federal Energy Regulatory Commission (FERC) to monitor 
private companies involved in electricity generation and transmission.  Under the Law, FERC monitors electric power company finances, including the auth ority to examine the accounts of all companies 
owning or partly owning an electric power facility. Fu rther authority is extended to FERC that allows 
its promotion of market stability through transpar ency by publishing wholesale electricity prices. 
 
The EPAct of 2005 also authorized FERC to establish incentive-based rates for interstate transmission 
by public utilities in order to promote investme nt in improved networks and technology and 
involvement in regional transmission organizations.  It also granted FERC authority to issue permits for 
new power lines in areas designated by the Secret ary of Energy as “National Interest Electric 
Transmission Corridors” if the Commission finds that: (1) the relevant state does not have the authority 
to either approve the siting or cons ider the interstate benefits exp ected to be achieved, or (2) the 
applicant does not qualify for state approval because it does not serve end-use customers in that state. 
(For a listing of U.S. Federal Agencies with Ener gy Regulatory Roles, see North America - Energy 
Picture II,  prepared by the North American Energy Working Group, pp. 76-77).          WT/TPR/M/160/Add.1 
Page 373 
 
 
• What does the US plan to enhance competition in that sector? (S5160-3 § 224) 
 ANSWER:  The U.S. electric power industry, the last  major regulated energy industry in the 
United States, is changing to be more competitive.  In some States, retail elect ricity customers can now 
choose their electricity company.  New wholesale elect ricity trading markets, which were previously 
nonexistent, are now operating in many regions of the country.  The number of independent power 
producers and power marketers competing in these new retail and wholesale power markets has increased substantially over the past few years.  To  better support a competitive industry, the power 
transmission system is being reorganized from a balkanized system with many transmission system operators, to one where only a few organizations operate the system.   
Because it provides the capability to move power over long distances, the transmission system is an 
integral component of the Nation’s electric power industry.  Through regulatory reform, the Federal 
Energy Regulatory Commission (FERC) has prom oted the development of competitive wholesale 
power markets and opened the transmission system to  all qualified users.  Since the late 1980's, FERC 
has approved more than 850 applications to sell power competitively in wholesale markets.  In 
arguably its most ambitious effort to date, in  December 1999, FERC issued Order 2000 calling for 
electric utilities to form regional transmission orga nization (RTOs) that will operate, control, and 
possibly own the Nation’s power transmission system .  The potential benefits of RTOs are the 
elimination of discriminatory behavior in us ing the transmission system, improved operating 
efficiency, and increased reliability of the power system. (Drawn from the Department of Energy 
publication, The Changing Structure of the Electric Power Industry 2000: An Update
. For further 
details, see The Federal Energy Regulator y Commission’s FY 2007 Congressional Performance 
Budget Request, pp. 45-77 .) 
 Postal and Courier Services
 
 [European Communities]  
• Could the United States specify the regulatory provisions regarding the treatment of parcels and 
packages and the extent to which foreign operators are allowed to provide the activity of collection, 
sorting, transport and delivery of parcels and packages? 
 
ANSWER:  Private delivery of parcels and packages in the United States is unregulated and open 
to foreign suppliers.  Only the United States Postal  Service is obligated to supply parcel delivery 
services on a universal basis throughout the United States.  
• Could the United States specify the regulatory provisions regarding the treatment of outbound 
letters and the extent to which fo reign operators are allowed to pr ovide the activity of collection, 
sorting, transport and delivery of outbound letters? 
 
ANSWER:  Outbound letter mail is open to competiti on from both domestic and foreign suppliers. 
 
• Could the United States specify the regulatory provisions regarding the delivery of hybrid mail and 
the extent to which foreign operators are allowed to provide this activity? 
 
ANSWER:  The United States Postal Service retain s a monopoly over letter mail, which would 
include the delivery of hybrid mail.   WT/TPR/M/160/Add.1 
Page 374  
 
U.S. GOVERNMENT REPORT  Regional Initiatives
 
 
[Japan] 
 
Q1. U.S. - EU Initiative to Enhance Transatlan tic Economic Integration and Growth (p.15-16, 
paras. 50-51)  
The Initiative, issued at the June 2005 U.S.-EU Summ it, reaffirms the importance of the U.S. – EU 
regulatory cooperation and agrees on the establishm ent of the high-level Regulatory Cooperation 
Forum as part of its implementation.    (1) Please provide information on the implementation of the Forum, including on the area of early 
warning regulatory cooperation.   
(2) Please also explain the implementation of the Work Plan, submitted in November 2005, in 
accordance with the said Initiative, including information in the areas of intellectual property rights 
and regulatory cooperation.   
 ANSWER:  The US-EU Regulatory Cooperation Forum was launched at the June 2005 US-EU 
Summit.  The initial Forum event was in Brussel s in January 2006 and focused on good regulatory 
practices.  The second Forum event is scheduled fo r May 2006 in Washington and will focus on best 
cooperative practices for regulatory dialogues.  US and EU authorities are working to implement the 
Work Plan that was issued at the November 2005 US-EU Economic Ministeria l.  Cooperation in the 
areas of regulations and IPR are featured prominen tly in the Work Plan, and progress in all areas will 
be noted at the June 2006 US-EU Summit. 
 
[Japan] 
 Q2. Agreement on Mutual Recognition between the United States of America and the European Community (p. 15-16, paras. 50-51)  
Regarding the Agreement on Mutual Recognition be tween the United States of America and the 
European Community, please provide information on the following:  (1) the state of the implementation of the agreemen t and the kind of difficul ties experienced in the 
process of implementation; 
(2) the evaluation by the U.S. of the implementati on of the agreement from the view point of cost-
benefit performance, taking into acc ount matters such as the number of cases of application of the 
agreement in each sectoral area per year and administrative costs of the implementation;  
and (3) whether any further extension of sectoral coverage of the agreement is expected and if so, the areas 
concerned.  
 
ANSWER:  The Agreement on Mutual Recognition between the United States of America and the 
European Community entered into force in  December 1998. The sectoral annexes on 
telecommunications equipment, electro-magnetic compatibility (EMC), and recreational craft are 
operational.  The remaining three annexes are not pr esently operational – the medical device annex is 
the subject of ongoing confidence building activities, the electrical safety annex was suspended by the 
EC in 2000, and US-EU regulatory cooperation on phar maceuticals is being pursued instead outside the 
annex on pharmaceuticals GMPs.  Our experiences with such agreements have been va ried.  For example, agreements which require a 
counterpart authority to demonstrate the competence  of its bodies to assess conformity to the other          WT/TPR/M/160/Add.1 
Page 375 
 
 
Party’s technical regulations tend to require a si gnificant amount of resources and commitment (e.g., 
negotiations, confidence building, and implementa tion) on both sides.  Implementation costs and 
aspects related to operation of such agreements vary  according to sector and specific approach selected 
for mutual recognition.  The annexes on telecommun ications equipment and EMC operate well and are 
used frequently by US and EU firms – while a nnexes on more sensitive pr oducts such as medical 
devices and pharmaceuticals have proven to be far more difficult to implement.  Many of the 
observations made by Canada in its paper submitte d to the WTO Committee on Technical Barriers to 
Trade on its experience with mutual recognition agre ements (G/TBT/W/167) are reflective of our own 
experience.  The United States believes that MRAs  are only one option of many for achieving the 
acceptance of conformity assessment results when those are required by regulation. 
 
At this time, the United States does not foresee extending the 1998 US-EC MRA to other product sectors.  We have negotiated a separate US-EC MRA on marine equipment that entered into force in July 2004.  The United States also negotiated MRAs with the EEA EFTA States (Norway, Iceland, and 
Liechtenstein) to parallel our MRAs with the EC in the sectors of telecommunications equipment, 
EMC, recreational craft, and marine equipment.  These US-EEA EFTA States agreements entered into 
force in March 2006.  
[Japan] 
 Q3. African Growth and Opportunity Act (p.16, para. 53) 
Concerning the extension to September 2007 of the AGOA’s special provision under which less-
developed beneficiary countries are permitted to u se regional or third country fabric in apparel 
imported into the United States under AGOA, is there any possibility of excessively promoting fabric 
exports to Africa from a particular third-country?  
ANSWER:  The Special Rule allowing for lesser devel oped countries to use third-country fabric 
does not promote the use of fabric from a particular  third-country. The Special Rule allows eligible 
AGOA apparel exporters the freedom to choose the s ource of their yarn and fabric based solely on 
commercial availability, price, competitiveness, and ot her market factors.  The Special Rule recognizes 
that certain yarns and fabrics are not produced in  commercial quantities in sub-Saharan Africa.  The 
use of third-country fabric is also limited in terms of time and quantity.   The Special Rule for the use of 
third-country fabric is only ava ilable through September 30, 2007.  The quantitative limitation for the 
twelve-month period beginning Octobe r 1, 2005 will be an amount not to exceed 5.8735 percent of the 
aggregate SMEs of all apparel articles imported into the United States in the preceding 12-month period for which data are availa ble, which equals 1,344,476,567  SMEs.  Of this overall amount, 
apparel imported under the special rule for lesser-dev eloped countries is limited to an amount not to 
exceed 2.9285 percent, which is  670,349,813 SMEs.  These quantities are recalculated for each 
subsequent year.  Apparel articles entered in ex cess of these quantities will be subject to otherwise 
applicable tariffs.  The duty-free cap is not allocated  among countries.  It is filled on a “first-come, 
first-served” basis.  
[Japan] 
 
Q4. U.S. - Australia Free Trade Agreement (p. 20, para.74) 
With regard to the coverage of the United States – Australia Free Trade Agreement, it is noted in the 
attached letter that both parties of the agreement confirmed that no provision of the agreement shall be construed as imposing any obligation on a part y regarding its immigration measures.   
 
(1) Please explain how matters relating to immigrati on measures have been dealt with and how this 
matter will be treated in the FTA to be concluded in the future by the U.S. 
 ANSWER:  The U.S.-Australia Free Trade Agreement does not contain any temporary entry or 
other immigration-related provisions. Th e side letter referred to further cl arifies that no provision of the WT/TPR/M/160/Add.1 
Page 376  
 
agreement shall be construed as imposing any ob ligation on a party regarding its immigration 
measures.  Currently, U.S. policy is that future Free Trade Ag reements will not include any immigration-related 
provisions. 
 
(2) What are the commitments on trade in services ma de under the United States – Australia Free Trade 
Agreement that are not included in the sche dules of specific commitments under the GATS? 
 ANSWER:  The US-Australia FTA includes several gene ral commitments that do not appear in the 
GATS as well as certain sectoral commitments that e ither do not appear or are broader than those 
scheduled in the GATS.  
• As a general matter, any “new” service is automatically covered in the FTA, 
but not in the GATS.  This is because the FTA covers all services, unless a reservation for a sector or measure is taken.   
 
• In addition, in most cases, where such  a reservation for a sector or measure is 
taken in the FTA, and then unilaterally liberalized by that party, that liberalization cannot be reversed.  Th is method of binding sectors contrasts 
with the GATS where a member can increase barriers in any sector in which the member either: (1) does not have a commitment; or (2) has a commitment 
in a particular sector but then liberalizes its actual treatment of foreign 
suppliers in that sector. 
 
• In other words, in almost all sect ors, the FTA locks in unilateral 
liberalizations, but the GATS does not. 
 
Australia and the United States have each made offe rs in the context of the Doha round that exceed 
current sectoral commitments in the GATS. 
 
• Most of these sectors are covered in the FTA.  For example, the United States 
and Australia have each made commitme nts in higher education and health 
services that do not appear in their current GATS schedules.  
 
• Under the FTA, Australia has made commitments to liberalize its foreign 
investment screening framework in relation to US investors, including higher notification thresholds for proposed acq uisitions of Australian corporations 
and developed commercial property. 
 
• Australia has also made significantly broader commitments in the FTA in the 
following important sectors: financial services such as insurance; advertising; 
business services such as services incidental to mining and energy; legal 
services; and in recreational services such as library services and entertainment services. 
 (3) Please explain the details of the arrangements such as preferential tariff-rate quotas and safeguards 
on certain procedures. 
 
ANSWER:  We greatly would appreciate further assist ance from Japan to understand this question 
and the information it is intended to solicit.           WT/TPR/M/160/Add.1 
Page 377 
 
 
[Japan] 
 Q5. U.S. - Thailand Free Trade Negotiations (p.21, para. 80) 
(1) Are negotiations of the U.S. - Thailand FTA expected  to be concluded by the end of TPA in spite of 
the suspension of the negotiation sch edule due to the dissolution of the Thai House of Representatives?  
If such is not the case, does the Government of th e United States intend to continue negotiations to 
complete this FTA after the TPA time limit?  ANSWER:  At this point, we do not know when the Thai  government will be in a position to return 
to negotiations.  When they are ready to restar t the negotiations, we will work with the Thai 
government to see if it is possible to complete t hose negotiations before the expiration of Trade 
Promotion Authority (TPA).  However the timing of  TPA will not dictate when we conclude the 
negotiations.  As always, substance will drive the process.  (2) Please explain whether the Government of the Un ited States intends to pu rsue full coverage of 
FTAs with all countries, as “comprehensiveness” is not  mentioned in some FTAs such as those with 
Oman and Bahrain.  ANSWER:  The United States sets a very high standa rd for the “substantially all the trade” 
requirement of Article XXIV of the GATT and th e “substantial sectoral coverage” requirement of 
Article V of GATS.  The United States’ fulfillment of these standards is demonstrated not by the use of 
the word “comprehensive” in the text of an FTA, but rather by the tariff elimination schedules and 
services non-conforming measures schedules attached to the FTAs, including those of Oman and Bahrain.   Trade Capacity Building
 
 [European Communities]  
The EC welcomes the US’s emphasis on sustainable economic growth and sust ainable development. 
Looking at the overall policies of  the US:  
• What plans does the US have for adoption of polic y strategies in order to enhance sustainable 
development? Does the issue of trade and sust ainable development fit into the US’ overall 
development strategies? 
• How does the US assess the possi bilities for increasing trade and development while ensuring 
environmental sustainability? Does the US curre ntly have a specific plan addressing this? 
ANSWER: Sustainable development is a core elem ent of the economic, development, and 
environmental strategies of the United States For example, the Trade Act of 2002 contains principal 
negotiating objectives with respect to the environmen t and instructs us to "strengthen the capacity of 
our trading partners to protect the environment through the promotion of sustainable development".  We achieve these objectives by inco rporating environmental commitments in the body 
of our free trade agreements and supplementing th ose commitments with environmental cooperation 
mechanisms.  In addition to our regional and bilatera l trade agreements, the United States is working to 
enhance sustainable development at the WTO by le ading efforts to create new disciplines on harmful 
fisheries subsidies, as well as improved market acce ss for environmental goods and services.  For more 
information on how U.S. policies incorporate sustai nable development objectives, we refer the EC to 
the OECD's 2005 Environmental Policy Review of the United States.  WT/TPR/M/160/Add.1 
Page 378  
 
Trade and Labor
 
 
[European Communities] 
 
The EC welcomes the detailed information provided on trade and labour issues. 
 
• The bilateral FTAs of the US systematically include provisions related to social issues and 
labour rights. Does the US already have some experience to share with these provisions and 
their enforcement? 
ANSWER:  Under the North American Agreement on Labor Cooperation (NAALC), the labor side 
agreement of the NAFTA, the United States has initia ted Ministerial consultations on a number of 
labor issues.  Thirty-four submissions have been filed under the NAALC.  Twenty-one were filed with 
the United States, of which nineteen involved alle gations against Mexico and two against Canada.  
Seven of the submissions filed with the United St ates have gone to minister ial level consultations, 
resulting in agreements to address the relevant pr oblem.  More information on the submissions and 
relevant cooperative activities is available at http://www.dol.gov/ILAB/programs/nao/submissions.htm . 
 
The United States believes that cooperation and cons ultations are the preferred means to ensure 
compliance with FTA labor obligations.  All FTAs negotiated under authority provided in the Trade 
Act of 2002 include cooperation mechanisms that direct  the parties to cooperate  on bilateral or regional 
cooperative activities on labor issues, including activiti es to strengthen our trading partners’ capacity to 
promote respect for core labor standards and comp liance with ILO Convention 182.  During our FTA 
negotiations, USTR and the Depart ment of Labor (DOL) consult w ith prospective FTA partners 
concerning those countries’ labor laws, and DOL provides technical assistance if needed.  The 
United States has undertaken cooperative activities w ith and provided technical assistance to many of 
our trading partners to strengthen their long te rm capacity to enforce their own labor laws. 
 
• Are the US taking initiatives aimed at ensuri ng respect for Core Labour Standards and 
promoting decent work in Export Processing Zones (EPZs) in third countries? 
ANSWER:  All FTAs negotiated under authority provided in the Trade Act of 2002 include the 
obligation that a party shall not fail to effectively enforce its labor laws in a manner affecting trade 
between the parties.  The obligation would cover la bor laws applicable in a party’s export processing 
zones.  The FTAs define labor laws as statutes and regulations directly related to specified 
internationally recognized labor rights, including the right of association, the right to organize and 
collectively bargain, and acceptable conditions of work  with respect to minimum wages, hours of work, 
and occupational health and safety.   In considering whether to designate, as well as wh ether to suspend or terminate, a country as a 
beneficiary for purposes of the GSP program, the President must take into account whether or not the 
country is taking steps to afford internationally recognized workers rights, as defined in U.S. law, 
including in any designated zone (i.e. EPZ) within that country.  In response to petitions submitted by 
interested parties, the United St ates has reviewed the conditions aff ecting workers rights in several GSP 
beneficiary countries.  For example, the United St ates recently reviewed conditions in Pakistan and 
Bangladesh in response to petitions citing concerns  about labor laws and enforcement in export 
processing or free trade zones. 
 
• Is the US promoting Corporate Social Respons ibility (CSR) initiatives in third countries? Do 
these initiatives include the promotion of Core Labour Standards? 
ANSWER:  Corporate social responsibility (CSR) gene rally involves voluntary business efforts to 
address the social and environmental concerns asso ciated with business operations.  Therefore,          WT/TPR/M/160/Add.1 
Page 379 
 
 
although the U.S. Government is supportive of CSR e fforts, it has no CSR enforcement or regulatory 
responsibility .  In September 2005, the U.S. Government  Accountability Office (GAO) released a 
study titled, “Observations on Federal Activities Rela ted to Global Corporate Social Responsibility and 
Human Rights.”  Although the report found that th e United States has no broad federal mandate 
regarding CSR, the GAO identified 12 U.S. agencies  with over 50 programs, policies, and activities 
that generally endorse and facilitate CSR. The report can be found at http://www.gao.gov/new.items/d051049t.pdf. 
 
[European Communities] 
 
The importance of linking trade with sustainable dom estic policies, and in particular employment 
related matters and core labour st andards, was confirmed by the Final Report of the World Commission 
on the Social Dimension of Globalisation of February 2004.  
• How does the US assess the conclusions of th e report with regard to trade policy? 
ANSWER:  The United States agrees with many of th e report’s conclusions.  In particular, the 
United States agrees that reforms at the national an d local level are the most critical in expanding the 
benefits of globalization and that  good national governance, democracy , respect for human rights, and 
sound economic institutions are the fundament al building blocks of development. 
 
• How will the US contribute to the follow- up of the recommendations of the World 
Commission? 
ANSWER:  The Untied States has not yet taken specific st eps to contribute to the follow-up of the 
Commission’s recommendations  The United States continues to review the report and to consider how best to contribute to its implementation.  
• How will the US contribute, including with its trade policies, to the promotion of fair 
globalisation and the promotion of decent work for all (as defined by the ILO) in line with the 
September 2005 UN Summit (§47) ? 
ANSWER:  As set out in the Trade Act of 2002, promoting respect for worker rights is one of the 
key U.S. trade negotiating objectives.  Accordingly, in our FTAs, parties commit to strive to ensure that 
specified internationally recognized labor rights are re cognized and protected in their laws and that they 
do not weaken such laws as an encouragement for tr ade or investment with another party.  Our FTA 
partners also commit to effectively enforce labor  laws and ensure access to labor tribunals for 
enforcement of worker rights.  Our FTAs also include labor cooperation mechanisms, whereby the 
parties agree to cooperate on labor issues, includi ng on issues related to acceptable conditions of work 
with respect to minimum wage, hours of wo rk, and occupational health and safety. 
 The United States also remains the largest donor to  the work of the ILO.  The United States has 
supported two ILO initiatives in particular: the Inte rnational Program on the Elimination of Child 
Labor (IPEC) and an initiative to implement the 199 8 ILO Declaration on Fundamental Principles and 
Rights at Work.  IPEC/ILO efforts have focused on  the means to eliminate the worst forms of child 
labor, including prostitution, pornography, and fo rced or bonded labor, and work in hazardous or 
unhealthy conditions. 
 WT/TPR/M/160/Add.1 
Page 380  
 
III.  TRADE POLICIES AND PRACTICES BY MEASURE 
 
[Trinidad and Tobago] 
 
I. Paragraph 77, page 38 indicates that certai n aspects of the AD and CVD system challenged in 
 the WTO were resolved during the period under review. 
 
 Can the United States indicate when it envisages that all aspects of its AD and CVD 
 system, which has been challenges in the WTO, will be resolved? 
 ANSWER:  The United States has complied with the vast majority of DSB recommendations and 
rulings in these disputes, in nearly all cases within  the “reasonable period of time” for doing so.  In 
some cases, the question of implementation is pending before a compliance panel.  The United States continues its efforts to complete  implementati on of DSB recommendations and rulings involving 
legislation in the Hot-Rolled Steel  dispute (DS184).  The United States has already completed 
implementation of non-legislative recommenda tions and rulings in that dispute. 
 
[Trinidad and Tobago] 
 
II. According to paragraph 195, page 64, the United States maintains a duty drawback 
 programme.  Customs duties and certain intern al taxes and fees resulting from  importation 
 are refunded following the export of either the imported product or the article  manufactured 
 from the imported product.  
 Can the United States provide additional details on this program and its realised 
 benefits?  
ANSWER: A full description of the United States’ drawback program is available on the U.S. 
Customs and Border Patrol website at http://www.customs.gov/xp/cgov/import/duty_rates/drawback . 
 
[Trinidad and Tobago] 
 
III. In paragraph 210, page 67, it is noted that  financial assistance to business is available 
 through the Trade Adjustment Assistance Programme for Firms, which is part of a  broader programme that also provides assistance to workers and farmers.  The Trade Act  of 
 2002 extended Trade Adjustme nt Assistance until September 2007 and made available US$80 
 million over five years to assist firms affected by import competition. 
 
 Can the United States outline key elements of its Trade Adjustment Assistance  Program as well as other related border programs and their benefits?  
 
ANSWER:  The Trade Adjustment Assistance (TAA) Program, as set out in the Trade Act of 1974 
as amended, provides technical assistance to help U.S. workers, farmers, or firms experiencing a 
decline in sales and employment, resulting in importa nt part from the increase in imports of like or 
directly competitive articles.    The Secretary of Commerce is responsible for administering the TAA for firms program and has 
delegated the statutory authority and responsibility for this program under the Trade Act of 1974 to the 
Department of Commerce’s Economic Development Administration (“EDA”).  EDA administers the 
Trade Adjustment Assistance for Firms Program through a national network of eleven Trade 
Adjustment Assistance Centers to help manufacturi ng and production firms, wh ich have lost domestic 
sales and employment due to increased imports of similar or competitive goods, become more 
competitive in the global economy.  More informa tion on the EDA regulations implementing the TAA          WT/TPR/M/160/Add.1 
Page 381 
 
 
Program may be accessed via EDA’s Internet website at http://www.eda.gov/AboutEDA/Programs.xml  
and http://www.eda.gov/Investme ntsGrants/Lawsreg.xml . 
 The Secretary of Labor is responsible for admini stering the TAA for workers program, which includes 
the Trade Adjustment Assistance (TAA) and the A lternative Trade Adjustment Assistance (ATAA) 
programs.  These programs assist individuals who have become unemployed as a result of increased 
imports from, or shifts in production to, foreign co untries. The goal of the Trade Act programs is to 
help trade-affected worker s return to suitable employment as quickly  as possible. To facilitate this goal, 
TAA-certified workers may access a menu of services that include income support, relocation allowances, job search allowances, and a health cove rage tax credit. TAA participants that require 
retraining in order to obtain suitable employment may receive occupational training.  
 In addition, the ATAA program for older workers provides an alterna tive to the benefits offered under 
the regular TAA program. Participation in ATAA allo ws older workers, for whom retraining may not 
be suitable, to accept reemployment at a lower wage and receive a wage subsidy.  More information on 
TAA for workers is available at http://www.doleta.gov/tradeact
. 
 
The Secretary of Agriculture is re sponsible for administering the TAA for farmers program.  Under the 
program, the U.S. Department of Agriculture provides technical assistance and cash  benefits to eligible 
farmers and fishermen if increased imports have contributed importantly to a price decline of at least 20 percent. Technical assistance under the program can provide access to a wide variety of resources from 
USDA’s Cooperative State Research , Education, and Extension Service (CSREES, information 
available at http://www.csrees.usda.gov/
), in partnership with a county extension service, to assist 
producers in exploring alternative crops and market ing techniques.  The program’s goal is to help 
producers respond proactively to import competition th rough training, cash benefits, and employment 
services.  More information on the program is available at http://www.fas.usda.gov/itp/taa/taa.asp . 
 
IV.  TRADE POLICIES BY SECTOR 
 
[Trinidad and Tobago] 
 
IV. In December 2004, the Federal Reserve appr oved a new rating system for BHCs, including 
FHCs.  The revised rating system, which b ecame effective 1 January 2005, emphasizes risk 
management, introduces a more comprehensive framewo rk for analyzing and rating financial factors, 
and provides a framework for assessing and rating the potential impact of the parent holding company 
and its non-depository subsidiaries on the subsidiary depository instituti on(s).  Under the new system, a 
composite rating and the risk management component  forms the basis to classify a BHC or FHC as 
“well managed.”   Can the United States provide additional information on this new rating system?  
 
ANSWER: Please see the Federal Reserve Board's Supe rvision and Regulation (SR) letter 04-18 
for more information on the new rating system fo r BHCs, including FHCs.  It can be found on the 
Federal Reserve’s public webs ite at http://www.federalreserve .gov/boarddocs/srletters/2004/sr0418.
 
htm. 
 There is also information in our manual on Ba nk Holding Company Supervision on the Federal 
Reserve’s public website, available at http ://www.federalreserve. gov/boarddocs/supmanual/
. 
 The specific section of the manual that might be most useful is section 4070 (Bank Holding Company 
Rating System), found at http://www.federalreser ve.gov/boarddocs/supmanual/bhc/200601/4000p2.
 
pdf. WT/TPR/M/160/Add.1 
Page 382  
 
[Singapore]  
 WT/TPR/S/160 Para 99-100 
 
On the issue of foreign ownership control, we unde rstand that there is a proposed legislation known as 
the "Barton Bill" now under consideration by the US  House of Representatives.  News reports on this 
have indicated that there is a provision in the Bill that would expand the current foreign ownership 
restrictions in US communications laws by making them applicable to certain Internet, Broadband and 
VOIP (voice over Internet Protocol) services.   We would appreciate if the US could share information on this Bill and in particular, on the motivations  for such a proposal. While many countries are 
considering the issue of imposing light-touch re gulation on services such as VOIP, the general 
direction of the market is that of allowing liberal  FDI limits on the provision of services such as these. 
 ANSWER:  We are unaware of any legislation curre ntly under consideration (including HR 5252, 
the so-called “Barton” bill) that would have the effe ct of expanding foreign ownership restrictions.  A 
2005 bill creating a new legal category of supplie rs (“broadband Internet transmission service 
provider”) did include provisions indicating that ex isting restrictions on radio licenses would also apply 
to this new category of suppliers seeking radio licen ses, but our understanding is that this implied no 
new restrictions.  To our knowledge, this bill is  not under active consideration at this time. 
 
[Singapore]  
 
WT/TPR/S/160 Para 109-112 
 
There have been recent consolidations and others  possibly in the Works (AT&T/SBC, Verizon/MCI, 
and AT&T/Bellsouth).  We would appreciate if  the US could comment on action taken to ensure that 
conditions of Competition are preserved in the US market, particularly in the following areas: 
 
(a) access to bottleneck network elements, given market consolidation and recent relaxation of 
rules for incumbent local phone carriers to provide unbundled access to network elements; 
 ANSWER: See below for response to questions (a) and (b) 
 
(b) provision of services such as IP transit, long distance transmission and local loop, as these 
services are input to international capacity services  and hence there have been some concern over 
possible anti-competitive conduct by merged entities in favor of affiliates; and  ANSWER: Both the Antitrust Division of the Depart ment of Justice (DOJ) and the Federal 
Communications Commission (FCC) carefully reviewed the potential competitive effects of the SBC-
AT&T and Verizon-MCI mergers, including their e ffect on the markets for special access services, 
such as local loop and transport services.  The DOJ found that in a number of buildings in SBC’s territory, AT&T was the only CLEC with a last mile connection (also known as a lateral connection) .  These last mile connections can be used to 
provide the loop portion for special access circu its.  The DOJ found that, with respect to those 
buildings, the merger would therefore reduce the numbe r of carriers with an owned or controlled last-
mile connection from two to one.  The DOJ made si milar findings in the Verizon-MCI merger.  Based 
on these findings, the DOJ entered into consent decr ees, which required the merged entities to divest 
indefeasible rights of use (IRUs) to those buildin gs where the acquired entity (AT&T or MCI) was the 
sole CLEC with a direct connection to the building and where the DOJ found entry unlikely. 
 In the FCC merger review proceeding, opponents of  the mergers alleged likely anticompetitive effects 
with respect to two types of wholesale special access services:  Type I services, which are special          WT/TPR/M/160/Add.1 
Page 383 
 
 
access services offered wholly over a carrier’s own facilities; and Type II services, which are special 
access services offered using a combination of th e carrier’s own facilities and the special access 
services of another carrier.  With respect to Type  I special access services, the Commission found that, 
absent appropriate remedies, the merger was likely to have anticompetitive effects in buildings where 
AT&T or MCI was the only competitive LEC with a direct connection to the building and where entry 
appeared unlikely.  The Commission further found, however, that IRU divestitures required under the 
DOJ consent decrees adequately re medied any likely anticompetitive effects in the provision of Type I 
wholesale special access services.  The Commission further found that the two merger s did not cause likely anticompetitive effects with 
respect to Type II wholesale special access services.  It based this conclusion, inter alia, on the findings 
that:  (1) AT&T and MCI did not have access to speci al access discount plans that were not available to 
other carriers; and (2) in the MSAs where AT&T a nd MCI had local facilities, other competing carriers 
had many more collocations and they also had comp eting fiber networks (which in a number of cases 
appeared more extensive than those of AT&T a nd MCI).  Finally, the Commission found comfort in 
certain voluntary commitments made by the merger applicants, including the commitments to:  (1) not 
seek any increase in state-approved UNE rates that are currently in effect; (2) exclude fiber-based 
collocation arrangements establishe d by the acquired entity (either AT&T or MCI) in identifying wire 
centers in which the acquiring entity (SBC or Verizon) claimed there was no impairment; (3) 
implement a performance metric plan for interstate special access services; (4) not raise rates paid by 
for certain in-region special access se rvices; and (5) abide by certain non-discrimination requirements 
with respect to special access services provided to its wireline affiliates. 
 (c) provision of bundled services (i.e., fixed and mobile telephony, broadband internet access, 
together with cable television) by merged entities and the risk of anti-competitive bundles that may 
impede competition in individual service markets. 
 
ANSWER:  In the FCC merger review proceedings fo r the SBC-AT&T and Verizon-MCI mergers, 
opponents of the mergers alleged likely anticompetitive effects with respect to bundled local and long 
distance services.  With respect to bundles of lo cal and long distance service, the Commission found 
that neither merger was likely to result in anticom petitive effects, given that AT&T and MCI no longer 
are, and are unlikely to become, significant providers (or potential providers) of bundled local and long 
distance service.  In addition, the Commission c oncluded that competition from intermodal competitors 
is growing quickly, and we expect it to become in creasingly significant in the years to come.  Finally, 
the Commission found comfort in the voluntary commitm ent made by the merger applicants to offer 
stand-alone DSL.  
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