RESTRICTED
WORLD TRADE WT/DSB/COM/2
27June1995
ORGANIZATION(95-1730)
Original: English
UNITED STATES 'AUTO AND AUTOPARTS ISSUES: USUNILATERAL MEASURES
Statement byUnited States
Thefollowing statement made bytheUnited States attheMeeting oftheDispute Settlement
Body on31May1995 hasbeenreceived from theOffice oftheUnites States Trade Representative
inGeneva on6June1995 withtherequest thatitbecirculated toMembers.
___________________________________________
TheUnited States hasaccepted Japan'srequest forconsultations, although wehaveyetto
agree onatimeandplace forthese consultations. MyGovernment hadproposed meeting onJune
20soastonottointerfere withthemeetings thatwilltakeplace inHalifax, Nova Scotia. Inlight
ofJapan'srejection ofthisdate,mygovernment isconsidering analternative datethatwewillpropose
forJapan'sconsideration. MyGovernment believes thattheentire package ofautoissues constitutes
aserious matter andhopes thatwecanreach amutually acceptable solution withJapan.
TheJapanese Government hasrepeatedly stated thatitbelieves thatthesubject ofitsrequest
raises amatter ofurgency. MyGovernment strongly disagrees withthisviewforanumber ofreasons
which Iwilldescribe. Weaskthatotherdelegations consider thisissuekeeping inmindtheimplications
forfuture disputes.
Although the1979 Understanding Regarding Notification, Consultation, Dispute Settlement and
Surveillance, theagreed description ofthecustomary practice oftheGATT inthefieldofdispute
settlement, andtheMontreal rules allinclude special timeframes forthecases ofurgency, nopanel
haseverissued areport under these procedures.
Itisclear thatJapan'srequest doesnotmeetthetraditional concept of"urgency" assetout
intheDSU andMontreal rulessince themontreal rulesstatethatcases ofurgency include perishable
goods inroute, andtheDSUsimply notes thatcases ofurgency mayinclude those relating toperishable
goods. Perishable goods arenotthesubject matter ofJapan'srequest.
Indeed, intheviewoftheUnited States, Japan'sarguments indicate thaturgent procedures
should notbeapplied inthiscase.
Asmydelegation noted attheCouncil onGoods meeting onMonday, Japan'srequest isbased
onactions thathavenotyetbeentaken.
TheUnited States hasnotyetimposed increased tariffs onimports ofcertain carsfromJapan.
- TheUnited States hasnotdetermined thatJapan hasviolated itsobligations under theWTO
Agreements.
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Page2
- There iscertainly theopportunity toreach amutually acceptable solution totheissues that
underlie theactions byJapan andtheUnited States.
Invocation oftheurgency provisions would drastically shorten thetimeforconsultations, i.e.,
Thecomplaining party isfreetorequest establishment ofapanel ifconsultations havefailed tosettle
thedispute within 20daysafterreceipt oftherequest forconsultations (DSU Article 4:8)andapanel
isdirected toaimtoissue itsreport within 3months. (DSU Article 12:8).
Delegations havefrequently stated andthedsuclearly indicates thatmutually agreed solutions
aretobepreferred. Thetighttimeframes oftheurgency procedures certainly diminish thelikelihood
thattheparties willreach amutually agreed solution prior totheissuance ofareport.
Japan hasargued that"thepossible consequences fortheworld trading system" indicated that
thisisanurgent matter. Assuming thatthisdispute involves unusual systemic issues, thisisthetype
ofcaseinwhich theparties should havethetimeandopportunity topresent theirrespective cases to
apanel andtheAppellate Body forcareful consideration rather thanaprocess thatrequires (1)multiple
submissions andmeetings withtheparties tothedispute, (2)consideration ofthearguments anddrafting
areport bythepanel, (3)submitting thatreport forinterim review andcomment, (4)possible additional
meetings andrevisions, and(5)circulation ofafinalreport totakeplace within a90-day period.
TheGATT experience withexpedited consideration ofadispute under the1966 procedures
hasnotbeenapositive one.Panels andtheparties todisputes conducted under these procedures have
haddifficulties meeting thedeadlines andproducing areport thatinspires theconfidence andsupport
necessary toachieve implementation ofpanel recommendations. TheDSU procedures forcases of
urgency areevenmore complex thanthe1966procedures andtheneedforconfidence inthenewWTO
dispute settlement system evenmore vital.
Japan hasalsoargued thatthiscaseisurgent because itishaving anadverse effect onits
industries. Thisiscertainly notanunusual condition inthecontext ofarequest forconsultations or
theestablishment ofapanel. Indeed inthiscase, thepress reports thatimports arecontinuing inthe
expectation thattheunderlying market access issues willberesolved.
Although Japan might argue thatthemagnitude oftheproposed measure distinguishes itfrom
other disputes, wedonotbelieve thatthisissueshould beacriterion indetermining whether amatter
isurgent.
Putting adollar (oryen)value ondisputes asameans todetermine whether thematter isurgent,
could inherently discriminate against smaller industries andsmaller economies.
Acceptance oftheJapanese arguments astowhatconstitutes anurgent matter would mean that
anydispute ofanyeconomic orsystemic importance could besubject totheextremely tighttimeframes
provided forconsideration ofthese cases. Thiswould likely overwhelm theWTO dispute settlement
system.
Wehavenewlyacceptedrulesondisputesettlementproceduresthatforthefirsttimesetdeadlines
forcompleting procedures. Wehaveyettodetermine whether "standard" timeframes, particularly
attheendoftheprocess, willprove workable. Thisisnotthetimetoimpose thestringent time
constraints ofan"urgent" case.
Weaskdelegations toconsider theissuecarefully before taking aposition thatmight influence
future disputes.