US embassy cable - 05GENEVA1620

UNCLAS SECTION 01 OF 03 GENEVA 001620 
 
SIPDIS 
 
PASS USTR FOR ALLGEIER, DWOSKIN, AND KLEIN 
EB/OT FOR CRAFT 
USDA FOR FAS/ITP/SHEIKH, MTND/HENKE 
USDOC FOR ITA/JACOBS AND MENDOZA 
 
E.O. 12958: N/A 
TAGS: ETRD, WTRO, USTR, Trade 
SUBJECT: WTO IMPORT LICENSING COMMITTEE - JUNE 15, 2005 
 
 
Summary 
 
1.  Begin Summary.  The June 15, 2005 meeting of the Import 
Licensing Committee began with a call from the chair for Members 
to catch up with required notifications and then featured issues 
raised by the United States, Australia, and Chinese Taipei 
regarding the import licensing practices of other Members.  The 
United States recalled questions to Brazil on licensing 
requirements for lithium products and to the European Communities 
on uranium, asking when written responses would be received. 
Other issues raised by the United States included Turkey's import 
licensing requirements on rice, China's procedures for importing 
scrap and waste material, Indonesia's import licensing 
requirements on certain textiles, and Venezuela's licensing 
procedures on certain agricultural products.  In addition, the 
United States requested an updated notification from Malaysia 
with particular emphasis on requirements affecting trade in motor 
vehicles, construction equipment, paper, and wood products. 
Among the issues raised by other Members included China's new 
licensing requirements for iron ore (by Australia) and China's 
use of automatic licensing and licensing in tariff-rate quotas 
(by Chinese Taipei).  The next meeting is set for September 28, 
2005.  End Summary. 
 
 
 
 
Opening Remarks 
 
2.  The outgoing chair, Victoria Campeanu of Romania, began with 
an assessment of the notification situation, stating that 
although notifications have improved there is still a long way to 
go.  She "named names" - she read out the list of 23 Members that 
have not made a single notification to the Committee since its 
inception in 1995 and in doing so she gave particular emphasis to 
major WTO players including Egypt and Thailand.  She urged 
Members to submit notifications without further delay. 
 
3.  The US delegation made the introductory points contained in 
instructions, expressing appreciation for the work of the chair 
and for all of the submissions made by the Members since the last 
meeting of the Committee.  He noted that providing notifications 
and responding to questions are essential elements of WTO 
Members' obligations and tangible evidence of the respect they 
owe each other as Members - to be both transparent in the 
administration of their trade regimes and responsive to 
legitimate requests for information about access to each other's 
markets. 
 
Issues Raised by the United States 
 
4.  Per instructions, the United States raised the following 
issues and/or questions during the meeting. 
 
Brazil - Lithium Products 
 
5.  The US representative recalled the questions in G/LIC/Q/BRA/3 
regarding Brazil's import licensing requirements for lithium 
products and asked when written responses would be ready. 
Brazil's delegate opined that import restrictions are necessary 
because of "potential risks" and "nuclear ends" but he also 
acknowledged US concerns and said a special inter-ministerial 
commission - involving the Ministry of Energy and Mining, the 
Ministry of Science and Technology, the Ministry of External 
Trade, the Ministry of External Relations, and the National 
Commission of Nuclear Energy - had been created to study them. 
Those debates take time, he said, and Brazil is not yet able to 
provide a detailed response.  He did provide some preliminary 
statistics - for the years 2000-05, 65 licenses were "conceded," 
24 were "not conceded," and 28 requests are still pending.  Trade 
values are small, he said, amounting to $3,281 in 2004 (135 
kilos) and $3,346 in 2003 (116 kilos). 
 
 
EC - Uranium 
 
6.  Per instructions, the US representative sought a response to 
its questions regarding the European Communities' import 
licensing requirements on enriched uranium (document 
G/LIC/Q/EEC/3).  The EC delegate replied that the European 
Communities is currently finishing its response, both for the 
Committee and in the form of a letter from Commissioner Mandelson 
to Ambassador Portman.  The EC delegate said the letter needed 
only a few modifications and corrections and would be sent to 
Ambassador Portman shortly.  In her comments, she described the 
Treaty of Corfu as a confidential document, but left open the 
possibility of disclosing more information about the import 
restrictions imposed and the requirements that enforce them. 
 
Turkey - Import Licensing Requirements for Rice 
 
7.  The US representative made all the points in the 
instructions, noting that Turkey published changes to its import 
licensing system for rice three times in 2004, yet none of these 
changes were notified to the WTO.  He emphasized that US 
exporters have had problems securing import permits for rice, and 
he strongly urged Turkey to resume the year-round issuance of 
import licenses for rice imports without requiring the purchase 
of domestic rice.  In addition, the US representative asked 
Turkey to promptly submit appropriate notifications regarding its 
licensing regime for rice and other products and to update its 
annual import licensing questionnaire to cover these products. 
(Note: Turkey did not have a representative at the meeting, so 
the US representative sent a copy of his statement to the Turkish 
mission, which acknowledged receipt and promised to forward the 
statement to Ankara for response.) 
 
Venezuela - Licensing Restrictions on Various 
Agricultural Products 
 
8.  The US representative indicated that Venezuela's existing 
notifications did not appear to cover import licensing 
requirements on certain agricultural products including potatoes, 
onions, fertilized eggs, day-old chicks, and meat products.  He 
urged Venezuela to review the situation and to submit updated 
notifications.  (Note: Venezuela did not have a representative at 
the meeting, so the US representative sent a text version of the 
US statement to Venezuela's mission with a request that a 
response be provided.) 
 
Malaysia - Licensing Requirements for Various Products 
 
9.  Per instructions, the US representative asked Malaysia to 
update its questionnaire, specifically with reference to import 
licensing requirements on motor vehicles, construction equipment, 
paper, and wood products.  Malaysia's representative took note of 
the request and said a response would be provided following 
consultations with his authorities. 
 
Indonesia - Licensing Restrictions on Textiles 
 
10.  Per instructions, the US representative made a statement 
regarding import licensing restrictions on certain textiles.  He 
referred to the US questions raised at the October 2003 and May 
2004 meetings, expressing general concern that the use of non- 
automatic licenses as a form of import regulation is inconsistent 
with Indonesia's WTO commitments and that requirements 
established by Decree 732/2002 continue to restrict and distort 
trade.  He identified specific concerns about the decree, 
including limitations on the use of imported fabric and who can 
import it, requirements that approved importers seek approval 
from the Ministry of Industry and Trade for the quantity and 
timing of imports, and requirements that importers submit to the 
Ministry a monthly report tracking each importation by date, 
destination, quantity, price, duty, and country of origin.  He 
requested that Indonesia eliminate or modify its existing 
licensing regime to address these concerns and said that the 
United States looks forward to working with Indonesia to achieve 
this objective. 
 
China - Registration of Scrap and Waste Imports 
 
11.  Per instructions, the US representative asked China to 
clarify when it will formally reopen the registration process for 
scrap and waste material.  China's representative took note of 
the question and replied that it would likely be "favorably 
considered" in Beijing. 
 
Issues Raised by Other Members 
 
12.  Australia and Chinese Taipei also posed questions, both 
directed at China, during the meeting. 
 
Australia - Questions to China 
 
13.  Australia flagged its general interest in getting more 
information from China on import licensing requirements 
introduced on March 1, 2005 for iron ore.  (Note: On the fringes 
of the meeting, Australia met bilaterally with China to pose more 
specific questions, including 1) when does China plan to notify 
these new requirements, 2) for what reasons has China brought 
iron ore within the scope of automatic licensing, 3) why has 
China decided to impose qualifying criteria on enterprises 
seeking licenses, 4) what specifically are those qualifying 
criteria, 5) for what other products, if any, has China imposed 
qualifying criteria for automatic licensing, and 6) in China's 
estimation, what effect will these new requirements have on 
imports in general and historical exporters in particular.  They 
have requested bilateral replies by July 15.) 
 
Chinese Taipei - Questions to China 
14.  The chair noted that G/LIC/Q/CHN/14 with questions from 
Chinese Taipei to China was first raised at the September 2004 
meeting.  Chinese Taipei recalled its interest in receiving 
responses.  China replied that it has not yet received the 
document, a requirement under the working procedures of the 
Committee, and therefore it is not required to respond.  Chinese 
Taipei observed that the document was sent to the Chinese mission 
and it is also available on the WTO website.  The discussion 
continued back and forth without resolution, with Korea's 
delegate weighing in to try to clarify why China was not 
answering questions that seem to be readily available.  (Note: 
Evidently not all Members were aware that China refused to accept 
the questions when they were sent through diplomatic channels. 
Korea's delegate admitted afterwards that he intervened out of 
confusion - because he did not immediately grasp why China was 
ducking the questions - and that he did so without instructions 
from Seoul.) 
 
Appointment of Chair and Vice Chair 
 
15.  The Committee unanimously elected a new chair, Pam Cooper of 
Canada, and a new vice chair, Peter Govindasamy of Singapore. 
 
Next Meeting 
 
16.  The next meeting of the Committee has been tentatively set 
for September 28, 2005.  That meeting will include the fourth 
transitional review of China and, as part of regular business, 
the European Communities and Brazil may finally provide 
substantive responses to US queries on enriched uranium and 
lithium products, respectively.  Shark