looking to expand their foreign operations to meet growing consumer demand outside the United States. In many countries, the opportunities for U.S. retailers to establish and maintain a presence are limited by various laws, regulations, and policies. Countries such as Japan and Brazil have protected their small stores from competition by limiting the size of retail establishments and placing onerous restrictions on where they can locate. Additionally, restrictions to protect so-called "cultural industries" by other countries have significantly hindered the establishment of retail operations by large U.S. booksellers. The U.S. retail industry strongly encourages negotiators to seek the elimination of foreign restrictions to trade in distribution services. It would be worth emphasizing the economic and employment benefits other countries could realize by liberalizing their distribution services sector. With registered sales receipts of more than $2.7 trillion in 1998, and having a significant multiplier effect throughout the U.S. economy, the retail industry adds substantially to U.S. Gross Domestic Product (GDP), economic growth, and employment. We invite U.S. negotiators to impress upon their counterparts that an open and thriving retail industry specifically, and distribution services sector generally, can be an important factor in improving the standard of living of their citizens, expanding economic activity and growth, and developing a modern consumer society. CONCLUSION In conclusion, NRF and J. C. Penney would like to thank Chairman Crane, Ranking Member Levin and the Members of the Trade Subcommittee for the opportunity to provide comments on the efforts to develop an agenda for the United States in the upcoming Seattle Ministerial Conference. America's retailers would like to reiterate that this is an important opportunity for the United States, U.S. companies, their employees, and consumers. We look forward to working with you in the coming months to prepare for the launching of the Seattle round of negotiations. We also look forward to working with you in the following years to bring the round to a successful and timely conclusion. Statement of the Labor/Industry Coalition for International Trade (LICIT) LICIT appreciates this opportunity to testify on U.S. objectives for the Seattle Ministerial and the ensuing round of WTO talks. Celebrating its 20th anniversary this year, LICIT brings companies and unions together in support of increased and equitable international trade. Among the companies and labor unions who have endorsed LICIT's latest paper are: American Flint Glass Workers; AMT-The Association for Manufacturing Technology; Bethlehem Steel Corp.; Communications Workers of America; Corning Inc.; DaimlerChrysler; International Brotherhood of Electrical Workers; Milacron Inc.; Motorola, Inc.; Paper, Allied-Industrial, Chemical & Energy Workers International Union (PACE); Union of Needletrades, Industrial and Textile Employees (UNITE); and United Steelworkers of America/United Rubber Workers Conference.1 The goal of the Seattle Ministerial is to launch and set parameters for a new round of multilateral trade negotiations. The main focus of these talks will be revisions to the existing WTO rules on agriculture, services and intellectual property. There is much that the United States can and should seek to accomplish within the parameters of this "built-in agenda." However, none of these positive results can be achieved unless the United States resolutely blocks efforts by a handful of WTO Members to go outside this agreed list of topics and reopen debate over the WTO's antidumping and anti-subsidy rules. IMPORTANCE OF EFFECTIVE ANTIDUMPING AND ANTI-SUBSIDY RULES Antidumping and anti-subsidy rules are a pillar of the WTO and an essential element of the multilateral trading system. From its inception, the GATT has provided that injurious dumping "is to be condemned" and has provided for remedies to offset and deter dumping and trade-distorting government subsidies. These rules are designed to ensure a basic level of fairness and to prevent abuse. The clear intent of the countries who want to reopen these rules, however, is to weaken them. Allowing this effort to succeed would inevitably lead to abuse of the world's open markets 1 Members do not necessarily associate themselves with every LICIT report or recommenda including that of the United States, the world's most open market--and would rapidly undermine confidence in the WTO itself. The Antidumping Agreement has been a particular focus of attacks by certain WTO Members as the Seattle Ministerial approaches. Yet, as the United States observed in a July 1998 submission to the WTO Working Group on the Interaction between Trade and Competition Policy, the antidumping remedy is: necessary to the maintenance of the multilateral trading system. Without this and other remedial safeguards, there could have been no agreement on broader GATT and later WTO packages of market-opening agreements, especially given the imperfections which remain in the multilateral trading system.... [T]he antidumping rules represent an effort to maintain a "level playing field" between producers in different countries. . . [and] are a critical factor in obtaining and sustaining necessary public support for the shared multilateral goal of trade liberalization. Without these essential rules and the accompanying rules on trade-distorting subsidies, past successes in trade liberalization could not have been achieved and future progress on the core WTO trade agenda would become impossible. THE ANTIDUMPING AND SCM AGREEMENTS SHOULD NOT BE REOPENED The Committtee on Ways and Means, in its 1997 markup of fast track legislation, approved by voice vote and without dissent a provision instructing U.S. negotiators to reject any agreement that would weaken current disciplines against dumping and subsidies: In the course of negotiations conducted under this title, the United States Trade Representative shall-... preserve the ability of the United States to enforce rigorously its trade laws, including the antidumping and countervailing duty laws, and avoid agreements which lessen the effectiveness of domestic and international disciplines on unfair trade, especially dumping and subsidies. The fast track bill reported by the Senate Finance Committee in 1997 also contains language highlighting the importance of strong rules against dumping and subsidies. The implication of these actions by the committees of jurisdiction are clear: the United States cannot join in any consensus to reopen negotiations over the WTO's antidumping and anti-subsidy rules. For several reasons, this is an eminently sound and sensible position: The current WTO antidumping and anti-subsidy rules were concluded only with great difficulty during the Uruguay Round, have hardly been tested, and certainly have not proven defective. Moreover, there are many new users of antidumping and anti-subsidy laws, often developing countries, trying to come into compliance with Uruguay Round rules. What is needed is a period of repose and certainty, not continued shifting of the WTO rules which could spur confusion and negatively affect all WTO Members' exports. • Antidumping measures affect only a tiny fraction of world trade. Where applied, they simply ensure a modicum of fairness. It would hardly be plausible to argue that use of antidumping is a major problem in international trade. There is other, much more important, work to do in Geneva. The same applies to countervailing measures under the SCM Agreement. Reopening the Antidumping and SCM agreements will only serve to make the next WTO round impossible to conclude, or else make its results impossible for the United States to digest. Conversely, avoiding another divisive fight over antidumping is the best way to promote progress on the far more important issues that comprise the agreed, built-in agenda for the next round. The only unresolved antidumping issue from the Uruguay Round, referred to the Committee on Anti-Dumping after the Marrakesh Ministerial, was circumvention.2 Unless and until some further agreement is reached on this point, the United States can continue with its current approach to preventing circumvention of valid AD/CVD orders. Adding clarity to the WTO rules (while certainly desirable and important) does not require, or justify, re-opening the agreement. Likewise, the only SCM issue requiring near-term attention is the pending expiration, unless extended by Ministerial decision, of the "greenlight" provisions of Arts. 8 and 9 and the "dark 2 See Agreement on Implementation of Article VI of GATT 1994: Statement on Anti-Circumvention, MTN/FA III-11(a). amber" provisions of Art. 6.1. Resolving this matter does not require or justify any reopening of the remainder of the SCM Agreement. IMPLEMENTATION OF URUGUAY ROUND RULES There have been only minor problems with WTO Members' implementation of the Antidumping Agreement, and certainly none that justify reopening the Agreement itself. While continued monitoring (within the Committee on Anti-Dumping) of how the Uruguay Round rules are being implemented makes sense, that is of course very different from re-negotiating those rules. The United States should be very clear about the distinction, and should be careful not to agree to anything under the "implementation" rubric that will in practice lead to reopening. The same is true with respect to the SCM Agreement. There are two Marrakesh Ministerial Decisions indirectly relating to antidumping that have not yet been properly implemented, but they should be addressed as part of the pending review of the WTO Dispute Settlement Understanding and resolved prior to any post-1999 negotiations. The first calls for an examination of the Antidumping Agreement Art. 17.6 standard of review, to determine whether it deserves broader application in WTO dispute settlement proceedings.3 The second recognizes the need for consistent WTO panel resolution of AD and CVD disputes-in other words, it makes clear by implication that the Art. 17.6 standard of review applies equally to panel reviews of CVD measures. While quite important, neither of these dispute settlement issues provides any reason to reopen the underlying substantive (Antidumping and SCM) agreements. NEEDED REFORMS TO THE WTO DISPUTE SETTLEMENT UNDERSTANDING As a separate item with a connection to the Seattle Ministerial, reforms must be made to the WTO Dispute Settlement Understanding (DSU). These reforms, which were supposed to be completed by the end of 1998 as a result of the 4-year review, are necessary if the DSU and, in effect, all WTO rules are to work. Therefore, the U.S. Government should seek reform in the following major areas: • The U.S. must place a high priority on the "defensive" concerns of the United States. Although the United States has been much more frequently a complainant than a defendant, this pattern cannot be expected to continue. The U.S. should therefore insist that any legal instrument extending the DSU 1) notes the critical importance of the Antidumping Agreement standard of review, and 2) clarifies the applicability of that standard to CVD disputes. One of the pillars of trade liberalization, after all, is the guarantee of effective remedies against unfair trade. The system needs to become more transparent. The United States should seek to amend the DSU by: 1) requiring Members to submit, promptly after each submission to a panel, a public version sufficient to permit a full understanding of the arguments; 2) requiring panel and Appellate Body meetings to be opened to all WTO Members and to the public; and 3) allowing affected private parties to participate fully in panel proceedings. This would enhance the credibility and performance of the system by allowing governments to fully utilize the resources and expertise of affected private parties who are normally the real parties of interest in WTO cases. The operation of the DSU has not provided a clear solution to market access problems when government enlists the assistance of the private sector in restricting access to its market. Solutions must be found to problems of market access in countries that employ these hybrid missions. As currently constituted, the system is structurally biased in favor of countries that maintain opaque barriers, and against countries with transparent legal regimes like our own. The DSU should also be revised to set clear limits on the WTO Secretariat's role in dispute settlement proceedings. It is inappropriate for Secretariat officials — who often do not accept or agree with the substantive rules which panels are supposed to be enforcing-to be substantively involved with panel deliberations. The Secretariat does not exist to espouse positions attacking individual articles of the GATT, or to side with particular Members who want to rewrite the Uruguay Round results in particular subject areas. The United States should therefore insist on a thorough review of the Secretariat and its funding. 3 Agreement on Implementation of Article VI of GATT 1994: Statement on Standard of Review for Dispute Settlement Panels, MTN/FA III-11(b). 4 Statement on Dispute Settlement Pursuant to the Agreement on Implementation of Article VI of the GATT 1994 or Part V of the Agreement on Subsidies and Countervailing Measures 1994, MTN/FA III-12. CONCLUSION The built-in agenda for the next round is an important one. There may also be other WTO issues on which the United States can and should seek progress at Seattle and in the talks that follow. However, to achieve a result that will enhance U.S. trade objectives and the status of America's working men and women, it is essential that the United States defeat any and all efforts to weaken the existing fair trade rules of the WTO. In practice, this means that those rules should not be reopened at all. LICIT looks forward to working with this Committee, with the Congress as a whole, and with the Administration to ensure that the promise of the upcoming multilateral talks is not squandered through a useless and unwise debate over antidumping and anti-subsidy rules. Statement of Arthur H. Smith, Vice President, General Counsel & Libbey Inc., headquartered in Toledo, OH is a leading producer of glass tableware and a producer of ceramic dinnerware in the United States and is a provider of metal flatware to U.S. foodservice customers. The company is actively involved in international trade and is keenly interested in developments within the World Trade Organization (“WTO”) and regional trade organizations. These Comments are in response to the Subcommittee's Advisory of July 8, 1999 inviting public comment on U.S. negotiating objectives for the WTO ministerial meeting to be held in Seattle, WA November 30-December 4, 1999. The Subcommittee is well aware that implementation is critical to the success of any trade agreement. The United States has a history of full and timely implementation of its obligations. U.S. companies are entitled to expect that our trading partners will reciprocate. Thus, Libbey strongly supports efforts by the United States to monitor and encourage compliance with all agreements by trading partners. Libbey likewise urges the United States to seek effective and transparent notification of compliance for all countries and all agreements. Also in regard to implementation, Libbey supports efforts by the United States and various international organizations, including the WTO, to provide technical assistance to developing countries in meeting agreed-to obligations. This assistance is especially critical in the areas of intellectual property, customs valuation, pre-shipment inspection. Libbey addresses these and other areas of particular interest below. INTELLECTUAL PROPERTY PROTECTION In the area of intellectual property, Libbey is particularly concerned with trade dress and industrial design. The United States and Japan, inter alia, have raised implementation of the Trade Related Intellectual Property ("TRIPs") Agreement as a priority issue for Seattle. Libbey in particular urges progress towards explicit recognition of trade dress rights, whether or not there has been an application for “industrial design" protection. Libbey calls on the United States to support extension of the duration of protection provided under Article 26.3 to as long as the industrial design is in commercial production in a member country. CUSTOMS VALUATION AGREEMENT AND PRESHIPMENT INSPECTION Because Libbey exports to a number of countries around the world, it is acutely aware of the importance of commercial certainty that the implementation of the Customs Valuation Agreement provides to exporters. With the transition period for implementation of that Agreement about to expire for many developing countries, there is an urgency to be sure that countries due to conform to the Agreement are able to do so on a timely basis. As the Subcommittee knows, more than thirty countries currently require preshipment inspection ("PSI") because their own customs infrastructures are not sufficiently developed to provide these services. Libbey understands the problems that have lead many developing and least developed countries to substitute a third party for their national customs service. Libbey believes, however, that there is a need for both a phased reduction in the number of countries relying on PSI companies and WTO supervision of PSI activities other than handling individual company complaints. INDUSTRIAL TARIFF REDUCTIONS Libbey is not opposed to inclusion of industrial tariffs in any upcoming negotiations as long as such negotiations are done on a request/offer basis. Glassware and ceramic dinnerware have long been viewed as highly import sensitive. This continues to be the case in 1999. Libbey specifically urges the United States to oppose efforts by some countries to have tariffs on industrial goods reduced on a formula basis or for singling out tariff peaks for above average tariff reductions. Such proposals will prove counterproductive to efforts by the United States and others to have the new negotiations conclude within a reasonable period of time. Libbey supports Australia's proposal to lower imposed tariff rates to the bound rates. Many developing countries in particular agreed to bound rates that were substantially higher than existing applied rates. Such differences can create market uncertainties, particularly in countries where there has been frequent resort to tariff modifications. There are provisions within the WTO to address import surges and unfair trade practices. It would make sense to eliminate the commercial uncertainty the tariff variability currently provides. SERVICES AND ELECTRONIC COMMERCE Libbey strongly urges the United States to make liberalization a particularly priority in certain service sectors. These include: distribution services; tourism (primarily restaurants); and transportation. These are of concern to Libbey as a supplier to the food service industry. In addition, Libbey supports further liberalization in financial and telecommunication services, as this reduces the cost of business in general. Finally, Libbey would benefit from expanded right-of-establishment for U.S. retail, wholesale and restaurant/bar enterprises. Related to business facilitation is minimal government interference with electronic commerce. Issues such as taxation, privacy and other regulation are significant concern to Libbey. The company supports the U.S. position of minimal government interference in this area, and urges the United States to make this goal of WTO work on electronic commerce as well. DISPUTE SETTLEMENT Libbey has not to date had direct interest in a dispute at the WTO. The company concurs, however, with proposals of the United States and others that seek greater transparency and improved access to the dispute settlement process within the WTO. The following would all promote support for the WTO system: timely derestriction of panel documents and public party briefs; access to panel and Appellate Body proceedings for representatives of private interested parties as well as a mechanism to permit amici briefs from such parties; and the availability of public transcripts of panel and Appellate Body meetings. Libbey understands that the ongoing dispute settlement review process has raised dozens of possible modifications to the system. Libbey would hope that any modifications that are ultimately accepted reflect the commercial reality that the existing system is already overlong, taking three years or more through appeal and implementation for the aggrieved U.S. industry to expect any relief. Changes to the system should not increase timelines for either disputes or implementation of changes required. GOVERNMENT PROCUREMENT Libbey believes that transparency in government procurement promotes government efficiency and promotes trade liberalization. Libbey supports the ongoing initiative to develop a transparency agreement that would be applicable to all WTO members. Indeed, Libbey continues to hopes that such an initiative will be completed by the time of the Ministerial. ANTIDUMPING, SUBSIDIES AND COUNTERVAILING DUTY MEASURES, AND SAFEGUARDS Libbey has not to date had to use U.S. trade laws. The existence of effective laws, is, however, critical to trade liberalization. Libbey opposes any general reopening of the Antidumping Agreement, which has been operating fairly well in its first 5 years. Libbey also opposes the selective re-opening of the existing rules system in the Antidumping Agreement. The United States should make clear to its trading partners that any rebalancing of that system would open up other areas, such as tariff bindings and the acceptability of concepts such as "special and differential treatment." Given that improved operation of the dispute settlement mechanism provides any party access to review for any antidumping, countervailing duty or |