USTR's September 30 fact sheet, "Monitoring and Enforcing Trade Laws and Agreements," outlines its past and current investigations in three sections: The application of trade laws and enforcement of U.S. rights under trade agreements; cases referred to the World Trade Organization (WTO) under its dispute settlement procedure; and improvements in worker rights and intellectual property protection as a result of U.S. market access incentives.
The text of the USTR's fact sheet follows:
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"I think nothing would be better for our ability to open markets than to be credible in showing that we will enforce existing laws and agreements." --President Bill Clinton, Speech at American University, February 1993.
President Clinton's commitment to the enforcement of trade agreements and U.S. trade laws has been clear from the beginning of his Administration. Through vigorous application of U.S. laws, and active enforcement of U.S. rights under the new dispute settlement procedures of the World Trade Organization (WTO), the Administration has effectively opened foreign markets to U.S. goods and services. The President has successfully used the incentive of preferential access to the U.S. market to encourage improvements in workers' rights and reform of intellectual property laws and practices in other countries. These enforcement efforts have resulted in major benefits to U.S. firms and workers.
Under President Clinton's direction, the Office of the U.S. Trade Representative has negotiated more than 220 trade agreements -- including the North American Free Trade Agreement (NAFTA), the World Trade Organization (WTO) agreements, and numerous other market-opening agreements that expand opportunities for U.S. companies and workers. These agreements, combined with aggressive export promotion and enforcement of our trade laws, have helped increase U.S. exports of goods and services since 1992 by 37.4 percent to more than $848.8 billion in 1996.
Since 1993, the Administration has vigorously enforced its rights by deploying all available trade enforcement tools at its disposal. It has launched 21 Section 301 investigations into foreign unfair trade practices; used the "Special 301' review of intellectual property rights protection to secure improved protection in at least ten major foreign markets; used U.S. trade laws to gain compliance with telecommunications trade agreements with three major trading partners and to address discrimination in foreign government procurement practices in five cases; and invoked the dispute settlement procedures of the WTO in 32 cases to protect the interests of U.S. producers and manufacturers.
This document outlines the Administration's commitment to and successes with strategic enforcement. Section I addresses the application of trade laws and enforcement of U.S. rights under trade agreements; Section II discusses cases referred to the WTO dispute settlement process by the United States; and Section III outlines improvements in worker rights and intellectual property protection spurred by the incentive of preferential access to the U.S. market.
MONITORING AND ENFORCEMENT ACTIONS
Application of U.S. Trade Laws and Enforcement of U.S. Rights Under Trade Agreements Section 301, Super 301, Special 301, Title VII, Section 1377
Section 301 and "Super 301"
Section 301 of the Trade Act of 1974 is the principal U.S. statute for addressing foreign unfair practices affecting U.S. exports of goods or services. Section 301 may be used to enforce U.S. rights under international trade agreements and may also be used to respond to unreasonable, unjustifiable, or discriminatory foreign government practices that burden or restrict U.S. commerce. "Super 301" refers to an annual process by which the U.S. Trade Representative identifies those priority foreign country practices the elimination of which is likely to have the most significant potential to increase U.S. exports.
-- Canada -- periodicals. Following self-initiation of a section 301 investigation, the United States successfully invoked WTO dispute settlement procedures to challenge Canada's measures that discriminate against imported magazines. A WTO dispute settlement panel and the WTO Appellate Body condemned Canada's ban on imports of such magazines, Canada's discriminatory excise tax on such magazines, and postal rates discriminating against imported magazines. Canada has accepted the reports and has agreed to comply with them.
-- EU -- banana imports. Following the initiation of section 301 investigations against the EU, Colombia and Costa Rica in response to a petition by Chiquita Brands International, Inc., and the Hawaii Banana Industry Association, the United States reached agreement with Colombia and Costa Rica in January 1996 regarding their actions affecting U.S. firms exporting bananas to the European Union (EU). The United States also successfully invoked WTO dispute settlement procedures, joined by Ecuador, Guatemala, Honduras and Mexico, in challenging the EU's import practices that discriminate against U.S. banana distribution companies. The reports of a WTO dispute settlement panel and the WTO Appellate Body, vindicating U.S. concerns and condemning the EU import regime, were adopted on September 25, 1997.
-- Canada -- Country Music Television. As a result of a section 301 investigation of Canadian government practices regarding the authorization for distribution via cable of U.S.-owned programming services, U.S. and Canadian firms reached a settlement in March 1996 that will restore market access.
-- China -- intellectual property rights protection. The credible leverage of carefully targeted section 301 retaliation was used to reach agreement in February 1995 with China on enforcement of its intellectual property protection laws, and again in June 1996 to secure effective compliance with that agreement.
-- EU -- enlargement. When the European Union enlarged to include Austria, Finland and Sweden, U.S. exports of semiconductors and other products suddenly faced higher tariffs. With section 301 authority and WTO compensation procedures as leverage, however, the United States negotiated an agreement with the EU in November 1995 to lower its tariffs on semiconductors and hundreds of other products for the entire EU market. Having reached an agreement that provided a satisfactory resolution of the issues under investigation, in October 1996 USTR terminated the investigation and began monitoring EU implementation under section 306.
-- Korea -- auto imports. As part of the Super 301 process in September 1995, the United States negotiated an agreement with Korea to increase access to the Korean market for U.S. and other foreign passenger vehicles. The agreement reduced by 15 percent the overall tax burden on autos with larger engines, liberalized many Korean standards and certification procedures, lifted some restrictions on advertising and retail financing, and provided the Korean Government's assurances that it would no longer promote an anti-import bias among consumers. Implementation of that agreement has been disappointing with virtually no improvement in foreign market sales, so this issue will be addressed in the 1997 Super 301 process.
-- Korea -- steel pipe and tube exports. In July 1995, in response to a section 301 petition from the Committee on Pipe and Tube Imports, the United States reached agreement with Korea on a mechanism to discuss Korea's economic trends and data on steel sheet and pipe and tube products, and Korea agreed to notify the United States in advance of Korean government measures that control steel production, pricing or exports.
-- Korea -- meat imports. In response to a section 301 petition filed by the National Pork Producers Council, the American Meat Institute, and the National Cattlemen's Association, the United States negotiated an agreement with Korea in July 1995 on measures to eliminate government-mandated, unscientific shelf-life restrictions, and thereby open the Korean market to U.S. meat and other food products. This agreement was reached through resort to WTO dispute settlement procedures, and requires Korea to notify the WTO as it implements each stage of the agreement.
-- Japan -- auto and auto parts imports. In May 1995 the United States proposed using section 301 to increase tariffs on luxury cars from Japan, after determining that Japanese policies discriminate against imports of U.S. autos and auto parts. The two governments subsequently reached a results-oriented agreement on measures Japan will take in this sector including deregulation. While the agreement led to positive results during its first year this progress was slowed or even reversed in its second year. The United States and Japan will hold an annual review meeting on October 8-9, 1997 at which they will discuss additional concrete steps that can be taken to open Japan's market to U.S. and other foreign auto and auto parts exports.
-- Canada -- beer imports. In August 1993 the United States and Canada settled a long- standing dispute over access for imported beer to the Canadian market, after the United States imposed retaliatory duties on Canadian beer pursuant to section 301.
"Special 301" - Intellectual Property Protection
Under the "Special 301" provisions in U.S. trade law, USTR at least annually identifies those countries that deny adequate and effective protection for intellectual property rights or deny fair and equitable market access for persons that rely on intellectual property protection. Countries that have the most onerous or egregious practices and whose practices have the greatest adverse impact on the relevant U.S. products are designated as "priority foreign countries" and are subject to section 301 investigations. Other countries with particular problems of protection or enforcement of intellectual property rights are placed on a "watch list" or "priority watch list" and are monitored closely for progress. China was designated as a priority foreign country in 1994 and 1996. Those designations led to subsequent agreements and/or actions, which are described above under Section 301.
-- Brazil. In April 1996 Brazil enacted a new, long-awaited industrial property law, providing patent protection and greater market access for products relying on such protection.
-- Argentina. In contrast to Brazil, Argentina continues to delay in providing adequate patent legislation, particularly for pharmaceutical products. As a result, Argentina has been placed on the priority watch list and on January 15, 1997 the Administration decided to withdraw 50 percent of Argentina's tariff benefits under the Generalized System of Preferences (GSP).
-- Taiwan. The Special 301 provisions of U.S. trade law have been used continuously since 1992 to obtain steady progress by authorities on Taiwan in improving the legislative framework available to protect intellectual property rights and the enforcement of those rights in the Taiwan judicial system. In 1994 Taiwan made significant strides in passing intellectual property rights legislation. In April 1996 Taiwan issued an 18-point action plan for enhanced protection, which covered all major remaining areas of concern.
-- Thailand. After the United States identified Thailand as a "priority foreign country" under the Special 301 provisions in 1993, Thailand has made steady progress in its protection of intellectual property, including increased enforcement efforts and the enactment of a new copyright law in 1994. In addition, action on a new law establishing intellectual property law courts has been completed and amendment of Thailand's patent law continues to be a priority U.S. objective.
-- Hungary. Hungary, which had been placed on the Special 301 "priority watch list," concluded a comprehensive bilateral agreement with the United States in July 1993, agreeing to provide patent protection to products as well as industrial processes.
-- The Philippines. The Philippines signed an agreement in April 1993 that included commitments to improve protection of copyrights, patents and trademarks, and to improve enforcement. Since that time, the Philippines has intensified its enforcement efforts, and in June 1997 enacted new legislation intended to bring the country's intellectual property laws into compliance with WTO obligations. Regulations are being drafted to implement the legislation, which is expected to take effect in January 1998.
-- Bulgaria. The Special 301 provisions of U.S. trade law have been used to obtain steady progress in improving the legislative framework available to protect intellectual property rights and the enforcement of those rights in Bulgaria. Just prior to the April 1997 Special 301 announcement, Bulgaria adopted amendments to expand the scope of protection for computer software.
-- Russia. Russia's new Criminal Code took effect on January 1. The new Code provides for stiffer penalties for violations of intellectual property rights. The Criminal Code was signed on June 13, 1997.
-- Indonesia. Three pieces of intellectual property legislation were approved by the Indonesian Parliament on March 21, 1997 and enacted by the President on May 7, 1997. This legislation amended Indonesia's copyright, patent, and trademark laws with the aim of bringing them into compliance with WTO obligations. This summer, the Indonesian Government began procuring and using legitimate software, thereby signaling the need for eliminating piracy in such copyrighted goods.
-- Mexico. Mexico passed a new copyright law on December 24, 1996 which addresses a number of inadequacies in the former law.
-- Australia. Australia has announced a new regime for protection of test data for pharmaceuticals and agricultural chemicals, to be effective January 1, 1998. Under the new system, data for "new chemical entities" will receive protection for five years from the date of registration of the originator product.
Telecommunications Trade (Sections 1374 and 1377)
Under Section 1377 of the Omnibus Trade and Competitiveness Act of 1988 the USTR annually reviews by March 31 of each year, the operation and effectiveness of U.S. telecommunications trade agreements and takes action where non-compliance is found.
-- Korea. The Administration has consistently used U.S. trade laws to address discriminatory market barriers in Korea's telecommunications market. In 1996, Korea was identified under Section 1374 of the Trade and Competitiveness Act of 1988 as a Priority Foreign Country (PFC). Year-long negotiations concluded in July 1997 with commitments by Korea to ensure that U.S. equipment suppliers would be treated fairly in areas including procurement, equipment certification and type approval, protection of intellectual property and technology transfer. Contributing to the decision to revoke Korea's identification as a PFC were Korea's agreement under the Information Technology Agreement to eliminate tariffs on information technology products, and adoption of a more pro-competitive regulatory regime in the context of its WTO commitments. Collectively these actions will greatly enhance competitive opportunities in a market expected to grow to $100 billion by the year 2000.
-- Mexico. In the 1996 Section 1377 review, USTR cited Mexico for not fulfilling its NAFTA obligation to accept test data from other parties' laboratories or test facilities relating to product safety to certify telecommunications equipment. An agreement reached in April 1997 established procedures to resolve this issue, which will further facilitate the export of U.S. telecommunications products to Mexico, currently worth $900 million.
And, in another action related to the telecommunications sector:
-- Japan -- Government procurement of telecommunications equipment. Following a complaint in April 1996 that Japan's National Police Agency (NPA) was discriminating against a U.S. supplier in a wireless telecommunications system procurement, USTR determined that Japan was potentially in violation of both its WTO government procurement obligations and its obligations under the bilateral government procurement agreement. Negotiations over the subsequent months resulted in the NPA agreeing to reopen the procurement. A new Request for Proposals was issued by the NPA in August 1997.
Foreign Government Procurement (Title VII)
Under Title VII of the Omnibus Trade and Competitiveness Act of 1988, USTR annually reviewed compliance by foreign governments with the Government Procurement Code, and identified countries that were discriminating in government procurement against United States goods and services. Pursuant to Section 7004 of the Omnibus Trade and Competitiveness Act of 1988 Title VII expired on April 30, 1996.
-- Germany -- electrical equipment. In April 1996 the Administration identified Germany under Title VII of the 1988 Omnibus Trade and Competitiveness Act for its failure to comply with market access procurement requirements in the heavy electrical equipment sector. The imposition of trade sanctions provided under Title VII was delayed until September 30, 1996 because consultations suggested a resolution might be possible given additional time. On October 1, 1996 then-Acting USTR Barshefsky announced that the German Government had agreed to take steps to ensure open competition in the German heavy electrical equipment market, including reform of the government procurement remedies system as well as outreach, monitoring, and consultation measures. The United States did not, however, terminate the Title VII action at that time because legislation implementing reform of the procurement remedies system needed to be enacted by the German legislature.
-- Japan -- telecommunications and medical technology. Following identification of Japan under Title VII, in October 1994 the United States and Japan reached agreement on government procurement of telecommunications products and services and medical technology products and services. USTR continues to monitor Japan's compliance with both agreements and to assess tangible progress in Japanese procurement practices in these two sectors.
-- Japan -- construction. Japan was identified under Title VII in April 1993 for discriminatory practices in its public sector construction market and USTR subsequently announced that sanctions would go into effect as of January 20, 1994. However, the sanctions were terminated prior to their imposition when Japan announced a plan to reform its public sector construction market, including measures to expand transparent and non-discriminatory procedures and adopt an open and competitive bidding system. Japan also agreed to monitor foreign access and hold annual consultations.
-- EU -- telecommunications. Title VII trade sanctions were imposed for the first time by the Clinton Administration against the EU for its discriminatory government procurement practices in the telecommunications sector. These sanctions remain in place.
-- EU -- electrical equipment. Following U.S. announcement of its intention to impose sanctions, the United States and the EU reached a historic agreement in May 1993 on access to EU government procurement of heavy electrical equipment, opening a $20 billion market to U.S. companies. The agreement was expanded in April 1994 to cover the electrical utility sector and subcentral government entities, doubling to $ 100 billion the bidding opportunities available to U.S. and EU firms under the GATT Government Procurement Code.
WTO Dispute Settlement -- Enforcing U.S. Rights under the WTO
Compliance with the agreements reached in the Uruguay Round of multilateral negotiations is among the Administration's top enforcement priorities. The United States has invoked formal procedures under the new World Trade Organization dispute settlement mechanism in 32 cases -- more than any other country in the world. Of those 32, the United States has won all five cases that have been taken through the WTO dispute settlement panel process so far, and beneficial settlements were reached in seven others. Of the remaining cases, seven are at the panel phase and 13 are at the consultation phase. Eleven new cases have been launched since January 1997 alone.
-- Japan -- liquor taxes. In July 1996 the United States won the first case it referred to a WTO dispute settlement panel after requesting consultations with Japan in July 1995. The panel found that Japan's liquor tax law violates WTO rules by taxing the domestic liquor shochu at rates far lower than Western-style brown and white spirits. The WTO Appellate Body affirmed the panel's finding. On October 1, 1997 Japan will phase in its first tranche of tax changes implementing the panel and Appellate Body reports in this case. Japan is the United States' second largest export market for whisky.
-- India -- patent protection. In July 1996 the United States invoked WTO dispute settlement procedures to challenge India's failure to establish a "mailbox" mechanism for patent applications, as required by the WTO agreement on intellectual property rights (TRIPS). In a major victory for the United States, a WTO dispute panel ruled in July 1997 that India must establish a TRIPS-consistent "mailbox" filing system for patent applications for pharmaceuticals and agricultural chemical products and that India has not yet done so. It is not yet known whether India plans to appeal this decision.
-- Canada -- magazine imports. The United States invoked WTO procedures in March 1996 to challenge Canada's discriminatory practices that protect its domestic magazine industry. In March 1997 a WTO dispute settlement panel found that two of the three Canadian measures challenged violated various GATT obligations. In June 1997 the WTO Appellate Body reversed the panel concerning the third measure challenged, thus giving the United States a complete victory. Canada and the United States have agreed that Canada will bring its measures into compliance by October 1998.
-- EU -- meat imports. In January 1996 the United States invoked WTO dispute settlement procedures to challenge the EU's restrictions on imports of meat from animals treated with growth hormones. In August 1997 a WTO dispute settlement panel found the EU's ban to be inconsistent with its obligations under the WTO Agreement on the Application of Sanitary and Phytosanitary Measures. In particular, the panel's report affirmed that the EU's ban is not based on credible science. The EU has appealed this decision. The WTO Appellate Body's decision is expected in late December 1997.
-- EU -- banana imports. After holding consultations with the EU under WTO dispute settlement procedures in 1995, the United States, Guatemala, Honduras and Mexico were joined by Ecuador in February 1996 in challenging the EU's practices relating to the importation, sale and distribution of bananas. In May 1997 a WTO dispute settlement panel found that the EU's banana regime violates WTO rules on 16 counts. On September 9, 1997 the WTO's Appellate Body largely affirmed the panel's legal conclusions against the EU regime, in particular its finding on agriculture market access measures and its finding regarding the scope of the General Agreement on Trade in Services (GNATS). The panel and Appellate Body reports were adopted on September 25, 1997 and accepted by the EU.
-- Korea -- shelf-life requirements. The United States and Korea consulted under WTO dispute settlement procedures in June 1995 and reached a settlement in July 1995 concerning Korea's arbitrary, government-mandated shelf-life restrictions that were a barrier to U.S. exports of many food products, including beef and pork. Under the terms of the settlement, which was notified to the WTO jointly by Korea and the United States, Korea agreed to convert to a manufacturer-determined shelf-life system for U.S. beef, pork, and other foods. Manufacturer-determined shelf-life systems are used throughout the world. Korea also agreed to remove other barriers to U.S. exports. The United States continues to work with Korea to ensure its implementation of the 1995 shelf-life agreement. Korea is the fourth largest market for U.S. agricultural exports and the third largest for beef exports.
-- EU -- grain imports. In July 1995 the United States invoked WTO dispute settlement procedures to enforce the EU's WTO obligations on imports of grains. In September 1995 the United States requested that a dispute settlement panel be established to review its complaint, but before a panel was established a settlement was reached in conjunction with the U.S.-EU settlement on EU enlargement. The settlement ensures implementation of the EU's Uruguay Round market access commitments on grains, reduces import charges on rice and provides for consultations on the EU's "reference price system." Because the EU failed to implement the settlement agreement, the United States submitted a new request for a panel in February 1997. Thereafter, the EU took steps toward compliance with the settlement and in April 1997 finally published regulations implementing the agreement. On April 30, 1997 the U.S. withdrew its request for a panel.
-- Japan -- sound recordings. In February 1996 the United States initiated WTO dispute settlement proceedings against Japan for denying protection to millions of dollars' worth of U.S. sound recordings made between 1946 and 1971. In December 1996 Japan amended its laws to provide this retroactive protection. In January 1997 the USTR announced that the dispute had been resolved and the WTO was notified that a mutually satisfactory solution had been reached.
-- Hungary -- agricultural export subsidies. In March 1996 the United States, joined by Argentina, Australia, Canada, New Zealand and Thailand, began a process of consultations with Hungary under WTO dispute settlement procedures concerning Hungary's lack of compliance with its scheduled commitments on agricultural export subsidies. Although a WTO dispute settlement panel was established in February 1997, an agreement was reached between Hungary and the concerned parties in July 1997. According to the agreement, Hungary will apply to the Council on Trade in Goods for a temporary waiver that will specify a program to bring Hungary into compliance with its commitments.
-- Portugal -- patent protection. In April 1996 the United States invoked WTO dispute settlement procedures to challenge Portugal's patent law, which failed to provide the minimum twenty years of patent protection required by the WTO TRIPS agreement. As a result of the U.S. challenge, Portugal announced a series of changes to its system to implement its WTO obligations. A settlement was notified to the WTO in October 1996.
-- Turkey -- box office tax. The United States requested consultations in June 1996 under WTO procedures concerning Turkey's tax on box office receipts from foreign films. Turkey maintains a discriminatory "municipality" tax on box office revenues from showing foreign films but not on box office revenues from showing domestic films. In January 1997 the United States requested the establishment of a WTO dispute settlement panel but panelists were not selected because the Turkish government had made progress in its efforts to equalize the tax. In July 1997 the United States and Turkey notified the WTO that a mutually satisfactory solution had been reached.
-- Pakistan -- patent protection. The United States also used the WTO dispute settlement mechanism to enforce Pakistan's obligation under the WTO intellectual property agreement to establish a "mailbox" mechanism for patent applications. In July 1996 the United States requested that the matter be referred to a panel. The United States and Pakistan subsequently settled this case in February 1997 after Pakistan issued an ordinance bringing its law into conformity with its TRIPS obligations.
-- Argentina -- measures affecting imports of footwear, textiles and apparel. In October 1996 the United States requested consultations with Argentina concerning specific duties imposed on various footwear, textile and apparel items in excess of Argentina's tariff commitments; a 3 percent ad valorem statistical tax; and measures relating to the labeling of imports of footwear, textiles and apparel. During consultations, Argentina represented that it had revised its labeling requirements in a manner that satisfied U.S. concerns. However no progress was made in regard to Argentina's specific duties and the 3 percent ad valorem tax. Accordingly, in January 1997 the United States requested the establishment of a WTO dispute settlement panel to examine the specific duties and statistical tax. The panel report is expected in late November 1997.
-- EU, Ireland, and UK -- Reclassification of LAN adapter cards and multimedia PCs. During 1995-1996, customs authorities in certain EU member States reclassified LAN adapter cards and multimedia-equipped PCs to tariff categories with higher duty rates. The United States filed three complaints under WTO dispute settlement procedures in November 1996 to address these actions and consultations were held in January 1997. Due to inadequate progress during consultations, however, the United States requested the establishment of a single WTO dispute settlement panel in February 1997 and the cases were consolidated. The panel report is expected in late November 1997.
-- Japan -- photographic film and paper. In June 1996 the United States initiated WTO dispute settlement procedures to address various Japanese laws, regulations and requirements inhibiting the distribution, offering for sale and internal sale of imported consumer photographic film and paper. As a result of a U.S. request, a panel was established in October 1996 and the panel report is expected in late 1997 or early 1998. Japan's photographic film and paper market is valued at about $2.8 billion per year.
-- Indonesia -- national car programs. In October 1996 the United States and the EU each requested consultations with Indonesia concerning its 1996 national car programs which grant tax and tariff benefits based on local content. At the same time, Japan requested consultations on the national car program. A WTO dispute settlement panel was established in response to a U.S. request in July 1997 and was consolidated with the panel previously established to consider complaints by the EU and Japan.
-- Korea -- liquor taxes. In May 1997 the United States requested consultations under WTO dispute settlement procedures with Korea to address its discriminatory tax regime that assesses higher taxes on Western-style distilled spirits than on the traditional Korean-style spirit soju. Consultations took place in May and June, 1997 and both the European Union and the United States have requested that a WTO dispute settlement panel be established to review their complaints. A panel will be established on October 16, 1997.
-- Japan -- agricultural imports. In April 1997 the United States requested consultations under WTO procedures with Japan concerning its testing procedures on certain agricultural products, including apples, nectarines and cherries. In particular, Japan prohibits the importation of each variety of a particular agricultural product until quarantine treatment has been tested for that specific variety, even though the treatment has proven effective with respect to other varieties of the same product. This redundant testing requirement can take up to two years and has proven very costly to U.S. apple producers in particular. Consultations in June proved unsuccessful and the United States will now request the formation of a WTO dispute settlement panel to address this dispute.
-- Australia -- salmon imports. Australia bans imports of untreated fresh, chilled or frozen salmon from the United States and Canada, allegedly for phytosanitary reasons even though a draft risk assessment found in 1995 that imports of eviscerated fish are not a basis for concern about the transmission of fish diseases to Australia's fish stocks. In November 1995 the United States invoked WTO dispute settlement procedures and consulted with Australia on these restrictions. In December 1996 the Australian government completed a risk assessment study supporting the continued maintenance of the import ban. In March 1997 Canada requested the establishment of a WTO dispute settlement panel, which has been established. The United States is a third-party participant in this proceeding and has reserved the right to request a panel as well.
-- Japan -- distribution services. In June 1996 the United States initiated WTO dispute settlement procedures regarding measures affecting market access for distribution services, applied by the Government of Japan pursuant to, or in connection with, Japan's Large Scale Retail Stores Law. In September 1996 the United States broadened the scope of the consultations to include additional Japanese measures and legal claims. Consultations have been held with Japan to review the consistency of these laws with Japan's market access and national treatment commitments for retail services under the General Agreement on Trade in Services.
-- Korea -- import clearance procedures. Consultations under WTO dispute settlement procedures were requested with Korea in April 1995 concerning its lengthy, burdensome and non-science-based import clearance procedures for agricultural and food products. As a result, Korea revised its inspection procedures for fresh fruit and vegetables, and agreed to make broader reforms to its food inspection and sanitation system by March 1996. After three rounds of WTO consultations on these promised reforms, in May 1996, it became clear that the Korean Government's actions had not resolved the problem. The United States thereafter held further consultations following which Korea made additional changes to its import clearance process. If the Korean Government fails to make further changes, and to faithfully implement those to which it has already committed, the United States will take further action under WTO procedures.
-- Brazil -- local content regime for automotive investment. In August 1996 the United States requested consultations under WTO dispute settlement procedures concerning Brazil's local content regime for automotive investment. In October 1996 USTR announced that the United States and Brazil had agreed to enter into intensive talks with the aim of removing the discriminatory impact of Brazil's practices on U.S. exports. In addition in October 1996 USTR initiated a section 301 investigation of this matter. In February 1997 the United States and Brazil held formal consultations to further discuss the Brazilian regime. Settlement negotiations with Brazil have continued since then.
-- Australia -- Prohibited export subsidies on leather. As part of a section 301 investigation, in October 1996 the United States requested consultations with Australia concerning subsidies available to leather under the Textile, Clothing and Footwear Import Credit Scheme and any other prohibited subsidies made available to leather. On November 25 Ambassador Barshefsky and Australian Deputy Prime Minister Fisher announced the successful settlement of the complaint, with an agreement by Australia to excise automotive leather from eligibility under the Import Credit Scheme and the Export Facilitation Scheme. Australia, however, has recently announced its decision to provide a new package of subsidies to an Australian exporter of automotive leather. The United States will challenge these new measures under WTO procedures.
-- Philippines -- measures affecting pork and poultry. Under the WTO Agreement, the Philippines must provide a minimum level of access for pork and poultry imports by means of tariff-rate quotas. However, the Philippines has established a licensing system for these quotas that imposes barriers to U.S. exports, in particular by allocating the majority of licenses to domestic producers who have no known interest in importing. Consultations under WTO procedures were held in April 1997. In September 1997, responding to a number of U.S. concerns, the Philippines government issued a revised version of its licensing requirements. We are now evaluating these changes in consultation with our exporting industry.
-- Belgium -- telephone directory services. In June 1997 the United States held consultations with Belgium to address certain Belgian government measures which appear to discriminate against ITT Promedia, N.V., a U.S. supplier of commercial telephone directory services. The Belgian measures include imposition of conditions for obtaining a license to publish commercial directories in Belgium as well as other measures governing the acts, policies and practices of ITT Promedia's Belgian competitor, BELGACOM B.V., with respect to telephone directory services.
-- Denmark -- intellectual property protection. In May 1997 the United States requested consultations with Denmark concerning its failure to provide its courts with the power to order unannounced raids and seize allegedly infringing products as evidence, as required by the TRIPS agreement. Although the TRIPS agreement requires that such provisional relief be made available in the context of civil proceedings, this relief appears to be available only in criminal proceedings in Denmark. The availability of such relief in civil proceedings is particularly important to the U.S. software industry because of the ease with which evidence of software piracy can be eliminated if the infringers are forewarned of the right holder's interest in their activities. Consultations are continuing, and the United States will refer this matter to a WTO dispute settlement panel if satisfactory progress is not made.
-- Sweden -- intellectual property protection. In May 1997 the United States also requested consultations with Sweden under the TRIPS agreement to address its failure to provide provisional relief in civil proceedings. Productive consultations were held in June 1997, and the Swedish Government has committed to examine whether it is necessary to amend its law. The United States is continuing to consult with Sweden in this regard.
-- Ireland -- copyright laws. In May 1997 consultations were held under WTO dispute settlement procedures concerning Ireland's failure to expeditiously bring its copyright law into compliance with the TRIPS agreement. As a result, the Irish Government has agreed to amend its copyright law. Its current schedule for doing so, however, is disappointingly slow and the United States is continuing to consult with the Irish Government to urge it to revise its copyright law in a more expeditious manner.
-- India -- import restrictions. In July 1997 the United States, joined by the EU, Canada, Australia, New Zealand and Switzerland, invoked WTO dispute settlement procedures to address India's restrictive quota regime. Under GATT rules, India was previously allowed to impose quotas for balance of payments reasons. However, India no longer has any balance of payments justification for the quotas. Although India has tacitly recognized this fact and has been negotiating for phase out time since January 1997, all offers by India to date have been inadequate. Consultations were held in September 1997 and the United States will request the establishment of a WTO dispute settlement panel if the restrictions are not removed.
-- Mexico -- corn sweeteners. On September 5, 1997 the United States requested WTO dispute settlement consultations with Mexico concerning Mexico's antidumping investigation of high fructose corn syrup from the United States. Problems cited include failure to determine whether there was sufficient evidence that the original petition was made by or on behalf of the domestic industry, failure to provide proper notification to the United States and failure to provide the U.S. industry timely access to the relevant information needed in the presentation of its case.
Using Preferential Access to the U.S. Market to Encourage Improvements in Worker Rights and Reform of Intellectual Property Laws
The Clinton Administration has used the Generalized System of Preferences (GSP) and Caribbean Basin Initiative (CBI) programs to integrate developing countries into the international trading system in a manner commensurate with their development and to encourage beneficiary countries to eliminate or reduce significant barriers to trade in goods, services and investment to afford all workers internationally recognized worker rights and to provide adequate and effective means for foreign nationals to secure, exercise and enforce intellectual property rights.
-- Argentina. Because of Argentina's failure to protect intellectual property rights, Argentina's GSP benefits were partially suspended effective May 17, 1997.
-- Pakistan. As of October 1, 1996 Pakistan's GSP benefits were partially suspended due to child labor and bonded labor problems in Pakistan.
-- Thailand. GSP benefits were restored to Thailand in 1995 only after Thailand made significant improvements in intellectual property protection.
-- Maldives. The Administration suspended GSP benefits for the Maldives on August 28, 1995 for failure to provide worker rights.
-- Dominican Republic, Guatemala, El Salvador, and Honduras. The Administration used GSP country practice reviews to obtain improvements in worker rights.
-- Philippines. A GSP eligibility review has been initiated resulting from a petition alleging that the Philippines has failed to implement its WTO market access obligation for pork.
-- Belarus, Swaziland and Thailand. Active GSP reviews dealing with worker rights are being used to encourage these countries to take steps to correct inadequacies.
-- Honduras, Panama, Paraguay, Turkey. The GSP review process is being utilized to motivate improved intellectual property rights enforcement or to strengthen legal protections in these countries.
-- Indonesia. The Administration has used and continues to use GSP eligibility to spur progress on worker rights issues in Indonesia.