Nov 9, 1989
U.S. ALLOWS ADOPTION OF ADVERSE PANEL RULING, BUT WON’T ABIDE.
GENEVA, NOVEMBER 7 (BY CHAKRAVARTHI RAGHAVAN)— The United States allowed the GATT Council, Tuesday, to adopt a panel ruling against the U.S. on S.337 of its trade and tariff act, but made clear that implementation of the ruling would depend on a favourable outcome (for the U.S.) in the Uruguay Round. The ruling against the U.S. was in a case brought against it by the EEC over the varying, and discriminatory procedures for enforcement of intellectual property rights as between nationals and foreign enterprises. While in disputes between U.S. nationals, normal remedies of adjudication in domestic courts would prevail, in disputes brought by an U.S. national or enterprise against a foreign enterprise in respect of imports, the U.S. party could have recourse to the domestic normal procedures or to the special procedures before customs. The GATT panel had held that these procedures discriminated against foreigners and the imported goods and thus violated the "national treatment" principle of GATT. The panel had recommended that the U.S. should be called upon to change its legislation and bring it into compliance with the GATT provisions. For several months now, the U.S. has been blocking adoption of the panel report and recommendations and has been severely criticised by the generality of GATT Council members. In agreeing to the adoption of the report, even though not itself a part of the consensus, the U.S. said Tuesday that the adoption of the report was one thing, and changing the S. 337 was quite another. Only congress could change these features found "objectionable", and until it did so, the provisions of the law would apply and guide the review of S. 337 orders by the president. The contracting parties, the U.S. delegate said, were now engaged in negotiations on providing "adequate and effective standards for global protection of intellectual property rights", and the U.S. expected these negotiations to result in multilateral obligations to provide effective border enforcement of such rights. The GATT CPs, the U.S. added, should be aware that the U.S. administration's ability to obtain appropriate change in S. 337 would be maximised in the context of legislation for implementing the results of the Uruguay Round. It was against the background of "an emerging international consensus" on intellectual property protection that the U.S. was prepared to consider and discuss with trading partners changes and discuss with trading partners changes in the way the U.S. handled infringing imports, the U.S. delegate told the Council. The European Community and other participants, while expressing satisfaction at the unblocking of the U.S. veto on the adoption of the report, nevertheless expressed themselves against the U.S. stand tying implementation to the outcome of the round. Earlier, on the issue of U.S. implementation (by changing laws) in regard to panel rulings against it on the issue of "super-fund" levy and "custom user" fees, the U.S. blocked action on Canadian and EEC requests for authorisation to retaliate against the U.S. by withdrawal of equivalent concessions, for the U.S. failure to change the U.S. super-fund levy. The rulings against the U.S. came more than two years ago, but the U.S. has been citing its negotiations with congress as the reason for delay in implementing the recommendations. When no changes have been effected after considerable lapse of time, both the Canada and the EEC sought the GATT Council permission, as required, to retaliate against the U.S. This has been blocked by the U.S. In bringing the issue up again at this meeting, Canada noted that while the U.S. house of representatives had adopted a bill in this regard, in the Senate the provision had been knocked out, and the whole effort was as good as dead. The U.S. however did not agree, and was hopeful that the changes would be effected through conference committees to reconcile the two versions. In any event, the U.S. said, none of the exporting countries had suffered any material damage by the discriminatory levy, as the levies were paid by the importers and hence no retaliation was called for. The issue is expected to come up at the session of the GATT contracting parties set for December 4-6. In other matters, South Korea allowed the adoption of panel ruling against it relating to imports of beef. The panel has said that Korea should eliminate or bring into conformity with GATT, its restrictions on beef imports introduced in 1984/85 and amended in 1988, which the panel ruled were clearly protectionist. As regards Korean restrictions in force and justified under its BOP rights, Korea was asked to hold consultations with U.S., Australia and New Zealand and other interest parties to work out a time-table for removal of the restrictions. Korea has now agreed to disinvoke its BOP rights to institute restrictions on imports and is to phase them out over an agreed time frame. In the meanwhile, other CPs have been requested to show "restraint" in raising complaints against Korea on this ground.