SEC. 305. IMPLEMENTATION OF ACTIONS.

(a) Actions to be taken under section 301.—

(1) Except as provided in paragraph (2), the Trade Representative shall implement the action the Trade Representative determines under section 304(a)(1)(B) to take under section 301, subject to the specific direction, if any, of the President regarding any such action, by no later than the date that is 30 days after the date on which such determination is made.
(2)

(A) Except as otherwise provided in this paragraph, the Trade Representative may delay, by not more than 180 days, the implementation of any action that is to be taken under section 301 —

(i) if—

(I) in the case of an investigation initiated under section 302(a), the petitioner requests a delay, or
(II) in the case of an investigation initiated under section 302(b)(1) or to which section 304(a)(3)(B) applies, a delay is requested by a majority of the representatives of the domestic industry that would benefit from the action, or

(ii) if the Trade Representative determines that substantial progress is being made, or that a delay is necessary or desirable to obtain United States rights or satisfactory solution with respect to the acts, policies, or practices that are the subject of the action.

(B) The Trade Representative may not delay under subparagraph (A) the implementation of any action that is to be taken under section 301 with respect to any investigation to which section 304(a)(3)(A) applies.
(C) The Trade Representative may not delay under subparagraph (A) the implementation of any action that is to be taken under section 301 with respect to any investigation to which section 304(a)(3)(B) applies by more than 90 days.

(b) Alternative actions in certain cases of export targeting.—

(1) If the Trade Representative makes an affirmative determination under section 304(a)(1)(A) involving export targeting by a foreign country and determines to take no action under section 301 with respect to such affirmation determination, the Trade Representative—

(A) shall establish an advisory panel to recommend measures which will promote the competitiveness of the domestic industry affected by the export targeting,
(B) on the basis of the report of such panel submitted under paragraph (2)(B) and subject to the specific direction, if any, of the President, may take any administrative actions authorized under any other provision of law, and, if necessary, propose legislation to implement any other actions, that would restore or improve the international competitiveness of the domestic industry affected by the export targeting, and
(C) shall, by no later than the date that is 30 days after the date on which the report of such panel is submitted under paragraph (2)(B), submit a report to the Congress on the administrative actions taken, and legislative proposals made, under subparagraph (B) with respect to the domestic industry affected by the export targeting.

(2)

(A) The advisory panels established under paragraph (1)(A) shall consist of individuals appointed by the Trade Representative who—

(i) earn their livelihood in the private sector of the economy, including individuals who represent management and labor in the domestic industry affected by the export targeting that is the subject of the affirmative determination made under section 304(a)(1)(A), and
(ii) by education or experience, are qualified to serve on the advisory panel.

(B) By no later than the date that is 6 months after the date on which an advisory panel is established under paragraph (1)(A), the advisory panel shall submit to the Trade Representative and to the Congress a report on measures that the advisory panel recommends be taken by the United States to promote the competitiveness of the domestic industry affected by the export targeting that is the subject of the affirmative determination made under section 304(a)(1)(A).

SEC. 306. MONITORING OF FOREIGN COMPLIANCE.

(a) In general.—The Trade Representative shall monitor the implementation of each measure undertaken, or agreement that is entered into to provide a satisfactory resolution of a matter subject to investigation under this chapter or subject to dispute settlement proceedings to enforce the rights of the United States under a trade agreement providing for such proceedings.
(b) Further action.—

(1) In general.—If, on the basis of the monitoring carried out under subsection (a), the Trade Representative considers that a foreign country is not satisfactorily implementing a measure or agreement referred to in subsection (a), the Trade Representative shall determine what further action the Trade Representative shall take under section 301(a). For purposes of section 301, any such determination shall be treated as a determination made under section 304(a)(1).
(2) WTO dispute settlement recommendations.— If the measure or agreement referred to in subsection (a) concerns the implementation of a recommendation made pursuant to dispute settlement proceedings under the World Trade Organization, and the Trade Representative considers that the foreign country has failed to implement it, the Trade Representative shall make the determination in paragraph (1) no later than 30 days after the expiration of the reasonable period of time provided for such implementation under paragraph 21 of the Understanding on Rules and Procedures Governing the Settlement of Disputes that is referred to in section 101(d)(16) of the Uruguay Round Agreements Act.

(c) Consultations.—Before making any determination under subsection (b), the Trade Representative shall—

(1) consult with the petitioner, if any, involved in the initial investigation under this chapter and with representatives of the domestic industry concerned; and
(2) provide an opportunity for the presentation of views by interested persons.

SEC. 307. MODIFICATION AND TERMINATION OF ACTIONS.

(a) In general.—

(1) The Trade Representative may modify or terminate any action, subject to the specific direction, if any, of the President with respect to such action, that is being taken under section 301 if—

(A) any of the conditions described in section 301(a)(2) exist,
(B) the burden or restriction on United States commerce of the denial rights, or of the acts, policies, and practices, that are the subject of such action has increased or decreased, or
(C) such action is being taken under section 301(b) and is no longer appropriate.

(2) Before taking any action under paragraph (1) to modify or terminate any action taken under section 301, the Trade Representative shall consult with the petitioner, if any, and with representatives of the domestic industry concerned, and shall provide opportunity for the presentation of views by other interested persons affected by the proposed modification or termination concerning the effects of the modification or termination and whether any modification or termination of the action is appropriate.

(b) Notice; report to Congress.—The Trade Representative shall promptly publish in the Federal Register notice of, and report in writing to the Congress with respect to, any modification or termination of any action taken under section 301 and the reasons therefor.
(c) Review of necessity.—

(1) If—

(A) a particular action has been taken under section 301 during any 4-year period, and
(B) neither the petitioner nor any representative of the domestic industry which benefits from such action has submitted to the Trade Representative during the last 60 days of such 4-year period a written request for the continuation of such action,

such action shall terminate at the close of such 4-year period.

(2) The Trade Representative shall notify by mail the petitioner and representatives of the domestic industry described in paragraph (1)(B) of any termination of action by reason of paragraph (1) at least 60 days before the date of such termination.
(3) If a request is submitted to the Trade Representative under paragraph (1)(B) to continue taking a particular action under section 301, the Trade Representative shall conduct a review of—

(A) the effectiveness in achieving the objectives of section 301 of—

(i) such action, and
(ii) other actions that could be taken (including actions against other products or services), and

(B) the effects of such actions on the United States economy, including consumers.

SEC. 308. REQUEST FOR INFORMATION.

(a) In general.—Upon receipt of written request therefor from any person, the Trade Representative shall make available to that person information (other than that to which confidentiality applies) concerning—

(1) the nature and extent of a specific trade policy or practice of a foreign country with respect to particular goods, services, investment, or intellectual property rights, to the extent that such information is available to the Trade Representative or other Federal agencies;
(2) United States rights under any trade agreement and the remedies which may be available under that agreement and under the laws of the United States; and
(3) past and present domestic and international proceedings or actions with respect to the policy or practice concerned.

(b) If information not available.—If information that is requested by a person under subsection (a) is not available to the Trade Representative or other Federal agencies, the Trade Representative shall, within 30 days after receipt of the request—

(1) request the information from the foreign government; or
(2) decline to request the information and inform the person in writing of the reasons for refusal.

(c) Certain business information not made available.—

(1) Except as provided in paragraph (2), and notwithstanding any other provision of law (including section 552 of title 5, United States Code), no information requested and received by the Trade Representative in aid of any investigation under this chapter shall be made available to any person if—

(A) the person providing such information certifies that—

(i) such information is business confidential,
(ii) the disclosure of such information would endanger trade secrets or profitability, and
(iii) such information is not generally available;

(B) the Trade Representative determines that such certification is well-founded; and
(C) to the extent required in regulations prescribed by the Trade Representative, the person providing such information provides an adequate nonconfidential summary of such information.

(2) The Trade Representative may—

(A) use such information, or make such information available (in his own discretion) to any employee of the Federal Government for use, in any investigation under this chapter, or
(B) may make such information available to any other person in a form which cannot be associated with, or otherwise identify, the person providing the information.

SEC. 309. ADMINISTRATION.

The Trade Representative shall—

(1) issue regulations concerning the filing of petitions and the conduct of investigations and hearings under this subchapter,
(2) keep the petitioner regularly informed of all determinations and developments regarding the investigation conducted with respect to the petition under this chapter, including the reasons for any undue delays, and
(3) submit a report to the House of Representatives and the Senate semiannually describing—

(A) the petitions filed and the determinations made (and reasons therefor) under section 302,
(B) developments in, and the current status of, each investigation or proceeding under this chapter,
(C) the actions taken, or the reasons for no action, by the Trade Representative under section 301 with respect to investigations conducted under this chapter, and
(D) the commercial effects of actions taken under section 301.

SEC. 310. IDENTIFICATION OF TRADE EXPANSION PRIORITIES.

(a) Identification.—

(1) Within 180 days after the submission in calendar year 1995 of the report required by section 181(b), the Trade Representative shall—

(A) review United States trade expansion priorities,
(B) identify priority foreign country practices, the elimination of which is likely to have the most significant potential to increase United States exports, either directly or through the establishment of a beneficial precedent, and
(C) submit to the Committee on Finance of the Senate and the Committee on Ways and Means of the House of Representatives and publish in the Federal Register a report on the priority foreign country practices identified.

(2) In identifying priority foreign country practices under paragraph (1) of this section, the Trade Representative shall take into account all relevant factors, including—

(A) the major barriers and trade distorting practices described in the National Trade Estimate Report required under section 181(b);
(B) the trade agreements to which a foreign country is a party and its compliance with those agreements;
(C) the medium- and long-term implications of foreign government procurement plans; and
(D) the international competitive position and export potential of United States products and services.

(3) The Trade Representative may include in the report, if appropriate—

(A) a description of foreign country practices that may in the future warrant identification as priority foreign country practices; and
(B) a statement about other foreign country practices that were not identified because they are already being addressed by provisions of United States trade law, by existing bilateral trade agreements, or as part of trade negotiations with other countries and progress is being made toward the elimination of such practices.

(b) Initiation of investigations.—By no later than the date which is 21 days after the date on which a report is submitted to the appropriate congressional committees under subsection (a)(1), the Trade Representative shall initiate under section 302(b)(1) investigations under this chapter with respect to all of the priority foreign country practices identified.
(c) Agreements for elimination of barriers.—In the consultations with a foreign country that the Trade Representative is required to request under section 303(a) with respect to an investigation initiated by reason of subsection (b), the Trade Representative shall seek to negotiate an agreement that provides for the elimination of the practices that are the subject of the investigation as quickly as possible or, if elimination of the practices is not feasible, an agreement that provides for compensatory trade benefits.
(d) Reports.—The Trade Representative shall include in the semiannual report required by section 309 a report on the status of any investigations initiated pursuant to subsection (b) and, where appropriate, the extent to which such investigations have led to increased opportunities for the export of products of the United States.

B. Relevant WTO Provisions

UNDERSTANDING ON RULES AND PROCEDURES

GOVERNING THE SETTLEMENT OF DISPUTES

…

Article 21

Surveillance of Implementation of Recommendations and Rulings

1.  Prompt compliance with recommendations or rulings of the DSB is essential in order to ensure effective resolution of disputes to the benefit of all Members.

…  

3.  At a DSB meeting held within 30 days¹¹ after the date of adoption of the panel or Appellate Body report, the Member concerned shall inform the DSB of its intentions in respect of implementation of the recommendations and rulings of the DSB.  If it is impracticable to comply immediately with the recommendations and rulings, the Member concerned shall have a reasonable period of time in which to do so.  The reasonable period of time shall be …

4.  Except where the panel or the Appellate Body has extended, pursuant to paragraph 9 of Article 12 or paragraph 5 of Article 17, the time of providing its report, the period from the date of establishment of the panel by the DSB until the date of determination of the reasonable period of time shall not exceed 15 months unless the parties to the dispute agree otherwise.  Where either the panel or the Appellate Body has acted to extend the time of providing its report, the additional time taken shall be added to the 15-month period; provided that unless the parties to the dispute agree that there are exceptional circumstances, the total time shall not exceed 18 months.

5.  Where there is disagreement as to the existence or consistency with a covered agreement of measures taken to comply with the recommendations and rulings such dispute shall be decided through recourse to these dispute settlement procedures, including wherever possible resort to the original panel. The panel shall circulate its report within 90 days after the date of referral of the matter to it.  When the panel considers that it cannot provide its report within this time frame, it shall inform the DSB in writing of the reasons for the delay together with an estimate of the period within which it will submit its report.

…

Article 22

Compensation and the Suspension of Concessions

1.  Compensation and the suspension of concessions or other obligations are temporary measures available in the event that the recommendations and rulings are not implemented within a reasonable period of time.  However, neither compensation nor the suspension of concessions or other obligations is preferred to full implementation of a recommendation to bring a measure into conformity with the covered agreements.  Compensation is voluntary and, if granted, shall be consistent with the covered agreements.

2.  If the Member concerned fails to bring the measure found to be inconsistent with a covered agreement into compliance therewith or otherwise comply with the recommendations and rulings within the reasonable period of time determined pursuant to paragraph 3 of Article 21, such Member shall, if so requested, and no later than the expiry of the reasonable period of time, enter into negotiations with any party having invoked the dispute settlement procedures, with a view to developing mutually acceptable compensation.  If no satisfactory compensation has been agreed within 20 days after the date of expiry of the reasonable period of time, any party having invoked the dispute settlement procedures may request authorization from the DSB to suspend the application to the Member concerned of concessions or other obligations under the covered agreements.

…  

6.  When the situation described in paragraph 2 occurs, the DSB, upon request, shall grant authorization to suspend concessions or other obligations within 30 days of the expiry of the reasonable period of time unless the DSB decides by consensus to reject the request.  However, if the Member concerned objects to the level of suspension proposed, or claims that the principles and procedures set forth in paragraph 3 have not been followed where a complaining party  has requested authorization to suspend concessions or other obligations pursuant to paragraph 3(b) or (c), the matter shall be referred to arbitration. Such arbitration shall be carried out by the original panel, if members are available, or by an arbitrator¹⁵ appointed by the Director-General and shall be completed within 60 days after the date of expiry of the reasonable period of time.  Concessions or other obligations shall not be suspended during the course of the arbitration.

7.  The arbitrator¹⁶ acting pursuant to paragraph 6 shall not examine the nature of the concessions or other obligations to be suspended but shall determine whether the level of such suspension is equivalent to the level of nullification or impairment.  The arbitrator may also determine if the proposed suspension of concessions or other obligations is allowed under the covered agreement.  However, if the matter referred to arbitration includes a claim that the principles and procedures set forth in paragraph 3 have not been followed, the arbitrator shall examine that claim.  In the event the arbitrator determines that those principles and procedures have not been followed, the complaining party shall apply them consistent with paragraph 3.  The parties shall accept the arbitrator's decision as final and the parties concerned shall not seek a second arbitration.  The DSB shall be informed promptly of the decision of the arbitrator and shall upon request, grant authorization to suspend concessions or other obligations where the request is consistent with the decision of the arbitrator, unless the DSB decides by consensus to reject the request.

…

Article 23

Strengthening of the Multilateral System

1.  When Members seek the redress of a violation of obligations or other nullification or impairment of benefits under the covered agreements or an impediment to the attainment of any objective of the covered agreements, they shall have recourse to, and abide by, the rules and procedures of this Understanding.

2.  In such cases, Members shall:

1. not make a determination to the effect that a violation has occurred, that benefits have been nullified or impaired or that the attainment of any objective of the covered agreements has been impeded, except through recourse to dispute settlement in accordance with the rules and procedures of this Understanding, and shall make any such determination consistent with the findings contained in the panel or Appellate Body report adopted by the DSB or an arbitration award rendered under this Understanding;
2. follow the procedures set forth in Article 21 to determine the reasonable period of time for the Member concerned to implement the recommendations and rulings;  and
3. follow the procedures set forth in Article 22 to determine the level of suspension of concessions or other obligations and obtain DSB authorization in accordance with those procedures before suspending concessions or other obligations under the covered agreements in response to the failure of the Member concerned to implement the recommendations and rulings within that reasonable period of time.

…

ANNEX II

GENERAL DESCRIPTION OF THE OPERATION OF SECTIONS 301-310⁷³⁰

A. Investigation by the USTR under Sections 302-303

1.   Sections 301-310 provide an important avenue to enforce US rights under the WTO Agreement.  The USTR can also start WTO proceedings outside the framework of Sections 301-310, as she did, for example, in the EC – Hormones and EC – LAN cases.   Sections 301-310 are also used in the context of other trade agreements.

2.  If Sections 301-310 are used, an investigation needs to be carried out by the USTR under Sections 302-303.  Such investigation can be initiated by the USTR either after the filing of a petition by any interested person or at the initiative of the USTR him or herself.

3.  If an interested person files a petition to request that action be taken under Section 301, the USTR has to first review the allegations in the petition.  Not later than 45 days after receipt of the petition, the USTR has to determine whether to initiate an investigation.  If the USTR makes an affirmative determination, he or she must initiate an investigation.

4.  On the date an investigation is initiated – or within maximum 90 days thereafter -- the USTR also has to request consultations with the other WTO Member concerned under DSU procedures (Section 303(a)(1)).  If no mutually acceptable solution is reached before the 60 day consultation period provided in the DSU, the USTR has to "promptly request proceedings on the matter under the formal dispute settlement procedures provided" in the DSU (Section 303(a)(2)).  The US is thus obliged to initiate consultations and, as the case may be, panel proceedings, before concluding its investigation.  At the same time, the USTR is free to terminate an investigation at any time, including before the initiation of panel proceedings.   

B. "Determination" on Denial of US Rights under Section 304

5.  Section 304 then mandates the USTR to "determine whether the rights to which the United States is entitled under [the WTO Agreement] are being denied".  The USTR has to do this "[o]n the basis of the investigation initiated under section 302 and the consultations (and the proceedings, if applicable) under section 303". 

6.  This determination under Section 304 has to be made within the following timeframe:  "the earlier of (i) the date that is 30 days after the date on which the dispute settlement procedure is concluded, or (ii) the date that is 18 months after the date on which the investigation is initiated". 

7.  Section 304 further provides that "if the determination made … is affirmative, [the Trade Representative shall] determine what action, if any, the Trade Representative should take under subsection (a) or (b) of section 301".

8.  Section 301(a) – entitled "Mandatory action" and the relevant provision in respect of determinations under the WTO Agreement – provides that "[i]f the United States Trade Representative determines under section 304(a)(1) that … the rights of the United States under any trade agreement are being denied … the Trade Representative shall take action authorized in section 301(c), subject to the specific direction, if any, of the President regarding any such action, and shall take all other appropriate and feasible action within the power of the President that the President may direct the Trade Representative to take under this subsection, to enforce such rights".

9.  Section 304(c) mandates the USTR to "publish in the Federal Register any determination made under section 304(a)(1), together with a description of the facts on which such determination is based".

C. "Consideration" on Implementation under Section 306

10.  As noted above, following the investigation under Section 302, the related request for WTO consultations and, as the case may be, the completion of panel or Appellate Body proceedings and an affirmative determination under Section 304, Section 304(a)(1) requires the USTR to determine what action, if any, to take under Section 301.    

11.  Section 301(c) defines the scope of the USTR's authority, i.e. the actions he or she can take, under Section 301.  Section 301(a)(2) provides for certain exceptions where the USTR "is not required to take action under section 301(a)(1)".  One of these exceptions is provided for cases where the USTR finds that "the foreign country is taking satisfactory measures to grant the rights of the United States under a trade agreement".  In practice, the USTR has interpreted this exception to include situations where the WTO Member concerned expresses the intention -- within 30 days after the date of adoption of the panel or Appellate Body report, pursuant to Article 21.3 of the DSU -- to comply with the recommendations and rulings of the DSB.

12.  Nevertheless, in such cases were no action is taken -- because a measure is undertaken or an agreement is entered into to provide a satisfactory resolution -- the USTR is obliged, under Section 306(a) to

"monitor the implementation of each measure undertaken, or agreement that is entered into, by a foreign country to provide a satisfactory resolution of a matter subject to investigation under this subchapter or subject to dispute settlement proceedings to enforce the rights of the United States under a trade agreement providing for such proceedings". 

13.  If the measure – including a statement by the WTO Member concerned that it will comply – or agreement concerns the implementation of DSB recommendations and the USTR "considers that the foreign country has failed to implement it", the USTR shall determine what further action he or she shall take under Section 301 "no later than 30 days after the expiration of the reasonable period of time provided for such implementation" in Article 21 of the DSU (Section 306 (b)).  In other words, the USTR's obligation to monitor a Member's intention to comply with DSB recommendations allows him or her to await the lapse of the reasonable period of time granted to the Member concerned to implement the panel or Appellate Body report.

14.  Since Section 306(b)(1) provides that any determination under Section 306(b) is to be treated as a determination made under Section 304(a)(1), the effect of a Section 306 determination is identical to that of Section 304 determinations in terms of the action the USTR has to take – or is allowed not to take – under Section 301.  As a result, the USTR also has to publish any Section 306 determination in the Federal Register, together with a description of the facts on which such determination is based pursuant to Section 304(c).

D. "Determination" on Action to Take under Section 306 and Implementation of Action under Section 305

15.  As noted earlier, in case the USTR considers under Section 306(b) that implementation failed, he or she has to determine what further action to take under Section 301(a).  He or she has to do so no later than 30 days after the expiration of the reasonable period of time.  Section 301(a)(2) provides for exceptions where the USTR is not required to take action. 

16.  In case the USTR decides to take action under Section 301, Section 305(a)(1) states:

"Except as provided in paragraph (2), the Trade Representative shall implement the action the Trade Representative determines under section 304(a)(1)(B) to take under section 301, subject to the specific direction, if any, of the President regarding any such action, by no later than the date that is 30 days after the date on which such determination is made".

Unless exceptions apply, a determination of action made within 30 days after the expiry of the reasonable period of time would thus be implemented no later than 60 days after the expiration of the reasonable period of time.

17.  Section 305(a)(2)(A), in turn, provides for certain exceptions to this 60 day rule.  The exception most relevant to this case is contained in Section 305(a)(2)(A)(ii):

"the Trade Representative may delay, by not more than 180 days, the implementation of any action that is to be taken under section 301 … if the Trade Representative determines that substantial progress is being made, or that a delay is necessary or desirable, to obtain United States rights or a satisfactory solution with respect to the acts, policies, or practices that are the subject of the action".

__________

¹¹ If a meeting of the DSB is not scheduled during this period, such a meeting of the DSB shall be held for this purpose.

¹⁵ The expression "arbitrator" shall be interpreted as referring either to an individual or a group.

¹⁶ The expression "arbitrator" shall be interpreted as referring either to an individual or a group or to the members of the original panel when serving in the capacity of arbitrator. 

⁷³⁰ This overview is of a non-binding nature and does not have the status of a factual finding by this Panel.  It was prepared following consultations with the parties as part of the descriptive part of this Report.