WORLD TRADE ORGANIZATION  
ORGANISATION MONDIALE DU COMMERCE  
ORGANIZACIÓN MUNDIAL DEL COMERCIO WT/TPR/M/200/Add.1 
9 September 2008 
 (08-4217) 
Trade Policy Review Body 
9 and 11 June 2008 Original:   English/Spanish 
 anglais/espagnol inglés/español 
  
TRADE POLICY REVIEW 
UNITED STATES 
Minutes of Meeting
 
Addendum  
Chairperson:  H.E. Mr. Yonov Frederick Agah (Nigeria) 
 This document contains the advance writte n questions, and replies 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  
Présidente:  S.E. M. Yonov Frederick Agah (Nigeria) 
 
 Le présent document contient les questions écrites communiquées à l'avance et les réponses 
fournies par les États-Unis.1 
__________________________________________________________________________________  
Órgano de Examen de las Políticas Comerciales 
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 pre guntas presentadas anticipadamente por escrito, 
junto con las respuestas facilitadas por los Estados Unidos.1 
                                                      
1 In English and Spanish./En anglais et espagnol./En inglés y en español.   
    WT/TPR/M/200/Add.1 
 Page 3 
 
 
 ADVANCE WRITTEN QUESTIONS BY MEMBERS 
 
MEXICO  
Se solicita a Estados Unidos responder a las siguien tes preguntas formuladas con base en lo señalado 
en el documento WT/TPR /S/200 del 5 de mayo de 2008. 
 IV.  POLÍTICAS COMERCIALES POR SECTORES / 5) Servicios / ii) Servicios de 
telecomunicaciones y servicios conexos  / b) Compromisos en el marco del AGCS y marco jurídico 
 
• En el párrafo 93 se indica que los Estados  Unidos se han reservado el derecho a una 
exención en virtud del artículo II del AGCS (N MF) para discriminar entre Miembros de 
la OMC "debido a la aplicación de medidas de  reciprocidad o en virtud de acuerdos 
internacionales que garantizan el acceso a los me rcados o el trato nacional" en el caso de 
los servicios de televisión directa al hogar, los de radiodifusión directa de televisión por satélite y los de audio digitales.  México desearía saber si los Estados Unidos tienen 
previsto eliminar dicha exención. 
• En el mismo párrafo se señala que los Esta dos Unidos se reservaron también el derecho 
de autorizar "la deducción de gastos por la publicidad realizada por una emisora extranjera y dirigida primordialmente a un mercado estadounidense, sólo en los casos en 
que la emisora extranjera esté ubicada en un país que permita una deducción análoga para 
una publicidad encomendada a una emisora est adounidense".  México está interesado en 
conocer en qué países se permite una deducción análoga para una publicidad 
encomendada a una emisora estadounidense. 
• En el párrafo 96 se menciona que la Comi sión Federal de Comunicaciones (FCC) se 
reserva el derecho a condicionar o denegar la autorización para exceder del límite del 25 
por ciento de participación extranjera en el capital si, como resultado de su análisis del 
interés público, determina que esa autorización representaría una amenaza para la competencia en el mercado estadounidense.  México desearía saber en qué casos la FCC 
ha determinado que la autorización para ex ceder del límite del 25 por ciento de 
participación extranjera representaban una amen aza para la competencia en el mercado 
estadounidense. 
• En el párrafo 97 se indica que en el marco de su norma de entrada libre, la FCC ha 
establecido una autorización general con respecto a las solicitudes para proveer servicios nacionales de larga distancia basados en la utilización de instalaciones o en la reventa.  
Para suministrar servicios internacionales es necesario obtener una autorización 
individual, pero, según las autoridades de lo s Estados Unidos, la autorización suele seguir 
un proceso pro forma y la mayor parte de las autorizaciones se conceden automáticamente.  México desearía conocer lo s criterios utilizados para conceder la 
autorización. 
• En el párrafo 108 se señala que la FCC inic ió un examen exhaustivo de las normas de 
propiedad de medios de comunicación en junio de 2006 y en diciembre de 2007 adoptó 
una orden al respecto (que aún no ha entrado en  vigor).  En virtud de esa orden, la FCC 
aprobó una aplicación menos estricta del Regl amento sobre la propiedad cruzada de 
emisoras de radiodifusión y pe riódicos, sin modificar ninguna de las demás restricciones 
a la propiedad de medios de comunicación.  México desearía saber en qué consiste la 
aplicación menos estricta del Reglamento sobre la propiedad cruzada de emisoras de 
radiodifusión y periódicos. WT/TPR/M/200/Add.1 
Page 4  
 
 • En el párrafo 109 se menciona que el artícul o 621 de la Ley de Comunicaciones prohíbe 
el suministro de "servicio de cable" por un ope rador de cable en una zona determinada sin 
una autorización o "franquicia". México desearía  conocer los requisitos para obtener una 
autorización o franquicia. 
IV. POLÍTICAS COMERCIALES, POR SECTORES  /  5) Servicios  / iii) Servicios financieros  / 
b) Marco legislativo y reglamentario  
• En el párrafo 124 se indica que para que un banco extranjero con sucursales o agencias en los 
Estados Unidos pueda tener la condición de sociedad holding financiera, la Ley 
Gramm-Leach-Bliley establece que deben aplicár seles criterios de "buena capitalización" y 
"buena administración" comparables con los que rigen para los bancos estadounidenses, 
"aplicándose debidamente el principio de trato nacional e igualdad de oportunidades". México 
desearía conocer  con mayor detalle cuáles son los criterios de  “buena capitalización” y 
“buena administración”. 
 
• El párrafo 131 menciona que aunque en los Estados Unidos los bancos extranjeros están 
sujetos por lo general a limitaciones geográficas y de otra índole, sobre la base del trato nacional, se han establecido algunas excepciones en la Lista de los Estados Unidos anexa al 
AGCS.  Por ejemplo, todos los directores de un banco nacional deben ser ciudadanos 
estadounidenses a menos que el banco sea una fili al de un banco extranjero, en cuyo caso 
basta con que sean estadounidenses la mayoría de los miembros del Consejo de Administración;  aproximadamente la mitad de  los Estados también exigen que todos o la 
mayoría de los miembros del Consejo de Administración de las entidades financieras de depósito sean ciudadanos estadounidenses.  México  desearía mayor claridad sobre el sentido 
de dichas excepciones en la Lista de Estados Unidos. 
 
• El párrafo 132 señala que en todos los Estados está permitida la entrada inicial en el mercado 
estadounidense mediante el estab lecimiento o adquisición de una  filial de un banco nacional 
por un extranjero.  La entrada inicial o la e xpansión por una persona extranjera (pero no por 
un nacional) mediante la adquisición o el estab lecimiento de una filial bancaria comercial 
constituida en un Estado se encuentra prohibida  o sujeta a limitaciones en 29 Estados.  
México desearía una aclaración sobre este párrafo, pues por una parte se indica que en todos 
los Estados está permitida la entrada inicial en el mercado estadounidense y por otra parte se 
menciona que está prohibida o sujeta a limitaciones en 29 Estados. 
 
• En el párrafo 148 se hace referencia a que al gunos grupos de seguros como el Instituto de 
Información sobre Seguros, la Asociación Ameri cana de Seguros y el Consejo Americano de 
Compañías de Seguros de Vida están a favor de  una carta federal para  la reglamentación de 
los seguros.  México desearía conocer los avances logrados a favor de una carta federal para 
la reglamentación de los seguros. 
 
• En el párrafo 155 se señala que las empresas de inversiones extranjeras no pueden ofertar 
públicamente sus acciones en los Estados Unidos a menos que la Comisión de Bolsa y 
Valores emita, caso por caso, una orden que permita a la empresa registrarse con arreglo a la 
Ley de Sociedades de Inversión.  México desearía  saber cuáles son los requisitos para que la 
Comisión de Bolsa y Valores autorice registrar se a una empresa de inversiones extranjeras. 
 IV. POLÍTICAS COMERCIALES, POR SECTORES  /  5) Servicios  / iv) Servicios de transporte 
aéreo /   a) Características principales  
 
En el párrafo 161 se menciona que algunos aer opuertos estadounidenses se gestionan parcial o 
totalmente a través de la subcontratación y los contratos de gestión, incluso con operadores  WT/TPR/M/200/Add.1 
 Page 5 
 
 
 extranjeros;  este tipo de acuerdo es habitual en el suministro de servicios como las operaciones en los 
terminales y las zonas de aparcamiento, el transporte en tierra, el mantenimiento de edificios, la manipulación de los equipajes, la construcción y la ingeniería. México desearía conocer los requisitos 
para este tipo subcontratación y los contratos de gestión.  
IV. POLÍTICAS COMERCIALES, POR SECTORES  /  5) Servicios  / iv) Servicios de transporte 
aéreo /  b) Marco reglamentario   
 El párrafo 167 indica que el Departamento de Tr ansporte permite, en ciertas circunstancias, que 
ciudadanos extranjeros sean propietarios de hasta el  49 por ciento de las acciones de una compañía 
aérea sumando acciones sin derecho a voto al porcenta je del 25 por ciento antes indicado, siempre que 
el control efectivo siga estando en manos de ci udadanos estadounidenses y que exista un acuerdo de 
cielos abiertos entre los Estados Unidos y el país de origen del inversor extranjero. México desearía 
saber en qué casos se permite que ciudadanos extran jeros sean propietarios de hasta el 49 por ciento 
de las acciones de una compañía aérea. 
 
IV. POLÍTICAS COMERCIALES, POR SECTORES  /  5) Servicios  / v) Transporte Marítimo   /  
b) Marco reglamentario  
• En el párrafo 189 se señala que la Ley de Tr ansporte Marítimo de 1984, enmendada por la 
Ley de Reforma de la Navegación de Altura de  1998, permite a las navieras celebrar contratos 
de servicios a largo plazo con importadores o exportadores sin que las agrupaciones de 
transportistas puedan limitar esa posibilidad.  México desearía conocer las condiciones para 
celebrar contratos de servicios.   
 
•  En el párrafo 191 se indica que no hay restricci ones a la inversión extranjera en astilleros o 
instalaciones de reparación de buques de los Estados Unidos, pero las prestaciones de determinados programas pueden estar supedita das a prescripciones de nacionalidad. México 
desearía conocer las limitaciones existentes pa ra la inversión extranjera en astilleros o 
reparación de buques.   
 IV. POLÍTICAS COMERCIALES, POR SECTORES  /  5) Servicios  / vi) Servicios profesionales y 
servicios prestados a las empresas  /  a) Introducción  
 
• En el párrafo 195 se menciona que en el contex to de los exámenes anteriores de los Estados 
Unidos, las autoridades señalaron que, en la pr áctica, hay muchos elementos en común entre 
los Estados respecto de algunas profesiones; por ejemplo, las autoridades estatales reconocen 
exámenes nacionales únicos para los servicios de contabilidad, de arquitectura y de ingeniería.  México desea saber si existe al gún proyecto para reconocer exámenes nacionales 
para otras profesiones. 
 MEXICO ADDITIONAL QUESTIONS  X) Medidas Sanitarias y Fitosanitarias. 
 
146. Las autoridades estadounidenses indican que de  conformidad con la legislación federal, 
los Estados de los Estados Unidos están auto rizados a establecer medidas y fitosanitarias 
siempre que sean compatibles con las normas y los reglamentos federales, así como con las 
obligaciones de los Estados Unidos en el marco  de las disciplinas pertinentes de la OMC. 
 WT/TPR/M/200/Add.1 
Page 6  
 
 Pregunta 
 La Convención Internacional de Protección Fitosanit aria (CIPF) reconoce a una sola Organización 
Nacional de Protección Fitosanitaria (ONPF) para el  establecimiento y aplicación de las diferentes 
medidas fitosanitarias para la exportación o importación de productos (NIMF No. 1 2006)
1. En este 
sentido, una vez que el país exportador cumpla c on las regulaciones establecidas por la ONPF para el 
ingreso de un determinado producto , no deben existir otras regulaciones que impidan la movilización 
del producto al interior del país. Por ejempl o California y Arizona establecen regulaciones más 
estrictas que las autorizadas por la ONPF y restringen el ingreso a su territorio, de productos que ya han sido importados a Estados Unidos. Esto no se  encuentra en orden con la CIPF ni con la 
reglamentación internacional de importaciones (NIMF No. 20, 2004)
2. ¿Como explica Estados Unidos 
esta actuación por parte de las autoridades est atales y que está haciendo para resolverlo? 
 148. Estados Unidos menciona que no hay limitaciones estatutarias con respecto a la 
duración del proceso para aprobar las import aciones de plantas, animales y productos 
derivados que se realizan por primera vez en los Estados Unidos. Normalmente, ese proceso 
dura entre dos tres años. 
 
Pregunta  Con base en las obligaciones de Transparencia de las Reglamentaciones Sanitarias y Fitosanitarias del 
Acuerdo sobre la aplicación de Medidas Sanitarias y Fitosanitarias
3 de la Organización Mundial de 
Comercio y al concepto de demoras indebid as en la elaboración y establecimiento de las 
reglamentaciones fitosanitarias, ¿porque no se establecen plazos definidos para los procesos 
administrativos posteriores a la conclusión de los an álisis de riesgo de plagas, para la publicación y 
entrada en vigor de las regulaciones que se establecen  para los productos que se exportan por primera 
vez a ese país?  
 160. La FDA, junto con el Servicio de Aduanas y Protección de Fronteras, realiza exámenes 
en el puerto de entrada de los productos alimenti cios importados distintos de la carne, las aves 
de corral y los productos a base de huevo, que incluyen el muestreo y análisis “cuando sean 
necesarios para asegurar que los productos alim enticios importados cumplen las prescripciones 
del sistema de inocuidad alimentaria de los Estados Unidos”. La FDA utiliza “alertas sobre 
importaciones” a fin de difundir informac ión a su personal en campo acerca de las 
importaciones que infringen la ley Federal de Productos Alimenticios, Medicamentos y 
Cosméticos y a las que, en consecuencia, se debe denegar la entrada en los Estados Unidos. Las 
alertas sobre importaciones se refieren a un pr oducto, una zona geográfica o una empresa en 
particular (fabricante, transportista, agricultor,  importador), o a una combinación de éstos. Las 
alertas sobre importaciones siguen en vigor hast a que el fabricante, transportista, agricultor o 
importador demuestra a la FDA que la infracción que ha dado lugar a la alerta se ha corregido. 
Las alertas sobre importaciones se publican en línea. No se dispone de información sobre el 
valor de las importaciones sujetas a las inspecc iones en frontera realizadas por la FDA o el 
Servicio de Aduanas y Protección de Fronteras.  
 
                                                     
 
1 Principios fitosanitarios para la  protección de las plantas y la apli cación de medidas fitosanitarias en 
el comercio internacional. 2006. NIMF No. 1, FAO. 
2 Directrices sobre un sistema fitosanitario de reglamentación de importaciones. 2004. NIMF No. 20, 
FAO. 
3 Acuerdo sobre la Aplicación de Medidas Sanitarias   y Fitosanitarias. 1994. Organización Mundial del 
Comercio.  WT/TPR/M/200/Add.1 
 Page 7 
 
 
 Las preguntas son: 
 1. Una vez que el fabricante, transportista, ag ricultor o importador ha corregido la infracción y 
esto ha sido demostrado a la FDA; se puede reanudar las exportaciones?  
2. En que casos y bajo condiciones se cierran completamente las importaciones de un país? 
 
MEXICO ADDITIONAL QUESTIONS 
 X) Medidas Sanitarias y Fitosanitarias 
 Pregunta 
 Se considera importante conocer:  
¿Si existe algún control sobre sus empresas exportador as, de ser el caso cómo  se hace?, ¿si cuentan 
con algún mecanismo o procedimiento que les permit a informar a los países  que importan productos 
alimenticios fabricados en ese país, cuando se de tectan problemas sanitarios con alguna empresa 
exportadora, para que el país receptor tome las medidas pertinentes? ¿si se tiene algún control para 
evitar que los productos retirados de  su mercado, ya sea por calidad ó fecha de caducidad (vencida ó 
próxima), puedan ser exportados a terceros países que  no cuenten con controles suficientes de sus 
importaciones? 
 162. El Grupo de Trabajo Interinstitucional so bre la Seguridad de las Importaciones ha 
recomendado varias medidas relacio nadas con cuestiones sanitari as y fitosanitarias para 
mejorar la inocuidad de las impo rtaciones en los Estados Unidos (véase el recuadro III.1).  Esas 
recomendaciones aún no se han promulgado (marzo de 2008).  
Pregunta  Se explique más ampliamente de qué forma se piensa implementar la recomendación del grupo de 
trabajo interinstitucional sobre la seguridad de las importaciones relativo a “hacer que la seguridad de 
los productos sea un principio importante de las re laciones diplomáticas que los Estados Unidos 
mantienen con los demás países, y aumentar el pe rfil de las actividades pertinentes de asistencia 
exterior”.  
MEXICO ADDITIONAL QUESTIONS 
 
X) Medidas Sanitarias y Fitosanitarias 
 
146. Las autoridades estadounidenses indican que de  conformidad con la legislación federal, 
los Estados de los Estados Unidos están auto rizados a establecer medidas y fitosanitarias 
siempre que sean compatibles con las normas y los reglamentos federales, así como con las 
obligaciones de los Estados Unidos en el marco  de las disciplinas pertinentes de la OMC. 
 
Pregunta  También dentro de las obligaciones comerciales de  los países miembros de la Organización Mundial 
de Comercio, bajo el Acuerdo de  Medidas Sanitarias y Fitosanitarias, se establece que los estándares 
emitidos por los organismos de referencia, en est e caso la Convención Internacional de Protección 
Fitosanitaria; la Organización Mundial de Salud Animal, y; el CODEX Alimentarius, deben ser 
tomados en cuenta para fomentar la armonización de medidas sanitarias y fitosanitarias. ¿Por qué los 
Estados Unidos fomenta y solicita a los países a adoptar estándares como el de Encefalopatía WT/TPR/M/200/Add.1 
Page 8  
 
 Espongiforme Bovina, y se abstiene de hacer lo pr opio en estándares propuestos por la OIE para el 
caso de la enfermedad de Newcastle, Fiebre Porc ina Clásica y tuberculosis bovina entre otras? 
 
SWITZERLAND 
 
Report by the Secretariat 
 
I.  RECENT ECONOMIC DEVELOPMENTS 
(7) Outlook 
 Paras 36-38: As a general comment on the Secretariat’s report:   In Part I on Recent Economic 
Developments, there are a number of figures which are out of date. It is particularly the case for the economic outlook, which refers to figures published for example in mid-July 2007 (CBO forecast) or 
in October 2007 (IMF forecast). CBO’s most recent ec onomic projections were released in February 
2008 and are significantly lower compared to what is mentioned in the report. The same is true for the 
IMF Spring 2008 World economic outlook, which now expects the US economy to grow by just 0.5% 
in 2008 and by 0.6% in 2009. Also, the figure for the budget deficit for 2008 (1.1% of GDP) in para . 36 does not take into account the fiscal stimulus package ( para. 19 ). Could the U.S. authorities 
provide their latest outlook for the U.S. economy?  
II. TRADE POLICY REGIME - FRAMEWORK AND OBJECTIVES 
(3) Foreign Investment Regime 
(ii) Reporting and review requirements 
 
In para. 19 , the Secretariat's report indicates that under section 721, the President may suspend or 
prohibit a covered transaction when there is credible evidence that th e foreign entity might take action 
that threatens to impair national security and no ot her provision of federal law provides adequate and 
appropriate authority to protect na tional security.  The President must decide whether to take action 
under section 721 within 15 days of the completion of a formal CFIUS investigation.  Could the U.S. authorities indicate on the basis of which specific criter ia the President is likely to suspend or prohibit 
a transaction and whether a "de minimis" clause may a pply for the financial value of the transaction to 
be submitted to these procedures?  If so, what is this de "minimis" applicable level? 
 
III. TRADE POLICIES BY MEASURE 
(1) Measures Directly Affecting Imports (i) Customs procedures 
 In para. 23 , the Secretariat's report indicates that CBP must submit to Congress an evaluation of the 
feasibility and cost of expanding the scan-programme  currently being rolled out in a pilot programme 
within 180 days of the programme's full implementa tion.  Could the U.S. authorities indicate whether 
the feasibility-analysis includes an explicit appreciati on of compatibility of Section 1701(b) of Public 
Law 110-53 with WTO rules, compatibility which curren tly is implicitly assumed by Art. 9?  Can the 
U.S. authorities give some indication as to when a nd under which procedure the report is likely to be 
dealt with by Congress? 
 Para. 24  of the Secretariat's report states that specific ports may be exempted from implementation of 
the prohibition for renewable two-year periods un der the condition that they are certified by the 
Secretary as meeting at least tw o of six conditions listed in Sect ion 1701(b) of Public Law 110-53. 
Could the U.S. authorities provide further informati on with respect to the criteria and the thresholds 
that will be used in determining "sufficiently low false alarm rates" (al. B), "the impact on trade 
capacity" (al. E) as well as "the flow of cargo" (al. E)?   WT/TPR/M/200/Add.1 
 Page 9 
 
 
 (2) Measures Directly Affecting Imports 
(vi) Anti-dumping and countervailing measures 
 
In para. 65 , the Secretariat's report suggests that the Un ited States considers that effective rules on 
anti-dumping and subsidies are necessary to address injurious dumped and subsidized imports, and 
can also contribute toward sustaining support for further trade liberalization.  Could the U.S. 
authorities indicate whether this is a majority view  in the U.S. agriculture and manufacturing sectors? 
Also, could the U.S. authorities indicate whether th ey also consider that anti-dumping measures are 
contributing toward sustaining internationa l support for further trade liberalization? 
 (4) Other Measures Affecting Production and Trade (iii) Competition policy 
 
In para. 210:  the Secretariat's report suggests that there are antitrust legislations in nearly all states in 
addition to U.S. Federal antitrust laws.  Could th e U.S. authorities explain why many states deem it 
necessary to also have their own antitrust legisla tion given the existence of comprehensive Federal 
antitrust laws, all the more that some other stat es have apparently decided not to introduce such 
legislations?  Given that presumably Federal laws are superseding state laws, in what main areas are these state laws applicable that might not be covered by Federal legislations?  Para. 216:   Could the U.S authorities explain what is understood by “limited immunity from antitrust 
laws” for export activities as mentioned in the S ecretariat’s report?  Which export activities are 
covered by this measure? Also, the Secretariat's re port indicates that international ocean carriers are 
allowed to engage in conferences (price-fixing arrang ements) by the Shipping Act of 1984.  Could the 
U.S. authorities explain the reasons behind such  an exception to antitrust legislations ? 
 (iv) Government procurement 
 
Para. 226:   According to the Secretariat's report, 31. 7% of contracts reported were awarded in 
FY2005 to set-aside preferential programmes, esp ecially to small businesses (21.1%) and small 
disadvantaged businesses (5.7%).  Also, as stated in  para. 246, procurement policy seeks to increase 
the participation of small businesses, veteran-ow ned small businesses, small disadvantaged business 
(SDBs), and women-owned small businesses. Being aw are that the thresholds evidenced in para. 240 
and applied by the U.S. authorities to the 39 other members of the GPA are higher than those supposed to apply to the set-aside programmes, coul d the U.S. authorities evaluate the effects of the 
set-aside programmes and policies on the market access for Members of the GPA? What are the 
prospects to see the SMEs from those countries treated  equally as SMEs located in the U.S.?  How do 
the set-aside programmes apply to contracts for whic h global values are higher than the thresholds of 
the GPA? Do the U.S. authoriti es envisage to create specific measures designed to facilitate the 
participation of SMEs in bigger contracts?  Para. 235:  The Clinger Cohen Act of 1996 establishes the use of a two-phase selection procedure for 
entering into a contract for the design and construc tion of a public building facility.  Could the U.S. 
authorities provide additional inform ation regarding the differences, if any, with respect to the 
procedures offered by the GPA which are open, selective and limited tenderings? 
 Para. 252:  The U.S. Administration adopted a new recipr ocity approach to sub-federal procurement 
in three FTAs (Colombia, Panama, and Peru).  Could the U.S. authorities elaborate on the new 
approach in reciprocity?  Are there any prospects fo r members of the GPA to benefit from an enlarged 
market access on the basis of reciprocity?  WT/TPR/M/200/Add.1 
Page 10  
 
 IV. TRADE POLICIES BY SECTOR 
(2) Agriculture (ii) Border Measures 
 
Para 20  of the Secretariat's report suggests that the United States apparently allocates certain Tariff 
Quota Shares by lottery. Could the U.S. indicate precisely to which products and tariff lines this 
applies, and what conditions must be fulfilled to pa rticipate in the lottery?  Furthermore, do the U.S. 
authorities consider this method to be compat ible with the Agreement on Import Licensing 
procedures?  
Para 25/Table IV.1  of the Secretariat's report:  This paragraph attributes the huge increase in Green 
Box spending for the years 2002 through 2005 to higher expenditures in food aid, particularly domestic food stamps programmes. Could the Unite d States provide a more detailed explanation of 
the changes that have led to this increase of 21 billion USD?  How has domestic food aid policy 
evolved since 2002? 
 
(4) Manufacturing 
 
Para. 78:  In light of the important potential welfare ga ins for the United States economy of a further 
lowering of tariffs on manufactured goods - as esti mated by the US International Trade Commission - 
do the U.S. authorities plan to reduce the relativel y high tariffs in the 12 sectors mentioned in the 
Secretariat’s report? 
 
SINGAPORE 
 
1. The report states that the SAFE port Act recognises that the 100% scanning requirements 
could have a significant impact on trade, and offers  the possibility of delaying the implementation for 
specific ports.  However, the Act does not address many issues of responsibilities, implementation and 
operational processes which create confusion to US  trading partners.  How does the US intend to 
address these issues? 
 2. We would appreciate the US' clarification on the following statement in the report which 
states that "non-tariff import restrictions are main tained largely for non-commercial purposes."  As the 
100% scanning requirement is imposed on all US-bound containers, this would seem to constitute a 
non-tariff barrier. 
 
CHINESE TAIPEI 
 
WTO Secretariat Repo rt (WT/TPR/S/200) 
 
I.  RECENT ECONOMIC DEVELOPMENTS 
(4) FISCAL POLICY 
(Paragraph 19 of Page 6) 
 
It would be appreciated if the US could please advise  us of what trade effects are expected to accrue 
from the economic stimulus measures passed early in 2008 to assist individuals and businesses? 
 II.  TRADE POLICY REGIME: FRAMEWORK AND OBJECTIVES (1)  OVERVIEW (Paragraph 3 of Page 12) (2)  INSTITUTIONAL AND POLICY FRAMEWORK (Paragraph 10 of Page 13)  
As indicated in the Report, while the United St ates considers that a comprehensive multilateral 
agreement offers the best chance to create e xpanded trade and development opportunities around the  WT/TPR/M/200/Add.1 
 Page 11 
 
 
 world, it believes that bilateral and regional trade lib eralization can also provide significant benefits.  
Consistent with this, the United States has con tinued to enter into preferential agreements.  
Furthermore, the US Administration and congressional leaders concluded a "trade policy template" in 
May 2007.  According to the USTR, the template provides a "clear and reasonable path forward for 
congressional consideration of Free Trade Agreemen ts with Peru, Colombia, Panama, and Korea 
[and] opens the way for bipartisan work on Trade Promotion Authority." 
 
Given the U.S. commitment to a strategy of tr ade liberalization at the multilateral, regional and 
bilateral levels, what are the prospects for the FTA with Colombia, Panama and Korea being passed 
by Congress, and the implications for other possibl e developments such as the renewal of the Trade 
Promotion Authority and the extensi on of Trade Adjustment Assistance? 
 
(3)  FOREIGN INVESTMENT REGIME 
(ii)  Reporting and review requirements 
(Paragraphs 22 and 24 of Pages 15-16) 
 The Report mentions that the Committee on Forei gn Investment in the United States (CFIUS) may 
review a previously reviewed transaction wher e CFIUS received false or inaccurate material 
information during the initial review or investigati on, or if a "mitigation" agreement resulting from the 
initial review or investigation was "intentionall y and materially breached".  Furthermore, under 
FINSA, CFIUS or a lead agency designated by th e Secretary of the Treasury may enter into, modify, 
monitor, and enforce agreements with any party to  a covered transaction to mitigate the transaction's 
national security risk.  Every mitigation agreement must be justified by a written analysis of the 
national security risk posed by the transaction.  
(a) Please could the U.S. elaborate further on the legal status of a mitigation agreement, and its 
key elements or provisions? 
(b) How does the U.S. authority evaluate the mitigating effects of such an agreement?  
 
(Paragraph 25 of Page 16) 
 In addition to section 721, the United States appli es industrial security regulations.  These generally 
require a contractor to obtain facility security cl earance and individual security clearance in order to 
perform a government contract involving acces s to classified sites or information. 
 
(a) Could the U.S. please elaborate further on the scope or coverage of industrial security 
regulations, and its legal sources?  
(b) We would appreciate knowing which authorities are in charge of issuing facility security 
clearance and individual security clearance, a nd their requirements of both substance and 
procedure. 
 (4)  INTERNATIONAL RELATIONS (ii)  Preferential and other arrangements (a)  Free-trade agreements (Paragraph 37 of Page 18) 
 As indicated in the Report, the U.S. has recen tly been actively pursuing FTAs negotiations, which 
reflects its strategy of increasing leverage fo r promoting multilateral trade liberalization. 
 (a) Could the U.S. please provide more deta ils of the guidelines used for choosing FTA 
negotiating partners? 
 WT/TPR/M/200/Add.1 
Page 12  
 
 We have also noted that partners of five of the FTAs that have recently entered into force are APEC 
members.   (b) Is it the U.S. intention to give priority to  FTA talks with more APEC economies, and thus 
realize the “open regionalism” principle in th e APEC region and advance freer trade, for 
example through an FTAAP via multilateral negotiations? 
 
(Paragraphs 36-38 and 41 of Pages 18-19) 
 
As indicated in the Report, we note that the Unite d States now has 14 bilateral and regional free trade 
agreements in place. Six additional FTAs have been completed, but have yet to enter into force. 
 
It would be appreciated if the U.S. could enlighten  us as to its future trade policy towards FTAs and 
WTO negotiations, as well as its policy priorities.  III. TRADE POLICIES AND PRACTICES BY MEASURES (2)  MEASURES DIRECTLY AFFECTING IMPORTS (i)  Customs Procedures (b) Container Security Initiative (CSI) and Secure Freight Initiative 
(Paragraph 22 of Page 27) 
 
We note from the report that approximately 90% of U.S.-bound cargo containers originate in or are 
transhipped from a CSI port.  
 
(a) Could the U.S. please advise us of the antic ipated schedule for implementing the 2006 SAFE 
Port Act, which contains requirements for th ree pilot programmes to assess the feasibility of 
100 percent overseas scanning of maritime containers?  
(b) Moreover, how is the U.S. planning to balan ce its homeland security concerns with its trade 
facilitation objectives? 
 (ii) Customs Valuation (Paragraph 32 of Page 29)  
The Report notes that the Customs and Border Pr otection (CBP) is considering switching from the 
current customs valuation practice of using the value of the “first or earlier” sale, that is, the sale 
between the manufacturer and the foreign intermediary, to using the price paid in the last sale prior to 
the importation into the United States.  If adopted, the CBP's proposal would result in the transaction value being determined on the basis of the price paid  by the buyer in the Unite d States, rather than a 
foreign intermediary. 
 (a) What is the rationale for proposing this change?  (b) What would be the expected timetable for implementing the change?  (v)  Other charges affecting imports (Paragraphs 57 and 58 of Pages 33 and 34)  
Certain imports continue to be subject to a me rchandise processing fee and a harbour maintenance 
fee; both were described in the Secretariat report for the last Review of the United States.  The 
merchandise processing fee applies to imports valued at  more than US$2,000.  The fee is set at 0.21% 
of the import value; the statutory minimum and maximum are US$25 and US$485.  Originating imports under the free-trade agreements concluded between the United States and Australia, Bahrain, 
Canada and Mexico, Chile, the Dominican Republic and Central America, Israel, and Singapore are  WT/TPR/M/200/Add.1 
 Page 13 
 
 
 exempt.  Eligible imports from less developed c ountries and CBERA beneficiary countries are also 
exempt, as are certain products imported under the GSP.  The application of the merchandise 
processing fee has been extended until September 2014,  following the adoption of the American Jobs 
Creation Act of 2004.  
The American Jobs Creation Act of 2004 required the Secretary of the Treasury to issue 
recommendations concerning the possible elimination of fees collected by the Department of Homeland Security, including the merchandise processing fee.  Such recommendations have not yet been issued.  In the context of th e last Review of the United States, the U.S. authorities indicated that 
they had no intention of eliminating the merchandise processing fee. 
 
(a) In view of the fact that the US Congress intended the merchandise processing fee to 
approximate the cost to the CBP of processing the entry of imported merchandise, would exemption from this fee for imports under the sp ecified FTAs be inconsistent with the above-
mentioned expectations, in terms of principle, policy goal, etc.? 
(b) Will the exemption be compensated for by the fees that might have been over-collected on 
goods imported from non-FTA partner countries? 
(c) In addition, we would be interested in knowing the results and recommendations of the 
Secretary of the Treasury study. 
 
(vi)  Anti-dumping and countervailing measures 
(a)  Legislation and administration 
(Paragraph 70 of Page 36) 
 We note that under any agreement entered into w ith a WTO Member considered to be a market 
economy, the suspension of a countervailing duties (CVD) investigation by the U.S. may also involve 
quantitative restrictions in addition to price undertakings.  
 
(a) Could the US please clarify how this practice is consistent with Article 18.1 of the SCM 
Agreement and Article 11.1 of GATT 1994? 
(b) In addition, what criteria does the U.S. apply when deciding on the quantitative restrictions to 
be undertaken by the exporting Member, in practice? 
 
(b) Anti-dumping 
(Para. 84 of Page 40) 
 According the Report, the average duration of an AD measure in place at the end of 2007 was some 
11 years. Extending AD measures beyond the 5-year statutory time limit as provided by Article 11.3 
of the Anti-dumping Agreement appears to  have become the norm in US practices . 
 Could the US please explain how the inconsistency of its overall practice in this respect with 
Article 11.3 of the Anti-dumping Agreement can be justified? 
 (vii) Safeguards (a) Global safeguards (Paragraph 98 of Page 43) 
 
Under U.S. law, NAFTA partners are excluded fro m the application of safeguard measures, unless 
they individually account for a substantial share of total imports, and it is shown that they make an 
important contribution to serious injury. 
 
It would be appreciated if the U.S. could please pr ovide us with more detailed information on how we 
can determine whether the import share is a “substa ntial” share of the totality and whether such 
importation is “an important contribution” to serious injury to the US domestic industry.  WT/TPR/M/200/Add.1 
Page 14  
 
 (iii) Export taxes, charges and levies 
(Paragraphs 178 and 179 of Page 58)  
The U.S. Constitution's Export Clause bars Congress from imposing any tax on exports and the 
exported cargo is exempt from the harbour mainte nance fee following a 1998 decision by the U.S. 
Supreme Court.  The Court held that the harbour ma intenance fee bore "the indicia of a tax", and that 
the value of the export cargo – the basis on which the fee is determined – did not "correlate reliably 
with the federal harbour services, facilities, and bene fits used or usable by the exporter".  Thus, the 
Supreme Court determined that the harbour maintenan ce fee, as applied to exports, violated the U.S. 
Constitution's Export Clause.  
(a) Could the U.S. please describe the main attributes of the harbour maintenance fee?  
(b) If this is deemed a kind of harbour servi ce fee, would that not constitute discriminatory 
treatment of import and export cargos? 
 (4) OTHER MEASURES AFFECTING PRODUCTION AND TRADE (v) Trade related intellectual property rights (e) Enforcement Activities 
(Paragraph 270 and 271 of Pages 77 and 78) 
 
The Report states that Section 337 of the Tariff Act of 1930 declares unlawful "unfair methods of 
competition and unfair acts in the importation and sale of products in the United States, the threat or 
effect of which is to destroy or substantially in jure a domestic industry, prevent the establishment of 
such an industry, or restrain or monopolize trad e and commerce in the United States."  The injury 
requirement does not apply to alleged infringement of  a valid U.S. patent, federally registered trade 
mark, copyright, or mask work, or vessel hull design.   Section 337 investigations are instituted by the 
United States International Trade Commission (USI TC); administrative law judges make an initial 
determination of whether there is an infringement/contravention of the law, which is then subject to 
review by the USITC.  If the USITC determines th at Section 337 has been violated, it may issue 
exclusion orders, cease and desist orders, or both.  Exclusion orders direct the CBP to bar entry into 
the United States of infringing goods from whatever  source (general exclusion orders) or from 
specifically identified entities (limited exclusion orders).  The President may disapprove a USITC 
order within 60 days.  
Between 1 January 2005 a nd 30 September 2007, 88 new Section 337 investigations were instituted; 
all except three involved allegations of patent in fringement, occasionally in combination with the 
infringement of other IPRs.  Investigations covere d products from 29 trading partners.  In the period 
between 1 January 2005 and 30 Sept ember 2007, the USITC issued 24 exclusion orders, of which 17 
were limited exclusion orders, a nd seven were general exclusions, together with cease and desist 
orders. As of 1 October 2007, there were 66 outsta nding exclusion orders, compared with 61 reported 
in the previous U.S. Review, affecting imports  of a range of products, including machinery and 
equipment, electrical and electronic products, some durable consumer goods, glasses, soft drinks, and 
cigarettes.  Experience has shown that Section 337 investigations  are usually initiated against companies (usually 
foreign companies) upon receipt of a unilateral complaint of patent infringement, even if the company 
being investigated has been selling its products in  the U.S. market for some time.  Once the ITC 
decides to initiate such an inv estigation, the companies being investigated invariably incur 
outrageously huge legal fees in the process of responding to the allegations. 
 
(a) As the factors involved in determining whet her infringements have occurred are extremely 
complicated, may we suggest that the ITC take  more explanations and objective information 
from both parties involved into account before it makes the initial decision of whether or not to accept the complaint?  WT/TPR/M/200/Add.1 
 Page 15 
 
 
 (b) In this context, could the U.S. please explai n the standard that the ITC is applying in 
determining whether or not to accept a 337 compliant? 
(c) Also, could the U.S. please provide the fi gures on the total number of complaints filed on 
patent infringement between 1 January 2 003 and April 30, 2008, and the number of 
complaints that were withdrawn  during the same period? 
 
IV. TRADE POLICIES BY SECTOR 
(2) AGRICULTURE 
(iii) Domestic programmes  
(Paragraph 27 and Table IV.2 of Page 84) 
 It is stated in the Report that average annual di rect government payments to agricultural producers 
were US$16.3 billion between 2003 and 2007.  Later, note  ‘c’ to Table IV.2 states that “The 2002 
Farm Act terminated authority for production flexib ility contract payments and established authority 
for fixed direct payments and counter-cyclical paym ent”.  However, the negative payment values are 
revealed under “Production flexibility contract paym ents” (horizontal column 2, Table IV.2) from 
2003 to 2007.   
 
(a) We would appreciate knowing what caused the negative values revealed under “Production 
flexibility contract payments” in Table IV.2. 
(b) Could the United States please provide more details of the related payments measures 
mentioned above? 
 (2) AGRICULTURE (iv)Export subsidies, credit, insurance, and guarantees 
(Paragraph 41 of Page 87) 
 
Under the Export Enhancement Program (EEP) and the Dairy Export Incentive Program (DEIP), the 
United States provides exporters of eligible co mmodities with cash bonus payments based on the 
quantities exported. Eligible commodities under the programmes include wheat, rice, frozen poultry, 
barley, table eggs, vegetable oil, milk powder etc.  
 
Could the United States please provide more inform ation and details of the programmes mentioned 
above? 
 
(3) MINING AND ENERGY 
(ii) Legal and policy framework (Paragraph 63 of Page 92)  
The Department of Energy has primary responsibil ity for federal energy policy, while states are 
responsible for their own energy policies.  
 
(a) Is there any cooperation mechanism between fe deral and local (state) governments on energy 
policy issues designed and operate d formally and periodically? 
(b) Have conflicts ever occurred between the tw o entities, especially concerning promotion of the 
further development of the energy sector, and encouragement of private investment and competition? 
(c) If so, what dispute settlement principles apply? WT/TPR/M/200/Add.1 
Page 16  
 
 (5) SERVICES 
(iii) Financial services (Paragraph 128 of Page 108)  
As indicated in the Report, branches of foreign banks are generally not required to commit organizational capital at the fede ral level and state level. Howe ver, foreign bank branches and 
agencies are subject to an “asset pledge require ment” under applicable federal and state law. 
 
According to our understanding, in addition to Inco me Tax, a 30% Branch Profit Tax on the after-tax 
earnings that are not reinvested by the close of the tax year, or are disinvested in a later tax year, is 
imposed on branches of foreign banks. The above-m entioned regulation prevents foreign banks from 
efficiently managing their assets. 
 
It would be appreciated if the U.S. would consid er reducing the amount of after-tax earnings that 
foreign banks are required to reinvest in the U.S ., or reducing the branch profit tax rate applied. 
 (Paragraph 124 of Page 107 & Paragraph 132 of Page 109)  
Agencies of foreign banks may not accept deposits fro m U.S. citizens or residents. Branch licences 
for foreign banks are not available in six states, but agency licences are available. These regulations 
create a less favourable operati ng environment for foreign banks.  
 
(a) Could the U.S. please explain the rationale behind such restrictions? 
(b) Would the U.S. consider granting foreign banks  branch licences in all states or allowing 
agencies of foreign banks to accept deposits from U.S. citizens or residents? 
 
COSTA RICA 
 INFORME DE LA SECRETARÍA, WT/TPR/G/200 
 
II. REGIMEN DE POLITICA COMERCIAL: MARCO Y OBJETIVOS 3) REGIMEN DE INVERSIONES EXTRANJERAS 
 
1. Tomando como referencia el  primer párrafo del apartado de Regimenes de Inversión 
Extranjera, Costa Rica desea obtener mayor información sobre los requerimientos que deben ser 
reportados bajo la Ley "Internati onal Investment and Trade in Services Survey Act". Asimismo, Costa 
Rica quisiera saber si Estados Uni dos pueden aportar mayores detalle s sobre el funcionamiento del 
registro como tal.   2. En el tema de servicios Costa Rica desea conocer mayores detalles sobre  la metodología de medición que utilizan con relación a la exportación de servicios. 
 
III. POLÍTICAS Y PRÁCTICAS COMERCIALES, POR MEDIDAS 
2) MEDIDAS QUE AFECTAN DIRECTAMENTE  A LAS IMPORTACIONES  ii) Valoración en aduana 
 
3. Actualmente, cuando se trata de transaccion es que conllevan una serie de ventas, la CBP 
normalmente utiliza el precio pagado en la "primera o anterior" venta. ¿Con qué tipo de documento el 
importador en Estados Unidos puede  justificar a CBP este valor? Si la CBP aplica el valor de 
transacción de las mercancías, éste normalmente consta en la factura comercial que posee el importador en Estados Unidos, por esta razón, es importante saber con qué tipo de documento 
actualmente se justifica ante la a duana un precio pagado en la "primera  o anterior" venta. (Párrafo 32) 
  WT/TPR/M/200/Add.1 
 Page 17 
 
 
 vi) Medidas antidumping y compensatorias 
 
4. ¿Podrían indicarnos cual es el status actual  de aplicación del pro cedimiento de reducción a 
cero? ¿Continúa el Departamento de Comercio aplicando dicho procedimiento? Si es así, ¿en qué 
etapas de la investigación y cuál es la valoración que han realizado sobre lo s últimos fallos emitidos 
por el Órgano de Apelación de la OMC sobre el tema? 
 
ix) Reglamentos técnicos, evaluac ión de la conformidad y normas 
 
5. ¿Qué porcentaje de los reglamentos técnicos vigentes están basados en normas 
internacionales? (Párrafo 114) 
 6. Estados Unidos menci ona que los reglamentos técnicos y lo s procedimientos de evaluación de 
la conformidad pueden ser adoptados por los Estados, en este sen tido ¿qué mecanismo se utiliza para 
asegurarse que dicha adopción no esté creando una normativa que sea contradictoria? (Párrafo 115) 
 
7. ¿La excepción de los requisitos de aviso y co mentarios para ciertas Agencias es para efectos 
de la notificación a lo interno de los Estados Uni dos o se refiere a la notificación que se hace al 
Comité de Obstáculos Técnicos al Co mercio de la OMC? (Párrafo 124) 
 8. ¿Cómo puede un ciudadano solicitar la modific ación o derogación de un reglamento técnico? 
¿Cuál es el procedimiento? (Párrafo 126) 
 9. ¿Para qué tipo de productos se requiere la d eclaración de conformida d del proveedor, y para 
cuales la certificación de tercera parte? ¿Cuáles s on los criterios utilizados por Estados Unidos para 
definir el tipo de procedimiento de evaluación de  la conformidad a aplic ar para determinados 
productos? (Párrafo 129) 
 10. ¿Qué tipo de incentivos reciben de parte del mercado estadounidense las mercancías que 
cumplen con las normas? (Párrafo 136)  
x) Medidas sanitarias y fitosanitarias 
 
11. En relación al párrafo 148, ¿cual es la justif icación para que Estados Unidos demore de 2 a 
más años para realizar un análisis de riesgo?  
 12. En relación al párrafo 149 Costa Rica desea conocer más s obre los “ePermits”, 
específicamente respecto al período de tiempo que demo ra los Estados Unidos en  emitir este permiso. 
¿Este permiso debe de solicitarse previo a cada exportación o tiene vigencia por un plazo?  
 13. En relación al párrafo 151, sobre el proceso de aprobación “basado en los avisos”, podría los 
Estados Unidos indicar:   
a) ¿Cuál es la ventaja con este nuevo proceso? ¿Es realmente este proceso más expedito en 
comparación al convencional?  b) ¿Podría EEUU detallar más sobre los resulta dos que han obtenido hasta ahora con este nuevo 
proceso? 
 
14. En relación al párrafo 160, en caso que ex ista una alerta a la importación, ¿cuál es el 
procedimiento que debe seguir el productor o el ex portador para demostrar que la alerta ha sido 
corregida?   WT/TPR/M/200/Add.1 
Page 18  
 
 15. ¿Puede EE.UU. justificar por qué el período de  cuarentena post entrada para los esquejes de 
crisantemos es de 6 meses y por qué no se puede ap licar un período menor cua ndo un país cumple con 
todos los requerimientos f itosanitarios respectivos?  
 
4) OTRAS MEDIDAS QUE AFECTAN A LA PRODUCCIÓN Y EL COMERCIO 
 
iii) Política en materia de competencia  
16. Según se señala en el párrafo 210 del Info rme de la Secretaría, las leyes antimonopolio 
federales abarcan todos los sectores de la economía y el comercio entre Estados así como el comercio 
internacional del país, con algunas exenciones y ex cepciones. ¿Podrían indicarnos cuáles son las 
excepciones a la aplicación de las leyes antimonopolio ? ¿Existen empresas con derechos especiales o 
exclusivos a las que no se les aplique la normativa antimonopolio?  
iv) Contratación pública 
 
17. ¿Cuáles tipos de contratación se llevan a cabo, y cuáles son los criterios para optar para una u 
otra modalidad?  18. ¿Se cuenta con datos respecto al porcentaje  de contrataciones otorgadas a proveedores 
extranjeros? 
 
19. ¿Cuáles son los procedimient os de recursos existentes? 
 20. ¿Se cuenta con información centralizada de opor tunidades de contratación a nivel federal y de 
los diferentes Estados? 
 
v) Derechos de propiedad intel ectual relacionadas con el comercio 
 
21. De acuerdo al párrafo diez del documento WT/TPR/S/200, en mayo de 2007, la Administración y los líderes del Congreso finali zaron un “modelo de política comercial” que tiene 
como finalidad, entre otras inclui r “flexibilidades" con respecto a la protección de la propiedad 
intelectual para asegurar que los interlocutores de  los Estados Unidos puedan alcanzar un equilibrio 
apropiado entre el fomento de la innovación en  el campo de los medicamentos que puedan salvar 
vidas y la promoción del acceso a ellos. Dentro de  estas flexibilidades previs tas en este modelo de 
política comercial, se establece una clarificación en el sentido que los países en desarrollo que han 
suscrito Acuerdos de Libre Comercio (TLC) con Estados Unidos pueden implementar excepciones a 
las reglas normales de protección a los datos de pr ueba, cuando sea necesario para proteger la salud 
pública.  En este sentido ¿cómo visualizan que los pa íses en desarrollo, que son socios comerciales de 
los Estados Unidos a través de acuerdos bilate rales, puedan implementar estas excepciones a las 
normas de protección a los datos de prueba para proteger la salud pública tal como se indica en el 
Bipartisan Trade Deal?  ARGENTINA 
 
WT/TPR/S/200, INFORME DE LA SECRETARIA 
 OBSERVACIONES CAPITULATIVAS 
3) Acceso a los mercados para las mercancías 
Párrafo 9, página viii y párrafo 49, página 38  
En estos párrafos se afirma que todas las líneas aran celarias, menos dos (dedicadas al petróleo crudo) 
están consolidadas, generalmente a tipos bajos, lo  que aporta previsibilidad al régimen comercial  WT/TPR/M/200/Add.1 
 Page 19 
 
 
 estadounidense. ¿Podría Estados Unidos inform ar cuál es el arancel aplicable a esas  líneas? ¿Cuáles 
serían los motivos por los que dichas líneas no se han consolidado o se han consolidado?  
 
I. EVOLUCIÓN ECONÓMICA RECIENTE 4) Política fiscal 
Párrafo 19, página 7  
Este párrafo se refiere a la introducción de medi das de estímulo fiscal durante 2008. ¿Podría Estados 
Unidos informar cuáles son los contribuyentes be neficiados por las desgravaciones fiscales aquí 
mencionadas? ¿Cuál es el monto/cuantía de la desgravación? 
 
II. RÉGIMEN DE LA POLÍTICA COMERCIAL: MARCO Y OBJETIVOS 
1) Panorama general Párrafo 1, página 14 
 
En este párrafo el informe menciona que los Estados  Unidos han avanzado en la aplicación de varias 
resoluciones de la OMC que demandaban cambios de  la legislación estadounidense, pero todavía 
restan algunas a las que aún no se ha dado pleno  cumplimiento. ¿Podría Estados Unidos informar 
cuáles son las resoluciones a las que aún no ha dado  cumplimiento y cuál es la razón de ello?  
 
2) Marco institucional y normativo  Párrafo 12, página 16 
 
En este párrafo el informe indica que, durante el período objeto de examen, los trabajadores, las 
empresas y los agricultores afectados negativamente por  el comercio internacional podían beneficiarse 
de las ventajas previstas en el Programa de Asistencia para el Ajuste al Comercio (TAA), autorizado por la Ley de Comercio de 1974, modificada. ¿P odría Estados Unidos informar cuáles son los 
requisitos que deben cumplirse para obtener los beneficios de este Programa? ¿Cuál es monto 
destinado a este programa en el período objeto de examen? 
 
3) Régimen de inversiones extranjeras 
i) Trato Nacional Párrafo 15, página 16 
 En este párrafo el informe indica que los Estados Un idos mantienen una política de trato nacional a la 
inversión extranjera directa, con algunas sujeciones a preocupaciones de orden cautelar y de seguridad 
nacional. Asimismo, los Estados Unidos también apli can medidas restrictivas a la inversión extranjera 
al nivel de Estados. ¿Podría Estados Unidos inform ar a qué se refiere el informe con “preocupaciones 
de orden cautelar”?  ii) Requisitos en materia de información y examen Párrafo 18, página 17 
 
En este párrafo se indica que el Secretario del Teso ro está elaborando un reglamento para mejorar la 
aplicación de la Ley de Seguridad Nacional e Inve rsiones Extranjeras. ¿Podría Estados Unidos 
informar cuáles son las car acterísticas que tendría dicho reglam ento y cuándo se estima que el mismo 
entrará en vigor?  
Párrafo 19, página 17 
 
El informe indica que el Presidente puede suspende r o prohibir una inversión extranjera cuando haya 
pruebas convincentes de que la entidad extranje ra podría realizar acci ones que supusieran una 
amenaza para la seguridad nacional, y ninguna ot ra disposición de las leyes federales ofrezca WT/TPR/M/200/Add.1 
Page 20  
 
 facultades apropiadas para proteger la seguridad na cional. ¿Podría Estados Unidos informar si el 
Presidente ha hecho uso de la facultad de suspender o prohibir una inversión? 
 
4) Relaciones Internacionales 
i) Organización Mundial del Comercio 
Párrafo 34, página 21  
En este párrafo se indica que la Administración est á comprometida a trabajar con el Congreso para 
aplicar las decisiones pendientes del OSD en determ inados asuntos. ¿Podría Es tados Unidos informar 
si, más allá del compromiso asumido, se han tomado algunas medidas o adoptado acciones para 
avanzar en la aplicación de las decisiones pendient es? ¿Existe algún cronograma o agenda para dichas 
acciones?  
III. POLÍTICAS Y PRÁCTICAS COMERCIALES, POR MEDIDAS 
2) Medidas que afectan directamente a las importaciones 
i) Régimen aduanero 
Párrafo 14, página 29 
 
Este párrafo indica que los Estados Unidos se en cuentran desarrollando un nuevo sistema aduanero 
para la tramitación de la carg a denominado “Entorno Comercial Automatizado (ACE)”, destinado a 
operar como un único punto de acceso en línea para tramitar las formalidades de importación y 
exportación.¿Podría Estados Unidos brindar más in formación acerca de las características de este 
programa?  
b) Iniciativa de Seguridad de los Contenedores (CSI) e Iniciativa de Seguridad de la Carga 
Párrafo 21, página 31 
 En este párrafo el informe indica que el procedimie nto utilizado en el marco de la “Iniciativa de 
Seguridad de los Contenedores (CSI)” consiste en  la selección e inspección de los contenedores de 
alto riesgo a través de “equipo de inspección no intrusivo, inspección física o ambas cosas”. ¿Podría 
Estados Unidos informar cuál es el tiempo promed io que demanda esta inspección en el puerto de 
embarque? ¿Se aplica este procedimiento a las mercader ías en tránsito por el territorio de los Estados 
Unidos? ¿Cuáles son los criterios utilizados para  determinar que un puerto califica como “CSI”? 
 
c) C-TPAT 
Párrafos 25 a 29, páginas 32 y 33  
Según se desprende del informe en los párrafos 25 a 29, entendemos que los Estados Unidos aún no 
han publicado ningún reglamento para el funciona miento de la Asociación Aduanera y Comercial 
contra el Terrorismo (C-TPAT), un programa que prevé que determ inados importadores 
estadounidenses se beneficien de reducciones en el índice de riesgo asignado a sus expediciones por el 
Servicio de Aduanas y Protección de Fronteras ( CBP). ¿Podría Estados Unidos brindar mayores 
detalles acerca de la ap licación de la C-TPAT? 
 
iii) Normas de Origen 
Párrafo 35, página 34 
 
En este párrafo se menciona que los Estados Unidos  aplican normas de origen preferenciales en el 
marco de varios acuerdos bilaterales de libre co mercio concertados después de 1997, pero que, a 
marzo de 2008, aún no se habían notificado a la OMC. ¿Podría Estados Unidos indicar cuándo se 
prevé realizar la notificación a dicha Organización?   WT/TPR/M/200/Add.1 
 Page 21 
 
 
 Párrafo 36, página 35 
 
En este párrafo el informe se refiere a que organism os distintos de la CBP (Oficina de Aduanas y 
Protección en Frontera) pueden adaptar e interpretar con más detalle los criterios generales para la 
aplicación de normas de origen no preferenciales, con el objeto de ajustarlos a las necesidades y fines 
del contexto específico en el que se aplican di chas normas. ¿Podría Estados Unidos brindar más 
información respecto de las necesidades y contexto  específicos a los que se hace referencia en este 
punto?  
 
vii) Restricciones cuantitativas y licencias 
Párrafo 112, página 53 
 
En este párrafo, el informe hace mención a que las importaciones de determin ados productos textiles 
y prendas de vestir procedentes de China están  sujetas a "niveles convenidos". ¿Podría Estados 
Unidos informar cuales son dichos “niveles convenidos” y con qué objeto se realizó este acuerdo con 
China? ¿En adición, podrían las autoridades de Es tados Unidos brindar más información acerca de 
este mecanismo y detallar si implica una lim itación de exportaciones por parte de China? 
 
3. Medidas que afectan directamente a las exportaciones iv) Asistencia a la exportación c) Promoción y ayuda a la comercialización 
Párrafo 189, página 71  
En este párrafo el informe hace referencia a que los Estados Unidos mantie nen diversos programas 
generales de promoción de las exportaciones, y asimi smo se refiere a la existencia de “Organizaciones 
Estatales de Desarrollo Internacional (SIDO)”, las cu áles apoyan las actividades de los organismos de 
promoción del comercio en 39 Estados del país. ¿P odría Estados Unidos informar cuáles son los 
programas generales de promoción de las export aciones y cuáles son los requisitos para acceder a 
ellos? ¿En adición, podría especificar qué tipo de ayuda brindan las “Organizaciones Estatales de Desarrollo Internacional”, a qué sectores está dirigida  y cuáles son los requisitos para beneficiarse de 
la misma?  4. Otras Medidas que afectan a la producción y el comercio iii) Política en materia de competencia a) Condiciones de acceso Párrafo 240, página 83  
En este párrafo el informe menciona que, con resp ecto al acceso a los mercados para la contratación 
pública, se mantienen una serie de prescripciones en  materia de compra de productos nacionales con 
respecto a la contratación no abarcada por el Acuerdo sobre Contratación Pública, el Acuerdo plurilateral de la OMC sobre el Comercio de  Aeronaves Civiles, o acuerdos comerciales 
preferenciales.¿Podría Estados Unidos brindar más detalles sobre cuáles son esas prescripciones, como asimismo los criterios por las que se aplican? 
 
IV. POLÍTICAS COMERCIALES POR SECTORES 
3) MINERÍA Y ENERGÍA iii) Algunas cuestiones Párrafo 64, páginas 109-110 
 En este párrafo, el informe se refiere a que el régime n fiscal aplicado a la energía tiene la finalidad de 
otorgar incentivos al suministro de combustibles alternativos y renovables y que la Ley de Política 
Energética de 2005, establece la concesión durante 11  años de incentivos fiscales para la producción 
nacional de energía y la eficiencia energética. ¿Podr ía el gobierno de Estados Unidos informar a qué 
monto ascienden estos incentivos fiscales y si los mismos han sido notificados a la OMC? ¿Podría WT/TPR/M/200/Add.1 
Page 22  
 
 indicarse para cada uno de los incentivos incluidos en el  cuadro de la página 110, cuál es, en caso de 
que existiera,  el plazo de aplicación de los mismos?  
Párrafo 66, páginas 110-111 
 
Este párrafo indica que las importaciones de etanol están sujetas a tipos arancelarios NMF ad valorem 
del 1,9 o el 2,5 por ciento (subpartidas 2207.1 060 y 2207.2000 del SA). Se impone un derecho 
adicional de 0,1427 dólares EE.UU. por litro a las im portaciones de etanol de la subpartida 9901.0050 
del SA procedente de fuentes a las que se aplique el trato NMF. ¿Podría Estados Unidos explicar a 
qué se debe la imposición del derecho adicional, y las razones por las que el mismo es aplicado a la 
subpartida 9901.0050? 
 
Párrafo 70, página 112 
En este párrafo, el informe estab lece que, desde 1976, los Estados Unidos han gastado unos 45.200 
millones de dólares en la construcción, mantenimie nto, reposición y administración de la Reserva 
Estratégica de Petróleo. Se dispone asimismo de  una Reserva de Petróleo para Calefacción del 
Noreste. ¿Podría Estados Unidos detallar cómo afecta esta financiación estatal en el costo del petróleo al que se enfrentan los usuarios de EE.UU.? ¿Se ha realizado alguna estimación sobre cual sería dicho costo ante la no intervención estatal?  
4) Sector manufacturero 
Párrafo 77, páginas 113-114 
 
Este párrafo establece que “en el contexto de la Iniciativa del Presidente para el Sector 
Manufacturero, el Secretario de Comercio ordenó que se realizara un estudio completo de los aspectos que influyen en la competitividad del sector ma nufacturero estadounidense. En el marco de ese 
proceso, el Departamento de Comercio celebró 23 mesas redondas públicas para identificar los retos a 
los que se enfrentan los fabricantes. En enero de  2004, el Departamento de Comercio publicó un 
informe que contenía 57 recomendaciones para h acer frente a esos retos. El Grupo de Trabajo 
Interinstitucional sobre la Competitividad del Sector  Manufacturero coordina la aplicación de estas 
recomendaciones, que incluyen hacer permanente la bonificación fiscal aplicada a la investigación y 
experimentación, modernizar el si stema jurídico estadounidense para suprimir los desincentivos a la 
inversión en el sector, identificar las prioridad es para la futura ayuda federal a la tecnología 
manufacturera avanzada y combatir las prácticas come rciales "desleales" que afectan a los fabricantes 
de los Estados Unidos. Las autoridades estadounidenses indican que ya se han aplicado 36 de las recomendaciones del informe”. ¿Podría el gobierno de Estados Unidos informar en qué consiste la 
bonificación fiscal aplicada a la investigación y experimentación, y si se ha hecho permanente? 
¿Podrían las autoridades describir a qué se hace refe rencia con “futura ayuda federal a la tecnología 
manufacturera avanzada”, y, en particular, qué tipo de ayuda incluiría? ¿Cuáles son las 36 recomendaciones del informe ya aplicadas?  
Párrafo 80, página 114 
 
En este párrafo, el informe sostiene que la ayud a del gobierno al sector manufacturero incluye la 
financiación de las exportaciones, pagos directos y ventajas fiscales. ¿Podrían las autoridades de 
Estados Unidos explicar cuáles son los requisito s para acceder a dicha ayuda? ¿Podrían facilitar 
estadísticas acerca del monto de ayuda brindado en el marco de esta ayuda en el período objeto de 
examen y los sectores que más se han beneficiado? ¿Podría el gobierno de Estados Unidos indicar la 
compatibilidad de estas medidas con lo dispuest o en el Acuerdo de Subvenciones y Medidas 
Compensatorias, en particular el Art.3.1.a), relativo a las subvenciones prohibidas? 
  WT/TPR/M/200/Add.1 
 Page 23 
 
 
 Párrafo 84, página 115 
 
De acuerdo con este párrafo, en virtud del Programa del Fondo de Capital para la Construcción, las 
empresas que explotan buques de pabellón estadoun idense pueden aplazar el pago de los impuestos 
federales aplicables a algunos depósitos efectuados en dicho Fondo para construir, reconstruir o 
adquirir los buques con derecho a ello construidos en  los Estados Unidos y documentados con arreglo 
a sus leyes. ¿Podría Estados Unidos informar si una empresa extranjera puede acceder a este beneficio?   
ARGENTINA ADDITONAL QUESTIONS 
 
WT/TPR/S/200, INFORME DE LA SECRETARÍA III. POLÍTICAS Y PRÁCTICAS COMERCIALES, POR MEDIDAS 2) Medidas que afectan directamente a las importaciones i) Régimen aduanero  
Pregunta adicional al párrafo 21, página 31 
 
¿Podrían los Estados Unidos brindar estadísticas a cerca del número de contenedores cuya salida del 
puerto haya sido prohibida lue go de haberse efectuado la inspección en el marco del CSI? 
 
Pregunta adicional al párrafo 29, página 33 
 ¿Podrían los Estados Unidos indicar específicamente los requisitos que deben cumplirse para que un 
país tenga acceso a un acuerdo por el que se reciba n beneficios de la C–TPAT al exportar a los  
Estados Unidos?  4) Otras medidas que afectan a la producción y al comercio v) Derechos de propiedad intelectual relacionados con el comercio Párrafo 269, página 92 (que amplía párrafo 191, página 72):  
En estos párrafos el informe refiere a que la Oficin a del Representante de los Estados Unidos para las 
Cuestiones Comerciales (USTR) realiza anualmente ex ámenes para determinar si en otros países se 
ofrece una protección adecuada y eficaz a la propiedad  intelectual (ello en virtud del “artículo 301 
especial” de la Ley de Comercio Exterior de 1974) . ¿Podrían los Estados Unidos detallar cuál es la 
metodología empleada en la elaboración de estos ex ámenes? ¿Cuáles son los cr iterios aplicados para 
ubicar a los terceros países examinados en las diversas categorías allí establecidas?  IV. POLÍTICAS COMERCIALES, POR SECTORES Panorama General Párrafo 1, página 94  
En este párrafo, el informe se refiere a que “la expiración de la Ley de Agricultura de 2002 y el 
entorno actual, caracterizado por unos precios elev ados de los productos básicos, brindarían la 
oportunidad de introducir cambios en las políticas encaminados a una mayor orientación del sector 
agropecuario hacia el mercado, lo  que redundaría en beneficio tanto de los consumidores como de los 
contribuyentes”. En tal sentido, ¿podrían los Estados  Unidos informar cuáles  serían los cambios que 
introduciría en sus políticas agrícolas para obt ener una mayor orientación hacia el mercado? 
 
2) Agricultura 
iii) Programas de ayuda interna Párrafo 26, página 100  
En este párrafo, el informe menciona que, en la ú ltima notificación de los Estados Unidos sobre ayuda 
interna, los Miembros de la OMC plantearon varias cuestiones en el Comité de Agricultura, entre las WT/TPR/M/200/Add.1 
Page 24  
 
 que cabe citar la calificación de los pagos directos  como correspondientes al “compartimiento verde”. 
Al respecto, los Estados Unidos respondieron que lo s pagos directos cumplen los criterios para su 
inclusión en dicho compartimiento. ¿Podrían los Es tados Unidos explicar detalladamente cuáles son 
los criterios que cumplen los “pagos directos” ot orgados a los productores en el período objeto de 
análisis (2004-2007) para ser calificados como de “caja verde”? ¿Podrían especificar qué productores 
han recibido estos pagos? ¿Cuál ha  sido el período base aplicado hasta 2002? ¿Cuál es el período base 
aplicado en la Farm Bill 2002-2007? ¿Finalmente,  podrían las autoridades de Estados Unidos 
confirmar si siguen vigentes disposiciones que af ectan las flexibilidades de  cultivo y excluyen a 
determinados cultivos para recibi r pagos directos; asimismo, podrían detallar tales disposiciones y los 
cultivos afectados? 
 
En el mismo párrafo, el informe señala que los pagos anticíclicos (PCC) no se refieren a productos 
específicos porque se basan en superficies y rendimien tos históricos y no se exige el cultivo de unos 
productos agrícolas determinados. Sin embargo, ¿podr ían los Estados Unidos explicitar cómo los PCC 
cumplen con el requisito de limitar la producción? ¿Podrían brindar ejemplos concretos, referidos a un 
productor de un producto en particular, entre los cinc o cultivos mencionados en el párrafo 29, de la 
página 101, detallando las siguientes cuestiones:  (i) el período base aplicado, superficie y 
rendimientos en el período objeto de análisis, y (ii)  el nivel de producción y de ingresos del productor 
en el período base y el nivel de producción y de ingr esos del productor en el período objeto de análisis 
(2004-2007)?   3) Minería y Energía iii) Algunas cuestiones Pregunta adicional al párrafo 64, páginas 109-110  
¿Podrían los Estados Unidos informar qué porcentaje de la producción de biodi ésel beneficiada con la 
bonificación fiscal fue exportado? ¿Cuál es el monto del beneficio fiscal recibido por exportadores de 
biodiésel? ¿Qué porcentaje representa el beneficio fiscal del precio f.o.b. de las exportaciones estadounidenses de biodiésel? ¿Qué valores de producción y de bonificaciones fiscales se proyectan para los próximos años?  
5) Servicios 
iii) Servicios Financieros 
Párrafo 152, página 134  
En este párrafo se indica que las principales leyes estadounidenses que rigen los servicios 
relacionados con los valores a nivel federal son la Le y de la Bolsa de Valores Mobiliarios de 1993, la 
Ley de la Bolsa de Valores de 1934, la Ley de  Contratos de Fideicomiso de 1939, la Ley de 
Sociedades de Inversión de 1940, la Ley sobre Ases ores en materia de Inversiones de 1940, la Ley 
Sarbanes-Oxley de 2002 y la Ley de Reforma de  la Estimación Crediticia de 2006. ¿Podrían los 
Estados Unidos informar de qué manera tratan las leyes mencionadas en este párrafo a los “consumidores sofisticados” de servicios relacionados  con los valores? ¿Cómo se define y cómo se 
prueba el carácter “sofisticado” de dicho consumidor? ¿Existen exce pciones a los diferentes requisitos 
de registro de agentes extranjeros para ope raciones realizadas por algún tipo específico de 
consumidor? ¿Existen dispensas en la reglamentación de protección al consumidor contra prácticas engañosas para algún tipo determinado de cons umidor? ¿De qué manera se implementan?  
 
iv) Servicios de Transporte Aéreo 
b) Marco Reglamentario 
Párrafo 166, página 138  
En este párrafo el informe afirma que la Oficin a del Secretario de Tran sporte, dependiente del 
Departamento de Transporte, supe rvisa la formulación de la po lítica estadounidense en materia de 
transporte aéreo. A su vez, la Administración Federa l de Aviación del Departamento de Transporte es  WT/TPR/M/200/Add.1 
 Page 25 
 
 
 responsable de las cuestiones de seguridad, regula la aviación del espacio comercial de los Estados 
Unidos y supervisa a los transpor tistas aéreos estadounidenses y extranjeros que operan en territorio 
estadounidense. ¿Podrían los Estados Unidos inform ar si las empresas de entrega expresa que operen 
aviones propios deben registrarse ante el Departam ento de Transporte y ante la Administración 
Federal de Aviación? ¿Existe alguna diferencia en el tratamiento en cuanto a la autorización y en 
cuanto a la aplicación de medidas para salvaguardar la competencia si el transportista es una empresa 
de carga o una empresa de entrega expresa? ¿De qué manera se diferencia en la regulación la actividad de transporte aéreo de la activid ad de entrega expresa por medios aéreos?  
 
CHILE 
 
Del Informe de la Secretaría (WT/TPR/S/200)  Sección:  III. POLITICAS Y PRÁCTICAS COMERCIALES, POR MEDIDAS 
2) MEDIDAS QUE AFECTAN DIRECTAMENTE A LAS IMPORTACIONES  
vi) Medidas antidumping y compensatorias  
Pregunta 1 En el párrafo 70 se indica que en el caso de trat arse de una economía que no es de mercado, los 
acuerdos de suspensión antidumping podrán combin ar compromisos relativos a los precios con 
elementos adicionales a fin de evitar la contención de  la subida de los precios  o la reducción artificial 
de los mismos. ¿Cuáles son los elementos adicionales a los que se refiere?  Pregunta 2 
En el párrafo 76 se señala que la Aduana puede exigir fianzas mayores a los importadores de mercancías sujetas a un mayor riesgo de incumplimien to. ¿Cuáles son los elementos de juicio en que 
se basa la determinación de riesgo de incumplimiento que permiten la exigencia de mayores fianzas? ¿Existe alguna fórmula que determine el monto de estas mayores fianzas? 
 
Pregunta 3 
Referente a lo que se señala en el párrafo 84, con respecto a los derechos antidumping actualmente vigentes en Estados Unidos. ¿Cuál puede ser la lógi ca de un exportador de est ar dispuesto a efectuar 
dumping no predatorio en plazos que van más allá de 10 o incluso 20 años que  justifique, que Estados 
Unidos mantenga 32 medidas antidumping en vigor dur ante al menos 20 años y 98 durante más de 10 
años? 
 
vii) Salvaguardias 
 
Pregunta 4 
En el párrafo 98 se señala que las importaciones provenientes de países del TLCAN están excluidas 
de la aplicación de medidas de salvaguardia, salvo cuando estas importaciones  representan una 
proporción sustancial de las importaciones total es y se demuestre que  contribuyen de una forma 
importante al daño grave. 
 
En el caso de excluir de una medida de salvaguardia global a los países que conforman el TLCAN, 
¿se toman en cuanta las importaciones provenientes de  estos países en forma separada con el fin de 
evaluar el daño grave?  Pregunta 5 
En el mismo párrafo 98 se indica que según la norma tiva interna de los Estados Unidos, las medidas 
de salvaguardia pueden consistir en aranceles, rest ricciones cuantitativas o contingentes arancelarios, 
licencias de importación u otras medidas. Puesto que una medida de salvaguardia tiene por objeto 
eliminar el daño a la rama de producción naciona l afectada, al aplicar restricciones cuantitativas WT/TPR/M/200/Add.1 
Page 26  
 
 ¿cómo se calculan los contingentes de importación permitidos que evitarán el daño causado por las 
importaciones sujetas a dumping? 
 
4) OTRAS MEDIDAS QUE AFECTAN A LA PRODUCCIÓN Y EL COMERCIO 
ii) Otras ayudas estatales, párrafo 205  
 
Pregunta 6 
En el párrafo 205 se menciona que "Los fabrican tes de productos sujetos a "aranceles invertidos" 
(tipos arancelarios sobre el producto acabado infe riores a los aplicables a su s insumos extranjeros) 
pueden beneficiarse del establecimiento en una zona  franca". Sin embargo en el párrafo 207 se señala 
que cerca del 60% del total del valor de las merc ancías transferidas a zonas francas consistía en 
productos nacionales y que "la mayoría de las importaciones son de petróleo crudo y aceites de 
petróleo, vehículos automóviles y sus partes, productos electrónicos, productos farmacéuticos, 
ordenadores y equipo de oficina, y textiles y prendas de  vestir". Lo anterior daría la impresión que los 
productos con “aranceles invertidos” no serían predom inantes en las mercancías  transferidas a zonas 
francas. Solicitamos una aclaración.  iii) Política en materia de competencia  Pregunta 7 
En el párrafo 209 se menciona que en un info rme de la OCDE se sugiere que la política de 
competencia podría mejorarse aplicando medidas ta les como la terminación de la inmunidad 
antimonopolio de las empresas gubernamentales y la eliminación de las exenciones. ¿Ha contemplado 
el gobierno de EE.UU. disminuir la inmunidad an timonopolio de empresas gubernamentales y reducir 
o eliminar exenciones a la ley antimonopolio?  
 
Pregunta 8 
En el párrafo 216 se indica que la Ley Webb-Pome rene concede una exención limitada de las leyes 
antimonopolio a las asociaciones de empresas competidoras exclusivamente con el fin de realizar 
operaciones de exportación colectiva de mercancías, siempre y cuando esto no dé lugar a una conducta que tenga efectos anticompetitivos en los Estados Unidos o cause perjuicio a los 
competidores nacionales. ¿Se ha considerado los posibles efectos negativos de esta exención en los 
mercados de terceros países?, ¿Se ha estudiado posibles perjuicios a empresas específicas que puedan 
verse enfrentadas a una competencia desleal? 
 
iv) Contratación pública  
 
Pregunta 9 
Se señala en el párrafo 234 que "la Ley de Co mpetencia en la Contratación Pública prevé 
procedimientos simplificados para adquisiciones de poco volumen.  La Ley de  Simplificación de las 
Adquisiciones Federales (FASA) estableció un nu evo umbral simplificado de 100.000 dólares 
EE.UU." Podrían indicar en qué consisten dichas si mplificaciones versus el procedimiento normal. 
 Pregunta 10 
En el párrafo 246 se señala que "La Ley de Pequeñas Empresas (P.L. 85-536) exige en principio que cada contrato cuyo valor previsto sea superior a 2.500 dólares EE.UU. pero inferior a 100.000 dólares 
EE.UU. se reserve exclusivamente a pequeñas empre sas". Esta exigencia estaría sujeta a excepciones 
cuando es contraria al interés público, de modo an álogo a las excepciones señaladas en el párrafo 
242? En caso de no existir estas excepciones, a qué se refieren cuando dicen "en principio"? en caso 
de existir las excepciones, como se compatibiliza el interés publico con la meta descrita en el párrafo 
247 de adjudicar a las pequeñas empresas el 23 por ciento de todos los contratos principales.? 
  WT/TPR/M/200/Add.1 
 Page 27 
 
 
 Sección :  IV. POLITICAS COMERCIALES, POR SECTORES. 
2) Agricultura  
 
Pregunta 11 Párrafo 17:  ¿Existe la intención de reducir los ar anceles NMF aplicados a la agricultura? 
 Pregunta 12 
Párrafo 24: ¿Existe la intención de reducir los obstáculos a la importación para ciertos productos 
agropecuarios como la carne de bovino, los productos lácteos, el azúcar y el alcohol? 
 
Pregunta 13 
Párrafo 30: ¿Existe la intención de modificar la estructura y montos de los préstamos de asistencia a la 
comercialización?, es decir de los pagos anticíclicos.  3) Minería y energía 
 
Pregunta 14 
Párrafo 54:  ¿Existe la intención de mejorar el Marco Reglamentario que rige  el mercado de la 
electricidad, para evitar el alza continua de los precios?  Pregunta 15 
Párrafo 59:  ¿Existe la intención de homogeneizar las ley es estatales sobre regulación de los derechos 
sobre los minerales en las tierras de titularidad pública? 
 
Pregunta 16 
Párrafo 62: ¿Existe la intención de homogeneizar  las leyes estatales sobre las políticas energéticas 
nacionales?  Pregunta 17 
Párrafo 79: ¿Existe la intención de reducir los obstáculos a la importación para los textiles y las 
prendas? 
 
Pregunta 18 
Párrafo 82: ¿Cuáles han sido las conclusiones derivad as de las diferencias con la CE en relación al 
comercio de aeronaves civiles?, en el marco de los Acuerdos de la OMC. 
 
5) Servicios 
 
Pregunta 19 
Párrafo 93: En las reservas NMF, Estados Unidos de scribe que su ley considera reciprocidad para los 
servicios de televisión directa al hogar, los de radi odifusión directa de televisión por satélite y los de 
audio digitales. Quisiéramos saber ¿como lo apli can? Y con respecto a países que también consideran 
reciprocidad en su legislación, ¿como aplican la r eciprocidad? Al existir la posibilidad ya la aplican? 
O el otro país se la debe haber aplicado primero?  
 Pregunta 20 
Párrafo 118: ¿A través de qué mecanismos los organism os de supervisión de lo s mercados financieros 
piensan fiscalizar la capacidad de las empresas para gestionar los riesgos?  Pregunta 21 
Párrafo 131: ¿Existe la intención de modificar  las normativas estatales , relacionada con la 
nacionalidad de los directores de los bancos  nacionales o los miembros del Consejo de 
Administración? 
 WT/TPR/M/200/Add.1 
Page 28  
 
 AUSTRALIA 
 III. TRADE POLICIES AND PRACTICES BY MEASURE (2) MEASURES DIRECTLY AFFECTING IMPORTS (ix) Technical regulations, conf ormity assessment, and standards  
 
1. Australia notes the United States has made ch anges to existing arrangements that result from 
the US Action Plan for Import Safety and the Food and Drug Administration’s (FDA’s) Food Protection Plan.  
• How will these changes: 
 a. be the least restrictive measures required to achieve the desired outcome;  and  b. take into account the record of the exporting country for producing safe and sanitary 
 products? 
 
(4) OTHER MEASURES AFFECTING PRODUCTION AND TRADE 
(v) Trade-related Intellectual Property rights  
 2. The US House of Representatives has introduced legislation that would alter US patent law 
from a "first to invent" to "first to file".    
• What are the implications of this change for users of US patent law? 
 
3. The US House of Representatives has passed a bill that would establish the Office of the US 
Intellectual Property Enforcement Representative in  the Executive Office of the President.  This 
Office would coordinate IP enforcemen t domestically and internationally.   
 
• What are the implications of this legisla tion for how the US enforces IP obligations? 
 IV. TRADE POLICIES BY SECTOR  (2) AGRICULTURE (iii) Domestic programmes 
 
4. Australia notes the continuation and expansi on of farm programs unde r the recent 2008 Farm 
Bill despite historic high crop prices. 
 
• Why is the United States not taking this opportunity  of historic favourable crop prices to reform 
its agriculture sector? 
 
5. The 2008 Farm Bill introduces two entirely new support programmes, the "Average Crop 
Revenue Election Program" and "Supplemental Agricultural Disaster Assistance".   
• If prices return to the levels seen over the lif e of the 2002 Farm Bill, will US agricultural support 
be higher than it would have been if the 2002 Fa rm Bill had simply been extended?  If so, how 
much higher will the support be? 
 6. Australia notes that the 2008 Farm Bill requi res the USDA Secretary to establish the sugar 
overall allotment quantity at not less than 85 per cent of the estimated quantity of sugar for domestic 
human consumption for the crop year in question. Th is allotment quantity is the amount of sugar that 
sugar processors are allowed to market in that crop year.  
  WT/TPR/M/200/Add.1 
 Page 29 
 
 
 • Is such a measure consistent with the principle of national treatment? 
 7. In addition to continuing the nonrecourse loan programme for raw cane sugar and refined beet 
sugar (at higher loan rates) a nd guaranteeing 85 per cent of the dom estic human consumption market 
for domestic production of sugar, th e 2008 Farm Bill also requires th at the USDA Secr etary purchase 
raw or refined sugar or in-process sugar and sell it to bioenergy producers if necessary to avoid the 
forfeiture of sugar to the US government.  
• What would be the effect on the US domestic sugar industry of removing these internal supports?  
What would happen to the volume of imports? Wh at would happen to the world sugar prices? 
 8. Australia notes that the 2008 Farm Bill extends  the dairy import assessment to imported dairy 
products.  
• Is such a measure consistent with the principle of national treatment? 
 
9. Australia notes that the annual average “g reen box” support increased markedly between 
marketing years 2002 and 2005 (paragraph 25 of the Secret ariat’s report refers), a nd that this increase 
mostly reflects higher expenditures on domestic f ood aid, particularly the Food Stamp programme. 
Australia refers to the recent announcement that the United States Department of Agriculture intends 
to purchase up to $50 million of additional pork products to be  distributed as domestic food 
assistance, which was made in response to a request by the US pork industry for assistance for its pork producers.   
• Could the United States detail the criteria that formed the basis for th e USDA’s decision to 
purchase additional pork products? What is the rela tionship between the domestic support that it 
provides for its farmers under the Farm Bill and domestic food aid? 
 
• Please provide details of the expenditure on domes tic food aid under the 2002 Farm Bill, and the 
anticipated expenditure on domestic  food aid under the 2008 Farm Bill? 
 
(v) Food labelling 
 
10. Could the United States confirm that the ma ndatory Country of Origin Labelling (CoOL) 
provision does not require a record-keeping regime that places an administrative burden on importers 
in excess of that applied to domestic participants. 
 11. Australia understands that the intent of CoOL  is the provision of consumer information.  
Please advise of the alternative measures that were considered pr ior to deciding that the proposed 
approach to mandatory CoOL placed the least regul atory burden to meet the objective of consumer 
information. 
 
JAPAN  Report by the Secretariat (WT/TPR/S/200)  
III. TRADE POLICIES AND PRACTICES BY MEASURE 
(2) MEASURES DIRECTLY AFFECTING IMPORTS 
(i) Customs procedures 
(Question 1: page 25-26, paragraph 18 -19 (24-hour rule, “10 plus 2” rule)) 
 
As a part of initiatives for counter-terrorism, the Un ited States has enforced regulations implementing 
an electronic presentation of cargo information in  advance under the Trad e Act of 2002, and has WT/TPR/M/200/Add.1 
Page 30  
 
 obligated the submission of the manifest of the in ternational sea container bound for the United States 
to the U.S. customs authorities no later than 24 hour s prior to loading. As a result, the deadline for 
delivery of containers to the yard, which had been commonly set around 24 hours prior to loading, has 
been changed to 48 hours. This has decreased efficiency of distribution imposing huge burden to the 
operators including those with excellent compliance record. 
 
In addition to this, the so-called “10 plus 2” rule, which will require  importers to report 10 additional 
data elements and carriers to repor t 2 additional data elements, will  be implemented and may require 
even longer lead time.  
We know that Customs and Border Protection (CBP ) has received a high number of public comments. 
We request the U.S. to ensure that the rule does not  disrupt the smooth flow of trade, by listening to 
the views of industries when the rule comes into ope ration, and by giving careful consideration to the 
public comments including the comment submitted by  the government of Japan. The government of 
Japan requests the Government of the United Stat es to make efforts to both secure and facilitate 
global trade, such as consideration of allowing fo r flexible implementation (such as extension of a 
deadline) to the Customs-Trade Partnership Ag ainst Terrorism (C-TPAT) participant from the 
perspective of providing clearer benefits to the C-TPAT.  
Please explain specific view of the U.S. on this matter. 
 
(Question 2: page 27, paragraph 24 (100% Container Scanning)) 
 
“Implementing Recommendations of the 9/11 Commi ssion Act”, enacted on August 3, 2007, contains 
provisions that require scanning of all U.S. bound ca rgo containers in principle before loading on a 
vessel at foreign ports on or after earlier of July  1, 2012. The provisions ar e inconsistent with the 
Framework of Standards which espouses the risk management approach adopted by the World 
Customs Organization (WCO). The Government of Japan has concerns that the provisions, depending on how it would be implemented, c ould severely disrupt the flow of goods into the United States from 
the rest of the world including Japan and all WT O members, and may cause a tremendous damage on 
international economic activities as a whole. This is al so a relevant issue from the perspective of trade 
facilitation discussed in the current WTO negotiations. For this reason, not only Japan but also other 
countries, even relevant bodies in the U.S., have expressed their opposition to the provisions. 
 While the Government of Japan fully understands th e importance of counter-te rrorism measures, it is 
also important to implement security measures in a way that does not undermine the smooth flow of 
goods. Therefore, the Government of Japan requests the Government of the United States to ensure 
that the aforementioned requirement does not disrupt smooth trade. The Government of Japan 
requests the Government of the U.S. to accurately  incorporate the opinions shown by each country 
and the real issue in the report to be presented to the congress based on the pilot project on 100 percent scanning under the Secure Freight Initiative. Si nce it is important for private sector to invest 
and establish an international supply chain from a l ong-term standpoint, we request the U.S. to secure 
predictability. The Government of Japan also requ ests the Government of the U.S. to continue 
constructive dialogue with relevant countries and to  give further consideration, based on the shared 
recognition to ensure a secure and facilitating global supply chain.  
 In this light, please provide the detailed plan of the U.S. government on how to avoid possible damage 
on international economic activities caused by the 100 percent scanning requirement for U.S. bound 
cargo containers.  WT/TPR/M/200/Add.1 
 Page 31 
 
 
 (ii) Customs valuation 
(Question 3:  page 29-30, paragraph 35-39 (Sim plification of the Special Marking Requirements 
of Origin for Watches and Clocks)) 
 
When importing watches and clocks in Chapter 91 in  HTSUS into the United States, all movements, 
cases, and bands are required to have the special ma rking of origin in Additional U.S. Note 4 to 
Chapter 91 in HTSUS and detailed requirements s tipulate how this special marking must be 
performed. 
 The government of Japan has long requested the G overnment of the United States to quickly work 
towards a simplification of the special marking require ments of origin. However, Japan is of the view 
that the special marking requirements of origin have not been improved. 
 
Although Japan appreciates that the United States accepted the use of indelible ink for the marking of origin in 1999, Japan can not agree with the ass ertion of the United States Government that its 
country-of-origin marking requirements are clear and simple as drafted.  
Japan believes that the country-of-origin marking on  the finished products of watches and clocks is 
sufficient enough not only for customs clearance purposes, but also for consumers information 
purposes.   In this regard, please indicate specific views of the U.S. Government.  (Question 4: page 32, paragraph 46 (Simplification of the Tariff Calculation Structure for Watches and Clocks ))  
The structure of calculating tariffs on watches and clocks in Chapter 91 in HTSUS is complicated, 
with separate tariffs stipulated for movements, cases, and bands, and tariffs on movements set at a 
fixed rate while tariffs on other parts are set at  ad valorem. Because of this complexity, the 
Government of Japan has long asked the Government  of the United States to quickly work towards a 
simplification of the tariff calculation structure. Ho wever, Japan has a view that the tariff calculation 
structure has not been improved.  The obligation to indicate the prices of individua l parts used for digital watches on invoices was 
eliminated when tariffs on digital watches were eliminated. Based on this, the Japan asserts that the 
tariff calculation structure and the special marking re quirements of origin for watches and clocks are 
linked, and that the complicated special marking requ irements of origin for watches and clocks would 
become unnecessary if the tariffs on watches and clocks were eliminated.   
As such, Japan would like to know the views of the United States regarding when its tariffs on 
watches and clocks can be eliminated.  
(vi) Anti-dumping and countervailing measures 
(Question 5: page 38, par agraph 77-78 (Byrd Amendment)) 
 The Byrd Amendment was found to be inconsistent  with the WTO Agreement in January 2003, and 
was finally repealed in February 2006. However, revenues from anti-dumping duties on goods 
imported to the United States before October 1, 2007, would continue to be distributed among the 
relevant parties under the transitional provision of the Deficit Reduction Act of 2005. This means that 
although the Byrd Amendment was nominally repealed, it continues to stay in effect. Therefore, the 
inconsistency with the WTO Agreement remains at  present even after the repeal of the Byrd 
Amendment. The Government of Japan strongly re quests the Government of the United States to WT/TPR/M/200/Add.1 
Page 32  
 
 promptly halt the distribution of revenues under the Byrd Amendment and to resolve the 
inconsistency with the WTO Ag reement on this issue.   
 
In this respects, please indicate the specific view  of the Government of the United States.  
 
(Question 6: page 41-42, paragraph 91-92(Zeroing)) 
 
The Government of Japan requests the Government of the United States to promptly abolish the use 
of “zeroing” in all anti-dumping procedures including administrative reviews.   
(1) What is the U.S. view on this issue? 
 (2) In this regard, please explain the progress of implementation of the DSB recommendations 
and rulings adopted in 23 January 2007 towards abol ishing the use of zeroing in the procedures other 
than the W-to-W comparisons in the original inves tigation, i.e., periodic review, sunset review, etc. 
 (Question 7:  page 41, paragraph 90-91 (“All Others Rate” Provision )) 
 
The DSB adopted its recommendations and rulings that found the United State’s statutory provision 
regarding the “all others” rate to  be inconsistent with the Anti- Dumping Agreement in August 2001, 
over six years ago. Although the U.S. took certain  measures to implement part of the DSB 
recommendations, the remaining part of them has not been implemented yet. If left untreated, since 
the provision in question could be applied to new anti-dumping investigations in the future 
inconsistently with the WTO Agreements, the Gove rnment of Japan requests the Government of the 
United States to amend such provision in order to  implement the DSB recommendations immediately. 
A full and prompt implementation of the DSB’s recommendations and rulings is essential to the 
effectiveness and credibility of the WTO dispute settlement system.   
Japan would like to ask the U.S. what steps it intend s to take to complete full implementation in this 
Congress and when the steps will be taken.  (3) MEASURES DIRECTLY AFFECTING EXPORTS (ii) Export restrictions and controls (Question 8: page 57, paragraph 173 
 Japan, as one of the major countries importing wood pr oducts, is concerned about the restriction of 
log export by the U.S. We have understood that the statutes are indicated in the following table, 
regarding the ban on the export of timber by the Un ited States. However, according to the Secretariat 
report, only unprocessed “western red cedar” is restricted and there is no explanation about the 
logging area.  
 
Thus, we would like to ask about three points as follows: 
 
(1) Please confirm whether the contents of the table concerning the ban on the export of timber 
are correct or incorrect. We would like to know mo re about the latest information on the related 
statues.  
 (2) According to the report by the Secretariat, the unprocessed western red cedar always requires 
an export license. Please provide the information on the prescript about the license, including the 
criteria for judgment of license. 
 
In the previous TPRs, the U.S. has explained to Jap an that “the purpose of the statute is to provide 
relief for shortages of unprocessed timber suppli es, which is consistent with Article XI:2( b) of the  WT/TPR/M/200/Add.1 
 Page 33 
 
 
 General Agreement on Tariffs and Trade 1994.” Ho wever, we consider that the Article XI: 2( a) may 
be referred to. If so, we understand that the phrase ”critical shortage” of the Article XI: 2(a) should 
not mean a general situation but refers to shortages of crops, etc. in cases such as famine (E/PC/T/C.II/36, p.9). The restrictions should be a pplied only “temporarily” in order to manage such 
an emergency. We also understand that the expor t restriction should not be used as a means of 
protection (E/PC/T/A/PV/19 page44). In contrast, we consider the current statutes of the U.S. may fall 
into a regulatory scheme for quantitative restrictions strictly, which is prohibited under Article XI of 
the GATT 1947, as the U.S. maintains “short supply control” for several years, not just temporarily, and the purpose of this regulation is  to protect domestic saw millers. 
 
(3) In this regard, please indicate specific view  of the U.S. Government on this matter.   
 
Table:  Current Status of Ban on the Export of Timber from the United States 
Title and/or type of restriction Locational prescript Application 
period Coverage 
Ban on the export of unprocessed timber 
(MSG of DG of Forest Service) Federal lands of Alaska managed 
by the Forest Service 1928~ 
- Ban on the export of unprocessed timber 
- Ban on direct substituti ng export of unprocessed 
   timber harvested in private land (supplement of 
  appropriation act) 1974~ 
- Ban on the export of unprocessed timber 
  (permanent) 
- Restriction on indirect  substituting export of 
  unprocessed timber harvested in private land Federal lands located West of the 
100th meridian in the continental 
U.S., except Alaska 
1990~ 
- Export prohibition or re striction on unprocessed 
  timber according to the sales scale State lands located West of the 
100th meridian in the continental 
U.S., except Alaska 1990~ Logs (including Cants 
of thickness over 8 ¾ inch)? 
- Short supply control (expor ban on Western Red   Cedar Federal and state land except 
Alaska and Indian Territory 1979~  
 
(iv) Government procurement 
(Question 9: page 70-71, paragraph 241)  
Concerning the Buy American Act (BAA) of 1933, the Trade Agreements Act of 1979 authorizes the 
President to grant waivers from the BAA and other procurement restrictions.  Then the President delegated this authority to the USTR.  The Government of Japan is still concerned about 
discriminatory regulations of the BAA and other ru les which require the U.S. Federal Government 
agencies to limit government procurement of forei gn products and services. The Government of Japan 
requests the U.S. Government to ensure equa l business opportunities for both U.S. and foreign 
suppliers, in accordance with the principle of non-discriminatory treatment in government 
procurement.   Please explain specific view of the U.S. Government on this point.  (v) Trade-related intellectual property rights (Question 10: page 75, paragra ph 259 ("First-to-Invent" system)) 
 
The United States is the only country to use the "fir st-to-invent" system, which, with regard to the 
patent system, makes the United States rather uni que. This system, however, lacks certainty and 
predictability in the sense that a patentee’s status can be overturned by the appearance of the prior 
inventor afterwards. This will provide extra burden to inventors who are required to prepare and keep 
documentary evidence to prove the date of inventio n. Many countries, including Japan, have pointed 
out that this issue creates a barrier for foreign co mpanies when trying to penetrate the U.S. business 
community. Although the practice of maintaining the first-to-invent system is not necessarily against 
the TRIPs Agreement, Japan again requests the United States to adopt the first-to-file system and also 
to improve all aspects of the patent systems that rest rict trade in the United States. This is due to the WT/TPR/M/200/Add.1 
Page 34  
 
 necessity of maintaining a transparent and stable system, as well as reducing the burdens borne by 
users through the difference in systems.    Please explain specific view of the U.S. on this point.  (Question 11: page 75, paragr aph 259 ("Submarine patents")) 
 
The early publication system in the United States provides exceptions whereby patent applications 
filed in the United States, but not filed overseas, or ma tters included in a patent application filed in the 
United States, but not included in the corresponding application filed overseas, can be made 
undisclosed at the request of the applicant. It is, th erefore, possible for a patent application to become 
a "Submarine Patent". Without knowing whether or not another application is already on file for the 
same invention, this system creates serious soci al and economic loss due to investments in R&D. 
 Japan strongly requests the United States to implem ent fully and promptly what has already been 
confirmed under the Framework Talks, i.e. by abolishing the exceptions from the early U.S. 
publication system, and by publishing all applications  except those not pending, or those not able to 
be laid open, after a period of 18 m onths from the earliest filing date.  
 Please explain specific view of the U.S. on this matter. 
 
(Question 12: page 75, paragraph 259 (Priority in the Paris Convention (In re Hiler)) 
 
The "Hilmer" doctrine exists in the United States. Fore ign applicants usually file applications, first in 
their own country and subsequently in the United States, thereby claiming priority under the Paris 
Convention. Due to the "Hilmer" doctrine, such fo reign applicants cannot prevent the patent grant 
from conflicting with applications filed before the act ual filing date of any subs equent applications in 
the United States, even during the priority pe riod, and thereby may suffer disadvantage.  
Please explain specific view of the U.S. on this point.  (Question 13: page 75, paragraph 259 (Language Discrimination in International Applications 
under the PCT))  
Article 102 (e) of the Patent Act provides that PCT international applications have the effect of 
eliminating subsequent applications since the in ternational filing date, only when the application 
primarily designates the United States and is pub lished in English intern ationally.  When PCT 
international applications are publishe d in other languages internationally, they do not have the effect 
of eliminating subsequent applications. Thus, Ar ticle102 (e) is discriminatory against other languages 
than English. In Japan and Europe, internationa l applications are not discriminated by language. 
Therefore, it is unfair that the same treatme nt is not guaranteed in the United States. 
 
The limitation of effects of eliminating subsequent  application by Article 102 (e) narrows advantage 
of moratorium on submitting translations under the PCT system, and is significantly disadvantageous 
to applicants, who need to translate documents in to English. The Government of Japan requests the 
Government of the United States to abolish the language discrimination based on Article 102 (e). 
 
Please explain specific view of the U.S. on this matter.  
(Question 14: page 75, paragraph 259 (Unity of invention)) 
 Under the current U.S. patent system, the scope of inventions that can be included in a single 
application, is narrower than that under the sy stems of the Japan Pate nt Office (JPO) and the 
European Patent Office (EPO), according to what we have been requested so far. Thus, a patentee is 
obliged to submit multiple applications, thereby increasing the burden. The Government of Japan  WT/TPR/M/200/Add.1 
 Page 35 
 
 
 wishes to repeat its request to the Government of th e United States to adopt the same criterion for its 
unity of invention as that of Japan and Europe.  What is the U.S. view on this matter?  (Question 15: page 75, paragraph 259 (Infor mation Disclosure Requirement of Prior Art 
Documents)) 
 
All applicants for the United States patents ought to disclose important prior art documents to the U.S. 
Patent and Trademark Office (USPTO) as far as they know until they obtain patents. In addition, they 
ought to submit English translation of prior art docum ents as a whole or in part, in case the documents 
are not in English. The Government of Japan reque sts the Government of the United States to take 
measures to reduce the burden on fore ign patent applicants, including eliminating the requirement to 
submit English translation and shortening the pe riod of the information disclosure requirement.  
 
Please explain specific view of the U.S. on this matter. 
 
(Question 16: page 75-76, paragraph 263 (Omnibus Appropriations Act)) 
 
Please indicate the prospect for the amendment of  the Section 211 of the Omnibus Appropriations 
Act.  
IV. TRADE POLICIES BY SECTOR 
(2) AGRICULTURE 
(iii) Domestic programmes (Question 17: page 84, paragraph 26)  
(1) Please explain the view of the U.S. Govern ment on how to categorize programs for domestic 
support into green box, blue box and amber box under the WTO Agriculture Agreement. The 
programs are the marketing assistance loan program, direct payment program, CCP (Counter Cyclical 
Payment) program and the newly created ACRE (A verage Crop Revenue Elect ion) program included 
in the new Farm Bill which was recently approv ed in both the U.S. Senate and the House of 
Representatives.  
In particular, Japan understands that the values of counter-cyclical payments are based on historical 
acreages and yields, as well as market prices.   
 
(2) Please explain whether one set of price uniformly is used regardless of states, or whether differentiated prices are used depending on the states or counties. 
 
(3) In either case, please explain whether the level of payment for each crop is related to the price 
of the crop differing every year.  
(5) SERVICES 
(ii) Telecommunications and related services  
(Question 18: page 98-99, paragraph 95)  
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 organized under U.S.  laws, or foreign governments, whilst at the 
same time, under Section 310(b)(4), licenses may be gr anted to companies organized in the U.S. that 
are controlled by holding companies organized in  the U.S. and in which foreign individuals, 
corporations, or governments own of record or vot e more than 25% of the capital stock, unless the 
FCC finds that such ownership is inconsistent wi th the public interest. Japan has maintained its WT/TPR/M/200/Add.1 
Page 36  
 
 position that the United States should eliminate its fo reign ownership rule applicable to all radio 
licenses for the purpose of operating telecommunica tions businesses stipulated in Section 310 of the 
Communications Act of 1934, as amended.  Please explain specific reason why the U.S. Government  maintains an upper limit of 20% to direct 
foreign ownership in FCC radio licenses for common carriers, while at the same time, allowing up to 
100% to indirect foreign ownership in FCC radi o licenses for common carriers (unless the FCC finds 
that such ownership is inconsistent with the public interest).  
(Question 19: page 99, paragraph 97 (Exp editing Processing Time for Section 310 
Authorization)) 
 
The Secretariat report notes that the processing time for applications takes from 14 days for routine 
authorizations to one year or lo nger depending on the complexity of each case. Japan believes that 
grasping the length of the processing time in advance is a critical element of the management strategy 
for operators wishing to enter the U.S. market. 
 What measures can be taken by the U.S. to expedite the aforementioned process?  
(Question 20: page 99-100, paragraph 98-99 (Consideration on the International Settlements 
Policy (ISP)) 
 The Secretariat report notes that the FCC is reviewin g certain requirements of the ISP to be removed.  
 Japan would welcome detailed explanati ons on such considerations, if any. 
 (iii) Financial services (Question 21: page 110-112, paragraph 138, 139,  145-148 (Harmonization and Unification of 
State-Based Regulatory Systems or Transi tion to the Federal Regulatory System)) 
 
Due to the state-based insurance regulation and superv ision in the U.S., foreign insurers who wish to 
conduct an insurance business in the U.S. are require d to obtain business licens es in each state where 
they wish to operate as well as are required to comp ly with supervisory regulations set by each state's 
authorities.  We are aware that even in the U. S., the U.S. Chamber of Commerce and insurance organizations such 
as American Insurance Association (AIA) and Ameri can Council of Life Insurers (ACLI) are pointing 
out problems with the current state-based regulations. In addition, there is an initiative in Congress (in 
both houses) to promote a National Insurance Ac t of 2007, which introduces the Optional Federal 
Charter (OFC) (in the harmonization and unification of the state-based regulations, for instance, including a measure under which an insurer who h as obtained license of a particular line of business 
or approval of a new product in one state is deem ed authorized to conduct the same line of business in 
other States). 
 
Japan takes note of the National Association of In surance Commissioners’ (NAIC) efforts to achieve 
uniformity among states' regulatory regimes and welcom es that the Treasury Department proposed the 
introduction of the OFC in the Blueprint for a Stronger Regulatory Structure published in March 
2008. 
 
However, the harmonization and unification of th e state-based insurance regulations including 
procedures for license and approval has not been realized.   “Blue print on financial sector”, announced by U.S. treasury on 31 March, should be included, since it 
has significant effects on the U.S. financial services system.  WT/TPR/M/200/Add.1 
 Page 37 
 
 
 Based on these developments, it would be appreciated if the Government of the United States 
provides an explanation to Japan’s comments as follows:  (1) The Government of the United States shoul d effectively promote the harmonization and 
unification of the state-based insurance regulations, or to introduce the OFC; and, 
 
(2) The Government of the United States should play a role in promoting the effective harmonization and unification of the state-based regulations or the shift to the federal regulatory 
system, in order to actively work on the state insurance regulatory authorities, and to present the 
Government of Japan with a practical timeline of these reforms. 
 
(Question 22: page 110, paragraph 140 (A bolition of Trusteed Surplus Requirement)) 
 
Under the state-based insurance regulatory system, the Trusteed Surplus Requirement is imposed on 
the branches of foreign insuran ce companies in the United States. This regulation requires the 
branches of foreign insurers to hold their majo r assets, which consist of deposits to the State 
authorities and Trusteed Assets, exceeding their net liability at banks or trust companies within the 
United States.  This requirement means that the branches of fore ign insurance companies have a substantial portion 
of their assets held under deposit, hampering their expeditious fund investments and causing a loss of 
investment opportunities to gain profits. This is a di scriminatory regulation in that it imposes a greater 
burden on the branches of foreign insurance co mpanies than on the Stated-based insurance 
companies.  Therefore, it would be appreciated if the Governme nt of the United States provides an explanation to 
Japan’s comment as follows:  
 The Government of the United States should abolish the Trusteed Surplus Requirement discriminatory to foreign insurance companies.  
(Question 23: page 110, paragraph 143 (Elim ination of Reinsurance Collateral Requirement)) 
 Under the current reinsurance regulations of the U.S ., foreign (re)insurers are required to post a trust 
account equivalent to 100 percent of the credit am ount within the country, or to submit a letter of 
credit for collateral, when they conduct rein surance businesses with U.S. ceding companies on a 
cross-border basis. These requirements impose unf airly heavy burden on overseas insurers in 
reinsurance business in the U.S. 
 Japan is aware that the introduction of a system which determines colla teral requirements according to 
the company’s credit rating has been discussed by NAIC, but the discussion has not made much progress. In the rapidly globalizing reinsurance mark et, the U.S. is recognized as the only developed 
country where such practice exists. The U.S. make s commitments on cross-borde r trade in reinsurance 
and explains that these requirements are for prudent ial reasons in the previous TPR.  However, this 
regulation is heavily burdensome for overseas in surers who conduct cross-border reinsurance 
businesses, and substantially reduces the interest to do so. 
 
Therefore, it would be appreciated if the Governme nt of the United States provides an explanation to 
Japan’s comments as follows:  (1) The Government of the United States should eliminate or relax these collateral requirements 
that impose unfairly heavy burdens on overseas insurers  in order to ensure th at Japanese (re)insurers 
not be discriminated against;  and,  WT/TPR/M/200/Add.1 
Page 38  
 
 (2) The Government of the United States should present a practical timeline for a review of the 
existing collateral requirements, paying due atten tion to ensuring that foreign (re)insurers not be 
discriminated against under the revised system.  
(v) Maritime transport 
(Question 24: page 119, paragraph 176) 
 
As stated in the report by the Secretariat, th e U.S. has not made any commitment on Maritime 
Services Sector, although the U.S. is the largest cargo country. Furthermore, negotiation based on the 
“Annex on Maritime Transport Services” has been  stagnating, due to divergent views over 
international shipping, auxiliary service a nd access to and use of port facilities.  
 Please indicate specific plan to exercise flexibility  in these issues, and thus to facilitate the 
implementation of the Annex.  (Question 25: page 119, paragraph 177, page  120, paragraph 182 (Sanction by the FMC)) 
 
The Federal Maritime Commission (FMC) is authorized  by Section 19 (1) (b) of the Merchant Marine 
Act of 1920 (the Jones Act) to make rules and regul ations affecting shipping in foreign trade.  The 
FMC imposed a unilateral sanction against Japan ese carriers in September 1997.  Although the 
sanction was removed in May 1999, the FMC still requires carriers to report to it on the situation of 
the ports in Japan. The rule (rep ealed in May 1999), which provide d grounds for unilateral sanctions, 
was a violation of the Treaty of Friendship, Co mmerce and Navigation between Japan and the United 
States, which provides each other's ships with natio nal treatment and most-favored-nation treatment.  
Japan, therefore, requests the U.S. to work more cl osely with the FMC to ensu re that such unilateral 
measures will no longer be taken.  Japan is concerne d about the impact of the Jones Act and any other 
related legislation on shipping trad e, and submitted a list of questions  (WT/GC/W/520) at the Review 
of the General Council last December.  (1) Japan would appreciate if the U.S. could pr ovide information about the current situation 
regarding the responses to the questions.  
Since the repeal of the above-mentioned rule, the FMC requires Japanese and U.S. carriers to report to 
it on the progress of port situations in Japan.  Effort s have been made and signs of progress have been 
seen in various aspects. The "prior consultation sy stem" has improved significantly (and the improved 
system has been implemented steadily); the Port Transportation Business Law was revised to abolish 
the supply-demand adjustment restriction and thus  has realized new entries into port transport 
business; progress has also been ma de toward the introduction of port terminal service operations on 
the 24-hour/364-day basis.  Japan strongly reque sts the FMC to fully understand these positive 
developments.  Despite significant improvement in the port situation of Japan, the FMC introduced in 
August 2001 a new order, which not only increased th e number of items to be reported, but also 
expanded the scope of the carriers subject to the reporting requirements.  The order includes 
requirements which go beyond the extent deemed appropriate to impose upon carriers, such as 
directly requiring Japanese carriers to submit translat ed copies of the Japanese laws and instructions 
concerned.  Thus, the order has been causing unfai r and excessive burdens on carriers. Should it be 
the case that the FMC decided to expand the range of the reporting requirements in order to judge 
whether or not it should impose unilateral sanctions , this would violate the Treaty of Friendship, 
Commerce and Navigation between the United States and Japan, and Japan would recognize it as a 
regrettable and serious abuse of the FMC's mandate . Japan, therefore, strongly requests the U.S. to 
withdraw the order.  
(2) Please explain specific view of the U.S. on this matter. 
  WT/TPR/M/200/Add.1 
 Page 39 
 
 
 (Question 26: page 119, paragraph 178, page 121, paragraph 184 (Cargo Preference Measures) 
 
The United States is the largest cargo owner c ountry.  The cargo preference laws generated over 
10 million revenue tons of cargo and US$1.3 billion of  ocean freight revenue in FY2006.  The amount 
of cargo for cargo reserva tion is not negligible. 
 
Japan requests the U.S. to abolish the Cargo Prefer ence Measures, such as the requirement to use the 
U.S. vessels for the export of Alaskan oil, wh ich is nevertheless commercial cargo.  These 
protectionist measures are inconsistent with the pr inciple of national treatment, and are also against 
the Ministerial Decision on the Negotiations on Ma ritime Transport Services of the WTO, which 
prescribes that participants should not apply an y protectionist measures during the negotiations. 
Please explain specific view of the U.S. on this matter.  
(Question 27: page 119, paragraph 178 (Construction Requirement on Cargo Services)) 
 
To supply cargo services between two points in the Unite d States is reserved for the ship built in the 
United States. Japan requests the Un ited States to abolish such a re quirement. Many people will agree 
that military aircraft should be constructed in th e U.S. for security reasons. But civil airlines are 
allowed to operate aircrafts made in foreign co untries. Domestic railway companies and road 
transport operators are allowed to use trains  or trucks made in foreign countries.  
 
Japan would like to know the reason why the U. S. government imposes construction requirements 
only on maritime transport.  
(Question 28: page 120, paragra ph 180 (Ocean Shipping Reform Act)) 
 
The Ocean Shipping Reform Act of 1998 includes a provision allowing the discriminatory treatment 
of Japanese and other foreign shipping firms, by making it possible to impose unilateral regulations on pricing and other practices. As the pricing prac tice is the foundation of a free shipping activity on a 
commercial basis, unilateral regulations by the FMC on the pricing practice obviously intervenes in 
such free shipping activity, thereby, discriminating foreign firms. Furthermore, an amendment to the 
Act in 1998 explicitly stipulates the right of the Fede ral Government to make this intervention. Japan 
requests the U.S. to confirm that in the future the FMC shall not impose unilateral regulations on 
shipping activities on a commercial basis, conducted by Japanese and other foreign shipping firms, 
which do not reflect the reality of the market.  Please explain specific view of the U.S. on this matter. 
 
(Question 29: page 120, paragraph 183 (Maritime Security Program)) 
 
The Maritime Security Program was extended for another ten years in October 2005, with the 
increased amount of subsidies (US$ 1.73 billion) a nd the increased number of ships subsidized (60 
ships). The Government of Japan requests the Go vernment of the United States to abolish the 
Program. It is obvious that a provision of such an enormous amount of subsid y distorts conditions for 
free and fair competition in the international maritime market. 
 Please explain specific view of the U.S. on this matter.  (Question 30: page 122, paragraph 190 (Maritime Transport Security Act))  
The Maritime Transport Security Act of 2002 has en acted to enhance maritime security.  Japan also 
recognizes that “Implementing Recommendations of  the 9/11 Commission Act” enacted in August 
2007.  This act contains provisions that require sca nning of all U.S. bound car go container in principle WT/TPR/M/200/Add.1 
Page 40  
 
 before loading on a vessel at foreign ports on or  after earlier of July 1, 2012.  The provisions, 
depending on how it would be implem ented, could severely disrupt the flow of goods into the United 
States from the rest of the world including Japan. Japan  requests the U.S. to d eal carefully with this 
act in order to avoid disrupting smooth trade. 
 
Please explain specific view of the U.S. on this matter. 
Report by the United States (WT/TPR/G/200) 
 
IV. TRADE POLICY DEVELOPMENTS SINCE 2006 (2) REGIONAL INITIATIVES 
(vi) The Enterprise for ASEAN Initiative (EAI) 
(Question 31: page 16, paragraph 61)  
Japan is of the view that the engagement of th e U.S. in Asia is significantly important for the 
prosperity in the Asia-Pacific region.   
 
(1) Does the U.S. have any plan to launch new economic initiatives in this region?   
 Japan is aware that the U.S. is negotiating FTA in several sectors with the ‘P4’ (Brunei, Singapore, 
New Zealand and Chile).   
(2) How does the US foresee its engagement in the Asia-Pacific region? Does this attempt of 
negotiation constitute a bigger picture of the U.S. engagement in the Asia-Pacific region?  
(viii) Enhancing Transitional Economic Relations 
(Question 32: page 16, paragraph 64 (U.S.-EU Summit)) 
 
(1) Please update on the developments of th e Transatlantic Economic Council (TEC). 
 (2) Please explain how the U.S. Government foresees the evolution of this transatlantic 
cooperation in future.  
 
(Question 33: page 17, paragraph 65-72 (Afr ican Growth and Opportunity Act (AGOA))) 
 
The application of the textile and apparel provisi ons of the AGOA, which offers duty-free and quota-
free treatment for apparel made of third-country ya rns and fabrics in a designated lesser developed 
country, has been extended until 2012. These provisions  promote export of yarns and fabrics from the 
third countries, including the US, to Africa. Ho wever, after the expiration of the Multi Fabric 
Agreement, many apparel articles made in China floo ded into the US market, and apparel industries in 
Africa were seriously damaged.  
 
Does the US Government believe that the Act is s till contributing to the development of the African 
industry?  (x) United States-Colombia Trade Promotion Agreement VI. LEGISLATIVE AGENDA (Question 34: page 21, paragraph 93 (U.S.-Colo mbia FTA), page 24, paragraph 111 (U.S.-Korea 
FTA)) 
 (1) How does the U.S. government expect the approval of U.S.-Korea FTA by the Congress? 
 In a recent Congress debate, the House passed the r esolution deciding not to discuss U.S.-Colombia 
FTA, although this agreement was concluded within  the valid period applicable to the Trade 
Promotion Authority (TPA).   WT/TPR/M/200/Add.1 
 Page 41 
 
 
 (2) How does U.S. government see this resolution affects the significance of the TPA, which 
allows the administration to further promote tr ade negotiations? It seems  that this resolution 
undermines the expected role of the U.S. as one of the promoters for free trade.  
FOLLOW UP QUESTIONS BY 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 taken by  the U.S. on the basis of the results from the pilot 
project. We would also appreciate the sharing of the results of the pilot project.  
Regarding the answer for Japan’s Question 17 (Domestic programmes) 
 
We have received the answers re garding the old Farm Bill. We would now like to touch upon the new 
Farm Bill. Japan recognizes that the U.S. administra tion is concerned that the Farm Bill, which was 
passed by the U.S. Congress and enacted on 22
nd May, is going against the directions discussed in the 
current WTO negotiations on agriculture . President 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.  
Japan is also concerned about the promotion of bio- ethanol 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. 
 
BRAZIL 
 
A – Rules  
“In light of the most recent ruling by the appellate body in the case “United States final anti-dumping measures on stainless steel from Mexico” (ds 344), wh ich further consolidates the case-law against 
the practice of “zeroing”, does the United States in tend to conduct a review of its anti-dumping 
legislation and practices as regards this matter? More specifically, does the US Department of Commerce intend to end the use of “zeroing” in periodic reviews?” 
 
“Paragraph 76, page 37, of the document ‘wt/tpr/ s/200’ informs that in addition to regular bond 
requirements, United States customs ‘may requi re enhanced bond amounts from importers of 
merchandise subject to increased default risk’.  cco rding to a report by the ‘government accountability 
office’ of the United States Government dated march 2008 (report gao-08-391), four products are 
responsible for 84% of the total amount of uncollected antidumping or countervailing duties: crawfish 
tail meat, garlic, honey, and mushrooms. Also , according to the report, the enhanced bond 
requirement has only been imposed to one product, shrimp, ‘which has little hi story in terms of duty 
collections’. given these circunstances, how does the United States justify imposing the enhanced 
bond requirement on shrimp importers? How does it justify imposing the enhanced bond requirement 
on shrimp importers and not on the importers of th e four products that account for 84% of the total 
amount of uncollected duties?”  “Paragraph 43, page 88, of the document ‘WT/TPR/S/ 200’ informs that in the context of its last 
review, the United States indicated that the administration was working with the Congress on 
legislation to repeal the statutory fee cap of 1% of  the guaranteed value of the transaction that applies 
to guarantees issued under the GSM 102 program. What  is the current status of the work conducted WT/TPR/M/200/Add.1 
Page 42  
 
 with Congress? Has there been any modification in the legislation or any new proposal submitted to 
the congress on this matter?”  (B) Intellectual Property:  
Regarding paragraph 12 (Chapter III, p.24), could the US identify the main TRIPS-plus provisions 
present in their Free Trade Agreements?  Regarding paragraph 260 (Chapter III,  p.75), could the US clarify the expression "partially  exclusive 
license", and how it would differ from a "non-exclusive license"? 
 
Regarding paragraph 260 (Chapter III, p.75), could the US provide inform ation on other legislation, in 
addition to the Atomic Energy Act and the Cl ean Air Act, enabling US authorities to grant 
compulsory licenses? If so, could the US provide  information on compulsory licenses eventually 
granted under other legislation, besides the Atomic Energy Act and the Clean Air Act? 
 
Regarding paragraph 262 (Chapter III, p.75), c ould the US provide detailed information on rule 
change proposals issued recently, aiming patent quality improvement?  
CHAPTER III - TRADE POLICIES AND PRACTICES BY MEASURE 
(2) MEASURES DIRECTLY AFFECTING IMPORTS 
(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? 
 
Page 31, paragraph 46, Table III.2 
 
The Table III.2 shows that tariff quotas (% of all ta riff 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? 
 
Approximately 10.7% of all US tariff lines are subject  to non-ad valorem tariff s.  How are these tariff 
lines distributed among HS chapters? (Par. 46, Table III.2).  
(v) Other charges affecting imports 
 
What percentage of US imports in 2007 was subject  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 maintena nce fee?  How was this 
percentage distributed among HS chapters? (Par. 57). 
 
Page 35, paragraph 62 
 
The document states that "Beer (imported and domestic) is subject to federal excise tax at a rate of 
US$18 per barrel of 31 gallons.  A reduced rate of US$7 is applied on the first  60,000 barrels of beer 
produced in a year by a domestic brewer with an annual production of two million barrels of beer or 
less. Imported beer is not eligible for the reduced rate."  Question:  Could the US justify the difference in the tr eatment of imported products in the light of 
WTO National Treatment principle? 
  WT/TPR/M/200/Add.1 
 Page 43 
 
 
 (vi) Anti-dumping and countervailing measures 
Page 36, paragraph 68 
 
Paragraph 68 of Chapter 3 states that ITA’ s AD/CVD Petition Counseling and Analysis Unit, 
established in 2004, assists U.S. companies with respect  to recourse to U.S. unfair trade laws. Does 
the Unit provide assistance, inter alia, to help unde rstand legislation, regula tions and information on 
how to file petitions? Could the US inform the number  of new investigations or sunset reviews where 
petitioners counted on the assistance of the Petition Counseling?  During the period covered by th is review, how many times the USDOC has self initiated an 
investigation and sunset reviews ? 
 
(ix) Technical regulations, conf ormity assessment and standards 
Page 47, paragraph 122  
The document states that "Executive Order 12889 requires a comment period of at least 75 days for 
"any proposed Federal technical regulation or an y Federal sanitary or phytosanitary measure of 
general application". The comment period may be  between 30 and 75 days for proposed technical 
regulations and conformity assessment procedures app lied to perishable goods or to address "urgent 
problems".  
Question:   Are there any criteria previously establis hed to guide the identification of "urgent 
problems"?  (x) Sanitary and phytosanitary measures 13.Re garding paragraphs 138-162 (Chapter III), on 
sanitary and phytosanitary measures,  Brazil is concerned with U.S. regulations that stipulate that 
domestic economic impact analyses must be conduct ed for the first-time importation of certain 
products.  Have there been any measures taken to eliminate these regulations, given that they do not 
seem to comply with article 2 (2) of the WTO Ag reement on Sanitary and Phytosanitary Measures? 
This concern has been raised before, during the l ast Trade Policy Review of the United States, in 
March 2006, and, more recently, during the last mee ting of the SPS Committee, in Geneva, in April 
2008. 
 
(4) OTHER MEASURES AFFECTING PRODUCTION AND TRADE 
(iii) Competition policy Page 66, paragraph 216 
 The document states that "a number of statutes provide for limited immunity from antitrust laws in 
specified cases. Immunity applies, for example, to specified aspects of agricultu re, fishing, insurance, 
and export activities. The Webb-Pomerene Act gran ts limited immunity from antitrust laws to 
associations of competing businesses solely for th e purpose of engaging in collective exports of 
goods, provided this does not result in conduct that h as anti-competitive effects in the United States or 
injure domestic competitors. In 2007, seven associati ons were registered with the FTC under the Act. 
The Export Trading Company Act of 1982, 15 U.S.C. 4011-4021, created a procedure by which, 
under certain circumstances, persons engaged in e xport trade may obtain an export trade certificate of 
review which provides, inter alia, for limited antit rust immunity. International ocean  carriers are 
allowed to engage in conferences (price-fixing arra ngements) by the Shipping Act of 1984 if they are 
not contested by the Federal Maritime Commission." On  page 64, paragraph 209,  on the other hand, it 
is also stressed that the OECD considers United States as owner of one of the least restrictive 
regulatory systems.  Questions:   Could the US identify what are the speci fic exempted sectors?  Do DOJ and (or) FTC 
have an updated and transparent list of exc1 usions? Regarding the mentioned Export Trading 
Company Act, how do US domestic laws  deal with foreign export cartels? WT/TPR/M/200/Add.1 
Page 44  
 
 CHAPTER IV - TRADE POLICIES BY SECTOR 
(2) AGRICULTURE (ii) Border measures 
 
Based on the fact that, according to paragraph 18 (Chapter IV) “close to 91% of out-of-quota tariffs 
are non-ad-valorem”, are there any plans to convert  out-of-quota tariffs into ad-valorem equivalent 
tariffs?  Regarding paragraph 19 (Chapter IV), what are the criteria used for allocation of tariff quotas to 
specific countries? 
 
(iv) Export subsidies, credit, insurance, and guarantees 
 
Regarding export subsidies, accord ing to paragraph 40 (Chapter IV), the United States have kept up 
their commitments under the WTO Agreement on Agri culture in relation to the 13 product groups 
agreed upon. However, paragraph 41 mentions the Export Enhancemen t Program (EEP) and the Dairy 
Export Incentive Program (DEIP), that provide cash bonus payments to exporters of certain 
commodities, including dairy products, wheat, barley  and frozen poultry, contingent on exports. The 
2002 Farm Bill authorized these programs until March 2008.  Will they continue after the approval of 
the new Farm Bill? Are they in compliance wi th article 9(1)(a) of the WTO Agreement on 
Agriculture? Are there any pl ans for their elimination? 
 
(v) Food labeling 
 
Regarding food labelling, mentioned in paragraphs 46-49 (Chapter IV ), what is the purpose of the 
introduction of the country-of-origin labeling requirement s included in the 2002 Farm Bill, in light of 
the fact that, according to the Department of Ag riculture, “The benefits derived from country-of-
origin labelling were found to be negligible” and that there is “little  or no evidence that consumers are 
willing to pay a price premium for country-of-origin labelling or that they would increase their purchases of food bearing the U.S. origin label” (p aragraph 49). Are these requirements present in the 
new Farm Bill? Is this not a non-tariff barrier to the importation of the products mentioned in 
paragraphs 46-48?  (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."  Question:   What is the “rationale” for the imposition of the additional duty? 
 
APPENDIX TABLES 
III. TRADE POLICIES AND PRACTICES BY MEASURE AIII.1 - General overview of U.S. preferential rules of origin Page 156 
 In relation to Cumulation provisions, why do the U.S.  Israel and U.S Jordan free trade  agreements 
limit Cumulation to a maximum of 15% of value?  In relation to full cumulation under U.S. - Dominican Republic - Central America, does the cumulation with Canada and Mexico for woven appare l are subject to the same rules of origin under 
the textile chain?  WT/TPR/M/200/Add.1 
 Page 45 
 
 
 Cumulation provisions on GSP rules of origin, as me ntioned on Table AIII.1 of the Appendix of the 
document WT/TPR/S/200 (Page 157), set the conditi ons under which  inputs imported from certain 
sources may be counted as domestical1y supplied in the GSP preference-receiving exporting country. 
Said provisions apply only between countries rec ognized by the US for this purpose as members of 
the same association. What are the conditions estab lished by US to recognize a group of countries as 
an association and to confer on them this preferencial treatment? 
 
CANADA  Report by the Government (WT/TPR/G/200) 
 
V. Trade-Related Capacity Building Initiatives; page 22, paragraph 101: 
 
The U.S. Government report notes that U.S. free trade agreements with developing countries establish 
trade capacity building committees that are charged with developing programs to assist with the 
implementation of the obligations of the agreemen ts and with the transition to liberalized trade 
resulting from the agreements. These committees ha ve already begun to meet under the CAFTA-DR, 
and will begin meeting under the Peru, Colombia an d Panama FTAs as soon as th ey have entered into 
force.   1. Could the U.S. provide more information on the composition of these committees and how 
they operate? Could the U.S. provide specific ex amples of programs developed by these committees 
to assist with implementation of obligations?  
Report by the Secretariat (WT/TPR/S/200) 
 
III. Trade Policies and Practices by Measure;  (1) Overview; page 23, paragraph 3: 
 
1. Please elaborate on the linkages between antic ipated new cargo security measures in the 
United States and their expected impacts on the maritime industry, and international trade. 
 
III. Trade Policy and Practices by Measure; (2) Measures Directly Affecting Imports; 
(i) Customs procedures; page 25, paragraphs 13-17:  
We note that the Food, Conservation, and Energy Act of 2008  (or 2008 Farm Bill) establishes in 
Title III a softwood lumber importer declaration program. The proposed legislation would require 
importers of softwood lumber products to the Unite d States to: (1) provide certain information; and 
(2) make certain declarations concerning the paym ent of SWL export charges. Canada believes that 
this proposal will duplicate the data reconciliati on process established by the existing bilateral 
Canada-U.S. Softwood Lumber Agreemen t 2006 and may introduce new and unnecessary 
complexities into the Softwood Lumber Agreements ' administration. Canadian authorities will be 
examining the consistency of this proposal with th e United States international trade obligations, in 
the event that the proposed Import Declar ation Programme enters into force.  
 
2. Can the U.S. please explain the rational and ju stification for this softwood lumber importer 
declaration proposal and indicate how, if it is incorpor ated into U.S. legislation, it will be compliant 
with U.S. international trade obligations, including the WTO Import Licensing Agreement? 
 III. Trade Policy and Practice by Measure;  (2) Measures Directly Affecting Imports;  (v) Other charges affecting imports; page 34, paragraph 58: 
 
On page 621 of the 2008 Farm Bill, there is a re ference to "customs user fees" under the section 
"Revenue Provisions for Agriculture Programs".   
 WT/TPR/M/200/Add.1 
Page 46  
 
 3. Can the U.S. explain if and to what extent these fees will be used to cover the cost of the 
provision of importation services by U.S. officials, fo r example the cost of the inspection, release and 
clearance processes?  Will any of these fees be new? 
 On October 10, 2003, the U.S. Food and Drug Admini stration (FDA) published an interim final rule 
titled, “Prior Notice of Imported Food Under the Public Health Security and Bioterrorism 
Preparedness and Response Act”.    4. When does the United States anticipate publishi ng its final rule on prior notice of imported 
food that will address public comments that were submitted to the FDA rulemaking process during the 
comment period that concluded July 13, 2004? 
 
III. Trade Policies and Practices by Measure; (2) Measures Directly Affecting Imports; 
(vi) Anti-Dumping and Countervailing Measures; page 36, paragraphs 68: 
 The report indicates that the AD/CVD Petition Counse ling and Analysis Unit of the International 
Trade Administration of the U.S. Department of Commerce assists U.S. comp anies with respect to 
recourse to U.S. trade laws.  5. Does the Department of Commerce collect st atistics on the use of this service by U.S. 
companies? If so, what is the incidence of u se of this service over the past several years? 
 
6. What is the relationship, if any, between this unit and the Trade Remedy Assistance Office 
administrated by the U.S. International Trade Commission?   7. It is understood that the Department of Co mmerce has established a formal unit to deal with 
trade remedy issues as they affect U.S. exports to  other countries. If so, what are the responsibilities of 
such a unit?   8. In this context, it is noted that a far greater  number of U.S. trade remedy determinations are 
challenged in WTO dispute settlement  proceedings compared to the number of foreign trade remedy 
determinations challenged by the United States. Can the U.S. Government please comment on this 
situation? 
 
III. Trade Policies and Practices by Measure; (2) Measures Directly Affecting Imports; 
(vi) Anti-Dumping and Countervailing Measures; page 36, paragraph 69: 
 The report states that the Department of Commerc e seldom uses its authority to self-initiate anti-
dumping and countervailing duty investigations.  
 9. During the period of review, did the Depart ment of Commerce self-initiate anti-dumping and 
countervailing duty investigations? If so, please indi cate how often and describe the circumstances. 
 III. Trade Policies and Practices by Measure; (2) Measures Directly Affecting Imports; (vi) Anti-Dumping and Countervailing Measures; page 36, paragraph 70: 
 
The report states that the Department of Commer ce may enter into agreements to suspend anti-
dumping and countervailing duty investigations. 
 
10. During the period of review, how often di d the Department of Commerce enter into 
agreements to suspend anti-dumping and counterva iling duty investigations? In such cases, please 
describe the circumstances, particularly with resp ect to any suspension agreements in cases involving 
“non-market economies”. 
  WT/TPR/M/200/Add.1 
 Page 47 
 
 
 III. Trade Policies and Practices by Measure; (2) Measures Directly Affecting Imports; 
(vi) Anti-Dumping and Countervailing Me asures; pages 36-37, paragraphs 71-74: 
 
Paragraphs 71-74 describe developments with respec t to administrative and sunset reviews. There is 
no mention of provisions related to  “changed circumstances” reviews by either the Department of 
Commerce or the U.S. International Trade Commission (ITC).  
 11. Were such provisions used during the peri od of review and if yes, under what specific 
circumstances?  III. Trade Policies and Practices by Measure; (2) Measures Directly Affecting Imports; (vi) Anti-Dumping and Countervailing Me asures; page 37, paragraphs 74-76: 
 
Paragraphs 74-76 describe recent de velopments with respect to th e posting of bonds and other 
securities considered necessary to protect revenue generated from the application of anti-dumping and 
countervailing duties. In this context, the U.S. Government Accountability Office (GAO) recently 
released a report entitled, “Antidumping and Countervailing Duties”.  The GAO made a number of specific recommendations for options that could be cons idered in the context of the collection of such 
duties.   12. Please explain the process, if any, to be undertaken by the Department of Commerce in 
considering these options. Is the Department of Commerce considering a proposed rulemaking 
procedure, a request for public comments,  or a formal reply to the GAO report? 
 
III. Trade Policies and Practices by Measure; (2) Measures Directly Affecting Imports; 
(vi) Anti-Dumping and Countervailing Me asures; pages 35-43, paragraphs 65-96: 
 
There have been a number of recent developments in  the application and administration of U.S. trade 
remedy law that were not mentioned in the report. These include but are not limited to: 
reconsideration of the Department of Commerce analysis in the context of countervailing duty 
investigations of indirect subsidies, benchmar ks, multi-year benefit streams, privatization of 
government owned facilities, and the a ttribution of subsidies among affilia ted firms.  There is also the 
matter of the application of countervailing duty law to some “Non-Market Economy” countries.  
 13. Please comment on these issues and changes and their effects on the administration of trade 
remedy law.  III. Trade policy and practice by measure;  (2) Measures Directly Affecting Imports;  (viii) Quantitative Restrictions and Impo rt Licensing;  page 44, paragraph 106: 
 
The United States administers an import permit program which restricts the importation of controlled 
substances and listed chemicals to the quantity whic h the United States consider necessary to meet the 
medical, scientific or other legitimate needs of th e country, and to monitor the handlers of such 
substances.  The United States also notes that this sy stem is necessary to meet its obligations related 
to the 1961 UN Single Convention Treaty on Narcotic Drugs, the 1971 UN Convention on Psychotropic Substances and the 1988 UN Convention Against the Illicit Traffic in Narcotic Drugs 
and Psychotropic Substances.   
But for opium, poppy straw, concentrate of poppy straw or coca leaf, no Schedule I or II substance, or 
narcotic substance in Schedule III, IV or V may be  imported unless the Attorney General finds (a) an 
emergency exists in which domestic supplies are inadequate; (b) competition among domestic 
manufacturers is inadequate and will not be render ed adequate by the registration of additional 
manufacturers; or (c) in any case in which the Attorney  General finds that such controlled substance is 
in limited quantities exclusively for scientific, analy tical or research uses.  The U.S. notes that the WT/TPR/M/200/Add.1 
Page 48  
 
 System is designed to restrict the quantity of im ports of controlled substa nces and listed chemicals 
and to maintain a monitoring system.   14. Can the U.S. explain why it is necessary that  the needs of the United States in controlled 
substances must first be met by domestic manufactur ers prior to allowing imported products to meet 
demand?  
 15. Has the U.S. ever allowed or considered a llowing those who are responsible for supplying the 
U.S. market to choose whether foreign or domest ic manufacturers may contribute to fulfilling the 
quotas for the U.S. market? If not, why not?  
 
16. In implementing its system to restrict the im portation of controlled substances to comply with 
its UN obligations, has the US explored other options  that would be least restrictive to trade?  If not, 
why not?  III. Trade Policy and Practice by Measure; (2) Measures Directly Affecting Imports; (viii) Quantitative Restrictions and Impo rt Licensing; page 45, paragraph 109: 
 
In 2008, Canada's Department of Fi sheries and Oceans, on the advice of its scientific advisors, set the 
harp seal Total Allowable Catch (TAC) at 275,000, out of a herd of more than 5.5 million.  This one-
year TAC included allocations of 2,000 seals fo r personal use and 4,950 seals for Aboriginal 
initiatives.  The 2008 hooded seal TAC was set at 8,200 animals, out of a herd of 600,000.  In 2008, 
Canada also amended its Marine Mammal Regulations, to further ensure that the annual seal hunt 
continues to be carried out responsibly.  Canada’s  seal hunt is sustainable, a fact supported by a 
number of independent reports over the years, incl uding the recent European Food Safety Authority 
report on the animal welfare aspects of global seal hunts.  
 
17. Since the hunt is considered sustainable, why does the U.S. impose measures preventing trade 
in seal products under the Marine Mammal Protec tion Act (MMPA), and withholding the possibility 
of obtaining a waiver due to the 1996 Pelly Amendm ent for reasons unrelated to the conservation of 
seals?  
18. Why does the MMPA allow domestic production by native inhabitants of Alaska and 
commercial sales in the U.S. of seal products which are otherwise banned by the MMPA, while denying the same opportunities to native inhabitants of Canada and other countries?  Is the U.S. 
considering an amendment to the MMPA in order to bring these measures into conformity with its obligations under the WTO? 
 
III. Trade Policies and Practices by Measure; (2) Measures Directly Affecting Imports; 
(vi) Technical regulations, conformity assessme nt and standards; page 48, paragraph 128: 
 
The Secretariat Report indicates that the United St ates does not track the extent to which its final 
regulations are based on international standards.  
 
19. Does the federal rule-making process require  regulators to assess the extent to which 
proposed rules fulfill international trade obligations, including those with respect to the adoption of 
international standards contained in the WTO Agreement on Technical Barriers to Trade?  
 III. Trade Policies and Practices by Measure; (2) Measures Directly Affecting Imports; (vi) Technical regulations, conformity assessme nt and standards; page 48, paragraph 129: 
 
The Secretariat Report notes that United States relies on a range of approaches to conformity 
assessment.  
  WT/TPR/M/200/Add.1 
 Page 49 
 
 
 20. To what extent is risk assessment used to determine the approach chosen? 
 21. To what extent do federal regulators accep t tests or certification provided by foreign-
accredited conformity assessment bodies which can be  traced to participation in an accreditation-
based multilateral recognition agreement such as th e International Labour Accreditation Cooperation 
(ILAC) or the International Accreditation Forum (IAF)? 
 
III. Trade Policies and Practices by Measure; (2) Measures Directly Affecting Imports; 
(vi) Technical regulations, conformity assessme nt and standards; page 49, paragraph 130: 
 The Secretariat Report notes that U.S. authorities have  indicated that there are no centralized data on 
the extent to which U.S. regulators have recognized  the equivalence of foreign technical regulations 
or the results of conformity assessment procedures performed abroad.  The United States has included enhanced provisions with respect to equivalency in  a number of free trade agreements signed since 
2000.  
 
22. Could the United States explain how these provisions are being implemented?  23. Can the United States cite specific examples where foreign regulations or conformity assessment results have been accepted as equivale nt to, and demonstrate compliance with, federal 
regulations? 
 
III. Trade Policies and Practices by Measure; (2) Measures Directly Affecting Imports; 
(vi) Technical regulations, conformity assessme nt and standards; page 49, paragraph 133: 
 
The Secretariat Report notes that one of the criteria used by ANSI to accredit standards-development 
organisations is “to agree to consider  applicable international standards”. 
 24. Could the U.S. explain how the compliance of standards-development organisations with this 
requirement is monitored and enforced to ensure consistency with provisions in the WTO Agreement 
on Technical Barriers to Trade with respect to the use of international standards by standardizing 
bodies? 
 
III. Trade Policies and Practices by Measure; (2) Measures Directly Affecting Imports; 
(ix) Technical regulations, conformity assessme nt, and standards; page 50, paragraph 137: 
 
The Secretariat Report notes that in July 2007, the President established the Interagency Working 
Group on Import Safety to conduct a comprehensive review of import safety and to identify areas for 
improvement. The Working Group, which has no statutory or regulatory authority of its own, has recommended several TBT-related measures to enhan ce the safety of imports into the United States. 
 25. Has the U.S. Government followed up on th ese recommendations?  If so, what was done and 
is there a report or information on actions take n that could be shared with other countries? 
 
III. Trade Policies and Practices by Measure; (2) Measures Directly Affecting Imports; 
(x) Sanitary and phytosanitary measu res; pages 50 & 51, paragraphs 140 & 146: 
 
In paragraph 140, page 50, United States indicates that it works closely with State authorities to 
ensure timely notification of appropriate sub-federa l regulations.  Furthermore,  in paragraph 146, page 
51, the United States describes the authority of individual States to establish SPS measures, noting 
that such measures must be consistent  with United States WTO obligations.   
 26. How does the United States ensure that state- level SPS measures are consistent with the WTO 
SPS Agreement and notified to WTO Members as appropriate?  If state-level SPS measures are WT/TPR/M/200/Add.1 
Page 50  
 
 inconsistent with WTO obligations, what actions does the United States take to ensure individual 
States comply with United States’ international obligations?  27. How does the U.S. ensure freedom of transit as required by GATT article V?  III. Trade Policy and Practices by Measure; (4) Other Measures Affecting Production and Trade; (v) Trade-related Intellectual pr operty rights; page 76, paragraph 265: 
 
According to the Secretariat Report for the United States, “The United States offers protection for 
geographical indications (GIs) for all classes of good s and services through its trade mark system”. 
 
28. Canada would be grateful fo r details on how the provisions found in Article 23 of the TRIPS 
Agreement, giving enhanced protection for wines and spirits GIs, are satisfied through the trade-mark 
system.  III. Trade Policy and Practices by Measure; (4) Other Measures Affecting Production and Trade;  (v) Trade-related Intellectual pr operty rights; page 76, paragraph 266: 
 
According to the Secretariat Report for the Un ited States, “...copyright law provides several 
inducements or advantages to encourage copyrighti ng owners to make registration, such as....allowing 
the copyright owner to record the registration with  U.S. Customs and Border Protection  (CBP) for 
protection against the importation of infringing copies”.   
 29. Canada would be grateful for details on the effectiveness of this measure and how often 
registrations are recorded with CBP.  IV. Trade Policies by Sector; (1) Overview; page 80, paragraph 8: 
 
30. How many waivers have been granted under the Jones Act on an annual basis since 1996, and 
according to which criteria?  
IV. Trade Policies by Sector; (3) Mining and Ener gy; (ii) Legal and Policy Framework; page 91, 
paragraph 60:  
Congress imposed a mining claim patent moratorium in 1994; the U.S. authorities indicate that, except for 400 patents that were grandfathered, no new patent applications are being accepted until 
Congress decides what to do with the moratorium. 
 
31. When is a decision expected to be taken by Congress with respect to the moratorium? 
 
IV. Trade Policies by Sectors; (2) Agriculture; (iii) Domestic Programmes; (b) Insurance 
programmes and emergency assistance; pages 83-87, paragraphs 25-39: 
 The 2008 Farm Bill has been recently passed by Congress to replace the Farm Security and Rural 
Investment Act of 2002.  Canada is concer ned with many aspects of the new bill.   
 32. Would the U.S. confirm that the 2008 Farm B ill increases the loan rates for most commodities 
covered under the Loan Deficiency Program. 
 
33. Would the U.S. confirm that the 2008 Farm  Bill increases the target prices for most 
commodities covered under the Counter-cyclical Payments Program (CCP).  34. Would the U.S. confirm that the 2008 Farm Bill establishes CCP paym ents for several new 
commodities.  WT/TPR/M/200/Add.1 
 Page 51 
 
 
 35. Would the U.S. confirm that the 2008 Farm B ill maintains the planting flexibility restriction 
under the Direct Payments program for fruits, vegetables and wild rice.  36. Would the U.S. confirm that the 2008 Farm  Bill maintains mandatory Country-of-Origin 
Labelling (COOL), albeit slightly modified from the 2002 legislation. 
 
37. Would the U.S. confirm that the 2008 Farm Bill increases the loan rates for refined beet sugar 
and raw cane sugar.  38. Would the U.S. confirm that the 2008 Farm Bill requires that sugar produced from in-process 
beet sugar (whether produced domestically or im ported) to count against processors’ marketing 
allotments, but does not require that sugar produc ed from imported cane syrup to count against 
processors’ marketing allotments.  39. Would the U.S. confirm that the 2008 Farm Bill prohibits refined sugar from being imported 
to the U.S. when processors are unable to market th eir allotment, but continues to allow imports of 
raw cane sugar when deficits are being reassigned to imports.  40. Would the U.S. confirm that the 2008 Farm B ill limits the Secretary’s ability to increase the 
tariff-rate-quota for refined sugar in the event of an  emergency shortage of s ugar in the United States 
to only between October 1st and Ma rch 31st of each fiscal year, instead of anytime during the fiscal 
year. 
 41. Would the U.S. confirm that the 2008 Farm Bill continues to tie the majority of food aid to domestic purchases.  
42. Would the U.S. confirm that the 2008 Farm  Bill introduces a new domestic cotton-user 
payment of $0.04/pound.    The 2008 Farm Bill also created a new Average Crop  Revenue Election (ACRE) program which is to 
begin in crop year 2009 and a new permanent disaster program.  
43. How will these new programs operate?  How w ill this new program co-exist with the revenue 
insurance component of crop insurance?    The 2008 Farm Bill provides the authority to genera te a substantial amount of support to the 
agriculture sector under the various farm programs,  including the two new programs listed above.   
 
44. How does the U.S. Administration anticipate meeting current commitment levels on domestic 
support and any future commitments ne gotiated under a Doha Agreement? 
 45. Would the U.S. provide assurance that these measures, for example mandatory COOL, will be 
implemented in a manner that is consiste nt with its intern ational obligations? 
 
IV. Trade Policies by Sector; (3) Mining and Ener gy; (ii) Legal and Policy Framework; page 91, 
paragraph 61: 
 
Companies seeking to lease federal lands for oil and gas exploration must pay a "bonus bid" 
determined through a competitive auction. 
 46. Please explain the "bonus bid" and provide more  details into how the auction process unfolds. 
In addition, is any interested company allowed to participate in the process or are there any 
restrictions (e.g. domestic companies only)? 
 WT/TPR/M/200/Add.1 
Page 52  
 
 IV. Trade Policies by Sector; (4) Manufacturing; page 96, paragraphs 79-80 
 
Under the new Farm Bill, Economic Adjustment Assistance of 4 cents per pound during the period 
beginning August 1, 2008 and ending on July 31,  2012 and 3 cents per pound thereafter, provided 
under subsection 1207(c), shall be ma de to domestic users of upland cotton that certify that assistance 
is used only to acquire, construct, install, mode rnize, develop, convert or expand land, plant, 
buildings, equipment, facilities, or machinery.   47. Can the United States explain what the time line is for users of upland cotton to use the 
assistance for the allowable purposes?  
 
48. Can the United States indicate what steps it will be taking to monitor and verify that the 
assistance is used only to acquire, construct, insta ll, modernize, develop, convert or expand land, 
plant, buildings, equipment, facilities, or machinery?  
49. Can the United States clarify whether these la nd, plant, buildings, equipment, facilities, or 
machinery have to be directly re lated to textile or other production that uses the cotton as a direct 
input?   50. Can the United States specify whether there is an end date for the provision of such 
adjustment assistance? 
 
IV. Trade Policies by Sector; (5) Services; (ii)  Telecommunications, page 100, paragraphs 100-
102: 
 
The Secretariat Report discusses access to unbundled telecommunications network elements in 
paragraphs 100 to 102.  The report does not address  the regulatory framework that would apply to a 
new facilities-based telecommunications entrant to  acquire rights-of-way, gain access to support 
structures of existing carriers and gain access to customers in buildings.  51. Could the United States provide a description of  the federal and other regulatory provisions 
that would apply to such access issues for a market entrant? 
 
IV. Trade Policies by Sector; (5) Services; (iii) Financial Services; pages 112-114; paragraphs 
153-155 & 158: 
 
The report outlines the contrasting approaches of th e two regulators of the securities sector in the 
United States.  The approach of the Securities and Exchange Commission, the regulator of equities, is 
outlined in paragraphs 153-155.  Ge nerally, the Securities and Exchange Commission requires foreign 
entities to undergo full domestic regi stration and oversight.  By contr ast, paragraph 158 notes that the 
Commodity Futures Trading Commission, which regulates futures and derivatives, may offer 
exemptions from registration and oversight to foreign entities.  We  understand that the Securities and 
Exchange Commission has recently announced that it is in discussions with Australia and the 
European Union on mutual recognition of compar able securities regimes, which would move the 
Securities and Exchange Commission closer to th e approach of the Commodity Futures Trading 
Commission.   52. How does the Securities and Exchange Commi ssion foresee mutual recognition proceeding?  
That is, what kinds of entities, securities, a nd investors might be accessible through mutual 
recognition?  What other jurisdictions might th e Securities and Exchange Commission consider 
candidates?    WT/TPR/M/200/Add.1 
 Page 53 
 
 
 IV. Trade Policies by Sector; (5) Services; (iii)  Financial Services; page 113; paragraph 155: 
 
U.S. banks must register as investment advisers onl y if they advise an investment company registered 
with the Securities and Exchange Commission unde r the Investment Company Act.  In contrast, 
foreign banks face a much wider trigger for registra tion – foreign banks genera lly must register as 
investment advisers if they provide investment advice for compensation. 
 53. Could the Securities and Exchange Commission explain the policy rationale behind this distinction?  NORWAY  Investment:  
 
In its report of 5 May 2008 (WT/TPR/S/200) the WTO Secretariat points to changes in the foreign 
investment regime (CH II, §17-25), particularly w ith regards to the implementation of FINSA (The 
Foreign Investment and National Security Act of 200 7).  Although we clearly recognize the need for 
measures to protect national security, it is in our view important that these measures are transparent, and that the relevant processes are predictable.   We are somewhat concerned that the present 
legislation and the related regula tions which were proposed by the Treasury in the spring 2008 do not 
fully meet these objectives, particularly as the con cept of national security does not appear to be 
clearly defined. 
 Norway would therefore greatly appreciate if the US  could further outline how the concept of national 
security is defined in the relevant laws and re gulations, and which cha nges these amendments will 
entail for foreign economic operato rs investing in your country.  
 
Maritime Services:  
 
"With regards to CH IV and Maritime Services in the report of the WTO Secretariat we would greatly appreciate receiving information on and status for any existing or proposed nationality requirements with respect to manning or registration of LNG vessels going to and from the US, either as part of 
legislation or agreements/arrangements involving the industry or companies and trade unions." 
 
HONG KONG, CHINA 
 
Anti-dumping (AD) 
(WT/TPR/S/200, P. 23, Para. 5; P. 40, Para. 85) 
 
1. The Secretariat remarked that AD duties coul d significantly affect the domestic prices of the 
US, and that as most of the measures were impos ed on intermediate goods, these duties could also 
increase costs for downstream producers and consumers.  It further raised the importance to ensure 
that AD measures did not retard adjustment to changing conditions in in ternational markets.  
Separately, the Secretariat also noted that the app lication of AD duties may not be without cost when 
applied in cases of pricing that are not predatory.   We would like to invite the US to shar e its responses to the above observations and 
comments.  Specifically, we would like to know how does the US balance the interests among 
different domestic stakeholders (e.g. producer s vs. downstream producers and consumers) in AD 
investigations, and how does it ensure that differen tial pricing practices that are not predatory will not 
be subject to AD duties.  WT/TPR/M/200/Add.1 
Page 54  
 
 (WT/TPR/S/200, P. 36, Para. 69) 
 
2. We note that the US Department of Commerce (U SDOC) is said to have the authority, though 
seldom uses it, to self-initiate anti-dumping/counterv ailing investigation.  During the review period, 
the USDOC is known to have set up a comprehensiv e programme to monitor and review the volume 
and unit values of five categories of textiles and clothing imports from Vietnam with a view to 
assessing, every six months, whether anti-dumping inv estigations 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.  (WT/TPR/S/200, P. 40, Para. 84; & P. 41, Para. 89) 
 
3. While we welcome that the US initiated fewe r AD investigations in 2005 and 2006, it is 
mentioned in the Secretariat Repor t that the average duration of an  AD measure in place at end 2007 
was some 11 years, and the oldest AD measure in pl ace dated from 1973.  As at end 2007, there were 
32 AD measures that had been in place for at least  20 years, and 98 cases for over 10 years.  Under 
sunset review procedures, 210 AD and CVD orders were reviewed from January 2000 to December 
2007, of which only 58 were revoked.   The large number of long-standing cases and th e low rate for revocation are a matter of 
concern, bearing in mind that AD measures should be terminated not later than five years under 
Article 11.3 of the AD Agreement unless otherwise ju stified.  Would the US advise whether it would 
give any special consideration to the measures that have already been in place for very long period of 
time, for instance over 10 years, when they come up for sunset reviews? 
 
Telecommunications services 
(WT/TPR/S/200, P. 99, Para. 96) 
 
4. We note that the Federal Communications Co mmission (FCC) has adopted an ‘open entry’ 
standard with respect to WTO Members’ ownership of common carrier wireless licenses.  In the US’ 
previous trade policy reviews, several WTO Members have urged the US to explicitly incorporate the 
open entry standard into the US legislation in order to enhance the legal certainty.  We would like to 
know the US’ latest plan in this respect. 
 
(WT/TPR/S/200, P. 99-100, Paras. 98-99) 
 
5. We note that the FCC recognized that certain  requirements of the international settlements 
policy are not conducive to the meaningful economic competition between telecommunications 
service providers and has recommended the initiation of a proceeding to consider the petition from 
some operators in this respect.  Could the US provi de an update on its consider ation of this petition? 
 
(WT/TPR/S/200, P. 102-103, Para. 108; & P. 103-104, Paras. 111-112) 
 6. We are pleased to note that the FCC approve d the relaxation of  the newspaper/ broadcast 
cross-ownership rule in December 2007 and woul d like to know whether and how this relaxation 
would be reflected in the US’ coming offer on telecommunications services.  7. We note the FCC’s efforts to improve th e local franchising process for cable services to 
remove these trade restricting regulations.  We also  note from the Secretariat Report that eight states 
had already taken action to remove the local licensing  requirement.  We would like to know if there is 
any plan to make this a nation wide policy and the timeframe for its implementation.   
Financial services   WT/TPR/M/200/Add.1 
 Page 55 
 
 
 (WT/TPR/S/200, P. 108, Para. 128) 
 
8. As set out in the Secretariat Report, a foreign bank must establish an insured banking 
subsidiary in order to accept or maintain domes tic retail deposits of less than US$100,000, except in 
the case of a foreign bank branch that was engage d in insured deposit-taking activities before or on 
19 December 1991.  We are however given to unde rstand from our traders that foreign banks are not 
allowed to participate in savings insurance system s in the US and could not accept deposits of less 
than US$100,000 as a result.  We would be grateful for the US’ clarification of its regulatory regime 
in this regard.  In case of any actual limitations re stricting foreign banks to participate in the US 
savings insurance systems or establish an insured banking subsidiary, would the US advise how the 
concerned discriminatory limitations are consider ed to be consistent with its existing GATS 
commitments?  
(WT/TPR/S/200, P. 110, Para. 143) 
 
9. We note from the Secretariat Report that non- US licensed reinsurers must post collateral 
when they conduct cross-border reinsurance business es with US licensed companies in order for the 
US licensed company to receive a credit for the reinsurance.  This discriminatory measure has 
however not been inscribed in the US’ existing GAT S schedule.  We would be grateful for the US’ 
advice on the consistency of the subject measure with its existing GATS commitments on reinsurance 
services. 
 
(WT/TPR/S/200, P. 111, Para. 148) 
 
10. We note that the US is making efforts towards uniformity of insurance regulations at the state 
level in response to Members’ comments in the prev ious trade policy reviews that those regulations 
had resulted in unjustified burdens on insurers and prevented them from responding to customer needs 
in a timely manner.  We would like to know the la test progress of the uniformity exercise, details of 
any possible regulatory changes that are under cons ideration, and the expected timeframe for the 
completion of the exercise. 
 
CHINA 
 
Summary Observations (1) Economic Environment  
1. What is the United State’s view on the pr ofound impact of the sub-prime crisis on its 
economy in the medium and long run? Please explain wh at actions have been taken so far to address 
such impact and evaluate their effectiveness? Affect ed by such factors as the sub-prime crisis, oil and 
food price hike, a large number of countries are facing the pressure of economy slowdown and mounting inflation in 2008.  How does the U.S. pl an to overcome the dual challenge of getting its 
economy onto normal track of growth and curbing inflation?  (2) Trade and Investment Policy Framework 
 
2. (Page vii, paragraphs 5) The Secretariat Repor t notes that the U.S. has not fully implemented 
the WTO rulings and revised its domestic legislati ons relating to intellectual property rights and anti-
dumping measures.  
 
Please explain the reason. Does the U.S. have any plan and timetable to implement relevant WTO 
DSB rulings to ensure the credibility of the DSB and the multilateral trading system as a whole?  
 WT/TPR/M/200/Add.1 
Page 56  
 
 (3) Market Access for Goods 
 
3. (Page viii, paragraphs 14) The Secretar iat Report notes that the Byrd Amendment was 
repealed in 2007, but AD and CVD duties assessed befo re October 2007 continued to be distributed to 
U.S. producers.  
 
WTO DSB ruled that the Byrd Amendment violat ed related provisions of GATT 1994, the Anti-
dumping Agreement and the SCM Agre ement, and requested the U.S. to change the legislation in 
conformity with its WTO obligations before 27 December 2003.  However, the U.S. failed to 
implement the ruling.  The Byrd Amendment was fina lly repealed at the end of 2007.  From the entry 
in force of the Byrd Amendment to end 2007, to tal disbursements of the duties collected were 
estimated at approximately US$1.9 billion, according to the Secretariat Report. Among those received the subsidies, the iron&steel producers benefited most and largest.  a. Please explain why the U.S. hasn’t fulfilled it obligation as requested by the ruling of the DSB to 
stop distributing AD and CVD duties to its domestic producers? 
 b. Could U.S. confirm whether it has stopped, at this moment, distributing AD and CVD duties to its 
domestic producers who supported the petition for investigation? If not, please explain why. 
 
c. Please provide specific information including st atistics regarding which industries have been 
receiving such AD and CVD duties through these meas ures and how much were distributed to each 
industry and each major producer within that industry?  d. Could U.S. explain whether such distribution of AD and CVD duties is in conformity with the SCM Agreement, particularly whether such dist ribution constitutes subsidies as defined by this 
Agreement?  Could the U.S. explain the reasoning if  it does not regard it as subsidies defined by the 
SCM Agreement?  
(5) Other Measures Affecting Trade 
 
4. The U.S. has been prohibiting the U.S. citi zens, permanent residents, companies or non-U.S. 
entities held by U.S. citizens or companies to im port products that are originated or partially 
originated from Cuba through its domestic laws and regulations.  It is reported that the Office of 
Foreign Assets Control has initiated an investiga tion on the imports of stainless steel products from 
China which contains Cuban nickel.  For the imports of above-mentioned products, the U.S. 
authorities are entitled to impose criminal and civil penalties. Criminal penalties include a fine up to 
250,000 USD or a 20-year imprisonment and civil penalties include a fine calculated on the basis of 
250,000 USD or twice the transaction value, whichever is higher.  
 a. Please confirm whether the above-mentioned inform ation, especially about the criminal and civil 
penalties, is correct or not. If not, please provide the correct one.  
b. Please explain whether the above-mentioned la ws and regulations of the US, which obviously 
jeopardize the normal trade between the U.S. and other WTO Members, are consistent with U.S. obligations under the WTO?  If yes, please explain the reasoning related to the WTO Agreements and 
specific Articles.  
c. How would the U.S. government address the above-mentioned issue be tween China and U.S.? 
  WT/TPR/M/200/Add.1 
 Page 57 
 
 
 I. Recent Economic Development 
(1) Overview 
 
5. (Part I, paragraph 3) The Secretariat Report notes that openness allows U.S. producers and consumers to access goods, services, and capita l from abroad at the best conditions. 
 
a. Does U.S. have any assessment regarding the benefits of domestic producers and consumers from 
such openness? Would it be possible for the U.S. to share such information with Members, if any? 
 b. In order to promote sustainable economic growth , and to maintain an open trade and investment 
regime, what will the U.S. government intend to do or what are the measures to be taken by the U.S. 
government to enhance the competitiveness of the domestic industries? 
 
(2) Output and Employment 
 6. (Page 4 paragraph 10) The Secretariat Re port notes that labor productivity continued to 
expand, however the pace of increase is less than unit labor costs in 2007.  
 Please list the industries with highest growth of labor productivity, and explain why.   
(3) Monetary and Exchange Rate Policies 
 
7. (Page 5, paragraph 15) The Secretariat Report notes that the dollar continued to depreciate in 
nominal and real terms during the review period as it has since 2002.   a. Please elaborate the rational for such depreciation and its impact on the U.S. economy, particularly 
on import and export.  
 b. Various analyses indicates that there is a causal  link between dollar depreciation and oil and food 
price hike, and this might trigger global wide inflation.  What is the U.S. view on such analysis?  8. The Federal Reserve has made a successive rate cuts, and the base lending rate has been 
lowered to 2%. The exchange rate of USD has kept falling, with an exchange rate to Euro decreased 
10% in 2007. The depreciation is getting even faster in  early 2008, e.g. by 8.3% at the end of March 
from year end of 2007, among which, a 6.4% drop to  Euro and 9.5% drop to Japanese Yen. Various 
analyses believe that the depreciation of USD has brought significant negative impact on other 
economies, particularly the developing ones. 
 
a. What’s the U.S. view on the above-mentioned an alyses about the impact of the dollar depreciation 
on other economies, particularly the developing ones?  b. Does U.S. deem it necessary to continue such a monetary policy related to the dollar depreciation? 
If so, how much is the room for further rate cuts? 
 
c. How does the U.S. evaluate the impact of su ch depreciation on its long-held status in the 
international currency system, par ticularly in the international reserve asset and settlement currency? 
What kind of dollar policy is the U.S. government in tends to maintain in the future and please explain 
its considerations in this regard.  
 
(4)  Fiscal Policy 
 
9. U.S. Treasury Secretary John Snow said at the annual meeting of IMF/WB on February 10
th 
that the U.S. will halve its fiscal deficit by 2009.  And this fiscal year’s budget report also mentioned 
that the Bush government planned to eliminate defic it and turn it into surplus by 2012.  However, WT/TPR/M/200/Add.1 
Page 58  
 
 according to the report published by the U.S. Treasu ry on March 12, the government deficit increased 
by 62% in 5 months from October 1 2007 than that of last fiscal year, reaching US$263.3 billion.  What steps does the U.S. plan to take to solve the enlarged defic it and meet the target of turning 
deficit to surplus by 2012? 
 
(5)  Balance of Payments 
 
10. Recently the U.S. has made significant results  in terms of reducing the trade deficit.  
 
Could the U.S. explain what factors, including re levant measures by the U.S., contribute to such 
reduction of trade deficit?  11. Will any policy arrangements be adopted in fu ture to promote the structural adjustment of 
domestic trade and to raise its saving rate?  What’s the U.S. view on the long term impact of the sub-
prime crisis on the domestic saving-consumption pattern?  
 
(6)  Developments on Trade and Investment 
 
12. (Part I, paragraph 28) The Secretariat Repor t notes that both the import and export of primary 
products expanded significantly due mainly to the growing importance of mining.  
 
Does the U.S. believe that the dollar depreciation is also a contributing factor to such expansion of 
primary products imports?  
II.  Trade Policy Regime: Framework and Objectives 
(1)  Overview  
13. (Page 12, paragraph 2) The Secretariat Report notes that the Trade Promotion Authority which the Administration views as an important tool  for achieving U.S. trade objectives expired in 
July 2007.  
Could the Administration explain that, without the Trade Promotion Authority, how it could ensure 
other WTO Members that any Doha result by consensus of the Membership, particularly the U.S. commitments therein, would not be changed by th e Congress or even requested to a re-negotiate? 
 
(3)  Foreign Investment Regime 
 
14. (Page 15, paragraph 18-22) The Secretariat Report notes that FINSA requires “national security” investigations on foreign mergers and acqui sitions. However, the Act and its regulations and 
guidance do not explicate the definition of “na tional security”. According to FINSA, “national 
security” includes issues relating to “homeland secu rity” as well. Besides, FINSA automatically 
subjects to a 45-day CFIUS investigation all transactions that result in “foreign government control” 
or control of U.S. “critical infrastructure”. FINSA also authorize CFIUS to conduct investigations on 
foreign investment transactions regardless of the shareholding percentage, at CFIUS own initiative. 
 
a. Could the U.S. confirm the above-mentioned info rmation, particularly on whether there is an 
explicit definition of “national security”? If yes, please provide such definition and the relevant 
provisions of the Act or any other re levant law. If not, could the U.S. explain how the U.S. ensures the 
transparency, fairness and predictability of CFIUS’ reviews and investigations? 
 
b. Please clarify the definition of “foreign government control”, “critical infrastructure” and “critical 
technology” relating to national security issues as referred to in the Act.   WT/TPR/M/200/Add.1 
 Page 59 
 
 
 c. Please provide updated information on the impl ementation procedures of FINSA of the Act or any 
other relevant law, particularly on how many such  investigations have been carried out, on foreign 
mergers and acquisitions in which sector, by  what countries, and with what results. 
 d. Are there any specific provisions/rules on civil punishment against violation of the Act? 
 
15. CFIUS has been repeatedly initiating review procedures on the acquisition of 3Com by China Huawei and Bain Capital. Since network equipmen ts are defined by the US as “sensitive area”, the 
intention of acquisition immediately triggered the US  review procedure after it was announced to the 
public. 3Com pointed out that Huawei, as a minority stake holder, would have no right to obtain the 
American sensitive technologies or the data of its sales to the US government. 3Com also announced 
that it would have a strict control over its sensitiv e technologies and avoid any illegal transfer of the 
sensitive technologies. Finally, this transaction was aborted.  a. What are the review criteria and procedur es of the CFIUS when conducting security review on 
foreign investments? Do the review criteria vary  to acquisitions of companies from country to 
country? If yes, what are the soecific?   b. What is the definition “sensitive area”? Under such  definition, if any, what products or equipments 
fall in the category of “sensitive area”? 
 
c. Could the U.S. provide detailed information on th e reviews by CFIUS, particularly on how many 
reviews, on what acquisitions, of what products or equipments, by what companies from what 
countries? Could the U.S. also provide the reas oning as announced by CFIUS for each negative result 
of such reviews?  
 
d. Does CFIUS take into consideration the opinion s of the Congress, media and/or other interested 
parties in the course of reviewing?  If so, how and why?   
(4)  International Relations 
(i)  World Trade Organization 
 
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.  
a. 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? 
 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? 
 
17. The U.S. economy has slowed down mainly due to  the outburst of sub-prime crisis in the late 
2007.  This has brought negative impact on the world economic development.  In general, people fear 
that this will result in the rise of trade protectioni sm in major developed countries including the U.S, 
which would also have negative imp act on the Doha Development Agenda. 
 
What is the U.S. view to such opinion?  What actio ns does the U.S. plan to take by playing a leading 
role with its own contributions to push forwar d the Doha multilateral trade negotiations, as a key 
economy that benefits most from the multilateral trading system?  WT/TPR/M/200/Add.1 
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 (ii) Preferential and other arrangements 
 
18. Please provide the statistics with regard to percentage of excluded products in the FTAs 
signed and implemented, including those in force a nd those concluded but yet to be implemented, by 
tariff line and by trade value.  
 
19. Please provide information on the percentage of imports under the FTAs’ preferential regime 
to the overall imports in 2007, on a country-by-country basis.   20. Please provide detailed data on th e contribution of FTAs in force to the growth of bilateral 
imports and exports of the U.S. in 2007, on a country-by-country basis.  
 
Aid for Trade 
 
21. Please explain what initiatives have been undert aken by the U.S. to fulfill its commitments on 
Aid for Trade?  Please also explain how such new initiatives are different and additional from its 
previous ones and those under other framework?  22. It seems that the U.S. has yet more to do to  meet its commitment of 0.7% of gross national 
income (GNI) as official development assistan ce (ODA) under the Monterrey Consensus.  
 
What actions does the U.S. plan to take in order to ef fectively meet the target at an early date?  Or the 
U.S. imply has no intention at all to meet such a target?  23 It is believed that provision of Duty-fr ee quota-free treatment to products imported from 
LDCs was a significant outcome of HK Ministerial Conference, which was also a mandatory 
obligation for all developed members, including the U.S. 
 Could the U.S. confirm whether it has fulfilled th is obligation? If yes, please provide relevant 
information including statistics and any possible exclusion. If no, please explain the reason and its 
plan, if any, to fulfill such obligation.  (III)  Trade Policies and Practices by Measures (2)  Measures Directly Affecting Imports (i)  Customs procedures 
 
24. (Page 25, paragraph 16)  The Secretariat Re port notes that a customs bond must be posted for 
each importation of merchandise.  The bond could be  as high as three times of the total of the 
imported merchandise value plus import duties, ta xes, and fees.  According to CBP bonds allow 
importers to take possession of their merchandise ahea d of time thus facilitating trade. However, such 
a compulsory requirement will tie up the importer’ s cash flow to a great extent therefore not 
facilitating trade.  
Please elaborate the considerations in  making this customs bond requirement. 
 25. (Page 27, paragraph 24) According to th e Implementing Recommendations of the 9/11 
Commission Act of 2007, all containers from a U.S.-bound vessel must be scanned using non-
intrusive imaging and radiation detection equipment.  However, according to C-TPAT, its participants 
shall enjoy lower inspection rate. 
 Please clarify the discrepancy between the Act and the Programme.  26. Please provide the findings of assessment of  the 100% scanning pilot programme and if 
possible, explain the conclusions of the assessment . China is concerned that the implementation of  WT/TPR/M/200/Add.1 
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 100% scanning requirement will create extra customs procedures and increase trade costs.  Could the 
U.S. elaborate what measures might be adopted to  avoid or minimize the ne gative impact of such 
requirement to international trade?  27. The U.S. Department of Homeland Secur ity has published a “10+2”requirement which 
requests the submission of 10 data elements by importe r or their designated agent and 2 data elements 
by carrier or their designated agent 24 ho urs prior to loading the U.S.-bound vessel.  
 a. The U.S. emphasized that this requirement was made for security reason and not for commercial or trade enforcement purpose. However, there are wide concerns that too much and strict port security 
requirements make it a drawback from trade facilitati on.  We would like to know what efforts have 
been or will be made by the U.S. to minimize its negative impact on trade.  How have the public  
concerns been taken into consideration by the U.S. authorities? 
 
b. How will the issue of commercial inform ation confidentiality be properly addressed?  
 
c. Please update the progress on this requirement. 
 28. According to the ruling of the Ninth Circuit Court of Appeals in Apr. 2008, U.S. customs and boarder control agencies have the authority to  search, review and copy the content of the 
laptops/electronic equipments without iden tifying specific reason for suspicion.  
 
Please explain what measures have been adopted by the U.S. to ensure that  these contents were not 
subject to abuse.  
(iii) Rules of Origin 
 
29. (Page 29, paragraph 35) The Report notes that “Determination of origin relies on self-certification.”   Please explain what the term “self-certification” means.  
30. (Page 29, paragraph 36) The Report notes th at “however, these general standards may be 
adapted and interpreted further by agencies other th an CBP to fit the needs and purposes of particular 
context in which non-preferential rules are applied. ”  Please clarify what are the “agencies” as referred to  in the paragraph.  What is the relationship 
between the CBP and the “agencies” in terms of ROO interpretation right? 
 31. (Page 29, paragraph 37) The Report notes that the “wholly obtained” criterion is used in the U.S. FTAs, including those that have entered into force since last review. As we understand, “wholly 
obtained” is only one of the criteria.   
Could the U.S. clarify what are the other criteria? 
 32. (Page 30, paragraph 38) The Report menti oned about “double substantial transformation”. 
 Please explain how to apply the “double substantial transformation” criterion to determine the country 
of origin. 
 33. (Page 30, paragraph 38) The Report mentioned that to qualify for preferential tariff treatment 
under the programmes, apparel must use U.S. components, regional components up to an annual cap.  WT/TPR/M/200/Add.1 
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 Please explain how the annual cap is calculated, what factors are considered/included, and if there is a 
uniform formula for the calculation.  34. (Page 30, paragraph 39) The Secretariat Report notes that “this scheme benefits U.S. 
companies with investments in Mexico and Cana da, and helps to integrate regional production.”  
 
Please elaborate how such schemes help to integr ate regional production, and what are the policies 
and measures adopted or will be adopted by the U.S. to promote regional production integration. 
 
(iv) Tariff 
 
35. According to U.S. current tariff schedule, high tariffs, whose tariff rates are 3 times higher 
than the national average, account for 5% of the tota l tariff-lines.  The tariff rates of tobacco, yogurt 
and peanuts are as high as 160% to 350%.  The tari ff rates of other agriculture products range from 
50% to 110%.  High tariffs and tariff peaks concen trate on agriculture products, on which the U.S. has 
strong competitiveness, as well as textile and clot hing, footwear and travel products, on which 
developing countries have strong export interests.  Please explicate the policy consideration behind the tariff structure and the possible effect on export 
from developing countries to U.S.  
36. Recently, the CBP has changed the custom cl assification of multiplayer hard-wood parquet, 
from the original HS heading 44.18.30 to heading 44.12.  Consequently multiplayer parquet imports 
are subject to a duty of 8%, instead of the orig inal duty-free treatment, which greatly affects the 
exporting enterprise and future exports.  
a. Please explain the reasons for this tariff classification adjustment. 
 
b. Please provide the import volume of the affected products in the latest 3 years and identify the 
principal suppliers of such products.  
(v)  Other charges affecting imports 
 
37. (Page 34, paragraph 61-64) The Secretariat Report notes that U.S. applies federal excise taxes on certain imported and domestic products. Reduced ta x rates are applied for domestic brewer with an 
annual production of 2 million barrels  of beer or less and domestic wine producers with an annual 
production of 0.15 million wine gallons or less.  Al so, the U.S. does not apply a value added tax.  
Sub-federal governments may impose sales taxes an d additional excise taxes on imports and domestic 
products.  a. Please explain the tax bases for sales tax and a dditional excise tax imposed by the sub-federal 
governments respectively for domestic products and for imported products.  
 
b. If the tax bases are different for importe d and domestic products, please explain why. 
 c. Please justify the preferential tax policy for do mestic brewers and wine producers, and its 
conformity with the WTO rules.  
 
(vi) Anti-dumping and countervailing measures  
38. Sec. 210.16(c) of the Commission’s Rules of  Practice and Procedure stipulates that U.S. 
international Trade Commission can issue Gene ral Exclusion Orders (GEOs) in the 337 
investigations. Sec. 210.39(b) of the Commission’s Ru les of Practice and Procedure stipulates that in  WT/TPR/M/200/Add.1 
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 case of a parallel suit in a district court, the distri ct court will suspend the suit and resume after the 
ruling of the ITC has been issued.  For imported products, the complainant may initiate a 337 investigation, request for a GEO and at the 
same time file a parallel suit with a district cour t.  However, for the U.S. domestically produced 
products, the complainant can only file a suit with the district court and can not apply for a GEO. 
Correspondingly, this means that foreign produ cers and importers may face two connected suits, 
while the local producers only need to ha ndle one suit at the district court. 
 a. Please explain how this treatment is consistent with the national treatment principle of WTO. Please 
also explain the consistency of the measure with Article 27 of the TRIPS Agreement, which requires 
that “...patents shall be available and patent right s enjoyable without discrimination as to the place of 
invention, ... and whether products are imported or locally produced.” 
 b. Please explain the consistency of the GEO with Article 42 of the TRIPS Agreement which requires 
“Fair and Equitable Procedures”. 
 
c. Please indicate whether U.S. is considering amending the application of GEO.  
 39. U.S. has initiated numerous antidumping investig ations against China in the past 30 years.  
The amendment of U.S. antidumping law in the 1980s has allowed cumulative assessment in the 
determination of injuries. Art. 771(7) (G) of th e Trade Act of 1974 (19U·S·C·§1677(7) (G)) stipulates 
that in the determination of “material injury” or “threat of material injury” for a certain domestic 
industry, “if such imports compete with each other and with domestic like products in the United States market”, “the Commission shall cumulatively assess the volume and effect of imports of the subject merchandise from all countries”. It is be lieved that the cumulativ e approach of assessment 
leads to a greater possib ility of finding injuries. 
 Could the U.S. explain such practice of cumula tive approach conform to the AD Agreement? 
 40. The U.S. Department of Commerce h as initiated 11 joint antidumping/countervailing 
investigations against imports from China since th e end of 2006. China notes meanwhile, U.S. still 
denies the market economy status of China. It is also  noted that it is U.S.’s consistent practice not to 
apply countervailing investigations  on the non-market economy countries. This can be verified by 
various rulings of courts and th e Department of Commerce. In both the report entitled “U.S.-China 
Trade Commerce Faces Practical and Legal Challe nges in Applying Countervailing Duties” submitted 
by the U.S. Government Accountability Office (GAO) to the Congress in Jun. 2005, and the 
testimony of Mr. Loren Yager, the chief for the international affairs and trade of GAO, to the 
Congress (U.S.-China Trade Challenges and Choices to apply Countervailing Duties to China), it was 
recognized that there are legal and practical difficu lties with regard to countervailing investigations 
against China. The explanation offered by U.S. on this discrepancy is that China’s current economic 
situation is already very different from the traditi onal soviet mode, and that the criteria for initiating 
countervailing investigations are already met. Neve rtheless, the Department of Commerce states quite 
the opposite: that the major factors of production, including land, loans, raw materials are controlled 
or manipulated by the government and there’s no effective market or market price.   a. Please justify the applicability of countervailing i nvestigations on the pro ducts from a “non-market 
economy” as recognized by the U.S. 
 
b. Please explain what fundamental changes have occurred in China’s economy that has qualified as 
applicable to the counter vailing investigations?  
 41. The Department of Commerce has initia ted numerous joint antidumping/countervailing 
investigations against imports from China. In the antidumping investigations, U.S. regards China as a WT/TPR/M/200/Add.1 
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 non-market economy and applies substitution met hod in calculating the dumping margin. China’s 
understanding is that it has been a consistent practice of U.S. to apply joint antidumping/countervailing investigations only to  the “market economies”.  While for the “non-
market economies”, it only applies antidumping inves tigations because it is already adequate to use 
non-market method to remedy an unfair trade resu lted from the government’s price interference and 
distortion, including providing subsidies. 
 Please explain why no measures have been taken to  avoid joint AD/CVD investigations against 
products imported from China since the U.S. regards China as a non-market economy? 
 
42. In the U.S. countervailing investigations agai nst China, despite the ample amount of factual 
evidence provided by China on the prices of land, raw materials, water and energy, the U.S. refused to 
accept the fact that the prices for the abovementi oned factors have already been highly market-
oriented, and insists on the use of external benchm arks. For raw materials, U.S. refused to use the 
price of China’s importation from market economies. For the prices of land, water and interest rates, it 
is a common understanding that different countries, even among countries of similar economic 
development, apply different rates a nd there’s no objective base rate that is applicable to all Members.  
 For each of the above mentioned factor of production, please specify the reasons for rejecting to adopt China’s domestic price or price of imports from a market economy.  Please also justify the rationality for using external benchmarks inst ead of China’s domestic prices. 
 
43. According to Article 11.2 of the Agre ement on Subsidies and Countervailing Measures 
(SCM), applications for initiating a countervailing investigation shall include “sufficient evidence” 
and “simple assertion, unsubstantiated by relevant ev idence, cannot be considered sufficient to meet 
the requirements”.  Article 13.1 also requires th at “in any event before the initiation of any 
investigation, Members the products of which may be subject to such investigation shall be invited for 
consultations”.  The U.S. maintains a low standard  for the “sufficient evidence” test in accepting the applications for 
CVD investigations, and requires China to prove the “simple assertion” test.  This is a significantly imbalanced distribution of burden of proof, and h as led to the abusive use of countervailing measures 
by the U.S. industries.  Apart from this, U.S. a llows new claims to be submitted after a case is 
registered, and for these newly submitted claims, Member(s) involved were not consulted.  The 
practice is inconsistent with the provisions  of Article 13.1 of the SCM Agreement.  
 a. Please explain the standards for the “sufficien t evidence” test for accepting a CVD application. 
Please specify how these standards are in line wi th the requirements of Article 11 of the SCM 
Agreement, and how will U.S. take measures to avoid abuse of countervailing measures? 
 b. Please explain the standards for accepting new clai ms after a case is registered, and what efforts 
will be made to fulfill the requirements of Article 13 of the SCM Agreement? 
 
44. (Page 36, paragraph 70) The Secretariat Repor t notes that AD and CVD investigations may be 
suspended based on an agreement with th e exporter or foreign governments.  
 What is the working procedure to reach such an agreement?  Will the U.S. accept the price 
undertakings if the exporter or foreign government initiates an offer?  If not, what is the reason? 
 
45. (Page 36, paragraph 70) The Secretariat Report notes that the agreement with respect to CVD 
investigations may involve quantitative restrictions.   a. Please clarify how such quantitative restrictions  conform to Article 11 of GATT, Article 18.1 of 
Anti-dumping Agreement and Article 11 of SCM Agreement.   WT/TPR/M/200/Add.1 
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 b. Please explain how the U.S can ensure transparency  of such agreements with exporters or foreign 
governments.  46. With regard to the sunset review, will the U.S. adjust the scope of products under 
investigation and domestic like-products in the review?  Are these products necessary to be newly 
emerged products during the period when anti- dumping measures are imposed? In this kind of 
reviews, will the investigation authority conduct inve stigations on the domestic injury to the industry 
and the possibility of recurrence?  
(vii) Safeguards 
 
47. On Mar. 5th, 2002, U.S. initiated safegua rd measures against imported steel products and 
imposed Steel Import Licensing and Surge Monito ring (SILSM) for the imported steel products, and 
the Department of Commerce issued implementation ru les for SILSM on Dec. 31, 2003.  On Dec. 4, 
2003, President Bush terminated the safeguard me asures, but SILSM was maintained until Mar. 21, 
2005.  On Mar. 11, 2005, the Department of Commerce issued a regulation on the Steel Import 
Monitoring and Analysis System (SIMAS) to replace SILSM and the new system is effective until Mar. 21, 2009.  SIMAS also expanded the scope of covered steel products.  
 a. Please explain the purpose for adopting automatic SIMAS and the reason for expanding the scope of covered steel products.  
 
b. Please explain how the U.S. government will protect the commercial secrets involved in the steel imports.  c. Please clarify whether SIMAS has led to any s ubsequent trade measures including safeguards.  
 
(x) Standards and other technical requirements 
 
48. In January, 2007, the U.S. started its impl ementation of repetitive use program of electronic 
products in the state of Washington, which cove rs provisions on manufacturers, collectors, and 
registration of transporters, labeling, f ee charging, and punishment for violations. 
 
Could the U.S. please clarify the scope of electronic products subject to the regulation and the criteria 
and procedures for the operation?  49. In 2007, FDA tightened inspection on the China’s exports to U.S. While fully respecting 
U.S.’s rights under the SPS agreement, it has to be pointed out that some inspection process last up to 
2-3 weeks, significantly affecting China’s export to U.S. In addition, the high inspection fees also 
prevented exports from the SMEs, leading to a si gnificant reduction in the import from China.  
 It was also claimed by Chinese exporters that diffe rent inspection standards have been applied for 
certain products which discriminates against the imported products.  
 
a. Please explain whether the U.S. is considering adopting measures to ensure reasonable timeframe 
for the inspections.  b. Please justify the application of differe nt standards to the imported products. 
 
50. The Public Health Security and Bioterro rism Preparedness and Response Act of 2002 (the 
Bioterrorism Act) set rigorous principles for food safety and prevention of bioterrorism.  The FDA is the agency in charge and had formulated a series of measures to implement the Act.  
 WT/TPR/M/200/Add.1 
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 Without prejudice to U.S.’s right to secure food safety and prevent bioterrorism, the reflection from 
the Chinese industries is that the new regulations ar e excessively complicated in terms of inspections, 
registration and notification, which reduced the sp eed of customs clearance, increased export-related 
costs and raised uncertainty and unpredictability, affecting normal trade.   
a. Please explain in what ways the Act and its implementation reflects the requirement of “minimizing 
negative trade effects” as stipulated in Article 5.4 of the SPS agreement.   b. Is the U.S. considering adopting measures to reduce the negative impacts on the exporters? 
 
51. China is the U.S.’s largest export market for poultry products.  However, China’s export of 
cooked poultry products to the U.S. market has enc ountered difficulties for many years.  After rounds 
of tough negotiations, U.S. officially recognized th e equal status of China’ s sanitary administration 
for the cooked poultry products.  On May 24, 2006, U. S. has passed an Act that allows importation of 
China’s cooked poultry products that are produced w ith the U.S. approved raw materials. U.S. has 
also expressed on numerous occasions that technical matters, including food safety issue with respect 
to China’s export of cooked poultry products to the U.S. is already resolved and the importation 
should begin as soon as possible.  However, on Aug. 3rd, 2007, the U.S. House of Representatives has 
passed the 2008 Agriculture Appropriation Bill, Artic le 733 of which requires that the appropriations 
shall not be used to enact or implement rules th at allow importation of cooked poultry products from 
China. In December 2007, the bill was approved by the Senate and signed by the President.  
 
a. Does the U.S. consider restricting importation from a specific country through limiting the use of government fund a discriminatory practice and that such  protectionist practices should be abolished?  
 b. Please explain the consistency of Article 733 of the abovementioned bill with Article 11.1 of the 
GATT 1994 on the general elimination of  quantitative restrictions.  Does the U.S. have plans to bring 
the measure in conformity with the WTO rules?   c. As the world’s largest trading and developed natio n, the U.S. plays an exemplary role to the world 
trade system.  Has the U.S. considered taking  measures to compensate for the losses of other 
Members of the WTO that were harmed by this provision?  
 
d. Does the U.S. have any plans to normalize trade in  cooked poultry products with China in the near 
future?  If so, what specific measures are going to be adopted?   52. (Page 51, paragraph 148) The Secretariat Report notes that there are no statutory limitations 
regarding the duration of the process to approve fi rst-time imports of plants, animals, and their 
products into the United States.”   a. Please explain reasons for not setting a time limit for the approval process?   b. Members are concerned that this will lead to  increased uncertainty for trade in the covered 
products.  What’s the U.S.’s view?  Is the U.S.  planning to adopt measures to address Members’ 
concerns?   
(3) Measures Directly Affecting Exports 
(ii) Export restrictions and controls 
 53. China is the largest market affected by U.S. ’s export restrictive measures.  U.S. is a strong 
nation in terms of science and technology, however , according to the U.S. statistics, U.S.-China 
bilateral trade in high-tech products registered a deficit of 67.65 billion USD in 2007, accounting for 
26.4% of the total bilateral trade deficit.  Accordi ng to China’s statistics, th e U.S.’s share in China’s 
import of high-tech products dropped from 18.3% in 2001 to 8.5% in 2007.  In 2007, the Department  WT/TPR/M/200/Add.1 
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 of Commerce issued a new regulation on the export c ontrol, requiring China to expand the scope of 
coverage of products subject to the verifica tion of the end users and end use (VEU).  
 a. Could the U.S. share with Members its report on the analysis of the impact of the export control policy on the domestic industries and employment?  
 
b. Please explain how the U.S.’s stringent export control measures on high-tech products are consistent with the spirit and rules of free trade.  c. Could the U.S. confirm that the export control on high-tech products is one of the main factors 
driving the China-U.S. trade off the balance? 
 d. Does the U.S. agree that the requirement of expans ion of coverage of VEU is a setback to the trade 
facilitation?   
e. Please explain reasons for a tightened export c ontrol against China, considering that in the 
meanwhile China is also pressed by the U.S. for more liberalization in more areas.  
 
(iv) Export assistance 
 
54. (page 58, paragraph 183) According to the S ecretariat Report, financing support by the Ex-Im 
Bank for U.S. exporting goods and services is subject  to the U.S.-content requirements.  The higher 
extent of U.S. content, the greater possibility to get bigger support.   Please explain whether such arrangements will lead to  differential or differentiated treatment among 
enterprises?  Will they lead to enterprise-specific subsidies? 
 
Other Measures Affecting Production and Trade 
(ii) Other government support 
 
55. (Page 62 Paragraph 202).  The Secretariat Re port notes that the American Jobs Creating Act 
of 2004 introduced a phase-in 9% ta x deduction for certain producers.  
 
a. Please explain the criteria that a producer must satisfy in order to be eligible for such a tax 
reduction.   b. Are these tax reductions only apply to domestic producers? 
 
(iv) Government procurement 
 
56. Please provide the latest 3 years statistical on the total  government procurements nationwide, 
and the latest 3 years data on the procurements covered by GPA.  
57. Please specify what government procurement policies and measures have been adopted for 
the purpose to fulfill the social and economic policy objectives.  58. With regard to the 1933 Buy Amer ican Act, please clarify the followings: 
 
a. The Act prohibits certain public agencies from purchasing foreign goods and services, requires to 
set up local-content criteria and to provide preferential price conditions for local suppliers, etc.  Please 
clarify which agencies’ procurement activities are gove rned by this Act.  And please describe the 
local criteria requirement.   
b. What is the criteria for “domestic products”?  WT/TPR/M/200/Add.1 
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 c. What is the 6% price premium over normal foreign products based on when assessing the prices 
during the procurements? 
 
(v)Trade-related intellectual property rights 
 59. It is said that the U.S. congress is in the process of amending the existing patent law and the 
amended draft has been passed by the House of Re presentatives and is current ly under reviewing by 
the Senate.   a. Please provide information on the state of play with regard to the amended draft and the main 
amendments to the existing patent law? 
 b. Please clarify whether and how all interested parties, including foreign ones such as governments 
and other entities, have been given ampl e opportunities to comment on the amendments. 
 
c. Please clarify when the process for the ame nded draft is expected to be completed. 
 60. (Page 74, paragraph 262) The Secretariat Repor t mentions that, in order to improve patent 
quality, the USPTO changed its rules in October 2007 , which will require applicants to identify more 
specificity of the claimed inventions to be examined.   
a. Please provide the details of the changes in the rules. 
 b. Please clarify whether and how all interested parties, including foreign ones such as governments 
and other entities, were given ample opportunities to comment on the changes.  
c. Please clarify whether these new rules have been notified to the WTO.  
 61. In 2007, the decision by the U.S. Supreme C ourt of Justice regardi ng the “non-obviousness” 
examination criteria for patents overthrew the rigi d application of “teaching-suggestion-motion test” 
criteria as previously set by the Federal Circuit Appeals Court.   
Please explain what substantial changes have take n place regarding the determination conditions of 
patent authorization and infringement dispute. And what  is the impact of such changes with regard to 
patent-related issues?  62. (Page 74, paragraph 262) The Secretariat Re port also mentions that the USPTO published 
Examination Guidelines to help determinations re garding the obviousness of claimed inventions.  
 Please clarify what are the changes regarding the USPTO’s criteria on the review and determination 
for “non-obviousness”.  63. Can the works prohibited from circulation, presen tation, or exhibition by law be registered for 
copyright in the U.S.? 
 64. What are the considerations of the U. S. for not acceding to the Rome Convention? 
 
65. Please brief about the Copyright Royalty Ju dges of 2006.  What are the main changes 
compared to the replaced Copyri ght Arbitration Royalty Panels? 
 66. Does the U.S. have any recent plan to amend its copyright related legislations? 
  WT/TPR/M/200/Add.1 
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 IV. Trade Policies by Sector 
Overview 
 
67. (Page 79, paragraph 1) The Secretariat Report states that “the expiration of the 2002 Farm 
Act, and the current environment of high commodity  prices, would offer an opportunity to introduce 
policy changes”. 
 
a. Does the U.S. government agree with such comment?  
 b. As is known to all, the Congress still wants to ke ep high level of trade-di storting supports and the 
new Farm Bill that mandates the expenditure of USD 286 billion in the coming 5 years has been 
passed by the Congress.  What’s the Administration’s view regarding the future subsidy policy and its 
implications if the veto by the US President is overridden by the Congress? 
 
Agriculture 
(i) Introduction 
 
68. (Page 81, paragraph 14-15).  The Secretariat Report notes that, according to the OECD’s 
analysis, the PSE for the United States dropped sh arply to US$29.3 billion in 2006 from an average 
annual amount of US$42.5 billion in 2004-2005, mainly as a result of higher world commodity prices 
rather than policy changes.  Ho wever, the Commodity Credit Corporation (CCC) net outlays for 2006 
remained at the same high level as in 2004-2005 when commodity prices were low.  
 Please explain why the net CCC outlay didn’t decrea se during the period when the commodity prices 
went up. Justification with reference to the dom estic factual evidence would be highly appreciated. 
 
69. (Page 82, paragraph 16) The Secretariat Report notes that the WTO DSB made a ruling in 
March 2005 that the export credit guarantee for upland cotton were in nature export subsidies which are prohibited by the WTO because the U.S. didn’t ma ke commitments in its schedule.  The U.S. has 
made certain adjustments for the cotton programme according to the ruling an d related requirements, 
including the elimination of “step 2” payment.  However, the WTO compliance panel established at 
the request of Brazil found that the changes U.S. ha d made to cotton programmes were insufficient to 
bring the measures into conformity with WTO rules. In December 2007, WTO established a panel 
upon the request by Canada and Brazil to examine whether past U.S. domestic support to agriculture had exceeded the applicable WTO ceiling.   a. What specific support measures for upland cotton ar e currently in place?  What is the timetable for 
further adjustments to the cotton support programmes to make them in full compliance with the WTO 
rulings?  b. Does the U.S. plan to make any changes to the export credit guarantee programmes for soybean as 
well?  If so, what is the timetable?  
c. What is the U.S. view regarding the claims brought by Canada and Brazil? 
 
(ii) Border measures 
 
70. (Page 82, Paragraph 18) The report noted that “the simple average out-of-quota MFN tariff in 
2007 was around 42%; the in-quota average was 9.1%”,  and added with the following information, 
“close to 91% of out-of-quota tariffs are non-ad valo rem, compared with almost 28% of in-quota 
tariffs”.   Could the U.S. explain how this calculation is mad e?  Is the methodology applied here the same as 
that set out in Annex A to the TN/AG/W/3 of 12 July 2006?  WT/TPR/M/200/Add.1 
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 Generally speaking, the non-ad valorem is more r estrictive than the ad valorem tariff, since they 
usually provide high level of disguised protection.  Does the U.S. have any plan to simplify those no-ad valorem tariffs, especially in the context of DDA negotiations?  71. (Page 82, Paragraph 18) The Secretariat Report notes that the latest U.S. notification on tariff 
quotas covers 2003.  
 When does the U.S. plan to make the next notification on tariff quotas?   72. (Page 82, Paragraph 19) The report indicate that MFN TRQ and the FTA TRQ might be 
provided side-by-side, at least for certain product categories.  
 Could the U.S. provide information on the im port volumes under MFN TRQ and the FTA TRQ of 
these product categories? What are the f ill rates of these products in question? 
 
73. (Page 82, Paragraph 20) The Secretariat Report highlights that “access to tariff quotas is on a 
first come, first served basis, except for dairy produc ts and sugar”, and “one or more methods may be 
used, depending on the particular good”.   a. Why different administrative methods ar e used for dairy products and sugar? 
 
b. Why more methods might be used for the so-calle d “particular good”?  Are there any criteria in this 
regard?   74. (Page 83, Paragraph 24) The Secretariat Report states that “beef, dairy, ethyl alcohol, sugar 
and sugar-containing products, and tobacco remain subject to high import barriers”, the out-of-quota 
tariffs of which are higher than 100 per cent, and “the Commission estimates that the removal of 
barriers on imports of raw and refined sugar w ould increase U.S. welfare by US$811 million”.  
 Please explain the reason to maintain those high impor t barriers.  Does the U.S. plan to lower or 
remove those high tariffs so as to increase the consumers’ welfare?   (iii) Domestic Programmes 
 
75. (Page 83-84, Paragraph 25-26) The Secretaria t Report refers to the questions by other 
Members regarding the U.S. notification on domestic  support, notably the categorization of direct 
payments as "green box", and of counter-cyclical payments as non-product-specific.  Meanwhile, the 
EC pointed out in its 2007 report on the U.S. Barrier s to Trade and Investment that there were wide 
concerns that such categorization permitted the c ounter-cyclical payments not to be accounted for in 
Current AMS, otherwise the U.S. could exceed its  WTO limit of USD19.1 billion production-linked 
support.  The U.S. responded that direct payments  met green box criteria and that counter-cyclical 
payments were based on historical acreages and yi elds, and did not requires specific crops to be 
grown, therefore were not product-specific.  
 
The arguments of the U.S. run against the findings of the Appellate Body of the U.S.-Cotton  case, 
which upheld the ruling of the Panel that the dire ct payments are “amber” and the counter-cyclical 
payments are product-specific.   
a. Does the U.S. accept such findings? If yes, would the U.S. modify its notification?  
 b. How will the U.S. modify the direct payments to  ensure the compliance with the green box criteria, 
including the review and clarifications under the Doha agriculture negotiations?   WT/TPR/M/200/Add.1 
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 c. Although the counter-cyclical payments did not re quire the production of specific crops, they were 
designed and implemented targeting at certain agri cultural products.  Please justify why the U.S. 
categorize counter-cyclical payments as non-product specific AMS?  If the counter-cyclical payments is non-product specific, why would the U.S. accep t the introduction of product-specific cap on Blue-
Box payments? 
 
(iv) Export subsidies, credit, insurance, and guarantees 
 
76. (Page 84, Paragraph 30) The Report quoted the results of several studies on domestic support, and highlighted that farm programme payments “c ontain elements that provide incentives for resource 
use that may be inconsistent with market signal s”, “counter-cyclical payments may provide for the 
reduction of price-related revenue risk, and could also have some influence on production decisions”, 
and “counter-cyclical payments may distort incentives in  some situations but that any such distortions 
are to a lesser degree than ‘coupled’ paymen ts such as marketing assistance loans”.  
 
How does the U.S. determine the target price of c ounter-cyclical payments and the rates for direct 
payments?   What are the differences between the legislated rates of payments and the actual rates of payments for 
major products, such as corn, cotton, wheat, rice and soybean, during the period from 2002 to 2007?   
77. (Page 87, Paragraph 42) Please explain in detail the rules for implementation of the Facility 
Guarantee Programme (FGP).  85. (Page 88, Paragraph 43) The Report states that “under GSM-102, the CCC is authorized to guarantee the repayment of credit made available to  finance U.S. exports of agricultural goods on 
credit terms of up to three years”, and “the CCC generally guarantees 98% of the principal and a 
portion of the interest”.   Please provide the information on the repayment terms of the credits, preferably on product-by-product and country-by-country basis.   
Please indicate the exact proportion of the interest provided by the CCC. 
 78. Please provide information on the implementa tion of counter-cyclical payments in recent 
years, notably, the payment for products including corn, soybean, cotton and rice, on a product-by-product basis. 
 
79. Please provide information on the implementa tion of specific support measures for soybean. 
 
(v) Food labeling 
 
80. The U.S. is among the countries that have most 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 att ach food labels. For fortified food 
products, nutrition labels are required in addition, wh ich need to describe the content of at least 14 
kinds of nutrients. Such requirements create larg e extra load to the exporting manufactures.   
 
Does the U.S. have any plan to modify its fo od labeling mechanism for the consideration of 
alleviating exporters’ burden?   WT/TPR/M/200/Add.1 
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 Mining and Energy 
 
81. It is reported that the U.S. Federal Energy  Regulatory Commission (FERC) is regulating on 
the operating prices and service terms of around 130  interstate natural g as pipelines, around 1000 
electricity suppliers and 174 high voltage power tr ansmission companies.  Please clarify the specifics .  
 
82. The Secretariat Report notes that the Energy Policy Act of 2005 requires a doubling of bio-fuel use.  And the federal policy encourages bio-fuel production and use through tax incentive 
programme which cost in forgone ta x revenue was US$2.7 billion in 2006. 
 
a. What is the U.S. point of view regarding the in terlinkage between such kind of bio-energy policies 
and the worldwide food price hike?  b. The world is faced with a situation where food prices continue to go up and poverty population is 
confronted with food security crisis. In these circum stances does the U.S. have any plan to adjust its 
bio-energy policy? 
 
(5) Services 
 
83. Please provide the information on balance of payment of U.S. services trade.   
84.  Please provide specific information on U.S. services trade with WTO developing Members, 
including sectoral and Member-specific breakdowns.  Please list the major imports and exports of 
services (by sectors and trade value) and main d estinations of U.S. service trade surplus.  
 
(ii)  Telecommunications and related services 
 
85. Page 99 paragraph 96 menti ons “public interest analysis” conducted to entities from WTO 
members of common carrier wireless licenses.  Please describe how “public interest analysis” is carried out.   
86. For a long time, U.S. has cited national secur ity reasons for prohibitin g China for providing 
commercial satellite lunching services to U.S. satellites or satellites made in U.S. for other countries, 
while allowing other countries to provide such servi ces to U.S. customers.  China’s view is that 
commercial satellite lunching services is a commercia l activity that poses no threat to the national 
security, and China has a significan t commercial interest in the fast growing commercial satellite 
lunching service market.  
 Please explain, so far, which countries’ commerci al satellite lunching services have been used by 
U.S.?  To which countries has U.S. provid ed commercial satellite lunching services? 
 
87. Page 102 paragraph 106 states that in order to  promote competition, diversity and localism in 
media productions, the U.S. maintains se veral media ownership restrictions. 
 a. Please describe the U.S. approach to achi eve diversity and localism at the same time? 
 b. Please explain in detail the radio/television cro ss-ownership rule and th e rationale behind it.  
 
c. Please explain the reason why the newspaper/broad cast cross-ownership rule bans a company from 
owning a daily newspaper and a broadcast station in the same market. 
 88. The United States maintains ownership restri ctions on foreign companies supplying common 
carrier radio services. A license will not be grante d to or held by (a) foreign government or the  WT/TPR/M/200/Add.1 
 Page 73 
 
 
 representative thereof or (b) U.S. corporation of whic h more than 20% of the capital stock is owned or 
voted by a foreign government or its representative or a corporation not organized under the laws of 
the United States.   Could the United States clarify what “foreign govern ment or the representative thereof means”? Does 
the United States have any plan to remove this r estriction as well as the 20% ownership restriction? 
 
(iii) Financial services 
 
89. The U.S. regulatory regime offers national tr eatment to foreign banks. However, in some key 
business aspects, restrictions are maintained that discriminates against foreign service suppliers.  For 
example, foreign banking institutions are prohibite d from participating in Federal Deposit Insurance 
Corporation (FDIC) and engaging in the retail banking services. These measures affected operations 
of foreign banking institutions in the U.S.   
a. Please justify these restrictive measures and explain the policy considerations.  
 b. Please indicate whether there are plans to remove these restrictions.   90. (Page xi, paragraph 26)  The Secretariat Report notes that given the implications of the sub-prime crisis, the U.S. regulator is consideri ng to change existing regulations and strengthen 
supervision.  
 a. How will the sub-prime crisis affect the establis hment of subsidiaries or acquisition transactions of 
foreign banks in the U.S. market?   
b. Will the U.S. authorities change their attitude towa rds the entry of foreign banks after the sub-prime 
crisis?   c. Will the regulatory changes impose limitations on the establishment or acquisition activities of foreign banks in the U.S.? Will these changes make  such establishment or acquisition harder than 
before? 
 
91. (Page 104, paragraph 114)  The Secretaria t Report describes the general information on 
foreign banks in the U.S. as of end-June 2007, in cluding the number of institutions and their total 
consolidated assets.  
a. Please provide information on the applications for establishment of foreign bank subsidiaries and 
branches in the U.S. in the last 2 years, including: a) how many have been a pproved; b) how many are 
in the review process; c) how many have been rejected, and the detailed reasons; and d) which 
countries did these banks belong to.  
 
b. Please provide information on approval of inter-sta te acquisitions or de novo establishments by the 
existing foreign banking institutions in the U.S in the latest 2 years.  
 92. (Page 108, paragraph 130)  The Secretaria t Report notes that the RNIBBA of 1994 allows 
interstate branching by merger or de novo  establishment of branches. However, there are special 
limitations and certain states  have different policies.  
 
a. Could the U.S. explicate in greater details wh at the requirements for interstate expansion by a 
foreign bank are, and what the specific criteria for approval are?  WT/TPR/M/200/Add.1 
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 b. For foreign banks that have established subsidia ries or branches in the U.S. market, are there any 
restrictions with regard to exclusive provisions, merger conditions, and quantitative limitations, etc. 
on their new mergers or de novo establishment of br anches in the U.S.?  Please explicate the details.  
 93. (Page 108, paragraph 130-132) The Secretariat Report mentions that there are strict 
limitations on the merger, acquisition or c ontrol of a U.S. bank by foreign banks.  
 Please explicate the specific restrictive measures on the foreign control of a U.S. bank and the criteria for approval. Please justify their consistenc y with U.S. commitments under the WTO. 
 
94. Please clarify the supervision criteria for the existing branches of Chinese banks in the U.S., 
and whether the Chinese branches are subject to the same requirements as the U.S. local banks. 
 95. The U.S. has some limitations and require ments with regard to board members of the 
subsidiaries of Chinese banks in the U.S.   
Does the U.S. have any plan to ease the lim itations in this regard in the future? 
 96. Please explain requirements and procedures of review with respect to foreign sovereign 
funds’ investment in U.S. market, as well as the po licy objectives of the U.S in this regard.  What 
measures have been taken to ensure WT O transparency obligations are met? 
 
97. In March 2008, U.S. Treasury has put forward plans for the reform of the financial regulatory 
regime.  Please explain the content of the reform, current progr ess and the expected final results of the reform. 
 
98. In the recent crisis in the U.S. financial market, the credit rating institutions were widely 
criticized. The problem of potential conflicts of inte rests, such as between credit rating businesses and 
consulting businesses, has surfaced in the crisis.   Please comment on this problem and explain whether there are plans to enhance U.S. administration 
on the credit rating institutions.  
 99. Please explain the regulatory re quirements that have to be met for establishing a securities 
services institution and the procedures for application.  (iv) Air transport services 
 
100. (Page 116, paragraph 167) Is there any plan to ease the foreign ownership limitations in the 
U.S. airlines in the near future?  101. (Page 116, paragraph 168) Under the code-sha ring programme between a foreign air carrier 
and a U.S. carrier, is the foreign carrier allowed to put the code on the U.S. carrier’s domestic routes 
to/from the U.S. airports that are not open for inte rnational airlines?  What are the considerations to 
grant approval?  102. (page 117, paragraph 173) When will the second-stage U.S.-EU Air Transport Agreement 
negotiation start? Please explain that in such context,  whether a further liberalized bilateral agreement 
will affect fair competition from a third party?  103. Please explain what are the laws/regulations  and procedures that the DOT refer to when 
allocating routes and flight schedules, i.e. what is the legal basis of “route case” and how it is 
implemented.  WT/TPR/M/200/Add.1 
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 104. How does the U.S. address th e issue of antitrust and prevent unfair competition in regulating 
the air transport market?  
(v) Maritime transport 
 105. Liberalization of maritime transportation is the most effective way to lower the cost of 
international trade and increase efficiency. As the wo rld’s largest trading nation and one of the largest 
maritime service suppliers, U.S. has shown reluct ance in making commitments regarding maritime 
services in the Doha Round despite continued effo rts from other Members, which undoubtedly causes 
negative impact on the negotiations of both this sector and the whole services negotiations as well. 
U.S. also maintains a number of discriminatory re strictions in maritime transportation services, in 
particular, regarding controlled carrier and port investment.  a. Please indicate if the U.S. is prepared to ma ke efforts to address the concerns of other WTO 
Members about U.S. commitments on maritime services. 
 
b. Please justify the restrictions on the controlled carrier. Considering the fact that the majority of Chinese carriers deemed by the U.S. as “controlled ca rriers” areas the matter of fact fully market-
oriented and self-accountable businesses, does U.S. ha ve plans to remove the restrictions on these 
carriers? 
 
c. Please explain reasons for restricting foreign i nvestment, including investment from China, in the 
U.S. ports. Are there any plans to remove these restrictions?   106. With respect to oil pollution and environmental protection, each state of the United States enforces standards higher than speci fied in the relevant internati onal conventions approved by the 
United States.  Vessel owners have to enter into extra arrangements with the concerned state relating 
to vessel apparatus and responsibility guarantee, which places a significant burden on vessel owners. 
 Does the U.S. have any plan to unify those standard s mentioned above so as to facilitate the provision 
of maritime transport services in the U.S.? 
 
107. The Merchant Marine Act, 1920 sets limitations  on foreign vessels’ engagement in transport 
business in near ocean and within the U.S. and tran sport of projects whose expenses are born by the 
Federal Government must be carried by American vessels.   Has the United States ever considered relaxing su ch limitations so as to achieve greater economic 
efficiency through increasing competition in  the U.S. market since last review? 
 108. Protection of transport along the coast of the U.S. under Jones Act affects reallocation of empty containers of foreign vessel companies. These stipulations under Jones Act  have put extra 
burdens on foreign maritime companies, putting them  at a disadvantage in their competition with the 
U.S. domestic companies.  
 
Has the U.S. ever considered removing those limitations since last review?  109. The U.S. always rejects other Members to revise their legislations in case they constitute barriers for trade of export interest to the U.S. wh ile the U.S. always takes its own legislations of 
similar nature as an excuse for obstructing trade of export interest to other Members with the 
destination in the U.S. 
 
Could the U.S. explain the logic of this attitude of theirs and inform Members that this will be 
changed soon? 
 WT/TPR/M/200/Add.1 
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 (vi) Professional and business services 
 
110. (Page 122, paragraph 194) The Secretariat Repor t mentions that the U.S. still lacks a national 
regulatory regime regarding professi onal and business services, and st andards still vary from state to 
state, which results in de-facto barrier to trade in services.  
 
Why is there little progress made in pushing forward a unified standard nationwide?  Does the U.S. 
have a specific timetable for eliminating this trade barrier?  111. Please provide information on legi slations pertaining to the administration of foreign invested 
accounting and auditing business. Which government agencies are in charge of accounting/auditing 
sector?  112. Apart from the Public Company Accounting Oversight Board (PCAOB), which government 
agencies are also entitled to review the working pa per of the accounting firms that provide services 
for the public listed companies? Which of  these are the most important agencies?  
 113. Please provide the criteria for the market access of the corporate accountants, auditors and 
accounting firms.  Are there any restrictions on the foreign service- providers (including professionals 
of other Members’ corporations and accounting firms, as well as professionals for establishing an accounting firm in U.S.)? 
 
114. Are there any restrictions on the U.S. service providers (including agencies and individuals) to provide services across states? Are there any r estrictions which may include restrictions on the 
scope of business on foreign service-suppliers to supply services across states?   
115. Please provide information on the mutual rec ognition of qualifications between U.S. and 
other countries on accounting/auditing services.   116. Please provide information on the number of registered U.S. auditors and the number of domestic/foreign accounting firms.   
117. What are the agencies responsible for the es tablishment and implementation of the accounting 
and auditing standards? How the CPA examinations are implemented and are there plans to reform 
the system?   118. Apart from the accounting firms, which other service sectors are also subject to overseas due 
diligence? How are the investigations conducted? 
 119. According to the estimate of the American Colle ge of Physicians, currently there’s a shortage 
of 126,000 nurses in U.S.  The national average vaca ncy rate for the nursing jobs is 9%, and reaches 
as high as 40% in some hospitals.  According to the estimates of the Bureau of Labor Statistics, by 2012, as many as one million nursing positions in U.S. will need to be filled.  The lack of nurses and 
paramedical personnel has greatly affected on th e welfare of U.S. consumers and patients.  
 Please explain, with such great shortage of nurses  and taking into account that U.S. allows foreign 
nurses to provide services through immigration, why not allow nursing services to be provided 
through CSS and IP on a short term basis? 
 
120. It is a common complaint from Chinese industr ies that U.S. visa requirements and procedures 
are excessively burdensome.  To obtain a U.S. visa,  an applicant not only has to submit complicated 
application forms, but also has to undergo bac kground investigation, onsite interviews and leave 
fingerprints.  These requirements impose great difficulties on the movement of natural persons as well 
as trade and investment.   WT/TPR/M/200/Add.1 
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 Please explain what measures has the U.S. been take n to ensure a balance between ensuring national 
security and facilitating movement of  natural persons.  Are there any plans to streamline procedures 
and requirements for H1-B visa?  121. Almost all states require architects and engin eers register or obtain a license, but different 
states apply different standards and requirements w ith respect to registration/licensing, and state 
registrations/licenses are only effective within the te rritory of the state.  The system imposes great 
difficulties on the free movement of the architects and engineers between states, and is a substantial barrier for foreign service-suppliers.   
a. Please explain whether the requirements and procedures for registration and licensing of architects 
and engineers are identical across all states.  If not , please specify the differences.  Please also explain 
policy objectives leading to these differences.  b. With respect to the architects and engineers fro m the developing countries, please explain whether 
work experiences in their home countries (regions) are recognized by US.  If yes, are there any 
conditions attached?  c. Does the U.S. federal government or the rele vant associations have plans to harmonize the 
standards for registration/licensing of these professional s? If yes, is there a specific timetable?  If no, 
please explain the policy considerations.  
 
d. Please explain whether identical standard s and procedures are applied in assessing the 
qualifications of foreign architects and engineer s in awarding registration/license to the domestic 
professionals?  If not, please explain the details of  the differences and policy objectives behind these 
differences. 
 
e. Please explain whether there are any restrictions on the business scope of the foreign architects and 
engineers.  If yes, please specify the ex act measures and policy considerations.  
 f. Please specify which single enquiry point is designated by U.S. to implement the WTO transparency obligation with respect to registra tion/licensing of the architect and engineers.  
 
g. U.S. schedule of specific commitments states that  “Two-thirds of the officers, partners, and/or 
directors of an architectural firm in Michigan mu st be licensed in Michigan as architects, professional 
engineers and/or land surveyors”.  This restricti on practically bans business of foreign architectural 
firms. Does U.S. have plans to remove this MA r estriction? If yes, please specify the timetable.  If no, 
please explain the legal/practical difficulties. 
 h. 12 states of U.S. have made reservations on the national treatment in mode 4 for engineering/integrated engineering service.  Please indicate whether U.S. has plans to remove these 
restrictions. If no, please explain the legal/practical difficulties.  
i. Please explain the current visa type/requirement for foreign architects and engineers.  Is U.S. 
considering removing visa quota for mode 4 for these professionals, or streamlining visa 
requirements/procedures?  If yes, please specify the timetable. If no, please explain the legal/practical difficulties.  Postal Services 
 
122. Current U.S. WTO commitment only covers road-based courier service.   a. Please explain whether U.S. allows foreign express delivery companies to establish airfreight 
centers in U.S. and provide domestic/international air express delivery service. WT/TPR/M/200/Add.1 
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 b. Please list the laws and regulations governing express delivery. Are there provisions governing 
express delivery in the Federal Aviation Law?  c. If a foreign service-supplier wishes to provide express delivery service across states, does it have to obtain license(s) for the establishment of branch(es) or  office(s)?  If a license is required, what is the 
scope of coverage of th e license (national/state)? 
 d. Please provide information on the foreign commerc ial presence in the U.S. express delivery market.  
 123. In the Doha Round, U.S. has excluded unive rsal service from the commitments on the postal 
services. However, the U.S. postal law does not have a clear definition on the universal service. 
 Please clarify the exact definition, business type and scope of coverage of universal service. 
 
Transparency---Notification of measures of gen eral application affecting trade in services 
 
124. China notes that the United States has not made any notifications to the Council for Trade in Services under Article III of the GATS since 2002.  Article III provides that “Each Member shall 
promptly and at least annually inform the Council for Trade in Services of the introduction of any new, or any changes to existing laws, regulations  or administrative guidelines which significantly 
affect trade in services covered by its specific commitments under this Agreement”. 
 
Could the United States confirm that no new laws, re gulations or administrative guidelines or changes 
to exiting laws, regulations or administrative guide lines which significantly affect trade in services 
covered by its specific commitments under this Agreement have been introduced since 2002? 
 Transparency—public involvement in the drafting process 
 
125. Could the United States explain what mechan isms are used to disseminate draft proposed 
laws and regulations for consultation with interest ed parties, including prospective foreign services 
suppliers?  ADDITIONAL QUESTIONS FROM CHINA  
1. The US classifies Chinese traditional medicine (CTM) 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 rational administration system for CTM. 
 
2. (Page 82, Paragraph 18) The report noted that “the simple average out-of-quota MFN tariff in 
2007 was around 42%; the in-quota average was 9.1%”,  and added with the following information, 
“close to 91% of out-of-quota tariffs are non-ad valo rem, compared with almost 28% of in-quota 
tariffs”.  Why are the out-of-quota tariff and the in-quo ta tariff of the same tariff line not treated 
in the same manner? Is it for the purpose of conv enience to apply the ad valorem in the in-quota 
tariffs, which are set at the level that can actually allow the trade to happen? 
 
3. Please list the requirements and procedures that a foreign company must comply with in 
order to launch U.S satellites a nd satellites made by the United States for other countries or 
satellites with components made by the United States?  
4. Government-owned or government controlled insurance companies are not authorized to 
conduct business in nearly 30 states of the United St ates, which include commercially important states 
like California, New York and Washington.  WT/TPR/M/200/Add.1 
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 a. Could the US please clarify what “government-owned or government controlled insurance 
companies” mean?”   b. What efforts have been made by the US  Government to provide equal market access 
opportunities to government-owned or govern ment controlled insurance companies that 
conduct their business on the basis of  commercial considerations?  
 c. Does the US Government intend to relax such restrictions? 
 
5. The US IT industry needs a great many prof essional service providers each year.  However, 
the number of H1-B visa issued each year is fa r from meeting the market demands.  The total quota 
for H1-B visa in 2009 is only 85,000, of which 20,000 is reserved for students who have received 
master’s degrees or above in the US, and another 6,800 is reserved for nationals from countries with 
which the US has bilateral trade agreements.  Excluding these two reservations, only 58,200 visas are 
available for all applicants around the world, which is far too limited for meeting the actual market 
demands.  To our knowledge, the U.S Citizenship and Immigration Service ceased taking H1B visa 
applications for skilled workers seven days afte r the visa window opened for year 2009.  Similar 
situation has been witnessed in the previous years.   Due to the huge gap between the quota and actual 
applications, immigration officers had to hold a random drawing to winnow down the applications. 
The business communities in the US are seri ously concerned with this situation. 
 a. Without prejudice to the US right to instit ute and implement its immigration policy, we 
would appreciate it if the United States could pr ovide some information as to what efforts it 
intends to make to address the co ncerns of the business communities? 
 b. By reserving 6800 visa permits for Members with  which the US has signed bilateral free trade 
agreements, how does the US comply  with Article V.4 of the GATS in respect of any Member 
outside the agreement? 
 
6. In the United States, almost all states require architects and engineers to register or obtain a 
license, but different states apply different standards and requirements with respect to registration/licensing, and state registrations/license s are only effective within the territory of the 
state.  This system imposes great difficulties on the free movement of architects and engineers 
between states, and is a substantial barrier for foreign service-suppliers.  
 
a. Please provide information on the number of applications by foreign architects and engineers 
for registration/license in the US across states.  How many of the applications have been 
approved? (sector/home country breakdown) How ma ny have been rejected?  Why have they 
been rejected?   b. Please provide information on the mutual recognition of qualifications (or similar arrangements) among the states for architectur al, engineering, integrated engineering and 
urban planning & landscape services.  Please sp ecify the number of professionals covered by 
such arrangements. 
 c. Please provide information on the mutual recognition of qualifications (or similar arrangements) between the US and other count ries/regions for architectural, engineering, 
integrated engineering and urban planning & land scape services.  Please specify the number of 
professionals covered by such arrangements.  
7. In regard to the US laws and regulations  on import of agricultural products:  In soliciting 
comments on its quarantine regulations on access of fo reign agricultural products, the US provided a 
lengthy argument about whether imported agricu ltural products would compete with its domestic WT/TPR/M/200/Add.1 
Page 80  
 
 industry. Members are concerned that this signals a possible abusive use of quarantine regulations as a 
disguised means of domestic trade protectionism.  What is the US explanation to this?   
 
8. The US has complex legal procedures leading to inefficiency in its work on pest risk analysis 
and quarantine access of foreign agri cultural products, and causing ser ious barriers to the agricultural 
products export from other WTO members to the US.  Does the US have any plan to improve 
working procedures to facilitate imports of forei gn agricultural products into the US market?  
 
9. China expressed its intention to export apples to the US in 1996, and filed applications and 
submitted technical documents in 1998.  In 19 99 the US listed 800 pests, and China responded 
accordingly.  In the bilateral meeting in 2000, the US  agreed to make best endeavors to finish its 
initial risk analysis report in 2001. In 2003 th e US again listed 787 pests, and China provided 
responses in April 2004.  In April 2005 China prov ided the required additional technical documents 
based on the initial risk analysis.  In the bilatera l meeting on plant quarantine in September 2006, the 
US indicated that the risk analysis report would be provided before the 16
th bilateral meeting.  Since 
then, China has urged many times but the US has not responded to date.  
10. The risk assessment on apples has been dra gging on for 10 years, which has caused serious 
impediment to China’s apple exports.  Could the US explain how and when it would finish the risk 
analysis so as to reduce the unnecessary  barriers to international apple trade? 
 
11. The US has agreed to resume imports of Chin ese Ya Pear based on risk assessment.  In China, 
the apples and pears share quite similar production areas, pest occurrences and management measures. 
Please explain how the US would expedite the solu tion of apple importation from China on the 
basis of its work on pears?  
 12. The Chinese apples have been exported to Ca nada and Mexico, the neighboring countries to 
the US.  Does the US take this fact into consideration  when dealing with the importation issue of 
Chinese apples? 
 
13. Though Asian Pear is of different speci es from Ya Pear, it has exactly the same production 
areas and disease and pest occurrences with Ya P ear, the import of which from China has been 
approved by the US. In 2005 China sent a letter to the US applying for Asian Pear export to the US, and later raised the issue in many subsequent bila teral meetings.  In May 2007 the US wrote to China 
notifying its progress in risk analysis on China’s Asian Pear exportation, and requesting additional 
technical documents from China.  In July 2007 China provided the additional documents, but has 
received no response from the US to date.  Would the US please provide its feedback on the 
additional documents from China? When does the US plan to finish the risk assessment?  In 
view of that China’s Ya Pears have obtained quarantine access, will the US consider to simplify 
the quarantine procedures for Asian Pears and appr ove the import of China’s Asian Pears at an 
early date? 
 14. In 1997, China and the US signed the Protocol on China’s Export of Penjing Plants in 
Growing Media to the US, but the US has never implem ented it.  Further more, the US issued relevant 
regulations later on, unilaterally tightening the re quirements on the entry of Penjing plants.  On 16
th 
January 2004, the US Animal and Plant Health Insp ection Service (APHIS) issued the Final Rule for 
the Importation of Artificially Dwarfed Plants in  Growing Media from the People’s Republic of 
China, requiring that China’s Penjing plants must be grown in growing medi a both before and after 
the transfer of the plants, and must be free of so il. Meanwhile, the Penjing plants must be grown in 
greenhouses with mesh screening of less than 1.6 mm 2 years before export, and 0.6 mm 6 months before export.  These requirements are totally unrealistic, making China unable to export Penjing 
plants to the US. China has raised the issue many times, and sent a letter to the US again in November 
2006, clearly proposing its amendments to the regul ation on Penjing plants.  However, no response  WT/TPR/M/200/Add.1 
 Page 81 
 
 
 has been received from the US to date.  How would the US justify its above-mentioned 
requirements on Penjing are reasonable and consistent with the SPS Agreement?  
 
15. On the US responses to Ch ina’s comments on its WTO/SPS notifications: Since 2006, China 
has provided comments on 13 of US SPS notifications, but has received responses for only 2 of them from the US.  The same is true with  China’s enquiry.  According to the Recommended Procedures for 
Implementing the Transparency Obligations of the SPS Agreement  (G/SPS/7/Rev.2), a Member 
receiving comments should respond within a reasonable period of time to any Member from whom it has received comments as to how it will take these comments into account.  Could the US please 
explain how it has been honoring the Proce dures by responding to comments and questions 
from other Members?  How are the comments of other WTO Members considered by the US? 
 16. The US requires that Diethylene Glycol cannot be used in products for ingestion or possibly 
ingested.  Does the US have maximum allowance for Diethylene Glycol in end products like 
toothpaste?  If so, please clarify the maximum allowance for Diethylene Glycol in medicated 
toothpaste and non-medicated toothpaste end pr oducts.  Does the US apply the same maximum 
allowance for Diethylene Glycol fo r toothpaste of domestic producers? 
 
17. Please provide detailed information on the a lignment of US standards with international 
standards in areas of mechanical and elect rical products and children toy products.  
 
18. In the product areas above, are there any new technical requirements?  Could the US 
provide the list of related standards and technical regulations? 
 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 de veloping or revising the technical regulations in 
certain areas, particularly on children’s products, organic products, recycling of electrical appliances 
and electronic equipment, and textile.  These tech nical regulations are intended to protect human 
safety and health and environment, but China is hi ghly concerned about their inconsistency 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 notifi cations 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 Consumer Conve nience 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 principl e of “no more trade restrictive than necessary” 
to international trade?  
20. These regulations do not contain specific treatment requirements for the re-use of the 
collected waste electrical appliances and electroni c equipment, but seem to focus more on collection 
and commitment of manufacturers.  This tends to  cause trans-boundary transf er of waste electrical 
appliances and electronic equipment, which deviates from the aim of these regulations.  How will the 
US prevent such trans-boundary transfers an d ensure the realization of goals of the 
regulations?  
 WT/TPR/M/200/Add.1 
Page 82  
 
 21. Some clauses of the Computer and Television Recovery and Recycling Act  have greater 
impact on the cost of new, small, and non-native br ands than that of esta blished, big, and native 
brands, which is against the principle of fair trade.  What is the US justification for such 
inconsistency with WTO principles?  
 
22. On technical regulations on children’s produc ts: Through January to February 2008, the US 
made a number of TBT notifications on children’ s goods. China notes that there are some common 
problems with the rationality of these notified techni cal regulations and their consistency with WTO 
rules.  China is concerned and looking forward to the US clarification . 
 The regulations set limits on total lead content in  toys, and have failed to distinguish soluble and 
insoluble lead content.  As a matter of fact, only so luble lead is hazardous for human health.  In view 
of this fact, most countries in the world only have li mits on soluble lead in toys rather than the total 
lead content. China has expressed its hope for ma ny times that the US to cancel this limit.  Does the 
US have any plan to modify the requirem ents with regard to lead content?  
 
23. The notified draft regulations of the US restrict the use of DINP, DIDP, and DNOP. To date there is no specific scientific evid ence that these three substances are hazardous for children’s health. 
The restriction will directly result in the incr ease of production cost and testing cost of toy 
manufacturers, and create trade barriers.  Could the US please provide the reasonable scientific 
evidence for restricting the use of the three subs tances-DINP, DIDP and DNOP? Otherwise, will 
the US consider removing such restrictions? If not, why?  
 24. These draft regulations establish a MRL of 0. 1% for 6 phthalates (DEHP, DBP, BBP, DINP, 
DIDP, and DNOP), with the testing scope covering all toys and children care articles. It neither 
designates testing methods by age groups nor excludes the parts that the children do not contact in 
use. In accordance with the principle establis hed in ISO 8124 for determining the poisonous 
substances in toys subject to testing, the parts s ubject to poisonous substan ces testing should be the 
material that children could possibly contact in nor mal use or abuse of the toys.  In accordance with 
the principle established in the same ISO standard for testing the hazardous elements in toys, only the 
toy material that is put in mouth or used by children under 6 years old is subject to testing.  Please 
provide the reasonable scientific evidence for this  limit of 0.1%?  Does the US plan to narrow 
the scope of test and inspection by designating test ing methods by age groups? If not, what is the 
justification? 
 25. On Notification G/TBT/N/USA/346 (Phthalates and Bisphenol-A - Prohibitions - Toys and 
Child Care Articles): The US already began to c onsider revoking it when notifying it in January 2008. 
It was revoked in March 2008, but was not timely no tified to other WTO members. As a result, China 
only learnt of the revocation after having provided comments to this notification.  As a WTO 
member, the US is supposed to have notified the revocation of notification USA346 to other 
WTO members in a timely manner.  Please expl ain why the US has failed to notify such 
information to the WTO, even until now? 
 26. On regulations on organic food: the US notified its proposed National Organic Program 
(NOP) (G/TBT/N/USA/244) in March 2007.  The proposal amended the regulation on the national list 
of substances permitted and prohibited by the US Department of Agriculture, involving all kinds of 
organic food.   
According to the proposal, the organic products ex ported to the US shall comply with the NOP 
requirements.  Could the US please explain how it has taken into account the conditions of 
production, geography and climate in other countries when it formulated the NOP? 
 
27. Compared with the version published on the website of US Department of Agriculture, the 
notified version has made many changes, but ther e were no explanations for such changes in the  WT/TPR/M/200/Add.1 
 Page 83 
 
 
 notification.  Could the US please confirm which is the valid version of NOP? If it is not 
consistent with the currently notified version , will the US consider a second notification to 
WTO? 
 
28. The proposal prohibits the use of milk substitu te.  However, there could be emergent cases of 
lacking organic milk in all organic farming, pa rticularly at the beginning of organic farming 
development when organic milk is not easily available.  Please justify. Will the US take on board 
the Chinese opinion that substitute di ary be allowed in cases of emergency?   
 
29. According to the notification form, the proposed  dates of adoption and entry into force are to 
be determined. Has the regulation concerned been adopted or entered into force?  If not, when?   
 
30. On 8 March, 2007, the US Consumer Product Safety Commission (CPSC) notified the 
Standard for the Flammability of Clothing Textiles (G/TBT/N/USA/242).  Please provide 
information on the adoption and enforcement da te of this standard. Has the US taken into 
consideration of China’s request for at least one year as a period of adaptation?  31. The standard requires that all samples shall be dry-cleaned before they undergo the laundering 
procedure, i.e., the refurbishing method includes both dry cleaning and washing.  In view that some 
textiles are appropriate for dry cleaning, and others  for washing, China proposes that the refurbishing 
method include either dry cleaning or washing.  Has the US taken this suggestion into 
consideration?  
 32. The US House of Representatives and Senate adopted “Consumer Product Safety 
Modernization Act”(H.R.4040) a nd “CPSC Reform Act” (S.2663) on 19 December 2007 and 6 March 
2008 respectively. China notes that the US has not  notified the two Acts to the WTO.  Meanwhile, 
China also notes that, specific and concrete t echnical requirements and standards on consumer 
products and children products ar e provided under these two Acts.  For instance, every manufacturer 
of a children’s product which is subject to a childre n’s product safety standard has to have the product 
tested by a qualified non-governmental independent th ird party.  Also, a children’s product would be 
considered to contain lead and shoul d be prohibited if: any part of th e product contains lead or lead 
compounds and the lead content of such part (calcula ted as lead metal) is greater than 0.03 percent by 
weight of the total weight of such part.  Three years after enactment, the permitted amount would be 
reduced to 0.01 percent.  Within 1 year after the date of enactment, the permissible lead level in 
consumer-use paint should be reduced from 0.06 percent to 0.009 percent by weight.  Have these two 
Acts been approved by the US President? Please provide updates.  Is the US going to implement 
its transparency obligation and notify these two Ac ts to the WTO?  If not, why? If yes, when?  
 33. It is noted that concrete, specific technical requirements and standards are involved in the two 
Acts.  China would like to ask whether these specific detailed technical requirements and 
standards are supported by sci entific assessment and based on  scientific information and 
evidence to fulfill the WTO obligation.  If yes, please provide relevant scientific information. If 
not, how does the US take steps to fulfill the WTO obligations?  
 
34. Please clarify whether the US Administrati on will fulfill its WTO/TBT obligations to 
respect scientific information an d evidence and ensure that relevant technical requirements and 
standards are based on sufficient scientific and technical information so that unnecessary trade 
barriers are avoided when developing correspondi ng technical regulations which follow the two 
acts.
 
 
35. If relevant technical requirements in the two Acts, such as the criteria for lead contained 
in consumer-use paint, are not justified by scien tific information and evidence, how will the US 
government formulate technical regulations cons istent with its obligations under the WTO and 
fulfill the Congress’s acts at the same time? Please explain.  WT/TPR/M/200/Add.1 
Page 84  
 
 36. The Federal Communications Commission requ ests that since March 1st 2007, all TV sets 
marketed in the US should be digital and all digita l TV sets with screen larger than 13 inches must 
comply with the DTV standards developed by Advanced Television Systems Committee (ATSC). 
Therefore, DTV manufacturers must ensure that thei r DTV sets are consistent with ATSC’s standards 
if they plan to ship their products to the US market .  Furthermore, due to the fact that a great amount 
of patents are involved in ATSC’s  DTV standards, a huge amount of patent fee is imposed on DTV 
manufacturers when they produce and ship DTV set s which conform to ATSC’s DTV standards.  
They complain that the fee for patents in ATSC st andards is much higher than a reasonable level and 
that constitutes unnecessary obstacles on DTV manufacturing and trade.  Has the US notified the 
adoption of ATSC’s standards on DTV to the WT O? If yes, please provide detailed information 
about the notification.  If not, when do es the US plan to make the notification?  
 
REPUBLIC OF KOREA 
 THE UNITED STATES ECONOMIC AND TRADE ENVIRONMENT 
 Recent Challenges to the U.S. Economy
 
 1. The Government Report (paragraph 26, page  9) notes that a full range of public policy 
responses, including monetary and fiscal policy actions , is being implemented to help resolve recent 
economic challenges.  
 A.  It is known that in order to prevent the recurrence of credit crises like the sub-prime 
mortgage crisis, the FRB is considering directly re gulating non-banks, including investment banks, in 
terms of liquidity control, etc. Please provide us  with detailed information regarding the plan. 
  B.  In March this year, the Treasury Department  released a plan for a comprehensive financial 
regulatory reform called "Blueprint for a Modernized  Financial Regulatory Structure." Please provide 
us with detailed information about th e timeline and feasibility of the plan. 
 
TRADE POLICIES AND PRACTICES BY MEASURE 
 
Measures Directly Affecting Imports - Customs Procedures
 
 
2. The Secretariat Report (paragraph 24, page 27) notes that the Implementing Recommendations of the 9/11 Commission Act of 2007 prohibits containers from being loaded on a 
U.S.-bound vessel unless they have been scanned usi ng non-intrusive imaging and radiation detection 
equipment.  It is our understanding that there are several foreign ports currently piloting the SFI and 
that based on the assessment from the pilot program, the Implementing Recommendations of the 9/11 
Commission Act of 2007 will go into effect from July  1, 2012.  Please provide  us with information 
regarding policy direction after the SFI pilot programme.  3. The Secretariat Report (paragraph 29, page 28) notes that CBP and the New Zealand Customs 
Service signed a security arrangement in July 2007.  Under this arrangement, the participants in New 
Zealand's Secure Exports Scheme receive C-TPAT be nefits when exporting to the United States.  
Please elaborate the US Government's plans to si gn such Mutual Recognition Agreements with other 
countries.  Measures Directly Affecting Imports - Anti-dumping and Countervailing Measures
 
 
4. The Secretariat Report (paragraph 91, page 40) notes that the USDOC's methodology of not granting offsets for non-dumped-sales, also known as "zeroing" (negative margins of dumping), in 
determining weighted average dumping margins, con tinued to be a source of legal disputes.  The 
Appellate Body of the WTO continues to conclude that USDOC acted inconsistently with the Anti- WT/TPR/M/200/Add.1 
 Page 85 
 
 
 Dumping Agreement (ADA) by maintaining the zeroing procedures.  For example, recently in a 
stainless steel case by Mexico, the Appellate Body reversed the Panel's conclusions, finding that 
simple zeroing in periodic review s is inconsistent with Article:2  of the GATT 1994 and Article 9.3 
and 2.4 of the ADA (WTO document WT/DS344/AB/R, 30 April 2008).  Please elaborate the US Government's plans to stop its "zeroing" pro cedures in all anti-dumpi ng proceedings, including 
original investigations and subsequent reviews, in  compliance with the relevant adjudications issued 
by the WTO Appellate Body.  Measures Directly Affecting Imports - Technical Re gulations, Conformity Assessment, and Standards
 
 
5. The Secretariat Report (paragraph 133, page 48)  notes that the ANSI accredits organizations 
whose standards development process meets ANSI re quirements of due process and consensus, which 
are established in the document ANSI Essential Requirements and in various other guidance documents.  The Report also notes that there are 208 ANSI accredited standards development 
organizations. 
 
 A.  Does the document ANSI Essential Requireme nts reflect the "Code of Good Practice for 
the Preparation, Adoption and Application of St andards" provided in Annex 3 of the WTO/TBT 
Agreement?   B.  Does the ANSI have the authority to cont rol or supervise such accredited organizations? 
 
6. The Secretariat Report (paragraph 136, page 49)  notes that in practice the U.S. market often 
provides strong incentives for imported and domestic products to meet certain standards, although 
compliance with standards is voluntary.  For example, the U.S distributors of home electronic appliances require the UL mark to be placed on every electronic products sold in the U.S.  In reality, it 
takes 6 months to 1 year to complete the process of receiving the certified mark.  This procedure 
seems to act as a market access barrier to many foreign electronic appliances exporters.  Please 
elaborate the US Government's plans to recognize fore ign quality certification to be equivalent to that 
of the UL Mark.  7. The Secretariat Report (paragraph 137, page 49) notes that the Interagency Working Group 
on Import Safety has issued a strategic framework  and an action plan, which recommends several 
TBT-related measures to enhance the safety of impor ts into the United States.  It is our understanding 
that the strategic framework advocates measures to protect public safety by ensuring the safety of 
imported goods.  However, as the framework reco mmends strengthening TBT- related measures, the 
measures are applied only to imported goods.  Therefore,  there is a concern that they might violate the 
national treatment principle and limit trade.  Korea would like to know the US Government's opinion 
on this matter.  Measures Directly Affecting Imports - Sanitary and Phytosanitary Measures
 
 8. The Secretariat Report (paragraph 142, page 50)  states that "according to the United States, 
U.S. SPS measures are based on international sta ndards and guidelines where they exist and as 
appropriate".  Although, the OIE guidelines does not include separate restric tions for sterilized food 
products in the case of international trade and quaran tine, the U.S. currently maintains restrictions on 
sterilized food imports due to the domestic procedures and guidelines.  What is the reason behind such 
restrictions? 
 
9. The Secretariat Report (paragraph 145, pa ge 50) notes that a risk assessment may be 
necessary to evaluate requests for first-time imports of  plants, animals, and their products.  Is there 
any regulation on the administrative procedures that  requires risk assessment to be conducted within a 
prescribed time period on the beef imported from the countries with the OIE's FMD-free country 
status? WT/TPR/M/200/Add.1 
Page 86  
 
 10. The Secretariat Report (paragraph 154, page 52) notes that under the Bioterrorism Act, the 
FDA must receive notice prior to the entry of food  that is imported or offered for import into the 
United States.  The report also notes that domestic  and foreign facilities that manufacture, process, 
pack, and hold food for consumption in the Unit ed States must register with the FDA.  These 
requirements acts as a market access barrier for food  exporting companies.  Please elaborate the US 
Government's plans to ease these requirements. 
 Other Measures Affecting Production and Trade - Competition Policy
 
 11. The Secretariat Report (paragraph 216, page 65) notes that the Webb-Pomerene Act grants 
limited immunities from antitrust laws to associations  of competing business solely for the purpose of 
engaging in collective exports of goods, provide d this does not result in conduct that has anti-
competitive effects in the United States or injure do mestic competitors.  It is our understanding that 
there is a possibility of business enterprises engaged in export cartels being involved in collaborative 
behavior which would impact domestic competition in the US.  Also, overseas consumers in markets 
where the US government grants export cartels will  be negatively affected by the immunized export 
cartels, consequently harming th e welfare of consumers.  Korea would like to know the US 
Government's opinion on these matters.  12. The Secretariat Report (paragraph 216, page 65)  also notes that international ocean carriers 
are allowed to engage in conferences (price-fixing arrangements) pursuant to the Shipping Act of 
1984 if they are not contested by the Federal Mar itime Commission.  However, in order to enhance 
competition among international maritime carriers,  the OECD has been discussing the mandatory 
elimination of maritime transportation cartels for every country.  Korea would like to know the US 
Government's position on the maritime  transportation cartels issue. 
 TRADE POLICIES BY SECTOR 
 
Services - Telecommunications and Related Services
 
 13. The Secretariat Report (paragraph 95, page 98) notes that under the Section 310(b)(3) of the Communication Act, no broadcast, common carrier, aeronautical en route or aeronautical fixed radio 
station license shall be granted to or held by U.S.  corporations of which more than 20% of the capital 
stock is owned of record or voted by foreign invest ors. These restrictions act as a barrier to foreign 
direct investment in these sectors.  Please elabor ate the US Government's plans to ease these 
restrictions.  
Services - Maritime Transport
 
 14. The Secretariat Report (paragraph 95, page 119)  notes that Cabotage restrictions remain in 
place in the United States.  The Jones Act r eserves cargo service between two points in the 
United States for ships that are registered and built in the United States and owned by a U.S. 
corporation, and on which 75% of the employees are U.S. citizens.  Please elaborate the US 
Government's plans to ease these restrictions. 
 
ADDITIONAL QUESTIONS FROM THE REPUBLIC OF KOREA 
 
TRADE POLICIES AND PRACTICES BY MEASURE 
 
Other Measures Affecting Production and Trade : Other government support:  overall support
 
 14. The Secretariat Report (paragraph 199) notes that the United States submitted a full 
notification under Article XVI:1 of the GATT 1994 a nd Article 25 of the Agreement on Subsidies and  WT/TPR/M/200/Add.1 
 Page 87 
 
 
 Countervailing Measures in November 2007. Please elaborate the U.S. Government's specific 
regulations on tax exemption for off-highway business use including the following questions. 
 15. According to notifications "G/SCM/N/3/USA/Suppl.1, G/SCM/N/16/USA/Suppl.1 G/SCM/N/25/USA/Suppl.1, G/SCM/N/38/USA ( 19 November 1998), "Commercial Fishing 
Exemption from Deficit Reduction Rate Compone nt of Excise Tax on Motor Fuels(Commercial 
fishermen can purchase untaxed diesel fuel or can recei ve a refund for any taxes paid on gasoline used 
in commercial fishing boats.)" is refe rred to in the fisheries subsidies. 
 (1) Under Article 2 (Specificity) of the WTO ASCM, these subsidies are seen as specific for 
commercial fishermen. Does the U.S. Government take the same view on this? 
(2) What is the exact total amount of tax exemption on fuel for fishermen annually? (3) What are the criteria to be a recipient of the s ubsidy?  Be involved in small-scale fisheries, in 
indigenous fishing activities or in ordinary fishing activities? 
(4) Finally, what is the average landed value of fi sh harvested by them (recipients of subsidy)?   
 
NEW ZEALAND 
 Trade Policy Developments 
(WT/TPR/S/200, page 12 and WT/TPR/S/200 page 8) 
 
The Secretariat notes that the United States h as made progress in implementing several WTO 
(Dispute Resolution) rulings calling for changes to U. S. legislation, but a few rulings have not yet 
been fully implemented.  Could the U.S. please provide a proposed timeline ou tlining future phases of implementation of WTO 
rulings, as well as background information on the extent to which these have/have not been 
implemented?  
Tariffs 
(WT/TPR/S/200 page 31 and WT/TPR/S/200 page 32) 
 
The Secretariat notes that the aver age applied tariff for agriculture in 2007 was 8.9%, down slightly 
from 2004 (9.7%).  The average applied tariff rate for non-agricultural products was 4% in 2007, unchanged from 2004.  The products subject to the highest ad valorem  or ad valorem  equivalent rates 
were tobacco (350%), sour cream (177.2%), and peanuts (164%); other agricultural products are 
subject to tariffs of between 50% and 110 %, incl uding milk and cream, butter substitutes, cheese, 
goose liver, sugar, cocoa powder, preparations for infant use, prepared mustard and cotton fibres .  In 
the non-agricultural sector, the highest rate was applied to footwear and leather products.  
 
The decrease in the average applie d MFN tariff for agriculture between 2004 and 2007 largely reflects 
increases in prices of agricultural produ cts and the resulting reduction in the ad valorem  equivalents 
(AVEs) of non- ad valorem  tariff rates applied on such products.  
 
What is the US justification for maintaining hi gh tariff protection in sectors like agricultural food 
products?  What program does the US have for the reducti on and eventual elimination of such tariffs? 
 
When does the US intend to redu ce or eliminate tariff peaks? 
 The Secretariat notes (p 32) that "on average, non- ad valorem tariffs continue to afford higher 
protection than ad valorem duties.  In 2007, the average AVE of non-ad valorem tariff rates was 9.2%, 
compared with 4.3% for ad valorem duties.  Ap art from agricultural products, non-ad valorem tariff WT/TPR/M/200/Add.1 
Page 88  
 
 rates also apply to articles of apparel and clothi ng, footwear and headgear, watches, and precision 
tools."  Given that non ad valorem tariffs are regarded as a non-transparent form of tariff protection, does the 
US have any plans to convert their non ad  valorem tariffs to ad valorem rates? 
 
The Secretariat report also notes (p 79) that "Manufacturing tariffs are generally low, but tariff peaks have sheltered a few industries from international competition, for example textiles, clothing, and 
footwear and leather".  
The USITC (WT/TPR/S/200, p96) identified textiles and apparel as subject to relatively high import 
barriers and that there would be significant welfar e gains if tariffs and other restrictions on these 
goods were to be eliminated.  What plans are there to review or reduce tariffs on these industries on a unilateral basis?  
The USITC (WT/TPR/S/200, p96) identified 12 sectors that are subject to relatively high tariffs, 
including edible fats and oils and processed fruits and vegetables.  How does the US intend to respond 
to the USITC's identification of the welfare gains that would result if these tariffs were to be reduced 
or eliminated?  Technical regulations, conformity assessment and standards  (WT/TPR/S/200 page 47 and 
WT/TPR/S/200 pp. 88-89) 
 The Secretariat report notes that preliminary estimates by the Department of Ag riculture for the direct 
incremental costs associated with the country-of-or igin labelling requirement in the 2002 Farm Act 
range from US$582 million to US$3.9 billion during the first year of application.  Annual costs to the 
US economy after a ten-year adjustment peri od are estimated to range from US$318 million to 
US$596 million.  The benefits derived from country-o f-origin labelling are found to be negligible.  
The Secretariat report also notes that the Departme nt of Agriculture found little or no evidence that 
consumers are willing to pay a price premium for country-of-origin labelling or that they would 
increase their purchases of food bearing the US origin label.  
Does the US intend to continue implementing mandato ry country of origin labelling, given its high 
cost and negligible benefits? If so, please  explain the reasons for this decision. 
 
Sanitary and Phytosanitary measures 
(WT/TPR/S/200 page 51 and WT/TPR/S/200 page 52)  
The Secretariat notes that typically, the process to a pprove first time imports of plants, animals and 
their products into the US takes between two to th ree years.  New regulations to establish a “notice-
based” approval process for fruits and vegetables be came effective in August 2007, because APHIS 
could not keep pace with the volume of import requests by using solely a rulemaking-based review and approval process. 
 
What has been the experience so far with the notice- based process?  What data is available to show 
that the new process has reduced the time taken to approve first time imports of plants, animals and their products?  
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 subsequen tly published country risk assessments for BSE.  WT/TPR/M/200/Add.1 
 Page 89 
 
 
 Could the US advise when it intends to either rec ognise the OIE assessments or conclude its own, and 
what measures additional to the relevant interna tional standard it has deemed “appropriate” with 
respect to the 3 risk categories?  
Agriculture 
(WT/TPR/S/200, page 84 and WT/TPR/S/200 page 85) 
 The Secretariat notes that annual average direct payments to US agricultural producers were 
US$16.3 billion between 2003 and 2007.  A study by the US Department of Agriculture found that 
farm programme payments “contain elements that provide incentives for resource use that may be 
inconsistent with market signals.”  Marketing assist ance loans provide an incentive to plant more than 
would be the case in their absence.  How does the US intend to reduce this level of suppo rt and ensure that farm payments become more 
consistent with market signals and less trade distorting over time? 
 
Agriculture:  Export subsidies 
(WT/TPR/S/200, page 87) 
 The Secretariat report notes that under the Dairy Export Incentive Program (DEIP) the United States 
provides cash bonus payments to exporters of elig ible commodities based on the quantity exported.  
There have been no bonuses granted under the DEIP  since 2004.  Although the DEIP has not been 
used to provide bonuses to exporters since 2004, the provision has been included in the revised Farm 
Bill, with language instructing the Secretar y to use it to the fullest extent possible. 
 We note that the DEIP has not been accessed since 2004.  We would be grateful for an update from 
the US on future plans for the programme? 
 
Government Procurement 
(WT/TPR/S/200 page 67) 
 The Secretariat report notes that US policy with r espect to market access for government procurement 
is based on reciprocity”.  The report goes on to no te that “The Trade Agreements Act generally 
prohibits federal agencies from purchasing goods a nd services from countries that are not a party to 
the GPA or other trade agreements that cover government procurement.” 
 As a member of APEC and having endorsed th e APEC Non-Binding Principles on Government 
Procurement, including the principle of non-discrim ination, does the US consider that its policy 
on Government Procurement is cons istent with those principles? 
 
Measures Directly Affecting Imports 
(WT/TPR/S/200 page 34) 
 
Merchandise Processing Fee (para 58)
 
 According to the U.S. authorities, Congress inte nded the merchandise processing fee to approximate 
the cost to CBP of processing the entry of imported merchandise.
4  They have also noted that the 
merchandise processing fee's statutory ceiling was introduced in part "to address GATT concerns".5  
The American Jobs Creation Act of 2004 required the Secretary of the Treasury to issue 
recommendations concerning the possible elimination of fees collected by the Department of 
                                                      
4 WTO document WT/TPR/M/126/Add.3, 22 November 2004. 
5 WTO document WT/TPR/M/126/Add.3, 22 November 2004. WT/TPR/M/200/Add.1 
Page 90  
 
 Homeland Security, including the merchandise processing fee.
6  Such recommendations have not yet 
been issued.  In the context of th e last Review of the United States, the U.S. authorities indicated that 
they had no intention of eliminating the merchandise processing fee.7 
 “New Zealand notes that The American Jobs Cr eation Act of 2004 required the Secretary of the 
Treasury to issue recommendations concerning the possible elimination of fees collected by the 
Department of Homeland Security, including the merchandise processing fee.  Could the US advise when recommendations concerning the possible elimination of merchandise processing  fees be issued? And when a review of f ees for possible elimination will then be 
completed?” 
 Excise on Beer (para 62)
 
 The Secretariat report notes that “Beer (imported and domestic) is subject to a US federal excise tax at 
a rate of US$18 per barrel of 31 gallons.
8  A reduced rate of US$7 is applied on the first 60,000 
barrels of beer produced in a year by a domestic  brewer with an annual production of two million 
barrels of beer or less.  Imported beer is not eligible for the reduced rate.” 
 Note:  60,000 barrels = 7m litres.  2m barrels = 235m litres.  In 2007, NZ beer output totalled 297m 
litres with the largest brewer (NZ Breweries) a ccounting for 152m litres (51% annual output).  The 
top five NZ breweries accounted for 97% of annual output – the remaining 69 breweries are largely in 
the ‘boutique’ market.  The US thresholds seem to give ‘discount’ excise to large brewing concerns. 
 New Zealand notes that a reduced rate of federal excise tax is applied on the first 60,000 barrels of 
beer produced in a year by a domestic brewer with an annual production of tw o million barrels of beer 
or less. 
 Could the US explain the rationale for the two levels of federal excise tax? 
Is a ‘domestic brewer with an annual production of two million barrels of beer or less’ considered to 
be a small enterprise (say, a ‘boutique’ brewer)? Could the US advise how this lower federal exci se tax (US$7 as opposed to US$18 per barrel of 
31 gallons) is applied to importe d product – thereby meeting the terms of Article III, (1) of GATT 
1994? 
 
EUROPEAN COMMUNITIES  
II. TRADE POLICY REGIME: FRAMEWORK AND OBJECTIVES  
(1) OVERVIEW WTO Secretariat's Report, page 12, para. 2 
 
The Secretariat Report outlines that the trade prom otion authority, which the Administration views as 
an important tool for achieving U.S. trade objectiv es, expired on 1 July 2007.  Furthermore, the 
Report states that in May 2007, the Administration and congressional leaders agreed to a trade policy 
"template", which has been described as "open[ing]  the way for bipartisan work on Trade Promotion 
Authority".  The template contains provisions on labour, environment, intellectual property, 
investment, government procurement, and port security.  
1. Could the US provide further information on the new trade policy template as regards labour 
issues? 
                                                     
 
6 Section 892(e), American Jobs Creation Act of 2004. 
7 WTO document WT/TPR/M/126/Add.3, 22 November 2004. 
8 26 USC 5051.  WT/TPR/M/200/Add.1 
 Page 91 
 
 
 WTO Secretariat's Report, page 12, para. 3 
 
The Secretariat Report outlines that the United Stat es grants unilateral preferences to developing 
countries under several schemes, which may be conditi onal on adherence to criteria that, according to 
the U.S. authorities, are intended to promote sound policies and allow beneficiaries to expand trade 
and investment. 
 2. Could the US provide information on specifi c schemes that provide incentives related to 
labour issues?  US Report, pp. 24- 25, para. 114  
The US states in its Report that its trade policy ag enda includes a strong commitment to protecting the 
rights of workers in America and in countries with which the US trades.  A concerted focus on worker 
training and education policies will continue to en sure that the American workforce can compete 
globally.  For workers displaced by trade, the Trade Adjustment Assistance Reform Act (TAA) of 
2002 (Title I of the Trade Act of 2002) modifies and expands the TAA for Workers program.  TAA 
helps workers adversely affected by foreign trad e through the provision of re-employment services:  
job training for displaced workers, income support while in training, and job search and relocation 
assistance.  Important changes to the program ma de in 2002 include expanded eligibility to more 
worker groups, increased benefits, and tax credits for health insurance cove rage assistance.  Congress 
has appropriated funds for the TAA pr ogram through September 30, 2008. 
 3. Could the US further indicate how it intends to follow up on its commitment to protect the 
rights of workers?  US Report, page 27, para. 125  
The US states in its Report that by undertaking th ese various elements – forging global, regional and 
bilateral trade agreements; encouraging developi ng countries’ multilateral integration; building 
support for open trade; encouraging sustainable deve lopment and core labour standards; and fostering 
greater transparency – the United States will conti nue to play its traditional leadership role in 
promoting trade liberalization and developing  a trading system of benefit to all. 
 4. Could the US elaborate further how it intends to encourage sustainable development and core 
labour standards in this context?  (3) FOREIGN INVESTMENT REGIME WTO Secretariat's Report, pp. 14-16, para 17-25  
The Report describes the way the Foreign Investme nt and National Security Act of 2007 (FINSA) 
reviews the operation of the Committee on Foreig n Investment in the United States (CFIUS). 
 
5. Could the United States explain whether an y changes introduced by FINSA constitute a 
de jure  exception to the WTO commitments of the United States? 
 
(4) INTERNATIONAL RELATIONS 
(i) World Trade Organization 
WTO Secretariat's Report, page 17 , para.31 and page viii, para. 5 
 
The Report outlines that the US has fulfilled its notification obligati ons, except for preferential rules 
of origin, agricultural tariff quotas, and government procurement statistics.  WT/TPR/M/200/Add.1 
Page 92  
 
 6. Could the United States provide information on its plans to fulfil its notification obligations 
regarding preferential rules of origin, agricu ltural tariff quotas, and government procurement 
statistics?  
(ii) Preferential and other arrangements 
WTO Secretariat's report, 19, para. 41 
 
7. Could the United States elaborate further on its  plans to deepen economic relationship with 
the United Arab Emirates? Are the US author ities considering the possibility to open FTA 
negotiations?  US report, pp 13-14, para. 48-48  
The overview of RTAs as indicated in Table AII.3 a nd described in the US report, appear to indicate 
that the US follows a rather homogenous model fo r RTAs. As already indicated during last US TPR 
in 2006, the United States" considers FTAs which c ontain comprehensive duty-elimination and a wide 
scope of non-tariff trade reforms to be the 'gold standard ' ”.   In this regard, the US confirmed at that 
time, that there was no better model on which to base  FTAs.  However, the EC continues to note that 
recent FTAs with less developed countries have been designed irrespective of the levels of 
development of its counterparts.  In particular , there is very limited asymmetry in commitments 
between the US and its less developed partners, in cluding long transition periods for the US itself.  
 
8. Could the United States explain how devel opmental aspects are taken into account when 
designing FTAs with less developed countries?  lease give examples.  9. Could the United States describe the use of MFN clauses in its FTAs?  What FTAs contain 
such clauses, and what is the rationale for each of them? 
 
US Report, page 14, para. 52 
 
The Report indicates that the FTAA remain ed suspended during 2006 and 2007. 
 
10. Could the US authorities explain whether there are effective attempts to resume these 
negotiations in 2008?  
III. TRADE POLICIES AND PRACTICES BY MEASURE  
(1) OVERVIEW 
WTO Secretariat's Report, page 23, para. 6 
 
The Report states that the Continued Dumping and Subsidy Offset Act of 2000 (the Byrd 
Amendment) was repealed in 2005, but AD and CV duties assessed before October 2007 continue to 
be distributed to U.S. producers who supported th e petition for investigation.  Total disbursements 
were estimated at approximately US$1.9 billion from  the entry in force of the Byrd Amendment to 
end 2007.  According to publicly available informat ion, such disbursements have been made to U.S. 
shrimp producers who supported AD petitions against e xporters of shrimp products from a number of 
countries.  11. Could the United States specify the total amount of disbursements to the aforementioned US 
producers to date?  
 12. Are the US producers involved in wild capture  fishing?  If so, have the US authorities taken 
measures to avoid that these subsidies contribute to overcapacity and overfishing?   WT/TPR/M/200/Add.1 
 Page 93 
 
 
 According to publicly available information, Star Kist Samoa and Chicken of the Sea International 
Samoa Packing, companies operating tuna canneries in American Samoa, a U.S. territory, benefit from a tax exemption agreement.  13. Could the U.S provide details of the tax exemp tions granted to these companies, in particular 
yearly total amount of tax credits obtained since the implementation of this measure? 
 14. Which companies in American Samoa, other than fish processing plants, benefit from these 
subsidies?  (2) MEASURES DIRECTLY AFFECTING IMPORTS (i) Customs procedures  
Large machinery deliveries that usually arrive dur ing a period of several months should be imported 
through the same customs entry point and within a 25 -day timeframe.  In practice, this makes imports 
of large machinery very complicated and costly, most  of the costs being transferred to customers in 
the US.  The tightening of security measures have al so caused delays in customs procedures leading, 
inter alia, to increased warehousing costs, as well as delays in processing of visa and work permit 
applications.   In general, any measures aiming at securing trade s hould be non-discriminator y and proportional, not 
disrupting the trade flow between the EU and the US. 
 
15. Could the US explain whether it envisages in troducing measures to facilitate the importation 
of large machinery? 
 
WTO Secretariat's Report, page 25, para. 17  
As regards the numerous and unilateral US initiativ es to improve security, the EC has made every 
effort to try and support the US, appreciating that steps had to be taken on the US side, although such 
measures are not without cost and difficulties to all trade in goods and to all economic operators.  The 
EC expects the US to remain mindful of the stre sses and strains of the cumulative effect of these 
measures and additional measures, especially  if and when applied on a global scale. 
 The intentions of the relevant US authorities appear  to show adherence to a trajectory which continues 
to introduce new and burdensome measures on international trade, thus imposing costs and 
restrictions on exports and exporters to the US.  
 
16. When will the US curtail the spread  and proliferation of these measures? 
 
WTO Secretariat's Report, page 26, para. 19 
 
The Report refers to regulatory analysis conducted in  the context of proposed rulemaking.  Additional 
data and cargo information would be required (the so -called 10+2), to be transmitted electronically by 
economic operators.  While the EC supports a layered risk-based approach and can see clear benefits in certain elements 
being adopted at global level, the quantity, utility and necessity of additional data elements is an issue 
of international significance which requires analysis at that level.  
 17. Could the US explain why US targeters cons ider these data elements contribute to better 
targeting and whether the necessary cost -benefits analysis has been made? 
 WT/TPR/M/200/Add.1 
Page 94  
 
 18. Could the US confirm that they would envi sage a global roll-out of such data requirements 
only after the international community has been fu lly consulted and taking into account the comments 
of the WCO SAFE Working Group of April and May 200 8 with a view to ensuring relevant, useful 
and available data is requi red, within cost limits? 
 
Additional data requirements which go beyond th e additional data requirements demanded today 
would lead to increased costs and risks to the facilitation of trade.   19. For each measure of this nature, the EC woul d like to know whether there are sufficient (or 
any) security benefits, and whether these benefits outweigh the resources needed to furnish and use 
them.  
 20. Could the US explain how it can be clear th at introducing such additional measures at the 
global level is justified?  
 
WTO Secretariat's Report, page 27, para. 20 
 
The Report refers to Global Trade Exchange a lthough US Customs and Border Protection have 
decided not to move forward with it.  21. Could the US explain this contradiction? 
 
WTO Secretariat's Report, page 27, para. 23 
 
The US has introduced a new legislation requiring 100 % scanning of all US imports at the latest in 
2012.  
 
22. Could the US furnish information whether it has assessed the cost of such a new obligation 
and its impact on trade?  23. Could the US explain the expected benefits from 100 % scanning compared to the currently risk-based approach, and why it has not waited fo r the outcome of the pilot programmes on 100 % 
scanning before adopting such legislation? 
 24. As regards the pilot scanning programme men tioned in paragraph 23, could the US clarify 
what is meant by the statement that this programme should be rolled out by July 2008? 
 
WTO Secretariat's Report, page 27, para. 24  
The Secretariat Report outlines that the Implem enting Recommendations of the 9/11 Commission Act 
of 2007 will subject all contai ners on US-bounds vessels to image scanning and radiation detection 
monitoring.   
25. Could the United States explain how they see th e consistency of this legislation with WTO 
rules relating to import restrictions and freedom of transit? 
 
(iv) Tariffs (b) Applied MFN Tariffs 
WTO Secretariat's Report, page 31, para. 43 
 
The Secretariat's Report states that the 2008 Ha rmonized Tariff Schedule reflects the fourth 
amendment to the HS (HS 2007).  On 1 January 2007, the World Customs Organization (WCO) launched an updating of the Harmonized Commodity  Description and Coding System ("HS").  A 
revision of the US Harmonized Tariff Schedule of the US ("HTSUS") followed the same year, in  WT/TPR/M/200/Add.1 
 Page 95 
 
 
 order to adapt the US customs nomenclature to tho se changes.  The EC currently contests the HTSUS 
2007 revision insofar as the sector of assem bled flooring panels is concerned.  
 26. Could the US provide information on what is the timing currently considered by US custom 
authorities for the notification of the HS 2007 transposition tables to the WTO?  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.  27. Could the US furnish information whether it has concrete plans to shift to ad valorem rates for 
non-agricultural products? 
 
(d) Preferential Tariffs 
WTO Secretariat's Report, page 33, par as. 53-54 and p.163, table AIII.3 
 
Regarding Table AIII.3, could the US provide more detailed specification at the Chapter level for the 
tariff averages calculated for HS section 11 "Tex tiles and Articles" for AGOA, considering that 
certain products within "Textiles and Articl es" come in tariff free for AGOA countries? 
 
(v) Other charges affecting imports 
WTO Secretariat's Report, page 34, para 57 
 The Report outlines that in addition to tariffs, imports  are subject to ad valorem harbour maintenance 
and merchandise processing fees.  Furthermore, merchandise processing fees are not applied on imports from some preferential countries.  29. Could the US provide information whet her in intends to eliminate this fee? 
 WTO Secretariat's Report, page 35, paras 62-63  
The Report states that imported beer is not eligible for the reduced rate of excise tax which is applied 
on the first 60,000 barrels of beer produced in a year by a domestic brewer with an annual production 
of two million barrels of beer or less.  Furtherm ore, small domestic producers (those with an annual 
production of 150,000 wine gallons or less) are eligible  for a credit of US$0.90 per wine gallon on the 
first 100,000 wine gallons and decreasing credit ra tes are available for wineries producing between 
150,000 and 250,000 wine gallons per year.  30. Could the US explain how the abovementi oned provisions comply with the GATT National 
Treatment principle? 
 31. Could the US provide information whet her it intends to change this policy? 
 
(vi) Anti-dumping and countervailing measures 
WTO Secretariat's Report, page 36, para 68  
The Secretariat's report states that the ITA' s AD/CVD Petition Counselling and Analysis Unit, 
established in 2004, assists US companies with respect to recourse to US unfair trade laws. The Unit 
provides assistance, inter alia, to help understand le gislation and regulations  and information on how 
to file petitions. WT/TPR/M/200/Add.1 
Page 96  
 
 32. Please provide further information on how U. S. companies are assisted and the process from 
the first contact until the filing of the petition and ex plain as to which analysis is done by this Unit.  
 
WTO Secretariat's Report, page 36, para 69 
 Paragraph 69 of the Secretariat report set s out the applied U.S. legislation.  
 33. Could the United States provide information re garding the transparency of its investigation 
process and explain how interested parties are provi ded the opportunity during the investigation to 
view and comment on detailed facts and cal culation upon which findings may be based? 
 
WTO Secretariat's Report, page 36, para 70 
 
The Report states that in the case of non-market economies, AD suspension agreements may combine 
price undertakings and additional elements in or der to prevent price suppression or undercutting.  
 
34. Could the United States furnish information on which additional elements may be combined 
with price undertakings in AD suspension agreements?  
(ix) Technical regulations, conf ormity assessment, and standards 
WTO Secretariat's Report, page 48, para. 129 
 The Report explains that the US relies on a wider range of approaches to conformity assessment, the 
types of instruments varying depending on the sector and including supplier's declaration of 
conformity and third party certification.  
35. Could the US explain in more detail in whic h sectors and as regards wh ich products supplier's 
declaration of conformity is used?  36. What are the regulatory agencies that have accepted this method?   37. Could the US explain the criteria for accepti ng SDoC in general, and specifically in cases 
where SDoC has been approved?  
 
WTO Secretariat's Report, page 49, para. 130  
The Report states that the US authorities have indicated  that there are no centralized data on the extent 
to which US regulators have recognized the equivalen ce of foreign technical regulations or the results 
of conformity assessment procedures performed abroad.  38. Could the US furnish information whether it is considering setting up a centralized database 
to contain such information?   
39. How do the relevant US authorities currently  apply the system, i.e. how do they verify 
whether certain foreign technical regulations/conf ormity assessment procedures have been recognized 
by the US?  
(x) Sanitary and phytosanitary measures 
WTO Secretariat's Report, page 51, paras. 144-145 
 
The Report summarizes how the USDA develops the procedure for setting import rules for 
agricultural products.  The EC would like to underline that, in the phytosanitary field, there are many 
applications submitted to APHIS/USDA which are s till pending to be considered.  In addition, some  WT/TPR/M/200/Add.1 
 Page 97 
 
 
 ongoing pest-risk assessment and rule-making processes are taking excessive long timeframes 
(decades), having a negative impact on exports opportunities for European producers.   EC producers and authorities have readily provide d information on production process and relevant 
regulations in order to facilitate Import Risk Anal ysis to be carried out.  In particular, tailored 
procedures have been suggested to  ensure compliance with US regulations.  While these efforts are 
acknowledged by APHIS/USDA, there has nonetheless been very little progress both in terms of facilitating general procedures and in terms of specific approval for imports.  There is a general 
perception that the plant health field suffers of a general lack of progress on the broader issues of 
procedures in APHIS.  According to WTO commitmen ts, parties are obliged to approve phytosanitary 
controls and procedures "without undue delays".  
 40. What are the United States views on these comments?  Does the United States intend to 
undertake any measures in order to improve this situation?   WTO Secretariat's Report, page 51, paras. 144-145  
The Report states that the US authorities note that , under federal law, US states are permitted to 
establish SPS measures, provided that these measure s are consistent with federal rules and 
regulations, and with US obligations  under relevant WTO disciplines. 
 
41. Could the US furnish information how the US authorities justify that import rules for certain 
establishment producing milk products, which are imposed  by State authorities, are stricter than the 
rules for interstate commerce under the oversight of  FDA?  Namely, State authorities of New Jersey 
insist that imports of ice cream must comply w ith the Pasteurized Milk Ordinance, although these 
products are explicitly excluded from th e scope of this ordinance.   
 
42. Which practicable procedure exists to nego tiate the approval of imports of Grade A dairy 
products?  For Grade A dairy imports into US, there are in prin ciple three options – but none of them works:  
 
(a) Listing of an EC dairy establishment as a 'domestic' establishment under the jurisdiction, 
inspection and control of one of the Federal States. However, since several years none of the States is 
accepting any applications of fore ign companies under this regime. 
 (b) Third party certification of full compliance with  the PMO. This option was launched as a pilot 
program in 2007.  Three certifying companies (all US-based, all founded by former FDA or State 
inspectors) were accredited and six companies we re audited.  The basis for approval is full 
compliance with all provisions of the PMO, which is not commercially viable for EC companies and 
not in-line with the SPS Agreement, which provi des for the approval of 'equivalent' measures. 
 (c) Agreement with FDA that the exporter's cont rol system provides an equivalent level of 
protection as the PMO. Since the beginning of 2008 FDA has cancelled all discussions. 
 The global animal health organisation OIE (with the consent of the EC and US) has issued an animal 
health code for BSE, which provides a science-based and agreed platform for the trade of beef.  The 
implementation of these rules into US import rules has been pending for several years.  
 
43. When does the United States intend to bring its  administrative rules into compliance with the 
OIE standard? 
 WT/TPR/M/200/Add.1 
Page 98  
 
 WTO Secretariat's Report, page 52, paras. 151-152 
 
The Report describes the new Fruit and Vegeta bles Import Regulation, outlining how the new 
procedures will be applied.  The EC welcomes the initiative aimed at streamlining the import approval 
process.  However, the EC notes that, unfortunately, it has not delivered so far positive results to our 
pending applications.  The EC would like to inv ite and encourage APHIS to broaden the list of 
products to be eligible for this streamline process with a view to facilitating trade.  When does the United States intend to respond to pending applications?  (4) OTHER MEASURES AFFECTING PRODUCTION AND TRADE (iv) Government Procurement WTO Secretariat's Report, page 67, para. 223 
 
According to the Report, Annex I of Appendix I of  the GPA contains the list of central government 
agencies covered by the GPA; Annexes 2 and 3 lis t the 37 states, the Federal and the sub-federal 
bodies applying the GPA.  45. Could the US clarify whether the US list of  Annex I entities include all the central level 
entities in the US?  
46. Could the US provide statistics on the size of  procurement of Annex I and Annex II entities in 
the GPA? 
 
WTO Secretariat's Report, page 69, para. 233 
 According to the Report, Federal government agen cies are required to publish notices of proposed 
procurement opportunities in excess of USD 25,000 in FedBizOpps (with some exceptions).  47. Could the US provide information concer ning the exceptions allowing Federal government 
agencies not to publish notices of proposed  procurement in excess of USD 25,000? 
 WTO Secretariat's Report, pp. 69-70, para. 235 
 
The Secretariat's Report states that the Clinger Cohen Act of 1996 authorizes the use of simplified acquisition procedures for the acquisition of commerc ial items valued at USD 5.5 million or less, 
under certain circumstances. 
 
48. Could the US describe which circumstan ces allow the use of simplified acquisition 
procedures and which simplified acquisition procedures are envisaged? 
 
WTO Secretariat's Report, page 70, para. 236 
 According to the Report, the authorities have noted  that the Federal Supply Schedules are akin to a 
catalogue, rather than a list of qualified s uppliers as used in selective tendering.  
 49. Could the US explain how the catalogues' syst em operates and in particular its differences 
with the lists of qualified suppliers?  
 
50. Could the US provide information whethe r the catalogues are open to the public?  Can 
interested suppliers apply at any time? 
  WT/TPR/M/200/Add.1 
 Page 99 
 
 
 WTO Secretariat's Report, pp. 71-72, para. 246-247 
 
The Report states that procurement policy seeks to  increase the participation of small businesses, 
veteran-owned small businesses, small disadvant aged business (SDBs), and women-owned small 
businesses.  Small and minority businesses are an im portant element as regards the so-called 
"procurement goals" established by the US Congres s for Federal procurement.  According to the 
submission circulated by the US in December 2007 (GPA Committee) 23% of all prime contracts are 
currently reserved for small businesses.  It is the EC understanding that this percentage has varied 
overtime.   
51. Could the US confirm whether this information is correct?  If so, could the US indicate the 
evolution of this percentage since the entry into force of the GPA? 
 According to the information available to th e EC, the Buy American Act provides for tender 
evaluation preferences of 12% where small busin esses are competing against non-US suppliers.  
 
52. Could the US confirm whether this information is correct, and if so, to explain in detail the 
scope of this provision?  
WTO Secretariat's Report, page 72, para. 251 
 
The Secretariat's Report states that each US State has its own procurement access conditions and that 
37 States participate in the GPA.   The fact that some of the States that do not par ticipate in the GPA restrict foreign participation in 
biddings, offer preferences to in-state suppliers , or apply domestic purchase requirements is a cause 
for concern to the EU. 
 53. Could the US provide information whether a nd which of the remaining US States envisage 
participation in the GPA?   
(v) Trade-related intellectual property rights 
(c) Trade marks and geographical indications 
WTO Secretariat's Report, page 75, paras 263 
 
54. Does the US have any information about EU Geographical Indications registered as trade 
marks in the US?  Please give examples. 
 
(d) Copyright 
WTO Secretariat's Report, page 76-77, paras 266-268  
55. Could the US provide statistical information on the level, type and value of illegal file sharing 
(music, videos, software) that takes place in US colleges and universities? 
 
56. Does the US intend to implement any measure re garding this practice and if so, could the US 
furnish information in this regard?  EU right-holder associations recently denounced the case of certain websites, which offer the 
possibility of downloading films and musical compos itions without the authorization of their rightful 
owners. Several Internet Service Providers based in  the U.S. appear to be giving technical support, 
either by facilitating the registration of the domain  or as providers of IP, to the reported websites 
(sharemule.com; sharemula.com; sinlamula.com; yendit.com; videochat.2ya.com and ciberdvd.com). 
 WT/TPR/M/200/Add.1 
Page 100  
 
 57. Which route could the US offer to achieve  the cessation of the alleged activities in the 
Internet?  
(e) Enforcement activities 
WTO Secretariat's Report, pp. 77-78, paras 270-271 
 
The Report describes how the Secti on 337 procedures are conducted.  
 58. Could the United States provide information on how many complaints does the USITC receive per year?  What percentage of them is a ccepted by the USITC to initia te the investigation?  
 
59. Does the United States have any plans to modify this procedure?  There are numerous reports about the public sale of European brands in the streets of New York and Washington D.C. 
 
60. Could the US provide information regarding which Department(s) control the enforcement of 
IPRs in the cities of New York and Washington, D.C. regarding street sales of IP infringing goods?  61. Could the US provide data on seizures of IP infringing goods offered for sale in the main US cities? 
 
IV. TRADE POLICIES BY SECTOR 
(1) OVERVIEW WTO Secretariat's Report, page 79, para.3 and page 96, para. 79 
 According to the Secretariat's Report manufacturing tariffs are generally low, but tariff peaks have 
sheltered a few industries from international competit ion, for example textiles, clothing, and footwear 
and leather.  Furthermore, the Report outlines that the U.S. International Trade Commission has also 
identified textiles and apparel as subject to relativel y high import barriers.  One study estimates U.S. 
welfare gains from the elimination of tariffs and remaining quantitative restrictions on imports of 
textiles and apparel at US$830 million and US$1.9 billion. 
 
62. Could the US furnish information whether it h as concrete plans to lower its tariffs on textiles 
and apparel, and in particular to level out the tariff peaks applied in this sector? 
 
(2) AGRICULTURE 
 
While the Secretariat's report focus on US farm pr ograms at the time of writing, a 2008 Farm Bill will 
imminently be enacted.  When describing the rationa le for a presidential veto, the US Administration 
itself seems to acknowledge that the new Farm Bill is even more trade distorting than the 2002 one. 
New provisions aggravating the trade-distorting char acter of US commodity programs would include: 
 
 Increase in loan rates and target prices for several commodities (as a result, payments would 
be triggered more easily if prices go down). Be neficiaries of this "rebalancing" include wheat, 
soybeans, barley. 
  New support mechanism for sugar (85% of the US market being guaranteed for US producers 
– sugar in excess of this 85% to be turned into ethanol by USDA). 
  The Milk Income Loss Contract (MILC) program is restored to cover 45 percent of the 
shortfall between $16.94 per hundred weight and the Boston Class I milk price. In addition, 
the $16.94 price will be adjusted for any month when the national average monthly cost of 
dairy rations exceeds $7.35 per hundredweight.  The quantity of milk production that is  WT/TPR/M/200/Add.1 
 Page 101 
 
 
 eligible for a MILC payment to a dairy produ cer is limited to 2,985,000 pounds for each fiscal 
year. 
  New support for cotton but would introduce a subsidy to cotton users.  New mechanisms which would both be trade distorting according to the Administration also 
include:  
   The ACRE revenue-based counter-cyclical payment,    A permanent disaster fund: USDA Secret ary Schafer stated that the permanent 
disaster program is not green box because it does not have the 30% loss requirement. 
  Funding for Direct Payments (notified by the US in the green box) are reduced to pay for 
some of the regrettable changes listed above, and the issue of planting restriction for Fruits & 
Vegetables (identified in the US-BZ Cotton case) is not addressed in the new Farm Bill. 
 
 US Food Aid will overwhelmingly remain in-k ind and tied to US commodities, only a $60 
million pilot project is added in the Farm Bill, far from the US Administration's own expectations (up to 25 % of th e international food aid budget). 
 63. Could US authorities confirm the informa tion above concerning the 2008 Farm Bill?  
 
2008 Farm Bill provides that as far as the  Dairy Import Assessment  is concerned  Alaska, Hawaii, 
Puerto Rico & DC are added to program financing dairy promotion and research activities and that the 
import assessment rate on imports is set at 7.5 cent (instead of 15 cent for domestic producers).  
64. Please assess the WTO conformity of these provisions, particularly in the light of the 
discriminatory effects of these provisions on importers, notably in respect to:  (a) There is no import of fluid milk to the US and the US dairy market is effectively closed for cheese, imports are funneled through quotas, most of  which are full. Therefore, imports of dairy 
product cannot benefit from any e xpansion of demand, even if any were to result from the 
promotional programs.  In this light, the levy has an equivalent effect of the discriminatory tariff on 
imports.  (b) Other dairy products imported into the US, such  as milk protein concentrate, are not normally 
used in dairy applications, but as raw material  in other processed foods and non-food industrial 
production and would not therefore benefit from those promotion programs. Again, the levy has an 
equivalent effect of the discriminatory tariff on imports.  
(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. 
 
65. Could the US furnish information whether it in tends to eliminate this difference of treatment 
between domestic and imported products? 
 WT/TPR/M/200/Add.1 
Page 102  
 
 (4) MANUFACTURING 
WTO Secretariat's Report, page 97, para. 85  
The Report states that US-flag vessels repaired abro ad are subject to a 50% duty, assessed on the cost 
of equipment and non-emergency repa irs in foreign countries.  The duty is not applied on US-owned 
foreign-flag vessels or in the context of US FTAs.  
 66. Could the US provide information whether it in tends to eliminate this difference of treatment? 
 
(5) SERVICES 
(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. 
 
67. Could the United States confirm the averag e number of cable providers by county and/or 
municipality in the States?  
(iii) Financial services 
WTO Secretariat's Report, page 110, para. 143 
 
The Report states that non-US licensed reinsurers must post collateral (i.e. make a trust account 
deposit in the United States for the whole of the opera tion equivalent, or submit a letter of collateral), 
when they conduct cross-border reinsurance business.  
68. Could the United States explain whether any progress has been made in initiatives to replace 
the blunt and in many cases excessive collateral requ irement by regulatory measures that take into 
account the actual risk of a particular cross-border reinsurer?  
(iv) Air transport services 
WTO Secretariat's Report, page 116, para. 167 
 The Report describes the restrictions on the ownership and control of US airlines.  
 69. Could the United States provide information whether it has any plans to change the regulations that maintain these restrictions?  
 
70. Does the United States fore see the possibility of surpassing the limits presently in place? 
 
(v) Maritime transport 
WTO Secretariat's Report, page 119, para. 176  
The Report states that the United States did not make an offer in maritime transport in the 
Negotiations on Maritime Transport Services suspe nded in June 1996, nor in the context of the 
services negotiations in the Doha Development Agenda. 
 71. Could the United States indicate if there are legislative or other impediments to making an 
offer in this sector, and describe such impediments? 
  WT/TPR/M/200/Add.1 
 Page 103 
 
 
 (vi)Professional and business services 
(c) Legal services 
 
The United States Conference of Chief Justices (CCJ ) adopted in August 2006 a resolution regarding 
the adoption of rules on the licensing and practice of Foreign Legal Consultants. In this resolution, the 
CCJ urges "the highest court of each state that has not already done so, to consider adopting a rule 
permitting the licensing and practice of foreign legal consultants." 
 72. Could the United States explain which States have, since the adoption of this resolution, adopted rules permitting the licensing and pr actice of foreign legal consultants? 
 
WTO Secretariat's Report, page 125, para. 207 
 
The Report notes that the 29 states with FLC rul es represent 86% of the U.S. legal services market. 
The Secretariat refers to the data from the U.S.  Economic Census (2002) and includes a hyperlink. 
This link does not refer to a specific publication or page, however. 
 73. Could the United States provide a more precise re ference to the source of  this information?  
 74. Could the United States indicate what percentage  of the US legal services market is currently 
covered by specific GATS commitments on Fore ign Legal Consultancy in its schedule of 
commitments?  
 
(d) Architectural and engineering services 
WTO Secretariat's Report, page 127, para. 214  
The Report states that there is no reciprocal registration between foreign countries and the 
United States, with the exception of Canada, with  which the United States maintains a full mutual 
recognition and immediate access agreemen t, the Inter-Recognition Agreement. 
 75. Could the United States explain who the signatory of the agreement is with Canada mentioned in this paragraph? 
 
76. Could the United States explain whether this agreement binds the United States?  77. Could the United States explain if this agreement has been notified under GATS Article VII?  V. ENVIRONMENTAL ISSUES US Report, page 25, para. 119 and page 26, para. 121 
 
In its Report the US asserts that on the multilateral front, the United States has been a global leader in 
seeking to discipline harmful fisheries subsidies a nd eliminate barriers to trade in environmental 
technologies and services through the WTO as part  of the Doha Development Agenda (DDA). 
Furthermore, the Report states that in the Rules Negotiating Group, the United States continues to 
lead in pressing for stronger disciplines on fisheri es subsidies that contribute significantly to global 
overcapacity and overfishing.  In  March 2007, the United States  submitted a far-reaching textual 
proposal for a fisheries subsidies agreement, whic h included a broad prohibition of the most harmful 
subsidies. 
 
78. Has the US adopted legislation that would preven t, in fact or in law, the provision of all forms 
of subsidies, at all levels of government, federal, state, local, th at would directly or indirectly 
contribute to overcapacity and overfishing?  If not, is it planning to do it in the future? 
 WT/TPR/M/200/Add.1 
Page 104  
 
 One of the United States' textual proposals (WTO  doc. TN/RL/GEN/145) for a fisheries subsidies 
agreement, referred to in paragraph 121 of the G overnment Report includes the following provision: 
 "2. This Annex does not cover government-to- government payments to obtain access for a 
Member's distant water fishing fleet to fisheri es resources within the exclusive economic zone of 
another country.  The further transfer of those access rights to the Member's fishing fleet is covered by 
this Annex but is not prohibited under Article 1, provided that: 
  (i) the Member's fishing fleet pays compensa tion comparable to the cost the fleet would 
otherwise have to pay for access to the fisheries resources; 
 (ii) the terms and conditions of access, in cluding the compensation paid by the fishing 
fleet, are published; and  (iii) the access arrangement  provides for a science-based assessment and monitoring of 
the status of the fisheries resources in ques tion and for compliance with applicable fishery 
management systems." 
 
One of the most significant fisheries access arra ngements in the South Pacific is the Treaty on 
Fisheries between the Governments of Certain Pacific Island States and the Government of the US. This agreement, last extended in 2003, regulates ac cess of US purse seine vessels in the EEZs of the 
South Pacific Island States which are members of th e Forum Fisheries Agency.  The financial terms 
of the Treaty, which include an annual payment by USAID of approximately US$14 million, stipulate 
an annual industry payment of US$3 million, which shall cover (i) licence fees for up to 45 vessels; 
and (ii) technical assistance. Furthermore, paragraph 3 of Schedule 2 to Annex II of the Treaty, 3 foresees that: "In order to increase the benefits to the Pacific Island parties under the Treaty, the 
United States industry will develop with the Pacifi c Island parties a system for revenue sharing where 
the ex-vessel price is at or above a mutually agreed  level.  Payments made under such a system will 
be made quarterly and will be in addition to the amount specified in paragraph 1(a)." 
 79. Could the United States provide information about the yearly value of the catches effected by U.S. vessels, since 2003, under the Treaty?  80. Could the United States provide details about  the revenue sharing system between the United 
States industry and the Pacific Island parties, in cluding the yearly amounts paid under this system 
since 2003?  81. Could the United States provide detailed info rmation on scientific assessment and setting of 
catch limits for fish stocks fish ed by U.S. vessels under the Treaty? 
 
The United States' textual proposal (WTO doc. TN/R L/GEN/145) for a fisheries subsidies agreement, 
referred to in paragraph 121 of the Governme nt Report foresees a total ban on subsidies, inter alia , for 
the construction of new vessels. The EC notes that  the website of the National Marine Fisheries 
Services (Office of Management and Budget) incl udes information about the Capital Construction 
Fund Program. In a dedicated webpage th e programme is described as follows: 
 
"The purpose of the Capital Construction Fund ( CCF) Program is to improve the fishing fleet by 
allowing fishermen to accelerate their accumulation of funds with which to replace or improve their fishing vessels. Created by the Merchant Marine Act of 1936, as amended (46 U.S.C. 1177), the CCF Program enables fishermen to construct, reconstruc t, or under limited circumstances, acquire fishing 
vessels with before-tax, rather than  after-tax dollars.  The program allows fishermen to defer tax on 
income from the operation of their fishing vessels. Under the CCF Program, the amount accumulated by deferring tax on fishing income, when used to help  pay for a vessel project, is, in effect, an interest 
free loan from the Government."   WT/TPR/M/200/Add.1 
 Page 105 
 
 
 82. Is this programme still available to US fish ermen?  If so, how do the US authorities ensure 
that the fishing capacity that resu lts from the use of this subsidy does not negatively impact fishery 
resources?  83. Could vessels having benefited fro m this subsidy be used in waters outside the jurisdiction of 
the United States?  
 84. Does the United States maintain a register of vessels having benefited from such subsidy? 
Could the US indicate the total amount of the subsidy provided to the US fishing sector under this programme?  
 
85. Has the United States notified this subsidy to the WTO?  86. As this subsidy programme would be pr ohibited under the proposals made by the US 
contained in its textual submission TN/RL/GEN/ 145, does the US plan the removal of such 
programme? If so, could the US provide an i ndication of the timing for such removal? 
 Concerning subsidies granted by the US in the fish eries sector, a "commercial fisheries failure" was 
declared by the U.S. Secret ary of Commerce in 2006 for the Klamath River Fall Chinook Salmon 
Fishery.  According to publicly available info rmation the US Congress appropriated $60 million in 
disaster assistance that was distributed during 2007. 
 
87. Could the United States provide details on wh ether these funds were allocated to fishermen 
involved in wild capture fisheries, and if so, how much and for which specific purposes? 
 A similar "commercial fisheries failure" was d eclared for the West Coast Salmon Fishery on 1
 May 
2008.  According to publicly available information the “Farm Bill”, as agreed by the Senate-House 
conference committee, includes $170 million in disaster  assistance to help commercial fishers and 
businesses affected by the salmon closure in Oregon, California, Washington and Idaho.  88. Could the United States provide details on whet her these funds will be allocated to fishermen 
involved in wild capture fisheries, and in the a ffirmative how much and for which specific purposes? 
 
In relation to the aforementioned questions, under Section 312(a) of the Magnuson-Stevens Act, the 
Commerce Secretary can declare a commercial fishery failure if requested to do so by a governor, or 
at the Secretary's discretion.  The Secretary mu st determine that the commercial fishery failure 
resulted from a fishery resource disaster due to natu ral causes, man-made causes beyond the control 
of fishery managers, or undetermined causes. 
 89. Could a "fishery resource disaster" be declared  as a result of, for example, cuts by fisheries 
managers in the fishing quotas?   90. Concerning the determination of a fisheries fa ilure, do economic and/or social factors play a 
role in making such a determination? 
 
EUROPEAN COMMUNITIES ADDITIONAL QUESTIONS 
 (2) MEASURES DIRECTLY AFFECTING IMPORTS 
(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? 
 WT/TPR/M/200/Add.1 
Page 106  
 
 Secretariat s Report, page 27; para 23 
Follow up questions to EC questions 22-23 
 
2. It is understood form 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? 
 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 appro ach; 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. 
 
(4) OTHER MEASURES AFFECTING PRODUCTION AND TRADE 
(iv) Government Procurement Secretariat Report page 67; para 223  
Follow up question to EC Question 45 . 
 
4. We have asked whether the US list of Annex I of Appendix I of the GPA  lists all central 
level entities in the US.  The US had replied that US Annex I includes most
 federal agencies.  Could 
the US list the central level entities th at are not included in Annex I? 
 
COLOMBIA 
 
I. EVOLUCIÓN ECONÓMICA RECIENTE 6) EVOLUCIÓN DEL COMERCIO Y LA INVERSIÓN iii) Inversión extranjera directa  
1. Del párrafo 35. Responder: 
 a)  ¿En que áreas de la economía se conc entra la inversión de Estados Unidos? 
b)  ¿Cuáles son los principales destinos de la  inversión de Estados Unidos en Suramérica? 
c)  ¿Cuál es la participación de la inversión de  Estados Unidos en Suramérica?  ¿En Colombia? 
 II. RÉGIMEN DE POLÍTICA COMERCIAL: MARCO Y OBJETIVOS 1) PANORAMA GENERAL 
 
1. Del párrafo 4. Explicar:  
Como regla general los Estados Unidos aplican el principio de trato nacional a los inversionistas 
extranjeros directos, sin embargo, mientras se reglam enta la Ley de Seguridad  Nacional e Inversiones 
Extranjeras, cómo se garantiza a las empresas con IE D su estabilidad y permanencia en el mercado, 
cuando tal principio puede ser inaplicado por razones de Seguridad Nacional?    
2) MARCO INSTITUCIONAL Y NORMATIVO 
 2. Del párrafo 11. Explicar: 
 a) Teniendo en cuenta  que las facultades otor gadas al Poder Ejecutivo para la promoción del 
comercio, mediante la ley de 2002, expiraron el 1º de julio de 2007, el Gobierno de Colombia estaría 
interesado en conocer el impacto que la ausencia de l Fast Track podría tener en la aprobación de los 
acuerdos negociados y la conclusión de las negociaciones bajo la Ronda de Doha.  
 b) En tal sentido, si la Administración consid era que las facultades para la promoción del 
comercio son vitales para el logro de los objetivos  comerciales del País, qué mecanismo alternativo se 
ha previsto para subsanar esa situación?  WT/TPR/M/200/Add.1 
 Page 107 
 
 
 3. Del párrafo 13. Aclarar: 
 En el marco del Programa de  Asistencia para Ajuste al Comercio, favor señalar cómo se garantiza que 
determinadas empresas no hagan uso del Programa para  tomar ventaja del mismo, frente a las filiales 
de empresas extranjeras ubicadas en  ese País y  que ingresan sus productos al mercado de los Estados 
Unidos?  
 
3) RÉGIMEN DE INVERSIONES EXTRANJERAS 
iii) Requisitos en materia de información y examen 
 4. Del párrafo 18. Responder: 
 a) Cuál es el objetivo de este nuevo reglamento?  b) ¿Cuál es el efecto previsto pa ra la inversión extranjera?  
c) ¿Cuál sería el efecto sobre los acuerdos de inversión? 
d) ¿Existe o existirá un sistema de admisión o autorización previo para realizar inversiones en 
general en Estados Unidos? e) ¿Existe o existirá un sistema de admisión o autorización previo para realizar inversiones en algunos sectores particulares en Estados Unidos? En  caso afirmativo, ¿Cuáles sería tales sectores?, 
¿Estarían dichos sectores relacionados con seguridad nacional?  
5. Del párrafo 21. Responder: 
 ¿Qué se considera “control por un gobierno extranjero”?  
III. POLÍTICAS Y PRÁCTICAS COMERCIALES, POR MEDIDAS 
2) MEDIDAS QUE AFECTAN DIRECTAMENTE A LAS IMPORTACIONES 
i) Régimen aduanero 
 
1. En el párrafo 20 se establece que como parte del programa (CSI) - Iniciativa de Seguridad de 
la Carga, la CBP está considerando la viabilidad de  establecer una base de datos gestionada por el 
sector privado para mejorar la evaluación del ri esgo de la carga internacional. ¿Podría los EEEUU 
ampliar la información sobre dicho pr ograma e informar si la administración de dicha base de datos a 
cargo del sector privado podría generar un s obrecosto adicional para los usuarios?  
 2. El párrafo 23 contempla la CBP esta impl ementando un programa piloto para escanear todos 
los contenedores destinados a los Estados Unidos  en los puertos marítimos extranjeros, y no 
solamente los considerados de "alto riesgo". Así mi smo, se estudia la viabilidad de ampliar éste 
programa a otros puertos extranjeros. ¿Podría los EEUU informarnos cuales otros puertos están 
siendo considerados para formar pa rte de éste programa piloto? ¿Qué criterios son tenidos en cuenta 
para la aplicación del programa?   3. En el párrafo 24 se afirma que: “El Comisario de la CBP ha señalado que la obligación de 
someter todos los contenedores destinados a los Estados  Unidos a vigilancia mediante el escaneado de 
imágenes y la detección de radiaciones en los pue rtos marítimos extranjeros tendría una "gran" 
repercusión en el comercio, y se traduciría en "me nores ganancias y mayores costos de transporte para 
los importadores estadounidenses". ¿Cómo se relaci ona el desarrollo de éste programa con las 
discusiones que se llevan a cabo en el Grupo de Ne gociación de Facilitación del Comercio GNFC en 
la OMC, cuando uno de los principales objeti vos consiste en la reducción y eliminación de 
sobrecostos para los usuarios?   4. ¿De acuerdo al párrafo 29, con que otros países miembros de la OMC, además de 
Nueva Zelanda, CE y Jordania, estaría interesado lo s EEUU en celebrar acuerdos de seguridad en la 
cadena de suministro?  WT/TPR/M/200/Add.1 
Page 108  
 
 5. El párrafo 59 hace referencia al gravamen de mantenimiento de puertos, el cual ha sido 
señalado por las autoridades como "insignificante”.  Ante tal consideración, ¿Se ha contemplado la 
posibilidad de que dicho gravamen sea eliminado?   6. En el párrafo 62, se señala que la cerveza importada no puede benefi ciarse del tipo reducido 
de 7 dólares EE.UU. del cual gozan los primeros 60. 000 barriles de cerveza producidos al año por un 
fabricante de cerveza nacional con una producción a nual igual o inferior a dos millones de barriles. 
¿Podría explicarse la justificación para el manten imiento de dicho beneficio que se traduce en una 
discriminación frente al producto importado? ¿Se ha  pensado en la eliminación del mismo o en 
medidas correctivas para superar dicha discriminación?  
 
iii) Normas de origen 
 
7. En el párrafo 39 se indica que en le marc o del Acuerdo de los Es tado Unidos con América 
Central y República Dominicana existe la posibi lidad de aplicar una acumulación ampliada de 
insumos con Canadá y México para  la elaboración de prendas de vestir tejidas, siempre que se 
cumplan determinadas condiciones entre los países involucrados en el mecanismo y no se sobrepasen 
ciertos límites.   a) Se ha pensado en ampliar la aplicación de l mecanismo de acumulaci ón ampliada a países 
diferente a México y Canadá? 
 
b) Los EEUU han puesto en vigor y vienen ne gociando acuerdos comerciales con diferentes 
países. Se ha pensado en algún mecanismo o in strumento que permita en  algún momento la 
convergencia de estos acuerdos?  ix) Reglamentos técnicos, evaluación de la conformidad y normas 
 
8. En el numeral 114 del documento WT/TPR/S/ 200 se informa que los estados pueden  delegar 
la potestad para establecer reglamentos técnicos y pr ocedimientos de evaluación de la conformidad en 
los gobiernos regionales, locales o municipales. ¿Exi ste la seguridad de que los reglamentos técnicos 
y los procedimientos de la conformidad realiza dos en todos estos niveles han sido notificados? 
 
9. ¿El gobierno de Estados Unidos ha consider ado la posibilidad de pedir a los organismos 
subfederales que le suministren directamente los re glamentos técnicos y procedimientos de evaluación 
de la conformidad propuestos por ellos?  
10. En el numeral 119 del documento  WT/TPR /S/200 se informa a qué sectores de la economía 
corresponden los reglamentos notificados entre julio de 2005 y octubre de 2007. Hay un 14% 
corresponde a medidas subfederales, pero no se esp ecifica a qué sectores corresponden esas medidas. 
¿Es posible conocer esa información?  11. ¿Es posible que el gobierno de Estados Uni dos defina que entiende por problemas “urgentes”, 
para los cuales la Orden Ejecutiva 12889 prescribe un período más corto para la formulación de 
observaciones sobre propuestas de reglamentos técnicos?  12. En el numeral 124 se informa que un organismo está exento del cumplimiento de las prescripciones sobre notificación y formulación de observaciones si constata que, “por una causa 
justificada”, tales prescripciones son “irrealizable s, innecesarias o contrarias al interés general”. 
Agrega que la utilización de esta excepción está sujeta a revisión judicial. ¿De darse una revisión judicial en contrario, no ocurriría cuando ya se esté aplicando el reglamento correspondiente? ¿Ha pensado el gobierno en establecer otro mecanismo de revisión más ágil?    WT/TPR/M/200/Add.1 
 Page 109 
 
 
 13. En el numeral 125 del documento WT/TPR/S/200 se informa que la Orden Ejecutiva 12866 
obliga a la Oficina de Gestión y Presupuesto a ex aminar todas las disposiciones “significativas” de 
organismos públicos federales (exc luidos los organismos reglamentari os independientes) antes de su 
publicación en el Federal Register como disposic iones propuestas o definitivas. A continuación se 
numeran algunas disposiciones que se consideran sign ificativas. ¿Existe alguna lista completa de las 
disposiciones que se consideran significativas? 
 14. ¿Se han dado exámenes judiciales de reglamento s técnicos o procedimientos de evaluación de 
la conformidad? En caso afirmativo, cuántos?  
15. Grupo de Trabajo Interinstitucional sobre la seguridad de las importaciones e identificar las 
esferas que pueden mejorar. Dicho grupo de trabaj o, que no tiene facultades jurídicas o de 
reglamentación propias, ha recomendado varias medidas relacionadas con los OTC para mejorar la seguridad de las importaciones en Estados Unidos. ¿Qué tipo de medidas ha recomendado ese comité?  
 x) Medidas sanitarias y fitosanitarias 
 
16. Del párrafo 146. Explicar:  Los Estados Federales adelanta n evaluaciones de riesgo cuando establecen medidas sanitarias y 
fitosanitarias en las condiciones que menciona el párrafo? De ser así, éstas son avaladas por el 
Servicio de Inspección Zoosanitaria y Fitosanitaria, con el fin que sean compatibles con las normas 
nacionales y los reglamentos federales y la OMC? Cu ál es el procedimiento que se sigue para tal fin? 
 17. En el numeral 148 se dice que “No hay limit aciones estatutarias con respecto a la duración del 
proceso para aprobar las importaciones de plantas,  animales y productos derivados que se realizan por 
primera vez en los Estados Unidos.  Normalmente, ese proceso dura entre dos y tres años.” Sin 
embargo, para Colombia es claro que este proceso  de aprobación para las importaciones de productos 
como para el reconocimiento de la regionali zación puede tomarse mucho más tiempo del establecido 
como normal por los Estados Unidos lo que genera  demoras injustificadas en dichos procesos.  
 Nos gustaría saber entonces, cuáles son los criterios técnicos y científicos que determinan la duración 
de una solicitud para la aprobación de las importa ciones de plantas, animales y productos derivados 
que ingresan por primera vez a los Estados Unidos y  para el reconocimiento de la regionalización?   
3) MEDIIDAS QUE AFECTAN DIRECTAMENTE A LAS EXPORTACIONES 
iv) Asistencia a la exportación 
 18. Adicional a las condiciones en que el Gobier no de Estados Unidos facilita asistencia a las 
exportaciones, de conformidad con numeral 3, ¿Como son las condiciones de asis tencia que otorga el 
gobierno de Estados Unidos a los productos que no s on  apoyados por gobiernos de los países cuyos 
exportadores compiten con los estadounidenses?  ¿Más favorables o menos favorables? 
 4) OTRAS MEDIDAS QUE AFECTAN A LA PRODUCCIÓN Y EL COMERCIO v) Derechos de propiedad intelectual relacionados con el comercio 
 
19. Preguntas generales:  
¿Se han adoptado algunas medidas o incentivos para estimular la transferencia de tecnología hacia 
países en vía de desarrollo?  WT/TPR/M/200/Add.1 
Page 110  
 
 20. Del párrafo 258. Responder: 
 c) ¿Qué políticas o medidas concretas se han a doptado o se pretende adoptar en los Estados 
Unidos para estimular o incentivar la innovación en  diferentes campos desde la perspectiva de la 
Propiedad Intelectual? 
 
d) ¿Se ha designado a alguna entidad en particular  la función de promoci ón de la innovación, el 
desarrollo tecnológico etc?. Si es así, ¿cuál es la na turaleza de este ente y sus principales funciones y 
planes o líneas de acción?  
21. Del párrafo 266. Responder: 
 ¿Cómo funciona el registro previo? ¿Por qué se est ablece sólo para aquellas obras frente a las cuales 
se hayan cometido infracciones? ¿Cómo se armoniza con la protección automática amparada por el derecho de autor? ¿Es posible realizar el registro de obras inéditas? 
 
22. Del párrafo 268. Responder:  ¿Cómo funciona la aplicación de las Licencias Oblig atorias y cuáles serían los supuestos en los que 
éstas se aplican? ¿Las normas mencionadas en el inform e son supletorias de la voluntad de las partes? 
 IV. POLÍTICAS COMERCIALES, POR SECTORES 2) AGRICULTURA i) Introducción 
 
1. En el Capítulo IV, numeral 2), párrafo 13, la  Secretaría indica que a principios de 2008, el 
Congreso estaba trabajando en una nueva ley de agricultura para prestarle apoyo a los productos 
básicos cosechados. ¿Podría Estados Unidos indicar en cuáles aspectos la nueva Ley modificará la legislación anterior?   
ii) Medidas en frontera 
 2. El párrafo 20 del Capítulo IV, señala que la  asignación de los contingentes se hace entre los 
importadores "tradicionales", importadores designados por los gobiernos de los países exportadores, y 
sobre la base de un sorteo. Puede Estados Un idos, señalar cómo se determina un importador 
“tradicional”?. Cuál es el objetivo de permitir que los Gobiernos países exportadores designen los 
importadores? Explique cuál es la metodología de  asignación de contingentes sobre la bases de un 
sorteo? 
 3. De acuerdo con la Comisión de Comercio Inte rnacional de los Estados Unidos (USITC), la 
eliminación de obstáculos en la importación de algunos productos, especialmente de la azúcar en 
bruto y refinado y a los lácteos, generaría un au mento de bienestar social del país bastante 
significativo.  ¿En qué argumentos se fundamenta Es tados Unidos para mantener estos obstáculos a 
las importaciones? ¿Existe algunos estudios nacion ales o internacionales que demuestren que estos 
obstáculos favorecen al bienestar social del país, co ntrarios a los que ha dado a conocer la USITC? 
(párrafo 21).  
iii) Programas de ayuda interna 
 
4. El párrafo 31 del Informe de la Secretaría  señala que “el Gobierno Federal ofrece seguros 
subvencionados contra las pérdidas resultantes de desastres naturales” y las oscilaciones de precios. 
Indique qué tipo de pérdidas cubre y hasta que monto. Cu ál es la base mínima para el pago del apoyo?   
  WT/TPR/M/200/Add.1 
 Page 111 
 
 
 5. En el mismo párrafo señalado en el numeral  anterior, el Informe señala que los productores 
pueden optar entre asegurar su rendimiento o sus ingresos, en el marco de los programas de seguro 
agrícola y que los productores asegurados reci ben un pago cuando el rendimiento efectivo o los 
ingresos son inferiores al nivel previsto debido a causa s incluidas en el seguro. Podría Estados Unidos 
informar si el monto asegurado corresponde a un porcenta je de la utilidad o sólo se cubren los costos 
de producción?. Quién y cómo se determ ina el nivel previsto de ingresos? 
 6. En el párrafo 31, la Secretaría informa que el  nivel básico de cobertura es el de los riesgos 
catastróficos, que se ofrece con una comisión ad ministrativa de 100 dólares EE.UU. por cosecha y 
país. Así mismo indica que el Depa rtamento de Agricultura reasegura a las compañías de seguros que 
ofrecen seguro de las cosechas. A qué país se refiere? Podría informar cuánto es el porcentaje cubierto 
por el Departamento de Agricultura? Cuál es el porcentaje del reaseguro sobre la prima? 
 7. En el Informe de la Secretaría, en el pá rrafo 34, se indica que además del seguro de las 
cosechas, los productores agrícolas reciben pagos de programas especiales y de urgencia. Puede 
Estados Unidos informar cuál es el porcentaje de superficie sembrada que se encuentra amparada con 
el seguro agropecuario?   8. En el documento WT/TPR/G/200, el pá rrafo 105 señala que los Estados Unidos “se 
comprometen a prestar asistencia para que los países en desarrollo refuercen su capacidad, especialmente mediante el ofrecimiento de ayuda para  el comercio”. Podría Estados Unidos, explicar 
en detalle en qué consiste esta asistencia?. Cómo los países en desarrollo pueden verse beneficiados 
con este tipo de apoyos?   9. En el párrafo 113 del Informe del Gobierno de  Estados Unidos, se indica que el Presidente ha 
comprometido a mejorar el Programa de asistencia para  el ajuste al comercio. Podría explicar con 
mayor detalle, en qué consisten las medidas que se implementaran para ayudar a los trabajadores y 
agricultores afectados por el comercio?  
5) SERVICIOS 
ii) Servicios de telecomunicaciones y servicios conexos 
 10. Según el párrafo 97, la F CC ha establecido una autorización general con respecto a las 
solicitudes para proveer servicios nacionales de  larga distancia basados en la utilización de 
instalaciones o en la reventa.  Posteriormente el párrafo 102 indica que las empresas de servicios 
públicos de telecomunicaciones basadas en la utili zación de instalaciones que tienen instalaciones de 
transmisión y prestan "servicios mejorados" deben permitir que otros proveedores de servicios 
mejorados utilicen sus instalaciones de transmisión sobre una base no discriminatoria y el párrafo 100 
hace referencia a las tarifas de acceso a los elem entos de red. Sin embrago, no se expone las 
obligaciones que deben cumplir los prestadores de ser vicios a través de la reventa y tampoco se hace 
referencia a si existe o no regulación sobre las tarifas para los re vendedores. Por lo anterior, se solicita 
exponer lo relacionado con las condiciones y tarifas para los proveedores que actúan bajo el régimen 
de reventa. 
 
iv) Servicios de transporte aéreo 
 
11. Del párrafo 161. responder: 
 
¿.Es posible que todos los aer opuertos estadounidenses de uso púb lico con servicios comerciales 
pueden gestionarse a través de subc ontratación o existen excepciones?  
 WT/TPR/M/200/Add.1 
Page 112  
 
 12. Del párrafo 162. Responder: 
 ¿La posibilidad de que los aeropuertos estadouniden ses con servicios comerciales sean de propiedad 
privada abarca la propied ad privada extranjera? 
 
13. Del párrafo 169. Responder: 
 ¿Se tiene previsto extender el plazo del Programa de Seguro Aéreo de la Administración Federal de 
Aviación más allá del 31 de agosto de 2008?  v) Transporte marítimo 
 
14. Del párrafo 176. Responder:  ¿EEUU ha considerado la posibilidad  de incluir compromisos específi cos en materia de servicios de 
transporte marítimo en el marco de l as negociaciones de la Ronda de Doha? 
 15. Del párrafo 198. Responder:  ¿Qué estadísticas se tienen sobre el ingreso de ciuda danos de México y Canadá a EEUU para trabajar 
en una ocupación profesional, de acuerdo con los términos del TLCAN? 
 
INDONESIA 
 
1. As one of 131 countries that has received GSP beneficiary from the US, Indonesia extends 
great appreciation and gratitude for the extension of GSP which the average tariff for GSP is just 
1.3% (page 7 of the Doc. WT/TPR/G/200) by U.S. government and its programs. 
 Question
 
 Indonesia wishes to have clarification as to whether the US has had a program to extend this program.  
2. 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$11.6 billion and impo rt has reached US$ 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 inform ed that USDA will implement a new policy  to inspect the fishery 
products from the other countries which have experi ence 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 the if this kind of certificate is used for fishery 
products, this would be misleading.   WT/TPR/M/200/Add.1 
 Page 113 
 
 
 Question  
 Indonesia seeks clarification on the USDA Inspection Program and policy. In addition, Indonesia is 
now taking some efforts to handle th e contamination of chroramphenicol , filthy, histamine, and 
salmonella on its fishery products. 
 
- 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 Additiona l 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. 
 
Question
 
 In this context, Indonesia requests further  in formation about the specification of the U.S CBP-
approved electronic data interchange system and the electronic equipment tracking system. 
 
INDIA 
 
1. The Secretariat in Summary Observations para graph 1 observes: “In the face of the economic 
uncertainty prevalent in early 2008, U.S. welf are would be best promoted by exploiting the 
adjustment capacity of the U.S. economy and cont inuing to reduce barriers to market access and other 
distorting measures, including those that result from high levels of assistance in agriculture and 
energy.”  What steps are being taken to “reduce barri ers to market access and other distorting 
measures, including those that result from high  levels of assistance in agriculture and energy”? 
 
2. The Secretariat in Summary Observations pa ragraph 5 states: “It [US] has fulfilled its 
notification obligations, except for preferential rules of origin, agricultural tariff quotas, and 
government procurement statistics.”  When does US plan to fulfil its outstanding notification 
obligations? 
 
3. The Secretariat in Summary Observations paragr aph 5 states: “rulings relating to intellectual 
property rights and anti-dumping have not yet been fully implemented” By when does the US intend 
implementing these rulings? 
 
4. The Secretariat in Summary Observations in paragraph 8 states that the United States has long maintained a policy of national treatment of fore ign direct investment, subject to sector-specific 
considerations, prudential con cerns, and national security.  Could the United States elaborate these 
sector-specific, prudential and national security considerations? 
 5. The Secretariat in Summary Observations pa ragraph 10 states: “Initial production volumes of 
small domestic wine and beer producers benefit from either a reduced federal excise tax rate or an 
excise tax credit.  This benefit is not available for imported products.” Does this not result in 
violation of the principle of national t reatment? The US is requested to explain.  
 6. The Export Credit Guarantee Programme which is managed by USDA/FAS has a major 
impact on a number of key agricultural markets.   Under this programme, the US government 
guarantees credits up to 98 % of the export value on a short-term to long term basis varying from up 
to 180 days under the Supplier Credit Guarantee Program SCGP, 3 years under the General Sales 
Manager (GSM) 102 and up to 10 years under GS M-103. Both the GSM-102 and GSM-103 are 
distortive insofar as the credit terms exceed the av erage life of the product/commodity in question, WT/TPR/M/200/Add.1 
Page 114  
 
 and the risk premia are inadequate to cover the long-term operating costs and losses of the 
programmes.  By charging less than the “cost of service rendered” is not the programme 
subsidizing agricultural exports? 
 
7. The Secretariat in Summary Observations pa ragraph 19 observes: “A review of competition 
policy procedures presented to Congress in 2007 recommended, among other things, simplifying and 
unifying merger clearing procedures and harmonizing th e work of state and federal antitrust agencies, 
particularly with respect to mergers.” To what extent have these recommendations been accepted 
and implemented? 
 8. The Secretariat in Summary Observations pa ragraph 25 observes: “A comprehensive inter-
carrier compensation reform plan is under consideration.” What are the major features of the inter-
carriage reform plan? 
 
9. The Secretariat in Summary Observations pa ragraph 24 observes: “Assistance for domestic 
ethanol production includes tax incentives and import duties.” Such incentives and duties act as 
entry barriers for more efficien tly produced ethanol around the world and therefore reduce the 
environmental benefits.  Is the US co nsidering reductions in such levies? 
 
10. The Secretariat in Summary Observations para graph 22 observes: “The expiration of the 2002 
Farm Act, and the current environment of high co mmodity prices, offers a favourable juncture to 
introduce policy changes aimed at further improving the market orientation of the agriculture sector to 
the benefit of both consumers and taxpayers .”  However the Farm Bill has enhanced payments to 
farmers under various commodity programmes even though market prices of these 
commodities have gone up sharply since 2002. What are the reasons for enha nced support levels 
under these circumstances? 
 
11. A variety of agricultural exports from India to the US have encountered problems due to 
delays in US Customs sampling and inspection pr ocedures, resulting in damage to the goods and 
subsequent commercial losses for the exporters – especially in case of mangoes and egg products. 
What are the sampling and inspection procedures in the US on agricultural produce imports? 
In view of these loses being sustained by Indi an exporters, will the US consider modifying the 
procedures? 
 
12. The Committee on Foreign Investment in the US ( CFIUS) was created with the intention to 
review acquisitions and mergers that impact the U.S. national security.  However, there are some 
members of Congress who want to extend CFIUS revi ew for all mergers and acquisitions and to rank-
order countries based on a criteria that seemed unclear .  Indian fear that this process will add cost, 
time, and possible political interference to future Indian-based company transactions within the US. 
What is the role of the Committee on Foreign  Investment in the US (CFIUS) on review of 
foreign investment transactions? 
 
13. To ensure that misinformation on India or Indian companies is not being forwarded to or 
collected by the US government, India would be happy to work with the concerned government 
agencies to promote transparency in the drafting of th e US government issued repor ts.  The fear is that 
U.S. government reports -- even those intended onl y to convey unverified concerns from private 
industry -- are regarded as fact and if the conclusions reached by the report are based on misinformation, they could have a detrimental im pact, especially for publicly listed companies. 
Moreover, it would make it difficult for the impacted  companies to respond.  For example, the U.S. 
Trade Representative’s reports on Telecom are not required to cite their sources.  Therefore, it is unclear how the USTR came to its findings or what  information it based its finding on.  Transparency 
will ensure that US government issued reports are based on facts as well as provide Indian companies 
the opportunity to fairly  and accurately respond. Will US consider citing the sources used in 
preparation of the government reports?  WT/TPR/M/200/Add.1 
 Page 115 
 
 
 14. Each year, the United States conducts an a nnual review under the GSP program to determine 
if there are certain imports currently eligible for benefits that could compete effectively in the US 
market if imported at normal tariff rates.  In 2005 US government removed Indian Gems & Jewellery 
from receiving the benefits of GSP. In the Annual review 2006, the US Administration decided not to 
renew the Competitive Needs Limitation (CNL) Wa iver for gold jewellery and brass lamps from 
India, thereby ending the GSP preference. The de cision of the US Government to end the GSP 
(Generalised System of Preferences) for gold jewe llery and brass lamps from India will lead to a large 
number of jobs being lost in these sectors in India.  GSP has been withdrawn from 8 out of 9 products 
for which the review was carried out under the new regulations.  What are the reasons for the 
sudden withdrawal of GSP benefits on  as many as 8 products out of 9? 
 15. The US appears to lack a transparent fram ework for regulation of Biogenerics or Follow on 
Protein Products (FOPPs).  The US Public Health  Service has no provision for regulation of FOPPs. 
While the Food Drugs and Cosmetics Act (USFDA ) was amended in 1984 to open ways for some 
generic drugs like Human Growth Hormone and insulin that are not regulated by Public Health 
Service, the US government needs to create a generi c 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 future generics would need to meet? 
 
16. The 'Buy America' clause prevents Indian companies from participating in Federal 
government contracts. Some States were also imposing 'local content' as well local employees' 
conditions. How does the Buy America clause work sin ce it impacts market access to the US? 
 17. The "Chicken Tax" instituted in 1963, was ai med at European truck makers.  This followed a 
trade war between the USA and Europe. Europe trip led the tax of chickens being imported from US, 
and the US retaliated by putting a 25% tax on any tr uck imported into the US.  This tax which has 
remained in force since then on import of trucks h as been identified as a barrier to Indian companies 
in this sector wanting to access US markets .  Why does the US continue to impose the "Chicken 
Tax"  on import of trucks into the country? 
 
18. How does the American Automobile Labelling Act works? Since it promotes use of US and 
Canadian parts, it makes entry of small cars made in India into the US market difficult.  Why the 
promotion of US and Canadian parts should not be construed as a non-tariff barrier? What procedures need to be met to export to the US market if the car is of approx 1000 cc? 
 
19. Extensive product description requirements complicate exports to the US and result in 
additional costs. Rules for marking and labelling of  retail packages are burdensome.  They require 
details regarding the country of origin, ultimate pur chaser in the US and the name of the country in 
which the article was manufactured or produced. Fu rthermore, there are requirements relating to the 
typology/physical characteristic of the clothing labels  (given size, font used, etc).  These standards 
imply that special labels ar e needed for the US market.  
 20. In addition, customs formalities for imports of textiles, clothing and footwear to the US 
require  supply of particularly detailed and voluminous information, which leads to additional costs 
and in some cases includes disclosure of  confid ential information such as the processing methods 
(type of finishing, of dyeing, etc). Much of this information seems to be irrelevant for customs or 
statistical purposes. The extension of the liquida tion period up to 210 days also functions as an 
important trade barrier. The retailer or the importer is often not in a position to re-deliver the goods 
upon Customs and Border Protection (CBP) request, in which case CBP applies a high penalty (100% 
of the value of the goods).  These delays are particularly damaging for seasonable products or for fashionable products having short life-span.  Th ese formalities are highly trade restrictive. What 
policy objectives are sought to be achieved by th ese procedures and can th ey not be achieved by 
measures that are less trade restrictive?  Is there a move to harmonize the labelling 
requirements with the EU? WT/TPR/M/200/Add.1 
Page 116  
 
 21. What is the basis of Section 232 of the Trade Expansion Act of 1962? Can US industry 
petition for the restriction of imports from thir d countries on the grounds of national security 
under this provision? Can protective measures be used for an unlimited period of time under this provision?  
 
22. The US Steel First Act passed in April, 2008 by the Congress is expected to impact market 
access for Indian steel exports. Under the Act for a ll Government funded infrastructure projects the 
steel has to be domestically produced.  Why should this not be considered a non-tariff barrier? 
 
23. India believes that the US has a mandatory la belling requirement for fresh fish and shellfish 
under the Country of Origin Labelling Programme (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 re quirement by the importer and domestic industry 
respectively?  In case of any difference in the level of punitive fines, India would like to know the reason for the same. 
 24. Would the US be willing to re-look at simplify the detailed labelling requirements which 
includes extensive product and content d escription on imports of food products? 
 
25. 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?  
26. The regulations on registration with and a dvance 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? 
 27. India would like to know as to why certific ation by the Export Inspection Council (EIC) 
has not been recognised for import of marine products? 
 
28. The zero tolerance on radio active contamination caused by cobalt 60 for import of industrial, 
municipal and sanitary castings is a highly stringent regulation .  Does the US plan to review and 
modify this norm for imports of industr ial, municipal and sanitary castings? 
 
29. The US Public Health Security and Biot errorism Preparedness and Response Act was 
formulated to address security ri sk surrounding the supply of foodstuffs.  The implementation of the 
so-called Bioterrorism Act (BTA) necessitates the re gistration of all foreign facilities that supply food 
to the US, prior notification of all shipments to th e US, record-keeping by fo reign 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 vegeta bles. 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? 
 
30. Although the objective under the Bioterrorism Act is quite obvious, the procedures such as 
filing of advance manifest and approval by the US Customs is lengthy and cumbersome in terms of 
the information to be provided by shippers, uncer tainty in being shipped and the cost entailed.  What 
are the US’ plans to address these issues? 
 
31. The U.S. has a relatively low level of implem entation and use of international standards set by 
international standardization bodies.  Many Indian  exporters to the U.S. market face regulatory 
barriers as products are increasingly being required to conform to multiple technical regulations  WT/TPR/M/200/Add.1 
 Page 117 
 
 
 regarding consumer protection (including health and safety) and environmental protection.  The 
complex nature of the U.S. regulatory systems can re present an important structural barrier to market 
access.  Obstacles for Indian exporters include, fo r example, a burdensome pharmaceutical approval 
system, documentary and labelling requirements for tex tiles etc.  It is quite common for equipment for 
use in the workplace to be subject to a number of  different standardizing bodies including the U.S. 
Department of Labor certification, a county author ity’s electrical equipment standards, product safety 
requirements as determined by insurance compani es as well as specific regulations imposed by large 
municipalities. A more integrated, transparent and streamlined regulatory environment would 
significantly assist domestic consumers and importers as well as exporters to the US. What steps are 
being taken to ameliorate this problem? 
 32. Indian exporters face a number of additional customs impediments, such as import user fees 
and excessive invoicing requirements on importers, which add to costs in a similar way to tariffs.  The 
most significant user fee is the Merchandise Processing Fee, which is levied on all imported merchandise except for products from the least deve loped countries, from eligible countries under the 
Caribbean Basin Recovery Act, the Andean Trade Pr eference Act, U.S. FTA partners, or from U.S. 
Offshore possessions.  Fixed previously at 0.17% of the value of the imported goods, the MPF rose to 0.19% in 1992 and amounts to 0.21% ad valorem on formal entries with a maximum of US$485 as from 1 January 1995.  At the request of Canada and the EU, the GATT Council instituted a Panel in 
November 1987 that held that the U.S. Customs user fees for merchandise processing were not in 
conformity with the General Agreement. The Pane l ruled that customs user fees should reflect the 
approximate cost of customs processing for the indi vidual entry in question.  This principle was not 
met by an ad valorem system such as that used  by the U.S. The GATT Council adopted the Panel 
report in February 1988.  The present customs user fee structure is somewhat more equitable, since 
the fixing of a ceiling makes it less onerous for high-v alue consignments.  However, the fee is still 
likely to exceed the cost of the service since it is still based on the value of the imported goods.  
Whilst the MPF was to last until 30 September 1990 when established, it was recently extended (as 
part of the American Jobs Creation Act of 2004) until 30 September 2014.   In view of Article 
VIII.1(a) of GATT how does US justify a levy which is in excess of cost of service rendered? 
Why should US impose such a levy when there are several countries poorer than the United 
States which are able to support their customs operations solely from the tax payer’s money? 
 
33. In the agricultural area, a number of sanitary  and phytosanitary (SPS) issues remain a source 
of difficulty. For example, the U.S. requires that Pest 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 ca n 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? 
 
34. Prior approval of the US Food and Drug Ad ministration (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? 
 
35. The electrical safety field in the US is ruled by workplace safety regulations developed by the 
Occupational Safety and Health Administration (OSHA), the National Electric Code and industry 
safety standards for electrical e quipment such as Underwriters´ Laboratories (UL). Exporters of 
electrical and electronic equipment and appliances face steep barriers to market their products on the US market.  Despite the fact that technological de velopment and consumer awareness in this sector 
favours self-certification by manufacturers, backed up by post-market surveillance and control, third 
party certification of electrical equipment and appliances is still mandatory ( de jure  and/or de facto ), 
in the US market.  Why is third party certification insisted upon? WT/TPR/M/200/Add.1 
Page 118  
 
 36. In 2007, the US Office of Foreign Assets C ontrol placed total bans on doing any transactions 
with a number of Iranian banks including with respect to any old deals since no grace period is 
allowed under the US regulations.  This has meant that  Indian companies are not able to realize their 
dues from Iran-based compani es even where letters of credit were  opened and goods shipped prior to 
the sanction.  Will US consider letting the foreign companies realise their past dues? 
 
37. Foreign-owned firms are faced with substantial barriers to access the U.S. Communication 
Services market.  These include for example rest rictions to investment, lengthy proceedings, 
conditionality of market access and reciprocity-based procedures. Market access barriers also exist for 
digital terrestrial television services.  By when would the US consider easing these restrictions? 
 
38. The US has been taking a very long time in clearing the applications by Indian Banks for 
setting up a branch in the US.  What is the process for setting up a branch and what is the average 
time period for clearing such applications? 
 
39. It takes several years for a foreign bank from th e time it initiated its application to provide full 
fledged Banking Services in the United States .  How does US explain this regulatory barrier when 
US banks themselves are demanding prompt and transparent regulatory procedures from the 
developing countries?  
40. Once a bank obtains a branch license in the US, the activities of the foreign parent bank in the 
US, known as Bank Holding Company (BHC), are rest ricted to only closely related banking activities 
and exclude several financial activities such as selling of insurance, Mutual funds, etc.  There is no 
such restriction in many developing countries in cluding India.  This severely restricts the 
opportunities for the foreign banks.  Is the United States planning to remove these restrictions? 
 
41. Foreign banks are not covered by the Depos it insurance scheme in the United States.  Why is 
that so when several developing  countries are offering these fa cilities to the foreign banks? 
 
42. A foreign bank’s branch is governed by the bank holding company regulations, which prohibit the bank from undertaking insurance and underwriting business in the United States, as well 
as restrict the parent bank’s equity ownership in  non-banking businesses that have U.S. operations.  
These are permitted under the financial holding comp any regulations; however, transition from bank 
holding company to financial holding company status again takes time and is subject to approval of 
the Federal Reserve, including determination of co mprehensive consolidated supervision in the home 
country.  Because of the above reasons, an Indi an bank currently cannot have a banking presence and 
undertake underwriting and insurance at the same time in the United States.  What is the rationale 
behind this US policy? 
 
43. Approvals required from multiple  regulators in US (Federal Reserve, OCC or State Banking 
Department and Federal Deposit Insurance Corporate (F DIC) of subsidiary.  Formation of inter-state 
branching is subject to regulation by each State.  Multiple level regulations create a market access 
barrier for many foreign banks aspiring to  establish presence in the United States.  What is the US 
doing to reduce the maze of regulation in this sector/ 
 
44. The information reporting requirements of th e US Tax Code as applied to certain foreign 
owned corporations mean that domestic and foreig n companies are treated differently.  These rules 
apply to foreign branches a nd to any corporation that has at least  one 25% foreign shareholder.  They 
require the maintenance, or the creation, of books  and records relating to transactions with related 
parties.  The documents must be stored at a place specified by the US tax authorities, and an annual 
statement filed containing information about dealings with related parties.  There are stiff penalties for 
non-compliance with the various provisions. The in formation reporting requirements of the US Tax 
Code are onerous.  Although their purpose, the prevention of tax avoidance and evasion, is  WT/TPR/M/200/Add.1 
 Page 119 
 
 
 reasonable, they are burdensome and add to the comp lexity for foreign-owned corporations of doing 
business in the US.  How does the US plan to make compliance with its tax laws less onerous? 
 45. The Indian broadcasters are facing various entry barriers in the US market.  The restrictions 
on an alien being granted an operating license  in the USA, under Section 310 of the US 
Telecommunications Act, effectively prohibit any foreign broadcaster from being granted license in 
the USA for cable, terrestrial or DTH systems.  The citizenship conditions effectively place a 
restriction due to which Indians can only invest in companies owned by the US Citizens.  Thus, even 
if FDI is permitted in Terrestrial Free-to-Air Broa dcast (non-subscription) which can be a total of up 
to 45% (20% direct and 25% indirect) the owner of the company needs to be a US Citizen as per 
Section 310. Similar is the position in DTH/DBS platforms as it is a universal practice to provide 
triple play services (i.e. two way connections) with Voice, Video and internet on the DTH platforms. 
This effectively requires the operator to obtain a common carrier license which attracts the provisions of Article 310(b).  Further, spectrum cannot be obta ined for wireless extensions by non-US citizens. 
Thus in practice, operating license cannot be grante d to Non-US citizens even for DTH services.  In 
the cable networks too, the provisions of Section 310 come as a barrier in market access of this sector 
by a foreigner.  How can the US explain the highly restrict ive and closed state of the markets in 
the  DTH, cable or satellite services? 
 
46. We understand that the process for normal time period for signing Totalisation Agreement is 
too time consuming and it can take anywhe re between four to five years.  What is the normal time 
period for signing a Totalisation Agreement with  the US and what are the processes involved? 
 
47. Even if India and US were to sign a Totali sation agreement, it will not  cover pension benefits 
for Indian workers who go on short term work visas to US -- 6 years H-1B, 5 years for an L-1B, and 7 years for an L-1A -- since the US Social Security System requires a minimum qualifying period of 40 
quarters of contribution to be e ligible for pension benefits.  How can the short-term workers who 
contribute a huge amount into the US  Social security system benefit? 
 
48. From the Uruguay Round the US has not o ffered any improvements in its Mode 4 Offer 
especially with regard to CSS and IP, under the WT O, whereas most of the developing countries have 
shown substantial progress in their Offers. How does the US explain the complete lack of progress 
in Mode 4 offers? 
 
49. US has not shown any flexibility with regard to taking commitments in Modes 1 and 2.  In 
this regard, India has requested the US bilaterally and the US is also a recipient of the plurilateral 
request. Which existing regulations prevent the US from undertaking these commitments? 
 
50 The reduction in the limit of the H1-B visa ha s been a matter of continuing concern to India 
as it is having an adverse impact on the services trade.   A number of private member Bills were also 
introduced in the US to increase the H1B cap and to  streamline the procedure, but these attempts have 
been unsuccessful.  What efforts are being made by the US  to increase the H1B visa cap?  In 
particular does US intend to provide a sp ecial category of a service provider visa? 
 
51. Apart from visas, security-related restrictions  on federal and state businesses are coming in 
the way of Indian IT companies doing business in th e United States.  While they were prepared to 
work with around the Buy American clause by finding local partners, the uncertainty about whether they would be eligible to bid makes business decisions difficult.  What are the security checks that 
Indian companies have to fulfil for getting fe deral and state contracts which are open for 
foreign bidding? 
 
52. Without disciplines in Domestic Regulations the most liberal access offers would be devoid 
of any commercial value.  In spite of this US  has been taking a conservative stand in the DR WT/TPR/M/200/Add.1 
Page 120  
 
 negotiations and which is contra dictory to their need for a high ambition in services trade.  How does 
US explain this contradiction in its trade policy? 
 
53. What are the relevant, sections of the US legislation relating to de termination of dumping 
margins? 
 
54. Which are the relevant parts, sections of  the US regulation or the specific computer 
programme of the US Department of Commerce th at lay down procedures for use of a comparison 
methodology for determination of dumping margin?  
55. Under what circumstances, does the US De partment of Commerce use the transaction to 
transaction comparison methodology for determini ng dumping margin?  And whether the US DOC 
allows off sets in the model comparisons under th is methodology?  What are the relevant parts, 
sections of the US regulation or the specific computer programme of the US Department of Commerce that lay down procedures for use of transaction to transaction comparison? 
 
56. How often does the US DOC use the weight ed average normal value – export transaction 
comparison (W-T) methodology in the original investig ations?  What are the relevant parts, sections 
of the US regulation or the specific computer progr amme of the US Department of Commerce that lay 
down procedures for use of this methodology?  And whether the US DOC allows off sets in the model comparisons under this methodology? 
 
57. What is the comparison methodology used by  US authorities for determining dumping margin 
in Administrative Reviews and what are the rele vant US laws/regulati ons/computer programmes? 
 58. Whether the US authorities use weighted  average normal value – export transaction 
comparison methodology (W-T) for determining dumping margin in Administrative Reviews?  And, 
if so, in how many cases?  59. Whether the US authorities provide an explan ation in their determinations, while using the 
W-T methodology in Administrative Reviews, as to  why the differences in export prices cannot be 
taken into account appropriately by the use of weight ed average to weighted average or transaction to 
transaction comparison due to the pattern of expor t transactions among different purchasers, regions 
or time periods (as required under Article 2.4.2 of the Anti Dumping Agreement)?  60. If the dumping margin determined as a result of Administrative Review is de minimis or zero 
or negative, does the Administration stop collecting AD duty in respect of exports of that exporter? 
 
61. The US conduct of the Sunset review falls short of the pre-define d conditions. US imposes 
unwarranted conditions on the par ticipation of exporters in the s unset reviews, requiring respondents 
to cover 50% of exports  before it will conduct a full Sunset review.  Will US be willing to review the 
sunset clause procedure? 
 
INDIA ADDITIONAL QUESTIONS 
 
The US-GSP benefit was available to Indian Gold Jewellery Sector till 30
th June 2007.  As per the 
data, the exports of Gold Jewellery from India to  USA, during July ’07 to March ’08 (after the 
withdrawal of US-GSP benefit from Indian Gold Jewellery) at US$1.35 billion has shown a major 
decline by 30% as compared to US$1.95 billion during Ju ly ’06 to March ’07.  It is for this reason that 
Indian Industry requested the US Administration to c onsider the restoration of GSP benefits to this 
sector.  Will the US reinstate GSP benefits whic h have hitherto supported livelihood of 
thousands of Indian workers/craftspersons?  
  WT/TPR/M/200/Add.1 
 Page 121 
 
 
 India’s tobacco exports to the US are  low and stand at US$3 million.  This is only about 0.3% of US 
total tobacco imports.  There is therefore treme ndous potential for growth. One of the major reasons 
for the poor off take of Indian tobacco by the US A is the Tariff Rate Quota (TRQ) regime prevailing 
in the USA.  Tobacco imports into the USA come under the purview of the Tariff Rate Quota, which 
was established in September 1995 for all cigarette type  tobaccos.  Under the TRQ, a tariff rate equal 
to the concessional rate (40.9 cents per kg) is applie d to tobacco imports until the in-quota quantity is 
filled, after which a tariff rate of 350% ad-valorem is applied.  The TRQ is sub-divided into specific 
allocation for 9 Countries and a ge neral allocation for other Countri es.  Under the North American 
Free Trade Agreement, Canada and Mexico are excluded from TRQ import duties.  India does not have any specific TRQ and is clubbed under “Others” with an allocation of only 3000 tons.  This 
limits growth of Indian tobacco exports to the US.  This system of quotas needs to be reviewed so as 
to allow for greater market access fo r Indian tobacco in the US.  The out of quota tariff of 350% acts 
as a barrier to Indian exports. India has made a poi nt that the quotas should be on MFN basis and not 
country specific.  Even if to allow an enhanced access to India, US has to negotiate with other 
countries having TRQ, it should initiate the process and in  the interim allow an in crease in the ‘others’ 
category of TRQ equal to the quota that remains unfilled.  Will the US review the current system of 
quotas for eliminating such a discriminatory system  of quota allotment?  Does the US plan to 
increase the quota for exports of FCV and Burley  tobacco since the current quota is restricted 
to 3000 tons only? 
 
PAKISTAN  
 
1. The USTR office issues a watch list for IPR violations every six months and moves ranking 
of countries in various categories. However, it is not made transparent as to how such ranking is determined. Several times, this ra nking is done to force countries to  take on TRIPS plus legislation 
irrespective of their serious efforts th ey make in enforcing IPR protection. 
 
a. Could the US Administration please give some details as to what factors are taken into 
consideration in placing countries on this watch list? 
b. Are these factors made known to the count ries concerned in good time, for them to take 
corrective measures, if any? 
 
2. Exporters of industrial goods from poor count ries such as Pakistan pay tariffs which are 
several times more than those from rich countries.  Th is position may be rectified to some extent if the 
Doha Round is successfully concluded.   However, this anomaly will not be eliminated all together. Is 
the US making any efforts to rectify this situation?  
3. Pakistan empathises with the USA on need for rigorous scrutiny for processing visa requests. 
However the very long processing time and incompre hensible rejections of legitimate business 
visitors are a major trade impediment.  Is the US  streamlining the procedures for legitimate businesses 
entry facilitation?  4. The US applies various methods of tariff quot a allocation in Dairy products.  May we have 
some details and rational for usi ng such methods and the criteria for each method to be applied? WT/TPR/M/200/Add.1 
Page 122  
 
 REPLIES PROVIDED BY THE UNITED STATES 
TO ADVANCE WRITTEN QUESTIONS 
 
ARGENTINA 
SUMMARY OBSERVATIONS 
3) Access to markets for goods  Paragraph 9, page viii and paragraph 49, page 38  
These paragraphs indicate that all tariff lines, excep t two (devoted to crude oil) are consolidated, 
generally at low rates, providing the US trade regime with predictability .  Could the United States 
indicate the tariff applicable to  these lines? For what reasons ha ve these lines been or not been 
consolidated?   
ANSWER:  The tariff rate for 2709.00.10 is 5.25 cents per barrel.  The tariff rate for 2709.00.20 is 
10.5 cents per barrel.  These lines were not bound as part of the Uruguay Round and in prior GATT 
negotiations for reasons of national security.  
 
I. RECENT ECONOMIC DEVELOPMENTS  4) Fiscal policy Paragraph 19, page 7 
 
This paragraph refers to the introduction of fiscal stimulus measures in 2008.  Could the United 
States indicate which taxpayers benefit from the abovem entioned tax relief? What is the amount of the 
relief?  
ANSWER:  The Economic Stimulus Act of 2008 includes stimulus payments to  households, and tax 
incentives for businesses to invest and create jobs.  Fo r households, single filers generally will receive 
a minimum of $300 and as much as $600, and joint fi lers will generally receive at least $600 and up to 
$1,200.  There is also an additional $300 payment for each qualifying child.  Total cash to households 
will be over $100 billion.  
The stimulus package totaled $150 billion – or around 1 percent of GDP --- and these business and 
household measures are large enough to make a real difference as we weather the current economic 
slowdown.    We expect that these payments will help right aw ay --- help individuals, families and our economy.  
Giving people cash means they can  decide how best to use it. 
 Examples of how the benefits will be distributed are at:  http://www.treas.gov/press/releases/report s/fact%20sheet%20examples.pdf. 
 
In addition to providing stimulus payments to individuals, the Economic Stimulus Act of 2008 
provides incentives to businesses. These incentives include a special 50-percent depreciation 
allowance for 2008 purchases and an increase in th e small business expensi ng limitation for tax years 
beginning in 2008.  
II. TRADE POLICY REGIME: FRAMEWORK AND OBJECTIVES 
1) Overview 
Paragraph 1, page 14  
In this paragraph the re port mentions that the United States h as made progress in the application of 
various WTO resolutions requiring changes in US legi slation, but there are still some that have not  WT/TPR/M/200/Add.1 
 Page 123 
 
 
 been fully complied with. Could the United States indicate wh ich resolutions have not been fully 
complied with and the reason for this?  
 
ANSWER:  As the United States has explained on an ongoing basis to Members at the DSB, the 
Administration is continuing to work with th e U.S. Congress on legislation implementing DSB 
recommendations and rulings in the Section 211 , Section 110  and Hot-Rolled Steel  disputes.  We note 
that in respect of the Hot-Rolled Steel  dispute, the relevant U.S. au thorities have already addressed the 
DSB’s recommendations and rulings with respect to  the calculation of antidumping margins in the 
particular hot-rolled steel antidumping duty investigation at issue. 
 
2) Institutional and regulatory framework 
Paragraph 12, page 16 
 
In this paragraph the report  indicates that during the period under review, workers, companies, and 
farmers negatively affected by international trad e could benefit from the advantages of the Trade 
Adjustment Assistance (TAA) Program, authorized by the Trade Act of 1974, as amended.   Could the 
United States indicate  what requirements must be met in order to obtain the benefits of this Program? 
What amount is devoted to this pr ogram during the period under review? 
 
ANSWER:  The U.S. Department of Labor administers the Trade Adjustment Assistance (TAA) for 
Workers program.  The TAA for Farmers and T AA for Firms programs are administered by the 
Departments of Agriculture and Commerce respectively.   
 In order to be certified for benefits under the TAA for Workers program, a group of workers must be found to have lost employment or had their hours of work reduced as a result of  increased imports or 
shifts in production to foreign countries.  Genera lly, worker groups that have had significant layoffs, 
and have experienced declines in sales or production that are attributable to increased imports, or have 
been affected by shifts in production to a foreign country, or whose firm has lost business as a supplier or assembler/ finisher for a TAA certified firm (secondary workers), may qualify as trade affected workers under the TAA program.    A trade-affected worker may receive one or more of the following services and benefits designed to 
help him or her transition to new employment:  
 Reemployment Services :  Employment Registration, Employment Counseling, Case Assessment, 
Job Development, Supportive Services, a nd Self-Directed Job Search Services. 
 
Job Search Allowances :  For costs of a job search outside of the local commuting area.  
 Relocation Allowances :  For costs of relocating to a job outside of the local commuting area. 
 Training Services :  Up to 104 weeks of training in a new occupational field, including classroom 
training, on-the-job training, and customized training.  
 
Trade Readjustment Allowances (TRA) :  Up to 104 weeks of income support for eligible workers 
enrolled in full-time training.  Health Coverage Tax Credit (HCTC) :  Tax credits covering up to 65% of the monthly health 
insurance premium paid by an  eligible participant.  
 In addition, for workers over the age of 50, the Alternative TAA program provides an alternative to 
the benefits offered under the regul ar TAA program. Participation in ATAA allows older workers, for 
whom retraining may not be suitable, to accept re employment at a lower wage and receive a wage 
subsidy.  If the worker obtains new employment wi thin 26 weeks of separation at wages less than WT/TPR/M/200/Add.1 
Page 124  
 
 $50,000 and less than those earned in adversely a ffected employment, the ATAA program will pay 
50 percent of the difference between the old wage and the new wage, up to $10,000 over a two-year 
period.  Funding for the TAA program varies based upon partic ipants who access services each year.  Training 
funds are capped at $220 million per year; however Trade Readjustment Allowances are not capped, 
and together with the $220 million allocated for tr aining result in total annual TAA program funding 
of nearly $1 billion per year.  For example,  in FY 2008, the total TAA appropriation was 
$888.7 million:  $220 million for TAA training, $33 million for state administration, $6.7 million for 
job search and relocation allowances, $606 million for income support or trade readjustment 
allowances (TRA), and $23 million for ATAA. 
 A breakdown of the total TAA appropriation for each of the past 5 fiscal years is available on the Department of Labor’s website at http ://www.doleta.gov/tradeact/pdf/5YearApprop.pdf. 
 
The TAA for firms program provides project grants to firms and industries adversely affected by an 
increase in imports of directly competitive or simila r articles with articles produced by the firm, and to 
help implement the firms' strategies to guide thei r economic recovery.  The Secretary of Commerce is 
responsible for administering the TAA for firms Pr ogram and has delegated the statutory authority 
and responsibility for this program under the Trade Act of 1974 to the Depa rtment of Commerce’s 
Economic Development Administration (“EDA”).  EDA regulations implementing the TAA Program 
may be accessed via EDA’s Internet website at: http://www.eda.gov/AboutEDA/Programs.xml 
 TAA for farmers provides technical assistance and financial payments to producers of raw 
commodities, who have been adversely affected by import competition.  The Secretary of Agriculture 
is responsible for administering the TAA for farmer s program.  More information on that program is 
available at:  www.fas.usda.gov/itp/taa. 
 
3) Foreign investment regime 
i) National treatment Paragraph 15, page 16 
 In this paragraph the report indicates that the Unite d States maintains a policy of national treatment 
for direct foreign investment, with some conditions related to concerns of a precautionary nature and 
national security. Moreover, the United States also ap plies restrictive measures to foreign investment 
at the State level.   Could the United States indicate w hat the report means by “concerns of a 
precautionary nature”? 
 ANSWER:   With respect to the original statement in E nglish that some investments may be subject to 
considerations of a “prudential nature,” as an exam ple, foreign banks seeking to establish or acquire a 
bank in the United States are required to demonstrate that they meet applicable prudential standards, 
including that they are subject to comprehensive,  consolidated supervision in their home countries. 
 
ii) Information and review requirements 
Paragraph 18, page 17  
This paragraph indicates that the Secretary of th e Treasury is developing regulations to improve 
enforcement of the Foreign Investment and National Security Act.   Could the United States indicate 
the characteristics of these regulations and when they are expected to take effect? 
 
ANSWER:   The Department of the Treasury issued proposed regulations for public comment on 
April 21, 2008, which are available on the website of the Committee on Foreign Investment in the United States (CFIUS) at:  http://www.ustreas.gov/offices /international-affairs/cfius/.  The goal of the 
proposed regulations is to:   WT/TPR/M/200/Add.1 
 Page 125 
 
 
 - Implement the requirements of FINSA and Executive Order 11858, as amended 
- Increase clarity and transparency, and - Make additional improvements based on experience under the current rules. 
 The Department of the Treasury will review a ll comments submitted during the comment period, 
which closes on June 9, 2008, a nd will subsequently issue final regulations, at which time such 
regulations will become effective.  
 
Paragraph 19, page 17  
The report indicates that the President may suspend or prohibit a foreign investment when there is 
compelling evidence that the foreign entity could enga ge in actions that may pose a threat to national 
security, and no other provision of federal law provides appropriate powers to protect national security.  Could the United States indicate whether the President has made use of the power to 
suspend or prohibit an investment? 
 ANSWER:   The President has exercised his power to suspend or prohibit an investment only one 
time, in 1991. 
 
4) International relations i) World Trade Organization 
Paragraph 34, page 21 
 
This paragraph indicates that the Administration is committed to working with Congress to enforce 
pending DSB rulings on specific matters .  Could the United States indicate whether, beyond the 
commitment made, any measures have been taken or actions adopted to move forward with the 
enforcement of pending rulings?  Is there any schedule or agenda for such actions?  
 
ANSWER:   As the Secretariat report indicates in the para graph to which Argentina refers in this 
question, the United States Congress has over the p ast several years undertaken major implementation 
efforts, including legislative efforts in the FSC, 1916 Act , CDSOA  and Cotton  disputes.  A number of 
proposed bills have been introduced to deal with outstanding implementation issues, and the 
Administration will continue to work with th e U.S. Congress on legislation implementing DSB 
recommendations and rulings in the Section 211 , Section 110  and Hot-Rolled Steel  disputes.  The 
legislative schedule is controlled by Congress, and it  is therefore not possible to provide a precise 
schedule for completion of remaining steps. 
 
III. TRADE POLICIES AND PRACTICES BY MEASURE  
2) Measures directly affecting imports  i) Customs regime  Paragraph 14, page 29 
 
This paragraph indicates that the United States is developing a new customs system for processing 
cargo called the “Automated Commercial Environment (ACE),” to operate as a single point of online 
access for the processing of import and export formalities.  Could the United States provide further 
information about the characteristics of this program?  
 
ANSWER:  The Automated Commercial Environment (A CE) is the commercial trade processing 
system being developed by U.S. Customs and Border Protection to facilitate trade while strengthening 
border security.  The ACE Secure Data Portal, essen tially a customized Web page, connects CBP, the 
trade community and participating government ag encies by providing a single, centralized, online 
access point for communications and information related to cargo shipments. 
 WT/TPR/M/200/Add.1 
Page 126  
 
 b) Container Security Initiative (CSI) and Cargo Security Initiative 
Paragraph 21, page 31  
In this paragraph the report indicates that the pr ocedure used in the framework of the “Container 
Security Initiative (CSI)” consists in the selecti on and inspection of high-risk containers through 
“non-intrusive inspection equipment, physical inspection, or both.”   Could the United States indicate 
the average time required for this insp ection in the port of shipment  
 
ANSWER:   Because CSI conducts overseas examinations using the normal downtime for a container 
awaiting loading in a foreign port and continues to improve the process of screening and examining 
containers by developing and fully utilizing state- of-the-art technology, screening time is minimal. 
 
Does this procedure apply to goods in tr ansit through United States territory?  
 
ANSWER:  Yes.  All containers that pose a potential risk  for terrorism are identified and inspected at 
foreign ports before they are placed on vessels destined for the United States. 
 
What criteria are used to determin e whether a port qualifies as “CSI”? 
 
ANSWER:   To implement the CSI program, CBP deploy s multi-disciplined teams to selected foreign 
seaports of countries that have bilaterally agreed to implement the CSI program. CSI officials partner 
with foreign governments to identify cargo containe rs that pose a potential risk for terrorism and 
inspect those containers at the foreign ports before they are shipped to the United States.  CSI initially 
became operational in the top twenty largest volume por ts that export to the United States.  CBP now 
intends to expand CSI to other ports based on stra tegic importance related to terrorist threats. 
 
c) C-TPAT 
Paragraphs 25 to 29, pages 32 and 33 
 
As follows from the report in paragraphs 25 to 29 , we understand that the United States has yet to 
publish any regulations for the operation of the Cu stoms-Trade Partnership Against Terrorism (C-
TPAT), a program allowing certain US importers to benefit from reductions in the risk index assigned 
to their shipments by Customs and Border Protection (CBP).   Could the United States provide further 
details on the application of the C-TPAT? 
 
ANSWER:   C-TPAT is a voluntary government-business in itiative to build cooperative relationships 
that strengthen and improve overa ll international supply chain and U.S. border security.  C-TPAT 
recognizes that U.S. Customs and Border Protecti on (CBP) can provide the highest level of cargo 
security only through close cooperation with the u ltimate owners of the international supply chain 
such as importers, carriers, consolidators, licensed  customs brokers, and manufacturers.  Through this 
initiative, CBP is asking businesses to ensure the in tegrity of their security practices and communicate 
and verify the security guidelines of their business partners within the supply chain. 
 
By participating in this supply chain security initi ative, companies will ensu re a more secure and 
expeditious supply chain for their employees, suppliers and customers.  Beyond these essential 
security benefits, CBP will offer benefits to certa in certified C-TPAT member categories, including: 
 - A reduced number of CBP inspections (reduced border delay times); 
- Priority processing for CBP inspections; 
- Assignment of a C-TPAT Supply Chain Security  Specialist (SCSS) who will work with the 
company to validate and enhance security through out the company’s international supply chain; 
- Potential eligibility for CBP Importer Self-Asse ssment program (ISA) with an emphasis on self-
policing, not CBP audits; 
- Eligibility to attend C-TPAT supply chain security training seminars.  WT/TPR/M/200/Add.1 
 Page 127 
 
 
 iii) Rules of Origin 
Paragraph 35, page 34 
 
This paragraph mentions that the United States a pplies preferential rules of origin within the 
framework of various bilateral free trade agreements  entered into since 1997, but that in March 2008, 
it had still not provided notification to the WTO.   Could the United States indicate when it plans to 
make this notification to this Organization? 
 
ANSWER:  The United States is working to complete its no tification of preferential rules of origin.   
 
Paragraph 36, page 35 
 
In this paragraph the report refers to the fact that agencies other than CBP (Customs and Border 
Protection) may adapt and interpret in greater deta il the general criteria for the application of non-
preferential rules of origin, in order to adapt them  to the needs and purposes of the specific context in 
which these rules are applied.   Could the United States provide further information regarding the 
specific needs and context to which this point makes reference?  
 
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 requirements.  vii) Quantitative restrictions and licenses  Paragraph 112, page 53  
In this paragraph, the report mentions that imports  of certain textile and clothing products from China 
are subject to “agreed upon levels.”  Could the United States indicate what these “agreed upon levels” 
are and the purpose for which th is agreement was made with China? Moreover, could the 
United States authorities provide further informatio n about this mechanism and indicate whether it 
involves a restriction on exports by China?  
ANSWER:  The terms of China’s WTO accession permit the United States and other WTO Members 
to take safeguard actions (i.e. impose quotas) on imports of Chinese textile and apparel products due 
to market disruption or threat thereof.  The safe guard provision is in effect through 2008.  Between 
2003 and 2005, the United States invoked safeguard ac tions on thirteen Chinese textile and apparel 
categories under the textile safeguard provision.  Safeguard consultations with China ultimately 
resulted in the bilateral textile agreement that w as attained in November 2005.  The agreement places 
limits, including annual growth, on imports from Ch ina of 34 individual product categories and will 
be in effect from January 1, 2006 through December  31, 2008.  The entire text of the agreement is 
available on the Office of Textiles and Apparel web site ( < http://otexa.ita.doc.gov > ), under “China 
Textile Safeguard.”  
 
3. Measures directly affecting exports  
iv) Export assistance c) Marketing promotion and assistance  Paragraph 189, page 71 
 
In this paragraph the report makes reference to the fact that the United States maintains various 
general export promotion programs and also refe rs to the existence of “State International 
Development Organizations (SI DO),” which support the activities of trade promotion bodies in 39 
States.   Could the United States provide information of what the general export promotion programs 
are and what the requirements are to access them?  In addition, would you sp ecify what type of aid 
the “State International Development Organizations” provide, to what sectors this aid is directed, 
and what the requirements are to benefit from it? WT/TPR/M/200/Add.1 
Page 128  
 
 ANSWER:  The State International Development Orga nizations (SIDO) fac ilitates general export 
promotion assistance to U.S. exporters.  Specifica lly, SIDO helps state international trade agencies 
better serve exporters by sharing innovative ideas a nd resources, developing the skills of state trade 
professionals, advocating the interests of states in trade promotion, and facilitating multi-state 
collaboration.  SIDO provides export promotion thro ugh the following means:  1) providing advocacy 
services for state trade and investment agencies in Washington and in state capitols; 2) providing 
networking opportunities for trade professionals to share best practices on performance measurement, 
trade missions, and other topics; 3)  organizing formal training seminars for state trade staff and providing opportunities for state employees to attend training programs organized by the U.S. Department of Commerce; 4) providing trade agen cies with up-to-date information on program 
management trends, funding oppor tunities, and best practices. 
 
4. Other measures affecting production and trade iii) Competition policy a) Access conditions 
Paragraph 240, page 83 
 
In this paragraph the report mentions that, w ith respect to access to markets for government 
procurement, a series of rules is maintained on purchasing domestic products with respect to the 
procurement not covered by the Agreement on Government Procurement, the multilateral WTO 
Agreement on Trade in Civil Aircraft , or preferential trade agreements.   Could the United States 
provide further details on what these rules are, as well as the criteria for their application? 
ANSWER:   The primary domestic purchasing requirement for goods is in the Buy American Act of 
1933, which limits the purchase of supplies and c onstruction materials by government agencies to 
those defined as “domestic end-products.”  A “dom estic end product” means: 1) an unmanufactured 
end product mined or produced in the United States; or 2) an end product manufactured in the United 
States, if the cost of its components mined, produc ed, or manufactured in the United States exceeds 
50 percent of the cost of all its components.  Compon ents of foreign origin of the same class or kind 
as those that the agency determines are not mi ned, produced, or manufactured in sufficient and 
reasonably available commercial quantities of a satisfactory quality are treated as domestic.  Scrap generated, collected, and prepared for processi ng in the United States is considered domestic.  
There are domestic purchasing requirements for certain service procurements not covered by the 
WTO Agreement on Government Procurement (GPA) or other agreements.  For example, domestic 
purchasing requirements apply to research and de velopment services and transportation services. 
 
IV. TRADE POLICIES BY SECTOR  3) MINING AND ENERGY 
iii) Some issues 
Paragraph 64, pages 109-110  
In this paragraph, the report refers to the fact th at the system of taxation applied to energy has the 
purpose of providing incentives for the supply of alte rnative and renewable fuels and that the Energy 
Policy Act of 2005 establishes the granting of fiscal  incentives for 11 years for domestic energy 
production and energy efficiency.   Could the United States government indicate the amount of these 
fiscal incentives and whether the WTO was notified of them? Could you i ndicate the effective term for 
each of the incentives included in  the table on page 110, if any? 
 
ANSWER:   The Energy Policy Act of 2005 (EPACT) sets forth an energy research and development 
program covering: (1) energy efficiency; (2) renewa ble energy; (3) oil and gas; (4) coal; (5) Indian 
energy; (6) nuclear matters and security; (7) vehicles and motor fuels, including ethanol; (8) 
hydrogen; (9) electricity; (10) energy tax incentiv es; (11) hydropower and geothermal energy; and 
(12) climate change technology.  At the time of enactment, the Congressional Budget Office (CBO)  WT/TPR/M/200/Add.1 
 Page 129 
 
 
 estimated that EPACT would increase direct spending by $2.2 billion over the period 2006-2010 and 
by $1.6 billion over the period 2006-2015.  CBO and the Joint Committee on Taxation estimated that 
EPACT would reduce revenues by $7.9 billion ove r the period 2005-2010 and by $12.3 billion over 
the period 2005-2015.  
Programs established by EPACT have not been notifie d to the WTO Subsidies Committee.  It is the 
intention of the United States to submit a new subs idy notification to the Subsidies Committee this 
year, which will reflect a review of all EPACT pr ograms and determinati ons as to which programs 
should be notified pursuant to Article 25 of the Agreement on Subsidies and Countervailing 
Measures.  A complete summary of EPACT can be  found at:  http://www.thomas.gov.  The effective 
term of each of the incentives is established in the law itself, which can be found at:  
http://frwebgate.access.gpo.gov/cgi-bin/get doc.cgi?dbname=109_cong_pub lic_laws&docid=f:pub105 
8.109. 
 
Paragraph 66, pages 110-111 
 
This paragraph indicates that ethanol imports are s ubject to ad valorem MFN tariff rates of 1.9 or 
2.5 percent (subheadings 2207.1060 and 2207.2000 of the HS). An addition duty of US$0.1427 per 
liter is imposed on ethanol imports in subheading 9901.0050 of the HS from sources subject to MFN 
treatment.  Could the United States explain the reas on for imposing the additional duty and the 
reasons why it is applied to subheading 9901.0050? 
 ANSWER:   The additional duty in Chapter 99 is app lied to ethanol imported under the two tariff 
lines identified by Argentina when destined for fuel use.  The placement of the additional duty is 
Chapter 99 is simply the mechanism used by the United States for tariff classifications arising from 
temporary legislation, temporary modifications proc laimed 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 additio nal duty will expire on 
January 1, 2011, unless it is further extended by Congress.  
Paragraph 70, page 112 
 
In this paragraph, the report establishes that, since 1976, the United States has spent approximately 
$45.2 billion on the construction, maintenance, re placement, and administration of the Strategic 
Petroleum Reserve. There is also a Northeast Home Heating Oil Reserve.   Could the United States 
provide details on how this government funding affect s the cost of oil for US users? Has any estimate 
been made on what this cost would be without government intervention? 
 
ANSWER:  The cost of oil for US users is not affected because the Strategic Petroleum Reserve 
(SPR) would be used only in a national energy em ergency.  In the event of a national energy 
emergency, SPR oil would be distributed by comp etitive sale.  The SPR h as been used under these 
circumstances only twice (during Operation Desert Storm in 1991 and after Hurricane Katrina in 
2005).  Estimates of cost of oil without the SPR in the event of a national emergency have not been 
made.  
4) Manufacturing sector 
Paragraph 77, pages 113-114 
 
This paragraph establishes that “in the context of the President’s Manufacturing Initiative, the 
Secretary of Commerce ordered that a complete study be undertaken on factors influencing the 
competitiveness of the US manufacturing sector. W ithin the framework of this process, the 
Department of Commerce held 23 public roun dtables to identify the challenges faced by 
manufacturers.  In January 2004, the Departme nt of Commerce published a report containing 57 WT/TPR/M/200/Add.1 
Page 130  
 
 recommendations for addressing these challenges.  The Interagency Working Group on 
Manufacturing Competitiveness coordinates the im plementation of these recommendations, which 
include making the tax incentive applied to research  and development permanent, modernizing the US 
legal system to eliminate disincentives for investme nt in the sector, identifying priorities for future 
federal aid for advanced manufacturing technology, and combating “unfair” trade practices affecting 
US manufacturers.  United States authorities indicate that 36 of the report’s recommendations have 
already been implemented.   Could the United States government indicate what the tax incentive for 
research and development consists of, and wheth er it has been made permanent? Could the 
authorities describe what “future federal aid for advanced manufacturing technology” refers to, and in particular, what type of aid it would include ? What are the 36 recommendations of the report 
already implemented?  
ANSWER:   In March 2003, the U.S. Secretary of  Commerce launched the Manufacturing Initiative 
in order to ensure that the federal government  is creating the conditions necessary for U.S. 
manufacturers to maximize their competitiveness.  The goal is to help American manufacturers 
compete in the 21st century, and pos ition the U.S. policy environment for further advancement.  The 
result of this comprehensive review was the Manufact uring in America Report, which was released on 
January 16, 2004.  This report was the result of  23 public roundtables in which senior Commerce 
officials listened to the concerns of U.S. manufacturers.  The Manufacturing in America Report contains 57 recommendations to revitalize the competitiveness of industry. 
 
Since the release of the Manufacturing in America Report, the U.S. government has implemented 
many of these recommendations to enhance the its focus on manufacturing competitiveness, create 
conditions for economic growth, and promote open markets and a level playing field for U.S. 
manufacturers.    
Those recommendations include: 
• Making the tax incentive applied to research and development permanent The Research & Development tax credit expired on December 31, 2007. 
 
• Identifying priorities for future federal aid for advanced manufacturing technology  
The report identified the need for a review of  current federal R&D programs important to 
manufacturing, to ensure that there is an appr opriate focus on innovation and productivity-enhancing 
technologies.  From that review of federal R&D Pr ograms, a comprehensive report was prepared that 
identified and described research a nd development priorities for the future of three critical, high-tech 
U.S. manufacturing areas – hydrogen energy tech nologies, nanomanufacturing, and intelligent and 
integrated manufacturing. The report, Manufacturi ng the Future: Federal Priorities for Manufacturing 
R&D, released in March, 2008 was prepared  by the Interagency Working Group (IWG) on 
Manufacturing R&D of the National Scien ce and Technology Council’s (NSTC) Committee  on 
Technology.  The report can be accessed at: http://www.manufacturing.gov/pdf/NSTCIWGMFGRD_ 
March2008_Report.pdf.  The report cites these manuf acturing areas as being important to U.S. 
economic and national security. It identifies thes e areas as potentially leveraging scientific and 
technological advances to transform knowledge and ma terials into valuable products. Much of this 
research falls under the American Competitiven ess Initiative, a government-funded mandate to 
increase investments in basic R&D, education a nd entrepreneurship. These manufacturing areas also 
correspond to existing priorities established by th e federal government through the President’s 
Hydrogen Fuel Initiative, the National Nanotec hnology Initiative, and the Networking and 
Information Technology Research and Development Program. 
 
• Implementing Recommendations of the Manufacturing in America Report  A summary of the 57 recommendations, including identification of the 36 that have been implemented, can be found on http://www.manufacturing.gov.   
  WT/TPR/M/200/Add.1 
 Page 131 
 
 
 Paragraph 80, page 114 
 
In this paragraph, the report indicates that go vernment aid to the manufacturing sector includes 
funding for exports, direct payments, and fiscal advantages.  Could the United States authorities 
explain the requirements for access to such aid? Could they provide statistics on the amount of aid 
provided within the framework of this assistan ce in the period under review  and the sectors that have 
benefited most?  Could the United States government indicate how these measures are consistent with 
the provisions of the Agreement on Subsidies and Countervailing Measures, in particular, Art.3.1.a) 
on prohibited subsidies? 
 ANSWER:   The Trade Policy Report by the Secretaria t describes numerous incentives provided the 
federal and state governments in the United States ( see, Ch. III(3)(iv) and (4)(ii)).  More detailed 
information can be found in the U.S. subsidy notification to the Subsidies Committee (see, 
G/SCM/N/123/USA, 15 November 2007), which was reviewed at the 2008 spring meeting of the Committee.  The United States also replied to questi ons regarding this notifi cation in writing (see, 
G/SCM/Q2/USA/35, 23 April 2008). 
 
Paragraph 84, page 115  
According to this paragraph, under the Capital Construction Fund Program, companies operating US-
flagged vessels may defer payment of federal taxes applicable to some deposits made into said Fund 
to build, rebuild, or purchase eligible vessels bu ilt in the United States and documented pursuant to 
US law.  Could the United States indicate whether a foreign company can access this benefit?  
 
ANSWER:   The Maritime Administration manages th e Capital Construction Fund (CCF) program. 
This fund allows persons to obtai n tax benefits in connection with  income derived from their vessel 
operations.  Foreign participation in ownership of vessels does not deny eligibility for those vessels to 
be the basis for the deferral of income tax consis tent with 46 App. U.S.C. §1177 and 46 C.F.R. Parts 
390 and 391. 
ARGENTINA ADDITIONAL 
 
III. TRADE POLICIES AND PRACTICES BY MEASURE 
4) Other measures affecting production and trade 
v) Trade-related intellectual property rights Paragraph 269, page 92 (expanding on Paragraph 191, page 72)  
In these paragraphs, the report states that USTR c onducts annual reviews to determine whether or not 
other countries provide adequate and effective pr otection for intellectual property (pursuant to 
“Special Article 301” of the 1974 Foreign Trade Act).  Could the United States explain in detail the 
methodology used in carrying out these reviews?  W hat are the criteria used to place third-party 
countries reviewed in the various categories established?  
 
ANSWER:   Please see the response to the closely related questions posed by Pakistan. 
 
IV. TRADE POLICIES BY SECTOR 
Overview Paragraph 1, page 94  
In this paragraph, the report states that “the expiration of the 2002 Farm Act, and the current 
environment of high commodity prices, would offer an opportunity to introduce policy changes aimed at further improving the market orientation of the agriculture sector in benefit of both consumers and 
taxpayers .”  In this regard, could the United States specify what changes it may be making in its 
agricultural policy to improve market orientation?  
 WT/TPR/M/200/Add.1 
Page 132  
 
 ANSWER:   The U.S. Congress has passed a new farm b ill, despite the Administration’s veto.  USDA 
will now implement the legislation as required by law.
9 
 
2) Agriculture 
iii) Domestic programs  
Paragraph 26, page 100 
 
In this paragraph, the report states that in the context of the latest U.S. notification on domestic 
support, WTO Members raised sever al issues in the Committee on Agriculture, including that of the 
categorization of direct payments as “green box.” In this regard, the United States responded that 
direct payments meet green box criteria.  Could the United States explain in detail what the criteria 
are in order for “direct payments” made to pr oducers in the period under review (2004-2007) to be 
categorized as “green box”? Could it specify wh ich products have received these payments?  What 
was the base period applied up to 2002?  What base period is applied under the 2002-2007 Farm Bill?  Lastly, could the U.S. authorities con firm whether or not they are adhering to current 
regulations that affect planting flexibilities and that  exclude certain crops from the receipt of direct 
payments? In addition, could it sp ecify exactly what these regula tions are and which crops are 
affected? 
 
ANSWER:  The criteria for decoupled income suppor t are detailed in the URAA (Annex 2, 
paragraph 6).  Direct payments meet these criteria.   Payments are decoupled from current production, 
i.e. made without respect to current production of any commodity.  Payments are made based on 
historical acreage and yields for wheat, corn, grain sorghum, barley, oats, rice, upland cotton, 
soybeans, other oilseeds, and peanuts.  The 2002 Farm Act provided an option for limited updating of 
historical base acres to 1998-2001 to reflect the expansion of direct pa yments to additional historically 
produced commodities.  For those eligible recipien ts who chose not to update  their base, base acres 
remained based on historical acreage prior to the 1996 Farm Act, and payment yields remained based 
on 1981-85 average yields.  Any crop can be grown on  the base acres, and recipients include fruit and 
vegetable producers in many circumstances.  Direct  Payments may be reduced or eliminated for 
planting fruits, vegetables, or wild rice in a manner not consistent with the regulations – for example, 
for those producers who do not have a documented history of double-cropping with fruit and vegetables. 
 
In the same paragraph, the report indicates that  counter-cyclical payments (CCPs) are non-product-
specific because they are based on historical acreages and yields and do not require specific crops to 
be grown.  Could the United States explain, however, how the CCPs meet the requirement of limiting 
production?  Could it give specific examples of a pr oducer of a particular product derived from one 
of the five crops indicated in Paragraph 29 on page 101, with detailed answers to the following 
questions: (i) the base period applied, acreage and yields in the period under review; and (ii) the 
level of production and income of the  producer during the base period and the level of production and 
income of the producer during the period under review (2004-2007)?   
 
ANSWER:   Counter-cyclical payments are notified as amber box.  Although the payment level is 
related to current prices, eligibility for payments is  based on historical acreage  and yields of covered 
commodities, without reference to current production.  Thus, payments related to the current price of 
a covered commodity are made to producers who cu rrently grow a wide variety of commodities, or 
indeed no commodities at all.  The United States do es not collect or maintain the detailed information 
requested with respect to individual producers. 
 
                                                     
 
9 The term “2008 Farm Bill” in these answers refers  to legislation (bill number H.R. 6124) currently 
pending in Congress.  The large majority of the provisions in H.R. 6124 were enacted by Congress on May 22, 2008, as Public Law 110-234 .  If H.R. 6124 becomes law, it woul d take the place of Public Law 110-234.  WT/TPR/M/200/Add.1 
 Page 133 
 
 
 3) Mining and Energy 
iii) Issues  
Additional question regarding paragraph 64, pages 109-110  Could the United States indicate what percent age of biodiesel production benefiting from tax 
incentives was exported? What is the amount of the tax benefit received by biodiesel exporters?  What 
is the amount of that tax benefit as a percentage of the f.o.b. price of U.S. biodiesel fuel exports?  What are the production amounts and tax incentives anticipated for coming years? 
 
ANSWER:   The Energy Policy Act provides biodiesel producers of a qualified biodiesel mixture a 
tax credit of $.50 or $1.00 pe r gallon.  Between 20% and 50% of U.S. biodiesel production was 
exported in 2007.  The Renewable Fuel Standard calls for the minimum use of 500 million gallons of 
biomass-based biodiesel in 2009, in creasing to 1.0 billion by 2012.  These targets may be reduced in 
the event of supply/price disruptions.  The curre nt biodiesel tax incentives are set to expire on 
December 31, 2008.  5) Services iv) Air transport services b) Regulatory framework Paragraph 166, page 138 
 This paragraph of the report states that the Office of the Secretary of Transportation (OST) at the 
Department of Transportation (DOT) oversees the form ulation of U.S. air transport policy and that the 
Federal Aviation Administration at the DOT is responsible for safety issues, regulates U.S. 
commercial space aviation, and monitors U.S. and fo reign air carriers operating in U.S. territory.  
Could the United States indicate whether or not express delivery companies t hat operate their own 
aircraft have to register with the Departmen t of Transportation and the Federal Aviation 
Administration?  Is there any differen ce in treatment with regard to aut horizations and with regard to 
the application of measures to safeguard competition,  depending on whether the carrier is a freight 
company or an express delivery company?  In what way does regulation of air transport activity differ 
from that of air express delivery activity?  
 ANSWER:  United States regulations do not  distinguish between carrier s engaged in express delivery 
and other forms of air cargo transportation.  Hence th ere is no difference in treatment with regard to 
authorizations or other measures that apply in the air transport sector.  All U.S and foreign air carriers 
must obtain economic authority from the U.S. Depa rtment of Transportation to conduct commercial 
operations in foreign air transportation to and from the United States.  All carriers must also obtain 
operations specifications from the Fe deral Aviation Administration to ope rate their own aircraft to and 
from the United States.  Any foreign carrier, incl uding an express delivery company, who wishes to 
engage in foreign indirect transportation (air  freight forwarding activities other than as actual 
operators of the aircraft) must also register with the Department.  Foreign direct air carriers may not 
engage in domestic air transportation services (ca botage) within the United States; but foreign air 
freight forwarders may (if their homeland offers r eciprocal opportunities to U.S. forwarders) handle 
domestic shipments so long as any air movement is on U.S. direct air carriers.  
 
AUSTRALIA 
 III. TRADE POLICIES AND PRACTICES BY MEASURE 
(2) MEASURES DIRECTLY AFFECTING IMPORTS 
(ix) Technical regulations, conf ormity assessment, and standards  
 
1. Australia notes the United States has made ch anges to existing arrangements that result from 
the US Action Plan for Import Safety and the Food and Drug Administration’s (FDA’s) Food 
Protection Plan. WT/TPR/M/200/Add.1 
Page 134  
 
 How will these changes: 
a. be the least restrictive measures required to achieve the desired outcome; and b. take into account the record of the ex porting country for producing safe and sanitary 
products? 
 ANSWER:   The Action Plan for Import Safety was de veloped by a U.S. interagency working group 
on import safety that has no statutory or regulatory authority of its own.  Rather, the Plan contains short- and long-term recommendati ons to improve the safety of imported products based on a cost-
effective, risk-based approach. The Food Protection Plan was developed by the U.S. Food and Drug 
Administration and contains short- and long-te rm recommendations, consistent with the Action 
Plan’s, to improve the safety of imported food based on a cost-effective, risk-based approach.  All of 
the recommendations contained in these plans were  reviewed from a trade perspective to ensure 
consistency with U.S. internati onal obligations.  Implementation of many of the recommendations 
will require legislative and regulatory action. Regul atory actions to implement any recommendations 
will be consistent with the regulatory philosoph y and principles contained in Executive Order 12866 
(e.g., by tailoring regulations “to impose the least burden… consistent with obtaining the regulatory 
objective” and by considering “the degree and nature  of the risks posed”) and provide public notice 
and comment consistent with the Administ rative Procedures Act (5 U.S.C. 511-599). 
 
(4) OTHER MEASURES AFFECTING PRODUCTION AND TRADE 
(v) Trade-related Intellectual Property rights  
 
2. The US House of Representatives has introduced legislation that would alter US patent law from a "first to invent" to "first to file".    
What are the implications of this change for users of US patent law? 
 
ANSWER:  Provisions altering the U.S. system from a “first to invent” to a “first to file” were a part 
of patent reform legislation.  Should this legisla tion move forward, from a purely statistical viewpoint 
there would seem to be little difference in result between  a first-to-invent patent system and a first-to-
file patent system.  More than 99.9 percent of pa tent applications filed in the United States raise no 
dispute as to priority of invention.  Even when such  disputes arise, the inventor who filed first prevails 
in a significant majority of these cases.  The actual effect of switching to first-to-file system, thus, is 
likely to have little or no actual significance based upon these statistical findings.  3. The US House of Representatives has passed a bill that would establish the Office of the US 
Intellectual Property Enforcement Representative in  the Executive Office of the President.  This 
Office would coordinate IP enforcemen t domestically and internationally.   
 
What are the implications of this legisl ation for how the US enforces IP obligations? 
 
ANSWER:   The legislation referred to has not yet been considered by the United States Senate.  We 
are not in a position to speculate on the implications  of particular provisions which are subject to 
further review and possible modification in the United States Congress.   
 
IV. TRADE POLICIES BY SECTOR (2) AGRICULTURE (iii) Domestic programmes 
 
4. Australia notes the continuation and expansi on of farm programs unde r the recent 2008 Farm 
Bill despite historic high crop prices.  
Why is the United States not taking this opportunity  of historic favourable crop prices to reform its 
agriculture sector?  WT/TPR/M/200/Add.1 
 Page 135 
 
 
 ANSWER:  The U.S. Congress has passed a farm bill, despite the Administra tion’s veto.  USDA will 
now implement the legislation as required by law.  5. The 2008 Farm Bill introduces two entirely new support programmes, the "Average Crop 
Revenue Election Program" and "Supplemental Agricultural Disaster Assistance".  
 
If prices return to the levels seen over the life of the 2002 Farm Bill, will US agricultural support be 
higher than it would have been if the 2002 Farm B ill had simply been extended?  If so, how much 
higher will the support be?  
ANSWER:   We have not done the analysis to answer this question. 
 6. Australia notes that the 2008 Farm Bill requi res the USDA Secretary to establish the sugar 
overall allotment quantity at not less than 85 per cent of the estimated quantity of sugar for domestic 
human consumption for the crop year in question. Th is allotment quantity is the amount of sugar that 
sugar processors are allowed to market in that crop year.  
 Is such a measure consistent with the principle of national treatment ? 
 
ANSWER:   The establishment of the overall allotmen t quantity is consistent with U.S. WTO 
obligations.  
 
7. In addition to continuing the nonrecourse loan programme for raw cane sugar and refined beet 
sugar (at higher loan rates) a nd guaranteeing 85 per cent of the dom estic human consumption market 
for domestic production of sugar, th e 2008 Farm Bill also requires th at the USDA Secr etary purchase 
raw or refined sugar or in-process sugar and sell it to bioenergy producers if necessary to avoid the 
forfeiture of sugar to the US government.  
 
What would be the effect on the US domestic s ugar industry of removing these internal supports?  
What would happen to the volume  of imports?  What would happe n to the world sugar prices? 
 
ANSWER:  We have not done the analysis to answer this question. 
 
8. Australia notes that the 2008 Farm Bill extends  the dairy import assessment to imported dairy 
products.    
Is such a measure consistent with the principle of national treatment? 
 
ANSWER:   The bill extends the dairy import assessment to all domestic producers and also imposes 
the assessment, albeit at a lower rate, on imports.  9. Australia notes that the annual average “g reen box” support increased markedly between 
marketing years 2002 and 2005 (paragraph 25 of the Secret ariat’s report refers), a nd that this increase 
mostly reflects higher expenditures on domestic f ood aid, particularly the Food Stamp programme. 
Australia refers to the recent announcement that the United States Department of Agriculture intends 
to purchase up to $50 million of additional pork products to be  distributed as domestic food 
assistance, which was made in response to a request by the US pork industry for assistance for its pork producers.  
 
Could the United States detail the criteria that form ed the basis for the USDA’s decision to purchase 
additional pork products?  What is the relationship between the domestic support that it provides for 
its farmers under the Farm Bill and domestic food aid?  WT/TPR/M/200/Add.1 
Page 136  
 
 ANSWER:   USDA receives a permanent appropriation under Section 32 of the Act of August 24, 
1935 (P.L. 74-320, as amended) equiva lent to 30 percent of annual customs receipts, which are used 
to fund various nutrition programs.  Most of the funds are transferred dir ectly to USDA’s Food and 
Nutrition Service (FNS) child nutrition account.  In addition, smaller am ounts of funds available 
under Section 32 are used to purchase additional pr oducts throughout the year to supplement the 
initial appropriation.  These purchases are primarily  fruits, vegetables, and meats, and are made at 
market prices by USDA’s Agricu ltural Marketing Service based on announced tenders. The products 
are then donated to domestic food programs, such sc hool feeding programs or food banks.  Decisions 
to purchase specific commodities ar e made based on available comm odities and FNS assessments of 
needs for specific products in various feeding pr ograms.  There is no specific relationship between 
domestic farm support and the commodity purchases ma de pursuant to Section 32, nor is there any 
relationship between the Section 32 nutrition progr ams and the Food Stamp program, to which the 
increase in green box programs can be ascribed   
Please provide details of the expenditure on domest ic food aid under the 2002 Farm Bill, and the 
anticipated expenditure on domestic food aid under the 2008 Farm Bill? 
 
ANSWER:   The U.S. has provided detailed data on e xpenditures on domestic food aid in its WTO 
notifications for the years 2002 – 2005.  It is too soon to know what expenditures of domestic food aid 
will be under the 2008 Farm Bill.   (v) Food labelling 
 
10. Could the United States confirm that the mandatory Country of Origin Labelling (CoOL) 
provision does not require a record-keeping reg ime that places an administrative burden on 
importers in excess of that applied to domestic participants. 
 ANSWER:  The COOL law, as amended by the 2008 Farm Bill, states that the Secretary of 
Agriculture (Secretary) may conduct an audit of any person who prepares, stores, handles, or distributes a covered commodity for retail sale to verify compliance with the law and that any person subject to an audit shall provide the Secretary with  verification of the country of origin of covered 
commodities.  The law further stat es that records maintained in the course of the normal conduct of 
business, including animal health papers, import or  customs documents, or producer affidavits, may 
serve as such verification.  The October 30, 2003, proposed rule for all cove red commodities specified that any person engaged 
in the business of supplying a covered commodity to  a retailer, whether directly or indirectly ( i.e., 
distributors, handlers, etc.), would be required to maintain records to establish and identify the 
immediate previous source and imme diate subsequent  recipient of a covered commodity, in such a  
way that identifies that product unique to that tran saction, for a period of two years from the date of 
the transaction.  For an imported covered commodity , the proposed rule specified that the importer of 
record as determined by U.S. Customs & Border Protection (CBP) must ensure that records:  
(1) Provide clear product tracking from the U.S. port of  entry to the immediate subsequent recipient, 
and (2) substantiate country of orig in claims, and, if applicable, d esignations of wild or farm-raised 
and maintain such records for a period of two years from the date of the transaction. 
 The U.S. Department of Agriculture (USDA) publishe d an interim final rule for fish and shellfish 
covered commodities on October 5, 2004, which significantly reduced the recordkeeping burden.  
Under the interim final rule, for an imported covered commodity, the importer of record as 
determined by CBP must ensure that records:  pr ovide clear product tracking from the port of entry 
into the United States to the immediate subsequent  recipient and accurately reflect the country of 
origin and method of production (wild and/or farm -raised) of the item as identified in relevant CBP 
entry documents and information systems; and must maintain such records for a period of one year  WT/TPR/M/200/Add.1 
 Page 137 
 
 
 from the date of the transaction.  The interim fina l rule also reduced the recordkeeping retention 
period for suppliers to one year.  Thus, for both domestically produced covered co mmodities and for imported covered commodities, 
appropriate records must be maintained to allow the Secretary to verify the origin information.  As 
USDA moves forward with implementing the final re gulation for the remaining covered commodities, 
USDA will consider all comments received and will implement the program in  as least burdensome a 
manner as possible for all regulated entities.  11. Australia understands that the intent of CoOL  is the provision of consumer information.  
Please advise of the alternative measures that w ere considered prior to deciding that the proposed 
approach to mandatory CoOL placed the least regulat ory burden to meet the objective of consumer 
information.  
 
ANSWER:  With respect to concerns regarding our international trade agreements, the U.S. 
Department of Agriculture (USDA) has consider ed these obligations throughout the rulemaking 
process and will publish a regulation that is consiste nt with our international obligations.  As for 
specific regulatory alternatives consistent with the au thorizing legislation that were investigated by 
USDA during the rulemaking process, that question will be best answered once the regulation is 
published in the Federal Register.  
BRAZIL 
A. Rules 
 
1) “In light of the most recent ruling by the appellate body in the case “United States final anti-
dumping measures on stainless steel from Mexico” (DS 344), which further consolidates the case-law 
against the practice of “zeroing”, does the United States intend to conduct a review of its anti-
dumping legislation and practices as  regards this matter?  More sp ecifically, does the US Department 
of Commerce intend to end the use of “zeroing” in periodic reviews?”  
 
ANSWER:   The Appellate Body report along with the accompanying panel report in DS344 was 
adopted by the Dispute Settlement Body on May 20 , 2008.  At a meeting of the Dispute Settlement 
Body on June 2, 2008, the United States stated its intention to comply with its WTO obligations. 
 2)“Paragraph 76, page 37, of the document ‘WT/TPR /S/200’ informs that in addition to regular bond 
requirements, United States customs ‘may requi re enhanced bond amounts from importers of 
merchandise subject to increased default risk’.   According to a report by the ‘government 
accountability office’ of the United States Govern ment dated march 2008 (report gao-08-391), four 
products are responsible for 84% of the total am ount of uncollected antidumping or countervailing 
duties: crawfish tail meat, garlic, honey, and mushroom s.  Also, according to the report, the enhanced 
bond requirement has only been imposed to one produc t, shrimp, ‘which has little history in terms of 
duty collections’.  Given these circumstances, how does th e United States justify imposing the 
enhanced bond requirement on shrimp importers?  How does it justify imposing the enhanced bond 
requirement on shrimp importers and not on the import ers of the four products that account for 84% 
of the total amount of uncollected duties?” 
 
ANSWER:   As the Government Accountability Offi ce (GAO) study notes, “[o]ver $613 million in 
AD/CV duties from fiscal years 2001 through 2007 were uncollected as of  September 2007” and 
“[t]he agriculture/aquaculture industry represents 87 percent of the total amount of uncollected 
AD/CV duties.” The antidumping duty orders with r espect to certain shrimp from China, Thailand, 
India, Vietnam, Brazil, and Ecuador were  the first antidumping orders imposed on 
agriculture/aquaculture merchandise after the enhanc ed bond directive was issued, and therefore the 
United States began applying the new directive to im porters of merchandise subject to those orders.  
Thailand and India have challenged this action in  WTO dispute settlement proceedings, which are WT/TPR/M/200/Add.1 
Page 138  
 
 ongoing.  The U.S. position regarding the directive and its application to importe rs of shrimp has been 
discussed in detail in those proceedings, and the U. S. submissions are available electronically at 
www.ustr.gov.  3)“Paragraph 43, page 88, of the document ‘WT/TPR/ S/200’ informs that in the context of its last 
review, the United States indicated that the ad ministration was working with the Congress on 
legislation to repeal the statutory fee cap of 1% of  the guaranteed value of the transaction that applies 
to guarantees issued under the GSM 102 program.  What is the current status of the work conducted 
with Congress?  Has there been any modification in the legislation or any new proposal submitted to 
the congress on this matter?”  
 ANSWER:  The 1% fee cap is repealed by section 3101(b) of the 2008 Farm Bill.  
 
B. Intellectual Property 
 1) Regarding paragraph 12 (Chapter III, p.24), could the US identify the main TRIPS-plus provisions 
present in their Free Trade Agreements?  
 
ANSWER:  Paragraph 12 of the Secretariat’s report does not refer to “TRIPS-plus provisions.”  The 
intellectual property provisions of U.S. FTAs seek to promote adequate and effective protection of 
intellectual property rights.  In pursuit of this objective, U.S. FTAs reflect the ability of WTO 
Members to implement in their law more extens ive protection than is required by the TRIPS 
Agreement.  The intellectual property provisions of U.S. FTAs also reflect the technological evolution 
that has occurred since the TRIPS Agreement was concluded more than  a decade ago, notably in areas 
such as the protection of copyright-protected ma terial delivered via the Internet, and related 
enforcement provisions. 
 
2) Regarding paragraph 260 (Chapter III, p.75), could the US clarify the expression "partially 
exclusive license", and how it would differ from a "non-exclusive license"? 
 
ANSWER:   The term “exclusive license” refers to a license in which the licensee has the exclusive 
right under the patent for a part or the full term of the patent, subject only to the retention by the U.S. 
Government of a license and rights in the invention.  The term “partially exclusive license” refers to a 
license in which the licensee does not have full rights to the patent.  Examples include situations in 
which the exclusive right granted is limited to making or using or selling the inve ntion, or is limited to 
specified fields of use or use in specified geogr aphic locations.  The term “non-exclusive license” 
refers to a license in which multiple licensees have the same right under the patent.  Sometimes, the 
term “non-exclusive license” is used in place of partial exclusive license. 
 3) Regarding paragraph 260 (Chapter III, p.75), c ould the US provide information on other 
legislation, in addition to the Atomic Energy Act and the Clean Air Act, enabling US authorities to 
grant compulsory licenses?  If so, could the US provide informati on on compulsory licenses 
eventually granted under other legislation, besi des the Atomic Energy Act and the Clean Air Act?  
 
ANSWER:  U.S. legislation provides very limited statutory authority for the grant of compulsory 
licenses, including the statutes mentioned in the que stion (the Atomic Energy Act and the Clean Air 
Act.) and old statutes relating to the creation of the Tennessee Valley Authority and other project-specific legislation.  We are not aware of any compulsory licenses granted under these project-specific 
authorities.  In addition to express statutory au thority, a compulsory license may be used in 
appropriate circumstances to remedy anticompetitiv e practices.  In the case of public non-commercial 
use of a patented invention, Section 1498 of Title  28, United States Code, provides a means to obtain 
reasonable and entire compensation from the Unite d States Government for public, non-commercial 
use by the Government or a party authorized by it.  Where a patentee believes the United States is 
using the patented invention without permission of  the patentee, the Unite d States has waived its  WT/TPR/M/200/Add.1 
 Page 139 
 
 
 sovereign immunity to suits against the United States for infringement of patents.  In addition, there 
are administrative procedures whereby a patentee, prior to filing suit under Section 1498, may seek to negotiate an appropriate license with a government agency  that it feels is using, or may wish to use, 
its patented invention.  
4) Regarding paragrap h 262 (Chapter III, p.75), could the US provide detailed information on rule 
change proposals issued recently, aiming patent quality improvement? 
 
ANSWER:  The changes to the rules of practice relate d to information disclosure statement (IDS) 
requirements and other related matters are to impr ove the quality and efficiency of the examination 
process.  These changes are designed to provide exam iners with more focused, relevant information at 
an earlier stage of prosecution.  The changes include:  (1) requiring an explanation of what caused the 
applicant to include a particular document in the IDS when a large IDS is submitted; (2) eliminating 
the ability to delay submission of information by just paying a fee; and (3) reminding practitioners 
that they have a duty to review the information submitted in an IDS and to filter out irrelevant 
information so as not to cause delay or waste USPT O resources.  Requiring an explanation of what 
caused the documents to be cited in certain IDSs w ill enable examiners to identify the most relevant 
prior art in an efficient and expeditious manner,  when an IDS containing a large number of 
documents, a large document, or a document in a fo reign language is submitted.  In other related 
matters, the changes will extend the period during whic h third parties may submit relevant patents and 
publications in published applicati ons from two months to six months  after publication, or mailing of 
a notice of allowance, whichever occurs first.  The changes also will enable a pplicants to consent in 
writing to the filing of a protest based on any unso licited documents received from a third party, and 
enable applicants to limit the length of time for wh ich the consent is in effect, the specific party who 
can file the protest, and the documents which can fo rm the basis of the protest.  The changes also 
permit certain technical amendments after allowance to reduce the need for the filing of a request for 
continued examination (RCE) to effect th ese technical changes to an application. 
 
BRAZIL ADDITIONAL 
 CHAPTER III - TRADE POLICIES AND PRACTICES BY MEASURE (2) MEASURES DIRECTLY AFFECTING IMPORTS 
Page 35, paragraph 62  
The document states that "Beer (imported and domestic ) is subject to federal excise tax at a rate of 
US$18 per barrel of 31 gallons. A reduc ed rate of US$7 is applied on th e first  60,000 barrels of beer 
produced in a year by a domestic brewer with an a nnual production of two million barrels of beer or 
less. Imported beer is not eligible for the reduced rate."  Could the US justify the difference in the 
treatment of imported products in the lig ht of WTO National Treatment principle? 
 
ANSWER:  Total production of beer and wine by small producers is quite small, and these small 
producers frequently face higher costs of production.   However due to these higher production costs 
any excise tax advantages offered to these producers have no trade distorting effect.  
 (vi) Anti-dumping and countervailing measures  Page 36, paragraph 68 
 
Paragraph 68 of Chapter 3 states that ITA’ s AD/CVD Petition Counseling and Analysis Unit, 
established in 2004, assists U.S. companies with re spect to recourse to U.S. unfair trade laws. Does 
the Unit provide assistance, inter alia, to help understand legislation,  regulations and information on 
how to file petitions? Could the US inform the number of new in vestigations or sunset reviews where 
petitioners counted on the assistance of the Petition Counseling?  
 WT/TPR/M/200/Add.1 
Page 140  
 
 ANSWER:   The PCAU does provide assistance, inter alia , to help companies understand the 
antidumping laws and regulations and provides inform ation on how to file petitions.  All contacts with 
U.S. companies are confidential; therefore, we are unable to disclose the number of new 
investigations or sunset reviews where petitioners counted on the assistance of the PCAU.  During the period covered by this review, how  many times the USDOC has self initiated an 
investigation and sunset reviews ? 
 
ANSWER:  During the period covered by this revi ew, the USDOC has not self initiated any 
investigations.  All sunset reviews are automatically  initiated.  The outcome of the sunset review is 
determined by the participation of inter ested parties and the facts of the case. 
 
(ix) Technical regulations, conf ormity assessment and standards 
Page 47, paragraph 122 
 The document states that "Executive Order 12889 requires a comment period of at least 75 days for 
"any proposed Federal technical regulation or any Federal sanitary or  phytosanitary measure of 
general application".  The comment period may be  between 30 and 75 days for proposed technical 
regulations and conformity assessment procedures a pplied to perishable goods or to address "urgent 
problems".  Are there any criteria previously established to guide the identific ation of "urgent 
problems"? 
 ANSWER:   The phrase "urgent problem" is not defined in  U.S. law.  Rather, the applicable U.S. 
government agency evaluates whether an "urgent prob lem" exists on a case-by-case basis in light of 
all the relevant facts.  
 
(x) Sanitary and phytosanitary measures 
 
13. Regarding paragraphs 138-162 (Chapter III), on sanitary and phytosanitary measures, Brazil 
is concerned with U.S. regulations that stipulat e that domestic economic impact analyses must be 
conducted for the first-time im portation of certain products.  Have there been any measures taken to 
eliminate these regulations, given that they do not seem to comply with article 2 (2) of the WTO 
Agreement on Sanitary and Phytosanitary Measures?   This concern has been raised before, during the 
last Trade Policy Review of the United States, in March 2006, and, more recently, during the last 
meeting of the SPS Committee, in Geneva, in April 2008. 
 
ANSWER:  The United States regulatory process is govern ed by the Administrative Procedures Act 
of 1946, originally enacted in 1946.  This legisla tion has been amended by Congress, and it has been 
supplemented by the Executive Branch through a seri es of Executive Orders.  In the area of sanitary 
and phytosanitary measures, U.S. regulatory decisions are made on the basis of a risk assessment.  Regulations that establish our SPS import requirement s do not include any provisions stipulating that 
an economic analysis must be c onducted for first time imports.  Th e economic analysis required under 
the Executive Order does not dictate the regulatory ac tion.  It does, however, provide stakeholders 
with important information about the likely impacts of the regulatory changes that a particular agency 
proposes to make.  The need to conduct an economic analysis is a gene ral requirement that may apply when a regulation 
by any US government agency is proposed.  It does not conflict with any provision of the WTO SPS 
Agreement. 
  WT/TPR/M/200/Add.1 
 Page 141 
 
 
 CHAPTER IV - TRADE POLICIES BY SECTOR 
(2) AGRICULTURE (ii) Border measures  Based on the fact that, according to paragraph 18  (Chapter IV) “close to 91% of out-of-quota tariffs 
are non-ad-valorem”, are there any plans to convert out-of-quota tariffs into ad-valorem equivalent 
tariffs?  
ANSWER:   The United States has proposed in the DDA ne gotiations that all agricultural tariffs be 
converted to simple ad valorem or simple specifi c tariffs.  We will implement whatever modality is 
finally agreed to by all the Parties. 
 Regarding paragraph 19 (Chapter IV), what are th e criteria used for allocation of tariff quotas to 
specific countries?  
ANSWER:   These allocations are based on commitments made in previous GATT and WTO 
negotiation. 
 
(iv) Export subsidies, credit, insurance, and guarantees 
 
Regarding export subsidies, according to paragraph 40 (Chapter IV), the United States have kept up 
their commitments under the WTO Agreement on Agri culture in relation to the 13 product groups 
agreed upon.  However, paragraph 41 mentions  the Export Enhancement Program (EEP) and the 
Dairy Export Incentive Program (DEIP), that prov ide cash bonus payments to exporters of certain 
commodities, including dairy products, wheat, barley and frozen poultry, contingent on exports.  The 
2002 Farm Bill authorized these programs until March 2008.  Will they continue after the approval of 
the new Farm Bill?  Are they in compliance w ith article 9(1)(a) of the WTO Agreement on 
Agriculture? Are there any plans  for their elimination? 
 
ANSWER:   Export Enhancement Program (EEP) - Becau se of global supply and demand conditions 
in recent years, no bonuses have been awarded unde r EEP since 2001.  The 2008 Farm Bill repealed 
statutory authorization for this program.  
 
Dairy Export Incentive Program (DEIP) – Based on current international prices levels, no bonus 
awards have been made under DEIP since Janua ry 2004.  The 2008 Farm Bill extended statutory 
authorization for this program until 2012.  
 
Both programs have been operated and reported co nsistently with U.S. reduction commitments under 
the WTO Agreement on Agriculture . 
 
(v) Food labeling 
 
Regarding food labelling, mentioned in paragraphs 46-49 (Chapter IV), what is the purpose of the 
introduction of the country-of-origin labeling requireme nts included in the 2002 Farm Bill, in light of 
the fact that, according to the Department of Ag riculture, “The benefits derived from country-of-
origin labelling were found to be negligible” and that there is “ little or no evidence that consumers are 
willing to pay a price premium for country-of-origin labelling or that they would increase their purchases of food bearing the U.S. origin label” (paragraph 49).  Are these requirements present in 
the new Farm Bill? Is this not a non-tariff barrier to the importation of the products mentioned in 
paragraphs 46-48?  
 
ANSWER:   The U.S. Department of Agriculture (US DA) is required to implement the country of 
origin labeling program as directed by the 2002 a nd 2008 Farm Bills.  While the expected benefits 
from implementation of this rule are difficult to quantify, USDA has received numerous comments WT/TPR/M/200/Add.1 
Page 142  
 
 from consumers expressing an interest in knowing where their food comes from.  This rule will 
provide benefits to those consumers who desire country of origin information. 
 USDA will implement the COOL provisions of the 2002 and 2008 Farm Bills in accordance with the 
law and in a manner that provides credible country of  origin information to consumers with the least 
possible cost and burden to the production and ma rketing infrastructure in accordance with the 
September 30, 2008, implementation date.  
APPENDIX TABLES 
III. TRADE POLICIES AND PRACTICES BY MEASURE 
AIII.1 - General overview of U.S. preferential rules of origin Page 156  
In relation to Cumulation provisions, why do the U. S. Israel and U.S Jordan free trade agreements 
limit Cumulation to a maximum of 15% of value? 
 ANSWER:  The 15% figure reflects the negotiations  by the parties to each agreement. 
 
In relation to full cumulation under U.S. - Do minican Republic - Central America, does the 
cumulation with Canada and Mexico for woven apparel are subject to the same rules of origin under 
the textile chain? 
 ANSWER:   Yes.  The cumulation rule in CAFTA-DR treats materials produced in Canada or 
Mexico, under certain circumstances, as if they  were produced in a party to CAFTA-DR when 
determining whether a woven appare l good is originating under CAFTA-DR.   All other rules of origin 
continue to apply without change.  
Cumulation provisions on GSP rules of origin, as me ntioned on Table AIII.1 of the Appendix of the 
document WT/TPR/S/200 (Page 157), set the cond itions under which inputs imported from certain 
sources may be counted as domestical1y supplied in  the GSP preference-receiving exporting country. 
Said provisions apply only between countries recognized by the US for this purpose as members of the same association.  What are the conditions established by US to recognize a group of countries as 
an association and to confer on them  this preferencial treatment? 
 ANSWER:  Under the statute governing the GSP Program (19 U.S.C. 2647(2)), in the case of an 
association of countries which is a free trade area or customs union, or which is contributing to 
comprehensive regional economic  integration among its members through appropriate means, 
including, but not limited to, the reduction of duties, the President may by Executive Order or 
Presidential proclamation provide that all members of such association other than members which are 
barred from designation shall be treated as one country for purposes of this subchapter.   Such 
treatment must be requested. 
CANADA 
 
REPORT BY THE GOVE RNMENT (WT/TPR/G/200) 
V. Trade-Related Capacity Building Initiatives 
page 22, paragraph 101 
 
The U.S. Government report notes that U.S. free tr ade agreements with developing countries establish 
trade capacity building committees that are charge d with developing programs to assist with the 
implementation of the obligations of the agreemen ts and with the transition to liberalized trade 
resulting from the agreements.  These committees ha ve already begun to meet under the CAFTA-DR, 
and will begin meeting under the Peru, Colombia and Pa nama FTAs as soon as they have entered into 
force.  Could the U.S. provide more information on the composition of these committees and how they 
operate?  Could the U.S. provide specific examp les of programs developed by these committees to 
assist with implementation of obligations?  WT/TPR/M/200/Add.1 
 Page 143 
 
 
 ANSWER:  US free trade agreements with Panama, Peru, Colombia, Central America and the 
Dominican Republic each establish a trade capacity building (TCB) committee as part of the agreement.  Representatives of the governments that are party to the trade agreement are members of 
the Committees.  The overall objective of the Committees is to regularly discuss and coordinate trade-related assistance needs of our partner countri es.  The focus covers assistance ranging from 
implementing customs obligations to programs helping small business or farmers benefit more 
broadly to the new trade opportunities.  Programs can be either bilateral or re gional.  US government 
TCB activities are provided by over 10 US agencies, including USAID, the MCC, State, the US Trade 
and Development Agency, the Oversees Private I nvestment Corporation, USDA, FDA, Commerce, 
and Treasury.  These programs are part of th e U.S. contribution to Aid for Trade. 
 
Representatives of the World Bank, the Inter-Ame rican Development Bank (IDB), the UN Economic 
Commission for Latin America and the Caribbean (ECLAC) and the Organization of American States (OAS) have participated in and contributed to th e TCB discussions at all meetings so to improve 
coordination among donors.  We also seek to have  representatives from the NGO and private sector 
communities participate also.  
 Under CAFTA-DR, US government TCB assistance to the CAFTA-DR region has increased significantly.  TCB assistance to the CAFTA-DR countries for the period grew from $185 million in 2002-2004 to $962 million in the period 2005-2007.  Th is assistance takes a variety of forms, 
including programs in customs reform, trade facilitati on, SPS training, agricultural diversification and 
private sector development, which respond to the needs identified by the CAFTA-DR countries.  
 
REPORT BY THE SECRETARIAT (WT/TPR/S/200) 
III. Trade Policies and Practices by Measure (1) Overview 
page 23, paragraph 3:  
Please elaborate on the linkages between antici pated new cargo security measures in the 
United States and their expected impacts on the maritime industry, and international trade. 
 
ANSWER:   We believe that while systems and practi ces will need to be changed to address security 
concerns, measures such as the proposed “10+2” pr ogram help to “push ou t” land borders.  This 
allows determinations on safety, as well as commercia l, concerns to be addressed at an earlier period 
of time, bringing more certainty and seamlessness to international trade.  
III. Trade Policy and Practices by Measure 
(2) Measures Directly Affecting Imports 
(i) Customs procedures page 25, paragraphs 13-17  
 
We note that the Food, Conservation, and Energy Act of 2008  (or 2008 Farm Bill) establishes in 
Title III a softwood lumber importer declaration program. The proposed legislation would require 
importers of softwood lumber products to the United  States to: (1) provide certain information; and 
(2) make certain declarations concerning the paym ent of SWL export charges. Canada believes that 
this proposal will duplicate the data reconcilia tion process established by the existing bilateral 
Canada-U.S. Softwood Lumber Agreement 2006 and may introduce new and unnecessary 
complexities into the Softwood Lumber Agreements ' administration. Canadian authorities will be 
examining the consistency of this proposal with the United States in ternational trade obligations, in 
the event that the proposed Import Decl aration Programme enters into force. 
 
Can the U.S. please explain the rational and justification for this softwood lumber importer 
declaration proposal and indicate how , if it is incorporated into U.S. legislation, it will be compliant 
with U.S. international trade obligations, including the WTO Import Licensing Agreement? WT/TPR/M/200/Add.1 
Page 144  
 
 ANSWER:   The softwood lumber provisions were passed by the Congress as part of Title III of the 
Farm Bill conference report.  However, due to a clerical error, Title III was not included in the 
physical copy of the enrolled bill  sent to the President for signatur e.  The President subsequently 
vetoed the enrolled bill as he received it, and the Congress voted to override that veto.  However, the 
Title III provisions were not enacted into law with the rest of the Farm Bill since they were not part of 
the enrolled bill.  Congress may act  to pass the missing provisions later in the current legislative 
session.  
III. Trade Policy and Practice by Measure 
(2) Measures Directly Affecting Imports 
(v) Other charges affecting imports 
page 34, paragraph 58  
On page 621 of the 2008 Farm Bill, there is a re ference to "customs user fees" under the section 
"Revenue Provisions for Agriculture Programs".  Can the U.S. explain if and to what extent these fees 
will be used to cover the cost of the provision of  importation services by U.S. officials, for example the 
cost of the inspection, release and clearance processes?  Will any of these fees be new? 
 
ANSWER:   Section 15201 of the 2008 Farm Bill extends  the sunset date of certain existing customs 
fees (currently provided for in 19 U.S.C. § 58c(a)) from 2014 to 2017.  It does not change the nature 
or amount of these existing fees.  The fee is limited in amount to the approximate costs of services 
rendered and is completely consis tent with U.S. WTO obligations. 
 
III. Trade Policies and Practices by Measure (2) Measures Directly Affecting Imports (vi) Anti-Dumping and Countervailing Measures 
page 36, paragraphs 68  
The report indicates that the AD/CVD Petition Counse ling and Analysis Unit of the International 
Trade Administration of the U.S. Department of Commerce assists U.S. comp anies with respect to 
recourse to U.S. trade laws.  Does the Department of Commerce coll ect statistics on the use of this 
service by U.S. companies? If so, what is the inci dence of use of this service over the past several 
years?  
ANSWER:   In the last four fiscal years (2004-2007) the AD/CVD Petition Counseling and Analysis 
Unit (PCAU) assisted 275 companies.  The PCAU a ssisted 83 companies in FY 2004, 76 in 2005, 40 
in 2006, 77 in 2007. 
 
What is the relationship, if any, between th is unit and the Trade Remedy Assistance Office 
administrated by the U.S. International Trade Commission?   
ANSWER:   There is no relationship between the PCAU and the Trade Remedy Assistance Office. 
 
It is understood that the Department of Commerce has established a formal unit to deal with trade 
remedy issues as they affect U. S. exports to other countries. If so, what are the responsibilities of such 
a unit?  
 
ANSWER:   Import Administration within the Depart ment of Commerce monitors whether trade 
remedy measures involving U.S. exports are conducte d fairly and in a manner consistent with the 
WTO Agreement on Implementation of Article VI of  the General Agreement on Tariffs and Trade 
1994, the Agreement on Subsidies and Countervailin g Measures and the Agreement on Safeguards. 
This team gathers information from a wide variety of sources, which provides it a basis for evaluating 
other administering authorities' proceedings.  The Import Administration team also serves as a  WT/TPR/M/200/Add.1 
 Page 145 
 
 
 resource to U.S. companies seeking to better understand foreign trade remedy practices and 
procedures.  In this context, it is noted that a far greater number of U.S. trade remedy determinations are 
challenged in WTO dispute settlement  proceedings compared to the number of foreign trade remedy 
determinations challenged by the United States.  Can the U.S. Government please comment on this 
situation? 
 
ANSWER:   While we are not aware of any detailed analysis of this issue, it is not surprising that 
exporters to the United States – the largest and one  of the most open economies in the world – are 
more likely to question any trade remedy, even those imposed in a WTO-consistent manner.  
Conversely, U.S. exporters, which have a large domestic market, and numer ous much smaller, and 
less significant export markets, may not be equall y compelled to challenge trade remedies to which 
they are subject.  Transparency is also a factor.  The U.S. trade remedy administration is one of the 
most, if not the most transparent in the world.  In contrast, the experience of our exporters is that the 
lack of transparency in other countries makes it difficult to even assess whether the WTO rules are 
being infringed.  Other factors may play a role as well, such as concerns regarding the handling of 
business confidential information.  
III. Trade Policies and Practices by Measure 
(2) Measures Directly Affecting Imports 
(vi) Anti-Dumping and Countervailing Measures 
page 36, paragraph 69 
 
The report states that the Department of Commerc e seldom uses its authority to self-initiate anti-
dumping and countervailing duty investigations.  During the period of review, did the Department of 
Commerce self-initiate anti-dumping and countervaili ng duty investigations?  If so, please indicate 
how often and describe the circumstances. 
 
ANSWER:   During the period of review, the Department of Commerce has not self-initiated any AD 
or CVD investigations.  III. Trade Policies and Practices by Measure (2) Measures Directly Affecting Imports (vi) Anti-Dumping and Countervailing Measures page 36, paragraph 70 
 The report states that the Department of Commer ce may enter into agreements to suspend anti-
dumping and countervailing duty investigations.  During the period of review, how often did the 
Department of Commerce enter into  agreements to suspend anti- dumping and countervailing duty 
investigations?  In such cases, please describe th e circumstances, particularly with respect to any 
suspension agreements in cases in volving “non-market economies”. 
 ANSWER:  In 2007, the Department entered into tw o market economy antidumping suspension 
agreements, one with exporters of lemon juice from Argentina and one with exporters of lemon juice 
from Mexico.  The Department entered into no ne w agreements involving non-market economies and 
no agreements involving CVD investigations.  In a ddition to the two lemon juice agreements, there 
are six other suspension agreements that were in eff ect prior to 2007 and remain in effect:  four with 
Russia; one with Mexico; and one with Ukraine. 
 WT/TPR/M/200/Add.1 
Page 146  
 
 III. Trade Policies and Practices by Measure 
(2) Measures Directly Affecting Imports (vi) Anti-Dumping and Countervailing Measures pages 36-37, paragraphs 71-74 
 Paragraphs 71-74 describe developments with respect to administrative and sunset reviews.  There is 
no mention of provisions related to  “changed circumstances” reviews by either the Department of 
Commerce or the U.S. International Trade Commission (ITC).  Were such provisions used during the 
period of review and if yes, under what specific circumstances? 
 ANSWER:  In addition to an annual administrative revi ew, interested parties may request a changed 
circumstances review of an antidumping or count ervailing duty order or suspension agreement.  
Section 751(b) states that Department of Commerc e shall conduct a changed circumstances review 
whenever it receives information demonstrating chang es sufficient to warrant a review.  Under section 
751(b)(4) of the Act, in the absence of good cause,  Department of Commerce may not review a final 
determination or suspension agreement in an inve stigation less than 24 months after the date of 
publication of the determination or the suspension.   While an administrative review is used to calcula te assessment rates and new cash deposit rates based 
on a period of sales subsequent to the investigatio n, a changed circumstances review in the U.S. 
administration of trade remedies addresses questions about the applicability of the order (for example, 
“no interest revocations,” where partial or total revocation of the order is warranted because domestic 
parties are no longer interested in covering certa in products).  Changed circumstances reviews may 
also address the applicability of cash deposit and assessme nt rates after there have been changes in the 
structure of a respondent, such as a merger or spi noff (“successor-in-interest ,” or “successorship,” 
determinations).  While section 351.222(g) of the De partment of Commerce’s re gulations specifically 
mentions revocation as an issue to be resolved unde r a changed circumstances review, the purpose of 
changed circumstances is not limited to revocation issues and is left open-ended by the language of 
the applicable statute.  The Department of Co mmerce completed six changed circumstances reviews 
during the period of review.  Of these six determinations, four involved company restructurings.   The Department of Commerce determines on a case-by-case basis whether changed circumstances 
sufficient to warrant a review exist.  The De partment of Commerce will only initiate a changed 
circumstances review if the factors underlying its initial determination have changed sufficiently to 
warrant such a review.  The Department of Commerce may revoke an order (or terminate a 
suspension agreement) in whole or in part  through a changed circumstances review.  
 
The Department of Commerce's regulations dealing with changed circumstances reviews can be found 
in 19 CFR 351.221(c)(3) and 351.222(g)  
III. Trade Policies and Practices by Measure 
(2) Measures Directly Affecting Imports (vi) Anti-Dumping and Countervailing Measures 
page 37, paragraphs 74-76 
 
Paragraphs 74-76 describe recent de velopments with respect to th e posting of bonds and other 
securities considered necessary to protect revenue generated from the application of anti-dumping and 
countervailing duties.  In this context, the U. S. Government Accountability Office (GAO) recently 
released a report entitled, “Antidumping and Countervailing Duties”.  The GAO made a number of 
specific recommendations for options that could be cons idered in the context of the collection of such 
duties.  Please explain the process, if any, to be und ertaken by the Department of Commerce in 
considering these options. Is the Department of  Commerce considering a proposed rulemaking 
procedure, a request for public comments, or a formal reply to the GAO report? 
  WT/TPR/M/200/Add.1 
 Page 147 
 
 
 ANSWER:   In its report on antidumping and countervailing duties, the GAO recommended that (1) 
the Secretary of Homeland Security, in consultatio n with other relevant ag encies, should determine 
whether U.S. Customs and Border Protection can ad just its bonding requirements to further protect 
revenue without violating U.S. law or interna tional obligations and w ithout imposing unreasonable 
costs on importers and (2) the Secretary of Comm erce should work with the Secretary of Homeland 
Security to identify opportunities to improve the cl arity of liquidation instructions.  The Department 
of Commerce is still developing its action plan in light of the GAO recommendations.  At this point, it 
would be premature to speculate on the specific measures that Commerce may take.  
III. Trade Policies and Practices by Measure 
(2) Measures Directly Affecting Imports 
(vi) Anti-Dumping and Countervailing Measures pages 35-43, paragraphs 65-96  
There have been a number of recent developments in  the application and administration of U.S. trade 
remedy law that were not mentioned in the report.  These include but are not limited to: 
reconsideration of the Department of Commerce analysis in the context of countervailing duty 
investigations of indirect subsidies, benchmar ks, multi-year benefit streams, privatization of 
government owned facilities, and the a ttribution of subsidies among affilia ted firms.  There is also the 
matter of the application of countervailing duty  law to some “Non-Market Economy” countries.  
Please comment on these issues and changes and their effects on the administration of trade remedy 
law.  
ANSWER:   We are not certain as to the “recent developm ents” to which Canada is referring.  With 
regard to the application of the CVD law to China,  in the CVD investigation involving glossy paper 
exports from China in 2006, Commerce determined th at it was appropriate to revisit the question of 
the applicability of the CVD law to non-market economy countries, in particular, China and its 
economy today.  In that investigation, Commerce fou nd that there is nothing in the U.S. CVD law that 
prevents applying that law to a non-market econom y.  Commerce also concluded that in the case of 
China, its economy today is vastly different from the economies addressed when Commerce’s policy 
regarding non-market economies was articulated in  the mid-1980s.  In that regard, Commerce also 
found that the nature of the Chinese economy t oday allows Commerce to identify and measure 
countervailable subsidies.  Our CVD investigatio ns against all countries, including China, are 
administrative proceedings conducted in accordance with  U.S. law and the Department’s regulations.  
These cases are, and will continue to be, conducted consistent with the United States’ international 
obligations.  III. Trade policy and practice by measure (2) Measures Directly Affecting Imports (viii) Quantitative Restrictions and Import Licensing page 44, paragraph 106 
 
The United States administers an import permit program which restricts the importation of controlled 
substances and listed chemicals to the quantity whic h the United States consider necessary to meet the 
medical, scientific or other legitimate needs of th e country, and to monitor the handlers of such 
substances.  The United States also notes that this sy stem is necessary to meet its obligations related 
to the 1961 UN Single Convention Treaty on Narcotic Drugs, the 1971 UN Convention on Psychotropic Substances and the 1988 UN Convention Against the Illicit Traffic in Narcotic Drugs 
and Psychotropic Substances.  
 But for opium, poppy straw, concentrate of poppy straw or coca leaf, no Schedule I or II substance, or 
narcotic substance in Schedule III, IV or V may be  imported unless the Attorney General finds (a) an 
emergency exists in which domestic supplies are inadequate; (b) competition among domestic 
manufacturers is inadequate and will not be render ed adequate by the registration of additional WT/TPR/M/200/Add.1 
Page 148  
 
 manufacturers; or (c) in any case in which the Attorney  General finds that such controlled substance is 
in limited quantities exclusively for scientific, analy tical or research uses.  The U.S. notes that the 
System is designed to restrict the quantity of im ports of controlled substa nces and listed chemicals 
and to maintain a monitoring system.   Can the U.S. explain why it is necessary that the ne eds of the United States in controlled substances 
must first be met by domestic manufacturers prior to allowing imported produc ts to meet demand?  
 
ANSWER:  The importation of controlled substances in to the United States is governed by the 
Controlled Substances Import and Export Act, 21 U.S.C.  952.  This provision was part of the original 
Controlled Substances Import and Export Act (herei nafter CSIEA) enacted by the United States 
Congress in 1970 and it remains essentially unchange d since its original enactment.  The CSIEA 
(along with the companion act governing domestic activities known as the Controlled Substances Act) 
were enacted by the United States Congress to address a number of issues.  The legislation seeks to provide an effective means of preventing and c ontrolling drug abuse and to support principles of 
international drug control that have existed since the early part of the 20th century and which have 
proven to be effective in combating internati onal diversion of contro lled substances into illicit 
channels.   It also implements U.S. obligations under international drug control treaties to which the 
United States is a party, including, but not limite d to, the Single Convention on Narcotic Drugs, 1961 
(Single Convention).  
Subsection 952(a) of the CSIEA covers the importati on into the United States of controlled substances 
in schedules I and II and narcotic drugs in schedul es III, IV, and V.  Subsection 952(b) applies to 
imports into the United States of non-narcotic c ontrolled substances in schedules III, IV, and V.  
These provisions curtail diversion of  dangerous drugs into illicit cha nnels domestically and worldwide 
while providing legitimate domestic access.  They  do so by, for example, requiring licenses for 
importation of both raw materials and finished goods,  as described in G/LIC/N/3/USA/5, as well as 
discouraging domestic production of narcotic raw ma terials (e.g., opium, poppy straw, concentrate of 
poppy straw, and coca leaves); enforcing quotas for co nsumption of manufactured  narcotic substances 
that reflect the estimated size of the legitimate dom estic market for such products; requiring importers 
of non-narcotic controlled substances to demonstrate a medical, scientific, or other legitimate use for 
the product; and generally minimizing opportunities fo r illegal diversion of controlled substances 
when offered for legitimate sale.  We view such requirements as critical to prevent and control drug 
abuse and to support principles of international drug control.  
Has the U.S. ever allowed or considered allowing those who are responsible for supplying the U.S. 
market to choose whether foreign or domestic manufacturers may contribute to fulfilling the quotas 
for the U.S. market? If not, why not?   
ANSWER:  The United States maintains non-automatic licensing requirements for certain imported 
products, including controlle d substances.  We consider that there is a significant risk of illegal 
diversion of controlled substances, with the possibi lity of extremely serious consequences, including 
with respect to health and safet y in the United States.  The requi rements mandated by the CSIEA and 
the Controlled Substances Act, as well as the im port licensing described in G/LIC/USA/3/N/5, are 
applied to guard against these eventualities.  Th ere are no plans to alter them at this time.  
 
In implementing its system to restrict the importation of controlled substances to comply with its UN 
obligations, has the US explored other options that would be least restrictive to trade?  If not, why 
not?  
ANSWER:   At this time, we believe the current system is the least trade-restrictive option, consistent 
with the objectives of CSIESA and U.S. obligations  under international drug control treaties to which 
the United States is a party.   
  WT/TPR/M/200/Add.1 
 Page 149 
 
 
 III. Trade Policy and Practice by Measure 
(2) Measures Directly Affecting Imports (viii) Quantitative Restrictions and Import Licensing page 45, paragraph 109:   
 In 2008, Canada's Department of Fi sheries and Oceans, on the advice of its scientific advisors, set the 
harp seal Total Allowable Catch (TAC) at 275,000, out of a herd of more than 5.5 million.  This one-
year TAC included allocations of 2,000 seals fo r personal use and 4,950 seals for Aboriginal 
initiatives.  The 2008 hooded seal TAC was set at 8,200 animals, out of a herd of 600,000.  In 2008, 
Canada also amended its Marine Mammal Regulations, to further ensure that the annual seal hunt 
continues to be carried out responsibly.  Canada’s  seal hunt is sustainable, a fact supported by a 
number of independent reports over the years, incl uding the recent European Food Safety Authority 
report on the animal welfare aspects of global seal hunts.   
Since the hunt is considered sustainable, why do es the U.S. impose measures preventing trade in seal 
products under the Marine Mammal Protection Act (MMPA), and withholding the possibility of 
obtaining a waiver due to the 1996 Pelly Amendmen t for reasons unrelated to the conservation of 
seals? 
 
ANSWER:  As its name suggests, the MMPA was enact ed in 1972 to protect marine mammals from 
harassment, capture, injury or other harm that  could reduce marine mammal populations beyond the 
point at which they cease to be a significant functioning element in the ecosystem of which they are a 
part.  Any measures under this Act with respect  to seal products are therefore aimed at the 
conservation of seal populations.  
Why does the MMPA allow domestic production by na tive inhabitants of Alaska and commercial sales 
in the U.S. of seal products which are otherwise banned by the MMPA, while denying the same 
opportunities to native inhabitants of Canada and ot her countries?  Is the U.S. considering an 
amendment to the MMPA in order to bring these meas ures into conformity with its obligations under 
the WTO? 
 
ANSWER:   The MMPA provides for limited exceptions  for takingof marine mammals by certain 
Alaska natives provided that the taking is (a) fo r subsistence purposes; (b) done for purposes of a 
limited trade in native handicrafts and clothing; a nd (c) is not accomplished in a wasteful manner.  
The MMPA allows for importation of seal products  from other countries (including Canada) if: (i) 
acquired in those countries as part of a cultural exch ange with Alaska natives or (ii) imported for non-
commercial purposes in conjunction with travel in th e United States or as part of a cultural exchange 
with Alaska natives.  The United States is not c onsidering amending these pr ovisions of the MMPA. 
 
III. Trade Policies and Practices by Measure 
(2) Measures Directly Affecting Imports (vi) Technical regulations, conf ormity assessment and standards 
page 48, paragraph 128 
 
The Secretariat Report indicates that the United St ates does not track the extent to which its final 
regulations are based on international standards.  Does the federal rule-making process require 
regulators to assess the extent to which proposed  rules fulfill international trade obligations, 
including those with respect to the adoption of  international standards contained in the WTO 
Agreement on Technical Barriers to Trade?   
ANSWER:   As provided in Executive Order 12866 and th e Administrative Procedures Act (5 U.S.C. 
511-599), the federal rule-making pr ocess is conducted so as to enable regulatory agencies to meet 
applicable statutory requirements, including those re lating to international oblig ations.  In particular, 
the Trade Agreements Act of 1979, as amended, pr ovides that federal agencies must not create WT/TPR/M/200/Add.1 
Page 150  
 
 unnecessary obstacles to trade or discriminate betwee n imported and domestic products, and need to 
take international standards into account when regulating. 
 
III. Trade Policies and Practices by Measure 
(2) Measures Directly Affecting Imports; 
(vi) Technical regulations, conf ormity assessment and standards 
page 48, paragraph 129 
 
The Secretariat Report notes that United States relies on a range of approaches to conformity 
assessment.  To what extent is risk assessment used  to determine the approach chosen?  
 
ANSWER:  Executive Order 12866 contains the regulatory philosophy and principles of the 
United States Government.  The use of cost-benefit analysis, in determining both the need to regulate 
and the design of a proposed regulation, plays a centr al role in the U.S. regulatory system.  Executive 
Order 12866 also recognizes that Federal agencies are the repositories of significant substantive 
expertise and experience and that in setting regulat ory priorities each Federal agency shall consider 
the degree and nature of the risks posed by various  substances or activities within its jurisdiction.  
Accordingly, each Federal agency d ecides the extent to which risk asse ssment is used in determining 
the appropriate approach to conformity assessment in the development of a particular regulation. 
 
To what extent do federal regul ators accept tests or certification provided by foreign-accredited 
conformity assessment bodies which can be tr aced to participation in an accreditation-based 
multilateral recognition agreement such as the International Labour Accreditation Cooperation 
(ILAC) or the Internationa l Accreditation Forum (IAF)? 
 
ANSWER:   The U.S Government does not track the exte nt to which federal regulators accept test 
results or certification provided by foreign-accred ited conformity assessment bodies.  However, we 
note, for example, that Federal Communication Commission (FCC) Rules allo w for the acceptance of 
test results based on either a government-to-gove rnment MRA or accreditation body agreements.  
However, to date the FCC has only recognized fore ign test labs based on government-to-government 
Mutual Recognition Arrangements/ Agreements (MRAs) and not on arrangements such as the ILAC 
or other accreditation-based multilateral recognition agreements.   
 
III. Trade Policies and Practices by Measure 
(2) Measures Directly Affecting Imports (vi) Technical regulations, conf ormity assessment and standards 
page 49, paragraph 130 
 
The Secretariat Report notes that U.S. authorities have  indicated that there are no centralized data on 
the extent to which U.S. regulators have recognized  the equivalence of foreign technical regulations 
or the results of conformity assessment procedures performed abroad.  The United States has included enhanced provisions with respect to equivalency in  a number of free trade agreements signed since 
2000.  Could the United States explain how th ese provisions are being implemented? 
 
ANSWER:   U.S. FTAs negotiated since 2000 contain to a varying degree provisions addressing 
equivalency of technical regulations and accep tance of the results of conformity assessment 
procedures.  In general, these provisions go  beyond the WTO TBT Agreement by providing 
additional mechanisms or procedures for Parties to facilitate consideration of requests for acceptance 
of the results of a conformity assessment procedure, or to obtain further information on the technical 
regulation in the context of a request to consider it equivalent to the importing country’s relevant 
technical regulation.  The United States engages regul arly with its FTA partners in discussions related 
to these and other TBT issues.   WT/TPR/M/200/Add.1 
 Page 151 
 
 
 Can the United States cite specific examples wher e foreign regulations or conformity assessment 
results have been accepted as equivalent to, and demonstrate compliance w ith, federal regulations? 
 
ANSWER:  The United States does not currently track or pl an to track the extent to which individual 
regulatory authorities have rendere d determinations regarding equi valence.  With respect to 
mandatory conformity assessment procedures, dependi ng on the relevant Federal agency and product 
concerned, the U.S. Government may accept the results of conformity assessment procedures 
conducted by foreign conformity assessment bodies.  A cceptance may, for example, require that the 
conformity assessment body be accredited by the U.S. Government or by a foreign government or recognized body under the terms of a government-to-government MRA. 
 
III. Trade Policies and Practices by Measure 
(2) Measures Directly Affecting Imports (vi) Technical regulations, conf ormity assessment and standards 
page 49, paragraph 133 
 
The Secretariat Report notes that one of the criteria used by ANSI to accredit standards-development organisations is “to agree to consider applicable international standards”.  Could the U.S. explain how 
the compliance of standards-development organisations  with this requirement is monitored and 
enforced to ensure consistency with provisions in  the WTO Agreement on Technical Barriers to Trade 
with respect to the use of international standards by standardizing bodies? 
 
ANSWER:  Article 4.1 of the TBT Agreement requires Members to take reasonable measures as may 
be available to them to ensure that non-governme ntal standardizing bodies within their territories 
accept and comply with the Code of Good Practice.   ANSI accepted the Code of Good Practice for the 
Preparation, Adoption and Application of Stan dards" provided in Annex 3 of the WTO/TBT 
Agreement in 1997.  ANSI has the authority to audit ANSI-accredited U.S.-domiciled standards 
developers on a regular basis and for cause to ensure  compliance with the provisions contained in the 
ANSI Essential Requirements document, which reflects the Code.  USG officials participate in all of 
ANSI’s policy committees as well as the Board of Directors alongside industry, consumer groups, 
NGOs, standards developers, and academics.  III. Trade Policies and Practices by Measure (2) Measures Directly Affecting Imports (ix) Technical regulations, conf ormity assessment, and standards 
page 50, paragraph 137 
  The Secretariat Report notes that in July 2007, the President established the Interagency Working 
Group on Import Safety to conduct a comprehensive review of import safety and to identify areas for 
improvement. The Working Group, which has no statutory or regulatory authority of its own, has recommended several TBT-related measures to enhance th e safety of imports into the United States.  
Has the U.S. Government followed up on these recomme ndations?  If so, what was done and is there a 
report or information on actions taken that  could be shared with other countries? 
 
ANSWER:   A progress report on implementation of actions in the Action Plan for Import Safety is 
being readied and should be publicly  available within a few weeks. 
 
III. Trade Policies and Practices by Measure 
(2) Measures Directly Affecting Imports 
(x) Sanitary and phytosanitary measures pages 50 & 51, paragraphs 140 & 146 
 
In paragraph 140, page 50, United States indicates that it works closely with State authorities to 
ensure timely notification of appropriate sub-federa l regulations.  Furthermore,  in paragraph 146, page WT/TPR/M/200/Add.1 
Page 152  
 
 51, the United States describes the authority of individual States to establish SPS measures, noting 
that such measures must be consistent  with United States WTO obligations.  How does the 
United States ensure that state-level SPS measures are consistent with the WTO SPS Agreement and 
notified to WTO Members as appropriate?  If state- level SPS measures are inconsistent with WTO 
obligations, what actions does the United States ta ke to ensure individual States comply with United 
States’ international obligations?  
ANSWER:   U.S. federal SPS agencies work closely w ith the relevant state authorities on a regular 
basis through a variety of means to ensure that  measures proposed and adopted are science based and 
in accord with our WTO rights and obligations .  If state level SPS measures are found to be 
inconsistent with WTO obligations, U.S. trade and regulatory agencies work with the individual state 
to communicate our concerns and revise the measure.  
How does the U.S. ensure freedom of transit as required by GATT article V? 
 ANSWER:  At least $100 billion worth of goods were  re-exported from the United States in 2007, 
giving an indication of the scale of goods in transit in the United States.  The U.S. is not aware of any 
concerns with respect to implementation of its obligations under GATT Article V. 
 
III. Trade Policy and Practices by Measure 
(4) Other Measures Affecting Production and Trade 
(v) Trade-related Intellectual property rights 
page 76, paragraph 265 
 
According to the Secretariat Report for the United States, “The United States offers protection for 
geographical indications (GIs) for all classes of goo ds and services through its trade mark system”.  
Canada would be grateful for details on how the provisions found in Article 23 of the TRIPS 
Agreement, giving enhanced protection for wines and spirits GIs, are satisfied through the trade-mark 
system . 
 ANSWER:  Under U.S. trademark law, the Trademark Act of 1946, as Amended, Public Law 79-489, 
Chapter 540, Approved 5 July 1946; 60 STAT. 427: 
 
Section 2(a), 15 U.S.C. §1052(a)
 - prohibits registration of a mark that consists of or comprises 
immoral, deceptive, or scandalous matter; or ma tter which may disparage or falsely suggest a 
connection with persons, living or d ead, institutions, beliefs, or nationa l symbols, or bring them into 
contempt, or disrepute; or a geographical indication which, when used on or in connection with wines 
or spirits, identifies a place other than the origin of the goods and is first used on or in connection with 
wines or spirits by the applicant on or after one year after the date on which the WTO Agreement (as 
defined in section 2(9) of the Uruguay Round Agreem ents Act [19 USC §3501(9)]) enters into force 
with respect to the United States.  Section 2(e)(2), 15 U.S.C. §1052(e)(2)
 - prohibits registration of marks which, when used on or in 
connection with the goods of an applicant, are "primarily geographically descriptive" of them.  
Section 2(e)(2) specifically excludes "indications of regional origin", which are registrable under 
Section 4, 15 U.S.C. §1054  as collective and certification marks.  In addition, where an applicant can 
demonstrate that a geographic term has become associated with its goods (or services) and thus has acquired distinctiveness with respect to those goods or services, registration is permitted under 
Section 2(f), 15 U.S.C. §1052(f)
. 
 Section 2(e)(3), 15 U.S.C. §1052(e)(3)
 - prohibits registration of marks which, when used on or in 
connection with the goods of the applicant, are "primarily geographically deceptively misdescriptive 
of them". 
  WT/TPR/M/200/Add.1 
 Page 153 
 
 
 Section 4, 15 U.S.C. §1054  - Collective and certification marks, including indications of regional 
origin, are registrable.  Section 13, 15 U.S.C. §§ 1063 & 1064
 - Any person who believes that he  is or would be damaged by 
the registration of a mark upon the principal regi ster can file an opposition or cancellation in the 
Patent and Trademark Office, based, among other gr ounds, on any of the above-mentioned provisions 
in Section 2.  Section 43, 15 U.S.C. § 1125
 - provides for civil actions to prevent false designations of origin and 
false descriptions that are likely to cau se confusion, as well as trademark dilution. 
 
Furthermore, an incidental and supplemental enforc ement mechanism exists under the auspices of the 
Alcohol, Tobacco Tax and Trade Bureau, the Fede ral Alcohol Administration Act of August 29, 
1935, 49 STAT. 977, 27 U.S.C. §§201 et seq.   Section 105(e), 27 U.S.C. §205(e) prohibits the sale of 
alcohol beverage products that ar e not labeled in conformity with  regulations intended to prohibit 
consumer deception and to  provide the consumer with adequate information about the identity of the 
product.  
III. Trade Policy and Practices by Measure 
(4) Other Measures Affecting Production and Trade (v) Trade-related Intellectual property rights 
page 76, paragraph 266  
According to the Secretariat Report for the Un ited States, “...copyright law provides several 
inducements or advantages to encourage copyrighti ng owners to make registration, such as....allowing 
the copyright owner to record the registration with  U.S. Customs and Border Protection  (CBP) for 
protection against the importa tion of infringing copies”.  Canada would be grateful for details on the 
effectiveness of this measure and how ofte n registrations are recorded with CBP.  
 
ANSWER:  In Fiscal Year 2007 (October 1, 2006 throug h September 30, 2007), CBP received 339 
copyright recordation requests.  Th e value of CBP’s recordation system is that it makes information 
on recorded copyrights and trademarks readily availa ble to frontline officers in CBP’s more than 300 
ports of entry, facilitating their ability to identif y counterfeit and pirated goods .  Precise figures on the 
effectiveness of copyright recordation are unavaila ble because many of the pirated goods seized by 
CBP also bear infringing trademarks.  In such  cases, the goods are often seized under trademark 
statutes and recorded as trademark seizures.  IV. Trade Policies by Sector (1) Overview page 80, paragraph 8 
 
How many waivers have been granted under the Jones Act on an annual basis since 1996, and 
according to which criteria?   
 
ANSWER:  Since 1996 there have been a total of 12 waivers granted under the Jones Act.  The 
authority to waive the Jones Act in the interest of  national defense is based on Public Law 81-891, an 
act to waiver certain navigation and vessel inspection laws. The provisions of this law specify that if 
no qualified U.S. vessel is available, the Jones Ac t could be waived on a case-by-case basis for that 
specific voyage. 
 46 U.S.C. 501 (2006). Waiver of navigation and vessel-inspection laws.  WT/TPR/M/200/Add.1 
Page 154  
 
 (a) On the request of the Secretary of Defense,  the head of an agency responsible for the 
administration of the navigation or vessel-inspecti on laws shall waive compliance with those laws to 
the extent the Secretary considers necessar y in the interest of national defense. 
 (b) By head of agency. When the head of an agency responsible for the administration of the 
navigation or vessel-inspection laws considers it n ecessary in the interest of national defense, the 
individual may waive compliance with those laws to  the extent, in the manner, and on the terms the 
individual prescribes.  (c) Termination of authority. The authority granted by this section shall terminate at such time as the 
Congress by concurrent resolution or the President may designate. 
 
IV. Trade Policies by Sector 
(3) Mining and Energy (ii) Legal and Policy Framework 
page 91, paragraph 60  
Congress imposed a mining claim patent moratorium in 1994; the U.S. authorities indicate that, except for 400 patents that were grandfathered, no new patent applications are being accepted until 
Congress decides what to do with the moratorium.  When is a decision expected to be taken by 
Congress with respect to the moratorium? 
 
ANSWER:   Since October 1, 1994, the Bureau of Land Management of the U.S. Department of 
Interior has been prohibited by annual Acts of Congress from accepting any new mineral patent applications. The current relevant Act expires on September 30, 2008, and we are not aware if or 
when Congress would act to renew this moratorium. 
 
IV. Trade Policies by Sectors 
(2) Agriculture (iii) Domestic Programmes (b) Insurance programmes and emergency assistance pages 83-87, paragraphs 25-39 
 
The 2008 Farm Bill has been recently passed by Congress to replace the Farm Security and Rural 
Investment Act of 2002.  Ca nada is concerned with many aspects of the new bill.  Would the U.S. 
confirm that the 2008 Farm Bill increases the loan rates for most commod ities covered under the 
Loan Deficiency Program. 
 ANSWER:   Most loan rates do not increase.  For mark eting loans, eight out of 20 commodities have 
an increase in their loan rate (wheat, barley, oats, minor oilseeds, graded wool, honey, cane sugar, 
beet sugar), two have a decrease (dry peas, len tils), and one is new in 2009 (large chickpeas). 
 
Would the U.S. confirm that the 2008 Farm Bill increases the target pri ces for most commodities 
covered under the Counter-cyclical Payments Program (CCP). 
 
ANSWER:  Yes, the target prices wheat, sorghum, barl ey, oats, soybeans and minor oilseeds increase 
beginning in 2010.  The target price for upland cotton will decrease.  The remainder of the target prices remain the same. 
 
Would the U.S. confirm that the 2008 Farm Bill establishes CCP payments for several new 
commodities.  
ANSWER:   Yes, dry peas, lentils, small chickpeas, large chickpeas.  
  WT/TPR/M/200/Add.1 
 Page 155 
 
 
 Would the U.S. confirm that the 2008 Farm Bill ma intains the planting flexibility restriction under the 
Direct Payments program for fruits, vegetables and wild rice. 
 
ANSWER:   Yes.  A pilot program for growing proc essing vegetables on a limited amount of direct 
payment acres in 7 States is authorized  
 
Would the U.S. confirm that th e 2008 Farm Bill maintains mandatory Country-of-Origin Labelling 
(COOL), albeit slightly modifie d from the 2002 legislation. 
 
ANSWER:   Yes. The legislation modifies the 2002 Farm Act legislation, including for ground meats, 
providing greater flexibility for processors.  There is also additional flexibility for labeling muscle 
cuts of covered meat commodities from multiple count ries of origin that include the United States. 
 
Would the U.S. confirm that the 2008 Farm Bill inc reases the loan rates for refined beet sugar and 
raw cane sugar. 
 
ANSWER:  Yes. 
 
Would the U.S. confirm that the 2008 Farm Bill requires that sugar produced from in-process beet 
sugar (whether produced domestic ally or imported) to count against processors’ marketing 
allotments, but does not require that sugar produced  from imported cane syrup to count against 
processors’ marketing allotments.  
ANSWER:   We are still reviewing the legisla tion and cannot answer at this time. 
 
Would the U.S. confirm that the 2008 Farm Bill prohi bits refined sugar from being imported to the 
U.S. when processors are unable to market their allo tment, but continues to allow imports of raw 
cane sugar when deficits are being reassigned to imports. 
 
ANSWER:   We are still reviewing the legisla tion and cannot answer at this time. 
 
Would the U.S. confirm that the 2008 Farm Bill limits the Secret ary’s ability to increase the tariff-
rate-quota for refined sugar in the event of an emer gency shortage of sugar in the United States to 
only between October 1st and March 31st of each fiscal year, instead of anytime during the fiscal year. 
 
ANSWER:   We are still reviewing the legisla tion and cannot answer at this time. 
 
Would the U.S. confirm that the 2008 Farm Bill conti nues to tie the majority of food aid to domestic 
purchases. 
 
ANSWER:   Yes. 
 Would the U.S. confirm that the 2008 Farm B ill introduces a new domestic cotton-user payment of 
$0.04/pound.  
 
ANSWER:   Yes, but the rate decreases to $0.03 per pound beginning in 2012. 
 
The 2008 Farm Bill also created a new Average Crop  Revenue Election (ACRE) program which is to 
begin in crop year 2009 and a new permanent disaster program.  
How will these new programs operate?  How will th is new program co-exist with the revenue 
insurance component of crop insurance?  
 WT/TPR/M/200/Add.1 
Page 156  
 
 ANSWER:   The operation of these progr ams will depend on implementing regulations, which have 
not yet been issued.  The 2008 Farm Bill provides the authority to genera te a substantial amount of support to the 
agriculture sector under the various farm program s, including the two new programs listed above.  
 How does the U.S. Administration anticipate mee ting current commitment levels on domestic support 
and any future commitments ne gotiated under a Doha Agreement? 
 
ANSWER:   Section 1601(d) of the 2008 Farm Bill provides the Secretary of Agriculture with 
sufficient flexibility to ensure that the Unite d 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.   
Would the U.S. provide assurance that these measures, for example mandatory COOL, will be 
implemented in a manner that is consiste nt with its international obligations? 
 
ANSWER:   Yes. The U.S. Department of Agriculture  (USDA) will implement the COOL provisions 
of the 2002 and 2008 Farm Bills in accordance with  the law and in a manner that provides credible 
country of origin information to consumers with the least possible cost and burden to the production 
and marketing infrastructure in accordance with the September 30, 2008, implementation date. 
 
IV. Trade Policies by Sector 
(3) Mining and Energy (ii) Legal and Policy Framework page 91, paragraph 61  
 
Companies seeking to lease federal lands for oil and gas exploration must pay a "bonus bid" determined through a competitive auction.  Please explain the "bonus bid" and provide more details 
into how the auction process unfolds. In addition, is any interested company allowed to participate in 
the process or are there any restrictions (e.g. domestic companies only)?  
ANSWER:  Lease sales are conducted through a compe titive, sealed bonus bidding process, and 
leases are awarded to the highest bidder. Successful  bidders make an up-front cash payment, called a 
bonus bid, to secure a lease.   A minimum bonus bid is  determined for each tract offered.  In addition 
to the cash bonus bid, a royalty rate of 12.5% or 16.66% is imposed on the value of production 
depending on location factors; or the royalty is recei ved “in-kind.” A royalty-in-kind payment is in the 
form of barrels of oil or cubic feet of natural gas. Bonuses are up-front lump sum payments typically 
made by oil and gas companies to the government for the right to explore, develop, and produce oil and natural gas resources.  Although these revenu es are sometimes significant, revenue generation is 
not their primary purpose.  Rather, the purpose of bonus  payments is the allocation of mineral rights; 
more significant payments occur in the form of royalties after production commences. The amount of 
a bonus payment is essentially determined entirely by the market.   When there is a competitive 
bidding process, bonuses represent a very efficient way to fairly allocate mineral rights.  The process 
is conducted in a transparent manner and is open to all firms in the United States, without regard to 
nationality of ownership.    
IV. Trade Policies by Sector 
(4) Manufacturing 
page 96, paragraphs 79-80 
 
Under the new Farm Bill, Economic Adjustment Assistance of 4 cents per pound during the period 
beginning August 1, 2008 and ending on July 31,  2012 and 3 cents per pound thereafter, provided 
under subsection 1207(c), shall be ma de to domestic users of upland cotton that certify that assistance  WT/TPR/M/200/Add.1 
 Page 157 
 
 
 is used only to acquire, construct, install, mode rnize, develop, convert or expand land, plant, 
buildings, equipment, facilities, or machinery.  Can the United States explain what the timeline is for 
users of upland cotton to use the assi stance for the allowable purposes?  
 
ANSWER:   The operation of this prog ram will depend on implementing regulations, which have not 
yet been issued. 
 
Can the United States indicate what steps it will be taking to monitor and verify that the assistance is 
used only to acquire, construct, install, moderni ze, develop, convert or expand land, plant, buildings, 
equipment, facilities, or machinery?  
 
ANSWER:   The operation of this prog ram will depend on implementing regulations, which have not 
yet been issued.    
Can the United States clarify whether these land, plan t, buildings, equipment, facilities, or machinery 
have to be directly related to textile or oth er production that uses the cotton as a direct input?  
 
ANSWER:   The operation of this prog ram will depend on implementing regulations, which have not 
yet been issued.    
Can the United States specify whether there is an end date for the provision of such adjustment 
assistance?     
ANSWER:   The legislation does not specify an end date. 
 
IV. Trade Policies by Sector 
(5) Services 
(iii) Financial Services pages 112-114, paragraphs 153-155 & 158 
 
The report outlines the contrasting approaches of th e two regulators of the securities sector in the 
United States.  The approach of the Securities and Exchange Commission, the regulator of equities, is 
outlined in paragraphs 153-155.  Ge nerally, the Securities and Exchange Commission requires foreign 
entities to undergo full domestic regi stration and oversight.  By contr ast, paragraph 158 notes that the 
Commodity Futures Trading Commission, which regulates futures and derivatives, may offer 
exemptions from registration and oversight to foreign entities.  We  understand that the Securities and 
Exchange Commission has recently announced that it is in discussions with Australia and the 
European Union on mutual recognition of compar able securities regimes, which would move the 
Securities and Exchange Commission closer to th e approach of the Commodity Futures Trading 
Commission.  How does the Securities and Exchange Commission foresee mutual recognition 
proceeding?  That is, what kinds of entities, securities, and investors might be accessible through 
mutual recognition?  What other jurisdictions  might the Securities and Exchange Commission 
consider candidates?  
 
ANSWER:   Regulation of securities markets and commod ities markets in the United States differs, 
reflecting differences in how the relevant exchang es operate, the types of investors in these markets, 
and the type of prudential regulation necessary for oversight of these different areas.  Recently, the SEC has begun to explore the possibility of adopti ng selective mutual recognition of oversight of 
certain types of financial service providers based in jurisdictions with regulation and enforcement 
comparable to that in the United States.   In January 2007, SEC staff members published an article in 
the Harvard International Law J ournal suggesting a system of “s ubstituted compliance.”  Under the 
suggested system, exempted foreign stock excha nges could set up trading screens and exempted 
broker-dealers could directly provide services to (and solicit business from) investors in the United 
States without registering with the SEC based on their compliance with s ubstantively comparable WT/TPR/M/200/Add.1 
Page 158  
 
 regulations and supervision by a foreign securities re gulator with powers substantively similar to the 
SEC.  Since then, the SEC’s Commissioners and staff have begun to explore the issue in speeches and 
public comments.  On June 12, 2007, the SEC held a public roundtable on mutual recognition.  Panel 
members included U.S. and foreign market participants, former SEC Commissioners and Chairmen, and academics.  Roundtable participants were ge nerally favorable to the concept but identified 
numerous implementation challenges, particularly with regard to de termining which jurisdictions had 
securities regulatory regimes that were broadly comp arable to the US regime. (Additional information 
about the Roundtable can be found at:  h ttp://www.sec.gov/spotlight/mutualrecognition.htm.) 
 On March 24, 2008, the SEC issued a press release announcing the next steps it was planning to take 
regarding mutual recognition of fo reign jurisdictions with comparable regulatory oversight.  These 
include: (1) exploring initial agreements with one  or more foreign regulatory counterparts, which 
would be based upon a comparability assessment by the SEC and by the foreign authority of one another's regulatory regimes; (2) considering adopt ion of a formal process for engaging other national 
regulators on the subject of mutual recognition.  This process could be accomplished through 
rulemaking or other appropriate mechanisms, possibl y informed by one or more initial agreements 
with other regulators; and (3) developing a process for mutual recognition discussions with 
jurisdictions comprising multiple securities regulat ors tied together by a common legal framework, 
including Canada (which has no national securities re gulator, but rather provincial regulators) and the 
European Union (whose national securities regulators are subject to supranational legislation and 
directives). 
 
On March 29, 2008, the SEC issued a press release after a meeting between SEC Chairman Christopher Cox and Australian Prime Minister  Kevin Rudd announcing that the SEC and the 
Australian Securities and Investme nt Commission (ASIC) were in discussions about developing a 
mutual recognition pilot arrangement between the two jurisdictions.  On May 29, 2008, the SEC 
issued a press release with the Canadian Securities Administrators (found at: 
http://www.sec.gov/news/press/2008/2008-98.htm) announc ing a schedule for completing a process 
agreement between the SEC and CSA that would le ad to a comparison assessment of the U.S. and 
Canadian regulatory systems in preparation for discussions regarding a mutual recognition 
arrangement between the SEC and Canada's pr ovincial and territorial securities regulators. 
 IV. Trade Policies by Sector (5) Services (iii) Financial Services page 113, paragraph 155 
 
U.S. banks must register as investment advisers onl y if they advise an investment company registered 
with the Securities and Exchange Commission under th e Investment Company Act.  In contrast, 
foreign banks face a much wider tr igger for registration – foreign banks generally must register as 
investment advisers if they provide in vestment advice for compensation.  Could the Securities and 
Exchange Commission explain the policy  rationale behind this distinction?   
 ANSWER:  Historically, the Investment Advisers Act of 1940 excluded U.S. banks and bank holding 
companies from the definition of “investment adviser .”  This provision was created at a time when 
banks were not permitted to engage in securities servi ces.  The intent behind the provision exempting 
banking institutions was to reflect that these firms were already subject to a comprehensive 
supervisory regime in the United States.  In  1999, the Gramm-Leach-Bliley Act narrowed this 
exemption, making it available only to banking instit utions that do not provide advisory services to 
registered investment companies.  WT/TPR/M/200/Add.1 
 Page 159 
 
 
 CHILE 
 
Report by the Secretariat (WT/TPR/S/200) 
III. TRADE POLICIES AND PRACTICES, BY MEASURES 
2) MEASURES DIRECTLY AFFECTING IMPORTS  
Antidumping and countervailing measures  
 Paragraph 70 indicates that in a non-market ec onomy, agreements to suspend antidumping could 
include commitments regarding prices with additiona l elements to avoid competition from the drop in 
prices or the artificial reduction of the same.  To what additional elements does it refer? 
 ANSWER:   Agreements with a foreign government considered to be a non-market economy may 
also involve quantitative restrictions.  The Unite d States, however, has not entered into such 
agreements with non-market economy WTO Members.  
Paragraph 76 states that the Customs Authority can  demand higher bonds from importers of goods at 
a higher risk for non-compliance.  What elements of  judgment are used to determine the risk of non-
compliance, thereby making it possible to demand higher bonds?  Is there a formula for determining 
the amount of these higher bonds?  
 
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.  As noted in the Secretariat's Report, CBP issued a directive 
pertaining to additional bond re quirements for importers of certain agriculture/aquaculture 
merchandise subject to antidumping or countervailing duty orders.  The directive, among other things, 
sets forth a process for CBP to determine an individual bond amount for those importers obtaining continuous bonds that secure the promise to pay all duties finally determined to be due on certain 
merchandise subject to antidumping or countervailing du ties.  If an importer chooses not to receive an 
individual bond amount, the directive also contains a formula for establishing the bond amount required. 
 
With regard to paragraph 84 on th e antidumping rights currently in force in the United States, what 
would be the logic of an exporter who would be willing to engage in predatory dumping over 
timeframes exceeding 10 or even 20 years, which would justify the United States maintaining 32 
antidumping measures in force for at least 20 years and 98 for 10 years? 
 ANSWER:   The United States cannot answer for the motivations behind private parties' pricing 
practices that lead to injurious dumping in the Un ited States.  However, we would note that the 
Antidumping Agreement does not refer to “predatory” dumping.   
 
The Agreement provides that an antidumping duty w ill terminate after five years, unless the Member 
initiates a sunset review before that date to dete rmine whether the expiration of the duty would likely 
lead to a continuation or recurrence of dumping an d injury.  The Agreement explicitly permits the 
measure to remain in force pending the outcome of  that review.  If like lihood is determined, the 
Agreement permits the Member to maintain the antidumping measure subject to the obligation of 
conducting a sunset review every five years.  As to  the measures referenced in paragraph 84 that are 
in place after a sunset review, consistent with the terms of the Agreement, the United States found that 
expiration of the measure would likely lead to a c ontinuation or recurrence of dumping and injury and 
therefore did not terminate the duty.  WT/TPR/M/200/Add.1 
Page 160  
 
 Safeguards 
 
Paragraph 98 states that imports from NAFTA c ountries are excluded from the application of 
safeguard measures unless they represent a substantial proportion of total imports and it is shown that 
they are significant in causing major damage.  If a NAFTA country is excluded from a global safe guard measure, are imports from these countries 
taken into account separately in assessing the serious injury? 
 ANSWER:  The U.S. safeguard statute requires determinati ons with regard to all imports and imports 
from NAFTA trading partners.  
 
Paragraph 98 indicates that, as per U.S. domestic legislation, safeguard measures can be tariffs, quantitative restrictions, tariff rate quotas, import licenses, or other measures.  Since the objective of a 
safeguard measure is to eliminate the damage cau sed to a national branch of production, what 
method is used to calculate the allowable impor t quotas that would avoid the damage caused by 
imports subject to dumping? 
 
ANSWER:   If the United States were to conclude that  a quantitative restriction was the appropriate 
remedy in response to a finding of serious injury, it would set the level of such restriction so as to 
address the serious injury or threat of serious in jury to the domestic industry and facilitate industry 
adjustment to import competition.  Any calculations would depend on the industry and to the facts of 
the particular situation. 
 
4) OTHER MEASURES AFFECTING PRODUCTION AND TRADE 
ii) Other government assistance, paragraph 205  
Paragraph 205 mentions that “The manufacturers of g oods subject to “inverse tariffs” (tariff rates for 
the finished product less than those applied to thei r foreign inputs) can benefit from the establishment 
of a foreign trade zone.  However, paragraph 207 st ates that nearly 60% of the total value of goods 
transferred to foreign trade zones were national goods and that “the majority of the imports are crude 
oil and refined oil, automobiles and auto part s, electronic products, pharmaceutical products, 
computers and office equipment,  and textiles and apparel.”  The foregoing would give the impression 
that products with “inverse tariffs” would not p redominate among the goods  transferred to foreign 
trade zones.  We would like a clarification.   
ANSWER:  One aspect of the foreign-trade zones program is the ability to manufacture a product 
using both domestic and foreign st atus merchandise (foreign status merchandise is held under bond in 
the zone prior to the payment of duties).  A manufactur er of a good subject to an inverted tariff could 
then benefit from payment of the finished product du ty rate for the foreign components, while also 
using domestic status merchandise in its operations.  The combination of foreign and domestic status 
merchandise in zone operations accounts for the high percentage of domestic st atus noted above.  The 
ratio of foreign and domestic status merchandise in zon es has been consistent for the last 10 years.  It 
should also be noted that domestic status includes not only products of U.S. origin, but also imported 
merchandise on which all duties have been paid (p roducts which are duty-free are often entered for 
consumption and then admitted into a zone in domestic status).  In addition, the inverted tariff is only 
one benefit of the zone program. Other benefits  offered by the program include supply chain 
management and customs operational efficiencies.   Many zones are established for warehouse and 
distribution operations with both domestic and fo reign status merchandise shipped through the 
facilities.   The largest industry using the FTZ program is curre ntly the oil refining industry, where inverted 
tariffs exist on the production of petrochemicals a nd refinery by-products.  The summary list of  WT/TPR/M/200/Add.1 
 Page 161 
 
 
 products mentioned above includes industries using z ones for both inverted ta riff benefits and other 
reasons.  
iv) Government contracting  
 
Paragraph 234 states that of the “the Competition in  Contracting Act calls for simplified procedures 
for small procurements.  The Federal Acquisition Simplificati on Act (FASA) established a new 
simplified threshold of 100,000 U.S. dollars.”  Could you indicate what said simplifications consist of 
as opposed to the normal procedure?  
ANSWER:  The simplified acquisition procedures may be fo und in Part 13 of the Federal Acquisition 
Regulation FAR (www.arnet.gov/far/).  The simpli fied acquisition methods include the use of a 
government-wide commercial purchase card and purchase orders.  Paragraph 246 indicates that “the Small Business Act (P.L. 85-536) in principle requires that each 
contract whose value exceeds 2,5000 U.S. dollars but  is less than 100,000 U.S. dollars be reserved 
exclusively for small businesses.”  Would this requirement be subject to exceptions if it is contrary to 
public interest, as would be the case for the exc eptions set forth in paragraph 242?  If these 
exceptions do not exist, what is meant by “in principle?”  If there are exceptions, how is public interest made compatible with the goal described in paragraph 247 of awar ding 23% of all primary 
contracts to small businesses?   
ANSWER:  Exceptions, which are found in FAR 19.000(b) and 19.502-2, include where the 
contracting officer determines there is not a reasona ble expectation of obtaining offers from two or 
more responsible small business concerns that are co mpetitive in terms of market prices, quality, and 
delivery and where the contracting officer rece ives no acceptable offers from responsible small 
business concerns.  
 
IV. TRADE POLICIES, BY SECTORS 
2) Agriculture 
 
Paragraph 17:  Do you intend to reduce MFN tariffs applied to agriculture?   
 
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.  
Paragraph 24:  Do you intend to reduce import barriers fo r certain agricultural products like bovine 
meat, dairy products, sugar, and alcohol?  
 
ANSWER:   The United States has no current plans to un ilaterally change its current MFN TRQs for 
agricultural products.  The United States would, of course, make any required changes pursuant to an 
agreement under the Doha  Development Agenda. 
 Paragraph 30:  Do you intend to change the structure and amounts of marketing assistance loans, i.e. 
anti-cyclical payments?   
 
ANSWER:   The recently enacted 2008 Farm Act will result in some changes to the marketing 
assistance loan program and the countercyclical payment program 
 
3) Mining and energy 
 Paragraph 54:  Do you intend to improve the Regulatory Framework governing the electricity market 
to avoid continuous price increases?  WT/TPR/M/200/Add.1 
Page 162  
 
 ANSWER:   The electricity market in the United States is  governed at both the fe deral and at the state 
government level.  At the federal level, the Federal Energy Regulatory Commission (FERC) is 
primarily responsible for oversight of wholesale markets, most of which now operate as a competitive 
market with market-based rates.  The retail market, which is defined as the sale of electricity to the 
ultimate end user, such as the homeowner or comme rcial business, is regulated by state agencies.  
 
At the federal level, FERC continues to encourag e fair and effective competitive markets.  Some 
efforts by FERC include:  establishing rules and procedures that ensure fair treatment of all 
participants in the market; oversight of the wholesal e markets for electricity and natural gas to protect 
consumers from market manipulation; and crea ting and enforcing mandatory electric reliability 
standards to protect the bulk-power grid. In add ition, FERC is engaged in dialogue with members of 
state regulatory agencies and industry participan ts to determine how demand response programs, 
which can be instituted at either the federal or stat e level, could be instituted to mitigate against price 
spikes in competitive markets by en couraging users to modify their behavior to reduce demand when 
energy prices are peaking. 
 Paragraph 59:  Do you intend to standardize state laws on mineral rights in publicly-owned lands? 
 
ANSWER:   There is no plan at this time to standardize state laws  on mineral rights in publicly-owned 
lands.  
Paragraph 62: Do you intend to standardize stat e laws on national energy policies?  
 
ANSWER:  There is no plan at this time to standardize state laws with national energy policies.  The 
Federal Government, including the U.S. Department  of Energy, does not have jurisdiction over the 
legislative process of the States, and each the 50 st ates are free to pass their own laws as long as they 
do not conflict with Federal laws.  Paragraph 79: Do you intend to reduce import barriers for textiles and apparel?  
 
ANSWER:  The U.S. is committed to concluding a succes sful Doha Round this year that achieves 
new market access for agricultural and industrial pr oducts, including textiles an d apparel, and services 
in both developed and emerging market economies.  
 
We are committed to the agreement that Members ma de in the Doha Round that  non-tariff barriers are 
an integral and equally important part of the negotiations and will identify and work to reduce non-
tariff barriers in the next phase of negotiations.  As pa rt of this effort, on October 26, 2007, the United 
States and the European Communities (EC) jointly tabled in the WTO Negotiating Group on Market 
Access a negotiating text on reducing non-tariff barri ers to trade related to labeling of textiles, 
apparel, footwear, and travel goods.  The United States and EC are currently seeking formal, public 
co-sponsorship of the negotiating text from Member  governments.  Sri Lanka recently agreed to co-
sponsor the text. 
 
Paragraph 82: What conclusions have been reached from the differences with the EC regarding trade 
of civil aircraft within the fram ework of the WTO Agreements?  
 ANSWER:   The reports of the panels in the two disput es have not yet been received by the parties. 
 
5) Services 
 
Paragraph 118: What mechanisms will financial market o versight bodies use to determine companies’ 
capacities to manage risks? 
 ANSWER:   http://www.federalreserve.gov/boarddocs/supmanual/  WT/TPR/M/200/Add.1 
 Page 163 
 
 
 http://www.federalreserve.gov/boarddocs/srletters/ 
 The above links are to the Federal Reserve Bo ard’s supervisory manuals and Supervision and 
Regulation Letters.  Supervisory le tters address significant policy and procedural matters related to 
the Federal Reserve System's supervisory responsib ilities. These letters are issued by the Board of 
Governors’ Division of Banking Supervision and Regulation and are a means of disseminating 
information to banking supervision staff at the Boar d and the Reserve Banks, as well as to supervised 
banking organizations.  Changes to the bank regulator y or supervisory regimes to better manage risk 
and to integrate risk assessments into the ove rall decision-making would be set forth via these 
mechanisms.  
 
Paragraph 131: Do you intend to amend state laws re garding the nationality of national bank 
directors or members of the Board of Directors?  
 ANSWER:   In contrast to some of our trading pa rtners, the United States imposes no requirements on 
banks or insurance companies related to the citizensh ip of senior management or key personnel.  The 
United States does maintain some federal and state citizenship requirements for banks and some state 
level citizenship requirements for insurance relating to composition of boards of directors.  However, 
those boards are not directly involved in the management of the company and have more of an oversight function which is less important to inv estors.  In the case of national banks, the legal 
requirement that all board members be U.S. citi zens is routinely waived by the Office of the 
Comptroller of the Currency as long as a majority remains U.S. citizens. 
 
CHINA 
 Summary Observations (1) Economic Environment  
1. What is the United States view on the profoun d impact of the sub-prime crisis on its economy 
in the medium and long run? Please explain what  actions have been taken so far to address such 
impact and evaluate their effectiveness? Affected by such factors as the sub-prime crisis, oil and food 
price hike, a large number of countries are fa cing the pressure of economy slowdown and mounting 
inflation in 2008. How does the U. S. plan to overcome the dual challenge of getting its economy onto 
normal track of growth and curbing inflation?  
 
ANSWER:  The U.S. economy is currently going through a slow period, resulting from continued 
adjustment in the housing markets, the effects of the related credit market turmoil, and, more lately, 
continued high energy prices.  The U.S. has take n several steps to maintain economic growth and 
ensure that the needed adjust ment in markets continues. 
 
The Administration and Congress worked together to  produce a timely fiscal package, the Economic 
Stimulus Act of 2008, which will send out nearly $100 billion in stimulus pa yments to households 
through July, and which contains incentives fo r business to invest in new equipment.  
 
The Administration encouraged the creation of  the HOPE NOW Alliance of mortgage lenders, 
servicers, and counselors, to streamline efforts to help struggling homeowners, which has helped 1.4 
million homeowners with workouts.   The Administration has taken steps to expand acces s to FHA programs, enabling more than 200,000 
borrowers to refinance into afford able FHA loans since August 2007.  
 
We believe these efforts will keep the economy growing, although slow ly, for the next few quarters, 
and that growth will accelerate toward the end of the year, as markets work through the needed 
adjustments.  WT/TPR/M/200/Add.1 
Page 164  
 
 There is no indication that the rising price of oil a nd the recent surge in food  prices has yet affected 
core inflation, which might signal a developing in flation problem.  Over the 12 months ending in 
April, core consumer spending infl ation is 2.1 percent.  That is th e same increase as in the previous 
12 month period (ending in April 2007).   
The long-term prospects for the U.S. remain bri ght.  U.S. economic fundamentals are strong, with 
high productivity, open markets, and a flexible workfo rce.  All of these will contribute to solid growth 
in the future.   
(2) Trade and Investment Policy Framework  
 
2. (Page vii, paragraphs 5) The Secretariat Repor t notes that the U.S. has not fully implemented 
the WTO rulings and revised its domestic legislati ons relating to intellectual property rights and anti-
dumping measures.  Please explain the reason. Does the U.S. have any plan and timetable to 
implement relevant WTO DSB rulings to ensure the credibility of the DSB and the multilateral trading 
system as a whole?   
ANSWER:  We note that Congress has over the past several years undertaken major legislative 
implementation efforts in the FSC, 1916 Act , CDSOA  and Cotton  disputes.  The Administration will 
continue to work with the U.S. Congress on le gislation implementing DSB recommendations and 
rulings in the Section 211 , Section 110  and Hot-Rolled Steel  disputes.  (We also note that in the Hot-
Rolled Steel  dispute, the relevant U.S. authorities ha ve already addressed the DSB’s recommendations 
and rulings with respect to the calculation of an tidumping margins in the particular hot-rolled steel 
antidumping duty investigation at issue.)  The legislative schedule is controlled by Congress, however, and it is therefore not possible to provide  a precise schedule for completion of remaining 
steps. 
 
(3) Market Access for Goods 
 
3. (Page viii, paragraphs 14) The Secretar iat Report notes that the Byrd Amendment was 
repealed in 2007, but AD and CVD duties assessed befo re October 2007 continued to be distributed to 
U.S. producers.  
 
WTO DSB ruled that the Byrd Amendment viol ated related provisions of GATT1994, the Anti-
dumping Agreement and the SCM Agre ement, and requested the U.S. to change the legislation in 
conformity with its WTO obligations before 27  December 2003. However, the U.S. failed to 
implement the ruling. The Byrd Amendment was fina lly repealed at the end of 2007. From the entry 
in force of the Byrd Amendment to end 2007, to tal disbursements of the duties collected were 
estimated at approximately US$ 1.9 billion, acco rding to the Secretariat Report. Among those 
received the subsidies, the iron&steel producers benefited most and largest. 
 
a. Please explain why the U.S. hasn’t fulfilled it ob ligation as requested by the ruling of the DSB 
to stop distributing AD and CVD duties to its domestic producers? 
 
b. Could U.S. confirm whether it has stopped, at this moment, distributing AD and CVD duties to its domestic producers who supported the petition for investigation? If not, please explain why.  
 
ANSWER:  The President signed the Deficit Reduction Act into law on February 8, 2006.  That Act 
includes a provision repealing the Continued Dumping and Subsidy Offset Act of 2000.  Therefore, 
the United States has taken all actions necessary to implement the Dispute Settlement Body’s 
recommendations and rulings in the referenced dis pute.  Pursuant to the Deficit Reduction Act, 
antidumping and countervailing duties that are being collected on goods now entering the United States are not distributed to domestic firms.  Please provide specific information including statistics  WT/TPR/M/200/Add.1 
 Page 165 
 
 
 regarding which industries have been receiving su ch AD and CVD duties through these measures and 
how much were distributed to each industry and each major producer within that industry?  
 
ANSWER:  Please see the following website for annual reports on disbursements:  
http://www.cbp.gov/xp/cgov/trade/pr iority_trade/add_cvd/cont_dump/.  
 Could U.S. explain whether such distribution of AD and CVD duties is in conformity with the SCM 
Agreement, particularly whether such distribution co nstitutes subsidies as defined by this Agreement? 
Could the U.S. explain the reasoning if it does not regard it as subsidies defined by the SCM Agreement? 
 ANSWER:   In United States – Continued Dumping and Subsidy Offset Act of 2000, the panel 
rejected Mexico’s claim that the disbursements under the CDSOA were actionable subsidies.  The 
panel concluded that there was “no basis . . . to find that the CDSOA per se is ‘specific’ within the meaning of Article 2.1(a) of the SCM Agreement.”  The panel went on to observe that pursuant to 
Article 1.2 of the SCM Agreement, “a subsidy that is  not ‘specific’ falls outside of the scope of the 
SCM Agreement” (WT/DS217/R, WT/DS234/R, 16 September 2002, paras. 7.115-7.116).     
 
(5) Other Measures Affecting Trade  
4. The U.S. has been prohibiting the U.S. citi zens, permanent residents, companies or non-U.S. 
entities held by U.S. citizens or companies to im port products that are originated or partially 
originated from Cuba through its domestic laws and regulations. It is reported that the Office of 
Foreign Assets Control has initiated an investiga tion on the imports of stainless steel products from 
China which contains Cuban nickel. For the imports of above-menti oned products, the U.S. 
authorities are entitled to impose criminal and civil penalties. Criminal penalties include a fine up to 
250,000 USD or a 20-year imprisonment and civil penalties include a fine calculated on the basis of 
250,000 USD or twice the transaction value, whichever is higher.  
 
a. Please confirm whether the above-mentioned in formation, especially about the criminal and 
civil penalties, is correct or not. If  not, please provide the correct one. 
 
b. Please explain whether the above-mentioned la ws and regulations of the US, which obviously 
jeopardize the normal trade between the U.S. and other WTO  Members, are consistent with U.S. 
obligations under the WTO? If yes, please expla in the reasoning related to the WTO Agreements 
and specific Articles.  
c. How would the U.S. government address the above-mentioned issue between China and U.S.?   
 
ANSWER:  U.S. law prohibits the importation of articles that are "made or derived in whole or in 
part of any article which is the growth, produce or manufacture of Cuba."  Criminal penalties for 
violating this prohibition range up to 10 years in prison, $1,000,000 in corporate fines, and $250,000 
in individual fines.  Civil penalties up to $65,000 per violation may also be imposed.  With respect to 
whether the Office of Foreign Assets Control has initiated an investigation into the imports of 
stainless steel products from China containing Cuban nickel, it is the Treasury Department’s policy 
neither to confirm nor deny the exis tence of any current investigation. 
 
The United States’ embargo on trade with Cuba is fully compliant with the relevant obligations under 
our international trade agreements.  If any party is concerned about how to ensure they are in 
compliance with these U.S. laws and regulations, they may contact the Office of Foreign Assets Control at the Department of Treasury for compliance counseling . 
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 I. Recent Economic Development 
(1) Overview 
 
5. (part I ，paragraph 3) The Secretariat Report notes that openness allows U.S. producers and 
consumers to access goods, services, and capita l from abroad at the best conditions.  Does U.S. have 
any assessment regarding the benefits of domestic  producers and consumers from such openness? 
Would it be possible for the U.S. to shar e such information with Members, if any?  
 ANSWER:  There is no official assessment of the U.S.  Government.  However, according to the 2007 
Economic Report of the President, engagement in  the global economy through increased trade has 
contributed to rising living standards for the av erage United States citizen.  Firms engaged in 
international trade tend to be more productive, ha ve higher employment growth, and pay higher than 
average wages than domestically oriented firms. 
 
Increased international trade has ra ised real incomes, restrained prices, introduced greater product 
variety, spurred technological advances and i nnovation, and raised living standards in the 
United States.  Studies have estimated that th e annual payoff from U.S. trade and investment 
liberalization to date, including from the Kennedy  Round, the Tokyo Round, the Uruguay Round, the 
North American Free Trade Agreement and other fr ee-trade agreements, is up to $1.5 trillion.  These 
gains arise through many channels:  higher long-te rm levels of commerce in goods and services that 
come from trade and investment liber alization; increased product variety; more efficient allocation of 
resources; and better transportation and communication technology. 
 
In order to promote sustainable economic grow th, and to maintain an open trade and investment 
regime, what will the U.S. government intend to do or what are the measures to be taken by the U.S. 
government to enhance the competitiven ess of the domestic industries? 
 
ANSWER:  As President Bush stated in May of 2007 , America is committed to advancing open 
economies at home and abroad, including open investment  and trade.  International trade and foreign 
investment strengthens our economy, improves produc tivity, supports higher paying jobs jobs, and 
spurs healthy competition.  
 
(2) Output and Employment 
 
6. (page 4 ，paragraph 10) The Secretariat Report not es that labor productivity continued to 
expand, however the pace of increase is less than unit labor costs in 2007.  Please list the industries 
with highest growth of labor productivity, and explain why.  
 ANSWER:  The Bureau of Labor Statistics of the U.S. Department of Labor measures and reports on 
productivity—as measured by output per hour of all persons.  The seasonally adjusted annual rates of 
productivity change in the first quarter were 1.9 pe rcent in the business sector, and 2.2 percent in the 
nonfarm business sector. These productivity gains were due  primarily to declines in hours worked.  In 
manufacturing, productivity changes were: 4.1 percen t in manufacturing, 2.3 percent in durable goods 
manufacturing, and 7.0 percent in nondurable goods manufacturing. Manufacturing productivity 
growth reflected a 4.2 percent decline in hours wo rked in the sector and an output decline of 0.3 
percent.  The productivity measure varies from quarter to quarter. Additional information on this subject is available at:   http://www.bls.gov/  and http://www.bls.gov/bls/productivity.htm.  
 
(3) Monetary and Exchange Rate Policies 
 
7. (page 5 ，paragraph 15) The Secretariat Report notes that the dollar continued to depreciate in 
nominal and real terms during the review period as it has since 2002.  
  WT/TPR/M/200/Add.1 
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 a. Please elaborate the rational for such depreciation and its impact on the U.S. economy, 
particularly on import and export.   b. Various analyses indicates that there is a caus al link between dollar depreciation and oil and 
food price hike, and this might trigger global wide inflation. What is the U.S. view on such 
analysis? 
 
ANSWER:  The exchange value of the US dollar is wholly market determined. 
 
8. The Federal Reserve has made a successive rate cuts, and the base lending rate has been 
lowered to 2%. The exchange rate of USD has kept falling, with an exchange rate to Euro decreased 
10% in 2007. The depreciation is getting even faster in  early 2008, e.g. by 8.3% at the end of March 
from year end of 2007, among which, a 6.4% drop to  Euro and 9.5% drop to Japanese Yen. Various 
analyses believe that the depreciation of USD has brought significant negative impact on other 
economies, particularly the developing ones.  
 
a. What’s the U.S. view on the above-men tioned analyses about the impact of the dollar 
depreciation on other economies, particularly the developing ones?  b. Does U.S. deem it necessary to continue such a monetary policy related to the dollar 
depreciation? If so, how much is the room for further rate cuts? 
 
c. How does the U.S. evaluate the impact of such depreciation on its long-held status in the international currency system, particularly in  the international reserve asset and settlement 
currency? What kind of dollar policy is the U.S. government intends to maintain in the future and 
please explain its considerations in this regard.  
 
ANSWER:  The Federal Reserve is an autonomous institution which makes its decisions based on 
current and changing conditions, thus commenting on its  prospective decisions would be speculative.  
It has an informative website at:  http://www.fede ralreserve.gov which explains its policy process in 
reaching decisions.  
The United States view is that international discussi on of these topics would occur at the International 
Monetary Fund, which has oversight of these issu es.  The WTO does not have the policy framework 
or tools to address these issues, and thus it is not  the appropriate forum to discuss U.S. monetary 
policy.   (4) Fiscal Policy 
 
9. U.S. Treasury Secretary John Snow said at the annual meeting of IMF/WB on February 10
th 
that the U.S. will halve its fiscal deficit by 2009.  And this fiscal year’s budget report also mentioned 
that the Bush government planned to eliminate defic it and turn it into surplus by 2012.  However, 
according to the report published by the U.S. Treasu ry on March 12, the government deficit increased 
by 62% in 5 months from October 1 2007 than that of  last fiscal year, reaching US$263.3 billion.  
What steps does the U.S. plan to take to solve th e enlarged deficit and meet the target of turning 
deficit to surplus by 2012?  
ANSWER:  The FY2009 budget anticipated large deficits  in FY2008 and FY2009 brought on by the 
economic slowdown and the economic stimulus package,  and the increases we have seen so far in the 
monthly data are not surprises.  Even with these large deficits for this year and next, the FY2009 
budget projected small surpluses in FY2012 and FY2013.   The FY2009 budget recognized that the budget defi cit would worsen in FY2008 and FY2009, as the 
economy worked through the housing adjustment, re lated financial market turmoil, and high and WT/TPR/M/200/Add.1 
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 rising oil prices.  The FY2009 budget predicted a defi cit of $410 billion for FY2008 (the current fiscal 
year) and $407 billion for FY2009.  The increase in the budget deficit for FY2008 and FY2009 reflects the slowdown in economic 
activity.  However, the economy is expected to rec over, and, following the usual historical pattern, 
growth will be above normal while the economy grows back to its l ong-run potential to produce.  The 
recovery in the economy, combined with fiscal discip line, is sufficient to bring the budget back into 
surplus in FY2012 and FY2013.  The Administration will be releasing its annual Mid-Session Budget 
Review in the middle of July, which will include a new economic forecast as well as new projections 
for receipts, outlays, and the deficit.  (5) Balance of Payments  
10. Recently the U.S. has made significant results  in terms of reducing the trade deficit.  Could 
the U.S. explain what factors, including relevant me asures by the U.S., contribute to such reduction of 
trade deficit?  
ANSWER:  The U.S. current account deficit has declined from $863.2 billion (at a seasonally 
adjusted annual rate) in the fourth quarter of 2005 to  $691.6 billion in the fourth quarter of 2007.  As a 
share of GDP the current account defi cit declined from 6.8 percent in the fourth quarter of 2005 to 4.9 
percent in the fourth quarter of 2007.  
 
The decline in the current account de ficit has been driven by strong growth in exports as a result of 
improvements in the economic performance of the main trading partners of the United States.  Import 
growth has slowed recently as a result of weaker growth in the U.S. economy.  
11. Will any policy arrangements be adopted in futu re to promote the structural adjustment of 
domestic trade and to raise its saving rate?  What’s the U.S. view on the long term impact of the sub-
prime crisis on the domestic saving-consumption pattern?   
 
ANSWER:  The U.S. current account deficit (and corresponding capital account surplus) reflects a 
number of factors: the relatively strong economy in the United States, the desirability of investments 
in the United States, and low national saving. 
 President Bush reaffirmed the U.S. commitment to an open economy – and that includes open trade and open investment policies.  The President laid  out a number of policies in his budget to reduce 
disincentives to save. 
 
To encourage private savings, the President’s Budget for FY 2008 proposes to make his tax relief 
permanent and includes proposals to create three sa vings options:  the Lifetime Savings Accounts, 
Retirement Savings Accounts, and Employer Reti rement Savings Accounts.  The Budget also 
includes proposals to make Health Savings Accounts (HSA) more attractive to employers and consumers.  All of these would help famili es save and thereby boost personal saving. 
 
The Administration’s tax policy has lessened disincentives for saving by reducing the double-tax on capital income (because a tax on capital income is a tax on saving).  It took a long time to build up the excesses in housing and credit, but the U.S. economy is working 
through it.  We have seen positive de velopments in recent months.  Market participants are adjusting, 
disclosures are being made, capital is being raised, assets are repricing, and although it will take more 
time, the markets are slowly working off the excesses.  Long-run domestic saving-consumption 
patterns are a function of several factors such as domestic and foreign interest rates, demographic 
patterns, tax rates, and other factors.     WT/TPR/M/200/Add.1 
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 (6) Developments on Trade and Investment 
 
12. (part I ，paragraph 28) The Secretariat Report not es that both the import and export of 
primary products expanded significantly due main ly to the growing importance of mining.  Does the 
U.S. believe that the dollar depreciation is also a contributing factor to su ch expansion of primary 
products imports? 
 ANSWER:   U.S. primary product imports, notably petrol eum imports, have risen in nominal terms as 
the price of these commodities has risen substantially.  In real terms, consump tion of oil is falling in 
the United States. 
 
II. Trade Policy Regime: Framework and Objectives 
(1) Overview 
 
13. (page 12, paragraph 2) The Secretariat Report notes that the Trade Promotion Authority which the Administration views as an important tool  for achieving U.S. trade objectives expired in 
July 2007.  Could the Administration explain that, wit hout the Trade Promotion Authority, how it 
could ensure other WTO Members that any Doha resu lt by consensus of the Membership, particularly 
the U.S. commitments therein, would not be cha nged by the Congress or even requested to a re-
negotiate?  
ANSWER:  There is broad support in the U.S. Congress for an ambitious result from the Doha Round 
negotiations.  Thus, the mechanics of obtaining congressional approval of the outcome of these 
negotiations begin with securing a strong result – one that achieves new trade flows and opens 
markets in agriculture, NAMA and services.  With an  ambitious agreement that provides new market 
access, the U.S. Congress as well as the legislat ures of other WTO Members will have a strong 
incentive to approve and implement the outcome.  
(3) Foreign Investment Regime 
 
14. (page 15 ，paragraph 18-22) The Secretariat Report notes that FINSA requires “national 
security” investigations on foreign mergers and acqui sitions. However, the Act and its regulations and 
guidance do not explicate the definition of “na tional security”. According to FINSA, “national 
security” includes issues relating to “homeland secu rity” as well. Besides, FINSA automatically 
subjects to a 45-day CFIUS investigation all transactions that result in “foreign government control” or control of U.S. “critical infrastructure”.  FINSA also authorize CFIUS to conduct investigations on foreign investment transactions regardless of the sh areholding percentage, at CFIUS own initiative.  
 Could the U.S. confirm the above-mentioned informa tion, particularly on whether there is an explicit 
definition of “national security”?  If yes, please prov ide such definition and the relevant provisions of 
the Act or any other relevant law.  If not, could the U.S. explain how the U.S. ensures the 
transparency, fairness and predictability of CFIUS’ reviews and investigations? 
 ANSWER:   Section 721, the current CFIUS regula tions, and the proposed CFIUS regulations 
(available at:  http://www.ustreas.gov/offices/internati onal-affairs/cfius/) do not directly define the 
term “national security.”  Section 721(f), however, provides an exemplary list of factors that CFIUS will consider in determining whether a transaction presents national security concerns.  Adding to the 
transparency and predictability of the CFIUS pro cess, the statute, executive order, and regulations 
governing the CFIUS process are all publicly availa ble, and proposed new regulations have been 
published for public comment. CFIUS also maintains a public webpage describing the review process.  
Furthermore, as required by FINSA, later this year  the Treasury Department will publish guidance on 
the types of transactions that CFIUS has revi ewed and that have presented national security 
considerations.  To ensure fairness of the process, CFIUS focuses its review in each case, regardless WT/TPR/M/200/Add.1 
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 of the parties, on genuine national security concerns , not economic or OTHER national interests or the 
creation or protection of national champions.  
Please clarify the definition of “foreign government control”,  “critical infrastructure” and “critical 
technology” relating to national security issues as referred to in the Act. 
 
ANSWER:  FINSA implementation procedures have been  specified in the Executive Order of 
January 23, 2008 and in the proposed regulations . From 2005-2007, a leading commercial database 
(Thomson) shows 5,100 foreign acquisitions of U.S.  companies.  CFIUS reviewed only 325 (7%) of 
the filings during this period.  Additional data re garding CFIUS reviews will be included in an annual 
report that will be provided to Congress by July 31, 2008, as required by FINSA.  A public version of 
this report will be released at that time as well. Fu rthermore, as required by FINSA, later this year the 
Treasury Department will publish guidance on the types of transactions that CFIUS has reviewed and 
that have presented national security considerations.   
 
Please provide updated information on the implemen tation procedures of FINSA of the Act or any 
other relevant law, particularly on how many such investigations have been carried out, on foreign 
mergers and acquisitions in which sector, by  what countries, and with what results. 
 
ANSWER:  FINSA implementation procedures have been  specified in the Executive Order of 
January 23, 2008 and in the proposed regulations . From 2005-2007, a leading commercial database 
(Thomson) shows 5,100 foreign acquisitions of U.S.  companies.  CFIUS reviewed only 325 (7%) of 
the filings during this period.  Additional data re garding CFIUS reviews will be included in an annual 
report that will be provided to Congress by July 31, 2008, as required by FINSA.  A public version of 
this report will be released at that time as well. Fu rthermore, as required by FINSA, later this year the 
Treasury Department will publish guidance on the types of transactions that CFIUS has reviewed and 
that have presented national security considerations. 
 
Are there any specific provisions/rules on civ il punishment against violation of the Act? 
 
ANSWER:   Section 800.801 of the proposed regulations specifies penalties for violations of Section 
721. 
 
15. CFIUS has been repeatedly initiating review procedures on the acquisition of 3Com by China Huawei and Bain Capital. Since network equipmen ts are defined by the US as “sensitive area”, the 
intention of acquisition immediately triggered the US  review procedure after it was announced to the 
public.  3Com pointed out that Huawei, as a minority  stake holder, would have no right to obtain the 
American sensitive technologies or the data of its sales to the US government. 3Com also announced 
that it would have a strict control over its sensitiv e technologies and avoid any illegal transfer of the 
sensitive technologies.  Finally, this transaction was aborted.  a.  What are the review criteria and 
procedures of the CFIUS when conducting security  review on foreign investments? Do the review 
criteria vary to acquisitions of companies from c ountry to country? If yes, what are the specific?  
 ANSWER:   We are prohibited by law from disclosing publicly information about specific cases in 
order to ensure the confidentiality of the process for all parties to transactions, so the following 
response is general in nature.  The Executive Order and regulations outline the general procedure for CFIUS reviews.  The 
regulations provide the criteria for determining when CFIUS may review a transaction—i.e., whether 
a transaction is a “covered transaction.”  As noted abov e, Section 721(f) provides an exemplary list of 
the factors that CFIUS will consider in determining whether a transaction presents national security concerns.  CFIUS assesses whether transactions present national security concerns on a case-by-case basis.  The CFIUS process is a voluntary process.  However, CFIUS can review transactions on its 
own initiative, where appropriate.  WT/TPR/M/200/Add.1 
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 b. What is the definition “sensitive area”? U nder such definition, if any, what products or 
equipments fall in the cate gory of “sensitive area”? 
 
ANSWER:   The term “sensitive area” is not used in  section 721 or the CFIUS regulations.  CFIUS 
assesses whether transactions present national secur ity concerns on a case-by-case basis.  Nothing 
about section 721 or the regulatory scheme created to implement it is intended to direct where foreign 
parties should invest in the U.S. economy, and CFIUS does not identify any sectors as being closed to foreign investors.  CFIUS examines all relevant ci rcumstances that a particular transaction presents, 
regardless of sector or industry, to determine whet her the transaction raises national security concerns. 
 Could the U.S. provide detailed information on the reviews by CFIUS, particularly on how many 
reviews, on what acquisitions, of what products or equipments, by what companies from what 
countries?  Could the U.S. also provide the reasoning as announced by CFIUS for each negative result of such reviews?   
ANSWER:  As noted in the response to question 14.c, for the period 2005-2007, the Thomson 
database shows 5,100 foreign acquisitions of U.S. co mpanies.  CFIUS reviewed only 325 (7%) of the 
filings during this period.  Additional data rega rding CFIUS reviews will be included in an annual 
report that will be provided to Congress by July 31, 2008, as required by FINSA.  A public version of 
this report will be released at that time as well. 
 
Does CFIUS take into consideration the opinions of the Congress, media and/or other interested 
parties in the course of reviewing? If so, how and why?  
 
ANSWER:  CFIUS focuses on national security concerns alone, not economic or other national 
interests.  Furthermore, CFIUS is subject to st rict confidentiality requirements.  CFIUS does not 
discuss specific cases with the public  or the media.  The law requires CFIUS to inform Congress of 
each case only after CFIUS has concluded action on the case,  which minimizes political pressures on 
the process.  Congress is also required by law to stri ctly protect the confidentiality of any information 
provided by CFIUS with respect to any case. 
 
(4) International Relations 
(1) World Trade Organization  
16. (page 17, paragraph 31) The Secretariat Report not es 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:   The United States is in the midst of a ma jor overhaul of the Federal Procurement Data 
System (FPDS), which it expects to complete with in the next few months.  When the FPDS overhaul 
is complete, the United States will submit its outstan ding government procurement notifications to the 
WTO Secretariat.  
 
17. The U.S. economy has slowed down mainly due to  the outburst of sub-prime crisis in the late 
2007.  This has brought negative impact on the world economic development. In  general, people fear 
that this will result in the rise of trade protectioni sm in major developed countries including the U.S, 
which would also have negative impact  on the Doha Development Agenda.  What is the U.S. view to 
such opinion?  What actions does the U.S. plan to  take by playing a leading role with its own 
contributions to push forward the Doha multila teral trade negotiations, as a key economy that 
benefits most from the multilateral trading system?  
ANSWER:   The United States’ economic growth increasingly depends on its ability to trade goods 
and services with foreign buyers and sellers, with export growth currently providing critical support to WT/TPR/M/200/Add.1 
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 the U.S. economy.  Over the past year (first quarter 2007 to first quarter 2008), the U.S. economy 
expanded by 2.5 percent, with goods and service ex ports accounting for 41 percent of the expansion. 
With the economy slowing recently to less than 1 per cent growth, exports remain important in helping 
sustain jobs and growth.  Key government policy to he lp sustain this growth is the negotiation of new 
trade flows under the Doha Round negotiations and bilateral free trade agreements with foreign 
governments.  Market opening that results in new trade flows can provide the opportunity to further 
boost economic growth.  Studies show that the great er the level of ambition achieved in the Doha 
Round negotiations the greater the bene fits will be to all countries, in  particular developing countries, 
which stand to gain the most economic benefits  through new market openings in key emerging 
economies.  The United States will continue to work  to break down barriers to trade and investment 
wherever it can, and will continue to work for a successful conclusion to the Doha Round of trade 
talks this year.  At the same time, it is pursui ng opportunities to open up new markets by passing free 
trade agreements.   
(ii) Preferential and other arrangements 
 18. Please provide the statistics with regard to percentage of excluded products in the FTAs 
signed and implemented, including those in force and those concluded but yet to be implemented, by 
tariff line and by trade value.  
 
ANSWER:   The United States would be pleased to provide information on tariff line liberalization 
through the WTO Committee on Regional Trade Agre ements (CRTA), and the RTA transparency 
mechanism that is in use there.   19. Please provide information on the percentage of imports under the FTAs’ preferential regime 
to the overall imports in 2007,  on a country-by-country basis.   
 
ANSWER:  Percentage of total U.S. imports in 2007 from individual FTA partners under FTA 
preferential regimes:  
Australia 0.2% 
Bahrain 0.01% 
Chile 0.3% 
Israel 0.1% 
Jordan 0.02% 
Morocco 0.01% 
NAFTA (Canada) 8.2% 
NAFTA (Mexico) 6.9% 
Singapore 0.05% 
Domincan Republic 0.1% 
El Salvador 0.1% 
Guatemala 0.1% 
Honduras 0.1% 
Nicaragua 0.0% 
 20. Please provide detailed data on the contribution of FTAs in force to the growth of bilateral 
imports and exports of the U.S. in 2007, on a country-by-country basis. 
 ANSWER:   Free trade agreements can be an important catalyst of cross border trade.  For example, 
since 2003, the year prior to entry into force of th e U.S.-Chile FTA, total bilateral trade between our 
countries has grown approximately 170 percent.  Also, though the U.S.-Morocco FTA has only been in effect for two years, U.S-Morocco trade has al ready grown substantially.  From 2005 (pre-FTA) to 
2007 (post-FTA), bilateral trade in goods be tween Morocco and the United States has doubled. 
 
The U.S. International Trade Commission maintains an extensive database that has U.S. import data 
by country.  China is encouraged to use this free resource.  http://dataweb.usitc.gov/. 
  WT/TPR/M/200/Add.1 
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 Aid for Trade 
 
21. Please explain what initiatives ha ve been undertaken by the U.S.  to fulfill its commitments on 
Aid for Trade? Please also explain how such new initiatives are different and additional from its 
previous ones and those under other framework? 
 
22. It seems that the U.S. has yet more to do to  meet its commitment of 0.7% of gross national 
income (GNI) as official development assist ance (ODA) under the Monterrey Consensus.  What 
actions does the U.S. plan to take in order to effecti vely meet the target at an early date? Or the U.S. 
imply has no intention at all to meet such a target? 
 ANSWER:  Paragraph 41 of the Monterrey Consensus ur ges developed countries to “make concrete 
efforts towards the target of 0.7 percent of gro ss national product (GNP) as OD A”.  The United States 
and a number of other countries do not accept a formal target measuring aid as a percentage of GDP because the effectiveness of aid is more importa nt than quantity, particularly when ODA can 
complement other sources of financing for development. 
 However, in 2002, President Bush pledged at Mont errey to increase ODA by 50% over 2000 levels by 
2006.  The 50% goal was achieved by 2003 and by 2006; the United States had increased ODA levels 
more than 130% over 2000 levels.  At the 2005, Gleneagles G8 Summit, President Bush announced 
the United States would double assistance to A frica between 2004 and 2010, a pledge the 
United States is also on track to meet.  U.S. assi stance to Africa was $6.8 billion in 2006, 50% above 
the 2004 level.  The Paris Declaration on Aid Effectiveness form alized the commitment by donors and partner 
countries to take action to adopt best practices in the delivery and management of aid resources, as set 
out in paragraph 43 of the Consensus, and agreed to the achievement of specific targets by 2010.  In 
addition to joining this commitment to improve  aid effectiveness, donor nations increased net 
disbursements of ODA by 78 percent between 2002 and 2006.  ODA is only one element of U.S. contributions to economic development in poor countries.  A more 
complete measure of how U.S. policies support economic growth and poverty reduction in the 
developing world is to examine total public and private sector resource flows from the U.S. to the 
developing world.  By including net trade and invest ment, personal remittances , and private grants by 
companies and NGOs in the total, it becomes clear  that support for developing countries takes many 
different forms and does not come from the govern ment alone.  However, government policies both 
promote and facilitate trade, investment, and other financial flows.  Efforts to support and increase 
such flows promote development, employ ment, and growth in poor countries. 
 In 2005, total resource flows from the U.S. to th e developing world – ODA, net imports, net private 
investment, personal remittances, and private grants  by companies and NGOs – reached $638 billion.  
This figure represents 5.1 percent of U.S. GDP. U.S. ODA of $27.6 billion, the largest amount of 
ODA extended by a single country, was 0.22 percent of GDP. 
 
23. It is believed that provision of Duty-fr ee quota-free treatment to products imported from 
LDCs was a significant outcome of HK Ministerial Conference, which was also a mandatory obligation for all developed members, including the U.S.  Could the U.S. confirm whether it has 
fulfilled this obligation? If yes, please provide relevant information including statistics and any 
possible exclusion. If no, please explain the reason and its plan, if any, to fulfill such obligation. 
 
ANSWER:  In Hong Kong, WTO Members agreed to pr ovide duty-free and quota-free market access 
to products originating in LDCs.  The United Stat es 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.  We are working on im plementing the terms of the decision in a fully WT/TPR/M/200/Add.1 
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 transparent manner that will result in commercia lly meaningful opportunities for the LDCs and 
we take seriously the need to address the full array of  factors that contribute pos itively to utilization of 
preferences.  For additional information, please refe r to the United States’ notifications to the WTO 
concerning duty-free market access for LDCs, c ontained in document WT/COMTD/W/149 and its 
addendums. 
 
III. Trade Policies and Practices by Measures 
(2) Measures Directly Affecting Imports (1) Customs procedures 
 24. (page 25, paragraph 16)  The Secretariat Report notes that a customs bond must be posted for 
each importation of merchandise.  The bond could be  as high as three times of the total of the 
imported merchandise value plus import duties, tax es, and fees.  According to CBP, bonds allow 
importers to take possession of their merchandise ahead  of time thus facilitating trade.  However, such 
a compulsory requirement will tie up the importer’ s cash flow to a great extent therefore not 
facilitating trade.  Please elaborate the considerations in making this customs bond requirement.  
 ANSWER:   Under the U.S. system, goods are permitted to enter the customs territory of the 
United States without having paid duties or other liabilities imposed by law.  In this manner, the 
United States expedites the entry of goods and does not make the importer wait for the final 
determination of duties owed or other liabilities unde r the law.  However, since the goods will have 
been long since released from U.S. Customs and Bo rder Protection (CBP) custody and would not be 
available for return to satisfy any obligations of th e importer when they are legally determined to be 
due, it is necessary for CBP to have some security against payment of amounts lawfully owed.  The 
fees surety providers charge an importer to obtain a bond are generally a very small percentage of the 
face value of the bond. 
 
25. (page 27, paragraph 24) According to the Implementing Recommendations of the 9/11 Commission Act of 2007, all containers from a U.S.-bound vessel must be scanned using non-
intrusive imaging and radiation det ection equipment. However, accord ing to C-TPAT, its participants 
shall enjoy lower inspection rate.  Please clarify the discrepancy between the Act and the Programme.  
 
26. Please provide the findings of assessment of the 100% scanning pilot programme and if 
possible, explain the conclusions of the assessment. China is concern ed that the implementation of 
100% scanning requirement will create extra customs procedures and increase trade costs. Could the 
U.S. elaborate what measures might be adopted to avoid or minimize the negative impact of such 
requirement to international trade?  
 
ANSWER (25-26):  Customs and Border Protection (CBP) and the Department of Energy (DOE) 
continue to study and evaluate the results of the Secure Freight Initiative (SFI) pilot programs.  All 
data gathered from these pilot programs will be reported to our Congress.  Any decision on the 
expansion of SFI will be informed by the inform ation yielded from the initial pilot ports.  Any 
expansion will be done in a reasoned,  responsible, and risk-based manner. 
 
27. The U.S. Department of Homeland Secur ity has published a “10+2”requirement which 
requests the submission of 10 data elements by importe r or their designated agent and 2 data elements 
by carrier or their designated agent 24 ho urs prior to loading the U.S.-bound vessel.  
 
a. The U.S. emphasized that this requiremen t was made for security reason and not for 
commercial or trade enforcement purpose.  Howeve r, there are wide concerns that too much and 
strict port security requirements make it a drawba ck from trade facilitation.  We would like to 
know what efforts have been or will be made by the U.S. to minimize its negative impact on 
trade.  How have the public concerns been taken into consideration by the U.S. authorities? 
  WT/TPR/M/200/Add.1 
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 ANSWER:  In developing the rule, CBP has consulted clo sely with traders.  In addition to reviewing 
the comments submitted on the draft rules, CBP is continuing its outreach to the trade community 
regarding the Security Filing.  In this regard, the participation of traders in the Advance Trade Data 
Initiative (ATDI) has been instrumental in CBP’s successful crafting of the proposal.  Through the 
collaborative ATDI process, CBP was able to identify data that commonly exists, is currently used by 
traders, and, if obtained in a timely fashion, woul d greatly benefit CBP’s targeting and analysis of 
potentially high-risk cargo prior to U.S. arrival. 
 
b. How will the issue of commercial inform ation confidentiality be properly addressed?  
 
ANSWER:   The United States fully appreciates the impor tance of maintaining the confidentiality of 
commercial information, and will do so in accordance  with the Trade Secrets Act and the Privacy Act. 
 
c. Please update the progress on this requirement. 
 ANSWER:  The United States is currently in the process of developing a rule on this topic. 
 28. According to the ruling of the Ninth Circuit Court of Appeals in Apr. 2008, U.S. customs and boarder control agencies have the authority to  search, review and copy the content of the 
laptops/electronic equipments without identifying specific reason for suspicion.  Please explain what 
measures have been adopted by the U.S. to ensure that these contents were not subject to abuse.  
 ANSWER:   The question does not specify the ruling in  question and we are therefore not in a 
position to comment.  As noted, the United States fully appreciates the importance of maintaining the 
confidentiality of commercial info rmation, and will do so in accord ance with the Trade Secrets Act 
and the Privacy Act.  (iii) Rules of Origin 
 
29. (page 29, paragraph 35) The Report notes th at “Determination of origin relies on self-
certification.” Please explain what the term “self-certification” means. 
 
ANSWER:  CBP generally accepts importer assertions as to the origin of goods without verification 
and, in that sense, relies on “self-certification” by importers.  However, CBP does engage in spot verifications, as well as verifications when it suspects the asserted country of origin is incorrect.  
 30. (page 29, paragraph 36) The Report notes that  “however, these general standards may be 
adapted and interpreted further by agencies other th an CBP to fit the needs and purposes of particular 
context in which non-preferential rules are applied. ” Please clarify what are the “agencies” as 
referred to in the paragraph.  What is the relati onship between the CBP and the “agencies” in terms 
of ROO interpretation right?  
 
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 requirements.  31. (page 29, paragraph 37) The Report notes that th e “wholly obtained” criterion is used in the 
U.S. FTAs, including those that have entered into force since last review.  As we understand, “wholly 
obtained” is only one of the criteria.  Could the U.S. clarify what are the other criteria?  
 ANSWER:   U.S. preferential rules of origin schem es employ the “wholly obtained” criterion for 
goods that are wholly the growth, product, or manufacture of a particular country.  For goods that do not meet this criterion (goods that consist in whole or in part of materials from more than one country) 
most U.S. preferential rules of origin schemes are based:  WT/TPR/M/200/Add.1 
Page 176  
 
 • on a change in name, character, and use (substantial transformation) and  
 • on a required minimum local value content; unless speci fied otherwise, the cost of foreign materials 
may not be included in local value content unless they  have been substantiall y transformed into a new 
and different article of commerce before being u sed to produce the good that is imported into the 
United States. 
 32. (page 30, paragraph 38) The Report mentione d about “double substantial transformation”.  
Please explain how to apply the “double substantial transformation” criterion to determine the 
country of origin.  
 
ANSWER:   A substantial transformation has occurred wh en an article emerges from a process with a 
new name, character or use, different from that possessed by the article prior to processing. A double 
substantial transformation is when the result of the first substantial transformation is used to produce 
another article with a new name, character or use. 
 
33. (page 30, paragraph 38)  The Report mentioned that to qualify for preferential tariff treatment 
under the programmes, apparel must use U.S. compon ents, regional components up to an annual cap.  
Please explain how the annual cap is calculated, wh at factors are considered/included, and if there is 
a uniform formula for the calculation. 
 ANSWER:  The amount of the ‘annual cap’ is established by Congress as a specific percentage of the 
aggregate square meter equivalents of all appare l articles imported into the United States in the 
preceding 12-month period for which data are availabl e.  The calculation is a simple mathematical 
exercise based on the statutory percentage established by Congress.  
34. (page 30, paragraph 39) The Secretariat Report notes that “this scheme benefits U.S. 
companies with investments in Mexico and Canada , and helps to integrate regional production.”  
Please elaborate how such schemes help to integrat e regional production, and what are the policies 
and measures adopted or will be adopted by the U. S. to promote regional production integration. 
 
ANSWER:   A limited amount of woven apparel ass embled in the CAFTA-DR from NAFTA inputs 
can enter Mexico, Canada or the U.S. duty-free as an originating CAFTA-DR product.  The concept 
was designed to allow greater sourcing flexibilities a nd to build on existing commercial relationships 
between NAFTA fiber, yarn and fabric pr oducers and CAFTA-DR apparel manufacturers. 
 
(iv) Tariff 
 
35. According to U.S. current tariff schedule, high tariffs, whose tariff rates are 3 times higher 
than the national average, account for 5% of the tota l tariff-lines.  The tariff rates of tobacco, yogurt 
and peanuts are as high as 160% to 350%.  The tari ff rates of other agriculture products range from 
50% to 110%.  High tariffs and tariff peaks concen trate on agriculture products, on which the U.S. has 
strong competitiveness, as well as textile and clot hing, footwear and travel products, on which 
developing countries have strong export interests.  Please explicate the policy consideration behind 
the tariff structure and the possible effect on export from developing countries to U.S. 
 
ANSWER:  Generally, the highest agricultural tariffs ma intained by the United States are the over-
quota tariffs maintained on products subject to  tariff-rate quotas.  These tariff-rate quotas were 
established during the Uruguay Round negotiations when the United States converted the absolute-
quotas on these products into tariff-rate quotas.   The average bound U.S. agricultural tariff is only 8.9% , among the lowest in the world.  In addition, 
imports of most products of de veloping countries benefit from duty-free treatment under various 
unilateral preference programs.  The United St ates will lower all its bound tariffs within the  WT/TPR/M/200/Add.1 
 Page 177 
 
 
 framework of multilateral negotiations where all c ountries make similar contributions to promoting 
international trade.  36. Recently, the CBP has changed the custom cl assification of multiplayer hard-wood parquet, 
from the original HS heading 44.18.30 to heading 44.12.  Consequently multiplayer parquet imports 
are subject to a duty of 8%, instead of the orig inal duty-free treatment, which greatly affects the 
exporting enterprise and future exports.  Please explain the reasons for this tariff classification 
adjustment. 
 
ANSWER:   Tariff classification is determined by the attributes of a specific product.  Inquiries about 
the tariff classification of specific products should be provided to the U.S. Customs and Border 
Protection (CBP).    
Please provide the import volume of the affected  products in the latest 3 years and identify the 
principal suppliers of such products. 
 ANSWER:   U.S. import volumes of these or any tariff h eadings can be found on-line at the U.S. 
International Trade Commission at dataweb.usitc.gov  
(v) Other charges affecting imports 
 
37. (page 34, paragraph 61-64) The Secretariat Repor t notes that U.S. applies federal excise taxes 
on certain imported and domestic products. Reduced ta x rates are applied for domestic brewer with an 
annual production of 2 million barrels  of beer or less and domestic wine producers with an annual 
production of 0.15 million wine gallons or less.  Also , the U.S. does not apply a value added tax. Sub-
federal governments may impose sales taxes and additional excise taxes on imports and domestic 
products. 
 
 a. Please explain the tax bases fo r sales tax and additional excise tax imposed by the sub-federal 
governments respectively for domestic products and for imported products.  
 
ANSWER:   State and local sales taxes are taxes collected on retail sales of goods and services to 
consumers.  Without more specific information,  we cannot comment on the portion of the question 
that concerns any “additional excise taxes” that may be imposed by States and local governments. 
 
b. If the tax bases are diffe rent for imported and domestic products, please explain why. 
 
ANSWER:   The total production of beer and wine by sm all producers is quite sm all, and these small 
producers frequently face higher costs of production, so any excise tax advantages offered to these 
producers have no trade distorting effect. 
 
c. Please justify the preferentia l tax policy for domestic brewers and wine producers, and its 
conformity with the WTO rules.  
 ANSWER:  The total production of beer and wine by sma ll producers is quite sm all, and these small 
producers frequently face higher costs of production, so any excise tax advantages offered to these 
producers have no trade distorting effect.  (vi) Anti-dumping and countervailing measures  
 
38. Sec. 210.16(c) of the Commission’s Rules of  Practice and Procedure stipulates that U.S. 
international Trade Commission can issue Gene ral Exclusion Orders (GEOs) in the 337 
investigations. Sec. 210.39(b) of the Commission’s Ru les of Practice and Procedure stipulates that in WT/TPR/M/200/Add.1 
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 case of a parallel suit in a district court, the distri ct court will suspend the suit and resume after the 
ruling of the ITC has been issued.   For imported products, the complainant may initiate a 337 investigation, request for a GEO and at the 
same time file a parallel suit with a district c ourt. However, for the U.S. domestically produced 
products, the complainant can only file a suit with the district court and can not apply for a GEO. 
Correspondingly, this means that foreign produ cers and importers may face two connected suits, 
while the local producers only need to ha ndle one suit at the district court.  
 
a. Please explain how this treatment is consistent  with the national treatment principle of WTO. 
Please also explain the consistency of the me asure with Article 27 of the TRIPS Agreement, 
which requires that “...patents shall be av ailable and patent rights enjoyable without 
discrimination as to the place of invention, .. . and whether products a re imported or locally 
produced.” 
 
ANSWER:   The issuance of general exclusion orders is governed by section 337(d)(2).  While it is 
possible that a patentee may commence a civil action in a United States district court and also file a 
complaint at the ITC under section 337, the respondent may obtain a stay of the district court proceeding effective until the conclusion of the ITC proceeding (and any appeals there from) in 
accordance with 28 U.S.C. 1659(a).  The record of  the ITC proceeding may then be used in the 
district court action, subject to the Federal Ru les of Civil Procedure and the Federal Rules of 
Evidence.  These provisions are consistent with the GATT 1994.  Article 27 of TRIPS relates to 
patentable subject matter and has no relevance to section 337, which does not address or affect what 
constitutes patentable subject matter. 
 
b. Please explain the consistency of the GEO with Article 42 of the TRIPS Agreement which 
requires “Fair and Equitable Procedures”. 
 
ANSWER:  Section 337 proceedings are conducted in accordance with the adjudicative provisions of 
the Administrative Procedure Act.  These provisions ensure that the Parties to any proceeding receive 
fair and equitable treatment.  We note that Ar ticle 49 is the relevant provision of the TRIPS 
Agreement, which requires, in relevant part, th at “such procedures shall conform to principles 
equivalent in substance to those set forth in this  Section” [Section II of the TRIPS Agreement].  We 
also note that a dispute settlement panel recognized that application of GEOs did not as such violate the General Agreement on Tariffs and Trade. 
 
c. Please indicate whether U.S. is considering amending the application of GEO.  
 ANSWER:   The Administration is not currently cons idering plans to amend section 337(d)(2). 
 39. U.S. has initiated numerous antidumping inves tigations against China in the past 30 years. 
The amendment of U.S. antidumping law in the 1980s has allowed cumulative assessment in the 
determination of injuries. Art. 771(7) (G) of th e Trade Act of 1974 (19U·S·C·§1677(7) (G)) stipulates 
that in the determination of “material injury” or “threat of material injury” for a certain domestic 
industry, “if such imports compete with each ot her and with domestic like products in the United 
States market”, “the Commission shall cumulatively assess the volume and effect of imports of the 
subject merchandise from all countries”. It is be lieved that the cumulative approach of assessment 
leads to a greater possib ility of finding injuries. 
 
Could the U.S. explain such practice of cu mulative approach conform to the AD Agreement? 
 
ANSWER:   Article 3.3 of the Antidumping Agreement specifically recognizes that investigating 
authorities may cumulate the injurious effects of subject imports from more than one country based on 
the view that simultaneous imports from several countries can have an aggregate effect on the  WT/TPR/M/200/Add.1 
 Page 179 
 
 
 industry in the importing country. US law and practice are consistent with Article 3.3.  Further, the 
Appellate Body found in the dispute involving OCTG from Argentina that cumulation is also 
permissive in five year reviews conducted pursuant to Article 11.3 of the ADA.  40. The U.S. Department of Commerce h as initiated 11 joint antidumping/countervailing 
investigations against imports from China since th e end of 2006. China notes meanwhile, U.S. still 
denies the market economy status of China. It is also  noted that it is U.S.’s consistent practice not to 
apply countervailing investigations  on the non-market economy countries. This can be verified by 
various rulings of courts and th e Department of Commerce. In both the report entitled “U.S.-China 
Trade Commerce Faces Practical and Legal Challe nges in Applying Countervailing Duties” submitted 
by the U.S. Government Accountability Office (GAO) to the Congress in Jun. 2005, and the 
testimony of Mr. Loren Yager, the chief for the international affairs and trade of GAO, to the 
Congress (U.S.-China Trade Challenges and Choices to apply Countervailing Duties to China), it was 
recognized that there are legal and practical difficu lties with regard to countervailing investigations 
against China. The explanation offered by U.S. on this discrepancy is that China’s current economic 
situation is already very different from the traditi onal soviet mode, and that the criteria for initiating 
countervailing investigations are already met. Neve rtheless, the Department of Commerce states quite 
the opposite: that the major factors of production, including land, loans, raw materials are controlled 
or manipulated by the government and there’s no effective market or market price.  Please justify the 
applicability of countervailing investigations on th e products from a “non-market economy” as 
recognized by the U.S.  
 
ANSWER:   The Department of Commerce has fully e xplained its rationale for applying the U.S. 
countervailing duty (CVD) law to China.  In initiati ng the CVD investigation involving glossy paper 
exports from China in 2006, Commerce determined th at it was appropriate to revisit the question of 
the applicability of the CVD law to non-market ec onomy countries, and in particular, China and its 
economy today.  In that investigation, Commerce fou nd that there is nothing in the U.S. CVD law that 
prevents applying that law to a non-market econom y.  Commerce also concluded that in the case of 
China, its economy today is vastly different from the economies addressed when Commerce’s policy 
regarding non-market economies was articulated in the mid-1980s.  In that regard, Commerce further 
found that the nature of the Chinese economy t oday allows Commerce to identify and measure 
countervailable subsidies.    Please explain what fundamental changes have o ccurred in China’s economy that has qualified as 
applicable to the countervailing investigations?  
 
ANSWER:   Commerce explained these changes in detail in the glossy paper CVD investigation. 
They included, inter alia, (1) that private i ndustry now dominates many sectors of the Chinese 
economy, and entrepreneurship is flourishing; (2) foreign trading rights have been given to over 
200,000 firms; (3) many business entities are generally free to direct most aspects of their operations, 
and to respond to (albeit limited) market forces; (4) th e role of central planners is vastly smaller than 
in the past; and (5) many more companies’  export activities are independent from the PRC 
government in comparison with the early- to mid- 1990s.  Given these changes, Commerce determined 
that the nature of the Chinese economy has changed so that it is now possible to determine whether 
the Chinese government has bestowed a subsidy u pon a Chinese producer (i.e., the subsidy can be 
identified and measured) and whethe r any such benefit is specific. 
 41. The Department of Commerce has initia ted numerous joint antidumping/countervailing 
investigations against imports from China. In the antidumping investigations, U.S. regards China as a 
non-market economy and applies substitution met hod in calculating the dumping margin. China’s 
understanding is that it has been a consistent practice of U.S. to apply joint antidumping/countervailing investiga tions only to the “market economies”. While for the “non-market 
economies”, it only applies antidumping investigations  because it is already adequate to use non-
market method to remedy an unfair trade resu lted from the government’s price interference and WT/TPR/M/200/Add.1 
Page 180  
 
 distortion, including providing subsidies.  Please explain why no measures have been taken to avoid 
joint AD/CVD investigations agains t products imported from China sin ce the U.S. regards China as a 
non-market economy?  
ANSWER:  Antidumping and countervailing duties offset dis tinct and different unfair trade practices.  
There is nothing in either the Antidumping or Su bsidies Agreement that prevents Members from 
investigating concurrent AD and CVD cases.  42. In the U.S. countervailing investigations agai nst China, despite the ample amount of factual 
evidence provided by China on the prices of land, raw materials, water and energy, the U.S. refused to 
accept the fact that the prices for the abovementi oned factors have already been highly market-
oriented, and insists on the use of external benchmar ks.  For raw materials, U.S. refused to use the 
price of China’s importation from market economies.  For the prices of land, water and interest rates, it is a common understanding that different count ries, even among countries of similar economic 
development, apply different  rates and there’s no objective base rate that is applicable to all Members.  
For each of the abovementioned factor of production , please specify the reasons for rejecting to adopt 
China’s domestic price or price of imports from a market economy. Please also justify the rationality 
for using external benchmarks inst ead of China’s domestic prices.  
 
ANSWER:   Commerce has used benchmarks derived from sources outside China when it determined 
that the use of domestic Chinese pr ices posed special difficulties because  they were unreliable due to 
distortions in the market.  For example, in the glossy paper case, Commerce determined that Chinese 
interest rates were distorted because of the role of the government in the domestic banking sector.  In 
the laminated woven sacks investigation, Commerce preliminarily determined that land prices in China could not be used as benchmarks, because  of pervasive government intervention in the 
domestic land market.  Finally, in the steel pipe  cases, Commerce rejected Chinese hot-rolled steel 
prices in its preliminary determinations becau se of the overwhelming dominance of government 
entities in the domestic steel market.  In each of these cases, Comme rce used third-country prices to 
calculate the benefit from government-provided loans, land and steel.  With regard to water, however, 
the Department has used rates in China as benchmarks in its benefit calculation.  Further, in the final 
determination of the circular welded pipe investiga tion, Commerce used, in part, certain import prices 
for hot-rolled steel into China as benchmarks for its an alysis.  Such prices are also considered Chinese 
domestic prices.  Each of these determinations is fully consistent with the U.S. CVD law, 
Commerce’s regulations, and the WTO Subsidies Agreement.  
 43. According to Article 11.2 of the Agre ement on Subsidies and Countervailing Measures 
(SCM), applications for initiating a countervailing investigation shall include “sufficient evidence” 
and “simple assertion, unsubstantiated by relevant ev idence, cannot be considered sufficient to meet 
the requirements”.  Article 13.1 also requires th at “in any event before the initiation of any 
investigation, Members the products of which may be subject to such investigation shall be invited for 
consultations”.  The U.S. maintains a low standard  for the “sufficient evidence” test in accepting the applications for 
CVD investigations, and requires China to prove the “simple assertion” test.  This is a significantly 
imbalanced distribution of burden of proof, and h as led to the abusive use of countervailing measures 
by the U.S. industries.  Apart from this, U.S. a llows new claims to be submitted after a case is 
registered, and for these newly submitted claims, Member(s) involved were not consulted.  The 
practice is inconsistent with the provisions  of Article 13.1 of the SCM Agreement.  
 
a. Please explain the standards for the “sufficient evidence” test for accepting a CVD 
application. Please specify how these standards are in  line with the requirements of Article 11 of 
the SCM Agreement, and how will U.S. ta ke measures to avoid abuse of countervailing 
measures? 
  WT/TPR/M/200/Add.1 
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 b. Please explain the standards for accepting ne w claims after a case is registered, and what 
efforts will be made to fulfill the requirem ents of Article 13 of the SCM Agreement? 
 
ANSWER:   The U.S. CVD law requires Commerce to  initiate a CVD proceeding whenever an 
interested party files a petition on behalf of an indus try that (1) alleges the elements necessary for an 
imposition of a duty and (2) is accompanied by in formation reasonably ava ilable to the petitioner 
supporting the allegations.   This st andard is fully consistent with Article 11 of the SCM Agreement.  
Moreover, the United States carefully examines all subsidy allegations, including those made after a 
case is initiated, to determine whether the statut ory requirements for initiation are met.  Where a 
petition does not meet the statutory requirements for initiation, Commerce will not initiate an 
investigation.  Similarly, if an allegation as to a specific program does not meet the aforementioned 
requirements that program will not be included in the investigation.  For example, in numerous 
instances in ongoing CVD investigations, Commerce di d not include in its investigation certain 
subsidies alleged by petitioners, including those allege d following the initiation of an investigation.  
In each case, the allegations failed to meet the statutory requirements for initiation.   
Further, in each of the CVD investigations initia ted to date, the United States has fully met its 
requirements under Article 13 of the SCM Agreemen t.  The U.S. Commerce Department is also 
always willing to discuss a subsidy allegation made after the initiation of a case and prior to its 
possible inclusion in the investigation.    44. (page 36, paragraph 70) The Secretariat Repor t notes that AD and CVD investigations may be 
suspended based on an agreement with th e exporter or foreign governments.  What is the working 
procedure to reach such an agreemen t? Will the U.S. accept the price undertakings if the exporter or 
foreign government initiates an offer? If not, what is the reason?  
 
ANSWER:  The opportunity to request a price undertaking is provided for under U.S. law and 
regulation and is available in a ll investigations.  Generally, a party will approach the Department 
seeking an agreement and discussions may begin at that  point.  Whether an agreement is entered into 
in any particular case depends upon whether the parti es are able to reach an agreement that meets the 
conditions of U.S. law, which are consistent with the AD and SCM Agreements, and which is 
practical and administrable.  The United Stat es does not accept every price undertaking sought by 
exporters or foreign governments and exporters or foreign governme nts do not accept every counter-
offer from the United States.  As a general matter, the Department prefers to allow our AD/CVD laws 
to correct for any distortions in the market.  Wh ether a price undertaking is accepted or not depends 
on the facts of a particular case.  Where parties s eek an agreement but an agreement is not entered 
into, the most common reason is that the negotia tors were simply unable to reach mutually 
satisfactory terms.    
45. (page 36, paragraph 70) The Secretariat Repor t notes that the agreement with respect to CVD 
investigations may involve quantitative restrictions. a. Please clarify how such quantitative 
restrictions conform to Article 11 of GATT, Artic le 18.1 of Anti-dumping Agreement and Article 11 of 
SCM Agreement.  
 
ANSWER:   The provision of U.S. law referenced provides Commerce the discretion to accept an 
undertaking involving quantitative restrictions in ve ry limited circumstances.   There are no such 
agreements in effect at present.  In light of these facts, and given that it has not been established that 
such restrictions are inconsistent with the provisions  referenced in the question, we do not believe it is 
incumbent upon us to explain why they are consistent. 
 b. Please explain how the U.S can ensure trans parency of such agreements with exporters or 
foreign governments.  
ANSWER:
  In developing an agreement, Commerce negotiat es directly with the exporters in the case 
of a market economy agreement and directly with  foreign governments in the case of a non-market WT/TPR/M/200/Add.1 
Page 182  
 
 economy agreement.  No less than thirty days prio r to entering an agreement, Commerce releases to 
all interested parties a draft agreement text and provides an opportunity for parties to comment on the 
text.  Any agreement into which Commerce enters is  published in the Federal Register and available 
on the internet. 
 
46 With regard to the sunset review, will the U.S. adjust the scope of products under 
investigation and domestic like-products in the review ?  Are these products necessary to be newly 
emerged products during the period when anti-dum ping measures are imposed? In this kind of 
reviews, will the investigation authority conduct inves tigations on the domestic injury to the industry 
and the possibility of recurrence?  
 ANSWER:   The scope of any sunset review will reflect the scope of the original antidumping duty 
order and any modifications resulting from subseque nt scope rulings and/or  changed circumstances 
determinations issued by the administering authority. 
 
(vii) Safeguards  
47. On Mar. 5th, 2002, U.S. initiated safegua rd measures against imported steel products and 
imposed Steel Import Licensing and Surge Monito ring (SILSM) for the imported steel products, and 
the Department of Commerce issued implementation rules for SILSM on Dec. 31, 2003. On Dec. 4, 
2003, President Bush terminated the safeguard me asures, but SILSM was maintained until Mar. 21, 
2005. On Mar. 11, 2005, the Department of Commerce issued a regulation on the Steel Import 
Monitoring and Analysis System (SIMAS) to replace SILSM and the new system is effective until Mar. 21, 2009. SIMAS also expanded th e scope of covered steel products.  
 
a. Please explain the purpose for adopting auto matic SIMAS and the reason for expanding the 
scope of covered steel products . 
 
ANSWER:   The Steel Import Monitoring and Analysis (SIM A) system is composed of two parts – an 
internet-based import licensing system and a public we bsite that displays aggregate import statistics.  
The internet-based licensing system is automatic, free of charge and consistent  with our international 
obligations.  It is solely designed to provide fast a nd reliable statistical information on steel imports to 
both the government and the public.  When the SIMA  system was originally established pursuant to 
section 201, the scope of the SIMA system was iden tical to the scope of the safeguard.  When the 
program was extended under Department of Commerce authority, the scope was modified to bring it 
into harmony with other widely accepted definitions of basic steel mill products in order to provide 
greater clarity to steel producers, consumers and the trading community.  This involved the both the 
addition and deletion of steel produc ts from the scope of the program. 
 
b. Please explain how the U.S. government will pr otect the commercial se crets involved in the 
steel imports.  
ANSWER:  The SIMA system provides the public and mark et participants with virtually real-time 
access to aggregated import pricing and volume information that can be used to assess current 
conditions in the U.S. market for steel products.  No business proprietary information is released to 
the public; SIMA follows the guidance of the Bureau of Census data release practices. 
 
c. Please clarify whether SIMAS has led to any subsequent trade measu res including safeguards. 
 
ANSWER:   The SIMA system’s sole purpose is to pr ovide the government and public with up-to-
date statistical information on U.S. steel imports.  It has not led to any trade measures including 
safeguards.  
  WT/TPR/M/200/Add.1 
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 (x) Standards and other technical requirements 
 
48.  In January, 2007, the U.S. started its implementation of repetitive use program of electronic products in the state of Washington, which cove rs provisions on manufacturers, collectors, and 
registration of transporters, labeling, fee charging, and punishment for violations.  Could the U.S. 
please clarify the scope of electronic products subject to the regulation and the criteria and 
procedures for the operation?  
 
ANSWER:   Without further information, it is difficult to know to what Washington State regulation 
China’s question refers.  If the question refers to  amendments to the Washington State Electronic 
Product Recycling Program, please see G/ TBT/N/USA/207 (August 11, 2006), as well as 
G/TBT/N/207/Corr.1 (August 18, 2006), and G/TB T/N/207/Add.1 (August 7, 2007), which indicate 
that the products covered are electronic products  (HS Chapter 8471, 8540) (ICS 31).  For further 
assistance, see the Washington State Legislature’ s website at <<http://apps.leg.wa.gov/RCW/default. 
aspx?cite=70.95N>>.  You may also contact the U.S. TBT Inquiry Point at <<ncsci@nist.gov>>. 
 
49. In 2007, FDA tightened inspection on the China’s exports to U.S. While fully respecting U.S.’s rights under the SPS agreement, it has to be pointed out that some inspection process last up to 
2-3 weeks, significantly affecting China’s export to U.S. In addition, the high inspection fees also 
prevented exports from the SMEs, leading to a si gnificant reduction in the import from China.  
 
It was also claimed by Chinese exporters that diffe rent inspection standards have been applied for 
certain products which discriminates against the imported products.   
a. Please explain whether the U.S. is cons idering adopting measures to ensure reasonable 
timeframe for the inspections. 
 
ANSWER:  FDA inspections do not last 3 weeks. Some FDA laboratory analyses of imported and 
domestic products may take significant time to pro cess depending on the complexity of the analysis 
and the backlog in place at the time.  FDA attempts to complete all analyses in the most expeditious 
manner possible and will be happy to investigate an y specific claims of undue delay in particular 
instances. 
 b. Please justify the application of diffe rent standards to the imported products.  
 
ANSWER :  FDA does not apply different standards to  imported food than it does to domestically 
produced food.  Both domestic and imported produc ts must meet requirements of the Federal Food, 
Drug, and Cosmetic Act, 21 United States Code 321 et  seq.  Certain imported products with a history 
of violative shipments may be listed in an FDA im port alert which contains guidance for importers 
relating to entering future imported products. 
 
50. The Public Health Security and Bioterro rism Preparedness and Response Act of 2002 (the 
Bioterrorism Act) set rigorous principles for food safety and prevention of bioterrorism. The FDA is 
the agency in charge and had formulated a series of measures to implement the Act.  
 Without prejudice to U.S.’s right to secure food safety and prevent bioterrorism, the reflection from the Chinese industries is that the new regulations ar e excessively complicated in terms of inspections, 
registration and notification, which reduced the sp eed of customs clearance, increased export-related 
costs and raised uncertainty and unpr edictability, affecting normal trade. 
 
a. Please explain in what ways the Act and its  implementation reflects the requirement of 
“minimizing negative trade effects” as stipul ated in Article 5.4 of the SPS agreement.  
 WT/TPR/M/200/Add.1 
Page 184  
 
 ANSWER:  The requirements for prior notice and registra tion were established by Congress with the 
passage of the Bioterrorism Act to improve the ability of the United States to pr event, prepare for, and 
respond to bioterrorism and other public health em ergencies.  The registration rulemaking process 
consisted of a proposed rule, interi m final rule, and final rule.  F DA has issued a proposed rule and 
interim final rule for prior notice; the final rule will be issued in the near fu ture.  FDA has encouraged 
public comment at every stage of the Bioterrorism  regulations’ developmen t.  FDA developed and 
published regulations which were open to public comment from both domestic and foreign parties.  
FDA also conducted numerous outreach meetings dir ected at foreign stakeholders, both within the 
U.S. to foreign embassy officials in Washingt on and via videoconference.  FDA received numerous 
comments from foreign governments, industries, and tr ade associations on both rules.  FDA reviewed 
the comments that were submitted during the comm ent period and developed the rules, taking the 
comments into account.  FDA also allowed for sever al opportunities for interested individuals to 
provide comments even as we began implementation of the interim final rule to make sure that we 
minimized any negative effect on trade while ensuring  our food safety and security.  FDA is aware of 
the international trade obligations of the Unite d States and has considered these obligations 
throughout the rulemaking process.  These rulemaki ngs are consistent with these international 
obligations.  FDA has actively explored ways to reduce the burden on industry to the extent feasible 
while fulfilling the Bioterrorism Act mandates.   Accordingly, to alleviate some of the burden re gistration requirements may impose on industry, FDA 
modified some of the elements of registration in  the interim final rule, including emergency contact 
information; the definitions for ‘‘farm,’’ ‘‘facility, ’’ and ‘‘retail food establishment,’’ and the timing 
for submitting updates to FDA when required elements in a registration change.  FDA also notes that 
the registration requirement applies to domestic faci lities, as well as foreign facilities, and that the 
registration provisions in the Bioterrorism Act cont ain certain exclusions that apply only to foreign 
facilities.  (See e.g., 21 CFR 1.226(a), which exempt s from the requirement to register a foreign 
facility, if food from such facility undergoes furt her manufacturing/processing (including packaging) 
by another facility outside the United States; no si milar exclusion applies to facilities within the 
Unites States.)  FDA believes its registration system is an efficient and straightforward process, and 
has received positive comments from stakeholders.  FDA notes that the current registration process is designe d to be flexible in that persons registering a 
facility may do so using one of four options: electroni cally, by mail or by fax using a hard copy of the 
registration form, or by submitting a CD-ROM for multiple registrations.  Registration information 
may be updated or a registration may be cancelled using any one of the four options.  Electronic 
registration provides an especially efficient me ans for registering a foreign facility, updating 
registration information, and canceling a registration.  In addition, the information required to register 
a facility is minimal, with many types of  information designated as optional.   
 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 have carefully considered all comments received and are 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.   FDA further notes that when the registration and pr ior notice requirements were initially implemented 
in 2003, FDA published a Compliance Policy Guide for each of the rules: Compliance Policy Guide 
110.300, Registration of Food Facilities Under the Public Health Security and Bioterrorism 
Preparedness and Response Act of 2002; and Complia nce Policy Guide 110.310, Prior Notice of Food 
Under the Public Health Security and Bioterro rism Preparedness and Response Act of 2002.  These 
Compliance Policy Guides (CPGs) described the US st rategy for maintaining an uninterrupted flow of 
food imports while improving their safety in accordance with the Bioterrorism Act requirements.  The  WT/TPR/M/200/Add.1 
 Page 185 
 
 
 CPGs included a transition period during which we emphasized education to achieve compliance and 
assisted submitters to become accu stomed to the new requirements. 
 
b. Is the U.S. considering adopting measures to  reduce the negative impacts on the exporters? 
 
ANSWER:  Since these regulations were first implemented almost five years ago, we believe the 
food industry has successfully adapted to these requi rements.  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 resulted in a rela tively smooth transition to the new procedures and 
have improved compliance with the new requirement s.  FDA notes that Compliance Policy Guide 
110.310, Prior Notice of Food Under the Public Health  Security and Bioterrorism Preparedness and 
Response Act of 2002, (CPG 110.310), for the prior notice interim final rule includes a provision (section III(c)(3)) that FDA and US Customs and Bord er Patrol will not take regulatory action when 
prior notice is not filed for food imported fo r non-commercial purposes with a non-commercial 
shipper.  Other CPG 110.310 provisions include:  (1) food imported or offered for import for quality 
assurance, research or analysis purposes only that fails to have the required manufacturing facility 
registration number; and (2) food imported wit hout the required registration number of the 
manufacturer if the submitter provides FDA with certain alternate information.    51. China is the U.S.’s largest export market for poultry products.  However, China’s export of 
cooked poultry products to the U.S. market has encountered difficulties for many years. After rounds 
of tough negotiations, U.S. officially recognized th e equal status of China’ s sanitary administration 
for the cooked poultry products.  On May 24, 2006, U. S. has passed an Act that allows importation of 
China’s cooked poultry products that are produced w ith the U.S. approved raw materials. U.S. has 
also expressed on numerous occasions that technical matters, including food safety issue with respect 
to China’s export of cooked poultry products to the U.S. is already resolved and the importation 
should begin as soon as possible.  However, on Aug. 3rd, 2007, the U.S. House of Representatives has 
passed the 2008 Agriculture Appropriation Bill, Artic le 733 of which requires that the appropriations 
shall not be used to enact or implement rules th at allow importation of cooked poultry products from 
China.  In December 2007, the bill was approved by the Senate and signed by the President.   
a. Does the U.S. consider restricting importati on from a specific country through limiting the use 
of government fund a discriminatory practice and that such protectionist practices should be abolished?   
ANSWER:   The United States places great importance on ensuring that its measures are based on 
science. 
 
b. Please explain the consistency of Article 733 of the abovementioned bill with Article 11.1 of 
the GATT 1994 on the general elimination of quantit ative restrictions.  Do es the U.S. have plans 
to bring the measure in conf ormity with the WTO rules? 
 
ANSWER:   Section 733 is set to expire at the end of the fiscal year.   
 
c. As the world’s largest trading and developed na tion, the U.S. plays an exemplary role to the 
world trade system. Has the U.S. considered ta king measures to compen sate for the losses of 
other Members of the WTO that were harmed by this provision?  
 
ANSWER:   The United States is committed to ensuring th at its measures are in compliance with the 
WTO SPS Agreement.  Given that market access had not been granted prior to enactment of the 
legislation, it is not clear what, if any, losses were incurred.  
 WT/TPR/M/200/Add.1 
Page 186  
 
 d. Does the U.S. have any plans to normalize trade  in cooked poultry products with China in the 
near future? If so, what specific measures are going to be adopted? 
 
ANSWER:  The United States intends to complete its risk assessment and rulemaking process in a 
timely fashion. 
 
52. (page 51 ，paragraph 148) The Secretariat Report notes that there are no statutory limitations 
regarding the duration of the process to approve fi rst-time imports of plants, animals, and their 
products into the United States.”   
a. Please explain reasons for not settin g a time limit for the approval process? 
 
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.  
 
b. Members are concerned that this will lead to  increased uncertainty for trade in the covered 
products. What’s the U.S.’s view? Is the U.S.  planning to adopt measures to address Members’ 
concerns?  
 
ANSWER:  It is our view that a transparent rulemaki ng process that bases decisions on scientific 
evidence ensures certainty for our tr ade partners and facilitates trade. 
 (3) Measures Directly Affecting Exports (ii) Export restrictions and controls 
 
53. China is the largest market affected by U.S.’s  export restrictive measures. U.S. is a strong 
nation in terms of science and technology.  Howeve r, according to the U.S. statistics, U.S.-China 
bilateral trade in high-tech products registered a deficit of 67.65 billion USD in 2007, accounting for 
26.4% of the total bilateral trade deficit. According to China’s statistics, the U.S.’s share in China’s 
import of high-tech products dropped from 18.3% in 2001 to 8.5% in 2007.  In 2007, the Department 
of Commerce issued a new regulation on the export c ontrol, requiring China to expand the scope of 
coverage of products subject to the verifica tion of the end users and end use (VEU).  
 
ANSWER:   The U.S. Government does not agree with the statistics as presented above.  According 
to the data available to the U.S. Government, the U.S. market share of Advanced Technology 
Products (ATP) into China in 2007 was only 7.8%, and not 8.5%. Overall, the significant drop in U.S. exports of high technology goods to China should not be attributed to U.S. export controls, as less 
than 0.9% of total exports to China require a U.S.  Department of Commerce dual use license.  A large 
percentage of the decline in these U.S. exports shoul d instead be attributed to market access issues 
that U.S. goods face in the Chinese market.  Moreove r, as described below, the U.S. Government has 
established the Validated End User (VEU) program as part of the ongoing bilateral effort to forge ties 
and increase trade between China and the United States. 
 
a. Could the U.S. share with Members its report on the analysis of the impact of the export 
control policy on the domestic industries and employment?  
 
ANSWER:   The U.S. Government does not have such a report available at this time to provide to 
WTO Members. 
 b. Please explain how the U.S.’s stringent ex port control measures on high-tech products are 
consistent with the spirit and rules of free trade.  WT/TPR/M/200/Add.1 
 Page 187 
 
 
 ANSWER:  The U.S. export controls administered by the Department of Commerce seek to protect 
U.S. national security. U.S. export controls recogni ze the realities and risks of the modern world and 
address them in a manner that allows the Unite d States to remain an innovative and globally 
competitive country.  As national security measures, U. S. export controls are consistent with its WTO 
obligations and are permissible pursuant to Article XXI of the GATT. 
 
c. Could the U.S. confirm that the export control on high-tech products is one of the main factors 
driving the China-U.S. trade off the balance?  
ANSWER:  To the contrary, the data clearly demonstrate that U.S. export controls are not a major 
contributing factor to the U.S. trade deficit with Ch ina.  As mentioned above, less than 0.9% of total 
exports to China require a U.S. Department of Commerce dual use export license.   
 
d. Does the U.S. agree that the requirement of ex pansion of coverage of VEU is a setback to the 
trade facilitation?  
 
ANSWER:   No, the United States does not agree.  The VEU Program is a trade facilitation measur e 
that allows the export, reexport and transfer of e ligible controlled items by any exporter or reexporter 
to authorized end-users in China without a Depart ment of Commerce dual-use license.  Such exports, 
reexports, or transfers do not require any other author ization from BIS for an indefinite period, subject 
to periodic U.S. Government review and as long as they are compliant with the Export Administration 
Regulations.  The United States views the VEU Program as increasing the efficiency of U.S. export 
controls and facilitating U.S.-China high technology trade in three ways:  
 
• First, by making transactions to companies aut horized as Validated End-Users faster and less 
bureaucratic, VEU responsibly effectuates U.S. po licy to constructively engage with China.  
 
• Second, by providing  firms in China who responsibly and carefully handle controlled U.S. 
civilian technology with more efficient access to those products, it creates a powerful market-
based incentive for compliance with U.S. expor t control laws.  With VEU, firms who are 
competitors of VEU companies may be interested in having the same advantages, and might be encouraged to improve their own comp liance with U.S. export control laws.   
 
• Finally, by making informed, risk-based distin ctions, VEU enables the U.S. Government to 
devote less time to routine transactions to customers we know a great deal about, and more time and attention to customers and transactions that we know less about.  In this way, VEU 
facilitates legitimate civilian trade. 
 e. Please explain reasons for a tightened export control against China, considering that in the 
meanwhile China is also pressed by the U.S. for more liberaliza tion in more areas. 
 
ANSWER:   U.S. export control policy and requirements toward China stem from our national 
security and foreign policy interests, including our commitments to the international export control 
regimes.  The United States intends to continue  discussions on export control issues with China 
through its bilateral dialogues.  Furthermore, th e United States introduced a trade facilitation measure 
in the area of export controls -- the VEU program -- that is specifically geared to facilitate the export 
of high technology items fro m the United States to China. 
 
(iv) Export assistance 
 
54. (page 58 ，paragraph 183) According to the Secretaria t Report, financing support by the Ex-
Im Bank for U.S. exporting goods and services is subject to the U.S.-content requirements.  The 
higher extent of U.S. content, the greater possibility to get bigger support.  Please explain whether WT/TPR/M/200/Add.1 
Page 188  
 
 such arrangements will lead to differential or diff erentiated treatment among enterprises? Will they 
lead to enterprise-specific subsidies?  
 
ANSWER:   Under the OECD Arrangement on Export Credits, Ex-Im Bank’s support cannot exceed 
85% of the export contract value.  Ex-Im Bank’s foreign content policy dictates that Ex-Im Bank will 
support the lesser of either 100% of U.S. content of  the export contract, or 85% of the total export 
contract.  Therefore, if U.S. content is 85% of the total export contract, Ex-Im Bank will support 85% 
of the total export contract.  If U.S. content is 90%  of the total export contract, Ex-Im Bank support is 
limited to 85% of the total export contract.    
Under these rules, Ex-Im Bank policy can provide diffe rent amounts of financing to U.S. exporters 
depending on the U.S. content of the export contract .  Ex-Im Bank applies the same rules to every 
applicant for Ex-Im Bank support.  The level of Ex-Im Bank’s financing may differ, based on the U.S. content of each contract.  However, it would be misleading to indicate that these requirements would result in differential treatment of applicants seeking Ex-Im support. 
 
(4) Other Measures Affecting Production and Trade 
(ii) Other government support  
55. (Page 62 Paragraph 202) The Secretariat Report notes that the American Jobs Creating Act of 
2004 introduced a phase-in ，9% tax deduction for certain producers. 
 
a. Please explain the criteria that  a producer must satisfy in order to be eligible for such a tax 
reduction.  
 
ANSWER:  In general, a producer must generate receip ts from the following items in order to qualify 
for the tax reduction: (1) Tangible personal property, computer software , or sound recordings produced by the taxpayer 
within the United States; 
(2) Motion picture film or videotape (including liv e or delayed television programming) if 50 percent 
or more of the total compensation relating to th e production of such film is paid for services 
performed in the United States; (3) Electricity, natural gas, or portabl e water produced in the United States;  
(4) Construction activities performed in the United States; and  (5) Engineering or architectural services performed in the United States for construction projects 
located in the United States.   
 
b. Are these tax reductions only apply to domestic producers? 
 
ANSWER:  In general, the tax reducti on is available to any producer that generates qualifying 
receipts (as described above) and has sufficient US  taxable income and qualifying wage expenses.  
 
(iv) Government procurement 
 
56. Please provide the latest 3 yea rs statistical on the total  government procurements nationwide, 
and the latest 3 years data on the procurements covered by GPA. 
ANSWER:   U.S. Federal procurement data is availa ble in the Federal Procurement Data System 
(FPDS) at the beginning of each fiscal year and all reports are available by accessing https://www.fpds.gov.  As noted ab ove, when the FPDS overhaul is  complete, the United States will 
submit its outstanding government procurement notifications to the WTO Secretariat.  
 
57. Please specify what government procuremen t policies and measures have been adopted for 
the purpose to fulfill the social and economic policy objectives.  WT/TPR/M/200/Add.1 
 Page 189 
 
 
 ANSWER:   Socio-economic programs are generally set  out in Subchapter D of the Federal 
Acquisition Regulation (FAR) (www.arnet.gov/far/), includes:  Part 19 (Small Business Programs, 
including small disadvantaged businesses, historic ally underutilized business zones, women-owned 
small businesses, and service-disabled veteran-ow ned small businesses), Part 22 (Application of 
Labor Laws to Government Acquisitions), Subpart 26.1 (Indian Incentive Program), and Subpart 26.3 
(Historically Black Colleges and Universities and Minority Institutions). 
 58. With regard to the 1933 Buy Amer ican Act, please clarify the followings: 
 
a. The Act prohibits certain public agenc ies from purchasing foreign goods and services, 
requires to set up local-content criteria and to provide preferential price conditions for local 
suppliers, etc.  Please clarify which agencies’ procurement activities are governed by this Act. 
And please describe the local criteria requirement.   b. What is the criteria for “domestic products”? 
 
ANSWER:   The Buy American Act of 1933 (BAA) provides for the prohibition of purchases of 
goods; it does not apply to services.  However, the regulations that implement the BAA provide a 
price preference for domestic goods, not a prohibition.   The BAA and its implementation regulations 
apply to all federal agencies.  The U.S. Governme nt defines “domestic end product” to mean:  an 
unmanufactured end product mined or produced in the United States; or (2) an end product 
manufactured in the United States, if the cost of its components mined, produced, or manufactured in 
the United States exceeds 50 percent of the cost of al l its components.  Components of foreign origin 
of the same class or kind as those that the agency determines are not mined, produced, or 
manufactured in sufficient and reasonably availabl e commercial quantities of a satisfactory quality are 
treated as domestic.  Scrap generated, collected, and prepared for processing in the United States is 
considered domestic.  
 
c. What is the 6% price premium over norma l foreign products based on when assessing the 
prices during the procurements?  
ANSWER:   According to FAR 25.105(b), if there is a dom estic offer that is not the low offer, and the 
restrictions of the Buy American Act apply to th e low foreign offer, the contracting officer must 
determine the reasonableness of the cost of the domestic offer by adding to the price of the low foreign offer, inclusive of duty: (1) 6 percent, if  the lowest domestic offer is from a large business 
concern; or (2) 12 percent, if the lowest domestic offer is from a small business concern.  
 
(v) Trade-related intellectual property rights  
59. It is said that the U.S. congress is in the process of amending the existing patent law and the 
amended draft has been passed by the House of Re presentatives and is current ly under reviewing by 
the Senate. a. Please provide information on the state of  play with regard to the amended draft and 
the main amendments to the existing patent law? 
 ANSWER:  Patent reform legislation was introduced  in both the House of Representatives (H.R. 
1908) and Senate (S.1145) on April 18, 2007.  Both b ills contain a mixture of provisions discussed in 
the House and Senate over the last two Congresses , including provisions related to the quality of 
issued patents, the cost of patent litigation, harm onization of patent laws, potential abuses within the 
patent system, and the special needs of the inde pendent inventor and universities.  The House of 
Representatives passed its bill by voice vote on Sept ember 7, 2007.  The Senate Judiciary Committee 
reported its bill out of Committee on July 19, 2007.  The Senate bill S. 1145 was scheduled for a 
Senate vote earlier this year, but has recen tly been taken off the Senate calendar. 
 WT/TPR/M/200/Add.1 
Page 190  
 
 b. Please clarify whether and how all interested  parties, including foreign ones such as 
governments and other entities, have been gi ven ample opportunities to comment on the 
amendments.   
ANSWER:  Patent reform was the subject of ten heari ngs in the House of Representatives and four in 
the Senate during the 108
th and 109th Congresses.  The House Judiciary Subcommittee on Courts, the 
Internet, and Intellectual Property held two hear ings during the 110th Congress.  The Subcommittee 
held a markup of its bill on May 16, 2007, and the bill was reported out of full Committee at a markup 
on July 18, 2007.  The House passed the bill by a vo te of 220-175 on September 7, 2007.  The Senate 
Judiciary Committee held a hearing on S. 1145 and re ported its bill out of Committee at a mark up on 
July 19, 2007.  All of the hearings and markups ha ve been open to the public and full transcripts of 
past hearings and House and Senate reports on the le gislation are readily available.  In addition all 
interested parties, including foreign government s and entities, are welcome to express their written 
comments and views on sections of the legislation and amendments to the relevant Members of 
Congress and Senators.  
 
c. Please clarify when the process for the am ended draft is expected to be completed. 
 
ANSWER:  Consideration of legislation is within the purview of the U.S. Congress.  There is 
currently no projection regarding when action on the pa tent reform legislation might be completed.   
 
60. (page 74, paragraph 262) The Secretariat Repor t mentions that, in order to improve patent 
quality, the USPTO changed its rules in October 2007 , which will require applicants to identify more 
specificity of the claimed inventions to be examined.  
a. Please provide the details of the changes in the rules.  
 ANSWER:   The proposed rules on claims and continuati on revise practice with respect to continued 
examination filings and the number of claims in patent applications.  Under proposed rules, an 
application or chain of continuing applications ma y include two continuing applications and a single 
request for continued examination, without providing  an explanation.  Further requests for continued 
examination require an explanation or justification as to why an add itional application is needed.  The 
proposed rules also permit applicants to submit fi ve independent claims with a total of twenty-five 
claims. The applicant must  submit an examination support document (ESD) if an application contains 
more than five independent claims or more than tw enty-five total claims, counting all of the claims in 
any other co-pending application having a patentably  indistinguishable claim.  The changes in this 
proposed rule would allow the USPTO to c onduct a better and more thorough and reliable 
examination of patent applications. 
 
b. Please clarify whether and how all interested  parties, including foreign ones such as 
governments and other entities, were given ample opportunities to comment on the changes.  
ANSWER:  USPTO proposed rules are published in the Federal Register , the official gazette of the 
U.S. Government.  By publishing the proposed rule in the Federal Register , the USPTO notifies the 
public of the pending rule.  Once published, any person or organization may comment on it directly, 
either in writing, or orally at a public heari ng.  The USPTO, like many agencies, generally accepts 
comments online or via e-mail.  The comment period varies, but it usually is 30, 60, or 90 days.  For 
each notice, the Federal Register  gives detailed instructions on how, when, and where a viewpoint 
may be expressed. 
 
c. Please clarify whether these new ru les have been notified to the WTO.  
  WT/TPR/M/200/Add.1 
 Page 191 
 
 
 ANSWER:  The United States District Court for the East ern District Court of Virginia issued a 
decision on April 1, 2008, enjoining the USPTO fro m implementing the changes in this final rule 
notice, therefore, the rules are not in effect.  The rules have not been notified to the WTO. 
 61. In 2007, the decision by the U.S. Supreme C ourt of Justice regardi ng the “non-obviousness” 
examination criteria for patents overthrew the rigi d application of “teaching-suggestion-motion test” 
criteria as previously set by the Federal Circuit Appeals Court. Please explain what substantial 
changes have taken place regarding the determination conditions of patent authorization and 
infringement dispute. And what is the impact of such changes with regard to patent-related issues? 
 ANSWER:  The U.S. Supreme Court opinion in KSR v. Teleflex  rejected the approach embodied in 
the Federal Circuit’s "motivation" test.  The form er test required USPTO to show some teaching, 
suggestion, or motivation (TSM test) in the prior art that would lead one of ordinary skill in the art to create a claimed invention before holding any claim obvious.  The Court held that the ordinary artisan has skill, common sense, and a certain level of creativ ity.  Where a patent application claims only a 
set of familiar elements combined according to known methods that does no more than yield 
predictable results, it is likely to be obvious.   Following the Supreme Court Decision in KSR v. Teleflex , USPTO evaluates the obviousness of 
patent applications by focusing on the Graham  factors: (i) the scope and content of the prior art, (ii) 
differences between the prior art and the claims at i ssue, and (iii) the level of ordinary skill in the 
pertinent art.  Since the Court did not totally reject  the use of motivation as a factor in the analysis, 
motivation is recognized as providing a helpful insi ght into the obviousness or non-obviousness of an 
invention.  62. (page 74, paragraph 262) The Secretariat Re port also mentions that the USPTO published 
Examination Guidelines to help determinations regarding the obviousness of claimed inventions. 
Please clarify what are the changes regarding the USPTO’s criteria on the review and determination 
for “non-obviousness”.  
 
ANSWER:  In reviewing obviousness in a patent appli cation, USPTO has been using the Graham 
factors (see above Answer, 61) in the analysis ev en before the decision by the Supreme Court in KSR 
v. Teleflex.  After the KSR v. Teleflex  decision, USPTO continues to use the Graham factors in the 
same way.  In applying the Graham factors -- (i) the scope and content of the prior art, (ii) differences 
between the prior art and the claims at issue, and (iii)  the level of ordinary skill in the pertinent art -- if 
the examiner determines that the prior art would lead one of ordinary skill in the art to create a 
claimed invention, the invention may be rendered obvi ous.  There is no requirement that the prior art 
has to clearly teach, suggest or motivate the claimed invention. 
 63. Can the works prohibited from circulation, p resentation, or exhibition by law be registered 
for copyright in the U.S.? 
 
ANSWER:  Yes. 
 
64. What are the considerations of the U.S. for not acceding to th e Rome Convention? 
 
ANSWER:   The TRIPS Agreement does not require adhe rence to the Interna tional Convention for 
the Protection of Performers, Producers of Phonogr ams and Broadcasting Organizations (the Rome 
Convention), 1961. 
 
65. Please brief about the Copyright Royalty Judges of 2006. What are the main changes 
compared to the replaced Copyri ght Arbitration Royalty Panels? 
 WT/TPR/M/200/Add.1 
Page 192  
 
 ANSWER:   Copyright Arbitration Royalty Panels were ad hoc panels convened by the Librarian of 
Congress to preside over proceedings to determine ra tes and terms for certain statutory licenses and to 
apportion royalties collected by th e Copyright Office among copyright owners.  Their determinations 
were reviewed by the Register of Copyrights , who made a recommendation to the Librarian of 
Congress whether to accept the determinations.  Th e final decision was made by the Librarian of 
Congress (subject to judicial review) upon the recommendation of the Register of Copyrights.  The 
Copyright Royalty and Distribution Reform Act of 2004 replaced these ad hoc panels with a 
permanent body of three Copyright Royalty Ju dges, who assumed responsibility for making the 
determinations formerly made by the Copyright Arbitration Royalty Panels.  Decisions of the 
Copyright Royalty Judges are final (subject to judicial review). 
 
66.  Does the U.S. have any recent plan to amend its copyright related legislations? 
 ANSWER:  A number of proposals to amend the copyright laws are pending in the U.S. Congress.  
Most of these bills are not likely to be enacted.  A comprehensive list of pending legislation can be 
found at www.copyright.gov/legislation.  The two bills pending in the Congress that have been 
considered by the relevant committees or subc ommittees are the Orphan Works Act of 2008 (S. 2913 
and H.R. 5889) and the Prioritizing Resources and Organization for Intellectual Property Act of 2007 
(H.R. 4279).  The United States remains consciou s of its TRIPS Agreement obligations when 
considering amendments to copyright law. 
 
IV. Trade Policies by Sector 
(1) Overview 
 
67. (page 79, paragraph 1) The Secretariat Repor t states that “the expiration of the 2002 Farm 
Act, and the current environment of high commodity  prices, would offer an opportunity to introduce 
policy changes”. 
 
a. Does the U.S. government  agree with such comment?   
 
ANSWER:   The U.S. Congress has passed a farm bill , despite the Administra tion’s veto.  USDA will 
now implement the legislation as required by law. 
 b. As is known to all, the Congress still wants to keep high level of trade -distorting supports and 
the new Farm Bill that mandates the expenditure of USD 286 billion in the coming 5 years has been passed by the Congress. W hat’s the Administration’s view regarding the future subsidy 
policy and its implications if the veto by the US President is overridden by the Congress? 
 ANSWER:   The U.S. Congress has passed a farm bill , despite the Administra tion’s veto.  USDA will 
now implement the legislation as required by law.  
(2) Agriculture 
(i) Introduction 
 
68. (page 81 ，paragraph 14-1) The Secretariat Report notes that, according to the OECD’s 
analysis, the PSE for the United States dropped sh arply to US$29.3 billion in 2006 from an average 
annual amount of US$42.5 billion in 2004-2005, mainly as a result of higher world commodity prices 
rather than policy changes.  Howeve r, the Commodity Credit Corporation （CCC）net outlays for 
2006 remained at the same high level as in 200 4-2005 when commodity prices were low.  Please 
explain why the net CCC outlay di dn’t decrease during the period wh en the commodity prices went 
up. Justification with reference to the domestic factual evidence would be highly appreciated. 
  WT/TPR/M/200/Add.1 
 Page 193 
 
 
 ANSWER:  Net CCC outlays are reported on a fiscal y ear basis (October – September) and reflect 
budgetary reporting for a wide range of USDA programs, not just commodity programs.  The CCC accounts do not conform to a crop or marketing year and may capture outlays that span two or more 
crop years.  There was a sharp decline in net CCC outlays in fiscal year 2007, which reflect reduced 
outlays under commodity programs due to higher market prices in crop year 2006.  We also note that 
net CCC outlays for fiscal year 2004 were $10.5 billion,  about the half the level of fiscal year 2005. 
 
69. (page 82 ，paragraph 16) The Secretariat Report notes that the WTO DSB made a ruling in 
March 2005 that the export credit guarantee for upland cotton were in nature export subsidies which 
are prohibited by the WTO because the U.S. didn’t ma ke commitments in its schedule.  The U.S. has 
made certain adjustments for the cotton programme according to the ruling an d related requirements, 
including the elimination of “step 2” payment.  However, the WTO compliance panel established at 
the request of Brazil found that the changes U.S. ha d made to cotton programmes were insufficient to 
bring the measures into conformity with WTO rules. In December 2007, WTO established a panel 
upon the request by Canada and Brazil to examine whether past U.S. domestic support to agriculture had exceeded the applicable WTO ceiling.  
a. What specific support measures for upland cott on are currently in place?  What is the 
timetable for further adjustments to the cott on support programmes to make them in full 
compliance with the WTO rulings?  
 
ANSWER:   The U.S. domestic support notifications  for 2002 – 2005 detail the support measures for 
upland cotton.  The United States believes it has co mplied with the WTO rulings and will provide a 
reaction to the findings of the Appellate Body in due course. 
 
b. Does the U.S. plan to make any changes to  the export credit guarantee programmes for 
soybean as well? If so, what is the timetable? 
 
ANSWER:  The United States made changes to its export credit guarantee programs in July 2005.  
The changes affect all commodities that make  use of the program, including soybeans. 
 
c. What is the U.S. view regarding th e claims brought by Canada and Brazil?   
 
ANSWER:  The United States is in compliance with its  domestic support obligations, as shown by 
our domestic support notifications for 2002 – 2005. 
 
(ii) Border measures 
 
70. (Page 82, Paragraph 18 ）The report noted that “the simple average out-of-quota MFN tariff 
in 2007 was around 42%; the in-quota average was 9.1% ”, and added with the following information, 
“close to 91% of out-of-quota tariffs are non-ad valo rem, compared with almost 28% of in-quota 
tariffs”.  Could the U.S. explain how this calculation is made? Is the methodology applied here the 
same as that set out in Annex A to the TN/AG/W/3 of 12 July 2006?   
 ANSWER:  The ad valorem equivalents provided by the U. S. Government were calculated from U.S. 
import statistics for 2006 as applied to tariff rates in effect for 2007.  The methodology set out in Annex A to document TN/AG/W/3 was not used. 
 
Generally speaking, the non-ad valorem is more r estrictive than the ad valorem tariff, since they 
usually provide high level of disguised protection.  Does the U.S. have any plan to simplify those no-
ad valorem tariffs,  especially in the context of DDA negotiations?  
 WT/TPR/M/200/Add.1 
Page 194  
 
 ANSWER:  The United States has proposed in the DDA nego tiations that all agricultural tariffs be 
converted to simple ad valorem or simple specific tariffs.  The United States will implement whatever 
modality is finally agreed to by all the Parties.  
71. (Page 82, Paragraph 18 ）The Secretariat Report notes that the latest U.S. notification on tariff 
quotas covers 2003. When does the U.S. plan to make the next notification on tariff quotas?  
 
ANSWER:  We are currently preparing our notifications for the years 2004-2006 and hope to have 
them ready for submission before August, 2008.  72. (Page 82, Paragraph 19) The report indicate that MFN TRQ and the FTA TRQ might be provided side-by-side, at least for certain product categories.  Could the U.S. provide information on 
the import volumes under MFN TRQ and the FTA TRQ of  these product categories?   What are the fill 
rates of these products in question? 
 
ANSWER:  The categories and agreements are too numer ous to list here.  An annual summary report 
compiled by U.S. Customs and Border Protecti on can be viewed at the following website:  
http://www.cbp.gov/xp/cgov/trade/trade_programs /textiles_and_quotas/commodity/yr_end_archived_
com_status/ 
 73. (Page 82, Paragraph 20) The Secretariat Report highlights that “access to tariff quotas is on a first come, first served basis, except for dairy produc ts and sugar”, and “one or more methods may be 
used, depending on the particular good”.  
a. Why different administrative methods  are used for dairy products and sugar?  
 
ANSWER:  Import licenses are used for cheese in order to  ensure that small importers of higher 
value, specialty cheese have predictable access to impo rts.  A special regime is used for raw sugar to 
ensure that the benefits of the higher, internal U.S. price are passed on to exporting countries which 
are, for the most, part developing economies. 
 
b. Why more methods might be used for the so -called “particular good”? Are there any criteria 
in this regard?  
ANSWER:  Different licensing regimes may be based on when the TRQs were put in place.  The 
original cheese quotas were mainly licensed to hist orical importers, whereas newer TRQ quantities for 
cheese established during the Uruguay Round are larg ely licensed to importers designated by the 
exporting country.  74. (Page 83, Paragraph 24) The Secretariat Report states that “beef, dairy, ethyl alcohol, sugar 
and sugar-containing products, and tobacco remain subject to high import barriers”, the out-of-quota 
tariffs of which are higher than 100 per cent, and “the Commission estimates that the removal of 
barriers on imports of raw and refined sugar w ould……increase U.S. welf are by US$811 million”. 
Please explain the reason to  maintain those high import barriers.  Does the U.S. plan to lower or 
remove those high tariffs so as to increase the consumers’ welfare?  
 ANSWER:  High tariffs remain in place for commoditi es which face substantial competition from 
imports.  The United States will lower these tariffs within the framework of multilateral negotiations 
where all countries make similar contributions to  promoting international trade and consumers’ 
welfare.   WT/TPR/M/200/Add.1 
 Page 195 
 
 
 (iii) Domestic Programmes 
 
75. (Page 83-84, Paragraph 25-26) The Secretaria t Report refers to the questions by other 
Members regarding the U.S. notification on domestic  support, notably the categorization of direct 
payments as "green box", and of counter-cyclical payments as non-product-specific.  Meanwhile, the 
EC pointed out in its 2007 report on the U.S. Barrier s to Trade and Investment that there were wide 
concerns that such categorization permitted the c ounter-cyclical payments not to be accounted for in 
Current AMS, otherwise the U.S. could exceed its  WTO limit of USD19.1 billion production-linked 
support.  The U.S. responded that direct payments  met green box criteria and that counter-cyclical 
payments were based on historical acreages and yi elds, and did not requires specific crops to be 
grown, therefore were not product-specific.  
 The arguments of the U.S. run against the findings of the Appellate Body of the U.S.-Cotton  case, 
which upheld the ruling of the Panel that the dire ct payments are “amber” and the counter-cyclical 
payments are product-specific. 
 
a. Does the U.S. accept such findings?  If yes, would the U.S. modify its notification?  
 
ANSWER:  In the Cotton dispute, the Appellate Body did not find that “direct payments are amber” 
or that “counter-cyclical payments are product-specific.”  
b. How will the U.S. modify the direct payment s to ensure the complian ce with the green box 
criteria, including the review and clarifications under the Doha agriculture negotiations?  
ANSWER:   The United States believes it has correctly notified Direct Payments. 
 
c. Although the counter-cyclical payments did not  require the production of specific crops, they 
were designed and implemented targeting at certai n agricultural products. Please justify why the 
U.S. categorize counter-cyclical payments as non-product specific AMS? If the counter-cyclical 
payments is non-product specific, why would the U.S. accept the introduction of product-specific 
cap on Blue-Box payments?  
ANSWER:  Eligibility for counter-cyclical payments is based on historic, not current, production.  
Any eligible crop can be grown on the base acres, an d recipients include fruit and vegetable producers 
in many circumstances.  Therefore, payments cannot be ascribed to the current producers of any 
specific product.    The introduction of the concept of “product-specific” Blue Box payments in the Doha negotiations does not affect the scope of “p roduct-specific” domestic support under the existing 
Agreement on Agriculture. 
 
(iv) Export subsidies, credit, insurance, and guarantees 
 
76. (Page 84, Paragraph 30) The Report quoted the results of several studies on domestic support, and highlighted that farm programme payments “c ontain elements that provide incentives for resource 
use that may be inconsistent with market signal s”, “counter-cyclical payments may provide for the 
reduction of price-related revenue risk, and could also have some influence on production decisions”, 
and “counter-cyclical payments may distort incentives in  some situations but that any such distortions 
are to a lesser degree than ‘coupled’ paymen ts such as marketing assistance loans”.  
 a. How does the U.S. determine the target price of  counter-cyclical payments and the rates for direct 
payments? 
 
ANSWER:  The rates were set in legislation (the 2002 Farm Act). 
 
b. What are the differences between the legislated rates of payments and the actual rates of WT/TPR/M/200/Add.1 
Page 196  
 
 payments for major products, such as corn, cott on, wheat, rice and soybean, during the period 
from 2002 to 2007? 
 
ANSWER:  The rates for Direct Payments were set in legislation (the 2002 Fa rm Act) and did not 
change.  There is no difference between legisl ated and actual rates of payment.  For the 
Countercyclical Payment program, a formula (set in  legislation) determines the actual payment rate, 
which can vary by commodity and year, depending on market prices.  77. (Page 87, Paragraph 42) Please explain in detail the rules for implementation of the Facility 
Guarantee Programme (FGP). 
 ANSWER:  The Facility Guarantee Program is designed to  expand sales of U.S. agricultural products 
to emerging markets where inadequate storage, pr ocessing, or handling capacity limit trade potential. 
The program provides payment guarantees to finance commercial exports of U.S. manufactured goods 
and services that will be used to improve agriculture-related facilities. 
 
Emerging markets often lack the infrastructure to support increased trade volume. Export sales of U.S. 
equipment or expertise to improve ports, load ing and unloading capacity, refrigerated storage, 
warehouse and distribution systems, and other re lated facilities may qualify for facility guarantees. 
 Under this program, USDA's Commodity Credit Corporation (CCC) guarantees payments due from 
approved foreign banks to exporters  or financial institutions in th e United States. USDA's Foreign 
Agricultural Service (FAS) administers this program on behalf of the CCC. The financing must be obtained through normal commercial sources. Typica lly, a guarantee covers 95 percent of principal 
and a portion of interest. FGP regulations are found in the Code of Federal Regulations 7 CFR 1493.  
An initial payment representing at least 15 percent of the value of the sales transaction must be 
provided by the importer to the exporter.  Paymen t terms may range from 1 to 10 years, with semi-
annual installments on principal and interest. Th e applicable program announcement will specify 
actual payment terms.  Payment must be made to  the exporter in U.S. do llars on deferred payment 
terms under an irrevocable fore ign bank letter of credit.  
 85. (Page 88, Paragraph 43) The Report states that “under GSM-102, the CCC is authorized to 
guarantee the repayment of credit made available to  finance U.S. exports of agricultural goods on 
credit terms of up to three years”, and “the CCC generally guarantees 98% of the principal and a 
portion of the interest ”. a. Please provide the information on the repayment terms of the credits, 
preferably on product-by-produc t and country-by-country basis.  
 
ANSWER:  CCC does not dictate tenor other than establishing the minimum of 30 days and up to a 
maximum of 36 months.  The terms of repayment le ss than the tenor maximum are determined by the 
buyer and seller during sales negotiations.  The repa yment terms for the credit guarantee program(s) 
are not determined by the product covered.  Sin ce the program fees are risk-based, the more risky 
countries will have higher fees than other countries.  
 
a. Please indicate the exact proportion of  the interest provided by the CCC. 
 
ANSWER:  CCC will cover interest up to 55% of the average investment rate of the most recent 26-
week Treasury bill auction.  
78. Please provide information on the implementa tion of counter-cyclical payments in recent 
years, notably, the payment for products including corn, soybean, cotton and rice, on a product-by-
product basis.  
 
ANSWER:   We refer China to our domestic support notifications for 2002-2005. 
  WT/TPR/M/200/Add.1 
 Page 197 
 
 
 79. Please provide information on the implementa tion of specific support measures for soybean.  
 ANSWER:  Data on support for soybeans by program can be found in our recent domestic support 
notifications for 2002 – 2005.  (3) Mining and Energy 
 
81. It is reported that the U.S. Federal Energy  Regulatory Commission (FERC) is regulating on 
the operating prices and service terms of around 130  interstate natural g as pipelines, around 1000 
electricity suppliers and 174 high voltage power transmission companies.  Please clarify the specifics.   
 
ANSWER:   The Federal Energy Regulatory Commission (FERC) monitors both the gas and electric 
wholesale markets to ensure that the markets are functioning correctly and to detect and investigate 
potential violations of Commission orders, rules a nd regulations that prevent market manipulation. 
FERC issues licenses for non-federal hydroelectric facilities, primarily covering environmental and 
safety issues, but it does not have jurisdiction over electric production.  The Commission provides 
authority for power marketers to use market-based rates.  In the natural gas industry, the commodity pri ce is market-based. FERC regulates the transmission 
tariffs for interstate natural gas pipelines.  These ta riffs include the price and terms of service.  FERC 
rules require that pipeline companies ensure fair treatment for all shippers, regardless of their 
affiliation with the indivi dual pipeline.  In the electricity sector , the combined price for electricity 
(both production and transmission) is market-bas ed in areas with organized regional wholesale 
markets. The organized markets are operated by Independent System Operators or Regional Transmission Organizations which are under FERC regulation, with the exception of ERCOT in 
Texas and the organized markets outside of the United States.  These markets encompass about 60% 
of all consumers.  Most of these markets use noda l (or congestion) pricing models.  Buyers can 
purchase power on the spot market and also engage in “bilateral” trades between willing buyers and 
willing sellers.   In areas of the country that do not have organized markets, transmission providers file a traditional 
cost-of-service tariffs with FERC for their services,  which is called the Open Access Transmission 
Tariff. In these areas, buyers and sellers can enga ge in “bilateral” trades between willing buyers and 
willing sellers under either cost-based or market-based rates.  82. The Secretariat Report notes that the Energy Policy Act of 2005 requires a doubling of bio-fuel use. And the federal policy encourages bi o-fuel production and use through tax incentive 
programme which cost in forgone ta x revenue was US$2.7billion in 2006. 
 
a. What is the U.S. point of view regarding th e interlinkage between such kind of bio-energy 
policies and the worldwide food price hike?  b. The world is faced with a situation where food prices continue to go up and poverty 
population is confronted with food security crisi s. In these circumstances does the U.S. have any 
plan to adjust its bio-energy policy? 
 
ANSWER:  The United States pursues policies to make sure the American people have access to 
safe, abundant and affordable supplies of both energy and food.  In the face of long term rising prices 
for energy and accompanying concerns, the Energy Policy Act of 2005 created incentives to diversify 
the portfolio of fuels produced by the United St ates.  These incentives were continued under the 
Energy Independence and Security Act of December 2007.  This remains an urgent matter that is 
central to both our energy policy and our national security.    WT/TPR/M/200/Add.1 
Page 198  
 
 Increased production of biofuels is but one of many  contributing factors to increased food prices, and 
not the most significant.  The United States is inv esting significantly in the research and development 
of next generation biofuels that will simultaneously  promote food security and energy diversification. 
While it is clear that the increased conversion of  corn, soybean oil, and other commodities into 
biofuels in the United States and other economies contributes in part to the increased prices for these 
commodities, there are other factors that are cont ributing more to rising food prices worldwide.  
 Demand for food in many countries has increased as incomes in many developing economies have 
increased;  examples of this are India and Chin a where the GDP growth has increased demand, 
particularly demand for meat products, which has cont ributed to both a growth in meat exports from 
the United States and also growing demand for protein meals, soybean meal, other food products.  
 Higher oil prices mean higher costs of transportation, processing, packaging and distribution, and all the other steps that bring food from farms to mark ets.  Fertilizer and other important inputs into 
agricultural production have also increased in price.   
 
Another major factor affecting world food prices h as been adverse weather conditions, particularly in 
Asia and Australia.  More recent, a number of fo reign governments, including WTO members, have 
imposed export restrictions on food and fertilizer , contributing to price increases for these products.  
The United States is actively working to address food security concerns associated with biofuels. We 
welcome further research on the reasons for food price increases. 
 
(5) Services 
 
83. Please provide the information on bala nce of payment of U.S. services trade.  
 
ANSWER:  According to the Bureau of Economic Anal ysis, in 2007, the United States recorded a 
total services trade surplus of $107 billion, and a tota l goods trade deficit of $815 billion.  In terms of 
trade with China, the United States recorded a services trade surplus of $5 billion in 2007, and a 
goods trade deficit of $256 billion.  For additional information covering previous years, please see:  
http://www.bea.gov/international/xls/table1.xls.  
84. Please provide specific information on U.S. services trade with WTO developing Members, 
including sectoral and Member-specific breakdowns .  Please list the major imports and exports of 
services (by sectors and trade value) and main destinations of U.S. service trade surplus.   
 
ANSWER:   No agreed WTO definition for developed or  developing Members exists, and it is up to 
individual Members to self-designate their develope d/developing status.  Furthermore, while the 
United States collects a wide range of services tr ade data, we are not able to provide individual 
breakouts for all WTO members.    In 2007, the latest year for which data are avai lable, U.S. exports of private services totaled 
$462 billion, while imports of private services tota led $335 billion.  Sales of services through foreign-
based affiliates in 2005 reached $529 billion, while purchases of services through U.S.-based affiliates 
reached $389 billion.    The United States publishes more detailed estimates of services trade data on an annual basis in the 
October issue of the Survey of Current Business, a publication of the Bureau of Economic Analysis 
(BEA).  BEA classifies its cross-border data by type  of service, and its sales through affiliate data by 
the primary industry of the affiliate.  For this info rmation on private services  trade (with cross-border 
trade data through 2006, and sales through affiliates through 2005), including available 
sectoral/country breakouts, please see:  
Article: http://www.bea.gov/scb/pdf/2 007/10%20October/1007_rd_text.pdf.  WT/TPR/M/200/Add.1 
 Page 199 
 
 
 Tables: http://www.bea.gov/scb/pdf/2007/10%20October/1007_int_srvcs_tables.pdf. 
 Preliminary data for 2007 is available at:  http://www.bea.gov/interna tional/bp_web/list.cfm?anon 
=71&registered=0.  (iii) Financial services 
 
89. The U.S. regulatory regime offers national tr eatment to foreign banks.  However, in some key 
business aspects, restrictions are maintained that di scriminates against foreign service suppliers. For 
example, foreign banking institutions are prohibite d from participating in Federal Deposit Insurance 
Corporation (FDIC) and engaging in the retail banking services. These measures affected operations 
of foreign banking institutions in the U.S.   
a. Please justify these restrictive measur es and explain the policy considerations.  
 ANSWER:  Countries differ as to the scope of business they allow and the in-country capital they 
require for direct branches of foreign banks.  The United States is among the most liberal countries in 
the world with regards to capital for bank bran ches, allowing bank branches to lend based on the 
world-wide capital of its parent bank and requiring  only a capital equivalency deposit which is less 
substantial than normal capital re quirements.  Except for a number of grandfathered institutions 
(existing foreign bank branches operating with insura nce), branches of foreign banks are--in effect--
not allowed to take retail deposits (in fact, they  can take deposits from individuals in excess of 
$100,000, but such deposits are not eligible for coverage by FDIC depos it insurance so retail 
depositors tend to place their money with U.S. juri dical persons where the first $100,000 is eligible 
for coverage).  Those wishing to do retail banking  can do so through subsidiaries which are extended 
full national treatment, including capital requireme nts.  The limitation on retail deposits taken by 
foreign banks operating in the United States through branches is noted in the U.S. GATS schedule.  
The following link provides a summary discussion of the policy considerations  of allowing deposit 
insurance to various forms of bank establishmen t:  http://www.fdic.gov/deposit/deposits/international/ 
guidance/guidance/membership.pd. 
 
b.  Please indicate whether there are plans to remove these restrictions.  
 
ANSWER:  The United States does not intend to remove this limitation at this time.  
 
90. (page xi, paragraph 26)  The Secretariat Repor t notes that given the implications of the sub-
prime crisis, the U.S. regulator is consideri ng to change existing regulations and strengthen 
supervision.  
 
a. How will the sub-prime crisis affect th e establishment of subsidiaries or acquisition 
transactions of foreign banks in the U.S. market?   b. Will the U.S. authorities change their attitude to wards the entry of foreign banks after the sub-
prime crisis?  
 c. Will the regulatory changes impose limitations on the establishment or acquisition activities of 
foreign banks in the U.S.? Will these changes ma ke such establishment or acquisition harder 
than before?  
 
ANSWER:   The United States remains committed to open financial markets on a national treatment 
basis.  WT/TPR/M/200/Add.1 
Page 200  
 
 91. (page 104, paragraph 114)  The Secretaria t Report describes the general information on 
foreign banks in the U.S. as of end-June 2007, in cluding the number of institutions and their total 
consolidated assets. 
 
a. Please provide information on the applications  for establishment of foreign bank subsidiaries 
and branches in the U.S. in the last 2 years, in cluding: a) how many have been approved; b) how 
many are in the review process; c) how many have been rejected, and the detailed reasons; and 
d) which countries did these banks belong to.   b. Please provide information on approval of in ter-state acquisitions or de novo establishments 
by the existing foreign banking institution s in the U.S in the latest 2 years.  
 
ANSWER:   Detailed information with regard to fore ign bank operations in the United States is 
available on the Federal Reserve web site: 
 
Structure and share data:  http://www.federalreserve.gov/releases/iba/. 
Applications:  http://www.federalreserve. gov/newsevents/press/orders/2008orders.htm. 
 Additional information on specific institutions can be accessed via: http://www.ffiec.gov/nicpubweb/ 
nicweb/SearchForm.aspx  
92. (page 108, paragraph 130)  The Secretaria t Report notes that the RNIBBA of 1994 allows 
interstate branching by merger or de novo  establishment of branches.  However, there are special 
limitations and certain states  have different policies.  
 
a. Could the U.S. explicate in greater details w hat the requirements for interstate expansion by a 
foreign bank are, and what the spec ific criteria for approval are? 
 b. For foreign banks that have established subsidia ries or branches in the U.S. market, are there 
any restrictions with regard to exclusive prov isions, merger conditions, and quantitative 
limitations, etc. on their new mergers or de novo establishment of branches in the U.S.?  Please 
explicate the details .  
 
ANSWER:  Information on application requirements can  be found here: http://www.federalreserve. 
ov/generalinfo/applications/afi/intfilings.htm.  Relevant statutory provisions may be found at 12 U.S.C. § 3103, 12 U.S.C. § 1831u, 12 U.S.C. § 36, 
and 12 U.S.C. § 1828(d). 
 93. page 108, paragraph 130-132) The Secretariat Report mentions that there are strict limitations 
on the merger, acquisition or control of a U.S. bank by foreign banks.  lease explicate the specific 
restrictive measures on the foreign control of a U.S.  bank and the criteria for approval. Please justify 
their consistency with U.S.  commitments under the WTO . 
 
ANSWER:   The United States has strict prudential a nd supervisory standards for all investors, 
whether foreign or domestic, that wish to acquire control of a U.S. bank, whether by acquisition or 
merger.  These standards are applied on a national treatment basis.  
As noted elsewhere, some states may have restric tions on foreign control of state-chartered banks, but 
there are no such restrictions on foreign control of national banks operating in these states.  State-
based restrictions are noted in the U.S. GATS schedule.  94. Please clarify the supervision criteria for the existing branches of Chinese banks in the U.S., 
and whether the Chinese branches are subject to th e same requirements as the U.S. local banks.   WT/TPR/M/200/Add.1 
 Page 201 
 
 
 ANSWER:   Branches of foreign banks in the United Stat es are supervised for adherence to prudential 
standards of financial strength, appropriate risk  management controls, and adherence to legal 
requirements.  Branches of foreign banks may not accept retail deposits from U.S. customers but 
branches are allowed to engage in all other banki ng activities, including engaging in lending activities 
based on the parent bank’s consolidated worldwide capital.  
 
For questions 93 and 94 please refer to the Un ited States GATS schedule for a full review of 
limitations to the U.S. national treatment and MFN obligations.  95. The U.S. has some limitations and require ments with regard to board members of the 
subsidiaries of Chinese banks in the U.S.  
 
Does the U.S. have any plan to ease the li mitations in this regard in the future? 
 
ANSWER:   In contrast to some of our trading partners, the U.S. imposes no requirements on banks 
related to the citizenship of senior management or  key personnel.  Thus, foreign banks have full 
flexibility in appointing the executives and other personnel who are responsible for day-to-day 
decisions about how the business is run.  The U.S. does maintain some federal and state citizenship 
requirements for banks relating to composition of boards of directors.  In addition, in the case of 
national banks, the legal requirement that all board  members be U.S. citizens is routinely waived by 
the Office of the Comptroller of the Currency as l ong as a majority remains U.S. citizens.  The United 
States does not currently intend to remove its GATS limitation in this regard. 
 96. Please explain requirements and procedures of  review with respect to foreign sovereign 
funds’ investment in U.S. market, as well as the po licy objectives of the U.S in this regard.  What 
measures have been taken to ensure WTO transparency obligations are met?  
 
ANSWER:  The United States has a longstanding commitment to open investment.  Inbound 
investment stimulates growth, creates jobs, enha nces productivity and improves competitiveness.  The 
United States benefits from s overeign wealth fund (SWF) investments, so long as they are 
commercially driven.  Investment in the United Stat es, whether by SWFs or private parties, may be 
reviewed by the Committee on Foreign Investment in the United States (CFIUS) if the transaction 
could result in control of a U.S. business by a fo reign person.  Consistent with the U.S. open 
investment policy, CFIUS review is focused on identifying and resolving genuine national security 
concerns alone, not on economic and OTHER national interests.  The statute, executive order, and 
regulations governing the CFIUS process are all pub licly available, and proposed new regulations 
have been published for public comment. CFIUS also maintains a public webpage describing the 
review process at http://www.ustreas.gov/ offices/international-affairs/cfius/. 
 97. In March 2008, U.S. Treasury has put forward plans for the reform of the financial regulatory 
regime.  Please explain the content of the reform, cu rrent progress and the expected final results of 
the reform.  
 ANSWER:   The Treasury blueprint for modernization of  the financial services industry can be found 
at:  http://www.treas.gov/press/releases/reports/Blueprint.pdf.  98. In the recent crisis in the U.S. financial market, the credit rating institutions were widely 
criticized.  The problem of potential conflicts of interests, such as betw een credit rating businesses 
and consulting businesses, has surfaced in the crisis.  Please comment on this problem and explain 
whether there are plans to enhance U.S. adm inistration on the credit rating institutions.  
 
ANSWER:   Please see recent testimony by Chairman Cox on this subject, which can be found at: 
http://www.sec.gov/news/testim ony/2008/ts042208cc.htm. 
 WT/TPR/M/200/Add.1 
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 99. Please explain the regulatory requirements that have to be met for establishing a securities 
services institution and the procedures for application.  
 
ANSWER:  This information can be found in detail on the SEC website.  For example the following 
is the link to broker-dealer registration:  http://www.sec.gov/divisions/marketreg/bdguide.htm. 
 (iv) Air transport services  
100. (page 116, paragraph 167) Is there any plan to ease the foreign ownership limitations in the 
U.S. airlines in the near future?  
 ANSWER:  The requirements on the ownership and control of U.S. airlines are set by statute, rather 
than by regulation, and Congressional action is necessar y to change the specific statutory provisions.  
The United States approaches this complex issue with  an open mind.  There are potential benefits to 
expanding investment opportunities and enhancing th e ability of airlines to serve a global market, as 
made clear by United States Secretary of Transporta tion Mary E. Peters when ending the rulemaking 
on “foreign investment ” in late 2006.  If the U.S. Government, including the U.S. Congress, is to be convinced to amend our laws, however, it will be essential to explain these benefits in convincing 
terms.  Moreover, a number of serious issues will need to be addressed satisfactorily, including the 
role that U.S. airlines play in our national de fense under DOD’s Civil Reserve Air Fleet (CRAF) 
program;  homeland security issues; the concerns of airline labor; and the potential for cross-border 
investment to undercut the rights of carriers to operate to third countries.  
 
101. (page 116, paragraph 168) Under the code-sharing programme between a foreign air carrier 
and a U.S. carrier, is the foreign carrier allowed to put the code on the U.S. carrier’s domestic routes 
to/from the U.S. airports that are not open for int ernational airlines?  What are the considerations to 
grant approval?  
 
ANSWER:   Subject to applicable air service agreem ents, foreign carriers may place their code, for 
the purpose of carrying only their in ternational passengers, on domestic  flights operated by their U.S. 
carrier code-share partners to and from all air ports in the United States, subject to terms and 
conditions that apply on a non-discriminatory basis to all airlines.  Foreign carriers may not engage in 
domestic service within the United States (i.e. cabotage) on a code-share basis or with their own 
aircraft.  102. (page 117, paragraph 173) When will the second-stage U.S.-EU Air Transport Agreement 
negotiation start?  Please explain that in such  context, whether a furt her liberalized bilateral 
agreement will affect fair competition from a third party? 
 
ANSWER:   The United States will continue to honor its  bilateral obligations as we seek further 
liberalization with like-minded partners.  The fi rst round of the second-stage U.S.-EU negotiations 
was held on May 15-16, 2008.  The ambition for these negotiations, as mandated in the U.S.-EU agreement, is to continue opening markets to ma ximize the benefits of aviation liberalization for 
consumers, airlines, labor and communities on both sid es of the Atlantic.  It is also our hope that the 
U.S.-EU agreement will establish a precedent of gl obal significance to promote the benefits of 
economic liberalization in this important sector. 
 
103. Please explain what are the laws/regulations  and procedures that the DOT refer to when 
allocating routes and flight schedules, i.e. what is  the legal basis of “route case” and how it is 
implemented.  
 
ANSWER:  The legal basis for carrier selection cases comes under the broad statutory requirement 
that air carriers must be certificated by the Secretar y of Transportation in order to engage in interstate 
or foreign air transportation.  The domestic route sy stem in the United States is not regulated as to  WT/TPR/M/200/Add.1 
 Page 203 
 
 
 routes or frequencies of carrier operations.  Carri ers apply for authority to operate within the 
United States and once determined by the U.S. Governme nt to be fit as an airline, the carrier itself can 
decide how often services should be offere d and to which domestic destinations. 
 With respect to international service, where an  Open-Skies relationship is in place, routes and 
frequencies are open and as many airlines of both sides as want to can serve based on the airlines’ 
own perception of market demand.  However, th ere are a small number of markets that remain 
restricted in terms of the number of airlines that may serve and/or the level of services (frequencies) that can be provided.  These may require carri er selection proceedings where the Department 
announces available new routes and/or frequencies, and all U.S. carriers are afforded an opportunity 
to compete in applying for the new opportunities.   Where it is necessary for us to choose among our 
airlines for new routes/additional frequencies, our pr incipal objective is to select the carrier(s) that 
will offer and maintain the best service to the tr aveling and shipping pub lic and will best increase 
competition in the market(s) involved.  
The Department of Transportation’s selection cases ar e generally conducted on the basis of a “written 
record,” using “show-cause” procedures.  Under th ese procedures, the Department establishes a case 
to consider the competing applications and sets forth a list of the evidence that it expects all parties to 
submit for the Department’s consideration.  Appl icants and other parties are also free to submit 
additional information that they want the Department  to consider in making its decision.  All parties 
are then given an opportunity to respond to that information in writing to the Department and other 
parties to the case.  The Department reviews all of the written pleadings in conjunction with the 
selection criteria described above and issues a tentativ e (“show-cause”) decision.  All parties are given 
an opportunity to object to the Department’s pr oposed selection(s), providing arguments (“showing 
cause”) as to why they view the Department’s selection as incorrect.  After considering those 
arguments and responses to those arguments, the Department of Transportation issues its final 
decision that addresses the arguments raised  in response to its tentative decision. 
 104. How does the U.S. address the issue of antitrus t and prevent unfair competition in regulating 
the air transport market?  
 
ANSWER:   The Justice Department is responsible fo r enforcing the antitrust laws in the airline 
industry. The Department of Transportation has the authority to approve and grant antitrust immunity 
to international airline agreements, and has author ity to take action against anti-competitive practices 
in the airline and airline distribution industries. 
 
(v) Maritime transport 
 
105. Liberalization of maritime transportation is the most effective way to lower the cost of 
international trade and increase efficiency. As the wo rld’s largest trading nation and one of the largest 
maritime service suppliers, U.S. has shown reluct ance in making commitments regarding maritime 
services in the Doha Round despite continued effo rts from other Members, which undoubtedly causes 
negative impact on the negotiations of both this sector and the whole services negotiations as well. 
U.S. also maintains a number of discriminatory re strictions in maritime transportation services, in 
particular, regarding controlled carrier and port investment.   
a. Please indicate if the U.S. is prepared to make efforts to address the concerns of other WTO 
Members about U.S. commitments on maritime services. 
 
ANSWER:   The U.S. offers are developed following c onsultations with our domestic constituencies, 
and reflect our commercial and economic interests in the WTO negotiations.  In the course of the 
negotiations, the United States engages with other c ountries and responds to questions with respect to 
U.S. measures in this or any other sector.  We must note that there are several countries that have not 
submitted comprehensive requests or offers covering all sectors in this round of GATS negotiations.   WT/TPR/M/200/Add.1 
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 b. Please justify the restrictions on the controlled carrier.  Considering the fact that the majority 
of Chinese carriers deemed by the U.S. as “cont rolled carriers” areas the matter of fact fully 
market-oriented and self-accountable businesses, does U.S. have plans to remove the restrictions 
on these carriers? 
 ANSWER:  The 1984 Act defines a controlled carrier as an ocean common carrier whose operating 
assets are, directly or indirectly, owned or contro lled by a government. Due to a controlled carrier’s 
close national ties, the carrier may be subject to non-market based forces.  To address this concern, 
Congress enacted the Controlled Carrier Act (section 9 of the 1984 Act), to prevent controlled carriers, whose marketplac e decision-making can be influenced by  governmental priorities or by their 
access to non-market sources of capital, from e ngaging in unreasonable below-market pricing 
practices that could disrupt trade or ha rm privately-owned shipping companies. 
 In the Ocean Shipping Reform Act of 1998, Cong ress made a number of changes strengthening the 
controlled carrier provisions. OSRA expanded the de finition of a controlled carrier by deleting the 
previous limitation that an entity can be a controlled carrier only when it operates vessels registered 
under the government that controls the carrier.  This change removed a potential loophole that may 
have enabled a controlled carrier to “flag-out” or re gister its vessels under the laws and regulations of 
another country, thereby avoiding th e controlled carrier provisions.  In  addition, OSRA removed three 
exceptions from the controlled carrier provisions: ag reement membership, operations in a controlled 
carrier’s bilateral trade with the United States, and OECD signatory status.  Prior to OSRA, the rates, 
charges, classifications, rules, etc., of a controlle d carrier were exempt from the controlled carrier 
provisions when they were pursuant to a conferen ce tariff.  The removal of the second exception now 
brings cargo in a controlled carrier’s bilateral tr ade under the controlled carrier provisions of OSRA. 
 The Commission has identified eight carriers as meeti ng the definition of controlled carrier contained 
in the Shipping Act of 1984, as amended by OSRA .  While the controlled carrier list has shifted 
dynamically in flag and geographic focus over the p ast two decades, currently five of those carriers 
listed are owned or controlled by th e People’s Republic of China. Like the other three listed entities, 
those carriers owned or controlled (whether directly or indirectly) by the Government of the People’s 
Republic of China were only added to the controlled ca rrier list after a thorough review of the relevant 
facts.  It should be noted that the Commission has granted partial exemptions from the requirement 
that such carriers must publish changes to their rates,  rules and regulations that result in increased cost 
to the shipper thirty days in advance of the eff ective dates of such rates, rules and regulations. 
 In view of Congress having recently revised th e controlled carrier provisions under OSRA to 
strengthen its application and in view of the Comm ission’s continuing ability to consider exemptions, 
where justified, of ongoing requirements upon cont rolled carriers, the United States Government is 
not presently considering weakening or removal of these statutory requirements. 
 
c. Please explain reasons for rest ricting foreign investment, including investment from China, in 
the U.S. ports. Are there any plans to remove these restrictions?  
 
ANSWER:  The United States does not restrict fore ign investment in U.S. ports.  
 As discussed in paragraphs 17 to 25 of the U.S. report, the Committee on Foreign Investment in the 
United States (CFIUS) may review investments that may result in foreign control of U.S. businesses 
to determine and address their effects on the national security of the United States. 
 
106. With respect to oil pollution and environmental protection, each state of the United States enforces standards higher than speci fied in the relevant internati onal conventions approved by the 
United States. Vessel owners have to enter into extra arrangements with the concerned state relating 
to vessel apparatus and responsibility guarantee, which places a significant burden on vessel owners.   WT/TPR/M/200/Add.1 
 Page 205 
 
 
 Does the U.S. have any plan to unify those standards mentioned above so as to facilitate the provision 
of maritime transport services in the U.S.?  
 
ANSWER:   The United States does assert primacy at the fe deral level for matters related to interstate 
and foreign commerce. However, individual states ha ve enacted laws which challenge that federal 
primacy, and there are several cases curr ently pending before U.S. courts. 
 107. The Merchant Marine Act, 1920 sets limitations  on foreign vessels’ engagement in transport 
business in near ocean and within the U.S. and tran sport of projects whose expenses are born by the 
Federal Government must be carried by American vessels.  Has the United States ever considered 
relaxing such limitations so as to achieve grea ter economic efficiency through increasing competition 
in the U.S. market since last review?  
 
ANSWER:  Section 27 of the Merchant Marine Act of 1920, known as the Jones Act, stipulates that 
operations in the United States coastwise trade, intercoastal and noncontiguous trades (including 
Alaska, Hawaii, Guam, and Puerto Rico) are to be reserved for U.S.-built and U.S.-owned ships 
manned by U.S. citizens and related statutes are critically important components of our Nation's 
economic and military security and are fully and strongly supported by Congress. 
 108. Protection of transport along the coast of the U.S. under Jones Act affects reallocation of empty containers of foreign vessel companies.  These stipulations under Jones Act  have put extra 
burdens on foreign maritime companies, putting them at a disadvantage in their competition with the 
U.S. domestic companies.  Has the U.S. ever considered removing those limitations since last review? 
 ANSWER:   This policy is based on reciprocal privile ges to U.S.-flag vessels, the repositioning of 
intermodal equipment, e.g. empty containers, chassis,  and straddle bars, between U.S. ports is allowed 
on foreign-flag vessels, if the equipment is ow ned or leased by the owner or operator of the 
transporting vessel for use in handling his cargo in the foreign trade, (Section 27, 46 App. U.S.C. 
883). These reciprocal privileges are granted to Chinese and American carriers under terms of the 
U.S.-China bilateral Maritime Agreement.  109. The U.S. always rejects other Members to revise their legislations in case they constitute 
barriers for trade of export interest to the U.S. wh ile the U.S. always takes its own legislations of 
similar nature as an excuse for obstructing trade of export interest to other Members with the 
destination in the U.S.  Could the U.S. explain the logic of th is attitude of theirs and inform Members 
that this will be changed soon?  
 
ANSWER:   We are unclear as to the meaning of this question. 
 
(vi) Professional and business services 
 
110. (Page 122, paragraph 194) The Secretariat Repor t mentions that the U.S. still lacks a national 
regulatory regime regarding professi onal and business services, and st andards still vary from state to 
state, which results in de-facto barrier to trade in services.  Why is there little progress made in 
pushing forward a unified standard nationwide?  Does the U.S. have a specific timetable for 
eliminating this trade barrier?  
ANSWER:   The GATS contains no requirement for a national regulatory regime or uniformity 
among a Member’s sub-central entities regarding qualif ications and licensing.  In the United States, 
these rights are reserved for the states by the Cons titution.  Amending the U.S. Constitution to remove 
this power from the states is not under consideration.  That said, the Constitution also requires state and local regulatory authorities to ensure that policy 
measures provide equivalent access and treatment to service suppliers from all 50 states, leading state WT/TPR/M/200/Add.1 
Page 206  
 
 and local authorities develop licensing requirements and procedures based upon objective, non-
discriminatory criteria.  We believe the inherent principles of non-discrimination contained in this 
system also serve to benefit foreign service suppliers.    111. Please provide information on legislations pertaining to the administration of foreign 
invested accounting and auditing business.  Wh ich government agencies are in charge of 
accounting/auditing sector? 
 
ANSWER:  Legislative language may differ slightly fro m state-to-state or from jurisdiction-to-
jurisdiction.  The state (jurisdiction) boards administer the laws governing the practice of 
accountancy.  Generally the language in state legislat ion follows this pattern:  “The Boards may issue 
a certificate to an applicant who holds a substantially  equivalent foreign credential if:  the applicant 
receives the credentials based on education, examin ation and experience that are comparable to or 
exceed those in effect in this state.”  
State Boards are in charge of the regulation of  accounting/auditing.  The Securities and Exchange 
Commission (SEC) and Public Company Accounting Oversight Board (PCAOB) are also involved in the regulation of publicly listed entities.  112. Apart from the Public Company Accounting Oversight Board (PCAOB), which government 
agencies are also entitled to review the working paper of the accounting firms that provide services 
for the public listed companies? Which of these are the most important agencies? 
 
ANSWER:  The state boards are ultimately responsible fo r granting or revoking a license to practice; 
they might therefore be considered to be the most important.  
The SEC and PCAOB may bar a practitioner or fi rm from engaging in services for publicly listed 
companies, but they do not have the authority to re voke a license to practice in other areas that are not 
publicly listed.    113. Please provide the criteria for the market acce ss of the corporate accountants, auditors and 
accounting firms. Are there any restrictions on the foreign service- providers (including professionals 
of other Members’ corporations and accounting fir ms, as well as professionals for establishing an 
accounting firm in U.S.)?  
 
ANSWER:   Market access depends on an individual hol ding a license to practice in a particular 
state(s) and for those states that require firm licensure, a firm license for accounting and auditing 
services.  Market access depends on acquiring the same licenses as would be required of a domestic 
provider.  114. Are there any restrictions on the U.S. service pr oviders (including agenc ies and individuals) 
to provide services across states?  Are there any re strictions which may include restrictions on the 
scope of business on foreign service-suppliers to supply services across states?   
 
ANSWER:   Domestic providers must recognize and r espect licensure require ments of individual 
states in order to practice across state lines.  This  is greatly facilitated by two legislatively enacted 
concepts:    
“Practice Privileges” emanating from Substantially Equivalent States 
“Practice Privileges” emanating from Mobility Legisl ation, which provides for No Notice, No Fee, 
No Escape.   “No Escape” means the provider agrees  to be bound by the laws of the state he practices in subject to 
a “practice privileges” under “Mobility”.  No distin ctions are made for foreign providers as long as 
they meet the same requirements as domestic providers.    WT/TPR/M/200/Add.1 
 Page 207 
 
 
 115. Please provide information on the mutual recogni tion of qualifications between U.S. and 
other countries on accounting/auditing services .  
 
ANSWER:   Mutual Recognition Agreements are based on a comparison of the Three Es:  Education, 
Examination, and Experience that make up the esse ntial requirements for qualifying in accountancy 
bodies around the world.  The U.S. International Qualifications Appraisal Board (IQAB), at the 
request of a foreign body, may conduct an appr aisal of the other country’s requirement for 
certification to determine if the comparison be tween the U.S requirement and the other body’s 
requirements are Substantially Equivalent enough to  base an agreement on.  Both countries (U.S. 
IQAB and the applying foreign body) must be satis fied that there is sufficient commonality between 
the qualifications to enable accountants to practice in each other’s country. 
 
116. Please provide information on the number of  registered U.S. auditors and the number of 
domestic/foreign accounting firms.  
 
ANSWER :  Of the approximately 650,000 CPAs licensed in the U.S., about 60% are in industry, 
commerce and government.  Of the remainder in the client practice of accountancy, more than 50% 
do not engage in auditing accounting, instead choosing to restrict their practices to tax preparation.  
As of May, 2008, the PCAOB has 1,869 firms regi stered, of which more than 45 percent are 
headquartered overseas.  
 
117. What are the agencies responsible for the establishment and implementation of the 
accounting and auditing standards? How the CPA ex aminations are implemented and are there plans 
to reform the system?  
 
ANSWER:   Ultimately, the state boards of accountancy have the responsibility for the regulation of 
standards promulgated by the FASB, PCAOB, SEC, AICP A, and by the state boards themselves.  The 
state boards administer the laws governing the CPA examination requirements.  Many state boards leave the operation of the examination process to the National Association of State Boards of 
Accountancy (NASBA), and most states adhere to uni form requirements to sit for the exam.  The U.S. 
system for credentialing CPAs is constantly unde rgoing improvements that provide greater facilitation 
for domestic and foreign candidates to take the CPA examination.  
118. Apart from the accounting firms, which other service sectors are also subject to overseas due 
diligence? How are the investigations conducted?  
 
ANSWER:   For many professions, states may also require firms to be licensed to provide services in 
their jurisdiction, which often requires registrati on with the licensing board along with either the 
Secretary of State or the Department of Commerc e for that state.  However, because most other 
professions in the United States are regulated at the level of the individual, due diligence is usually 
exercised in the licensing process itself.   119. According to the estimate of the American Colle ge of Physicians, currently there’s a shortage 
of 126,000 nurses in U.S.  The national average vaca ncy rate for the nursing jobs is 9%, and reaches 
as high as 40% in some hospitals. According to the estimates of the Bureau of Labor Statistics, by 
2012, as many as one million nursing positions in U.S. will need to be filled.  The lack of nurses and paramedical personnel has greatly affected on th e welfare of U.S. consumers and patients.  Please 
explain, with such great shortage of nurses and taki ng into account that U.S. allows foreign nurses to 
provide services through immigration, why not allo w nursing services to be provided through CSS 
and IP on a short term basis?  
ANSWER:  Many foreign nurses live and work in the United States.  For the most part these services 
are not provided on a temporary basis. Shortages of nurses are largely met through permanent 
immigration and employment.  In cases where there is an interest in temporary nursing services, WT/TPR/M/200/Add.1 
Page 208  
 
 foreign nurses who meet U.S. licensure requireme nts may enter the United States under our existing 
“specialty occupation worker” (H-1B) program or under the H-1C program for foreign nurses and are subject to the terms of those admission categories.  120. It is a common complaint from Chinese industr ies that U.S. visa requirements and procedures 
are excessively burdensome.  To obtain a U.S. visa,  an applicant not only has to submit complicated 
application forms, but also has to undergo bac kground investigation, onsite interviews and leave 
fingerprints.  These requirements impose great difficulties on the movement of natural persons as well as trade and investment.  Please explain what measures has the U.S. been taken to ensure a balance 
between ensuring national security and facilitating mo vement of natural persons. Are there any plans 
to streamline procedures and requirements for H1-B visa?  
ANSWER:  We pursue the dual goals of keeping the United States safe and welcoming qualified 
temporary workers, and both are important.  A policy of “secure borders, open doors” is not a 
contradiction:  we can and must  guard our country against threats to our security and sensitive 
technology, while at the same time  facilitating legitimate travel.  U.S. immigration law requires such 
current visa procedures as submitting an application,  providing fingerprints, and interviewing with a 
consular officer.  In January 2008, the Department  of State issued guidance authorizing consular 
officers, in certain circumstan ces, to waive the non-immigrant visa interview and fingerprint 
requirements for some categories of applicants who have previously provided 10 fingerprints, been 
interviewed, and received visas.  A waiver of the interview requirement will not be permissible for 
applicants who require additional processing.  This  procedural change will allow us to focus our 
interviews on first time and other applicants w ho require interviews, while facilitating the visa 
renewals of legitimate travelers.  Efforts to stre amline visa procedures are not limited to one particular 
nonimmigrant classification.  The response to Question 121 (i) includes a discussion of the 
streamlining of nonimmigrant visa application procedures. 
 
121 Almost all states require architects and engineers register or obtain a license, but different states apply different standards and requirements w ith respect to registration/licensing, and state 
registrations/licenses are only effective within the te rritory of the state.  The system imposes great 
difficulties on the free movement of the architects and engineers between states, and is a substantial barrier for foreign service-suppliers.  
 
a. Please explain whether the requirements and procedures for registration and licensing of 
architects and engineers are identic al across all states.  If not , please specify the differences. 
Please also explain policy objec tives leading to these differences.  
 
ANSWER:  The United States takes issue with the assertion made here, which neither draws on nor is 
substantiated by the Review.  To the extent that there are limitations on mobility, they apply to all 
professionals and do not discriminate against foreign-service suppliers.  These professions are regulated at the state level, and their requirements and procedures for registration and licensing are not identical.  The U. S. federal government does not maintain a central 
source for such information.  Information on stat e licensing policies may be obtained directly from 
each jurisdiction’s web site.  The National Council  of Architectural Registration Boards’ and the 
National Council of Examiners for Engineering and Su rveying’s web sites also provides a link to each 
jurisdiction’s web site.  
http://www.ncarb.org/stateboards/index.html. 
http://www.ncees.org/licensure/.  In addition, the national councils of the regulatory bodies have been increasingly active in developing 
model rules, which state and local authorities then draw upon in developing their regulatory policies.   WT/TPR/M/200/Add.1 
 Page 209 
 
 
 These model rules have fostered a great deal of convergence among the states toward a common set of 
practices and principles in sectors such as architecture and engineering.  For example, the model rule in engineering gene rally requires a candidate for licensure to have 
obtained a bachelors degree in engineering from an accredited program, four years of progressive 
engineering experience subsequent to the degree, and the successful completion of both the NCEES 
Fundamentals of Engineering and the Principles & Pr actice of Engineering examinations.  The state 
laws usually include the national model but also typi cally have some requirements that are unique to 
that jurisdiction.  Some states such as California re quire an additional, state-specific examination for 
candidates who intend to practice structural engi neering to demonstrate knowledge of seismic 
concerns. 
 The model is very similar for architecture:  a 5-year NAAB-accredited degree in Architecture, 
followed by a 3-4 year structured internship pr ogram, and successful completion of the Architect 
Registration Examination (ARE).  Some jurisd ictions accept alternatives to the education and 
internship requirements.  All jurisdictions  require successful completion of the ARE. 
 
b. With respect to the architects and engineers from the developing countries, please explain 
whether work experiences in th eir home countries (regions) are recognized by US. If yes, are 
there any conditions attached? 
 ANSWER:   For architecture, the National Council fo r Architectural Registration Boards (NCARB) 
has a Broadly Experienced Foreign Architect (BEFA) program.  The BEFA process allows equivalent, demonstrated forei gn education and practice experien ce to satisfy the education and 
examination requirements for certification by NCARB.  The NCARB Certificate then serves as the credential for licensure in the speci fic jurisdiction.  For more information, see:  http://www.ncarb.org/ 
Certification/befacert.html. 
 For engineering, work experience typically must be of a grade and nature that demonstrates that the 
level of responsibility has increased over the four year period.  Also, most state boards require that the 
experience be gained under the supervision of a Professional Engineer who can attest to the quality 
and amount of experience.  Many state boards also  have a provision to allow candidates to explain 
why they did not have the opportunity to work under the direct supervision of a Professional Engineer 
and to request an exception to the requirement. 
 
c. Does the U.S. federal governme nt or the relevant associations have plans to harmonize the 
standards for registration/licensing of these professi onals? If yes, is there a specific timetable? If 
no, please explain the policy considerations.  
 
ANSWER:  See China question 110. 
 
d. Please explain whether identical standards  and procedures are applied in assessing the 
qualifications of foreign architects and engin eers in awarding registration/license to the 
domestic professionals? If not, please explain the details of the differences and policy objectives 
behind these differences. 
 
ANSWER:   Generally, the same requirements for licensure  apply to foreign candidates as they do for 
domestic candidates.  For architecture, if the applicant approaches an individual state, the 
requirements would be identical.  If they approach NCARB through an MRA or the BEFA program, a 
Certificate may be granted that may lead to licensure in a specific ju risdiction. In engineering, most 
licensing boards require an evaluation be completed on the educational credentials of any applicant 
educated outside the United States to determine the equivalency of that degree with a U.S. degree. 
 WT/TPR/M/200/Add.1 
Page 210  
 
 e. Please explain whether there are any restrictions on the business scope of the foreign 
architects and engineers. If yes, please specify  the exact measures and policy considerations .  
 
ANSWER:   Once licensed by a U.S. jurisdiction, fore ign architects and engineers enjoy the same 
scope of practice as domestic professionals in that jurisdiction.    f. Please specify which single enquiry point is designated by U.S. to implement the WTO 
transparency obligation with respect to registrati on/licensing of the architect and engineers.  
 
ANSWER:   USTR is the enquiry point for implementation of Art. III.4.  
 
 g. U.S. schedule of specific commitments st ates that “Two-thirds of the officers, partners, 
and/or directors of an architectural firm in Michigan must be licensed in Michigan as architects, professional engineers and/or land surveyors”. This restriction practically bans 
business of foreign architectural firms. Does U.S. have plans to remove this MA restriction? 
If yes, please specify the timetable. If no, pl ease explain the legal/practical difficulties. 
 
ANSWER:   There is currently no plan to remove this r estriction.  However, this requirement applies 
equally to U.S. firms and only puts a limitation on  firms establishing a practice in Michigan; it does 
not limit cross-border delivery of architectural services by foreign firms.    
 
 h. 12 states of U.S. have made reservations  on the national treatment in mode 4 for 
engineering/integrated engineering service.  Pl ease indicate whether U.S. has plans to 
remove these restrictions. If no, please exp lain the legal/practical difficulties. 
 
ANSWER:   There are currently no plans to remove these restrictions.  The Federal government 
continues to work with all states to encourage th e elimination of limitations on MA and NT where 
possible. 
 
i. Please explain the current visa type/requi rement for foreign architects and engineers. Is 
U.S. considering removing visa quota for mode 4 for these professionals, or streamlining visa 
requirements/procedures?  If yes, please specify  the timetable. If no, please explain the 
legal/practical difficulties. 
 
ANSWER:   Licensed architects and engineers may be admitted under the H-1B program. Because the 
H-1B program is applied on a global basis to any profession that meets the statutory requirement, there are no numerical limitations for the specific profession of architecture or engineering.  Visa 
requirements and procedures are designed to ad dress many policy objectives, such as national 
security, adherence to U.S. immigration and labor laws, public health and safety, among others.  The 
United States makes every effort to ensure that application procedures are practical and efficient, 
while ensuring these important policy objectives are met.  
 
We are constantly working on ways to streamline vi sa procedures.  The interview waiver authority is 
discussed in the response to Question 120.  The Depart ment of State is also moving quickly to make 
the entire visa process more electronic through an online visa application process, an online 
appointment system (which over 70 posts now use), and online fee payment.  A fully electronic process provides more accurate and verifiable informa tion, allows for screening in advance of the visa 
interview, increases convenience for applicants , and standardizes the process worldwide.  
 Postal Services 
 
122. Current U.S. WTO commitment only covers road-based courier service.    WT/TPR/M/200/Add.1 
 Page 211 
 
 
 a. Please explain whether U.S. allows foreign exp ress delivery companies to establish airfreight 
centers in U.S. and provide domestic/in ternational air express delivery service. 
 
ANSWER:  The right for a foreign express delivery company to provide air transport services to or 
from the United States will be governed by the a pplicable air transport agreement between the 
United States and that company’s homeland governme nt (in the absence of such an agreement, 
applications for authority can be considered on the b asis of comity and reciprocity.)  Such agreements 
typically also provide rights for carriers to perfo rm their own ground handling services and to employ 
without restriction any surface transportation for cargo to or from any points in the territory of the parties to the agreement or in third countries.  A dditionally, foreign companies may register in the 
United States, on the basis of effective reciprocity, to  engage in foreign indirect transportation (air 
freight forwarding activities other than as actual operators  of the aircraft.)  Foreign direct air carriers 
may not engage in domestic air transportation ser vices (cabotage) within the United States; but 
foreign air freight forwarders may (if their ho meland offers reciprocal opportunities to U.S. 
forwarders) handle domestic shipments so long as any air movement is on U.S. direct air carriers. 
 
b. Please list the laws and regulations govern ing express delivery. Are there provisions 
governing express delivery in th e Federal Aviation Law? 
 
ANSWER:  Certain legal restrictions apply with regard  to postal and express delivery services.  A 
combination of criminal and civil statutes and US Postal Service implementing regulations address 
private service provider participation in the postal sector.  In general, the Private Express Statutes (PES) (18 U.S.C. §§ 1693-1699; 39 U.S.C. §§ 601-606) make it unlawful for any entity other than the 
U.S. Postal Service to send or carry letters over post routes[1] for compensation unless postage on the 
matter carried by private carrier is paid in an am ount equivalent to the applicable postage, or the 
carriage qualifies for an exception or suspension.  Th us, private carriage of letters is not prohibited, 
although, in many circumstances, the PES makes pr ivate carriage of nonurgent letters economically 
disadvantageous. 
There are several exceptions to the PES: 
(1) letters or packets that “relate to some part of the cargo of such conveyance”[2];  
(2) those that “relate to . . . the current business of the carrier, or to some article carried at the same 
time as such conveyance”[3]; (3) “receiving and deli vering to the nearest post office, postal car, or 
other authorized depository for mail matter any mail matter properly stamped”[4]; (4) “the 
conveyance or transmission of letters or packets by  private hands without compensation”[5]; (5) “the 
conveyance or transmission of letters or packets . . . by special messenger employed for the particular 
occasion only;”[6] (6)  postage for private carriage ha s been paid; and [7] (7)  the carriage satisfies the 
price or weight tests. With respect to the latter excep tion, private carriage of letters is permitted if: (1) 
the amount paid for private carriage of the letter equa ls at least six times the current rate for the first 
ounce of a single-piece First Class letter (also known as the “base rate” or “base tariff”) [8];(2) the 
letter weighs at least 12.5 ounces[9]; or (3) the carriag e falls within one of the six suspensions to the 
Private Express Statutes that the Postal Service voluntarily promulgated in regulations codified as 39 C.F.R. §§ 310.1 and 320.2-320.8, as in effect on July  1, 2005.[10]  These suspensions cover data 
processing materials, letters of bona fide college and university organizations, international ocean 
carrier-related documents, extremely urgent letters, advertisements accompanying parcels or 
periodicals, and international remailing. 
Footnotes:  
[1] Under Postal Service regulations in 39 CFR Part  310, letters are defined as messages directed to a 
specific person or address and recorded in or on a tangible object.  Tangible objects include items 
such as paper, recording disks, and magnetic tapes.  Post routes are defined to include public roads, 
highways, railroads, water routes, air routes and le tter-carrier routes within the territorial boundaries 
of the United States on which mail is carried by the Postal Service.   WT/TPR/M/200/Add.1 
Page 212  
 
 [2] 18 U.S.C. § 1694.  
[3] Id.  
[4] 18 U.S.C. § 1696(a).  [5] Id. at (c).  [6] Id.  Carriage by special messenger of twenty-five or more letters or packets falls outside of this 
exception, however, and may only be performed under one of the exceptions in 39 U.S.C. § 601.  Id. 
[7] 39 U.S.C. § 601(a).  These requirements are as follows:  
(1) [the letter] is enclosed in an envelope;  
(2) the amount of postage which would have been charged on the letter if it had been sent by mail is 
paid by stamps, or postage meter stamps, on the envelope; 
(3) the envelope is properly addressed;  
(4) the envelope is so sealed that the letter ca nnot be taken from it without defacing the envelope;  
(5) any stamps on the envelope are can celed in ink by the sender; and  
(6) the date of the letter, of its transmission or [of its] receipt by the carrier is endorsed on the 
envelope in ink.  
Id.  
[8] Id. at (b)(1). [9] Id. at (b)(2). [10] Id. at (b)(3).  
c. If a foreign service-supplier wishes to provid e express delivery service across states, does it 
have to obtain license(s) for the establishment of branch(es) or office(s)? If a license is required, 
what is the scope of coverage of the license (national/state)?  
 
ANSWER:   No. The United States treats express delivery services as a lightly regulated business 
service. Express delivery suppliers are not subject to licensure at the federal or state level.  
 d. Please provide information on the foreign co mmercial presence in the U.S. express delivery 
market.   
ANSWER:  While we do not maintain a list of ever y foreign express provider, the following link 
provides information on extraterritorial offices  of exchange (ETOEs) in the United States: 
http://www.state.gov/p/io/ipp/55320.htm. 
 123. In the Doha Round, U.S. has excluded unive rsal service from the commitments on the postal 
services.  However, the U.S. postal law does not have a clear definition on the universal service. 
Please clarify the exact definition, business type and scope of coverage of universal service.  
 ANSWER:   As the question recognizes, U.S. postal law does not have a clear definition of universal 
service.  However, the Postal Accountability a nd Enhancement Act of 2006 makes a fundamental 
distinction between “market dominant” and “compet itive” products and directs the Postal Regulatory 
Commission to issue determinations related to these categories.  
Market Dominant includes: 
• Products covered by the Postal Monopoly, see, 18 USC 1696;  [letters and packets, generally 
applied to First-Class Mail and addressed Standard Mail]; 
• Products over which the Postal Service exercise s significant market power, as defined in 39 
USC 3642(b)(1); 
 Although subject to change, the list of products id entified by Congress in December 2006, at 39 USC 
3621 remains an accurate list of pr oducts deemed market dominant. 
  WT/TPR/M/200/Add.1 
 Page 213 
 
 
 That law also directed the Postal Regulatory Co mmission to research and report to the President and 
Congress on "universal service and the postal monopoly" in the United States, including its development, current scope, and an y proposed changes.  That report is currently under preparation, 
and is scheduled to be issued in December 2008.  Transparency---Notification of measures of gen eral application affecting trade in services 
 
124. China notes that the United States has not made any notifications to the Council for Trade in 
Services under Article III of the GATS since 2002.  Article III provides that “Each Member shall 
promptly and at least annually inform the Council for Trade in Services of the introduction of any 
new, or any changes to existing laws, regulations  or administrative guidelines which significantly 
affect trade in services covered by its speci fic commitments under this Agreement”.  Could the 
United States confirm that no new laws, regulations  or administrative guidelines or changes to exiting 
laws, regulations or administrative guidelines whic h significantly affect trade in services covered by 
its specific commitments under this Ag reement have been introduced since 2002? 
 
ANSWER:   The United States notes that fewer th an 20 of the 152 WTO Members have made 
notifications pursuant to Article III:3 since 200 2.  Accordingly, the absence of Article III:3 
notifications would not appear to support a conc lusion that they have neither introduced new 
measures nor changed existing measures in a manner that significantly affects trade in services 
covered by their specific commitments.  
 
Transparency—public involvement in the drafting process 
 
125. Could the United States explain what mechani sms are used to disseminate draft proposed 
laws and regulations for consultation with int erested parties, including prospective foreign services 
suppliers?  
 
ANSWER:   As a general rule, draft proposed regula tions are published and public comment is 
solicited, subject to certain exceptions established in  law, in the U.S. Federal Register, which is 
widely circulated in hard copy to librari es and universities, and is available on line at 
http://www.gpoaccess.gov/fr/Index.html.  Individual U.S. agencies may also post draft regulations on 
their own websites. 
The U.S. Library of Congress posts draft proposed laws, to the extent possible, on THOMAS, which 
is available at:  http://thomas.loc.gov/.  
CHINA ADDITIONAL 
 
2. (Page 82, Paragraph 1) The report noted that “the simple average out-of-quota MFN tariff in 
2007 was around 42%; the in-quota average was 9.1%”,  and added with the following information, 
“close to 91% of out-of-quota tariffs are non-ad valo rem, compared with almost 28% of in-quota 
tariffs”.  Why are the out-of-quota tariff and the in-quota tar iff of the same tariff line not treated in the 
same manner? Is it for the purpose of convenience to apply the ad valorem in the in-quota tariffs, 
which are set at the level that can actually allow the trade to happen?  
 
ANSWER:   The in-quota tariffs are based on long-standi ng tariff rates that have applied for these 
products.  The over-quota tariffs were only created in  the Uruguay Round as part of the “tariffication” 
process that converted absolute quotas into tariff-rate quotas.  Before the Uruguay Round 
commitments were implemented, these products faced  absolute quotas rather than tariff-rate quotas. 
 4. Government-owned or government controlled insurance companies are not authorized to conduct business in nearly 30 states of the United St ates, which include commercially important states 
like California, New York and Washington. WT/TPR/M/200/Add.1 
Page 214  
 
 a. Could the US please clarify what “governme nt-owned or government controlled insurance 
companies” mean?”   b. What efforts have been made by the US  Government to provide equal market access 
opportunities to government-owned or government  controlled insurance companies that conduct 
their business on the basis of commercial considerations?  
 c. Does the US Government inte nd to relax such restrictions? 
 
ANSWER:  There remain a number of commercially impor tant states that do not maintain limitations 
on authorization of government-owned or governme nt controlled insurance companies.  The NAIC 
has explained that the state regulators are concerne d that state owned or controlled companies could 
avoid U.S. regulatory oversight, especially regardin g enforcement actions. The meaning of the terms 
“government-owned or government controlled insuran ce companies” vary by state.  Some states use a 
general definition while others have  some discretionary authority.  There are no plans to relax these 
measures. 
 5. The US IT industry needs a great many prof essional service providers each year.  However, 
the number of H1-B visa issued each year is fa r from meeting the market demands.  The total quota 
for H1-B visa in 2009 is only 85,000, of which 20,000 is reserved for students who have received 
master’s degrees or above in the US, and another 6,800 is reserved for nationals from countries with 
which the US has bilateral trade agreements.  Excluding these two reservations, only 58,200 visas are 
available for all applicants around the world, which is far too limited for meeting the actual market 
demands.  To our knowledge, the U.S Citizenship and Immigration Service ceased taking H1B visa 
applications for skilled workers seven days af ter the visa window opened for year 2009. Similar 
situation has been witnessed in the previous years.   Due to the huge gap between the quota and actual 
applications, immigration officers had to hold a random drawing to winnow down the applications. 
The business communities in the US are seri ously concerned with this situation. 
 
a. Without prejudice to the US right to institute and implement its immigration policy, we would 
appreciate it if the United States could provide some information as to what efforts it intends to 
make to address the concerns of the business communities? 
 
ANSWER:  The numerical limitation applying to the H- 1B program is established in federal statute 
by the U.S. Congress. Both the Congress and the Admi nistration are aware of the concerns raised by 
the business community in this regard. In recent year s, there have been numerous legislative proposals 
related to the H-1B cap, but thus far none have been passed by the Congress. 
 
b. By reserving 6800 visa permits for Members with  which the US has signed bilateral free trade 
agreements, how does the US comply with Article  V.4 of the GATS in respect of any Member 
outside the agreement? 
 
ANSWER:   The reservation of 6,800 H-1B visas for certa in Members with which the United States 
has signed bilateral free trade agreements does not raise the overall level of barriers to trade in 
services for Members outside those agreements, and is therefore not in conflict with Article V.4. A numerical limitation of 65,000 is applied to certain petitions for H-1B visas, with an additional 20,000 
available in the case of H-1B applicants with adva nced degrees from U.S. uni versities.  However, not 
all petitions for H-1B visas are subject to these numerical limitations. In fact, in the case of certain 
petitions for H-1B petitions no numerical limitation is applied.  In practice the United States issues far 
more H-1B visas worldwide than the 65,000 inscrib ed in its schedule of services commitments. 
 6. In the United States, almost all states require architects and engineers to register or obtain a 
license, but different states apply different standards and requirements with respect to 
registration/licensing, and state registrations/license s are only effective within the territory of the  WT/TPR/M/200/Add.1 
 Page 215 
 
 
 state.  This system imposes great difficulties on the free movement of architects and engineers 
between states, and is a substantial barrier for foreign service-suppliers.  
 
a. Please provide information on the number of applications by foreign architects and engineers 
for registration/license in the US across states.  How many of the applications have been 
approved? (sector/home country breakdown) Ho w many have been rejected? Why have they 
been rejected?  
ANSWER:  The United States government does not collect su ch data.  In any event, the United States 
does not agree with the assumption that such data would be useful in evaluating the regulations and 
procedures implemented by state licensing boards and their conformity with applicable WTO rules.  
Applications are evaluated in a transparent and non-discriminatory manner; a ny variation in approval 
rates could be attributed to a number of factors that do not reflect on the fairness of the process.  
 
b. Please provide information on the mut ual recognition of qualifications (or similar 
arrangements) among the states for architectur al, engineering, integrated engineering and 
urban planning & landscape services. Please specify the number of professionals covered by such arrangements. 
 
ANSWER:   In architecture, the most common path to  licensure includes a minimum 5-year, National 
Architectural Accrediting Board (NAAB)-accredited de gree in Architecture, followed by a structured 
internship (approximately 3-4 years), and the comple tion of the Architect Registration Examination.  
Many states however have alternatives to satis fy their individual education and internship 
requirements.  There are 54 member boards (juris dictions) in National Council of Architectural 
Registration Boards (NCARB). There are approximately 110,000 licensed architects in the United States.  Authoritative information on st ate reciprocity or comity can be found at: 
http://www.ncarb.org/Certification/index.html 
 For engineering licensure, the state boards recognize engineering degrees accredited by ABET 
(formerly Accreditation Board for Engineering and Technology), progressive experience obtained 
under the direct control and responsible of a Prof essional Engineer, and the successful completion of 
16 hours of (National Council of Examiners fo r Engineering and Surveying) NCEES licensure 
examinations.  Applicants with these credentials ge nerally are allowed licensure in all jurisdictions 
without exception and are considered to be Model Law Engineers.  Authoritative information on state 
reciprocity or comity can be found at:  http://www.ncees.org/records/establishing.php.  For landscape architects, 49 states require licensure .  Licensing is based on the Landscape Architect 
Registration Examination (L.A.R.E.), and admission to the exam usually requires a degree from an 
accredited school plus 1 to 4 years of work expe rience under the supervision of a licensed landscape 
architect.  A landscape architect can also obt ain certification from the Council of Landscape 
Architectural Registration Boards, which can be us eful in obtaining reciprocal licensure in other 
states.  Authoritative information on state reciprocity or comity can be found at: 
http://www.clarb.org/Default.asp. 
 
Only one state requires licensure for urban planning. 
 
c. Please provide information on the mutual  recognition of qualifications (or similar 
arrangements) between the US and other count ries/regions for architectural, engineering, 
integrated engineering and urba n planning & landscape services. Please specify the number of 
professionals covered by such arrangements. 
 
ANSWER:  First, to correct an implication of the question, the U.S. federal government does not 
negotiate nor is a signatory to mutual recogniti on agreements.  MRAs are between state authorities 
and foreign entities. WT/TPR/M/200/Add.1 
Page 216  
 
 In engineering, ABET is a signatory to the Washington Accord, which recognizes substantial 
equivalence in the accreditation of qualifications in  professional engineering.  The U.S. Council for 
International Engineering Practice is a signatory to the APEC Engineer Agreement and Engineer 
Mobility Forum.  Since the individual state boards are empowered to enforce the engineering practice 
act in their respective jurisdiction, any mutual rec ognition agreement must be with the individual state 
board and the interested country/region.  Currently  the Nevada Board has entered into an agreement 
with Alberta, Canada to provide for the mutual recognition of licensees between these two 
jurisdictions.  The Texas Board has a reciprocity ag reement with Canada and Mexico, and is currently 
negotiating a similar agreement with Engineers Australia.  
Information on MRAs in architecture was contai ned in paragraph 215 of the Review.  The 
United States government does not collect statis tics on the number of domestic and foreign 
professionals that are covered by MRAs.  7. In regard to the US laws and regulations  on import of agricultural products:  In soliciting 
comments on its quarantine regulations on access of fo reign agricultural products, the US provided a 
lengthy argument about whether imported agricu ltural products would compete with its domestic 
industry. Members are concerned that this signals a possible abusive use of quarantine regulations as a 
disguised means of domestic trade protectionism.  What is the US explanation to this?   
 
ANSWER:  In the area of sanitary and phytosanitary m easures, U.S. regulatory decisions are made 
on the basis of a risk assessment.  Regulations  that establish our SPS import requirements do not 
include any provisions stipulating that an economic analysis must be conducte d for first time imports. 
 The economic analysis required under U.S. law does not dictate the regulatory action.  It does, however, provide stakeholders with important info rmation about the likely impacts of the regulatory 
changes that a particular agency proposes to make .  The need to conduct an economic analysis is a 
general administrative law requirement that appli es regardless of the subject matter of the proposed 
regulation.  8. The US has complex legal procedures leading to inefficiency in its work on pest risk analysis 
and quarantine access of foreign agri cultural products, and causing ser ious barriers to the agricultural 
products export from other WTO members to the US.  Does the US have any plan to improve working 
procedures to facilitate imports of foreign  agricultural products into the US market? 
 
ANSWER:   In July 2007, USG issued a procedure for issuing new and revised phytosanitary import 
measures. As an alternative to undergoing the fo rmal rulemaking-based process, imports that are 
eligible can now be approved through a notice-based  process.  As with the rulemaking-based process, 
a pest-risk analysis must first be conducted for ne w fruits or vegetables c onsidered for importation. 
However, if the risk analysis shows that the commodi ty’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 comments that disprove the findings of th e pest-risk analysis, a notice is then published in 
the Federal Register to announce that the USG w ill 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 sin ce the August 16, 2007 impl ementation date were 
completed in significantly shorter time periods.  The U. S. is very pleased with its experience with the 
notice based process. 
 
9. China expressed its intention to export apples to the US in 1996, and filed applications and 
submitted technical documents in 1998.  In 19 99 the US listed 800 pests, and China responded 
accordingly. In the bilateral meeting in 2000, the US agreed to make best endeavors to finish its initial 
risk analysis report in 2001. In 2003 the US agai n listed 787 pests, and China provided responses in  WT/TPR/M/200/Add.1 
 Page 217 
 
 
 April 2004.  In April 2005 China provided the requ ired additional technical documents based on the 
initial risk analysis.  In the bilateral meeting on pl ant quarantine in September 2006, the US indicated 
that the risk analysis report would be provided before the 16th bilateral meeting. Since then, China has 
urged many times but the US has not responded to date.  
ANSWER:  The United States conducts a multitude of risk  analyses for varying products from many 
trading partners.  With respect to Chinese-origin ap ples, the risk analysis process is being conducted 
in a thorough, deliberative manner in accordance with U.S. law. 
 10. The risk assessment on apples has been dra gging on for 10 years, which has caused serious 
impediment to China’s apple exports.  Could the US explain how and when it would finish the risk 
analysis so as to reduce the unnecessary ba rriers to international apple trade?  
 
ANSWER:  The process used to evaluate the phytosanitary risk associ ated with China’s market 
access request for apples is being conducted in a thorough, deliberative manner in accordance with 
U.S. laws and international rights and obligations .  The United States cannot predict when market 
access will be achieved. 
 11. The US has agreed to resume imports of Chin ese Ya Pear based on risk assessment.  In China, 
the apples and pears share quite similar production areas, pest occurrences and management measures. 
Please explain how the US would expedite the solu tion of apple importation from China on the basis 
of its work on pears?  
 ANSWER:   The United States has determined that the phytosanitary risk presented by ya pears is 
different from that of other pear species and apples .  An evaluation of the risk associated with other 
pear species and apples continu es in accordance with U.S. law. 
 12. The Chinese apples have been exported to Ca nada and Mexico, the neighboring countries to 
the US.  Does the US take this fact into consideration when dealing with the importation issue of 
Chinese apples?  
 
ANSWER:   No, the United States does not rely on th e regulatory decisions of neighboring countries 
to determine the appropriate level of protection for the United States.   Each country has a sovereign 
right to set its own appropriate level of protection under the SPS Agreement.  
13. Though Asian Pear is of different speci es from Ya Pear, it has exactly the same production 
areas and disease and pest occurrences with Ya P ear, the import of which from China has been 
approved by the US.  In 2005 China sent a letter to th e US applying for Asian Pear export to the US, 
and later raised the issue in many subsequent bila teral meetings.  In May 2007 the US wrote to China 
notifying its progress in risk analysis on China’s Asian Pear exportation, and requesting additional 
technical documents from China.  In July 2007 China provided the additional documents, but has 
received no response from the US to date.  Would the US please provide its feedback on the additional 
documents from China?  When does the US plan to fini sh the risk assessment?  In view of that China’s 
Ya Pears have obtained quarantine access, will the US  consider to simplify the quarantine procedures 
for Asian Pears and approve the import of China’s Asian Pears at an early date?  
 
ANSWER:   The phytosanitary risk analysis for Chinese- origin Asian pears is being conducted in a 
thorough, deliberative manner in accordance with U.S. law, and the conclusions of the analysis will be 
forwarded to China for review when appropriate.  14. In 1997, China and the US signed the Protocol on China’s Export of Penjing Plants in 
Growing Media to the US, but the US has never implem ented it.  Further more, the US issued relevant 
regulations later on, unilaterally tightening the re quirements on the entry of Penjing plants.  On 16
th 
January 2004, the US Animal and Plant Health Insp ection Service (APHIS) issued the Final Rule for WT/TPR/M/200/Add.1 
Page 218  
 
 the Importation of Artificially Dwarfed Plants in  Growing Media from the People’s Republic of 
China, requiring that China’s Penjing plants must be grown in growing medi a both before and after 
the transfer of the plants, and must be free of soil.   Meanwhile, the Penjing plants must be grown in 
greenhouses with mesh screening of less than 1.6 mm 2 years before export, and 0.6 mm 6 months before export.  These requirements are totally unrealistic, making China unable to export Penjing 
plants to the US. China has raised the issue many times, and sent a letter to the US again in November 
2006, clearly proposing its amendments to the regul ation on Penjing plants.  However, no response 
has been received from the US to date.  How would the US justify its above-mentioned requirements 
on Penjing are reasonable and consistent with the SPS Agreement?  
 ANSWER:   The final rule establishing phytosanitar y measures for importing Penjing plants in 
growing media was published in January 2004.  Th is rule explains why the phytosanitary import 
measures were necessary to achieve the U.S. appropr iate level of protection as demonstrated by the 
risk assessment.  The rule was publis hed in accordance with U.S. law. 
 
15. On the US responses to Ch ina’s comments on its WTO/SPS notifications: Since 2006, China 
has provided comments on 13 of US SPS notifications, but has received responses for only 2 of them from the US. The same is true with China’s enquiry.  According to the Recommended Procedures for 
Implementing the Transparency Obligations of the SPS Agreement  (G/SPS/7/Rev.2), a Member 
receiving comments should respond within a reasonable period of time to any Member from whom it has received comments as to how it w ill take these comments into account.  Could the US please 
explain how it has been honoring the Procedu res by responding to comments and questions from 
other Members? How are the comments of other WTO Members considered by the US? 
 ANSWER:   The United States responds to comments by re ference to these comment s in its final rules 
published in the Federal Register
 and notified to the Secretariat as an addendum to the original 
notification.   
 16. The US requires that Diethylene Glycol cannot be used in products for ingestion or possibly 
ingested.  Does the US have maximum allowance for Diethylene Glycol in end products like 
toothpaste? If so, please clarify the maximum allowance for Diethylene Glycol in medicated 
toothpaste and non-medicated toothpaste end products. Does the US apply the same maximum 
allowance for Diethylene Glycol for toothpaste of domestic producers? 
 
ANSWER:   Most toothpaste marketed in the United States is regulated as drugs.  FDA does not allow 
use of DEG in drug products.  It is not considered to be a safe excipient, and DEG is considered an 
adulterant.  
There is no established limit for DEG use in unmedi cated cosmetic toothpastes.  However when DEG 
does appear, it should not exceed trace levels b ecause it is a by-product or contaminant.  
 
The standards are the same for domestic or imported products. 
 17. Please provide detailed information on the ali gnment of US standards with international 
standards in areas of mechanical and elec trical products and ch ildren toy products.  
 
ANSWER:  The U.S Government does not track the percen tage of technical regulations that are 
based on international standards.  Legislati on implementing the Uruguay Round Agreements and 
additional guidance provided to regulators require them  in developing regulations to consider the use 
of relevant international standards that may be e ffective and appropriate for meeting their regulatory 
objectives. 
 
18. In the product areas above, are there any new technical requirements?  Could the US provide 
the list of related standard s and technical regulations?  WT/TPR/M/200/Add.1 
 Page 219 
 
 
 ANSWER:   Given the ambiguity in the time frame and pr oduct/activity coverage of the question, it is 
not possible to answer the question as posed.  In gene ral, final technical regulations can be found on 
agency websites (e.g., www.cpsc.gov) and on Regulati ons.gov.  As previously mentioned, the U.S 
Government does not track the percentage of tec hnical regulations that are based on international 
standards, nor does it track the standa rds being utilized in the marketplace.  
 
20. These regulations do not contain specific treatment requirements for the re-use of the 
collected waste electrical appliances and electroni c equipment, but seem to focus more on collection 
and commitment of manufacturers.  This tends to  cause trans-boundary transf er of waste electrical 
appliances and electronic equipment, which deviates from the aim of these regulations.  How will the 
US prevent such trans-boundary transfers and ensure the realization of goals of the regulations?  
 
21. Some clauses of the Computer and Television Recovery and Recycling Act  have greater 
impact on the cost of new, small, and non-native br ands than that of esta blished, big, and native 
brands, which is against the principle of fair trade.  What is the US justification for such inconsistency 
with WTO principles? 
 
ANSWER (20-21):  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 legislatures in the United States every 
year, and the vast majority of such proposals are no t enacted into law.  The proposed bills that were 
notified in documents G/TBT/N/USA332 and G/TBT/N/USA 342 were subsequently enacted, and the 
United States will notify to the WTO for comment any proposed implementing regulations.  
 22. On technical regulations on children’s produc ts:  Through January to February 2008, the US 
made a number of TBT notifications on children’ s goods. China notes that there are some common 
problems with the rationality of these notified techni cal regulations and their consistency with WTO 
rules.  China is concerned and looking forward to the US clarification. 
 
The regulations set limits on total lead content in  toys, and have failed to distinguish soluble and 
insoluble lead content.  As a matter of fact, only so luble lead is hazardous for human health.  In view 
of this fact, most countries in the world only have li mits on soluble lead in toys rather than the total 
lead content.  China has expressed its hope for ma ny times that the US to cancel this limit.  Does the 
US have any plan to modify the requirements with regard to lead content?   
 23. The notified draft regulations of the US restrict the use of DINP, DIDP, and DNOP.  To date 
there is no specific scientific evid ence that these three substances are hazardous for children’s health. 
The restriction will directly result in the incr ease of production cost and testing cost of toy 
manufacturers, and create trade barriers.  Could the US please provide the reasonable scientific 
evidence for restricting the use of the three subst ances-DINP, DIDP and DNOP?  Otherwise, will the 
US consider removing such restrictions?  If not, why   
 
24. These draft regulations establish a MRL of 0. 1% for 6 phthalates (DEHP, DBP, BBP, DINP, 
DIDP, and DNOP), with the testing scope covering all toys and children care articles.  It neither 
designates testing methods by age groups nor excludes the parts that the children do not contact in 
use.  In accordance with the principle established in ISO 8124 for determining the poisonous 
substances in toys subject to testing, the parts s ubject to poisonous substan ces testing should be the 
material that children could possibly contact in nor mal use or abuse of the toys.  In accordance with 
the principle established in the same ISO standard for testing the hazardous elements in toys, only the 
toy material that is put in mouth or used by children under 6 years old is subject to testing.  Please 
provide the reasonable scientific evidence for this li mit of 0.1%?  Does the US plan to narrow the 
scope of test and inspection by designating testin g methods by age groups?  If not, what is the 
justification?  
 WT/TPR/M/200/Add.1 
Page 220  
 
 25. On Notification G/TBT/N/USA/346 (Phthalates and Bisphenol-A - Prohibitions - Toys and 
Child Care Articles):  The US already began to consider revoking it when notifying it in January 
2008.  It was revoked in March 2008, but was not ti mely notified to other WTO members.  As a 
result, China only learnt of the revocation after ha ving provided comments to this notification.  As a 
WTO member, the US is supposed to have notified the revocation of notification USA346 to other 
WTO members in a timely manner. Please explain why the US has failed to notify such information to 
the WTO, even until now?  
 
ANSWER (22-25):  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 legislatures in the United States every 
year, and the vast majority of such proposals ar e not enacted into law.  The United States will 
continue to notify any proposed regulations to the WTO for comment.  
26. On regulations on organic food: the US notified its proposed National Organic Program 
(NOP) (G/TBT/N/USA/244) in March 2007.  The proposal amended the regulation on the national list 
of substances permitted and prohibited by the US Department of Agriculture, involving all kinds of 
organic food.   
According to the proposal, the organic products ex ported to the US shall comply with the NOP 
requirements.  Could the US please explain how it has taken into account the conditions of 
production, geography and climate in other countries when it formulated the NOP?  
 ANSWER:   When the NOP publishes a proposed rule requesting comments on amendments to the 
NOP requirements, all interested parties – both domes tic and foreign – are invited to participate. One 
of the purposes of the NOP is to facilitate domestic  and international marketing of fresh and processed 
food that is organically produced and assure consum ers that such products meet consistent, uniform 
standards.  Therefore, NOP invites foreign commenters to explain how changes in the NOP 
requirements may affect production in various clim ates and geography in those countries insofar as it 
may affect exports to the United States.  The NOP  did received comments from foreign parties when 
the March 2007 proposed changes to the NOP requi rements were published and these were addressed 
in the final rulemaking published in October 2007.   
 
27. Compared with the version published on the website of US Department of Agriculture, the 
notified version has made many changes, but ther e were no explanations for such changes in the 
notification.  Could the US please confirm which is the valid version of NOP? If it is not consistent 
with the currently notified version, will the US consider a second notification to WTO?  
 
ANSWER:  The NOP web site has recently been update d.  To access the latest version of the NOP 
requirements, go to http://www.ams.usda.gov.  On th e left side of the screen, click on the “National 
Organic Program.” This will take you to the NOP we b site.  Once there, on the right side of the 
screen, click on “Regulations.”  At the top of the screen is a link to the “e-code of Federal 
regulations,” which will always be the most up-to-date version of the NOP requirements. 
 28. The proposal prohibits the use of milk substitu te.  However, there could be emergent cases of 
lacking organic milk in all organic farming, pa rticularly at the beginning of organic farming 
development when organic milk is not easily available.  Please justify. Will the US take on board the 
Chinese opinion that substitute diary be allowed in cases of emergency?   
 
ANSWER:   No synthetic dairy replacers are allowed as m ilk substitutes, effective October 21, 2007.  
Milk replacers without antibiotics, for emergenc y use only, no nonmilk products or products from 
BST treated animals, were not renewed for use by the NOP based on a recommendation from the 
National Organic Standards Board (NOSB).  Petitions  to the NOSB for reconsideration of substitute  WT/TPR/M/200/Add.1 
 Page 221 
 
 
 dairy products, including synthe tic milk replacers, are always welcome, however.  To submit a 
petition, contact the NOP at the NOP website (see above).  29. According to the notification form, the proposed  dates of adoption and entry into force are to 
be determined.  Has the regulation concerned been adopted or entered into force? If not, when?   
 
ANSWER:   The proposed rule that was published in March 2007 became effective October 21, 2007 
after publication in the Federal Register (Vol. 72, No. 199) on October 16, 2007.    
30. On 8 March, 2007, the US Consumer Product Safety Commission (CPSC) notified the 
Standard for the Flammability of Clothing Textiles  (G/TBT/N/USA/242).  Please provide information 
on the adoption and enforcement date of this standard. Has the US taken into consideration of 
China’s request for at least one year as a period of adaptation?  
 
31. The standard requires that all samples shall be dry-cleaned before they undergo the laundering 
procedure, i.e., the refurbishing method includes bot h dry cleaning and washing. In view that some 
textiles are appropriate for dry cleaning, and others  for washing, China proposes that the refurbishing 
method include either dry cleaning or washing.  Has the US taken this suggestion into consideration?  
 
ANSWER (30-31):  The final regulation was published in th e Federal Register on March 25, 2008 
(73 Fed. Reg. 15636).  The purpose of the ru lemaking was to amend a regulation that was 
promulgated in the 1950’s in order to better reflect  current consumer practices and technologies and 
clarify several aspects of the regulation.  The re gulatory process began in Fe bruary 2007 and lasted 
over a year.  The effective date of the regulati on is not until September 22,  2008, so suppliers will 
have six months to comply with its requireme nts.  CPSC took China’s comments on the proposed 
rulemaking into account during the regulatory process, and CPSC’s explanation of its revisions to the 
original regulation and its responses to comments re ceived can be found in the final regulation. 
 
32. The US House of Representatives and Senate adopted “Consumer Product Safety 
Modernization Act”(H.R.4040) a nd “CPSC Reform Act” (S.2663) on 19 December 2007 and 6 March 
2008 respectively.  China notes that the US has not notified the two Acts to the WTO.  Meanwhile, 
China also notes that, specific and concrete t echnical requirements and standards on consumer 
products and children products ar e provided under these two Acts.  For instance, every manufacturer 
of a children’s product which is subject to a childre n’s product safety standard has to have the product 
tested by a qualified non-governmental independent th ird party.  Also, a children’s product would be 
considered to contain lead and should be prohibited if :  any part of the product contains lead or lead 
compounds and the lead content of such part (calcula ted as lead metal) is greater than 0.03 percent by 
weight of the total weight of such part.  Three years after enactment, the permitted amount would be 
reduced to 0.01 percent.  Within 1 year after the date of enactment, the permissible lead level in 
consumer-use paint should be reduced from 0.06 percent to 0.009 percent by weight.   Have these two 
Acts been approved by the US President?  Please provide updates. Is the US going to implement its 
transparency obligation and notify these two Acts to the WTO? If not, why? If yes, when?  
 
33. It is noted that concrete, specific technical requirements and standards are involved in the two 
Acts.  China would like to ask whether these speci fic detailed technical re quirements and standards 
are supported by scientific assessment and based on scientific information and evidence to fulfill the 
WTO obligation.  If yes, please provide relevant scien tific information.  If not, how does the US take 
steps to fulfill the WTO obligations? 
 
34. Please clarify whether the US Administrati on will fulfill its WTO/TBT obligations to respect 
scientific information and evidence and ensure that  relevant technical requirements and standards 
are based on sufficient scientific and technical in formation so that unnecessary trade barriers are 
avoided when developing corresponding technica l regulations which follow the two acts.  
 WT/TPR/M/200/Add.1 
Page 222  
 
 35. If relevant technical requirements in the two Acts , such as the criteria for lead contained in 
consumer-use paint, are not justified by scientific  information and evidence, how will the US 
government formulate technical regulations consis tent with its obligations under the WTO and fulfill 
the Congress’s acts at the same time? Please explain.  
 
ANSWER (33-35):  The United States does not agree with  the assumptions underlying China’s 
questions.  Moreover, the cited measures are proposed Federal legislation, not regulations.  There are 
several thousand measures proposed in the U.S. C ongress every year, and the vast majority of such 
proposals are not enacted into law.  The two bills cited by China are currently being discussed by a 
House-Senate conference committee, so the proposed legislation that may (or may not) be voted on by 
the House and Senate later this year may look signi ficantly different than either of the two current 
bills. 
 We note that bills proposed in the U.S. Congress ar e public documents and available on the internet, 
for example, at http://thomas.loc.gov.  Interested parties including foreign governments are free to 
express their views to members of Congress, as well as their staffs and the staff of committees, as well 
as to the Administration.  Moreover, congressi onal debates are published in the Congressional 
Record, and committees issue reports explaining the inte nt of the legislation, often on an article-by-
article basis.  The United States can assure China that it will con tinue to notify any propo sed regulations to the 
WTO for comment.  
 
36. The Federal Communications Commission requ ests that since March 1st 2007, all TV sets 
marketed in the US should be digital and all digita l TV sets with screen larger than 13 inches must 
comply with the DTV standards developed by Advanced Television Systems Committee (ATSC). 
Therefore, DTV manufacturers must ensure that thei r DTV sets are consistent with ATSC’s standards 
if they plan to ship their products to the US mark et. Furthermore, due to the fact that a great amount 
of patents are involved in ATSC’s  DTV standards, a huge amount of patent fee is imposed on DTV 
manufacturers when they produce and ship DTV sets which conform to ATSC’s DTV standards. They 
complain that the fee for patents in ATSC standard s is much higher than a reasonable level and that 
constitutes unnecessary obstacles on DTV manufacturing and trade. Has the US notified the adoption 
of ATSC’s standards on DTV to the WTO? If ye s, please provide detailed information about the 
notification.  If not, when does th e US plan to make the notification?  
 ANSWER:  As reported by the U.S. Representative to the March 2006 meeting of the TBT 
Committee, on November 3, 2005, the Federal Communications Commission (FCC) modified its 
digital tuner requirements to advance DTV tran sition. The United States notified the proposed 
modification to the WTO on July 8, 2005 in G/TBT/N/USA/128.  China’s written comments 
submitted to the FCC in response to notification G/ TBT/N/USA/128 were considered in making that 
decision and responses to them are contained in  the Commission’s “Second Report and Order” (FCC 
05-190).  A copy of the “Second Report and Order” w as provided to China in bilateral meetings held 
on March 14, 2006 and is also  available at www.fcc.gov. 
 
SEPARATE CUSTOMS TERRITORY OF TAIWAN, 
PENGHU, KINMEN AND MATSU 
 WTO Secretariat Report (WT/TPR/S/200) I. RECENT ECONOMIC DEVELOPMENTS 
(4) FISCAL POLICY  
(Paragraph 19 of Page 6) 
 
It would be appreciated if the US could please advise us of what trade effects are expected to accrue 
from the economic stimulus measures passed early in 2008 to assist individuals and businesses?  WT/TPR/M/200/Add.1 
 Page 223 
 
 
 ANSWER:   The Economic Stimulus Act of 2008 is d esigned to give a temporary boost to the 
economy to help support activity as the housing sector continues to adjust.  By the middle of July, 
about 130 million households will have received more than $100 billion. Incentives to increase 
business investment will be working throughout the year.  We expect that these measures will keep 
the economy working at a higher level of activity and employment than would otherwise be the case.  
The major effects on trade will be through the increa se in U.S. domestic demand.  Imports will likely 
be higher than would be the case if there were no stim ulus package.  To the extent that U.S. imports 
are higher, this will stabilize or boost the economies of  major U.S. trading partne rs and their suppliers.  
In addition, there will be modest addition to U.S. exports as a result of the boost to foreign activity.  
The trade effects are likely to be relatively small. 
 
II. TRADE POLICY REGIME: FRAMEWORK AND OBJECTIVES 
(1) OVERVIEW (Paragraph 3 of Page 12) (2) INSTITUTIONAL AND POLICY FRAMEWORK (Paragraph 10 of Page 13)  
 As indicated in the Report, while the United St ates considers that a comprehensive multilateral 
agreement offers the best chance to create e xpanded trade and development opportunities around the 
world, it believes that bilateral and regional trade lib eralization can also provide significant benefits.  
Consistent with this, the United States has con tinued to enter into preferential agreements.  
Furthermore, the US Administration and congressional leaders concluded a "trade policy template" in 
May 2007.  According to the USTR, the template provides a "clear and reasonable path forward for 
congressional consideration of Free Trade Agreemen ts with Peru, Colombia, Panama, and Korea 
[and] opens the way for bipartisan work on Trade Promotion Authority." 
 
Given the U.S. commitment to a strategy of trade  liberalization at the multilateral, regional and 
bilateral levels, what are the prospects for th e FTA with Colombia, Panama and Korea being passed 
by Congress, and the implications for other possible developments such as th e renewal of the Trade 
Promotion Authority and the extension of Trade Adjustment Assistance?  
 ANSWER: The May 2007 understanding demonstrates that the Administration can work with the 
Congress to accomplish an ambitious trade agenda.  The Administration has submitted legislation on 
the free trade agreement with Colombia and is in  active discussions with the Congressional leadership 
on moving that legislation forward.  We are also  consulting with Congress on submitting legislation to 
implement the pending free trade agreements with S outh Korea and Panama.  In addition, Members of 
Congress support an ambitious result from the Doha  Round negotiations and the Administration will 
be working to achieve a strong result that opens markets in agriculture, NAMA, and services. Thus, 
the future of Trade Promotion Authority and th e Trade Adjustment Assistance program are also 
important issues for Congress.  (3) FOREIGN INVESTMENT REGIME (ii) Reporting and review requirements (Paragraphs 22 and 24 of Pages 15-16) 
 The Report mentions that the Committee on Forei gn Investment in the United States (CFIUS) may 
review a previously reviewed transaction wher e CFIUS received false or inaccurate material 
information during the initial review or investigati on, or if a "mitigation" agreement resulting from the 
initial review or investigation w as "intentionally and materially breached".  Furthermore, under 
FINSA, CFIUS or a lead agency designated by th e Secretary of the Treasury may enter into, modify, 
monitor, and enforce agreements with any party to  a covered transaction to mitigate the transaction's 
national security risk.  Every mitigation agreement must be justified by a written analysis of the 
national security risk posed by the transaction.  
 WT/TPR/M/200/Add.1 
Page 224  
 
 a) Please could the U.S. elaborate further on the legal status of a mitigation agreement, and its 
key elements or provisions? 
 
ANSWER:   Mitigation agreements are contracts that one  or more U.S. Government agencies enter 
into with one or more parties to a transaction befo re CFIUS.  Prior to FINSA, agencies entered into 
these agreements under their inherent authority to en ter into contracts.  FINSA formally authorized 
CFIUS and any lead agency to negotiate, enter into or impose, and enforce ag reements with any party 
to a covered transaction.  As required by FINSA,  the annual report that CFIUS must provide to 
Congress by July 31 will include a discussion of th e types of security arrangements and conditions 
that CFIUS has used to mitigate national security concerns.  A version of this report will be made 
publicly available as well. 
 
b) How does the U.S. authority evaluate the mitigating effects of such an agreement? 
 
ANSWER:  Section 721(l)(1)(B) requires that any mitig ation agreement be based on a risk-based 
analysis, conducted by CFIUS, of the threat to na tional security of the covered transaction.  Executive 
Order 11858, as amended, further requires that the agency proposing a mitigation agreement prepare 
in writing and provide to CFIUS a statement that identifies the national security risk posed by the 
transaction and the measures it believes are reasona bly necessary to address the risk.  CFIUS must 
agree that the proposed mitigation is appropriate and approve the measures. 
 (Paragraph 25 of Page 16) 
 
In addition to section 721, the United States appli es industrial security regulations.  These generally 
require a contractor to obtain facility security cl earance and individual security clearance in order to 
perform a government contract involving acces s to classified sites or information.  
 
a) Could the U.S. please elaborate further on th e scope or coverage of industrial security 
regulations, and its legal sources? 
 
ANSWER:  The National Industrial Security Program (NISP), established by Executive Order 12829, 
governs the defense industry’s access  to classified information and ensures that the cleared U.S. 
defense industry protects the classified inform ation in its possession while performing work on 
contracts, programs, bids, or research and develo pment efforts.  The principal operating document 
under the NISP is the National Industrial Security  Program Operating Manua l (NISPOM), available 
on the website of the Defense Security Service of the Department of Defense.   b) We would appreciate knowing which authorities are in charge of issuing facility security 
clearance and individual security clearance, and their requirements of both substance and procedure. 
 
ANSWER:  The NISP is principally administered by the Defense Security Service of the Department 
of Defense.  The requirements and procedures for clearances are ou tlined in the National Industrial 
Security Program Operating Manual NISPOM. 
 
(4) INTERNATIONAL RELATIONS 
(ii) Preferential and other arrangements (a) Free-trade agreements  
(Paragraph 37 of Page 18) 
 
As indicated in the Report, the U.S. has recen tly been actively pursuing FTAs negotiations, which 
reflects its strategy of increasing leverage fo r promoting multilateral trade liberalization.  Could the 
U.S. please provide more details of the guide lines used for choosing FTA negotiating partners?  
  WT/TPR/M/200/Add.1 
 Page 225 
 
 
 ANSWER:  In selecting FTA partners, the United States considers a range of factors, including how 
the FTA fits with our larger goal of advanci ng free trade around the world, the likely economic 
benefit to the United States, and a country’s commitm ent to open markets and to the rule of law.  
These criteria are not applied in a mechanistic manner:   considerations that weigh heavily in the case 
of one country may be outweighed by  other considerations in the case of other countries.  In addition, 
the U.S. government seeks input from both Congress and the private sector.  We have also noted that 
partners of five of the FTAs that have r ecently entered into force are APEC members.  
 a) Is it the U.S. intention to give priority to  FTA talks with more APEC economies, and thus 
realize the “open regionalism” principle in th e APEC region and advance freer trade, for example 
through an FTAAP via multilateral negotiations?  
ANSWER:   The United States is willing to consider en tering into negotiations for an FTA with any 
country that meets its criteria, as described above.    (Paragraphs 36-38 and 41 of Pages 18-19)  
As indicated in the Report, we note that the Unite d States now has 14 bilatera l and regional free trade 
agreements in place.  Six additiona l FTAs have been completed, but  have yet to enter into force .  It 
would be appreciated if the U.S. could enlighten us as to its future trade policy towards FTAs and 
WTO negotiations, as well as its policy priorities. 
 
ANSWER:  The core of U.S. trade policy is to open markets and to advance the rule of law through 
the multilateral trading system, as it has been since before the founding of the GATT.  A strong and 
vital WTO is central to that task.  The United States also pursues bilateral and regional free trade 
agreements (FTAs) that are complementary to an d compatible with advancing the goals of the 
multilateral trading system.  U.S. FTAs, because of their comprehensive duty-elimination and breadth 
of commitments, produce significant benefits for its partners, and thus strengthen and expand the 
forces working towards global trade reforms.  Furthe rmore, the liberalization undertaken by many of 
our FTA partners has often led those Members to in creased participation in liberalizing at the WTO. 
 
III. TRADE POLICIES AND PRACTICES BY MEASURES 
(2) MEASURES DIRECTLY AFFECTING IMPORTS 
(i) Customs Procedures (b) Container Security Initiative (CSI) and Secure Freight Initiative (Paragraph 22 of Page 27) 
 We note from the report that approximately 90% of U.S.-bound cargo containers originate in or are 
transhipped from a CSI port.  
 
a) Could the U.S. please advise us of the antici pated schedule for implementing the 2006 SAFE Port 
Act, which contains requirements for three pilot programmes to assess the fe asibility of 100 percent 
overseas scanning of maritime containers?  
 
ANSWER:   On March 3, 2006, the Secure Freight Initiative (SFI) was launched to improve U.S. 
efforts to assess risks in the global supply chain.  The first three SFI ports (Puerto Cortes, Honduras; 
Port Qasim, Pakistan; and Southampton, Unite d Kingdom) became fully operational on October 12, 
2007 (the total U.S.-bound container volume at  these three ports from October 12, 2007 to 
February 12, 2008 was 51,937 containers).  The United States is working on plans for additional pilot 
projects using scanning equipment, but has no schedule at this time.  
b) Moreover, how is the U.S. planning to bal ance its homeland security concerns with its trade 
facilitation objectives? 
 WT/TPR/M/200/Add.1 
Page 226  
 
 ANSWER:   We believe that while systems and practi ces will need to be changed to address security 
concerns, measures such as SFI help to “push out”  land borders.  This a llows determinations on 
safety, as well as commercial, concerns to be addressed at an earlier period of time, bringing more certainty and seamlessness to inte rnational trade.  Thus, these m easures can advance trade facilitation 
goals. 
 
(ii) Customs Valuation 
(Paragraph 32 of Page 29)  
The Report notes that the Customs and Border Pr otection (CBP) is considering switching from the 
current customs valuation practice of using the value of the “first or earlier” sale, that is, the sale 
between the manufacturer and the foreign intermediary, to using the price paid in the last sale prior to 
the importation into the United States.  If adopted, the CBP's proposal would result in the transaction value being determined on the basis of the price paid  by the buyer in the Unite d States, rather than a 
foreign intermediary.  What is the rationale for proposing this change?  
 
ANSWER:   The rationale for the Proposed Rule change  was to make the U.S. interpretation of the 
expression “sold for exportation to the United States' ' for purposes of applying the transaction value 
method of valuation in a series of sales situation co nsistent with the considered views of the WCO’s 
Technical Committee, as reflected in Commentary 22.1.  What would be the expected timetable for 
implementing the change? 
 
ANSWER:  The U.S. is studying the issue at this time. 
 
(v) Other charges affecting imports 
(Paragraphs 57 and 58 of Pages 33 and 34) 
 
Certain imports continue to be subject to a me rchandise processing fee and a harbour maintenance 
fee; both were described in the Secretariat report for the last Review of the United States.  The 
merchandise processing fee applies to imports valued at  more than US$2,000.  The fee is set at 0.21% 
of the import value; the statutory minimum and maximum are US$25 and US$485.  Originating imports under the free-trade agreements concluded between the United States and Australia, Bahrain, 
Canada and Mexico, Chile, the Dominican Republic and Central America, Israel, and Singapore are 
exempt.  Eligible imports from less developed c ountries and CBERA beneficiary countries are also 
exempt, as are certain products imported under the GSP.  The application of the merchandise 
processing fee has been extended until September 2014,  following the adoption of the American Jobs 
Creation Act of 2004. 
 
The American Jobs Creation Act of 2004 required the Secretary of the Treasury to issue recommendations concerning the possible elimination of fees collected by the Department of Homeland Security, including the merchandise processing fee.  Such recommendations have not yet been issued.  In the context of th e last Review of the United States, the U.S. authorities indicated that 
they had no intention of eliminating the merchandise processing fee. 
 
a) In view of the fact that the US Congress intended the merchandise processing fee to approximate 
the cost to the CBP of processing the entry of imported merchandise, would exemption from this fee 
for imports under the specified FTAs be inconsistent with the above- mentioned expectations, in terms 
of principle, policy goal, etc.?   
 
ANSWER:  No.  The United States considers its decision to absorb the costs of services for certain 
FTA partners to be entirely appropriate.  
b) Will the exemption be compensated for by the fees that might have been over-collected on goods 
imported from non-FTA partner countries?   WT/TPR/M/200/Add.1 
 Page 227 
 
 
 ANSWER:   No.  By statute, CBP may not use the fees it collects to fund services for goods exempt 
from the fees.  Rather, the U.S. ab sorbs the costs of such services. 
 
c) In addition, we would be interested in knowi ng the results and recommendations  of the Secretary of 
the Treasury study. 
 
ANSWER:  The study has not yet been finalized. 
 (vi) Anti-dumping and countervailing measures 
(a) Legislation and administration 
(Paragraph 70 of Page 36)  
We note that under any agreement entered into w ith a WTO Member considered to be a market 
economy, the suspension of a countervailing duties (C VD) investigation by the U.S. may also involve 
quantitative restrictions in addition to price undertakings.   a) Could the US please clarify how this practice is  consistent with Article 18.1 of the SCM Agreement 
and Article 11.1 of GATT 1994? 
 
ANSWER:  The provision of U.S. law referenced provides Commerce the discretion to accept an 
undertaking involving quantitative restrictions in ve ry limited circumstances.   There are no such 
agreements in effect at present.  In light of these facts, and given that it has not been established that 
such restrictions are inconsistent with the provisions  referenced in the question, we do not believe it is 
incumbent upon us to explain why they are consistent.  
b) In addition, what criteria does the U.S. apply wh en deciding on the quantitati ve restrictions to be 
undertaken by the exporting Member, in practice?  
ANSWER:   The provision of U.S. law referenced provides Commerce the discretion to accept an 
undertaking involving quantitative restrictions in ve ry limited circumstances.   There are no such 
agreements in effect at present.  (b) Anti-dumping (Para. 84 of Page 40) 
 
According the Report, the average duration of an AD measure in place at the end of 2007 was some 
11 years. Extending AD measures beyond the 5-year statutory time limit as provided by Article 11.3 
of the Anti-dumping Agreement appears to have become the norm in US practices.  Could the US 
please explain how the inconsistency of its overall practice in this respect with Article 11.3 of the 
Anti-dumping Agreement can be justified ? 
 
ANSWER:  The United States’ procedures on sunset review s are consistent with its WTO obligations 
and have been upheld in several WTO disputes.  Co nsistent with the principles of the Antidumping 
Agreement, an antidumping duty will remain in place as long as it is appropriate to address sales of 
merchandise at dumped prices that injure U.S. domes tic industries.  The Agreement provides that an 
antidumping duty will terminate after five years unl ess the Member initiates a sunset review before 
that date, to determine whether the expiration of  the duty would likely lead to a continuation or 
recurrence of dumping and injury.  The Agreement explicitly permits the duty to remain in force 
pending the outcome of that review.  If likelihood is determined, the Agreement permits the Member 
to maintain the antidumping duty subject to the ob ligation of conducting sunset reviews every five 
years.  The U.S. system, therefore, is entirely consistent with its obligations under the Antidumping Agreement.  WT/TPR/M/200/Add.1 
Page 228  
 
 We disagree with the characterization of U.S. sunset review procedures.  Of the 49 orders the 
United States has revoked following sunset reviews si nce January 2007, 20 were in force only five 
years.  Thus, the contention that the extension of duties beyond five years has “become the norm in U.S. practices” is not an accurate characterization.   (vii) Safeguards (a) Global safeguards (Paragraph 98 of Page 43) 
 
Under U.S. law, NAFTA partners are excluded fro m the application of safeguard measures, unless 
they individually account for a substantial share of total imports, and it is shown that they make an 
important contribution to serious injury.  It would be appreciated if the U.S. could please provide us 
with more detailed information on how we can dete rmine whether the import share is a “substantial” 
share of the totality and whether such importation is  “an important contribution” to serious injury to 
the US domestic industry.  
 
ANSWER:   Article 802 [of the NAFTA] provides that where a NAFTA country takes a global 
safeguard action that is, an emergency action dir ected at goods from all countries the country must 
exclude goods from other NAFTA countries unless:  • imports from a NAFTA country, considered indi vidually, account for a substantial share of 
total imports, and 
• imports from a NAFTA country, considered indi vidually or, in exceptional circumstances, 
imports from NAFTA countries considered collectively, contribute importantly to the serious injury or 
threat of such injury.  
Article 802 provides guidance as to when imports from a NAFTA country account for a "substantial 
share" of total imports and when imports from a NAFTA country or countries "contribute 
importantly" to serious injury or the threat of such injury.  Under Article 802(2)(a), a country 
"normally" will not be considered to account for a substantial share of total imports if it was not 
among the top five suppliers of the subject good.  
Similarly, under Article 802(2)(b), imports from a NAFTA country or countries "normally" will not 
be deemed to contribute importantly to serious injury , or threat, if the growth rate of imports from the 
country or countries during the period in which the injurious increase in imports occurred is 
appreciably lower than the growth rate of total imports from all sources over the same period.  The use of the word "normally" recognizes the need for so me flexibility in exercising this rule.  There may 
be instances in which a country not meeting one  of these guidelines should be included in the 
safeguards action, or the reverse.  
(iii) Export taxes, charges and levies 
(Paragraphs 178 and 179 of Page 58) 
 The U.S. Constitution's Export Clause bars Congress from imposing any tax on exports and the 
exported cargo is exempt from the harbour mainte nance fee following a 1998 decision by the U.S. 
Supreme Court.  The Court held that the harbour ma intenance fee bore "the indicia of a tax", and that 
the value of the export cargo – the basis on which the fee is determined – did not "correlate reliably 
with the federal harbour services, facilities, and bene fits used or usable by the exporter".  Thus, the 
Supreme Court determined that the harbour maintenan ce fee, as applied to exports, violated the U.S. 
Constitution's Export Clause.  
 
a) Could the U.S. please describe the main attributes of the harb our maintenance fee? 
  WT/TPR/M/200/Add.1 
 Page 229 
 
 
 ANSWER:  The harbor maintenance fee is assessed on  port use associated with imports, admissions 
into foreign trades zones, domestic  shipments, and passenger transportations.  The fee is assessed only 
at ports that benefit from the expenditure of fund s by the Army Corps of Engineers for maintaining 
and improving the port trade zones. The fee is 0.125 percent of the value of the cargo.  The funds are 
made available, subject to appropriation, to the Army Corps of Engineers for the improvement and 
maintenance of United States ports and harbors. 
 
b) If this is deemed a kind of harbour service fee, would that not constitute discriminatory treatment 
of import and export cargos? 
 ANSWER:   The United States does not consider the fee to be discriminatory. 
 
(4) OTHER MEASURES AFFECTING PRODUCTION AND TRADE 
(v) Trade related intellectual property rights (e) Enforcement Activities 
(Paragraph 270 and 271 of Pages 77 and 78)  
The Report states that Section 337 of the Tariff Act of 1930 declares unlawful "unfair methods of competition and unfair acts in the importation and sale of products in the United States, the threat or 
effect of which is to destroy or substantially in jure a domestic industry, prevent the establishment of 
such an industry, or restrain or monopolize trad e and commerce in the United States."  The injury 
requirement does not apply to alleged infringement of  a valid U.S. patent, federally registered trade 
mark, copyright, or mask work, or vessel hull design.   Section 337 investigations are instituted by the 
United States International Trade Commission (USITC );  administrative law judges make an initial 
determination of whether there is an infringement/contravention of the law, which is then subject to 
review by the USITC.  If the USITC determines th at Section 337 has been violated, it may issue 
exclusion orders, cease and desist orders, or both.  Exclusion orders direct the CBP to bar entry into 
the United States of infringing goods from whatever  source (general exclusion orders) or from 
specifically identified entities (limited exclusion orders).  The President may disapprove a USITC 
order within 60 days.  Between 1 January 2005 a nd 30 September 2007, 88 new Section 337 investigations were instituted; 
all except three involved allegations of patent in fringement, occasionally in combination with the 
infringement of other IPRs.  Investigations covere d products from 29 trading partners.  In the period 
between 1 January 2005 and 30 Sept ember 2007, the USITC issued 24 exclusion orders, of which 17 
were limited exclusion orders, a nd seven were general exclusions, together with cease and desist 
orders. As of 1 October 2007, there were 66 outsta nding exclusion orders, compared with 61 reported 
in the previous U.S. Review, affecting imports  of a range of products, including machinery and 
equipment, electrical and electronic products, some durable consumer goods, glasses, soft drinks, and 
cigarettes.   Experience has shown that Section 337 investigations  are usually initiated against companies (usually 
foreign companies) upon receipt of a unilateral compla int of patent infringement, even if the company 
being investigated has been selling its products in  the U.S. market for some time.  Once the ITC 
decides to initiate such an inv estigation, the companies being investigated invariably incur 
outrageously huge legal fees in the process of responding to the allegations.  As the factors involved in 
determining whether infringements have occurred are extremely complic ated, may we suggest that the 
ITC take more explanations and objective information fr om both parties involved into account before 
it makes the initial decision of wheth er or not to accept the complaint? 
 
ANSWER:   The institution of a section 337 investiga tion based upon a complaint does not constitute 
a decision that the respondent has violated section 337.  That is a matter for determination by an administrative law judge after institution of the investigation and after opportunity for a full WT/TPR/M/200/Add.1 
Page 230  
 
 evidentiary hearing.  The administrative law judge’s decision is then subject to review by the entire 
Commission.  
b)  In this context, could the U.S. please explain  the standard that the ITC is applying in determining 
whether or not to accept a 337 compliant? 
 
ANSWER:   The ITC will normally institute an investigation on complaint if the complaint complies 
with the Commission's rules, and if it properly alle ges a violation of section 337.  Institution of an 
investigation based on a complaint does not constit ute a decision that the respondent has violated 
section 337. 
 
c) Also, could the U.S. please provide the figures on the total number of complaints filed on patent 
infringement between 1 January 2003 and April 30, 2008, and the number of complaints that were 
withdrawn during the same period? 
 ANSWER:   There were approximately 165 Section 337 co mplaints filed between  January 1, 2003 
and April 30, 2008.  A very small number of these  may have been withdrawn by the complainant 
prior to the Commission's vote on whether to institute the requested investigation.  Over 90 percent of 
the Section 337 investigations filed during this period included allegations of patent infringement. 
 
IV. TRADE POLICIES BY SECTOR 
(2) AGRICULTURE 
(iii) Domestic programmes (Paragraph 27 and Table IV.2 of Page 84) 
 
It is stated in the Report that average annual di rect government payments to agricultural producers 
were US$16.3 billion between 2003 and 2007.  Later, note ‘c’ to Table IV.2 states that “The 2002 
Farm Act terminated authority for production flexib ility contract payments and established authority 
for fixed direct payments and counter-cyclical paym ent”.  However, the negative payment values are 
revealed under “Production flexibility contract pa yments” (horizontal column 2, Table IV.2) from 
2003 to 2007.  a) We would appreciate knowing what caused  the negative values revealed under “Production 
flexibility contract payments” in Table IV.2.  
ANSWER:   These figures reflect changes in budgetary accounts, including possible overpayments 
and refunds. 
 
b) Could the United States please provide more de tails of the related pay ments measures mentioned 
above?  
ANSWER :  If the question refers to information on the Direct and Countercyclical Payment 
programs, additional information can be found in  our domestic support notifications for 2002 – 2005 
or at:  http://www.fsa.usda.gov/FSA/newsReleas es?area=newsroom&subject =landing&topic=pfs& 
newstype=prfactsheet&type=detail &item=pf_20060301_insup_en_dcp06.html. 
 
(2) AGRICULTURE 
(iv)Export subsidies, credit, insurance, and guarantees 
(Paragraph 41 of Page 87)  
Under the Export Enhancement Program (EEP) and the Dairy Export Incentive Program (DEIP), the 
United States provides exporters of eligible co mmodities with cash bonus payments based on the 
quantities exported. Eligible commodities under the programmes include wheat, rice, frozen poultry, 
barley, table eggs, vegetable oil, milk powder etc.   WT/TPR/M/200/Add.1 
 Page 231 
 
 
 Could the United States please provide more inform ation and details of the programmes mentioned 
above? 
 
ANSWER:   The Export Enhancement Program (EEP) operated under the authority of the 
Agricultural Trade Act of 1978, as amended.  The program allowed USDA to provide bonuses in the 
form of cash payments to make U.S. commodities mo re competitive in the world marketplace and to 
offset the adverse effects of unfair trade practices or subsidies by others.  Because of global supply 
and demand conditions in recent years, no bonuses have been awarded under EEP since 2001.  The 
2008 Farm Bill repealed statutory authorization for this program.  
The Dairy Export Incentive Program (DEIP) operates similarly as EEP, except that it applies to dairy 
products. At present international prices levels, no DE IP bonus awards have been made since January 
2004.  
(3) MINING AND ENERGY  
(ii) Legal and policy framework 
(Paragraph 63 of Page 92) 
 
The Department of Energy has primary responsibi lity for federal energy policy, while states are 
responsible for their own energy policies.   
a) Is there any cooperation mechanism between fe deral and local (state) governments on energy 
 policy issues designed and operated formally and periodically?  
b) Have conflicts ever occurred be tween the two entities, especially  concerning promotion of the 
 further development of the energy sector, and encouragement of private investment and 
 competition?  
c) If so, what dispute settlement principles apply?  
ANSWER:  There is no cooperation mechanism between the U.S. Department of Energy and the state 
governments on federal energy policy issues.  We ar e unaware of any conflicts between the U.S. 
Department of Energy and the States concerni ng further development of the energy sector. 
 (5) SERVICES (iii) Financial services (Paragraph 128 of Page 108) 
 
As indicated in the Report, branches of foreign banks are generally not required to commit 
organizational capital at the federal level and stat e level.  However, foreign bank branches and 
agencies are subject to an “asset pledge require ment” under applicable federal and state law.  
According to our understanding, in addition to Inco me Tax, a 30% Branch Profit Tax on the after-tax 
earnings that are not reinvested by the close of the ta x year, or are disinvested in a later tax year, is 
imposed on branches of foreign banks.  The above-m entioned regulation prevents foreign banks from 
efficiently managing their assets.  It would be appreciated if the U.S. would consider reducing the 
amount of after-tax earnings that foreign banks are required to reinvest in the U.S., or reducing the 
branch profit tax rate applied . 
 ANSWER:   The objective of the foreign branch profits  tax (which applies to all foreign branches 
operating in the United States, not only bank branch es) is to tax foreign branches operating in the 
United States on a comparable basis to foreign subsid iaries operating in the United States, e.g., the tax 
basis for such branches is a dividend equivalent amount (please see USC 26 884).  WT/TPR/M/200/Add.1 
Page 232  
 
 (Paragraph 124 of Page 107 & Paragraph 132 of Page 109) 
 
Agencies of foreign banks may not accept deposits from U.S. citizens or reside nts.  Branch licences 
for foreign banks are not available in six states, but agency licences are available.  These regulations 
create a less favourable operating environment for foreign banks.  
 
a) Could the U.S. please explain th e rationale behind such restrictions? 
b) Would the U.S. consider granting foreign ba nks branch licences in all states or allowing 
 agencies of foreign banks to accept depos its from U.S. citizens or residents? 
 ANSWER:   Countries differ as to the scope of business they allow and the in-country capital they 
require for direct branches of foreign banks.  The United States is among the most liberal countries in 
the world with regards to capital for bank bran ches, allowing bank branches to lend based on the 
world-wide capital of its parent  bank and requiring only a capital e quivalency deposit that is less 
substantial than normal capital requirements.  Except for a number of grandfathered institutions, 
branches of foreign banks are in effect not allowed to take retail deposits.  (In fact, they can take 
deposits from individuals in excess of $100,000, but such  deposits are not eligible for coverage by 
FDIC deposit insurance so retail de positors tend to place their money with U.S. juridical persons 
where at least the first $100,000 is  eligible for coverage.)  Those wishing to do retail banking can do 
so through subsidiaries which are extended full na tional treatment, including capital requirements.  
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. 
 Foreign banks wishing to branch into the U.S. mark et have the option of setti ng up a federal branch or 
a state branch in those states that  allow branches.  Foreign persons wishing to enter the U.S. market 
through establishment or acquisition of a bank subsidiary have the option of choosing a national or 
state charter.  A national bank, chartered by the Office of the Comptroller of the Currency, may be 
established or acquired in any state.  A state bank, ch artered by the relevant state banking authority, is 
limited or unavailable in some states.  Please refe r to the US GATS schedule for a detailed listing of 
state-level restrictions.  The United States has no current plans to change its  policy with regard to retail deposit taking by 
foreign bank branches. 
 
COLOMBIA 
 
I. RECENT ECONOMIC DEVELOPMENTS 
6) TRADE AND INVESTMENT DEVELOPMENTS 
iii) Direct foreign investment paragraph 35.   
 
Reply:  In what areas of the economy is U.S. investment concentrated?  
 ANSWER:   According to Bureau of Economic Analysis (BEA) statistics, most U.S. FDI in Colombia 
is concentrated in the mining ($1.7 billi on) and manufacturing ($1.5 billion) sectors. 
 
What are the primary areas of U.S. investment in South America? 
 ANSWER:  Most U.S. FDI in South America is c oncentrated in non-bank holding companies, 
extractive industries, and manufacturing.  
What percentage of U.S. investment is in South America?  In Colombia? 
  WT/TPR/M/200/Add.1 
 Page 233 
 
 
 ANSWER:   U.S. investment in South America is 3.3% of total foreign direct investment of 
$2.3 trillion; while U.S. investment in Colombia is 0.2%.  
II. TRADE POLICY SYSTEM:  FR AMEWORK AND OBJECTIVES  
1) GENERAL OVERVIEW  
paragraph 4  
Explain:  As a general rule, the United States appl ies the principle of national treatment to direct 
foreign investors, however, how can market stab ility and permanence for companies with direct 
foreign investors be guaranteed while the Foreign Investment and National Security Act is being 
regulated, if said principle could be in applicable for national security reasons?  
 
ANSWER:   The Committee on Foreign Investment in the United States (CFIUS) operates under 
Section 721 of the Defense Production Act, as am ended by the Foreign Investment and National 
Security Act of 2007.  CFIUS focuses on genuine national security concerns alone, not economic or 
national interests.  CFIUS provides investors with a mechanism to obtain government review of their 
transaction, if they believe it presents national secur ity considerations.  CFIUS operates under a strict 
time line, with most transactions passing through the CFIUS process within 30 days.  Finally, the 
footprint of CFIUS is very small—for the period 2005-2007, the Thomson database shows 5,100 
foreign acquisitions of U.S. companies.  CFIUS re viewed only 325 (7%) filings during this period. 
 2) INSTITUTIONAL AND LEGAL FRAMEWORK  paragraph 11 
 
Explain:  Bearing in mind that the 2002 law grants the Executive Branch powers, which expire on 
July 1, 2007, the Government of Colombia would be  interested in learning the impact that the absence 
of Fast Track could have on the approval of negotia ted agreements and on the conclusion of the Doha 
Round negotiations.  
 
ANSWER:   TPA procedures continue to apply to thr ee free trade agreements (with Colombia, South 
Korea, and Panama) that were signed before TPA expired and that Congress has not yet considered.  
On April 10, after the President submitted proposed legislation to implement the U.S. - Colombia free 
trade agreement (FTA) under TPA procedures, the House of Representatives voted to suspend the 
TPA timetable for considering the legislation.  Congress has not altered TPA procedures with respect 
to the pending FTAs with Panama and South Korea.  The Administration is working to ensure that 
Congress will vote on legislation approving the U.S. - Colombia FTA during this session.  
Members of Congress support an ambitious result from the Doha Round negotiations.  Thus, the 
mechanics of obtaining congressional approval of the outcome of these negotiations begin with 
securing a strong result – one that opens markets in agriculture, NAMA, and services.  In such a case, 
the Congress as well as the legislatures of other WTO Members will have a strong incentive to approve and implement the outcome.  Along these lines, if the Administration feels that these trade promotion capabilities are vital to 
achieving the country’s trade objectives, what alt ernative mechanism is planned to rectify this 
situation? 
 
ANSWER:   While TPA procedures apply to bills impl ementing agreements signed before July 1, 
2007, the Administration’s authority to conduct trade negotiations is derived from the U.S. 
Constitution and is not dependent on TPA.  Rather , TPA creates a legislative process whereby the 
Congress commits to consider on an expedited basi s and without amendment legislation approving 
specific trade agreements that the Administration h as negotiated in accordance w ith TPA rules.  In the 
absence of TPA, Congress can consider trade agreemen t implementing bills under standard legislative WT/TPR/M/200/Add.1 
Page 234  
 
 procedures.  Congress used those procedures in 2000, for example, to approve implementing 
legislation for the U.S. - Jordan FTA.  
Paragraph 13 
 
Clarify: Within the framework of the Trade Adju stment Assistance Program, please indicate what 
would guarantee that certain companies would not take advantage of the program when dealing with 
branches of foreign companies located in that count ry and that send their products to the U.S. market . 
 ANSWER:   Benefits under the Trade Adjustment Assi stance for Workers program are focused on 
worker groups displaced by the effects of foreign tr ade.  No specific benefit accrues to the company 
itself under this program.  Rather, it shields the workers from the effects of economic decisions 
related to foreign trade that might be made by their former employer. 
 
3) FOREIGN INVESTMENT SYSTEM 
iii) Information and assessment  
paragraph 18  Respond:  What is the objective of these new regulations? 
ANSWER:   The goal of the proposed regulations is to:  
 
Implement the requirements of FINSA and the executive order 
Increase clarity and transparency, and Make additional improvements based on experience under the current rules 
 
b) What is the foreseeable effect for foreign investment?  
 ANSWER:   The improvements in the regulations are exp ected to reinforce the U.S. open investment 
climate by increasing the predictability a nd transparency of the CFIUS process. 
 
c) What would the effect be on investment agreements? 
 ANSWER:   See the previous response. 
 
d) Is there or will there be an admission or prior authorization system for making investments in 
general in the United States?  
 ANSWER:   The United States does not have a general requirement that foreign investment in the 
United States be pre-authorized.  e) Is there or will there be an admission or prio r authorization system for making investments in 
certain specific sectors in the United States?  If so, which sectors?  Would these sectors be related to 
national security?  
 
ANSWER:   There are a limited number of conditions a nd restrictions established at the federal level 
on foreign investment in the United States, such as in connection with atomic energy, telecommunications, banking, fishing, maritime servic es, and mining.  Individual states also may have 
limited conditions and restrictions.  These restri ctions are not necessarily prohibitions, but may 
establish preconditions or ownership level restrictions and are separa te and unrelated to the CFIUS 
process.    
Paragraph 21 
 
Respond:  What is meant by “c ontrol by a foreign government”?  WT/TPR/M/200/Add.1 
 Page 235 
 
 
 ANSWER:   Under Section 721 and the proposed re gulations, a foreign government-controlled 
transaction is a covered transaction that could r esult in control of a U.S. business by a foreign 
government or a person controlled by or acting on behalf of a foreign government.  The proposed 
regulations further define the both the term “control” and the term “foreign government.” 
 III. TRADE POLICIES AND PRACTICES, BY MEASURES 2) MEASURES THAT DIRECTLY AFFECT IMPORTS  i) Customs system 
 
Paragraph 20  states that as part of the Cargo Security Initiative (CSI), CBP is considering the 
viability of establishing a database managed by th e private sector to improve risk evaluation of 
international cargo.  Could the United States provide additional information about this program and 
indicate if administration of said private sector  database could generate additional costs for users?   
 
ANSWER:   The United States is no longer considering this program. 
 
Paragraph 23  states that CBP is implementing a pilot program to scan all containers bound for the 
United States in foreign seaports and not only tho se considered “high risk.”  Thus, the viability of 
expanding this program to other fo reign ports is being studied.  Could the United States tell us which 
other ports are being considered to be part of this  pilot program?  What criteria are taken into 
account in applying the program?  
 
ANSWER: CBP and the Department of Energy continue to study and evaluate  the results of the 
Secure Freight Initiative (SFI) pilot programs.  A ll data gathered from these pilot programs will be 
reported to our Congress.  Any decision on the expans ion of SFI will be informed by the information 
yielded from the initial pilot ports.  Any expansion will be done in a reasoned, responsible, and risk-
based manner. 
 Paragraph 24  states that “The CBP Purser has claimed the obligation to survey containers bound for 
the United States using image scanning and radiati on detection in foreign seaports with “major” 
repercussions on trade, and this would translate into  “fewer profits and greater transportation costs for 
U.S. importers .”  How does development of this program relate to discussions carried out in the WTO 
Negotiating Group on Trade Facilitation (NGTF) if one of the main objectives is the reduction and 
elimination of additional costs for users?   
 
ANSWER:   As the SAFE Port Act pilot programs conti nue to yield more data, the United States will 
continue to gain insights into potential operational approaches that do not adversely affect the flow of 
cargo.  The twin goals of CBP are to secure cont ainers and ensure trade facilitation.  Each port 
requires unique solutions to complex challenges.  Effective partnerships with host governments and 
the trade will help ensure that the most efficien t operations are deployed.  Further, by allowing 
determinations on safety and commercial concerns to be addressed at an earlier period of time, 
measures under the SAFE Port Act offer the poten tial to bring more certainty and seamlessness to 
international trade.  Thus, these measure s can advance trade facilitation goals. 
 
Paragraph 59  refers to the tax for port maintenance, which has been called “insignificant” by 
authorities.  Given this, has the possibility been consid ered that said tax could be eliminated?  
 ANSWER:  Elimination of this fee is not currently under consideration. 
 
Paragraph 62  states that imported beer cannot benefit from the reduced rate of 7 U.S. dollars for the 
first 60,000 barrels of beer produced per year by  a national beer producer with an annual production 
equal to or less than  two million barrels.  Can you explain the justification for maintaining said 
benefit which translates into discrimination agains t the imported product?  Have you thought of 
eliminating this benefit or of corrective meas ures that would counteract this discrimination?  WT/TPR/M/200/Add.1 
Page 236  
 
 ANSWER:  Total production of beer and wine by sma ll producers is quite small, and these small 
producers frequently face higher costs of production .  However due to these higher production costs 
any excise tax advantages offered to these producers have no trade distorting effect. 
 
iii) Rules of origin 
 
Paragraph 39  indicates that within the framework of the Central-America-Dominican Republic-
United States Free Trade Agreemen t there is the possibility of applying an expanded accumulation of 
inputs with Canada and Mexico for the manufact ure of woven apparel, provided that specific 
conditions are complied with between the countries i nvolved in the mechanism a nd that certain limits 
are not exceeded .  Has thought been given to expanding application of the applied accumulation 
mechanism to countries other than Mexico and Canada?  
 
ANSWER:  Both the Colombia Trade Promotion Ag reement and the Peru Trade Promotion 
Agreement provide for consultations between the pa rties to the respective agreements to consider 
whether to permit regional cumulation for text iles and apparel (subject to domestic legal 
requirements) in light of our shared desire to promote regional integration.  The United States has enacted and is negotiating trade agreements with different countries.  Has 
thought been given to some mechanism or instrume nt that would make it possible in a given moment 
to merge these agreements?  
 
ANSWER:  The United States is currently working with  its trade partners to put free trade 
agreements into effect with Costa Rica, Oman, and Peru.  In addition, the Administration is focusing 
its efforts to obtain Congressional approval of th e pending FTAs with Colombia, Korea, and Panama. 
 ix) Technical regulations, evaluation of conformity and rules  
Number 114 of the document WT/TPR/S/200 states that countries can appoint a representative to 
establish technical regulations and procedures to eval uate conformity in regional, local, and municipal 
governments.  Is there an assurance that notification has b een given of the technical regulations and 
conformity procedures carried out at these levels?  
 
ANSWER:   The U.S. WTO TBT Enquiry Point contract s a U.S. commercial data vendor, State Net, 
to monitor State-level regulatory activities in all 50 states and the District of Columbia. State Net 
electronically delivers a daily report on State legislation and regulation to the Enquiry Point.  The report originates from each State capitol where data is  gathered by a State Net representative and is 
combined in a nation-wide database resulting in  complete U.S. coverage.  Various external 
information cross-checks at the U.S.  Enquiry Point have proved that the State Net reports are reliable 
in accuracy and scope of reporting and tracking U.S. State-level regulatory activities.  Please contact 
the U.S. Enquiry Point for add itional information (ncsci@nist.gov
). 
 
Has the United States government considered the po ssibility of asking sub-fe deral institutions to 
directly supply technical regulations and procedu res to evaluate conformity as proposed by them? 
 
ANSWER:   In view of the present capability of the United States at the central-government level 
Enquiry Point in tracking State-level actions, establishing additional Inquiry Points at a sub-central-government level would be re dundant and impose an unnecessary and burdensome expense on the 
States.  In addition to the database previously re ferenced, the U.S. WTO TBT Enquiry Point monitors 
the National Association of State Secretaries of St ate (NASS) for additional assurance that regulatory 
activities are comprehensively and accurately tracked and notified to the WTO.  Number 119 of the document WT/TPR/S/2000 states  which sectors of the economy correspond to the 
regulations notified between July 2005 to October 2007.  Fourteen percent correspond to sub-federal  WT/TPR/M/200/Add.1 
 Page 237 
 
 
 measures, but no specification is given as to  which sectors these measures correspond.  Is it possible 
to obtain that information?  
 
ANSWER:   In 2005-2007, U.S. State-level notifica tions included proposed measures regarding 
aquaculture products; motor vehicles; consumer products, such as appliances, household cleaners, 
lighting products, electronics, and toys; wood produc ts; cigarettes; textiles and apparel; and beer and 
malt beverages.    
Is it possible for the United Stat es government to define what it me ans by “urgent” problems for 
which Executive Order 12889 prescribes a shorter peri od for formulating comments on proposals for 
technical regulations?  
ANSWER:  The United States has not attempted to impose a horizontal definition of ‘urgent 
problem’ on U.S. regulators to implement the provisions of the TBT Agreement.  The regulatory authority determines the urgency of a problem. 
 
Number 124 states that an institution is exempt from complying with prescriptions for notification and making comments if it shows that “for a justified reason” such prescriptions “cannot be carried out, 
are unnecessary, or contrary to general interest.”  It adds that use of this exception is subject to 
judicial review.  If a judicial review finds against it, would it not occur when the appropriate 
regulation is already being applied?  Has the government thought about establishing a more agile 
review mechanism? 
 
ANSWER:   No.  
 Number 125 of the document WT/TPR/S/200 states that Executive Order 12866 obligates the Office 
of Management and Budget to examine all “significant” provi sions from federal public bodies 
(excluding independent regulatory bo dies) before their publication in the Federal Register as proposed 
or final provisions.  Following is a list of  certain provisions considered significant.  Is there a 
complete list of provisions that are considered significant? 
 
ANSWER:   The Unified Agenda, published semiannually, contains a list of regulations that U.S. 
agencies are planning to promulgate.  The Agenda ge nerally contains designations, such as whether or 
not a proposed regulation is significant.  The curre nt Agenda (as well as past Agendas) are available 
on RegInfo.gov.   
Have there been judicial reviews of technical regulations or procedures to evaluate conformity?  If 
so, how many?  
ANSWER:   The United States does not centrally track judicial review of technical regulations. 
 Interagency Working Group on Import Safety and id entification of areas that could be improved.  
Said working group, which has no juridical or regul atory powers of its own, has recommended several 
measures related to OTC to improve the saf ety of imports into the United States.  What type of 
measures has this committee recommended?  
 
ANSWER:  The full report on the recommendations can be found on the internet at: 
www.importsafety.gov.   
 
x) Sanitary and phytosanitary measures 
paragraph 146 
 
Explain:  Do the states evaluate risks when th ey establish sanitary and phytosanitary measures under 
the conditions mentioned in this  paragraph?  If so, are these endorsed by the Animal and Plant WT/TPR/M/200/Add.1 
Page 238  
 
 Health Inspection Service to see if they are compatible with national  rules, federal regulations, and 
the WTO?  What procedure is followed for this purpose? 
 
ANSWER:  Our sub-national governments are required to  meet all of the obligations of the WTO 
SPS Agreement.  U.S. federal SPS agencies work cl osely with the relevant state authorities on a 
regular basis through a variety of means to ensu re that measures proposed and adopted are science 
based and are consistent with U.S. WTO obligations.   Number 148 states that:  “There are no statutory limitations on the duration of the process for approving plants, animals, and de rived products being imported into the United States for the first 
time.  Normally, this process lasts between two and th ree years.”  However, for Colombia, it is clear 
that the process for approving imports and recognizing  regionalization can take much longer than that 
described as normal by the United States, generating unjustified delays in these processes.   
Thus, we would like to know what  technical and scientific criteria determine the length of a request 
for approval of the importation of plants, animals, and derived products entering the United States for 
the first time and for regionalization.  
 
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 to ensure a thorough 
review of both the original submission and all scientific evidence, and to respond to comments 
received by interested stakeholders, including WTO Members, of U.S. proposed measures within a 
predetermined and inflexible timeframe.  
3) MEASURES THAT DIRECTLY AFFECT EXPORTS 
iv) Export assistance 
 
In addition to the conditions under which the Unite d States government facilitates export assistance 
pursuant to number 3, can you describe the assist ance conditions that the United States government 
gives to products that are not supported by go vernments whose countries compete with the United 
States?  Are they more or less favorable?  
 ANSWER:   While the question is not clear to us, we  would make two points.  First, the Export-
Import Bank's mandate is to neutralize any compe titive financing that is provided by official 
government export credit agencies (ECAs).  Acco rdingly, the Export-Import Bank only offers 
programs that serve to match comparable programs of other ECAs.  Second, any financing provided 
by the Export-Import Bank is consistent with  the OECD Arrangement and the WTO Subsidies 
Agreement.   
4) OTHER MEASURES AFFECTING PRODUCTION AND TRADE 
v) Trade-related intellectual property rights  
 General questions: 
 
Have certain measures or incenti ves been adopted to stimulate technology transfer to developing 
countries?  
 ANSWER:   Yes, the United States has promoted a range  of incentives to its domestic enterprises and 
institutions to promote and encour age technology transfer to deve loping, and particularly least-
developed, countries in order to enable the creati on of a sound and viable technological base.  The 
activities of the United States in this regard have been regularly reported to the Council on TRIPS, in 
keeping with the Decision of the Council on TRIPS of  20 February 2003.  The most recent such report 
was provided to the TRIPS Council in October 2007, and is reflected as document IP/C/W/497/Add.5. 
  WT/TPR/M/200/Add.1 
 Page 239 
 
 
 Paragraph 258  
 
Respond:  What specific measures have been adopted or  plan to be adopted in the United States to 
stimulate or incentivize innovation in different field s from an intellectual property point of view?  
 ANSWER:   The United States has adopted many plans to  stimulate or incentivize innovation.  As an 
example of such plans, the United States has adopted  technology transfer policies and laws that are 
aimed at promoting innovation.  The Bayh Dole  Act of 1980 and other technology transfer laws 
provide incentives for universities and inventors to  engage in innovative research and technology 
development.  Under the Bayh Dole Act, a unive rsity may choose to retain the ownership of the 
invention that arises from the funding by the U.S. Government.  The university can commercialize the 
patented invention and generate the license income that  is shared with the inventors.  Similarly, the 
U.S. government agencies that have research faciliti es may also license their patented inventions.  The 
income from the license also has to be shared with the inventors.  The number of patented inventions 
and licensed invention may also be used for consideration of career advancement. 
 
Has any particular entity been designated to promot e innovation, technological development, etc?  If 
so, what is the nature of this entity and its main functions and plans or lines of action?  
 
ANSWER:   The U.S. does not have a particular entity that is designated to promote innovation.  
Many U.S. agencies promote innovation by provi ding research funding to universities, federal 
laboratories, companies, and individuals.  Most uni versities and federal laboratories have an office of 
technology transfer whose functions are to manage  intellectual property assets, including patenting 
inventions, and commercialization of the inventions .   The United States Patent and Trademark Office 
through its Global Intellectual Property Academy provides international training on intellectual 
property protection, enforcement and technology transf er.  Other U.S. agencies and universities also 
provide training and facilitate discussions on in novation and technology commercialization. 
 
Paragraph 266  
 
Respond:  How does preregistration work?  Why does it exist only for works which have had 
infractions committed against them?  How is it harmonized with automatic protection under 
copyright?  Is it possible to register unedited works?   
ANSWER:   Preregistration was introduced in 2005 pursuant  to legislation enacted to confer some of 
the benefits of copyright registration (such as the availability of statutory damages and awards of 
attorney’s fees) on owners of copyrights in works being prepared for commercial distribution that are 
infringed before their release to the public.  That legislation was enacted in response to concerns 
expressed by copyright owners in industries such as the motion picture industry and the recording 
industry that the increasing occurrence of “p rerelease infringement” of motion pictures and 
phonorecords on the Internet before the first authorized exhibition or distribution of those works is causing serious economic harm which cannot be ade quately compensated without the availability of 
remedies ordinarily available only to copyright owne rs of works that were registered prior to their 
infringement.  Preregistration is not actually a form  of registration.  It can more accurately be 
described as a notification of intention to register th e work once it has been distributed to the public.  
It is available only for works that fall into classes of works (such as motion pictures and sound 
recordings) that have had a history of prerelease infringement.  
The availability of preregistration does not conflic t with the principle of automatic protection.  
Preregistration, like registration, simply gives the copyright owner the opportunity to seek certain 
remedies (statutory damages and attorney’s f ees) that are not available for infringement of 
unregistered works.  (Under the U.S. Copyright Act,  an award of statutory damages or attorney’s fees 
is only possible if (in the case of infringement of an unpublished work) the work was registered before 
the infringement occurred, or (in the case of in fringement of a published work) the work was WT/TPR/M/200/Add.1 
Page 240  
 
 registered before or within three months of publication. )  It is possible to preregister a work that is still 
in the process of preparation, so long as the work  is being prepared for commercial distribution and 
has not yet been published, and provided that prep aration of the work has commenced and at least 
some portion of the work has been fixed in a tangible medium of expression.  Paragraph 268 
 
Respond:  How does the application of Mandato ry Licenses work and under what circumstances 
would they be applied?  Are the rules mentioned in th e report in addition to the will of the parties?  
 ANSWER:   U.S. copyright law includes several statut ory licenses, each of which operates differently 
from the others.  See 17 U.S.C. §§ 111, 114, 115,  116, 118, 119 and 122.  These licenses cover 
retransmission of broadcast signals by cable  systems (§ 111), public performances of sound 
recordings by means of digital audio transmis sions (§ 114), the making and distribution of 
phonorecords of certain nondramatic musical works (including transmission of “digital phonorecord 
deliveries”) (§ 115), public performances of musical works in jukeboxes (§ 116), the use of published 
nondramatic musical works and published pictoria l, graphic, and sculptural works by public 
broadcasting entities (§ 118), and retransmission of broadcast signals by satellite carriers (§§ 119 and 
122).  These licenses are available without regard to the willingness of the copyright owner to license 
the permitted uses.  Royalties are paid to copyright owners either directly or indirectly (indirect 
payments are made through collectives and/or th rough the Copyright Office); the conditions and 
means of payment vary from license to license.  Ra tes are determined by industry-wide negotiations 
or, if agreement cannot be reached, by Copyright Royalty Judges in the Library of Congress. 
 
IV. TRADE POLICIES, BY SECTORS  
2) AGRICULTURE  
i) Introduction  
 
In Chapter IV(2), para. 13, the Secretariat indi cates that at the beginning of 2008, Congress was 
working on a new agricultural law to support harvested basic products.  Can the United States 
indicate in which aspects the new Law will amend previous legislation?  
 ANSWER:   The recently passed 2008 Farm Act, a very lengthy document, contains numerous 
modifications and amendments to prev ious legislation.  It is not possible at this time to list all these 
changes.  USDA’s Economic Rese arch Service will shortly have on its website a side-by-side 
comparison of the major provisions of the 2002 and 2008 Farm Acts.  ii) Border measures 
 
Paragraph 20  of Chapter IV states that tariff rate quotas are allocated to “traditional” importers 
designated by the governments of exporting countri es and chosen by lot.  Can the United States 
indicate how a “traditional” importer is determined?  What is the objective of permitting the 
governments of exporting countries to designate impor ters?  Explain the methodology for allocating 
tariff rate quotas based on lot.   
 
ANSWER:   Different licensing regimes may be based on when the TRQs were put in place.  The 
original cheese quotas were mainly licensed to hi storical importers, whereas newer TRQ quantities 
from the Uruguay Round were largely licensed to importers designated by the exporting country.  
Allowing exporting countries to designate importers  gives the exporting country the opportunity to get 
a better price for its exports.  U nder the lottery system, qualified importers may apply for several 
licenses, indicating their priorities.  Applications are selected randomly and awarded their highest priority request until all of th e licenses have been allocated. 
  WT/TPR/M/200/Add.1 
 Page 241 
 
 
 In accordance with the United States International Trade Commission (USITC), the elimination of 
import barriers for certain products, particularly raw and refined sugar a nd dairy products, would 
generate a significant increase in  the country’s social welfare.  Are there any national or international 
studies showing that these barriers favor the country’s social welfare, other than those that the 
USTIC has provided?  (paragraph 21). 
 
ANSWER:   There have been numerous studies by international organizations and private 
associations over the past 4-5 years in the context of multilateral trade liberalization that analyze the 
impact of reducing market access barriers and domestic subsidies.  The United States has been analyzed extensively in those studies. USDA’s Economic Research Service completed such an 
analysis in 2001, which showed the benefits  to the United States from global trade reform. 
 
iii) Domestic assistance programs 
 
Paragraph 31  of the Report by the Secretariat states that  “the Federal government offers subsidized 
insurance against losses stemming from natural disaster s” and price variations.  Indicate the type of 
losses it covers and up to what amount.  What is the minimum base for making payment?  
 ANSWER:   Yield policies insure producers against yi eld losses due to natural causes such as 
drought, excessive moisture, hail, wind, frost, insects,  and disease.  There are several different kind of 
yield policies, which offer different levels of cove rage.  For example, a farmer selects the amount of 
average yield he or she wishes to insure; from 50-75 percent (in some areas to 85 percent). The farmer 
also selects the percent of the predicted price he or  she wants to insure; between 55 and 100 percent of 
the crop price established annually by RMA. If the harvest  is less than the yield insured, the farmer is 
paid an indemnity based on the difference. Indemn ities are calculated by multiplying this difference 
by the insured percentage of the established pr ice selected when crop insurance was purchased. 
 
Paragraph 31  of the Report also states that producers can opt between insuring their crop or their 
income, as part of agricultural insurance programs and that insured producers receive a payment if the 
effective crop or income is less than the anticipated  level due to causes included under the insurance.  
Can the United States state if the amount insured  corresponds to a percentage of profit or if it only 
covers production costs?  Who defines and how is income level defined?   
 
ANSWER:   USDA offers various revenue-based in surance plans. All revenue-based options 
determine revenue differently.   The follo wing information provides a basic summary. 
 Adjusted Gross Revenue (AGR) - insures revenue of the entire farm rather than an individual crop by 
guaranteeing a percentage of average gross farm  revenue, including a small amount of livestock 
revenue. The plan uses information from a producer's Schedule F tax forms, and current year expected 
farm revenue, to calculate  policy revenue guarantee. 
 Crop Revenue Coverage (CRC) - pr ovides revenue protection based on price and yield expectations 
by paying for losses below the guarantee at the higher of an early-season price or the harvest price. 
 
Group Risk Income Protection (GRIP) - makes indemnity payments only when the average county revenue for the insured crop falls belo w the revenue chosen by the farmer. 
 Income Protection (IP) - protects producers against re ductions in gross income when either a crop's 
price or yield declines from early-season expectations. To determine coverage, see the policy 
provisions.  Revenue Assurance (RA) - provides dollar-denominat ed coverage by the producer selecting a dollar 
amount of target revenue from a range define d by 65-75 percent of expected revenue. 
 WT/TPR/M/200/Add.1 
Page 242  
 
 The price components of the revenue coverage under CRC, GRIP, IP and RA are determined from 
futures market data.  The yield components are based on historical yields for the farm, for CRC, IP and RA, or historical yields for the county, for GRIP.  RA and CRC are currently the most popular 
forms of revenue insurance.   
The dollar plan – provides protection against declin ing value due to damage that causes a yield 
shortfall. Amount of insurance is based on the cost of growing a crop in a specific area. A loss occurs 
when the annual crop value is less than the amount  of insurance.  The maximum dollar amount of 
insurance is stated on the actuarial document. The insured may select a percent of the maximum dollar 
amount equal to either catastrophic level of coverage, or additiona l coverage levels. 
 
More information can be found at:  http://www.rma.usda.gov/policies/. Again in paragraph 31, the Secretariat states that th e basic level of coverage is for catastrophic risks 
and is offered with an administrative commission of 100 U.S. dollars per crop and country.  It also indicates that the Department of Agriculture reinsu res insurance companies offering crop insurance.  
To which country does this refer?  Could you indi cate what is the percentage covered by the 
Department of Agriculture?  What is th e percentage of reinsurance over the prime?    
 
ANSWER:   Paragraph 31 refers to administrativ e commission of 100 U.S. dollars by crop and 
“county” not “country.” The Standard Reinsuran ce Agreement (SRA) operates between the Federal 
Crop Insurance Corporation (FCIC) and individual insurance companies that participate in the 
program.  Each company determines annually, within th e framework of the SRA, what level of risk to 
retain and what to cede to the FCIC, thus the levels  of shared risk vary annually and by individual 
company.  Given the complexity of the SRA, it is  difficult to answer these questions in a simple 
manner.  We refer Colombia to the Risk Manageme nt Agency website at:  http://www.rma.usda.gov/ 
pubs/ra/05sra_final.pdf. 
 
Paragraph 34  of the Report by the Secretariat indicates th at in addition to crop insurance, agriculture 
producers receive payments from special and emergency programs.  Can the United States indicate 
the planted surface area covered  by agricultural insurance?   
 
ANSWER:   As of May 26, 2008, the Federal Crop Insu rance Corporation shows net acres insured at 
for the 2007 crop year at 271,663,000 acres. 
 Paragraph 105  of document WT/TPR/G/200 states that the United States “is committed to providing 
assistance to developing countries in strengthening their capacities, particularly by offering trade 
assistance.”  Can the United States explain in detail w hat this assistance entails?  How can 
developing countries benefit from  this type of support?   
 
ANSWER:   The United States, through a number of agencies, including but not limited to USAID 
and MCC, has provided more than $7 billion in trade-related assistance (trade capacity building 
(TCB) or Aid-for-Trade) to developing country partne rs since 2001.  As a donor, we strive to respond 
to the needs and priorities identified by our developi ng country partners and value their input to our 
TCB programs.  Trade-related funding is part of our overall assistance programs with our partner 
countries.   Assistance offered by the U.S. Government runs the full gamut of trade-related assistance, from technical assistance to help developing countries and transition economies accede to, with the WTO 
or to follow the rules of the international trading system. .  Many U.S. Government agencies provide 
technical assistance to developing countries and tr ansition economies in order to build their trade 
competitiveness.  These technical assistance activ ities that are not specifically related to WTO 
accession or agreements can include, but are not li mited to, any of the following types of support 
activities: (1) negotiating regional trade agreements, (2 ) eliminating subsidies or price controls in the 
trade sector, (3) improving trade statistics, (4) encouraging business support services for exporting  WT/TPR/M/200/Add.1 
 Page 243 
 
 
 and importing companies, (5) developing business in formation for export and import markets, (6) 
drafting commercial codes, (7) implementing anti-monopoly policies, (8) designing consumer 
protection policies, (9) reforming government pr ocurement, (10) improving sanitary/phytosanitary 
standards in traded goods, (11) promoting technolo gy transfer to enhance trade, (12) removing 
technical barriers to trade, (13) applying rules of  origin for trading purposes, (14) improving customs 
procedures, (15) developing a competitive workforce,  (16) encouraging trade finance, (17) developing 
the financial sector, (18) achieving sound fiscal, m onetary, and exchange rate policies, (19) 
developing necessary infrastructure for trade, (20)  supporting trade-related transportation projects, 
(21) designing environmental standards and technol ogy, (22) promoting investment agreements and 
investment protection mechanisms. 
 
USAID is present in over 70 countries, providing the United States with a unique opportunity to work with and respond to the needs of developing count ries as they seize the opportunities of trade 
liberalization.  The USAID mission is the first stop for any developing country or transition economy seeking USG trade-related assistance.  In the absence  of a USAID mission in a particular country, 
please visit the U.S. Embassy. 
 Paragraph 113  of the Report of the Government of the United States indicates that the President is 
committed to improving the Trade Adjustment Assistance Program.  Could you explain in greater 
detail what the measures to be implemented enta il for helping workers and farmers affected by trade?   
 ANSWER:   The Trade Act of 1974 was last amended on August 6, 2002.  The Department of Labor 
operates Title I, Subtitle A of the Trade Act- Trade Adjustment Assist ance (TAA) for Workers. 
 The Department has identified four overarching princi ples that should guide the reauthorization of the 
TAA program to ensure its relevance for the 21st century economy.  Trade-affected employers must 
have support to help prevent layoffs.  Trade-affect ed workers must have improved access to education 
and training.  Trade-affected workers must have  increased individual choice to “earn and learn” 
through the TAA program by having access to transitional benefits.  Trade-affected workers must be able to access services through a streamlined and efficient workforce investment system.  The Department believes that following these four  principles will help make the program more 
effective in meeting the needs of the 21st century workfo rce by providing work ers with assistance to 
improve their opportunities to return to work as quickly as possible in high skill jobs that pay good wages.  
5) SERVICES 
iv) Air transport services 
paragraph 161  
 
Reply:  Is it possible for all public U.S. airpor ts with commercial services to be managed through 
subcontracting or are there exceptions?  
 ANSWER:   U.S. and foreign privately-owned companies provide a variety of services at U.S. 
commercial service airports including airport and terminal management, parking, private security, retail concessions, aircraft ground handling and fu eling.  Any Airport owner can contract with 
privately-owned companies to provide airpor t management and retail concession services under 
management or concession contracts.  The Fe deral Aviation Administration will permit this 
arrangement as long as the Airport owner retains aut hority over the operation and management of the 
Airport, including the airport’s Federal obligations .  The private company serves an agent of the 
airport owner and receives a management fee or retail concession fee for its services.  WT/TPR/M/200/Add.1 
Page 244  
 
 Paragraph 162  
 
Reply:   Does the possibility of U.S. airports with co mmercial services being privately owned include 
foreign private ownership?  
 ANSWER:   There are no legal barriers to or restrictions on U.S. airports with commercial service that 
prevent them from being privately-owned.  Priv ate ownership includes both domestic and foreign-
owned private companies.  However, there are lega l restrictions that complicate financing and reduce 
both profitability and incentives to privately own airports.   Historically all of the major airports in the 
United States, including all commercial service ai rports have been unde r public ownership. 
 
Paragraph 169  
 
Reply:  Are there plans to extend the deadline fo r the Air Safety Program of the Federal Aviation 
Administration beyond August 31, 2008? 
 
ANSWER:   The provision of insurance at set prices and for set coverage is  mandatory until August 
31.  The Secretary of Transportation will decide  as August approaches whether to continue the 
insurance and if so on what terms.  For each of the past 5 years, the decision with respect to what to 
do after August has been to continue the policies on the same terms.   v) Maritime transport 
Paragraph 176 . 
 
Reply:  Has the United States considered the possibility of including specific compromises in 
maritime transport services within the fram ework of the Doha Round negotiations?  
 
ANSWER:   The U.S. offers are developed following c onsultations with our domestic constituencies, 
and reflect our commercial and economic interests in the WTO negotiations.  In the course of the 
negotiations, the United States engages with other c ountries and responds to questions with respect to 
U.S. measures in this or any other sector.  Paragraph 198  
 
Reply:  Are they any statistics available on the in come of Mexican and Canadian citizens in the 
United States working in professional occupations pursuant to NAFTA terms?  
 ANSWER:  No. Parties to the NAFTA collect and maintain  data related to the granting of temporary 
entry to NAFTA professionals. However, statistics are not available on the income of Mexican and 
Canadian citizens in the United States working in professional occupations pur suant to NAFTA terms. 
 
COSTA RICA 
II. TRADE POLICY REGIME: FRAMEWORK AND OBJECTIVES 
3) FOREIGN INVESTMENT REGIME   1. Taking the first paragraph of  the section on the Foreign Investment Regime as a reference, 
Costa Rica would like to obtain further informa tion about the requirements that must be reported 
under the "International Investment and Trade in Serv ices Survey Act." Moreov er, Costa Rica would 
like to know whether the United States can provide further details on the operation of the registry as 
such.   
ANSWER:   For additional information on reporting requirements under the “International Investment 
and Trade in Services Survey Act,” please refer to the portion of the Code of Federal Regulations  WT/TPR/M/200/Add.1 
 Page 245 
 
 
 pertaining to BEA’s surveys.  This document outlin es reporting requirements and details the types of 
services for which BEA collects data.  Copies of BEA surveys are available on the International 
section of the BEA website, http://www.bea.gov/inte rnational/index.htm, under the heading ‘Survey 
Forms and Related Materials.’  
Regarding the operation of the registry, the surv eys are mandatory and firms are responsible for 
reporting whether or not BEA contacts them directly.  Although most large firms keeps track of and comply with government reporting requirements, BEA must also proactively reach out to potential 
respondents.  We do this in a variety of ways.  In a benchmark year, we may purchase mailing lists 
from business information providers.  On an on going basis, we follow the business press and trade 
publications and send forms to firms that appear like ly to have transactions of the types covered by 
our surveys.  Finally, some information that he lps to identify services exporters and importers is 
available from Census Bureau surveys of domestic firms.  Recently, we obtained information from 
Census on firms that responded affirmatively to a question about imports of services, which will allow 
us to improve the sample frames on our surveys of trade in services. 
 
2. On the issue of services, Costa Rica would like additional details on the measurement 
methodology used in relation to the export of services.  
ANSWER:   The most comprehensive source of info rmation on BEA’s methodologies for estimating 
services exports is The Balance of Payments of the Unite d States: Concepts, Data Sources, and 
Estimating Procedures  published in 1990 and available here:  http://www.bea.gov/methodologies/ 
index.htm#international_meth.  BEA has made numerous improvements in our methodologies since the publication of that document.  An overview of these improvements through 2003 is available in the article “U.S. International 
Services: Cross-Border Trade in 2002 and Sales Through Affiliates in 2001” in the October 2003 
issue of the Survey of Current Business  found here: http://www.bea.gov/scb/date_guide.asp. 
Subsequent versions of this annual article, publis hed every October, outline improvements made each 
year through 2007.  For a more detailed explan ation on the methods associated with any year’s 
improvements, please refer to that year’s version of the annual article “Annual Revision of the U.S. 
International Accounts,” published every July in the Survey of Current Business . 
 
III. TRADE POLICIES AND PRACTICES BY MEASURE 
2) MEASURES DIRECTLY AFFECTING IMPORTS  ii) Valuation for customs purposes 
 3. Currently, in cases of transactions entailing a series of sales, CBP normally uses the price paid 
in the "first or prior" sale. What type of document can the importer in the United States use to 
document this value for CBP? If CBP applies the va lue of the goods transaction, this value normally 
appears on the commercial invoice he ld by the importer in the United States. For this reason it is 
important to know what type of document can curren tly be used to document to customs the price paid 
in the “first or prior” sale. (Paragraph 32) 
 
ANSWER:  The United States issued Treasury Decision (T.D. 96-87) in 1997, 31 Cust. B. & Dec. 
No. 1, to provide notice on the documentation a nd information needed to support when transaction 
value many be based on a sale involving a middleman and the manufacturer or other seller (first sale), rather than on the sale in which the importer is a pa rty.  The T.D. indicates that relevant documents 
include purchase orders, invoices, proof of paymen t, contracts and any additional correspondence 
which demonstrate how the parties dealt with one  another.  The information should present a 
complete paper trail of the imported merchandise showing the structure of the entire transaction.  
 WT/TPR/M/200/Add.1 
Page 246  
 
 vi) Antidumping and countervailing measures 
 
4. Please indicate the current status of applicat ion of the sunset review procedure.  Is the 
Department of Commerce still applying this procedure?  If so, at what stage is the investigation and 
what is the assessment of the most recent rulings made by the WTO Appellate Body on the matter? 
 ANSWER:   The United States continues to conduct s unset reviews according to the AD and SCM 
Agreements.  U.S. sunset review measures have  been upheld in several WTO disputes.  The 
Agreements provide that an antidumping or counter vailing duty will terminate after five years, unless 
the Member initiates a sunset review before that da te to determine whether the expiration of the duty 
would likely lead to a continuation or recurren ce of dumping or subsidization and injury.  The 
Agreements explicitly permit the duty to remain in  force pending the outcome of that review.  If 
likelihood is determined, the Ag reements permit the Member to maintain the antidumping or 
countervailing duty subject to the obligation of condu cting a sunset review every five years.   
 ix) Technical regulations, confor mity assessment, and standards 
 
5. What percentage of current technical regula tions is based on international standards? 
(Paragraph 114) 
 
ANSWER:   The U.S Government does not track the per centage of technical regulations that are 
based on international standards.  Legislati on implementing the Uruguay Round Agreements and 
additional guidance provided to regulators require them  in developing regulations to consider the use 
of relevant international standards that may be e ffective and appropriate for meeting their regulatory 
objectives.  6. The United States mentions that technical regulations and conformity assessment procedures 
may be adopted by the States. In this regard, what  mechanism is used to ensure that such adoption 
does not create contradictory legislation? (Paragraph 115) 
 
ANSWER:    Potential conflicts are addressed by our C onstitution and subsequent Federal statutes, by 
consultation and cooperation between the Federal government and State and local governments and, if 
necessary, by use of our judicial processes.   
 
7. Is the exception to the notification and comment requirements for certain Agencies for 
purposes of notification within the United States, or does it refer to the notification made to the 
WTO’s Committee on Technical Barriers to Trade? (Paragraph 124) 
 
ANSWER:  The exception is for purposes of notice and co mment in the United States and applies to 
particular measures, not agencies.  For example, the Federal Aviation Administration could amend an approach path to airports for instrument appro ach procedures, because, for example, a tree on the 
approach path had grown taller. In such cases, it may not be considered necessary to seek comment 
and delay could prove dangerous.  Decisions to except a measure from notice and comment 
requirements remain subject to judicial review. 
 
8. How can a citizen request the amendment or repeal of a technical regulation? What is the 
procedure? (Paragraph 126) 
 ANSWER:  The procedure to request review or repeal of a technical regulation is to submit a written 
statement of the request to the appropriate regulatory authority.  
9. For what types of products are the supplier’s declaration of conformity and the third party 
certification required? What criteria does the United States use to define the conformity assessment 
procedure to be applied to sp ecific products? (P aragraph 129)  WT/TPR/M/200/Add.1 
 Page 247 
 
 
 ANSWER:  The United States does not maintain statistics th at track the extent to which regulators or 
the marketplace rely on specific types of conformity assessment procedures, whether SDoC, third party certification, or other forms of conformity assessment.  However, in general the U.S regulatory 
philosophy relies heavily on SDoC wherever possible. 
 
Although the United States relies to a large extent  on SDoC to both mandatory and voluntary product 
requirements, as well as on industry's self-policing efforts, if a product fails to meet mandatory 
requirements, the Federal agency with jurisdic tion over that product has the authority to take 
enforcement action against the supplier of the product.  
For some products reliance on SDoC may not provi de appropriate or effective assurance that a 
product conforms with applicable requirements, a nd in such cases, other forms of assurance may be 
required, such as third party certification or testing.  
10. What types of incentives do goods that co mply with the standards receive from the US 
market? (Paragraph 136) 
 
ANSWER:  The primary incentive for the use of and comp liance with voluntary standards is greater 
product acceptance in the marketplace.  
x) Sanitary and phytosanitary measures 
 
11. With respect to paragraph 148 , what is the justification for the United States to take two or 
more years to conduct a risk analysis?  
 
ANSWER:   The approval of Sanitary and Phytosanitary measures, including risk analyses, are based 
on science and undergo a comprehensive transparent ru lemaking process.  Because of the nature of 
the process, some risk analysis procedures take longer to complete than others.  In general, it is not 
possible to ensure review of the scientific evidence and to respond to comments on proposed 
measures sent by interested stakeholders, includi ng WTO members, within a pre-determined and 
inflexible timeframe.  12. With respect to paragraph 149, Costa Rica would like to know more about the “ePermits,” 
specifically with respect to the period of time the Un ited States takes to issue this permit. Must this 
permit be requested prior to each ex port, or does it have an effective term? 
 
ANSWER:   “E-Permits” is a web-based tool that giv es customers the ability to apply for a permit, 
check its status, and view it online. Submitting app lications and receiving permits via the internet 
saves a tremendous amount of time and effort on one of APHIS’ more paper-intensive processes, and 
therefore quicker than the conventional paper process.  Each permit, depending upon the t ype of permit, has its own polices and procedures. These ePermits 
do not differ from the conventional paper-based appli cation procedure.  Therefore, the permit is 
approved only for the requested import product and for a requested period of time.  If the customer 
seeks to import a product not designated on this permit, and new request must be submitted. 
 13. With respect to paragraph 151, on the “no tice-based” approval process, could the United 
States indicate:  What is the advantage of this new process?  Is this process really more expeditious 
than the traditional process?  
 
ANSWER:   In July 2007, USG issued a procedure fo r issuing new and revised phytosanitary import 
measures. As an alternative to undergoing the fo rmal rulemaking-based process, imports that are 
eligible can now be approved through a notice-b ased process. As with the rulemaking-based process, 
a pest-risk analysis must first be conducted for new fruits or vegetables cons idered for importation.  WT/TPR/M/200/Add.1 
Page 248  
 
 However, if the risk analysis shows that the commod ity’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 comments that disprove the findings of th e pest-risk analysis, a notice 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, although 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.   
 
a) Could the United States provide more details on the results obtained to date with this new 
process?  
ANSWER:   See above response. 
 
14. With respect to paragraph 160, in the event of an import alert, what procedure should the 
producer or exporter follow to demonstrat e that the alert has been corrected? 
 
ANSWER:   Products subject to an import alert may be removed from the alert once the firm has 
demonstrated to the U.S. Food and Drug Administration (FDA) that they have “overcome the 
appearance of violation.”  In many cases, th is entails the firm submitting 5 consecutive clean 
shipments before FDA will consider removing the fi rm from the import alert.  However, some import 
alerts require additional steps be fore a firm can be removed from import alert.  This can include 
submission of documents (e.g., HACCP records, 3rd.  party certification, etc.) to FDA for review.  
Guidance is usually provided in these import alerts on what additional information FDA will need to 
have confidence that the firm has overcome the app earance of a violation.  Contact information is 
provided on the import alerts if there are questi ons on how a firm can be removed from a specific 
import alert.  
15. Can the United States justify why the post-entry quarantine period for chrysanthemum 
cuttings is six months, and why a shorter peri od cannot be applied when a country meets all the 
respective phytosanitary requirements? 
 
ANSWER:   The post-entry requirements will be app lied to Chrysanthemum species for 6 months 
after importation.  This period of time has been de termined to be necessary to inspect post-entered 
plant material during the growing period for pests (primarily plant pathogens, including 
Chrysanthemum White Rust or CWR). CWR, caused by the fungus Puccinia horiana P. Henn., is a 
quarantine-significant pest in the United States (Title 7, Code of Federal Regu lations, Part 319.37-2).  
Importation of Chrysanthemum species are prohibite d from several countries (excluding Costa Rica), 
territories, and possessions due to the potential of th is organism to be transported with prohibited 
articles of Chrysanthemum. When CWR is found in the US, the States and APHIS cooperate to 
eradicate it." 
 
4) OTHER MEASURES AFFECTING PRODUCTION AND TRADE 
iv) Government procurement 
 
16. What types of procurement are undertaken and what criteria are used to choose one type or 
another?  
ANSWER:   The three basic types of procurement proce dures are: sealed bidding, which is used when 
the award will be made solely on the basis of pr ice; negotiated procurement procedures, which are 
generally used when the evaluation includes factor s other than cost and discussions may be necessary  WT/TPR/M/200/Add.1 
 Page 249 
 
 
 to understand offerors’ proposals;  and limited tendering procedures,  which may be used only under 
specified circumstances such as urgent and compe lling needs or where there is only one available 
source.  
17. Is there any data on the percentage of  procurement granted to foreign suppliers? 
 ANSWER:   U.S. Federal procurement data is availa ble in the Federal Procurement Data System 
(FPDS) at the beginning of each fiscal year and all reports are available by accessing https://www.fpds.gov.  
 18. What are the existing appeals procedures?  
ANSWER:  Suppliers may file protests of federal agen cies’ procurement actions at the Agency’s 
Protest Official; the Government Accountability Offi ce (GAO); or the U.S. C ourt of Federal Claims 
(COFC).  GAO, which is an independent legisla tive-branch agency, receives between 800 and 1,500 
protests each year; the COFC receives between 50 and 100 each year.  Suppliers who protest to the 
GAO and are dissatisfied with GAO’s decision are permitted to file a subsequent protest at the COFC.  
Decisions of the COFC may be appealed to the U.S.  Court of Appeals for the Federal Circuit.  In a 
protest at either the GAO or the COFC, suppliers may challenge the terms of a solicitation for a 
federal contract or the award (or proposed award) of  a federal contract.  Protests may be filed by any 
supplier, U.S. or foreign, that is an actual or pr ospective offeror whose direct economic interest would 
be affected by the award of the contract, or by failu re to award the contract.  Interim measures in the 
form of suspension of the procurement are available at either forum.  Further information, including 
copies of bid protest decisions, can be found on th e website of each forum:  www.gao.gov for GAO 
and www.uscfc.uscourts.gov for the COFC. 
 
19. Is there centralized information on procurem ent opportunities at the federal level and for the 
various States?  
ANSWER:   All U.S. Federal procurement opportuniti es for award of new contracts over $25,000 
may be found on the website:  www.FedBizOpps.gov.  Procurem ent opportunities for the various 
States may be found on state government websites.  
v) Trade-related aspects of intellectual property rights  
 20. According to paragraph ten of document WT /TPR/S/200, in May 2007, the Administration 
and the Congressional leadership finalized a “trade  policy model” whose purpose, among other things, 
is to include “flexibilities” with respect to the protec tion of intellection property in order to ensure that 
US partners can achieve an appropriate balan ce between fostering innovation in, and promoting 
access to life-saving medicines. Among the flexibiliti es provided in this trade policy model, a 
clarification is established in the sense that deve loping countries that have signed a Free Trade 
Agreement (FTA) with the United States may impl ement exceptions to the normal rules protecting 
test data, when necessary to protect public health.  In this sense, how do you foresee that developing 
countries that are trading partners with the Un ited States through bilateral agreements can 
implement these exceptions to the rul es of protection of test data in order to protect public health as 
indicated in the Bipartisan Trade Deal? 
 
ANSWER:  The May 2007 trade policy agreement be tween the Administration and Congress was 
concluded with specific respect to four Free Trad e Agreements that were, at that time, pending 
approval by the U.S. Congress (Peru, Colombia, Pana ma, and the Republic of Korea).  The elements 
of the agreement between the Administration an d Congress, including provisions regarding the 
protection of pharmaceutical data, are applicable to  those four FTAs.  Previous U.S. FTAs are not 
affected by these provisions. 
 WT/TPR/M/200/Add.1 
Page 250  
 
 EUROPEAN COMMUNITIES 
 
II. TRADE POLICY REGIME: FRAMEWORK AND OBJECTIVES  (1) OVERVIEW WTO Secretariat's Report, page 12, para. 2 
 
The Secretariat Report outlines that the trade prom otion authority, which the Administration views as 
an important tool for achieving U.S. trade objectiv es, expired on 1 July 2007.  Furthermore, the 
Report states that in May 2007, the Administration and congressional leaders agreed to a trade policy 
"template", which has been described as "open[ing]  the way for bipartisan work on Trade Promotion 
Authority".  The template contains provisions on labour, environment, intellectual property, 
investment, government procurement, and port security.  Could the US provide further information on 
the new trade policy template as regards labour issues? 
ANSWER:  The Bipartisan Agreement on Trade Policy of May 10, 2007 between the Administration 
and congressional leaders provided a path forward fo r pending free trade agreements.  The principal 
labor-related obligation of free trade agreements that reflect the Bipartisan Agreement is the 
requirement that each Party adopt and maintain in its  statutes and regulations, and practice thereunder, 
the fundamental labor rights as stated in the 1998 ILO Declaration on Fundamental Principles and 
Rights at Work .  Additional provisions include that (i) a Pa rty not waive or derogate from, or fail to 
effectively enforce its labor laws including impl ementing, that principal obligation in a manner 
affecting trade or investment between the Parties,  (ii) decisions on the distribution of enforcement 
resources shall not be a reason for non-compliance w ith a Party’s labor obligations, and (iii) labor 
obligations in a free trade agreement are subject  to the same dispute settlement procedures and 
remedies as the Agreement’s commercial obligations.  Free trade agreements reflecting the Bipartisan Agreement build upon the existing obligation to effectively enforce labor laws and expand the 
covered labor laws to include those laws related to  employment discrimination.  As a member of the 
ILO, the United States is committed to the ILO Declaration, which obligates the ILO Members to 
respect, promote, and realize the principl es concerning the fundamental labor rights. 
 
WTO Secretariat's Report, page 12, para. 3 
 
The Secretariat Report outlines that the United Stat es grants unilateral preferences to developing 
countries under several schemes, which may be conditi onal on adherence to criteria that, according to 
the U.S. authorities, are intended to promote sound policies and allow beneficiaries to expand trade 
and investment.  Could the US provide information on specific schemes that provide incentives 
related to labour issues? 
ANSWER:   The United States grants preferential mark et access to developing and least developed 
countries through the Generalized System of Pref erences program and other regional preference 
program contingent upon meeting several criter ia, one of which is taking steps to afford 
internationally recognized workers rights.  These prog rams provide for regular and transparent review 
processes of whether beneficiary countries are meeti ng the eligibility criteria, which could result in a 
suspension of benefits should a country be determined not to be meeting the criteria. 
US Report, pp. 24- 25, para. 114 
 The US states in its Report that its trade policy ag enda includes a strong commitment to protecting the 
rights of workers in America and in countries with which the US trades.  A concerted focus on worker 
training and education policies will continue to en sure that the American workforce can compete 
globally.  For workers displaced by trade, the Trade Adjustment Assistance Reform Act (TAA) of 
2002 (Title I of the Trade Act of 2002) modifies and expands the TAA for Workers program.  TAA 
helps workers adversely affected by foreign trad e through the provision of re-employment services:  
job training for displaced workers, income support while in training, and job search and relocation  WT/TPR/M/200/Add.1 
 Page 251 
 
 
 assistance.  Important changes to the program ma de in 2002 include expanded eligibility to more 
worker groups, increased benefits, and tax credits for health insurance cove rage assistance.  Congress 
has appropriated funds for the TAA program through September 30, 2008.  Could the US further 
indicate how it intends to follow up on its commitment to protect the rights of workers? 
 ANSWER:   The trade policy agenda of the United St ates includes strong commitments to protecting 
the rights of workers in America and in countries with which we trade and to promoting a level 
playing field for American workers.  The Admi nistration is currently discussing with Congress 
initiatives to renew and reform the Trade Adjustment Assistance program.  
 
US Report, page 27, para. 125 
 
The US states in its Report that by undertaking th ese various elements – forging global, regional and 
bilateral trade agreements; encouraging developi ng countries’ multilateral integration; building 
support for open trade; encouraging sustainable deve lopment and core labour standards; and fostering 
greater transparency – the United States will conti nue to play its traditional leadership role in 
promoting trade liberalization and developing a trading system of benefit to all.  Could the US 
elaborate further how it intends to encourage su stainable development and core labour standards in 
this context? 
ANSWER:   The Administration will continue to negotia te bilateral trade agreements that fully 
incorporate congressional guidance on trade and labo r issues.  The U.S. free trade agreement (FTA) 
process has helped to encourage many of our tradi ng partners to adopt new labor law reforms.  We 
will continue to encourage further consideration of labor rights issues in multilateral fora as well.  In 
addition, we will seek to provide technical cooperation, when possible, to assist countries in strengthening labor rights enforcement. 
 
(3) FOREIGN INVESTMENT REGIME 
WTO Secretariat's Report, pp. 14-16, para 17-25  
The Report describes the way the Foreign Investme nt and National Security Act of 2007 (FINSA) 
reviews the operation of the Committee on Foreign Investment in the United States (CFIUS).  Could 
the United States explain whether any changes intro duced by FINSA constitute a de jure exception to 
the WTO commitments of the United States? 
 
ANSWER:   We believe that all changes to U.S. law introduced in FINSA are fully consistent with 
U.S. WTO obligations. 
 
(4)INTERNATIONAL RELATIONS 
(i) World Trade Organization WTO Secretariat's Report, page 17, para.31 and page viii, para. 5  
The Report outlines that the US has fulfilled its notification obligati ons, except for preferential rules 
of origin, agricultural tariff quotas, a nd government procurement statistics.  Could the United States 
provide information on its plans to fulfil its notific ation obligations regarding preferential rules of 
origin, agricultural tariff quotas, a nd government procurement statistics? 
 
ANSWER:   The United States is working to complete its notifications of preferential rules of origin 
and agricultural tariff quotas.  The United States is in the midst of a major overhaul of the Federal 
Procurement Data System (FPDS), which it expects to  complete within the next few months.  When 
the FPDS overhaul is complete, the United States will submit its outstanding government procurement 
notifications to the WTO Secretariat.   
(ii) Preferential and other arrangements WT/TPR/M/200/Add.1 
Page 252  
 
 WTO Secretariat's report, 19, para. 41 
 Could the United States elaborate further on its plans to deepen economic relationship with the United Arab Emirates? Are the US authorities c onsidering the possibility to open FTA negotiations? 
 ANSWER:   Following the cessation of formal negotiati ons on a bilateral Free Trade Agreement in 
early 2007, U.S. and UAE officials inaugurated an enhanced “Trade and Investment Framework 
Agreement (TIFA)-Plus” forum, in which they  intend to pursue additional opportunities for 
strengthening trade and investment ties.  The TIFA -Plus process is meant to build on the progress - in 
some cases considerable - made during the FTA ta lks.  Additional areas will be explored as 
circumstances warrant.  The first m eeting under the TIFA-Plus format took place in June 2007; future 
meetings will be scheduled as soon as possible.  It is not possible at the moment to predict at what 
point the two sides might consider resuming negotiations on an FTA. 
 
US report, pp 13-14, para. 48-48 
 The overview of RTAs as indicated in Table AII.3 a nd described in the US report, appear to indicate 
that the US follows a rather homogenous model fo r RTAs. As already indicated during last US TPR 
in 2006, the United States" considers FTAs which c ontain comprehensive duty-elimination and a wide 
scope of non-tariff trade reforms to be the 'gold standa rd' ”.  In this regard, the US confirmed at that 
time, that there was no better model on which to base  FTAs.  However, the EC continues to note that 
recent FTAs with less developed countries have been designed irrespective of the levels of 
development of its counterparts. In particular, there is very limited asymmetry in commitments 
between the US and its less developed partners, incl uding long transition periods for the US itself.  
Could the United States explain how developmental aspects are taken into account when designing 
FTAs with less developed countries? Please give examples. 
 ANSWER:  The United States negotiates each FTA individuall y with each partner, to take account of 
the specific circumstances and needs of the trading relationship.  A fundamental aspect of each of the 
U.S. FTAs is the elimination of duties on substantia lly all the trade.  For a small number of sensitive 
products, the United States has agreed to an extende d transition period, rather than a result short of 
tariff elimination.  Could the United States describe the u se of MFN clauses in its FTAs? What FTAs 
contain such clauses, and what is the rationale for each of them?  
 
ANSWER:   There are goods MFN clauses in certain U.S. FTAs – including those with Chile, 
Colombia, Morocco and Peru – that apply to certa in agricultural products.  The nature, scope and 
rationale for these clauses differ from one agreement to another.  In each cas e, the clause forms an 
integral part of the particular market access co mmitments negotiated for the products covered by the 
clause.  Through such a clause, for example, the pa rties might have been able to agree to a longer 
transition period for liberalization on a particular product, with the understanding that liberalization 
would be accelerated if subsequent developments lessen the degree of import sensitivity for that 
product.  
All U.S. FTAs include an MFN clause for service s and investment.  The United States reserves the 
right in its FTAs to adopt or maintain services and investment measures that accord differential 
(better) treatment to countries with which we have concluded agreemen ts before the FTA under 
negotiation enters into force.  The rationale for th is reservation is to ensure that each new negotiation 
is conducted from the same starting point.  Once an FTA  enters into force, however, the FTA partner 
is afforded the same treatment, on an MFN basis, that  we give to our future trade agreement partners, 
with the exception of four areas: aviation, fisher ies, maritime matters, and telecommunications.  In 
these sectors, we reserve the right to provide differe ntial (better) treatment to future trading partners. 
  WT/TPR/M/200/Add.1 
 Page 253 
 
 
 US Report, page 14, para. 52 
 
The Report indicates that the FTAA remained suspended during 2006 and 2007.  Could the US 
authorities explain whether there are effective a ttempts to resume these negotiations in 2008?   
 
ANSWER:   The United States participates in the Free Trade Area of the Americas process in two 
functions:  one, as Co-Chair along with the Govern ment of Brazil’s Foreign Ministry (Itamaraty); the 
other, as a national delegation.  As  U.S. Co-Chair, the United States  has welcomed continued dialogue 
on the FTAA process.  As the U.S. national delegation,  the United States joined with the vast majority 
of leaders in the hemisphere in calling for a continuation of the FTAA negotiations and the 
resumption of trade meetings.  Other leaders however indicated that the conditions did not yet exist 
for the achievement of the FTAA.  Colombia’s cons ultations aimed at facilitating a meeting of trade 
officials; however, to date there has been no agreement on the timing of a meeting.  
III. TRADE POLICIES AND PRACTICES BY MEASURE 
(1) OVERVIEW 
WTO Secretariat's Report, page 23, para. 6  
The Report states that the Continued Dumping and Subsidy Offset Act of 2000 (the Byrd 
Amendment) was repealed in 2005, but AD and CV duties assessed before October 2007 continue to 
be distributed to U.S. producers who supported th e petition for investigation.  Total disbursements 
were estimated at approximately US$1.9 billion from  the entry in force of the Byrd Amendment to 
end 2007. According to publicly available informatio n, such disbursements have been made to U.S. 
shrimp producers who supported AD petitions against e xporters of shrimp products from a number of 
countries.  Could the United States specify the total amount of disbursements to the aforementioned 
US producers to date?  
 
ANSWER:   Please see the following website for annual reports on disbursements:  http://www.cbp. 
gov/xp/cgov/trade/priority_trade/add_cvd/cont_dump/.  
Are the US producers involved in w ild capture fishing?  If so, have the US authorities taken measures 
to avoid that these subsidies contribute to overcapacity and overfishing? 
 ANSWER:  Yes; U.S. producers include processors as well as fishers. The U.S. shrimp fisheries are 
federally managed under two fishery management plan s, but, due to the unique features of shrimp 
biology, management measures focus on limiting interactions with sea turtles and other protected species and monitoring harvests of large-size offs hore shrimp.  Harvest levels have remained 
approximately the same for many years. 
 According to publicly available information, Star Kist Samoa and Chicken of the Sea International 
Samoa Packing, companies operating tuna canneries in American Samoa, a U.S. territory, benefit from a tax exemption agreement.  Could the U.S provide details of the tax exemptions granted to these 
companies, in particular yearly total amount of tax credits obtained since the implementation of this 
measure?  
ANSWER:  These companies, among others, are eligible to receive an economic development tax 
credit calculated pursuant to the ru les of sections 30A and 936 of the Internal Revenue Code.  To be 
eligible, a corporation must have derived 80% or more of its gross income from sources in a U.S. 
possession and 70% or more of its gross income from the active conduct of a trade or business in a 
U.S. possession during the applicable period.  Eligibility  is not based on factors such as the size of the 
corporation or the sector of the economy in which it  operates.  The amount of the credit equals the 
sum of: (1) 60 percent of the corporation’s qualif ied American Samoa wages and allocable employee 
fringe benefit expenses; and (2) 15 percent of the corporation’s depreciation allowances with respect 
to short-life American Samoa tangible property, 40  percent of depreciation allowances for American WT/TPR/M/200/Add.1 
Page 254  
 
 Samoa medium-life tangible property and 65 percent of depreciation allowances for American Samoa 
long-life tangible property. This tax credit is cu rrently scheduled to be phased out in 2008.  
Information on the yearly amounts of the tax credit is not available. 
 
Which companies in American Samoa, other than fish processing plants, benefit from these subsidies?  
 
ANSWER:   The tax credit is available to all firms without  regard to industry; however, given the lack 
of economic diversification in American Samoa, it is not surprising that, to the best of our knowledge, 
fish processing plants are the only enterprises that ha ve taken advantage of the program in American 
Samoa. 
 
(2) MEASURES DIRECTLY AFFECTING IMPORTS 
(i) Customs procedures  
Large machinery deliveries that usually arrive dur ing a period of several months should be imported 
through the same customs entry point and within a 25-day timeframe. In practi ce, this makes imports 
of large machinery very complicated and costly, most  of the costs being transferred to customers in 
the US. The tightening of security measures have also  caused delays in customs procedures leading, 
inter alia, to increased warehousing costs, as well as delays in processing of visa and work permit 
applications.  In general, any measures aiming at securing trade should be non-discriminatory and 
proportional, not disrupting the trade flow between the EU and the US.  Could the US explain whether 
it envisages introducing measures to facilitate  the importation of large machinery? 
 
ANSWER:  The United States already has such measures.  They permit imports of disassembled 
large machinery to be treated as a single importation, at the election of the importer, if certain requirements are met.  WTO Secretariat's Report, page 25, para. 17 
 
As regards the numerous and unilateral US initiativ es to improve security, the EC has made every 
effort to try and support the US, appreciating that steps had to be taken on the US side, although such 
measures are not without cost and difficulties to all trade in goods and to all economic operators.  The 
EC expects the US to remain mindful of the stre sses and strains of the cumulative effect of these 
measures and additional measures, especially if and wh en applied on a global scale.  The intentions of 
the relevant US authorities appear to show adherenc e to a trajectory which continues to introduce new 
and burdensome measures on internatio nal trade, thus imposing costs a nd restrictions on exports and 
exporters to the US. When will the US curtail the spread and proliferation of these measures?  
 
ANSWER :  The United States appreciates the support th e EC has extended in the past on matters 
relating to trade and security, and looks forward to  continued cooperation on these important issues.  
However, the United States does not accept the premise of the question. 
 
WTO Secretariat's Report, page 26, para. 19 
 
The Report refers to regulatory analysis conducted in  the context of proposed rulemaking. Additional 
data and cargo information would be required (the so -called 10+2), to be transmitted electronically by 
economic operators.  
While the EC supports a layered risk-based approach and can see clear benefits in certain elements 
being adopted at global level, the quantity, utility and necessity of additional data elements is an issue 
of international significance which requires analysis at that level.  Could the US explain why US 
targeters consider these data elemen ts contribute to better targeti ng and whether the necessary cost-
benefits analysis has been made? 
  WT/TPR/M/200/Add.1 
 Page 255 
 
 
 ANSWER:   Currently, CBP relies primarily on carrier manifest information to perform advance 
targeting prior to vessel loading. Internal and exte rnal reviews have concluded that more complete 
advance shipment data would produce more accurate and effective cargo risk assessments.  In this way, resources can be focused on true threats and legitimate cargo can speed through the system as 
quickly as possible. 
 
Could the US confirm that they would envisage a gl obal roll-out of such data requirements only after 
the international community has been fully consu lted and taking into account the comments of the 
WCO SAFE Working Group of April and May 2008 with a view to ensuring relevant, useful and available data is required, within cost limits? 
 
ANSWER:   U.S. authorities are fully consulting an d receiving input from interested parties. 
 Additional data requirements which go beyond th e additional data requirements demanded today 
would lead to increased costs and ri sks to the facilitation of trade.  For each measure of this nature, 
the EC would like to know whether there are suffic ient (or any) security benefits, and whether these 
benefits outweigh the resources needed  to furnish and use them.  
 
ANSWER:   Please see our response to Question 17. 
 
Could the US explain how it can be clear that introducing such additional measures at the global 
level is justified?  
 
ANSWER:  Please see our response to Question 17. 
 
WTO Secretariat's Report, page 27, para. 20 
 The Report refers to Global Trade Exchange a lthough US Customs and Border Protection have 
decided not to move forward with it.  Could the US explain this contradiction?  
 
ANSWER:  U.S. authorities are consulting broadly with, and receiving input from, interested parties 
with respect to all aspects of this measure, and are assessing that input.  WTO Secretariat's Report, page 27, para. 23  
The US has introduced a new legislation requiring 100 % scanning of all US imports at the latest in 
2012.  Could the US furnish information whether it has as sessed the cost of such a new obligation and 
its impact on trade? 
 
ANSWER:   U.S. authorities are consulting broadly with, and receiving input from, interested parties 
with respect to all aspects of this measure, and are assessing that input.  
Could the US explain the expected benefits fr om 100 % scanning compared to the currently risk-
based approach, and why it has not waited for th e outcome of the pilot programmes on 100% 
scanning before adopting such legislation? 
 
ANSWER:  The Secure Freight Initiative (SFI) launched the International Container Security (ICS) 
project in Phase 1 of its efforts to help safegua rd the global supply chain by evaluating advanced 
cargo scanning and data integration capabilities at sev en overseas ports. The International Container 
Security project strengthens maritime cargo secur ity and global nuclear non-proliferation efforts by 
providing real time radiographic and spectrogra phic scanning of maritime shipping containers.  
Radiography, which is performed with Non- Intr usive Inspection (NII) technology, involves use of x-
rays or gamma rays to penetrate a container and produce an image of the contents. These images can WT/TPR/M/200/Add.1 
Page 256  
 
 be reviewed by officials for the presence of a nomalies, which may include contraband or illicit 
nuclear or radiological material.  CBP and the Department of Energy continue to study and evaluate the results of the SFI pilot 
programs.  All data gathered from these pilot programs will be reported to our Congress.  Any 
decision on the expansion of SFI will be informed by the information yielded from the initial pilot 
ports.  Any expansion will be done in a reasoned, responsible, and risk-based manner 
 
As regards the pilot scanning programme mentioned in paragraph 23, could the US clarify what is 
meant by the statement that this progr amme should be rolled out by July 2008? 
 ANSWER:  This was based on the best available informa tion at the time.  Work is continuing on the 
program. 
 
WTO Secretariat's Report, page 27, para. 24 
 The Secretariat Report outlines that the Implem enting Recommendations of the 9/11 Commission Act 
of 2007 will subject all contai ners on US-bounds vessels to image scanning and radiation detection 
monitoring.  Could the United States explain how they see th e consistency of this legislation with 
WTO rules relating to import restrictions and freedom of transit? 
 
ANSWER :  The United States sees the legislation as entirely consistent with U.S. WTO obligations. 
 
(iv) Tariffs 
(b) Applied MFN Tariffs WTO Secretariat's Report, page 31, para. 43 
 The Secretariat's Report states that the 2008 Ha rmonized Tariff Schedule reflects the fourth 
amendment to the HS (HS 2007). On 1 January 2007, the World Customs Organization (WCO) launched an updating of the Harmonized Commodity Description and Coding System ("HS"). A revision of the US Harmonized Tariff Schedule of the US ("HTSUS") followed the same year, in 
order to adapt the US customs nomenclature to t hose changes. The EC currently contests the HTSUS 
2007 revision insofar as the sector of asse mbled flooring panels is concerned.  Could the US provide 
information on what is the timing currently consid ered by US custom authorities for the notification of 
the HS 2007 transposition tables to the WTO?  
ANSWER : Like all other WTO Members, we are awaiting decisions that must be taken in the Market 
Access Committee in order for Members to be able to  submit the necessary information.  Once those 
decisions are taken, we will promptly provide the requisite information. 
 
(d) Preferential Tariffs WTO Secretariat's Report, page 33, paras. 53-54 and p.163, table AIII.3 
 
Regarding Table AIII.3, could the US provide more detailed specification at the Chapter level for the 
tariff averages calculated for HS section 11 "T extiles and Articles" for AGOA, considering that 
certain products within "Textiles and Articles" come in tariff free for AGOA countries?  
 
ANSWER:   AGOA duty-free preferences apply to all apparel lines in HS chapters 61 and 62 that 
meet the preferential rules of origin, as well as to certain textile and apparel items designated as 
handloomed, handmade and folklore articles.  U. S. imports of textiles and apparel from AGOA 
totalled $1.3 billion; virtually all of this trade, or  96 percent, was eligible for duty-free treatment under 
AGOA preferences.  The Chapter av erage tariffs are as follows:  WT/TPR/M/200/Add.1 
 Page 257 
 
 
     AGOA   MFN 
    2006    Simple   Average Average Chapter    AVE             %     %   
50   1.65  0.80  
51     4.27  6.84  52    7.47  8.40  53     0.08  1.53  54     9.45 10.25  
55   11.65 10.52  
56   3.58  5.01  57   3.16  3.25  58   4.57  7.69  59   2.40  2.24  
60     9.46 10.50    
61     0.41 12.02  62   0.34 11.31  63   2.99  7.00   Total 0.55   9.00  
 
Source:  U.S. Department of Commerce, Office of Textiles and Apparel  
(v) Other charges affecting imports 
WTO Secretariat's Report, page 34, para 57 
 The Report outlines that in addition to tariffs, imports  are subject to ad valorem harbour maintenance 
and merchandise processing fees. Furthermore, merchandise processing fees are not applied on imports from some preferential countries.  Could the US provide information whether in intends to 
eliminate this fee? 
 
ANSWER:   There is no plan to eliminate the fee. 
 
WTO Secretariat's Report, page 35, paras 62-63  
The Report states that imported beer is not eligible for the reduced rate of excise tax which is applied 
on the first 60,000 barrels of beer produced in a year by a domestic brewer with an annual production 
of two million barrels of beer or less. Furthermor e, small domestic producers (those with an annual 
production of 150,000 wine gallons or less) are eligible  for a credit of US$0.90 per wine gallon on the 
first 100,000 wine gallons and decreasing credit ra tes are available for wineries producing between 
150,000 and 250,000 wine gallons per year.  Could the US explain how the abovementioned 
provisions comply with the GATT National Treatmen t principle? Could the US provide information 
whether it intends to change this policy?  
 
ANSWER:  These provisions comply with U.S. WTO obliga tions.  There is no plan to change them. 
 
(vi) Anti-dumping and countervailing measures 
WTO Secretariat's Report, page 36, para 68 
 
The Secretariat's report states that the ITA' s AD/CVD Petition Counselling and Analysis Unit, 
established in 2004, assists US companies with respect to recourse to US unfair trade laws. The Unit 
provides assistance, inter alia, to help understand le gislation and regulations  and information on how 
to file petitions. Please provide further information on how  U.S. companies are assisted and the WT/TPR/M/200/Add.1 
Page 258  
 
 process from the first contact until the filing of the petition and explain as to which analysis is done by 
this Unit.  
 
ANSWER:  The PCAU is available to any business with a question on remedies available under the 
U.S. trade remedy laws, or that wishes to de velop and file an antidum ping or countervailing duty 
petition.  Particular attention is paid to small-  and medium-sized businesses that may find the petition 
process difficult to comprehend, or may be unable to afford the assistance of outside trade counsel to 
develop and file a petition.  During pre-filing discussions with potential petitioners, the PCAU works 
to ensure that any petition that may be filed will be properly documented in relation to all statutory 
and regulatory requirements.  The PCAU examines the content of any draft petition, including the 
data and sources of information used to suppor t the allegation and makes recommendations for 
improving the allegation and supporting information.   
WTO Secretariat's Report, page 36, para 69 
 
Paragraph 69 of the Secretariat report sets  out the applied U.S. legislation.  Could the United States 
provide information regarding the transparency of its investigation process and explain how 
interested parties are provided the opport unity during the investigation to view  and comment on 
detailed facts and calculation upon which findings may be based? 
 
ANSWER:   The United States investigation process is transp arent at all stages.  Interested parties are 
afforded the opportunity to submit factual information to rebut, clarify, or correct factual information 
submitted by any other interested party at any time  prior to the established deadlines.  Moreover, 
interested parties may submit arguments at any stag e of the proceeding.  All filings submitted to the 
Department of Commerce must be simultaneously served on all interested parties to the investigation.  
 Commerce issues a preliminary determination, allowi ng all parties to review the determination and 
comment prior to publication of the final determinati on.  Within five days of the preliminary and final 
determinations, calculation memos, programs, and any other materials necessary to reproduce the 
calculations are made available to the appropriate parties.  Also, Commerce makes itself available to 
meet with the interested parties to explain the calcu lations and decisions made in the determination.  
After the preliminary determination, Commerce ac cepts case and rebuttal briefs, and holds a public 
hearing on issues raised in the briefs, if requested.  At the conclusion of the hearing, Commerce places 
a verbatim transcript of the hearing on the record .  In addition, Commerce often holds ex parte 
meetings and accepts letters filed by part ies at any time during an investigation. 
 Commerce maintains a complete record of all submis sions filed during an inv estigation, and mandates 
that public versions be created of all documents  submitted to, or generated by, Commerce.  These 
documents are available to the public in Commerce’s reading room.  In addition, all preliminary and 
final determinations are published in the Federal Register and Commerce places many of its decision 
memoranda directly on its website. Via its Ad ministrative Protective Order (APO) procedure, 
Commerce allows legal representatives for interest ed parties to access proprietary information 
submitted to Commerce during an investigation.  WTO Secretariat's Report, page 36, para 70 
 
The Report states that in the case of non-market economies, AD suspension agreements may combine 
price undertakings and additional elements in or der to prevent price suppression or undercutting.  
Could the United States furnish information on whic h additional elements may be combined with 
price undertakings in AD suspension agreements? 
 
ANSWER:   Agreements with a foreign government considered to be a non-market economy may 
also involve quantitative restrictions.  The Unite d States, however, has not entered into such 
agreements with non-market economy WTO Members.   WT/TPR/M/200/Add.1 
 Page 259 
 
 
 (ix) Technical regulations, conf ormity assessment, and standards 
WTO Secretariat's Report, page 48, para. 129  
The Report explains that the US relies on a wider range of approaches to conformity assessment, the 
types of instruments varying depending on the sector and including supplier's declaration of 
conformity and third party certification. 
 
1. Could the US explain in more detail in which sectors and as regar ds which products 
supplier's declaration of conformity is used? 
 
2. What are the regulatory agenci es that have accepted this method?  
 
3. Could the US explain the criteria for accepti ng SDoC in general, and specifically in cases 
where SDoC has been approved? 
 ANSWER:  The United States does not maintain statistics th at track the extent to which regulators or 
the marketplace rely on specific types of conformity assessment procedures, whether SDoC, third party certification, or other forms of conformity assessment.  However, in general the U.S regulatory 
philosophy relies heavily on SDoC wherever possible.  
 Although the United States relies to a large extent  on SDoC to both mandatory and voluntary product 
requirements if a product fails to meet mandatory re quirements, the Federal agency with jurisdiction 
over that product has the authority to take enforc ement action against the supplier of the product.  
 For some products reliance on SDoC may not provi de appropriate or effective assurance that a 
product conforms with applicable requirements, a nd in such cases, other forms of assurance may be 
required, such as third party certification or testing.  
 
WTO Secretariat's Report, page 49, para. 130  
The Report states that the US authorities have indicated  that there are no centralized data on the extent 
to which US regulators have recognized the equivalen ce of foreign technical regulations or the results 
of conformity assessment procedures performed abroad.  Could the US furnish information whether it 
is considering setting up a centralized database to contain such information?  
 
ANSWER:  The United States is not considering setting up a centralized database on regulatory 
actions related to equivalence of foreign technical regulations or acceptance of results of conformity 
assessment procedures performed abroad.  
How do the relevant US authorities currently apply the system, i.e. how do they verify whether certain 
foreign technical regulations/conformity assessment  procedures have been recognized by the US? 
 
ANSWER:   U.S. authorities recognize that U.S. regulatory agencies have discretion to develop and 
employ various methods for such recognition, consis tent with the principles contained in Executive 
Order 12866.  
(x) Sanitary and phytosanitary measures 
WTO Secretariat's Report, page 51, paras. 144-145 
 
The Report summarizes how the USDA develops the procedure for setting import rules for 
agricultural products.  The EC would like to underline that, in the phytosanitary field, there are many 
applications submitted to APHIS/USDA which are s till pending to be considered.  In addition, some 
ongoing pest-risk assessment and rule-making processes are taking excessive long timeframes 
(decades), having a negative impact on exports opportunities for European producers.  WT/TPR/M/200/Add.1 
Page 260  
 
 EC producers and authorities have readily provide d information on production process and relevant 
regulations in order to facilitate Import Risk Anal ysis to be carried out.  In particular, tailored 
procedures have been suggested to  ensure compliance with US regulations.  While these efforts are 
acknowledged by APHIS/USDA, there has nonetheless been very little progress both in terms of facilitating general procedures and in terms of specific approval for imports.  There is a general 
perception that the plant health field suffers of a general lack of progress on the broader issues of 
procedures in APHIS. According to WTO commitments , parties are obliged to approve phytosanitary 
controls and procedures "without undue delays". What are the United States views on these 
comments? Does the United States intend to undert ake any measures in order to improve this 
situation?  
 ANSWER:   In July 2007, USG issued a procedure fo r issuing new and revised phytosanitary import 
measures. As an alternative to undergoing the fo rmal rulemaking-based process, imports that are 
eligible can now be approved through a notice-b ased process. As with the rulemaking-based process, 
a pest-risk analysis must first be conducted for ne w fruits or vegetables c onsidered for importation. 
However, if the risk analysis shows that the commod ity’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 comments that disprove the findings of th e pest-risk analysis, a notice 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.   
 
WTO Secretariat's Report, page 51, paras. 144-145 
 
The Report states that the US authorities note that , under federal law, US states are permitted to 
establish SPS measures, provided that these measure s are consistent with federal rules and 
regulations, and with US obligations  under relevant WTO disciplines.  Could the US furnish 
information how the US authorities justify that import rules for certain establishment producing milk 
products, which are imposed by State authorities, are stricter than the rules for interstate commerce 
under the oversight of FDA? Namely, State authorities of New Jersey insist that imports of ice cream 
must comply with the Pasteurized Milk Ordi nance, although these products are explicitly excluded 
from the scope of this ordinance.  
 
ANSWER:   The actual importation of ice cream into th e United States from the European Union is a 
matter of federal law.  If ice creams arriving at our ports of entry from the EU meet federal 
requirements they may lawfully enter into interstate  commerce within this country.  Insofar as we are 
aware, there are no issues with respect to the app lication of federal law to ice cream importation from 
EU member states. New Jersey’s regulation for fr ozen desserts, which include ice creams, requires 
that the ingredients used in ice creams which will be sold in New Jersey must be derived from Grade 
A sources.  It is FDA’s understanding that New Jersey  has recently begun applying this particular 
regulation to imported ice creams, with the resu lt that New Jersey has embargoed such products upon 
their entry into New Jersey.  Upon learning of this matter, FDA made enquiries with New Jersey, with 
the result that New Jersey has agreed to re frain from taking such actions in the future. 
 
WTO Secretariat's Report, page 51, paras. 144-145 
 
For Grade A dairy imports into US, there are in prin ciple three options – but none of them works: a) 
Listing of an EC dairy establishment as a 'domes tic' establishment under the jurisdiction, inspection 
and control of one of the Federal States. However,  since several years none of the States is accepting  WT/TPR/M/200/Add.1 
 Page 261 
 
 
 any applications of foreign companies under this  regime; b) Third party certification of full 
compliance with the PMO. This option was launche d as a pilot program in 2007. Three certifying 
companies (all US-based, all founded by former FD A or State inspectors) were accredited and six 
companies were audited. The basis for approval is  full compliance with all provisions of the PMO, 
which is not commercially viable for EC companie s and not in-line with the SPS Agreement, which 
provides for the approval of 'equivalent' measures; c)  Agreement with FDA that the exporter's control 
system provides an equivalent level of protection as the PMO. Since the beginning of 2008 FDA has cancelled all discussions.  Which practicable procedure exists to negotiate the approval of imports of 
Grade A dairy products? 
 ANSWER:   FDA believes that it provides mechanisms fo r prospective importers of Grade A products 
to access the U.S. market.  For example, an impor ting country (or political subdivision thereof) has 
the option, although not listed above, to become a full member of the National Conference of Interstate Milk Shippers (NCIMS), meaning that it will be subject to all NCIMS rules and enjoy all 
privileges of a U.S. State.  There are at least two EU firms which have availed themselves of the 
option of having an NCIMS member state audit thei r system.  Moreover, in order to further expand 
opportunities available for importers, last year  the NCIMS initiated a pilot program whereby 
certifying companies can audit foreign firms for comp liance with the PMO. This program, when fully 
implemented, will offer an additional avenue for European firms to access the U.S. market, noting, 
however, that it does not differ in  any substantive way from the process of obtaining NCIMS member 
certification. 
 
With regard to the above comments, as the EC is  aware, FDA and NCIMS representatives have spent 
considerable resources working with the EC to eval uate the equivalence of the European system for 
Grade A dairy regulation. After several years of work without a corresponding EC technical team, 
FDA concluded that, given the diversity of Memb er States programs for implementing EC hygiene 
directives, continued expenditure of resources wa s not justified, at least until such time as a 
satisfactory alternative approach was agreed by the parties and a proper objective demonstration of 
equivalence could be completed. FDA suggests that  initially narrowing the scope of the equivalence 
determination may be an alternative approach that could be considered. 
 The global animal health organisation OIE (with the consent of the EC and US) has issued an animal 
health code for BSE, which provides a science-based and agreed platform for the trade of beef. The 
implementation of these rules into US import rules has been pending for several years.  When does the 
United States intend to bring its administrative rules into compliance with the OIE standard?  
 
ANSWER:   Expansion of the list of eligible imports that are subject to APHIS’ new  notice-based 
procedure is under consideration and the USG looks forward to sharing the outcomes of our 
deliberations with all trading partners when completed. 
 
(4) OTHER MEASURES AFFECTING PRODUCTION AND TRADE (iv) Government Procurement WTO Secretariat's Report, page 67, para. 223 
 According to the Report, Annex I of Appendix I of  the GPA contains the list of central government 
agencies covered by the GPA; Annexes 2 and 3 lis t the 37 states, the Federal and the sub-federal 
bodies applying the GPA.  Could the US clarify whether the US list of Annex I entities include all the 
central level entities in the US? 
 ANSWER:   The U.S. list of Annex 1 entities includes most federal agencies.   
 
Could the US provide statistics on the size of procurement of Annex I and Annex II entities in the 
GPA? 
 WT/TPR/M/200/Add.1 
Page 262  
 
 ANSWER:   The United States is in the midst of a ma jor overhaul of the Federal Procurement Data 
System (FPDS), which it expects to complete with in the next few months.  When the FPDS overhaul 
is complete, the United States will submit its outstan ding government procurement notifications to the 
WTO Secretariat.  
 
WTO Secretariat's Report, page 69, para. 233  
According to the Report, Federal government agen cies are required to publish notices of proposed 
procurement opportunities in excess of USD 25,000 in FedBizOpps (with some exceptions).  Could 
the US provide information con cerning the exceptions allowing Fed eral government agencies not to 
publish notices of proposed procurement in excess of USD 25,000? 
 
ANSWER:   The exceptions may be found in the Fede ral Acquisition Regulation (FAR) 5.202, and 
include when the notice “cannot be worded to precl ude disclosure of an agency’s needs and such 
disclosure would compromise the national security” (www.arnet.gov/far/
). 
 WTO Secretariat's Report, pp. 69-70, para. 235 
 
The Secretariat's Report states that the Clinger Cohen Act of 1996 authorizes the use of simplified acquisition procedures for the acquisition of commerc ial items valued at USD 5.5 million or less, 
under certain circumstances.  Could the US describe which circu mstances allow the use of simplified 
acquisition procedures and which simplifie d acquisition procedures are envisaged?  
 
ANSWER:   The simplified acquisition procedures may be found in Part 13 of the Federal Acquisition 
Regulation FAR (www.arnet.gov/far/).  The aims of simplified acquisition procedures include the 
reduction of administrative costs, promoting effi ciency and economy in contracting; and avoiding 
unnecessary burdens for agencies and contractors.  Th e simplified acquisition methods include the use 
of a government-wide commercial purchase card and purchase orders.  
WTO Secretariat's Report, page 70, para. 236 
 According to the Report, the authorities have noted  that the Federal Supply Schedules are akin to a 
catalogue, rather than a list of qualified s uppliers as used in selective tendering.  Could the US explain 
how the catalogues' system operates and in particul ar its differences with the lists of qualified 
suppliers?  
ANSWER:   Information on the operation of the Fede ral Supply Schedules program may be found at: 
http://www.gsa.gov/Portal/gsa/ep/contentView. do?contentId=8106&contentType=GSA_OVERVIEW 
 
Under the GSA Schedules Program, the General Serv ices Administration (GSA) establishes long-term 
government-wide contracts that allow customers to  acquire a vast array of products and services 
directly from commercial suppliers.  To beco me a GSA Schedule contractor, a supplier must 
first submit an offer in response to th e applicable GSA Schedule solicitation.  G SA awards contracts 
to responsible companies offering co mmercial items, at fair and reasonable prices, that fall within the 
generic descriptions in the GSA Schedule solicitations. 
 
Could the US provide information whether the catalogues are open to the public? Can interested 
suppliers apply at any time?  
 
ANSWER:   The Federal Supply Schedules are open to the public.  Schedules e-Library 
(http://www.gsaelibrary.gsa.gov/) is the online source fo r the latest contract award information on the 
Schedules.  As noted above, to become a GSA Sche dule contractor, a supplier must first submit an 
offer in response to the applicable GSA Schedule solicitation.   
  WT/TPR/M/200/Add.1 
 Page 263 
 
 
 WTO Secretariat's Report, pp. 71-72, para. 246-247 
 
The Report states that procurement policy seeks to  increase the participation of small businesses, 
veteran-owned small businesses, small disadvant aged business (SDBs), and women-owned small 
businesses.  Small and minority businesses are an im portant element as regards the so-called 
"procurement goals" established by the US Congr ess for Federal procurement. According to the 
submission circulated by the US in December 2007 (GPA Committee) 23% of all prime contracts are 
currently reserved for small businesses. It is the EC understanding that this percentage has varied 
overtime.  Could the US confirm whether this information is  correct?  If so, could the US indicate the 
evolution of this percentage since the entry into force of the GPA?  
 
ANSWER:   The U.S. Congress has established a goal of 23 percent participation by small businesses 
in Federal prime contracts.  The 23 percent is only a goal.  It does not represent contracts reserved for 
small businesses as a significant portion of the 23 percent goal is met in the award of contracts 
through open competition with other suppliers.   
 
Section 603(b) of Pub. L.105-135 (Dec.12,1997) created the HUBZone Program, which set a 3 percent goal of prime contracts awarded to small businesses in Historically Underutilized Business 
Zones (HUBZones) and increased the (then) 20 percent prime contracts goal to 23 percent. 
 According to the information available to th e EC, the Buy American Act provides for tender 
evaluation preferences of 12% where small busin esses are competing against non-US suppliers. Could 
the US confirm whether this inform ation is correct, and if so, to explain in detail the scope of this 
provision?  
ANSWER:   FAR 25.105(b)(2) provides that:  if there is a domestic offer that is not the low offer, and 
the restrictions of the Buy American Act apply to the low foreign offer, the contracting officer must 
determine the reasonableness of the cost of the domestic offer by adding to the price of the low 
foreign offer, inclusive of duty, 12 percent, if the lowest  domestic offer is from a small business 
concern. The contracting officer must use this fa ctor, or another factor established in agency 
regulations, in small business set-asides if the low offer is from a small business concern offering the 
product of a small business concern that is not a domestic end product. The 12% tender evaluation 
preference does not apply to the procurement of goods covered by the GPA (FAR 25.105(a)(2)).  
 WTO Secretariat's Report, page 72, para. 251  
 
The Secretariat's Report states that each US State has its own procurement access conditions and that 37 States participate in the GPA.  The fact that some  of the States that do not participate in the GPA 
restrict foreign participation in biddings, offer pr eferences to in-state suppliers, or apply domestic 
purchase requirements is a cause for concern to the EU.  Could the US provide information whether 
and which of the remaining US States envisage participation in the GPA?  
 
ANSWER:   None of the 13 states that are not covered by the WTO GPA has indicated its interest in 
participating in the GPA.  
 
(v) Trade-related intellectual property rights 
(c) Trade marks and geographical indications WTO Secretariat's Report, page 75, paras 263 
 
Does the US have any information about EU Geographi cal Indications registered as trade marks in 
the US? Please give examples. 
 
ANSWER:  It is unclear what signs the EC is referring to in its question.  It is our understanding that 
lists of EC GIs are maintained in various sections of  the EC’s Official Journal, and perhaps elsewhere WT/TPR/M/200/Add.1 
Page 264  
 
 as well.  It is also unclear whether or not this question would encompass signs protected under any 
national systems that may be maintained by EC Member States.  While it is difficult to determine what are, in fact, the EC GIs that are the subject of this question, if the EC has specific examples in 
mind, we invite them to consult our database, thr ough which they can quickly determine the status of 
those signs.  The U.S. Patent and Trademark Offi ce maintains an easily searchable and comprehensive 
online database of trademark applications a nd registrations, available at www.uspto.gov. 
 
(d) Copyright 
WTO Secretariat's Report, page 76-77, paras 266-268  
Could the US provide statistical information on th e level, type and value of illegal file sharing (music, 
videos, software) that takes place in US colleges and universities? 
 
ANSWER:   While some trade groups and non-governme ntal organizations (including universities 
themselves) have attempted to measure the level of infringing file-sharing taking place on college and 
university computer networks, we are not aware of any authoritative statistical information on this 
type of activity.  
Does the US intend to implement any measure regar ding this practice and if so, could the US furnish 
information in this regard? 
 ANSWER:   The United States has a robust set of intellectual property laws prohibiting copyright 
infringement, including infringement over the Internet and other computer systems.  In addition to the 
panoply of remedies available to private rights holde rs in civil lawsuits against illegal file-sharing, 
United States law also provides criminal penalties fo r certain types of copyright infringement.  These 
criminal laws were further enhanced in 2005 w ith provisions designed to facilitate prosecution of 
online file-sharing of works that have not yet been  legitimately released by their respective copyright 
owners.  The Department of Justice vigorously en forces these criminal laws, and will continue to do 
so.  In addition, the Department of Justice and other U.S. agencies have encouraged colleges and 
universities to implement policies to minimize the use of university computing resources to infringe 
intellectual property rights  and commit other crimes. 
 
EU right-holder associations recently denounced the case of certain websites, which offer the 
possibility of downloading films and musical compos itions without the authorization of their rightful 
owners. Several Internet Service Providers based in  the U.S. appear to be giving technical support, 
either by facilitating the registration of the domain  or as providers of IP, to the reported websites 
(sharemule.com; sharemula.com; sinlamula.com; ye ndit.com; videochat.2ya.com and ciberdvd.com).  
Which route could the US offer to achieve the ces sation of the alleged activities in the Internet? 
 
ANSWER:  The United States provides a variety of remedi es for copyright owners against those who 
infringe of their copyrights, and in some cases,  even against those who merely assist in such 
infringement.  The Digital Millennium Copyright Act also sets out a “notice and take-down” system 
whereby rights holders who believe their works are be ing infringed on a particular Internet site can 
request their removal in an expedited process.  (See 17 U.S.C. Sec. 512.)  Although news reports 
indicate that legal action against some of the above-mentioned sites have been unsuccessful in 
European courts, we are unaware of whether the EU  right-holder associations referenced above have 
initiated legal action against th e above-referenced Internet sites in the United States. 
 (e) Enforcement activities WTO Secretariat's Report, pp. 77-78, paras 270-271 
 
The Report describes how the Secti on 337 procedures are conducted.  
  WT/TPR/M/200/Add.1 
 Page 265 
 
 
 Could the United States provide information on how  many complaints does the USITC receive per 
year?  What percentage of them is accepted  by the USITC to initiate the investigation? 
 
ANSWER:   During 2006, the U.S. International Trade Commission (Commission) voted to institute 
33 Section 337 investigations.  In 2007, the Commission voted to institute 35 Section 337 
investigations. Each of these investigations stemmed from the filing of a complaint by a private party.  
All or nearly all of the complaints filed with  the Commission during these years resulted in the 
institution of an investigation.  Those complaints we re subject to review and, whenever warranted, the 
Office of Unfair Import Investigations requested th at the complainant provide additional information 
in support of the complaint prior to the Commission’s vote on institution. 
 
Does the United States have any plans to modify this procedure? 
 
ANSWER:  The Commission is now concluding a rule-making process that may result in some 
changes to procedural rules relating to Section 337 complaints.  These changes, however, would not 
fundamentally alter the procedure for the institution of new investigations. 
 There are numerous reports about the public sale of European brands in the streets of New York and Washington D.C.  Could the US provide information regar ding which Department(s) control the 
enforcement of IPRs in the cities of New York and Washington, D.C. regarding street sales of IP 
infringing goods? 
 
ANSWER:   In the United States, both federal and state governments have authority to protect 
trademarks and to enforce laws against trademark counterfeiting.  At the federal level, trademark 
counterfeiting cases are investigated by several agencies, including the Federal Bureau of 
Investigation, the Department of Homeland Secu rity/Immigration and Customs Enforcement (ICE), 
and the United States Postal Inspection Service.  Pr osecution of federal criminal cases is conducted by 
the Department of Justice.  At the state level, the responsible en tities vary, although in New York and 
Washington, the entities chiefly responsible woul d be the New York Police Department and the 
District Attorney’s Offices of the 5 boroughs of New York, and the Metropolitan Police Department and District of Columbia United States Attorney’s Office, respectively)  Could the US provide data on seizures of IP infringing  goods offered for sale in the main US cities? 
 
ANSWER:  Although the United States maintains some information regarding seizures of IP-
infringing goods (for example, DHS/Customs and Border Protection compiles data on infringing 
items seized at ports of entry, and the Department  of Justice maintains statistics on the number of 
federal criminal IP cases and defe ndants), neither the Department of Justice nor other federal agencies 
maintains a comprehensive set of data on all seizures of IP-infringing goods in major U.S. cities.  In 
addition to the several federal law enforcement agencies with responsibilities for seizure of IP-
infringing goods and investigation of IP-related cr imes, a comprehensive measure of such seizures 
would also include information from a large numbe r of state and local law enforcement agencies, 
which account for the majority of seizures of IP-infringing goods in the United States. 
 
IV. TRADE POLICIES BY SECTOR 
(1) OVERVIEW WTO Secretariat's Report, page 79, para.3 and page 96, para. 79 
 According to the Secretariat's Report manufacturing tariffs are generally low, but tariff peaks have 
sheltered a few industries from international competit ion, for example textiles, clothing, and footwear 
and leather. Furthermore, the Report outlines that th e U.S. International Trade Commission has also 
identified textiles and apparel as subject to relativ ely high import barriers. One study estimates U.S. 
welfare gains from the elimination of tariffs and remaining quantitative restrictions on imports of 
textiles and apparel at US$830 million and US$1.9 billion.  Could the US furnish information whether WT/TPR/M/200/Add.1 
Page 266  
 
 it has concrete plans to lower its tariffs on textiles a nd apparel, and in particular to level out the tariff 
peaks applied in this sector?  
ANSWER:  The U.S. is committed to concluding a succes sful Doha Round this year that achieves 
new market access for agricultural and industrial products – including textiles and apparel - and 
services in both developed and emerging market economies.  The fundamental U.S. objective for 
textiles in the Doha Round, as established by the Trade Promotion Authority (TPA) passed by 
Congress, is to obtain competitive opportunities for U. S. exports of textiles and apparel in foreign 
markets substantially equivalent to the competitive opportunities afforded imports in the United States 
market.  It is assumed that any new TPA will at a minimum provide for the same or similar objectives 
for textile and apparel negotia tions as the recently-expired TPA. 
 
(2) AGRICULTURE 
 
While the Secretariat's report focus on US farm pr ograms at the time of writing, a 2008 Farm Bill will 
imminently be enacted.  When describing the rationa le for a presidential veto, the US Administration 
itself seems to acknowledge that the new Farm Bill is even more trade distorting than the 2002 one. 
New provisions aggravating the trade-distorting char acter of US commodity programs would include:  
Increase in loan rates and target prices for sever al commodities (as a result, payments would be 
triggered more easily if prices go down).  Beneficiaries of this "rebalancing" include wheat, soybeans, barley.  New support mechanism for sugar (85% of the US market being guaranteed for US producers 
– sugar in excess of this 85% to be turned into ethanol by USDA).  The Milk Income Loss Contract 
(MILC) program is restored to cover 45 percen t of the shortfall between $16.94 per hundredweight 
and the Boston Class I milk price.  In addition, th e $16.94 price will be adjusted for any month when 
the national average monthly cost of dairy rations exceeds $7.35 per hundredweight.  The quantity of milk production that is eligible for a MILC paym ent to a dairy producer is limited to 2,985,000 
pounds for each fiscal year.  New support for cotton  but would introduce a subsidy to cotton users. 
New mechanisms which would both be trade distor ting according to the Administration also include: 
The ACRE revenue-based counter-cyclical payment, A permanent disaster fund:  USDA Secretary Schafer stated that the permanent disaster program  is not green box because it does not have the 30% 
loss requirement. Funding for Direct Payments (notif ied by the US in the green box) are reduced to 
pay for some of the regrettable changes listed above, and the issue of planting restriction for Fruits & 
Vegetables (identified in the US-BZ Cotton case) is not addressed in the new Farm Bill.  US Food Aid 
will overwhelmingly remain in-kind and tied to US commodities, only a $60 million pilot project is added in the Farm Bill, far from the US Admini stration's own expectations (up to 25 % of the 
international food aid budget).  Could US authorities confirm the information above concerning the 
2008 Farm Bill?  
 
ANSWER:  Since the 2008 Farm Act has not been implemen ted and regulations re main to be written, 
it is premature to discuss WTO classification issues.  We do not agree with many of the characterizations in this question.  For example,  the definition of domestic  human consumption, on 
which the marketing allotment for sugar is to be set (that is, at 85% of domestic human consumption 
on an annual basis) includes both domestic production and imports. 
 
2008 Farm Bill provides that as far as the  Dairy Import Assessment  is concerned  Alaska, Hawaii, 
Puerto Rico & DC are added to program financing dairy promotion and research activities and that the 
import assessment rate on imports is set at 7.5 cent (instead of 15 cent for domestic producers).  
Please assess the WTO conformity of these provisi ons, particularly in the light of the discriminatory 
effects of these provisions on importers, notably in respect to:(a) There is no import of fluid milk to 
the US and the US dairy market is effectively clo sed for cheese, imports are funneled through quotas, 
most of which are full.  Therefore, imports of  dairy product cannot bene fit from any expansion of 
demand, even if any were to result from the promo tional programs.  In this light, the levy has an 
equivalent effect of the discriminatory tariff on im ports.(b) Other dairy products imported into the US,  WT/TPR/M/200/Add.1 
 Page 267 
 
 
 such as milk protein concentrate, are not normally used in dairy applications, but as raw material in 
other processed foods and non-food industrial produ ction and would not theref ore benefit from those 
promotion programs. Again, the l evy has an equivalent effect of the discriminatory tariff on imports.  
 
ANSWER:  The United States will implement these provisions  consistent with its WTO obligations.  
The Dairy Import Assessment program does not di scriminate against imported products.  In fact, 
imports are assessed a rate of only 7.5 cents to finance dairy promotion and research activities, as 
opposed to the assessment rate of 15 cents on domestic dairy products.    
(4) MANUFACTURING 
WTO Secretariat's Report, page 97, para. 85 
 
The Report states that US-flag vessels repaired abro ad are subject to a 50% duty, assessed on the cost 
of equipment and non-emergency repa irs in foreign countries.  The duty is not applied on US-owned 
foreign-flag vessels or in the context of US FTAs.  Could the US provide information whether it 
intends to eliminate this difference of treatment? 
 
ANSWER:   The duty on U.S. vessels repaired abroad has been eliminated as part of the general tariff 
concessions in U.S. free trade agreements.  There ar e no plans to eliminate the tariff differences that 
may exist between free trade agreem ent partners and other economies.  
 
(5) SERVICES 
(iii) Financial services WTO Secretariat's Report, page 110, para. 143 
 
The Report states that non-US licensed reinsurers must post collateral (i.e. make a trust account 
deposit in the United States for the whole of the opera tion equivalent, or submit a letter of collateral), 
when they conduct cross-border reinsurance business.  Could the United States explain whether any 
progress has been made in initia tives to replace the blunt and in  many cases excessive collateral 
requirement by regulatory measures that take into a ccount the actual risk of a particular cross-border 
reinsurer? 
ANSWER:   The U.S. States maintains such collatera l requirements as a prudential requirement on 
any supplier of reinsurance that does not choose to  be regulated under the U.S. system.  The NAIC 
and the U.S. regulators continue to consider the vi ews expressed by various interested persons on this 
issue.  Many U.S. primary insurance companie s strongly support these prudential requirements as a 
means to ensure the payment of reinsurance recove rables by non-U.S. regulated reinsurers.  There are 
no additional developments to report at this time.  
(iv) Air transport services 
WTO Secretariat's Report, page 116, para. 167  
The Report describes the restrictions on the ownership and control of US airlines.  Could the 
United States provide information whether it has any plans to change the regulations that maintain 
these restrictions? 
 
ANSWER:   The requirements on the ownership and control of U.S. airlines are set by statute, rather 
than by regulation, and Congressional action is necessar y to change the specific statutory provisions.  
The United States approaches this complex issue with  an open mind.  There are potential benefits to 
expanding investment opportunities and enhancing th e ability of airlines to serve a global market, as 
made clear by United States Secretary of Transporta tion Mary E. Peters when ending the rulemaking 
on “actual control” in late 2006.  If the U.S. Gove rnment, including the U.S. Congress, is to be 
convinced to amend our laws, however, it will be essential to explain these benefits in convincing WT/TPR/M/200/Add.1 
Page 268  
 
 terms.  Moreover, a number of serious issues will need to be addressed satisfactorily, including the 
role that U.S. airlines play in our national de fense under DOD’s Civil Reserve Air Fleet (CRAF) 
program; homeland security issues; the concerns of airline labor;  and the potential for cross-border investment to undercut the rights of carriers to operate to third countries.  Does the United States foresee the possibility of surpassing the limits presently in place? 
 
ANSWER:  As noted above, the United States approach es the issue with an open mind; however, 
changes to statutory percentage limits on investment require Congressional action.  (v) Maritime transport WTO Secretariat's Report, page 119, para. 176  
The Report states that the United States did not make an offer in maritime transport in the 
Negotiations on Maritime Transport Services suspe nded in June 1996, nor in the context of the 
services negotiations in the Doha Development Agenda.  Could the United States indicate if there are 
legislative or other impediments to making an o ffer in this sector, and describe such impediments? 
ANSWER:  The U.S. offers are developed following cons ultations with our domestic constituencies, 
and reflect our commercial and economic interests in the WTO negotiations.  In the course of the 
negotiations, the United States engages with other c ountries and responds to questions with respect to 
U.S. measures in this or any other sector.   (vi)Professional and business services (c) Legal services  
The United States Conference of Chief Justices (CCJ ) adopted in August 2006 a resolution regarding 
the adoption of rules on the licensing and practice of Foreign Legal Consultants. In this resolution, the 
CCJ urges "the highest court of each state that has not already done so, to consider adopting a rule 
permitting the licensing and practice of  foreign legal consultants."  Could the United States explain 
which States have, since the adoption of this resolu tion, adopted rules permitting the licensing and 
practice of foreign legal consultants? 
ANSWER:   Since August 2006, Delaware, North Dakot a, and South Carolina have adopted FLC 
rules. 
WTO Secretariat's Report, page 125, para. 207 
 
The Report notes that the 29 states with FLC rul es represent 86% of the U.S. legal services market. 
The Secretariat refers to the data from the U.S.  Economic Census (2002) and includes a hyperlink. 
This link does not refer to a specific publication or page, however.  Could the United States provide a 
more precise reference to the s ource of this information?  
ANSWER:   Please try the following link.  If the link b ecomes broken, USTR will be pleased to guide 
the EC to the data through the American Fact  Finder section of the Census Bureau website. 
http://factfinder.census.gov/servlet/IQRTa ble?_bm=y&-ds_name=EC0200A1&-NAICS2002=5411&-
_lang=en. 
Could the United States indicate what percentage of the US legal services market is currently covered 
by specific GATS commitments on Foreign Legal Consultancy in its schedule of commitments?  
ANSWER:   The 18 states covered by our Uruguay R ound commitments represent 70 percent of the 
U.S. legal services market.  WT/TPR/M/200/Add.1 
 Page 269 
 
 
 (d) Architectural and engineering services 
WTO Secretariat's Report, page 127, para. 214  
The Report states that there is no reciprocal registration between foreign countries and the 
United States, with the exception of Canada, with  which the United States maintains a full mutual 
recognition and immediate access agreement, the Inter-Recognition Agreement.  Could the 
United States explain who the signatory of the agreement is with Canada mentioned in this 
paragraph? 
ANSWER:  The Inter-Recognition Agreement is between  the National Council of Architectural 
Registration Boards (NCARB) and the Committe e of Canadian Architectural Councils.  
 
Could the United States explain whether this agreement binds the United States? 
 
ANSWER:   The agreement does not bind the United States.  It is implemented only by those states 
and provinces that ratify the agreement. 
 
Could the United States explain if this agreem ent has been notified under GATS Article VII?  
 
ANSWER:   The agreement was notified to the WTO: S/C/N/52 
V. ENVIRONMENTAL ISSUES 
US Report, page 25, para. 119 and page 26, para. 121 
 
In its Report the US asserts that on the multilateral front, the United States has been a global leader in 
seeking to discipline harmful fisheries subsidies a nd eliminate barriers to trade in environmental 
technologies and services through the WTO as part  of the Doha Development Agenda (DDA). 
Furthermore, the Report states that in the Rules Negotiating Group, the United States continues to 
lead in pressing for stronger disciplines on fisheri es subsidies that contribute significantly to global 
overcapacity and overfishing.  In  March 2007, the United States  submitted a far-reaching textual 
proposal for a fisheries subsidies agreement, whic h included a broad prohibition of the most harmful 
subsidies.  Has the US adopted legislation that would preven t, in fact or in law, the provision of all 
forms of subsidies, at all levels of government, federa l, state, local, that would directly or indirectly 
contribute to overcapacity and overfishing? If not , is it planning to do it in the future? 
 
ANSWER:   As noted above, the United States supports  an ambitious result in the WTO fisheries 
subsidies negotiations that will discipline harm ful subsidies that contribute significantly to 
overcapacity and overfishing, and we call on others to do the same.  Current U.S. practice is fully 
consistent with such a result. 
 
One of the United States' textual proposals (WTO  doc. TN/RL/GEN/145) for a fisheries subsidies 
agreement, referred to in pa ragraph 121 of the Government Report includes the following 
provision:"2.  This Annex does not cover governme nt-to-government payments to obtain access for a 
Member's distant water fishing fleet to fisheri es resources within the exclusive economic zone of 
another country.  The further transfer of those access rights to the Member's fishing fleet is covered by 
this Annex but is not prohibited under Article 1, pr ovided that:(i) the Member's fishing fleet pays 
compensation comparable to the cost the fleet woul d otherwise have to pay for access to the fisheries 
resources;  (ii) the terms and conditions of access, including the compensation paid by the fishing 
fleet, are published;  and (iii) the access arrange ment provides for a scien ce-based assessment and 
monitoring of the status of the fisheries resources  in question and for compliance with applicable 
fishery management systems." 
 One of the most significant fisheries access arra ngements in the South Pacific is the Treaty on 
Fisheries between the Governments of Certain Pacific Island States and the Government of the US. WT/TPR/M/200/Add.1 
Page 270  
 
 This agreement, last extended in 2003, regulates ac cess of US purse seine vessels in the EEZs of the 
South Pacific Island States which are members of the Forum Fisheries Agency. The financial terms of the Treaty, which include an annual payment by US AID of approximately US$14 million, stipulate an 
annual industry payment of US$3 million, which shall cover  (i) licence fees for up to 45 vessels; and (ii) technical assistance.  Furthermore, paragraph 3 of Schedule 2 to Annex II of the Treaty, 3 foresees 
that:  "In order to increase the benefits to the Paci fic Island parties under the Treaty, the United States 
industry will develop with the Pacific Island parti es a system for revenue sharing where the ex-vessel 
price is at or above a mutually agreed level.  Payments made under such a system will be made 
quarterly and will be in addition to the amount specified in paragraph 1(a)." Could the United States 
provide information about the yearly value of the ca tches effected by U.S. vessels, since 2003, under 
the Treaty?  
ANSWER:   Due to a marked contraction of the U.S. fleet since 2000, and considerable inter-annual 
variation in the fish price, the approximate a nnual value of U.S. catches under the Treaty ranges 
between $100-200 million USD.  We note that the correct figure for the amount provided in assistance 
by USAID is $18 million USD annually (not $14 million). 
 
Could the United States provide details about the rev enue sharing system between the United States 
industry and the Pacific Island parties, including the yearly amounts paid under this system since 
2003?  
 
ANSWER:  Under the terms of the Treaty between the United States and the Pacific Island States, the 
United States tuna industry makes an annual paymen t of US$3 million to the Forum Fisheries Agency 
(FFA), which is distributed to the FFA member states .  In addition, amendments to the Treaty in 2003 
provided that the U.S. industry would develop with  the Pacific Island Parties a system for revenue 
sharing.  This system has been developed and pr ovides that when the average price of skipjack 
(Katsuwomus pelamis) delivered by US vessels licensed under the Treaty to the canneries in 
American Samoa averages $800 per short ton or hi gher for an agreed period (calculated twice per 
Treaty year), the industry will provide the Parties wi th as an additional 1% of the total value of the 
catch, above and beyond the annual payment.  This  latter provision was not triggered until 2007, as 
fish prices were below the threshold level.  Sin ce 2007, the U.S. industry has provided over 1 million 
USD to the Pacific Island Parties under this arrangeme nt.  It is estimated that in 2008 the first six-
month payment could be as high as 2 million USD. 
 
Could the United States provide detailed inform ation on scientific assessment and setting of catch 
limits for fish stocks fished by U.S. vessels under the Treaty? 
 ANSWER:   U.S. vessels operating under the Treaty ar e subject to a strict management and 
monitoring regime, including use of satellite-based  vessel monitoring systems, observers, full 
reporting of all catches on a weekly basis, notificatio n of entry and exit from zones of each Party, port 
sampling and monitoring as well as other requirements.  Data provided by these U.S. vessels provides one of the largest source of fisheries data used by the South Pacific Commission’s Oceanic Fisheries 
Program (SPC/OFP) in its work to conduct science- based stock assessments for Pacific stocks of 
skipjack, yellowfin and bigeye tunas, as well as othe r associated species.  The data from U. S. vessels, 
most of which are provided by catch and effort logs, are unique in that they are verified by observers and port sampling programs.  These vessels also opera te in full compliance with applicable measures 
(including catch limits) adopted by the Wester n and Central Pacific Fi sheries Commi ssion, the 
regional fisheries management organization (RFM O) responsible for adopting conservation and 
management measures for highly migratory species in  the Western and Central Pacific Ocean.  The 
stock assessments conducted by the SPC/OFP, based on data provided by the United States, form the 
basis of conservation and management recomme ndations to be considered by that RFMO. 
 The United States' textual proposal (WTO doc. TN/R L/GEN/145) for a fisheries subsidies agreement, 
referred to in paragraph 121 of the Governme nt Report foresees a total ban on subsidies, inter alia , for  WT/TPR/M/200/Add.1 
 Page 271 
 
 
 the construction of new vessels.  The EC notes that the website of the National Marine Fisheries 
Services (Office of Management and Budget) incl udes information about the Capital Construction 
Fund Program. In a dedicated webpage the programme  is described as follows:  "The purpose of the 
Capital Construction Fund (CCF) Pr ogram is to improve the fishing fleet by allowing fishermen to 
accelerate their accumulation of funds with which to replace or improve their fishing vessels. Created 
by the Merchant Marine Act of 1936, as ame nded (46 U.S.C. 1177), the CCF Program enables 
fishermen to construct, reconstruct, or under lim ited circumstances, acquire fishing vessels with 
before-tax, rather than after-tax dollars. The progr am allows fishermen to defer tax on income from 
the operation of their fishing vessels. Under the CCF Program, the amount accumulated by deferring tax on fishing income, when used to help pay for a v essel project, is, in effect, an interest free loan 
from the Government."  Is this programme still available to US fishermen? If so, how do the US 
authorities ensure that the fishing capacity that results from the use of this subsidy does not negatively 
impact fishery resources?  
 
ANSWER:   Capital Construction Funds are governed by section 607 of the Merchant Marine Act of 
1936 and section 7518 of the Intern al Revenue Code.  The CCF program is currently available not 
only to U.S. citizens that own or lease fishing v essels but also to those who own or lease the wide 
spectrum of other commercial vessels (for example, tugs, barges, bulk cargo vessels, container vessels, tankers, cruise vessels and ferries).  The U.S. Department of Transportation’s Maritime 
Administration (MARAD) administers the program with respect to commercial vessels other than 
fishing vessels; the National Oceanic and Atmospheric Administration (NOAA) in the U.S. 
Department of Commerce administers the program with respect to fishing vessels.  All funds 
contributed to the program come from the CCF account holders themselves, without any form of matching contributions.  The benefit to the account hold er is limited to the deferral of income tax on 
contributions to the fund and earnings on those amounts until the funds are withdrawn by the fisher.  When funds are withdrawn for approved purposes, the tax basis of a qualified vessel (used for the 
computation of depreciation allowances or gain or lo ss) is reduced by the amount of any withdrawal.   
 With respect to fishing vessels, licensing and other requirements ensure that vessels are eligible to 
participate in a particular fishery only if the associated fishing is sustainable.  Because many U.S. 
fisheries are in the process of stabilizing or wit hdrawing capacity, a large percentage of CCF accounts 
for fishing vessels are inactive, i.e., those account holders are not withdrawing the funds in their 
accounts.  Legislative proposals to allow withdrawal  of the funds for other purposes (e.g., retirement, 
purchase of quotas under market-based limited access privilege programs) are currently before 
Congress. 
 
Could vessels having benefited from this subsidy be used in waters outside the jurisdiction of the 
United States?  
 
ANSWER:   The program does not place specific limita tions on where fishing vessels will be used.  
Please see the answer to question 9.  
Does the United States maintain a register of vessels having benefited from such subsidy? Could the 
US indicate the total amount of the subsidy prov ided to the US fishing sector under this programme?  
 
ANSWER:   NOAA maintains a database that lists all the fishing vessels qualified under the program.  
We estimate that the annual total benefit confe rred from tax deferrals pursuant to the program is 
approximately $5 million.  This estimate may overstate the benefit because it does not account for the 
fact that the tax basis of a qualified vessel is reduced by the amount of any withdrawal which 
represents amounts previously excluded or deducted from taxable income.  It is difficult to estimate 
the amount that goes back into the fishery; as noted in the response to question 9, a large percentage 
of CCF accounts are inactive in light of the restrictions on capacity in many U.S. fisheries.  Has the United States notified this subsidy to the WTO?  WT/TPR/M/200/Add.1 
Page 272  
 
 ANSWER:  No.  Please see the response to the Europ ean Communities’ previous question on this 
topic in G/SCM/Q2/USA/20 (April 1999). 
As this subsidy programme would be prohibited under the proposals m ade by the US contained in its 
textual submission TN/RL/GEN/145, does the US plan the removal of such programme? If so, could the US provide an indication of the timing for such removal? 
 
ANSWER:   The United States supports an ambitious outcome in the WTO fisheries subsidies 
negotiations and will comply with any new rules th at are adopted, including rules that may have 
originated in a U.S. fish subsidies proposal.  Therefor e, if such rules were to have the effect suggested 
by the EC, affected U.S. policies would be modified accordingly. 
 
Concerning subsidies granted by the US in the fish eries sector, a "commercial fisheries failure" was 
declared by the U.S. Secret ary of Commerce in 2006 for the Klamath River Fall Chinook Salmon 
Fishery.  According to publicly available info rmation the US Congress appropriated $60 million in 
disaster assistance that was distributed during 2007.  Could the United States provide details on 
whether these funds were allocate d to fishermen involved in wild  capture fisheries, and if so, how 
much and for which specific purposes? 
 
ANSWER:   The Klamath Disaster Funds were allocated to the following programs and groups:  to 
commercial fishermen for lost income ($35 m illion) and for vessel maintenance and safety 
($7 million); to affected businesses ($14 million); to the states, tribes and industry organizations for 
outreach and administrative support ($2 million); a nd to states, tribes, universities and commercial 
fishermen for research ($3 million).  A similar "commercial fisheries failure" was d eclared for the West Coast Salmon Fishery on 1
 May 
2008. According to publicly available information the “Farm Bill”, as agreed by the Senate-House 
conference committee, includes $170 million in disaster  assistance to help commercial fishers and 
businesses affected by the salmon closure in Or egon, California, Washington and Idaho.  Could the 
United States provide details on whether these funds w ill be allocated to fishermen involved in wild 
capture fisheries, and in the affirmative how  much and for which specific purposes? 
 
ANSWER:  The funds will not only be allocated to affected commercial fishermen and related 
businesses but also to affected recreational bus inesses.  Precise allocation figures and other 
information are not yet available.  In relation to the aforementioned questions, under Section 312(a) of the Magnuson-Stevens Act, the 
Commerce Secretary can declare a commercial fishery failure if requested to do so by a governor, or 
at the Secretary's discretion.  The Secretary mu st determine that the commercial fishery failure 
resulted from a fishery resource disaster due to natu ral causes, man-made causes beyond the control 
of fishery managers, or undetermined causes.  Could a "fishery resource disaster" be declared as a 
result of, for example, cuts by fish eries managers in the fishing quotas?  
 
ANSWER:  No.  Only “fishery resource disasters” resu lting from regulatory restrictions put in place 
to protect human health or the marine environment are eligible for consideration; reduction in fishing 
quotas does not qualify. 
 
Concerning the determination of a fisheries failure, do economic and/or social factors play a role in 
making such a determination? 
 
ANSWER:  Yes. Severe economic impacts must be shown, and must also be logically traced to a 
disaster.  WT/TPR/M/200/Add.1 
 Page 273 
 
 
 HONG KONG, CHINA 
 
Anti-dumping (AD) 
(WT/TPR/S/200, P. 23, Para. 5; P. 40, Para. 85) 
 
The Secretariat remarked that AD duties could significantly affect the domestic prices of the US, and that as most of the measures were imposed on in termediate goods, these duties could also increase 
costs for downstream producers and consumers.  It further raised the importance to ensure that AD 
measures did not retard adjustment to changing cond itions in international markets.  Separately, the 
Secretariat also noted that the a pplication of AD duties may not be w ithout cost when applied in cases 
of pricing that are not predatory. 
 
We would like to invite the US to share its responses to the above observations and comments.  
Specifically, we would like to know how does th e US balance the interests among different domestic 
stakeholders (e.g. producers vs. downstream pr oducers and consumers) in AD investigations, and 
how does it ensure that differential pricing practices t hat are not predatory will not be subject to AD 
duties.  
 ANSWER:   A public interest test is not included in the U.S. antidumping duty law, although 
provisions that would establish such a test have been  considered by the Congress.  The United States 
does provide an opportunity for all parties to par ticipate in an antidumping investigation and ensures 
that all views expressed by parties are placed on the public record.  However, the determination to 
impose an antidumping order is ultimately based on whether dumping has occurred and whether it has 
caused material injury.  Inclusion of a public interest test would politicize the administration of the 
unfair trade laws, as any such assessment would i nherently be highly subjective given the numerous 
and varied competing interests that woul d need to be appropriately balanced. 
 
(WT/TPR/S/200, P. 40, Para. 84; & P. 41, Para. 89) 
 While we welcome that the US initiated fewer AD i nvestigations in 2005 and 2 006, it is mentioned in 
the Secretariat Report that the average duration of an AD measure in place at end 2007 was some 
11 years, and the oldest AD measure in place dated from 1973.  As at end 2007, there were 32 AD 
measures that had been in place for at least 20 years, and 98 cases for over 10 years.  Under sunset review procedures, 210 AD and CVD orders were reviewed from January 2000 to December 2007, of 
which only 58 were revoked.  
 The large number of long-standing cases and the low rate for revocation are a matter of concern, 
bearing in mind that AD measures should be terminated  not later than five years under Article 11.3 of 
the AD Agreement unless otherwise justified.  Would the US advise whether it would give any special 
consideration to the measures that have already been in place for very long period of time, for 
instance over 10 years, when th ey come up for sunset reviews?   
 
ANSWER:   The United States’ procedures on sunset revi ews are consistent with its WTO obligations 
and have been upheld in severa l WTO disputes.  The Agreement provides that antidumping duties 
may remain in place for five years unless the Member  initiates a sunset review to determine whether 
the expiration of the duty would likely lead to a c ontinuation or recurrence of dumping and injury.  If 
likelihood is determined, the Ag reement permits the Member to maintain the antidumping duty 
subject to the obligation of conducting a sunset re view every five years.  We disagree with the 
characterization of U.S. sunset review procedures.  Of the 49 orders the United States has revoked 
following sunset reviews since January 2007, 20 were in force only five years.  Thus, the contention 
that the extension of duties beyond five years ha s “become the norm in U.S. practices” is not an 
accurate characterization. 
 WT/TPR/M/200/Add.1 
Page 274  
 
 Financial services 
(WT/TPR/S/200, P. 108, Para. 128) 
 As set out in the Secretariat Report, a foreign bank  must establish an insured banking subsidiary in 
order to accept or maintain domestic retail depos its of less than US$100,000, except in the case of a 
foreign bank branch that was engaged in insure d deposit-taking activities be fore or on 19 December 
1991.  We are however given to understand from our traders that foreign banks are not allowed to 
participate in savings insurance systems in th e US and could not accept deposits of less than 
US$100,000 as a result.  We would be grateful for the US’ clarification of its regulatory regime in this 
regard.   In case of any actual limitations restricting foreign banks to participate in the US savings 
insurance systems or establish an insured banki ng subsidiary, would the US advise how the 
concerned discriminatory limitations are considered  to be consistent with its existing GATS 
commitments?  
ANSWER:  Countries differ as to the scope of business they allow and the in-country capital they 
require for direct branches of foreign banks.  The United States is among the most liberal countries in 
the world with regards to capital for bank bran ches, allowing bank branches to lend based on the 
world-wide capital of its parent bank and requiring  only a capital equivalency deposit which is less 
substantial than normal capital requirements.  Except for a number of grandfathered institutions, 
foreign branches are in effect not allowed to take retail deposits.  (In fact they can take deposits from 
individuals in excess of $100,000, but such deposits ar e not eligible for coverage by FDIC deposit 
insurance so retail depositors tend to place their mone y with U.S. juridical persons where at least the 
first $100,000 is eligible for coverage.)  Tho se wishing to do retail banking can do so through 
subsidiaries which are extended full national treatme nt, including capital requirements.  In practice, 
over twice as much business is conducted through bran ches as opposed to subsidiaries.  The limitation 
on retail deposit taking by foreign banks operating in the United States through branches is noted in 
the U.S. GATS schedule. 
 
(WT/TPR/S/200, P. 110, Para. 143) 
 
We note from the Secretariat Report that non-US licen sed reinsurers must post collateral when they 
conduct cross-border reinsurance businesses with US li censed companies in orde r for the US licensed 
company to receive a credit for the reinsurance.  This discriminatory measure has however not been 
inscribed in the US’ existing GATS schedule.  We would be grateful for the US’ advice on the 
consistency of the subject measure with its existing GATS commitments on reinsurance services. 
 
ANSWER:  There is no discrimination.  The U.S. stat es maintain such collateral requirements as a 
prudential requirement on any supplier of reinsurance that does not choose to be regulated under the 
U.S. system.  The NAIC and the U.S. regulators continue to consider the views expressed by various interested persons on this issue.  Many U.S. pr imary insurance companies strongly support these 
prudential requirements as a means to ensure the payment of reinsurance recoverables by non-U.S. 
regulated reinsurers.  There are no additiona l developments to report at this time. 
 
(WT/TPR/S/200, P. 111, Para. 148) 
 
We note that the US is making efforts towards uniform ity of insurance regulations at the state level in 
response to Members’ comments in the previous trade policy reviews that those regulations had resulted in unjustified burdens on insurers and prev ented them from responding to customer needs in a 
timely manner.  We would like to know the latest progress of the uniformity exercise, details of any 
possible regulatory changes that are under cons ideration, and the expected timeframe for the 
completion of the exercise. 
 ANSWER:  The U.S. state insurance regulators, working through their coordinating body the 
National Association of Insurance Commissioners ( NAIC), already have taken a number of steps to  WT/TPR/M/200/Add.1 
 Page 275 
 
 
 make the insurance company licensing process as uniform as possible. For example, the NAIC has 
developed, and all states have agreed to participat e in, a Uniform Certificate of Authority Application 
process that provides significant standardization of the filing requirements that U.S. state regulators 
use in considering the licensing of a company already established in one U.S. state.  In addition, U.S. 
state insurance regulators continue to coordinate regarding solvency regula tion of companies licensed 
to do business in the U.S. market.  The NAIC a nd the U.S. states also have specific initiatives 
underway relating to life insurance and related produ cts; and for producers (agents/brokers).  Progress 
has been made although there is no specific deadline fo r completion.  The objective of the work is to 
make the U.S. insurance market as competitiv e as possible while maintaining sound prudential 
regulation.  
INDIA 
 
1. The Secretariat in Summary Observations para graph 1 observes: “In the face of the economic 
uncertainty prevalent in early 2008, U.S. welf are would be best promoted by exploiting the 
adjustment capacity of the U.S. economy and cont inuing to reduce barriers to market access and other 
distorting measures, including those that result from high levels of assistance in agriculture and 
energy.” What steps are being taken to “reduce ba rriers to market access and other distorting 
measures, including those that result from high levels of assistance in agriculture and energy”?  
 
ANSWER:   The United States strongly supports multilatera l trade liberalization and is committed to 
an ambitious and comprehensive result in the WTO Doha Round.  We are prepared to make 
significant market access commitments provided othe r Members make meaningful contributions as 
well.  
 2. The Secretariat in Summary Observations pa ragraph 5 states: “It [US] has fulfilled its 
notification obligations, except for preferential rules of origin, agricultural tariff quotas, and 
government procurement statistics.” When does US plan to fulfil its outstanding notification 
obligations?  
ANSWER:   The United States is working to complete its notifications of preferential rules of origin 
and agricultural tariff quotas.  The United States is in the midst of a major overhaul of the Federal 
Procurement Data System (FPDS), which it expects to  complete within the next few months.  When 
the FPDS overhaul is complete, the United States will submit its outstanding government procurement 
notifications to the WTO Secretariat.  
 
3. The Secretariat in Summary Observations paragr aph 5 states:  “rulings relating to intellectual 
property rights and anti-dumping have  not yet been fully implemented” By when does the US intend 
implementing these rulings? 
 ANSWER:   The U.S. Administration continues to work  with the U.S. Congress to fully implement 
the recommendations and rulings of the Di spute Settlement Body in these disputes. 
 4. The Secretariat in Summary Observations in paragraph 8 states that the United States has long maintained a policy of national treatment of fore ign direct investment, subject to sector-specific 
considerations, prudential con cerns, and national security.  Could the United States elaborate these 
sector-specific, prudential and na tional security considerations?  
 
ANSWER:  Investment in the United States may be reviewed by the Committee on Foreign 
Investment in the United States (CFIUS) for national security concerns if the transaction could result 
in control of a U.S. business by a foreign person.  Consistent with the U.S. open investment policy, 
CFIUS review is focused on identifying and resolv ing genuine national security concerns alone, not 
on economic and other national interests.  Ther e are a limited number of  other conditions and 
restrictions established at the fe deral level on foreign investment in the United States, such as in WT/TPR/M/200/Add.1 
Page 276  
 
 connection with atomic energy, telecommunications, banking, fishing, maritime services, and mining.  
Individual states also may have limited conditions and restrictions.  These restrictions are not necessarily prohibitions, but may establish preconditi ons or ownership level restrictions and are 
separate and unrelated to the CFIUS process.  
5. The Secretariat in Summary Observations pa ragraph 10 states: “Initial production volumes of 
small domestic wine and beer producers benefit from either a reduced federal excise tax rate or an 
excise tax credit.  This benefit is not available for imported products.” Does this not result in violation 
of the principle of national treatmen t? The US is requested to explain. 
 
ANSWER:  The total production of beer and wine by sma ll producers is quite sm all, and these small 
producers frequently face higher costs of production, so any excise tax advantages offered to these 
producers have no trade distorting effect.  6. The Export Credit Guarantee Programme which is managed by USDA/FAS has a major 
impact on a number of key agricultural market s. Under this programme, the US government 
guarantees credits up to 98 % of the export value on a short-term to long term basis varying from up 
to 180 days under the Supplier Credit Guarantee Program SCGP, 3 years under the General Sales 
Manager (GSM) 102 and up to 10 years under GS M-103. Both the GSM-102 and GSM-103 are 
distortive insofar as the credit terms exceed the av erage life of the product/commodity in question, 
and the risk premia are inadequate to cover the long-term operating costs and losses of the 
programmes. By charging less than the “cost of service rende red” is not the programme subsidizing 
agricultural exports? 
 
ANSWER:  The United States suspended the operation of the SCGP and GSM-103 programs in 
2006, and statutory authority for these programs was re pealed in the 2008 Farm Bill.  With respect to 
the GSM-102 program, the United States modified the operation of this program to comply with the 
recommendations and rulings of the DSB in the Cotton  dispute.  The United States has received the 
recent report of the Appellate Body on this matte r and will provide comments on it in due course. 
 7. The Secretariat in Summary Observations pa ragraph 19 observes: “A review of competition 
policy procedures presented to Congress in 2007 recommended, among other things, simplifying and 
unifying merger clearing procedures and harmonizing th e work of state and federal antitrust agencies, 
particularly with respect to mergers.” To what extent have these recommendations been accepted and 
implemented?  
 
ANSWER:  The antitrust enforcement agencies observed th e AMC's proceedings with interest, and 
they continue to consider  appropriate follow-up actions, as do Members of Congress. 
 8. The Secretariat in Summary Observations pa ragraph 24 observes: “Assistance for domestic 
ethanol production includes tax incentives and import duties.” Such incentives and duties act as entry 
barriers for more efficiently produced ethanol around the world and therefore reduce the 
environmental benefits. Is the US c onsidering reductions in such levies? 
 
ANSWER:  No. 
 9. The Secretariat in Summary Observations para graph 22 observes: “The expiration of the 2002 
Farm Act, and the current environment of high co mmodity prices, offers a favourable juncture to 
introduce policy changes aimed at further improving the market orientation of the agriculture sector to 
the benefit of both consumers and taxpayers. ”  However the Farm Bill has enhanced payments to 
farmers under various commodity programmes even t hough market prices of these commodities have 
gone up sharply since 2002. What are the rea sons for enhanced support levels under these 
circumstances?  
  WT/TPR/M/200/Add.1 
 Page 277 
 
 
 ANSWER:   The U.S. Congress has passed a new farm b ill, despite the Administration’s veto.  USDA 
will now implement the legislation as required by law.  10. A variety of agricultural exports from India to the US have encountered problems due to 
delays in US Customs sampling and inspection pr ocedures, resulting in damage to the goods and 
subsequent commercial losses for the exporters – especially in case of mangoes and egg products. 
What are the sampling and inspecti on procedures in the US on agricultural produce imports?  In view 
of these loses being sustained by Indian exporters, will the US consider m odifying the procedures? 
 
ANSWER:  The sampling and inspection procedures of the United States are explained in detail in 7 
CFR part 319 and the Title 21 of the Egg Products In spection Act.  The United States is committed to 
ensuring that its measures are in compliance with the WTO SPS Agreement.  Given that we are not 
aware of any delays in our inspection procedures, it is not clear what, if any, losses were incurred. 
 
11. The Committee on Foreign Investment in the US  (CFIUS) was created with the intention to 
review acquisitions and mergers that impact the U.S. national security.  However, there are some 
members of Congress who want to extend CFIUS review  for all mergers and acquisitions and to rank-
order countries based on a criteria that seemed unclear .  Indian fear that this process will add cost, 
time, and possible political interference to future  Indian-based company transactions within the 
US. What is the role of the Committee on Foreign In vestment in the US (CFIUS) on review of foreign 
investment transactions? 
 
ANSWER:  As noted in response to Question 4, the law establishing the CFIUS review process 
covers only those transactions that would result in control of a U.S. business by a foreign person.  
Furthermore, CFIUS review is focused on genuine national security concerns alone, not economic and 
national interests.  This limited scope of CFIUS was confirmed by Congress through its adoption of 
the Foreign Investment and National Security Act (FINSA) in 2007, by the Executive Order issued by 
President Bush on January 23, 2008, and by the pr oposed regulations that the Department of the 
Treasury issued on April 21, 2008.  CFIUS does not rank-order countries, and the United States welcomes all foreign investment that is consistent with national security. 
 
12. Each year, the United States conducts an a nnual review under the GSP program to determine 
if there are certain imports currently eligible for benefits that could compete effectively in the US 
market if imported at normal tariff rates.  In 2005 US government removed Indian Gems & Jewellery 
from receiving the benefits of GSP. In the Annual review 2006, the US Administration decided not to 
renew the Competitive Needs Limitation (CNL) Wa iver for gold jewellery and brass lamps from 
India, thereby ending the GSP preference. The de cision of the US Government to end the GSP 
(Generalised System of Preferences) for gold jewe llery and brass lamps from India will lead to a large 
number of jobs being lost in these sectors in India.   GSP has been withdraw n from 8 out of 9 products 
for which the review was carried out under the new regulations.  What are the reasons for the sudden 
withdrawal of GSP benefits on as many as 8 products out of 9?  
 
ANSWER:   The U.S. did not remove GSP benefits  for Indian gems and jewellery in 2005.   In 
December 2006 when Congress extended the GSP program through December 31, 2008, Congress 
also amended the GSP statute to direct that by July 1 of each year, the President should revoke any CNL waiver that had been in effect for at least fi ve years if a beneficiary developing country exported 
to the United States, during the preceding calendar year , a quantity of the article that had a trade value 
in excess of 1.5 times the annual CNL ($130 million in 2007) or exceeded 75 percent of total U.S. 
imports (the “super-competitive” thresholds).  The wa ivers for competitive need  limitations that were 
revoked for the eight products, as of July 1, 2007, terminated the GSP benefits for those products.  
This was done after a thorough review of the pertinent statutory considerations. 
 WT/TPR/M/200/Add.1 
Page 278  
 
 13. The 'Buy America'  clause prevents Indian companies from participating in Federal 
government contracts. Some States were also imposing 'local content' as well local employees' conditions.  How does the Buy America clause work sin ce it impacts market access to the US?  
 
ANSWER:   The Trade Agreements Act (19 U.S.C. 2501, et seq. ) generally prohibits Federal agencies 
from purchasing goods and services of a foreign country  that is neither a party to a trade agreement 
with the United States (WTO Agreement on Government Procurement (GPA) or a free trade agreement (FTA)) nor a least developed country.  States that have not agreed to cover their 
procurement under the GPA or an FTA have no oblig ation to open their procurements to foreign 
suppliers. 
 
14. The "Chicken Tax" instituted in 1963, was ai med at European truck makers.  This followed a 
trade war between the USA and Europe.  Europe tr ipled the tax of chickens  being imported from US, 
and the US retaliated by putting a 25% tax on any tr uck imported into the US.  This tax which has 
remained in force since then on import of trucks h as been identified as a barrier to Indian companies 
in this sector wanting to access US markets.  Why does the US continue to impose the "Chicken Tax"  
on import of trucks into the country?  
 
ANSWER:   As part of the Uruguay Round and in prior GATT negotiations, the United States 
committed to bind its MFN tariffs on trucks at 25 percent.  The United States strongly supports 
multilateral trade liberalization and is committed to  an ambitious and comprehensive result in the 
WTO Doha Round.  We are prepared to make si gnificant market access commitments provided other 
Members make meaningful contributions as well.  15. How does the American Automobile Labelling Act works? Since it promotes use of US and 
Canadian parts, it makes entry of small cars ma de in India into the US market difficult.  Why the 
promotion of US and Canadian parts should not be construed as a non- tariff barrier? What 
procedures need to be met to export to th e US market if the car is of approx 1000 cc?  
 
ANSWER:  Congress passed the American Automobile Labeling Act (AALA) in 1992 to help 
consumers in the selection of new vehicles by provi ding information about the country of origin of 
vehicles and their parts.  Passenger vehicles manufact ured after October 1, 1994 must have labels 
specifying their percentage value of U.S./Canad ian parts content, the country of assembly, and 
countries of origin of the engine and transmission.   The requirements are solely informational, and 
apply in the same way and to the same extent re gardless of where a vehicle is manufactured.  While 
there are costs associated with calculating count ry-of-origin information, the National Highway 
Traffic Safety Administration, in implementing the AALA, has sought to minimize cost impacts to the 
extent consistent with ensuring that consumers are provided with the information required by the 
Congress.  The United States does not believe the AAL A has made the entry of cars into the U.S. 
market any more difficult, and we do not believe these informational requirements are burdensome.   
With respect to the last question, the a pplicable FMVSS regulations can be found at 
http://www.nhtsa.dot.gov/portal/site/nhtsa/menu item.20e36159f952728891e67a 1090008a0c/, and the 
applicable EPA regulations can be found at http ://www.epa.gov/lawsregs/bizsector/automotive.html.  
 16. Extensive product description requirements complicate exports to the US and result in 
additional costs. Rules for marking and labelling of  retail packages are bur densome. They require 
details regarding the country of origin, ultimate purc haser in the US and the name of the country in 
which the article was manufactured or produced. Fu rthermore, there are requirements relating to the 
typology/physical characteristic of the clothing labe ls (given size, font u sed, etc).  These standards 
imply that special labels are needed for the US market.  
 
ANSWER:   The U.S. is committed to concluding a su ccessful Doha Round this year that achieves 
new market access for agricultural and industrial pr oducts, including textiles an d apparel, and services 
in both developed and emerging market economies.    WT/TPR/M/200/Add.1 
 Page 279 
 
 
 We are committed to the agreement that Members ma de in the Doha Round that  non-tariff barriers are 
an integral and equally important part of the negotiations and will identify and work to reduce non-
tariff barriers in the next phase of negotiations.  As pa rt of this effort, on October 26, 2007, the United 
States and the European Communities (EC) jointly tabled in the WTO Negotiating Group on Market 
Access a negotiating text on reducing non-tariff barrier s to trade related to labelling of textiles, 
apparel, footwear, and travel goods.  The United States and EC are currently seeking formal, public 
co-sponsorship of the negotiating text from Member  governments.  Sri Lanka recently agreed to co-
sponsor the text.  17. In addition, customs formalities for imports of textiles, clothing and footwear to the US 
require  supply of particularly detailed and voluminous information, which leads to additional costs 
and in some cases includes disclosure of  confid ential information such as the processing methods 
(type of finishing, of dyeing, etc). Much of this information seems to be irrelevant for customs or 
statistical purposes. The extension of the liquida tion period up to 210 days also functions as an 
important trade barrier. The retailer or the importer is often not in a position to re-deliver the goods 
upon Customs and Border Protection (CBP) request, in which case CBP applies a high penalty (100% 
of the value of the goods).  These delays are particularly damaging for seasonable products or for fashionable products having short life-span. These  formalities are highly trade restrictive.  What 
policy objectives are sought to be achieved by th ese procedures and can they not be achieved by 
measures that are less trade restrictive? Is there a move to harmonize the labelling requirements with the EU? 
 ANSWER:  In 2007, Customs and Border Protection (CBP ), exercising its responsibilities to enforce 
U.S. trade laws, processed 9.7 million import tran sactions involving textiles and apparel.  Out of 
these, approximately 959 were detained for addition al information to support the country of origin 
declared to CBP.  The information that is required is documents that will show that the goods were 
produced in the country declared to CBP.  The requ est for such documents is made to the importer, 
but the manufacturer may submit the documents di rectly to CBP if there is a concern about 
confidentiality.  All CBP officials are required to co mply with the Trade Secret s Act that preserves the 
confidentiality of business/corporate information.  All of CBP’s work regarding imports of textile a nd apparel products is risk-based.  Because of the 
amount of illegal transshipment, origin fraud, smuggling, misdescription and undervaluation of 
merchandise to evade applicable quantitative restrict ions and payment of duties, CBP has focused on 
textile imports as a high-risk import commodity.  CBP does extensive analysis to identify actual 
transactions that are in violation of U.S. laws.  Because goods entered in circumvention of absolute 
quotas may be inadmissible, CBP has the legal author ity to have goods re-delivered if information 
regarding the country of origin is incorrect.  In 2007, CBP ordered redelivery 43 times and issued 
penalties to companies totaling $2.9 million.  Ever y importer has extensive access to procedures under 
the law and can protest the amount of the penalty by  providing further information regarding the level 
of reasonable care that was taken regarding the transaction. 
 
18. What is the basis of Section 232 of th e Trade Expansion Act of 1962? Can US industry 
petition for the restriction of imports from thir d countries on the grounds of national security under 
this provision? Can protective measures be used for an unlimited period of time under this provision? 
 
ANSWER:   A Section 232 investigation is conducted un der the authority of the Trade Expansion Act 
of 1962, as amended. The purpose of the investigati on is to determine the effect of imports on the 
national security.  Investigations may be initiated based on an application from an interested party 
including industry, a request from the head of any department or agency, or may be self-initiated by 
the Secretary of Commerce.  By law, the Secretary of Commerce has 270 days to  present the Commerce Department's findings and 
recommendations to the President.  During the course of an investigation, Commerce may provide the WT/TPR/M/200/Add.1 
Page 280  
 
 public with an opportunity to comment and pr esent information and advice relevant to the 
investigation, usually through a notice in the Fede ral Register. Additional information is gathered 
from such sources as: surveys of producers, importe rs and endusers; on-the-record meetings with 
interested parties; site visits; and a review of public literature. 
 
If the Secretary finds that imports threaten to impa ir the national security, the President has 90 days to 
determine whether he agrees with the Secretary’ s findings, and to determine whether to use his 
statutory authority to “adjust imports.”  Secti on 232 does not place any time limits on the protective 
measures that may be applied to address the harm to U.S. national security caused by imports. 
 
19. The US Steel First Act passed in April, 2008 by the Congress is expected to impact market 
access for Indian steel exports.  Under the Act for all Government funded infrastructure projects the steel has to be domestically produced. Why should this not be considered a non-tariff barrier? 
 ANSWER:  On April 30, 2008, HR 5935, the “American Steel First Act of 2008,” a bill to amend 
U.S. government procurement provisions vis-à-vis iron and steel products used in public building and 
works projects, was introduced in the U.S. House of Representatives.  The draft legislation has not 
been voted on by the House of Repres entatives and has not become U.S. law.  
 
20. The zero tolerance on radio active contamination caused by cobalt 60 for import of industrial, 
municipal and sanitary castings is a highly stringent regulation.  Does the US plan to review and 
modify this norm for imports of indus trial, municipal and sanitary castings?  
 
ANSWER:  The question does not identify the regulation in  question and we also were unable to do 
so.  We are therefore not in a position to comment. 
 
21. The U.S. has a relatively low level of implem entation and use of international standards set by 
international standardization bodies. Many Indian ex porters to the U.S. market face regulatory barriers 
as products are increasingly being required to conf orm to multiple technical regulations regarding 
consumer protection (including health and safety) a nd environmental protection.  The complex nature 
of the U.S. regulatory systems can represent an important structural barrier to market access. 
Obstacles for Indian exporters include, for exam ple, a burdensome pharma ceutical approval system, 
documentary and labelling requirements for textiles etc. It is quite common for equipment for use in 
the workplace to be subject to a number of diff erent standardizing bodies including the U.S. 
Department of Labor certification, a county author ity’s electrical equipment standards, product safety 
requirements as determined by insurance compani es as well as specific regulations imposed by large 
municipalities.  A more integrated, transparen t and streamlined regulatory environment would 
significantly assist domestic consumers and importers as well as exporters to the US.  What steps are 
being taken to ameliorate this problem?  
 
ANSWER:  The United States does not agree with the assumptions underlying India’s question.  
Without specific information from India regardi ng the alleged problems that its exporters are 
encountering, we are unable to respond to the questi on as posed.  To the extent that Indian exporters 
are faced with allegedly problematic labeling require ments for textiles, the United States invites India 
to be a co-sponsor of the joint U.S.-EC proposal in the NAMA negotiations which addresses non-tariff barriers relating to the labeling of textiles, apparel, footwear, and travel goods (TN/MA/W/93, 
26 October 2007).  
 
22. Indian exporters face a number of additional customs impediments, such as import user fees 
and excessive invoicing requirements on importers, which add to costs in a similar way to tariffs.  The 
most significant user fee is the Merchandise Processing Fee, which is levied on all imported merchandise except for products from the least deve loped countries, from eligible countries under the 
Caribbean Basin Recovery Act, the Andean Trade Pr eference Act, U.S. FTA partners, or from U.S. 
Offshore possessions. Fixed previously at 0.17% of the value of the imported goods, the MPF rose to  WT/TPR/M/200/Add.1 
 Page 281 
 
 
 0.19% in 1992 and amounts to 0.21% ad valorem on formal entries with a maximum of U.S. $485 as 
from 1 January 1995. At the request of Canada and the EU, the GATT Council instituted a Panel in 
November 1987 that held that the U.S. Customs user fees for merchandise processing were not in 
conformity with the General Agreement. The Pane l ruled that customs user fees should reflect the 
approximate cost of customs processing for the indi vidual entry in question. This principle was not 
met by an ad valorem system such as that used  by the U.S. The GATT Council adopted the Panel 
report in February 1988. The present customs user fee structure is somewhat more equitable, since the 
fixing of a ceiling makes it less onerous for high-valu e consignments. However, the fee is still likely 
to exceed the cost of the service since it is s till based on the value of the imported goods. Whilst the 
MPF was to last until 30 September 1990 when establis hed, it was recently extended (as part of the 
American Jobs Creation Act of 2004) until 30 September 2014.  In view of Article VIII.1(a) of GATT 
how does US justify a levy which is in excess of co st of service rendered? Why should US impose such 
a levy when there are several count ries poorer than the United States which are able to support their 
customs operations solely from the tax payer’s money?  
 
ANSWER:  The United States’ Merchandise Processing Fee with a cap of $485 is limited in amount 
to the approximate costs of services rendered a nd is completely consistent with U.S. WTO 
obligations.  
 23. The electrical safety field in the US is ruled by workplace safety regulations developed by the 
Occupational Safety and Health Administration (OSHA), the National Electric Code and industry 
safety standards for electrical equipment such as Underwriters´ Laboratories (UL).  Exporters of 
electrical and electronic equipment and appliances face steep barriers to market their products on the US market.  Despite the fact that technological de velopment and consumer awareness in this sector 
favours self-certification by manufacturers, backed up by post-market surveillance and control, third 
party certification of electrical equipment and appliances is still mandatory ( de jure  and/or de facto ), 
in the US market.  Why is third party certification insisted upon?  
 
ANSWER:  OSHA’s Nationally Recognized Testing Laboratory (NRTL) program has proven to be 
very effective in ensuring the safety of products us ed in the workplace.  Certification of electrical 
products by approved third-party facilities – NTRLs – ensures that equipment is safe before  it enters 
the market. 
 
OSHA’s third-party certification requirements apply to  electrical products used in the workplace.  
These requirements were originally proposed an d were developed through an open rulemaking 
process.  OSHA concluded in the rulemaking that requiring third-party certification of electrical 
products by NRTLs was reasonably necessary and appr opriate to protect the safety of employees.  
OSHA has twice updated its electrical safety requirements through an open rulemaking process, and 
each time maintained the third-party certification requirements.  OSHA’s third-party certification requirements appl y equally to all manufacturers, regardless of 
country of origin, and is trade facilitating in  that OSHA will recognize facilities under the NRTL 
program regardless of their location, including facilities located outside the United States on a 
national treatment basis. 
 
24. In 2007, the US Office of Foreign Assets C ontrol placed total bans on doing any transactions 
with a number of Iranian banks including with respect to any old deals since no grace period is 
allowed under the US regulations.  This has meant that  Indian companies are not able to realize their 
dues from Iran-based compani es even where letters of credit were  opened and goods shipped prior to 
the sanction.  Will US consider letting the foreign companies realise their past dues?  
 
ANSWER:  The underlying authority for the restricti ons on transactions with Iranian banks 
referenced in this question arises primarily from  the International Emerge ncy Economic Powers Act 
(IEEPA), the United Nations Participation Act, and re levant Executive orders.  Using this authority, WT/TPR/M/200/Add.1 
Page 282  
 
 the U.S. Government has blocked an Iranian bank,  Bank Saderat, under an Executive order targeting 
terrorism, and has also blocked three Iranian ba nks – Bank Melli, Bank Sepa h, and Bank Mellat – 
under an Executive order aimed at countering the proliferation of weapons of mass destruction. 
 With certain exceptions, U.S. persons are prohibite d from engaging in any transactions or dealings 
involving property in which a designated bank has an interest, direct or indirect.  As a result, OFAC 
controls all dealings by U.S. persons with the targets – including transactions relating to outstanding 
trade and standby letters of credit, lo ans, ongoing obligations, and other debt. 
 In implementing sanctions under IEEPA, OFAC can authorize transactions that would otherwise be 
prohibited, when consistent with U.S. foreign po licy.  OFAC considers specific license requests on a 
case-by-case basis.  As to your specific question rega rding whether Indian companies may be able to 
realize dues from Iran-based companies, OFAC ca nnot offer a specific opinion on these facts but will 
duly consider any specific license requested related to these facts. 
 
25. The US has been taking a very long time in clearing the applications by Indian Banks for 
setting up a branch in the US.  What is the process for setting up a branch and what is the average 
time period for clearing such applications? 
 
ANSWER:  Information on application requirements can  be found here: http://www.federalreserve. 
gov/generalinfo/applications/afi/intfilings.htm  
26. It takes several years for a foreign bank from th e time it initiated its application to provide full 
fledged Banking Services in the United States . How does US explain this regulatory barrier when US 
banks themselves are demanding prompt and transpar ent regulatory procedures from the developing 
countries?  
 ANSWER:  The following link provides information on the va rious steps in the application process:   
http://www.federalreserve.gov/generalin fo/applications/afi/filingstages.htm 
 
27. Once a bank obtains a branch license in the US, the activities of the foreign parent bank in the 
US, known as Bank Holding Company (BHC), are rest ricted to only closely related banking activities 
and exclude several financial activities such as selling of insurance, Mutual funds, etc.  There is no 
such restriction in many developing countries in cluding India.  This severely restricts the 
opportunities for the foreign banks. Is the United States planning to remove these restrictions? 
 ANSWER:  Title 12 of the Code of Federal Regulati ons, Chapter 11 regulates the acquisition of 
control of banks and bank holding companies by co mpanies and individuals, defines and regulates the 
nonbanking activities in which bank holding compani es (including financial holding companies) and 
foreign banking organizations with United Stat es operations may engage, and establishes the 
minimum ratios of capital to assets that bank  holding companies must maintain.  See: 
http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?c=ecfr& sid=635f26c4af3e2fe4327f d25ef4cb5638&tpl=/ 
ecfrbrowse/Title12/12cfr225_main_02.tpl.  
28. Foreign banks are not covered by the De posit insurance scheme in the United States.  Why is 
that so when several developing countries are offering these facilities to the foreign banks?  
 
ANSWER:  Countries differ as to the scope of business they allow and the in-country capital they 
require for direct branches of foreign banks.  The United States is among the most liberal countries in 
the world with regards to capital for bank bran ches, allowing bank branches to lend based on the 
world-wide capital of its parent bank and requiring  only a capital equivalency deposit which is less 
substantial than normal capital requirements.  Except for a number of grandfathered institutions, 
foreign branches are in effect not allowed to take retail deposits.  (In fact they can take deposits from 
individuals in excess of $100,000, but  such deposits are not eligible for coverage by FDIC deposit  WT/TPR/M/200/Add.1 
 Page 283 
 
 
 insurance so retail depositors tend to place their mone y with U.S. juridical persons where at least the 
first $100,000 is eligible for coverage.)  Tho se wishing to do retail banking can do so through 
subsidiaries which are extended full national treatment , including capital requirements.  As a practical 
matter, few foreign banks are interested in settin g up retail networks and they are happy to take 
advantage of the light capital treatment given br anches—over twice as much business is done through 
branches as opposed to subsidiaries.  The limita tion on retail deposit taking by foreign banks 
operating in the United States through branches is noted in the U.S. GATS schedule.  29. A foreign bank’s branch is governed by the bank holding company regulations, which prohibit the bank from undertaking insurance and underwriting business in the United States, as well 
as restrict the parent bank’s equity ownership in  non-banking businesses that have U.S. operations.  
These are permitted under the financial holding comp any regulations; however, transition from bank 
holding company to financial holding company status again takes time and is subject to approval of 
the Federal Reserve, including determination of co mprehensive consolidated supervision in the home 
country.  Because of the above reasons, an Indi an bank currently cannot have a banking presence and 
undertake underwriting and insurance at the same time in the United States.  What is the rationale 
behind this US policy?  
 
ANSWER:   The requirements for establishing a ba nk holding company and financial holding 
company are prudential in nature and can be  found at the resource sites listed above. 
 
30. Approvals required from multiple  regulators in US (Federal Reserve, OCC or State Banking 
Department and Federal Deposit Insurance Corporate (F DIC) of subsidiary.  Formation of inter-state 
branching is subject to regulation by each State.  Multiple level regulations create a market access 
barrier for many foreign banks aspiring to  establish presence in the United States.  What is the US 
doing to reduce the maze of regulation in this sector? 
 ANSWER:  Foreign financial firms wishing to enter the United States market have a choice of legal 
forms (e.g., branch, agency or subsidiary) and li cences (state or national).  Financial regulatory 
authorities may have overlapping juri sdiction depending on the sector.  Th is is partially the result of 
the federal organization of the United States and also  the result of the financial regulatory process.  
The Treasury blueprint for modernization of th e financial services industry can be found at:  
http://www.treas.gov/press/releases/reports/Blueprint.pdf. 
 31. The information reporting requirements of th e US Tax Code as applied to certain foreign 
owned corporations mean that domestic and foreig n companies are treated differently.  These rules 
apply to foreign branches and to any corporation that  has at least one 25% foreign shareholder. They 
require the maintenance, or the creation, of books  and records relating to transactions with related 
parties.  The documents must be stored at a place specified by the US tax authorities, and an annual 
statement filed containing information about dealings with related parties.  There are stiff penalties for 
non-compliance with the various provisions.  The in formation reporting requirements of the US Tax 
Code are onerous.  Although their purpose, the prevention of tax avoidance and evasion, is 
reasonable, they are burdensome and add to the comp lexity for foreign-owned corporations of doing 
business in the US.  How does the US plan to make complian ce with its tax laws less onerous?  
 ANSWER:   The United States is continually reviewing its tax code with an eye to improving 
efficiency while maintaining equity and mini mizing opportunities for tax avoidance and evasion. 
 
32. We understand that the process for normal time period for signing Totalisation Agreement is 
too time consuming and it can take anywhere between four to five years.  What is the normal time 
period for signing a Totalisation Agreement with  the US and what are the processes involved?  
 
ANSWER:  Totalization agreements are negotiated by th e Social Security Administration (SSA) on 
behalf of the United States and the corresponding Mini stry or Agency of the foreign country.  There is WT/TPR/M/200/Add.1 
Page 284  
 
 no specific time for negotiations.  Some agreement negotiations have been completed in as little as 
2 years, while others have taken more than 20 years to  complete.  Four to five years is about average. 
 While the U.S. SSA cannot comment on the process for the other government, we can describe the process in the United States.  Before approaching an other country to begin discussions, the SSA must 
first evaluate the other country’s social security sy stem to ensure it meets the requirements in section 
233 of the U.S. Social Security Act (the Act).    Specifically, the Act requires that the other country ha ve a system that is of general application and 
which provides periodic benefits or the actuarial equi valent thereof in the event of old-age, disability 
or death.  In addition, any totalization agreement concluded pursuant to section 233 of the Act must 
provide for the elimination of dual coverage (taxa tion) on the same earnings, and must provide for the 
combination of periods of social security covera ge in both countries when necessary to meet the 
minimum coverage requirements for benefits fro m one or both countries.  SSA also does initial 
actuarial estimates to ensure that the costs to the U.S. Social Secur ity Trust Funds would be offset by 
the foreign tax savings and additiona l foreign benefits that would accrue to U.S. workers, employers 
and beneficiaries under the provisions of a proposed agreement.  Following this initial research, SSA must obtain appr oval from the U.S. Department of State to begin 
discussions with the foreign government.  If approve d, the SSA meets with its foreign government 
counterpart to begin negotiations.  Negotiations generally take place during week-long meetings held 
over a number of years.  Once negotiations are comp leted, the proposed agreement is vetted through 
SSA’s internal review process and the Department  of State (which performs a language comparison 
when necessary).  The Department of State would th en issue authority to hold an agreement signing. 
 
33. Even if India and US were to sign a Totali sation agreement, it will not  cover pension benefits 
for Indian workers who go on short term work visas to US -- 6 years H-1B, 5 years for an L-1B, and 
7 years for an L-1A -- since the US Social Security System requires a minimum qualifying period of 40 quarters of contribution to be eligible for pension benefits.  How can the short-term workers who 
contribute a huge amount into the US Social security system benefit?  
 
ANSWER:  If a social security agreement with India were legally possible, persons who had 
completed at least 6 quarters of U.S. coverage (gen erally equivalent to one and one half years), but 
less than the number required to obtain a benefit w ould be able to combine their periods of U.S. 
coverage with periods  of Indian coverage.  If such a person met U.S. minimum coverage requirements 
based on combined coverage, th ey would qualify for a partial or prorated U.S. benefit. 
 
34. From the Uruguay Round the US has not o ffered any improvements in its Mode 4 Offer 
especially with regard to CSS and IP, under the WT O, whereas most of the developing countries have 
shown substantial progress in their Offers. How does the US explain the complete lack of progress in 
Mode 4 offers? 
 
ANSWER:  This is the subject of ongoing negotiations, to be discussed in the appropriate negotiating 
venue. 
 35. US has not shown any flexibility with regard to taking commitments in Modes 1 and 2.  In 
this regard, India has requested the US bilaterally and the US is also a recipient of the plurilateral 
request.  Which existing regulations prevent the US from undertaking these commitments?  
 
ANSWER:  The United States strongly supports improved commitments for cross-border services 
and has actively engaged in discussions on these serv ices.  However, matters subject to the ongoing 
negotiations should be taken up in that forum.    WT/TPR/M/200/Add.1 
 Page 285 
 
 
 36. The reduction in the limit of the H1-B visa ha s been a matter of continuing concern to India 
as it is having an adverse impact on the services trade. A number of private member Bills were also introduced in the US to increase the H1B cap and to  streamline the procedure, but these attempts have 
been unsuccessful.  What efforts are being made by the US to increase the H1B visa cap?  In 
particular does US intend to provide a sp ecial category of a service provider visa? 
 
ANSWER:   The numerical limitation applying to the H- 1B program is established in federal statute 
by the U.S. Congress. Both the Congress and the Admi nistration are aware of the concerns raised by 
the business community in this regard. In recent year s, there have been numerous legislative proposals 
related to the H-1B cap, but thus far none have b een passed by the Congress.  The U.S. immigration 
system does not make provision for a "special category of service supplier visa." Service suppliers 
seeking to enter the United States in order to te mporarily supply services may enter under different 
admission categories depending on the nature and conditions of the service to be supplied. 
 37. Apart from visas, security-related restrictions  on federal and state businesses are coming in 
the way of Indian IT companies doing business in th e United States.  While they were prepared to 
work with around the Buy American clause by finding local partners, the uncertainty about whether they would be eligible to bid makes business decisions difficult.  What are the security checks that 
Indian companies have to fulfil for getting federal and state contracts which are open for foreign 
bidding?  
ANSWER:  The tender documentation will specify the security requirements for a particular 
procurement.  Security requirements will vary de pending on the nature of the good or service being 
procured.  For example, specifications may requi re personal identity verifications for access to 
Federal facilities or security clearances for access to classified information.  See FAR subparts 4.4 and 
4.13. 
 
38. Without disciplines in Domestic Regulations the most liberal access offers would be devoid 
of any commercial value.  In spite of this US  has been taking a conservative stand in the DR 
negotiations and which is contra dictory to their need for a high ambition in services trade.  How does 
US explain this contradiction in its trade policy? 
 ANSWER:  The United States disagrees with the premise of this question.  Regulatory treatment that 
voids a “liberal” commitment of its commercial value would likely be inconsistent with the 
commitment itself.  It should be addressed in the context of that commitment, rather than through a 
different, over-arching set of disciplines.  In our view , this is the best way to achieve an ambitious 
result. 
 
With regard to domestic regulation, a truly ambiti ous result would be to clarify existing disciplines 
under Articles VI:4 and VI:5 in a way that allo ws Members to implement their GATS commitments 
in a manner that reflects their right to regulate in a manner consistent with dom estic policy objectives.  
The approach of the United States in the negotiations  on domestic regulations is driven by a desire for 
clear and precise language for any new binding disciplines under the GATS on that right to regulate.  
Many of the proposals have been vague and unwor kable, inviting future disputes rather than 
protecting the valid expectations of both regulators an d the service suppliers of other Members.  Such 
proposals are counter-productive to our efforts to demons trate to Members that it is in their interest to 
undertake ambitious market access commitments, and that such commitments do not pose a threat to 
domestic policies.  From the outset, the United St ates has cautioned that domestic regulation in 
services is extremely complicated and that developing  a single set of disciplines to be applied to all 
services sectors poses particular problems.  We have al so been clear that a sectoral approach would be 
much more effective than a horizontal approach in achieving far-reaching results.  In our view, clarity 
about the problems of horizontal application and preci se language that avoids, rather than engenders, 
unnecessary disputes, is necessary to achieve an am bitious approach to the services negotiations. 
 WT/TPR/M/200/Add.1 
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 39. What are the relevant, sections of the US legislation relating to determination of dumping 
margins?  
ANSWER:   Depending on the stage of the proceeding and the issues involved, any of sections 731 
through 783 of the Tariff Act of 1930, as amended, may be relevant to the determination of dumping 
margins. 
 
40. Which are the relevant parts, sections of the US regulation or the specific computer 
programme of the US Department of Commerce t hat lay down procedures for use of a comparison 
methodology for determination of dumping margin? 
 
ANSWER:  Among others, section 351.414 of title 19 of the Code of Federal Regulations discusses 
the comparison methodologies that may be utilized for determining dumping margins.  There are no 
computer programs that lay down procedures for use of a comparison methodology – the decision of 
which comparison methodology is utilized is made by Commerce officials, based on the facts of the 
case. 
 
41. Under what circumstances, does the US Department of Commerce use the transaction to 
transaction comparison methodology for determini ng dumping margin?  And whether the US DOC 
allows off sets in the model comparisons under th is methodology?  What are the relevant parts, 
sections of the US regulation or the specific computer programme of the US Department of 
Commerce that lay down procedures for use of transaction to transaction comparison? 
 
ANSWER:   Neither the Antidumping Agreement nor U.S.  statutory law provide any criteria for the 
circumstances in which the transaction to transaction comparison methodology may be used.  
Notwithstanding this significant amount of discre tion, Commerce has only utilized the transaction to 
transaction comparison methodology in one instance  involving the implementation determination for 
softwood lumber from Canada. 
 
The issue of offsets in the model comparisons does not arise when using the transaction to transaction 
comparison methodology. 
 
In response to the last part of this qu estion, please see our response to question 54. 
 
42. How often does the US DOC use the weighted  average normal value – export transaction 
comparison (W-T) methodology in the original inves tigations?  What are the relevant parts, sections 
of the US regulation or the specific computer progr amme of the US Department of Commerce that lay 
down procedures for use of this methodology?  And whether the US DOC allows  off sets in the model 
comparisons under this methodology? 
 
ANSWER:   To date, there are no antidumping duty orde rs that have been imposed in which the 
average-to-transaction comparison methodology was u sed in the investigation.  Commerce, however, 
is reviewing its use of this methodology as we ll as the bases upon which other WTO Members utilize 
this methodology to ensure that it is fully exercising its WTO rights. 
 
43. What is the comparison methodology used by US authorities for determining dumping margin 
in Administrative Reviews and what are the relevant  US laws /regulations /computer programmes? 
 
ANSWER:   Similar to Members that maintain a pr ospective normal value system, when Commerce 
conducts an administrative review, it generally ma kes comparisons between monthly-average normal 
values and transaction-specific export prices.  This  comparison methodology is provided for in section 
777A of the Tariff Act of 1930, as amended, and 19 CFR 351.414.  Again, this is a decision made by 
Commerce officials and not required by any computer program.   WT/TPR/M/200/Add.1 
 Page 287 
 
 
 44. Whether the US authorities use weighted  average normal value – export transaction 
comparison methodology (W-T) for determining dumping margin in Administrative Reviews?  And, if 
so, in how many cases? 
 
ANSWER:  It is unclear to us what information India is seeking with this question.  To the extent that 
the question was intended to suggest that in some  administrative reviews, Commerce may have used 
the average-to-transaction comparison methodology whic h, in investigations, may only be used when 
certain conditions have been met, India is mistaken.  Commerce’s administrative review comparison 
methodology differs from this investigation co mparison methodology – and the investigation 
methodology has never been used in an administrative review. 
 
45. Whether the US authorities provide an explanati on in their determinations, while using the 
W-T methodology in Administrative Reviews, as to why the differences in export prices cannot be 
taken into account appropriately by the use of we ighted average to weighted average or transaction 
to transaction comparison due to the pattern of  export transactions among different purchasers, 
regions or time periods (as required under Artic le 2.4.2 of the Anti Dumping Agreement)? 
 
ANSWER:   As provided for by its terms, Article 2. 4.2 of the Antidumping Agreement applies only 
during the investigation phase; its requirements, including the one to which India alludes in its 
question, do not apply in administrative reviews. 
 
46. If the dumping margin determined as a result of  Administrative Review is de minimis or zero 
or negative, does the Administration stop collecting AD duty in respect of exports of that exporter? 
 
ANSWER:   If, in the final results of an administrativ e review, Commerce finds that an exporter was 
not engaged in dumping (zero or de minimis , within the meaning of U.S. law), consistent with the 
results of that review, Commerce will instruct Cu stoms not to require cash deposits of estimated 
antidumping duties with respect to future imports from  that exporter.  Consistent with the terms of 
footnote 22 of the Antidumping Agreement, the e xporter may remain subject to the antidumping duty 
order and, if found to have enga ged in dumping in a subsequent administrative review, may again be 
required to make cash deposits of estimated antidumping duties.  
47. The US conduct of the Sunset review falls short of the pre-defined conditions.  US imposes 
unwarranted conditions on the par ticipation of exporters in the s unset reviews, requiring respondents 
to cover 50% of exports before it will conduct a full Sunset review.  Will US be willing to review the 
sunset clause procedure? 
 ANSWER:  U.S. sunset review procedures fully comply with the obligations of the Antidumping 
Agreement and do not impose any unwarranted conditi ons on the participation of exporters.  The 
Department of Commerce will still conduct a sunset review, even if the participating exporters 
accounted for less than one-half of the relevant exports .  However, due to the very significant lack of 
participation from the other exporters, the applicatio n of the facts available may result.  Nonetheless, 
in such cases, the Department of Commerce will c onduct an expedited review  and will rely upon the 
information contained in the substantive respon ses of the cooperating exporters when making the 
sunset determination.  The Department of Commerc e's measures in this rega rd were upheld by the 
panel in OCTG from Argentina, and not  appealed to the Appellate Body. 
 
INDIA ADDITIONAL 
 
The US-GSP benefit was available to Indian Gold Jew elry Sector till 30th June 2007.  As per the data, 
the exports of Gold Jewelry from India to USA, duri ng July '07 to March '08 (after the withdrawal of 
US-GSP benefit from Indian Gold Jewelry) at US $1.35 billion has shown a major decline by 30% as 
compared to US$1,95 billion during July '06 to March '07.  It is for this reason that Indian Industry 
requested the US Administration to consider the restoration of GSP benefits to this sector.  Will the WT/TPR/M/200/Add.1 
Page 288  
 
 US reinstate GSP benefits which have hithert o supported livelihood of thousands of Indian 
workers/craftspersons?  
ANSWER:   GSP benefits for gold jewelry from India ma y only be restored if import levels in a 
calendar year fall below the competitive need limitation (CNL) thresholds for that year.  In 2007, U.S. 
imports of gold jewelry from India ($1.9 billion) exceeded the CNL threshold of $130 million for that 
year.  India's tobacco exports to the US are low and stand at US$3 million. This is only about 0.3% of US 
total tobacco imports. There is therefore tremendous  potential for growth.  One of the major reasons 
for the poor off take of Indian tobacco by the US A is the Tariff Rate Quota (TRQ) regime prevailing 
in the USA. Tobacco imports into the USA come u nder the purview of the Tariff Rate Quota, which 
was established in September 1995 for all cigarette type  tobaccos.  Under the TRQ, a tariff rate equal 
to the concessional rate (40.9 cents per kg) is applie d to tobacco imports until the in-quota quantity is 
filled, after which a tariff rate of 350% ad-valorem is applied.  The TRQ is sub-divided into specific 
allocation for 9 Countries and a ge neral allocation for other Countri es.  Under the North American 
Free Trade Agreement, Canada and Mexico are excluded from TRQ import duties. India does not 
have any specific TRQ and is clubbed under "Others"  with an allocation of only 3000 tons.  This 
limits growth of Indian tobacco exports to the US. Th is system of quotas needs to be reviewed so as to 
allow for greater market access for Indian tobacco in the US.  The out of quota tariff of 350% acts as a 
barrier to Indian exports. India has made a point that the quotas should be on MFN basis and not 
country specific.  Even if to allow an enhanced access to India, US has to negotiate with other 
countries having TRQ, it should initiate the process and in the interim allow an increase in the 'others' 
category of TRQ equal to the quota that remains unfilled.  Will the USreview the current system of 
quotas o r eliminating such a discriminatory system of  quota allotment?  Does the US plan to increase 
the quota for exports of FCV and Burley tobacco since the current quot a is restricted to 3000 tons 
only?  
ANSWER:   The terms of market access for tobacco are being negotiated in the Doha Development 
Agenda.  
INDONESIA 
 
As one of 131 countries that has received GSP beneficiary from the US, Indonesia extends great 
appreciation and gratitude for the extension of GSP which the average tariff for GSP is just 1.3% 
(page 7 of the Doc. WT/TPR/G/200) by U.S. government and its programs.  Indonesia wishes to have 
clarification as to whether the US has had a program to extend this program. 
 ANSWER:  We are working with Congress to extend the program beyond its cu rrent expiration date 
of December 31, 2008.  
 
JAPAN 
 
III. TRADE POLICIES AND PRACTICES BY MEASURE (2) MEASURES DIRECTLY AFFECTING IMPORTS 
(i) Customs procedures 
(Question 1: page 25-26, paragraph 18 -19 (24-hour rule, “10 plus 2” rule)) 
 As a part of initiatives for counter-terrorism, the Un ited States has enforced regulations implementing 
an electronic presentation of cargo information in  advance under the Trad e Act of 2002, and has 
obligated the submission of the manifest of the in ternational sea container bound for the United States 
to the U.S. customs authorities no later than 24 hours prior to loading.  As a result, the deadline for 
delivery of containers to the yard, which had been commonly set around 24 hours prior to loading, has 
been changed to 48 hours.  This has decreased effi ciency of distribution imposing huge burden to the  WT/TPR/M/200/Add.1 
 Page 289 
 
 
 operators including those with excellent compliance record. 
 In addition to this, the so-called “10 plus 2” rule, which will require  importers to report 10 additional 
data elements and carriers to repor t 2 additional data elements, will  be implemented and may require 
even longer lead time.  
We know that Customs and Border Protection (CBP ) has received a high number of public comments. 
We request the U.S. to ensure that the rule does not  disrupt the smooth flow of trade, by listening to 
the views of industries when the rule comes into ope ration, and by giving careful consideration to the 
public comments including the comme nt submitted by the government of Japan.  The government of 
Japan requests the Government of the United Stat es to make efforts to both secure and facilitate 
global trade, such as consideration of allowing fo r flexible implementation (such as extension of a 
deadline) to the Customs-Trade Partnership Ag ainst Terrorism (C-TPAT) participant from the 
perspective of providing clearer benefits to the C-TPAT.  Please explain specific view of the U.S. on 
this matter. 
 
ANSWER:   CTPAT is a program designed to recognize the security measures that companies have 
voluntarily undertaken in order to secure their suppl y chains.  This program does not lend itself to be 
included into the regulations implementing the statutor y authority of the so-called “10 plus 2” rule.  
However, CTPAT status will be considered in im plementing the program and CTPAT status will be 
considered in enforcement and as a mitigating f actor for any enforcement or penalty actions 
encountered by such a member.  Once the final ru le goes into effect, CBP will implement a one-year 
informed compliance program to allow an adequate amount of time for the filing community to adjust 
their operating systems and processes.  CBP is committe d to working closely with the trade to ensure 
that the right data is being provided at the right time. 
 
(Question 2:  page 27, paragraph 24 (100% Container Scanning)) 
 
“Implementing Recommendations of the 9/11 Commi ssion Act”, enacted on August 3, 2007, contains 
provisions that require scanning of all U.S. bound ca rgo containers in principle before loading on a 
vessel at foreign ports on or after earlier of July 1, 2012.  The provisions are inconsistent with the 
Framework of Standards which espouses the risk management approach adopted by the World 
Customs Organization (WCO).  The Government of Japan has concerns that the provisions, 
depending on how it would be implem ented, could severely disrupt the flow of goods into the United 
States from the rest of the world including Japan and all WTO members, and may cause a tremendous 
damage on international economic ac tivities as a whole.  This is also a relevant issue from the 
perspective of trade facilitation discussed in the cu rrent WTO negotiations.  For this reason, not only 
Japan but also other countries, even relevant bodies in the U.S., have expressed their opposition to the 
provisions.   
While the Government of Japan fully understands th e importance of counter-te rrorism measures, it is 
also important to implement security measures in a way that does not undermine the smooth flow of goods.  Therefore, the Government of Japan requests the Government of the United States to ensure 
that the aforementioned requirement does not disrupt smooth trade.  The Government of Japan 
requests the Government of the U.S. to accurately  incorporate the opinions shown by each country 
and the real issue in the report to be presente d to the congress based on the pilot project on 
100 percent scanning under the Secure Freight Initiative.  Since it is important for private sector to 
invest and establish an international supply chain fro m a long-term standpoint, we request the U.S. to 
secure predictability.  The Government  of Japan also requests the Govern ment of the U.S. to continue 
constructive dialogue with relevant countries and to  give further consideration, based on the shared 
recognition to ensure a secure and facilitating global supply chain.  In this light, please provide the 
detailed plan of the U.S. government on how to  avoid possible damage on international economic 
activities caused by the 100 percent scanning requirement for U.S. bound cargo containers . 
 WT/TPR/M/200/Add.1 
Page 290  
 
 ANSWER:   The U.S. Congress took into considerati on that all economic factors could not be 
adequately known at the time of passing the SAFE Po rt Act of 2006.  That is why a pilot program and 
a report on the efficacy and costs of the program was required before the plan was to be deployed on a 
worldwide scale. 
 
(ii) Customs valuation 
(Question 3: page 29-30, paragraph 35-39 (Simplification of the Special Marking Requirements 
of Origin for Watches and Clocks)) 
 When importing watches and clocks in Chapter 91 in  HTSUS into the United States, all movements, 
cases, and bands are required to have the special ma rking of origin in Additional U.S. Note 4 to 
Chapter 91 in HTSUS and detailed requirements s tipulate how this special marking must be 
performed.  
The government of Japan has long requested the G overnment of the United States to quickly work 
towards a simplification of the special marking require ments of origin.  However, Japan is of the view 
that the special marking requirements of origin have not been improved. 
 
Although Japan appreciates that the United States accepted the use of indelible ink for the marking of origin in 1999, Japan can not agree with the ass ertion of the United States Government that its 
country-of-origin marking requirements are clear and simple as drafted.  Japan believes that the 
country-of-origin marking on the finished products of watches and clocks is sufficient enough not 
only for customs clearance purposes, but al so for consumers information purposes.  In this regard, 
please indicate specific views of the U.S. Government. 
 ANSWER:   The United States has carefully considered  this issue and Japan’s arguments, but does 
not agree that the U.S. marking requirements fo r watches and clocks are unnecessarily complicated. 
 (Question 4:  page 32, paragraph 46 (Simplif ication of the Tariff Calculation Structure for 
Watches and Clocks )) 
 The structure of calculating tariffs on watches and clocks in Chapter 91 in HTSUS is complicated, 
with separate tariffs stipulated for movements, cases, and bands, and tariffs on movements set at a fixed rate while tariffs on other parts are set at  ad valorem. Because of this complexity, the 
Government of Japan has long asked the Government  of the United States to quickly work towards a 
simplification of the tariff calculation structure.  Ho wever, Japan has a view that the tariff calculation 
structure has not been improved. 
 
The obligation to indicate the prices of individua l parts used for digital watches on invoices was 
eliminated when tariffs on digital watches were el iminated.  Based on this, the Japan asserts that the 
tariff calculation structure and the special marking re quirements of origin for watches and clocks are 
linked, and that the complicated special marking requ irements of origin for watches and clocks would 
become unnecessary if the tariffs on watches and clocks were eliminated.  As such, Japan would like 
to know the views of the United States regardi ng when its tariffs on watches and clocks can be 
eliminated. 
 
ANSWER:   The United States has carefully considered  this issue and Japan’s arguments, but does 
not agree that U.S. marking requirements and tariff rates for watches and clocks are unnecessarily 
complicated. 
 
(vi) Anti-dumping and countervailing measures 
(Question 5: page 38, par agraph 77-78 (Byrd Amendment)) 
 
The Byrd Amendment was found to be inconsistent  with the WTO Agreement in January 2003, and  WT/TPR/M/200/Add.1 
 Page 291 
 
 
 was finally repealed in February 2006.  Howe ver, revenues from anti-dumping duties on goods 
imported to the United States before October 1, 2007, would continue to be distributed among the 
relevant parties under the transitiona l provision of the Deficit Reduction Act of 2005.  This means that 
although the Byrd Amendment was nomin ally repealed, it continues to st ay in effect.  Therefore, the 
inconsistency with the WTO Agreement remains at  present even after the repeal of the Byrd 
Amendment.  The Government of Japan strongly re quests the Government of the United States to 
promptly halt the distribution of revenues under the Byrd Amendment and to resolve the 
inconsistency with the WTO Agreement on this issue.  In this respects, please indicate the specific 
view of the Government of the United States.  
 
ANSWER:   The President signed the Deficit Reduction Ac t into law on February 8, 2006.  That Act 
includes a provision repealing the Continued Dumpi ng and Subsidy Offset Act of 2000.  Therefore, 
the United States has taken all actions necessary to implement the Dispute Settlement Body’s 
recommendations and rulings in the referenced dis pute.  Pursuant to the Deficit Reduction Act, 
antidumping and countervailing duties that are being collected on goods now entering the United 
States are not distributed to domestic firms.  (Question 6: page 41-42, paragraph 91-92)  
The Government of Japan requests the Government of the United States to promptly abolish the use 
of “zeroing” in all anti-dumping procedures including administrative reviews.  
 (1) What is the U.S. view on this issue? 
 (2) In this regard, please explain the progress of  implementation of the DSB recommendations and 
rulings adopted in 23 January 2007 towards abolis hing the use of zeroing in the procedures other 
than the W-to-W comparisons in the original inves tigation, i.e., periodic review, sunset review, etc. 
 ANSWER:   It should be quite clear that, in the view of the United States, the Members did not agree 
to create an obligation to provide offsets for non-dumped transactions when they agreed to the Antidumping Agreement.  Neverthele ss, the Appellate Body has found that such an obligation exists 
within the Antidumping Agreement and the GATT 1994.   
 With respect to Japan’s question about implemen tation of the DSB recommendations and rulings in 
DS322, as Japan is aware, the position of the United St ates is that it has taken appropriate steps to 
implement that report.  We acknowledge that Jap an is dissatisfied with those steps and this 
disagreement is now before a dispute settlement panel consistent with the term s of Article 21.5 of the 
DSU.  However, this is not the appropriate forum to discuss further these compliance issues. 
 
(Question 7: page 41, paragraph 90 -91 (“All Others Rate” Provision)) 
 
The DSB adopted its recommendations and rulings that found the United State’s statutory provision regarding the “all others” rate to  be inconsistent with the Anti- Dumping Agreement in August 2001, 
over six years ago.  Although the U.S. took cer tain measures to implement part of the DSB 
recommendations, the remaining part of them has not been implemented yet.  If left untreated, since 
the provision in question could be applied to new anti-dumping investigations in the future 
inconsistently with the WTO Agreements, the Gove rnment of Japan requests the Government of the 
United States to amend such provision in order to  implement the DSB recommendations immediately. 
A full and prompt implementation of the DSB’s recommendations and rulings is essential to the 
effectiveness and credibility of the WTO dispute settlement system.  Japan would like to ask the U.S. 
what steps it intends to take to complete full im plementation in this Congress and when the steps will 
be taken. 
 
ANSWER:   Legislation that would implement the DS B's recommendations and rulings with respect WT/TPR/M/200/Add.1 
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 to the U.S. antidumping duty statute was introduced  in the last Congress.  The U.S. Administration 
continues to support specific legislative am endments that would implement the DSB's 
recommendations and rulings in this regard and w ill work with Congress with respect to the DSB’s 
recommendations and rulings that have not alr eady been addressed by the U.S. authorities. 
 
(3) MEASURES DIRECTLY AFFECTING EXPORTS 
(ii) Export restrictions and controls 
(Question 8:  page 57, paragraph 173 
 
Japan, as one of the major countries importing wood pr oducts, is concerned about the restriction of 
log export by the U.S. We have understood that the statutes are indicated in the following table, 
regarding the ban on the export of timber by the Unit ed States.  However, according to the Secretariat 
report, only unprocessed “western red cedar” is restricted and there is no explanation about the logging area.  
 
Thus, we would like to ask about three points as follows: 
(1) Please confirm whether the contents of the table concerning the ban on the export of timber are 
correct or incorrect. We would like to know more about the latest information on  the related statues.  
 (2) According to the report by the Secretariat, the unprocessed we stern red cedar always requires an 
export license. Please provide the information on the prescript about th e license, including the 
criteria for judgment of license . 
 
In the previous TPRs, the U.S. has explained to Jap an that “the purpose of the statute is to provide 
relief for shortages of unprocessed timber supplies, which is consistent with Article XI:2(b) of the 
General Agreement on Tariffs and Trade 1994.” However,  we consider that the Article XI: 2(a) may 
be referred to.  If so, we understand that the phrase ”critical shortage” of the Article XI: 2(a) should 
not mean a general situation but refers to shortages of crops, etc. in cases such as famine 
(E/PC/T/C.II/36, p.9).  The restrictions should be a pplied only “temporarily” in order to manage such 
an emergency. We also understand that the expor t restriction should not be used as a means of 
protection (E/PC/T/A/PV/19 page44). In contrast, we consider the current statutes of the U.S. may fall 
into a regulatory scheme for quantitative restrictions strictly, which is prohibited under Article XI of 
the GATT 1947, as the U.S. maintains “short supply control” for several years, not just temporarily, and the purpose of this regulation is  to protect domestic saw millers. 
 
(3) In this regard, please indicate specific view of the U.S. Government on this matter. 
 ANSWER:   1. The information sought to be reflected in the table would be more accurately reflected 
by recognizing that U.S. restrictions on exports of unprocessed timber are contained in the following 
three measures: 
 
• The Forest Resources Conservation and Shor tage Relief Act (FRCSRA, PL 101-382, 1990), 
which applies to public land west of the 100th meridian, excluding Alaska (regulations are found in 
36 CFR 223 et seq); 
 
• The Export Administration Act (EAA, PL 96-72, 1979), which applies to all federal and state 
land, excluding Alaska (regulations are found in 15 CFR 754);  and  
• Alaska National Forest management polici es (36 CFR 223.201), which apply to national 
forests in Alaska.  
There have been no recent changes to these measures. 
 2. Please see the regulations cited in the answer to question 1 for the requested information.  WT/TPR/M/200/Add.1 
 Page 293 
 
 
 3. The FRCSRA was designed to promote the conservation of forest resources in conjunction 
with state and federal resource management plans.  Restrictions under FRCSRA were put in place to conserve forests and habitat of threatened and enda ngered species, such as the northern spotted owl.  
The effect of such restrictions on the quantity of unprocessed timber available for export from the 
United States is minimal given that the lands subject to these restrictions account for less than 3 percent of the timber harvested annually in the Un ited States.  Table: Current Status of Ban on the 
Export of Timber from the United States 
 
Title and/or Type of Restri ction Locational prescript A pplication Period Coverage 
Ban on the Export of Unprocessed 
Timber 
(MSG of DG of Forest Service) Federal lands of Alaska 
managed by the Forest 
Service 1928~ 
-Ban on the Export of Unprocessed 
Timber 
-Ban on Direct Substituting Export 
of unprocessed timber harvested in 
private land  
(supplement of appropriation act) 1974~ 
- Ban on the Export of 
Unprocessed Timber (Permanent) 
-Restriction on Indirect 
Substituting Export of unprocessed 
timber harvested in private land Federal lands located 
West of the 100th meridian 
in the continental US, 
except Alaska 
1990~ 
- Export Prohibition or Restriction 
on Unprocessed Timber according 
to the Sales Scale  State lands located West 
of the 100th meridian in 
the continental US, except 
Alaska 1990~ Logs (including Cants of 
thickness over 8 3/4 inch) 
- Short Supply Control (Export ban 
on Western Red Cedar) Federal and state land 
except Alaska and Indian 
Territory  1979~  
 
(iv) Government procurement  (Question 9:  page 70-71, paragraph 241) 
 Concerning the Buy American Act (BAA) of 1933, the Trade Agreements Act of 1979 authorizes the 
President to grant waivers from the BAA and other procurement restrictions.  Then the President delegated this authority to the USTR.  The Government of Japan is still concerned about 
discriminatory regulations of the BAA and other ru les which require the U.S. Federal Government 
agencies to limit government procurement of forei gn products and services. The Government of Japan 
requests the U.S. Government to ensure equa l business opportunities for both U.S. and foreign 
suppliers, in accordance with the principle of non-discriminatory treatment in government 
procurement.  Please explain specific view of th e U.S. Government on this point. 
 
ANSWER:   For procurement covered by the WTO Ag reement on Government Procurement (GPA) 
or a Free Trade Agreement (FTA), the United States  Government has waived the application of the 
Buy American Act and other discriminatory provisions  for eligible goods.  In such cases, offers of 
eligible products receive equal c onsideration with domestic offers. 
 (v) Trade-related intellectual property rights (Question 10:  page 75, paragraph 259 ("First-to-Invent" system))  
 The United States is the only country to use the "fir st-to-invent" system, which, with regard to the 
patent system, makes the United States rather unique.  This system, however, lacks certainty and predictability in the sense that a patentee’s status can be overturned by the appearance of the prior 
inventor afterwards.  This will provide extra burden to inventors who are required to prepare and keep 
documentary evidence to prove the date of inventi on.  Many countries, including Japan, have pointed 
out that this issue creates a barrier for foreign co mpanies when trying to penetrate the U.S. business WT/TPR/M/200/Add.1 
Page 294  
 
 community.  Although the practice of maintaining the first-to-invent system is not necessarily against 
the TRIPS Agreement, Japan again requests the United States to adopt the first-to-file system and also 
to improve all aspects of the patent systems that restri ct trade in the United Stat es.  This is due to the 
necessity of maintaining a transparent and stable system, as well as reducing the burdens borne by 
users through the difference in systems.  Please explain specific view of the U.S. on this point. 
 
ANSWER:   Although the U.S. first-to-invent patent sy stem is unique, it is clearly compatible with 
the TRIPS Agreement; it has worked well and, indeed, has certain advantages.  For example, the U.S. 
system is fair in that it rewards the first inventor
 who files a patent application, rather than rewarding 
the first person to file an application regardless of whether that first applicant to file an application 
was, indeed, the first inventor. 
 
From a purely statistical viewpoint there would seem to be little difference in result between a first-to-
invent patent system and a first-to-file patent syst em.  More than 99.9 percent of patent applications 
filed in the United States raise no dispute as to priority  of invention.  Even wh en such disputes arise, 
the inventor who filed first prevails in a signifi cant majority of these cases.  The actual effect of 
switching to first-to-file system, thus, is likely to have little or no actual significance based upon these 
statistical findings. 
 With regard to the alleged burden imposed by a firs t-to-invent system due to the use of documentary 
evidence to prove the date of invention, it should be  kept in mind that inventors in most first-to-file 
systems also maintain such  evidence in order to be able to assert "prior user rights" or derivation.  
Documentary and other objective evidence is require d to establish prior user rights in cases where an 
earlier inventor wishes to continue using an inventio n that was patented by another party that filed 
first, and obtained, a patent on that invention.  Such evidence is also required to prove inventorship 
where the first person to file derived the invention from the true inventor and is not entitled to the 
patent.  (Question 11:  page 75, paragraph 259 ("Submarine patents")) 
 
The early publication system in the United States provides exceptions whereby patent applications 
filed in the United States, but not filed overseas, or ma tters included in a patent application filed in the 
United States, but not included in the corresponding application filed overseas, can be made undisclosed at the request of the applicant. It is, th erefore, possible for a patent application to become 
a "Submarine Patent".  Without knowing whether or not another application is already on file for the 
same invention, this system creates serious social  and economic loss due to investments in R&D.   
 
Japan strongly requests the United States to implem ent fully and promptly what has already been 
confirmed under the Framework Talks, i.e. by abolishing the exceptions from the early U.S. 
publication system, and by publishing all applicatio ns except those not pending, or those not able to 
be laid open, after a period of 18 months from the earliest filing date.  Please explain specific view of 
the U.S. on this matter. 
 ANSWER:   The provisions for the adoption of an "early publication" system in the United States that 
were originally sent to the U.S. Congress (in the 104
th Congress) were fully consistent with the 
obligations of the 1994 United States-Japan patent accords. 
 U.S. obligations in those 1994 patent accords were satis fied by the timely introduction of the relevant 
bill in the 104
th Congress.  The United States made every e ffort to have legislation passed that was 
consistent with the 1994 patent accords, and Congress enacted Public Law 106-113 on November 29, 
1999.  This law contains a provision to publish, with in 18 months, most patent applications filed in 
the United States.  The law also provides excep tions.  Because average patent pendency in the 
United States is approximately two years, the po ssibility of submarine patents occurring based on 
applications pending on June 8, 1995, has greatly di minished over time and continues to do so.  The  WT/TPR/M/200/Add.1 
 Page 295 
 
 
 USPTO is actively studying ways to reduce the length  of time an application is pending before it is 
granted, and means to further promote publication.  It is hoped that these efforts will eliminate any 
applications that are not published w ithin 18 months of their filing date. 
 
Because most patent applications filed in th e United States are published within 18 months, we 
believe that experience with our publication syst em will demonstrate over time that the need for 
exceptions will be proven to be unwarranted.  More over, continuing efforts to further reduce patent 
pendency in the United States will help to allevi ate any problems that these exceptions may cause. 
 
(Question 12:  page 75, paragraph 259 (Prior ity in the Paris Convention (In re Hiler)) 
 The "Hilmer" doctrine exists in the United States. Fore ign applicants usually file applications, first in 
their own country and subsequently in the United States, thereby claiming priority under the Paris 
Convention. Due to the "Hilmer" doctrine, such fo reign applicants cannot prevent the patent grant 
from conflicting with applications filed before the act ual filing date of any subs equent applications in 
the United States, even during the priority period, and thereby may suffer disadvantage.  Please 
explain specific view of the U.S. on this point. 
 ANSWER:   The concerns of the Hilmer Doctrine, if any,  were mitigated to a large extent by changes 
to the U.S. patent law that went into effect on June 8, 1995.  These changes permit all patent 
applicants, including those from Japan, to file provisi onal patent applications that will give them the 
earliest possible prior art date for subsequently f iled non-provisional applications.  It should also be 
noted that this issue is under discussion in the ongoi ng substantive patent la w harmonization talks in 
WIPO. 
 
The effective date of a patent a pplication as a prior art reference unde r the so-called "Hilmer" doctrine 
is not inconsistent with the obliga tions of Article 4B of the Paris Convention, as it does not affect the 
ability of an applicant to obtain a patent where the applicant has made a prior ity claim that establishes 
an effective filing date prior to the effective prior art date of the patent.  Note that WIPO's Patent 
Cooperation Treaty explicitly allows countries to  apply the Hilmer doctrine in Article 64.4. 
 (Question 13: page 75, paragraph 259 (Language Discrimination in International Applications 
under the PCT)) 
 Article 102 (e) of the Patent Act provides that PCT international applications have the effect of 
eliminating subsequent applications since the in ternational filing date, only when the application 
primarily designates the United States and is pub lished in English intern ationally.  When PCT 
international applications are publishe d in other languages internationally, they do not have the effect 
of eliminating subsequent appli cations.  Thus, Article102 (e) is di scriminatory against other languages 
than English. In Japan and Europe, internationa l applications are not discriminated by language. 
Therefore, it is unfair that the same treatme nt is not guaranteed in the United States. 
 The limitation of effects of eliminating subsequent  application by Article 102 (e) narrows advantage 
of moratorium on submitting translations under the PCT system, and is significantly disadvantageous 
to applicants, who need to translate documents into  English.  The Government of Japan requests the 
Government of the United States to abolish the language discrimination ba sed on Article 102 (e).  
Please explain specific view of the U.S. on this matter. 
 ANSWER:   A bill has been introduced be fore the first session of the 110
th Congress, but when or if 
this Congress will take action on this bill is unknown. 
 (Question 14:  page 75, paragraph 259 (Unity of invention))  
Under the current U.S. patent system, the scope of inventions that can be included in a single WT/TPR/M/200/Add.1 
Page 296  
 
 application, is narrower than that under the sy stems of the Japan Patent Office (JPO) and the 
European Patent Office (EPO), according to what we have been requested so far.  Thus, a patentee is 
obliged to submit multiple applications, thereby increasing the burden. The Government of Japan 
wishes to repeat its request to the Government of th e United States to adopt the same criterion for its 
unity of invention as that of Japan and Europe.  What is the U.S. view on this matter? 
 
ANSWER:   The U.S. Patent and Trademark Office has been studying the implementation of unity of 
invention for national applications for many years.  There are concerns that the current unity standard 
may not be the best approach to the issue of limiting the claiming of multiple inventions in single 
applications, especially in emerging technologies.  To that end, the United States has, in the past, 
suggested studying these issues at the WIPO Standi ng Committee on the Law of Patents (SCP). There 
are also serious implementation concerns, in cluding revenue, resource allocation and labor 
management.  These concerns must be viewed in  the context of the difficulties in coping with 
application filings that continue to increase year-to-year, especially in high-technology areas. 
 
(Question 15:  page 75, paragraph 259 (Infor mation Disclosure Requirement of Prior Art 
Documents)) 
 All applicants for the United States patents ought to disclose important prior art documents to the U.S. 
Patent and Trademark Office (USPTO) as far as they know  until they obtain patent s.  In addition, they 
ought to submit English translation of prior art docum ents as a whole or in part, in case the documents 
are not in English.  The Government of Japan reque sts the Government of the United States to take 
measures to reduce the burden on fore ign patent applicants, including eliminating the requirement to 
submit English translation and shortening the peri od of the information disclosure requirement.  
Please explain specific view of the U.S. on this matter. 
 
ANSWER:   An applicant is required to submit info rmation that is known to be material to 
patentability. The public interest is best served, an d the most effective pate nt examination occurs 
when, at the time an application is being examined , USPTO is aware of and evaluates the teachings of 
all information material to patentability.  Each indi vidual associated with the filing and prosecution of 
a patent application has a duty of candor and good  faith in dealing with USPTO, which includes a 
duty to disclose to USPTO all information known to th at individual to be material to patentability as 
defined in this section.  The duty to disclose info rmation exists with respect to each pending claim 
until the claim is cancelled or withdrawn from cons ideration, or the application becomes abandoned. 
USPTO believes that this policy best serves the public  interest by ensuring that all known prior art 
that is material to patentability is brought to the examiner’s attention.  While translations “ought” to 
be submitted, they are only required to be submitted if  they are readily available, otherwise a concise 
explanation of the relevance, as it is  presently understood, is acceptable. 
 
(Question 16:  page 75-76, paragra ph 263 (Omnibus Appropriations Act)) 
 
Please indicate the prospect for the amendment of the Section 211 of the Omnibus Appropriations 
Act. 
 
ANSWER:   A number of legislative proposals that would implement the WTO Dispute Settlement 
Body’s (DSB) recommendations and rulings in this  dispute have been introduced in the current 
Congress, in both the U.S. Senate and the U.S. H ouse of Representatives.  The U.S. Administration 
continues to work with Congress to implem ent the DSB’s recommendations and rulings. 
  WT/TPR/M/200/Add.1 
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 IV. TRADE POLICIES BY SECTOR 
(2) AGRICULTURE (iii) Domestic programmes 
(Question 17: page 84, paragraph 26)  
(1) Please explain the view of the U.S. Govern ment on how to categorize programs for domestic 
support into green box, blue box and am ber box under the WTO Agriculture Agreement.  The 
programs are the marketing assistance loan program, direct payment program, CCP (Counter Cyclical 
Payment) program and the newly created ACRE (A verage Crop Revenue Elect ion) program included 
in the new Farm Bill which was recently approv ed in both the U.S. Senate and the House of 
Representatives. 
 
In particular, Japan understands that the values of counter-cyclical payments are based on historical 
acreages and yields, as well as market prices.   
 
ANSWER:   In our most recent notifications for 2002 – 2005, the United States notified all payments 
under the marketing assistance loan program as amber box support. Direct Payments were notified as 
decoupled payments under Para. 6 of Annex II.   CCPs were notified as amber box, non-product 
specific support.  Japan’s understanding about CCPs is correct.  The U.S. provided answers to 
questions on our notifications at the Committee on Agriculture meeting in November 2007.  It is 
premature to respond to questions about the 2008 Farm Act. 
 
(2) Please explain whether one set of price unifo rmly is used regardless of states, or whether 
differentiated prices are used depending on the states or counties. 
 
ANSWER:   For the marketing assistance loan program, re payment rates can vary by locality (that is, 
there is a loan repayment rate that determines mark eting loan benefits when local prices are below the 
loan rate).  Payment rates for Direct Pa yments and CCPs do not vary by locality. 
 
(3) In either case, please explain wh ether the level of payment for each  crop is related to the price of 
the crop differing every year. 
 
ANSWER:   Payments under the marketing assistance loan program and the CCP program are related 
to current prices. Payments under the Direct Payment program do not vary with prices, or with current 
production, and are thus notified as decoupled payments under Annex II. 
 (5) SERVICES 
(iii) Financial services (Question 21: page 110-112, paragraph 138, 139,  145-148 (Harmonization and Unification of 
State-Based Regulatory Systems or Transi tion to the Federal Regulatory System)) 
 Due to the state-based insurance regulation and superv ision in the U.S., foreign insurers who wish to 
conduct an insurance business in the U.S. are require d to obtain business licens es in each state where 
they wish to operate as well as are required to comp ly with supervisory regulations set by each state's 
authorities. 
 
We are aware that even in the U. S., the U.S. Chamber of Commerce and insurance organizations such 
as American Insurance Association (AIA) and Ameri can Council of Life Insurers (ACLI) are pointing 
out problems with the current state-based regulations. In addition, there is an initiative in Congress (in 
both houses) to promote a National Insurance Ac t of 2007, which introduces the Optional Federal 
Charter (OFC) (in the harmonization and unification of the state-based regulations, for instance, 
including a measure under which an insurer who has obt ained license of a particular line of business 
or approval of a new product in one state is deem ed authorized to conduct the same line of business in 
other States). WT/TPR/M/200/Add.1 
Page 298  
 
 Japan takes note of the National Association of In surance Commissioners’ (NAIC) efforts to achieve 
uniformity among states' regulatory regimes and welcom es that the Treasury Department proposed the 
introduction of the OFC in the Blueprint for a Stronger Regulatory Structure published in March 
2008.  However, the harmonization and unification of  the state-based insurance regulations including 
procedures for license and approval has not been real ized. “Blue print on financial sector”, announced 
by U.S. treasury on 31 March, should be included, si nce it has significant effects on the U.S. financial 
services system.  Based on these developments, it would be appreciated if the Government of the 
United States provides an explanati on to Japan’s comments as follows: 
 
(1) The Government of the United States should eff ectively promote the harmonization and unification 
of the state-based insurance regulations, or to introduce the OFC; and, 
 
(2) The Government of the United States should play  a role in promoting the effective harmonization 
and unification of the state-based regulations or the shift to the federal regulatory system, in order to 
actively work on the state insurance regulatory aut horities, and to present the Government of Japan  
with a practical timeline of these reforms. 
 ANSWER:   Discussions for an optional federal charter are ongoing in the U.S. government.  There is 
currently no timeline for implementation of the “Blu e Print.”  The U.S. state insurance regulators, 
working through their coordinating body the Nati onal Association of In surance Commissioners 
(NAIC), already have taken a number of steps to  make the insurance company licensing process as 
uniform as possible. For example, the NAIC has deve loped, and all states have agreed to participate 
in, a Uniform Certificate of Authority Application process that provides significant standardization of 
the filing requirements that U.S. state regulators u se in considering the licensing of a company already 
established in one U.S. state.  In addition, U.S. state insurance regulators continue to coordinate 
regarding solvency regulation of companies licensed  to do business in the U.S. market.  The NAIC 
and the U.S. states also have specific initiatives underway relating to life insurance and related 
products; and for producers (agents/brokers).  Progr ess has been made although there is no specific 
deadline for completion.  The obj ective of the work is to make the U.S. insurance market as 
competitive as possible while mainta ining sound prudential regulation. 
 (Question 22: page 110, paragraph 140 (A bolition of Trusteed Surplus Requirement)) 
 
Under the state-based insurance regulatory system, the Trusteed Surplus Requirement is imposed on 
the branches of foreign insuran ce companies in the United States.  This regulation requires the 
branches of foreign insurers to hold their majo r assets, which consist of deposits to the State 
authorities and Trusteed Assets, exceeding their net liability at banks or trust companies within the 
United States. 
 This requirement means that the branches of fore ign insurance companies have a substantial portion 
of their assets held under deposit, hampering their expeditious fund investments and causing a loss of 
investment opportunities to gain profits. This is a di scriminatory regulation in that it imposes a greater 
burden on the branches of foreign insurance co mpanies than on the Stated-based insurance 
companies.  Therefore, it would be appreciated if  the Government of the United States provides an 
explanation to Japan’s comment as follows:  The Government of the United States should abolish the 
Trusteed Surplus Requirement discriminat ory to foreign insurance companies. 
 
ANSWER:   U.S. state regulators maintain such requirements on foreign branches as a prudential 
measure. 
 
(Question 23: page 110, paragraph 143 (Elim ination of Reinsurance Collateral Requirement)) 
 
Under the current reinsurance regulations of the U.S ., foreign (re)insurers are required to post a trust 
account equivalent to 100 percent of the credit am ount within the country, or to submit a letter of  WT/TPR/M/200/Add.1 
 Page 299 
 
 
 credit for collateral, when they conduct rein surance businesses with U.S. ceding companies on a 
cross-border basis.  These requirements impose unf airly heavy burden on overseas insurers in 
reinsurance business in the U.S. 
 
Japan is aware that the introduction of a system which determines co llateral requirements according to 
the company’s credit rating has been discussed by NAIC, but the discussion has not made much 
progress. In the rapidly globalizing reinsurance mark et, the U.S. is recognized as the only developed 
country where such practice exists.  The U.S.  makes commitments on cross-border trade in 
reinsurance and explains that these requirements are for prudential reasons in the previous TPR. 
However, this regulation is heavily burdenso me for overseas insurers who conduct cross-border 
reinsurance businesses, and substantia lly reduces the interest to do so. 
 
Therefore, it would be appreciated if the Governme nt of the United States provides an explanation to 
Japan’s comments as follows: 
 
(1) The Government of the United States should elim inate or relax these collateral requirements that 
impose unfairly heavy burdens on overseas insurers in order to ensure that Japanese (re)insurers not 
be discriminated against; and,  
 (2) The Government of the United States should present a practical timeline for a review of the 
existing collateral requirements, paying due atten tion to ensuring that foreign (re)insurers not be 
discriminated against under the revised system. 
 ANSWER:   The U.S. States maintains such collatera l requirements as a prudential requirement on 
any supplier of reinsurance that does not choose to  be regulated under the U.S. system.  The NAIC 
and the U.S. regulators continue to consider the vi ews expressed by various interested persons on this 
issue.  Many U.S. primary insurance companie s strongly support these prudential requirements as a 
means to ensure the payment of reinsurance recove rables by non-US regulated reinsurers.  There are 
no additional developments to report at this time. 
 
(v) Maritime transport 
(Question 24: page 119, paragraph 176) 
 
As stated in the report by the Secretariat, the U.S. has not made any commitment on Maritime 
Services Sector, although the U.S. is the largest cargo country. Furthermore, negotiation based on the 
“Annex on Maritime Transport Services” has been  stagnating, due to divergent views over 
international shipping, auxiliary service and access to and use of port facilities. Please indicate 
specific plan to exercise flexibility in these issues, and thus to facilitate the implementation of the 
Annex.  
ANSWER:   The US offers are developed following cons ultations with our domestic constituencies, 
and reflect our commercial and economic interests in the WTO negotiations.  In the course of the 
negotiations, the United States engages with other c ountries and responds to questions with respect to 
U.S. measures in this or any other sector. We must note that there are several countries that have not submitted comprehensive requests or offers covering all sectors in this round of GATS negotiations.   
 
(Question 25: page 119, paragr aph 177, page 120, paragraph 182 
(Sanction by the FMC))  
 
The Federal Maritime Commission (FMC) is authorized  by Section 19 (1) (b) of the Merchant Marine 
Act of 1920 (the Jones Act) to make rules and regul ations affecting shipping in foreign trade.  The 
FMC imposed a unilateral sanction against Japan ese carriers in September 1997.  Although the 
sanction was removed in May 1999, the FMC still requires carriers to report to it on the situation of 
the ports in Japan.  The rule (repealed in May 1999), which provided grounds  for unilateral sanctions, WT/TPR/M/200/Add.1 
Page 300  
 
 was a violation of the Treaty of Friendship, Commerce and Navigation between Japan and the 
United States, which provides each other's ships with national treatment and most-favored-nation 
treatment.  Japan, therefore, requests the U.S. to work more closely w ith the FMC to ensure that such 
unilateral measures will no longer be taken.  Japan is  concerned about the impact of the Jones Act and 
any other related legislation on shipping trade, a nd submitted a list of questions (WT/GC/W/520) at 
the Review of the General Council last December. 
 
(1) Japan would appreciate if the U.S. could pr ovide information about the current situation 
regarding the responses to the questions.  
Since the repeal of the above-mentioned rule, the FMC requires Japanese and U.S. carriers to report to 
it on the progress of port situations in Japan.  Effort s have been made and signs of progress have been 
seen in various aspects. The "prior consultation system" has improved significantly (and the improved 
system has been implemented steadily); the Port Transportation Business Law was revised to abolish 
the supply-demand adjustment restriction and thus  has realized new entries into port transport 
business; progress has also been ma de toward the introduction of port terminal service operations on 
the 24-hour/364-day basis.  Japan strongly reque sts the FMC to fully understand these positive 
developments.  Despite significant improvement in the port situation of Japan, the FMC introduced in 
August 2001 a new order, which not only increased th e number of items to be reported, but also 
expanded the scope of the carriers subject to the reporting requirements. The order includes 
requirements which go beyond the extent deemed appropriate to impose upon carriers, such as 
directly requiring Japanese carriers to submit translat ed copies of the Japanese laws and instructions 
concerned. Thus, the order has been causing unfair and excessive burdens on carriers. Should it be the 
case that the FMC decided to expand the range of the reporting requirements in order to judge 
whether or not it should impose un ilateral sanctions, this would vi olate the Treaty of Friendship, 
Commerce and Navigation between the United States and Japan, and Japan would recognize it as a 
regrettable and serious abuse of the FMC's mandate . Japan, therefore, strongly requests the U.S. to 
withdraw the order. 
 
(2) Please explain specific view of the U.S. on this matter . 
 
ANSWER:   In 1996, the Commission initiated FMC Docket No. 96-20, Port Restrictions and 
Requirements in the United States/Japan Trade , pursuant to its authority under section 19 of the 1920 
Act, to investigate practices which adversely aff ected the operations of non-Japanese carriers in 
Japanese ports.  Government-to-Government negotiations  in 1997 resulted in an exchange of letters 
between the Japanese Ambassador and the Secretary of State, and in the settlement of outstanding 
fees imposed on Japanese carriers by the FMC.  Pursua nt to those bilateral negotiations, the Japanese 
Government promised to deregulate the port sector.  That agreement sought to reduce the number of 
matters subject to prior consultation and a commitme nt to respond to requests for prior consultation 
within 30 days. 
 
On August 9, 2001, the FMC amended the semi-annua l reporting requirements, originally issued in 
May 1999, on Japanese and U.S. carriers and al so issued a one-time Information Demand Order 
(under Section 15 of the Shipping Act of 1984) to an additional nine vessel-operating common 
carriers serving the U.S.-Japan trad e.  The Commission continues to monitor conditions in that trade 
relying on information it collects through the semi-a nnual reports it requires from the two U.S. flag 
carriers and three Japanese flag carriers that are pa rties to the proceeding.  The Commission also relies 
upon information it receives informally from the trans portation industry, either directly or through 
other agencies, to monitor conditions at Japan’s ports. 
 Although the Commission appreciates that the Government of Japan has asserted that they have 
deregulated shipping and that increased port opera ting hours have resulted in major improvements, 
the Commission has continued to receive information indicating disappointment with the results of efforts in Japan.  As explained by the Commissi on staff at the United States – Japan Regulatory  WT/TPR/M/200/Add.1 
 Page 301 
 
 
 Reform discussions in April of this year, th e Commission continues to monitor regulatory and 
commercial developments affecting access to the Japanese trades through semi-annual reports 
submitted by two U.S.-flagged carriers and three Jap anese-flagged carriers.  While interested parties 
are free to provide comments to the Commission at any time, for the moment, the Commission has not 
been given any indication that the situation is either grave enough to warrant serious action under 
section 19 or inconsequential enough to warrant the discontinuation of the proceeding or the reporting 
requirements.  Until provided with further indicati ons from the Government of Japan or other sources 
that there has been substantial relief from these re strictive practices, the Commission will continue to 
keep the docketed proceeding open an d continue to collect informati on from the carriers pursuant to 
its authority under section 19 of the 1920 Act.  
Nonetheless, the Commission appreciates that the Government of Japan has offered to provide, on a 
government-to-government basis, a translation of Jap anese law changed in 2006 that may be relevant 
to the Commission’s ongoing review of conditions at Japanese ports.  Though the Commission has 
not yet received an English translation of that law, it would be pleased to receive one from the 
Government of Japan.  This would likely make it unnecessary for the Japanese-flag carriers to provide 
a translation of this law. 
 
(Question 26: page 119, paragraph 178, page 121, paragraph 184 (Cargo Preference Measures) 
 The United States is the largest cargo owner c ountry. The cargo preference  laws generated over 
10 million revenue tons of cargo and US$1.3 billion of  ocean freight revenue in FY2006.  The amount 
of cargo for cargo reservati on is not negligible. 
 
Japan requests the U.S. to abolish the Cargo Prefer ence Measures, such as the requirement to use the 
U.S. vessels for the export of Alaskan oil, wh ich is nevertheless commercial cargo.  These 
protectionist measures are inconsistent with the pr inciple of national treatment, and are also against 
the Ministerial Decision on the Negotiations on Ma ritime Transport Services of the WTO, which 
prescribes that participants should not apply any protectionist measures during the negotiations.  
Please explain specific view of the U.S. on this matter . 
 
ANSWER:   Since 1904 Congress has enacted a series of such laws, which require exporters and 
importers to use U.S.-flag vessels to transport a cer tain percentage of any oceanborne cargoes and that 
are financed, directly/indirectly, by the U.S. Government.  The cargo preference laws result in 
meeting the National security objective by assuring  that sufficient sealift capability and intermodal 
transportation infrastructure exist to support vita l homeland and National security interests. These 
laws help sustain the assured sealift capability of U.S.-flag vessels and the related mariner positions 
that are vital to our National security and are fully compliant with the United States’ obligations to the 
WTO.  
Lifting the prohibition against exporting Alaskan oil removed a significant distortion of the oil 
market, which yields economic benefits, and is consistent with International Energy Agency 
recommendations.  Even with the requirement to tran sport the oil on U.S. flag ships, eliminating the 
prohibition has had on balance a beneficial trade libera lizing effect.  The last Alaskan crude oil to be 
exported was in April 2000. Since that time all Al askan crude oil production has moved to the U.S. 
West Coast market for refining and domestic cons umption.  The United States does not believe that 
the legislation raises any difficulty with obligations  in the WTO with respect to the negotiations on 
maritime transport services. 
 
(Question 27: page 119, paragraph 178 (Construction Requirement on Cargo Services)) 
 
To supply cargo services between two points in the Unite d States is reserved for the ship built in the 
United States. Japan requests the Unite d States to abolish such a requi rement.  Many people will agree 
that military aircraft should be constructed in th e U.S. for security reasons.  But civil airlines are WT/TPR/M/200/Add.1 
Page 302  
 
 allowed to operate aircrafts made in foreign c ountries.  Domestic railway companies and road 
transport operators are allowed to use trains  or trucks made in foreign countries.  Japan would like to 
know the reason why the U.S. government impo ses construction requirements only on maritime 
transport. 
 
ANSWER:   It is critical for U.S. shipbuilders to build  commercial ships for this trade if a viable 
industrial base is to be maintained to meet future  national defense requirements.  Moreover, the Navy 
relies upon shipyards that perform commercial work fo r the Jones Act for day-to-day maintenance of 
naval and surge fleet vessels, su ch as the Ready Reserve Fleet.   
 Many other nations have opted to support thei r shipbuilding industries through less transparent 
methods.  
 
(Question 28: page 120, paragra ph 180 (Ocean Shipping Reform Act)) 
 
The Ocean Shipping Reform Act of 1998 includes a provision allowing the discriminatory treatment 
of Japanese and other foreign shipping firms, by making it possible to impose unilateral regulations 
on pricing and other practices. As the pricing prac tice is the foundation of a free shipping activity on a 
commercial basis, unilateral regulations by the FMC on the pricing practice obviously intervenes in 
such free shipping activity, thereby, discriminating foreign firms. Furthermore, an amendment to the 
Act in 1998 explicitly stipulates the right of the Fede ral Government to make this intervention. Japan 
requests the U.S. to confirm that in the future the FMC shall not impose unilateral regulations on 
shipping activities on a commercial basis, conducted by Japanese and other foreign shipping firms, 
which do not reflect the reality of the market.  Please explain specific view of the U.S. on this matter . 
 
ANSWER:   As explained at the U.S. – Japan Regulator y Reform discussions in April, prior to the 
1998 amendment to section 19 of the Merchant Marine Act, 1920, Congress found that section 19 of the 1920 Act authorized the Commission to address c onditions unfavorable to shipping in the United 
States foreign waterborne trades which arise out of , among other things, competitive pricing practices.  
Congress simply clarified that section 19 covered such pricing by adding express wording via the Ocean Shipping Reform Act of 1998.  As section 19 is U.S. law, the Federal Maritime Commission is 
required to administer the law as enacted. 
 
(Question 29: page 120, paragraph 183 (Maritime Security Program)) 
 
The Maritime Security Program was extended for another ten years in October 2005, with the 
increased amount of subsidies (US$1.73 billion) and the increased number of ships subsidized (60 
ships).  The Government of Japan requests the Government of the United States to abolish the 
Program.  It is obvious that a provision of such an enormous amount of subsid y distorts conditions for 
free and fair competition in the international maritime market.  Please explain specific view of the 
U.S. on this matter . 
 ANSWER:   On October 8, 1996, President Clinton signe d into law the Maritime Security Act (P.L. 
104-239) after it was overwhelmingly adopted by th e House of Representatives and the Senate. This 
measure established the Maritime Security Program (M SP) to support an initial fleet of 47 militarily 
useful U.S.-flag commercial vessels crewed by Amer ican citizens. Participating vessel operators are 
required to make their ships and other commerc ial transportation resources available to the 
Department of Defense during times of war or na tional emergency. Eligible vessels may be built 
either in the United States or in a foreign country. 
 Through the enactment of the Maritime Secu rity Act of 2003, the 108th Congress expanded the 
program to incorporate 60 vessels. The legislati on also called for increased payments, subject to 
annual appropriations. The program, subject to annual  appropriations, is administered on the basis of 
renewable one-year contracts, provided funding is available.   WT/TPR/M/200/Add.1 
 Page 303 
 
 
 Of the 60 ships participating in the MSP program about  40 are container ships.  This compares to the 
fully cellular world container fleet of 3,514 ships a nd the general cargo fleet comprised 16,544 ships.  
Another 13 RO-RO ships are in the MSP program compared to over 7,000 RO-RO ships were in 
operation around the world. 
 
(Question 30: page 122, paragraph 190 (Maritime Transport Security Act)) 
 
The Maritime Transport Security Act of 2002 has en acted to enhance maritime security. Japan also 
recognizes that “Implementing Recommendations of  the 9/11 Commission Act” enacted in August 
2007.  This act contains provisions that require scanni ng of all U.S. bound cargo container in principle 
before loading on a vessel at foreign ports on or  after earlier of July 1, 2012.  The provisions, 
depending on how it would be implem ented, could severely disrupt the flow of goods into the United 
States from the rest of the world including Japan. Japan  requests the U.S. to deal carefully with this 
act in order to avoid disrupting smooth trade.  Please explain specific view of the U.S. on this matter. 
 
ANSWER:   The United States is committed to working w ith our domestic and foreign partners, trade 
and industry, to implement 100% scanning in a logi cal and practical manner that integrates smoothly 
into the global trade supply chain. 
 
IV. TRADE POLICY DEVELOPMENTS SINCE 2006 
(2) REGIONAL INITIATIVES 
(vi) The Enterprise for ASEAN Initiative (EAI) (Question 31: page 16, paragraph 61) 
 
Japan is of the view that the engagement of th e U.S. in Asia is significantly important for the 
prosperity in the Asia-Pacific region . (1) Does the U.S. have any plan to launch new economic 
initiatives in this region? 
 
ANSWER:   The United States is currently participating in the P-4 Financial Se rvices and Investment 
negotiations.  The first round of discussions took place in Chile in March and th e first formal round of 
negotiations is scheduled for mid-June in New Zeal and.  In parallel, the United States is undertaking 
an exploratory process to determine whether or not it will participate in the full comprehensive P-4 
Free Trade Agreement.  That process is not yet complete.  
Japan is aware that the U.S. is negotiating FTA in several sectors with the ‘P4’ (Brunei, Singapore, 
New Zealand and Chile ).  (2) How does the US foresee its engagement in the Asia-Pacific region? 
Does this attempt of negotiation constitute a bigger pi cture of the U.S. engagement in the Asia-Pacific 
region?  
ANSWER:   The P-4 countries envision growing the P-4 FTA membership across the Asia Pacific.  
Were we to join, we would do so based on the pros pect that the Agreement would provide a pathway 
to broader Asia-Pacific regional economic integra tion with like-minded countries committed to high-
standard agreements.  The United States is alread y pursuing further regional economic integration in 
the Asia Pacific Economic Cooperation forum (APEC)  through intensive exploration of the prospect 
of a Free Trade Area of the Asia- Pacific, as well  as through bilateral FTAs, such at the pending 
agreement with South Korea.    
 
(viii) Enhancing Transitional Economic Relations 
(Question 32: page 16, paragraph 64 (U.S.-EU Summit))  
 Please update on the developments of the Transatlantic Economic Council (TEC). 
 
ANSWER:   At the April 2007 U.S.-EU Summit, US and EU leaders launched the Framework for 
Advancing Transatlantic  Economic Integration , with the goal of deepening and broadening WT/TPR/M/200/Add.1 
Page 304  
 
 transatlantic economic ties through a multi-year work  program.  This new Fram ework also established 
the Transatlantic Economic Council (TEC), compri sed of U.S. Cabinet Members and European 
Commissioners, to oversee implementation of the Framework’s work program.    
Since the 2007 Summit meeting, the TEC has met in Washington on November 9, 2007 and on May 
13, 2008 in Brussels.  The TEC has adopted wo rking arrangements on its composition, working 
methods, and relations with stakeholders, legislat ors and regulators; convened a Group of Advisers to 
provide input and guidance on priorities for transatla ntic economic integration; and appointed senior 
officials from regulatory agencies as members of  the U.S.-EU High-Level Regulatory Cooperation 
Forum. 
 
The May 2008 TEC meeting addressed a range of concrete steps to promote closer integration, 
including: 
 
European Commission commitment to propose cha nges to EU regulations that will allow the 
importation of poultry meat processed us ing pathogen reduction treatments.  
The United States Occupational Safety and Health Ad ministration agreement to publish a new request 
for information (RFI) concerning possible use of supp liers’ declaration of conformity to certify that 
certain electrical products meet U.S. workplace safety standards.  European Commission action to ensure that trad e in cosmetics and personal care products is not 
disrupted by EU implementation of its chemicals regulation (REACH).  
Agreement to an Open Investment Statement which affirms our commitment to promoting open 
investment policies at home and to working together to oppose protectionism abroad.  
More details on the results of the May 2008 TEC meeting are noted in the TEC Joint Statement 
available at: http://www.state.gov/p/eur/rls/or/104918.htm. 
 
(2) Please explain how the U.S. Go vernment foresees the evolution of th is transatlantic cooperation in 
future .  
 
ANSWER:   The 2007 Framework recognized the multi-year nature of our work program – indeed it 
builds directly upon the work of prior U.S.-EU initia tives.  In order to bring the work launched in 
2007 to fruition, the United States will continue our work on all elements of the Framework, giving 
particular attention to regulatory cooperation, in tellectual property rights, secure trade and financial 
markets.  We expect to take stock of pr ogress in a TEC meeting before the end of 2008. 
 
(Question 33:  page 17, paragraph 65-72 
(African Growth and Opportunity Act (AGOA)) 
 The application of the textile and apparel provisi ons of the AGOA, which offers duty-free and quota-
free treatment for apparel made of third-country ya rns and fabrics in a designated lesser developed 
country, has been extended until 2012.  These provisi ons promote export of yarns and fabrics from the 
third countries, including the US, to Africa.  However, after the expiration of the Multi Fabric 
Agreement, many apparel articles made in China floo ded into the US market, and apparel industries in 
Africa were seriously damaged. 
 Does the US Government believe that the Act is s till contributing to the development of the African 
industry? 
 ANSWER:  Although the expiration of the Agreemen t on Textiles and Clothing heightened 
competition around the world including African count ries, U.S. imports of apparel under AGOA have 
more than tripled, from $359.4 million in 2001 to $1.3 billion in 2007, and account for about 
40 percent of AGOA non-oil exports.  This overall increase occurred despite a decline of about 
$300 million between 2004 and 2005, due mainly to the end of global apparel quotas on January 1, 
2005.  WT/TPR/M/200/Add.1 
 Page 305 
 
 
 Trade agreements and preference programs, in particular AGOA and its third country fabric 
provisions, have served as a strong catalyst for in creased apparel exports from sub-Saharan Africa.  
To a lesser extent, exports also increased becaus e of:  economic integrati on; competitive wages; 
individual country programs and government polic ies, such as the creation of export processing 
zones; infrastructure development programs;  a nd other government investments and incentives that 
served to attract domestic and foreign direct inv estment mostly of Asian origin, and from African 
countries (South Africa, Mauritius) and the EU.  
 
Although heightened competition has forced some AGOA producers out of the market, many other 
AGOA apparel producers are remaining competitive.   Some analysts believe AGOA’s tariff 
advantage, as well as improvements in infrastructur e, will continue to help some African producers 
remain competitive and retain or even grow th eir market share in certain apparel products. 
 
(x) United States-Colombia Trade Promotion Agreement 
VI. LEGISLATIVE AGENDA 
(Question 34: page 21, paragraph 93 (U.S.-Colo mbia FTA), page 24, paragraph 111 (U.S.-Korea 
FTA))  
 
How does the U.S. government expect the approv al of U.S.-Korea FTA by the Congress?  
 
ANSWER:   The Administration is in active discu ssions with the Congressional leadership on 
submitting legislation to implement the free trade agreement (FTA) with South Korea. 
 
In a recent Congress debate, the House passed the r esolution deciding not to discuss U.S.-Colombia 
FTA, although this agreement was concluded within  the valid period applicable to the Trade 
Promotion Authority (TPA).  How does U.S. government see this reso lution affects the significance of 
the TPA, which allows the administration to further promote trade negotiations?  It seems that this 
resolution undermines the expected  role of the U.S. as one of the promoters for free trade. 
 
ANSWER:   The Administration’s authority to conduct trade negotiations is derived from the U.S. 
Constitution and is not dependent on TPA.  Rather, TPA creates a legislative process under which 
Congress commits to consider on an expedite d basis and without amendment legislation 
implementing specific trade agreements that Admi nistration has negotiated in accordance with TPA 
rules.  In the absence of TPA, Congress can c onsider trade agreement implementing bills under 
standard legislative procedures,  Congress used t hose procedures in 2000, for example, to approve 
implementing legislation for the U.S. - Jordan FTA.  
KOREA 
 
THE UNITED STATES ECONOMIC AND TRADE ENVIRONMENT 
Recent Challenges to the U.S. Economy  
1. The Government Report (paragraph 26, page  9) notes that a full range of public policy 
responses, including monetary and fiscal policy actions , is being implemented to help resolve recent 
economic challenges.  
A. It is known that in order to prevent the recu rrence of credit crises like the sub-prime mortgage 
crisis, the FRB is considering directly regulating non-banks, including investment banks, in terms of 
liquidity control, etc.  Please provide us with detailed information regarding the plan. 
 
B. In March this year, the Treasury Department released a plan for a comprehensive financial 
regulatory reform called "Blueprint for a M odernized Financial Regulatory Structure."  Please 
provide us with detailed information abou t the timeline and feasibility of the plan . WT/TPR/M/200/Add.1 
Page 306  
 
 ANSWER:  On March 31, 2008, the U.S. Treasury Departme nt released its Blueprint for an improved 
financial regulatory structure, one that strengthe ns consumer protections, improves tools for market 
stability and enhances financial innovation. Treasu ry's Blueprint for a Modernized Financial 
Regulatory Structure presents a series of short- , intermediate- and long-term recommendations for 
reform of the U.S. regulatory structure.  
The short-term recommendations include improvement s to regulatory coordination and oversight that 
regulators can make quickly. The Blueprint r ecommends creating a new federal commission for 
mortgage origination to protect consumers better .  The report also recommends modernizing the 
President's Working Group on Financial Markets a nd clarifying the Federal Reserve's liquidity 
provisioning. 
 
Intermediate-term recommendations focus on elimin ating some of the duplication in our existing 
regulatory system, but more importantly they offer ways to modernize the regulatory structure for 
certain financial services sectors, within the current framework. Recommendations include 
eliminating the thrift charter, creating an optional federal charter for insurance and unifying oversight 
for futures and securities. 
 
The long-term recommendation is to create an en tirely new regulatory structure using an objectives-
based approach for optimal regulation.  The struct ure will consist of a market stability regulator, a 
prudential regulator and a business conduct regul ator with a focus on consumer protection. 
 The blueprint can be found at:  http://www.tr eas.gov/press/releases/reports/Blueprint.pdf. 
 
Other Measures Affecting Production And Trade : Other Government Support: Overall 
Support  
2. The Secretariat Report (paragraph 199) notes that the United States submitted a full 
notification under Article XVI:1 of the GATT 1994 a nd Article 25 of the Agreement on Subsidies and 
Countervailing Measures in November 2007.  Please elaborate the U.S. Government's specific 
regulations on tax exemption for off-highway business use including the following questions. 
 
According to notifications "G/SCM/N/3/USA/Suppl.1, G/SCM/N/16/USA/Suppl.1 G/SCM/N/25/USA/Suppl.1, G/SCM/N/38/USA( 19 November 1998), "Commercial Fishing 
Exemption from Deficit Reduction Rate Compone nt of Excise Tax on Motor Fuels(Commercial 
fishermen can purchase untaxed diesel fuel or can recei ve a refund for any taxes paid on gasoline used 
in commercial fishing boats.)" is refe rred to in the fisheries subsidies.  Under Article 2 (Specificity) of 
the WTO ASCM, these subsidies are seen as spec ific for commercial fishermen. Does the U.S. 
Government take the same view on this? 
 ANSWER:   We note that notifications are provided without prejudice to the legal status of the 
measure under the ASCM or the nature of the m easure itself.  The United States has not taken a 
position concerning the application of the ASCM to the measure in question but provides this 
information for transparency.  Section 4041(a) of th e Internal Revenue Code (IRC) imposes taxes on 
the sale of certain fuel for the purpose of the Highway Trust Fund located within the U.S. Treasury 
(established by IRC Section 9503), the moneys of which may only be used for particular purposes 
related to the construction and main tenance of highways and mass transit.  As such, this tax does not 
apply to fuel for non-highway uses such as commercial fishing, as provided for in Sections 
4041(b)(1)(C) and 6421(e)(2) of the IRC. 
 3. In addition to other fuel excise taxes, sec tion 4042 of the Internal  Revenue Code imposes a 
tax on fuel used in the provision of commercial wa terway transportation in inland waterways, which 
revenues are appropriated to the Inland Waterways Trust Fund (established by IRC Section 9506).  As 
this appears to relate to transportation services, section 4042(d)(1)(B) makes clear that this tax does  WT/TPR/M/200/Add.1 
 Page 307 
 
 
 not apply to fuel associated with the transportation of fish caught by fishers.  What is the exact total 
amount of tax exemption on fuel for fishermen annually? 
 ANSWER:   This information is not available. 
 
4. What are the criteria to be a recipient of the s ubsidy? Be involved in small-scale fisheries, in 
indigenous fishing activities or in ordinary fishing activities?  ANSWER:  See the answer to 15 (1) above. 
 
5. Finally, what is the average landed value of fish harvested by them (recipients of subsidy)? 
 ANSWER:   This information is not available. 
 TRADE POLICIES AND PRACTICES BY MEASURE Measures Directly Affecting Imports - Customs Procedures  
6. The Secretariat Report (paragraph 24, page 27) notes that the Implementing 
Recommendations of the 9/11 Commission Act of 2007 prohibits containers from being loaded on a 
U.S.-bound vessel unless they have been scanned usi ng non-intrusive imaging and radiation detection 
equipment. It is our understanding that there are sev eral foreign ports currently piloting the SFI and 
that based on the assessment from the pilot program , the Implementing Recommendations of the 9/11 
Commission Act of 2007 will go into effect from July 1, 2012.  Please provide us with information 
regarding policy direction after the SFI pilot programme . 
 
ANSWER:   CBP and DOE continue to study and evaluate  the results of the Secure Freight Initiative 
(SFI) pilot programs.  All data gathered from the se pilot programs will be reported to our Congress.  
Any decision on the expansion of SFI will be info rmed by the information yielded from the initial 
pilot ports.  Any expansion will be done in a reasoned, responsible, and risk-based manner. 
 
7. The Secretariat Report (paragraph 29, page 28) notes that CBP and the New Zealand Customs 
Service signed a security arrangement in July 2007.  Under this arrangement, the participants in New 
Zealand's Secure Exports Scheme receive C-TPAT benefits when exporting to the United States. 
Please elaborate the US Government's plans to sign  such Mutual Recognition Agreements with other 
countries . 
 
ANSWER:  The United States is planning to sign Mu tual Recognition Arrangements with Canada 
and Jordan this month (June 2008). 
 Measures Directly Affecting Imports - Anti-dumping and Countervailing Measures 
 
8. The Secretariat Report (paragraph 91, page 40) notes that the USDOC's methodology of not 
granting offsets for non-dumped-sales, also known as "zeroing" (negative margins of dumping), in 
determining weighted average dumping margins, c ontinued to be a source of legal disputes. The 
Appellate Body of the WTO continues to conclude that USDOC acted inconsistently with the Anti-
Dumping Agreement (ADA) by maintaining the zeroing procedures. For example, recently in a 
stainless steel case by Mexico, the Appellate Body reversed the Panel's conclusions, finding that 
simple zeroing in periodic reviews is inconsistent with Article Ⅵ:2 of the GATT 1994 and Article 9.3 
and 2.4 of the ADA (WTO document WT/DS344/AB/R, 30 April 2008).   Please elaborate the US 
Government's plans to stop its "zeroing" proce dures in all anti-dumping proceedings, including 
original investigations and subsequent reviews, in  compliance with the relevant adjudications issued 
by the WTO Appellate Body.  
 WT/TPR/M/200/Add.1 
Page 308  
 
 ANSWER:   The Appellate Body report along with the accompanying panel report in DS344 was 
adopted by the Dispute Settlement Body on May 20 , 2008.  At a meeting of the Dispute Settlement 
Body on June 2, 2008, the United States stated its intention to comply with its WTO obligations.  
With respect to the issue of “zeroing” in inv estigations, the United States notes that, effective 
February 22, 2007, the Department of Commerce has abandoned the use of zeroing in investigations 
using the weighted average – to – weighted average comparison methodology. 
 
Measures Directly Affecting Imports - Technica l Regulations, Conformity Assessment, and 
Standards   
9. The Secretariat Report (paragraph 133, page 48)  notes that the ANSI accredits organizations 
whose standards development process meets ANSI re quirements of due process and consensus, which 
are established in the document ANSI Essential Requirements and in various other guidance 
documents. The Report also notes that there are 208 ANSI accredited standards development 
organizations. 
 A. Does the document ANSI Essential Requirements ref lect the "Code of Good Practice for the 
Preparation, Adoption and Application of Sta ndards" provided in Annex 3 of the WTO/TBT 
Agreement?  
 ANSWER:   Yes.  Note, there are now 214 ANSI accr edited standards development organizations. 
 B. Does the ANSI have the authority to control or supervise such accredited organizations?  
 
ANSWER:   ANSI has the authority to audit such orga nizations on a regular basis and for cause to 
ensure compliance with the provisions contained in the Essential Requirements document. 
 10. The Secretariat Report (paragraph 136, page 49)  notes that in practice the U.S. market often 
provides strong incentives for imported and domestic products to meet certain standards, although 
compliance with standards is voluntary.  For ex ample, the U.S distributors of home electronic 
appliances require the UL mark to be placed on every electronic products sold in the U.S.  In reality, it 
takes 6 months to 1 year to complete the pro cess of receiving the certified mark. This procedure 
seems to act as a market access barrier to many foreign electronic appliances e xporters. Please 
elaborate the US Government's plans to recognize forei gn quality certification to be equivalent to that 
of the UL Mark. 
 
ANSWER:   Without further information, it is difficult to know whether Korea’s concerns relate to 
market place demands or government  regulation.  To the extent they are the latter, the U.S. 
Department of Labor’s Occupationa l Health and Safety Administra tion (OSHA) currently requires 
that certain categories or types of products or e quipment be “approved” (i.e., tested and certified) by 
third-party organizations it calls “Nationally Recognized Testing Laboratories” (NRTLs).  There are 
37 different types of products for which OSHA re quires NRTL approval, and the largest of these 
types is electrical products and equipment.  Th ese requirements seek to prevent accidents through 
assuring safety of products used by American workers.  Requirements for approval apply to private 
employers, most federal government places of employment, and some state and local government 
places of employment.  Organizations interested in  applying for the NRTL designation must apply to 
the OSHA NRTL Program.  The requirements for recognition as a NRTL are contained in 29 CFR 
1910.7 and additional information is available on OSHA’s website (www.osha.gov).  Each NRTL has 
a scope of recognition which specifies the particular types of products or equipment it is capable of 
approving and the test standards used for the appr oval.  NRTLs can use an appropriate international 
test standard for their approvals.  UL is one of  18 organizations recognized as a NRTL.  Recognition 
is open to bodies located in other countries.  And, a NRTL may be approved by OSHA to use outside 
parties to do part of its testing or evaluation activities.  While the home appliance distributors 
mentioned in the question may specify that only pr oducts with the UL mark are acceptable to them,  WT/TPR/M/200/Add.1 
 Page 309 
 
 
 from the standpoint of the OSHA requirements, the mark of any NRTL that can approve these types 
of products is acceptable to OSHA.  
If the U.S. distributors’ products are being sold for use in a workplace environment, and are subject to 
certification by an OSHA-accredited NRTL, then a Korean certification body could seek to become 
an accredited NRTL. 
 
Based on information provided by UL, it is our unders tanding that turnaround times in excess of 2-10 
weeks generally indicate that a product failure has occurred, that the original submittal was 
incomplete or required rework, or that the pro duct was “new and unusual.”  UL home appliance 
standards typically are developed and maintained using an American National Standards Institute 
(ANSI)-accredited process which ensures transparen cy, openness, impartiality and consensus, 
effectiveness, relevance, coherence, etc.   
11. The Secretariat Report (paragraph 137, page 49) notes that the Interagency Working Group 
on Import Safety has issued a strategic framework  and an action plan, which recommends several 
TBT-related measures to enhance the safety of impor ts into the United States.  It is our understanding 
that the strategic framework advocates measures to protect public safety by ensuring the safety of 
imported goods. However, as th e framework recommends strengthe ning TBT-related measures, the 
measures are applied only to imported goods.  Therefore,  there is a concern that they might violate the 
national treatment principle and limit trade .  Korea would like to know the US Government's opinion 
on this matter. 
 
ANSWER:   The Action Plan for Import Safety was de veloped by a U.S. interagency working group 
on import safety that has no statutory or regulatory authority of its own.  Rather, the Plan contains 
short- and long-term recommendations to improve the safety of imported products based on a cost-
effective, risk-based approach.  All of the reco mmendations contained in these plans were reviewed 
from a trade perspective to ensure consistency with  U.S. international obligations.  As we did in 
developing the recommendations, the United States will work to ensure that any measures adopted to 
implement the Action Plan will be cons istent with our WTO obligations.  
 
Measures Directly Affecting Imports - Sa nitary and Phytosanitary Measures 
 
12. The Secretariat Report (paragraph 142, page 50)  states that "according to the United States, 
U.S. SPS measures are based on international sta ndards and guidelines where they exist and as 
appropriate". Although, the OIE guidelines does not in clude separate restrictions for sterilized food 
products in the case of international trade and quaran tine, the U.S. currently maintains restrictions on 
sterilized food imports due to the domestic procedures and guidelines.  What is the reason behind 
such restrictions?  
 
ANSWER:  Under US Food and Drug Administration re gulations, specifically 21 CFR Parts 108, 
113 and 114, domestic canned foods and imported canned foods are treated equally.  All domestic and 
foreign producers of low acid and acidified canne d foods must register their facility and submit 
evidence of the adequacy of thei r thermal process or acidification pr ocess with respect to controlling 
microorganisms of pubic health significance and cont rolling spoilage.  This can be accomplished by 
using internationally accepted scientific standard s to establish a proper thermal or acidification 
process.  Given the very serious consequences of  improper processing of these foods, e.g. botulism, 
these science-based controls continue to be  necessary to protect public health.   
 13. The Secretariat Report (paragraph 145, pa ge 50) notes that a risk assessment may be 
necessary to evaluate requests for first-time imports of plants, animals, and their products .  Is there 
any regulation on the administrative procedures that  requires risk assessment to be conducted within WT/TPR/M/200/Add.1 
Page 310  
 
 a prescribed time period on the beef imported from the countries with the OIE's FMD-free country 
status?  
 
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. 
 
14. The Secretariat Report (paragraph 154, page 52) notes that under the Bioterrorism Act, the 
FDA must receive notice prior to the entry of food  that is imported or offered for import into the 
United States. The report also notes that domestic and foreign facilities that manufacture, process, 
pack, and hold food for consumption in the United  States must register  with the FDA. These 
requirements acts as a market access ba rrier for food exporting companies.  Please elaborate the US 
Government's plans to ease these requirements. 
 ANSWER:  Since these regulations were first implemented almost five years ago, we believe that the 
food industry has successfully ad apted to these requirements.  We are not aware of continuing 
problems associated with the registration and prio r notice requirements.  Although there were some 
technical problems encountered during the early implementation stage, 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 requireme nts.  FDA further notes that Compliance Policy 
Guide 110.310, “Prior Notice of Food Under the Public Health Security and Bioterrorism 
Preparedness and Response Act of 2002,” provides that regulatory action will not be taken where 
prior notice has not been filed in certain, limited circumstances, reflecting FDA’s willingness to ease 
the impact of the prior notice process. 
 
Other Measures Affecting Production and Trade: Other Government Support: Overall Support 
 
17. The Secretariat Report (paragraph 199) notes that the United States submitted a full 
notification under Article XVI:1 of the GATT 1994 a nd Article 25 of the Agreement on Subsidies and 
Countervailing Measures in November 2007. Please elaborate the U.S. Government's specific 
regulations on tax exemption for off-highway business use including the following questions. 
 
18. According to notifications "G/SCM/N/3/USA/Suppl.1, G/SCM/N/16/USA/Suppl.1 G/SCM/N/25/USA/Suppl.1, G/SCM/N/38/USA( 19 November 1998), "Commercial Fishing 
Exemption from Deficit Reduction Rate Compone nt of Excise Tax on Motor Fuels(Commercial 
fishermen can purchase untaxed diesel fuel or can recei ve a refund for any taxes paid on gasoline used 
in commercial fishing boats.)" is refe rred to in the fisheries subsidies. 
 
The Secretariat Report (paragraph 199) notes that the United States submitted a full notification under 
Article XVI:1 of the GATT 1994 and Article 25 of  the Agreement on Subsidies and Countervailing 
Measures in November 2007. Please elaborate the U. S. Government's specif ic regulations on tax 
exemption for off-highway business use including the following questions. 
 
According to notifications "G/SCM/N/3/USA/Suppl.1, G/SCM/N/16/USA/Suppl.1 G/SCM/N/25/USA/Suppl.1, G/SCM/N/38/USA ( 19 November 1998), "Commercial Fishing 
Exemption from Deficit Reduction Rate Compone nt of Excise Tax on Motor Fuels(Commercial 
fishermen can purchase untaxed diesel fuel or can recei ve a refund for any taxes paid on gasoline used 
in commercial fishing boats.)" is refe rred to in the fisheries subsidies.  WT/TPR/M/200/Add.1 
 Page 311 
 
 
 1) Under Article 2 (Specificity) of the WTO AS CM, these subsidies are seen as specific for 
commercial fishermen. Does the U.S. Go vernment take the same view on this? 
 ANSWER:   We note that notifications are provided without prejudice to the legal status of the 
measure under the ASCM or the nature of the m easure itself.  The United States has not taken a 
position concerning the application of the ASCM to the measure in question but provides this 
information for transparency.  Section 4041(a) of th e Internal Revenue Code (IRC) imposes taxes on 
the sale of certain fuel for the purpose of the Highway Trust Fund located within the U.S. Treasury 
(established by IRC Section 9503), the moneys of which may only be used for particular purposes 
related to the construction and main tenance of highways and mass transit.  As such, this tax does not 
apply to fuel for non-highway uses such as commercial fishing, as provided for in Sections 
4041(b)(1)(C) and 6421(e)(2) of the IRC. 
 In addition to other fuel excise taxes, section 4042 of the Internal Revenue Code imposes a tax on fuel 
used in the provision of commercial waterway tran sportation in inland waterways, which revenues are 
appropriated to the Inland Waterways Trust Fund (est ablished by IRC Section 9506).  As this appears 
to relate to transportation services, section 4042(d) (1)(B) makes clear that this tax does not apply to 
fuel associated with the transportation of fish caught by fishers.  
 
2) What is the exact total amount of ta x exemption on fuel for fishermen annually? 
3) What are the criteria to be a recipient of the s ubsidy? Be involved in small-scale fisheries, in 
 indigenous fishing activities or in ordinary fishing activities? 4) Finally, what is the average landed value of fish harvested by them (recipients of subsidy)? 
 
TRADE POLICIES BY SECTOR  
Services - Maritime Transport  
19. The Secretariat Report (paragraph 95, page 119)  notes that Cabotage restrictions remain in 
place in the United States. The Jones Act reser ves cargo service between two points in the 
United States for ships that are registered and built in the United States and owned by a U.S. 
corporation, and on which 75% of the employees are U.S. citizens.  Please elaborate the US 
Government's plans to ease these restrictions.  
 
ANSWER:  There are no such plans.  
 
MEXICO 
 
IV. TRADE POLICIES BY SECTOR 
5) SERVICES 
(iii) Financial Services 
(b) Legislative and regulatory framework 
 
Paragraph 124  states that “to qualify as a financial holding company, the Gramm-Leach-Bliley Act 
(GBLA) provides that ‘well capitalized’ and ‘well mana ged’ standards comparable to those applied to 
U.S. banks be applied to foreign banks operating a br anch or agency in the United States ‘giving due 
regard to the principle of national treatment  and equality of competitive opportunity.’”  Mexico would 
like more detailed information on the criteri a for “well capitalized” and “well managed.”  
 
ANSWER:   The criteria for “well capitalized” and “w ell managed” may be found in the Federal 
Reserve’s Regulation Y, codified at 12 CFR 22 5.2(r)(3) and (s)(3).  Additional information is 
available in the Federal Register notice publishing  the final rule implementing the financial holding 
company provisions of the Gramm-Leach-Bliley Act, at  66 Federal Register 40 0, 408-411 (January 3, 
2001). WT/TPR/M/200/Add.1 
Page 312  
 
 Paragraph 131  states that “Although foreign banks are ge nerally subject to geographic and other 
limitations in the United States on a national treatment  basis, some exceptions have been reserved in 
the U.S. GATS Schedule.  For example, all director s of a national bank must be U.S. citizens unless 
the bank is an affiliate or subsidia ry of a foreign bank, in which case  only a majority of the board need 
be U.S. citizens; approximately half of the states also require all or the majority of the board of 
directors of depository financial in stitutions to be U.S. citizens.”  Mexico would like further 
clarification of the meaning of the exceptions in the U.S. Schedule . 
 ANSWER:   In contrast to some of our trading partners, the U.S. imposes no requirements on banks 
related to the citizenship of senior management or  key personnel.  Thus, foreign banks have full 
flexibility in appointing the executives and other personnel who are responsible for day-to-day 
decisions about how the business is run.  The U.S. does maintain some federal and state citizenship 
requirements for banks relating to composition of boards of directors.  In addition, in the case of 
national banks, the legal requirement that all board  members be U.S. citizens is routinely waived by 
the Office of the Comptroller of the Currency as long as a majority remains U.S. citizens.  
 
Paragraph 132  states that “Initial entry into the U.S. market through the establishment or acquisition 
of a nationally chartered bank subsidia ry by a foreign person is permitted in all states.  Initial entry or 
expansion by a foreign person (but not a domestic  person) through acquisition or establishment of a 
state-chartered commercial bank subsidiary is prohibited or limited in 29 states.”  Mexico would like 
clarification of this paragraph, given that, on the one han d, it indicates that initial entry into the U.S. 
market is permitted in all states but, on the other, st ates that such entry is prohibited or subject to 
limitation in 29 states.  
 
ANSWER:   As a general matter, foreign persons wi shing to enter the U.S. market through 
establishment or acquisition of a bank subsidiary have the option of choosing a national or state 
charter.   A national bank, chartered by the Office of  the Comptroller of the Currency, may be 
established or acquired in any state.  A state bank, ch artered by the relevant state banking authority, is 
limited or unavailable in some states.  Paragraph 148  states that “Some insurance groups, such as the Insurance Information Institute, the 
American Insurance Association, a nd the American Council of Life Insurers (ACLI) are in favor of a 
federal charter for insurance regulation.”  Mexico would like to know what progress has been made 
towards a federal charter for insurance regulation . 
 ANSWER:  On March 31 of this year the U.S. Treasury Department released its “Blueprint for a 
Modernized Financial Regulatory Structure.”  One of the issues raised in the Blueprint is an optional 
federal charter for insurance.  Discussions for su ch a charter are ongoing.  There is currently no 
timeline for implementation of the “Blue Print.”   
 
Paragraph 155  states that “A foreign investment compan y may not publicly offer its shares in the 
United States unless the Securities and Exchange Commission [SEC] issues an order, on a case-by-
case basis, permitting the company to register under the Investment Company Act (ICA).”  Mexico 
would like to know what the SEC’s requirements are for authorizing the registration of a foreign 
investment company . 
 ANSWER:  All funds that seek to sell their shares publicly in the United States generally must 
register with the SEC as investment compan ies under the Investment Company Act of 1940 
(“Investment Company Act”).  Section 7(d) of the Investment Company Act requires that any non-
U.S. fund that wishes to register as an investme nt company and publicly offer its securities in the 
United States must first obtain an order from the SEC.  To issue such an order, the SEC must find that 
"by reason of special circumstances or arrangements,  it is both legally and practically feasible to 
enforce the provisions of [the Investment Company Act against the non-U.S. fund,] and that the issuance of [the] order is otherwise consistent with the public interest and the protection of investors."   WT/TPR/M/200/Add.1 
 Page 313 
 
 
 If an order under Section 7(d) is obtained, the fore ign investment company may then proceed with the 
regular registration process.  Details on investment  company registration requirements may be found 
at http://www.sec.gov/divisions/investment/invcoreg121504.htm.  
IV. TRADE POLICIES BY SECTOR 
(5) SERVICES 
(iv) Air transport services (a) Main features 
 
Paragraph 161  states that “Some U.S. airports are par tly or totally operated through outsourcing and 
management contracts, including with foreign operato rs; this type of arrangement is common in the 
provision of services such as terminal and park ing area operations, ground  transport, building 
maintenance, baggage handling, an d construction and engineering.”  Mexico would like to be 
informed of the requirements for this ki nd of outsourcing and management contracts . 
 
ANSWER:  There are no restrictions in the United States on the participation of foreign companies 
that supply airport services such as those mentioned in paragraph 161. Such companies would have to 
comply with all applicable security requirements.  Participation by foreign companies in the supply of 
these services in the United States would be governed  by U.S. labor and immigration laws, as well as 
applicable licensing and certification requirements for specific occupations.  The requirements for 
outsourcing and management contra cting opportunities are determined by the individual airports 
seeking such contracts.  U.S. airports typically so licit for such contracting opportunities in airport 
trade periodicals and on their individual web sites.  The FAA does not collect, retain or distribute information governing contracting opportunities at U.S. airports.  
IV. TRADE POLICIES BY SECTOR 
(5) SERVICES 
(iv) Air transport services (b) Regulatory framework: 
 
Paragraph 167  states that “on a case-by-case basis, the Department of Transportation [DOT] has 
allowed foreign citizens to own up to 49% of an airline’s stock by using non-voting shares above 
25%, provided that actual control remains in the ha nds of U.S. citizens and an open-skies agreement 
exists between the United States and the homeland of the foreign investor.”  Mexico would like to 
know under what circumstances foreign citizens are a llowed to own up to 49% of an airline’s stock . 
 ANSWER:  The decision to allow foreign citizens to own up to 49% of a U.S. carrier is one that can 
be made on a case-by-case basis by the Department of Transportation and h as been allowed only in 
circumstances where it was determined that, inter alia , U.S. citizens would remain in actual control of 
the carrier, and there was an open-skies agreemen t in effect between the United States and the 
homeland of the foreign investor.  
IV. TRADE POLICIES BY SECTOR 
(5) SERVICES 
(v) Maritime transport (b) Regulatory framework: 
 
Paragraph 189 [sic – paragraph 180 ] states that “The Shipping Act of 1984, as amended by the 
Ocean Shipping Reform Act of 1998 (OSRA), allows sh ipping lines to enter into individual long-term 
service contracts with importers and exporters, without carrier groups be ing able to restrict them.”  
Mexico would like to be informed of the requirements for entering into service contracts . 
 ANSWER:  Numerous pro-competitive reforms were  enacted under OSRA to increase industry 
market responsiveness focused on service contrac ting between shippers and Vessel Operating WT/TPR/M/200/Add.1 
Page 314  
 
 Common Carriers (“VOCCs”).  Shippe rs were permitted to negotiate service contracts directly and 
confidentially with individual VOCCs.  OSRA el iminated the requirement that all of the 
commercially sensitive service contract essential term s (including rates) be made available to the 
public and that shippers which were similarly situated  (i.e,,  a shipper able to meet those terms) be 
given the same contract terms.  The confidentiality of certain terms has fostered a shift to contract 
carriage -- carriers generally report that 80 percent or more of their liner cargo currently moves under 
service contracts.   Most shippers are now ne gotiating one-on-one with individual carriers for 
confidential service contracts, instead of negotia ting with rate-setting conferences or groups of 
carriers.  
Service contracts under OSRA could only be offe red by VOCCs.  OSRA continued to limit Non-
Vessel-Operating Common Carriers (NVOCCs) to o ffering their customers tariffs rates via their 
public tariffs.  In January 2005, however, the Commission used its exemption authority to allow NVOCCs to enter into confidential NVOCC Service A rrangements (“NSAs”) with their customers.  
As a condition for NVOCCs being permitted to en ter into NSAs, these arrangements, like VOCC 
service contracts, are required to be filed with the FMC.  
 Paragraph 191  states: “There are no restrictions on foreign investment in U.S. shipyards or ship-
repair facilities, but benefits under certain  programs may be contingent upon nationality 
requirements.”  Mexico would like to know what the current restrictions on foreign investment in 
shipyards or ship-repair facilities are . 
 
ANSWER:  There are no restrictions on foreign investment in U.S. shipyards or ship-repair facilities.  
 As discussed in paragraphs 17 to 25  of the U.S. report, the Committee on Foreign Investment in the 
United States (CFIUS) may review investments that may result in foreign control of U.S. businesses 
to determine and address their effects on the national security of the United States. 
 
IV. TRADE POLICIES BY SECTOR 
(5) SERVICES (vi) Professional and business services (a) Introduction 
 
Paragraph 195  states: “In the context of previous U.S. reviews, the authorities noted that, in practice, 
there is a high degree of commonality across the st ates for some professions; for example, single 
national examinations are recognized by state authorities for accounting, architectural, and engineering services.”  Mexico would like to know if there is any plan to recognize national 
examinations for other professions . 
 
ANSWER:  The decision to recognize national examinations is made by state licensing boards.  We 
do not know how many licensed professions that have not already done so are moving towards 
national examinations.  However, more professions th an those cited already offer national exams that 
are recognized by state boards, including nursing and pharmacy. 
 
MEXICO ADDITIONAL 
 
X) Sanitary and Phytosanitary Measures.  
146. US authorities indicate that pursuant to federal legislation, the US States are authorized to 
establish [sanitary] and phytosanitary measures, provide d they are consistent with federal standards 
and regulations, as well as with the obligations of the United States within the framework of the 
pertinent disciplines of the WTO. 
  WT/TPR/M/200/Add.1 
 Page 315 
 
 
 The International Plant Protection Convention (IPPC) recognizes a single National Plant Protection 
Organization (NPPO) for the establishment and appli cation of the various phytosanitary measures for 
the export or import of products (ISPM No. 1, 2006).10  In this sense, once the exporting country 
complies with the regulations established by the NPPO for the entry of a specific product, there 
should be no other regulations preventing the move ment of the product inside the country.  For 
example, California and Arizona ha ve established stricter regulations than those authorized by the 
NPPO and restrict the entry into their territories of  products that have already been imported into the 
United States.  This is not in line with the IPPC or with international regul ations on imports (ISPM 
No. 20, 2004).11  How does the United States explain this action by the state authorities and what is it 
doing to resolve it? 
 ANSWER:  The states are in accordance with the IPPC and NPPO; as long as they provide a 
sufficient scientific basis for their regulations.  
Although there are international standards, each c ountry and state has the sovereign right to impose 
regulations to protect its people; so long as ther e is justifiable reasoning. Movement of products 
between states is also highly regulated.  
 
148. The United States mentions that there are no statutory limitations with respect to the duration 
of the process to approve imports of plants, animal s, and derivative products undertaken for the first 
time into the United States. Normally this process takes between two and three years. 
 
Based on the obligations of Transparency of San itary and Phytosanitary Regulations of the World 
Trade Organization’s Agreement on the Applic ation of Sanitary and Phytosanitary Measures
12 and 
the concept of undue delays in the development and  establishment of phytosanitary regulations, why 
are defined terms not established for the administra tive processes following the conclusion of the pest 
risk analyses, for the publication and entry into effect  of the regulations established for the products 
exported for the first time to that country?  
 
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.  
160. The FDA, together with Customs and Border Protection, performs inspections at the port of 
entry on imported food products other than meat, poultry, and egg products, including sampling and 
analysis “when necessary to ensure that the impor ted food products meet the requirements of the 
United States food safety system.”  The FDA uses “i mport alerts” in order to disseminate information 
to its field personnel on imports that violate the Fe deral Food, Drug and Cosmet ic Act and those that, 
consequently, must be denied entry into the United States.  The import alerts relate to a product, a 
geographic area, or a company in particular (m anufacturer, shipper, fa rmer, importer), or a 
combination of these factors. Import alerts remain in  effect until the manufacturer, shipper, farmer, or 
importer demonstrates to the FDA that the violation giving rise to the alert has been corrected. Import 
alerts are published online.  There is no informati on on the value of imports subject to inspection at 
the border by the FDA or Customs and Border Protection.  
 
                                                     
 
10 Phytosanitary principles for the protection of plants and the application of phytosanitary measures in 
international trade. 2006. ISPM No. 1, FAO. 
11 Guidelines for a phytosanitary import regu latory system. 2004. ISPM No. 20, FAO. 
12 Agreement on the Application of Sanitary an d Phytosanitary Measures. 1994.  World Trade 
Organization. WT/TPR/M/200/Add.1 
Page 316  
 
 Questions: 
 
1. Once the manufacturer, shipper, farmer, or im porter has corrected the violation and this has 
been demonstrated to the FDA, may imports resume?   
ANSWER:  Products subject to an import alert may be removed from the alert once the firm has 
demonstrated to FDA that they have “overcome th e appearance of violation.”  In many cases, this 
currently entails that the firm su bmit 5 consecutive clean shipments before consideration is given to 
the firm for removal from the import alert.  Howe ver, some import alerts require additional steps 
before a firm can be removed from import alert.  This can include submission of documents (e.g., 
HACCP records, 3rd. party certification, etc.) to FDA for review.  Guidance is usually provided in 
these import alerts on what additional information FDA will need to have confidence that the firm has 
overcome the appearance of a violation.  Contact in formation is provided on the import alerts if there 
are questions on how a firm can be removed from a specific import alert. 
 
2. In what cases and under what conditions are im ports from a country completely closed?  
 
ANSWER:  FDA’s guidance on this subject states that FDA may place a country on an Import Alert 
(IA) for Detention Without Physical Examination (DWPE) under the specific circumstances described 
in FDA’s Regulatory Procedures Manual, Chapter 9- 6, Detention Without Physical Examination.  
Specifically, “when there is evidence that a pr oduct from a specific geographical area or country 
could pose a health hazard, the appropriate Center  or district should recommend detention without 
physical examination. In such case s, where there is also information that the product is likely to 
continue to be violative, it may not be necessary to collect and analyze a physical sample.”  In 
addition, FDA may recommend Import Alert for specific product(s) from a country or a specific 
geographic area when: 
 1. There are at least twelve (12) detentions in a recent six-month period or less; and 
2. These detentions represent at least 25% of the to tal shipments of that product examined in that 
time period as known to the recommending district or unit;  and  
3. These detentions represent a significant number of  firms that manufacture, ship, or grow the 
product from the geographic area or country. 
 162. The Interagency Working Gr oup on Import Safety has recommended several measures related 
to sanitary and phyto-sanitary matters to improve  the safety of imports in the United States (see 
Box III.1). These recommendations have not  yet been promulgated (March 2008). 
 
Question.  
 
Explain in more detail how you plan to implemen t the recommendation of the interagency working 
group on import safety with respect to “making product safety an important principle in the 
diplomatic relationships the Unite d States maintains with other co untries, and increasing the profile 
of relevant foreign assistance activities.” 
 ANSWER:   The U.S. Food and Drug Administration (FDA) has done a lot of outreach both to 
embassies and bilaterally to many countries at both the technical and policy level to inform 
individuals about our priorities and to invite their reactions.  In addition, FDA is seeking to establish a 
presence in other countries (China, India, Central/S outh America, Europe, and the Middle East) all of 
which will assist with diplomatic re lationships with assistance activities.  WT/TPR/M/200/Add.1 
 Page 317 
 
 
 NEW ZEALAND 
 
Trade Policy Developments 
(WT/TPR/S/200, page 12 and WT/TPR/S/200 page 8)  
The Secretariat notes that the United States h as made progress in implementing several WTO 
(Dispute Resolution) rulings calling for changes to U. S. legislation, but a few rulings have not yet 
been fully implemented.  Could the U.S. please provide a proposed timeline ou tlining future phases of implementation of WTO 
rulings, as well as background information on the extent to which these have/have not been 
implemented? 
ANSWER:  We note that Congress has over the past several years undertaken major legislative 
implementation efforts in the FSC, 1916 Act , CDSOA  and Cotton  disputes.  The Administration will 
continue to work with the U.S. Congress on le gislation implementing DSB recommendations and 
rulings in the Section 211 , Section 110  and Hot-Rolled Steel  disputes.  The legislative schedule is 
controlled by Congress, however, and it is therefor e not possible to provide a precise schedule for 
completion of remaining steps.  We note that in respect of the Hot-Rolled Steel  dispute, the relevant 
U.S. authorities have already addressed the DSB’s recommendations and rulings with respect to the calculation of antidumping margins in the particular  hot-rolled steel antidumping duty investigation at 
issue. 
 
Tariffs 
(WT/TPR/S/200 page 31 and WT/TPR/S/200 page 32) 
 
The Secretariat notes that the aver age applied tariff for agriculture in 2007 was 8.9%, down slightly 
from 2004 (9.7%).   The average applied tariff rate  for non-agricultural products was 4% in 2007, 
unchanged from 2004.  The products subject to the highest ad valorem  or ad valorem  equivalent rates 
were tobacco (350%), sour cream (177.2%), and peanuts (164%); other agricultural products are 
subject to tariffs of between 50% and 110 %, incl uding milk and cream, butter substitutes, cheese, 
goose liver, sugar, cocoa powder, preparations for infant use, prepared mustard and cotton fibres .  In 
the non-agricultural sector, the highest rate was applied to footwear and leather products.  
 
The decrease in the average applie d MFN tariff for agriculture between 2004 and 2007 largely reflects 
increases in prices of agricultural produ cts and the resulting reduction in the ad valorem  equivalents 
(AVEs) of non- ad valorem  tariff rates applied on such products.  
 What is the US justification for maintaining high tariff protection in sectors like agricultural food 
products? 
ANSWER:   Generally, the highest agricultural tariffs maintained by the United States are the over-
quota tariffs maintained on products subject to  tariff-rate quotas.  These tariff-rate quotas were 
established during the Uruguay Round negotiations when the United States converted the absolute-quotas on these products into tariff-rate quotas.   
 
What program does the US have for the reducti on and eventual elimination of such tariffs? 
ANSWER:   The United States strongly supports multilatera l trade liberalization and is committed to 
an ambitious and comprehensive result in the WTO Doha Round.  We are prepared to make 
significant market access commitments provided othe r Members make meaningful contributions as 
well. 
 WT/TPR/M/200/Add.1 
Page 318  
 
 When does the US intend to redu ce or eliminate tariff peaks? 
ANSWER:   See previous response. 
The Secretariat notes (p 32) that "on average, non- ad valorem tariffs continue to afford higher 
protection than ad valorem duties.  In 2007, the average AVE of non-ad valorem tariff rates was 9.2%, 
compared with 4.3% for ad valorem duties.  Ap art from agricultural products, non-ad valorem tariff 
rates also apply to articles of apparel and clothi ng, footwear and headgear, watches, and precision 
tools."    
Given that non ad valorem tariffs are regarded as a non-transparent form of tariff protection, does 
the US have any plans to convert their non ad valorem tariffs to ad valorem rates? 
ANSWER:   The United State remains committed as part  of the Doha Round to ensure transparent 
tariff protection.  In both the agriculture and the NAMA negotiations, efforts are underway to reform 
or eliminate non-ad valorem tariffs.  The United Stat es will implement whatever modality on tariffs is 
finally agreed to by all the Parties.  
The Secretariat report also notes (p 79) that "Manufacturing tariffs are generally low, but tariff peaks 
have sheltered a few industries from international competition, for example textiles, clothing, and 
footwear and leather".  The USITC (WT/TPR/S/200, p96) identified textiles and apparel as subject to relatively high import 
barriers and that there would be significant welfar e gains if tariffs and other restrictions on these 
goods were to be eliminated.  What plans are there to review or reduce tariffs on these industries on a 
unilateral basis?  
ANSWER:   The U.S. is committed to concluding a su ccessful Doha Round this year that achieves 
new market access for agricultural and industrial products – including textiles and apparel - and 
services in both developed and emerging market economies. 
 
The fundamental U.S. objective for textiles in the Doha Round, as established by the Trade Promotion 
Authority (TPA) passed by Congress, is to obtai n competitive opportunities for U.S. exports of 
textiles and apparel in foreign markets substan tially equivalent to the competitive opportunities 
afforded imports in the United States market.  
The USITC (WT/TPR/S/200, p96) identified 12 sectors that are subject to relatively high tariffs, 
including edible fats and oils a nd processed fruits and vegetables.  How does the US intend to respond 
to the USITC's identification of the welfare gains that  would result if these tariffs were to be reduced 
or eliminated? 
ANSWER:   Generally, the highest agricultural tariffs maintained by the United States are the over-
quota tariffs maintained on products subject to  tariff-rate quotas.  These tariff-rate quotas were 
established during the Uruguay Round negotiations when the United States converted the absolute-quotas on these products into tariff-rate quotas.   The United States will lower these tariffs within the 
framework of multilateral negotiations where all c ountries make similar contributions to promoting 
international trade and consumers’ welfare.  Technical regulations, conformity assessment and standards (WT/TPR/S/200 page 47 and WT/TPR/S/200 pp. 88-89) 
 
The Secretariat report notes that preliminary estimates by the Department of Ag riculture for the direct 
incremental costs associated with the country-of-or igin labelling requirement in the 2002 Farm Act 
range from US$582 million to US$3.9 billion during the first year of application.  Annual costs to the  WT/TPR/M/200/Add.1 
 Page 319 
 
 
 US economy after a ten-year adjustment peri od are estimated to range from US$318 million to 
US$596 million.  The benefits derived from country-o f-origin labelling are found to be negligible.  
The Secretariat report also notes that the Departme nt of Agriculture found little or no evidence that 
consumers are willing to pay a price premium for country-of-origin labelling or that they would 
increase their purchases of food bearing the US origin label. 
 
Does the US intend to continue implementing mandat ory country of origin labelling, given its high 
cost and negligible benefits? If so, please  explain the reasons for this decision. 
ANSWER:   The U.S. Department of Agriculture (US DA) is required to implement the country of 
origin labelling program as directed by the 2002 an d 2008 Farm Bills.  While  the expected benefits 
from implementation of this rule are difficult to quantify, USDA has received numerous comments 
from consumers expressing an interest in knowing where their food comes from.  This rule will 
provide benefits to those consumers who desire country of origin information. 
 USDA will implement the COOL provisions of the 2002 and 2008 Farm Bills in accordance with the 
law and in a manner that provides credible country of  origin information to consumers with the least 
possible cost and burden to the production and ma rketing infrastructure in accordance with the 
September 30, 2008, implementation date. 
 
Sanitary and Phytosanitary measures (WT/TPR/S/200 page 51 and WT/TPR/S/200 page 52). 
 The Secretariat notes that typically, the process to a pprove first time imports of plants, animals and 
their products into the US takes between two to th ree years.  New regulations to establish a “notice-
based” approval process for fruits and vegetables be came effective in August 2007, because APHIS 
could not keep pace with the volume of import requests by using solely a rulemaking-based review 
and approval process. 
 
What has been the experience so far with the notice- based process?  What data is available to show 
that the new process has reduced the time taken to approve first time imports of plants, animals and 
their products?  
ANSWER:   In July 2007, USG issued a procedure fo r issuing new and revised phytosanitary import 
measures. As an alternative to undergoing the fo rmal rulemaking-based process, imports that are 
eligible can now be approved through a notice-b ased process. As with the rulemaking-based process, 
a pest-risk analysis must first be conducted for ne w fruits or vegetables c onsidered for importation. 
However, if the risk analysis shows that the commod ity’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 comments that disprove the findings of th e pest-risk analysis, a notice is then published in 
the Federal Register to announce that the USG w ill 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.  
Agriculture 
(WT/TPR/S/200, page 84 and WT/TPR/S/200 page 85)  
The Secretariat notes that annual average direct pa yments to US agricultural producers were US$16.3 
billion between 2003 and 2007.  A study by the US  Department of Agriculture found that farm WT/TPR/M/200/Add.1 
Page 320  
 
 programme payments “contain elements that pr ovide incentives for resource use that may be 
inconsistent with market signals.”  Marketing assist ance loans provide an incentive to plant more than 
would be the case in their absence.  
How does the US intend to reduce this level of s upport and ensure that farm payments become more 
consistent with market signals and less trade distorting over time? 
ANSWER:  The U.S. operates its farm programs within  the disciplines of the WTO Agreement on 
Agriculture and ensures that its domestic support pr ograms are consistent with its obligations.  For 
example, payments under the marketing assistance lo an program have been properly notified as amber 
box support since 1995. 
 
Agriculture: Export subsidies  
(WT/TPR/S/200, page 87) 
 
The Secretariat report notes that under the Dairy Export Incentive Program (DEIP) the United States 
provides cash bonus payments to exporters of elig ible commodities based on the quantity exported.  
There have been no bonuses granted under the DEIP  since 2004.  Although the DEIP has not been 
used to provide bonuses to exporters since 2004, the provision has been included in the revised Farm 
Bill, with language instructing the Secretar y to use it to the fullest extent possible. 
 
We note that the DEIP has not been accessed since 2004.  We would be grateful for an update from 
the US on future plans for the programme? 
ANSWER:   The DEIP will be used consistent with our subsidy reduction commitments and as market 
conditions warrant.  
Government Procurement  
(WT/TPR/S/200 page 67)  
The Secretariat report notes that US policy with r espect to market access for government procurement 
is based on reciprocity”.  The report goes on to no te that “The Trade Agreements Act generally 
prohibits federal agencies from purchasing goods a nd services from countries that are not a party to 
the GPA or other trade agreements that cover government procurement.” 
 
As a member of APEC and having endorsed th e APEC Non-Binding Principles on Government 
Procurement, including the principle of non-discri mination, does the US consider that its policy 
on Government Procurement is cons istent with those principles? 
 
ANSWER:   Ensuring fully open and competitive tendering is the fundamental principle of the U.S. 
procurement system.  At the same time, U.S. law a nd policy restricts participation by foreign suppliers 
whose governments have not agreed to provide pro cedural safeguards and comparable market access 
opportunities for U.S. suppliers in their governme nt procurement markets.  This purchasing 
prohibition in the Trade Agreements Act (19 U.S.C. 2501, et seq. )  may be waived for suppliers of 
any government that agrees to provide such  safeguards and access for U.S. suppliers.  
 Measures Directly Affecting Imports (WT/TPR/S/200 page 34) Merchandise Processing Fee (para 58) 
 According to the U.S. authorities, Congress inte nded the merchandise processing fee to approximate 
the cost to CBP of processing the entry of imported merchandise.
13  They have also noted that the 
                                                      
13 WTO document WT/TPR/M/126/Add.3, 22 November 2004.  WT/TPR/M/200/Add.1 
 Page 321 
 
 
 merchandise processing fee's statutory ceiling was introduced in part "to address GATT concerns".14  
The American Jobs Creation Act of 2004 require d the Secretary of the Treasury to issue 
recommendations concerning the possible eliminat ion of fees collected by the Department of 
Homeland Security, including the merchandise processing fee.15  Such recommendations have not yet 
been issued.  In the context of th e last Review of the United States, the U.S. authorities indicated that 
they had no intention of eliminating the merchandise processing fee.16 
 “New Zealand notes that The American Jobs Cr eation Act of 2004 required the Secretary of the 
Treasury to issue recommendations concerning the possible elimination of fees collected by the 
Department of Homeland Security, including the merchandise processing fee. 
Could the US advise when recommendations conc erning the possible elimination of merchandise 
processing fees be issued?  And when a review of fees for possible elimination will then be completed?” 
ANSWER:  Elimination of this fee is not  currently under consideration.  
 
Excise on Beer (para 62)  
The Secretariat report notes that “Beer (imported and domestic) is subject to a US federal excise tax at a rate of US$18 per barrel of 31 gallons.
17  A reduced rate of US$7 is applied on the first 60,000 
barrels of beer produced in a year by a domestic  brewer with an annual production of two million 
barrels of beer or less.  Imported beer is not eligible for the reduced rate.” 
 
Note: 60,000 barrels = 7m litres.  2m barrels = 235m litres.  In 2007, NZ beer output totalled 297m 
litres with the largest brewer (NZ Breweries) a ccounting for 152m litres (51% annual output).  The 
top five NZ breweries accounted for 97% of annual output – the remaining 69 breweries are largely in 
the ‘boutique’ market. The US thresholds seem to give ‘discount’ excise to large brewing concerns. 
New Zealand notes that a reduced rate of federal excise tax is applied on the first 60,000 barrels of 
beer produced in a year by a domestic brewer with an annual production of tw o million barrels of beer 
or less. 
Could the US explain the rationale for the two levels of federal excise tax? 
ANSWER:   The total production of beer and wine by sm all producers is quite sm all, and these small 
producers frequently face higher costs of production. 
 
Is a ‘domestic brewer with an a nnual production of two million barrels of beer or less’ considered to 
be a small enterprise (say, a ‘boutique’ brewer)? 
ANSWER:   Yes, according to the U.S. beer industry definition of small enterprise. 
 Could the US advise how this lower federal ex cise tax (US$7 as opposed to US$18 per barrel of 31 
gallons) is applied to imported product – thereby mee ting the terms of Article III, (1) of GATT 1994? 
ANSWER:   Since total production of beer and wine by small producers is quite small, and these 
small producers frequently face higher costs of pr oduction, any excise tax advantages offered to these 
producers have no trade distorting effect.  
                                                     
 
14 WTO document WT/TPR/M/126/Add.3, 22 November 2004. 
15 Section 892(e), American Jobs Creation Act of 2004. 
16 WTO document WT/TPR/M/126/Add.3, 22 November 2004. 
17 26 USC 5051. WT/TPR/M/200/Add.1 
Page 322  
 
 NORWAY 
 Investment:  
 
In its report of 5 May 2008 (WT/TPR/S/200) the WTO Secretariat points to changes in the foreign 
investment regime (CH II, §17-25), particularly w ith regards to the implementation of FINSA (The 
Foreign Investment and National Security Act of 200 7).  Although we clearly recognize the need for 
measures to protect national security, it is in our view important that these measures are transparent, and that the relevant processes are predictable.   We are somewhat concerned that the present 
legislation and the related regula tions which were proposed by the Treasury in the spring 2008 do not 
fully meet these objectives, particularly as the con cept of national security does not appear to be 
clearly defined.  
Norway would therefore greatly appreciate if the US could further outline how the concept of national 
security is defined in the relevant laws and re gulations, and which changes these amendments will 
entail for foreign economic operators investing in your country.   
ANSWER:   FINSA and Executive Order 11858, as ame nded, reinforce CFIUS’ focus on genuine 
national security concerns alone, not economic or ot her national interests.  Though the regulations do 
not define the term “national security,” section 721 (f) of the Defense Production Act (50 U.S.C. App. 
2170(f)), as amended by FINSA, provides an exemplar y list of factors that CFIUS will consider in 
determining whether a transaction presents national secu rity concerns.  Furthermore, as required by 
FINSA, the Department of the Treasury will be publishing in the Federal Register guidance on the 
types of transactions that CFIUS has reviewed and that have presented national security considerations.  In addition, a dding to the transparency and pr edictability of the CFIUS process 
generally, the statute, executive order, and regul ations governing the CFIUS process are all publicly 
available, and the new regulations have been pub lished in proposed form for public comment, and the 
comments will be fully considered before final regul ations are issued. CFIUS also maintains a public 
webpage describing the review process at http:// www.ustreas.gov/offices/international-affairs/cfius/. 
 
Maritime Services:  
 
"With regards to CH IV and Maritime Services in th e report of the WTO Secretariat we would greatly 
appreciate receiving information on and status for any existing or proposed nationality requirements 
with respect to manning or registration of LNG vess els going to and from the US, either as part of 
legislation or agreements/arrangements involvi ng the industry or companies and trade unions." 
 ANSWER:   Congress amended the Deepwater Port Ac t through the Coast Guard and Maritime 
Transportation Act of 2006 to de velop and implement a program to promote the transportation of 
LNG to the United States on U.S.-flag vessels.  Unde r this amendment, the Maritime Administrator 
must give top priority to deepwater port applicants  that commit to utilize U. S.-flag vessels in their 
port operations. However, the Act has been interp reted to include both domestic and foreign-flag 
LNG vessels providing gas to deepwater port faciliti es licensed by the Agency . Based on security and 
safety considerations the Deepwater Port U.S. Ma nning Initiative seeks to encourage the employment 
of highly trained and skilled U.S. mariners to m eet the current and forecasted demand for professional 
mariners in the international LNG shipping industry.  
PAKISTAN 
 
1. The USTR office issues a watch list for IPR violations every six months and moves ranking 
of countries in various categories. However, it is not made transparent as to how such ranking is determined. Several times, this ra nking is done to force countries to  take on TRIPS plus legislation 
irrespective of their serious efforts th ey make in enforcing IPR protection.  WT/TPR/M/200/Add.1 
 Page 323 
 
 
 Could the US Administration please give some details as to what factors are taken into consideration 
in placing countries on this watch list? 
 
ANSWER:   Each year, as required by U.S. law, the Office of the United States Trade Representative 
(USTR) issues a Special 301 Report cataloguing sp ecific IPR problems in numerous countries 
worldwide.  The review of each trading partner’s IPR regime is done on a case by case basis, and all 
relevant factors are taken into consideration.  USTR considers information submitted by interested 
stakeholders and U.S. Embassies located in foreign capitals.  In addition, USTR actively encouraged 
foreign governments to submit material which can be  taken into account in these reviews.  A country 
is placed on the Special 301 list if it is clear that it "denies adequate and effective protection of IPR or 
fair and equitable market access to U.S. persons th at rely upon IP protection."  In addition to citing 
specific concerns, Special 301 also affords an opport unity to give credit where it is due, such as by 
improving the standing of countries when there ar e significant improvements in IPR protection and 
enforcement. 
 
Are these factors made known to the countries con cerned in good time, fo r them to take corrective 
measures, if any?  
 
ANSWER:  The Special 301 process entails ample oppor tunities for engagement with individual 
trading partners to discuss IPR concerns and possibl e ways to address them.  Throughout the course of 
the year, the United States meets regularly with our  trading partners to discuss IPR concerns.  U.S. 
Embassies are also actively engaged in order to convey specific IPR concerns to host country 
governments and to discuss potential resolutions. 
 2. Exporters of industrial goods from poor count ries such as Pakistan pay tariffs which are 
several times more than those from rich countries.  Th is position may be rectified to some extent if the 
Doha Round is successfully concluded.  However, th is anomaly will not be eliminated all together.  Is 
the US making any efforts to rectify this situation?  
 ANSWER:  The United States is fully committed to a successful and ambitious outcome to the Doha 
round. 
 
3. Pakistan empathises with the USA on need for rigorous scrutiny for processing visa requests. 
However the very long processing time and incompre hensible rejections of legitimate business 
visitors are a major trade impediment. Is the US streamlining the procedures for legitimate 
businesses entry facilitation? 
 
ANSWER:  We pursue the dual goals of keeping the United States safe and welcoming qualified 
nonimmigrants, and both are important. A policy of "secure borders, open doors" is not a contradiction: we can and must guard our country  against threats to our security and sensitive 
technology, while at the same time facilitating leg itimate travel. We are constantly working on ways 
to streamline visa procedures.  The Department of State is moving quickly to make the entire visa 
process more electronic through an on-line visa a pplication process, an on-line appointment system 
(which over 70 posts now use), and on-line fee pa yment. A fully electronic process provides more 
accurate and verifiable information, allows for fraud screening in advance of the visa interview, 
increases convenience for applicants, and standardiz es the process worldwide.  In January 2008, the 
Department of State issued guidance authorizing cons ular officers, in certain circumstances, to waive 
the nonimmigrant visa interview and fingerprint requ irements for some categories of applicants who 
have previously provided ten fingerprints, been in terviewed, and received visas.  A waiver of the 
interview requirement will not be permissible for applicants who require additional processing.  This 
procedural change will allow us to focus our interv iews on first time and other applicants who require 
interviews, while facilitating the visa re newals of legitimate travelers.   WT/TPR/M/200/Add.1 
Page 324  
 
 With limited exceptions, all visa applicants are presumed  to be immigrants (and thus not eligible for a 
nonimmigrant visa) unless and until they satisfy the consular officer that they qualify for a non-immigrant visa classification.  Because U.S. immigration law places the burden of proof on a visa applicant, the consular officer must consider e ach applicant for a visa as a business visitor who does 
not prove nonimmigrant qualifications – includi ng a residence in a foreign country which the 
applicant has no intention of abandoning, and the temp orariness of the visit – to be an immigrant, who 
may not receive a nonimmigrant visa.    
4. The US applies various methods of tariff quota allocation in Dairy products .  May we have 
some details and rational for using such methods and the criteria for each method to be applied? 
 
ANSWER :  Different licensing regimes may be based on when the TRQs were put in place.  The 
original cheese quotas were mainly licensed to hi storical importers, whereas newer TRQ quantities 
from the Uruguay Round were largely licensed to importers designated by the exporting country.  
Allowing exporting countries to designate importers  gives the exporting country the opportunity to get 
a better price for its exports.  Under the lottery system, qualified importers may apply for several 
licenses, indicating their priorities.  Applications are selected randomly and awarded their highest priority request until all of th e licenses have been allocated. 
 
SINGAPORE 
 
1. The report states that the SAFE port Act recognises that the 100% scanning requirements 
could have a significant impact on trade, and offers  the possibility of delaying the implementation for 
specific ports.  However, the Act does not address many issues of responsibilities, implementation and 
operational processes which create confusion to US trading partners.  How does the US intend to 
address these issues? 
 
ANSWER:  CPB and DOE have been operating pilot progr ams to determine how best to implement 
and operationalize these programs.   Direct experience rather than issuance of a general regulation 
will yield the best results.  Each port requires unique  solutions to complex challenges.  This is our 
current approach to implementation. 
 
2. We would appreciate the US' clarification on the following statement in the report which 
states that "non-tariff import restrictions are maintained largely for non-commercial purposes."   As 
the 100% scanning requirement is imposed on all US- bound containers, this would seem to constitute 
a non-tariff barrier.    
ANSWER:   The 100% scanning requirement’s sole objective is to secure the safety of containers 
entering the United States.  The United States conti nues to take measures consistent with U.S. WTO 
obligations that balance the need to facilitate tr ade with the need to safeguard our homeland and 
citizens. 
 
SWITZERLAND 
 
REPORT BY THE SECRETARIAT I.  RECENT ECONOMIC DEVELOPMENTS 
(7) Outlook 
Paras 36-38 : As a general comment on the Secretariat’s report :  In Part I on Recent Economic 
Developments, there are a number of figures which are out of date. It is particularly the case for the 
economic outlook, which refers to figures published for example in mid-July 2007 (CBO forecast) or 
in October 2007 (IMF forecast).  CBO’s most recent economic projections were released in February 
2008 and are significantly lower compared to what is mentioned in the report.  The same is true for  WT/TPR/M/200/Add.1 
 Page 325 
 
 
 the IMF Spring 2008 World economic outlook, which now expects the US economy to grow by just 
0.5% in 2008 and by 0.6% in 2009.  Also, the figure for the budget deficit for 2008 (1.1% of GDP) in para. 36  does not take into account the fiscal stimulus package ( para. 19 ). Could the U.S. authorities 
provide their latest outlook for the U.S. economy? 
 
ANSWER : The most recent official projection for the U.S. economy comes from the Board of 
Governors and Presidents of the Federal Reserve Banks  at the meeting of April 29-30. 2008.  In what 
is referred to as the “Central Tendency”, the Board of Governors and Presidents projected a range of 
U.S. real GDP growth of 0.3 to 1.2 percent for 2008, 2.0 to 2.8 percent for 2009, and 2.6 to 3.1 percent for 2010.  The central tendency excludes the 3 highest and 3 lowest projections made by 
the participants.  Projections for other variables were also provided.  The “summary of economic 
projections” follows the “minutes of the Fede ral Open Market Committee, April 29-30, 2008” 
available at the hot link below. 
 http://www.federalreserve.gov/monetar ypolicy/files/fomcminutes20080430.pdf. 
 
II TRADE POLICY REGIME - FRAMEWORK AND OBJECTIVES 
(3) Foreign Investment Regime 
(ii) Reporting and review requirements 
 
In para. 19 , the Secretariat's report indicates that under section 721, the President may suspend or 
prohibit a covered transaction when there is credible evidence that th e foreign entity might take action 
that threatens to impair national security and no ot her provision of federal law provides adequate and 
appropriate authority to protect national security. The President must decide whether to take action 
under section 721 within 15 days of the completion of a formal CFIUS investigation.  Could the U.S. 
authorities indicate on the basis of which specific criteria the President is likely to suspend or 
prohibit a transaction and whether a "de minimis"  clause may apply for the financial value of the 
transaction to be submitted to these pr ocedures ?  If so, what is this de "minimis" applicable level ? 
 
ANSWER:   The Foreign Investment and National Security Act of 2007 authorizes the President to 
suspend or prohibit a transaction, regardless of its si ze, but only if he finds that there is credible 
evidence to believe that the foreign person exercisi ng control over the U.S. business might take action 
that threatens to impair national security, and ot her laws do not provide ad equate and appropriate 
authority to protect the national security.  Further, section 721 authorizes CFIUS, where appropriate, 
to impose conditions or enter into mitigation agr eements with parties to resolve national security 
concerns.  CFIUS seeks to resolve concerns in th is way, rather than recommend that the President 
prohibit a transaction.    Para. 216 :  Could the U.S authorities explain what is und erstood by “limited immunity from antitrust 
laws” for export activities as mentioned in the Secretariat’s report? Which export activities are 
covered by this measure ?  Also, the Secretariat's report indicates that international ocean carriers are 
allowed to engage in conferences (price-fixi ng arrangements) by the Shipping Act of 1984. Could the 
U.S. authorities explain the reasons behind su ch an exception to antitrust legislations?  
 ANSWER:   In paragraph 216 reference is made to the Shipping Act, which text includes the 
statement that “international ocean carriers are allowed to engage in conferences (price-fixing 
arrangements) by the Shipping Act of 1984 if they are not contested by the Federal Maritime Commission. We wish to clarify that no immunity is made available to owners of cargo or exporters of commodities under the Shipping Act of 1984, as amended by the Ocean Shipping Reform Act of 
1998 (“OSRA”). The immunity referenced in the latte r statutes apply solely to agreements between 
ocean common carriers (or between marine terminal  operators) to discuss or regulate international 
transportation rates, conditions of service, or ot herwise engage in coopera tive working arrangements 
relating to transportation services.  The limited immuni ty available to parties of agreements filed with WT/TPR/M/200/Add.1 
Page 326  
 
 the Commission pursuant to the Shipping Act is available equally to transportation of imports and 
exports in the United States foreign ocean borne commerce.   Regarding the ability of ocean common carriers to form conferences with authority to discuss and 
agree upon prices under the Shipping Act, the numbe r of rate-making conferences has gone from 35 
conference agreements on file with the Commission in 1998 to eight conference agreements currently 
on file. The emergence of global markets, the im proved service of non-conference carriers, and the 
deregulatory nature of OSRA are catalysts that ha ve contributed to the restructuring of the liner 
shipping industry. This has led to the virtual elim ination of traditional conf erences and a dramatic 
increase in efficiency-enhancing operational types of  agreements, such as vessel-sharing and space 
charter agreements. 
 Significantly, the European Union decided to el iminate a longstanding bloc  exemption which has 
permitted rate-making agreements in foreign trades of  the European Union. The repeal of the bloc 
exemption is set to expire in October of this year , and such repeal will directly affect transportation 
services currently offered in trades between the EU  and the United States. Nonetheless, we estimate 
that only 6 agreements currently filed with the Federal Maritime Commission will need to be 
restructured or eliminated to ensure complia nce with EU guidelines. The Commission expects to 
monitor the transition from the bloc exemption e nvironment and the Commission’s Bureau of Trade 
Analysis (“BTA”) will study the effects of the re peal of the exemption on the U.S. trades. This 
examination will be conducted as an adjunct to BT A’s on-going program that monitors competitive 
and economic conditions within the U.S. ocean liner trades and the activities of liner carriers 
operating under agreements.  This study will in clude a before-and-after comparison of market 
conditions within the U.S. trades that would be most affected by the bloc exemption repeal. 
 
III. TRADE POLICIES BY MEASURE  
(1) Measures Directly Affecting Imports 
(i) Customs procedures  
In para. 23 , the Secretariat's report indicates that CBP must submit to Congress an evaluation of the 
feasibility and cost of expanding the scan-programme  currently being rolled out in a pilot programme 
within 180 days of the programme's full implementation. Could the U.S. authorities indicate whether 
the feasibility-analysis includes an explicit appreciation of  compatibility of Section 1701(b) of Public 
Law 110-53 with WTO rules, compatibility which curren tly is implicitly assumed by Art. 9 ? Can the 
U.S. authorities give some indication as to when an d under which procedure the report is likely to be 
dealt with by Congress ?  
 ANSWER:   Customs and Border Protection (CBP) and th e Department of Energy (DOE) continue to 
study and evaluate the results of the Secure Freight  Initiative (SFI) pilot programs.  All data gathered 
from these pilot programs will be reported to ou r Congress.  Any decision on the expansion of SFI 
will be informed by the information yielded from th e initial pilot ports.  Any expansion will be done 
in a reasoned, responsible, and risk-based manner.  
Para. 24 of the Secretariat's report  states that specific ports may be exempted from implementation of 
the prohibition for renewable two-year periods un der the condition that they are certified by the 
Secretary as meeting at least tw o of six conditions listed in Sect ion 1701(b) of Public Law 110-53. 
Could the U.S. authorities provide further information with respect to  the criteria and the thresholds 
that will be used in determining "sufficiently lo w false alarm rates" (al. B), "the impact on trade 
capacity" (al. E) as well as "the flow of cargo" (al. E)?  
 
ANSWER:   The United States is continuing to study and evaluate the pilot programs now in place, 
which will inform further decision-making.   WT/TPR/M/200/Add.1 
 Page 327 
 
 
 (2) Measures Directly Affecting Imports  
(vi) Anti-dumping and countervailing measures 
 
In para. 65 , the Secretariat's report suggests that the Un ited States considers that effective rules on 
anti-dumping and subsidies are necessary to address injurious dumped and subsidized imports and can 
also contribute toward sustaining sup port for further trade liberalization. Could the U.S. authorities 
indicate whether this is a majority view in the U.S. agriculture and manufacturing sectors? Also, 
could the U.S. authorities indicate whether they also consider that anti-dumping measures are 
contributing toward sustaining international support for further trade liberalization?  
 ANSWER:   The United States believes that effective rules on antidumping and subsidies can 
contribute toward sustaining support for further tr ade liberalization.  The United States has a clear 
mandate from the Congress to maintain the strength and effectiveness of its trade remedy laws.   
 Trade remedies are a central feature of the multilate ral trading system.  The world trading community 
has explicitly provided for the use of anti-dumpi ng and countervailing duty  remedies since the 
conclusion of the General Agreement on Tariffs and Trade in 1947.  The reasons for this consensus 
can best be understood in the broader context of the trade-liberalizing agreements of which trade 
remedies form a central part.  For example, while trade liberalization resulting from the Uruguay 
Round has led to increased trade overall, it has also le ft markets more open to unfair trade practices.  
Trade remedy rules assist in the promotion of tr ade liberalization efforts by reassuring domestic 
producers and workers that a remedy exists to addr ess the unfair trade practices of injurious dumping 
and subsidization.   
(4) Other Measures Affecting Production and Trade  
(iii) Competition policy 
 
Para. 216 :  Could the U.S authorities explain what is und erstood by “limited immunity from antitrust 
laws” for export activities as mentioned in the Secretariat’s report?  Which export activities are 
covered by this measure?  Also, the Secretariat's report indicates that international ocean carriers are 
allowed to engage in conferences (price-fixing a rrangements) by the Shipping Act of 1984.  Could the 
U.S. authorities explain the reasons behind such  an exception to antitrust legislations ?  
 
ANSWER:   In paragraph 216 reference is made to the Shipping Act, which text includes the 
statement that “international ocean carriers are allowed to engage in conferences (price-fixing 
arrangements) by the Shipping Act of 1984 if they are not contested by the Federal Maritime 
Commission. We wish to clarify that no immunity is made available to owners of cargo or exporters 
of commodities under the Shipping Act of 1984, as amended by the Ocean Shipping Reform Act of 
1998 (“OSRA”). The immunity referenced in the latte r statutes applies solely to agreements between 
ocean common carriers (or between marine terminal  operators) to discuss or regulate international 
transportation rates, conditions of service, or ot herwise engage in coopera tive working arrangements 
relating to transportation services.  The limited immuni ty available to parties of agreements filed with 
the Commission pursuant to the Shipping Act is available equally to transportation of imports and exports in the United States foreign ocean borne commerce. 
 
(iv) Government procurement 
 Para. 226: According to the Secretariat's report, 31.7%  of contracts reported were awarded in 
FY2005 to set-aside preferential programmes, esp ecially to small businesses (21.1%) and small 
disadvantaged businesses (5.7%).  Also, as stated in  para. 246, procurement policy seeks to increase 
the participation of small businesses, veteran-ow ned small businesses, small disadvantaged business 
(SDBs), and women-owned small businesses.  Being aware that the thresholds evidenced in para. 240 
and applied by the U.S. authorities to the 39 other members of the GPA are higher than those WT/TPR/M/200/Add.1 
Page 328  
 
 supposed to apply to the set-aside programmes, coul d the U.S. authorities evaluate the effects of the 
set-aside programmes and policies on the market a ccess for Members of the GPA? What are the 
prospects to see the SMEs from those countries treate d equally as SMEs located in the U.S. ?  How do 
the set-aside programmes apply to co ntracts for which global values are higher than the thresholds of 
the GPA?  Do the U.S. authorities envisage to cr eate specific measures designed to facilitate the 
participation of SMEs in bigger contracts?  
 
ANSWER:  Under the WTO Agreement on Government Pr ocurement (GPA), the United States has 
stated in its General Notes that the GPA does not apply to set asides on behalf of small and minority 
businesses.  The small business set aside program is  mandated by the Small Business Act (15 U.S.C. 
631, et seq. ), and may be modified by the U.S. Congress.  U.S. Federal procurement data is available 
in the Federal Procurement Data System (FPDS) at  the beginning of each fiscal year and all reports 
are available by accessing https://www.fpds.gov.  Para. 235:   The Clinger Cohen Act of 1996 establishes the use of a two-phase selection procedure for 
entering into a contract for the design and construction of a public building facility.  Could the U.S. 
authorities provide additional information regarding  the differences, if any, with respect to the 
procedures offered by the GPA which a re open, selective and limited tenderings?  
 
ANSWER:   The requirements of the two-phase selection procedure are set out in FAR subpart 36.3 
(Two-Phase Design-Build Selection Procedures).   Phase 1 is an open competition that selects offerors 
which can submit proposals for phase 2.  Phase 2 is a type of selective tendering. 
 Para. 252:  The U.S. Administration adopted a new recipr ocity approach to sub-federal procurement 
in three FTAs (Colombia, Panama, and Peru). Could the U.S. authorities elaborate on the new 
approach in reciprocity? Are there any prospects for members of the GPA to benefit from an enlarged 
market access on the basis of reciprocity?  
 
ANSWER:   The reciprocity approach has only been used in three FTAs (Colombia, Panama, and 
Peru).  Under that approach, if a State governme nt agreed to allow non-discriminatory access to its 
procurement to suppliers from the FTA partner, th en businesses from that State would enjoy the same 
access to sub-central procurement in that country.  Ho wever, if a State did not authorize coverage of 
its procurement under the FTA, its businesses were not ensured non-discriminatory access to the sub-
central procurement of the FTA partner.  Eight stat es and Puerto Rico agr eed to cover procurement 
under these FTAs.  The reciprocity approach was not  used when States were asked to authorize 
coverage of their procurement under the GPA.  The United States has no plans to apply this approach 
to the GPA. 
 
IV. TRADE POLICIES BY SECTOR 
(2) Agriculture (ii) Border Measures 
 Para 20  of the Secretariat's report suggests that the United States apparently allocates certain Tariff 
Quota Shares by lottery.  Could the U.S. indicate precisely to  which products and tariff lines this 
applies, and what conditions must be fulfilled to partic ipate in the lottery? Furthermore, do the U.S. 
authorities consider this method to be compa tible with the Agreement on Import Licensing 
procedures?  
 
ANSWER:  No TRQ shares are allocated by lottery.  However, some import licenses used within 
these TRQs are allocated by lottery under the Dairy Import Licensing program.  Most dairy products under TRQs require licenses.  The Notes at the beginning of Chapter 4 of the 
HTSUS indicate the tariff lines for which import licenses are required.  Under the dairy import 
licensing program, there are three types of licen ses which indicate the manner under which the license  WT/TPR/M/200/Add.1 
 Page 329 
 
 
 was issued: designated, historical, and lottery.  Under designated licenses, the country to which the 
TRQ is assigned designates the importer.  Histori cal licenses, originally parceled to historical 
importers at the time TRQs were first established, are renewable every year.  Lottery licenses are issued to applicants on a random basis and must be applied for each year.  Historical license quantities 
are temporarily or permanently transferred to the lo ttery when historical holders do not utilize them.  
This is intended to assure the fullest utilization of  TRQs possible in accordance with market demand.  
 To participate in the program, regardless of the ty pe of license (historical, designated, or lottery), 
importers must apply and meet eligibility requirements,  including the requirement that they have been 
importing or exporting at least prescribed minimum amounts of some type of dairy product.  The 
program requirements are stipulated under the licensing regulations, found in 7 CFR Part 6.  We 
consider this method to be fully compatible with the Agreement on Import Licensing Procedures . 
 Para 25/Table IV.1  of the Secretariat's report: This paragraph attributes the huge increase in Green 
Box spending for the years 2002 through 2005 to higher expenditures in food aid, particularly 
domestic food stamps programmes.  Could the United States provide a more detailed explanation of 
the changes that have led to this increase of 21 billion USD?  How has domestic food aid policy 
evolved since 2002? 
 
ANSWER:   Payments under most U.S. nutrition programs (domestic food aid) are mandatory, 
meaning they are not subject to an annual budge t limitation.  The 2002 Farm Act set the program 
parameters for 2002 - 2007, and the programs rules remained basically unchanged for that period.  
The increased demand for food assistance reflects pr imarily changes in economic circumstances, 
meaning more people apply for assistance.  Additional details about spending under particular  domestic food aid programs are included in the 
U.S. domestic support notifications to the Committee on Agriculture. 
 
(4) Manufacturing 
 
Para. 78 :  In light of the important potential welfare gains for the United States economy of a further 
lowering of tariffs on manufactured goods - as es timated by the US International Trade Commission - 
do the U.S. authorities plan to reduce the relativel y high tariffs in the 12 sectors mentioned in the 
Secretariat’s report? 
 
ANSWER:  The United States strongly supports multilatera l trade liberalization and is committed to 
an ambitious and comprehensive result in the WTO Doha Round.  We are prepared to make 
significant market access commitments provided othe r Members make meaningful contributions as 
well.  
ADDITIONAL RESPONSES TO QUESTIONS 
 ARGENTINA 
 
Could the US provide statistics on the number of  containers for which departure from a port was 
prohibited following a CSI inspection?  
ANSWER:  There have been few incidents where a contai ner was delayed for further verification of 
contents.  No containers have been totally prevented from being loaded.  
 
Could the U.S. specify the requirements that must be met in order for a country to obtain access to an 
agreement whereby C-TPAT benefits would be accorded  to persons exporting to the United States? 
 WT/TPR/M/200/Add.1 
Page 330  
 
 ANSWER:   C-TPAT is a voluntary government-business in itiative to build cooperative relationships 
that strengthen and improve overall international supp ly chain and U.S. border security.  Through this 
initiative, CBP is asking businesses to ensure the in tegrity of their security practices and communicate 
and verify the security guidelines of their business pa rtners within the supply chain.  C-TPAT offers 
trade-related businesses an opportunity to play an activ e role in the war against terrorism and does not 
involve agreements with trading partners.    
 
BRAZIL 
 
Page 66, paragraph 216 
 The document states that "a number of statutes provide for limited immunity from antitrust laws in specified cases. Immunity applies, for example, to specified aspects of agricultu re, fishing, insurance, 
and export activities. The Webb-Pomerene Act gran ts limited immunity from antitrust laws to 
associations of competing businesses solely for th e purpose of engaging in collective exports of 
goods, provided this does not result in conduct that h as anti-competitive effects in the United States or 
injure domestic competitors. In 2007, seven associati ons were registered with the FTC under the Act. 
The Export Trading Company Act of 1982, 15 U.S.C. 4011-4021, created a procedure by which, under certain circumstances, persons engaged in e xport trade may obtain an export trade certificate of 
review which provides, inter alia, for limited an titrust immunity. International ocean carriers are 
allowed to engage in conferences (price-fixing arra ngements) by the Shipping Act of 1984 if they are 
not contested by the Federal Maritime Commission." On  page 64, paragraph 209,  on the other hand, it 
is also stressed that the OECD considers United States as owner of one of the least restrictive 
regulatory systems. 
 
Questions: Could the US identify what are the sp ecific exempted sectors? Do DOJ and (or) FTC have 
an updated and transparent list of  exc1usions? Regarding the men tioned Export Trading Company 
Act, how do US domestic laws deal with foreign export cartels? 
 
ANSWER:  The exempted sectors and activities can ind eed be identified, but there is no single 
“master” list of them.  A quite good recent compila tion may be found in Annex A of Chapter IV (B) 
of the Antitrust Modernization Commission’s 2007 Report.
18  Previous Secretariat TPR reports on the 
United States have contained similar lists.19 
 Neither the Webb-Pomerene Act nor the Export Trading Company Act provide for immunity from 
enforcement actions under foreign antitrust laws.  Similarly, U.S. antitrust laws apply to foreign 
export cartels, provided that the criteria for jurisdiction under the antitrust laws are met.   See Para. 
211 of  the Secretariat Report. 
 
CANADA  
IV. Trade Policies by Sector; (5) Services; (ii)  Telecommunications, p age 100, paragraphs 
100-102: 
 
The Secretariat Report discusses access to unbundled telecommunications network elements in paragraphs 100 to 102.  The report does not address  the regulatory framework that would apply to a 
new facilities-based telecommunications entrant to  acquire rights-of-way, gain access to support 
structures of existing carriers and gain access to customers in buildings. 
                                                     
 
18 Antitrust Modernization Commission Report, at 398; located at:  http://govinfo.library.unt.edu/amc/ 
report_recommendation/chapter4.pdf. 
19 See, e.g., the 1999 Secretariat TPR Report on the United States, at 147 – 149 (Box III.4 – Selected 
Statutory Antitrust Immunities).  WT/TPR/M/200/Add.1 
 Page 331 
 
 
 51. Could the United States provide a description of the federal and other regulatory provisions 
that would apply to such access issues for a market entrant?  
 
ANSWER:  There is an extensive record of FCC rule making addressing the issues Canada has raised, 
the goal (and general outcome) of which has been to ensure the ability of competitive common 
carriers to obtain access to utiliti es’ poles, ducts, rights-of-way and to common-tenant buildings on 
reasonable rates and non-discriminatory terms and conditions.    Relevant Orders include:  
March 21 Order addressing competitive access to  multi-tenant buildings, available at:  
http://hraunfoss.fcc.gov/edocs_pub lic/attachmatch/FCC-08-87A1.doc. 
 June 8, 2007 Order addressing competitive access to inside wiring in multi-tenant buildings, available 
at:  http://hraunfoss.fcc.gov/edocs _public/attachmatch/FCC-07-111A1.doc. 
 
Background on access to poles, ducts, conduits and rights of way, including recent Orders, is available 
at:  http://www.fcc.gov/eb/mdrd/PoleAtt.html.  The FCC also has a pending notice of proposed rulemaking regarding the need to revise its pole attachment rules, available at:  http://h raunfoss.fcc.gov/edocs_public/attachmatch/FCC-07-
187A1.doc. 
 Note that access to public rights-of-way typically are re gulated at the state or local level. To the extent 
that a state or local government’s regulation of ri ghts-of-way “prohibit[s] or ha[s] the effect of 
prohibiting the ability of any entity to provide any intestate or intrastate telecommunications service” 
the affected party could file a petition with the FCC to preempt that decision pursuant to section 
253(a) of the Communications Act.  However, pursuant to section 253(c) of the Act, “[n]othing in [section 253] affects the authority of a State or local government to manage the public rights-of-way or to require fair and reasonable compen sation from telecommunica tions providers, on a 
competitively neutral and nondiscriminatory ba sis, for use of public rights-of-way on a 
nondiscriminatory basis, if the compensation required is publicly disclosed by such government.”  CHILE  
Question 7
 
 Paragraph 209 mentions an OECD report, which suggests that the competition policy could be 
improved by applying measures such as terminati on of anti-monopolistic immunity for government 
companies and elimination of exemptions.  Has the United States considered decreasing anti-
monopolistic immunity for government companies and reducing or eliminating exemptions to the anti-
monopoly law?  
ANSWER:   The vast bulk of the U.S. economy is subj ect to standard antitrust enforcement.  Any 
exceptions to the application of the antitrust laws are narrowly and strictly construed.  In addition, in 
some cases specialized regulatory agencies with sector-specific responsibilities apply competition 
rules analogous to the federal antitrust laws, and th e antitrust agencies retain an advisory, competition 
advocacy role.   The Justice Department and th e FTC monitor the scope of antitrust exemptions 
closely pursuant to their competition advocacy roles in  the U.S. Government.  There is a wealth of 
public information available relating to U.S. antitrus t exemptions.  See, e.g., ABA Section of Antitrust 
Law, Antitrust Law Developments (6th ed. 2007).  The Antitrust Modernization Commission (AMC) 
established by the U.S. Congress in 2002 studied the advisability of modifying or dropping specific 
antitrust exemptions.  The FTC’s Chairman and its A ssociate Director for Policy and Coordination for 
the Bureau of Competition provided testimony to the AMC on this issue, supporting a critical review WT/TPR/M/200/Add.1 
Page 332  
 
 of exemptions to assist in the promotion of vigorous competition and the health of the U.S. economy.  
The AMC completed its work in 2007 and issued  certain recommendations  regarding antitrust 
exemptions and immunities.  See Chapter IV.B . of the Commission’s Report and Recommendations 
for details.  With regard to the OECD document ci ted at ¶209 of the Secretariat Report, Chile is 
invited to examine its specific recommendations directly.   
Question 8
 
 
Paragraph 216 indicates that the Webb-Pomerene  Law grants a limited exemption from anti-
monopoly laws to associations of competing compan ies for the exclusive purpose of joint exportation 
of goods, provided that this does not lead to anti-competitive behavior in the United States or 
prejudice national competitors.  Have the possible negative effects of  this exemption on third-party 
markets been taken into account?  Have the possi ble prejudices to specific companies facing unfair 
competition been studied?  
 
ANSWER:   The United States has not formally studied su ch effects.  Such effects are outside the 
jurisdiction of U.S. antitrust law.  See Paragraph 211 of the Secretariat’s Report. 
 
Questions 19  
 
Paragraph 93:  With regard to most favored nati ons, the United States indicates that its law provides 
for reciprocity for direct-to-home television services, direct satellite television broadcast services, and digital audio services.  We would like to know how they are applied.  With regard to countries that 
also provide for reciprocity in their legislation, how is this reciprocity applied?  If this scenario 
exists, is it already being applied?  Or must the other country apply it first?  
 
ANSWER:   Under the FCC’s rules, if a foreign-licensed satellite seeks to offer direct-to-home, direct 
satellite broadcasting, or digital audio services, then the FCC determines on whether the home market 
of the foreign applicant provides effective co mpetitive opportunities (ECO) for these particular 
services to U.S.-licensed satellite operators.  The burden is on the foreign applicant to show such 
opportunities exist in the home market for U.S. satellite operators.  The determination is not 
contingent upon a U.S.-licensed operator actually serving the applicant’s home market, only that the 
opportunities exist to do so.  CHINA 
 
(ii)  Telecommunications and related services  85.  Page 99 paragraph 96 men tions “public interest analysis” conducted to entities from WTO 
members of common carrier wireless licenses. 
 
Please describe how “public interest analysis” is carried out.  
 
ANSWER:   If an application is submitted for a common carrier wireless license, the FCC conducts a 
review of the application to determine whether gran ting that license to the applicant is in the public 
interest.  Under the FCC’s Order, known as the Fore ign Participation Order, the FCC concluded that 
the public interest would be served by permitting greater investment by individuals and entities from WTO Member countries in U.S. common carrier radio licensees.  Accordingly, those individuals or 
entities are afforded a rebuttable presumption by wh ich the FCC presumes that foreign investment 
from a WTO Member country does not pose competitive concerns in the U.S. market.  Where there is 
a showing of a risk to competition in the U.S. market from such investments, the FCC may impose 
specific conditions on the licensee to a ddress those risks to competition. 
 
86.  For a long time, U.S. has cited national security reasons for prohibiting China for providing 
commercial satellite lunching services to U.S. satellites or satellites made in U.S. for other countries,  WT/TPR/M/200/Add.1 
 Page 333 
 
 
 while allowing other countries to provide such servi ces to U.S. customers.  China’s view is that 
commercial satellite lunching services is a commercia l activity that poses no threat to the national 
security, and China has a significan t commercial interest in the fast growing commercial satellite 
lunching service market.   Please explain, so far, which countries’ commerci al satellite lunching services have been used by 
U.S.?  To which countries has U.S. prov ided commercial satellite lunching services? 
 
ANSWER:   Given the close relationship between sate llite launch services and the development of 
missile technology, there are important security an d non-proliferation issues to consider relating to 
this sector.  Markets where commercial launch servi ces are provided by a state-owned enterprise that 
is also involved in developing military technology pose particular concerns.   
 U.S. commercial entities are allowed to use satellite  launch services of companies from a number of 
countries that have appropriate saf eguards related to the launching of sensitive technology.  U.S. 
companies involved in satellite launch services have  provided such services to several foreign 
companies and/or governments, including from Europe and Asia.   87.  Page 102 paragraph 106 states that in order to promote compe tition, diversity and localism in 
media productions, the U.S. maintains se veral media ownership restrictions. 
 a. Please describe the U.S. approach to achi eve diversity and localism at the same time? 
 
ANSWER:  The FCC’s media ownership rules seek to encourage competition, diversity and localism 
as longstanding goals.  The broadcast ownership regul ations limit the number of broadcast stations 
that a single firm can own.  This ensures that there are a sufficient number of independently owned 
broadcast stations to promote a diverse array of content selection decisions and viewpoints.  The 
FCC’s localism goals seek to ensure that local tele vision and radio stations are responsive to the needs 
and interests of their local communities.  The FCC continues to examine its localism rules and 
policies  
b. Please explain in detail the radio/television cross-ownership rule and the rationale behind it.  
 
ANSWER:   The radio/television cross-ownership rule  limits the number of commercial radio and 
television stations an entity may own in the same market, with the degree of common ownership permitted varying depending on the size of the rele vant market, as determined by the number of 
independently owned media "voices" that would remain post-merger.  The rule strikes a balance 
between the protection of diverse viewpoints and the operational efficiencies and other benefits that 
can result from joint ownership of both televi sion and radio stations in the same market. 
 
c. Please explain the reason why the newspaper/ broadcast cross-ownership rule bans a company 
from owning a daily newspaper and a br oadcast station in the same market.  
 ANSWER:   Originally adopted in 1975, the newspape r/broadcast cross-ownership rule serves the 
public interest because it furthers ownership and vi ewpoint diversity.  The rule was modified in 2007 
to adopt a presumption, in the top 20 Designated Ma rket Areas (“DMAs”), that it is not inconsistent 
with the public interest for one entity to own a daily newspaper and a radio station or a daily 
newspaper and a television station, if (1) the te levision station is not ranked among the top four 
stations in the DMA and (2) at least eight inde pendent “major media voices” remain in the DMA.  
The FCC will consider newspaper/broadcast comb inations in markets ranked 21 and below if the 
station is a failed or failing station; or if the ne wspaper/broadcast combination results in a new source 
of a significant amount of local news in a market.  WT/TPR/M/200/Add.1 
Page 334  
 
 88. The United States maintains ownership restrictions on foreign companies supplying common 
carrier radio services. A license will not be grante d to or held by (a) foreign government or the 
representative thereof or (b) U.S. corporation of whic h more than 20% of the capital stock is owned or 
voted by a foreign government or its representative or a corporation not organized under the laws of 
the United States.  
 
Could the United States clarify what “foreign government or the representative thereof means”? 
Does the United States have any plan to remove this restriction as well as the 20% ownership restriction? 
 ANSWER:   A representative of a foreign government in this context means an entity who acts “on 
behalf of” or “in connection with” the foreign government.  There are no plans to remove these limitations.  As a policy matter, the United Stat es encourages other WTO members to eliminate 
government ownership in telecommunications service  providers, which can affect the independence 
of the regulatory body.  COLOMBIA  As per paragraph 29, with what other WTO member  countries, in addition to New Zealand, the EC, 
and Jordan, would the United States be interested in  entering into security agreements in the supply 
chain?  
 
ANSWER:   CBP is also conducting mutual recognition projects with Australia, Canada, Japan and 
Singapore.  
 Telecommunications and related services
 
 
According to paragraph 97, the FCC has established a general authorization regarding applications to 
provide national long-distance services based on the u se of installations or on resale.  Later paragraph 
102 states that telecommunications public services comp anies that have transmission installations and 
provide “enhanced services” must allow other providers  of enhanced services to use their transmission 
installations in a non-discriminatory manner, and paragraph 100 makes references to network access 
tariffs.  However, there is no explanation of the obligations of service provides in resale and of 
whether tariffs for resellers are regulated.  Therefore, an explanation is re quested of the conditions 
and tariffs for providers acting within the resale system.   
 
ANSWER:  Operators seeking to offer resale-based local service can use regulated wholesale tariffs 
offered by incumbent local exchange carriers.  Op erators seeking to resell domestic or international 
long-distance, or wireless service, negotiate rates,  terms and conditions with facility-based suppliers 
of such services.  Resellers of local services ar e generally required by state-level public utility 
commissions to file tariffs, but there is no tariffi ng requirement (rather, a prohibition on tariffs) for 
long-distance or wireless services. 
 
COSTA RICA 
 Competition Policy
 
 
1. As indicated in paragraph 210 of the Report by the Secretariat, federal antitrust laws cover all 
sectors of the economy and trade between States, as well as the country’s international trade, with 
some exemptions and exceptions. Could you indicate the exceptions to the application of antitrust 
law? Are there companies with sp ecial or exclusive rights to wh ich antitrust legislation does not 
apply? 
  WT/TPR/M/200/Add.1 
 Page 335 
 
 
 ANSWER:   Please see Paragraph 216 of the Report as well as our contemporaneous answers to 
Brazil’s question on this same topic for a general disc ussion of our immunities and exemptions.   With 
regard to the last question, concerning antitrust im munities for “companies with special or exclusive 
rights,” the United States does not have immunities based on that criteria.   EUROPEAN COMMUNITIES 
 
WTO Secretariat's Report, page 52, paras. 151-152
 
 The Report describes the new Fruit and Vegeta bles Import Regulation, outlining how the new 
procedures will be applied. The EC welcomes the initiative aimed at streamlining the import approval 
process. However, the EC notes that, unfortunately, it  has not delivered so far positive results to our 
pending applications. The EC would like to invite  and encourage APHIS to broaden the list of 
products to be eligible for this streamline  process with a view to facilitating trade.  When does the 
United States intend to respond to pending applications?   
 ANSWER:   Given the nature of the analysis, and the fact  that every application is different, it is not 
possible to give an exact estimate of when APHI S will respond to specific applications except to say 
that APHIS processes each applica tion as expeditiously as possible.  
 
HONG KONG, CHINA 
 
Telecommunications services
 
 
(WT/TPR/S/200, P. 99, Para. 96) 
We note that the Federal Communications Commission (FCC) has adopted an ‘open entry’ standard 
with respect to WTO Members’ ownership of common carrier wireless licenses.  In the US’ previous 
trade policy reviews, several WTO Members have urged the US to explicitly incorporate the open 
entry standard into the US legislation in  order to enhance the legal certainty.  We would like to know 
the US’ latest plan in this respect.    
 
ANSWER:   Currently, there are no plans to incorporate th e open entry standard into U.S. legislation, 
nor do we believe it necessary.  We are unaware of any Member that includes such a standard in its 
legislation.  (WT/TPR/S/200, P. 99-100, Paras. 98-99) 
 
We note that the FCC recognized that certain requi rements of the international settlements policy are 
not conducive to the meaningful economic co mpetition between telecommunications service 
providers and has recommended the initiation of a proceeding to consider the petition from some 
operators in this respect.  Could the US provide an update on its consideration of this petition?   
 
ANSWER:   The FCC is currently considering this  issue but has not formally acted on it. 
 (WT/TPR/S/200, P. 102-103, Para. 108; & P. 103-104, Paras. 111-112)  6. We are pleased to note that the FCC approved  the relaxation of the newspaper/ broadcast 
cross-ownership rule in December 2007 and would like to know whether and how this relaxation 
would be reflected in the US’ coming offer on telecommunications services.    
 
ANSWER:  It is premature to comment directly on any new offer coming from the US. 
 WT/TPR/M/200/Add.1 
Page 336  
 
 7. We note the FCC’s efforts to improve the local franchising process for cable services to 
remove these trade restricting regulations.  We also  note from the Secretariat Report that eight states 
had already taken action to remove the local licensing requirement.  We would like to know if there is 
any plan to make this a nation wide policy and the timeframe for its implementation.    
 ANSWER:   The FCC established nationwide standard s for the franchising process which establish 
reasonable procedural schedules and limit burdens on a pplicants.  As noted, several states have taken 
additional steps to raise the franchising process to the state level and limit the local process.  The 
number of states doing so has increas ed from the eight states cited to 21 states as of May 15, 2008.  
There are no plans for further FCC action in this area.    INDIA  
The Secretariat in Summary Observations paragrap h 19 observes:  A review of competition policy 
procedures presented to Congress in 2007 recomme nded, among other things, simplifying and 
unifying merger clearing procedures and harmonizing th e work of state and federal antitrust agencies, 
particularly with respect to mergers." To what extent have these recommendations been accepted and 
implemented?  
 
ANSWER:  The antitrust enforcement agencies observed th e AMC's proceedings with interest, and 
they continue to consider  appropriate follow-up actions, as do Members of Congress. 
 
Telecommunications
 
 13.  To ensure that misinformation on India or Indian companies is not being forwarded to or 
collected by the US government, India would be happy to work with the concerned government 
agencies to promote transparency in the drafting of th e US government issued repor ts.  The fear is that 
U.S. government reports -- even those intended onl y to convey unverified concerns from private 
industry -- are regarded as fact and if the conclusions reached by the report are based on misinformation, they could have a detrimental im pact, especially for publicly listed companies. 
Moreover, it would make it difficult for the impacted  companies to respond.  For example, the U.S. 
Trade Representative’s reports on Telecom are not required to cite their sources.  Therefore, it is 
unclear how the USTR came to its findings or what  information it based its finding on.  Transparency 
will ensure that US government issued reports are based on facts as well as provide Indian companies 
the opportunity to fairly  and accurately respond.  Will US consider citing the sources used in 
preparation of the government reports?  
 
ANSWER:   As some information used in this report is provided on a confidential basis, not all can be 
cited publicly.  We do not believe any report to date has resulte d in inaccurate conclusions, but we 
agree that it is useful to provide target Memb ers an opportunity to address allegations prior to 
finalizing conclusions in such a report.  37.  Foreign-owned firms are faced with subs tantial barriers to access the U.S. Communication 
Services market. These include fo r example restrictions to investment, lengthy proceedings, 
conditionality of market access and reciprocity-based procedures. Market access barriers also exist for 
digital terrestrial television services.  By when would the US consider easing these restrictions?   
 ANSWER:   These are very general statements which are difficult to evaluate and respond to.  As a 
general response,  since the United States has more foreign investment in these sectors than any other 
market we aware of, we are not convinced that  these aspects cited represent significant impediments 
to market access.  We are always open, however,  to discussing how specific regulations result in 
demonstrable impediments to foreign participation in the U.S. market.  
  WT/TPR/M/200/Add.1 
 Page 337 
 
 
 45.  The Indian broadcasters are facing various entry barriers in the US market. The restrictions on an 
alien being granted an operating license in  the USA, under Section 310 of the US 
Telecommunications Act, effectively prohibit any foreign broadcaster from being granted license in 
the USA for cable, terrestrial or DTH systems.  The citizenship conditions effectively place a 
restriction due to which Indians can only invest in companies owned by the US Citizens.  Thus, even 
if FDI is permitted in Terrestrial Free-to-Air Broa dcast (non-subscription) which can be a total of up 
to 45% (20% direct and 25% indirect) the owner of the company needs to be a US Citizen as per 
Section 310. Similar is the position in DTH/DBS platforms as it is a universal practice to provide triple play services (i.e. two way connections) with Voice, Video and internet on the DTH platforms.  
This effectively requires the operator to obtain a common carrier license which attracts the provisions 
of Article 310(b). Further, spectrum cannot be obtai ned for wireless extensions by non-US citizens.  
Thus in practice, operating license cannot be grante d to Non-US citizens even for DTH services.  In 
the cable networks too, the provisions of Section 310 come as a barrier in market access of this sector by a foreigner.  How can the US explain  the highly restrictive and clo sed state of the markets in the 
DTH, cable or satellite services?  
 
ANSWER:   These assertions are factually incorrect.  We  have had several cases of foreign-affiliated 
operators participating in our broadcast, cable, terrest rial wireless, and direct-to-home markets.  While 
foreign participation in terrestrial broadcasting is ra re, there is no reason to presume that participants 
in either cable or direct-to-home services would be  precluded from participation due to restrictions 
under Section 310.  JAPAN 
 
Telecommunications and related services
 
 
(Question 18: page 98-99, paragraph 95) 
 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 organized under U.S.  laws, or foreign governments, whilst at the 
same time, under Section 310(b)(4), licenses may be gr anted to companies organized in the U.S. that 
are controlled by holding companies organized in  the U.S. and in which foreign individuals, 
corporations, or governments own of record or vot e more than 25% of the capital stock, unless the 
FCC finds that such ownership is inconsistent wi th the public interest. Japan has maintained its 
position that the United States should eliminate its fo reign ownership rule applicable to all radio 
licenses for the purpose of operating telecommunica tions businesses stipulated in Section 310 of the 
Communications Act of 1934, as amended. 
 
Please explain specific reason why the U.S. Government maintains an upper limit of 20% to direct 
foreign ownership in FCC radio licenses for common ca rriers, while at the same time, allowing up to 
100% to indirect foreign ownership in FCC radio licenses for common carriers (unless the FCC finds 
that such ownership is inconsistent with the public interest). 
 ANSWER:   The requirement to hold a license through a U. S. subsidiary ensures adequate jurisdiction 
over companies using radio spectrum.  This is a statutory limitation, which is, however, not inconsistent with permitting 100% fo reign participation in our market. 
 
(Question 19: page 99, paragra ph 97 (Expediting Processing Time fo r Section 310 Authorization)) 
 The Secretariat report notes that the processing time for applications takes from 14 days for routine 
authorizations to one year or lo nger depending on the complexity of each case. Japan believes that 
grasping the length of the processing time in advance is a critical element of the management strategy 
for operators wishing to enter the U.S. market. WT/TPR/M/200/Add.1 
Page 338  
 
 What measures can be taken by the U.S.  to expedite the aforementioned process? 
 
ANSWER:   Considering the number, value, and complexity of transactions processed, current 
procedures appear to be working well, consiste nt with the U.S. policy of promoting an open 
investment regime.   
 
(Question 20: page 99-100, para graph 98-99 (Consideration on the International Settlements Policy 
(ISP)))  The Secretariat report notes that the FCC is reviewin g certain requirements of the ISP to be removed.  
 
Japan would welcome detailed explanati ons on such considerations, if any. 
 
ANSWER:   The FCC is currently considering this issu e, and has developed a public record, but has 
not formally acted on it.  KOREA  
Other Measures Affecting Production and Trade - Competition Policy
 
 
11.  The Secretariat Report (paragraph 216, page  65) notes that the Webb-Pomerene Act grants 
limited immunities from antitrust laws to associations  of competing business solely for the purpose of 
engaging in collective exports of goods, provide d this does not result in conduct that has anti-
competitive effects in the United States or injure domestic competitors. It is our understanding that 
there is a possibility of business enterprises engaged in export cartels being involved in collaborative 
behavior which would impact domestic competition in the US. Also, overseas consumers in markets 
where the US government grants export cartels will  be negatively affected by the immunized export 
cartels, consequently harming the welfare of consumers. Korea would like to know the US 
Government's opinion on these matters.  
 
ANSWER:   As noted by Korea, the Webb-Pomerene  Act of 1916 provides a limited antitrust 
exemption.  That exemption only applies to the expor t of  “goods, wares or merchandise.”   As also 
noted in Korea’s question, the exemption does not ap ply to conduct that has an anticompetitive effect 
in the United States or that injures domestic competit ors of the members of an export association.   It 
does not provide any immunity from enforcement actions under foreign antitrust laws should a 
foreign government believe that its consumer s or businesses are adversely affected by a Webb 
association’s conduct in its markets. 
 12.  The Secretariat Report (paragraph 216, page 65)  also notes that international ocean carriers are 
allowed to engage in conferences (price-fixing arra ngements) pursuant to the Shipping Act of 1984 if 
they are not contested by the Federal Maritime  Commission.  However, in order to enhance 
competition among international maritime carriers,  the OECD has been discussing the mandatory 
elimination of maritime transportation cartels for every country.  Korea would like to know the US 
Government's position on the maritim e transportation cartels issue. 
 
ANSWER:   Regarding the ability of ocean common carri ers to form conferences with authority to 
discuss and agree upon prices under the Shipping Act, the number of rate-making conferences has 
gone from 35 conference agreements on file with  the Commission in 1998 to eight conference 
agreements currently on file.  The emergence of global markets, the improved service of non-
conference carriers, and the deregulatory nature of OSRA are catalysts that have contributed to the 
restructuring of the liner shipping industry.  This  has led to the virtual elimination of traditional 
conferences and a dramatic increase in efficiency-enh ancing operational types of agreements, such as 
vessel-sharing and space charter agreements. 
  WT/TPR/M/200/Add.1 
 Page 339 
 
 
 Significantly, the European Union decided to el iminate a longstanding bloc  exemption which has 
permitted rate-making agreements in foreign trades of the European Union.  The repeal of the bloc 
exemption is set to expire in October of this year , and such repeal will directly affect transportation 
services currently offered in trades between the EU  and the United States. Nonetheless, we estimate 
that only six agreements currently filed with the Federal Maritime Commission will need to be 
restructured or eliminated to ensure complia nce with EU guidelines. The Commission expects to 
monitor the transition from the bloc exemption e nvironment and the Commission’s Bureau of Trade 
Analysis (“BTA”) will study the effects of the re peal of the exemption on the U.S. trades. This 
examination will be conducted as an adjunct to BT A’s on-going program that monitors competitive 
and economic conditions within the U.S. ocean liner trades and the activities of liner carriers 
operating under agreements.  This study will in clude a before-and-after comparison of market 
conditions within the U.S. trades that would be most affected by the bloc exemption repeal. 
 
Services - Telecommunications and Related Services   
 
13.  The Secretariat Report (paragraph 95, page 98) notes that under the Section 310(b)(3) of the 
Communication Act, no broadcast, common carrier, aeronautical en route or aeronautical fixed radio station license shall be granted to or held by U.S.  corporations of which more than 20% of the capital 
stock is owned of record or voted by foreign invest ors.  These restrictions act as a barrier to foreign 
direct investment in these sectors.  Please elaborate the US Governme nt's plans to ease these 
restrictions. 
 
ANSWER:   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. 
 
MEXICO 
 Telecommunications and related services
 
 GATS commitments and legal framework Paragraph 93 states that “The United States reserves the 
right to an exemption under GATS Article II (MFN) to discriminate between WTO Members ‘due to 
application of reciprocity measures or through in ternational agreements guaranteeing market access or 
national treatment’ for direct-to-home (DTH), dig ital broadcast satellite (DBS), and digital audio 
services (DARS).”  Mexico would like to know if the United States plans to eliminate this exemption. 
 ANSWER:   The United States has submitted a conditiona l offer with respect to DTH, DBS and 
DARS as part of the DDA GATS negotiations, with th e goal of eliciting similar offers from other 
Members.  So far, no Member has offered to in clude similar commitments for those services in their 
own offers.  No final decision has been made on wh ether, in fact, the United States will eliminate the 
exemption.  This same paragraph states that “The United Stat es also reserved the right to ‘allow the deduction for 
expenses of an advertisement carried by a foreign broadcast undertaking and directed primarily to a 
U.S. market only where the broadcast undertaking is located in a foreign country that allows a similar 
deduction for an advertisement placed w ith a U.S. broadcast undertaking.”  Mexico would like to 
know which countries allow a similar deduction fo r an advertisement placed with a U.S. broadcast 
undertaking . 
 ANSWER:   Most countries allow for similar deductions.  Canada, for one, does not. 
 
Paragraph 96 states that “the Federal Communicati ons Commission (FCC) reserves the right to attach 
conditions to or deny authorization to exceed the 25% foreign ownership benc hmark if, as a result of WT/TPR/M/200/Add.1 
Page 340  
 
 its public interest analysis, it finds that such au thorization would threaten competition in the U.S. 
market.”  Mexico would like to know in what cases the FCC has found that the authorization to 
exceed the 25% foreign ownership benchmark w ould threaten competition in the U.S. market.  
 
ANSWER:   None. 
 
Paragraph 97 states that “In the context of its ope n entry standard, the FCC has instituted a blanket 
authorization with respect to a pplications to supply domestic long-distance services on a facilities or 
resale basis.  To supply international services, an i ndividual authorization is required, but according to 
the U.S. authorities, the authorization process is generally pro forma , with most authorization granted 
automatically.”  Mexico would like to know what criteria are used to grant this authorization . 
 ANSWER:  Guidelines for applying for international ser vices are available at:  http://www.fcc. 
gov/ib/pd/pf/214guide.html, which also includes a sample application.  The main criterion for 
authorization is completion of this short applica tion form, which generally results in an automatic 
grant on the 14
th day after public notice.  If law enforcement, national security or related concerns are 
raised, the process can take longer to allow Executiv e Branch agencies an opportunity to contact the 
applicant and complete their review.  Paragraph 108 states that “The FCC launched a compre hensive review of [media ownership] rules in 
June 2006, and adopted an order in December 2007 ( not yet in effect).  In that order the FCC 
approved a relaxation of the newspaper/broadcast cross-ownership rule, leaving all other media 
ownership restrictions unchanged.”  Mexico would like to know in what way the newspaper/broadcast 
cross-ownership rule has been relaxed. 
 
ANSWER:   As Mexico notes, those rules are not in effect, and are currently under review by the U.S. 
Congress. 
 Paragraph 109 states that “Section 621 of the Co mmunications Act prohibits a cable operator from 
providing ‘cable service’ in a particular area without obtaining an authorization or ‘franchise. ’  
Mexico would like to know what the requirements are for obtaining an authorization or franchise. 
 
ANSWER:   Requirements vary by state.  As one exam ple, requirements for Texas, can be found here: 
http://www.puc.state.tx.us/rules/subrules/cable/28.6/28 .6.doc  As a general matter, local authorities 
may not grant an exclusive franchise and may not unreasonably refuse to award an additional 
competitive franchise.  SWITZERLAND 
 
(4) Other Measures Affecting Production and Trade 
 
(iii) Competition policy  
 In para. 210, the Secretariat's report suggests that ther e are antitrust legislations in nearly all states in 
addition to U.S. Federal antitrust laws. Could the U.S. authorities explain why many states deem it 
necessary to also have their own antitrust legislatio n given the existence of  comprehensive Federal 
antitrust laws, all the more that some other stat es have apparently decided not to introduce such 
legislations? Given that presumably Federal laws a re superseding state laws, in what main areas are 
these state laws applicable that might not be covered by Federal legislations?  
 
ANSWER:   State antitrust enforcement is rooted in principles of federalism, a system – as in 
Switzerland – in which both federal and state govern ments strive to protect and enhance the public 
welfare in their respective territori es.  Each level of government determines, within bounds, what is 
necessary to the achievement of p ublic goals.  States may challenge anticompetitive conduct under the 
federal antitrust laws – either on their own behalf  as an injured consumer or on behalf of their  WT/TPR/M/200/Add.1 
 Page 341 
 
 
 residents as parens patriae  – or under their own state antitrust laws.  Federal antitrust law does not 
usually supercede state laws, but coexists with th em.  We are unaware of any instance, moreover, 
where the states have discriminated against foreign pa rties in their enforcement of the federal or state 
antitrust laws.  
Although almost all states have their own antitrust laws; as a practical matter, most of these statutes 
are similar in substance to the fe deral antitrust laws.  Moreover, even where the state statutes differ, 
they are generally interpreted by state courts consis tently with federal law.  Federal and state antitrust 
enforcers also work closely together to ensure maximum consistency in antitrust enforcement and to 
minimize any unnecessary burden on private parties.  There are certain instan ces where the enforcers 
decide that investigation and enforcement are more appropriate solely at the federal level or at the 
state level; there are other instances where each enforcer has its own separ ate interest in participating.  
In the latter situation, the federal and state antitr ust enforcement agencies have devoted substantial 
efforts to ensure effective coordination of paralle l federal-state investiga tions, and generally the 
process works well. 
 
The Antitrust Modernization Commission, which was created by the U.S. Congress to examine whether the need exists to modernize antitrust laws, studied the role of state antitrust enforcement in a 
federal system and determined last year that no legislative changes were required.  The Commission 
recommended, inter alia, that “state non-merger enforcement should focus primarily on matters 
involving localized conduct or competitive effects.”
20 
 
Para. 216: Could the U.S authorities explain what is und erstood by “limited immunity from antitrust 
laws” for export activities as mentioned in the Secretariat’s report?  Which export activities are 
covered by this measure?  Also, the Secretariat's report indicates t hat international ocean carriers 
are allowed to engage in conferences (price-fixing ar rangements) by the Shipping Act of 1984. Could 
the U.S. authorities explain the reasons behi nd such an exception to antitrust legislations ? 
 
ANSWER:   Regarding the ability of ocean common carri ers to form conferences with authority to 
discuss and agree upon prices under the Shipping Act, the number of rate-making conferences has gone from 35 conference agreements on file with  the Commission in 1998 to eight conference 
agreements currently on file.  The emergence of global markets, the improved service of non-
conference carriers, and the deregulatory nature of OSRA are catalysts that have contributed to the 
restructuring of the liner shipping industry.  This  has led to the virtual elimination of traditional 
conferences and a dramatic increase in efficiency-enh ancing operational types of agreements, such as 
vessel-sharing and space charter agreements.  
Significantly, the European Union decided to el iminate a longstanding bloc  exemption which has 
permitted rate-making agreements in foreign trades of the European Union.  The repeal of the bloc 
exemption is set to expire in October of this year , and such repeal will directly affect transportation 
services currently offered in trades between the EU  and the United States.  Nonetheless, we estimate 
that only six agreements currently filed with the Federal Maritime Commission will need to be 
restructured or eliminated to ensure complian ce with EU guidelines.  The Commission expects to 
monitor the transition from the bloc exemption e nvironment and the Commission’s Bureau of Trade 
Analysis (“BTA”) will study the effects of the rep eal of the exemption on the U.S. trades.  This 
examination will be conducted as an adjunct to BT A’s on-going program that monitors competitive 
and economic conditions within the U.S. ocean liner trades and the activities of liner carriers 
operating under agreements.  This study will in clude a before-and-after comparison of market 
conditions within the U.S. trades that would be most affected by the bloc exemption repeal. 
__________ 
 
                                                     
 
20 Antitrust Modernization Commission, Report and Recommendations (2007), Recommendation 
Number 33.