WORLD TRADE WT/DS57/1
G/SCM/D7/1
ORGANIZATION 9October 1996
(96-4123)
Original: English
AUSTRALIA -TEXTILE, CLOTHING AND FOOTWEAR
IMPORT CREDIT SCHEME
Request forConsultations bytheUnited States
Thefollowing communication, dated 7October 1996, from thePermanent Mission ofthe
United States tothePermanent Mission ofAustralia, iscirculated inaccordance withArticle 4.4of
theDSU.
_______________
Myauthorities haveinstructed metorequest consultations withtheGovernment ofAustralia
pursuant toArticles 1and4oftheUnderstanding onRules andProcedures Governing theSettlement
ofDisputes (DSU), Article 4.1oftheAgreement onSubsidies andCountervailing Measures (SCM
Agreement), andArticle 30oftheSCM Agreement (totheextent thatitincorporates byreference
Article XXIII:1 oftheGeneral Agreement onTariffs andTrade 1994), regarding subsidies available
toleather under theTextile, Clothing andFootwear Import Credit Scheme (TCF scheme) andanyother
subsidies toleather granted ormaintained inAustralia which areprohibited under Article 3oftheSCM
Agreement. Under theTCF scheme, exporters ofeligible products earnimport credits which are
calculated asapercentage ofthedomestic value added content oftheirexports, andwhich enable the
holder ofthecredits toreduce theamount ofcustoms dutypaidoneligible imported goods byanamount
uptothevalue ofthecredits held.
TheUnited States considers thatthese measures violate theobligations oftheGovernment of
Australia under Article 3oftheSCM Agreement. TheUnited States considers thatbenefits accruing
toitdirectly orindirectly under theSCM Agreement arebeing nullified orimpaired asaresult ofthe
failureoftheGovernmentofAustraliatocarryoutitsobligationsunderArticle3oftheSCMAgreement.
TheUnited States reserves therighttoraiseadditional factual andlegalmatters during thecourse of
theconsultations.
Welookforward toreceiving yourreply tothisrequest andtofixing amutually convenient
dateforconsultations. Inview ofthemeeting oftheCommittee onSubsidies andCountervailing
Measures on23-24 October andthespecial meeting ofthisCommittee scheduled fortheweek of
28October, wepropose meeting inGeneva atamutually convenient timeduring thelasttwoweeks
ofOctober.