WORLD TRADE
ORGANIZATIONWT/TPR/M/56
11 August 1999
(99-3404)
Trade Policy Review Body
12 and 14 July 1999
TRADE POLICY REVIEW
UNITED STATES
Minutes of Meeting
Chairperson:  H.E. Mr. Jean-Marie Noirfalisse (Belgium)
Page
I. INTRODUCTORY REMARKS BY THE CHAIRPERSON 3
II. OPENING STATEMENT BY THE REPRESENTATIVE OF THE
UNITED STATES 4
III. STATEMENT BY THE FIRST DISCUSSANT 9IV. STATEMENT BY THE SECOND DISCUSSANT 12V. STATEMENTS BY MEMBERS OF THE TRADE POLICY REVIEW BODY 16
VI. REPLIES BY THE REPRESENTATIVE OF THE UNITED STATES
AND ADDITIONAL COMMENTS 28
VII. CONCLUDING REMARKS BY THE CHAIRPERSON 39
ANNEX I ADVANCE WRITTEN QUESTIONS
1 41
                                                     
1 Responses by the United States to advance written questions will be issued as WT/TPR/M/56/Add.1.WT/TPR/M/56
Page 3
I. INTRODUCTORY REMARKS BY THE CHAIRPERSON
1. The fifth Trade Policy Review of United States was held on 12 and 14 July 1999.  The
Chairperson, H.E. Mr Jean-Marie Noirfalisse (Belgium) welcomed H.E. Ambassador
Susan G. Esserman (Deputy U.S. Trade Representative, Washington), as head of the U.S. delegation,
H.E. Ambassador Rita D. Hayes, the delegation fr om Washington and the U.S. Mission in Geneva.
He also introduced the discussants, Ambassador Kåre Bryn (Norway) and Ambassador
Carmen Luz Guarda (Chile), who would speak in th eir personal capacities and not as representatives
of their respective governments.  In accordance with the established procedure, the discussants had
made available, in advance, an outline of the main issues they intended to raise.
2. The Chairperson recalled the purpose of the Trade Policy Reviews and the main elements of
the procedures of the meeting.  The report by the Government of the United States was contained in
document WT/TPR/G/56 and that of the WTO Secr etariat in document WT/TPR/S/56.  The main
issues to be raised by the discussants were contained in document WT/TPR/D/36.  Copies of advance
written questions, submitted by Switzerland;  Korea;  Hong Kong, China;  Australia;  New Zealand;
Japan;  Norway;  Chile;  the EU;  Poland;  Brazil;  Turkey;  Malaysia;  India;  Colombia;  and
Mauritius, had been transmitted to the delegation of United States.  Replies to these and other
questions raised during the meeting will be issued as WT/TPR/M/56/Add.1.WT/TPR/M/56
Page 4
II. OPENING STATEMENT BY THE REPRESENTATIVE OF THE UNITED STATES
3. In her opening statement, the representative of the United States noted that the Trade Policy
Review was an opportunity to help other Members understand the U.S. system and policies, and that it
contributed to transparency.  Open markets were, under the rule of law, the best spurs to growth and
technical innovation.  President Clinton’s economic policy reflected this, making open domesticmarkets and participation in the trading system, together with fiscal discipline and support for
education and training, fundamental pillars of U.S. economic policy.
4. The United States viewed the WTO as a guarantor of open markets and trade for Americans,
and central to reducing trade barriers and creating a more open, prosperous, technologically
sophisticated world economy in the decades ahead.  The WTO had also proved in the last two years to
be an essential shield for all countries against cycles of protectionism and retaliation and hence had
been a critical stabilizing factor during the financial crisis.  Further, the WTO promoted universalvalues of openness, transparency, fairness, mutual benefit and the rule of law in the world economy.
Thus the United States had both participated in negotiations and faithfully implemented their
commitments, including the results of dispute settlement panels.  Faithful implementation by WTO
Members was critical to the effectiveness of the WTO Agreements, and the United States welcomed
the opportunity to review U.S. implementation in the Trade Policy Review process.
(i) Trade and economic developments 1996-98
(a) Domestic economy
5. The United States believed that a review of the U.S. economic record demonstrated the value
of open markets under the rule of law.  Since the last Trade Policy Review, the United Stated had
experienced two remarkable years of high growth, low inflation, and job creation, and trade continued
to be an important factor contributing to the growth of the U.S. economy.  Early in 1999, the U.S.
economic recovery entered its ninth year, and was now the longest peacetime expansion in U.S.
history.  Real GDP growth had risen from an annu al average of 2.9% in 1994-96, to 3.9% in 1996-98.
The U.S. economy had increased by US$850 billion, r eaching a GDP level of US$8.5 trillion in 1998.
Inflation had declined from 2.1% in the period of the earlier review to 1.4% during the present period,the lowest level since the 1960s.
6. The growth of business investment had played an important role in the economic expansion,
much of it fuelled by business demand for computers, telecommunication equipment and other
productivity enhancing technologies.  Since the previous review period, the rate of growth of
investment had increased from 9.4% to 11.2% per y ear.  As a share of GDP, investment had reached
12.7% in 1998, its highest share since 1982.  The coincidence of high growth and low inflation
reflected continued improvement in labour productivity.  In 1994-96, real output per hour worked hadincreased at a 1.7% annual rate;  in 1996-98, the rate of increase had been 2%.  In manufacturing,
productivity had increased at an annual rate of 4.8%.  Employment had increased by 6.5 million jobs
from December 1996 to December 1998, compared to a 4.7 million job increase in the previous
review period;  unemployment, which had averaged 5.5% in 1995-96, had dropped to an average
4.7% in 1997-98.  By June 1999,  the rate of unemployment had fallen to 4.3%, the lowest peacetimerate since the 1950s.  At the same time, annual worker compensation had increased by 2% per year,
compared to increases that had been only slightly positive in the previous period.
7. Some concerns remained, however, not all segments of the U.S. population had enjoyed the
benefits from the strong overall U.S. economic performance.  Some rural communities, farms, Indian
reservations, and inner cities continued to suffer from high unemployment and lack of investment.Rapid technological change, while offering remarkable economic opportunity, also threatened to
sharpen gaps in living standards between some skilled and unskilled workers nationwide.  TheWT/TPR/M/56
Page 5
Administration believed the best response was to ensure continuous improvement of education
standards.
(b) U.S. trading partners
8. The representative of the United States noted that open U.S. trade policies and adherence to
WTO disciplines had also offered opportunities to other countries.  Overall, in 1998, the United Stateshad imported over US$1.1 trillion worth of goods and services, a US$300 billion increase since the
creation of the WTO in January of 1995.  The healthy U.S. economy and continued open U.S. market
had been an especially valuable source of support to  nations suffering from the financial crisis:  the
United State's share of Asian exports, for example, was at levels not reached since the late 1980s.
Likewise, the openness of the U.S. market had served as a valuable aid to development.  During the
1990s the United States had taken nearly half of the growth in developing country exports to the
industrial world:  US$210 billion in new exports between 1991 and 1997, compared toUS$135 billion for the EU and US$64 billion for Japan.
9. This had continued during 1998, when, as the most  recent figures showed, developing country
exports to the United States had risen by 7% – more rapidly than to any other major market – in the
first two quarters.  The United States expected this to continue, and the Administration was consulting
with the U.S. Congress on measures to further en sure open markets for developing country exports,
including renewal of the Generalized System of Preferences, passage of the African Growth and
Opportunity Act, and expansion of the Caribbean Basin Initiative.  Internationally, the Accelerated
Tariff Liberalization initiative begun in APEC, the ITA II, and extension of the WTO standstill on
application of tariffs to electronic transmissions, together with U.S. and other efforts to build Internet
and telecommunications capacity in developing countries, offered similar opportunities.  The UnitedStates had also been providing technical assistance to developing countries on WTO rules and
implementation.
(c) U.S. trade performance
10. With respect to overall U.S. trade performance, U.S. import and export developments
reflected roughly the rapidly growing domestic  economy during a worldwide economic slowdown.
Since 1996, total goods and services exports had risen from US$848 billion to US$931 billion.  The
Administration estimated that about 14 million Ameri can jobs were supported by exports.  These jobs
tended to demand higher skills and command higher  salaries than other jobs.  This, however,
represented slower growth in exports than in the pr evious review period.  In fact, total exports had
declined by about US$6 billion from 1997 to 1998, reflecting the effects of the financial crisis on U.S.
farm and manufacturing exports.  The sector most significantly affected had been agriculture, with
farm exports actually falling from US$60 billion in 1996 to US$52 billion in 1998.  Strong growth inGDP and even stronger growth in domestic demand had contributed, together with the Asian financial
crisis, to increasing imports.  Real imports of goods and services had increased from US$960 billion
in 1996 to US$1.1 trillion in 1998, representing average annual import growth of 12.2% in 1997-98,
compared to 9% in 1995-96.
11. The financial crisis had had an especially severe effect on the U.S. steel industry and its
workers.  As a result of the collapse of demand in the Asian economies, steel imports sold at
extraordinary low prices into the United States had increased by a unprecedented 50%, from an
average of 2.3 to 3.6 million tonnes per month.  This had led to severe hardship in the industry.  In
response, the Administration had taken strong, WTO- consistent actions to address dumping.  At the
same time, the Administration had vigorously opposed WTO-inconsistent steel quota legislation,contributing to the defeat of this initiative in the Senate.
12. Largely as a result of the export slowdown and strong U.S. growth, the U.S. deficit in goods
and services trade had increased substantially in 1998 to US$151.2 billion, or 1.8% of GDP.  In theWT/TPR/M/56
Page 6
four years preceding 1998, the goods and services trade deficit had ranged between US$84 billion and
US$93 billion.  The sharp increase in the trade deficit in 1998 had continued:  the U.S. deficit in
goods alone had ballooned to an annualized US$319 billion within the first four months of 1999.
(ii) Trade policy developments
13. While several issues raised cause for concern, during the review period the United States had
enjoyed a remarkable and unprecedented period of growth, technological advance, and rising
standards of living.  Trade policy had been critical to this, including the overall openness of the U.S.
market, implementation of WTO commitments, use of dispute settlement, and environmental and
labour policies consistent with WTO obligations, and concern for social goals at home and abroad.
(a) WTO commitments
14. The representative of the United States stated that, with respect to implementation of
commitments, U.S. actions included:  (i) the on-schedule implementation of tariff cuts, and reductionof non-tariff measures under the General Agreem ent on Tariffs and Trade, with Uruguay Round
tariff-cut implementation to be completed by 2005.  Nearly 60% of U.S. imports were now duty free,
and by World Bank measurements, trade-weighted average tariffs nearly all bound were 2.8%;
(ii) with respect to the Agreements on Agriculture and Sanitary and Phytosanitary Measures (SPS),
the on-schedule reduction of agriculture tariffs and subsidies.  Since the last review period, theUnited States had implemented a thorough revamping and modernization of farm programmes
through the 1996 Farm Bill, reducing subsidies and controls over farm production, de-linking most
supports from production, and complying with WTO commitments.  Likewise, U.S. sanitary and
phytosanitary standards and inspection procedures were, in accordance with the SPS Agreement,
based on science, and rigorous in protecting public health;  (iii) full compliance with its commitments
under the General Agreement on Trade in Services (GATS).  U.S. service sectors' regulations were
generally open to domestic and foreign competition, with some exceptions as was noted in the
Secretariat Report.  The United States had made commitments in most service sectors, and
participated in the Basic Telecommunications and Financial Services Agreements.  The U.S. domestic
telecommunications reform legislation promoted innovation and competition, and reflected theprinciples in the GATS and Basic Telecommunications  Agreement;  (iv) with respect to intellectual
property rights, full compliance of U.S. intellectual property statutes, including patent, trade mark and
copyright laws, and enforcement with WTO standards.  Since the last review period, the
Administration had signed and the U.S. Senate had ratified two recent World Intellectual Property
Organization Treaties addressing enhanced copyright and other issues on the Internet;  and
(v) on-schedule implementation of U.S. commitments under the Agreement on Clothing and Textiles.
As a result of this implementation and of other factors, textile and apparel imports had grown by 34%since 1995, from US$48.3 billion to US$64.7 billion in 1998, well above the overall growth rate for
imports of 23%.
(b) Dispute settlement
15. The Administration viewed the Dispute Settlement Understanding as a fundamentally
important part of the WTO.  Ensuring respect for the rulings of dispute panels and the Appellate Bodywas an important priority for the United States as witnessed by U.S. implementation of adverse panel
rulings.  The United States was working with other Members to improve the dispute settlement
system, and the WTO itself, through more clear procedures for facilitating prompt compliance with
panel and Appellate Body decisions so that countries could secure results in a commercially
meaningful time-frame.  The Administration was of the view that the dispute settlement systemshould be more open and transparent;  panel reports should be released promptly, and hearings should
be open to public observance.WT/TPR/M/56
Page 7
(c) Sustainable development and labour policy
16. Noting that trade was not an end in itself but rather an essential contributor to raising living
standards and promoting sustainable development, the representative of the United States stressed the
strong synergies between trade and sustainable development.  While pursuing trade liberalization the
Administration had also pursued high levels of pr otection of the environment and health, and would
continue to do so.  Consistent with WTO rights  and obligations, the Administration's approach to
these issues was firmly based on rigorous science and concern for public health and safety, which was
critical to public confidence in regulatory systems and public support for free and open trade.
17. Likewise, at the 1996 WTO Ministerial in Si ngapore, WTO Ministers had renewed their
commitment to observance of internationally recognized  core labour standards.  For the United States,
this commitment was integral to their work in the WTO.  The United States observed internationally
recognized core labour standards and actively supported full implementation of the June 1998ILO Declaration on Fundamental Principles and Rights  at Work and its follow-up.  President Clinton
had also pledged to seek ratification of the recent ILO Convention on the Prohibition and Immediate
Action for the Elimination of the Worst Forms of Child Labour.  U.S. labour laws and policies
reflected respect for internationally recognized core  labour standards, concern for worker health and
safety, and commitment to education and job training programmes which upgraded skills and helpedworking people take advantage of the opportunities created by trade policy.  The United States had
also, in several cases, developed voluntary initia tives in which U.S. companies committed to ensure
high labour standards in their international operations.
(d) Public views of trade
18. The representative of the United States noted that while bringing enormous benefits, rapid
pace of technological change and growth of trade also aroused some public fears concerning the
ability of less-educated and less-skilled workers to adapt to a more competitive world.  Together with
the rising trade imbalance, and events like the surge of steel imports in 1998, they created broader
public concerns about the role of trade in the U.S. economy.  The Administration had addressed these
concerns in several ways, including through longer-term programmes ensuring fiscal discipline;  bypromoting modern communications and Internet access for all areas of the country;  and by investing
in education and reform of job training programmes.  Effective trade actions to address unfair trade
practices and import surges consistent with and according to WTO rules was another important
element.  One especially important aspect of this work was consultation with Congress to renew and
improve the Trade Adjustment Assistance program, which offered special assistance to workers who
had become or were threatened to become totally or partially separated as a result of trade
competition.  This required eligible workers to have  completed or be enrolled in training in order to
receive trade readjustment allowances.
19. At the same time, through participation in the WTO and implementation of U.S.
commitments and in public discourse, the President, Ambassador Barshefsky and other members of
the Cabinet constantly reflected and reinforced the importance of open markets and a strong trading
system to U.S. prosperity and growth, and the importance of ensuring that social goals advancedalong with trade and growth.  In this respect, hosting the WTO’s Third Ministerial Conference this
year gave the United States a remarkable opportunity to demonstrate to the public in the United States
the importance of open trade and the WTO for prosperity and peace.
20. Public and Congressional support for an open trade policy rested not only on U.S. actions, but
on the ability of the public to see U.S. trading partners equally committed to respecting disputesettlement and implementing commitments.  Were a pattern to develop in which others did not
implement adverse dispute settlement rulings, or requested broad delays in implementing their
commitments, U.S. public support for the system could not be maintained.WT/TPR/M/56
Page 8
(iii) Conclusion
21. Noting that in the past years, the United States had enjoyed great prosperity and growth, the
representative stressed that her country viewed its commitment to open markets and the WTO system
as integral to the explanation for its economic success.  Abiding by WTO commitments was a matter
of national self-interest for the United States and should be for all Members seeking to instilconditions for sustained growth and prosperity.  The United States was proud of its role in the WTO’s
creation and development, and gave great credit as well to other Members, the Secretariat, and former
Director-General Ruggiero for their dedication to the system and its ideals of open markets,
transparency, and the rule of law.  The United States hoped to build upon this record as host and Chair
of the next Ministerial Conference, in the new Round expected to be launched at Seattle, and into the
next century.WT/TPR/M/56
Page 9
III. STATEMENT BY THE FIRST DISCUSSANT
22. The first discussant (H.E. Mr. Kåre Bryn) referred to three broad themes:  Macroeconomic
issues, the trade policy regime, and trade in services.
(i) Macroeconomic issues
23. The U.S. economy had enjoyed a remarkable period of sustained growth since 1991.  The
main driving forces had been private consumption and investments.  Since 1995, imports of goods and
services had grown more rapidly than exports.  The resulting trade deficit, together with increasing
capital inflows from abroad, had made the consum ption- and investment-driven growth possible with
manageable inflationary pressure, in spite of an extremely tight labour market.  A consequence of the
high private consumption had been a very low level of private savings.
24. These factors had brought about a double set of long-term imbalances in the economy:  the
saving – investment imbalance and the current account imbalance.  Managing these imbalances in achanging international environment gave rise to several uncertainties as to further economic
expansion and foreign trade relations.
25. The IMF World Economic Outlook, published in May 1999, contained a thorough analysis of
several scenarios for the U.S. economy and the prospect s for a soft or a hard landing.  Although the
IMF underlined that a soft landing was indeed possible, many of the IMF Directors made the pointthat the current and projected private sector and external imbalances might be unsustainable in the
longer run.  They went on to say that “past evidence suggested that the longer they [the imbalances]
continued, the greater were the chances of a sharp and painful correction.  Adverse consequences of
such a correction for the global economy could be transmitted to other countries through abrupt
reductions in U.S. imports, as well as potentially disruptive swings in exchange rates, equity markets,and monetary conditions”.
26. The fact that economic growth was picking up again in Asia, also cast doubt as to the
availability of capital imports to the U.S. to the same extent as during the Asian financial crises, thus
raising the need for policy adjustments to correct the economic imbalances.
27. He sought comments by the U.S. delegation on these issues, and particularly on how they saw
the prospects for entering into a new round of trade negotiations, in the light of the possible needs for
economic policy adjustments, with inevitable increased protectionist pressure.
(ii) Trade policy regime
28. The United States deserved credit for its co mmitment to the multilateral trading system as
witnessed daily in the work of the WTO.  At the same time the United States was an active advocate
for regional initiatives.  Regional integration agreements that were fully consistent with WTO rules
and compatible with its objectives could both support and complement the rules-based andtrade-expanding orientation of the multilateral trading system.  Still the question remained whether
the emphasis should be so strong on developing regional initiatives at a time when the multilateral
system was gradually becoming truly global.  The wider issues of globalization seemed to point in the
same direction.
29. There were also some aspects of unilateralism in U.S. trade policy that gave rise to concern.
Several provisions afforded extraterritoriality through the application of U.S. domestic legislation on
foreign countries or companies outside the United States.  Another aspect was the provisions for
unilateral sanctions or retaliatory measures against another country or a foreign company, based
entirely on U.S. appreciation of the alleged offence.WT/TPR/M/56
Page 10
30. The U.S. Government’s proposal for a renewal and extension of “fast-track” negotiation
procedure was rejected by Congress last autumn.  He noted that the Government Report stated that
“fast-track” provision was not a prerequisite for undertaking trade negotiations or concluding trade
agreements, and that the Administration would vigorously pursue its trade agenda.  While and nobody
doubted the sincerity of the Administration in this respect, the fact remained that a “fast-track”provision was an important guarantee for other WTO Members that a negotiated package would not
run into difficulties in the United States.  Therefore, he asked how the U.S. delegation now saw the
prospect for “fast-track,” and whether the United States could accept a “single undertaking” concept
for the negotiations without “fast-track” provisions.
31. The United States deserved full credit for its central role in the creation of the WTO as well as
its participation in the work of the organization, including implementation of Agreements.  In some
areas, for instance textiles, the tempo could perhaps have been more rapid.  The United States hadalso taken a leading role in advocating openness and transparency in the work of the WTO.
32. The Dispute Settlement Mechanism was rapidly becoming a central and indispensable feature
of the operation of the trading system.  The United States support for this system and compliance with
the rulings by panels or the Appellate Body was crucial for its success and good functioning.  He paid
tribute to the United States for faithfully complyin g with rulings even when they had gone against the
U.S. claims.  The success of the DSM would have made it easier for the United States to abandon its
unilateral practices already referred to.  He sought comments in this regard from the U.S. delegation.
33. He also asked whether it had become too easy to resort to dispute settlement procedures,
instead of solving disputes through consultations and negotiations.  He noted that for smaller
countries, and particularly for developing countries, cases before the DSM represented a very heavystrain on resources.  So far, the United States had been involved in 46% of the cases before the DSM
(78 out of 168).  While 20% of the total number of cases had been settled out of court, the figure was
just over 10% for U.S. cases.  He sought an explanation regarding the apparent overrepresentation of
the United States.  One important way of strengthening the dispute settlement system would be to
make the WTO Legal Centre operational as soon as possible.  He wondered whether the United Stateswould announce its participation and contribution during the TPR meeting or would wait until Seattle.
34. He commended the United States for providing information on environmental and labour
issues.
(iii) Trade in services
35. The services sector played a dominant role in the U.S. economy, with a share of GDP and
employment of between 75 and 80%.  During recent years there had been an increasing trend towards
greater liberalization.  In particular the negotiations on basic telecommunications and financialservices had been important landmarks towards further liberalization of the services sector, both
internationally and in the United States.
36. As far as financial services were concerned, it was noted in the Secretariat Report that there
were multiple regulatory authorities in the United States, both at the federal and state level, although
changes had been taking place during the last few years;  he asked whether there were furtherprospects for harmonization of these regulations and other measures in order to liberalize this sector.
37. The United States was the world’s largest telecommunications market with 30% of the world
total.  The telecommunications act of 1996 had aimed at introducing more competition.  The
Secretariat had concluded that the multilateral approach to liberalizing the telecommunication services
market in the WTO framework appeared to have cont ributed to the enhancement of competition in the
United States, and particularly in the international market.  He sought comments on the situation and
the prospects for the future.WT/TPR/M/56
Page 11
38. One notable exception to the trend towards greater liberalization of services in the
United States, was maritime transport.  As noted in the Secretariat Report:  “Transportation is one
sector that remains somewhat insulated from international competition.”  In this regard he asked how
the United States saw the resumption of the negotiations on maritime transport and whether any
efforts were being made by the Administration to change or modify the legislation that reserved thedomestic market for U.S. ship operators as well as U.S. shipbuilders.WT/TPR/M/56
Page 12
IV. STATEMENT BY THE SECOND DISCUSSANT
39. The second discussant (H.E. Ms. Carmen Luz Guarda) referred to certain specific trade
policies and practices of the United States and to certain sectors.
40. The trade policy of the United States was open and transparent, with a low tariff level.  The
simple average MFN tariff had declined from 6.4% in 1996 to 5.7% in 1999 and was expected to fallto 4.6% by the end of the period of application of the results of the Uruguay Round.  All the tariffs
except for two were bound and 30% of the tariff lines had zero tariffs.  Moreover, as the tariffs were
levied on the f.o.b. value of imports, the protection provided was less than in those countries in which
tariffs were applied on the c.i.f. value.  Nevertheless, 5% of MFN tariffs, mainly on agricultural
products and textiles, clothing, and footwear, had tariff peaks exceeding three times the overall
average, to which should be added the progressivity of the tariffs and the fact that specific duties
accounted for 86 of the top 100 U.S. tariffs.
41. Despite this low tariff protection, the use of specific duties and tariff maxima, although
legitimate, tended to restrict access to the United States market.  In fact, specific duties were less
transparent and, through their modus operandi , weighed more heavily on lower-priced products
within the same tariff line, thus protecting the domestic product from cheaper imports, which often
came from developing countries.  Likewise, the greater tariff protection afforded by tariff escalationhad the effect of restricting the entry of developing country imports with higher value added.
42. Since a new round of negotiations would begin in 2000, which would include agriculture and
certainly non-agricultural products, she asked whether the United States delegation envisaged
converting specific duties into ad valorem  tariffs and embarking on a true liberalization of trade that
included solving the problem of escalation and tariff peaks.
43. The United States applied a series of regulations and technical standards, and sanitary and
phytosanitary requirements for the purpose of informing and protecting the consumer and
safeguarding human, animal, and plant health.  It was estimated that over 44,000 local, state, and
federal authorities monitored compliance with about 89,000 product standards within their
jurisdictions.  The complexity of the system could be attributed to the existence of these three levelsof regulation:  federal, state, and local, which in some cases overlapped and were mutually
inconsistent.  She asked how the United States could ensure that measures of this type did not turn
into restrictions on market access, especially when they were applied at the state and local levels.
44. The United States used various trade protection instruments, including safeguards and
anti-dumping and countervailing duties.  Recourse  to anti-dumping and countervailing measures was
almost completely automatic and independent, while the application of safeguards was at the
President's discretion, a power which he had chosen not to exercise in applying a safeguard in themost recent case of lamb meat imports, with serious effects on the exports of Australia and
New Zealand.
45. She stressed the restrictive effects on trade produced simply by initiating an investigation with
a view to the application of anti-dumping or counter vailing duties.  The fact that most investigations
were initiated by the industries or sectors in the United States most sensitive to competition couldsignal that they were being used to threaten fore ign competitors, in the expectation that this would
ensure that, in anti-dumping cases, their prices would not be too low, or, in subsidies and
countervailing duties cases, they would be cautious in  the use of government subsidies.  In any event,
the mere fact of initiating a proceeding did not mean that the duties in question would ultimately be
applied, since in practice, at least between 1996 and 1998, only one third of cases had ended in theapplication of anti-dumping duties, and in the case of countervailing duties the fraction had been even
smaller.WT/TPR/M/56
Page 13
46. Another aim of local industry might be to induce the U.S. Government to seek negotiated
solutions with its competitors, as in the st eel industry, which was using these instruments
simultaneously and extensively, with regard to both products and the countries being challenged, as
was confirmed by the numerous investigations initiated.
47. Between 1996 and 1998, the tendency to use these instruments had declined, in terms both of
cases initiated and the number of measures applied.  However, probably due to the large trade deficit
generated by steeply increasing imports, this decreasing trend may well have gone into reverse,
considering that in the last year about 40 cases had been initiated.
48. She noted that the number of anti-dumping measures in force had risen from 292 in the
previous trade policy review period to 297 in the present period.  Now that the United States had
begun sunset reviews of those measures in existence before 1 January 1995, it was to be hoped that
there would be a perceptible decrease in the number of anti-dumping measures in place.  She askedwhether the United States delegation could assess the effect of the sunset reviews.
49. While there was no mistaking the professionalism of the United States authorities in the
conduct of their investigations, some elements of the investigation tended to be subjective and
discriminatory.  In particular, the anti-dumping la ws were based on an assumption that had no basis in
reality, since they presupposed that the domestic market of the dumped product was a closed andprotected market, which was rarely the case.  In practice, almost any sale made on the United States
market at a price lower than that on the market of origin was treated as dumping.  In other words, a
trade practice in conformity with the realities of the market might be defined as unfair.
50. At the same time, despite the transparency in terms of the publication of regulations and
proceedings, the language used was awkward and hard to understand for a developing countryexporter, upon whom fell the burden of proof.  Moreover, the petitioners' practice of including all the
exporters of a product in the petition for an investigation meant that countries with a very small share
of the United States market had to absorb the costs and the effects of these investigations, which
usually meant their withdrawal from the United States market.  She asked whether the United States
envisaged making any changes in its regulations in the future.
51. The United States had numerous export controls to regulate trade with unauthorized
destinations for national security or foreign policy reasons.  One of these control measures affected
certain encryption products, whose licensing had been transferred from the Department of State to the
Department of Commerce at the end of 1996.  Rapi d technological progress and the development of
electronic commerce had made it essential to improve the protection of personal data, confidential
information, and databases, and this encryption technology was becoming increasingly necessary.  As
the world leader in electronic commerce she wondered how the United States expected to reconcile itscontrols on the export of these sophisticated encryption products with the market's need for this
technology as a means of further developing electronic commerce and ensuring the security of the
data transmitted.
52. The United States had a series of programmes for subsidizing and/or promoting exports of
agricultural products.  One of these, the Export Enhancement Program, had not been used sinceJuly 1995 due to the prevalence of high international prices.  However, now that prices of various
basic farm products had fallen, she enquired about the outlook regarding the use of the funds available
under this programme, and what the likelihood was  of the United States being able to eliminate these
subsidies in the next round of trade negotiations.
53. The U.S. family of 301 legislation authorized the Office of the U.S. Trade Representative to
review the trade practices of trading partners that might affect exports of goods and services or impair
U.S. rights under international trade agreements, and to apply retaliatory measures.WT/TPR/M/56
Page 14
54. Under this legislation, measures might be imposed on the grounds that the practices were
considered discriminatory or unjustifiable (301), for lack of effective protection of intellectual
property rights (Special 301), because of restrictions on market access to U.S. products and services
(Super 301) or because of discrimination against U.S. goods and services in government procurement
(Title VII).  The application of this legislation was characterized by discretionary features ofconsiderable significance.  At the same time, even if a measure taken by a country did not violate its
commitments to the WTO or other agreements, it might be the subject of investigation and sanctions
if it restricted the trade of the United States.  Moreover, despite the requirement to use the dispute
settlement procedures of the WTO or other relevant agreements, family 301 procedures had
time-limits, which would permit sanctions to be imposed before all the phases of a dispute settlement
system had been completed.  All this meant that there was also a restraining effect on trade.  She
noted that a special working group was studying the compatibility of Section 301 with WTO rules,and sought comments on the use of the 301 family when it did not run parallel with a dispute
settlement proceeding.
55. The United States had complied with its nominal commitments under the Uruguay Round
Agreement on Textiles and Clothing.  However, of a total of 750 quotas it had eliminated only 13, of
which 11 concerned Romania.  This did not amount to  true liberalization of the textiles and clothing
sector.  She asked what policy the United States intended to pursue in order to eliminate these quotas
within the time remaining for the implementation of the Agreement on Textiles and Clothing, and
whether it intended to take any initiative, as other Members had to eliminate restrictions early under
Article 2.15.
56. The new rules of origin, which had been applied by the United States to these products since
1 July 1996, were resulting in a disadvantage for exports to that market by depriving certain processes
of the production chain of their origin and causing an imbalance in the Uruguay Round commitments.
Several Members of the WTO had expressed their concern, and another had held consultations with
the United States that apparently led to an agreement, which, for the sake of transparency, should be
made known to all WTO Members.  She asked what measures the United States intended to adopt, orwas implementing, with respect to its rules of origin regime in this sector.
57. The average nominal MFN tariffs applied to agricultural products were almost double the
overall average tariff.  The agricultural sector of the United States economy was characterized by the
extensive use of specific tariffs (42% of total agriculture), tariff peaks, high in-quota and out-of-quota
tariffs, the use of the special safeguard for agriculture, and domestic support and export subsidy
programmes.  In other words,  the entire range of protectionist measures were found in this sector.
Moreover, agricultural products had also been subject to safeguards, countervailing duties. andanti-dumping duties.
58. If the United States was the leading world exporter of agricultural products in 1998, she
wondered whether it really needed to increase its  competitiveness through domestic support measures,
and to promote and support its exports through export subsidies.  Similarly, if U.S. agriculture was
competitive, why was it necessary to protect its domestic market with high tariffs, quotas and specialsafeguards, which did not contribute to the full integration of this sector into the rest of the economy?
But for these market access restrictions, however legitimate, the United States would perhaps be the
leading importer of agricultural products in the world, and not the second.  She urged the United
States to show leadership in fostering further li beralization and reform of this sector during the
forthcoming trade negotiations so that agriculture could be fully integrated into the WTO rules on an
equal footing with industrial products.
59. The United States had been one of the strongest proponents of the idea of establishing
multilateral disciplines (minimum standards) for the protection of intellectual property rights, with a
view to reducing international trade distortions and avoiding illegitimate trade in goods and services
covered by such rights.  This recognized leadership of the United States was reflected not only at theWT/TPR/M/56
Page 15
multilateral, regional, and bilateral levels, but also at the domestic level, since the United States
periodically updated and completed the federal protection afforded to intellectual property right
holders.  Nevertheless, during this period there had been a number of situations that could be
construed as contrary to the interests traditionally expressed by the United States with respect to the
protection and enforcement of intellectual property rights;  these called for further clarification.
60. It emerged from the Report of the Secretariat that in a country where private activity
constituted the motor of the economy, the State appeared as one of the main applicants for patents,
suggesting that there was considerable state part icipation in the development, financing, and
ownership of one of the most important factors of production:  technology.  In this connection, she
asked by what mechanisms and means the United States Government ensured that this high level of
participation did not have an impact on the production of goods and services by transferring subsidies
that were contrary to healthy and fair competition.
61. Regarding the system for determining who had the right to obtain a patent, the United States
remained the only country to be guided by the "first-to-invent" principle, which had been abandoned
by all other countries because its application had been shown to cause a number of disadvantages and
injustices, principally to right holders from abroad.  Although the United States had introduced
changes aimed at diminishing these negative effects, she sought an explanation regarding theadvantages the United States saw in continuing to maintain this system, which stood in the way of
increased harmonization of intellectual property systems between countries, and whether the internal
consultations that had been conducted might lead the United States to adopt the "first-to-file"
principle.
62. Regarding the extension of intellectual property rights, in certain areas the United States had
opted for the so-called principle of "national exhaustion" of rights, which permitted the territorial
segmentation of markets and was a mechanism which complicated the free circulation of goods that
had been legitimately placed on the market.  She sought explanations regarding the grounds for
adopting this approach in a global economic system that sought to eliminate barriers to legitimate
trade.  She asked whether parallel imports constituted acts that adversely affected the holders ofintellectual property rights and if so whether this principle applied to all categories of intellectual
property rights.
63. The so-called "Buy American" Act and other provisions at the state level privileged the
purchase of products from the United States and certain developing countries, as long as such
purchases remained outside the GPA, NAFTA, and certain bilateral agreements concluded by the
United States.  However, in spite of some of the praiseworthy intentions of this Act it appeared to
have introduced discriminatory elements in governme nt procurement that were contrary to free-trade
practices and to the principles that the United States itself was trying to promote in various fora, not
only with respect to transparency of government procurement, but also to increased market access.
Other U.S. legal provisions (U.S. Federal Departments Specific Annual Budget Appropriation Act,
Rail Passenger Service Act, Buy Local provisions, etc.) would seem to involve similar discrimination.
She was interested to hear whether the United States was considering any modification of theseprovisions, aimed at reducing or limiting the preferences for domestic options in government
procurement, so that the Federal and State Governments could freely determine which procurement
option was best.
64. Finally, she stressed that the United States, as the world's largest economy, had a great
influence on its surroundings and on the world trading system, and bore considerable responsibility inthe maintenance and strengthening of the multilateral trading system represented by the WTO.  As the
Seattle Ministerial Conference would be launching a new round of negotiations, she hoped that the
United States would continue to exercise leadership in pursuit of a more liberal, generalized, and
transparent international trading system with st rengthened rules aimed at improving the trade
environment so that all of the Members could benefit from the trade opportunities offered.WT/TPR/M/56
Page 16
V. STATEMENTS BY MEMBERS OF THE TRADE POLICY REVIEW BODY
65. Members welcomed the U.S. delegation and commended the United States for its outstanding
economic performance during the period under review.  The openness and transparency of U.S. trade
policies were highlighted.  Members stressed the important role played by the United States in the
WTO, and expressed their appreciation for the hosting of the next WTO Ministerial Conference inSeattle.
66. The representative of Switzerland noted that the United States was its most important
non-European trading partner with a share of 11% of  its total exports and 7% of its total imports in
1998.  The United States was also an important destination of Swiss direct investment.  He
congratulated the United States on the remarkable economic performance of its economy and for its
active participation in the WTO activities.  He noted that the United States had been an attractive
destination for foreign direct investment, due not only to the large size of its market, but also to theliberal and transparent nature of its trading and investment regimes where there were relatively few
burdensome regulations and other government measures distorting competition.  Trade relations
between Switzerland and the United States had been good and had faced no major economic
problems.
67. Concerns were raised, however, with regard to the U.S. rules of origin for textiles, effective
since 1 July 1996; in his view, these were not consistent with the Uruguay Round standstill
commitment, with Article 2 of the WTO Agreement on Rules of Origin, nor Article 4.2 of the
Agreement on Textiles and Clothing.  The new rules of origin no longer allowed foreign fabric
embroidered, dyed, or printed in Switzerland to be conferred Swiss origin, and thus posed severe
problems for the Swiss textile industry.  Recent discussions between the United States and theEuropean Union had shown a sign of compromise in this regard, and he welcomed such step as well
as an amendment to the U.S. marking legislation.  He sought information regarding the time-frame for
the envisaged solution on dyed and printed fabrics and on marking of silk fabrics and scarves.
68. He recognized that mutual recognition agreem ents (MRAs) were a powerful tool to bridge
technical barriers to trade, and supported U.S. efforts to negotiate such agreements with othercountries and to extend existing MRAs to new sectors.  In this context, he was interested in the
current MRA between the United States and Sweden on pharmaceutical products;  he sought
information on the nature of agreement and its relationship with the EU's conformity assessment
procedures.
69. He expressed concern about the unilateral character of some procedural aspect of Section 301
of the Trade Act of 1974, where the U.S. administration was required to take action if it determined
that a foreign government was violating or denying U.S. rights or benefits, and burdening orrestricting U.S. trade.
70. The representative of Canada stated that all duties subject to tariff reduction had been
eliminated under the Canada-U.S. Free Trade Agreement, and that the two economies exchanged over
US$1 billion in goods and services every day, complementing each other to a high degree.
71. He noted that the success of the WTO and the multilateral trading system depended in large
measures on the active leadership of the United States, both in terms of moving forward on the WTO
agenda and in terms of maintaining the integrity of the WTO rules.  He asked about how the United
States intended to contribute to keeping the WTO system relevant and responsive.  He also
commended the United States for its efforts to improve the transparency and openness of the WTO
structure.
72. He expressed concern about the extraterritorial application of the Cuban Liberty and
Democratic Solidarity Act and the continuing U.S. tendency to resort to unilateral rather theWT/TPR/M/56
Page 17
multilateral solutions.  He asked whether future U.S. sanction legislation would be in line with
accepted international practice.  At the same time, he  appreciated that U.S. courts had reaffirmed the
primacy of the Federal Government in matters of international trade, in ruling against a state law on
economic sanctions.
73. Canada shared, with the United States and other countries, concerns about the impact of
prevailing conditions in international steel trade, and had been taking trade remedy actions in response
to unfair traded imports.  However, he was concerned about the U.S. actions, including legislative
proposals to unilaterally reduce imports or to modify trade remedy law, to make it easier to take
import action.
74. He noted that there was scope for more effort to explain the benefits of free trade to the
general public, and encouraged the U.S. administration to inform and support a wider view of
American self-interest within the U.S. Congress, in particular, with regard to granting the Presidenttrade negotiating authority.
75. He was concerned that special interests groups had influence over U.S. domestic policy in
agricultural trade, in areas such as proposed laws on country-of-origin labelling on meat and meat
products, sugar syrup reclassification, existing regulations concerning "hold and test" for perishable
produce, and loan deficiency payments and relief assistance initiated in 1998.  He was also worriedthat South Dakota had blocked trucks carrying livestock and grain from Canada during the fall of
1998, and that certain interest groups once again threat ened to block Canadian agricultural shipments.
He expressed regret that the Federal Government was reluctant to insist that individual States conform
with international trade obligations, including those measures on alcoholics beverages.
76. He noted that Canada's concerns with regard to U.S. trade policy included coverage
exclusions and exemptions restricting the U.S. government procurement markets,  restrictions on
domestic maritime transportation services, the enforcement of the U.S. Mode 1 commitments for
telecommunications services under the GATS, and onerous procedures for foreign nationals to defend
alleged international property breaches before the International Trade Commission and the domestic
courts.  Additional questions on U.S. trade policy had been submitted in writing.
77. The representative of the Republic of Korea commended the United States for its continuous
leadership in safeguarding and strengthening the multilateral trading system.  He noted that the U.S.
procedures for anti-dumping and countervailing duties investigation could be improved, especially, in
the areas of investigation and determination of margins, while stressing that anti-dumping measures
should not be used as a protectionist tool.  He also expressed his hope that the United States would
fully and promptly implement the rulings by the WTO Dispute Settlement Body, whose role was
crucial for enhancing the credibility of the body as well as securing the stability and predictability ofthe rule-based trading system.  He had also submitted advanced questions in writing.
78. The representative of Hong Kong, China noted that a major feature of the United States
policy was its transparency, and highlighted the special responsibility of the United States as a leader
within the WTO.  The United States was urged to forge a consensus, listening carefully to the needs
and aspirations of Members at all stages of development, to set an appropriately broad agenda for theWTO's future work programme.
79. Trade relations between Hong Kong, China and the United States were constructive.  The
United States was Hong Kong, China's second largest tr ading partner.  U.S. direct investment in Hong
Kong was not only important from the point of view of the capital but also because it contributed to
the transfer of technology.
80. He noted that there had been no major changes in the trade policy regime since the last
Review.  The United States had resisted protectionist pressures.  There was a tendency towardsWT/TPR/M/56
Page 18
regionalism, bilateralism and plurilateralism, however the United States had stressed that regional
agreements were WTO consistent.  Overall tariff protection was low but tariff peaks still existed;
tariff escalation was also present.
81. The representative welcomed the U.S. resistance to protectionist pressures, and urged the
United States to reduce the use of anti-dumping measures;  the number of anti-dumping investigationshad increased in 1998.  Concern was raised regarding the use of Section 301 and Special 301;  the
United States was encouraged to resort to the WTO DSB.
82. Hong Kong, China considered that core labour standards should not be discussed in the WTO.
83. The government procurement system in the United States was transparent but further
transparency was encouraged given the complexity of the system.  There were exceptions to MFN and
national treatment in certain areas of government procurement at the subfederal level.  On textiles he
noted that the United States had complied with the integration stages according to the ATC but was
disappointed that most apparel quotas would not be liberalized until 2005.  He believed that rules of
origin for textiles lacked transparency.
84. The representative of the European Commission agreed with the U.S. contention that the
"world trading system was far from perfect", and thus welcomed U.S. support for launching a new
trade round.  However, he was disappointed by the reserved attitude shown by the United Statestowards the articulation of a meaningful agenda for the new round; the Report by the U.S.
Government to this meeting did not touch upon i ssues such as investment, competition, industrial
tariffs, trade facilitation, technical assistance, the problems of implementation, or the better
integration of developing countries into the trading system.  He noted that the U.S. emphasis for the
new round, including regional initiatives, environment, labour issues and anti-corruption, did notseem to win a consensus based on the interests of all WTO Members.
85. He expressed concern about the evident weakening of support for free trade, which was
reflected in the recent legislative actions promoted by the steel industry.  He welcomed the U.S.
Administration's resistance, so far, to WTO-inconsistent initiatives, and encouraged it to continue to
do so in the future.  He was also concerned about a strong backslash against globalization in the U.S.Congress, which had reportedly refused to renew the "fast-track" authority.  He also expressed
disappointment at the slow process of the Transatlantic Economic Partnership and the U.S.
Administration's unwillingness to take the lead in those areas that fell under the legislative and
regulatory purview of the States.
86. He was concerned expressed concern that the United States had re-instituted unilateral trade
provision, such as Super 301 and Title VII of the Om nibus Trade Act, and stated that trade problems
should not be solved through forced settlements based on unilateral determinations of unfairness,unilateral timetables, and the threat of unilateral trade action, as seen in the dispute over bananas.
Another area of concern was extraterritorial provisions of certain U.S. legislation both federal and
subfederal, including the Helms-Burton Act and the Iran-Libya Sanctions Act.  He stressed that this
legislation was contrary to international law and U.S. WTO obligations.
87. As the broad and deep integration took place between the two economies, it was important to
improve early warning, and to intensify dialogue and regulatory cooperation.
88. The representative of New Zealand refered to the tariff protection, in particular in the
agricultural sector where some products had higher  than average protection and were also subject to
tariff quotas.  The out-of-quotas rates were particularly disappointing, and lamb had been added
recently to the list of products to which a tariff rate quota was applied.WT/TPR/M/56
Page 19
89. The use of safeguard measures had increased;  moreover, he believed that the safeguard
imposed on lamb originating in New Zealand was unjustified.  Protection to the dairy sector was also
highlighted;  subsidies to this sector had increased.
90. The United States was committed to promoting liberalization, and he hoped that this would be
demonstrate through addressing protection in the domestic dairy and food industries.
91. The representative of Brazil recognized the importance of the U.S. market for Brazil
especially for manufacturing goods.  He highlighted, as had other members, that during the period
under review the United States had experienced steady growth, in contrast with his country.  Brazilian
exports to the United States had not increased while imports to Brazil originating in the United States
had;  he attributed this to protectionist measures.  Average tariffs were low but tariff peaks and
escalation were still present in the U.S. tariff struct ure.  In this regard he enquired whether the United
States had any intention of reducing tariff peaks.  High tariffs affected specific Brazilian exports,namely soja products and orange juice.  He noted that sugar, fruit, shrimp, and bovine and swine meat
were also subject to protectionist measures in the U.S. market.  On subsidies, he asked about the
extension of the Export Enhancement Programme for poultry.  He noted that a steel curtain had again
fallen around the United States.
92. The representative of Japan stated his appreciation for the key role played by the U.S.
economy, with its continued growth since March 1991, in the stabilization of the world economy.
Japan strongly believed that the maintenance by the Government of the United States of its sound
economic policy posture would benefit not only the United States but also the world economy.  The
United States being the largest economy in the world and the most important Member of this
Organization, the trade policy of the United States had a considerable impact on the internationaltrade environment, as well as on the trade system itself, and had a particularly important responsibility
to the sound development of world trade.  The United States was Japan's most important trading
partner, the total trade between the two count ries amounting to approximately US$185 billion in
1998.  Although Japan welcomed and supported the basic thrust of the U.S. policy to promote free
trade and to open up the U.S. market, and appreciated the efforts to counter domestic protectionistpressure, it was still concerned about some recent developments, such as the re-institution of "Super
301".  Concern was also expressed with respect to certain bills, under deliberation in Congress, aimed
at introducing procedures and measures that could violate the WTO Agreement.
93. Japan believed that a bill imposing import quotas relating to the steel industry, currently under
deliberation in Congress, was inconsistent with the WTO Agreement.  Japan appreciated the fact that
the U.S. Government had expressed its view against the bill and noted that the U.S. Senate had voted
against the Cloture Motion on this bill last June.  Although it seemed that the bill would not beapproved, another bill to relax the injury criteria, necessary for the invocation of a safeguard, was
being proposed.  Japan expected the Government of the United States to continue taking a consistent
and strong position to resist such protectionist pressure.
94. A number of anti-dumping petitions had been filed during the past year, especially in the steel
industry sector.  While this was a highly sensitive political issue, it was at the same time a reflectionof the protectionist mood in the United States.  For example, on the issue of the anti-dumping petition
against cold-rolled carbon steel flat products filed June 1999, Japan had serious doubts on its grounds,
such as the rate of the increase in imports, the causal relationship between the import increase and the
decline in domestic prices.  Since 1998, anti-dumping petitions had been filed against Japan on six
items of steel, which covered more than 60% of Japan's steel exports to the United States using 1997export volumes.  Considering that the initiation of an  anti-dumping investigation itself had an effect of
discouraging trade, Japan was concerned about the abuse of anti-dumping measures.  Trade remedies
were a double-edged sword and their abuse could encourage protectionism.  Japan urged the U.S.
Government to apply these measures with proper restraint.WT/TPR/M/56
Page 20
95. The U.S. Government had reinstituted, in March 1999, "Super 301" and "Title VII".  In April,
the United States Trade Representative had presented reports to Congress, identifying insurance, autos
and auto parts, and flat glass as trade practices of concern with regard to Japan, as well as computer
products and services, and construction as discriminatory procurement practices.  Japan could not
accept the unilateral specification, by the U.S. Government, of trade practices of other countries as"trade barriers" under "Super 301" and "Title VII", nor the unilaterally set time-frame for
negotiations.
96. Japan was also concerned about the U.S. approach to recent dispute settlement cases.  In the
dispute on bananas with the European Union, on the issue of procedures of the DSU, Japan, having no
intention of taking either side in the case, had the impression that the U.S. Government had forced its
measures through the dispute settlement system without fully respecting the multilateral process under
the WTO.  Japan urged the U.S. Government to resist the temptation to resort to unilateraldetermination and to respect the multilateral system, although, in some cases, it was time-consuming
to resolve trade disputes.  It was in the interest of  all the Members and, in the long-term, for the stable
development of the world trading system to which the role of the United States was primordial.
97. Japan expressed its hope that "fast-track" legislation would be put in place promptly, in view
of the upcoming negotiations.  Without having a mandate through the "fast-track"-related acts,Members participating in the up-coming negotiations would have to negotiate on an unstable ground.
This might impede the momentum of the negotiations .  Referring to the U.S. view, as shown in its
Government Report, that on-going results, including ITA II and the ATL, were important as a signal
to the world that the WTO is keeping up with the rapid changes occurring in the world, Japan was of
the view that, although the sectoral approach c onducted so far had resulted in a success, such an
approach seemed to be at its limit, and a comprehensive approach was needed for the further
liberalization of trade in order to reflect the various interests of all the participants.
98. The representative of Japan stated that the nine bilateral trade, investment, or intellectual
property rights arrangements described in the Secretariat Report as "agreements" were in fact all
Japan's voluntary measures and were not "agreements".  In addition, with regard to the U.S.-JapanEnhanced Initiative on Deregulation and Competition Policy, the phrase "the Enhanced Initiative is
aimed at addressing reform of relevant government laws and regulations which impede access to the
Japanese market for U.S. goods and services" was not correct.  The Enhanced Initiative was
conducted under the basic principle of a two-way dialogue, Japan having submitted its own requests
to the U.S. regarding deregulation.  The Second Joint Status Report on the Enhanced Initiative issued
in May also included "Deregulation and other Meas ures by the Government of the United States".
99. Japan recognized that the very basis of the U.S. trade policy was a liberal one, but given its
large trade volume, even a small measure taken by the United States, going in a wrong direction,
would have a severe negative impact on international trade.  Japan was looking forward to receiving a
response to all the queries posed and to having further exchanges of views on the United States' trade
policy.
100. The representative of Chile commended the United States' economic performance and
highlighted the important role of the United States  in international trade at the multilateral level,
through the WTO, and at the regional level, through APEC and ALCA.  The United States was one of
Chile's major trading partners, and an important market especially for non-traditional exports.
101. Chile showed concern about the application of anti-dumping duties and the investigation
procedure.  The mere fact that an investigation was started represented a cost to the exporting countryeven if at the end a duty was not imposed.
102. The representative of Australia noted that the United States was his country's second largest
trading partner, accounting for 19% of its total trade, and the largest single source of foreign directWT/TPR/M/56
Page 21
investment.  Acknowledging that the U.S. trad e polices were, in overall terms, supportive of
increasingly open markets and expanded trade, he noted that some sectors of the U.S. economy
remained highly resistant to change, particularly  in the agricultural and maritime sectors.  He
encouraged the United States to move its agricultural sector in the directions charted by the FAIR Act,
to resist pressures to wind back reforms already implemented, and to re-assert its commitment toachieving liberalization of world agricultural trade.
103. He expressed disappointment with regard to the decision taken by the U.S. administration to
impose restraints on the import of Australian and New Zealand lamb.  He believed that the decision
was based on the threat of injury, rather than actual in jury, thus resorting to protectionist interests.  He
suggested that the decision could sent a poor signal on the level of the U.S. commitment to roll-back
agricultural protectionism.  His country would seek  consultations under the Safeguards Agreement for
the removal of the measure.
104. The representative of Turkey hoped that, as U.S. economic growth was crucially important
for the rest of the world, it would not restrict its market by way of safeguards, anti-dumping, and other
types of non-tariff measures.  He also expressed concerns about unilateral actions taken under
Section 301 of the U.S. Trade Act, as well as about dumping investigations on certain products, such
as steel.  He urged the United States to exercise greater restraint in the use of anti-dumping measuresas he believed that such measures had become anti-competitive in nature.  He also noted the problems
of tariff peaks affecting some agricultural products, and textiles, clothing and footwear, and of
specific duties applied on agricultural products, footwear, precision instruments, chemicals, and
textiles.
105. The representative of Malaysia noted that the United States had been key to the recovery of
those countries affected by the Asian crisis;  since the U.S. market remained open to exports from the
region, that recovery, through exporting, would be possible.  The U.S. system had some imperfections
already mentioned by other Members, which he hoped would be addressed;  of major concern for
Malaysia was the extraterritoriality of U.S. laws.
106. The representative of India, welcomed the reiteration by the United States of its commitment
to maintaining an open and competitive market in it s territory, full and faithful compliance with WTO
obligations, and acceptance of the rulings of the WT O dispute settlement system in cases in which it
was a party.  With respect to tariffs, she noted that the United States had failed to address tariff peaks,
dispersion, and escalation in sectors such as agricultural and food products, and textiles, clothing, and
footwear.  India was also concerned about the extensive use of specific duties in the U.S. tariff
structure and noted that the U.S. authorities imposed user fees on the arrival of merchandise, vessels,
trucks, trains, private boats, and planes, as well as on passengers.  The most significant of the customsuser fees was the Merchandise Processing Fee (MPF), levied on all imported merchandise except for
products from the least developed countries.  The Harbour Maintenance Tax was levied on
water-borne imports, and domestic cargoes at an ad valorem  rate of 0.l25% increasing the landed
costs of imports.  India considered such use of fees and taxes trade-restrictive and questioned their
WTO consistency.
107. The representative noted that contingency measures were frequently applied on products that
already attracted import prohibitions, import licensing, and quantitative restrictions or attracted import
quotas or restraints under bilateral trade agreements and arrangements.  She noted than in U.S.
legislation, there was no provision for the implementation of the "lesser duty rule", in accordance with
Article 9.1 of the Agreement on Anti-Dumping, and that the full margin of dumping was charged asanti-dumping duty.  Although the application of the lesser duty rule was not mandatory, its absence
resulted in the domestic industry of the United States getting more protection than needed to remove
the injury.WT/TPR/M/56
Page 22
108. With respect to the agricultural sector, she noted that export subsidies were numerous.  With
regard to U.S. non-preferential rules of origin, India considered that they lacked consistency and
clarity.  Article 334 of the Uruguay Round Agreements Act had effected amendments to the rules of
origin for textiles with effect from 1 July 1996.  As a result, market access for certain textiles products
from India that had been already circumscribed by the restraint limits, had been further reduced.  Shedid not believe this could have been the intention of the framers of the ATC nor of the Agreement on
Rules of Origin.  While the consistency of these new rules in the U.S. had been challenged by the EC
in the DSB, and India was a third party to the consultations that ensued, the details of a reported
bilateral settlement had not been notified to the DSB.
109. Regarding standards and conformity assessment systems and other technical barriers to trade,
the United States maintained very high standards and enforced them through testing of goods before
entry, and compulsory certification of goods, despite the fact that U.S. official bodies themselves hadstudied the system of testing and standards in the United States and had concluded that it had become
"increasingly complex, costly and burdensome to national welfare".  India also considered the
requirements in the United States in the area of la belling to be burdensome.  In several sectors, such
as electrical equipment and domestic appliances, many countries had opted for self-certification by
manufacturers backed by post-market surveillance and control instead of compulsory third partyinspection at post-production stage.  In the United States, however, third party certification in these
sectors was still mandatory: there were more than 2,700 state and municipal authorities in the
United States that required particular safety certifications for products sold or installed within their
jurisdictions.  The rules regarding importation of fres h fruit and vegetables into the United States were
very stringent.  Quarantine and other phytosanitary requirements had resulted in a practical ban onimports of Indian mangoes, grapes, and other products into the United States.  The listing of
standards-related measures in the United States was intended to be indicative rather than exhaustive.
New barriers to trade not falling within the traditional definition of non-tariff measures and lacking
overt visibility were emerging.
110. India considered that export controls and licensing applied by the United States to dual-use
and encryption products were administered in a non-transparent manner, were discriminatory, and
might not be justifiable under the relevant WTO Agreements, in particular the GATT.  India urged the
U.S. authorities to rectify this situation.
111. In the area of trade in services, India noted that Indian professional degrees were in general
not recognized in the United States and that U.S. visa restrictions were very restrictive.  This was
particularly true in the case of computer professionals, who faced, since the last TPR review was held,
even more stringent regulations;  this had had an adverse effect on software exports from India to theUnited States.  Seen from the context of such restrictions and trade barriers, it was not surprising that
U.S. imports of services in mode 4 of supply were an insignificant proportion of total import of
services.  India also noted the use of unilateral measures by the United States, in particular under
Section 301 of the Trade Act of 1974 as amended by the Omnibus Trade, and Competitiveness Act of
1988.
112. With respect to preferences granted under the Generalized System of Preferences (GSP), the
extension of the scheme, as approved by the United States on 1 July 1998, departed from the principle
of providing market access on a non-discriminatory basis through its restrictive clauses regarding
internationally recognized worker rights, and adequate and effective protection of intellectual property
rights.  Moreover, the United States Trade Representative was entertaining petitions urging removalof GSP benefits on the grounds of denial of market access by the beneficiary countries to U.S. exports
or of inadequate protection of intellectual property rights.  For instance, India had been denied GSP
benefits on pharmaceuticals and agrochemicals on the grounds of inadequate patent protection on
these items.  Several apparel items from India, which were eligible for duty-free importation under the
GSP prior to 1 January 1995, were no longer extended this benefit, and were now attracting generalimport tariff ranging between 16% and 34%.WT/TPR/M/56
Page 23
113. There was expectation that the United States, being a major trading power, would conduct its
trade policy in such a way as to strengthen the mu ltilateral trading system, and in this respect, India
was confident that the current review of the U.S. trade policy regime would encourage the United
States to do so.
114. The representative of Norway was concern that anti-dumping and countervailing duties
played a preponderant role in U.S. trade policies.  In spite of a reduction in the number of new cases
in recent years, the number of anti-dumping orders continued to rise, indicating that the procedures for
terminating these measures were not sufficiently speedy and powerful.  He inquired about the effects
of the recently introduced "sunset" provision on the anti-dumping orders in place, in particular, on
those imposed on Norwegian salmon in 1991.
115. He noted that restrictions in international shipping trade had remained in place without any
roll-back throughout the period of trade liberalization in recent decades, and that the multilateralapproach to liberalize the sector could bring considerable economic benefits.  On the issue of
administration of government procurement and licensing of professional services, he stressed that
WTO obligations should apply at all levels of governments, including a subfederal level.  He also
expressed concern about the extraterritorial aspect of the U.S. trade policy legislation, and urged the
United States to abolish such legislation.
116. With regard to labour standards, he supported the U.S. view that the implementation of core
labour standards was relevant for these reviews.  He also noted that Norway and the United States had
common interests in a successful completion of the ITA II negotiations, regarding them as a natural
"deliverable" at the 1999 Ministerial Meeting in Seattle.
117. The representative of Colombia highlighted the vital role that the United States had in the
world economy.  However, tariff escalation was still present in the U.S. tariff to the detriment of
exports with higher value added from developing countries, and there were greater levels of protection
on goods in which developing countries had comparative advantage, e.g. textiles, footwear, and
agricultural products.  This was complemented by special safeguard and anti-dumping measures.
Colombia had been affected by safeguard measures on broom corn broom, and until the end of theyear by anti-dumping duties on certain flowers.  Hi s Government hoped that the preferences granted
under the GSP would be enhanced in scope and extended in time.
118. The United States was Colombia's major trade partner.  Colombia benefited from the GSP and
ATPA;  nonetheless, many goods were not subject to preferences, for instance textiles and clothing.
Moreover, market access to the United States was difficult for some products due to customs
inspection procedures, which caused delays and led to damage of goods.  The representative requested
help from the United States to control smuggling into Colombia.
119. The representative of Pakistan stated that the United States was one of his country's major
trading partners and sources of foreign direct investment.  Therefore, Pakistan was concerned about
the quotas on textile exports, and hoped that these would be reduced.  The use of anti-dumping
measures were also of concern.  Tariff peaks remained on textiles, apparel, and footwear, and he
urged the United States to reduce these.  On GSP he noted that there were 149 beneficiaries but thatpreferential treatment was subject to conditionality;  he hoped this would be reduced.  He noted that
voluntary export restraints seemed to apply to steel.  The United States had advocated a standstill on
tariffs for e-commerce;  however there was an internal debate in the United States regarding taxes on
e-commerce;  he requested some clarification on this matter.
120. The representative of Mauritius appreciated that the United States had shown an interest in
her country and the region, which was most recently reflected in the proposed Africa Economic
Growth and Opportunity Act.  She hoped to see the early adoption of such legislation in a form that
would meet their needs and expectations.  She welcomed the support expressed by AmbassadorWT/TPR/M/56
Page 24
Barshefsky at the U.S.-Africa Ministerial meeting held in March this year, for a waiver for the pursuit
of the Lomé Convention.  She also urged the United States to bear in mind the concerns and needs of
small economies like Mauritius when formulating its trade policy, particularly as regards market
access and investments.  She finally recalled the written questions which had been raised by Mauritius
relating to Agricultural Safeguards, GSP and NAFTA.
121. The representative of Costa Rica sought information regarding investment incentives
provided at the state level in the United States, and on the state of development of the agreement
being negotiated between the United States and the European Union, which would entail changes in
rules of origin for certain products.
122. The representative of Uruguay highlighted the macroeconomic achievements of the
United States since the previous Trade Policy Review in 1996.
123. Both the Government and the Secretariat Reports referred to the importance that the United
States placed in eliminating obstacles to trade.  In this context he sought clarification on certain
measures adopted by the United States.  He refered to restrictions on the entry of certain products to
the U.S. markets, for instance lamb;  to the rece nt announcement by the President to grant a loan to
producers; and to the renovation of the subsidy programme for exports of dairy product, many of
which were sent to Latin America.  These measures were not fully in line with the liberalizing visionmaintained by the United States in the WTO and within the CAIRNS group.
124. The representative of Romania stated that the United States was an important trade partner for
his country, and U.S. investors were increasingly interested in the Romanian market.  However, there
was still a larger potential.  He noted that the United States had decided to disinvoke Article XIII of
the Marrakesh Agreement establishing the WTO.  He hoped that in the context of the sunset reviewprogramme the anti-dumping duties affecting three Romanian products would be revoked.  He
thanked the United States for the technical assistance provided to his country in regard to trade;  this
had facilitated the transition of his economy to a market economy, had aided better understanding of
certain WTO Agreements, and subsequently had enabled improved domestic capacity to implement
those Agreements.
125. The representative of Brunei Darussalam, speaking on behalf of ASEAN, congratulated the
United States for sustaining robust growth since 1991, and for serving as a linchpin for global trade.
The United States could and should continue to play a significant role in providing momentum for
sustained growth in global trade.  While acknowledging the relatively low level of U.S. tariffs,
ASEAN was concerned by the scope and level of specific duties, as well as by tariff dispersion –
especially in agriculture, food and tobacco, and textiles and clothing and by tariff escalation.
Regarding tariff preferences, the United States would make a significant contribution to themultilateral trading system if it were to multilateralize its preferential tariff rates or to bind its GSP
preferences.
126. ASEAN noted that while there was a decline in the number of anti-dumping investigations
initiated since the last Trade Policy Review, the value of trade affected by them, at US$920 million,
remained high.  There was also an increasing number of investigations on steel products, which,although they had not affected ASEAN trade, would have an impact on global steel trade.  With
respect to countervailing duty investigations, although determinations had affected only a small
fraction of U.S. trade, mostly on steel, the mere initiation of investigations had had a "chill effect" on
some US$640 million of imports in 1996 and 1997.  ASEAN noted that the United States accounted
for a major proportion of all anti-dumping and countervailing measures in the WTO.  ASEANencouraged the United States to remain steadfast in resisting calls for protective measures and to
fast-track the ongoing sunset review process, and would continue to monitor the developments in the
United States regarding the use of contingency measures.WT/TPR/M/56
Page 25
127. ASEAN encouraged the United States to refrain from the use of Section 301 investigations,
and suggested that the United States reformulate, if not repeal this Section of the Trade Act of 1974.
ASEAN also urged the United States to refrain from resorting to any other type of unilateral measure.
128. With respect to agriculture, ASEAN noted the persistence of tariff peaks in certain
commodities, as well as a low rate of quota fills for certain products, and encouraged theUnited States to eliminate tariff peaks, especially for products with low quota utilization.  ASEAN
noted the restrained use of export subsidies by the United States, but remained concerned about the
possibility of using the Export Enhancement Program (EEP);  in this respect, ASEAN encouraged the
United States to reformulate the EEP or allow it to expire in 2001.
129. The representative of Cuba noted that in the time that had elapsed since the last review, the
Government of the United States had focused on the practical implementation of the Helms-Burton
Act in spite of the extensive criticism by the intern ational community and in spite of the fact that the
United States had reached a political settlement with the European Union in April 1997 and May 1998
aimed at limiting the extraterritorial implications of the Act for European companies.
130. During this time, not only had the United States maintained the economic, commercial and
financial blockade initiated in 1959, but it had approved and applied new measures to reinforce the
blockade in its extraterritorial scope.  In particular, through the adoption on 21 October 1998 of theOmnibus Consolidated and Emergency Supplem ental Appropriations Act for 1999 (Budget or
Appropriations Act), a number of sections had been approved and subsequently implemented.  These
included regulations and provisions whose basic objective was to secure greater control by Congress
on effective compliance with Title IV of the Helms- Burton Act and to extend its effect to cover the
entire world.  Similarly, through the approval of Section 211, the principles of the Helms-Burton Acthad been extended to cover the intellectual property requirements of the United States.
131. He enumerated those sections of the United States Budget Act for 1999 which had a direct
impact on trade.
132. Section 211 – The practice of maintaining, renewing and entering new trade mark and patent
registrations for United States companies in Cuba and Cuban companies in the United States was notcovered by the blockade until the approval of Section 211.  This violated articles of the
WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).  Cuba had
initiated actions in the WTO, and in particular, it had repeatedly asked the United States for
information concerning the compatability of that section with WTO rules and had denounced the
unilateral nature of the said provision in the TRIPS Council.  Cuba had been supported in its
complaint by other Members of the WTO.  However, the United States had been incapable of
providing the requested explanation.
133. Section 2225 – Concerning the denial of visa s to "confiscators" of American property,
Title XXII (Department of State Authorities and Activities) stipulated that the Secretary of State may
deny the issuance of a visa to any alien who, through abuse of political or governmental position,
converted for personal gain real property that had been confiscated or expropriated from a national of
the United States, or who was complicit in such a conversion.  It further established that six months
from the date of enactment of the Act, and every twelve months thereafter, the Secretary of State shall
submit to the Speaker of the House of Representatives and to the chairman of the Committee on
Foreign Relations of the Senate a report, including a list of aliens who had been denied a visa under
that subsection, and a list of aliens who could have been denied a visa under that subsection but were
issued a visa, and an explanation as to why each such visa was issued.
134. Section 2802 – Under Title XXVIII (Other Foreign Policy Provisions), this section concerned
reports on determinations under Title IV of the Helms-Burton Act and provided that 30 days after the
enactment of the Budget Act and every three months thereafter during the period endingWT/TPR/M/56
Page 26
30 September 1999, the Secretary of State shall submit to the appropriate congressional committees a
report on the implementation of Section 401 of the Helms-Burton Act.  Each report shall include an
unclassified list, by economic sector, of the number of entities then under review pursuant to that
section, an unclassified list of all of the entities and a classified list of all of the individuals that the
Secretary of State had determined to be subject to that section, and an unclassified list of all of theentities and a classified list of all of the individuals that the Secretary of State had determined were no
longer subject to that section.
135. Furthermore, on 10 and 13 May 1999, the regulations of the Department of the Treasury and
the Department of Commerce of the United States, implementing the measures announced by
President Clinton on 5 January 1999 in respect of Cuba, were made public.  These new regulations,
which modified the previous regulations, did not contribute any evidence of an effective relaxation of
existing provisions.  On the contrary, they were made contingent on their consistency with theTorricelli Act and the Helms-Burton Act, a condition which by definition cancelled any flexibility.
136. On the basis of the above considerations, he asked the delegation of the United States how its
Government intended to comply with the different resolutions of the United Nations General
Assembly, which had called for an end to the blockade of Cuba, and what its Government would do to
repeal this set of coercive measures against Cuba, which were contrary to the principles and rulesembodied in a series of WTO Agreements, and which violated international law.
137. The representative of Hungary congratulated the outstanding performance of the U.S.
economy during the period under review.  Acknowledging that a widening current account deficit had
solicited some domestic interest groups to allege unfair trade practices by trading partners, he
welcomed that the U.S. administration had so far resisted such protectionist pressure.  He expressedhis hope that, like in the latest economic turmoil, the United States would continue to act as a shock
absorber.  At the same time, he asked for the U.S. view on the growing gap between savings and
domestic investment.
138. He noted that the United States was an important economic partner for his country;  the
United States was its fifth largest export market and sixth largest import supplier.  In recent years,bilateral trade had steadily grown;  U.S. expo rts to Hungary grew by 302% in 1992-98, while EU
exports increased by 231% during the same period.  Access for Hungarian exports to the U.S. market
had been facilitated by the GSP scheme as well as large inflows of U.S. investment in Hungary.  He
requested information on U.S. plans for the extension of the GSP scheme, which had expired on
30 June 1999.
139. He commended the United States for its liberal trade and investment regimes, acknowledging
that its sample average applied MFN tariffs had been further reduced in the review period.  However,he expressed concern that there existed a number of tariff peaks, especially in the agricultural and
food sectors, as well as in textiles, clothing, and footwear, and that these duties were specific and
tended to be higher, on average, than ad valorem  tariffs.  He welcomed the decline of the number of
duty orders from the anti-dumping and countervailing duties investigations.  He expressed his
appreciation of the efforts of the U.S. Administration in hosting the Seattle Ministerial Conference,and enquired about the prospect of obtaining fast-track negotiating authority.
140.  The representative of the Czech Republic expressed his appreciation to the United States for
its contribution to strengthening legally biding ru les and principles of international trade, and
encouraged the United States to exercise a leadership  in setting the future international trade agenda in
the next round of multilateral trade talks.
141. He noted that while the level of overall tariff protection in the United States was among the
lowest in the world, high tariff protection existed in a number of sectors, including those of particular
interest to his country.  Thus, he encouraged the United States to undertake further tariff reductionsWT/TPR/M/56
Page 27
not only in agriculture, but also in industrial products, in the next round of multilateral trade
negotiations.
142. He expressed concern about the procedures applied by the U.S. authorities in anti-dumping
investigations, for example, regarding non-market economy status.  While he acknowledged the
number of anti-dumping and countervailing actions had indeed declined for the period under review,he sought information on the value of imports covered by the existing anti-dumping duty orders as
well as countervailing duty orders in effect on 1 January 1999.
143. He noted the prevailing anti-trade sentiments and weakening support for free trade in the U.S.
public opinion.  Despite efforts by the U.S. Government to interact with the American citizen, one
recent study showed that about 58% of Americans believed that foreign trade was bad for the U.S.
economy because of cheap imports, while 38% agreed that foreign trade was good for the U.S.
economy.  He asked for the views of the U.S. authorities in this regard, and enquired about its strategyto meet the concerns on free trade expressed by civil society.
144. The representative of the Slovak Republic welcomed the continuous commitment of the
United States to an open and competitive market  in the world economy.  However, she expressed
regret that the number of anti-dumping investigations had been increasing in 1998 after a period of
decline in the number of investigations since the es tablishment of the WTO.  In particular, she raised
concern about the negative impact of these measures on small economic and economies in transition.
145. The representative of Egypt considered that the WTO was not the competent institution to
deal with labour standards.  The United States had just passed legislation prohibiting the import of
goods produced under conditions in which core labour standards were breached.  He understood that
the United States was respecting labour standards but stressed that the United States should notimpose sanctions on these goods.  He reiterated concerns raised by other members regarding
anti-dumping, intellectual property rights, and customs valuations.WT/TPR/M/56
Page 28
VI. REPLIES BY THE REPRESENTATIVE OF THE UNITED STATES AND
ADDITIONAL COMMENTS
146. The Chairperson invited the representative of the United States to focus her responses on
three main themes:  (i) overall environment;  (ii) trade policy framework;  and (iii) trade policies and
practices.
(i) Overall environment
147. The representative of the United States outlined the value of the Trade Policy Review process
to the United States.  The TPR was seen as a significant contribution to the transparency of the
multilateral trading system and the transparency of the trade regimes of individual WTO Members.
The TPR was an opportunity for the United States to help others understand its system and policies.
148. More than three hundred written questions from participants in the review had been received,
and additional questions were raised orally during the first day of the review.  The United States wasnot able to answer all of the written questions, many of which asked for detailed and quite technical
information, in the short time allotted.  However,  they would endeavoured to provided preliminary
responses to a number of questions.  Written answers to all questions would be provided in due
course.
149. Regarding the building of public support for open markets, first, the authorities were building
support by advocating an agenda that broadly benefited the American public and peoples around the
world.  This would include broad-based market access negotiations to op en up new opportunities in
agriculture, services, and industrial goods.  They would ensure that the approach captured and
promoted the new and emerging high-technology ar eas that had the capacity to transform Members'
economies.  The agenda would be manageable and balanced to ensure that developed and developingcountries alike benefited.  Also critical to securing public support was institutional reform – including
ensuring that the WTO addressed issues of concern to citizens and that it was accessible to the public.
Achieving early results would help to galvanise support for a broader agenda and demonstrate the
crucial importance of the WTO in securing commercial meaningful market access and reform.
150. Second, the President had sought to host the Third Ministerial Conference in the
United States, believing that this event would serve as a focal point for demonstrating to Americans
the importance of trade and the WTO to the prosperity and future of their nation.  To that end,
Administration officials had and would continue to tr avel throughout the United States to speak of the
importance of trade and to listen to citizens' interests and concerns as they shaped their agenda.
Recently, they had listened to the concerns of citizens in Atlanta, Sacramento, Indianapolis, Chicago,
Dallas, and many other places in the United States.
151. Fast-track authority was not required to conduct trade negotiations.  Nor was fast track the
trade agenda; rather it was a process for implementing trade legislation.  She reiterated that the best
way to secure public support and ultimately to secure implementing legislation was to lay a thoughtful
agenda, based on the diverse perspectives of the people.  The Administration had set an active global
trade agenda for this year, focused on the launch of a new round of negotiations at the World Trade
Organization Ministerial Conference in Seattle.  At the same time, the Administration was pressingahead to open markets through the Asia-Pacific Economic Cooperation forum and in negotiations
toward a Free-Trade Area of the Americas;  by expanding the U.S. trade relationship with Africa;
enlarging the Trans-Atlantic Economic Partnership with Europe, and through a wide range of bilateral
trade initiatives.  The absence of fast track had not impeded the Administration from moving forward
with each of these initiatives.
152. The Administration had stressed its interest  in working with the Congress to develop
legislation and build bipartisan support for fast track.  Early this year, in his State of the UnionWT/TPR/M/56
Page 29
message, the President again had called on Congress to renew fast track.  Other Administration
officials, including Ambassador Barshefsky, had repeated that call both in public statements and in
meetings with interested members of Congress.
153. As the trade deficit had soared, protectionist sentiment had increased.  This was particularly
true in the case of steel, where an extraordinary surge of unfairly low priced imports had entered theUnited States, completely out of proportion to domestic demand.  The Administration had take strong,
WTO-consistent action to address dumping in response to petitions filed by domestic steel producers.
At the same time, the Administration had taken vigorous steps to oppose WTO-inconsistent steel
quota legislation, which had contributed to its defeat in the U.S. Senate.
154. In agriculture, the sharp decline in exports due to the collapse of demand in Asian economies,
combined with bumper crops, low commodity prices, and several natural disasters in the
United States, had led to severe hardship and fear  in rural communities.  To ensure that the farm
community – as well as the U.S. Congress – continued to pursue an activist trade agenda, it was
imperative that the United States' trading part ners abide by their WTO commitments, including
faithfully implementing WTO panel reports, and, in future negotiations, continued to lower the
significant barriers to agriculture trade.
155. Regarding a point made about the U.S. reserved attitude toward the articulation of a
meaningful agenda for the New Round, she noted that out of deference for the seriousness and the
purpose of the TPR process, which was to review the operation of the U.S. trade regime over the past
two years and to enhance Members' understanding of U.S. policies and practices, the United States
determined that it would not be appropriate to use the TPR to advocate their future agenda.  To the
contrary, the authorities believed it more appropriate and fair to give other Members a full accountingof their trade regime.  There were a multitude of fora for discussing the future agenda, including the
General Council special sessions and informal gatherings of ministers and senior officials throughout
the year, where the United States had and would continue to participate vigorously.  To generate
public support it was critical that the United States pursued a broad and ambitious agenda to
demonstrate that the WTO worked i.e. that othe r countries abided by their commitments, including
faithfully implementing panel rulings.
156. The strong economic performance of the United States was noted by members, but concerns
were raised about a possible hard landing for the U.S. economy and its negative implications for the
global economy.  However, she believed that the most significant aspect of strong U.S. economic
performance for this trade policy review, had not been noted, namely that the U.S. economic
performance was solidly based in, and indeed could not be fully understood but for, the U.S.
commitment to pro-competitive policies at home and open markets at the border.
157. While the linkages between open, pro-competitive markets, on the one hand, and enhanced
economic performance, on the other, were numerous and complex, she highlighted one that seemed
essential to the U.S. experience.  Although the shares of U.S. GDP, represented by national saving
and domestic investment, had risen steadily across the decade, it was still often noted that the
United States saved and invested modest shares of its total national income, relative to other countries.One of the principal benefits of open, pro-competitive markets, and the full engagement in the WTO
had been an enhancement of the ability of the United States to allocate scarce resources with a high
degree of efficiency, resulting in substantial rewards to the savers providing the resources and the
American public in general through sustained grow th, expansion of job and economic opportunity and
steadily rising standards of living.  The United States might not be the world's highest saver, but itwas surely one of the world's most efficient investors, thanks to pro-competitive open market policies.
This achievement of high degrees of efficiency in the allocation of scarce resources had to be
considered part of the bedrock upon which U.S. economic success rested.WT/TPR/M/56
Page 30
158. In light of these observations on the U.S. economy, she believed that a closing line of her
opening statement bore repeating.  The United States considered that abiding by its WTO
commitments was a matter of national economic self-interest for the country and it should be similarly
so for all Members seeking to instil in their own economies conditions for sustained growth and
success.
159. With regard to the possibility of a hard landing, it was important to understand the context in
which the trade deficit and what some perceived as other imbalances had occurred in the last year and
half.  The Asian financial crisis, combined with lo w growth had limited investment opportunities in a
number of U.S. trading partners, and had contributed to increasing net inflows of foreign capital to the
United States over the last two years.  This, in turn, had contributed to a reduction in domestic interest
rates, increases in the price of U.S. financial assets, and increases in domestic consumption and
investment.  The simultaneous widening of the U.S. current account deficit with the increase of netcapital inflows had meant that the United States  played the major role in absorbing the sharp
balance-of-payments adjustments occurring in Asia and elsewhere.  As the IMF had recently reported,
U.S. consumers and investors had accounted for nearly half of the total increase in global demand last
year.  The United States thus had played a major role in preventing the global balance-of-payment and
growth difficulties over the last two years from degenerating into a far worse situation.
160. As the economy reached full employment, capacity constraint, and a slowing of demand
growth, it would be important that recovery bega n and/or continued to progress outside the U.S.
borders.  In such an eventuality, the U.S. economy, which had fed so much demand for the output of
other countries over the last two years, should benefit from a peaking and gradual decline of its
current account deficit, at a time when domestic demand might be slowing.  With proper managementand recovery abroad, there was little reason to expect a difficult adjustment to a more balanced pattern
of global growth than had been witnessed over the last two years.  Strong fundamentals and earnings
growth underpinned U.S. financial asset markets, whic h, together with recovery outside their borders,
would support an orderly transition for the U.S. balance-of-payments position and economy.
161. The first discussant commended the representative of United States for her answers.  He noted
that, as the U.S. growth was dependent on economic recovery abroad, and that the management of the
world economy was important to address the issue of its macroeconomic imbalances.  He also
stressed that it was important not only for the United States but also for the world economy that the
U.S. administration received the fast-track authority.
162. The second discussant noted that fast-track authority was not required to initiate negotiations,
only to conclude them.  However, considering the three-year time-frame proposed for the new round,
she wondered whether the absence of fast-track authority would allow the United States to concludenegotiations by 2003.
163. The representative of the United States replied that the U.S. administration would try to win
public support by laying down the right agenda, and then would try to secure fast-track authority from
the U.S. Congress.
164. The representative of Japan, although appreciating the U.S. administration's effort to resist
protectionist pressure so far, expressed concern about the rise of protectionism in the United States,
especially associated with the recent use of anti-dumping measures.  He also noted that fast-track
authority was crucial for other countries to particip ate in credible trade negotiations, and expressed
Japan's hope that the U.S. administration would continue to make its best effort for the renewal of the
authority.
165. The representative of Canada asked about the U.S. experience in building public support for
trade liberalization, as he felt that it would be useful for other countries.WT/TPR/M/56
Page 31
166. The representative of India appreciated the U.S. administration's efforts to fight against the
protectionist pressure.
167. The representative of the United States noted that, to build public support, it was important to
travel round the country advocating the benefits of free trade and responding to citizens' concerns.  In
particular, it was crucial for the public to have direct access to and dialogue with trade officials.
(ii) Trade policy framework
168. On unilateralism and the use of Section 301 the representative of the United States said that
Section 301 was the vehicle in U.S. domestic law that permitted private parties to petition the
Government to investigate foreign trade practices and to take action to redress non-compliance with
trade agreements – multilateral and bilateral.  The U.S. process was open and transparent and
welcomed public participation;  Section 301 facilitated that participation.  Section 301 was fully
consistent with their WTO obligations – both on its face and as applied by the Administration.  Just asthe DSU required Members to use the dispute settlement process when they sought to redress a
violation of a WTO Agreement, Section 301 required that complaints involving WTO violations were
taken through the formal WTO dispute settlement procedure.  As a matter of longstanding policy, the
U.S. had never determined that another country's practice had violated the GATT without having
obtained a GATT or WTO panel finding to that effect;  nor had the U.S. ever retaliated against aforeign practice that a GATT or WTO panel had determined to be consistent with the GATT.
169. She noted that compliance with panel rulings - and the effectiveness of dispute settlement in
delivering bottom-line results in a commercially m eaningful time frame - went to the heart of the
WTO's credibility.  No one could accept a weakening of the commitment of the WTO to prompt
resolution of disputes.  This was important not only for delegations that were active participants indispute settlement, like her delegation, but also for the overall integrity of the institution that benefited
all its Members.  But "prompt" resolution could not mean a period of years to complete the dispute
settlement process.  If it did, Members would find little support for continued use of the multilateral
process to settle their disputes.  The text of the DSU provided for prompt consequences for failure to
implement DSB rulings – it had to, if it was to create an incentive for all governments to play by therules.
170. The U.S. GSP programme had expired on 30 June.  The annual suspensions of the programme
were the result of budget rules, which affected certain legislation moving through Congress.  Lost
revenues, in this case the tariff revenue lost from duty-free entry of products under GSP, had to be
offset by increased revenue elsewhere.  Legislation had been introduced in both the House and Senate
to re-authorize the GSP programme.  The Senate Finance Committee had voted for a five-year
extension of GSP, but there had been no action to date in the House.  Nevertheless, the programme
was expected to be re-authorized by the Congress as it had been in past years.
171. Regarding regionalism, the United States was a member, with Canada and Mexico, of the
NAFTA, and was also a party to a bilateral free-trade area with Israel.  These agreements had been
notified to the multilateral system and had been the subject of detailed factual examinations.  The
factual examination by the Committee on Regional Trade Agreements of the NAFTA had beencompleted in February 1997, but the concluding report had not yet been adopted.  Nevertheless, the
United States remained confident that the Committee would conclude that the goods and services
aspects of NAFTA were consistent with the rele vant provisions of GATT 1994 and GATS Article V.
172. The NAFTA was the most comprehensive and largest regional trade agreement in the world,
with nearly 400 million people producing over US$8.5 trillion worth of goods and services.  Tradeamong the NAFTA parties had soared during the five years of the Agreement.  Canada was the
United States' largest trading partner, and, since NAFTA, Mexico had become the second largest
trading partner and export market.  Under the NAFTA, tariffs had been eliminated on 97% of theWT/TPR/M/56
Page 32
parties' tariff lines (at 8-digit levels) and more than 99% of intra-trade by volume;  since its
ratification, there had been two rounds of successful tariff acceleration negotiations.
173. The United States was committed to creating the Free Trade Area of the Americas by the year
2005.  The FTAA would create a single free-trade area covering North America, Latin America, and
the Caribbean – encompassing 800 million people.  The United States was determined that the FTAAshould improve upon WTO rules and disciplines wherever possible and appropriate.
174. The United States was also participating actively in the Asia Pacific Economic Cooperation
forum, which had a long-term goal of "free and open trade and investment in the region."  APEC
consisted of 21 economies and accounted for over half of world trade.  The APEC forum had served
as an effective catalyst for the subsequent completion of the WTO Information Technology
Agreement.  Additionally, the APEC leaders had called for the early liberalization of tariff and other
trade barriers, on an MFN basis, in 15 key sectors, accounting for US$1.5 trillion in global trade.
175. Regarding State-Federal relations, the United States fully intended to implement any
commitments that it made pursuant to agreements concluded during the next round of WTO
negotiations, regardless of whether those commitments applied to federal, state or local measures.
Under U.S. law, there were a variety of ways to seek and bring about compliance with commitments
made at the non-federal level.  The U.S. approach had always relied in the first instance onconsultation and cooperation, and this approach had worked well.  In the procurement area, it had
sought and had obtained voluntary commitments by state governments, some 37 of which made
commitments under the GPA;  it was likely that the consultation and cooperation approach would
continue to be followed.
176. The second discussant noted that the United States had entered into a limited number of
regional agreements, but had made an effort to liberalize all of its trade in these agreements.
177. The first discussant believed that regional agreements had been an important locomotive for
liberalization prior to the creation of the WTO, but he was not sure how this fitted into the new WTO
framework.  Concerning Section 301, he noted that small countries, which did not have a constituency
in the United States, depended completely on the way the U.S. Administration carried out theinvestigations.
178. The representative of India noted that her country had raised questions on the conditions set
for renewal of the GSP, and on USTR practices of accepting private complaints which could lead to
withdrawal of GSP benefits.  She believed that the GSP was applied in a discriminatory manner by
country and products;  sometimes the sectors involved were very small.  Regarding Section 301
investigations, she wondered how the process of consultation embedded in them could give
assurances to U.S. trading partners.  She considered Section 301 investigations to be inconsistent withthe Uruguay Round Agreements Act.
179. The representative of Japan reiterated concerns about unilateralism and extraterritorial
application of the U.S. trade measures and stated that his country was concerned that the approach
taken in Section 301 investigations was pursued with a threat of retaliation.  Japan could not accept
unilateralism and dispute settlement should have been conducted in accordance with the WTO rules.The representative of the United States had not dispelled this fear.  He also registered Japan's strong
concern about the U.S.  re-export control which obliged foreign firms to obtain permission from the
U.S. Government for exportation of certain goods.
180. The representative of Brazil was concerned by the WTO consistency of the Section 301
family of legislation with legislation implementing the Uruguay Round, and by the conflict between
federal and state legislation.WT/TPR/M/56
Page 33
181. The representative of Cuba requested that the U.S. comment on the unilateral and
extraterritorial measures imposed by the United States against his country.
182. The representative of the United States stated that, responding to the first discussant's
question on regional trading agreements, when external tariffs were lower, discrimination was less.
As the United States had the lowest weighted-average tariff in the world, she encouraged othercountries as well to have lower tariffs.  With respect to the application of the GSP, she stressed that
the United States applied standards on a non-discriminatory basis.  Regarding the alleged
inconsistency of Section 301 with the Uruguay Round Agreements Act, she noted that, while
domestic legislation prevailed in the United States over international law, all WTO Agreements were
incorporated in domestic law.
(iii) Trade policies and practices
183. Regarding the level or type of U.S. tariff on particular products or groups of products, the
U.S. delegation they had listened carefully to the co mments concerning the structure of the U.S. tariff
and the preview of the dialogue that would take place on tariffs for agricultural and non-agricultural
products in the coming months.  Continuing to enhance market access multilaterally was an important
U.S. objective for the Round that would be launched  in Seattle.  Shortly the United States would be
tabling proposals for market access negotiations for agricultural and non-agricultural products.
184. The United States was fully and faithfully implementing its obligations under the ATC.
Textile imports had grown in the United States by  about 34% in the last two years, exceeding the
growth rate for all imports, of 15% in the same pe riod.  As anticipated in the ATC, liberalization was
occurring through the ATC's accelerated-growth provisions on top of the growth rates already
mandated by the bilateral agreements notified under the ATC.  For example, one of the largest textileexporting countries had seen its textile exports to the U.S. grow by 118% during the life of the ATC.
And products by another major exporter grew by 69% during the same period.
185. In response to the question posed by India, in cases where the U.S. textile industry was
suffering serious damage or actual threat of damage, the U.S. would continue to exercise its right
under Article 6 of the ATC to apply the transitional safeguard for products that were not underrestraint.
186. U.S. agricultural policy had evolved over the period under review;  the more market-oriented
approach fostered by the 1996 farm legislation had been initially implemented against a backdrop of
strong exports, high commodity prices, and favorable returns for most farmers and ranchers.  More
recently, that backdrop had deteriorated with historically low prices putting tremendous pressure on
U.S. producers and creating a need for additional assistance.  This assistance had taken the form of
increased domestic support, although well below the U.S. Uruguay Round ceilings and generally hadbeen provided in a manner as least trade distorting as possible.  The use of export subsidies had been
restrained from the beginning of the implementation period.  Reflecting the current supply and
demand situation and aggressive use of export subsidies by other Members for the same products, the
United States had used allowable export subsidies for a narrow range of products.  It had met its
market access commitments for agricultural products but had been under increasing market pressurefrom some countries for a few select products to which it had responded on occasion with legitimate
use of the safeguard mechanism.
187. On the rising number of anti-dumping measures, she said that the increase in the number of
new cases was largely a result of the global financial crisis, which began in late 1997 and continued
through 1998, resulting in an influx of low-priced imports in certain sectors.  Steel had been one ofthe principal sectors affected.WT/TPR/M/56
Page 34
188. There had been considerable interest expressed regarding the likely result of the current
sunset reviews of anti-dumping measures.  It was impossible to estimate with precision the number of
anti-dumping orders that would be terminated or revoked pursuant to the reviews;  each decision was
made on the facts on record in each proceeding.  As of July 1998, when the United States had begun
initiating sunset reviews, there had been 321 transition orders in effect (orders that were in effect on1 January 1995).  By 1 July 1999, sunset reviews had been initiated on 228 orders or suspended
investigations.  Of these reviews, 72 had been co mpleted and only 11 had resulted in the continuation
of the trade remedy.  The remaining 61 orders or agreements had been terminated or revoked.
189. Some delegations had questioned whether the recent decision to impose a safeguard measure
on imports of lamb meat portended a retreat from strong and effective U.S. advocacy for free and
open agricultural markets.  She noted that the decision to apply safeguard duties was fully consistent
with the WTO Agreement on Safeguards and followed an extensive investigation by the U.S.International Trade Commission, which had unanimously found that surging imports had been a threat
of serious injury to the U.S. lamb industry.  Consistent with the recommendation from the USITC, the
safeguard duties would provide temporary relief from imports, in order to prevent serious injury, by
providing a necessary breathing space to the domestic industry.  This temporary import relief, and
domestic assistance, would enable the U.S. industry to  take steps to adjust to import competition.  The
United States remained committed to achieving its goal of liberalized trade in agriculture.
190. Steel imports from Japan and a number of other countries had increased by more than 100%
in 1998.  In response to this unprecedented surge the U.S. steel industry had filed a number of
anti-dumping cases.  The filing of anti-dumping petitions was at the discretion of the domestic
industry.  If a petition met U.S. legal requirements, which were fully consistent with the initiationrequirements in the WTO Anti-dumping Agreement, the authorities were obligated by law to initiate
an investigation.
191. Regarding the concern raised about protectionism and steel legislation, she indicated that
recently the U.S. Administration had vigorously opposed the steel quota bill.  The vote against the
quota bill in the Senate on 22 June had been a reaffirmation of the U.S. commitment to open marketsand to a strong economy.
192. Standards setting in the United States was genera lly a private-sector-driven process, reflecting
the commercial realities of the marketplace.  While generally private-sector driven, U.S. standards
were established through a consultative process that ensured maximum transparency.  As was noted in
the Secretariat report, the American National Standards Institute coordinated the development of
private standards and participated as the U.S. representative to the International Organization for
Standardization.  U.S. government policy stipulated that federal agencies should participate involuntary standards development activities and use voluntary consensus standards where possible.
193. All proposed U.S. Government technica l regulations were published in the Federal Register
for comment, and responses to those comments were provided when a final rule was adopted.  The
National Institute of Standards and Technology, which acted as the U.S. enquiry point under the
TBT Agreement, notified the WTO Secretariat of all relevant technical regulations, as provided forunder Article 2.5 of the Agreement.
194. She believed that U.S. standards were in full conformity with the WTO Agreement on
Technical Barriers to Trade, which allowed countries to take necessary measures, at appropriate
levels, to achieve legitimate objectives, and not for trade protectionism.
195. Like many federal systems, the United States had a multilayered system of government
procurement with jurisdiction resting with individu al governments.  At all levels of government,
however, government procurement was conducted on an open and transparent basis.  As the result of
WTO initiatives on government procurement, including the plurilateral GPA and the multilateralWT/TPR/M/56
Page 35
Working Group on Transparency in Government Procurement, the Federal Government had increased
coordination with subfederal government authorities, disseminating information on WTO activities
and seeking input for ongoing negotiations.  The United States currently covered 37 states under the
GPA, which had been codified in U.S. law through the Uruguay Round Agreements Act.  This
legislation required the President to consult with the States regarding implementation of the GPA andUSTR to establish a Federal-State consultation process.
196. While U.S. procurement practices were universally transparent, both federal and subfederal
authorities applied a variety of Buy American requirements.  For federal-level procurement, most of
these restrictions were waived for parties to the GPA.  Similarly, state-level restrictions could not
apply for coverage of the 37 States under the GPA.  The United States continued to explore
possibilities for further liberalization, both plurilaterally and multilaterally in the WTO.  In this
respect, the Uruguay Round Agreements Act provided authority to waive the most prohibitivefederal-level restrictions for countries that agreed to adopt transparent government procurement
practices and enforce effective anti-corruption measures.
197. Historically, the first-to-invent principle had been part of the U.S. patent law.  Section 104 of
title 35, United States Code, which provided that a national of a WTO Member may prove the date of
invention using evidence of events that had occurred outside the United States, ensured that therewould be no discrimination based on where an invention had been made, in judicial or administrative
proceedings between the U.S. and foreign companies involving proof of the date of invention between
U.S. and foreign companies.
198. Parallel imports were defined as genuine goods placed on the market with the consent of the
owner of the applicable intellectual property right – copyright, trade mark or patent – which weresubsequently sought to be imported into the domestic market without the consent of the right owner.
Various U.S. laws provided a certain degree of parallel import protection for copyrighted works,
patented inventions, and trade marked products because parallel imports undermined intellectual
property rights.  Parallel importing of pharmaceutical products was particularly worrisome, given the
difficulty of ensuring the safety and efficacy of drugs that left the normal distribution chain.
199. The President of the United States announced support for electronic commerce by permitting
the export of strong encryption when used to protect sensitive financial, health, medical, and business
proprietary information in electronic form.  The updated export policy would allow U.S. companies
new opportunities to sell encryption products to various regions.  The new policy was consistent with
input from industry groups while preserving national security and law enforcement concerns.  The
Administration would continue to dialogue with U.S. industry and to review its policy to determine if
additional updates may be necessary to continue a balanced approach that protected the public safetyand national security, ensured privacy, and promoted electronic commerce.  This new policy did not
interfere with any WTO commitments and was consistent with U.S. objectives in electronic
commerce.
200. The United States looked forward to a new round of services negotiations that expanded on
current commitments by removing restrictions across a broad range of sectors, improved how sectorswere classified or described, and established regulatory disciplines to promote transparency.
201. Specific questions had been raised about maritime transport.  The United States had
participated fully in the Uruguay Round and the extended negotiations on maritime transport,
especially given the already high level of liberalization (including transparency) in its maritime
transport sector.  In fact, 97% of U.S. international water-borne trade was carried on foreign-flagvessels.  In 1996, the United States had joined with delegates representing more than 50 maritime
nations to end the extended maritime discussions under the Uruguay Round and to take up the issue
again in the next round of trade negotiations in the WT0.WT/TPR/M/56
Page 36
202. With respect to U.S. cabotage practices in maritime transport (the Jones Act), the
Administration supported the Jones Act as an essential element of its maritime policy, and would not
be proposing changes to the Act.  The United States was one of more than 40 maritime nations that
reserved their domestic trade to national flag vessels.  The terms of reference governing the extended
maritime negotiations following the Uruguay Round had excluded cabotage.  The United States hadsupported this position due to the essential link that the Jones Act provided in its national
transportation network and readiness capability.  This point had been repeatedly noted by the
Department of Defense.  Over 75% of the ocean-going vessels in the Jones Act fleet had military
utility.  The Jones Act assured U.S. control of essential transportation assets (including vessels,
shipyards, and parts and equipment suppliers) and related infrastructure, in both peacetime and
wartime.
203. On financial services she noted that it was highly unlikely that foreign services suppliers had
hesitated to operate in the United States because of the federal system of regulations in this area.  U.S.
regulations were, with very isolated exceptions, completely non-discriminatory, meaning U.S. firms
received no favorable treatment.  The U.S. had a very substantial presence of foreign financial
services suppliers in the country in banking, securities and insurance.  On that basis alone, she did not
think that the added burden of subfederal regulation made much difference in terms of access to theU.S. markets.
204. Regarding movement of persons, the United States was a country of immigrants and proud of
its heritage.  Nevertheless, no country allowed free flow of persons, particularly those wishing to
work in a foreign country.  Indeed, all visa regulations had some restrictive effect on the temporary
entry of persons, including professionals.  There was nothing discriminatory about U.S. regulatoryrequirements with respect to professional certification.  U.S. and foreign professionals had to meet the
same subfederal requirements.  However, there were many professions, such as accounting and
architecture, where the essential qualification requirements were harmonized, even though
administered by States.
205. The second discussant, while recognizing the low average level of tariffs applied by the
United States, noted that there remained some very high tariff peaks, some of which were specific
duties.  Chile would like to see those tariff peaks reduced in the next round of negotiations, and in this
respect expected that the U.S. offer would be comprehensive, including both agricultural and
industrial products.  A comprehensive offer would also tackle the problem of tariff escalation.  The
discussant noted that, as a result of the Farm Act of 1996, U.S. agricultural policy had become more
market oriented.  This translated in a more restrict ed use of subsidies, consistent with WTO rules, and
for a limited number of products.  With respect to the use of contingency measures, she referred to thefact that sunset reviews conducted so far had led to the elimination of most anti-dumping and
countervailing duties applied;  in only 11 cases had duties remained in place.
206. Referring to steel, she noted that, although imports had surged, cheaper imports had benefited
other industries that were steel users.  She asked whether in the case of suspension agreements, like
the agreement recently reached with Brazil, the Administration consulted with industries using steelas an input, and whether the "public interest" provision included in the Trade Act of 1930 was taken
into account.
207. With respect to intellectual property rights, she queried whether the United States had any
intention of changing the "first to file" system.  Regarding financial services, she referred to the
Financial Services Act of 1999, a bill currently being considered by Congress, aimed at allowingfinancial institutions to provide integrated servic es.  She wondered whether, the bill, if passed by
Congress, would repeal the Glass Steagall Act, which prevented insurance companies from offering
banking services.  Noting that the passing of the bill had been delayed due to lack of agreement
regarding the regulating body, she wished to know in what way the reforms contained in the bill
would affect U.S. commitments in the WTO.WT/TPR/M/56
Page 37
208. The representative of India requested comments on the use of contingency measures.
Although the number of anti-dumping investigations had increased, duties had been applied only in a
few cases.  However, this still created uncertainty for exporters.  She also remarked that there was no
provision in U.S. legislation for "lesser duty".  She noted that tariffs applied on textiles, clothing and
footwear were still high, and that there were no initiatives to reduce them.  With respect to trade inservices, she considered that the number of visas granted to providers of professional services were
restricted in on an ad hoc basis.  Moreover, social security charges had to be paid although no benefits
were extended for stays of less than ten months.
209. The representative of Brazil stated that for his country there had been no other solution but to
negotiate a suspension agreement on steel with the United States, since the anti-dumping duties that
were to be applied as a result of a U.S. investigation would have been so high as to impede access to
the U.S. market.  During the investigation, privatized Brazilian mills had been accused of benefitingfrom state subsidies.  He requested information regarding the 11 cases where, after sunset reviews
were conducted, anti-dumping or countervailing duties had been maintained.
210. The representative of Australia expressed his country's deep disappointment with respect to
the recent safeguard measures applied by the United States on imports of lamb from Australia and
New Zealand.  Australia would follow the appropriate WTO procedures on the matter.
211. The representative of Canada expressed his concern regarding the lack of harmonization
between policies at the federal and subfederal level in the United States.  He was also concerned about
the lack of intention by the United States to reform the Jones Act.
212. The representative of New Zealand expressed his country's disagreement with respect to the
recent safeguard measures applied by the United States on imports of lamb from Australia and New
Zealand.
213. The representative of Hong Kong questioned the United States' claim to having the lowest
weighted-average tariff.  He noted the regional focus of U.S. trade policy;  and expressed his concern
with respect to the trade effects of these initiatives, especially on textiles.  He was interested in
learning about the U.S. agenda for the Seattle Ministerial Conference, and with respect to how theywere building support amongst Members for the scope of future negotiations.
214. The representative of Jamaica praised the United States for its open and transparent policy
framework.  Jamaica looked forward to participating in Seattle and hoped that the negotiations would
lead to a new era of full participation.  Regarding the future round of negotiations, he expressed his
satisfaction that no reference had been made to a single undertaking.  On telecommunications
services, he expressed his concern with respect to the Federal Communication Commission's (FCC)
benchmark settlement policy, which he found contrary to civil practice and international trade.  Onelectronic commerce, the United States had put forward a standstill on tariffs and taxes.  Some studies
showed, however, that this would lead to an erosion of the tax base.  Referring to competition policy,
it was not clear whether the United States would support its inclusion in the next round of
negotiations.  While noting that U.S. standards were determined by private developers, he questioned
the scientific foundation of standards not based on internationally agreed principles.
215. The representative of the European Union stated that he had taken note of the answers to
questions raised by his delegation to the United States.  He disagreed, however, with the
United States's observation that addressing questions regarding the new trade agenda did not belong in
a Trade Policy Review, especially since the United States delegation had made explicit reference to it.
The European Union was looking forward to a more detailed reply to the more specific aspects of thequestions raised.  However, his delegation remained unconvinced regarding the explanations supplied
with respect to Section 301 of the Trade Act of 1974, Super 301, the ability of theWT/TPR/M/56
Page 38
Federal Government to make state governments comply with WTO provisions, standards, Buy
American Act restrictions, and the implementation of the Telecommunications Agreement.
216. The representative of Malaysia also expressed his concern regarding the relationship between
Federal Government and state governments and expressed his view that this relationship should go
beyond consultations as regards compliance at a subfederal level with obligations under the WTO.His delegation awaited the U.S. delegation's comments with respect to the use of unilateral measures.
Regarding standards, he wished to know if these were imposed also at a subfederal level.  He asked
when the written answers to the questions raised would be provided.
217. The representative of Japan noted that, in her references to government procurement, the U.S.
representative had not mentioned the Buy American Act, which was contrary to the spirit of the
Agreement on Government Procurement.  He expressed his concern with respect to the statement that
the United States did not plan to remove the Jones Act.  In this respect, he urged the United States toremove cargo preferences and the Jones Act.  No reference had been made by the U.S. representative
regarding telecommunication services and the FCC's benchmark rule.  He considered that the
licensing procedures with respect to telecommunications lacked transparency, and urged the United
States to increase transparency or remove these licensing criteria.  He expressed his hope that the
United States would collaborate in the initiative to achieve a fair cost-sharing for internet services.Referring to the automotive industry, he noted that regulations such as those contained in the
Automotive Labelling Act and in the Corporate Average Fuel Economy Act implicitly encouraged the
purchased of domestic cars.
218. The representative of Cuba stated that no cleared answers had been provided to questions
raised regarding Section 301 and with respect to U.S. measures against Cuba.
219. The representative of the United States stated that written responses to the questions raised
would be provided as soon as possible.  With respect to steel, she noted had there had been a surge of
steel imports in a short period of time, and that this had caused hardship for the U.S. steel industry.
The Administration had made a large effort to prevent protectionist pressures from gaining ground.
All measures taken by the United States had been WTO-consistent.  Answering the queries posedwith respect to electronic commerce, she noted that  the U.S. proposal addressed import tariffs, not
internal taxes.  On competition policy, she stat ed that the bilateral initiatives in which the
United States had engaged referred to enforcement, while discussions at a multilateral level had been
very broad, and not appropriate for negotiations at the current stage.  Many of the other issues raised
related to specific questions.WT/TPR/M/56
Page 39
VII. CONCLUDING REMARKS BY THE CHAIRPERSON
220. We have had serious, positive and open discussions.  Members of the TPRB are clearly
impressed by the United States' recent outstanding economic performance which is reflected, inter
alia, in strong growth, low unemployment and low inflat ion.  No doubt, this performance is partly due
to the considerable trade and investment liberalization achieved by the Uruguay Round and WTOAgreements.
221. Members acknowledged that the U.S. economy is among the most open and transparent in the
world.  This openness and its recent impressive economic performance have meant that the United
States has played a pivotal role in supporting the world economy in the wake of the Asian financial
crisis.  At the same time, imports, often at lower prices, have served as an important safety valve for
the U.S. economy, helping to meet domestic demand and subdue inflationary pressures that might
otherwise have emerged.  Further, foreign invest ment has enabled the U.S. economy to grow faster
than would have been the case had it relied solely on domestic saving.
222. Members acknowledged that while the resulting large and widening U.S. current account
deficit, and difficulties faced by some sectors (notably steel and agriculture), have led to certain
protectionist pressure, hitherto the Administration has,  by and large, resisted these pressures, to the
benefit of the multilateral trading system.
223. Nonetheless, one senses that Members are worried that if the U.S. economy slows
substantially, and unemployment starts to edge up, it may become more difficult for the
Administration to resist domestic protectionist pre ssures.  Moreover, given that the United States is
the world's single largest trader and the importance that Members attach to its leadership role on
multilateral issues, delegations asked clarification or voiced concerns about a number of features ofthe U.S. trade and investment regime and recent developments therein, particularly those of a
unilateral or extra-territorial nature.   Among these features were:
- the impact of regional initiatives on the WTO-based multilateral system;
- the existence of tariff "peaks", often embodied in specific rates, and tariff 
escalation;
- some recent high profile anti-dumping (notably in steel), countervailing and 
safeguard ( inter alia , lamb) actions;
- conditions attached to the GSP;
- import protection and the export enhancement programme for agriculture;
- rules of origin, especially with respect to textiles and clothing;
- speed and scope of implementation of commitments pertaining to the ATC;
- measures, notably 301 and related actions, aimed, inter alia , at securing 
market access abroad for U.S. exporters;
- actions by the U.S. in matters that have not fully worked their way through 
WTO disputes settlement procedures;
- extra-territorial application of U.S. and sub-federal laws (including those 
pertaining to labour, health, sanitary and environmental standards);WT/TPR/M/56
Page 40
- state-federal relations relating to U.S. WTO commitments;
- protection of U.S. shipbuilders and providers of shipping services;
- government procurement, in particular the Buy American Act.;  and
- harmonization of U.S. intellectual property rights with international practice.
224. Clarification has been brought to these issues and we look forward to written replies on
outstanding matters.
225. The U.S. commitment to the full implemen tation, and compliance with, WTO rules and
principles has to be noted.  Although the above matters may appear to be relatively insignificant for
an economy as large as the United States, some can have extremely serious repercussions for U.S.
trading partners, especially smaller less-developed economies.
226. Looking to the future, Members expressed some worry over the Administration's difficulty,
for the time being, in securing "fast-track" authority, which many Members perceived as a reflectionof a certain erosion of support within the United States for trade liberalization.  While noting that
"fast-track" was not needed for negotiations and the endeavours of the U.S. Administration to build
overall (domestic, institutional and international) support for a meaningful, transparent trade agenda,
with the next Ministerial being hosted by the United States in Seattle later this year, Members look to
the United States to demonstrate its traditional leader ship role in undertaking future multilateral trade
negotiations.WT/TPR/M/56
Page 41
ANNEX I
ADVANCE WRITTEN QUESTIONS
SWITZERLAND
(WT/TPR/S/56)1 Trade policy regime:  framework and objectives1.1 Agencies involved in trade policy formulation and implementation (pages 22 - § 20)
The Foreign Agricultural Service operates agricultural export and import programmes such as the
Dairy Export Incentive Program (DEIP).
Could the US delegation elaborate on the legal basis, the support coverage and the effects of such a
programme?
1.2 Bilateral agreements/United States-European Union Transatlantic Economic
Partnership (pages 42-43 § 91-92)
Has the Transatlantic Consumer Dialogue (TACD) already brought concrete results which could also
be of interest for non participating countries?  Are positive or negative effects to be expected for these
countries?
1.3 Trade policies and practices by measure/overview (page 46 § 6)
The report indicates that potential distortions of competition may arise as a consequence of various
forms of assistance provided by federal and state Governments to some sectors (notably agriculture).
Could the U.S. delegation give an evaluation of the po tential distortions of competition resulting from
assistance provided by the federal level compared with the assistance provided by the state level?
2 Trade policies and practices by measure
2.1 Border measures/Rules of origin, marking and labelling (III.2.ii) (page 54 -§ 26 and
page 55 - § 28)
Page 54 - §26:
In the U.S. special country-of-origin marking requirements are in force in particular in the area of
watches.  According to these marking requirements the bracelet, the movement and the case must be
marked separately even though the watch is imported as a whole.  Such requirements are very
burdensome formalities for the importation of watches.
What is the background of such a specific marking requirement in particular under the aspect of trade
facilitation?
Are there any efforts underway to facilitate the rather complicated tariff structure in this area
(compound duties)?
Page 55 - § 28:
As of 1 July 1996 there are new rules of origins in the area of textiles in place despite a standstill
clause in the WTO Agreement on Rules of Origin.  We have expressed our concerns already in the
course of the 1996 trade policy review.  It is inte resting to learn, that the EU, with which the U.S.
have a special preferential arrangement dealing with the marking of silk products, has requestedconsultations with the U.S.WT/TPR/M/56
Page 42
What are the U.S. plans to bring these rules into conformity with WTO or at least to find a solution
which would allow everybody to benefit from a labelling scheme as granted to the EU?
2.2 Internal measures/Trade related intellec tual property rights/Patents (page 109 - §190)
In the case of public non-commercial use (Article 31 (b) TRIPS), please indicate whether there is any
measure (e.g., notification, publication or piece of legislation) taken by the competent authorities
calling the attention of governmental agencies or contractors to the TRIPS obligation to “promptly”
inform the right holder of the use of his patented invention whenever they know or have demonstrable
grounds to know that they are using a valid patent without making a patent search.
Internal measures/Trade-related intellectu al property rights/Geographical Indications
(page 112 - §200)
In its reply to the Swiss Delegation's questions regarding the US legislative practice and jurisprudence
relating to the deceptively misdescriptive use of the term "Swiss" in trademarks, the following reply
was given:  "To establish a goods-place association the examining attorney must only show that is
reasonable to believe that the goods or services could have emanated from the named place.  There isno need to establish that the particular geographic area name is 'known for' the goods or service in
question."  (doc. IP/Q/USA/1, page 20).
Kindly indicate the standard applied in determining what is "reasonable" and, if possible, provide
examples of the same.  Please also indicate if, in the individual case, the examiner may, ex officio,pose questions to the applicant regarding the "right" to use the term "Swiss" (e.g. that the firm
involved is Swiss or that the goods in question are of Swiss origin).  Please describe, in greater detail,
the "stricter" standard applied since 1993 concerning the registration of geographic terms, in
particular regarding the use of the term "Swiss".
2.3 Internal measures/Trade related intell ectual property rights (page 116 - § 219)
Parallel imports of goods can generally be prevented by the holder of intellectual property right.  Only
in the case of trade marks parallel imports are allowed under certain circumstances.  Exceptions to this
are cases when the parallel imports embody physical differences to the goods trade marked in the
United States.
What is the reason for not applying the principle of the international exhaustion in the area of trade
marks?
Where is the risk of allowing the parallel import of  original product being trade marked in the U.S.?
2.4 Internal measures/Standards, sanitary requirements, and environmental regulations
(page 122 - §235)
In Para. 235 it is stated that third-party certification is becoming increasingly important and approval
of certifiers or of products by government agents, such as the Occupational Safety and Health
Administration (OSHA), is mandatory for selected products.
It would be interesting to learn for which products mandatory approval by OSHA is needed?To the best of our knowledge OSHA recognizes Nationally Recognized Testing Laboratories
(NRTLs) to test products according to test standa rds specifically recognized by OSHA.  According to
our information these standards are all U.S.-based standards, such as those issued by the American
National Standards Institute and Underwriters Laboratories.  In this context OSHA does not recognize
Nationally Recognized Testing Laboratories for non U.S. -based test standards, such as those issued by
ISO/IEC standards or EU standards.  In this context we would like to mention that the U.S. so far hasWT/TPR/M/56
Page 43
notified 124 technical regulations to WTO naming the agencies responsible for the notification of
such technical regulations. OSHA is not listed.
Could the U.S. delegation confirm that standards recognized by OSHA and being incorporated in
technical regulations are in accordance with the technical content of relevant international standardssuch as ISO and IEC?
2.5 Annex III.2:  Agriculture / Border measures (page 164 §5)
Were all the cases of applied safeguard measures notified?
If no, for which reasons?
2.6 Support programmes (Page 167 § 11 and page 169 - §21)
Page 167 - § 11:
What is the present level of the guarantees administered by the Commodity Credit Corporation?
What was the level of the losses registered during the last three years?
Page 169 § 21:
The report indicates that "the net lending costs (inc luding marketing assessment receipts) during the
fiscal year 1997 were 110.0 million and US$970.4 million during FY 1998".  How do you explain this
rise of the "net lending cost"?
3 Trade policy in services
3.1 Financial services/Banking services (page 182 - § 11)
The report indicates that as of April 1998, 13 States permit inter-state branching by de novo
establishment of branches based on the Riegle-Neal Interstate Banking and Branching Act.
Have since that time other states opted in and permit interstate banking by de novo establishment of
branches?
What States are these?What is the reason for not having bound interstate branching by de novo establishment under GATS?
3.2 Financial services/Insurance services (page 188 - § 25)
Can you elaborate in the initiative of State Regulation 2000 (SR 2000)?  Does it aim to issue
guidelines that the insurance commissioners can follow on a voluntary basis?  One of the goals is to
eliminate licensing and approval barriers.  What barriers are manly targeted to be eliminated?
What is the timeframe for implementation of SR 2000?
3.3 Financial services/Financial market integration (page 191 - § 36)
Can you elaborate on the main differences between the two proposed bills on financial modernization
legislation?
What are the chances for finding a compromise on the financial modernization legislation bill in the
current session of Congress?WT/TPR/M/56
Page 44
3.4 Telecommunication Services/WTO Basic Telecommunication Agreement (page 194  § 46
and page 195 - § 49 and pages 195-196 - §50 and page 196 - § 51)
Page 194 - § 46:
The U.S.'s commitments in telecommunications services are described in paragraph 46.  The U.S.
Scheduled "none" for direct limitations in mode 3 in the market access column.  The paragraph
indicates that there are no restrictions on indirect ownership of a common carrier radio licence.
What about non-radio licences?
Are there also no restrictions on indirect ownership?
Page 195 - § 49:
This paragraph describes the Foreign Participation Order of November 1997 that guarantees an open
entry standard for applicants from the WTO Members (no effective competitive opportunities test any
more).  The order left discretion to the FCC to attach conditions or deny an application in case of the
new carrier poses a "very high risk to competition".  Please, could you specify the term "very high risk
to competition"?
Further the FCC can take "public interest factors" into consideration, such as national security,
law-enforcement issues, foreign policy and trade concerns.
Please could you specify what do you mean with law-enforcement issues and foreign policy and trade
concerns?   (To be conform with paragraph 6 of the reference paper the answer must allow an
objective, timely, transparent and non-discriminatory allocation of resources.)
Pages 195-196 § 50:
The Foreign Participation order of 1995 is described in this paragraph.  Are there similar rules in the
order of 1997?
Page 196 - § 51:
In the description of the International Satellite Service Order the U.S. mention also the FCC's
discretionary power to take "public interest factor s" into consideration.  The term is described in
footnote 65.  Please could you these items enlighten and give some examples?
3.5 Transportation services/ Maritime transport services (pages 199-203)
Domestic water borne trade (§ 59- 61-62 - 73):
The Jones act provides a protected market not only for U.S. domestic ship operators, but also for U.S.
shipbuilders, who are the sole supplier of ships on domestic routes.
Is there any intention to modify the Jones Act in the near future? If so, to what extent?Recent developments (§ 70):
"The United States, like most of its trading partners, exempts the shipping sector from otherwise
applicable antitrust laws.  Under the Shipping Act, liner operators can enter into agreements to fix
prices (“conferences”), to discuss pricing policies (“discussion agreements”), or to share assets or
cooperate on operational matters (“consortia” or “alliance agreements”)."
How do the U.S. judge the exemption of these agreements from antitrust prosecution from an
economic point of view?
What are the U.S. experiences with regard the right of the FMC (Federal Maritime Commission) to
ask that a federal court enjoin the agreement operations?WT/TPR/M/56
Page 45
CANADA
FROM GOVERNMENT REPORT (WT/TPR/G/56)
On the Economic Environment, para 13, pages 6-7, the Report indicates that “the Clinton
Administration has coupled a liberal trade policy with initiatives predicated on strong fiscal discipline,support for education and scientific investment…” What specific measures encouraging scientific
investment have been introduced?
On Environmental Issues, para 53, page14, the Report indicates that it will seek “the elimination of
subsidies that contribute to over-fishing.”  What criteria would be used to identify such subsidies?
FROM SECRETARIAT REPORT (WT/TPR/S/56)
I. ECONOMIC ENVIRONMENT(1) Main Economic Developments, para 5, page 4:
Report states that foreign investment increased during the review period.  To what extent are
investment incentives used to promote foreign investment?  Is this another factor in the increase in
foreign investment?  Which states or regions  benefited most from increased investment?
III. TRADE POLICIES AND PRACTICES BY MEASURE
There is very little information on state-level government activities.  Can you provide a summary of
fiscal or government assistance/incentives at the state level?
(2) Border Measures, (ii) Rules of origin, marking, and labelling, para 25, page 54:
In 1998, there were several legislative proposals in the U.S. Congress to require country-of-origin
labelling for foreign meat and meat products imported into the U.S.  However, no legislation on
country-of-origin labeling for meat was enacted.  In the current 106th Congress, similar proposals are
once again being discussed.  What steps is the U.S. taking to ensure that any country-of-origin
labeling requirements for imported meat and meat products are not trade distorting and are
consistent with WTO obligations?
(2) Border Measures, (iv) Contingency measures, page 71:
Chart III.6 shows an increase in the number of countervail cases initiated from 1996 to 1998.  What
are the factors related to this trend?  Is the number of initiations expected to continue increasing?
(3) Measures Affecting Exports, (i) Export prohibitions and licensing, para 97, page 79:
Economic sanctions include unilateral measures with extra-territorial application, which have
continued to attract significant attention.  The U.S. Administration is on record as supporting theenactment of comprehensive sanctions reform legislation, including a waiver for Title IV of the
Cuban Liberty and Democratic Solidarity (LIBERTAD) Act.  What action does the Administration
intend to that effect?
(4) Internal Measures, (iii) Trade-related intellectual property rights
On Section 337 Investigations, para 224, pages 117-118: The Report asserts that s. 337 of the United
States Tariff Act of 1930, has been brought into compliance with WTO obligations.  We appreciate
that an effort was made, as part of the URAA, to implement the earlier GATT Panel Report whichWT/TPR/M/56
Page 46
found that s. 337 was inconsistent with GATT, Art. III:4.  However it is still the case that foreign
nationals face more onerous procedural burdens in having to defend cases of alleged intellectual
property breaches in both the ITC and domestic courts, compared to U.S. nationals who would be
subject only to infringement actions in the domestic courts.  How can such continuing differential
treatment be reconciled with the USA's national treatment obligations under TRIPS, Art. 3?
The Supreme Court of the United States, in its decisions in Florida Prepaid Postsecondary Education
Expense Board v. College Savings Bank  et al.  and College Savings Bank  v. Florida Prepaid
Postsecondary Education Expense Board et al. , indicates that individuals and corporations cannot sue
states [or state agencies] in state courts for the infringement of certain intellectual property rights.
Our understanding is that it had been previously been held that states [and state agencies] cannot be
sued in federal courts for such infringements.  Please explain how the United states complies with
Article 44(2) .
(4) Internal Measures, (iv) Standards, sanitary requirements & environmental regulations
With regard to para 239, page 123:  In addition to  U.S. Department of Agri culture (USDA) Veterinary
Services' requirements, individual U.S. states have animal health certification requirements for
imports.  Although USDA recognizes Canada's animal h ealth status, certain states continue to require
that Canadian cattle be tested and/or vaccinated for brucellosis or tuberculosis.  Given that Canada's
cattle herd is free of these diseases, why are Canadian cattle subjected to testing and/or vaccination?
(4) Internal Measures, (v) Government procurement, paras 274-275, page 132:
a. The United States notes the value of, and trends in, U.S. federal procurement spending, and
notes certain laws and regulations that restrict certain contracts from foreign competition.  Canada
notes that beyond these provisions, Congress also specifies or “earmarks” certain contracts forspecific contractors.  What value of U.S. federal procurement was “earmarked” in appropriations for
the most recent fiscal year for which the United States has records?
b. In para 274 and the U.S. responses to Canada’s questions in the 1996 U.S. trade policy
review, the referenced documents outline U.S. fede ral government expenditure relative to GDP, note
that set-asides account for only 6-7% of the value of items covered under the Tokyo Round, and
remind readers that many awards to small business are made through open competition that do notinvolve set-asides.
We observe that the 1996 State of Small Business: A Report of the President indicates that in FY
1995, small businesses won US$66.7 billion in federal contract awards, including US$42.9 billion in
direct awards from the federal government a nd US$23.8 billion awarded to small businesses as
subcontractors to prime contractors working directly for the federal government.  The US$66.7 billion
amounts to 33% of the US$202.3 billion in contract actions awarded in FY 1995.  If American small
business is winning one third of the contract dollars spent by the U.S. federal government, the vast
majority of those contracts without the benefit of set-asides, why are small business set-asides
necessary at all?
We also observe that the U.S. Government may reserv e for small business set-asides any contract that
the contracting officer has a reasonable expectation that two or more small businesses are qualified to
supply.  Foreign suppliers, like their U.S. competitors, must develop contacts and pursue bid
opportunities many months prior to CBD publication, but have no way of knowing whether thecontracting officer will eventually decide to reserv e the contract for small business, thus excluding the
foreign firms from the competition.  How does the U.S. consider this requirement to be
“predictable”?WT/TPR/M/56
Page 47
c. On federally-funded state and local transportation contracts, para 277, pages 132-133:  Under
what legal definition does the U.S. consider transit equipment purchases and transportation
infrastructure contracts to be state or local procurements when, since 1964, U.S. federal
transportation grants typically account for well over half and often up to 80% of the total cost of such
projects?  If federally-funded transportation systems and infrastructure contracts are considered to bestate or local purchases, then why may state or local government not determine which procurement
preferences, if any, apply as they do in other state and local contracts?
d. On tendering and purchasing procedures, paras 282-287, pages 135-136: Certain U.S. federal
procurement regulations, including those on small business subcontracting plans and past
performance, do not apply to foreign bidders in certain circumstances.  The U.S. Federal Acquisition
Regulations (FAR) on small business subcontracting plans (FAR Part 19) and past performance (FARPart 15) specify that if these bid evaluation factors do not apply to a specific bid, these factors are to
be considered as neutral in the evaluation.  We are concerned that foreign firms who are not required
to provide certain information in their bids may be nonetheless disadvantaged if government buyers
have inadequate guidance on how to implement this requirement for neutral evaluation.  Many
agencies have published agency-specific bid evaluation guidelines.  In some bid evaluation matrices,these factors (particularly past performance) are heavily weighted.  How does the United States ensure
that the internal practices of individual agencies are consistent with the federal requirement for
neutral consideration?
ANNEX III.3:  STEEL, paras 3-17, pages 174-178:
We note that the sharp increase in imports, at the end of last year, created considerable pressure in
Congress for further legislation, over and above the trade remedy laws being enforced by the
Executive Branch.  While the recent, effective, defeat of steel quota legislation in the Senate is to be
welcomed, has the Administration concluded its revi ew and satisfied itself on the WTO-consistency of
alternative legislation, such as the Steel Trade Enforcement Act?
Para 16, page 178 notes that tax relief measures are being introduced for steel companies.  Given that
these measures appear to be specific, have they been notified as per ASCM requirements?  If not, will
they be notified in the future?  How long are these tax relief measures expected to be in place?
FROM SECRETARIAT REPORT (WT/TPR/S/56)
III. TRADE POLICIES AND PRACTICES BY MEASURE(4) Internal Measures, (i) Taxation, paras 154-158, pages 96-98:
In June 1992, the GATT adopted the Report of the Panel on U.S. “Measures Affecting Alcoholic and
Malt Beverages.” The Panel found that elements of the U.S. Federal excise tax and dozens of
State-level measures contravened the General Agreement by discriminating against imported beer and
wine.  To date, the offending elements in the Federal excise tax, as well as the great majority of
State-level measures, have not been amended.  What plans does the U.S. Administration have to
arrange the removal of the discriminatory elements of these measures, including at the State level?
(4) Internal Measures, (v) Government procurement, para 274, page 132:
This paragraph provides U.S. statistics on overall government procurement for 1998.  Yet, the U.S.
has not yet submitted statistical reports on its WTO AGP-covered procurement.  Would the U.S.
please indicate the total value of AGP-covered pr ocurement at the federal level and the total value of
procurement set-aside under the small and minority business set-aside programs that would otherwise
have been covered by the AGP?  May we have the same information for AGP-covered procurement at
the state level?WT/TPR/M/56
Page 48
With regard to paras 289-291, pages 136-138:  This section includes extensive information on the Buy
American provisions of the U.S. government.  Set-aside provisions may also have a significant impact
on the scope and predictability of coverage under the AGP.  At the 1996 TPRM, it was suggested by
Canada that the U.S. give further consideration to the elimination and circumscription of these
exclusions and exemptions.  What progress has the U.S. made in eliminating or circumscribing
exclusions to the AGP, such as the small and minority set-aside programs?
ANNEX III.2:  AGRICULTURE
(ii) Border Measures, paras 3-7, pages 163-166:
a. We note that of the 44 U.S. tariff quotas listed in Annex table III.2.2,  a total of  34 of the
tariff quotas (or 77 per cent) were less than 95 per cent filled in 1998.  Could the U.S. explain the
reason for the large number of quotas that were underfilled?  Of the tariff quotas that were
underfilled, how many of these are tariff quotas that involve allocations to specific countries or
regions? Where tariff quotas are allocated to specific countries or regions, does the U.S. have any
plans to introduce greater flexibility in its TRQ administration that would allow all WTO membersaccess to underfilled quotas?
b. In 1998, one or more U.S. state governments initiated activities to restrict Canadian
agricultural exports to the U.S., thereby increasin g costs and destabilizing the economic environment
for importers, exporters and others.  What is the U.S. federal governm ent's jurisdiction, responsibility
and strategy in (i) dealing with such activities in the event they occur and (ii) more importantly,
preventing them from occurring?  What is the U.S. federal government doing to ensure that U.S. WTO
obligations are not violated by state actions?
(iii) Support programmes, paras 8-26, page 167-171:
a. With regard to the U.S. Export Credit Guarant ee Program, what steps is the U.S. federal
government taking to ensure that the provision of export credit for agriculture commodities do not
distort trade in third country markets?
b. The U.S., in addition to non-recourse loans, offers producers loan deficiency payments
(LDPs), which in the past two years have entailed significant expenditures by the USDA.  Could the
U.S. delegation indicate how much has been spen t in support of each commodity under the LDPs?
c. The U.S. Congress last year voted significant increases in PFC payments, as well as a range
of other measures to compensate producers for income decreases from falling prices and shrinking
demand.  Could the U.S. delegation explain where these payments should be classified under the
WTO's categories of domestic support?
d. The U.S. also currently offers significant support through a variety of insurance programs
authorized by the USDA's Risk Management Agency, including crop and revenue insurance.  At the
same time, the U.S. is considering how risk management tools for producers might be either improvedor enriched.  Could the U.S. delegation provide any information on the proposals being considered
and how they might impact on USDA domestic support expenditures?WT/TPR/M/56
Page 49
FROM SECRETARIAT REPORT (WT/TPR/S/56)
TRADE POLICIES AND PRACTICES BY MEASURE(4) Internal Measures, (iv) Standards, sanitary requirements & environmental regulations
With regard to para 264, page 128:  A U.S. Congressional Research Service report of April 6, 1999,
acknowledges that the Marine Mammal Protection Act (MMPA) prohibits trade in marine mammal
products regardless of species’ conservation status and therefore appears to be inconsistent with U.S.
WTO obligations.  For example, under the Convention on International Trade in Endangered Species
(CITES), neither ringed nor harp seals are considered threatened or endangered in any way and
therefore no monitoring or trade restrictions are justified on the movement of products from eitherspecies.  Yet, under the MMPA, both species are restricted, so that no import of these species is
allowed into the United States.  We also note that the MMPA would appear to be in violation of the
national treatment provisions of the WTO by allowing domestic production in Alaska and commercial
sales in the U.S. of products which are otherwise banned by the MMPA while denying the same rights
to native inhabitants in Canada and other countries.  What action is the U.S. Government
contemplating to bring the MMPA into conformity with its obligations under the WTO?
FROM SECRETARIAT REPORT (WT/TPR/S/56)
SUMMARY OBSERVATIONS(4) Trade Policies in Services, para 21, page xiii:
The aggressive pursuit of open skies aviation agreements by the U.S., as highlighted by the report,
stands in marked contrast to the U.S.’s continued efforts to protect domestic maritime transportationservices from international competition.  Could the U.S. explain the rationale for these apparently
inconsistent policy objectives?
General question on the implementation of U.S. WTO commitments:
Paragraph 3(a) of the GATT 1994 states that “The pr ovisions of Part II of GATT 1994 shall not apply
to measures taken by a Member under specific mandatory legislation, enacted by that Member beforeit became a contracting party to GATT 1947, that prohibits the use, sale or lease of foreign-built or
foreign-reconstructed vessels in commercial applications between points in national waters or the
waters of an exclusive economic zone...” The U.S. notified measures covered by this exemption on
December 20, 1994.
Paragraph 3(c) states that “A Member whose measures are covered by this exemption shall annually
submit a detailed statistical notification consisting of a five-year moving average of actual and
expected deliveries of relevant vessels as well as additional information on the use, sale, lease or
repair of relevant vessels covered by this exemption.”
Canada notes that the U.S., in a letter dated December 21, 1998 to the Director General, included a
“summary statistical table on actual and expected deliveries of relevant vessels.”  Can the
United States provide Members with copies of the earlier annual submissions made by the United
States as required by paragraph 3(c)?
Canada would also like to suggest that reference to the U.S. exemption as provided by paragraph 3(a)
of GATT 1994 and information on the notifications provided by the United States in fulfilment of its
obligations under paragraph 3(c) of GATT 1994 be added to the Secretariat report, possibly in the
section dealing with measures affecting exports and in Table AII:2 - Status of selected notification
requirements to the WTO.WT/TPR/M/56
Page 50
IV. TRADE POLICIES IN SERVICES
(2) Financial services, para 11, page 182:
The Report indicates that though interstate branching by de novo  establishment is permitted only in 13
states, the District of Columbia, and Puerto Rico, it is anticipated by the U.S. authorities that
additional states will permit de novo  branching as consolidation continues in the banking system .
Could the U.S. provide a more precise indication as to  when it anticipates that additional states will
permit de novo establishment?
(3) Telecommunications Services, (ii) Market structure, paras 40-41, page 193:
According to the WTO's report, the 1996 Telecommunications Act was intended to introduce more
competition in the broadcasting and cable market.  However, many sections of the Act loosened
cross-ownership regulations leading to industry consolidation.  Foreign programming services have
long complained of the lack of access to U.S. cable  markets due to the fact that the major U.S. cable
providers also own many of the services they are carrying, thus making the access to these cablemarkets difficult.  What steps have the FCC and the federal government undertaken to ensure fair
market access by smaller U.S. and foreign firms to ensure carriage in the U.S. cable market?
(3) Telecommunications Services, (iii) WTO Basic Telecom Agreement, paras 44-55,
pp. 193-197:
a. The U.S. commitments under the WTO Agreement on Basic Telecommunications, the U.S.
Foreign Participation Order, and the International Satellite Services Order, issued by the FCC on
November 26, 1997, state that foreign policy reasons and trade concerns may be raised as reasons to
deny applications for licences by foreign telecoms service providers.  The GATS makes no provisionfor trade and foreign policy grounds to be raised as reasons to deny licences, neither in its general
provisions nor in the Reference Paper which is specific to basic telecommunications services.  How
does the United States reconcile these aspects of the FCC's order with U.S. trade obligations?
b. Can the U.S. confirm that its cross- border (mode 1) commitments on basic
telecommunications services have been implemented?  Can the U.S. confirm that, as required by U.S.
mode 1 commitments, foreign service suppliers are in deed allowed to provide mobile satellite services
to points in the U.S. using gateways outside the U.S?  Have any licenses been granted to provide such
services?  If no, please explain.
c. GATS Article VI requires that “[w]here authorization is required for the supply of a service
on which a specific commitment has been made, the co mpetent authorities of a Member shall, within
a reasonable period of time after the submission of an application considered complete under
domestic laws and regulations, inform the applicant of the decision concerning the application.”
Similarly, the Reference Paper on Regulatory Principles that applies to basic telecoms services
requires that when a licence is required, all the licensing criteria and the period of time required to
reach a decision on a licence application, shall be made public.  In the context of applications for the
provision of cross-border satellite services, has the relevant information been made public and what
period of time would the U.S. consider "reasonable" for the consideration of an application?
(4) Transportation Services, (ii) Maritime transport services
a. With respect to para 59, page 199:  It is intere sting to note that the growth rate forecast for
1997-2002 for international water-borne trade, an area in which the U.S. maintains a fairly open
regime, is nearly three times greater (3.3%) than that forecast for the domestic trade (only 1.2%), an
area which the report notes “is exclusively reserved for U.S.-vessels under the Jones Act.” As
demonstrated by the dramatic growth that has resulted from the deregulation of the domestic airWT/TPR/M/56
Page 51
industry and more recently from open skies initiatives, liberalization of the U.S.’s domestic maritime
cabotage regime could provide a significant impetus for growth in this area and at the same time
remove an important impediment to trade.  As an initial measure, is there any possibility for a waiver
system (such as in Canada) wherein upon determinati on that there is no suitable domestic flag vessel
available for a domestic movement, a foreign flag vessel could be authorized subject to relevant dutyand crewing requirements?
b. With respect to paragraph 74 on page 203: We believe that the fact that the U.S. did not table
an offer in the WTO negotiations on maritime transport services is a major reason why the
negotiations were suspended.  We encourage the U.S. to make an offer when the negotiations resume.
Does the U.S. support the resumption of the WTO negotiations on maritime transport services as
scheduled in 2000 and, if so, does it plan to table a substantive offer at that time, which would be veryhelpful in moving the negotiations forward?
c. The Secretariat’s Report is silent on the U.S.’s inability to ratify the OECD Shipbuilding
Agreement, which would impose significant disciplines on subsidies for shipbuilding.  Is the
Administration still actively supporting the OECD Shipbuilding Agreement and, if so, what is it doingto convince Congress to ratify it?
(5) Professional Services, (ii) Legal services, para 96, pages 213-214:
The report indicates that foreign lawyers may be enti tled to practice law in the U.S. by meeting the
same state licensing requirements as U.S. nationals.  Footnote 139 to Paragraph 96 mentions that, in
this context, New York State is the only jurisdiction which allows individuals to practice without
having studied law in the U.S., provided they have studied or practised in a country whose
jurisprudence is based on English common law.  Can the U.S. indicate whether other states are
envisaging changes to their regulatory regime so as to recognize foreign legal education when settingthe criteria for admission to their respective bars?
REPUBLIC OF KOREA
I. Trade Policies and Practices by Measure
1. Border Measures
1.1 Tariffs
P. 46 (para. 9)1. Though average U.S. tariff rates are as low as 5.7% in 1999, tariff peaks in certain industries,
such as footwear and precision instruments, appear  exceedingly high.  Tariffs on those industries will
still remain high even after the full implementation of the U.R.  What is the U.S.'s long-term plan for
harmonizing "tariff peaks"?
P.47 (para 9 (b))2. Duty-free items substantially increased in 1999, compared with 1998 and 1996.  What kinds
of industries became tariff free in 1999?
P. 483. As discussed in B ox III. 1, specific duties cause greater economic inefficiency than
ad-valorem  tariffs, and conceal high ad-valorem  equivalents, though specific duties are relativelyWT/TPR/M/56
Page 52
simple to administer.  Is the U.S. considering reducing the high share (12.9% in 1999) of specific
duties out of all tariff lines?
1.2 Rules of Origin, Marking and Labelling
P. 55 (para 28)
4. Can the agreement with the E.U to prevent th e new rules from affecting imports of silk
products be used as a basis for the MFN treatment by the other countries?
1.3 Non-Tariff Measures
P. 57 (para. 38)
5. Importation of natural gas or liquefied natural gas is authorized only if it is consistent with the
public interest.  An assessment of public interest is required except for imports originating in a
country with which the United States has a free-trade agreement.  Why does U.S. relate importation of
natural gas or liquefied natural gas with the public interest?  Why not petroleum and other natural
resources?   In addition, the concept of public interest could be arbitrary.  What does U.S. mean by
public interest in this case?
1.4 New Customs Clearance Guideline6. The U.S. Customs Authority made public on 31st March 1999 new guidelines for customs
clearance concerning import document keeping requirement and fine imposition in case of non-
keeping (19 U.S.C 1508(a), (c); 1509(g)(1)).  In the case of non-compliance, the importer shall be
fined from US$5,000 up to US$100,000 and this is applicable retrospectively from 15 July 1996.
What is the rationale for the U.S. to apply a procedure designed for customs fraud to this kind of
negligence of document keeping, instead of making separate rules specific to this category?  What
justifies the retrospectivity?
1.5 Contingency Measures
P. 60 (para. 47)
7. Under section 311(a) of the NAFTA Implementation Act, NAFTA countries are excluded
from the application of safeguard measures, unless they are among the top five suppliers and it is
shown that they make an important contribution to serious injury.  However, it may be argued thatsuch a regulation is inconsistent with the most fundamental principle of the WTO i.e., MFN.  What is
the U.S. position on such view, and how many times has the U.S. invoked such regulation?
P. 64 (para. 62)
8. In the DRAMs case, i.e., the dispute between Korea and the U.S. regarding the U.S.
anti-dumping measures on DRAMs from Korea, the Panel recommended that the United States bring
"section 353.25(a)(2)(ii) of the Department of Commerce regulations, and the Final Results of the
Third Review, into conformity with its obligations" under the Agreement.  The WTO Panel agreed
with Korea that the "not likely" criterion in the U.S. anti-dumping revocation regime violates Article11.2 of the Anti-Dumping Agreement.  Specifically, the Panel rejected the U.S. practice, finding that
it improperly shifted the burden of proof to the repondent companies and required them to prove a
negative - that they are "not likely" to dump in the future.  The Panel found that whenever an
investigating authority conducts a revocation review , the authority bears the burden of proof and, toWT/TPR/M/56
Page 53
maintain a duty, must affirmatively find that du mping is "likely" to continue or recur if the
anti-dumping duties were removed.
In addition to invalidating the U.S. regulation, the Panel also found that the decision of the U.S.
Department of Commerce not to revoke the anti-dumping order on DRAMs from Korea based on the"not likely" criterion was inconsistent with Article 11.2 of the Agreement.  Therefore, to implement
the Panel's recommendations, the United States is obliged both to amend its revocation regulation and
to revoke the DRAMs anti-dumping order because, as the Panel found, it has no legal basis.
P. 76 (para. 87)9. In determining the likelihood of continuation or recurrence of dumping if anti-dumping duties
are revoked, the competent authority's finding should be based on objective and unbiased facts, and
reliance on mere conjecture is not permitted under the AD agreement.  Whatever the method used for
that purpose, it seems that the determination by the ITA and the USITC of the likelihood may involve
a high degree of conjecture.  In that respect, we believe that a zero or de minimis  level of dumping
margin for three consecutive years should be a fairly sufficient evidence that dumping is not likely torecur in the near future.  What is the U.S. view on this?
2. Measures Affecting Exports2.1 Section 301 and Related MeasuresP. 85 (para 122 and 123)10. Under the section 301(a) and (b), if the USTR does not reach an agreement with a foreign
country, it may decide to suspend, withdraw or  prevent the application of trade agreement
concessions, apparently unilaterally.  Does the U.S. believe that these provisions are consistent with
the principle of multilateralism?
P. 93 (para. 141)11. Under Super 301 procedures, the investigation period for practices involving a WTO
agreement is 18 months, while the investigation period for other practices is 12 months .  Why is there
a difference in the time allowed for investigations?  What is its justification?  Would it not be more
consistent to have a single 18-month investigation period for all?  Similarly, in paragraph 152, Title
VII states that the investigation period for government procurement practices involving the WTO
Government Procurement Agreement is 18 months while the investigation period for government
procurement practices not covered by the WTO GPA is 12 months.  Again, why is there a difference
in time allowed for investigations, and what is its justification?
3. Internal Measures3.1 TaxationP. 98 (para. 158)12. The current harbour maintenance tax (HMT) taxes only exports to the U.S., but does not tax
exports originating from the U.S. In that sense, the recently proposed user fee for the HMT by theAdministration has the potential to rectify this imbalance.  When is the user fee expected to be
implemented and will this user fee be levied on both exports from and imports to the U.S?WT/TPR/M/56
Page 54
P. 102 (para. 165)
13. The FSC (foreign sales corporation) provisions of the U.S. Internal Revenue Code may
constitute a subsidy in violation of the WTO Agreement on Subsidies and Countervailing Measures
(SCM), because they give direct financial assistance to exports of U.S. companies through taxconcessions.  However, the United States maintains that the FSC is fully consistent with its WTO
obligations.  What is the basis for the U.S. belief that the FSC provisions do not violate the WTO
SCM?
3.2 Trade-Related Aspects of Intellectual Property RightsP. 108 (para. 186)14. The U.S. is the only country using a first-to-invent patent system, as opposed to the
first-to-file system followed by the rest of the world.  The difference has often created interface
problems.  What is the U.S. view on this matter?
P. 111 (para 197)
15. Under Article 16.2 of the TRIPs, the well-known trademark shall be protected by being taken
into account in determining likelihood of confusion.  However, the fact that the U.S. lacks any listing
of the well-known trademarks may lead to improper protection.  How can the well-known trademark
be identified ?  What is the U.S. position on this issue?
3.3 Standards, Sanitary Requirements, and Environmental Regulations3.3.1 Standards, Technical Regulations and Conformity AssessmentP. 121 (para. 231)16. With regard to the adoption of international standards, while the U.S. claims that national
standards are "technically equivalent" to internationa l ones, it has a relatively low level of direct use
of standards set by international standardizing bodies.  Does the U.S. have any plans to review
existing standards and achieve full alignment with international standards?
3.3.2 Sanitary and Phytosanitary MeasuresP. 124 (para. 246)
17. Through the Korea-U.S. Work Plan in August of 1995, the U.S. government has permitted the
import of Cheju citrus on the condition that phytosanitary safety measures for prohibited disease and
pests (Citrus Canker Disease) be carried out.  However, the importation of Cheju citrus into the five
major citrus producing states (California, Florida, Arizona, Louisiana and Texas) is still prohibited.
As Korea is taking the appropriate measures in its inspections, what is the justification of such
discrimination by the citrus producing states and wi ll the U.S. federal government address this issue?
3.4 Government ProcurementP. 138-139 (para. 294-295)18. There is a discrepancy between the definition of "U.S. made end product" as defined in the
Trade Agreement Act and "domestic end product" as defined in the Buy American Act.  The
Secretariat report states that the U.S. is seeking an amendment to the Federal Acquisition Regulation
(FAR) to rectify the discrepancy by introducing  the definition of "U.S. made end products" asWT/TPR/M/56
Page 55
products that are manufactured or substantially transformed in the U.S., regardless of the source of the
components, thus allowing the purchase by federa l agencies of all U.S. made end-products, whether
or not they are defined as "domestic end products" under the Buy American Act.
19. How far has this amendment gotten in the legislative process?   When is this amendment likely
to take effect?   Also, if the "U.S. made end product" satisfies the definition in the amended FAR but
does not satisfy the definition of the Buy American Act, would it be subject to the price margin
requirement or other requirements as set by the Buy American Act?  (In other words, would the FAR
amendment legally or effectively render useless th e definition of "domestic end products" as defined
in the Buy American Act?)
3.5 Competition PoliciesP. 144 (para. 312)20. Under the Clayton Act, foreigners are granted national treatment and may therefore sue for
the same amount (as the national entities), but this does not apply to foreign states, which may recoveronly an amount equal to the damage inflicted plus the cost of the suit.  On what basis (or rationale) is
this distinction made?  And how are foreign para-statal (e.g. government invested corporations)
entities treated under the Clayton Act regarding damage recovery?
P. 144 (para. 313), p. 142 (para. 305)21. The FTC Act covers areas that are covered under the Sherman Act, the Clayton Act as well as
cases that do not fall precisely under these two acts.  When foreigners are involved in cases that can
be covered under the Sherman Act or the Clayton Act, under which Act (i.e., under either of the two
Acts or the FTC Act) will the foreigner sue or be sued?  On what basis will the distinction be madeand what difference will it make to the foreigner whether he/she is treated under one act rather than
the other?  Some states have laws different from the Federal Law.  In cases where foreign entities are
involved, under which jurisdiction will the cases be covered - under district, state or federal level?
P. 146 (para. 320)22. What is the extent of the immunity granted and what are the criteria for the grant for the
"limited immunity" in certain sections mentioned in this paragraph under the Exporting Company Act
and Webb-Pomerene Act?  What will the U.S. position be when other nations applied their own
competition laws to U.S. entities with immunities under these Acts for violating competition
regulations in their jurisdictions?   It seems that export cartels and price fixing can also be granted
immunity under the Act in certain sectors.
II. Annex III.1:  TextilesP. 161 (para. 11)
23. On 19 November 1998, the EU requested consultations with the United States on the latter's
alleged failure to implement commitments under a 1997 agreement regarding U.S. rules of origin.
The revision of rules of origin on textile products (effective July 1, 1996) may violate Article 2 a, c, d,
of WTO agreement on rules of origin.  What is the U.S. view of this possible violation?
24. U.S. customs procedures require excessively perforating sample sign for textile products
which damages the samples.  U.S. also requires import visa for the small amount of samples of textile
products and clothing to be re-exported after the exhibition.  These practices are restrictions to market
access.  Does the U.S. have a plan to remove these measures?WT/TPR/M/56
Page 56
III. Annex III.2:  Agriculture
P. 168 (para 16)25. It is said that the U.S. Government added approximately US$6 billion to the Product
Flexibility Contract payment programme in the FY 1999 with a view to supporting farmers suffering
from price falls or natural disaster.  What's the contents of this measure and its criteria for payment?
P. 169 (para 21)26. It is reported that small-size pork farmers have been directly paid US$50 million in total
through the Small Hog Operation Payment Program since February 1999 and also benefitted from taxrefund since March 1999.  Will these measures be included in the calculation of Aggregate Measure
of Support (AMS) as these are having impact on market prices, and subject to reduction provided for
in the Agreement on Agriculture?
27. What is the scope of the Emergency Crop Loss Program introduced in 1999 for the purpose
of compensating farmers that suffered agricultural losses in 1998?  Is this program consistent with
the criteria for relief support to natural disaster permitted under the Agreement on Agriculture?  Is
there similar program applicable to livestock such as beef and pork?
P. 163 (para 4)28. As seen in Annex table III.2.2, there are several items whose quota are underfilled below
30%.  What explains this?
29. U.S. have country quota system in some dairy products, which is arguable in connection with
non-tariff barrier.  Does U.S. have any room to study to introduce the global quota system in the
future?
IV. Annex III.3:  SteelP. 178 (para 15)
30. How would the Early Warning System work?  What would be the "extraordinary
circumstances" which would activate the Early Warning System?
P. 178 (para 16)
31. Under the Action Plan, steel companies experiencing losses may be allowed to offset these
losses against the taxes paid during the prior five years instead of the current two year carry-back
periods, allowing steel companies to obtain refunds for prior taxable years, reaching periods before
the Asian financial crisis.  Would this act constitute a subsidy for steel companies?  Also, is this act
consistent with the efficient operation and possible restructuring of the U.S. steel industry?
V. Trade Policy in Services1. Telecommunications Services
P. 194-195 (para. 45-46)
32. In international telecommunications services, the Federal Communications Commission
(FCC) has considerable discretion in either granting or denying an application under causes of "very
high risk to competition or public intere st factors" by both Section 214 and 310 of theWT/TPR/M/56
Page 57
Communications Act.  National security, law-enforcement issues, foreign policy and other "public
interest factors" can be also taken into considera tion in determining whether to grant an application.
As these factors are potential entry barriers to foreign competition, the Korean government would like
to hear the views of the U.S. on this matter.
2. Transportation Services2.1 Maritime Transport ServicesP. 201 (para. 65)
33. The ten-year maritime Security Program provides funding up to US$100 million annually for
up to 47 vessels and U.S. citizens owning or leasing vessels may obtain tax benefits through the
Capital Construction Fund and various other channels.  How do you explain this apparent
inconsistency with the fundamental prin ciples of MFN and National Treatment?
P. 201 (para. 66)
34. The U.S.-flag fleet is also supported by cargo preference requirements for certain types of
cargos.  And the Alaska Power Administration Sale Act of 1995 retained the pre-existing U.S.-flag
vessel carriage requirement for Alaska crude oil exports.  These regulations appear to be inconsistentwith the basic principles of the WTO.  What is the U.S. position concerning this matter?
HONG KONG, CHINA
Import licensing
(WT/TPR/S/56, P. 57, Para. 38)
227. We note that importation of natural gas or liquefied natural gas is authorized only if it is
consistent with the public interest and a finding of public interest is required except for imports
originating in a country with which the U.S. has a free-trade agreement (FTA).  It is also mentioned
that currently, virtually all natural gas imports originate in FTA partners.  We are interested to know
how "public interest" is defined and based on what criteria public interest is determined.  Have any
applications for authorization to import from non-FTA countries been rejected on the grounds of
"public interest"?  Would the U.S. share with us if it has any plan to relax the import requirements for
non-FTA parties?
Non-tax measures affecting investment
(WT/TPR/S/56, P. 103, Paras. 168 & 170)228. We learn from the Secretariat Report that the U.S.' foreign direct investment regime contains
long-standing exceptions from the WTO principles of NT and MFN (e.g. sector-specific reciprocity
provisions and blanket restrictions on foreign ownership in telecommunications and energy sectors).
Does the U.S. Government have any plans to remove such exceptions progressively and if so, would
appreciate if the U.S. could provide more details on these plans?WT/TPR/M/56
Page 58
Government procurement (GP)
(WT/TPR/S/56, PP. 131-141, Paras. 273-300)
229. We understand that the U.S. Government provides assistance or preference to small business
concerns.  While we note that para. 1 of the General Notes of the U.S.' schedule of commitments in
Appendix I to the GPA states that "this Agreement will not apply to set asides on behalf of small andminority businesses"; and paragraph 2 of the Notes to Annex 2 to Appendix I states that "the
Agreement shall not apply to preferences or restri ctions associated with programs promoting the
development of distressed areas and businesses owned by minorities, disabled veterans and women",
we would like to know if the U.S. has any plan to remove these preferences, which are not in line with
the principle of non-discrimination.
230. We would like to seek detailed information on the operation of these assistance programmes
including set aside and subcontracting plan requirements.  We are also interested to know how suchassistance operates vis-à-vis the principle of non-discrimination in areas such as:
- whether these assistance programmes distinguish between the U.S. and non-U.S.
small business suppliers or among non-U.S. suppliers;
- whether there are threshold values above or below which these assistance
programmes will not be applicable;
- what measures have been put in place to ensure that domestic and foreign suppliers
are put on equal footing in bidding for contracts to which these assistance
programmes are applicable;
- whether the requirements under these assistance programmes form part of the criteria
for qualification or selection of suppliers;
- whether preferential treatment is given to those bids with subcontracting plans;  and
- under the subcontracting plan requirement, what measures have been put in place to
ensure that domestic and foreign subcontractors are put on equal footing in bidding
for subcontracts.
231. We note a number of Party-specific non-application and reciprocity provisions in General
Notes 5 to 9 of the U.S.' schedule of commitments in Appendix I to the GPA.  These provisions are
derogations from the fundamental principle of non-discrimination of the multilateral trading system.
We would appreciate an update on the progress in working towards the removal of such provisions
and what plans the U.S. has to remove such provisions.
Competition policies
(WT/TPR/S/56, P. 149, Para. 323)232. It is stated that the Project American Jobs Through the Foreign Antitrust Improvements
Amendments Act of 1998 seeks to provide for actions against anti-competitive conduct involving
foreign trade based on harm to U.S. exporters without regard to the effect of such conduct on U.S.
consumers.  To what extent is this Act compatible with the widely recognized competition goal of
promoting economic efficiency and market contestability?WT/TPR/M/56
Page 59
Textiles:  Integration
(WT/TPR/S/56, P. 160, Para. 6)
233. We would like to seek clarification on the visa requirement for products integrated under
Stage 2 which have been eliminated as from 1 January 1999.  Could the U.S. confirm that the visa
arrangement for products to be integrated under the subsequent stages in accordance with Article 2.8of the ATC will also be eliminated at the same time of the integration?
Financial services
(WT/TPR/S/56, P. 182, Para. 11)234. We note that the establishment of a branch, agency or subsidiary bank by a foreign bank is
prohibited if the foreign bank is not subject to comprehensive consolidated supervision (CCS) by
home country authorities.  Would the U.S. provide more  information on the CCS?
(WT/TPR/S/56, P. 186, Para. 17)235. It is mentioned that under limited circumstan ces, foreign broker-dealers are exempted from
registration requirements under U.S. laws.  What would be these limited circumstances?
(WT/TPR/S/56, P. 187, Para. 20)
236. We note that foreign-owned dealers would be a ccorded national treatment as long as U.S.
firms operating in the government debt markets of the foreign country are accorded "the same
competitive opportunities" as domestic companies .  Will the U.S. Government review such reciprocity
requirements and consider removing this arrangement from the list of MFN Exemptions?
(WT/TPR/S/56, P. 191, Para. 36 and Footnote 41)
237. Note that financial services modernisation legislation is being proposed, with a view to
enhancing market access and providing national treatment for foreign services suppliers.  Weunderstand that the legislation is being considered in the current Congress session. It would be useful
to know the latest state of play.
Telecommunications services
(WT/TPR/S/56, P. 194, Para. 47)238. It is mentioned that the exclusive right of the Communications Satellite Corporation (Comsat)
to provide link-ups with Intelsat and Inmarsat has ended after Inmarsat privatized in April 1999.  We
would like to know the progress of privatization and whether foreign suppliers may participate in
providing these satellite services .
(WT/TPR/S/56, PP. 195-196, Paras. 49 & 51)
239. We note that the Federal Communications Commission (FCC) reserves the right to attach
conditions to granting of authority or denying application for provision of international
telecommunications, and in allowing foreign satellite services when "a very high risk to competition"
is posed or "public interest" is affected.  We would like to know more information on what
circumstances will be considered as constituting "high risk to competition".WT/TPR/M/56
Page 60
(WT/TPR/S/56, P. 196, Para. 52)
240. The Benchmark Settlement Rate Policy attaches conditions to foreign participation in the U.S.
telecom market since the FCC considers international settlement rates pay to foreign carriers
constitute a subsidy to these foreign carriers.  It is mentioned that a reform is being contemplated, and
a final Order is expected in the second quarter of 1999. We would like to know more details aboutthose attached conditions.  Also, would the U.S. provide more information on the formulation and
implementation of the re form, such as the content and time frame etc?
Transportation services
(WT/TPR/S/56, P. 200, Para. 62;  P. 203, Para. 73)241. The Jones Act protects the domestic water-borne trade such that it is exclusively reserved for
U.S. vessels.  Studies by the U.S. International Tr ade Commission showed that repeal of the Act could
reduce shipping services cost and increase benefit to consumers.  The issue has been discussed in theSenate and the Congress in 1998.  It would be appreciated if the U.S. could brief us on the progress of
discussion and if the U.S. has any plan to amend the Act.
(WT/TPR/S/56, P. 203, Para. 72)
242. Regulatory changes under the Ocean Shipping Reform Act has enhanced the powers of the
Federal Maritime Commission (FMC) to review ra tes of foreign government carriers and guard
against foreign-government backed pricing.  Actions may be taken against owners, operators, agents
or masters of foreign vessels that engage in pricing practices that create "conditions unfavourable to
U.S. shipping".  We are interested to know more information on what constitutes "unfavourable
conditions" and what are the possible actions.
(WT/TPR/S/56, PP. 207-208, Para. 82)243. We note that different standards exist in the certification of domestic and foreign aircraft
repair stations.  Certification for foreign station is subject to annual and biennial reviews whilst
domestic stations are valid till surrendered or revoked.  Proposed legislation to bring the standards
into conformity failed to pass through the Congress.  We are interested to know whether the policy
will be reviewed again in the future .
AUSTRALIA
Safeguards Legislation
Given that the WTO Safeguards Agreement already provides for the application of temporary trade
restrictions in certain specific circumstances and that legislative proposals before the U.S. Congress
would significantly lower the U.S. domestic legal standard for obtaining import relief, what plans
does the United States have for preventing Section 201 of the 1974 Trade Act from being used by U.S.industries faced with unsubsidized import comp etition to avoid making competitive adjustments?
Australia has a number of reservations and questions about the USITC S.201 report on lamb meat
which it has put to the United States.  We consider that safeguards action would be unjustifiable in
this instance and would send the wrong signal to others in relation to safeguards action in relation tothreat alone.WT/TPR/M/56
Page 61
Agriculture Domestic Support Arrangements
In the 1996 Federal Agricultural Improvement and Reform (FAIR) Act the United States made a
significant positive change to the provision of domestic support arrangements to grains and oilseeds.
Previous price supports, which were linked to current production levels, were largely removed andreplaced by a decoupled system of direct payments under the Agricultural Market Transition Act
(AMTA).  This provides a good example for other countries to follow in liberalizing domestic support
regimes.  We note that in 1998 the U.S. Congress approved payments to farmers in the form of
additional AMTA payments of $3.5 billion, explicitly as a response to the low commodity prices, and
enabled farmers to bring forward the payment of the scheduled AMTA amounts, also in response to
low commodity prices.  This would appear to mean  that both the scheduled AMTA payments and the
supplemental payments are, in fact, linked to changes in current commodity prices.  We would like to
ask the U.S. whether it regards each set of payments  made in 1998 as falling within the "green box"
or "amber" box and whether it intends to increase AMTA payments during years of low commodity
prices?
Agriculture Export Subsidy Roll-overs
We note that on 14 May 1999 the U.S. announced that it would be making available an additional
45,177 mt of non-fat dry milk, 7,500 mt of whole milk powder and 1,270 mt of cheese, being the
difference between Uruguay Round limits and actual quantity of product subsidized in years prior to
1998-99.  This will mean that the U.S. will likely exceed its WTO export subsidy commitments inboth 1998-99 and 1999-00.  Could the U.S. explain how the alloca tion of these additional quantities is
consistent with its obligations under Articles 9 and 10 of the Agreement on Agriculture?
Export Credits
Article 10.2 of the Agreement on Agriculture requires that:
"Members undertake to work toward the development of internationally agreed disciplines
to govern the provision of export credits, export credit guarantees or insurance programmes
and, after agreement on such disciplines, to provide export credits, export credit guarantees
or insurance programmes only in conformity therewith."
We are concerned that negotiations in the OECD have not yet reached completion as we are about to
commence a new round of negotiations on agriculture .  Does the U.S. expect that negotiations will be
able to be completed in the next six months and is  the U.S. intending to improve its offers on export
credit reforms?
Shrimp
What is the basis for continued denial of access to the U.S. market for shrimp from the Spencer Gulf
of Australia (i.e. where turtles are not found) and from the Northern Prawn Fishery (under
"shipment-by-shipment" provisions).  How and when will the U.S. remove such restrictions?
Sugar
We note that access to the U.S. market for raw sugar, governed by a tariff rate quota, is now at near
record low levels, and in the current year only just exceeds the U.S.'s WTO minimum accesscommitment.  We note also that the differential between the world market price for sugar and the U.S.
price is now at near record levels, with the U.S. price nearly four times the world market price.  With
the sugar program continuing to send the wrong market signals to U.S. producers who are expanding
production at a time of low world prices, how does the U.S. intend to meet the expectation ofWT/TPR/M/56
Page 62
unsubsidized foreign producers, such as Australia, that access to the U.S. market will be
progressively liberalized?
When will the United States be rectifying its Harmonized Tariff Schedule to take account of a
necessary polarity adjustment for raw sugar?   (The polarity adjustment would mean the base tariff
equivalent to be applied to raw sugar imports entering the United States under the second tier of the
tariff rate quota would be 17 cents per pound instead of 18 cents per pound.)
Government Procurement
The U.S. government procurement market remains highly restricted under the Trade Agreements and
Buy American Acts, and additionally through the plurilateral nature of the Government ProcurementAgreement, to which Australia is not party.  What measures does the U.S. envisage adopting in
domestic arrangements to improve access and increase the competitiveness of the U.S. market?  Does
the U.S. see the scheduled review of the Governm ent Procurement Agreement leading to a revamped
GPA II which establishes a proper MFN basis for internationally competitive government
procurement, with full regard to principles of non-discrimination and national treatment?   If so, is the
U.S. prepared to negotiate on elements of it s domestic regime as part of the review?
Australia supports the development of a principles-based Agreement on Transparency in Government
Procurement, which does not negate, obviate or replace the need for a proper review and renegotiation
of the Government Procurement Agreement.  Is this also the view of the U.S. Government ?
Non Tariff Measures (NTM)
We note the finding in the June 1999 OECD Economic Outlook  "Trends in Market Openness" that,
notwithstanding improvement over recent years, NTMs still have a high frequency in the U.S. (16.8%of tariff lines, against 19.1% for the EU and 10.7% for Japan).  How does the U.S. propose to further
decrease the incidence of NTMs in its market?
Intellectual Property
Could the U.S. explain its understanding of the TRIPS consistency of s110(5) of the US Copyright Act
(homestyle exemption) in ensuring the protection of the legitimate interests of composers andpublishers of musical work?
Services
What measures or reforms does the U.S. intend to take to ensure that State-level regulations of
professional and business services (particularly skills and residency-testing procedures), do not
create unnecessary impediments to market access, particularly in accountancy, law, engineering and
architecture?
Telecommunications
What is the basis for restrictions on foreign com panies wishing to invest in radio telecommunications
infrastructure and/or provide mobile and satellite services?  What plans are there for liberalization of
these restrictions?
Maritime Services
We note that U.S. laws governing coastwise shipping, the 1920 Merchant Marine Act and the 1885
Passenger Services Act, effectively preclude foreign involvement in the U.S. maritime sector, leavingWT/TPR/M/56
Page 63
this the only U.S. transport sector so protected.  How does the U.S. intend to liberalize the unusually
restrictive laws on the provision of maritime services in the United States?
In view of the U.S. Government's strong support for the negotiation in the OECD of disciplines on
shipbuilding subsidies, what plans does the United States have for liberalizing the domestic maritime
sector to the benefit of U.S. consumers and agricultural producers?
NEW ZEALAND
Tariffs :  The Secretariat Report notes that, notwithstanding the U.S.' low overall level of
tariff protection, 5% of MFN tariffs involve rates exceeding three times the overall average.  Goods
affected by such tariff "peaks" include some food and agricultural products, textiles, clothing and
footwear (S/III, para. 2, p. 45).  The U.S. has stat ed that its policy is based "strongly on the premise
that removing barriers and distortions to global trade enhances higher wage job creation, incomes,
living standards and growth potential, for the U. S. and its trading partners" (G/V, para. 75, p. 17).
In view of this, what is the U.S.' justification for maintaining high tariff protection in these
areas, and what programme does it have for the reduction and eventual elimination of such tariffs?
Import licensing :  The Secretariat Report notes that import permits are required for most
plants and plant products to protect against the introduction of pests and diseases, and to protect
endangered plant species (S/III, para. 35, p. 56).  The report further notes that if the country is free of
the disease or pest in question, APHIS will issue the import permit (footnote 35).
In light of this, how does the U.S. justify the longstanding delay in resolving New Zealand's
request for access to the U.S. for live honeybee and honeybee semen, when, in view of New Zealand's
superior honeybee health status, there is no scientific basis for denying such access of SPS grounds?
Safeguards :  We note that, while the number of anti-dumping and countervailing duty
investigations has declined in the U.S. during the period under review, the number of safeguard
investigations has increased (S/III,  para. 45, p. 46).  This trend could be interpreted as suggesting that
safeguard actions are being relied on by certain domestic industries as an easy response to the natural
and foreseen consequences of the greater market acc ess opportunities that followed in the wake of the
Uruguay Round.  In this connection, New Zealand is particularly concerned about the safeguard
action initiated on lamb exports.
Would the U.S. comment on these aspects?The Secretariat Report states that import measures, including safeguard measures are
designed to counteract trade practices such as export subsidies and the dumping of products onto theU.S. market (S/III, para. 4, p. 45).
Given this policy, it would seem inconsistent to impose safeguard measures where there is no
question of the product concerned being subsidiz ed, dumped or unfairly traded.  Would the U.S.
comment on this?
The Secretariat Report also notes that the U.S. International Trade Commission (ITC)
evaluates the economic effectiveness and welfare effect s of U.S. trade policy measures (S/ III, para. 1,
p. 45).
What measures are taken by the US ITC, and by the President in deciding on a safeguards
remedy, to ensure that the economic effectiveness and consumer welfare effects of imposing non-trade
restrictive measures as opposed to trade restrictive measures are taken into account?WT/TPR/M/56
Page 64
In determining a remedy can the U.S. explain what  measures it has in place to ensure that the
remedy imposed is necessary to prevent serious injury or the threat of serious injury?
Export controls :  The U.S. maintains export controls on unprocessed timber originating from
non-federal public lands in the western continental United States under the Forest Conservation andShortage Relief Act (S/III, para. 98, p. 80).
What is the economic rationale for maintaining this prohibition?Is this measure for purely conservation reasons, or does it have the effect of increasing
domestic supply?
How does the U.S. assess the impact of these measures on negotiations in the WTO on
forestry?
Export credits:  Could the U.S. please advise what steps it is taking to mitigate the effect that its use
of government financed export credit and export guarantee programmes has on other exporters?
U.S. Dairy Policies :  New Zealand welcomes the confirmation in the conclusion to the U.S.
Government's statement on its trade policy, that "open, competitive markets – both internally and at
the border – have contributed to our economic efficiency and prosperity".  (G/II, para. 22, p. 9).
However, certain U.S. industries, such as dairy, with its complex system of import licensing and quotaadministration regulating dairy imports, dairy compacts, export subsidies, price supports and milk
marketing orders, appear to be not quite so open and competitive.
How does the U.S. reconcile maintaining a highly protected dairy sector, with its commitment
to "genuinely open markets for trade in agriculture, goods and services"?  (G/(I, para. 1, p. 5).
In particular, what justification does the U .S. have for the continued use of export subsidies
under the DEIP, when these have a price-distorting effect in an already depressed global commodity
market, and which are contradictory to the U.S.' declared objective of the elimination of export
subsidies in a new round of agriculture negotiations?
What measures are envisaged to reform the U.S. dairy industry to make it more open and
competitive by submitting it to the same market disciplines as other industries?
JAPAN
Report by the Government (WT/TPR/G/56)
(i) The Government Report states that the most recent severe decline in personal saving in the
United States is widely perceived to be related to the sharp increase in the market value of financial
assets in the U.S. over the last two years and, therefore, is likely to be temporary in nature
(para. 15, p. 7).  However, if there is a rapid decline in the market price of monetary assets, whenover-consumption is made under an unrealized capital gain, there would be a high possibility of the
American Economy crash landing.  Please explain what measures the United States would take if
such a rapid decline in the assets price would actually happen.
(ii) The trend in stock prices also has a great impact on personal consumption and household
savings .  Please explain how the United States' Government evaluates the present trend of stock
prices, as well as the future prospects.WT/TPR/M/56
Page 65
Report by the Secretariat (WT/TPR/S/56)
1. Tariff Peaks (para. 12, p. 11)The United States is implementing MFN tariff reductions on a number of products in accordance with
the Uruguay Round commitments.  However, tariff peaks for such products as textiles and clothing,
etc. still remain .  Please explain the reasons for maintaining such tariff peaks and the future prospects
for reducing such peaks.
2. WTO Dispute Settlement (p. 28, para. 42)(1) EC-banana case:  U.S. reaction against the new measures adopted by the ECa) Has the U.S. measure, "withholding liquidation", effective as of 3 March 1999, been
terminated as a result of the authorization by the DSB of the U.S. suspension of concessions or other
obligations?
b) The U.S. decided to begin withholding liquidation on 3 March when the DSB had not yet
authorized the U.S. to suspend concessions and related obligations.  Did the U.S. make such a
decision because the U.S. Government was required to take certain action by the date provided for in
Section 301 of the U.S. Trade Act?
(2) EC-Hormones case:  EC-Measures Affecting Meat and Meat Products (Hormones)
Regarding the banana case, the Government of Japan expressed its view that it very much regretted
that the U.S. had decided to begin withholding liquidation, effective 3 March 1999, on selected
products from the EU, thereby causing an effect equi valent to the U.S. taking unilateral action.  The
Government of Japan, therefore, requests that the U.S. and EC act in good faith regarding the
Hormones case, in accordance with the rules and regulations of the WTO.  Please explain the U.S.
view on this point?
3. Negotiating Competence for Tariff Reductions (para. 51, p. 31)(1) It is understood that tariff reductions exceed ing the tariff rates of the UR Agreement are
admitted to some sectors under Article 111 of the Implementation of the UR Agreement Bill, without
having any further approval from the U.S. Congress since mandate was given during the UR
negotiations.  The fifteenth sectors discussed under the ATL/EVSL initiative include environmental
goods, energy, food, rubber, gems and jewellery.  These sectors were not included in the tariff duty
sectors which were mandated for negotiations during the UR.
In the hearing of the International Trade Subcommittee of the Senate Finance Committee,
held on 14 July, Ambassador Fisher, Deputy USTR, stated that, in certain areas of the so-called
advanced tariff liberalization sectors, "there is residual authority;  in others, there is not".  He also
stated that, "to complete that negotiation of those reductions and to change the current practices, thatwe will have to have the authority for fast-track and approval, and this is why we need to seek it in a
timely manner".
In which fields does the United States think that the Government has no trade negotiating
authority.  Under which mandate is the Government of the United States carrying out tariffnegotiation in those fields in the context of ATL/EVSL?
(2) At the end of 1998, fast-track related bills were not approved by the Congress.  What is the
prospect of these bills being approved this year?  If these bills are not approved this year, will theWT/TPR/M/56
Page 66
Government of the United States be negotiating the next round only by way of the mandate given
during the UR?
4. Regional Trade Agreements
(1) FTAA (para. 53, p. 31)
(a) With regard to the FTAA, please explain the relationship among the FTAA, the NAFTA and
the Mercosur .  How does the United States envisage a free-trade area which already contains another
free-trade area and a customs union?
When the Mercosur, which is a customs union, join s the FTAA, how will the common external tariff be
treated? Will the common external tariff of the Mercosur only be applied to non-FTAA countries?  In
other words, will the Mercosur join the FTAA by itself?
(b) When establishing the FTAA, can the United States assure that the provisions of rules of
origin will not become further restrictive?  Can the United States also assure that the members of theFTAA would not increase local content requirements?
(2) NAFTA(i) (Para. 56, p. 33) Regional trade agreements are exceptions to the principles of the WTO,
which is to maintain the free and non-discriminatory  principles of the multilateral trading system,
especially the MFN.  The establishment of such re gional trade agreements is, therefore, only admitted
when this will promote trade and contribute to the world.
Regarding the NAFTA, an issue of conformity with Article XXIV of the GATT has been pointed out
several times and concerns have been expressed on the complex and strict application of the rules of
origin on automobiles, which may be considered as restrictive measures from the point of view of the
third parties.
Please explain how much imports on automobile par ts from the non-parties increased upon and after
establishment of the NAFTA?
(ii) (Para. 59, p. 33) According to the Understanding on the Interpretation of Article XXIV of the
GATT, the time frame for the establishment of regional integration is, in principle, ten years.
Establishing a fifteen-year transitional period for elimination of tariffs and non-tariff measures seems
to not be in conformity with Article XXIV of the GATT.  Please explain the rationale for this longer
transitional period?
Safeguard measures are also to be applied in the free trade area.  Will the safeguard measures also be
applied to external trade? Please explain its conformity with the GATT Article XXIV.
5. Tariffs (para. 8, p. 46)(1) Tariff rates of trucks (motor vehicles for the transport of goods)The U.S. imposes high tariff rates, such as 25% on most truck items (HS 8704).  In comparison with
the tariff rates of other WTO members (e.g. free for Japan, 0 to 22% for EC, 5 to 20% for Australia),this figure remains considerably high.
Japan would like to know the reason why the U.S. im poses ten times higher tariff rates on trucks than
on passenger vehicles (concession rate at 2.5%), and, in addition, would like to request elimination of
this tariff peak.WT/TPR/M/56
Page 67
(2) HS96
The U.S. has not yet finished the process of rectifying and modifying its Schedule in order to
introduce the HS96.  Japan brought up the same point at the last TPRM for the U.S. two years ago.  It
is, therefore, regrettable to see that there has been no change in the situation and Japan would like torequest an early finalization.  When is the U.S. finalizing the process?
(3) Method of Tariff Determination for Watches (P. 47, para. 12)Regarding the method for determining tariffs on watches, the U.S. does not just apply one single tariff
rate for completed watches, but rather, applies different rates on various parts.  Wrist watches
(generally classified under Chapter 91), for example, are subject to this method.  Under this method,exporters must submit not only the value of the completed products, but also the value of the various
parts contained therein.  Since this system is imposing a great burden on exporters, Japan requests
that the U.S. improves the current system and adopts a single tariff to apply to completed products.
Japan also requests the U.S. to simplify its customs procedures by adopting a HS 6-digit system .
Please explain the U.S. view on this point.
6. Rules of Origin(1) Local content requirement on automobiles (para. 24, p. 54)
It is mentioned that, "[f]or automotive products, the regional-content requirement is 56%, to be
increased to 62.5% in 2002".  What is the reason for increasing the requirement?  Rules of origin are
regarded as an "other regulation in commerce" as stated in Article XXIV:  5(b) of the GATT.  Such
substantial strengthening of the rules of origin may well violate Article XXIV:5 which stipulates that,
"duties and other restrictive regulations of commerce shall not be higher or more restrictive than thecorresponding duties and other regulations of commerce existing in the same constituent territories
prior to the formation of the free trade area, or interim agreement".  What is the United States' view on
this point?
(2) Rules of origin in NAFTA (para. 24, p. 54)Under the rules of origin in NAFTA, in order for a textile product to be considered of NAFTA origin,
the production process of yarns or cotton must be made within the NAFTA.  Textile products using
textiles imported from Japan are, therefore, not considered of NAFTA origin, thereby a higher tariff
rate is applied when distributed in the NAFTA.  This being so, rules of origin in the NAFTA
constitute a barrier to investment from Japan into  the NAFTA countries and also has the effect of
excluding the exports of non-parties, thereby resulting in discrimination.  The rules of origin of theNAFTA are substantially stricter rules compared to those of the United States-Canada Free Trade
Agreement.  The Committee on Regional Trade Agreement is now in the process of examining the
NAFTA but has not yet clearly addressed its views.  However, it cannot be denied that such an
agreement may conflict with the provisions of Article XXIV of the GATT.  Japan would like to
request the United States to amend the rules of origin in the NAFTA to the extent of similar rules oforigin in the United States and also to improve market access for non-parties.   What is the U.S. view
on this point?
(3) Changes in the U.S. rules of origin for textiles and apparel products
In November 1998, the European Communities requested consultations with the United States
pursuant to Article 8.4 of the Agreement on Textiles and Clothing, Article 7 of the Agreement on
Rules of Origin, Article 14.1 of the Agreement on Technical Barriers to Trade and Article XXII of the
GATT 1994, in regard to this issue.  On 15th Ja nuary 1999 the first meeting for consultations, in
which Japan participated as a third party, was held.  Since then there seems to have been no progress.WT/TPR/M/56
Page 68
What are the current U.S. rules of origin for textiles and apparel products?  (Are the changed rules,
which entered into force on 1st July 1996, being implemented at present?)
What is the latest situation regarding the consultations between the United States and the European
Communities?
Which rules of origin will the U.S. authorities apply for textiles and apparel products from now on?
(Will the U.S. authorities return to the rules of origin which were valid before the change in
July 1996?)
(4) Rules of Origin for Watches (P. 54, para. 26)
Exporters are obliged to indicate the country of origin for each major part when importing watches
into the U.S.  Furthermore, the formula for the indication of origin is very complicated.  Such a
system imposes a heavy burden on exporters.  Japan requests that the U.S. simplifies its system in
order to only oblige indication of a single origin for completed watches, and in order to allow
exporters to determine the appropriate way for indicating the origin .  What is the U.S. view on this
point?
(5) Labelling of Automobiles (P. 54, para. 27)The "American Automobile Labelling Act" mandates la bels for passenger cars and light trucks sold in
the U.S. that include a certain ratio of parts made in the U.S. or Canada.  This law implicitly
encourages the use of domestic products and could be inconsistent with the principles of national
treatment.
Moreover, since the labelling requirement applies only to automobiles with a greater non-U.S./Canada
ratio, this system provides a heavy administrative burden for calculating such a ratio on
foreign-affiliated manufacturers, which generally have a higher non-U.S./Canada ratio, as well as the
dealers of such automobiles.  This could be deemed as a de facto barrier to imports.  Japan, therefore,
requests that this system be revised to secure fair competition .  Please explain the U.S. view on this
point.
7. Non-tariff measures(1) Iran and Libya Sanctions Act of 1996 (para. 55, p. 31)In 1996, the United States enacted the Iran and Libya Sanctions Act.  The scope of the sanction covers
parties investing in excess of $20 million a year that, under judgement from the President, contributedirectly and markedly to the development of oil resources in Iran and Libya.  The sanction measures
include those regarding Export-Import Bank assistance, export licenses, loans or credit provided by
U.S. financial institutions, U.S. government debt instruments, government procurement and imports.
The Act may come under the extraterritorial application of a U.S. internal law and may contain some
inconsistencies with the WTO Agreement.  Japan strongly requests the United States to apply the law
in a diligent manner to ensure consistency with international law.   To add, in light of the fact that the
sanction measure is waived for three enterprises, enterprises in all countries, including Japan, should
not be treated discriminatorily.  Please explain the U.S. view on this point.
(2) The Helms Burton ActThe Helms-Burton Act includes such measures as those which allow a U.S. national to sue for
damages any person who traffics in property confiscated by the Cuban Government at the time of the
Cuban Revolution, as well as those which restrict the entry of corporate officers from such companies,
and thereby may be in violation of the GATT and the GATS.  In May 1998, the United States and theWT/TPR/M/56
Page 69
EU agreed to waiver application of this law.  Japan requests the United States, therefore, to extend
the same treatment as the EU to third countries, including Japan.   Please explain the U.S. view on
this point.
(3) Tariff quota of sugar (p. 57, para. 36)Japan is interested in the U.S. tariff rate quota for sugar as it thinks that the administration of such
tariff quota is rather unclear.  Could the U.S. explain such administr ation, including the criteria for
issuing a CQE (Certificate of Quota Eligibility)?
8. Anti-Dumping (P. 64, paras. 53- )
(1) Overview
Japan wishes to stress that AD measures should be applied in a WTO-consistent manner and that they
should be administered fairly and rationally.
The number of petitions for AD measures and the imposition of AD duties are said to be decreasing in
the U.S.  In actual fact, the number of investigations initiated has recently been decreasing, with the
peak cumulating at 84 cases in 1992.  However, in 1998, the number was again up reaching 36 cases.
All in all, the number of investigations initiated in the U.S. rate among the highest in the world.  There
are also cases where a specific industry seems to be using this system as a tool for protectionism.Recently, a WTO panel found that a U.S. AD measure against Korean DRAMs was
WTO-inconsistent.  This, in the view of Japan, is an example of the arbitrary administration of the AD
regime in the U.S.
AD measures are exceptions to the principles of MFN and to the rule where tariffs must not be raised
above bound levels.  Abuse of AD measures in a protectionist manner adversely affects trade.
Moreover, any initiation of an investigation itself has a chilling effect on exporters and importers.  In
light of these trade-distorting effects inherent in AD measures, as has been demonstrated through
Japan's request, in the Japan-U.S. Dialogue on Deregulation, for improving AD procedures, it is our
view that the utmost care must be taken in invoking AD measures.  Therefore, Japan requests the U.S.
to administer the AD system adequately.   Please explain the U.S. view on this point.
(2) Anti-dumping Act of 1916 (P. 64, para. 61)
The Anti-dumping Act of 1916 is causing a trade-chilling effect.  For example, Japanese trading firms
are being sued under this Act.  Even an American court has ruled that this Act has a protectionist
component.  Such a WTO- inconsistent law must be abolished as soon as possible.  Japan is nowrequesting establishment of a panel on this issue and is awaiting adequate reaction from the U.S. side.
(3) Steel (p. 68, para. 69)On June 2, the U.S. steel industry filed an AD petition against the imports of cold-rolled carbon steel
flat products from several countries, including Japan.  It is surprising that such a petition has been
filed at a time when the U.S. steel market is recovering, both in terms of production and price, and
when imports from Japan have decreased to a historic level.  Japan is concerned that political pressure
from the steel industry and labor unions could hamper a fair and objective handling of the case.  Japan
shall closely monitor the handling of this issue by the DOC and the ITC.  This petition, together with
the steel industry's support for a protectionist trade bill, is most alarming to Japan as it could lead to a
general momentum of protectionism in the U.S.WT/TPR/M/56
Page 70
9. Export ban and import licensing (p. 80, para. 98)
In the U.S., exports of logs from state-owned forests, which are located on the west-hand side of the
100 West longitude, are banned eternally for the purpose of protecting northern spotted owls, etc.
However, Japan thinks that this measure is rather an export quantitative restriction for protectingdomestic sawmillers as, first of all, protection of spotted owls must be done through regulating
log-cuts and not by export bans.  Secondly, only export restrictions have been introduced, whereas no
regulations have been established for the domestic transactions of logs.  Moreover, the U.S. promotes
its exports of timber products.  Japan would, therefore, like to request the U.S. to remedy this measure
in accordance with the WTO Agreemen t.  Please explain the U.S. view on this point.
Generally speaking, not only regarding forestry products but also regarding agricultural products,
Japan is concerned about the export quantitative restrictions, which are regulated laxly in comparison
with import quantitative restrictions that ha ve been tariffied under the UR agreements.
10. Export subsidies
(1) Export Enhancement Program (p. 80, para. 100)
The Report explains that the Export Enhancement Program(EEP) is assessed according to 5 criteria,
for example, "the potential to develop, expand or maintain markets for U.S. agricultural
commodities".  Could the U.S. explain in detail the practical administration of this assessment by
using such criteria?
Regarding the budgetary outlays of the EEP, this has been fluctuating substantially from year to year
(in 1996, the outlay of the EEP was 339.5 million dollars; in 1997 the amount became zero; and in
1998 the amount rebounded to 2.06 million dollars).  Could the U.S. explain the reason for such
fluctuation?  Is it due to the assessment of the EEP as mentioned above?
(2) Dairy Export Incentive Program (p. 80, para. 102)The U.S. argues to abolish export subsidies.  Does the U.S. think that it could stop using the Dairy
Export Incentive Programme (DEIP) completely?   If so, there is a risk that its dairy exports will
decline, and as the U.S. does not have any production-limiting programs for dairy products, itsdomestic dairy prices will also decline.  On the other hand, Japan understands that the U.S. will
abolish the price support for milk for processing at the end of 1999.  Does the U.S. plan to take
fundamental policy measures for these anticipated situations?
11. Section 301 and related measures(1) Section 301 of the Trade Act of 1974 (paras. 117-129, pp. 84-90)At the entry into force of the WTO Agreement, the United States announced that it had amended its
Trade Act of 1974 in order to respect the procedures of the enhanced Dispute Settlement system.  Theamendment, however, has proved to be insufficient.  The discretion of the USTR is not clear under the
Act, and the Act has a possibility to be implemented not in compliance with the WTO Agreement.  If
the United States determines under the Act whether another Member denies the rights or benefits of
the United States under the WTO Agreement without following the necessary procedures under the
Dispute Settlement Mechanism, it is inconsistent with Article 23 of the DSU.  It is very unlikely thatthe discretion of the USTR and the specific direction of the President is to be exercised consistently
with the WTO Agreement.  This fact seriously da mages the Dispute Settlement Mechanism within the
framework of the WTO.  Therefore, the United States should amend its Trade Act of 1974 to ensure
that it fully complies with its obligations under the DSU.WT/TPR/M/56
Page 71
(2) "Super 301", "special 301" and Section 13 71-1382 and Title VII of the Omnibus Trade and
Competitiveness Act of 1988
The United States Government re-instituted, as of March this year, the "Super 301" (Provision added
to Section 301 of the Trade Act of 1974 by Section 1302 of the Omnibus Trade and CompetitivenessAct of 1988) and Title VII of the Omnibus Trade and Competitiveness Act of 1988.  These provisions
have strengthened procedures under Section 301 of the Trade Act of 1974, which can lead to adopting
unilateral measures by automatically identifying foreign actions, policies and practices as a priority
foreign country practice or a discriminatory practice in the case of government procurement.  Such
re-institution shows that the United States has not altered its attitude towards its trading partners,
including Japan, as it continues to conduct trade disputes to its advantage through the threat of taking
unilateral trade measures.  Japan is greatly concerned that such a U.S. policy will seriously damagethe WTO framework.  How can the United States justify such an approach under the WTO
Agreement?
Japan is also concerned about the use of the "Sup er 301" and the review under Section 1377 of the
Omnibus Trade and Competitiveness Act of 1988, which will seriously damage the WTO framework.These provisions again show that the United States has not changed its attitude of forcing trading
partners to concede to concessions by reviewing the trade measures of trading partners unilaterally
and by threatening them with retaliatory measures.
12. Investment(1) The relationship between the multilateral framework on investment and bilateral investment
treaties (BITs) (para. 98, p. 44)
This paragraph indicates, "BITs lay the policy gr oundwork for broader multilateral initiatives in the
ECD and, eventually, the WTO ".  What is the U.S. view on the re lationship between such multilateral
frameworks as the GATS (including the possible multilateral framework to be negotiated in the
future) and the BITs?
(2) Exemption from National Treatment on investment (para 168, p.103)This paragraph indicates that the U.S. maintains some reciprocity conditions on investment.  Please
list the provisions that are exceptions to the principle of National Treatment?
13. Trade-related intellectual property rights(1) First-to-Invent System (para. 186, p. 108)The United States is the only country using a "first-to-invent system", and, above all, the U.S. does
not adopt the early publication system that other developed countries adopt.  Regarding the patent
system, the U.S. is rather unique.  Many countries, including Japan, have pointed out that such
uniqueness results in a barrier which foreign companies face when they enter the U.S. businesscommunity.  Such a practice to maintain a first-to-invent system is not necessarily against the TRIPS
Agreement.  However, the United States should adopt a first-to-file system in view of the necessity to
have a transparent and stable system, as well as to reduce the burdens which users bear due to the
difference of systems.  Japan continues to request improvement of the patent systems that restrict
trade in the U.S.  Please explain the U.S. view on this point?
(2) "Submarine" Patent (para. 186, p.108)The lack of an early publication system in the United States is not necessarily against the TRIPS
Agreement, but is rather one of the reasons for the "submarine" patent.  This may lead to a duplicationWT/TPR/M/56
Page 72
of research and development investment by the third party as such a party cannot know, at the outset,
which application has already been filed by others and what exactly conflicts with the party's interests.
This deteriorates transparency and the expectation of the patent system, and is also a factor for
preventing smooth trade and investment and business activities.  An interference proceeding is a
burden for the party concerned with regard to preparing documentation and the cost for attorneys.Although the patent terms were corrected in the UR  Agreement Act (and the United States confirmed
in 1994 under the Framework Talks started in 1993 that it was introducing an early publication
system), pending applications already filed in th e U.S. Patent Trademark Office at the time of the
amendment of the law benefit from a 17-year patent term from the date of the patent grant.  There is a
possibility that a patentee still benefits from a 17-year patent term after a long period of examination.
In addition, although Japan has implemented faithfully what was confirmed under the Framework
Talks, the U.S. has not yet implemented some of the issues, including introduction of an early
publication system.
Japan acknowledges that the Comprehensive Patent Bill, including these issues, was submitted to the
House of Representatives in the 106th Congress.  Japan would like to have the latest information on
the deliberations in the House of Representatives, and whether or not a similar bill shall be submitted
to the Senate.   Japan expects further efforts to be made by the U.S. Government towards its early
implementation.
(3) The United States Patent Law (para. 185, p. 108)Thanks to an amendment to the U.S. Patent Law brought about through the UR Agreement Act, any
person in the process who decides who made the invention first may prove and rely on the same date
of invention in a foreign country.  This solves the discriminatory treatment in the process between
U.S. citizens and foreign citizens.
However, according to Section 102(g) of the U.S. Patent law, which provides that, "a person shall be
entitled to a patent unless before the applicant' s invention thereof the invention was made in this
country by another who had not abandoned, suppressed, or concealed it," only the invention made in
the U.S. can be granted a patent as an invention made first, to prevent a grant of a patent to other
inventors.  This is a substantial discrimination against inventions made outside the United States and
should be corrected.  Please explain the U.S. view on this point
(4) Priority in the Paris Convention (In re Hilmer) (para. 190, p. 109)There is a "Hilmer" doctrine in the United States.  Foreign applicants usually file applications, first in
their own country and subsequently in the United States, thereby claiming priority under the ParisConvention.  Due to the "Hilmer" doctrine, such fo reign applicants cannot prevent the patent grant
from conflicting with applications filed before the actual filing date of any subsequent applications in
the U.S., even during the priority period, and thereby may suffer a disadvantage.  This is against
Article 4B of the Paris Convention which states that acts by a third-party in the priority period "cannot
give rise to any third-party right or any right of personal possession".  This is also against Article 2.1of the TRIPS Agreement which requires compliance with Article 4 of the Paris Convention.  Please
explain the U.S. view on this point.WT/TPR/M/56
Page 73
(5) Copyrights (paras. 203-215, pp. 113-116)
(i) It is stated in paragraph 204, page 113, that th e U.S. ratified the WIPO Copyright Treaty and
the WIPO Performances and Phonograms Treaty in March, 1999.  However, Japan understands that a
notification of ratification for these treaties by the U.S. has not yet been circulated to the membercountries of the WIPO.  Japan would like to confirm whether the U.S. has already ratified the two
treaties as stated in the Secretariat Report.
(ii) Japan would like to request the U.S. to accede to the International Convention for the
Protection of Performers, Producers of Phonog rams and Broadcasting Organizations (Rome
Convention, 1961), which has been ratified and acceded to by many developed countries, including
Japan and the member states of the EC, as soon as possible in order to improve protection of the rightsof performers and broadcasting organizations.
(iii) Japan would also like to request the U.S. to confirm its protection of the moral rights of
authors so that it will be in full compliance with  the obligations under the Bern Convention for the
Protection of Literary and Artistic Works to which the U.S. became party in 1989 .
(6) Bilateral and Regional Intellectual Property Agreements (para 220, p.117)It is reported that "the United States has signed a number of bilateral intellectual property
agreements", and that "clauses related to intellectu al property in these Agreements are tailored to the
TRIPS Agreement;  in some cases they go beyond the provisions of the TRIPS Agreement".
Regarding "Japan Actions to be taken by the Patent Office" between the Japanese Patent Office and
the U.S. Patent and Trademark Office (as specified in Table AIII.4), these actions are to be considered
as those which the U.S. and Japan confirmed to undertake in the Framework Talks.  Japan has
faithfully implemented what was confirmed under the Framework Talks.  However, on the contrary,the U.S. has implemented neither the introduction of an early publication system, nor the
improvement of re-examination, for the past three and half years, even after the time limit promised
by the U.S.  Japan strongly requests the United States to implement these issues completely and
promptly .
14. TBT (p. 121, para. 230)
(1) How many standards in total existed in the U.S. at the end of 1998 (including those which are
incorporated into technical regulations)?
(2) According to paragraph 233, federal agencies are directed to use voluntary consensus
standards in lieu of government standards.  Could the U.S. explain the reason behind this policy?
(3) According to paragraph 236, firms from NAFTA countries can participate in the development
process of standards of another NAFTA country.  Since non-NAFTA firms do not benefit from this
privilege, can not such a privilege be considered as a discriminatory or unnecessary trade barrier?
15. Sanitary and Phytosanitary Measures
(1) In paragraph 239, reference is made to the fact that sanitary and phytosanitary measures
which apply to domestic foodstuffs also apply to imported foodstuffs.  Does this mean that additional
safety criteria could be applied to imported foods?
(2) In paragraph 241, it is stated that, "[a]ny products that might be harmful to consumers are
subject to regulatory action whether or not they ex ceed the defect levels", when referring to "Food
Defect Action Levels".  Can we understand that an objective definition of "harmful" is required inWT/TPR/M/56
Page 74
this guideline?  Does the U.S. Government set down a time-limit for fulfilling its scientific verification
of whether it be "harmful" or not?
(3) In paragraph 253, it is stated that, "[c]ertain agricultural commodities must meet United States
import requirements related to grade, size, quality and maturity".  Could the U.S. explain the grounds
on which it establishes these regulations?  Does these regulations constitute inappropriate trade
obstacles which are not in compliance with the WTO Agreement?
(4) Japan has proposed quarantine measures on the export of oranges from Japan.  As the U.S.
has not yet replied to our proposal, we would like to know the prospects of removing the bans on the
export of oranges from Japan?
16. Government Procurement (pp. 131-141)
(1) Value of government procurement (para. 274)The share of the production of the government procurement sector to GDP in the United States stands
at more than 30%, although there has been a slight decrease in this figure during the 1990's (34.4% for
1992 and 32% for 1998).  Combined with the scale and steady growth of the U.S. economy, we
cannot overlook the implication that this sector has on international trade.  Also, the value of goods
procured by state-level governments amounts to 2.66 times higher than that procured by the federal
government (federal-level:  35.5 billion U.S. dollars, state-level:  94.5 billion U.S. dollars), and thiseven if only 37 states currently open their government procurement markets to foreign suppliers.
We, therefore, hope that quick offers will also be made with regard to the remaining 13 States that are
not in the scope of the WTO Government Procurement Agreement (the GPA), as well as with regard
to seven major cities, i.e., Boston, Chicago, Dallas, Detroit, Indianapolis, Nashville and San Antonio,whose markets the United States has undertaken to  open according to the bilateral memorandum of
understanding with the European Union.  Please explain if the U.S. has any intention to make an offer
with regard to these States and cities?
(2) Tendering procedures (paras. 282-287)We recognize that electronic tendering procedures by way of computer networks have considerably
developed in the United States.  On the other hand, the United States specifies the "Commerce
Business Daily (or state journal in the case of state governments)" in Appendix II to the GPA, as the
publication that the Contracting Parties utilize for the public notice of intended procurement under
Article 9.1 of the Agreement, as well as for public notice after award of a contract under Article 18.1.
For our part, we believe that existing Article 13.1 must be amended if we are to allow tendering
procedures through electronic means only.
Are the electronic tendering procedures, that are in place in the U.S., only available in addition to, or
as an option for, the original announcement of procurement opportunities through publication and
the original tendering system in writing?
(3) Domestic review mechanismAs for the domestic review mechanisms regarding procurements by the federal and state governments
that are subject to the GPA, including cases wher e a review body is a tribunal, how are these made
public?  What kind of cases have been brought to th e review mechanisms with  respect to government
procurements covered by the GPA, and how have these been dealt with?WT/TPR/M/56
Page 75
(4) Buy American Act (paras. 288-291, p. 136)
In the United States, there exist such rules that explicitly favor domestic products, e.g. the "Buy
American Act", state laws restricting the use of foreign steel materials in public works and the Federal
Land Transportation Aid Act regarding the priority use of U.S. steel materials.
It is reported that the Trade Act of 1979 secures these rules to be consistent with the GPA, and thus
the Buy American Act only applies to certain government procurements that fall outside of the
Agreement (para. 288).  In this regard, we w ould like to confirm that government procurements
subject to the GPA are excluded from the application of the Buy American Act, including the "Buy
State Provision".
Also, in view of the GPA's objective to allow the non-discrimination principle fully prevail by way of
ensuring transparency with respect to government procurements exceeding certain limits, Japan
strongly urges the U.S. to abolish this kind of protectionist rules as soon as possible.   And this is so
much more so when one takes into account the U.S.  role and responsibility as a major player in the
international free trade arena.
Lastly, from the viewpoint of ensuring the non-disc riminatory principle in the field of government
procurement, we request that the U.S. list all of its state procuring agencies in the Annex of the GPA.
(5) Panel on the Massachusetts State Government Procurements (para. 299, p. 140)The Panel on the Massachusetts State Government Procurement Act was established based on the
requests from Japan and the European Union, which claim that the Act regulating state contracts with
companies doing business with or in Myanmar or Burma violates the provisions of the GPA.  The
Panel has currently been suspended since a federal regional court has decided that the Act isunconstitutional (on 22 June 1999, a federal high court supported this decision), resulting in the Act
losing effect and thus discriminatory procurements by the State being suspended.
For our part, we shall continue to watch carefully the future developments of the domestic court
judgement on this issue, even after suspension of the Panel.  If any changes occur to the status quo
situation regarding the effectiveness of the Act, including the case where a decision by the federal
regional court may be reversed, we intend to request the immediate resumption of the Panel.
Furthermore, we understand that, on political or diplomatic grounds, there exist other states in the
United States that have similar laws or provisions requiring procuring state agencies not to transact
business with, or to discriminate against, suppliers that do business with certain countries.  We insist
that states that are covered by the GPA should abolish this kind of discriminatory provision if any.
Finally, if suppliers from a contracting country to the GPA are excluded from state procurements
according to these laws, how does the U.S. foresee consistency with the non-discriminatory principle
in the Agreement?
17. Competition
(1) The Protect American Jobs Through...Amendments Act of 1998 (para. 323, p. 149)This paragraph indicates that the Act provides for the actions to be taken when harm is done to U.S.
exports through anti-competitive conducts.  Please explain the details of this Act.  For example, what
are the criteria for judging whether U.S. exports ha ve actually been harmed?  What are the measures
to be taken in such cases?WT/TPR/M/56
Page 76
Please explain in detail which measures the U.S. competition authorities would take with regard to
the monopolistic or oligopolistic situations in overseas market caused by anti-competitive practices.
How can one judge whether, in such cases, the situation concerned has actually harmed the U.S.
trade?  What are the U.S. views on using not only  bilateral and plurilateral cooperation agreements,
but also a multilateral framework when dealing with these anti-competitive practices that have
transborder dimensions.
(2) Competition policy (p. 142)Japan recognizes that the U.S. Department of Justice has adopted a policy of applying U.S. Anti-trust
laws to those practices that have been carried out outside the United States and that are considered to
be harming the interests of U.S. exporters.  However, such a conduct should be regarded, from theviewpoint of its influence on the U.S. market, as an extra-territorial application of the U.S. Anti-trust
laws on practices which merely have an indirect effect on the U.S. market.  Such an extra-territorial
application impinges upon the sovereignty and interests of an importing country and is not allowed
under international law.  Japan, therefore, strongly hopes that the U.S. will refrain from making such
an extra-territorial application.
In order to strengthen its competition policy, Japan has been conducting an overall review of all of its
exemptions from the application of the Anti -monopoly Act.  Through this process, numerous
exemptions have been already abolished or modifi ed to limit their scopes.  The remaining exemptions
are also now under review for modifying their scope.  Japan would, thus, like to urge the U.S. to
reduce its exemptions from the application of the Anti -trust laws, both at a federal and a state level.
Please also explain the current status of review for the U.S. exemptions, as well as the policy for
review in the future?
18. Agriculture, textiles and steel(1) Quantitative Restraints carried over from MFA (para. 8, p. 161)A number of WTO Members, especially developing country Members, have expressed concern that
the proportion of integrated textile and apparel products under restraint was very limited and that the
U.S. integration programmes for the first and second stages are not commercially meaningful.  Japan
hopes that the United States will make positive co mmitments to an effective integration for a third
stage integration programme, recalling that the process of integration should be "progressive in
character", as envisioned in the Agreement on Textiles and Clothing.
(2) Agriculture
(i) Export promotion (para. 10, p. 167)
The Report explains that export promotion is provided through the Market Access Program (MAP),
which uses funds from the USDA's Commodity Cr edit Corporation (CCC).  We understand that, in
July 1998, to prevent the grain price from declining, President Clinton announced a plan to purchasethe wheat surplus through CCC for 250 million dollars and to provide it at no cost to the countries in
need of food aid.  Can we conclude that the main purpose of this policy was to support the wheat
price for producers, rather than to give food aid to  other countries?  Could the U.S. explain how it
classifies such payment within the scope of the Agreement on Agriculture (Green, Blue or Amber)?
Have exports under this scheme already been terminated?
(ii) Production Flexibility Contract (PFC) (p. 167, para. 12)a) To cope with the recent low grain prices, the U.S. introduced support measures for farmers
amounting to approximately 6 billion-dollars, of which around 3 billion were added to the 1998 directWT/TPR/M/56
Page 77
payments to farmers as part of a Market Loss Payment.  We understand that this payment is a direct
income payment in the case of price declines.  Could the U.S. explain how it classifies such payment
within the scope of the Agreement on Agriculture (Green, Blue or Amber)?  If this payment is
classified in the direct fixed payments, does not this payment breach the upper limit (35.626 billion
dollars) of the budgetary outlays specified in the 1996 Farm Law (the Federal AgriculturalImprovement and Reform Act of 1996)?
b) Can a farmer having an agreement under the 1996 Farm Law receive direct payment, even if
he or she has quitted agriculture?
c) Can we understand that newcomers are not entitled to receive this payment at all?  In other
words, does this payment result in restricting new-entries into farming?
(iii) Short-term loan scheme (p. 168, para. 17)Because of the recent low agricultural products' prices, we understand that many farmers have been
granted a short-term loan scheme by way of a loan  rate.  However, to put it simply, when farmers
apply this scheme, the stockholding rate of the Commodity Credit Corporation (CCC) will increase
substantially.  How does the U.S. cope with this increased stockholding rate?  Or can we understand
the rate does not increase substantially?  If so, why?
(iv) Price supports for sugar, peanuts and tobacco (p. 168, paras. 19-20)a) What has been the annual amount of subsidies paid for each product in recent years?
b) How these subsidies are classified in the WTO agreements (COA and SCM)?
c) Please provide detailed information for each program.
(3) Steel (p. 174, Annex III.3)
The increase of steel imports in 1998 was due to the strong U.S. domestic demand and the lack of
capacity of the American steel industry.  It is Japan's understanding that, currently, the steel market
has recovered, both in terms of production and price.  An arbitrary use of AD measures impede sound
trade, thus Japan requests an adequate handling of the case by the U.S. authorities. Japan understands
the political background surrounding this issue.  Nonetheless, it is concerned about the apparenttendency toward protectionism, including the submission of a bill that limits the import of steel into
the U.S.  Japan requests an adequate handling of the issue.
19. Trade policies in the services sector
(1) Financial services
(i) Supervision of foreign banks (para. 14, p. 183)In the United States, foreign banks are supervised by both the federal and the state governments.  We
welcome that the financial inspections of those banks are now jointly conducted by the FRB and other
related supervisory authorities in accordance with the "FBO Financial Supervision Program".
However, the points raised by the various supervisors differ, and Japan would like to request further
improvements in this respect, including harmonization of the relevant rules and regulations.  Please
explain the U.S. view on this point?
(ii) Citizenship requirement for directors of financial institutions (para. 31, p. 190)While all directors of banks licensed under U.S. national laws should, in principle, be U.S. citizens,
this requirement may be eased for branches or affiliated companies of foreign banks at the discretionWT/TPR/M/56
Page 78
of the Comptroller of the Currency. Specifically, the Comptroller would only require more than half
of the directors of those entities to be U.S. citizens.  At the state level, some of state authorities have
lifted this kind of citizenship requirement.  However, some states have more restrictive regulations
and Japan requests that these regulations be thoroughly abolished.   Please explain the U.S. view on
this point?
(iii) Japan-U.S. Insurance Agreement (para. 32, p. 190)The United States insists that, out of the five criteria for terminating measures to avoid any radical
change in the so-called third insurance sector - as set out in the "1996 Supplementary Measures by the
Government of Japan and the Government of the United States regarding Insurance" - those criteria
relating to the reform of the rating organization system and to product approval within the standard90-day period have not been met.  Japan would like to stress, however, that Japan has been faithfully
implementing the bilateral insurance arrangement and have satisfied all five criteria upon
implementation of the rating organization reform as of 1 July 1998.  Japan would also like to point out
that liberalization in the third sector will be completed by January 2001.
In this regard, both countries confirmed that, if neither side could conclude by having a common view
as to whether or not the criteria had been met, each side would preserve its right to act in conformity
with its own view.
(iv) Liberalization of cross-state operations (para. 11, p. 182)Whereas Japan appreciates that there is an increasing tendency for state authorities to allow a
cross-state opening of branches by banks, Japan urges for the complete liberalization to be realized as
soon as possible.
(2) Telecommunications services
(i) Harmonization of regulations at the state level (para. 40, p. 193)Telecommunications services are regulated at both the federal and the state level.  Japan is concerned
that each State has different procedures as well as different terms and conditions for certification and
that the applicants must adapt themselves to the regu lations of both federal level, as well as of all the
states, in which they wish to provide services.  These differences de facto constitute a market entry
barrier for carriers wishing to enter the U.S. telecommunications market.  The Government of the
United States should take initiatives to integrate the state regulations in light of the trends to liberalize
and globalize this sector.  Please explain the U.S. view on this point?
(ii) Regulations on Dominant Carriers (para 50, p.195)
Even if a foreign carrier has "market power" in a particular foreign market, this does not necessarily
mean that the carrier has "market power" in the U.S. market.  Therefore, regulations on a foreign
carrier due to their dominance in another foreign market have no rationale and may result inunjustified discriminatory treatment against foreign carriers.  Such regulations may also have the
effect to unfairly restrict foreign direct investment.  These regulations under the U.S. domestic law,
which have no basis under the WTO Agreement, may be inconsistent therewith.  Please explain the
U.S. view on this point?
(iii) International Charging Arrangements of the Internet (para 53)
All costs for international leased circuits for the international Internet backbone between the U.S. and
non-U.S. countries are charged to non-U.S. telecommunications operators and ISPs.  This provides an
impediment to reducing the cost of the Internet ac cess in countries other than the U.S.  The cost ofWT/TPR/M/56
Page 79
network linking two countries is, in general, shared equally by both countries.  Nine
telecommunications operators in the Asia-Pacific region released a statement on the cost sharing of
the international Internet interconnection link between the U.S. and the Asia-Pacific region.  The
APEC is also initiating a study on traffic flow  and on the cost structure of the Internet.
This unfair business behaviour where non-U.S. telecommunications operators and ISPs are charged
for all costs on international leased circuits is impeding fair competition and thus should be changed
and improved.  Please explain the U.S. view on this point?
(iv) Foreign participation in the U.S. telecommunications market (para. 49, p. 192)A new FCC rule which took effect in February 1998 on the entry of foreign service suppliers basically
exempts WTO Members from "Economic Compe titive Opportunity (ECO)" test.  However,
restrictions on foreign indirect investment of common radio station licenses remains.  Relevant
sections of the Communications Act should be amended in light of ensuring implementation of the
commitments of the U.S. under the WTO Basic Telecom Agreement.
Japan is also concerned about several substantial barriers, listed below, to a foreign carrier's entry into
the U.S. market and would like to seek improvement.  Please explain the U.S. view on these points?
1) With regard to Section 214 for certification and Section 310 for a radio station license, the
criteria such as "public interest" and "very high risk of competition" are not clear and the FCC has
wide discretion to be able to refuse market entry for these reasons.
2) Although such factors as "foreign policy" and "trade concerns" are listed as elements of
"public interest", licenses could be refused for these reasons unrelated to the applications.
3) Competing carriers are allowed to file petitions for licenses without rational reason, thus
needlessly prolonging the application procedures.
(v) Benchmark RulesIn August 1997, the FCC adopted Benchmark Rules which set down an upper limit (benchmark) for
the settlement rate of calls originating in the U.S.  This regulation took effect in January 1998, with agrace period of 1 to 5 years depending on the stage of development of the country in which the carrier
is domiciled.  It took effect for Japan and other developed countries in January this year.  The FCC
has announced that it will take mandatory measures against carriers that are unable to meet the
benchmark standards.
Japan would like to request the U.S. to abolish such Benchmark Rules as there are certain problems
on, for example, the following points:
- they could become a de facto barrier to entry into the U.S. market;
- they allow the U.S. Government to set down one-sided settlement rates in connection
with its policy of regulations on new entry, whereas the settlement rate should be
determined commercially;  and
- there is doubt about their consistency with the various principles of the WTO
Agreement, such as the MFN treatment.
Please explain the view of the U.S. on these points:
(3) Maritime transport servicesWT/TPR/M/56
Page 80
(a) FMC
In paragraph 60, although actions taken by the FMC are only mentioned as measures to "correct or
counterbalance adverse, unfair or discriminatory foreign practice", the actions, which are unilaterally
taken by the U.S., should be regarded as having a character against the spirit of the WTO which givespriority to the principle of multilateralism.  Japan would like to seek the U.S. views on this problem.
(b) Restriction on maritime transport services (Domestic water-borne trade, paras. 61-62)What sort of restrictions are there on maritime domestic transport services, except for requirements
for shipbuilding, ownership and crewing, for example, license/permit for accession,
admission/submission of fares, etc?
(c) The Passenger Services Act of 1886 (para. 61, p. 199)The Report states, "In general, the same requirement apply to the domestic passenger service under
the Passenger Services Act of 1886".  Are the regulations on passenger transportation services
entirely the same as those on cargo transportation services?
(d) The Merchant Marine Act of 1920 (The Jones Act) (paras. 61-62, pp. 199-200)Ships for coastal shipping services are required to be built in the U.S.  However, it is disadvantage for
foreign shipbuilders to prohibit shipping companies from making use of ships built in foreign
countries.  It is also disadvantageous to clients, such as in case of long distance maritime
transportation from the mainland of the U.S. to the Hawaii islands due to the increase in cost for
maritime transport by using the comparatively expensive U.S.-flag fleet.  Such restrictions should be
removed and the problem raised in the course of reviewing exemptions concerning domestic maritimetransport based on paragraph 3.(b) of the GATT 1994.  The U.S. Government is expected to actively
contribute to ensuring a steady implementation of the review work.
(e) The Maritime Security Program (MSP) (para. 65, p. 201)It is obvious that continuation of the enormous subsidy of US$100 million annually over a period of
ten years will distort free and fair competition.  Thus, the subsidy must be abolished.  Please explain
the U.S. view on this point?
(f) The Cargo Preference Measures, including the Alaska Power Administration Sale Act (para.
66, p. 201)
According to the Alaska Power Administration Sale Act of 1995, the export of Alaska crude oil must
be carried by U.S.-flag vessels and crew members should be U.S. citizens.  The Act is condemned by
a lot of countries as it is against the Ministerial Decision on Negotiations on Maritime Transport
Services of 15 December 1993, which decided not to introduce new measures during the terms of
negotiation, and also against the Decision on Maritime Transport Service of the Council on Trade inServices on 28 June 1996, which again decided not to  introduce new measures during the terms of
negotiation.
At the last TPRM for the U.S., the U.S. explained that such legislation did not violate the U.S.
international obligations and that it would not improve its negotiation position, since oil from Alaskacould not previously be transported in foreign vessels.  However as the Ministerial Decision states
that participants "shall not apply any measures affecting trade in maritime transport services", no
measures shall be applied whether it improves the U.S. negotiation position or not.  Japan requests
that this measure be abolished.WT/TPR/M/56
Page 81
The U.S. should abolish the Cargo Preference Measures which advantage the U.S.-flag vessels, and is
consequently extremely protective.
For the reason of transparency, details and quantity should be announced concerning the cargoes
subject to cargo preference requirements and concerning the cargoes actually carried on U.S.-flagvessels.
(g) Retaliatory action by Federal Maritime Commission(FMC) (p. 199)The FMC is statutorily authorised to take retaliatory actions, based on the Merchant Marine Act of
1920, against foreign shipping practices that adversely affect U.S. shipping.
In September 1997, the FMC imposed unilateral sanctions against three Japanese shipping carriers,
imposing fines of US$100,000 for each visit to U.S. ports, on the grounds of allegations with regard to
the previous consultation system of Japanese ports.  It actually collected US$1.5 million (fines
occurring in September) from those Japanese carriers in October 1997.
Although the U.S. and Japanese Governments reached an agreement on the Japanese port issue, the
FMC did not take any other measures than freezing the action indefinitely.  Therefore, Japan
requested the U.S. to completely withdraw the retaliatory action, which violates the MFN and national
treatment clause of the Treaty of Friendship, Commerce and Navigation between Japan and the U.S.,
and then carried out bilateral meetings based on the clause of the Treaty in January and July of 1998.
On 28 May 1999, the FMC decided to remove the final rule and to order the Japanese and U.S.
shipping companies to report Japanese port practices, but Japan's insistence that such retaliatory
action is illegal was not changed.  Appropriate measures by the U.S. Government are requested.
(h) Restrictions of customs brokerage services (para. 69, p. 202)
What other kinds of restrictions on customs brokerage services are there than the condition that at
least one person in a business entity must hold a customs broker's licence?
(i) The Ocean Shipping Reform Act of 1998 (para. 71, p. 202)
The Act remains a scope for the FMC to excessively intervene tariffs. Based on the principle for the
freedom of shipping in international trade, the government provision for shipping activities on a
commercial basis should be limited to a minimum.  Japan should, therefore, continue to carefully
observe the FMC's actions to ensure that there is no excessive intervention by the FMC after the Act's
entry into force.
(4) Professional Services (paras. 89 & 91, p. 211)(a) Uniformity should be established among states with respect to license and qualification
requirements for each profession when accepting foreign professional service suppliers.  Please
explain how the United States envisages to cope with this point?
(b) Japan requests the United States to present the current status of mutual recognition
arrangements at state level .
(c) Residency and citizenship requirements in certain states, with respect to professional services,
should be abolished.  Does the United States have any intention to abolish these requirements?WT/TPR/M/56
Page 82
(5) Legal Services (paras. 89 & 90, p. 213)
(a) It should be noted that, in the United States, foreign lawyers are allowed to practice in only
about 20 states, as well as the District of Columbia.  In all of these 20 states, plus the District of
Columbia, a certain period of practicing experience is required.  Only two states require three years ofexperience, another two states require four years of experience and the 15 other states, plus the
District of Columbia, require five years of experience.  Two states only allow inclusion of experience
periods in a third country, whereas the others do not:  they only allow inclusion of the period of
practice in the country where the person is qualified.
For the purpose of promoting the liberalization of trade in services, all the states should accept foreign
qualified lawyers and all the states, plus the District of Columbia, should reduce the period of practiceto three years.  Japan welcomes the explanation on the current status of liberalization efforts.
(b) The last sentence of paragraph 96 states, "foreign lawyers may enter into partnerships with
American lawyers in any U.S. states".  Does this mean that foreign lawyers are entitled to enter into
partnership with American lawyers without being qualif ied as FLCs or U.S. lawyers?  If so, what kind
of activities are such foreign lawyers allowed to do?
20 Others(1) AutomobilesThere are still examples where domestic automobiles are favored over imported automobiles.  For
example, the "American Automobile Labelling Act" implicitly encourages the use of NAFA parts,
and under the CAFE (Corporate Average Fuel Economy), domestic and imported automobiles are
placed under different disciplines.  Furthermore, companies are obliged to undergo unnecessarilyburdensome work to fulfill these requirements.  Japan requests the U.S. to address these issues
adequately.
(2) Re-export ControlThe U.S. Government mandates foreign firms to obtain authorization from the Government when they
re-export certain goods, such as:  (a) originating in the U.S.;  (b) containing US-originated parts;  or(c) produced by U.S. technology.  Such a requirement apparently constitutes an extraterritorial
application of the U.S. laws and is inconsistent with international law. Japan requests that such
requirement be abolished.  In addition, until its  abolishment, the following transitional measures
should be taken:  (a) in light of the fact that for non-U.S. companies it is difficult to obtain
information on the re-export regulation, the U.S. should strengthen its efforts to publicize suchinformation, and in a case where a company cannot be expected to know a specific requirement, it
must not be held liable;  (b) the U.S. should publicize as a guideline th e methodology that the DOC
uses in calculating the ratio of software and technology incorporated in a product;  (c) companies
should be allowed to utilise the de minimus  level according to the above guidelines.
(3) Metric System
Considering the impact of the U.S. market on the world, Japan strongly requests that the metric
system (the SI unit), which is the global standard, be utilized more broadly by the U.S. government
and American businesses.  We note that the U.S. committed itself on this issue in the 2nd annual
report of the SII (Structural Impediments Initiative) in 1992.WT/TPR/M/56
Page 83
(4) Procurement of Supercomputers from Japan
The anomalous action taken by the U.S. Government with respect to the procurement of a
supercomputer by the National Cent er for Atmospheric Research - such as a letter implying dumping
prior to the initiation of a formal anti-dumping investigation - may be inconsistent with nationaltreatment and other provisions of the WTO Agreement.  Japan has requested the U.S. to explain the
factual circumstances regarding this matter in bilateral consultations, and will continue to seek
assurances that such irregularities will not be repeated.
NORWAY
Anti-dumping and countervailing measures (Page 62-)
The distribution of countervailing orders by product category are shown in Chart III.7.  The
dominance of base metals in particular suggest that certain industries for too long have been allowed
to set the U.S. agenda in this area.  This slows down the introduction of new and more cost-efficient
technology directly by penalizing imports based on more modern technology.  There is also anindirect negative effect as the mere existence of the anti-dumping instruments creates a threat that acts
as an impediment to the introduction to the U.S. market of new products.  In this context, it is also
disturbing to note that there was an increase in new cases in 1998, once again initiated mainly by
sunset industries, after three years when the number of new cases had been encouragingly low.  On
this basis, while regretting that the Secretariat's report was somewhat superficial on this issue, wewould like to ask the U.S. representatives what is currently being done in order to limit the influence
of sunset industries on U.S. anti-dumping policies?
Section 301 (Page 84-)
Section 301 of the Trade Act of 1974, provides relatively comprehensive power of attorney to impose
trade measures on foreign countries, in cases where U.S. authorities believes that foreign countries
maintain an act, policy or practice that violates U.S. rights or benefits under trade agreements, or is
unjustifiable, unreasonable or discriminatory and burdens or restricts U.S. commerce.  We would like
to express our concern over this legislation, as it provides opportunities to impose trade measures in
an arbitrary way.
Shipbuilding (Page 106-)
The OECD Shipbuilding Agreement concluded in 1994, which is meant to eliminate all direct support
and to combat injurious pricing practices, is mentioned in the Secretariat report on page 106.  Norway
would appreciate some information on the current stat us of the ratification process of this agreement
in the U.S?
Intellectual Property Rights (Page 107-)
Norway believes that, in order to achieve a truly global system for protection of intellectual property
rights, it is necessary to harmonize the procedures in national IPR laws.  Accordingly, we would like
to know whether the U.S. will consider changing its pat ent legislation so as to adopt the "first to file"
principle for claiming patents?
Norway is considering introducing a system of differential patent application fees depending on the
size of the enterprise.  We have been told that the USPTO already practice a similar system.  What
experiences has the USPTO in general drawn from  this practice?  Has the practice led to any
problems because applicants have claimed that they belong to a different category to save application
fees?WT/TPR/M/56
Page 84
Government Procurement (Page 131-)
Since the last review of the GPA, the United States has concluded agreements with both Norway and
Switzerland, and these two countries are no longer exempt from MFN treatment for procurement of
goods and services at the sub-federal government and public utilities level.  Will the U.S. initiate
agreements with other countries as well in an atte mpt to abolish exceptions from the MFN treatment
for procurement of goods and services at the sub-federal and public utilities level?
Buy American Act (Page 136-)
With regard to government procurement, the U.S. has in force legislation which gives preferential
treatment to domestic products and suppliers.  This legislation seems to violate the basic principle ofnon-discrimination often advocated by the U.S. in different WTO-fora.  Will the U.S. amend this
legislation in line with commonly accepted principles of international trade?
Article XXIII is the general exemption article of the Agreement on Government Procurement.  Will
the U.S., as a matter of transparency, issue a list of all products and procurements classified as"indisable (exempt) for national security or for national defence purposes"?
Textiles (Page 159-)
U.S. quantitative measures on textiles and clothing remain substantial and their liberalization falls
short of liberalizations implemented by other countries, including Norway.  On this basis we would
like to ask if further measures are being contemplated by the U.S. authorities in order to open up the
U.S. market for such products?
Agriculture (Page 163-169)
(Para 4) With regard to methods of tariff quota administration, could the U.S. Delegation describe the
system as such including whether the same methods are used for all product categories?
(Para 6) How can import permits for plants, animals and an imal products be obtained;  which criteria
is to be fulfilled, validity period, etc?
(Para 7) Could the U.S. Delegation provide more details on the licensing system for sugars and
certain dairy products?
(Para 10) Could the U.S. Delegation provide more informat ion with regard to the funding of costs of
overseas marketing and promotional activities, both of brand and generic promotions?
(Para 23) Exemptions of excise taxes;  which types?
Preferential agreements (Page 36 – Box II.2)
- Which agricultural products with MFN tariff rates exceeding zero per cent are
subject to zero duties under the GSP scheme or other preferential agreements?
- Are there any quotas or quantitative limits within these schemes?
- Are there any differences in the preferential schemes granted to the different groups
of countries mentioned in Box II.2, page 36?  And if so, which ones?WT/TPR/M/56
Page 85
Maritime transport services (Page 200-203)
(Para 62)  The Jones Act provides a protected market not only for U.S. domestic ship operators, but
also for U.S. shipbuilders.  However, as an exempti on to the rule, there is in para. 62 referred to that
foreign companies are allowed to establish shipping companies in the United States as long as theymeet the Jones Act requirements.  Could the U.S. Delegation give information to what extent such
foreign shipping companies act ually are present in the U.S?
(Para 64)  In para 64 the cost and tax disadvantages of flying the U.S. flag are described.  To what
extent does the manning rules i.e. the number of se afarers required on board U.S. vessels, contribute
to creating the cost differential?
(Paras. 69 & 72)  In para. 69 it is stated that "there are no measures limiting the provision of maritime
transport auxiliary services except for the provision of a brokerage services".  However, in para, 72
last sentence, it is stated also that non-vessel-operating common carriers (NVOCCs) that are not in the
U.S., must meet a higher bond am ount (US$150,000 versus US$75,000).  Could the U.S. Delegation
comment on this, as the latter requirement may have a potential for being discriminatory?
(Paras. 70 & 72)  The Ocean Shipping Reform Act of 1998 (OSRA) was passed in October 1998 and
put into effect from 1 May 1999.  This new law is aimed at being pro-competitive, and is based on
immunity from antitrust prosecution.  We would like to have confirmation from the U.S. whether they
consider this new legislation to represent the most appropriate solution, and that there neither for thetime being, nor in the near future, will be a need for reviewing this legislation?
(Para. 73)  We have with interest noted that the questions of lifting some of the Jones Act restrictions
have been raised from time to time by interested parties in the U.S. as described in para. 73  We have
seen various figures regarding the extra cost incurred by maintaining the Jones Act restrictions, andwould therefore be interested to know if th e U.S. administration has produced such figures?
(Para. 74)  According to para 74, the U.S. is observing a standstill agreement.  However, it is
questioned whether the restrictions on transportation of Alaskan oil are in conformity with the WTO
standstill agreement.  In addition to advocating adherence to the standstill commitment and principle,
we would appreciate any information on how this trade has developed since 1995?
CHILE
Agriculture
1. The simple average MFN tariff rate applied by the United States fell from 6.4% in 1996 to
5.7% in 1999.  However, in the same period tariff protection increased for agricultural products,
prepared food, live animals, beverages and tobacco, which means increased protection for a large
proportion of Chile's exports.  This is a result of the process of quota tariffication undertaken in
accordance with WTO commitments.  Chile would like to know whether the MFN tariff applicable to
agricultural products will go on increasing in the future.
2. Tariff protection for a broad range of agricultural products, including live animals, meat
products, prepared food, beverages and tobacco, increased between 1996 and 1999 to reach the
current level of 10.7%.  This is more than twi ce the average for industrial products which amounts to
4.7%.  These measures are seriously affecting the developing countries which export agriculturalproducts and especially those which add value to these exports.  What is the United States doing to
open up its market uniformly to all products coming from abroad?
3. The United States applies a system of marketing orders to certain agricultural products,
including grapes, kiwi and other fruit, under which restrictions are imposed on their marketingWT/TPR/M/56
Page 86
through the application of minimum quality requirements which are checked at the port of entry.  Is
the United States considering modifying this system so that market conditions are not artificially
affected?
Tariffs
1. The application of specific duties affords greater protection to lower-value products, thereby
making it possible to stabilize domestic prices against fluctuations in the international prices of those
products.  If a country intensively exports agricultural products and their price falls, that country,
instead of being able to benefit from its greater competitiveness, finds that its exports to the
United States have become more expensive, since it has to pay a specific duty whose  ad valorem
equivalent varies from approximately 40 to 232%.  Does the United States intend to stop applying
specific duties within the near future?
2. It is stated that the dispersion of tariff rates encourages exporters and importers to reclassify
products within the Harmonized System (HS) so  that they are subject to lower tariffs.  What is the
procedure for reclassifying products in the HS?
Import licences
1. The Secretariat Report indicates that import permits for plants and some plant products are
issued only to firms or individuals resident in the United States.  What is the reason for this?
2. Please provide a better explanation of the APHIS criteria for issuing import permits.
3. What is the justification for the special treatment granted to Canada exempting it from these
permits, inasmuch as the four reasons given do not seem to be totally objective?
Rules of origin
With regard to the application of its rules of origin, could the United States provide
information on the verification proceedings that have been carried out?  In particular, we would like
to know what, in actual practice, is the activating procedure, what products have been affected and
their origin, and the frequency of the proceedings.
Anti-dumping
1. What types of economic/econometric analyses are used for assessing injury?
2. What methodology is used for calculating the exporter's profit margin?
3. Do the injury analyses include the effects on third parties, such as industrial users,
consumers, and others?
4. Are databases or information other than that provided in the petitions and by the parties
available for the injury analysis?
5. When is the constructed price criterion used in investigations under Article 2.2 of the
Anti-Dumping Agreement?  Is there any preference as regards the use of the constructed price or the
third country market criterion?
6. What sampling methods are used?
7. Is the United States prepared to eliminate anti-dumping measures in a possible free trade
agreement of the Americas (FTAA)?WT/TPR/M/56
Page 87
Anti-dumping and countervailing duties
Chile would like more information about the "sunset review" procedure and wishes to know
whether the United States envisages expediting the review process in order to get results more
quickly.  It is specifically concerned about the case of Chilean carnations since for the last 12 yearsthese have been the subject of an anti-dumping measure and countervailing duties which have
excluded them totally from the United States market and are now the subject of a full review.
Subsidies
1. According to para. 109 of the Secretariat Report, several federal government agencies, as well
as a number of State and local ones, are assisting exporters by providing guarantees, loans, etc.  To
what extent is this aid consistent with WTO rules?
2. The Government of Chile feels obliged to express its disquiet and concern at the existing
subsidy situation at all levels of government administration.  Chile would like to receive information
from the United States about the future of its export subsidies, whether or not notified to the WTO.Similarly, it would like to know how the United States proposes to deal with the question of subsidies
in the multilateral negotiations on agriculture in the WTO and the FTAA.
3. Would the United States please explain the operation of the Foreign Sales Corporations and
demonstrate their consistency with the WTO Agreements.
Investment
1. With reference to NAFTA Chapter 11, we would li ke to know the position of the United States
as regards a possible modification or interpretation of the rules relating to expropriation and thepossibility of appeal and compensation.
2. How does the Government of the United States assess the functioning of the NAFTA
investment chapter?
3. Could the United States explain the relations hip between NAFTA and other agreements, for
example the Softwood Lumber Agreement between Canada and the United States?
4. How does the United States propose to approach this question in future agreements?
Other questions
1. Could the United States please explain the tariff and non-tariff treatment accorded to used
goods?
2. What tax concessions (e.g. exemption from income  tax) are enjoyed by companies established
in foreign-trade zones?
3. What policy will the United States adopt with respect to the port charges it applies to
imports?WT/TPR/M/56
Page 88
EUROPEAN UNION
Report by the U.S. Government
Para. 52:
Could the U.S. elaborate further on the position they have outlined in para 52.  How do they envisage
this being taken forward in the New Round?  In particular, does the U.S. agree that there is need for
clarification of the relationship between MEAs and WTO rules.  And, how do President Clinton's
comments relate to the U.S. position in the (suspended) on-going negotiations of the Biosafety
Protocol to the Convention on Biodiversity?  And to biotechnology in general?
Para. 53:
We agree that identifying positive synergies between trade and environment is important, especially
as regards market access.  Will the U.S. be supportive of the Community's proposal for reducing tariffs
for LDCs at Seattle?
Para. 53:
Does the U.S. envisage including the elimination of  export credits when removing or reducing trade
distorting measures in the agriculture sector?
Para. 54:
Has the U.S. any specific ideas on how to ensure  close working links between trade and environment
officials at an international level?  How does th e U.S. ensure such coordination within the U.S.
Administration?
Report by the WTO Secretariat
Para. 9, page 20
Since the legal regime for services, investment and intellectual property and to some extent also for
goods is a mix of federal and state laws and regulations, is the U.S. Administration prepared to seek
the necessary negotiating and legislative authority in those areas where this would be necessary in
order to conduct the next round of WTO negotiations?
Para. 60, page 64
It may be useful to provide further explanation on how AD/CVD sunset reviews are conducted and
how the changes in market conditions are taken into consideration, also in light of the fact that there
are some measures, still in force, which date back over two decades.
Para. 62, page 64
How do the United States intend to implement th e recommendation of the panel on Dynamic Random
Access Memory Semiconductors (DRAMs) of one megabit or above from Korea (WTO document
WT/DS99/R of 29 January1999) that the United St ates “bring section 353.25(a)(2)(ii) of the DOC
regulations, and the Final Results Third Review, into conformity with its obligations under Article
11.2 of the AD Agreement”?
Para. 186, page 108
Please explain how the U.S. Government ensures adequate remuneration for use of patents by U.S.
Government authorities?WT/TPR/M/56
Page 89
Para. 200-202, page 112
Are geographical indications that are not registered under the Federal Principal Register entitled to
protection under relevant laws and regulations  on labels?  What are the administrative and
enforcement competences of the BATF, the F ood and Drug Administration and the U.S. Department
of Agriculture in relation to the protection of geographical indications?
Para. 204, page113
Please explain how the U.S. implem ented Article 6bis of the Berne Convention to which it is a party?
Para. 231, page 121
This paints a much too positive picture of U.S. transposition of ISO and IEC standards.  The ISO 9000
family of standards consists, at the moment, of approximately 20 standards.  This should be comparedto ISO total catalogue of standards, which is over 5000, and the U.S. has a very bad track record of
transposing them.
QS 9000 is also a good example of how U.S. automotive industry has departed from established
international best practice and it is not until recently that QS 9000 has been aligned to ISO 9000.
Para. 233, page 122
This covers only the federal level leaving the individual states to create their own standards.
Para. 235, page 122
Here it should be mentioned that OSHA, contrary to the WTO/TBT Agreement, does not accept
international standards under their product certification programme.
Para. 249, page124
It may be useful to expand on the timeframe for APHIS decisions with regard to imports of fruits andvegetables in the U.S.  It may also be useful to consider the limitations on ports of entry for citrus
fruits.
Para. 275, page 132
At a sub-governmental level the number of entities covered by the GPA could be increased, with a
positive effect of expanding the global coverage and effectiveness of the Agreement.  Are there any
ongoing discussions between U.S. federal authorities and sub-federal and other entities in order toencourage them to join the GPA?
Para. 288 et seq., page 136
“Buy American”, and other similar rules represent several billion dollars worth of lost market
opportunities to EU companies.  These exceptions have trade distorting effects on a free and efficientmarket.  Is the U.S. prepared to review and roll back “B uy American” restrictions in the context of
further negotiations?
Para. 292, page 138
The sanctions maintained by the U.S. vis-à-vis most EC Member States appear to have beenmotivated by the applicability of Article 36 of the EC Utilities Directive to the telecommunications
sector.  On 3 June 1999 the European Commission issued a notice effectively excluding virtually the
whole telecommunications sector from the scope of the Directive.  In view of this development, could
the United States indicate the rationale for continuing its sanctions?  Could the United States indicate
when it will abolish them?
Para. 299, page 140
The Burma/Massachusetts dispute in the WTO has been suspended.  Nevertheless, the EC remains
concerned about the wider issue of sub-federal selective purchasing measures, which continue toWT/TPR/M/56
Page 90
exist.  Could the U.S. provide further information on th e mechanisms used by the federal authorities
to avoid sub-federal authorities adopting legislation inconsistent with the GPA?
Para. 51 page 196
In the field of satellite communications and allocation of frequencies, the market access policy shouldresult in an open, timely and non discriminatory licensing.  It would appear that the licensing process
should not:
- be based on broad and vague conditions and criteria;
- subject foreign satellite systems to over regulation;
- delay the entry of systems ready to enter the market as a result of burdensome
conditions, like an excessive relocation cost burden;
- treat differently like services.
It would be helpful if the U.S. could elaborate on the implementation of the WTO Basic
Telecommunications Agreement in these respects.
POLAND
1. About 50% of Poland's exports to the U.S. is covered by the U.S. GSP.  The system expired at
the end of last month.  Its renewal will be dependent on decisions by the U.S. Congress and by the
U.S. President.  Poland is concerned that such decisions will be taken only after the summer recess
which would result in a suspension of the system for a period of three to four months and inconsequence in a decrease in exports of some goods.  Please provide information on when a final
decision on the matter can be expected and whether the system will be renewed by one year
(financial) or by two or three years.
2. Please provide information whether the U.S. in tends to maintain import quotas for textiles
and clothing from Poland and from other WTO members until 2004 (in accordance with the ATC) or
will the U.S. fully liberalize some categories of products especially clothing at an earlier date.
3. Please provide information whether the U.S. intends to introduce changes to the present
system of administration of tariff quotas on im ports of cheese from various countries including
Poland.  Poland's specific interest is focused on the possibility of making more flexible the way the
so-called historic tariff quotas are utilized.  Poland considers that the present regulations and rulesexcessively protect those to whom the quotas have been allocated.
BRAZIL
Tariffs peaks
According to the Report by the Secretariat the simple average applied MFN tariff rate is 5,7% in 1999
and expected to fall to 4,6% once the Uruguay Round and ITA tariff cuts are fully implemented.
Notwithstanding, 5% of the MFN tariffs involve rates that exceed three times the overall average.
Such tariff peaks affect agricultural and food produc ts and textiles, clothing and footwear (pg. 45, 2).
The average for agriculture is 10,8%, and 42% of the duties applied are non ad valorem .  The results
are that these products are benefiting from higher than average protection and higher percentage of
tariff peaks (pg. 163, 3).  Tariff quotas also apply to agricultural products, with simple average tariff
rate estimated at 9,5%, while corresponding average out of quota tariff is set at 55,8% (pg. 163, 4).WT/TPR/M/56
Page 91
Brazil is a traditional exporter of agricultural and food products as well as textiles and footwear as
many other developing countries.  Since one of the main objective of the WTO is to guarantee a better
market access to developing countries, we would like to know whether, either now or in the
context of a new round, the U.S. could offer some solution to this systemic question of market access.
Recent press report sustain that the U.S. authorities would not favor a new round in tariffs based on
automatic tariff cuts, by means of formulas or bands, because the U.S. wants to preserve the existing
tariff peaks.  This of course would constitute a major disincentive for developing countries to engage
in negotiations.
Is the U.S. planning to maintain tariff peaks at current levels?  If the statement is correct would it also
apply to products listed as agricultural ones?
Tariff escalation
The magnitudes of the simple averages of applied MFN tariffs shows that tariff protection in 1999
was higher for finished goods than for semi-finished and for raw materials.  Tariff escalation meansthat the level of effective tariff protection increases as goods undergo further processing, and tends to
promote primary and semi-finished goods, slowing the move to higher value added production
(pg.52, 19).
Brazil is exporting to the U.S. many products affected by tariff escalation.  Since this is another
systemic question in the area of market access, Brazil wants to express its concern with a practice that
is impeding developing countries to move to a more valued added type of exports.  Is there any plan
from the U.S. to handle this situation
Is the U.S. open to consider proposals that tend to establish a level playing field for these products or
cluster of products?
Orange juice - Specific duties
Specific and compound duties are a feature of the U.S. tariff.  In 1999 they account for 12,9% of all
tariffs and apply mainly to agricultural products,  prepared food, footwear and headgear, chemicals
and chemical products, textiles and base metals.  More than 80 of the top ad valorem  equivalent duties
range from 40,6% to 232,2% (pg.48, 12).
The main problem of Brazil in this area is related to orange juice.  Imports of this product in the U.S.
are subject to the application of a specific tariff related to volume, corresponding to an ad valorem
tariff of around 49%.  This measure, aimed to protect domestic producers, is obstructing imports andhampering internal consumption.
Is the U.S. envisaging any measure to reduce these distortions?  Or is this issue "unnegotiable" as
was the case in the Uruguay Round?   Again, in the case of Brazil, such an attitude would undermine
the value of any future negotiations.
Sugar
Sugar is subject to the raw cane sugar tariff rate quota or to the refined sugar tariff rate quota.  To be
eligible for a TRQ countries must obtain a Certificate of Quota Eligibility or a Special SugarCertificate (pg. 57, 36).
With minimum price guarantees to domestic producers and through tariff quotas to imports, the U.S.
is supporting an artificially high price for sugar, protecting and promoting internal production of beet
sugar, but also distorting international prices.WT/TPR/M/56
Page 92
Brazil, one of the largest producers and the biggest exporter of cane sugar, is being discriminated in
the administration of the quota allocation system.  This system is allocating to the three main world
producers only 25% of the sugar cane quota, but is allowing non-traditional exporters to buy sugar in
the international market to re-export to the U.S.
Is the U.S. planning to address this discriminating system that is rewarding dubious practices and
disregarding the competitiveness of the suppliers?  Is there any plan to deregulate the U.S. sugar
market?
Fruits
In addition to strict regulations, the safety of U.S. food products is safeguarded through pre-market
clearances, mandatory production practices, inspections, and random ongoing sampling.  The food
safety standards that apply to domestically produced foods also apply to imported foods
(pg. 123, 239).
Brazil is a traditional competitive fruit exporter, but excessive phytosanitary measures and import
licensing requirements practically banned imports of these products from Brazil to the U.S.  The main
problem in this area is the long process to obtain the risk free certificate.  The case of papayas is a
good example of the difficulties of the whole process, taking almost six years, when similar process
for other countries takes only three years.  This delay in the certification process is becoming an
important barrier to trade, since its costs and time length impede the flow of trade.
How does the U.S. plan to address this situation that is discriminating products that are highly
competitive in the international market?
Shrimps
Following the environmental regulation enforced unde r the Endangered Species Act it is prohibited to
import shrimps and shrimps products harvested with commercial fishing technology that may
adversely affect sea turtles.  Shrimps imports are prohibited unless the USDA certifies that the nation
has adopted a comparable program to protect sea turtles.  Imports not certified are allowed by boats
using turtle excluder devices provided they are accompanied by certification from the harvester and
the government of the exporting country.  This practice has been the object of a dispute in the WTOthat found that the ban was inconsistent with GATT rules.  The period of implementation would be
13 months from 25 November 1998 (pg. 129, 266).
Brazil is under the certification system, since 1992, but was excluded for exports several times after
the visit of technical missions, despite the fact that the Brazilian Government has implemented aspecific law through IBAMA obliging Brazilian boats to use TEDs.  After the WTO panel, Brazilian
exports are under a waiver and under the submission of periodic verification.
The uncertainty created under this situation is affecting exporters and undermining the evolution of
trade relation between Brazil and the U.S., since the USTR declare that it is committed to ensuringthat U.S. environment laws remain firmly in place.
How does the U.S. intend to address the persisting negative effects of this practice?  Does the U.S.
intend to fully comply with the results of the panel?
Bovine and swine meat - Sanitary and Phytosanitary measures
In the U.S., responsibility for food safety is shar ed among several federal government agencies and
departments in cooperation with state and local governments (pg. 123).  Meat and poultry products
can only be imported from countries and plants approved by the U.S., with the Federal MeatWT/TPR/M/56
Page 93
Inspection Act requiring countries to impose inspections requirements equivalent to the U.S.
(pg. 125, 249).
Brazil is a traditional exporter of bovine meat, but the U.S. is not accepting Brazil as free from animal
diseases, neither accepting some states as disease free zones as the Office of Epizootics is doing.
How is the process of adapting the U.S. legislation to  the rules of the SPS Agreement in the area of
regional certification?
Poultry meat and soya beans and soya oil - Support programs
The Export Enhancement Program - EEP was re-authorized until the year 2001.  The purpose of the
program is to enable exporters to offer prices that  are competitive with those being offered by other
countries' exporters in selected foreign markets.  Commodities eligible for assistance are wheat, wheat
flour, feedgrains, rice, vegetable oil, frozen poultry, barley malt, pork and eggs (pg. 167, 8).
Brazil is also one of the biggest exporters of poultry meat, but its exports, mainly to the Middle East,
have been heavily affected by the EEP export subsidy, re-introduced in 1998 allegedly to compensate
the EC's export subsidies.  How does the U.S. envisage to handle this situation that discriminates
against a country that is exporting agricultural products without subsidies?
Other area of concern to Brazil is the use of the EEP to support exports of soya oil. Brazil is a leading
exporter of this product, but has been affected by U.S. subsidies in the past.
How does the U.S. plan to avoid the negative and trade distorting effects of these subsidies?  Does the
U.S. agree to support a "subsidies war" in detriment of developing countries' participation in
international trade?
Textiles
The ATC provides for the gradual and complete integration of textiles and clothing products into
WTO rules over a ten years transition period.  While integrating products from the four required
categories in the first and second stages, the integration of products was concentrated in yarns and was
least noticeable in clothing (only 12,4% of the volume of imports integrated).  In the first integrationstage, the products involved were not subject to quotas and hence no restriction was eliminated.  In
the second stage 24 categories have been integrated some of them of interest to Brazil (pg. 161, 8).
Is the U.S. planning to incorporate more categories related to clothing in the third stage of the ATC
program?
According to the Secretariat's Report, new textile rules of origin became effective 1 July 1996, for
products requiring a certain degree of assembly (where the final garment was assembled), and for
products that require minimal cutting and assembly, as towels and sheets (where the fabric was
woven) (pg. 55, 28).  An agreement was reached with the EU in 1997, but was subject to bilateralconsultations in the WTO, because under the new rule some products were no longer recognized as
having EU origin (pg. 161,11).
An agreement between the U.S. and the EU that removes quotas to Asian fabrics and allows imports
of European products without discrimination will harm Brazilian products, a traditional exporter ofthese products.
How will the U.S. evaluate the impact of this decision on traditional exporters?  Will the U.S. consult
with interested parties?WT/TPR/M/56
Page 94
Steel
Of the 72 anti-dumping investigations initiated between 1996 and 1998, 54% involved steel products,
following a pattern observed in the past twenty years (pg. 68,69).  The number of anti-dumping duty
orders in effect on 1 January 1999 was 297, 41% of these were on iron and steel.(pg. 70, 70).
There were 18 countervailing duty investigations initiated between 1996 and 1998, and 13 of these
involved steel products.  There were 51 CVD orders in effect on 1 January 1999, and 58% of them
applied to steel product (pg. 72, 74).
How does the U.S. explain such a concentration of AD and CVD on the steel sector?  Would this not
indicate simply that the U.S. steel industry is no t competitive as compared to producers from different
countries and continents?
Brazil views this situation as an example of a protec tionist policy toward an industry that is loosing
competitiveness.  Does the U.S. plan to increase the level of exposure of its steel sector to
international competition?
TURKEY
1. With respect to the dispute settlement, the U.S. has been the biggest beneficiary of the WTO
system in obtaining successful results against its foreign trading partners.  In fact in the U.S.Government's Report, page 9, it is stated that U.S. has been the most active user of dispute settlement
in the WTO and it has reached favourable results in 20 of the 22 cases so far for either by successful
settlement or panel ruling.
This being the case, how does the U.S. reconcile  unilateral actions that may be taken under
Section 301 of the U.S. Trade Act against its trading partners, with the WTO provisions especially
those provisions relating to Dispute Settlement Understanding?   We are aware that the U.S. has
seldom resorted to this measure.  Would the U.S. clarify its justifications in this regard?
2. Although it was originally envisaged that the Harmonization Work Programme for
non-preferential Rules of Origin would be completed within three years of initiation, negotiations to
this end have not been able to bring about the final results.  The lack of common understanding in thisregard has prolonged the settlement of a number of legal and practical problems, which are a source
of concern to the Turkish Delegation.
It is the view of this Delegation that until the Work Programme is completed, Members
should refrain from introducing national arrangements that create restrictive, distorting and disruptiveeffects on international trade.  Frequent changes to these arrangements could also give rise to
uncertainty for the exporters.  We, therefore, atta ch importance to the successful completion of the
Harmonization Work Programme.
Within this context, we would like to ask the U.S. what is the current situation for the
implementation of the U.S. requirements on non-prefe rential rules of origin so far as textiles and
clothing are concerned and what are the future plan s for them?  Likewise, could the U.S. briefly state
its assessment regarding ongoing efforts towards harmonizing non-preferential rules of origin?
Questions on Dumping and Subsidies
3. How do the U.S. anti-dumping authorities examine, during a review investigation initiated
under Articles 11.2 and 11.3 (sunset review) of the An ti-Dumping Agreement, whether the injury will
continue or recur if the definitive anti-dumping duty is terminated?  What are the criteria used under
these circumstances?WT/TPR/M/56
Page 95
4. In Article 15 of the Anti-Dumping Agreement it is stated that special regard must be given by
developed country Members to the special situation of developing country Members when
considering the application of anti-dumping measures under the Anti-Dumping Agreement.  Turkey
would like to know how the U.S. interprets this pr ovision.  In relation to this Article, Turkey would
like to know also how the U.S. anti-dumping aut horities interpret Article 9.1 of the Anti-Dumping
Agreement with respect to the application of lesser duty rule.
5. Under the provisions of Statement of Administrative Action (SAA) 888-89, if companies
have a long track record of not using a subsidy programme, the mere availability of the programme
should not, by itself, indicate likelihood of continuation or recurrence of a countervailable subsidy.
Nevertheless, SAA 888 also provides that as long as a subsidy programme continues to exist, the
Department should not consider "company" or "industry" specific renunciations of countervailablesubsidies by themselves, as an indication that continuation or recurrence of countervailable subsidies
is unlikely.  Could the U.S. provide clarification on how the U.S. authorities determine the likelihood
of continuation or recurrence of a countervailable subsidy in a sunset investigation, if the companies
in question have a long track record of not using a subsidy programme?
6. Could the U.S. explain whether or not the Department of Commerce makes adjustments to the
net countervailable subsidy rates for programmes that exist, but were modified subsequent to the CVD
order, in a sunset investigation?  If so, how are these adjustments made?
7. The U.S. initiated dumping and subsidy investigations on certain import products from
Turkey simultaneously, and consequently imposed two sets of additional levies as anti-dumping and
countervailing duties concurrently.  Would the U.S. clarify its methodology for calculating the
margins for additional duties simultaneously for the same product so far as dumping and subsidy
investigations are concerned?  What criterions has  the U.S. established in calculating simultaneously
these two separate margins for the same product in a transparent manner?
8. The Secretariat's Report, Page 68, points to the fact that of the 72 anti-dumping investigations
initiated between 1996 and 1998, 54% of the total cases involved steel products.
We would welcome further comment from the U.S. on this subject as many members may
have concern over the trend for protectionism in the U.S.
MALAYSIA
Topic:  Anti-Dumping
Background
The Administrative Review of the existing AD duty in the U.S. is carried out at the request of the
local industry or interested parties.  This is don e annually.  The review allows for the retroactive
application of the AD duties and the difference between the existing rate and the newly determined
rate is then applied on the Malaysian manufacturer.  If the new AD duty is lower, the difference isreturned with interest and if the new AD duty is higher, the difference is paid by the Malaysian
manufacturer.
Issue 1
This Administrative review is a burden to the local industries, both in terms of legal consultation fees
and the time involved in filling out the questionnaire and the preparations for the verification.WT/TPR/M/56
Page 96
Issue 2
The time taken to refund the Malaysian manufacturers.
Question 1
If the Administrative Review is requested by th e U.S. industry, what is the standard of evidence
required of the local industry in the U.S. to request for an administrative review?  Does a mere
request without evidence by the local industry to ca rry out the review suffice for the initiation of a
review?
Question 2
Article 9.3.1 of the WTO AD Agreement requires that:
“Any refund shall be made promptly and norma lly in not more than 90 days following the
determination of final liability made pursuant to this subparagraph.  In any case, where a refund is notmade within 90 days, the authorities shall provide an explanation if so requested.”
We have come to understand that in practice the return of the refund takes longer than 90 days.  What
is the period taken by the U.S. in refunding and how does the U.S. expect to improve on this?
iv(a) - Standards, sanitary requirements and environmental regulations
There are numerous technical regulations and standards imposed by the U.S. on grounds of consumer
protection, public health, safety and the environment.  Numerous jurisdictions and agencies
administer these, which contributes to the comple xity of conformance to these regulations.  This
situation lend themselves to costly delays in obtaining approvals and bringing the products in
conformity  with these standards.  Para 231 of the report note that there are 50,000 standards in
existence established by about 400 organizations.  The National Standards and Certification
Information (NSCI) of the National Institute of Standards and Technology (NIST) is the designated
enquiry point for the WTO TBT Agreement.  Is it sufficient to approach the NSCI alone to get all
information on regulations and standards pertaining to a specific product and is these information
collated by product description to make it easily retrievable and accessible to foreign exporters?
As at 31 December 1998, the U.S. notified 124 technical regulations to the WTO for health and safety
reasons .  Do regulations so notified include all regulations imposed at the federal, state and local
level?
Topic:  Rules Of Origin, Marking And Labelling
Background
Under the Textile Fibre Products Identification Act, all textile products must be labelled or marked
and the name of the manufacturer and where the textile products were processed are required to be
indicated.  For products that require minimal cutting and assembly, origin is conferred by the country
where the fabric was woven.
Issue
Malaysia is concerned with this rule as exports of products such as tablecloth and bedlinen from third
countries whose fabrics whose fabrics are made from Malaysia are considered as products of
Malaysian origin.  Malaysia’s acceptance in 1997 of the U.S. proposal to drop quota and visa
requirements is only applicable to certain dyed and printed fabric in category 611.WT/TPR/M/56
Page 97
Question
Why does the U.S. assume that the issue of Rules of Origin has been resolved when the acceptance
only covers certain dyed and printed fabric in category 611?
Topic:  Buy American Act
Background
The Buy American Act is applied to government funded purchases and contains various forms of
measures against products and services produced in other countries.  These include measures such as
compliance with established local content requirements and giving preferential price terms to localcompanies.
Issue
The ACT has the effect of restricting market access for foreign goods and discouraging U.S.
companies from using foreign goods in their bidding to supply goods and services to government
agencies.  A U.S. company for example, which has been buying Malaysian latex and nitrile gloves
since 1988 was denied the opportunity to become a supplier of the same products to the U.S.
government agencies.
Topic:  Pepper - Non Acceptance of Malaysian Grades and Stringent Mould Standard
Background
Malaysian pepper encounters difficulties in penetrating the U.S. market.  With the exception of
Standard Malaysia Pepper No. 1, the U.S. does not accept other specifications of standards and grades
of pepper from Malaysia.  However, these grades are acceptable in other markets such as EU and
Japan.
Issue
This technical barrier has restricted the entry of other grades of pepper into the U.S. market.
Malaysian pepper has to comply with American Spice Trade Association (ASTA) Quality
Specification which is more stringent than the specification and standards imposed by EU and Japan.
Question 1
Malaysian pepper has technically met the international standard and quality specification as other
countries such as Japan, EU and Australia have accepted the grades and quality of Malaysian pepper.
What is the basis for U.S. non-acceptance of other grades of Malaysian pepper?
Question 2
Malaysian pepper has to comply with the standard and quality specifications imposed by the U.S.
government (US FDA) and the U.S. Spice Trade As sociation (ASTA).  This two-layer process has
created uncertainties in trade as well as increased the cost of exporting to the Malaysian exporters.
What is the basis for Malaysian pepper to be subjected to the two inspection processes;  one by theGovernment and another one by the spice trade association?WT/TPR/M/56
Page 98
Topic:  Restriction on Tropical Timber
Background
Currently, there are proposed bills in the City Councils of New York, Los Angeles and Long Beach
seeking to disallow use of tropical timber in their areas of jurisdiction, unless it is certified by the
organizations approved by the Forest Stewardship Council, U.S.
Issue
These proposed bills are discriminatory as they only single out tropical timber for certification.
Temperate and boreal timbers are not subjected to certification.
Question 1
Why are temperate and boreal timbers are not subjected to the certification?  What is the basis for
discriminatory certification on tropical timber?
Question 2
The proposed bills by the municipal governments are inconsistent with the U.S. commitment and
obligations in the WTO.  What are the measures and actions taken by the U.S. Government to ensure
the state and municipal governments’ observanc e and compliance to the U.S. commitments and
obligations in the WTO?
Topic:  U.S. Subsidy for Export of Agricultural Products
Background
Currently, several U.S. agricultural products are subsidized through programmes such as the Export
Enhancement Programme, the Sunflower Oil Assistance Programme and the Cottonseed Oil
Assistance Programme.  These programmes are targeted at markets which are also markets for
Malaysian products, especially palm oil.  The programmes are also aimed at facilitating U.S.
agricultural exports to countries experiencing hard currency constraints that may be unable topurchase U.S. agricultural commodities without credit.
Issue
As most of these countries are also the export markets for Malaysian palm oil, subsidized exports of
U.S. vegetable oils under these programmes have the effect of displacing Malaysian palm oil exports.
Question 1
What is the U.S. targeted performance of exports of agricultural products to the market concerned,
and shall the subsidies be withdrawn once the U.S. exporters meet the targeted performance?
Topic:  Quantitative Restriction on Textile and Clothing
Background
The WTO Agreement on Textiles and Clothing stipulates a progressive removal of quotas so that by
1 January 2005, there would be quota free trade in textiles and apparel.WT/TPR/M/56
Page 99
Issue
The U.S. has so far only removed quotas on items of little commercial interest, and items of
significant trade interest are being kept under quota until the end of transition period.  In the case of
Malaysia, the U.S. has yet to liberalize items  such as T-shirt, trousers and fabrics.
Question
Will the U.S. be in the position to remove all quantitative restrictions as mandated in the WTO
Agreement on Textiles and Clothing?
INDIA
Trade Policy Regime:  Framework and Objectives:
1. Under the APEC ATL initiatives, the United States has been a party to the identification of
nine sectors for tariff reductions.  What was the basis for such selection?   The introduction of these
initiatives in the WTO as proposed by APEC, w ith the product scope, end dates and end-rates for
tariff cutting, precludes consideration of specific interests of WTO Members other than those that are
also APEC Members.  Is this form of regionalism consistent, in the view of the United States, with the
objectives, principles and modalities of nego tiations implicit in the WTO Agreements?
2. The U.S. GSP Programme appears to build in grant of benefits with retrospective effect as
well as their withdrawal with retrospective effect.  The list of articles and countries are reviewed
annually.  The numerous circumstances under which the programme can effectively be modified are
set out in paragraph 72.  Paragraph 76 sets out that discriminatory treatment among beneficiary
countries by products is enabled by section 504(c) of the Trade Act of 1974.  These create uncertaintyfor traders from beneficiary countries.  Since investment and trade decisions are predicated on
predictability, what do the U.S. authorities propose to do to make this programme effective and of
greater benefit to eligible countries and entities?  W hat is the share of imports of GSP in total imports
of USA and what have been the underlying trends since its inception in 1976?
Trade Policies and Practices by Measure:
3. It has been reported that one in every seven duties on imports are specific or non- ad valorem ,
and that specific duties account or as many as 86 of the top 100 MFN tariffs.  Since this serves to
restrict imports from economies such as India relative to the more developed countries that typify a
high-price regime, when and how does the United States intend to reduce the implicit bias in its tariff
structure?  What is the rationale for continuing to impose specific duties on such a large number oftariff lines?
4. The signing of the Marrakesh Agreement creating the WTO resulted in the Agreement on
Textiles and Clothing (ATC) which envisaged the gradual integration of the Multi-Fibre Arrangement
(MFA) into the multilateral trading system within a period of ten years of the taking effect of theagreement.  ATC provides for a transitional safeguard mechanism (TSG) during the transition period.
The transitional safeguards have been invoked by the U.S. extensively in as many as over 26 cases
since 1995 against various countries.  Against India the transitional safeguard mechanism has been
invoked thrice.  While these safeguards have been revoked, in two instances after the invocation of
the dispute settlement mechanism, a lot of damage has already been done to the market access thathad been gained by India in the U.S.  In this scenario, what are the U.S.' plans to ensure meaningful
integration, in order to provide due market access to Indian exporters .  Besides, the safeguard
measures earlier initiated by the U.S. were on items already under restraint and such measures create
an atmosphere of uncertainty for exporters and hinder market access.  Can the U.S. assure India thatWT/TPR/M/56
Page 100
no safeguard action would be taken against any product already under restraint in light of the ATC
requirement to use safeguard action only sparingly?
5. Various studies in the U.S. suggest that the system of testing, standards, labelling and
conformity assessment are too costly, burdensome and complex, and that typically the requirementsare set at levels higher than international norms.  The quality requirements stipulated for edible oils by
the U.S. are much higher than those set by 'Codex Alimentarius' for instance.  The Fastener Quality
Act regulations discriminate against non-NAFTA suppliers in various ways.  Procedural hassles also
abound as the original laboratory testing report or certified copy thereof has to be attached to each lot
and the fastener parts logo must be registered with the U.S. patent and trademark office.  What is the
rationalization for continuing such practices and regulations?
COLOMBIA
SECTION III
TRADE POLICIES AND PRACTICES BY MEASURE
Paragraph 6
What plans has the United States for preventing the Buy American Act and other similar trade
legislation (e.g. the Small Business Act) from disc riminating against exports from third countries and,
in particular, developing countries?
BORDER MEASURES
Tariffs
Paragraphs 12 to 19
The Secretariat Report mentions the principal characteristics of the United States tariff
structure.  These include specific duties, higher dispersion and tariff escalation, features which are
more apparent in relation to products such as text iles, clothing, footwear and agricultural products.
These characteristics make the tariff more opaque and impede access to the North American market.
Could the United States provide information about its plans to give its tariff a more even and
neutral structure?
Non-tariff measures
Paragraph 36
The country of importation sugar quota is based on a reference period which is often not
representative.
Is the United States in a position to revise this reference period if a country, such as
Colombia, can show that the period is not representative of its exports?
Paragraph 38
The report mentions that the importation of liquefi ed natural gas is authorized only if it is
consistent with the public interest, except in the case of imports originating in a country with which
the United States has a free trade agreement.
Could the United States please define the nature of the public interest criterion.WT/TPR/M/56
Page 101
Has the United States approved imports of gas from countries with which it does not have
trade agreements?
Special measures
Paragraph 71
The Report mentions that all the countervailing duty investigations were initiated with a
parallel anti-dumping investigation.
Does this mean that if no subsidy is determined, the authorities continue the investigation in
order to determine the existence of dumping?
(3) MEASURES AFFECTING EXPORTS
Duty and tax concessions affecting exports
Paragraph 104
The drawback system for commerce and manufacturing industry allows for the refund of
customs duties, internal taxes or fees.
Could the United States provide more information about the kinds of internal taxes which are
refundable?
As far as fees ("otros derechos") are concerned, do these include anti-dumping and
countervailing duties and those imposed as a result of a safeguard investigation?
Are all exports entitled to be nefit from the drawback system?
Foreign-trade zones
Paragraph 106
According to the Secretariat Report, goods may enter foreign-trade zones without formal
customs entry procedures and payment of duties.
Does the duty-free treatment apply equally to raw materials, intermediate goods and capital
goods?
Paragraph 108
The Secretariat Report states that under special income tax provisions, a portion of the export
income of an eligible foreign sales corporation is exempt from U.S. income tax.
Is the income tax exemption on part or all of the tax?
Section 301 and related measures
Paragraphs 135 to 138
The Secretariat Report describes the review process to which some countries are subject
under "Special 301".  According to the Report, each year the USTR must identify the countries that
deny adequate and effective protection of intellectual property rights or fair and equitable marketWT/TPR/M/56
Page 102
access to United States persons that rely upon such protection.  The Report adds that a country may be
found to deny adequate and effective protection of intellectual property rights even if it complies with
its obligations under the TRIPS Agreement.
Colombia is included in the "watch list" and has been subject to two reviews so far in 1999
and very possibly will be subject to a further review in December 1999 as a developing country.
In the light of the terms of Article 23 of the DSU which specifies that no Member shall make
unilateral determinations with regard to the consistency of a measure adopted by another Member
except through recourse to the dispute settlement system, could the United States explain how
"Special 301" incorporates these provisions?
Following the interim out-of-cycle reviews of 19 February 1999, Colombia, although
benefiting from the TRIPS transitional period, was not removed from the watch list.  Could the
United States explain the legal basis for this action?
Could the United States explain what these reviews consist of and why it is necessary to
subject a country to repeated reviews?
INTERNAL MEASURES
Government procurementParagraph 288
The Report refers to preferences in the area of government procurement being applied to the
products and services of all least-developed countries and certain products and services of theCaribbean Basin countries.  Could the United States provide further information about this preference
programme and indicate whether it intends to extend it to other Caribbean Basin countries?
TRADE POLICIES IN SERVICES
Air transport services
Paragraph 79
How can the full exploitation of open skies agreements be reconciled with the practice of
unilaterally decertifying the air transport services of third countries on non-trade grounds and, in the
case of Colombia, on the basis of a safety-oriented criterion?
Professional services
Paragraphs 89 and 90
What plans has the United States for ensuring that the commitments made by the Federal
Government, in this and other similar cases, are duly respected at all decision-making levels in the
United States, including State and local authority levels?
MAURITIUS
1. Could the United States indicate whether the Special Safeguard provided for agricultural
products is applied on a discretionary basis by the U.S. authorities?  Or is this applied automatically
as laid down in the WTO Agreement?WT/TPR/M/56
Page 103
2. Could the delegation provide information on its GSP programme which is now part of the
Omnibus Appropriation Bill of FY 1999, in particular as regards the date of entry into force of the
current programme and the new product coverage?  Could the US equally indicate the criteria used
to determine the eligibility of countries benefiting from GSP?
3. The report indicates that trade has grown substantially among the NAFTA countries since the
implementation of the Agreement.  Could the delegation provide statistical information on the sectors
in which trade has grown and the extent of such growth?
__________