Dec 5, 1987

CPS DISCUSS DISPUTES AND PANEL REPORTS.

GENEVA DECEMBER 3 (IFDA) -- A number of pending trade disputes and unimplemented panel reports involving one or the other of the three major trading blocs engaged the attention of the GATT Contracting Parties at their session Wednesday and Thursday.

The first related to the U.S. complain against Canada for its ban on exports of unprocessed herring and salmon.

The panel had ruled against Canada, holding the export restrictions to be violative of article XI.

The U.S. had brought the complaint, at the instance of its fish processing industries who have sought access to Canadian unprocessed herring and salmon for their processing industries.

At the CPS session the U.S. called for speedy adoption of the report and its implementation. Canadian delegate John Weekes however said his government was still studying the report and its implications, and needed more time.

Nicaragua referred to the report of the panel that went into its complaint against the U.S. for its trade embargo, and noted that despite the considerable lapse of time, there had been no progress in adopting and implementing the report. The Nicaraguan delegate was disturbed at the difficulties faced by small countries like Nicaragua in establishing its rights under GATT.

Brazil for the Latin American group and Cuba were among those who reportedly spoke in support of Nicaragua, but no action was taken.

The U.S., which has invoked national security considerations for its embargo, has flatly dismissed the panelís findings, and blocked its adoption. At the 40th anniversary celebrations on November 30, the U.S. Trade Representative, Clayton Yeutter said that his country could not agree to the GATT panel or the CPS session sitting in judgement over its national security interests.

On the U.S. complaint against the EEC over its so-called third country meat directive, imposing standards in slaughterhouses in respect of meat imports into the EEC, the CPS agreed to set up a panel to look into the dispute.

The U.S. contends that the directive is a violation of the requirement for national treatment for imports, and that the EEC directive while penalising imported meats that did not observe the slaughterhouse standards took no action in respect of meat produced domestically by EEC member-states, and was thus discriminatory.

The European Communities, in another dispute involving Japan, pressed upon Japan to implement the report of the panel that held Japanís taxing policies as discriminatory against imported alcoholic beverages, since they subjected them to higher domestic duties than equivalent Japanese beverages, through a complex process of classification of tax schedules.

The report of the panel has already been adopted by the GATT Council. The EEC wanted Japan to implement the report and bring its taxes in line with GATT obligations, and do this within the context of the 1988-89 Japanese budget.

Japan said the report was being studied, and it was unable to make further commitments at this time.

The panel ruling against the U.S. over its levy of the custom user fees, and the recommendation that the U.S. should bring these fees into line with its GATT obligations, was raised by Canada and the European Communities.

The report itself has been circulated only on November 25 as a restricted document, and the U.S. has not agreed to its consideration at the CPS session, and has sought time to consider it. The U.S. has said it should be taken up at the next meeting of the GATT Council in 1988.

Both Canada and the EEC pressed for early adoption of the report and its implementation by the U.S.

Mexico complained against the non-implementation by the U.S. of the panel report on the U.S. super-fund levy, a discriminatory levy on imported petroleum and petroleum products to finance environmental cleanup.

A GATT panel had ruled against the U.S. and this had been adopted by the GATT Council.

The Mexican delegate noted that more than six months had elapsed, and the U.S. had not still implemented the recommendations.

The European communities, which had also complained in this matter, warned that unless the U.S. acted on the panel report, it would have no choice but to seek GATT authorisation to take retaliatory measures against the U.S.

The U.S. delegate noted the current congressional preoccupation with budget and the omnibus trade bill, presumably as an explanation for no action so far on the superfund levy, but promised to bring the concerns of Contracting Parties to the authorities in Washington.