01-2603. WTO Consultations Regarding Countervailing Duties on Certain Carbon Steel Products From Brazil

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 21, 2000, the United States received from Brazil a request for consultations under the Marrakesh Agreement Establishing the World Trade Organization (WTO Agreement). In its request, Brazil identifies two measures, both of which involve determinations by the U.S. Department of Commerce (Commerce) under U.S. countervailing duty law addressing the benefits of pre-privatization subsidies that may be attributable to privatized firms. These measures are as follows:

• A sunset review determination by Commerce with respect to certain cut-to-length plate from Brazil, 65 FR 18065 (Apr. 6, 2000); and
• A suspended final affirmative countervailing duty determination by Commerce with respect to certain hot-rolled steel from Brazil, 64 FR 38742 (July 19, 1999).

Brazil alleges that each of these determinations is inconsistent with Articles 1.1(b), 10, 14, 19 and 21 of the WTO Agreement on Subsidies and Countervailing Measures (SCM Agreement), because, according to Brazil, there was no proper finding of whether the financial contributions made prior to a change of ownership conferred a benefit to the current producer of the subject goods. With respect to the hot-rolled steel investigation, Brazil also alleges that Commerce's failure to terminate the investigation based on a finding of no subsidization is inconsistent with Article 11.9 of the SCM Agreement.

In its request, Brazil also expresses concern relating to the practice of Commerce with respect to pre-privatization subsidies. However, Brazil does not make any specific allegations as to how this practice is inconsistent with particular provisions of the SCM Agreement or other WTO agreements.

Under Article 4.3 of the WTO Dispute Settlement Understanding (DSU), consultations are to take place within a period of 30 days from the date of receipt of the request, or within a period otherwise mutually agreed between the United States and Brazil. In this case, consultations took place in Geneva, Switzerland, on January 17, 2001. 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 March 5, 2001, to be assured of timely consideration by USTR.

ADDRESSES:

Submit comments to Sandy McKinzy, Monitoring and Enforcement Unit, Office of the General Counsel, Room 122, Office of the United States Trade Representative, 600 17th Street, NW., Washington, DC 20508, Attn: Change in Ownership Methodology Dispute—Brazil. Telephone: [phone].

FOR FURTHER INFORMATION CONTACT:

William D. Hunter, Associate General Counsel, Office of the United States Trade Representative, 600 17th Street, NW., Washington, DC 20508. Telephone: [phone].

SUPPLEMENTARY INFORMATION:

Section 127(b) of the Uruguay Round Agreements Act (URAA) (19 U.S.C. 3537(b)(1)) requires that notice and opportunity for comment be provided after the United States receives a request for the establishment of a WTO dispute settlement panel. Consistent with this obligation, but in an effort to provide additional opportunity for comment, USTR is providing notice that consultations have been requested pursuant to the WTO Dispute Settlement Understanding. If such 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 six to nine months after it is established.

Major Issues Raised by Brazil

In its consultation request, Brazil alleges that in United States—Imposition of Countervailing Duties on Certain Hot-Rolled Lead and Bismuth Carbon Steel Products, WT/DS138/AB/R, the WTO Appellate Body found Commerce's change in ownership methodology to be inconsistent with the SCM Agreement. Brazil alleges that the Appellate Body found that Commerce had not properly examined whether financial contributions made prior to a change of ownership conferred a benefit on the current producer of the subject goods. Therefore, Brazil alleges that the continued application of Commerce's change in ownership methodology in the cited countervailing duty determinations violates Articles 1.1(b), 10, 14, 19 and 21 of the SCM Agreement (and, in the case of the certain hot-rolled steel from Brazil investigation, Article 11.9). According to Brazil, if the United States had properly examined the nature of the change in ownership in each of the countervailing duty proceedings identified in Brazil's request for consultations, Commerce would have found that no benefit was conferred to the purchasers of the companies in question in the context of the privatizations.

Public Comment: Requirements for Submissions

Interested persons are invited to submit written comments concerning the issues raised in the dispute. Comments must be in English and provided in fifteen copies. A person requesting that information contained in a comment submitted by that person 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 commenter. Confidential business information must be clearly marked “BUSINESS CONFIDENTIAL” in a contrasting color ink at the top if each page of each copy.

Information or advice contained in a comment submitted, other than business confidential information, may be determined by USTR to be confidential in accordance with section 135(g)(2) of the Trade Act of 1974 (19 U.S.C. 2155(g)(2)). If the submitter believes that information or advice may qualify as such, the submitter—

(1) Must so designate the information or advice;

(2) Must clearly mark the material as “SUBMITTED IN CONFIDENCE” in a contrasting color ink at the top of each page of each copy; and

(3) Is encouraged to provide a non-confidential summary of the information or advice.

Pursuant to section 127(e) of the URAA (19 U.S.C. 3537(e)), USTR will maintain a fill on this dispute settlement proceeding, accessible to the public, in the USTR Reading Room: Room 101, Office of the United States Trade Representative, 600 17th Street, NW., Washington, DC 20508. The public file will include a listing of any comments received by USTR from the public with respect to the proceeding; the U.S. submissions to the panel in the proceeding, the submissions, or non-confidential summaries of submissions, to the panel received from other participants in the dispute, as well as the report of the dispute settlement panel, and, if applicable, the report of the Appellate Body. An appointment to review the public file (Docket WTO/D-218, Change in Ownership Methodology Dispute—Brazil) may be made by calling Brenda Webb, [phone]. The USTR Reading Room is open to the public from 9:30 a.m. to 12 noon and 1 p.m. to 4 p.m., Monday through Friday.

A. Jane Bradley,

Assistant United States Trade Representative for Monitoring and Enforcement.