May 12, 1989

U.S. AGAIN BLOCKS PANEL REPORT ON SECTION 337 PROCEEDINGS.

GENEVA, MAY 10 (BY CHAKRAVARTHI RAGHAVAN) -- For the fourth time in succession, the United States Wednesday again blocked adoption of a GATT panel report which ruled against the U.S. and its use of Section 377 proceedings against imports purportedly violating patent rights of U.S. enterprises.

The case was brought against the U.S. by the EEC in a dispute over patent rights between U.S. and EEC enterprises.

The panel had ruled against the U.S. But the U.S. has been blocking adoption of the report raising various legal issues that have already been considered and rejected by the panel.

When the item came up before the GATT Council Wednesday, the EEC's Christoph Bail reminded that this was the fourth time the subject was coming up and the U.S. had already delayed adoption by trying to misrepresent the findings of the panel.

The adoption of the panel's report, the EEC further noted, had received wide support, and there should be no further delay in adoption.

Japan said it had been increasingly concerned about the attitude of the United States towards the GATT dispute settlement mechanism. The Japanese delegate, Amb. Yoshio Hatano, cited in this connection the U.S. blocking of the adoption of this panel report, the U.S. failure to implement the panel report on the super-fund levy and U.S. customs user fees.

These U.S. stands and failures would erode the credibility of the GATT dispute settlement process itself. Japan believed that it was not the U.S. intention to discredit the dispute settlement process, and would urge the U.S. to allow the adoption of the report.

Voicing a similar view, Canada said the blocking of the panel report would send wrong signals to the international trading community.

Though a large number of other participants also spoke up again this time favouring the adoption of the report, the U.S. blocked its adoption.

U.S. delegate, Frederick Montgomery argued that the administration and the congress were still concerned over the interpretations in the panel's report and hence the U.S. was not prepared to accept adoption of the report.

The EEC underlined that the U.S. attitude was a matter of concern to all contracting parties. Bail formally asked the U.S. to lift its objections, but to no avail. The subject is expected to come up again before the June meeting of the council.