WORLD TRADE ORGANIZATION  
ORGANISATION MONDIALE DU COMMERCE  
ORGANIZACIÓN MUNDIAL DEL COMERCIO WT/TPR/M/200/Add.2 
9 September 2008 
 (08-4219) 
Trade Policy Review Body 
9 and 11 June 2008 Original:   English/ 
 anglais/  inglés 
  
TRADE POLICY REVIEW 
UNITED STATES 
Minutes of Meeting
 
Addendum  
Chairperson:  H.E. Mr. Yonov Frederick Agah (Nigeria) 
 This document contains the a dditional responses to questions provided by the United States.1 
__________________________________________________________________________________  
Organe d'examen des politiques commerciales 
9 et 11 juin 2008 
 
EXAMEN DES POLITIQUES COMMERCIALES 
ÉTATS-UNIS 
Compte rendu de la réunion
 
Addendum  
Président:  S.E. M. Yonov Frederick Agah (Nigéria) 
 
 Le présent document contient les réponses a dditionnelles aux questions communiquées par les 
États-Unis.1 
__________________________________________________________________________________ 
 
Órgano de Examen de las Políticas Comerciales 
9 y 11 de junio de 2007  
EXAMEN DE LAS POLÍTICAS COMERCIALES 
ESTADOS UNIDOS 
Acta de la reunión
 
Addendum  
Presidente:  Excmo. Sr. Yonov Frederick Agah (Nigeria) 
 
 En el presente documento figuran las respu estas adicionales a las preguntas presentadas por 
los Estados Unidos.1 
                                                      
1 In English only.   
   WT/TPR/M/200/Add.2 
 Page 3 
 
 
 ADDITIONAL RESPONSES TO QUESTIONS 
 
ARGENTINA  iii) Financial Services 
Paragraph 152, page 134  
This paragraph indicates that the main U.S. laws governing securities services at the federal level are 
the Securities Act of 1993 [sic], the Securities Ex change Act of 1934, the Trust Indenture Act of 
1939, the Investment Company Act of 1940, the I nvestment Advisers Act of 1940, the Sarbanes-
Oxley Act of 2002, and the Credit Rating Reform Act of 2006.  Could the United States explain how 
the laws cited in this paragraph treat “sophisticated consumers” of security-related services?  How is 
the “sophisticated” nature of such a consumer defin ed and demonstrated?  Are there exceptions to 
the various requirements for the registering of fo reign agents for transactions carried out for some 
specific kind of consumer?  Are there exemptions fr om the regulations prot ecting consumers from 
deceptive practices for some specific type of consumer?  How are they implemented? 
 
ANSWER:  The U.S. federal securities laws include the concept of the “sophisticated investor” in 
several contexts.  As a result, there is no one defin ition of this term.  Below is a summary of some of 
the more commonly used exemptions  which center on this concept. 
 Issuer Registration Exemptions 
 
Private Offering Exemption
 
 Section 4(2) of the Securities Act exempts from regi stration “transactions by an issuer not involving 
any public offering.” To qualify for this ex emption, the purchasers of the securities must: 
 
• have enough knowledge and experience in finance and business matters to evaluate the risks and 
merits of the investment (the “sophisticated inv estor”), or be able to bear the investment’s 
economic risk;  
• have access to the type of information normally provided in a prospectus; and  
• agree not to resell or distribute the securities to the public.  
 
The exemption disappears if there is public solicitati on or general advertising in connection with the 
offering.
1 
 Regulation D
 
 Regulation D establishes three exemptions from Securities Act registration.  
 
• Rule 504 provides an exemption for the offer and sale of up to $1,000,000 of securities in a 12-
month period.
2  Like the other Regulation D exempti ons, one may not use public solicitation or 
advertising to market the securities, and purch asers receive “restricted” securities (meaning that 
they may not sell the securities without registration or an applicable exemption).  However, this 
                                                      
1 The precise limits of this private offering exemption are uncertain.  As the number of purchasers 
increases and their relationship to the company and its management becomes more remote, it is more difficult to show that the transaction qualifies for the exemption.  If  securities are offered to even one person who does not 
meet the necessary cond itions, the entire offering may be in  violation of the Securities Act. 
2 A company may use this exemption so long as it is not a blank check company and is not subject to 
Exchange Act reporting requirements. WT/TPR/M/200/Add.2 
Page 4  
 
 exemption can be used for a public offering of secu rities, and investors will receive freely tradable 
securities.
3 
 
• Rule 505 provides an exemption for offers and sal es of securities totaling up to $5 million in any 
12-month period. Under this exemption, an issuer  may sell to an unlimited number of “accredited 
investors”4 and up to 35 other persons who do not need to satisfy the sophistication or wealth 
standards associated with other exemptions. Purc hasers must buy for investment only and not for 
resale. The issued secur ities are “restricted.” Consequently, the issuer must inform investors that 
they may not sell for at least six months without registering the transaction. The issuer may not use general solicitation or adver tising to sell the securities.  
 
• Rule 506 is a “safe harbor” for the private offe ring exemption. If the company satisfies the 
following standards, it can be assured that it is within the Section 4(2) exemption:  
o Raise an unlimited amount of capital;  
o Cannot use general solicitation or advertising to market the securities;  
o Sell securities to an unlimited number of accred ited investors (the same group identified in 
the Rule 505 discussion) and up to 35 other purchasers. Unlike Rule 505, all non-accredited 
investors, either alone or with a purchaser repr esentative, must be sophisticated - that is, they 
must have sufficient knowledge and experience in financial and business matters to make 
them capable of evaluating the merits an d risks of the prospective investment;  
o Issuer must be available to answer questions by prospective purchasers;  
o Financial statement requirements ar e the same as for Rule 505; and  
o Purchasers receive “restricted” securities. Con sequently, purchasers may not freely trade the 
securities in the secondary market after the offering. 
 For purposes of Regulation D, “accredited investor” is defined as any person who comes within any 
of the following categories, or who the issuer reas onable believes comes within any of the following 
categories, at the time of the sale of the securities to that person: 
 
                                                     
 
3 Investors receive the freely tradable securities under the following circumstances which require:  
Registering exclusively in one or more states that require a publicly filed registration statement and delivery of a 
substantive disclosure document to investors;  
⋅ Registering and selling in a state that  requires registration and disclosure delivery and also selling in a state 
without those requirements, so long the disclosure documents are mandated by the state in which all 
purchasers are registered;  or,  
⋅ Selling exclusively according to state law exemptions that permit general solicitation and advertising, so 
long as sales are only to “accredited investors.” 
Even if private sales are made where there are no specific disclosure deliver y requirements, care should be taken 
to provide sufficient information to investors to avoid violating the antifraud provisions of the securities laws. 
 4 An “accredited investor” is:  
⋅ a bank, insurance company, regist ered investment company, busine ss development company, or small 
business investment company;  
⋅ an employee benefit plan, within the meaning of the Employee Retirement Income Security Act, if a bank, 
insurance company, or registered investment adviser makes the investment decisions, or if the plan has total 
assets in excess of $5 million;  
⋅ a charitable organization, corporation or partnership with assets exceeding $5 million;  
⋅ a director, executive officer, or general partner of the company selling the securities;  
⋅ a business in which all the equity owners are accredited investors;  
⋅ a natural person with a net worth of at least $1 million;  
⋅ a natural person with inco me exceeding $200,000 in each of the two most recent year s or joint income with 
a spouse exceeding $300,000 for thos e years and a reasonable expectation of the same income level in the 
current year; or  
⋅ a trust with assets of at least $5 million, not formed  to acquire the securities offered, and whose purchases 
are directed by a sophisticated person.   WT/TPR/M/200/Add.2 
 Page 5 
 
 
 (1) Any bank as defined in section 3(a)(2) of the Ac t, or any savings and loan association or other 
institution as defined in section 3(a)(5)(A) of the Act whether acting in its individual or fiduciary 
capacity; any broker or dealer registered pursuant to section 15 of the Securities Exchange Act of 
1934; any insurance company as defined in sectio n 2(13) of the Act; any investment company 
registered under the Investment Company Act of 1940 or a business development company as defined 
in section 2(a)(48) of that Act; any Small Busin ess Investment Company licensed by the U.S. Small 
Business Administration under section 301(c) or (d) of the Small Business Investment Act of 1958; any plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, if such plan has total assets in excess of $5,000,000; any employee bene fit plan within the meaning of the Employee 
Retirement Income Security Act of 1974 if the invest ment decision is made by a plan fiduciary, as 
defined in section 3(21) of such act, which is eith er a bank, savings and loan association, insurance 
company, or registered investment adviser, or if the employee benefit plan has total assets in excess of 
$5,000,000 or, if a self-directed plan, with invest ment decisions made solely by persons that are 
accredited investors; 
 
(2) Any private business development company as defi ned in section 202(a) ( 22) of the Investment 
Advisers Act of 1940;  (3) Any organization described in section 501(c)(3) of the Internal Revenue Code, corporation, 
Massachusetts or similar business trust, or part nership, not formed for the specific purpose of 
acquiring the securities offered, with total assets in excess of $5,000,000; 
 (4) Any director, executive officer, or general partner of the issuer of the s ecurities being offered or 
sold, or any director, executive officer, or genera l partner of a general partner of that issuer; 
 
(5) Any natural person whose individual net worth or joint net worth with that person's spouse, at the 
time of his purchase exceeds $1,000,000;  (6) Any natural person who had an individual inco me in excess of $200,000 in each of the two most 
recent years or joint income with that person's s pouse in excess of $300,000 in each of those years and 
has a reasonable expectation of reaching the same income level in the current year; 
 
(7) Any trust, with total assets in excess of $5, 000,000, not formed for the specific purpose of 
acquiring the securities offered, whose purchase is dir ected by a sophisticated person as described in 
§230.506(b)(2)(ii); and  
(8) Any entity in which all of the equity owners are accredited investors. 
 Accredited Investor Exemption - Section 4(6) 
 
 Section 4(6) of the Securities Act exempts from registration offers and sales of securities to accredited investors when the total offering price is less than $5 million.  The definition of accredited investors is 
the same as that used in Regulation D.  Like the ex emptions in Rule 505 and 506, this exemption does 
not permit any form of advertising or public  solicitation.  There are no document delivery 
requirements.   Rule 144A
 
 
Rule 144A under the Securities Act provides a safe harbor from registration requirements for certain 
private resales of restricted securities to qualified institutional buyers (“QIBs ”), which generally are 
large institutional investors with over $100 million in investable assets.  When a broker or dealer is 
selling securities in reliance on Rule 144A, it is subject  to the condition that it may not make offers to 
persons other than those it reasonably believes to be QIBs. WT/TPR/M/200/Add.2 
Page 6  
 
 A QIB is defined as follows under this rule: 
i. Any of the following entities, acting for its own account or the accounts of other qualified 
institutional buyers, that in the aggregate owns  and invests on a discretionary basis at least 
$100 million in securities of issuers that are not affiliated with the entity: 
A. Any insurance company  as defined in section 2(a)(13) of the Act; 
 Note: A purchase by an insurance company fo r one or more of its separate accounts, 
as defined by section 2(a)(37) of the Investment Company Act of 1940 (the "Investment Company Act"), which are neither registered under section 8 of the Investment Company Act nor required to be so registered, shall be deemed to be a 
purchase for the account of such insurance company. 
B. Any investment company  registered under the Investment Company Act or any 
business development company  as defined in section 2(a)(48) of that Act; 
C. Any  Small Business Investment Company licensed by the U.S. Small Business 
Administration under section 301(c) or (d) of the Small Business Investment Act of 1958; 
D. Any plan established and maintained by a state,  its political subdivisions, or any 
agency or instrumentality of a state or its political subdivisions, for the benefit of its employees; 
E. Any employee benefit plan  within the meaning of title I of the Employee Retirement 
Income Security Act of 1974; 
F. Any trust fund whose trustee is a bank or  trust company and whose participants are 
exclusively plans of the types identified in paragraph (a)(1)(i)(D) or (E) of this 
section, except trust funds that include as participants individual retirement accounts 
or H.R. 10 plans; 
G. Any business development company as defined in section 202(a)(22) of the 
Investment Advisers Act of 1940; 
H. Any organization described in section 501( c) (3) of the Internal Revenue Code, 
corporation (other than a bank as defined in section 3(a)(2) of the Act or a savings and loan association or other institution refe renced in section 3(a)(5)(A) of the Act or 
a foreign bank or savings and loan associati on or equivalent institution), partnership, 
or Massachusetts or similar business trust;  and 
I. Any  investment adviser  registered under the Investment Advisers Act. 
ii. Any dealer  registered pursuant to section 15 of th e Exchange Act, acting for its own account 
or the accounts of other qualified institutional bu yers, that in the aggregate owns and invests 
on a discretionary basis at least $10 million of securities of issuers that are not affiliated with 
the dealer, Provided, That securities constituting the whole or a part of an unsold allotment to 
or subscription by a dealer as a participant in  a public offering shall not be deemed to be 
owned by such dealer; 
iii. Any dealer registered pursuant to section 15 of the Ex change Act acting in a riskless principal 
transaction on behalf of a qualified institutional buy er;  Note: A registered dealer may act as  WT/TPR/M/200/Add.2 
 Page 7 
 
 
 agent, on a non-discretionary basis, in a tr ansaction with a qualified institutional buyer 
without itself having to be a qualified institutional buyer. 
iv. Any investment company registered under th e Investment Company Act, acting for its own 
account or for the accounts of other qualified institu tional buyers, that is part of a family of 
investment companies which own in the aggr egate at least $100 million in securities of 
issuers, other than issuers that are affiliated w ith the investment company or are part of such 
family of investment companies.  Family of investment companies  means any two or more 
investment companies registered under the I nvestment Company Act, except for a unit 
investment trust whose assets consist solely of shares of one or more registered investment companies, that have the same investment advi ser (or, in the case of unit investment trusts, 
the same depositor), Provided That, for purposes of this section: 
A. Each series of a series company (as defined in Rule 18f-2 under the Investment 
Company Act ) shall be deemed to be a separate investment company;  and 
B. Investment companies shall be deemed to  have the same adviser (or depositor) if their 
advisers (or depositors) are majority-owned s ubsidiaries of the same parent, or if one 
investment company's adviser (or depositor) is a majority-owned subsidiary of the 
other investment company's adviser (or depositor); 
v. Any entity, all of the equity owners of whic h are qualified institutional buyers, acting for its 
own account or the accounts of othe r qualified institutional buyers; and 
vi. Any bank as defined in section 3(a)(2) of the Act, any savings and loan association or other 
institution as referenced in section 3(a)(5)(A) of the Act, or any foreign bank or savings and 
loan association or equivalent institution, acti ng for its own account or the accounts of other 
qualified institutional buyers, that in the aggreg ate owns and invests on a discretionary basis 
at least $100 million in securities of issuers that are not affiliated with it and that has an 
audited net worth of at least $25 million as de monstrated in its latest annual financial 
statements, as of a date not more than 16 m onths preceding the date of sale under the Rule in 
the case of a U.S. bank or savings and loan association, and not more than 18 months preceding such date of sale for a foreign bank or savings and loan association or equivalent 
institution. 
California Limited Offering Exemption - Rule 1001
 
 
SEC Rule 1001 provides an exemption from the regi stration requirements of the Securities Act for 
offers and sales of securities, in  amounts of up to $5 million, that satisfy the conditions of §25102(n) 
of the California Corporations Code.  This California law exempts from California state law 
registration offerings made by California compan ies to “qualified purchasers” whose characteristics 
are similar to, but not the same as, accredited investors under Regulation D.  This exemption allows 
some methods of general solicitation prior to sales.   
Broker-Dealer Registration Exemption 
 
Persons who engage in the business of buying and se lling securities either on behalf of others or for 
his or her own account are considered to be acting as a broker or a dealer and are generally required to 
register with the SEC.  
 
There is an exception from registration for cross-bo rder supply of broker-dealer services if the broker-
dealer meets the conditions contained in Rule 15a-6 under the Securities Exchange Act of 1934.  Rule 
15a-6 currently exempts foreign broker-dealers that  (1) effect unsolicited transactions; (2) provide WT/TPR/M/200/Add.2 
Page 8  
 
 research reports to large U.S. institutions; (3) eff ect transactions for U.S. institutions that are 
intermediated by a registered U.S. broker-dealer;  a nd (4) execute transactions directly with registered 
U.S. broker-dealers or certain other entities (i.e., the World Bank).   
 Rule 15a-6 permits solicitation of institutional invest ors, so long as the contacts are intermediated by a 
U.S. registered broker-dealer, and the U.S. and foreign broker-dealers limit their activities to the 
following:  
• contacting major U.S. institutional investors a nd U.S. institutional investors from outside the 
United States, provided that, in case of oral contact s with U.S. institutional investors that are not 
major U.S. institutional investors, either (i) a registered representative of the registered broker-
dealer participates in such contact, or (ii) such contact takes place outside of the trading hours of 
NYSE and no orders to effect transactions other than those involving foreign securities are 
accepted by the foreign broker-dealer; 
• visit major U.S. institutional investors in the Un ited States, provided that the foreign broker-dealer 
is accompanied on such visits by a registered re presentative of the registered broker-dealer that 
accepts the responsibility for the foreign broke r’s communications with such investors; 
• visit, on an unchaperoned basis, major U.S. ins titutional investors, so long as the number of days 
on which such unchaperoned visits occur do not ex ceed 30 per year and the foreign broker-dealer 
does not accept orders to effect any securities transactions; and 
• provide U.S. investors with access to screen-b ased quotation systems that supply quotations, 
prices and other trade reporting information input directly by the foreign broker-dealer, so long as any resulting transactions are effected in acco rdance with the requirements of Rule 15a-6. 
 
Rule 15a-6 defines “major U.S. institutional investor” as a person that is: 
 (i) a U.S. institutional investor that has, or has under management, total assets in excess of 
$100 million; provided, however, that for pur poses of determining the total assets of an 
investment company under this rule, the invest ment company may include the assets of any 
family of investment companies of which it is a part;  or 
(ii) an investment adviser registered with the Commission under section 203 of the Investment 
Advisors Act of 1940 that has total asset s under management in excess of $100 million. 
 The term “U.S. institutional investor ” is defined as a person that is: 
 
(i) an investment company registered with the Commission under section 8 of the Investment 
Company Act of 1940;  or 
(ii) a bank, savings and loan association, insu rance company, business development company, 
small business investment company, or employee benefit plan defined in Rule 501(a)(2);  an organization described in section 501(c)(3) of th e International Revenue Code, as defined in 
Rule 501(a)(3);  or a trust defined in Rule 501(a)(7). 
 
Investment Company Registration Exemption 
 
Section 2(a) (51) of the Investment Company Act of 1940 defines "Qualified Purchaser" essentially, 
as an individual with $5 million or more in inv estable assets and individuals  managing $25 million or 
more of investable assets on behalf of other qualified purchasers. 
  Section 3(c) (7) of the Investment Company Act ex cepts from the definition of "investment company" 
any issuer whose outstanding securities are owned exclusively by persons who were qualified purchasers at the time of the acquisition (provided that  the issuer does not make a public offering).   
 
  WT/TPR/M/200/Add.2 
 Page 9 
 
 
 Investment Advisors Act Exemption 
 
Section 205 of the Investment Advisers Act of 1940 generally prohibits registered investment advisers 
from charging performance-based fees.  However,  Rule 205-3 provides an exception to this 
prohibition in the case of a "qualified client," defined as: 
 
• a person/entity with $750,000 or more  under management with the adviser; 
• a person/entity that the adviser reasonably believ es (i) has a net worth (or joint net worth with 
spouse) of $1,500,000;  or (ii) is a qualified purchaser under Section 2(a)(51) of the Investment 
Company Act; 
• an officer, director, general partner, etc. of the adviser;  or 
• an employee of the adviser who participates in investment decision-making (and has done so for 
at least 12 months). 
 
Antifraud Provisions 
 
The antifraud provisions of the U.S. securities laws a pply uniformly, without regard to a specific type 
of consumer.  They apply even if an entity qualifies for an exemption. 
 
BRAZIL 
 
(iv) Tariffs Page 31, paragraph 45 
 
The document, in paragraph 45, mentions some data about ad valorem rates.  Could you provide data 
which also take into account non ad-valorem tariffs? 
 
ANSWER:  This paragraph refers to tariff rates for 2008.   At this time, we have not calculated the 
2008 ad valorem equivalent tariffs for specific and compound rates because we do not have the full 
year of trade data for 2008 on which to make these calculations.  For 2007, considering both ad 
valorem and non ad-valorem rates this paragraph would read as follows:   
“Including both ad valorem and non-ad valorem ra tes, the simple average applied MFN tariff was 
4.8% in 2007.  The average applied MFN tariff was 8.9% for agriculture (WTO definition), and 4% for non-agricultural products.”  
 
Page 31, paragraph 46, Table III.2 
 The Table III.2 shows that tariff quotas (%  of all tariff lines) are decreasing.  Are there any plans to 
eliminate, or further reduce, the use of tariff quotas , particularly for products of interest to developing 
countries?   
  
ANSWER:  In the Doha Round negotiations for both agricultural and non-agricultural products 
efforts are underway to reform or eliminate non-ad  valorem tariffs.  The United States will implement 
whatever modality on tariffs is finally agreed to by all the Parties. 
 
Approximately 10.7% of all US tariff lines are subject to non-ad valorem tariffs.  How are these tariff 
lines distributed among HS chapters? (Par. 46, Table III.2) ? WT/TPR/M/200/Add.2 
Page 10  
 
 ANSWER: 
Chapter Description Percent of total 
tariff lines 
represented by 
chapter Percent not 
Ad Valorem 
rates 
01 LIVE ANIMALS 0.3% 25.9% 
02 MEAT AND EDIBLE MEAT OFFAL 0.9% 45.5% 
03 FISH AND CRUSTACEANS, MOLLUSCS AND OTHER AQUATIC 
INVERTEBRATES 1.3% 3.8% 
04 DAIRY PRODUCE; BIRDS' EGGS; NATURAL HONEY; EDIBLE PRODUCTS OF 
ANIMAL ORIGIN, NESOI 2.4% 50.2% 
05 PRODUCTS OF ANIMAL ORIGIN, NESOI 0.2% 4.8% 
06 LIVE TREES AND OTHER PLANTS; BULBS, ROOTS AND THE LIKE; CUT 
FLOWERS AND ORNAMENTAL FOLIAGE 0.3% 26.7% 
07 EDIBLE VEGETABLES AND CERTAIN ROOTS AND TUBERS 1.6% 53.3% 
08 EDIBLE FRUIT AND NUTS; PEEL OF CITRUS FRUIT OR MELONS 1.1% 54.6% 
09 COFFEE, TEA, MATE AND SPICES 0.5% 14.6% 
10 CEREALS 0.2% 66.7% 
11 MILLING INDUSTRY PRODUCTS; MALT; STARCHES; INULIN; WHEAT 
GLUTEN 0.4% 50.0% 
12 OIL SEEDS AND OLEAGINOUS FRUITS; MISCELLANEOUS GRAINS, SEEDS 
AND FRUITS; INDUSTRIAL OR MEDICINAL PLANTS; STRAW AND FODDER 0.5% 43.6% 
13 LAC; GUMS; RESINS AND OTHER VEGETABLE SAPS AND EXTRACTS 0.1% 7.7% 
14 VEGETABLE PLAITING MATERIALS AND VEGETABLE PRODUCTS, NESOI 0.1% 18.2% 
15 ANIMAL OR VEGETABLE FATS AND OILS AND THEIR CLEAVAGE 
PRODUCTS; PREPARED EDIBLE FATS ; ANIMAL OR VEGETABLE WAXES 0.6% 46.3% 
16 EDIBLE PREPARATIONS OF MEAT, FISH, CRUSTACEANS, MOLLUSCS OR 
OTHER AQUATIC INVERTEBRATES 0.9% 10.1% 
17 SUGARS AND SUGAR CONFECTIONERY 0.6% 51.5% 
18 COCOA AND COCOA PREPARATIONS 0.7% 43.6% 
19 PREPARATIONS OF CEREALS, FLOUR, STARCH OR MILK; BAKERS' WARES 0.7% 25.7% 
20 PREPARATIONS OF VEGETABLES, FRUIT, NUTS, OR OTHER PARTS OF 
PLANTS 1.8% 41.8% 
21 MISCELLANEOUS EDIBLE PREPARATIONS 0.9% 43.8% 
22 BEVERAGES, SPIRITS AND VINEGAR 0.7% 46.6% 
23 RESIDUES AND WASTE FROM THE FOOD INDUSTRIES; PREPARED 
ANIMAL FEED 0.3% 34.3% 
24 TOBACCO AND MANUFACTURED TO BACCO SUBSTITUTES 0.5% 51.8% 
25 SALT; SULFUR; EARTHS AND STONE; PLASTERING MATERIALS, LIME 
AND CEMENT 0.8% 1.2% 
26 ORES, SLAG AND ASH 0.5% 18.8% 
27 MINERAL FUELS, MINERAL OILS AND PRODUCTS OF THEIR 
DISTILLATION; BITUMINOUS SUBSTANCES; MINERAL WAXES 0.7% 36.1% 
28 INORGANIC CHEMICALS; ORGANIC OR INORGANIC COMPOUNDS OF 
PRECIOUS METALS, OF RARE-EARTH METALS, OF RADIOACTIVE 
ELEMENTS OR OF ISOTOPES 2.5% 0.0% 
29 ORGANIC CHEMICALS 9.3% 0.1% 
30 PHARMACEUTICAL PRODUCTS 0.4% 0.0% 
31 FERTILIZERS 0.2% 0.0% 
32 TANNING OR DYEING EXTRACTS; TANNINS AND DERIVATIVES; DYES, 
PIGMENTS AND OTHER COLORING MATTER; PAINTS AND VARNISHES; 
PUTTY AND OTHER MASTICS; INKS 1.0% 0.0% 
33 ESSENTIAL OILS AND RESINOIDS; PERFUMERY, COSMETIC OR TOILET 
PREPARATIONS 0.4% 4.7% 
34 SOAP ETC.; LUBRICATING PRODUCTS; WAXES, POLISHING OR SCOURING 
PRODUCTS; CANDLES ETC., MODELING PASTES; DENTAL WAXES AND 
DENTAL PLASTER PREPARATIONS 0.4% 0.0% 
35 ALBUMINOIDAL SUBSTANCES; MODIFIED STARCHES; GLUES; ENZYMES 0.2% 43.5% 
36 EXPLOSIVES; PYROTECHNIC PRODUCTS; MATCHES; PYROPHORIC 
ALLOYS; CERTAIN COMBUSTIBLE PREPARATIONS 0.1% 0.0% 
Table cont'd WT/TPR/M/200/Add.2 
 Page 11 
 
 
 Chapter Description Percent of total 
tariff lines 
represented by 
chapter Percent not 
Ad Valorem 
rates 
37 PHOTOGRAPHIC OR CINEMATOGRAPHIC GOODS 0.4% 0.0% 
38 MISCELLANEOUS CHEMICAL PRODUCTS 1.5% 2.0% 
39 PLASTICS AND ARTICLES THEREOF 2.2% 0.0% 
40 RUBBER AND ARTICLES THEREOF 1.4% 0.0% 
41 RAW HIDES AND SKINS (OTHER THAN FURSKINS) AND LEATHER 1.2% 0.0% 
42 ARTICLES OF LEATHER; SADDLERY AND HARNESS; TRAVEL GOODS, 
HANDBAGS AND SIMILAR CONTAINERS; ARTICLES  OF GUT (OTHER 
THAN SILKWORM GUT) 0.7% 1.3% 
43 FURSKINS AND ARTIFICIAL FUR; MANUFACTURES THEREOF 0.2% 0.0% 
44 WOOD AND ARTICLES OF WOOD; WOOD CHARCOAL 1.6% 2.9% 
45 CORK AND ARTICLES OF CORK 0.2% 0.0% 
46 MANUFACTURES OF STRAW, ESPARTO OR OTHER PLAITING MATERIALS; 
BASKETWARE AND WICKERWORK 0.5% 0.0% 
47 PULP OF WOOD OR OTHER FIBROUS CELLULOSIC MATERIAL; 
RECOVERED (WASTE AND SCRAP) PAPER AND PAPERBOARD 0.2% 0.0% 
48 PAPER AND PAPERBOARD; ARTICLES OF PAPER PULP, PAPER OR 
PAPERBOARD 2.2% 0.0% 
49 PRINTED BOOKS, NEWSPAPERS, PICTURES AND OTHER PRINTED 
PRODUCTS; MANUSCRIPTS, TYPESCRIPTS AND PLANS 0.3% 0.0% 
50 SILK, INCLUDING YARNS AND WOVEN FABRICS THEREOF 0.1% 0.0% 
51 WOOL AND FINE OR COARSE ANIMAL HAIR, INCLUDING YARNS AND 
WOVEN FABRICS THEREOF; HORSEHAIR YARN AND WOVEN FABRIC 1.0% 18.8% 
52 COTTON, INCLUDING YARNS AND WOVEN FABRICS THEREOF 2.2% 4.7% 
53 VEGETABLE TEXTILE FIBERS NESOI; YARNS AND WOVEN FABRICS OF 
VEGETABLE TEXTILE FIBERS NESOI AND PAPER 0.3% 3.2% 
54 MANMADE FILAMENTS, INCLUDING YARNS AND WOVEN FABRICS 
THEREOF 1.2% 6.2% 
55 MANMADE STAPLE FIBERS, INCLUDING YARNS AND WOVEN FABRICS 
THEREOF 1.2% 0.0% 
56 WADDING, FELT AND NONWOVENS; SPECIAL YARNS; TWINE, CORDAGE, 
ROPES AND CABLES AND ARTICLES THEREOF 0.5% 7.0% 
57 CARPETS AND OTHER TEXTILE FLOOR COVERINGS 0.4% 0.0% 
58 SPECIAL WOVEN FABRICS; TUF TED TEXTILE FABRICS; LACE; 
TAPESTRIES; TRIMMINGS; EMBROIDERY 0.7% 6.9% 
59 IMPREGNATED, COATED, COVERED OR LAMINATED TEXTILE FABRICS; 
TEXTILE ARTICLES SUITABLE FOR INDUSTRIAL USE 0.6% 0.0% 
60 KNITTED OR CROCHETED FABRICS 0.6% 0.0% 
61 ARTICLES OF APPAREL AND CLOTHING ACCESSORIES, KNITTED OR 
CROCHETED 2.4% 9.9% 
62 ARTICLES OF APPAREL AND CLOTHING ACCESSORIES, NOT KNITTED OR 
CROCHETED 3.1% 11.3% 
63 MADE-UP TEXTILE ARTICLES NESOI; NEEDLECRAFT SETS; WORN 
CLOTHING AND WORN TEXTILE ARTICLES; RAGS 0.9% 1.0% 
64 FOOTWEAR, GAITERS AND THE LIKE; PARTS OF SUCH ARTICLES 1.2% 12.9% 
65 HEADGEAR AND PARTS THEREOF 0.3% 34.5% 
66 UMBRELLAS, SUN UMBRELLAS, WALKING-STICKS, SEAT-STICKS, WHIPS, 
RIDING-CROPS AND PARTS THEREOF 0.1% 0.0% 
67 PREPARED FEATHERS AND DOWN AND ARTICLES THEREOF; ARTIFICIAL 
FLOWERS; ARTICLES OF HUMAN HAIR 0.1% 0.0% 
68 ARTICLES OF STONE, PLASTER, CEMENT, ASBESTOS, MICA OR SIMILAR 
MATERIALS 0.6% 1.5% 
69 CERAMIC PRODUCTS 0.6% 0.0% 
70 GLASS AND GLASSWARE 1.6% 3.5% 
71 NATURAL OR CULTURED PEARLS, PRECIOUS OR SEMIPRECIOUS STONES, 
PRECIOUS METALS; PRECIOUS METAL CLAD METALS, ARTICLES 
THEREOF; IMITATION JEWELRY; COIN 1.0% 0.0% 
72 IRON AND STEEL 2.5% 0.0% 
Table cont'd WT/TPR/M/200/Add.2 
Page 12  
 
 Chapter Description Percent of total 
tariff lines 
represented by 
chapter Percent not 
Ad Valorem 
rates 
73 ARTICLES OF IRON OR STEEL 2.4% 0.0% 
74 COPPER AND ARTICLES THEREOF 0.9% 0.0% 
75 NICKEL AND ARTICLES THEREOF 0.3% 0.0% 
76 ALUMINUM AND ARTICLES THEREOF 0.6% 0.0% 
78 LEAD AND ARTICLES THEREOF 0.1% 36.4% 
79 ZINC AND ARTICLES THEREOF 0.1% 15.4% 
80 TIN AND ARTICLES THEREOF 0.1% 0.0% 
81 BASE METALS NESOI; CERMETS; ARTICLES THEREOF 0.6% 4.5% 
82 TOOLS, IMPLEMENTS, CUTLERY, SPOONS AND FORKS, OF BASE METAL; 
PARTS THEREOF OF BASE METAL 1.3% 29.4% 
83 MISCELLANEOUS ARTICLES OF BASE METAL 0.6% 1.7% 
84 NUCLEAR REACTORS, BOILERS, MACHINERY AND MECHANICAL 
APPLIANCES; PARTS THEREOF 7.4% 0.1% 
85 ELECTRICAL MACHINERY AND EQUIPMENT AND PARTS THEREOF; 
SOUND RECORDERS AND REPRODUCERS, TELEVISION RECORDERS AND 
REPRODUCERS, PARTS AND ACCESSORIES 5.4% 0.7% 
86 RAILWAY OR TRAMWAY LOCOMOTIVES, ROLLING STOCK, TRACK 
FIXTURES AND FITTINGS, AND PARTS THEREOF; MECHANICAL ETC. 
TRAFFIC SIGNAL EQUIPMENT OF ALL KINDS 0.3% 0.0% 
87 VEHICLES, OTHER THAN RAILWAY OR TRAMWAY ROLLING STOCK, AND 
PARTS AND ACCESSORIES THEREOF 1.8% 0.0% 
88 AIRCRAFT, SPACECRAFT, AND PARTS THEREOF 0.2% 0.0% 
89 SHIPS, BOATS AND FLOATING STRUCTURES 0.2% 0.0% 
90 OPTICAL, PHOTOGRAPHIC, CINEMATOGRAPHIC, MEASURING, 
CHECKING, PRECISION, MEDICAL OR SURGICAL INSTRUMENTS AND 
APPARATUS; PARTS AND ACCESSORIES THEREOF 2.9% 3.0% 
91 CLOCKS AND WATCHES AND PARTS THEREOF 1.7% 72.4% 
92 MUSICAL INSTRUMENTS; PARTS AND ACCESSORIES THEREOF 0.4% 2.4% 
93 ARMS AND AMMUNITION; PARTS AND ACCESSORIES THEREOF 0.4% 10.3% 
94 FURNITURE; BEDDING, CUSHIONS ETC.; LAMPS AND LIGHTING FITTINGS 
NESOI; ILLUMINATED SIGNS, NAMEPLATES AND THE LIKE; 
PREFABRICATED BUILDINGS 0.8% 0.0% 
95 TOYS, GAMES AND SPORTS EQUIPMENT; PARTS AND ACCESSORIES 
THEREOF 0.7% 1.3% 
96 MISCELLANEOUS MANUFACTURED ARTICLES 0.9% 22.2% 
97 WORKS OF ART, COLLECTORS' PIECES AND ANTIQUES 0.1% 0.0% 
 
(v) Other charges affecting imports 
 
What percentage of US imports in 2007 was s ubject to the merchandise processing fee?  How was 
this percentage distributed among HS chapters? (Par. 57). 
 
What percentage of US imports in 2007 was subject  to the harbour maintenan ce fee?  How was this 
percentage distributed among HS chapters? (Par. 57).  
ANSWER:  The United States does not maintain data in this form. 
 
(3) MINING AND ENERGY 
(III) Selected Issues 
Page 93, paragraph 66 
 
The document states that "Imports of ethanol are subject to ad valorem MFN tariff rates of 1.9% or 2.5% (fuel ethyl alcohol under subheadings HS 22 07.1060 and HS 2207.2000) . An additional duty of 
US$0.1427 per litre (US$0.54 per gallon) is assessed  for imports of ethanol from MFN sources under 
subheading HS 9901.0050."   What is the “rationale” for the imposition of the additional duty? 
  WT/TPR/M/200/Add.2 
 Page 13 
 
 
 ANSWER:  The additional duty in Chapter 99 is applied to imported ethanol when destined for fuel 
use.  Its placement in Chapter 99 is the mechanism used by the United States for tariff classifications 
arising from temporary legislation, temporary modifi cations proclaimed pursuant to trade agreements 
legislation, and other such changes to the tariff schedule.  
Under current U.S. legislation (as amended in the 2008 Farm Bill), the additional duty will expire on 
January 1, 2011, unless it is further extended by Congress. 
 
CANADA 
 On October 10, 2003, the U.S. Food and Drug Admi nistration (FDA) published an interim final rule 
titled, “Prior Notice of Imported Food Under the Public Health Security and Bioterrorism 
Preparedness and Response Act”.  When does the United States anticipate publishing its final rule on 
prior notice of imported food that will address pub lic comments that were  submitted to the FDA 
rulemaking process during the comment p eriod that concluded July 13, 2004? 
 ANSWER:  FDA currently is working on issuing the prio r notice final rule in the near future.  
Although FDA cannot discuss any changes to prior notice requirements in the final rule as the 
Administrative Procedure Act prohibits FDA from addressing comments during a pending rule making process, FDA has carefully considered all co mments received and is aware of the impact of 
the rule on trade.  FDA notes that trade c ontinued without significant interruption on the 
implementation date of December 12, 2003, and fo und that the implementation of the prior notice 
requirements was relatively smooth.   
• On page 43 of the U.S.' Replies to Canada, th e U.S.' responses to Canada's questions on the 
operation of the new Economic Adjustment Assi stance to users of upland cotton under the 
new Farm bill simply state that the implementing regulations have not been issued yet. 
• Can the U.S. specify what is the timing for i ssuing the implementing regulations for this new 
program?  Will there be a pre-publication and comment period? 
 ANSWER:   Under the statute, USDA must issue regulations by August 1, 2008.  In order to meet the 
deadline, USDA may be required simply to issue a final rule, with no comment period. 
 
CHINA 
 
16.  （page 17, paragraph 31 ） The Secretariat Report notes that the U.S. met most of its notification 
obligations between 2005 and 2007 except those on agricultural tariff quotas and government 
procurement statistics.  What are the reasons for the U.S. to  not fully meet its WTO notification 
obligations in the above-mentioned areas? What is  its plan and timeframe to make such notifications? 
 
ANSWER:   Regarding agriculture, the United States is currently preparing our notifications for the 
years 2004-2006 and hopes to have them ready for submission before August 2008. 
 
The United States is in the midst of a major overhaul of the Federal Procurement Data System (FPDS), which it expects to complete within th e next few months.  When the FPDS overhaul is 
complete, the United States will submit its outsta nding government procuremen t notifications to the 
WTO Secretariat.   b. It is noted that the U.S. hasn’t notified the tec hnical regulation drafts at sub-federal level. Could 
the U.S. explain the reasons and its plan and timeframe to make such notifications?   
 
ANSWER:  The United States can assure China that it will continue to notify any proposed 
regulations to the WTO in accordance with our WTO obligations.  With regard to China's question, WT/TPR/M/200/Add.2 
Page 14  
 
 however, we are unable to respond without knowing the specific draft technical regulation to which 
China refers. 
 
v. Food labeling  
 80.  The U.S. is among the countries that have mo st strict requirements on food labeling.  There 
currently exist as many as 22 different food labe ls, and revision and suppl ementation takes place 
every year.  The U.S. requires that all the packaged  food must attach food labels.  For fortified food 
products, nutrition labels are require d in addition, which need to d escribe the content of at least 
14 kinds of nutrients.  Such requirements create large extra load to the exporting manufactures.  Does 
the U.S. have any plan to modify its food labelin g mechanism for the consideration of alleviating 
exporters’ burden?   
ANSWER:   FDA food labeling requirements are based on the requirements set forth in the Federal 
Food, Drug and Cosmetic Act.  The food labeling regulations promulgated unde r the act apply to both 
domestic and imported food products.  All foods are re quired to have:  (1) a statement of identity, 
(2) a net quantity of contents statement, (3) a lis t of ingredients, (4) the name and address of the 
manufacturer, packer, or distributor and (5) nutr ition information.  These five mandatory label 
elements must meet certain type size requirements and must appear on the appropriate panel of the food label.  However, certain f ood products may be exempt from ma ndatory nutrition labeling if they 
do not normally contain significant amounts of the nut rients required to be included in the nutrition 
labeling.   
 In addition, under the Food Allergen Labeling an d Consumer Protection Act of 2004 (FALCPA), a 
food that is or is made with an ingredient that c ontains one of the 8 major food allergens must declare 
the name of the food source of each major food alle rgen on the food’s label either:  1) within the 
ingredient list or 2) in a separate “Contains” st atement immediately following or adjacent to the 
ingredient list.  Both domestic and imported food products must adhe re to the same set of food labeling laws and 
regulations.  FDA has not been provided with any information that would persuade us that it is 
necessary to revise the requirements for mandatory label information or to allow imported foods an 
exemption from required label information.   
 1.  The US classifies Chinese traditional medicine (C TM) as herbal medicines. It is highly concerned 
that such classification does not reflect the nature of the CTM and makes it impossible for CTM to be 
registered and distributed in the US as common  drug products. There is a call for an early 
establishment of a rational administration system for CTM. Please explain whether the US has any 
plans for establishment of a ratio nal administration system for CTM.  
 
ANSWER:  One of the issues relevant to the approval of CTM products in the United States relates to 
FDA's regulations regarding the re quirements that must be met when multiple active ingredients are 
combined into one product.  FDA intends to propo se revisions to those regulations that, under certain 
circumstances, would allow for the exemption of cer tain types of products, including potentially CTM 
products, from the requirements that pertain to comb ination drugs.  Additionally, some CTM products 
may be botanical drug products, and FDA has issued guidance regarding when a botanical drug may be marketed over-the-counter, and when pre-appr oval for the product may be required before 
marketing.  This guidance also addresses the submi ssion of investigational new drug applications for 
botanical drug products, including those currently la wfully marketed as foods and dietary supplements 
in the United States.  See http://www.fda.gov/cder/guidance/1221dft.htm. 
 
3.  Please list the requirements and procedures that a foreign company must comply with in order to 
launch U.S satellites and satellites made by the Unite d States for other countries or satellites with 
components made by the United States?  WT/TPR/M/200/Add.2 
 Page 15 
 
 
 ANSWER:  U.S. defense export license requirements apply to the launch of U.S. satellites, or the 
launch of U.S.-origin components c ontrolled on the United States Munitio ns List.  All defense exports 
must be in support of the national security and foreign policy interests of the United States.  This export licensing process is governed by the Arms Export Control Act, 22 U.S.C. 2778, et. seq., and is administered by the Department of State through the International Traffic in Arms Regulations 
(ITAR), 22 C.F.R. Parts 120-130.  Additional inform ation is available at:  http://pmddtc.state.gov/ 
licenses.htm.  Certain laws relating specifically to the launch of U. S. satellites, which have been incorporated into 
the ITAR procedures, include:  
 
• The Strom Thurmond National Defense Authorization Act (P.L. 105-261);  and the 
• Foreign Relations Authorization Act, Fiscal  Years 1990 and 1991 (Pub lic Law. 101-246). 
 19.  According to US TBT notifications circulated by the WTO, we note that in recent years the US 
Federal Government and its states are either developi ng or revising the technical regulations in certain 
areas, particularly on children’s products, orga nic products, recycling of electrical appliances and 
electronic equipment, and textile. These technical regulations are intended to protect human safety 
and health and environment, but China is highly concerned about their inco nsistency with the WTO 
rules. 
 On regulations regarding recycling of electrical appliances and electronic equipment: 
In January 2008, three states of the US issued 4 TBT notifications on recycling of electrical 
appliances and electronic equipment (G/TBT/N/USA332, G/TBT/N/USA 333, G/TBT/N/USA 340, 
and G/TBT/N/USA 342).  The 4 notified regulations are titled Recycling of Computer Equipment , 
Manufacturer Responsibility and C onsumer Convenience Computer Equipment Collection and 
Recovery Act , An Act Relating to the Disposal of Electronic Waste , and Computer and Television 
Recovery and Recycling Act , respectively.  
 These technical requirements transfer the obligation a nd risks of recycling or reusing waste electrical 
appliances completely to manufacturers or producers.  In this way they have increased the market 
access threshold for manufacturers or producers, an d reduced the obligations and responsibilities of 
governments in services, guidance, and after-pollution treatment.  Would the US please explain how 
these regulations conform with the TBT principle of “no more trade restrictive than necessary” to 
international trade?   
 ANSWER:  The United States does not agree with the assumptions underlying China’s questions.  
Moreover, the cited measures are proposed State legislation, not regulations.  There are thousands of measures proposed in the U.S. Congress and State legi slatures in the United States every year, and the 
vast majority of such proposals are not enacted in to law.  The United States will continue to notify 
any proposed regulations to the WTO for comment.  
II. TRADE POLICY REGIME 
 
• In our written questions 13 and 17, we asked about the US view on its leading role in the 
Doha negotiations.  We note that in their responses,  the US seems to concentrate solely on market 
access and “new trade flow” without mentioning anythi ng about the reform of its agriculture regime, 
particularly the reduction of the trade distorting support .  The fact is that, up to this critical moment of 
the Doha negotiations, all other Members are waiting for the US to put forward a new and meaningful 
offer on trade distorting support to break the ice.  We would like to take this opportunity to remind the 
US that this is a Development Round and Devel opment means much more than market access and 
“new trade flow”.  Instead, it means real cut on farm subsidies, cotton, DFQF, SVEs, S&D, 
particularly SPs and SSM, and revision and impr ovement of rules, particularly on “zeroing”.  WT/TPR/M/200/Add.2 
Page 16  
 
 ANSWER:  To be successful, a Doha outcome must accomplish the central objective of global 
market-opening that yields new trade flows worldw ide in each of the thr ee core negotiating areas – 
agriculture, industrial goods, and services.  The e xperiences of successful economies over the past ten 
years show clearly that openness to goods and services trade, and non-discrimination in their 
treatment, is an absolutely key ingredient in t hose countries’ economic growth and development.  
Developing countries in particular have the most to  gain by other developing countries decreasing 
barriers, particularly through new access to key em erging markets such as China.  The Round is about 
more than agriculture alone – and cannot succeed if China and other key emerging markets refrain 
from making real contributions in each of the three core areas.   
 The United States is very concerned with China’s message that only developed countries must do 
more.  China’s increasing role in the global trading system comes with a certain degree of 
responsibility.  The United States will do its  part and expects no less from others.  
 
• On China’s question 14, and 15, we appreciat e very much the detailed responses provided by 
the US.  Our comments are as followed:  
1.  We would welcome the guidance to be published the US Treasury Department later this year and 
would appreciate it if the US could send us a copy or at least refer us to a website which contains this 
guidance.   
ANSWER:  The final regulations and guidance will be placed on the CFIUS webpage 
(http://www.ustreas.gov/offices/international-affairs/cf ius/) and published in the Federal Register.  
Federal Register notices related to CFIUS can be accessed by searching fo r “Committee on Foreign 
Investment in the United States” on the Fe deral Register website (http://www.gpoaccess. 
gov/fr/Index.html). 
 We would also welcome the public version of th e annual report by CFIUS to Congress by July 31, 
2008 and would appreciate it if this report could be shared among Members with a copy or a reference 
to the website.  We would also urge the US to provi de sufficient information in such public version of 
reports, while recognizing the needs for confidentia lity, so as to ensure those Members, including 
China, who have put forward enorm ous questions on this issue that such reviews are done in a fair and 
transparent way with minimum adverse effects on foreign investment.  
ANSWER:   The U.S. Department of the Treasury will send China a copy of the report as soon as the 
unclassified version is available.  The classified version is due to Congress on July 31, 2008.  The 
unclassified version will be available some time later. 
 
• On China’s question 18, we feel disappointed th at the US simply referred us to CRTA instead 
giving us a direct response. We share the view that the CRTA and RTA transparency mechanism are 
the specific forums and tools to examine the RTAs . However, in our view, this does not necessarily 
preclude the opportunity for us to raise questions on  RTA in the TPRM, the objective of which is to 
increase transparency on various aspects of a Member ’s trade policies and practices. If we switch all 
specific questions to various committees, the effe ctiveness of TPRM would be seriously undermined. 
Furthermore, what we seek is a general picture of exclusion of US FTAs rather than too much detailed 
information. Therefore, we would urge the US to provide response to our questions.  
 ANSWER:   We do not have a compilation of such data  at this time but we will be developing and 
providing this type of data through the normal CRTA  process.  Information on U.S. FTAs currently in 
force can be found at:  www.ustr.gov and thr ough the WTO Documents Online portal under the 
Committee on Regional Trade Agreements. 
 
• On China’s question 23, we appreciate the res ponses by the US.  However, the document that 
the US referred us to, i.e. WT/COMTD/W/149 and its addendums is a notification of the US to the  WT/TPR/M/200/Add.2 
 Page 17 
 
 
 CTD about its internal process on the duty-free a nd quota-free market access for LDCs.  And the 
latest addendum No. 4 was made in April 2007, more  than one year ago, we wonder if the US could 
share with Members updated information on DFQF and would urge the US to take the lead in 
materializing this important commitment to LDCs. 
 ANSWER:   In Hong Kong, the United States agreed to implement the duty-free, quota-free 
obligations contained in Annex F of the Hong Kong Ministerial Declaration in conjunction with the 
results of the Doha Round.  Th e Doha Round is a single undertaki ng for a good reason, as we can 
achieve the best package if all contributions are combined.  We strongly believe, backed by many 
studies, that the best result for all developing coun tries, including the LDCs, is an ambitious package 
that opens markets and results in new trade flows.   
 
We remain committed to achieving a successful outco me to the Doha Round -- one that delivers 
meaningful market access contribu tions in agriculture, industrial goods, and services -- resulting in 
significant new trade flows.  Such a result offe rs the best opportunity to make a significant 
contribution to global economic growth and poverty reduction.  
 
Currently, we continue to work on implementing the terms of the Hong Kong decision in a fully 
transparent manner that results in commercially m eaningful opportunities for the LDCs and we take 
seriously the need to address the full array of factors that contribute positively to utilization of 
preferences.  Implementing our Annex F commitment s will complement ongoing U.S. efforts to foster 
the further integration of developing countries and LD Cs into the multilateral trading system – which 
is a vital part of U.S. trade policy.  A longstanding  element in the U.S. efforts to increase developing 
country and LDC participation in the global trad ing system is the provision of duty-free access for 
products from beneficiary developing countries entering our market through several programs – 
including AGOA, CBTPA and GSP.  
 III. TRADE POLICIES AND PRACTICES BY MEASURE 
 
• On China’s question 25-26 under “Customs procedures’ on 100% scanning pilot programs, 
we welcome the response and note that “all data gathered from these [SFI] pilot programs will be 
reported to our [US] Congress”.  We would like to know  if such data or any summary reports could be 
shared among Members so as to ensure many Memb ers with similar concerns that such programs 
would not cause much negative impact to trade.   
 
ANSWER:   CBP recently reported to Congress on the pilo t programs.  This report can be found at:  
 
http://commerce.senate.gov/public/_files/SFIRepor t_PublicRelease_FINAL_Consolidated.pdf. 
  In addition, the testimony of CBP officials on the pilot can be found at: 
 
http://www.cbp.gov/xp/cgov/newsroom /congressional_test/pilot_ports.xml. 
 
On China’s question 35 on US tariffs of agricultu ral products, we welcome the statement that “the 
United States will lower all its bound tariffs within the framework of multilatera l negotiations”.  This 
would be a key element to demonstrate the US le adership in the Doha negotiations, particularly 
considering that tariff peaks as high as 160-350 % still ex ist in the US, which is 2.5 to 5.4 times of the 
highest agriculture tariff (65%) of China. 
 
ANSWER:  No response necessary. 
 
On China’s question 37 on reduced tax rates for US  domestic small beer and wine producers, we 
thank the US for providing their view on the “trade distorting effect” of such a practice, which actually is not what we asked about.  We are more inte rested in the justificati on of this preferential tax WT/TPR/M/200/Add.2 
Page 18  
 
 policy solely for domestic producers under the national treatment principle.  It should be underlined 
that, under the national treatment principle which specifically mentions “i nternal taxes and other 
internal charges”, there seems to be no “de minims” provision based on size of production or trade 
distorting effect to allow a Member to treat do mestic products more preferably than imported 
products.  
ANSWER:   The United States appreciates China’s view s on this topic, but considers that the 
measures in question are justified.  In addition,  as the United States previously explained, the 
measures do not have any trade-distorting effect. 
 • Of course we understand that the food price hike is a complicated issue and would need 
comprehensive and thorough analysis before we  could draw an objective and science-based 
conclusion.  Therefore, we would draw the US attention to the very recent report of UNCTAD titled “Addressing the Global Food Crisis” issued on early June  in Rome. In this report, biofuel together 
with food security was listed as one of the five major factors as underlying causes of the food crisis 
and this report specifically listed the US 2007 Ener gy Bill as an example and pointed out that “The 
use of maize for ethanol production is expected to almost double between 2005/06 and 2007/08.  In 
2009 it is forecast that almost 38 percent of total Un ited States domestic maize use, equivalent to 100 
million tons, will be devoted  to biofules production.” 
 
ANSWER:  The United States adequately addressed this issue on June 11, at the TPR.  
 In answering China’s question 41 where China que stioned the US’ practice of double counting and 
duplicate remedies in joint AD/CVD inv estigations, the US replied that “there is nothing in either the 
Antidumping or Subsidies Agreement that prevents  Members from investigating concurrent AD and 
CVD cases.”  This is not a satisfactory answer.  The question is, the methodology adopted by the US 
in AD investigations is to calculate the alleged dum ping margin on the basis of surrogate country data, 
which already excludes any possible intervention by China, and is sufficient to provide remedy for 
any price distortion caused by alleged subsidies.  This  has also been proved by the practices of US in 
more than 20 years before the CFS case in 2006.  We would ask the US to explain why a joint CVD 
investigation needs to be initiated now in additio n to AD investigation without any change in AD 
investigation methodology?  And please testify that joint AD/CVD investigations of the US did not 
cause double counting and duplicate remedy problems.   
ANSWER:  Anti-dumping proceedings and countervailing dut y proceedings remedy two separate and 
distinct types of unfair trade practices, dumping and subsidization.  Accordingly, when presented with 
proper AD and CVD applications, it is appropriate fo r the administering authority to initiate both 
antidumping and countervailing duty proceedings to i nvestigate whether dumping or subsidization is 
occurring.  With regard to the allegation of a double remedy, the Commerce Department has not 
concluded that a double remedy could never arise as a result of parallel AD and CVD determinations 
(in which the CVD investigation included domestic s ubsidies) in a NME country; instead, it has stated 
that allegations of double remedy in such circ umstances need to be proven rather than merely 
presumed. 
 
In question 42, the US replied that Chinese corres ponding domestic prices or rates were “unreliable” 
therefore external benchmarks were widely adopted.   We noticed that US had determined to use an 
interest rate benchmark which was calculated by averaging the widely differed interest rates from a 
number of “selected” countries.  It also determ ined to adopt the land price in Bangkok as the 
benchmark for a remote and poor province in Chin a instead of an average land price around the land 
under investigation in the OTR Tires case.  In recen t cases, more than 90% of the “subsidy rate” used 
external benchmarks.  A follow-up question is what are the criteria for the US to choose a benchmark 
in investigation against China?  
  WT/TPR/M/200/Add.2 
 Page 19 
 
 
 ANSWER:  The criteria used by the United States in choosing a commercial benchmark is the same 
for all CVD investigations conducted by the United St ates.  Before the Comme rce Department resorts 
to external benchmarks, it carefully consider s in-country prices, which are preferred under our 
regulations.  When we find that internal prices are distorted, however, we may resort to alternatives, 
including comparable market-determined prices on the world market or in third countries.    
With regard to China’s question 43, please clarify whether the criteria for accepting new allegations 
after an investigation is initiated is the same as the initiation standard of investigation, which 
according the US is “(1) alleges the elements necessary for an imposition of a duty and (2) is 
accompanied by information reasonably availabl e to the petitioner supporting the allegations.” 
Further, we would like to know, besides the willi ngness for consultation, whether US has conducted 
any consultations with Members concerned on new a llegations after the initiation of a case or prior to 
its possible inclusion in the investigation.  
ANSWER:  The standard to initiate on subsidy programs  does not change at any point during a CVD 
proceeding.  Specifically, Section 702(b) of the U. S. statute requires the Commerce Department to 
initiate a CVD proceeding whenever an  interested party files a petition on behalf of an industry that 
(1) alleges the elements necessary for an imposition of a duty under section 701(a) of the Act; and 
(2) is accompanied by information reasonably availa ble to the petitioner(s) s upporting the allegations. 
We examine all subsidy allegati ons carefully to determine whether they meet the statutory 
requirements for initiation.  If the allegation meet s the statutory requirements and is timely filed, 
Commerce is required to initiate an investigation of  the alleged subsidies.  Where an allegation does 
not meet the statutory requirements for initiation, Commerce will not initiate an investigation.   
 
As to China’s second question, the answer is yes.  Whenever such a meeting has been requested, the 
United States has met with foreign governments to discuss new subsidy allegations prior to a decision 
on whether to initiate an inv estigation on such programs. 
 
EUROPEAN COMMUNITIES 
 
(i) Customs procedures  Follow up question to EC question 15:  
1.  Could the US explain in more detail the requirements for treating the imports of large 
disassembled machinery as a single importation?   ANSWER:  Please see the regulation published on page 31, 921 in Volume 71 of the Federal Register 
(June 2, 2006).   Secretariat s Report, page 27;  para 23 Follow up questions to EC questions 22-23 
 
2. It is understood from the US response that the US has so far not carried out any evaluation of the cost of the 100% scanning legislation and its impact on trade.  Could the US confirm that this 
understanding is correct?  
 ANSWER:   As explained in our original reply, U. S. authorities are consulting broadly with, and 
receiving input from, interested parties with resp ect to all aspects of this measure, and are assessing 
that input.  Those aspects include cost, and the EC’s understanding is thus incorrect.  
3. It is noted that the US has not responded to our question regarding the benefits of 100% 
scanning compared to the current risk based approach ;  and why it has not awaited the results of the 
pilot programs before adopting such legislation. We  will therefore repeat this question to the US.  WT/TPR/M/200/Add.2 
Page 20  
 
 ANSWER:   The United States has responded to this ques tion.  For further information on the U.S. 
evaluation of this program and its benefits, we refe r the EC to CBP’s recent report to Congress, at:  
 http://commerce.senate.gov/public/_files/SFIRepor t_PublicRelease_FINAL_Consolidated.pdf. 
 
 Related testimony of CBP officials on the pilot can be found at: 
 http://www.cbp.gov/xp/cgov/newsroom /congressional_test/pilot_ports.xml. 
 
WTO Secretariat's Report, page 32, para. 46 
 The Report states that on average, non- ad valorem tariffs applied by th e US continue to afford higher 
protection than ad valorem duties.  In 2007, th e average ad valorem equivalent (AVE) of non-ad 
valorem tariff rates was 9.2%, compared with 4.3%  for ad valorem duties.  Apart from agricultural 
products, non-ad valorem tariff rates also apply to  articles of apparel and clothing, footwear and 
headgear, watches, and precision tools.  Could the US furnish inform ation whether it has concrete 
plans to shift to ad valorem rat es for non-agricultural products?  
 
ANSWER:   Please refer to the Doha Round negotiations for U.S. positions on tariff rates. 
 
(3) MINING AND ENERGY 
(iii) Selected issues 
WTO Secretariat's Report, page 93, para. 66 
 
According to the Report, imports of ethanol are subject to ad valorem  MFN tariff rates of 1.9% or 
2.5% (fuel ethyl alcohol under subheadings HS 2207.1060 and HS 2207.2000).  Furthermore, an 
additional duty of US$0.1427 per litre (US$0.54 per gallon) is assessed for imports of ethanol from 
MFN sources under subheading HS 9901.0050.  Could the US furnish information whether it intends 
to eliminate this difference of treatm ent between domestic and imported products? 
 
ANSWER:  The additional duty in Chapter 99 is applie d to ethanol imported under the two tariff 
lines when destined for fuel use.  The placement of the additional duty in Chapter 99 is simply the 
mechanism used by the United States for tariff cl assifications arising from temporary legislation, 
temporary modifications proclaimed pursuant to trad e agreements legislation, and other such changes 
to the tariff schedule.  Under current U.S. legislation (as amended in the 2008 Farm Bill), the additio nal duty will expire on 
January 1, 2011, unless it is further extended by Congress. 
 
(ii) Telecommunications and related services 
WTO Secretariat's Report, page 103-104, paras 109-112  
The Report describes the regulation in place in the Un ited States to obtain an authorization to provide 
cable services. Could the United States confirm the aver age number of cable providers by county 
and/or municipality in the States?  
 
ANSWER:   On average, there is one. 
 
ECUADOR 
 
1.  Paragraph 29, page 9.  In th is paragraph, the Secretariat observes that iron and steel imports were 
those that increased the most in 2006.  Would it be possible to find out how much imports of fruits and vegetables rose, if at all, in that same year? 
  WT/TPR/M/200/Add.2 
 Page 21 
 
 
 ANSWER:  For this information, please refer to the following publication from the U.S. Department 
of Agriculture, Increased U.S. Imports of Fresh Fruit and Vegetables, A Report from the Economic 
Research Service:   http://www.ers.usda.gov/Publications /fts/2007/08Aug/fts32801/fts32801.pdf. 
 2.  Paragraph 1, page 12.  The Secretariat’s report notes that the United States has fulfilled most of its 
notification obligations, but also mentions th at there are a number of exceptions, including 
agricultural tariff quotas and government procurement statistics.  What other exceptions might there 
be?  ANSWER:   As the Secretariat’s report states: “The United States has met most of its WTO 
notification obligations; exceptions include notificat ions on agricultural tariff quotas and government 
procurement statistics.”  We know of no “other” exceptions.  3.  Paragraph 12, page 13.  This paragraph of the Secretariat’s report states that the Trade Adjustment 
Assistance (TAA) programs expired in December 20 07, but the Consolidated Appropriations Act of 
2008 contained an appropriation to operate fully the TAA program for workers for fiscal year 2008.  
Could the U.S. authorities explain in greater de tail the differences between these two programs? 
 ANSWER:  The Consolidated Appropriations Act of 2008 contained an appropriation to continue to 
operate the Trade Adjustment Assistance program, wh ich had expired in December 2007.  Therefore, 
the same TAA program will continue to operate in 2008. 
 
4.  Paragraph 43, page 19.  In the report from the Secretariat, some items subject to specific national 
security provisions may be ineligible for GSP treat ment.  What items would be subject to these 
provisions?  
ANSWER:   The statute governing GSP provides that ar ticles subject to certain national security 
actions proclaimed pursuant to section 232 or 351 of the Trade Expansion Act of 1962 (19 U.S.C. 
1862, 1981) are ineligible for duty-free treatment for purposes of the GSP.  5.  Paragraph 3, page 23.  According to this pa ragraph in the report from the Secretariat, the SAFE 
Port Act of 2006 codified and expanded existi ng cargo and supply-chain security programs, and 
established additional filing requireme nts for importers.  Could the U.S. authorities specify what these 
additional requirements consist of, w ith respect to filing by importers? 
 ANSWER:  The SAFE Port Act codified DHS’s advan ce information requirements and automated 
analysis, the Customs-Trade Partnership Agains t Terrorism (C-TPAT), the Container Security 
Initiative (CSI), and the use of non-intrusive inspecti on (NII) technology to scan high-risk shipments.   
 The additional filing requirements for importers refe rs to the Security Filing, also known as “10+2,” 
which will require carriers to submit “10+2” additiona l pieces of information in order to enhance the 
security of the maritime environment.  The additio nal information includes: (1) a vessel stow plan 
used to transmit information about the physical lo cation of cargo loaded aboard a vessel bound for the 
U.S; and (2) container status messages, which report container movements and changes in status (e.g., 
empty or full).  It also requires importers to s ubmit an “Importer Security Filing” containing the 
following 10 data elements:  Manufacturer (or supplier) name and address 
Seller (or owner) name and address 
Buyer (or owner) name and address Ship-to name and address Container stuffing location Consolidator (stuffer) name and address 
Importer of record number/foreign trade zone applicant identification number WT/TPR/M/200/Add.2 
Page 22  
 
 Consignee number(s) 
Country of origin, and Commodity Harmonized Tariff Schedule number  The same Act stipulates that beginning in mid-2012, all containers must be scanned prior to being 
loaded on a U.S.-bound vessel.  In addition to offe ring the possibility of delaying the implementation 
for specific ports, has the application of additi onal measures or programs aimed at minimizing the 
significant impact that such a measure would have on trade been considered? 
 
ANSWER:   Customs and Border Protection (CBP) and th e Department of Energy (DOE) continue to 
study and evaluate the results of the Secure Frei ght Initiative (SFI) pilot programs.  Any decision on 
the expansion of SFI will be informed by the in formation yielded from the initial pilot ports.  Any 
expansion will be done in a reasoned,  responsible, and risk-based manner. 
 CBP recently reported to Congress on the pilot programs.  This report can be found at: 
http://commerce.senate.gov/public/_files/SFIRepor t_PublicRelease_FINAL_Consolidated.pdf. 
 In addition, the testimony of CBP officials on th e pilot can be found at:  http://www.cbp.gov/xp/cgov/ 
newsroom/congressional_test/pilot_ports.xml.  6.  Paragraph 7, page 24.  What exactly is the ne w approval process, referred to in the Secretariat’s 
report, which became effective in August 2007 for fi rst-time imports of fruits and vegetables subject 
to designated phytosanitary measures?  ANSWER:   In July 2007, the U.S. Government put out a procedure for issuing new and revised 
phytosanitary import measures.  As an alternative to undergoing the formal rulemaking-based process, 
imports that are eligible can now be approved through a notice-based process.  As with the 
rulemaking-based process, a pest-ri sk analysis must first be conduc ted for new fruits or vegetables 
considered for importation.  However, if the risk analysis shows that the commodity’s risk can be 
sufficiently mitigated by one or more of the five designated phytosanitary measures, a notice announcing the availability of the pest-risk analysis is published in the Federal Register to allow for 
public comment for 60 days.  Barring substantive comme nts that disprove the findings of the pest-risk 
analysis, a notice is then published in the Federa l Register to announce that USG will begin issuing 
import permits for the commodity.   USDA’s Animal and Plant Health Inspection Servi ce (APHIS) estimates that it takes a minimum of 
18 months to evaluate and approve  new import requests under the rule-making system.  However, the 
process can take 2 to 3 years and longer in some ca ses.  The notices that were published and finalized 
since the August 16, 2007 implementation date were completed in significantly shorter time periods.  
The U.S. is very pleased with its e xperience with the notice based process. 
 7.  Paragraph 36, page 30.  Para graph 36 of the report from the Secret ariat indicates that, in general, 
an article is considered to have been produced in a country if it is wholly the growth, product, or 
manufacture of that country or has been substantially  transformed into a new and different article of 
commerce with a name, character, or use distinct fro m that of the article or articles from which it was 
so transformed.  However, these general standards ma y be adapted and interpreted further by agencies 
other than CBP to fit the needs and purposes of th e particular context in which non-preferential rules 
are applied.  What guidelines do these agencies us e to adapt and interpret these general standards 
further?  
 ANSWER:   There are various provisions of U.S. law th at require determinations of origin or of 
whether a product is domestic or imported.  The au thorities who administer these laws must interpret 
them in accordance with their particular requireme nts.  These laws require the addition of further 
information and do not conflict with the initial determination make by CBP.  WT/TPR/M/200/Add.2 
 Page 23 
 
 
 8.  The U.S. delegation actively participates in TR IPS Council negotiations and has indicated a certain 
degree of flexibility regarding the proposal submitte d by the “Disclosure Group” to amend the TRIPS 
Agreement as part of the linkage between TRIPS and the Convention on Biodiversity.  What degree 
of flexibility could the United States consider in te rms of the components of this proposal, which is 
sponsored by most of the Doha Round developing countries?  
 
ANSWER:  The United States believes that the TPR process should not entail detailed discussion of 
positions in ongoing multilateral trad e negotiations.  However, the United States is prepared to 
reiterate its position that we regard the curre nt provisions of the TRIPS Agreement and the 
Convention on Biodiversity as being mutually suppor tive, and we therefore do not support amending 
the TRIPS Agreement to require the disclosure of cer tain information in patent applications.  The 
United States is, however, committed to remain ing actively engaged in the TRIPS Council's 
examination of these issues.  9.  As part of the negotiations of the Trade a nd Environment Committee, the U.S. delegation, along 
with other developed countries, is  promoting the early liberalizati on of industrial environmental goods 
under the schedule approach.  In order to comply  fully with the negotiating mandate, would the 
United States consider addressing other aspects of the mandate, such as environmental services, non-
tariff barriers, and special and differentiated treatme nt, through an appropriate transfer of technology 
under the schedule approach or through some other negotiating approach?  
ANSWER:   The U.S. believes one of the most eff ective means for ensuring the diffusion of 
environmental technologies internationally is thr ough the elimination of trade barriers to these 
technologies.  The proposals we have tabled  in the WTO environmental goods and services 
negotiations in recent years aim to address such barriers.    
We also recognize the need for financial assistance and capacity  building to help advance the 
development of environmental technology markets in developing countries.  To this end, the U.S., 
along with several other G-8 members, has recen tly created the Clean Technology Fund which is 
designed to help developing countries finance cl imate-friendly technologies.  These funds are in 
addition to the trade-related technical assistance funds  the U.S. continues to furnish to the WTO in its 
efforts to assist developing countries in  their trade capacity building efforts. 
 
10.  The U.S. delegation has said that agricultu ral products are not environmental goods, even though 
they are not excluded from the negotiating mandate in  Paragraph 31(iii) of th e Doha Declaration.  
Could the United States [re]consider this position,  given that a significant number of developing 
countries are urging that agricultural products, in cluding organic products, be included in these 
negotiations? 
 ANSWER:  The United States considers that the Doha Round is the appropria te negotiating venue, 
not the Trade Policy Review.  11.  Ecuador thanks the United States Government fo r granting tariff preferences to Andean countries 
under the ATPDA [Andean Trade Preference Act] and fo r its ongoing efforts to ensure that they earn 
WTO approval.  In the opinion of Ecuador, the principle of shared responsibility within the 
international community in the fight against drug tr afficking forms the basis for the grant of these 
tariff preferences.  Despite its limited financial resources, Ecuador is making tremendous efforts to 
control this problem, which is global in scale.  With this in mind, would the United States consider 
extending the period of validity of the ATPDA with respect to Ecuador, whose tariff preferences will 
expire in December 2008?  ANSWER:  Trade preferences fall under the authority of the U.S. Congress.  The Congress has not 
indicated its intentions with respect to the A ndean Trade Preference Act beyond this year.  
 WT/TPR/M/200/Add.2 
Page 24  
 
 HONG KONG, CHINA 
 
(WT/TPR/S/200, P. 36, Para. 69) 
 
We note that the US Department of Commerce (US DOC) is said to have the authority, though seldom 
uses it, to self-initiate anti-dumping/countervailing i nvestigation.  During the review period, the 
USDOC is known to have set up a comprehensive programme to monitor and review the volume and 
unit values of five categories of textiles and clot hing imports from Vietnam with a view to assessing, 
every six months, whether anti-dumping investigations  against such products should be self-initiated 
by USDOC.  We are interested to know what conclusions the USDOC have drawn up on the 
monitoring programme in the Vietnam case . 
 
ANSWER:  On September 28, 2006, Secretary of Co mmerce Carlos Gutierrez and United States 
Trade Representative Susan Schwab announced the initiation of an import monitoring program 
covering certain textile and apparel products from Vietnam.  As part of the monitoring program, the 
Commerce Department would conduct a review ever y six months to determine whether sufficient 
evidence existed to self-initiate an antidumpi ng investigation.  The program commenced upon 
Vietnam's entry into the WTO and concl udes at the end of the Administration. 
 
The Commerce Department has completed two six month reviews since the program began.  In each 
review, the Department found insufficient evid ence to warrant self-initiating an antidumping 
investigation.  The next six month review cove ring February through July  2008 imports will occur 
after the release of July import data in September 2008.
 
 
INDIA 
 1.  The Secretariat in Summary Observations para graph 25 observes: “A comp rehensive inter-carrier 
compensation reform plan is under consideration.” What are the major features of the inter-carriage 
reform plan?  
 
ANSWER:   Because there are a range of issues being examined, and numerous proposals on how to 
address them, it is not possible to describe approach es as a unitary plan.  The range of proposals can 
be accessed at the following URL:  http:// www.fcc.gov/wcb/ppd/IntercarrierCompensation/ 
history.html.  In the United States, the term “intercarrier compensati on” refers to the charges that one carrier pays to 
another carrier to originate, transport, and/or terminate telecommunications traffic.  Although the 
same or similar facilities are used to originate, termin ate and transport all types of traffic, the rates for 
intercarrier compensation vary based on several f actors:  (1) the beginning and ending points of the 
call (whether the call is local or long distance, and wh ether it is interstate or intrastate);  (2) the types 
of carriers involved (incumbent local carriers, competitive local carriers, long distance providers, wireless carriers); and (3) the type of traffic (wireline voice calls, wireless calls, data bound for an Internet service provider). 
 
Intercarrier compensation payments are governed by  a complex system of federal and state rules. 
There are two major forms of intercarrier compen sation - access charges and reciprocal compensation. 
Access charges generally apply to calls that begin and end in different local calling areas. Interstate 
access charges apply to calls that originate and te rminate in different states, and intrastate access 
charges apply to calls that originate and terminate in different local calling areas within the same state. 
The Commission oversees interstate access charge  rates, and the states oversee intrastate access 
charge rates. Reciprocal compensation generally app lies to calls that begin and end within the same 
local calling area. Historically, reciprocal compen sation rates have been lower than access charge 
rates, and interstate access charge rates have b een lower than intrastate access charge rates.  
  WT/TPR/M/200/Add.2 
 Page 25 
 
 
 The Commission initially crafted its interstate access charge rules to facilitate payments between local 
telephone companies and long-distance companies after the 1984 breakup of the former AT&T monopoly.  The agency modified and expanded its intercarrier compensation rules following passage 
of the Telecommunications Act of 1996.  Drama tic changes in the marketplace since that time, 
however, have placed increasing strains on the existing intercarrier compensation system.  For 
example, most wireless services were not available in the 1980s.  More recently, the introduction of 
bundled service offerings and new services, such as voice-over-Internet protocol (VoIP) technology, have blurred traditional industry and regulatory distinctions, and posed questions that were not 
contemplated when the intercarrier co mpensation rules were initially created. 
 
In response to these developments and the increas ing strains placed on the existing intercarrier 
compensation regimes, the Commission has undertaken  a fundamental re-exami nation of intercarrier 
compensation.  In July 2006, the Commission issued a Public Notice seeking comment on a comprehensive intercarrier compensation reform plan (the “Missoula Plan”) filed by the National Association of Regulatory Utility Commissioner s’ (NARUC) Task Force on Intercarrier 
Compensation.  Numerous comments were received in  response to the Public Notice, the due date for 
which was extended to February 1, 2007.  Ad ditionally, the Commission requested and recently 
received comment on proposed amendments to the Missoula Plan, including a process for the creation 
and exchange of call detail reco rds and a new regulatory support mechanism intended to assist states 
that have already rebalanced rates. 
 
2.  The US appears to lack a transparent framework  for regulation of Biogenerics or Follow on Protein 
Products (FOPPs).  The US Public Health Servi ce has no provision for regulation of FOPPs.  While 
the Food Drugs and Cosmetics Act (USFDA) was am ended in 1984 to open ways for some generic 
drugs like Human Growth Hormone and insulin that ar e not regulated by Public Health Service, the 
US government needs to create a ge neric pathway for all biotech drugs.  There is a need to lay down 
the scientific requirements that future generics would need to meet.  Will US be prepared to lay down 
these scientific requirements that futu re generics would need to meet?  
 
ANSWER:   The Food and Drug Administration supports th e goal of making safe and effective drugs 
available and affordable for Ameri can consumers and supports legislation to create such a pathway to 
allow for the approval of follow-on biologic products  through a robust scientific, regulatory, and legal 
discussion.  Any such legislation must, as a first prio rity, ensure patient safety.  Furthermore, it should 
also include adequate intellectual property protections in order to ma intain the research enterprise that 
has generated life-saving medications.  During the l ast session, Congress considered several bills, but 
none of them were passed. 
 
3.  India believes that the US has a mandatory labe lling requirement for fresh fish and shellfish under 
the Country of Origin Labelling Pr ogramme (and Public Law 107-171).  Are these requirements 
equally applicable for domestic industry?  What is the quantum of the punitive fines imposed for 
violation of this labelling requirement by the impor ter and domestic industry resp ectively?  In case of 
any difference in the level of punitive fines, Indi a would like to know the reason for the same.  
 ANSWER:  The Farm Security and Rural Investment  Act of 2002 (Public Law 107-171), the 2002 
Supplemental Appropriations Act (Public Law 107-2 06), and the Food, Conservation and Energy Act 
of 2008 (Public Law 110-234 and commonly known as the 2008 Farm Bill) amended the Agricultural 
Marketing Act of 1946 to mandate country of origin  labeling (COOL) at the retail level for covered 
commodities.  Covered commodities include beef, la mb, chicken, chicken, goat, pork, fish and 
shellfish, perishable agricultural commodities, gi nseng, and certain nuts.  The implementation of 
mandatory COOL was delayed until September 30, 2008 for all covered commodities except fish and 
shellfish.  For covered fish and shellfish, the U. S. Department of Agriculture (USDA) published an 
interim final rule on October 5, 2004.  
 WT/TPR/M/200/Add.2 
Page 26  
 
 Mandatory COOL is applied at the retail level in the United States, and retailers must notify their 
customers of the country of origin of covered commodities.  An entity that supplies a covered 
commodity to a retailer, whether domestic or fo reign, must provide the necessary information 
regarding the country of origin of the commodity to the retailer.   
The 2004 interim final rule for fish and shellfish stat es that retailers may be subject to a civil penalty 
of up to $10,000 for wilful violations of the statute.  The interim final rule also states that suppliers may face penalties of up to $10,000.  The 2008 Farm Bill reduces the maximum penalty for covered 
retailers and suppliers to $1,000, when a retaile r or supplier has not made a good faith effort to 
comply with and wilfully violates the statute.  4.  Would the US be willing to re-look at simp lify the detailed labelling requirements which includes 
extensive product and content description on imports of food products? 
 
ANSWER:  Aside from fish and shellfish, the U.S. Depart ment of Agriculture (USDA) plans to issue 
an interim final rule for the remaining covered co mmodities.  The interim final rule will provide a 60 
day period for interested parties to submit comme nts.  USDA will review all comments received,  
both on the interim final rule that will soon be publ ished for the remaining covered commodities, as 
well as the comments received to date on the interi m final rule for fish and shellfish.  USDA will 
publish a final rule for all covered commodities at some point in the future.  
 
5.  Testing procedures for import of processed food consignments are cumbersome and take 
substantial time.  What are the US plans to simplify these testing procedures with reduction in time 
periods?  
 
ANSWER:  U.S. FDA continuously conducts research into  more rapid and sensitive test methods to 
be employed for analyzing food products.  Several ra pid test kits, including those for Salmonella spp. 
and Listeria monocytogenes, are currently used by FDA to analyze food products.  If a product is found presumptive positive on a rapid test kit, then further analysis is performed on the product to 
determine whether a product is violative or not.  This does add on extra time but the majority of products do test negative on the initial screening met hod.  The FDA labs are also currently looking 
into other procedures and practices (e.g. - reducing paperwork) to cu t down on analytical time while 
maintaining a high degree of quality in their analytical work. 
 
6.  The regulations on registration with and adva nce notice to the FDA on imports of food products 
create unnecessary delay for exports from India.  Does the US intend to cut down timelines or 
streamline the procedure thereof?  
 ANSWER:   Since these regulations were first implemente d almost five years ago, FDA believes that 
the food industry has successfully adapted to these requirements.  FDA is not aware of continuing 
problems associated with the registration and pr ior notice requirements.  FDA believes that the 
graduated enforcement process coupled with the vigo rous education and outreach efforts by both the 
government and the industry have supported a rela tively smooth transition to the new procedures and 
have improved compliance with the new requirements. 
 
7.  India would like to know as to why certifica tion by the Export Inspection Council (EIC) has not 
been recognised for import of marine products?   
 ANSWER:  Without knowing what India means by 'im port of marine products,' what ‘marine 
products’ are of concern to India, and what circumstances surround India’s question, the United States does not have enough information to be able to respond. 
 
8.  The US Public Health Security and Bioterro rism Preparedness and Response Act was formulated 
to address security risk surrounding the supply of fo odstuffs.  The implementation of the so-called  WT/TPR/M/200/Add.2 
 Page 27 
 
 
 Bioterrorism Act (BTA) necessitates the registration of all foreign facilities that supply food to the 
US, prior notification of all shipments to the US , record-keeping by fore ign enterprises to allow 
traceability of foods, and procedures for the administra tive detention of suspect foods.  The measures 
cover all the main food exports to the US, bevera ges (including wines and spirits), processed foods, 
dairy products, and fruit and vegetabl es.  Deliveries by international mail by private individuals are 
exempted, but foreign mail order companies are still subject to these burdens.  The additional red-tape 
resulting from the implementation of the BTA affect s Indian agri-food businesses in particular small 
and medium enterprises.  What steps are being taken to lessen the trade inhibiting effect of these 
procedures?  
 
ANSWER:   The four food-related regulations related to  the Bioterrorism Act (i.e., recordkeeping, 
administrative detention, registration, and prior not ice) are not intended to have a trade inhibiting 
effect.  The recordkeeping requirement does not generally apply to foreign entities since foreign 
persons are excluded from the rule, except for foreig n persons who transport food in the U.S.  The 
administrative detention provision imposes no require ments on importers; rather, this BTA provision 
authorizes FDA to detain an article of food, if ther e is credible evidence or information that indicates 
the article presents a threat of serious adverse heal th consequences or death to humans or animals.  
The administrative detention final rule describes the procedures that FDA uses to institute an 
administrative detention order.   With respect to the registration and prior noti ce requirements, FDA is not aware of continuing 
problems associated with the registration and pr ior notice requirements.  FDA believes that the 
graduated enforcement process coupled with the vigo rous education and outreach efforts by both the 
government and the industry have supported a rela tively smooth transition to the new procedures and 
have improved compliance with the new requirements.  
 
9.  Although the objective under the Bioterrorism Act is quite obvious, the procedures such as filing 
of advance manifest and approval by the US Custom s is lengthy and cumbersome in terms of the 
information to be provided by shippers, uncertain ty in being shipped and the cost entailed.  What are 
the US’ plans to address these issues?  
 
ANSWER:   Enforcement of various provisions of the Bioterrorism Act are the duties of the U.S. 
Food and Drug Administration (FDA) and U.S. Customs.  Since these regulations were first 
implemented almost five years ago, FDA believes that the food industry has successfully adapted to 
these requirements.  FDA is not aware of continui ng problems associated with the registration and 
prior notice requirements.  Although there were some  technical problems encountered during the early 
implementation stage, FDA believes that the gr aduated enforcement process coupled with the 
vigorous education and outreach efforts by both th e government and the indus try have supported a 
relatively smooth transition to the new procedur es and have improved compliance with the new 
requirements.  FDA currently is working on issuing the prior noti ce final rule in the near future.  Although FDA 
cannot discuss any changes to prior notice require ments in the final rule as the Administrative 
Procedure Act prohibits FDA from addressing comme nts during a pending rule making process, FDA 
has carefully considered all comments received, incl uding comments regarding the impact of the rule 
on trade.  FDA notes that trade continued without significant interruption on the implementation date 
of December 12, 2003, and found that the implem entation of the prior notice requirements was 
relatively smooth.  
10.  In the agricultural area, a number of sanitary and phytosanitary (SPS) issues remain a source of 
difficulty. For example, the U.S. requires that P est Risk Analysis (PRA) be carried out for new 
agricultural products before the import conditions are established.  The time between applying and 
inclusion on the list of approved products can be long as for pomegranates from India.  What steps are 
being taken for reducing the time between applying and inclusion on the list of approved products?   WT/TPR/M/200/Add.2 
Page 28  
 
 ANSWER:  In July 2007, the U.S. Gove rnment issued a procedure for issuing new and revised 
phytosanitary import measures.  As an alternative to undergoing the formal rulemaking-based process, 
imports that are eligible can now be approved through a notice-based process.  As with the 
rulemaking-based process, a pest-ri sk analysis must first be conduc ted for new fruits or vegetables 
considered for importation.  However, if the risk analysis shows that the commodity’s risk can be 
sufficiently mitigated by one or more of the five designated phytosanitary measures, a notice 
announcing the availability of the pest-risk analysis is published in the Federal Register to allow for 
public comment for 60 days.  Barring substantive comme nts that disprove the findings of the pest-risk 
analysis, a notice is then published in the Federal Register to announce that the U.S. Government will begin issuing import permits for the commodity. 
 
APHIS estimates that it takes a minimum of 18 mont hs to evaluate and a pprove new import requests 
under the rule-making system.  However, the process can take 2 to 3 years and longer in some cases. 
The notices that were published and finalized sinc e the August 16, 2007 implementation date were 
completed in significantly shorter time periods.  The U. S. is very pleased with its experience with the 
notice based process.  
 
11.  Prior approval of the US Food and Drug Administration (FDA) is required for commercial 
marketing.  Approval requirements include five years of marketing in at least one country outside the 
U.S. Over the Counter procedure for approval by the FDA is quicker as long as the active substance 
has a US market history.  However, it takes much  longer for products such as plant based (herbal) 
products even if they have been in use for a long time in the exporting country.  Why does history of 
use for a long time in the exporting country not facilitate quicker approval?   
 
ANSWER:   Although information on foreign marketing may be relevant to the approval of a drug 
product in the U.S., and is required to be submitted in a marketing a pplication when relevant, foreign 
marketing experience is not required for approval in the U.S.  Even when  information on foreign 
marketing is available, however, applicants must s till provide sufficient data  from adequate and well-
controlled clinical investigations to support approv al in the U.S. Foreign marketing experience also 
may be relevant to a determination that a product can be marketed under an over-the-counter 
monograph.  See 21 C.F.R. 330. 14(b) and related regulations. 
 INDONESIA 
 
Bilateral Trade Relations 
 
The United States is one of Indonesia’s most im portant economic partners.  The US is the 2
nd largest 
export destination of Indonesian Products and the 2nd as Indonesia’s import sources. Total trade 
continues to increase from year to year. During 2005, total trade between Indonesia-U.S. was 
US$13.7 billion; export has reached US$9.89 billion and import has reached US$3.9 billion. During 
2006, total trade between Indonesia-U.S was US$15.3 billion: export has reached US$11.2 billion and 
import has reached US$4,0 billion; and in 2007, total trade between Indonesia-U.S. was US$16.4 
billion: export has reached US$11.6 billion and impor t has reached US$4.8 billion. However, some 
problems between the two countries are still in place and need further clarification.   
 
Avian Influenza Virus H5NI on Fishery Product 
 
Formerly, (during the visit of  some officials of Ministry of Fishery and Maritime to US), the US 
National Fisheries Institute informed that USDA will implement a new policy to inspect the fishery 
products from the other countries which have experien ce of Avian Influenza virus (H5N1).  In case of 
product from Indonesia it is “crab meat breaded” the In stitute advised the Government of Indonesia to 
issue a certificate of H5N1virus free for this product.   However, since Avian Influenza virus (H5N1) 
is used only for poultry, Indonesia is of the view th e if this kind of certificate is used for fishery  WT/TPR/M/200/Add.2 
 Page 29 
 
 
 products, this would be misleading.  Indonesia seeks clarification on the USDA Inspection Program 
and policy. In addition, Indonesia is now taking some efforts to handle the contamination of 
chroramphenicol, filthy, histamine, and salmonella on its fishery products.   
 
ANSWER:  Highly pathogenic avian influenza (HPAI) subt ype H5N1 is considered to exist in the 
following regions: Cambodia, China, Indonesia, Japan, Kazakhstan, Laos, Malaysia, Romania, 
Russia, South Korea, Thailand, Turkey, Ukraine, and Vietnam.  Attached below is the Federal 
Register citation for USDA's action to ban pr oducts from Indonesia due to H5N1 detections.  
However, according to USDA authorities, they do not  regulate fishery products for avian influenza.  
http://ecfr.gpoaccess.gov/cgi/t/text/te xt-idx?c=ecfr&sid=9125c4f734b27f0. 
http://ecfr.gpoaccess.gov/cgi/t/text/te xt-idx?c=ecfr&sid=9125c4f734b27f0. 
http://ecfr.gpoaccess.gov/cgi/t/text/te xt-idx?c=ecfr&sid=9125c4f734b27f0. 
 
Security Filing and Additional Carrier Requirements  
 
We are fully aware that for the security purposes, the US Customs and Border Protection (CBP) has 
the policy for cargo to inspect prior to lading that cargo at foreign port of entry. More explanation regarding Importer Security Filing and Additional Carrier Requirements especially:  24 hours rule, 
Trade Act Regulation and Safe Port Act has been done. Similarly, more explanation regarding in 
additional data with the Vessel Stowage Plan and Container Status Message which it could increase 
the amount of expenditures of storage and lo ading for Indonesia’s vessels have been asked. 
 
In this context, Indonesia requests further info rmation about the specification of the U.S CBP-
approved electronic data interchange system and the electronic equipment tracking system.   
 
ANSWER:  The U.S. in recent rulemaking proposed th e collection of new information prior to 
loading for merchandise destined fo r the United States.  The rulemaking requires submission of this 
information by an approved electronic data interchange  system.  This new information is the Importer 
Security Filing and must be submitted via the CBP-a pproved electronic data interchange system.  The 
current approved electronic data interchange sy stems for the Importer Security Filing is the 
Automated Manifest System (AMS) and the Automated Broker Interface (ABI).  The U.S. is proposing to require carriers to submit a vessel stow plan for vessels destined to the United States.  
The vessel stow plan is used to transmit inform ation about the physical location of cargo loaded 
aboard a vessel, which enhances the security of the ma ritime environment.  The vessel stow plan must 
be submitted via the CBP-approved electronic data  interchange system.  The current approved 
electronic data interchange system for the vessel stow plan is the Automated Manifest System. 
 
In addition to the vessel stow plan requirements pr oposed, it is also proposed that the incoming carrier 
submit messages regarding the status of events if the carrier creates or collects a container status 
message (CSM) in its equipment tracking system repor ting that event.  There is no requirement that a 
carrier create or collect any CSM data if the carrier does not otherwise create or collect on its own and maintain in its electronic equipment tracking system.  JAPAN  
Regarding the answer for Japan’s Qu estion 2 (100% Container Scanning) 
We are aware that the Government of the United States has been conducting a pilot program for 100% container scanning to see the possible impact on inte rnational economic activities.  Japan would like 
to be further informed on the next steps to be ta ken by the U.S. on the basis of the results from the 
pilot project. We would also appreciate the shar ing of the results of the pilot project.   
 ANSWER:  Customs and Border Protection (CBP) and the Department of Energy (DOE) continue to 
study and evaluate the results of the Secure Frei ght Initiative (SFI) pilot programs.  Any decision on WT/TPR/M/200/Add.2 
Page 30  
 
 the expansion of SFI will be informed by the in formation yielded from the initial pilot ports.  Any 
expansion will be done in a reasoned,  responsible, and risk-based manner. 
  CBP recently reported to Congress on the pilot programs.  This report can be found at: 
 http://commerce.senate.gov/public/_files/SFIRepo rt_PublicRelease_FINAL_Consolidated.pdf.
 
 
 In addition, the testimony of CBP officials on the pilot can be found at: 
 
http://www.cbp.gov/xp/cgov/newsroom/c ongressional_test/pilot_ports.xml.  
 
We have received the answers regarding the old Fa rm Bill.  We would now like to touch upon the 
new Farm Bill.  Japan recognizes that the U.S. admi nistration is concerned that the Farm Bill, which 
was passed by the U.S. Congress and enacted on 22nd May, is going against the directions discussed in the current WTO negotiations on agriculture.  Preside nt Bush also stated on 21st May that the bill is 
inconsistent with the objective in international trad e negotiations.  Japan would like to ask if the U.S. 
government has any intention of reviewing the Farm  Bill to make it compatible with international 
rules at the time when the DDA is concluded.  ANSWER:  First, without a new Farm Bill, the United St ates would have been required to revert to 
historic legislation from the 1940's.  Second, the Ad ministration will implement the new legislation in 
accordance with our existing WTO obligations.  Third, th e U.S. Farm Bill is not the U.S. Doha offer.  
With a successful market opening DDA outcome, we will change our domestic legislation in accordance with new international obligations.  Japan is also concerned about the promotion of bio-et hanol production included in this Act.  However, 
we realize that it is too early to ask such a questi on;  therefore we would like to raise the question in 
the coming sessions of the Committee on Agriculture and other opportunities.  ANSWER:  No response required.  
 
NEW ZEALAND 
 
According to the United States, U.S. SPS measu res are based on international standards and 
guidelines “where they exist and as appropriate” (WT/TPR/S/200 p. 51 para 142).    Following the detection of BSE in the US in Dece mber 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” The OIE has subsequently  published country risk assessments for BSE. 
 
• Could the US advise when it intends to either recognise the OIE assessmen ts or conclude its 
own, and what measures additional to the rel evant international standard it has deemed 
“appropriate” with respect to the 3 risk categories? 
 ANSWER:   USDA has begun drafting a proposed rule to  amend the import regul ations to address 
bovine spongiform encephalopathy (BSE) risk in a more comprehensive manner.  This rulemaking will propose import regulations that are consistent with the World Organization for Animal Health’s 
(OIE) guidelines for the trade of live bovine and bo vine products between re gions based on their BSE 
risk status (i.e., negligible risk, controlled risk, or undetermined risk).  We believe that the new 
regulations will offer two major benefits:  (1) they  will facilitate trade by implementing a transparent 
process based on objective, international, science-b ased criteria, including OIE country risk status 
criteria;  and (2) they expedite the trade fac ilitation process as USDA will be able to notify country 
status changes through a Federal Register notice,  rather than through the more time consuming 
rulemaking process.  WT/TPR/M/200/Add.2 
 Page 31 
 
 
 THAILAND 
 General Comments
 
 Container Security Initiative (CSI) 
 1. The SAFE Port Act 2006 indicates that the containers being transported to the U.S. must go 
through the scanning system equipped with non-intrusive imaging and radiation detection.  At present, 
Thailand is implementing this system on an e xperimental basis by scanning 5% of US-bound 
containers at the Laem Chabang Port.  U.S. Customs and Border Protection’s (CBP) policy is for 
Thailand to reach 100% within 2012.  
 In Thailand’s view, this scanning system poses an enormous impact on trade by creating additional 
delays and increased transportation costs.  As the U.S. is the Thailand’s second largest export market, 
we would appreciate its reconsideration of this measur e.  We also hope that the U.S. will ensure that 
security-related measures do not unnecessarily impede trade. 
 ANSWER:   The examination process takes advantage of the time the container is in drayage, that is, 
the normal down time while the container is waiting to be loaded, thus not interfering with the normal 
flow of container traffic through the terminal.  Inspections are conducted by the host government & 
not by U.S. officials.  If the goods are destined to the U.S. and/or transiting, & if high-risk to 
terrorism, they are targeted. 
 
Sanitary and Phytosanitary Measures for Animal and Animal Products  
 
2. The U.S. maintains SPS requirements on the im portation of certain animals, animal products, 
organism and vectors and veterinary biological produ cts, to protect U.S. livestock and poultry against 
the introduction of diseases that do not exist in the U.S.   Thailand’s Department of Livestoc k Development, Ministry of Ag riculture and Cooperatives, has 
submitted an application under the permit system to the USDA Food Safety and Inspection Service 
(FSIS) but the application has not been approved ye t.  Up to the present da y, Thailand has not been 
able to export meat, poultry and egg products to the U.S. while 34 other countries can do so.  We 
would appreciate clarification on the status of this issue.  ANSWER:  The Food Safety & Inspection Service comple ted an initial review of the information and 
supporting materials submitted by Thailand in its a pplication for eligibility to export poultry products 
to the United States.  This review identified several  areas where additional information was needed in 
order for FSIS to conclude the document review porti on of the eligibility process.  FSIS, in a letter to 
Dr. Yukol Limlamthong, Director General in the Department of Livestock Development at the 
Ministry of Agriculture and Cooperatives, dated Ju ly 7, 2006, identified these pieces of additional 
information.  FSIS has to date not received any r esponse to its information request and thus cannot 
continue its document review.  Please advise when we  can expect a response or whether you need the 
request for additional information. 
 
Inaccurate information contained in  National Trade Estimate Report 
 
3. In its National Trade Estimate (NTE) repor t, the U.S. has unfairly accused Thailand on 
numerous accounts.  For example, the NTE report indicates that the Thai government
 provides export 
subsidies for rice by selling rice at below market rates on government-to-government sales.  Moreover, the U.S. indicates that the Board of Inv estment and Industrial Esta te Authority of Thailand 
subsidizes the exportation of rice and packing credit programs.   WT/TPR/M/200/Add.2 
Page 32  
 
 In fact, the Thai government sets prices according to the market situation and does not have the 
aforementioned subsidy policies.  We would like th e U.S. to clarify the criteria used for data 
processing in NTE report.  We also strongly urge the U.S. to correct the errors in its NTE report.  ANSWER:  The United States publishes its National Tr ade Estimate (NTE) report annually after 
extensive consultations with the U.S. private sector  and host governments.  All interested parties, 
including other governments, are encouraged to r espond to our Federal Register notice requesting 
public comments at the beginning of each report cycl e.  In the context of the production of the 2009 
NTE, the United States welcomes any additional in formation the Royal Thai Government wishes to 
provide to clarify its policies in the areas men tioned above.  In the 2008 NTE report, the following 
information was included with respect to potential ex port subsidies provided by the Thai Government:  
 
Thailand maintains programs to support tr ade in certain manufactured products and 
processed agricultural products, which may cons titute export subsidies.  These include 
various tax benefits, import duty reductions , credit at below-market rates on some 
government-to-government sales of Thai rice (established on a case-by-case basis), and 
preferential financing for exporters.  The Thai  government terminated its packing credit 
programs and export contingent  subsidies provided by the Board of Investment and the 
Industrial Estate Authority of Thailand.   
 WTO Secretariat Report (WT/TPR/S/200) 
III. Trade Policy and Practices by Measures  
(2)(vi) Anti-dumping and Countervailing Measures Para. 76 page 37 
 
4. The Secretariat Report identifies that U.S. Customs may require enhanced bond amounts from 
importers of merchandise subject to increased de fault risk.  In this respect, additional bond 
requirements for importers of certain agricultu re/aquaculture merchandise are subject to anti-
dumping/countervailing duty cases.  Could the U.S. elaborate on the criteria or factors in defining “increased default risk”?  How does the 
U.S. identify the products subj ect to increased default risk? 
 
ANSWER:  Pursuant to CBP’s regulatory authority, a port director may require additional bond 
amounts or other additional security in order to en sure that the acceptance of an entry will be 
adequately protected against any duties or other liabilities imposed by law.  See e.g., 19 Code of 
Federal Regulations §113.13, for a description of the factors CBP typically takes into consideration in 
establishing the amount of the bond. 
 
IV. Trade Policies By Sector 
(2)(ii) Border Measures  Paras. 20-21 pages 82-83 
 5. The Report states that “Access to tariff quotas is on a first come first served basis, except for 
diary products and sugar.  Access to the tariff quot a for raw sugar is granted to exporting countries, 
not importers. It is administered through certificates of quotas eligibility”.  Could the U.S. explain how it allocates these quotas to exporting countries?  Please also provide examples of the allocation 
method. 
 
ANSWER :  The allocation of the U.S. raw sugar TRQ is based upon U.S. sugar imports during the 
period 1975-81.  The allocations are announced in USTR press releases and Federal Register notices, 
for example:  http://www.ustr.gov/Document_Library/Press_Releases/2007/August/USTR_ Announces_FY_2008_Tariff-Rate_Quota_Allo cations_for_Raw_Cane_Sugar.html. 
  WT/TPR/M/200/Add.2 
 Page 33 
 
 
 The allocations were published in Appendix Table 27, Page 62 of this document:  
http://www.ers.usda.gov/Pub lications/aer711/aer711d.pdf. 
 
Para. 24 page 83 
 6. The Secretariat Report states that “According  to the U.S. International Trade Commission, 
some agriculture products, including beef, dairy, ethyl alcohol, sugar and sugar-containing products, 
and tobacco remain subject to high import barri ers.”  The commission also estimates that the 
elimination of barriers on these products will increase U.S. welfare.  
Does the U.S. have plans to eliminate the af orementioned import barriers for these products? Will 
these barriers be readjusted to meet the requirements of the Doha Round Agreement? 
 ANSWER:   The United States has no current plans to  unilaterally change its MFN tariffs.  The 
United States would, of course, make any require d changes pursuant to an agreement under the Doha 
Development Agenda. 
 
(2)(iii) Domestic Programmes 
(a) Commodity Programmes Paras. 28-30 pages 84-85 
 7. The Secretariat Report discusses U.S. domestic supports, i.e. direct payment and counter-
cyclical payments.  It states that in the 2002 Farm Act, fixed direct payments are unrelated to price and are based on historical acreage and yields but are available to historical producers of specified crops when prices fall below levels established in legislation.  A study by the Department of 
Agriculture found that farm program payments “co ntain elements that provide incentives for resource 
use that may be inconsistent with market signa l”.  According to other studies, counter-cyclical 
payments may provide for the reduction of price-re lated revenue risk, and could also have some 
influence on production decisions and may di stort incentives in some situations.  
 Could the U.S. provide details on domestic support programs contained in the new Farm Bill?  Please 
elaborate in detail all changes to domestic suppor t programs.  Furthermore, please indicate whether 
these domestic support programs will be readjusted to meet the requirement of the Doha Round 
Agreement.  ANSWER:   Since the 2008 Farm Act has not been implem ented and regulations re main to be written, 
it is premature to elaborate on all of the potential changes to domestic support programs.  However, 
section 1601(d) of the 2008 Farm Bill provides the Secretary of Agriculture with sufficient flexibility 
to ensure that the United States complies with existing domestic support commitment levels.  Any 
new commitments made by the United States in the Doha round would be the subject of further implementing legislation.  
(c) Marketing Orders 
Paras. 35-38 page 86  
8. The Secretariat Report mentions that bindi ng market orders may also contain “supply 
management” provisions that fix output levels, specify the proportion of output to be sold in specific markets, or provide for the creation of reserve pools of covered commodities The U.S. Department of 
Justice commented that these producer allotments  amounts to “a government sanctioned and enforced 
cartel of U.S. producers.”  We would appreciate it if the U.S. could provide more details on how this mechanism works.  In the view of the U.S., how do these measures promote co mpetition without distorting the market system? 
 WT/TPR/M/200/Add.2 
Page 34  
 
 ANSWER:   The quoted comments of the Department of Justice were made specifically with respect 
to a proposed marketing order that was ultimately rej ected and never entered into force.  Only three 
commodities currently use reserve pools:  tart cherries  grown in seven States, Far West spearmint oil, 
and California raisins.  
For raisins, the marketing order 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 u sed in any market.  Reserve raisins may be sold to 
handlers for free use; used in diversion programs; e xported 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 re cent 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 applied to imported raisins.  For spearmint oil, the marketing order authorizes volume control measures to regulate the marketing 
of spearmint oil through annual sales allotments.  Spearmint oil produced in excess of a grower’s 
allotment is placed into a reserve pool and used later to fill production deficiencies and unexpected 
demand.  For tart cherries, the marketing order authorizes vol ume controls that provide for a reserve pool in 
times of heavy cherry supplies.  Under the order, r eserve cherries may be released to handlers for free 
use, used in diversion programs; exported, or ca rried over as a hedge against a short crop the next 
year.  Other major marketing order provisions, not currently in use, include minimum grade and size 
regulations and authorization for market rese arch and development projects, including paid 
advertising.  
Marketing orders and agreements (1) maintain the high quality of produce that is on the market, (2) 
standardize packages and containers; (3) regulate th e flow of product to market, (4) establish reserve 
pools for storable commodities, and (5) authori ze production research, marketing research and 
development, and advertising.  
(2)(V) Food Labeling 
Paras. 46-49 page 88  
9. The Secretariat Report mentions that the a pplication of country-of-origin labeling on beef, 
lamb, pork, perishable agricultural commodities, a nd peanuts has been delayed twice, most recently 
until September 2008.  Also the Department of Agri culture found little or no evidence that consumers 
are willing to pay a price premium for country-of-or igin labeling or that they would increase their 
purchases of food bearing the U.S. origin label.  Could the U.S. give more details on this measur e, such as when will it start and what documents 
would be required?  
ANSWER:  The Food, Conservation and Energy Act of 2008 mandates country of origin labeling 
(COOL) at the retail level for beef, lamb, pork, chic ken, goat meat, ginseng, perishable agricultural 
commodities, and certain nuts effective Septembe r 30, 2008.  The United States Department of 
Agriculture will publish an Interim Final Rule in the U.S. Federal Register in the coming weeks.  At 
the same time, the United States will notify the interim final rule to the WTO.  However, since it will 
be designated as an “interim” final rule, USDA w ill continue considering the comments received and 
can make revisions to the regulation even after Se ptember 30. The United States intends to implement 
COOL in a manner consistent with our WTO obligations.  
  WT/TPR/M/200/Add.2 
 Page 35 
 
 
 VIETNAM  
 1.  The Textile and clothing monitoring mechanism  
The implementation of the monitoring mechanism does not facilitate trade in textiles and clothing 
between Vietnam and the US, and this mechanism is not consistent with WTO principals and 
regulations on trade in goods in general a nd in textiles – clothing in particular.   
 We would like to request the US to cease the impl ementation of this monitoring mechanism.   
 
ANSWER:   The Vietnam textile and apparel import mon itoring program is consistent with our WTO 
obligations.  Monitoring is done through publically available U.S. Census import statistics.  There are 
no licenses, fees or other restrictions placed on imports from Vietnam.    In fact, textile and apparel imports from Vietnam have shown strong growth, increasing 34 percent in 
2007 to make Vietnam our fourth largest supplier.  The upward trend in import growth continued in 
the first four months of 2008 with a 26 percent incr ease over January-April 2007.  Even in the apparel 
products subject to monitoring, imports increased 41 percent in 2007, and by 34 percent for the first 
four months of 2008 compared to the same pe riod in 2007.  This import monitoring program 
concludes at the end of the Administration. 
 
2.  The regulations and criteria of market economy   
The market economy status has not been substantia lly and obviously referred in WTO regulations.  In 
practice, inconsistent application of this status has been restricting international trade and harming 
trade interests of related nations. 
 
As a nation with comprehensive legal framework  on international trade, meanwhile the US 
regulations on market economy status are not specific,  reducing the transparency and predictability of 
the implementing process. 
 The US is kindly requested to give its ideas to im prove the transparency and predictability of the 
procedures as well as criteria fo r market economy recognition.  
 ANSWER:   The criteria that govern non-market economy country determinations are listed explicitly 
in section 771(18) (B) of the Tariff Act of 1930.  In addition, the Commerce Department makes these 
analytical, facts-intensive determinations in the context of antidumping proceedings in which 
interested parties and the public, including the gove rnment of the foreign country in question, have 
full opportunity to participate and provide comment or evidence for the record.  In analyzing the 
economy and ongoing reforms of the foreign country in question, the Department of Commerce relies 
solely on expert, third-party, publicly available s ources of information and data, e.g., the World Bank, 
International Monetary Fund and Asian Development Bank, and makes its full analysis memorandum 
available on the DOC/Import Administration's websit e at www.ia.ita.doc.gov.  For these reasons, the 
Department's determinations are as transparent and consistent as they can be, given the often unique 
initial conditions or reform path of  the foreign country in question. 
 
3.  Fruits and vegetables importation 
 
The compliance of registration and phytosanitary pr ovisions for importation of  fruits and vegetables 
to the US market is a time consuming process.  The implementation of necessary procedures for one 
product normally takes a number of years.  
We would like to request the US to improve thes e provisions and procedur es in order to support 
Vietnam to take full advantages of trade opportunities for fruits and vegetables. WT/TPR/M/200/Add.2 
Page 36  
 
 ANSWER:   Sanitary and Phytosanitary measures in the United States are based on science and 
undergo a comprehensive transparent rulemaking process.  It is not possible to ensure review of the 
scientific evidence and to respond to comments on pr oposed measures sent by interested stakeholders, 
including WTO members, within a pre- determined and inflexible timeframe. 
 
However, to address the concerns raised by our tr ading partners, in July 2007, the USG issued a 
procedure for issuing new and revised phytosanit ary import measures.  As an alternative to 
undergoing the formal rulemaking-based process, im ports that are eligible can now be approved 
through a notice-based process.  As with the rulema king-based process, a pest-risk analysis must first 
be conducted for new fruits or vegeta bles considered for importation.  However, if the risk analysis 
shows that the commodity’s risk can be sufficiently mitigated by one or more of the five designated 
phytosanitary measures, a notice ann ouncing the availability of the pest-risk analysis is published in 
the Federal Register to allow for public comment for 60 days.  Barring substantive comments that 
disprove the findings of the pest-risk analysis, a not ice is then published in the Federal Register to 
announce that USG will begin issuing import permits for the commodity. 
 
APHIS estimates that it takes a minimum of 18 mont hs to evaluate and a pprove new import requests 
under the rule-making system.  However, the process can take 2 to 3 years and longer in some cases. 
The notices that were published and finalized sinc e the August 16, 2007 implementation date were 
completed in significantly shorter time periods.  The U. S. is very pleased with its experience with the 
notice based process.   
 
4.  Personnel movement 
 
The US is kindly requested to facilitate visa pro cedures for businesses to access the US market and for 
personnel working at representative offices and joint ventures in the US.  
 
ANSWER:   Visa requirements and procedures are designed to address many policy objectives, such 
as national security, adherence to U.S. immigrati on and labor laws, public health and safety, among 
others.  The United States makes every effort to en sure that application procedures are practical and 
efficient, while ensuring these important policy objectives are met.  
We are constantly employing new technology and creating innovative programs to streamline visa 
procedures.  All U.S. overseas posts have mechanisms to expedite legitimate urgent business travelers 
and students, via Embassy Business Facilitation Pr ograms that often partner with the American 
Chamber of Commerce. Our Business Visa Center  in Washington D.C. (BusinessVisa@state.gov) 
provides information to U.S.-based businesses about the application process for business (B-1) travel 
to the United States. 
 The Department of State is moving quickly to make  the entire visa process more electronic through an 
online appointment system (which over 70 posts now use), and development of an online visa 
application process and online fee payment.  A fu lly electronic process will provide more accurate 
and verifiable information, allow for screening in advance of the visa interview, increase convenience 
for applicants, and standardize the process worldwide. 
 
5.  Telecommunications and banking  
 
The US is kindly requested to explain and eliminate,  to the extent of inconsistency, the limitation of 
25% capital contribution by foreign SOEs in Telecom service join ventures in the US.  
 
ANSWER:   Section 310 does not preclude control by an SOE of a wireless license, provided such 
license is held indirectly, as specified in the U. S. GATS schedule.  Under Section 310 (b) of the 
Communications Act, no licenses may be granted to U.S.  corporations of which more than 20% of the 
capital stock is owned of record or voted by non-U. S. citizens, their representatives, corporations not  WT/TPR/M/200/Add.2 
 Page 37 
 
 
 organized under U.S. laws, or foreign governments,  whilst at the same time, under Section 310(b)(4), 
licenses may be granted to companies organized in th e U.S. that are controlled by holding companies 
organized in the U.S. and in which foreign individua ls, corporations, or govern ments own of record or 
vote more than 25% of the capital stock, unless the FCC finds that such ownershi p is inconsistent with 
the public interest. 
 
There are no plans to eliminate the direct foreign ownership restriction.  As a practical matter, allowing 100% indirect ownership has not proven to act as a restriction on market entry by foreign 
operators.  
We would like to request the US to support and facilitate the establishment of representative offices 
and branches of commercial banks of Vietnam in the US.   ANSWER:  Vietnamese banks wishing to establish a branch or agency in the U.S. market have the 
option of doing so either via a federal license or a state license in those stat es that allow branches or 
agencies.  (Please refer to the U.S. GATS schedule for a detailed listing of states that allow foreign 
branches and/or agencies.)  Concerning requireme nts for a license, the Un ited States is among the 
most liberal countries in the world with regard to capital for bank branches, allowing bank branches to 
lend based on the world-wide capital of its pare nt bank and requiring only a capital equivalency 
deposit that is less substantial than normal cap ital requirements.  Except for a number of 
grandfathered institutions, branches of foreign banks ar e in effect not allowed to take retail deposits.  
The limitation on retail deposit taking by forei gn banks operating in the United States through 
branches is noted in the U.S. GATS schedule.  
__________