Comments of the united states on the answers of brazil to further questions from the panel to the parties following the second panel meeting

The US Assertions of Confidentiality Are Baseless

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5. There Is No Basis under WTO Rules for the United States to Withhold Planted Acreage Information on The Basis of Confidentiality

4. The US Assertions of Confidentiality Are Baseless
29. The United States attempts to justify its “scrambling” of the acreage data on the grounds that it is “confidential” data barred by the US Privacy Act.^²²³ A close examination of the facts, including the federal court precedent that binds USDA’s administrative actions, shows that the farm-specific acreage data requested by the Panel and Brazil are not confidential.^²²⁴
30. The primary basis for the US confidentiality assertion is an 11 April 2002 USDA FOIA decision concerning FOOS Farm (Exhibit US-104). This non-appealed USDA decision stands for the fairly narrow proposition that a FOIA request for a single farm’s planting records is an invasion of privacy rights of that farm’s operator. In that decision, USDA found that the “release of the number of acres farmed by FOOS Farms would not contribute significantly to public understanding of the operations and activities of FSA.”^²²⁵
31. As the USDA FOOS Farm decision in Exhibit US-104 demonstrates, there is clearly a difference between a FOIA request for a single farm’s acreage data and an across-the-board request for all acreage information – such as that set out in Brazil’s 3 December request, and in the rice FOIA request. USDA – and USTR – are bound by US federal court decisions that made exactly this distinction. The leading case is US district court decision in Washington Post v. United States Department of Agriculture, 943 F.Supp. 31 (D.D.C. 1996).^²²⁶ In that case, the federal court rejected USDA’s arguments that the Privacy Act prevented it from producing information on the US cotton programme, including over $1 billion in marketing loan payments, Step 2 payments, and deficiency payments, among others, to US cotton farmers. The court found that there were no violations of privacy rights of US cotton farmers from the “disclosure of names, addresses, and payments that commodity programme recipients received.”^²²⁷ A close reading of the decision highlights the illegitimacy of the post hoc US assertions of confidentiality raised in this dispute. Consider the following passages from the decision:
The nature of the list [names, addresses, amount of subsidies] sought by plaintiff in this case does not create the same sort of personal privacy concerns or invite the kind of unwarranted intrusion that would justify nondisclosure. The only individualized information that would be ascertainable from the release of the list is that a particular individual grows cotton, the address of the farm where the cotton is grown and where the subsidy is received, and how much of a subsidy that cotton farmer received in 1993. It might also be deduced from the amount of the subsidy how much cotton the producer grew in 1993. The Court is unable to discern, nor have defendants persuasively explained, how any of this relatively generic information about thousands of similarly situated business people could constitute clearly unwarranted invasions of their personal privacy. Indeed, it is precisely because the list is so large and the information so generic that the impact on privacy interests are so small.^²²⁸

32. The court went on to note that there was a strong public interest in the disclosure of the information, rejecting USDA’s arguments that the data “pertaining to the cotton programme recipients would not shed any light on the workings of the agency and that therefore there is no public interest in its disclosure.”^²²⁹ The court found (in language that is particularly applicable to this WTO dispute) that “a significant public interest lies in shedding light on the workings of the Department of Agriculture and the administration of this massive subsidy programme, and plaintiffs have persuasively demonstrated how the release of the recipients names, addresses and subsidy amounts could illuminate the USDA’s actions.”^²³⁰ Thus, despite the Privacy Act of 1974, the court ordered USDA to turn over the farm-specific information.

33. A 1999 US federal court decision in Hill v. United States Department of Agriculture found there was a privacy interest in instances where the FOIA request sought information on loans made to an individual borrower. Citing the Washington Post case, the court reasoned that because the information related to the finances of one closely-held family corporation and not to “tens of thousands of otherwise indistinguishable business people,” it found the corporation had a significant privacy interest.^²³¹
34. In light of this precedent, it is not surprising that USDA’s FOIA office in Kansas City (which is USDA’s only FOIA office for such data) agreed on 14 November 2003 to provide complete contract base and acreage data in relation to rice. This is because that request covered all rice planted acreage and all rice contract acreage. Pursuant to the reasoning in the Washington Post case, USDA’s FOIA representatives necessarily must have determined that because the request did not focus on an individual producer’s farm, the interests of the public in understanding and evaluating the operation of the contract payment schemes outweighed any privacy interests. Otherwise, the rice data would never have been released. The post-hoc attempt by the United States on 18 December 2003 and 20 January 2004 to argue that this information was provided by “mistake” is simply not credible.
35. Brazil notes, further, that the United States provided no evidence that any mandatory provisions of US law or regulations prevent the production of acreage information. The United States incorrectly argues that the Privacy Act of 1974 prohibits the release of planted acreage information for individual farms.^²³² But nothing in the text of the Privacy Act cited by the United States requires this. Indeed, the fact the federal court in Washington Post ordered the production of farm-specific payment data shows the fallacy of this US arguments. The Washington Post decision teaches that the Privacy Act of 1974 does not function as an inviolate shield to protect individual crop planting data with no exception other than the written permission of each US farmer, as the United States incorrectly asserts.
36. In fact, the only reference to acreage reports is in what the United States incorrectly characterizes as a “long-standing policy” set out in FSA’s FOIA Handbook.^²³³ But this FOIA “policy” does not constitute a US law mandating confidentiality of planted acreage information. It is only guidance to FOIA officers that obviously can be disregarded by the USDA Secretary or other implementing officials in individual cases. The release of the rice information by USDA’s FOIA office on 14 November 2003 demonstrates that this policy guidance is not mandatory. In fact, the statutory FOIA requirements, as interpreted by the US federal courts (as in the Washington Post decision) clearly take priority over any internal USDA policy guidance documents. The United States is not barred by any provision of US law, either on its face or as interpreted by US courts, from providing the information requested by the Panel.
37. The evidence cited by the United States in support of its refusal to provide the requested data does not, therefore, support its conclusion that the data cannot be released.^²³⁴ In effect, the US government has attempted to create, post-hoc, a new mandatory policy for the purposes of this dispute. This blatant attempt to prevent the Panel and Brazil from gaining access to information that was readily supplied to a private US citizen in the case of rice was rejected by the Panel in its 12 January 2004 Communication. Unfortunately, the United States’ 20 January 2004 Letter continues this approach.
38. Finally, Brazil notes that even if the USDA FOIA policy “guidance” were set out in a mandatory US statute, the United States could still provide the information requested by the Panel and Brazil without “scrambling” it. As the Panel has noted in its 12 January 2004 Communication, there would have been various options available to the United States to produce the information in a manner that would have protected the confidentiality rights of US farmers. Brazil made it clear in its 22 December 2004 Answers to Questions that a substitute number protecting the alleged confidentiality rights of farmers would be acceptable.^²³⁵ Since neither Brazil nor the Panel has any interest in an individual farm’s identity, providing the requested information in such a manner would have provided Brazil and the Panel with the payment information that they have long sought.
39. In its 20 January 2004 Letter, the United States now asserts that no farm-specific data was actually requested, as the Panel has only sought to determine the total amount of contract payments to farms producing upland cotton.^²³⁶ However, both the Panel’s 12 January 2004 Communication and Exhibit Bra-369 are clear that the United States was required to produce farm-specific information, on the basis of which the allocation of contract payments as support to upland cotton could be performed. And as Brazil has demonstrated above,^²³⁷ the initial allocations have to be performed on a farm-specific level to avoid any aggregation problems.
40. The United States did not even provide a complete summary of the data resulting from the farm-specific comparison between planted and contract acreage on an aggregate basis.^²³⁸ Such summary aggregate information is, of course, not confidential, since it could never reveal the names of any producers, their farms, or the location of the farms. Of course, such a summary document is not a perfect substitute for the complete farm-specific data requested by the Panel. But the US failure to present this obviously non-confidential data highlights its continuing non-justifiable concealment of key information from the Panel and Brazil.
41. Had the United States been willing to cooperate on this issue, it could have either provided the data, as the Panel’s 12 January 2004 Communication and Brazil’s 22 December Answers to Questions^²³⁹ suggested, using a dummy farm number or a consolidated single file for contract and planted acreage (with no farm number),^²⁴⁰ or clarified with Brazil whether there could be a way to address the US confidentiality concern, including throught special procedures for confidential information, as foreseen by Articles 13 and 18 of the DSU.^²⁴¹ Instead, the United States has simply chosen to refuse to produce the information.
42. Lastly, the United States’ 18 December 2003 Letter dramatically calls for Brazil to “return” the rice FOIA request data that was requested and received by a private US citizen.^²⁴² Yet, US federal courts have held that “once records are released, nothing in FOIA prevents the requester from disclosing the information to anyone else.”^²⁴³ Thus, under US law, the rice data is in the public domain. However, in the spirit of cooperation, Brazil notes that it understands that neither it, nor any person in or formerly in its delegation, or which provided statements to the Panel, currently retains any of this now-public data released by USDA pursuant to its FOIA authority. Moreover, the only information from the rice request used by Brazil in this dispute is set out in Exhibit Bra-368, which reflects aggregated data gleaned from the farm-specific comparisons of rice contract acreage with rice planted acreage. Brazil assumes that even the United States would agree that this aggregated data is not confidential.
5. There Is No Basis under WTO Rules for the United States to Withhold Planted Acreage Information on The Basis of Confidentiality
43. As described in Section 4 above, the effect of the “scrambling” of planted acreage and contract acreage data by the United States amounts to withholding information specifically requested by the Panel. Further, the failure of the United States to provide any non-cotton base acreage for the third category of farms,^²⁴⁴ and the failure of the United States to produce any information on market loss assistance payments and peanut direct and counter-cyclical payments, also amounts to withholding the information requested by the Panel.
44. In its 20 January 2004 Letter, the United States now makes the additional argument that it can no longer provide the requested information in an anonymous format,^²⁴⁵ using either a dummy farm number, or providing a consolidated file that would contain both contract acreage and planted acreage, but no farm serial number.^²⁴⁶ According to the United States, this is because it has already provided contract acreage with farm serial numbers, and that, with the additional information requested by the Panel, Brazil would be able to deconstruct the “confidential” farm serial number.^²⁴⁷ This argument is irrelevant, because the United States has an obligation to produce the information, even if it is “confidential.”
45. The United States asserts that, pursuant to the US Privacy Act, it cannot release so-called “confidential” farm-specific planted acreage information associated with a particular farm.^²⁴⁸ Nevertheless, despite the alleged bar of the US Privacy Act, the United States produced farm-specific information concerning the contract acreage designating it as “confidential due to its sensitive nature.”^²⁴⁹ The United States never explained how it could produce contract payment information on a farm-specific basis, which would be protected by WTO confidentiality procedures, but not farm-specific acreage information. If the WTO confidentiality procedures are good enough for one set of confidential data, then they must be good enough for another set of “confidential” data.
46. But even accepting, arguendo, that the US acreage data is confidential under US law, there is no basis for the United States to argue or assert that the confidentiality of this information would not be protected in these WTO proceedings. Paragraph 3 of the Panel’s working procedures states that “Members shall treat as confidential information submitted by another Member to the Panel which that Member has designated as confidential.” These working procedures, like DSU Articles 13.1 and 18.1, require information designated as confidential by the United States to be protected as such by both the Panel and Brazil. Nothing in the Panel’s working procedures or any other DSU rule suggests that the United States should be concerned that its information would not be protected. Certainly, nothing suggests that the United States may unilaterally withhold or redact requested information on confidentiality grounds. Indeed, the Panel notes in its 12 January 2004 Communication that this information “can be protected under the DSU and our working procedures.”^²⁵⁰ Brazil fully agrees.
47. Brazil notes that the US 18 December 2004 Letter also did not request the adoption of any special confidentiality procedures. Nor did the United States attempt to contact Brazil prior to 18 December 2003 to discuss whether Brazil would agree to special procedures for the protection of the allegedly confidential information – procedures that Brazil has agreed to repeatedly in past disputes involving business confidential information.^²⁵¹ The United States has similarly participated in many earlier WTO disputes in which it has agreed to such procedures.^²⁵² Nor has the United States presented evidence or argument suggesting that existing WTO confidentiality provisions would not fully protect the confidentiality of planted acreage information. It goes without saying that Brazil would have treated such information in a confidential manner, consistent with its obligations under the Panel’s working procedures, and Articles 13.1 and 18.1 of the DSU.
48. There is no legal basis under WTO rules for the United States to withhold this information following the Panel’s August 2003, October 2003, 3 December 2003 and 12 January 2004 requests that it produce this information. These requests to the United States to produce the information requested by Brazil in Exhibit Bra-369 were made pursuant to the Panel’s authority under DSU Article 13.1.
49. The Appellate Body and panels have held that a Member is required to provide information – including confidential business information – upon a request made under DSU Article 13.1. The Appellate Body in Canada – Aircraft found that WTO Members “are … under a duty and an obligation to ‘respond promptly and fully’ to requests made by panels for information under Article 13.1 of the DSU.”^²⁵³ The obligation in DSU Article 13.1 is not limited to only non-confidential information. Indeed, Article 13.1 explicitly anticipates the production of confidential information, providing that “confidential information which is provided shall not be revealed without formal authorization from the individual, body, or authorities of the Member providing the information.” As the Appellate Body stated in Canada – Aircraft:
[t]o hold that a Member party to a dispute is not legally bound to comply with a panel's request for information relating to that dispute, is, in effect, to declare that Member legally free to preclude a panel from carrying out its mandate and responsibility under the DSU. So to rule would be to reduce to an illusion and a vanity the fundamental right of Members to have disputes arising between them resolved through the system and proceedings for which they bargained in concluding the DSU.^²⁵⁴

50. The “refusal by a Member to provide information requested of it” has been found by the Appellate Body to “undermine seriously the ability of a panel to make an objective assessment of the facts and the matter, as required by Article 11 of the DSU.”^²⁵⁵ The obligation to provide information has been deemed a “requirement for collaboration of the parties in the presentation of the facts and evidence to the panel.”^²⁵⁶ Panels have found that “the most important result of the rule of collaboration appears to be that the adversary is obligated to provide the tribunal with relevant documents which are in its sole possession.”^²⁵⁷

51. In US – Wheat Gluten, the Appellate Body reaffirmed this “obligation” and “duty” under DSU Article 13.1 to produce all information requested, including information designated as “business confidential.” In that case, the United States only agreed to produce to the panel, but not to the EC, information redacted from the public version of a USITC report in a safeguard investigation. The panel in that case proposed three different special procedures for business confidential information, but the United States still refused to make the information available to the EC. The panel indicated that the information withheld “would have facilitated our objective assessment of the facts in this case, and of the matter before us.”^²⁵⁸ On appeal, the Appellate Body reaffirmed the “obligation” and “duty” of Members to produce all information, including business confidential information, to panels when requested under DSU Article 13.1. In affirming the panel’s ruling, the Appellate Body stated that it “deplore[d] the conduct of the United States” in refusing to produce business confidential information.^²⁵⁹
52. The panel in Canada – Aircraft similarly emphasized the obligation of a Member under DSU Article 13.1 to provide “highly sensitive business confidential information,”^²⁶⁰ as well as information that Canada claimed was governed by a “Cabinet privilege.”^²⁶¹ Similar to what the United States did in “scrambling” the key information in this case, Canada argued that while it could not provide the confidential “Cabinet privilege” documents, it could provide a summary of the criteria the Government used to award one particular contribution.^²⁶² However, the panel rejected the utility of this proffered information, finding that the information provided by Canada was not sufficient to rebut Brazil’s prima facie case that Canada had provided export subsidies.^²⁶³ In addition, as with the “scrambled” information provided by the United States, the panel noted the uselessness of business confidential information “redacted” by Canada. The panel found it had been so heavily redacted that it was “simply of no value to the panel.”^²⁶⁴
53. As in Canada – Aircraft, the US “scrambling” of contract and acreage data effectively “redacted” the information requested by the Panel to such an extent that it cannot be relied on. In addition, the United States’ offer to provide “summary” data tabulating the incomplete “scrambled” acreage data on the one hand, and the contract acreage on the other hand, should be rejected by the Panel. As in Canada – Aircraft, a party refusing to cooperate under Article 13.1 should not be permitted to selectively present evidence while withholding evidence within its exclusive control that is far more directly relevant. As the panel found in Canada – Aircraft, “Canada has outright refused (on the basis of Cabinet privilege) to provide what in the Panel’s view are the most relevant of the documentation that it requested regarding the five contributions identified by Brazil.”^²⁶⁵ Data permitting the linking of contract and acreage data is similarly the most relevant of the documentation requested by the Panel.
54. The US refusal to provide certain allegedly confidential information in this dispute without even seeking special confidentiality provisions^²⁶⁶ (while providing other information it designates as confidential) is completely inconsistent with its arguments before the Appellate Body in Canada – Aircraft. In that appeal, the United States argued that “the need for additional procedures for protecting business confidential information is extremely important, because it goes to the viability of WTO dispute settlement as a vehicle for preserving the rights and obligations of Members.”^²⁶⁷ Moreover, the United States argued that the application of procedures for protecting business confidential information promotes important objectives, because Members’ rights and obligations under the covered agreements can only be preserved if due process is accorded to both the complaining party and the responding party.^²⁶⁸ The United States maintained that “the demands of due process are not satisfied, however, if the absence of such procedures precludes a Member from properly making its case.”^²⁶⁹
55. Finally, while it argues in this case that the 1974 Privacy Act allegedly prevents it from providing the acreage information in any form, the United States maintained in Canada - Aircraft that “a Member’s national laws do not provide a basis for depriving another Member of its rights under the WTO Agreement.”^²⁷⁰ In that case, the EC – as a third party – argued that requiring its officials to sign a non-disclosure form as part of special confidentiality procedures set up by the Canada – Aircraft panel would violate their duties of disclosure under EC law. In response, the United States argued that the EC’s claim that “its officials would be unable, under their staff regulations, to accept the undertaking proposed ‘should not be allowed.’”^²⁷¹
56. In conclusion, there is no justification under WTO rules for the United States to refuse to produce all of the information sought by the Panel in August 2003, October 2003, and on 3 December 2003 and 12 January 2004. The continuing refusal to provide this highly-relevant information is clear evidence of non-cooperation.

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