2010-32868. WTO Dispute Settlement Proceeding Regarding China-Subsidies on Wind Power Equipment

AGENCY:

Office of the United States Trade Representative.

ACTION:

Notice; request for comments.

SUMMARY:

The Office of the United States Trade Representative (“USTR”) is providing notice that on December 22, 2010, in accordance with the Marrakesh Agreement Establishing the World Trade Organization (“WTO Agreement”), the United States requested consultations regarding certain subsidies provided by the People's Republic of China (China) on wind power equipment. The consultation request addresses a measure of China entitled the “Provisional Measures on Administration of Special Fund for Industrialization of Wind Power Equipment” (“Wind Power Equipment Fund”). The Wind Power Equipment Fund provides grants that appear to be contingent on the use of domestic over imported wind power equipment, and thus appears to be a prohibited subsidy that is inconsistent with China's obligations under Article 3 of the Agreement on Subsidies and Countervailing Measures (“SCM Agreement”). In addition, as it appears that China has neither made available a translation of the measure into a WTO official language nor notified it to the WTO, China appears to have failed to comply with its transparency obligations under the WTO Agreement. USTR invites written comments from the public concerning the issues raised in this dispute.

DATES:

Although USTR will accept any comments received during the course of the dispute settlement proceedings, comments should be submitted on or before January 31, 2011, to be assured of timely consideration by USTR.

ADDRESSES:

Non-confidential comments (as explained below) should be submitted electronically via the Internet at http://www.regulations.gov,, docket number USTR-2010-0036. If you are unable to provide submissions by www.regulations.gov, please contact Sandy McKinzy at [phone] to arrange for an alternative method of transmission. If (as explained below) the comments contain confidential information, the person wishing to submit such comments should contact Sandy McKinzy at [phone].

FOR FURTHER INFORMATION CONTACT:

Eric Garfinkel, Chief Counsel for China Trade, [phone], Joseph Rieras, Assistant General Counsel, [phone], Terry McCartin, Deputy Assistant USTR for China Affairs, [phone], or Jean Kemp, Director, Steel Trade Policy, [phone] for questions concerning the issues in the dispute; or Sandy McKinzy, Legal Technician, [phone], for questions concerning procedures for filing submissions in response to this notice.

SUPPLEMENTARY INFORMATION:

USTR is providing notice that the United States has requested consultations with the Government of China pursuant to the WTO Understanding on Rules and Procedures Governing the Settlement of Disputes (“DSU”). If the consultations should fail to resolve the matter and a dispute settlement panel is established pursuant to the DSU, such panel, which would hold its meetings in Geneva, Switzerland, would be expected to issue a report on its findings and recommendations within nine months after it is established.

The request for consultations follows from the decision of the United States Trade Representative (“Trade Representative”) to initiate an investigation under Section 302 of the Trade Act of 1974, as amended (“Trade Act”) in response to a petition filed by the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL-CIO CLC (“USW”). See Initiation of Section 302 Investigation and Request for Public Comment: China—Acts, Policies and Practices Affecting Trade and Investment in Green Technology, 75 FR 64776 (Oct. 20, 2010). In light of the number and diversity of the acts, policies, and practices covered by the petition, and after consulting with the petitioner, the Trade Representative decided, pursuant to Section 303(b) of the Trade Act, to delay for up to 90 days the request for consultations with the Government of China for the purpose of verifying and improving the petition. Id. at 64777.

Since the initiation of the investigation on October 15, 2010, USTR has sought information and advice from the petitioner and the appropriate committees established pursuant to section 135 of the Trade Act, has taken account of the public comments submitted in response to the October 20, 2010 notice, and has conducted its own research and worked with other agencies in order to verify and improve the various claims set out in the USW petition. As a result of those efforts, USTR has verified and improved claims involving subsidies provided by China on wind power equipment under its Wind Power Equipment Fund. In particular, USTR has verified that China's Wind Power Equipment Fund provides grants that appear to be contingent on the use of domestic over imported wind power equipment, and thus appears to be a prohibited subsidy that is inconsistent with China's obligations under Article 3 of the SCM Agreement. In addition, as it appears that China has neither made available a translation of the measure into a WTO official language nor notified it to the WTO, China appears to have failed to comply with its transparency obligations under the WTO Agreement. In particular, China appears to have failed to comply with its obligations under Article XVI:1 of the GATT 1994, Article 25 of the SCM Agreement, and Part I, Paragraph 1.2, of the Protocol on the Accession of the People's Republic of China (to the extent that it incorporates paragraph 334 of the Report of the Working Party on the Accession of China).

Accordingly, on December 22, 2010, the United States requested consultations under the DSU regarding China's Wind Power Equipment Fund, on the bases described above. The consultation request will be published on the WTO Web site, http://www.wto.org,, under “Disputes.”

Since the initiation of the investigation on October 15, 2010, USTR has not been able to verify and improve claims with respect to the remaining acts, policies, and practices covered in the USW petition. Those matters are not included in the request for consultations and are not being continued in the investigation under Section 302(b). However, the Trade Representative continues to have serious concerns with these acts, policies and practices and their effects on U.S. workers and businesses, and will continue to work with the petitioner and other stakeholders to develop additional information and effective means for addressing these matters.

Public Comment: Requirements for Submissions

Interested persons are invited to submit written comments concerning the issues raised in the consultation request. Interested persons may submit public comments electronically to http://www.regulations.gov,, docket number USTR-2010-0036. If you are unable to provide submissions by http://www.regulations.gov,, please contact Sandy McKinzy at [phone] to arrange for an alternative method of transmission.

To submit comments via http://www.regulations.gov,, enter docket number USTR-2010-0036 on the home page and click “Search.” The site will provide a search-results page listing all documents associated with this docket. Find a reference to this notice by selecting “Notice” under “Document Type.” Click on the reference to this notice, and then click “Submit Comment.” The http://www.regulations.gov site provides the option of submitting comments by filling in a “Type Comment & Upload File” field, or by attaching a document. Given the detailed nature of the comments sought by USTR, interested persons are requested to provide their comments in an attached document. If a document is attached, it is sufficient to type “See attached” in the “Type Comment & Upload File” field.

A submitter requesting that information contained in a comment be treated as confidential business information must certify that such information is business confidential and would not customarily be released to the public by the submitter. Confidential business information must be clearly designated as such and the submission must be marked “BUSINESS CONFIDENTIAL” at the top and bottom of the cover page and each succeeding page.

USTR may determine that information or advice, other than business confidential information, is nonetheless confidential. If the submitter believes that information or advice may qualify as such, the submitter—

1. Must clearly so designate the information or advice;

2. Must clearly mark the material as “SUBMITTED IN CONFIDENCE” at the top and bottom of the cover page and each succeeding page; and

3. Must provide a non-confidential summary of the information or advice.

Any comment containing information that is business confidential or submitted in confidence must be submitted by fax to Sandy McKinzy at [phone]. A non-confidential summary must be submitted to http://www.regulations.gov. The non-confidential summary will be placed in the docket and open to public inspection.

USTR will maintain a docket on this dispute settlement proceeding accessible to the public. Comments submitted in response to this notice will be placed in the docket and open to public inspection pursuant to 15 CFR 2006.13, except confidential business information exempt from public inspection in accordance with 15 CFR 2006.15 or information that USTR determines to be confidential. Comments open to public inspection may be viewed on http://www.regulations.gov,, under Docket No. USTR-2010-0036.

If a dispute settlement panel is convened and in the event of an appeal from such a panel, the U.S. submissions, as well as any non-confidential submissions (or non-confidential summaries of submissions) received from other participants in the dispute, will be made available to the public on USTR's Web site at http://www.ustr.gov. The report of the panel, and, if applicable, the report of the Appellate Body, will be available on the Web site of the World Trade Organization, http://www.wto.org.

Bradford Ward,

Deputy General Counsel.