E8-5885. WTO Dispute Settlement Proceeding Regarding China-Measures Affecting Financial Information Services and Foreign Financial Information Suppliers

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 March 3, 2008, in accordance with the Marrakesh Agreement Establishing the World Trade Organization (WTO Agreement), the United States requested consultations with China regarding restrictions and requirements China imposes on financial information services and service suppliers. That request may be found at http://www.wto.org contained in a document designated as WT/DS373/1. 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, comments should be submitted on or before April 18, 2008 to be assured of timely consideration by USTR.

ADDRESSES:

Comments should be submitted (i) electronically, to [e-mail], with “China Financial Information Services (DS373)” in the subject line, or (ii) by fax, to Sandy McKinzy at [phone], with a confirmation copy sent electronically to the electronic mail address above, in accordance with the requirements for submission set out below.

FOR FURTHER INFORMATION CONTACT:

James P. Kelleher, Associate General Counsel, Office of the United States Trade Representative, 600 17th Street, NW., Washington, DC, [phone].

SUPPLEMENTARY INFORMATION:

USTR is providing notice that the United States has requested consultations with China pursuant to the WTO Understanding on Rules and Procedures Governing the Settlement of Disputes (“DSU”). 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 nine months after it is established.

Major Issues Raised by the United States

On March 3, 2008, the United States requested consultations with China regarding restrictions and requirements that China imposes on financial information services and service suppliers. China requires foreign financial information suppliers to supply their services through an entity designated by Xinhua News Agency (“Xinhua”). Xinhua has designated one of its commercial enterprises as the only available agent. Xinhua, through its organizational structure, including related entities and affiliates, appears to be not only the regulator but also a competitor of foreign financial information suppliers. For example, Xinhua has launched “Xinhua 08”, a financial information supplier that supplies services on a commercial basis and in competition with foreign service suppliers. China also appears to prevent foreign financial information service suppliers from establishing any commercial operations in China other than limited representative offices. China's measures include the following, as well as any amendments and related or implementing measures:

• Notice Authorizing Xinhua News Agency To Implement Centralized Administration Over the Release of Economic Information in the People's Republic of China by Foreign News Agencies and Their Subsidiary Information Institutions (December 31, 1995);
• Decision on Establishing Administrative Permission for the Administrative Examination and Approval of Items That Must Be Retained (June 29, 2004);
• Measures for Administering the Release of News and Information in China by Foreign News Agencies (September 10, 2006);
• Notices on the Annual Inspection of Foreign News Dissemination Entities;
• Catalogue of Industries for Guiding Foreign Investment (October 31, 2007);
• Decisions of the State Council Regarding Entrance of Non-Public Capital Into Cultural Industries (April 13, 2005);
• Several Opinions on Introducing Foreign Investment Into the Cultural Sector (July 6, 2005);
• Opinion on Foreign Investment in Cultural Industries (August 5, 2005);
• Detailed Rules on the Approval and Control of Resident Representative Offices of Foreign Enterprises (February 13, 1995);
• Procedures of the State Administration for Industry and Commerce for the Registration and Administration of Resident Representative Offices of Foreign Enterprises (March 5, 1983);
• Rules for Internet Information Services (September 2000); and
• Administrative Rules for Internet News Information Services (September 25, 2005);

These and other requirements and restrictions appear to accord less favorable treatment to foreign financial information services and service suppliers than that accorded Chinese financial information services and service suppliers which are not affected by these requirements and restrictions. China's measures also appear to impose requirements on foreign financial information suppliers that are more restrictive than those imposed on them at the time of China's accession to the WTO.

USTR believes these measures are inconsistent with China's obligations under Articles XVI, XVII, and XVIII of the General Agreement on Trade in Services and Part I.1.2 of the Protocol on the Accession of the People's Republic of China, including paragraph 309 of the Working Party Report.

Public Comment: Requirements for Submissions

Interested persons are invited to submit written comments concerning the issues raised in the dispute. Comments should be submitted (i) electronically, to [e-mail], with “China Financial Information Services (DS373)” in the subject line, or (ii) by fax, to Sandy McKinzy at [phone], with a confirmation copy sent electronically to the electronic mail address above.

USTR encourages the submission of documents in Adobe PDF format as attachments to an electronic mail. Interested persons who make submissions by electronic mail should not provide separate cover letters; information that might appear in a cover letter should be included in the submission itself. Similarly, to the extent possible, any attachments to the submission should be included in the same file as the submission itself, and not as separate files.

Comments must be in English. 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 designated as such and “BUSINESS CONFIDENTIAL” must be marked at the top and bottom of the cover page and each succeeding page. Persons who submit confidential business information are encouraged also to provide a non-confidential summary of the information.

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 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) 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 file on this dispute settlement proceeding, accessible to the public, in the USTR Reading Room, which is located at 1724 F Street, NW., Washington, DC 20508. The public file will include non-confidential comments received by USTR from the public with respect to the dispute; if a dispute settlement panel is convened or in the event of an appeal from such a panel, the U.S. submissions, the submissions, or non-confidential summaries of submissions, received from other participants in the dispute; the report of the panel; and, if applicable, the report of the Appellate Body. The USTR Reading Room is open to the public, by appointment only, from 10 a.m. to noon and 1 p.m. to 4 p.m., Monday through Friday. An appointment to review the public file (Docket WTO/DS-373, China Financial Information Services Dispute) may be made by calling the USTR Reading Room at [phone].

Daniel Brinza,

Assistant United States Trade Representative for Monitoring and Enforcement.