US embassy cable - 05GENEVA1825

UNCLAS SECTION 01 OF 07 GENEVA 001825 
 
SIPDIS 
 
SENSITIVE 
 
PASS USTR FOR ALLGEIER, DWOSKIN 
STATE/EB/OT FOR CRAFT 
USDA/FAS/ITP FOR MTND/HENKE, FAA/SE/WILSON 
USDOC FOR SPETRINI, JACOBS 
 
E.O. 12958: N/A 
TAGS: ETRD, WTRO, USTR, Trade 
SUBJECT:  11-15 JULY 2005 MEETINGS OF THE WTO RULES NEGOTIATING 
GROUP 
 
 
This cable is Sensitive but Unclassified - Please Protect 
Accordingly 
 
SUMMARY 
 
1. (SBU) The WTO Rules Negotiating Group met formally and 
informally 11-15 July 2005.  Thirteen papers were submitted for 
these meetings (nine on antidumping and countervailing duties, 
one on subsidies and three on fisheries subsidies) demonstrating 
a continued high level of interest in these negotiations; the 
negotiating group ran out of time for discussion, so five of 
these papers will be taken up at the September meeting.  The 
Chairman also continued his plurilateral consultations with a 
smaller group of approximately 14 delegations; this has become an 
important forum primarily for the discussions on antidumping, 
although for the first time in the plurilateral consultations the 
group took up a proposal on subsidies (a paper by the United 
States on the allocation of subsidies).  There were also 
substantive discussions on papers from Egypt on currency 
conversion in antidumping calculations, Canada on special dispute 
settlement rules from antidumping and countervailing duty cases, 
China on establishing post-initiation comment procedures, and two 
papers from the Friends of Antidumping Negotiations, one on 
limiting the number of exporters examined and one on introducing 
a public interest test.  A prior discussion of a paper by the 
Friends on reviews of antidumping duty measures was also resumed. 
 
2. (SBU) There were also fisheries subsidies papers from Japan on 
illegal, unreported and unregulated ("IUU") fishing and from 
Australia, Ecuador and New Zealand on aquaculture.  However, the 
most significant discussion of the week related to a very 
ambitious paper by Brazil laying out a broad proposal on the 
kinds of subsidies that should be prohibited or permitted, and on 
special and differential ("S&D") treatment for developing 
countries.  Although there was much informal discussion about how 
to intensify the negotiations in anticipation of the Hong Kong 
Ministerial meeting in December, for example by lengthening the 
meetings or forming smaller groups to address specific issues, no 
changes were formally announced.  The United States also used the 
opportunity of the Rules Group meeting to meet bilaterally with, 
among others, Brazil, China, Mexico and Norway, and 
plurilaterally with the EC, Australia and Canada to discuss 
countervailing duty and subsidy issues.  The next Rules Group 
meeting will be held 26-30 September 2005.  End summary. 
 
ANTIDUMPING 
 
EGYPT PAPER ON CURRENCY CONVERSION 
 
3. (SBU) Egypt presented in formal session its paper 
(TN/RL/W/183) on clarifying the rules on conversion of currency 
in antidumping calculations, specifically, by defining the terms 
"fluctuation" and "sustained movement" of currency, as they are 
used in Article 2.4.1 of the antidumping agreement.  Most of the 
comments by Members were supportive, although several Members 
asked Egypt to describe its own methodology.  Several Members, 
including Brazil and Japan, noted that this would be a very 
difficult issue to negotiate, and therefore tended to favor a 
prior US proposal (TN/RL/GEN/5) which approached the issue as one 
of transparency, by asking Members to report their practices to 
ensure consistency, rather than attempting to define permissible 
practices.  Korea and Thailand both stated that they had no 
experience with this provision in their antidumping practice. 
The EC recalled the difficult negotiations on this issue in the 
Uruguay Round, and said that it avoided the problem by using 
average exchange rates; where there is a problem, the EC breaks 
its averaging into sub-periods, such as months. 
 
 
CANADA PAPER ON DISPUTE SETTLEMENT 
 
4. (SBU) Canada presented its paper (TN/RL/GEN/48) in informal 
session and in the plurilateral meeting on improving dispute 
settlement procedures in cases involving antidumping and 
countervailing duty measures.  The proposal would require a 
Member, promptly upon a finding by the dispute settlement body of 
any WTO-inconsistency in an antidumping or countervailing duty 
measure, to suspend the measure until a new, compliant measure is 
put into place and approved by a panel.  Unlike an earlier 
proposal by Canada (TN/RL/GEN/37), this proposal was modified so 
as not to require refund of all duties back to the time the 
measure was originally put into place.  (NOTE:  This proposal 
reflects Canada's concerns that its companies have had to make 
large deposits of antidumping and countervailing duties during 
the ongoing disputes relating to softwood lumber.) 
 
5. (SBU) This version of Canada's proposal received much broader 
support, particularly among some of the Friends of Antidumping. 
However, from the tone of interventions, it is not clear how 
seriously Members are taking this proposal.  A number of Members 
questioned whether this proposal goes too far in the case of 
minor inconsistencies.  Several Members, including Japan and the 
US also asked why this proposal was limited to antidumping and 
countervailing duty measures; the US noted that the economic harm 
from measures inconsistent with other agreements could be just as 
great; Mexico noted that in the DSU negotiations it had made a 
similar proposal applicable to all agreements; Brazil, half- 
jokingly, suggested it would like to see this proposal applied to 
the agriculture agreement.  Canada replied that special treatment 
was justified by the high number of challenges to antidumping and 
countervailing duty measures, and by the large amounts of money 
involved.  Japan also asked how the proposal would affect 
prospective duty collection systems, which would not be able to 
reach back and collect any duties if the Member taking the 
measure is successful on appeal; they suggested that in light of 
this problem, the proposal should be limited to retrospective 
duty assessment systems.  (NOTE:  The US has the only clearly 
retrospective duty assessment system for antidumping and 
countervailing duties.)  The EC described Canada's paper as a 
move in the right direction, and it looked favorably on it; 
however, it noted that there are certain details of the proposal 
that need to be worked out. 
 
FRIENDS PAPER ON LIMITED EXAMINATION 
AND THE ALL OTHERS RATE 
 
6. (SBU) Norway on behalf of the Friends of Antidumping presented 
their paper (TN/RL/GEN/46) in informal session on conditions 
under which an authority may limit the number of exporting 
companies it examines in an antidumping investigation, and how it 
calculates the "all others" rate applicable to non-investigated 
exporters.  While several Members said that the provisions of the 
Antidumping Agreement in question needed clarification, support 
for this paper was quite limited.  Many Members questioned the 
feasibility of the proposal to require examination of at least 
2/3 of the exporters in every case. 
 
7. (SBU) The US suggested that more clarification was needed of 
the kinds of reasons that would justify a limited examination, 
and also noted that the proposal to require authorities to accept 
up to ten volunteered responses in addition to the 2/3 of 
exporters it was otherwise required to examine seemed to require 
the impossible, and effectively required examination of all 
exporters in virtually all cases.  Mexico argued that all known 
exporters should receive a questionnaire, but those who did not 
make themselves known and "remained in the shadows" should be 
treated as uncooperative; after the exporters have responded, the 
authority can decide for which of them it will calculate a margin 
of dumping.  (NOTE:  Mexico recently lost a dispute settlement 
challenge by the US to its antidumping measure on rice and was 
criticized by the Panel for passively waiting for exporters, who 
may not have known about the case, to announce their interest to 
the authorities, and treating any who did not as uncooperative 
parties subject to highest possible rate of duty.)  The EC 
delivered a long (over 30 minute) critique of the paper that drew 
an equally long defense by Norway.  (NOTE:  Norway is reportedly 
unhappy about the way the EC selected exporters in its recent 
investigation of Salmon, which may, in part, have been the 
genesis of this paper and would explain the tone of the final 
exchange.) 
 
CHINA PAPER ON ESTABLISHMENT OF 
COMMENT PERIOD AFTER INITIATION 
 
8. (SBU) China presented in the informal session its paper 
(TN/RL/GEN/55) on establishing a formal 20-day comment period 
after initiation during which all investigative activity would be 
suspended while parties commented on the allegations in the 
petition, the product coverage of the investigation, and any 
other issue they thought needed to be addressed promptly.  The 
response to the paper was quite positive, although the Friends 
clearly are of the view that the paper does not go far enough in 
disciplining initiations, while most users of antidumping were 
concerned about the disruption of their process.  Korea and 
Norway agreed that there should be a time set aside for comment 
on the petition, but that time should be prior to initiation so 
that improper initiations can be avoided.  The EC seemed to echo 
this view by observing that it may be more difficult for 
authorities to end an investigation that has already begun than 
never to begin one at all.  Brazil wondered why this proposal is 
necessary, as parties can already submit any comments they 
believe are relevant; it asked if establishing a formal comment 
period would preclude comments later.  The US also noted that, 
while it is not opposed to this concept, parties are already free 
to submit comments at any time; the US asked for more details 
about how this proposal would work in practice.  Australia 
expressed concern that this proposal would delay the 
questionnaire, which is a serious concern given its relatively 
short investigation period.  China recognized the possible timing 
implications of its proposal and indicated that it did not 
believe that it would extend the procedure too long. 
 
FRIENDS PAPER ON LESSER DUTY 
 
9. (SBU) The Friends presented their paper on lesser duty 
(TN/RL/GEN/430 during the plurilateral consultations, and India 
also re-presented a paper it had submitted in the spring 
(TN/RL/GEN/32).  Neither Japan (for the Friends) nor India had 
much new to say about their Lesser Duty proposals.  The 
discussion was dominated by the EC and Brazil (co-sponsor from 
the Friends), each discussing their respective lesser duty 
practices and methodologies.  The EC, in particular, seemed 
intent on seizing leadership of the issue, by criticizing the 
Friends' proposal and methodologies at great length, and 
explaining how the EC's methodology was the only real workable 
one consistent with a high level of ambition.  The EC also 
criticized the technical level of the discussion of the proposals 
before Members really had begun that discussion. 
 
10. (SBU) The EC lost some of its bluster, however, when Korea 
said that, unlike the inflexible US system, the EC "negotiates" 
the lesser duty between exporters and the domestic industry. 
The EC indignantly denied that they "negotiate" this, stating 
that the Commission applies rules, although the administrators of 
course have a certain degree of discretion.  A continuation of 
the discussion focused on the determination of an appropriate 
level of profit when calculating a lesser duty and again 
highlighted the high degree of administrative discretion in some 
Members' practices.  The US used these exchanges to point out the 
dangers of "managed trade" posed by these proposals.  Another big 
focus of the discussion was the impact of the application of the 
dispute settlement system on lesser duty methodologies, which are 
currently discretionary and largely non-transparent.  There was 
also a discussion of how judicial review in the US would affect 
the lesser duty methodologies.  The US raised a number of other 
concerns, previewing the issues raised in the US paper 
(TN/RL/GEN/58) to be discussed in September.  Egypt, Argentina 
and Canada also raised concerns about a mandatory lesser duty 
rule, but a number of Members, such as China, remained silent. 
The Chairman stated that we will continue the discussion of 
lesser duty at the September plurilateral session. 
 
FRIENDS PAPER ON PUBLIC INTEREST 
 
11. (SBU) On behalf of the Friends, Hong Kong presented in the 
informal session the revised paper (TN/RL/GEN/53) on a mandatory 
public interest test.  Hong Kong pointed out that the proposal is 
limited to requiring examination of a measure's economic effects, 
rather than the broader public interest.  The proposal also does 
not define how those effects should be examined, although that 
can be discussed at a later meeting.  India noted that all 
Members consider their public interest, but asked whether we 
really need a legal obligation; it also asked Members to share 
their experiences.  Canada, which has an infrequently-used public 
interest provision in its current law, indicated that it 
supported the thrust of the paper, but believed that such an 
inquiry should be distinct from the determination of AD/CV 
duties.  It believed that a public interest test should be 
considered only after a Member has determined that antidumping 
measures are otherwise appropriate.  Reflecting comments by many 
Members at the prior meeting, Brazil expressed concern about how 
a public interest decision would be treated by a dispute 
settlement panel.  China complained that the new version of this 
paper was limited to economic interests, rather than broader 
public interest; in China's view Members should consider such 
issues as public health, the environment and national security in 
deciding whether to apply antidumping duties.  At this point, 
time ran out, but the Chair said he would return to this paper at 
the September meeting. 
 
FRIENDS PROPOSAL ON REVIEW 
PROCEEDINGS UNDER ARTICLE 9 
 
12. (SBU) Korea presented in the plurilateral consultations the 
FANs paper (TN/RL/GEN/44) on proposals for Article 9 procedures 
(imposition and collection/assessment of antidumping duties). 
This was the second time the paper was discussed during 
plurilateral consultations.  (Note:  at the last plurilateral, 
the FANs were having such difficulty explaining and justifying 
their proposals that the Chairman stopped the discussion and 
asked that proponents do some homework in order to better present 
their case for the next meeting.)  This time Korea was better 
prepared and the discussions went more smoothly, although little, 
if any convergence on issues was reached. 
 
13. (SBU) The FANs' paper advocates that certain rules and 
principles applicable to the investigation phase of a dumping 
investigation be equally applicable to subsequent proceedings 
(for example new shipper reviews and, in the U.S. system, 
"administrative reviews," during which the final assessment of 
antidumping duties is determined).  Two central issues flow from 
this proposal: (1) whether the practice of "zeroing" should be 
disallowed in the context of administrative reviews and (2) 
whether the "de minimis" threshold in investigations should be 
applicable to administrative reviews.  Because the practice of 
zeroing in the context of administrative reviews is currently 
being examined by two WTO dispute settlement panels, Members 
recognized that further discussion of the issue should wait until 
after the examination of the panel reports.  As to the de minimis 
issue, the FANs argued that there was no reason why the two 
percent threshold applicable in investigations should not be 
equally applicable to administrative reviews.  The United States 
countered by stating that the de minimis threshold was a 
negotiated threshold without any substantive meaning and that, as 
the WTO Appellate Body has recognized, nothing in the current 
text of the Antidumping Agreement required the two percent 
threshold to be applicable to administrative reviews. 
 
14. (SBU) The FANs paper also proposed that the evidence and due 
process provisions of Article 6 become applicable to Article 9 
review proceedings.  As an initial matter, several Members, 
including the United States, made the point that the FANs should 
clarify precisely which specific provisions of Article 6 should 
be applicable Article 9 proceedings and for the provisions that 
would apply, precisely how they would apply.  More generally 
however, the United States expressed some support for this 
proposal given that numerous due process procedures are already 
part of U.S. practice.  Others with less transparent systems were 
more argumentative.  The EC, for example, asked the FANs to 
explain their practice in this area, knowing that Korea, despite 
being a significant user of the antidumping remedy, has conducted 
very few, if any, reviews under Article 9.   Korea's unconvincing 
response was that their initial investigations were so thorough 
that subsequent reviews were unnecessary.  The EC also made the 
relatively weak argument that Article 9 proceedings in the EC 
system were only of concern to the importer and exporter being 
examined, ignoring the fact that decisions made in one 
determination might establish an important precedent in other 
proceedings involving similarly situated interested parties. 
Overall, given the vastly different systems of Members under 
Article 9 (e.g., retrospective versus prospective duty 
collection), it became abundantly apparent that the FANs 
proposals would have varying ramifications and that Members were 
reluctant change their particular duty collection system. 
 
SUBSIDIES 
 
US PAPER ON WHEN AND HOW TO ALLOCATE 
SUBSIDY BENEFITS OVER TIME 
 
15. (SBU) The US presented in informal session, and again in the 
plurilateral consultations, its paper (TN/RL/GEN/45) synthesizing 
and elaborating upon three earlier proposals (TN/RL/GEN/4, 
TN/RL/GEN/12 and TN/RL/GEN/17) on the decision of whether to 
allocate the benefits of a subsidy over time rather than 
attributing them solely to the year of receipt.  If benefits are 
allocated, the US paper addressed the period and model of the 
allocation.  The US noted that there are at least three possible 
bases for distinguishing subsidies to be allocated from those to 
be expensed: frequency, size and use.  There was broad support 
for the US approach which identifies subsidies to be allocated 
based on frequency with which the subsidy is granted, i.e., on 
whether a subsidy is recurring or non-recurring, with the latter 
subsidies being allocated over time.  On this point, Canada noted 
that it distinguishes subsidies based on the use and purpose of 
the subsidy, and would want any rules or guidelines on subsidy 
allocation to remain sufficiently flexible to accommodate 
Members' different approaches.  The US agreed that some 
flexibility should be preserved, and noted that the Canadian and 
US methodologies often lead to the same result. 
 
16. (SBU) While there also appeared to be general agreement as to 
the use of the average useful life of assets in the industry in 
question as the allocation period, several Members commented that 
they favored using an allocation period based on the average 
useful life of industry assets in the exporting country rather 
than on the assets of the importing company, as suggested by the 
US.  The US pointed out that this would mean that in a 
countervailing duty investigation, similar subsidies given by 
different exporting countries could result in different 
countervailing duty rates and, moreover, the average useful life 
of particular assets are generally the same regardless of the 
country in which they are used. 
 
17. (SBU) With regard to the US proposal that the time value of 
money be factored into any allocation model, Brazil suggested 
that, as in the case of the export credit rules, this would 
disadvantage developing countries who generally have higher costs 
of capital.  The US responded that the time value of money is a 
fundamental principle of finance, that the export credit rules 
are an entirely separate issue, and that a GATT Panel and an 
Informal Group of Experts has already endorsed inclusion of the 
time value of money in any allocation formula.   Finally, several 
Members asked whether the US proposal would only apply to 
countervailing measures, or would also apply to direct dispute 
settlement challenges to subsidies.  The US responded that it was 
focusing on countervailing duties, but suggested that it may be 
appropriate to apply these principles to other parts of the 
Subsidies Agreement as well and that there should be a separate 
discussion on this issue. 
 
FISHERIES SUBSIDIES 
 
18. (SBU) On July 15, meeting for almost a full day, the Rules 
Negotiating group discussed the fish subsidies element of its 
mandate, in what may have been the most substantive and technical 
discussion to date.  Three papers, from Japan, Australia, and 
most importantly, from Brazil, addressed which kinds of subsidies 
should or should not be permitted under a future agreement. 
Japan's paper provided an overview of international efforts to 
combat illegal, unreported and unregulated ("IUU") fishing. 
Australia, Ecuador and New Zealand cosponsored an informative 
paper to help Members decide whether new fisheries subsidies 
disciplines should be applicable to acquaculture and whether 
there might be a risk of circumvention of stronger disciplines on 
wild (fisheries) if aquaculture were excluded. Brazil's paper 
presented a detailed, revised proposal addressing which 
particular subsidies should be actionable, and what special 
provisions might apply to developing countries.  While there are 
many difficult issues ahead, it is clear that the negotiating 
group is engaging at a technical level that is necessary to make 
significant progress in the negotiation. 
 
JAPAN PAPER ON "IUU" 
FISHING 
 
19. (SBU) In welcoming Japan's paper, Members acknowledged the 
role of IUU fishing in depleting fisheries resources and 
distorting trade but roundly questioned the WTO's role in 
addressing the matter. Canada and Chile took the opportunity to 
inform Members of their countries' successful conclusion of 
national plans of action implementing the FAO International Plan 
of Action on IUU Fishing.  Many delegations pointed out the 
obvious fact that no country explicitly subsidizes IUU fishing. 
These delegations suggested that overcapacity was the primary 
driver of IUU fishing, and that stronger disciplines on subsidies 
that contribute to overcapacity would help address the causes of 
IUU fishing.  There was also an extensive discussion of the only 
example given by Japan of the kind of subsidy that should be 
disciplined to help address IUU fishing:  subsidies associated 
with transferring vessels from a contracting party of a regional 
fisheries management organization (RFMO) to a non-contracting 
party of an RFMO and vice versa. 
 
AUSTRALIA, ECUADOR AND 
NEW ZEALND PAPER ON AQUACULTURE 
 
20. (SBU) Australia characterized its paper as an attempt to 
spark debate on what aspects of aquaculture were within or 
outside the scope of the Rules Negotiations.  The Australian 
delegate said it was important that new disciplines on fisheries 
subsidies not weaken existing disciplines on aquaculture and 
reminded delegations of the rapid growth of the sector and the 
interplay between wild caught and farming operations (as feed 
fish and as fingerlings for ranching operations, for example). 
Although certain delegations, including the United States, 
pointed out the importance of debating the implications of not 
specifically including aquaculture as a focus of the 
negotiations, there was a general sense that (1) wild capture 
fisheries should be the focus of this negotiation and (2) any 
subsidy element associated with wild caught inputs to the sector 
would likely be captured by new and/or existing disciplines. 
BRAZIL PAPER ON FISHERIES SUBSIDIES 
AND SPECIAL AND DIFFERENTIAL 
TREATMENT 
 
21. (SBU) Brazil's proposal has been the most ambitious and far- 
ranging in the discussions so far, as it attempts to lay out a 
broad plan of the kinds of subsidies which should be prohibited 
or permitted, and of the circumstances under which special and 
differential treatment should be granted to developing countries. 
The proposal would prohibit all subsidies to the wild (capture) 
fisheries sector (that is, excluding aquaculture and inland 
fisheries), except for programs included in a non-actionable 
green box.  The non-actionable programs would include subsidies 
for various conservation, health and safety purposes, programs to 
reduce fishing capacity (i.e., buybacks) and retraining programs 
for fishermen.  Subsidies to artisanal and small-scale fishing 
would also be non-actionable depending upon the state of the 
stock (as determined by the FAO).  The paper offers definitions 
of "artisanal" and "small-scale" fishing.  (Note: this exclusion 
would apparently apply to developed as well as developing 
countries.)  However, if any vessel and/or company of a Member 
were found to engage in IUU fishing, serious prejudice would be 
deemed to exist for all of that Member's otherwise non-actionable 
subsidies.  Members would have three years to phase out or 
eliminate all prohibited subsidies.  Members would also have to 
comply with more detailed notification requirements (including 
information identifying the fishery receiving the subsidy, 
subsidy amounts on a per vessel/fleet/fishery basis and the 
management status of the fishery); if a subsidy is not notified, 
it would be presumed to be prohibited. 
 
22. (SBU) For developing countries, an additional list of 
subsidies would be permitted under certain conditions (e.g., 
Members which are part of a regional fisheries management 
organization would receive special flexibility), including 
subsidies to fishing vessel construction, repair and 
modernization, government-to-government payments for access to a 
country's Exclusive Economic Zone (EEZ) and assistance to 
disadvantaged regions.  However, serious prejudice would be 
presumed in certain circumstances (e.g., subsidies benefiting any 
vessel not operating under the rules of a regional fisheries 
management organization). 
 
23. (SBU) The paper was very well received with many delegations 
applauding the substantive work and level of technical 
engagement.  Virtually every aspect of the paper provoked 
discussion as delegates responded to the many details offered in 
the paper, mostly reacting to the text rather than questioning 
the Brazilian formulation or assumptions.  Developing countries, 
such as India, Pakistan, Sri Lanka, Thailand, et al, welcomed the 
S&D provisions but questioned the strictures involved. Japan, 
Korea and Chinese Taipei in an apparent concern for the treatment 
of China, criticized the two-tiered approach to disciplining 
subsidies.  Korea questioned whether the proposal was too 
elaborate at this stage in the negotiations. Many countries 
questioned the draconian nature of the one-strike-and-you-are-out 
proposal on IUU fishing and the difficulties of meeting the 
notification requirements, although many countries welcomed 
strong transparency provisions, including the EC which has made 
transparency its strongest objective.  There were calls for 
further refinement of distinctions between artisanal and small 
scale fisheries.  In every instance, Brazil described its paper 
as a work in progress intended to stimulate discussion, and 
expressed flexibility on the particulars. 
 
24. (SBU) The United States reaffirmed its discomfort with a 
green light category, and questioned if some of the proposed 
greenlight programs could instead be simply exempted from the 
contemplated stricter disciplines. New Zealand highlighted the 
need to keep the approach simple and suggested that infusing a de 
minimis threshold into the negotiated text might obviate the need 
for an S&D response to every provision. 
 
TECHNICAL GROUP ON QUESTIONNAIRES 
 
25. (SBU) The technical group on questionnaires reconvened to 
continue a discussion of Members' practices with regard to 
antidumping questionnaires.  For this meeting, the Group's 
Chairman provided members with a matrix comparing the standard 
exporter questionnaires of Brazil, China, The European 
Communities, India, New Zealand, and the United States.  The 
Group reviewed sections of the matrix addressing company contact 
information, corporate structure, and affiliation.  The Chair 
concluded that there was general agreement on two points: 1) E- 
mail addresses should be requested and used to facilitate the 
process of collecting data, recognizing that the medium may not 
be appropriate for the transmission of certain information; and 
2) an organization chart of the respondent company is a useful 
tool which should be requested.  Finally, the Chair noted that 
Members' questions regarding affiliation differ significantly. 
The level of detail contained in the United States' affiliation 
questions became the focus of the discussion, but the session 
concluded with no consensus on the requisite questions that 
should be asked with regard to affiliation. 
 
PROCEDURAL ISSUES AND BILATERAL MEETINGS 
 
26. (SBU) The Chairman held a series of meetings with individual 
Members and small groups to discuss ways to intensify the process 
leading up to the Hong Kong ministerial in December.  The Chair 
made it clear that in his view the current process is working 
well, but may need to be augmented.  The problem with the current 
process was illustrated by the fact that the Group did not have 
time to discuss four of the papers submitted for this meeting. 
Various ideas were floated including lengthening the meetings, 
and appointing "facilitators" to guide the discussions on certain 
issues.  However, the Chair did not announce at the meeting any 
specific decision regarding the details of such proposals. 
(NOTE: In a subsequent report to the Trade Negotiating Committee, 
the Chair stated that he expected to select "Friends of the 
Chair" to advance the work on particular issues.) 
 
27. (SBU) The United States had a bilateral meeting at the 
request of Brazil in order to allow its administrators to make a 
presentation on their calculation of a "lesser duty" in 
antidumping investigations.  The United States met bilaterally 
with China and with Mexico to get a better sense of their views 
on the progress of negotiations.  The United States also met 
bilaterally with Norway to discuss its proposal on transparency 
and due process in antidumping investigations that it will be 
presenting to the negotiating group in September.  Finally, the 
United States met plurilaterally with the EC, Canada and 
Australia to discuss how to move the countervailing duty/subsidy 
aspects of the negotiations forward. Shark