2015-11382. WTO Dispute Settlement Proceeding Regarding Certain Measures Providing Export-Contingent Subsidies to Enterprises in Several Industrial Sectors in China

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 the United States has requested the establishment of a dispute settlement panel under the Marrakesh Agreement Establishing the World Trade Organization (“WTO Agreement”). That request may be found at www.wto.org contained in a document designated as WT/DS489/6. 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 May 12, 2015, to be assured of timely consideration by USTR.

ADDRESSES:

Public comments should be submitted electronically to www.regulations.gov,, docket number USTR-2015-0004. 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 comment contains confidential information, then the comment should be submitted by fax only to Sandy McKinzy at [phone].

FOR FURTHER INFORMATION CONTACT:

Arthur Tsao, Assistant General Counsel, Office of the United States Trade Representative, Office of the United States Trade Representative, 600 17th Street NW., Washington, DC 20508, [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 submits or receives a request for the establishment of a WTO dispute settlement panel. USTR is providing notice that a dispute settlement panel has been requested pursuant to the WTO Dispute Settlement Understanding (“DSU”) and has been established by the WTO. The panel will hold its meetings in Geneva, Switzerland.

Major Issues Raised by the United States

The United States has requested the establishment of a panel to examine whether certain Chinese measures are providing export-contingent subsidies to enterprises in several industrial sectors in China. It appears that China provides export-contingent subsidies through a program establishing “Foreign Trade Transformation and Upgrading Demonstration Bases” (“Demonstration Bases”) and “Common Service Platforms”. Demonstration Bases are industrial clusters of enterprises in several Chinese industries, including the textiles, agriculture, medical products, light industry, special chemical engineering, new materials, and hardware and building materials industries. Common Service Platforms are service suppliers designated by China to provide services to enterprises in Demonstration Bases. China designates an industrial cluster of enterprises in a particular industry as a Demonstration Base and then provides subsidies to the enterprises located in the Demonstration Base. These subsidies include the provision of discounted or free services through Common Service Platforms or the provision of grants.

The Demonstration Base/Common Service Platform program and the grants at issue are reflected in legal instruments that include, but are not limited to, the instruments set out in the panel request.

Because the Demonstration Base/Common Service Platform program and the grants at issue provide subsidies contingent upon export performance to enterprises located in China, the measures appear to be inconsistent with Article 3.1(a) of the SCM Agreement, and China appears to have acted inconsistently with Article 3.2 of the SCM Agreement.

Public Comment: Requirements for Submissions

Interested persons are invited to submit written comments concerning the issues raised in this dispute. Persons may submit public comments electronically to www.regulations.gov docket number USTR-2015-0004. 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.

To submit comments via www.regulations.gov,, enter docket number USTR-2015-0004 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” on the left side of the search-results page, and click on the link entitled “Submit a Comment.” (For further information on using the www.regulations.gov Web site, please consult the resources provided on the Web site by clicking on “How to Use This Site” on the left side of the home page.)

The www.regulations.gov site provides the option of providing comments by filling in a “Type Comments” field, or by attaching a document using an “Upload File” field. It is expected that most comments will be provided in an attached document. If a document is attached, it is sufficient to type “See attached” in the “Type Comments” field.

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

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

Any comment containing confidential information must be submitted by fax. A non-confidential summary of the confidential information must be submitted to www.regulations.gov. The non-confidential summary will be placed in the docket and open to public inspection.

Pursuant to section 127(e) of the Uruguay Round Agreements Act (19 U.S.C. 3537(e)), USTR will maintain a docket on this dispute settlement proceeding, accessible to the public at www.regulations.gov,, docket number USTR-2015-0004. The public file will include non-confidential comments received by USTR from the public regarding the dispute. If a dispute settlement panel is composed, or in the event of an appeal of any report circulated by such a panel, the U.S. submissions, 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 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, www.wto.org. Comments open to public inspection may be viewed on the www.regulations.gov Web site.

Juan A. Millán,

Acting Assistant United States Trade Representative for Monitoring and Enforcement.