./.  WORLD TRADE  
ORGANIZATION  WT/GC/W/558 
1 December 2005 
 (05-5714) 
General Council 
1-2 December 2005 Original:   English 
 
 
 
REVIEW OF THE EXEMPTION PROVIDED 
UNDER PARAGRAPH 3 OF GATT 1994 
 
Questionnaire to the United States from Japan  
 
 
 The following communication, dated 30 November 2005, is being circulated at the request of 
the Delegation of Japan.  
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 Paragraph 3 of GATT 1994 provides the exemption for a specific measure of a Member 
related to prohibition of  the use, sale or lease of  foreign-built or foreign-reconstructed vessels.  The 
same paragraph provides the Ministerial Conference with a mandate to review such exemption no 
later than five years the date of entry into for ce of the WTO Agreement and thereafter every two years 
for as long as the exemption is in force.  This manda te has been exercised by the General Council and 
we are in the fourth round of such review.   In order to conduct a substantial and meani ngful review, it is important for a Member 
invoking this exemption to provide information pur suant to this paragraph and provide necessary 
explanation to the Council.  It is also important that Members interested in the exemption provide 
questions and comments expecting the invoking Member  will respond in an appropriate manner.  All 
these exchange of views will contribute this C ouncil to examine “whether the conditions which 
created the need for the exemption still prevail”.  
 Japan appreciates the report presented by the US, which is contained in WT/L/600.  Japan 
also appreciates the US initiative for providing inte rested Members with relevant information and 
explanation in an informal meeting on 27 September 2005.   Based on such information and explanation as we ll as the results of previous reviews, Japan 
wishes to further contribute to the review process of this time through raisi ng relevant questions and 
comments to the US.  Japan would like to ask th e US to respond to the following points in an 
appropriate time to the General Council so that a ll Membership can share the explanation for their 
considerations.  Japan reserves its right to further present additional questions and clarifications on the 
response to be provided by the US. 
 
Question 1  
 
 Please explain the following points.  Although th ose were raised during the previous reviews, 
Japan was not able to receive satisfactory explanati on.  Japan would therefore like to request the US, 
once again, to provide further explanations regarding our interests as specified below. 
 WT/GC/W/558 
Page 2  
 
 (a) Correlation between the national security and the shipbuilding capacity protected by 
Jones Act; 
(b) Specific quantitative threshold of shipbuildi ng or maintenance capacity indispensable 
for the maintenance of the national security; 
(c) Are there any shipyards on the list that have  neither supplied nor repaired a vessel to 
the Navy?  However, if this is the case,  please clarify how such shipyards contribute 
to the development or the maintenance of the national security; 
(d) The annual report(WT/L/600) submitted by th e US in accordance with the provision 
of paragraph 3(c) included some records of ship types such as , “Platform” and “Pontoon”, yet it seemed that those types of ships were not covered by 
paragraph 3(a).  Please explain whether the domestic shipbuilding requirement 
applies to those types of ships. 
Question 2  
 
 We would like to bring to your attention inclusion of vessels, fo r exclusive naval use, namely, 
“BRITIN” on page 14, “WATKINS(AKR -315)” on page 18, “BENAVIDEZ” and 
“SODERMAN(AKR-317)” on page 19 of the list.  Does the US regard those vessels as merchant 
vessels? 
 
Question 3  
 
 During the last review, we have also pointe d out about substantial figurative inconsistency 
between the amount of actual delivery and the amou nt entered in the order books.   Despite the US’ 
assurance that these data would be adequately modi fied and the footnotes be newly added to each 
specific data, the only discernible improvement this time is the footnote merely stating “Cancelled or 
delayed vessel orders may not be accurately reflected in the report.”  This is  deeply disappointing and 
we would like to request the US to provide appropria te data reflecting the actual situation in the US. 
 Question 4
 
  Quite a number of fishing vessels seem to appear on the list.  We would ask a concrete 
explanation of how these fishing vessels could contri bute to the development or maintenance of the 
existing performance-level of the national security .  On this point, during the last informal 
consultation two years ago, the US insisted that  all the listed vessels would contribute to such 
purpose.  We find it difficult to imagine these fishi ng vessels would be conscripted at the war time. 
Small- sized fishing vessels occupy a large portion of the vessels protected by the Jones Act, 
consisting 65% of the deliveries (9% in the Gross Tonnage). We also find it extremely difficult to 
accept the relationship, if any, between these smal l-sized fishing vessels and the national security.  
We would therefore like to ask the US to provide further explanation on these matters. 
 Question 5
 
 
 We would appreciate it if the US could provi de us with “additional information on the use, 
sale, lease and the repairing of relevant vessels” s tipulated in paragraph 3 (c) of the GATT 1994.  We 
believe this information would be essential as a starting point of this review process.  
 
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