WTO Dispute Settlement Proceeding Regarding China--Certain Measures Affecting the Automobile and Automobile-Parts Industries

Juan Millan
October 17, 2012

[Federal Register Volume 77, Number 201 (Wednesday, October 17, 2012)]
[Notices]
[Pages 63917-63920]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-25462]


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OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE

[Dispute No. WTO/DS450]


WTO Dispute Settlement Proceeding Regarding China--Certain 
Measures Affecting the Automobile and Automobile-Parts Industries

AGENCY: Office of the United States Trade Representative.

ACTION: Notice; request for comments.

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SUMMARY: The Office of the United States Trade Representative (AUSTR@) 
is providing notice that on September 17, 2012, the United States 
requested consultations with the People's Republic of China (``China'') 
under the Marrakesh Agreement Establishing the World Trade Organization 
(``WTO Agreement'') concerning certain measures that appear to provide 
subsidies such as grants, loans, forgone government revenue, the 
provision of goods and services, and other incentives contingent upon 
export performance to

[[Page 63918]]

automobile and automobile-parts enterprises in China. These measures 
appear to be prohibited subsidies that are inconsistent with China's 
obligations under Article 3 of the Agreement on Subsidies and 
Countervailing Measures (``SCM Agreement''). In addition, it appears 
that China has failed to comply with its transparency obligations under 
the WTO Agreement. The consultation request may be found at www.wto.org 
contained in a document designated as WT/DS450/1. USTR invites written 
comments from the public concerning the issues raised in this dispute.

DATES: Although USTR will accept any comments received during the 
course of the dispute settlement proceedings, comments should be 
submitted on or before November 12, 2012, to be assured of timely 
consideration by USTR.

ADDRESSES: Public comments should be submitted electronically to 
www.regulations.gov, docket number USTR-2012-0030. If you are unable to 
provide submissions by www.regulations.gov, please contact Sandy 
McKinzy at (202) 395-9483 to arrange for an alternative method of 
transmission.
    If (as explained below) the comment contains confidential 
information, then the comment should be submitted by fax only to Sandy 
McKinzy at (202) 395-3640.

FOR FURTHER INFORMATION CONTACT: Robert Anderson, Assistant General 
Counsel, or Shannon Nestor, Assistant General Counsel, (202) 395-3150, 
Office of the United States Trade Representative, 600 17th Street NW., 
Washington, DC 20508.

SUPPLEMENTARY INFORMATION: USTR is providing notice that consultations 
have been requested pursuant to the WTO Understanding on Rules and 
Procedures Governing the Settlement of Disputes (``DSU''). If such 
consultations should fail to resolve the matter and a dispute 
settlement panel is established pursuant to the DSU, such panel, which 
would hold its meetings in Geneva, Switzerland, would be expected to 
issue a report on its findings and recommendations within nine months 
after it is established.

Major Issues Raised by the United States

    On September 17, 2012, the United States requested consultations 
with China concerning certain subsidies that appear to be contingent 
upon export performance provided to automobile and automobile-parts 
enterprises in China. Specifically, the United States is challenging 
various forms of export-contingent subsidies that China appears to 
provide through a program establishing ``export bases'' for the 
automobile and automobile-parts industries within China. China appears 
to provide export-contingent subsidies to the automobile and 
automobile-parts enterprises that are located in these ``export bases'' 
or that are designated as ``export base'' enterprises. To date, it 
appears that China has created automobile and automobile-parts ``export 
bases'' in the following twelve municipalities: Wuhan, Tianjin, 
Chongqing, Shanghai, Guangzhou, Hefei, Wuhu, Xiamen, Taizhou, 
Changchun, Baoding, Liuzhou, as well as in other localities in the 
provinces of Jiangsu, Shandong, Shanxi, Henan, Inner Mongolia, 
Heilongjiang, Liaoning, Hunan, Zhejiang, Yunnan, Guangdong, Fujian, 
Anhui, and Beijing city.
    In its request for consultations, the United States identified 
measures that appear to provide the subsidies through China's 
automobile and automobile-parts ``export bases'' that include, but are 
not limited to, the following legal instruments, operating separately 
or collectively, as well as any amendments, or related, successor, 
replacement, or implementing measures: Policy on Development of 
Automotive Industry; Policies for Automobile Trade; Notice Regarding 
Application for National Automobile and Automobile Parts Export Base 
Enterprises; Circular of the State Council on Printing, Distributing 
and Implementing Several Supporting Policies for the Outline of 
National Medium- and Long-Term Science and Technology Development Plan 
(2006-2020); Circular of the General Office of the State Council on 
Forwarding the Several Opinions of MOFCOM and other Departments on the 
11th FYP for Electromechanical Exports Growth Model; Decision To 
Designate 8 National Automobile and Automobile Parts Export Bases, 
MOFCOM; MOFCOM, NDRC Names 160 Companies as National Export Base 
Enterprises; Interim Measures on the Management of Fund for Optimizing 
Import and Export Structure of Electromechanical and High-Tech 
Products, Ministry of Commerce and Ministry of Finance; MOFCOM, NDRC 
Conference Notice on National Automobile Exports; Notice of MOFCOM and 
NDRC on Issuing the Measures for the Administration of National Export 
Bases of Automobiles and Parts and Components (for Trial 
Implementation); Opinions on Maintaining the Steady Growth of Foreign 
Trade; 2009 State Council General Office Notice on Automobile Industry 
Restructuring and Revitalization Planning (for planning period 2009-
2011); Notice on Implementation of Online Application for the Central 
Foreign Trade Development Fund; Opinions of MOFCOM, NDRC, MIIT, MOF, 
Customs and AQSIQ on Enhancing the Sustainable and Healthy Development 
of the Export of Automobile Products of China; Notice of Examination 
Results of the National Automobile and Automobile Parts Export Bases; 
Opinions on Promoting the Continued Healthy Development of 
Electromechanical Exports During the 12th Five-Year Plan; Notice of 
MOFCOM and NDRC on Issuing the Measures for the Administration of 
National Export Bases of Automobiles and Parts and Components (Revised 
Draft); MOFCOM, NDRC Accreditation and Assessment of Automobiles and 
Automobile Parts Export Bases (Draft for Comment); MOF and MOFCOM 
Notice Regarding Sound Management of the 2011 Foreign Trade Common 
Services Platform Establishment Fund; MOF and MOFCOM Notice Regarding 
the Sound Management of the 2010 Common Services Platform Establishment 
Fund; MOF Notice Regarding Arranging the 2011 Foreign Trade Common 
Services Platform Establishment Fund; MOFCOM and MOF Notice on 
Management of Funds To Maintain the Steady Growth of Foreign Trade; 
Wuhan Automobile and Automobile Parts Status Report and Development 
Plan (2006-2010); Wuhan Municipal Opinion on Automobile and Automobile 
Parts Exports; Tianjin Outline of Eleventh Five-Year Plan of Economic 
and Social Development; Circular of Tianjin Commerce Commission on 
Printing and Distributing the Measures for the Recognition and 
Management of Tianjin Automobile and Automobile Parts Export Base 
Enterprises; Tianjin Notice on the Adjustment of Members of Tianjin 
National Automobile and Automobile Parts Export Bases; Forwarding the 
Opinions on Accelerating the Construction of Tianjin National 
Automobile and Automobile Parts Export Base; Chongqing City Management 
of Automobile and Automobile Parts Export Base Enterprises; Opinions of 
the Chongqing Municipal People's Government on the Construction of 
Automobile and Automobile Parts Export Base; Chongqing Circular on 
Establishment of a Leading Group for the Construction of Chongqing 
Automobile and Automobile Parts Export Bases; Chongqing 2011

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Notice Regarding the Application Work for the 2011 Chongqing Foreign 
Trade Common Services Platform Establishment Special Fund Program; 
Shanghai Foreign Economic and Trade Development ``Eleventh Five-Year 
Plan''; Shanghai Municipal Commission of Commerce and the Municipal 
Finance Bureau 2012 Notice for the Application of the 2011 Shanghai 
Foreign Trade Common Services Platform Establishment Special Fund 
Program; Printing and Issuing the Work Plan for the Application of 
Guangzhou for National Automobile and Automobile Parts Export Base and 
Export Base Enterprises; Opinions on Accelerating the Construction of 
National Automobile and Automobile Parts Export Base in Guangzhou; 
Interim Measures for the Management of National Automobile and 
Automobile Parts Export Base Guangzhou Sub-Base (Valid for 5 years or 
until 2013); Circular of Guangzhou Foreign Trade and Economic 
Cooperation Bureau on Verifying Conghua City as the Guangzhou Conghua 
National Automobile and Automobile Parts Export Base; 2011 Circular of 
Application for Special Fund of Guangzhou Automobile and Automobile 
Parts Export Base; 2011 Circular of Application for Special Fund of 
Guangzhou Automobile and Automobile Parts Export Base Attachment One: 
Application Form for the Guangzhou Municipal Automobile and Automobile 
Parts Export Base Dedicated Funding Project; 2011 Circular of 
Application for Special Fund of Guangzhou Automobile and Automobile 
Parts Export Base Attachment Two: Feasibility Analysis Report for the 
Guangzhou Municipal Automobile and Automobile Parts Export Base 
Dedicated Funding Project (Reference Sample); Guangdong Province 2011 
Notice Regarding the Work To Manage Well the Foreign Trade Common 
Services Platform Establishment Fund; Notice on Hefei City Automobile 
and Automobile Parts Export Base Support Fund Management Method 
(Interim Measures); Anhui Notice Regarding Investigation of Received 
Applications for National Automobile and Automobile Parts Export Base 
and Enterprises; Anhui Regarding Applications for Electro-mechanical 
Product Imports and Exports Structure Fund Program; Anhui Province 
Opinions Regarding Expediting Equipment Manufacturing; Xiamen Municipal 
Notice on Automobile Industry Development Action Plan; Notice of Xiamen 
on the Management of Special Funds To Maintain Steady Growth of Foreign 
Trade (Trial Implementation); Notice of Xiamen on the Management of 
Electromechanical and High-Tech Products Export Adjustment Programs; 
Xiamen City 2001 Notice on the Issuance of the Interim Measures on 
Management of Outsourcing Services Common Services Platform Special 
Construction Fund; Taizhou Municipal Opinions on the Promotion of 
Stable and Healthily Developing Foreign Trade; Opinions From the 
Peoples Government of Zhejiang Province on Promoting the Stable and 
Healthy Development of Province-Wide Foreign Trade; Zhejiang Notice on 
the Management of the 2011 Foreign Trade Common Services Platform 
Construction Special Fund; Liuzhou Municipal Opinion on Encouraging 
Exports of Automobile and Automobile Parts; Guangxi Zhuang Autonomous 
Region Policy Opinion To Support the Development of the Automobile 
Industry; Reply of the Economic Commission of Guangxi Zhang Autonomous 
Region on Approving the Registration of Automotive Chassis Core Parts 
Technological Upgrading and Export Base Construction Project of Liuzhou 
Wuling Automobile United Development Co., Ltd.; Notice on Management of 
Special Funds To Maintain the Steady Growth of Foreign Trade (Jilin); 
Changchun Xinglong Comprehensive Bonded Zone Automobile Import/Export 
Base Project; Jilin Province Opinion on Automobiles and Automobile 
Parts Exports; Jilin Province Opinion on Accelerating the Development 
of Automobile Parts; Jilin Province Management and Implementation 
Measures on Funds To Maintain Steady Growth of Foreign Trade; Jilin 
Province Notification for Organizations To Apply for the 2011 Foreign 
Common Services Platform Establishment Fund; Hebei Province Opinion on 
Broadening Opening to the Outside World To Accelerate the Development 
of Open Economy; Hebei Province 2011 Notice Regarding Sound Management 
of the Foreign Trade Common Services Platform Establishment Fund; 
Notice on Jiangsu Province Export Base Support Methods; Jiangsu 
Province Interim Measures on Management of Funds To Maintain a Steady 
Growth of Foreign Trade; Circular on the Pilot Accreditation and 
Management of Shandong Province Electro-Mechanical Products Export 
Bases and Notice To Begin the Accreditation of the First Batch of 
Export Bases; Shanxi Province Management Measures on Special Funds To 
Maintain Steady Growth of Foreign Trade; 2012 Inner Mongolia Autonomous 
Region Work Plan for the Establishment of Electro-Mechanical and High-
Tech Industry Export Base; Henan Province Opinion To Promote the 
Sustained and Healthy Development of Foreign Trade; 2009 Heilongjiang 
Province Opinion To Further Sustain the Stable Growth of Foreign Trade; 
Measures Administering, Operating, Funding or Specifying the Forms of 
Support Provided to Automobile or Automobile Parts Enterprises Within 
Any Automobile and Automobile Parts Export Base; and Measures 
Administering, Operating, Funding or Specifying the Forms of Support 
Pprovided to Automobile or Automobile Parts Enterprises in Jiangsu, 
Shandong, Anhui, Jiangxi. Liaoning, Heilongjiang, Hunan, Inner 
Mongolia, Shanxi, Zhejiang, Yunnan, Guangdong, Hebei, Fujian, Henan 
provinces, and Beijing City.
    In addition, it appears that China has failed to comply with its 
transparency obligations in regards to these export-contingent 
subsidies. In particular, the United States has explained that the 
measures appear to be inconsistent with Articles 3, 25.1, 25.2, 25.3, 
and 25.4 of the SCM Agreement; Article XVI:1 of the General Agreement 
on Tariffs and Trade 1994; and Paragraphs 1.2, 2(C)(1), and 2(C)(2) of 
Part I of the Protocol on the Accession of the People's Republic of 
China.

Public Comment: Requirements for Submissions

    Interested persons are invited to submit written comments 
concerning the issues raised in this dispute. Persons may submit public 
comments electronically to www.regulations.gov docket number USTR-2012-
0030. If you are unable to provide submissions by www.regulations.gov, 
please contact Sandy McKinzy at (202) 395-9483 to arrange for an 
alternative method of transmission.
    To submit comments via www.regulations.gov, enter docket number 
USTR-2012-0030 on the home page and click ``search.'' The site will 
provide a search-results page listing all documents associated with 
this docket. Find a reference to this notice by selecting ``Notice'' 
under ``Document Type'' on the left side of the search-results page, 
and click on the link entitled ``Comment Now!.'' (For further 
information on using the www.regulations.gov Web site, please consult 
the resources provided on the Web site by clicking on ``How to Use 
Regulations.gov'' on the bottom of the page.)
    The www.regulations.gov site provides the option of providing

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comments by filling in a ``Type Comments'' field or by attaching a 
document using an ``upload file'' field. It is expected that most 
comments will be provided in an attached document. If a document is 
attached, it is sufficient to type ``See attached'' in the ``Type 
Comments'' field.
    A person requesting that information contained in a comment 
submitted by that person be treated as confidential business 
information must certify that such information is business confidential 
and would not customarily be released to the public by the submitter. 
Confidential business information must be clearly designated as such 
and the submission must be marked ``BUSINESS CONFIDENTIAL'' at the top 
and bottom of the cover page and each succeeding page. Any comment 
containing business confidential information must be submitted by fax 
to Sandy McKinzy at (202) 395-3640. A non-confidential summary of the 
confidential information must be submitted to www.regulations.gov. The 
non-confidential summary will be placed in the docket and open to 
public inspection.
    Information or advice contained in a comment submitted, other than 
business confidential information, may be determined by USTR to be 
confidential in accordance with section 135(g)(2) of the Trade Act of 
1974 (19 U.S.C. Sec.  2155(g)(2)). If the submitter believes that 
information or advice may qualify as such, the submitter--
    (1) Must clearly so designate the information or advice;
    (2) Must clearly mark the material as ``SUBMITTED IN CONFIDENCE'' 
at the top and bottom of the cover page and each succeeding page; and
    (3) Must provide a non-confidential summary of the information or 
advice.
    Any comment containing confidential information must be submitted 
by fax. A non-confidential summary of the confidential information must 
be submitted to www.regulations.gov. The non-confidential summary will 
be placed in the docket and open to public inspection.
    Pursuant to section 127(e) of the Uruguay Round Agreements Act (19 
U.S.C. 3537(e)), USTR will maintain a docket on this dispute settlement 
proceeding accessible to the public at www.regulations.gov, docket 
number USTR-2012-0030.
    The public file will include non-confidential comments received by 
USTR from the public with respect to the dispute. If a dispute 
settlement panel is convened or in the event of an appeal from such a 
panel, the U.S. submissions, any non-confidential submissions, or non-
confidential summaries of submissions, received from other participants 
in the dispute, will be made available to the public on USTR's Web site 
at www.ustr.gov, and the report of the panel, and, if applicable, the 
report of the Appellate Body, will be available on the Web site of the 
World Trade Organization, www.wto.org. Comments open to public 
inspection may be viewed on the www.regulations.gov Web site.

Juan Millan,
Acting Assistant United States Trade Representative for Monitoring and 
Enforcement.
[FR Doc. 2012-25462 Filed 10-16-12; 8:45 am]
BILLING CODE 3290-F3-P