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

611 See, e.g., Exhibit Bra-127 (2004 U.S. Budget, p. 109 (emphasis added)).

612 See exhibits cited in Brazil’s 11 August 2003 Answers, para. 165 and Brazil’s 28 January 2004 Comments, para. 129.

613 US 11 February 2004 Answers, para. 23.

614 In a letter to the Panel dated 16 February 2004, the United States similarly declares that it “will provide any other data in response to Question 264(b) within the time indicated (and sooner if the data can be collected and examined in less time).”

615 See Brazil’s 28 January 2004 Comments, paras. 135-137; Brazil’s 27 August 2003 Comments, para. 64; Brazil’s 22 August 2003 Comments, para. 99; Brazil’s 11 August 2003 Answers, para. 162; Brazil’s 22 July 2003 Oral Statement, para. 122.

616 See US 11 August 2003 Answers, para. 155.

617 Exhibit Bra-158 (US Department of Agriculture, Office of Inspector General, Financial and IT Operations, Audit Report, Commodity Credit Corporation’s Financial Statements for Fiscal Year 2002, Audit Report No. 06401-15-FM (December 2002), Notes to the Financial Statements, p. 14); Exhibit US-129 (US Department of Agriculture, Office of Inspector General, Financial and IT Operations, Audit Report, Commodity Credit Corporation’s Financial Statements for Fiscal Years 2003 and 2002, Audit Report No. 06401-16-FM (November 2003), Notes to the Financial Statements, p. 15).

618 US 11 February 2004 Answers, para. 25.

619 US 11 February 2004 Answers, para. 28.

620 US 11 February 2004 Answers, para. 29.

621 See Exhibit Bra-117 (2 U.S.C. § 661(c)(2)); Exhibit Bra-185 (Congressional Budget Office Staff Memorandum, “An Explanation of the Budgetary Changes under Credit Reform,” April 1991, p. 7 and Table 2); Exhibit Bra-186 (Congressional Research Service Issue Brief for Congress, “Agriculture and the Budget,” IB95031 (16 February 1996), p. 3).

622 ^ US House of Representatives, Report 105-178, Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Bill, 1998, p. 90, available at:

http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=105_cong_reports&docid=f:hr178.105.pdf.

623 See Exhibit Bra-117 (2 U.S.C. § 661(c)(2)); Exhibit Bra-185 (Congressional Budget Office Staff Memorandum, “An Explanation of the Budgetary Changes under Credit Reform,” April 1991, p. 7 and Table 2); Exhibit Bra-186 (Congressional Research Service Issue Brief for Congress, “Agriculture and the Budget,” IB95031 (16 February 1996), p. 3).

624 ^ US House of Representatives, Report 105-178, Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Bill, 1998, p. 90, available at: http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=105_cong_reports&docid=f:hr178.105.pdf.

625 ^ US House of Representatives, Report 105-178, Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Bill, 1998, p. 90, available at: http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=105_cong_reports&docid=f:hr178.105.pdf.

626 Exhibit US-129 (US Department of Agriculture, Office of Inspector General, Financial and IT Operations, Audit Report, Commodity Credit Corporation’s Financial Statements for Fiscal Years 2003 and 2002, Audit Report No. 06401-16-FM (November 2003), Notes to the Financial Statements, p. 15).

627 The Congressional Budget Office agrees, projecting positive subsidy estimates for every cohort during the period 2002-2013. Exhibit Bra-432 (Congressional Budget Office, Fact Sheet, row titled “Export Credit Guarantee Program, Subsidy Account,” available at http://www.cbo.gov/factsheets/CCC&FCIC.pdf).

628 US 11 February 2004 Answers, para. 46. As the party asserting this fact, the United States bears the burden of proving it. See e.g. Appellate Body Report, Japan – Apples, WT/DS245/AB/R, para. 157 (“It is important to distinguish, on the one hand, the principle that the complainant must establish a prima facie case of inconsistency with a provision of a covered agreement from, on the other hand, the principle that the party that asserts a fact is responsible for providing proof thereof.”).

629 US 11 February 2004 Answers, para. 48. See also U.S. 11 August 2003 Answers, para. 155. As the party asserting this fact, the United States bears the burden of proving it. See e.g. Appellate Body Report, Japan – Apples, WT/DS245/AB/R, para. 157 (“It is important to distinguish, on the one hand, the principle that the complainant must establish a prima facie case of inconsistency with a provision of a covered agreement from, on the other hand, the principle that the party that asserts a fact is responsible for providing proof thereof.”).

630 Moreover, the United States has never responded to reports by the U.S. General Accounting Office and testimony by GAO officials, submitted by Brazil, demonstrating that CCC rescheduling has historically been in arrears. See Brazil’s 28 January 2004 Comments, para. 136; Brazil’s 22 August 2003 Comments, para. 99. See also Exhibit Bra-181 (US General Accounting Office, Report to the Ranking Minority Member, Committee on Agriculture, Nutrition, and Forestry, US Senate, Former Soviet Union: Creditworthiness of Successor States and US Export Credit Guarantees, GAO/GGD-95-60 (February 1995), p. 50-52 and Table 2.6 (noting that in 1995 defaults on Russian and Former Soviet Union guarantees reached $2 billion by the end of 1993, and that despite repeated rescheduling agreements, those debts were not being repaid.); Exhibit Bra-152 (GAO, Statement of Allan I. Mendelowitz, Director, Trade, Energy and Finance Issues, National Security and International Affairs Division, before the Task Force on Urgent Fiscal Issues of the Committee on Budget of the US House of Representatives, Status Report on GAO’s Reviews of the Targeted Export Assistance Programme, the Export Enhancement Program, and the GSM-102/103 Export Credit Guarantee Programs, GAO/T-NSIAD-90-53, 28 June 1990, p. 14 (noting that historically, the majority of GSM support that is rescheduled is “in arrears.”).

631 US 11 February 2004 Answers, para. 53.

632 US 11 February 2004 Answers, para. 54.

633 As the party asserting this fact, the United States bears the burden of proving it. See e.g. Appellate Body Report, Japan – Apples, WT/DS245/AB/R, para. 157 (“It is important to distinguish, on the one hand, the principle that the complainant must establish a prima facie case of inconsistency with a provision of a covered agreement from, on the other hand, the principle that the party that asserts a fact is responsible for providing proof thereof.”).

634 Exhibit Bra-153 (US Department of Agriculture Office of Inspector General Financial and IT Operations Audit Report of the Commodity Credit Corporation’s Financial Statements for Fiscal Year 2000, Audit Report No. 06401-14-FM (June 2001), p. 31). See also Exhibit Bra-154 (US Department of Agriculture Office of Inspector General Great Plains Region Audit Report of the Commodity Credit Corporation’s Financial Statements for Fiscal Year 2001, Audit Report No. 06401-4-KC (February 2002), p. 49 (“[T]he fees CCC charged for its GSM-102 and GSM-103 export credit guarantee programs have not been changed for many years and may not be reflecting current costs.”).

635 See Brazil’s 11 August 2003 Answers, para. 167 (second bullet point).

636 Exhibit Bra-121 (US General Accounting Office (“GAO”), Report to Congressional Committees, “Credit Reform: US Needs Better Method for Estimating Cost of Foreign Loans and Guarantees,” GAO/NSIAD/GGD-95-31, December 1994, p. 20) (“GAO/NSIAD/GGD-95-31”)).

637 See, e.g., Brazil’s 28 January 2004 Comments, para. 253; Brazil’s 18 November 2003 Further Rebuttal Submission, paras. 233-241.

638 This evidence is summarized at paragraphs 231-241 of Brazil’s 18 November 2003 Further Rebuttal Submission.

639 See Brazil’s 24 June 2003 First Submission, paras. 289-292; Brazil’s 22 July 2003 Oral Statement, para. 116; Brazil’s 11 August 2003 Answers to Questions, paras. 139-140, 152-157, 183-187; Brazil’s 22 August 2003 Rebuttal Submission, paras. 103-105; Brazil’s 22 August 2003 Comments, paras. 92-93, 109-113; Brazil’s 27 August 2003 Comments on US Rebuttal Submission, paras. 68-80; Brazil’s 7 October 2003 Oral Statement, para. 72; Brazil’s 18 November 2003 Further Rebuttal Submission, paras. 230-242; Brazil’s 2 December 2003 Oral Statement, para. 79.

640 Regarding the statutory one-per cent fee cap, see US 11 August 2003 Answers, para. 180. See also Exhibit US-150 (Annual Review of Fees for USDA Credit Programmes, March 25, 2003, p. 4 (“Section 211(b)(2) of the Agricultural Trade Act of 1978, as amended, caps the current fees at 1 per cent for . . . GSM-102 and SCGP.”)).

641 Brazil’s Answer to Question 252 from the Panel, para. 167 (22 December 2003) (footnotes omitted).

642 Brazil’s Answer to Question 276 from the Panel, para. 2.

643 WT/DS139/R, WT/DS142/R, paras. 11.6-11.7 (adopted as modified 19 June 2000) (italics added).

644 WT/DS126/R, paras. 10.4-10.7 (adopted 16 June 1999).

645 See also the panel reports in the Aircraft disputes between Canada and Brazil, in which the panels took into account the nature of the measures and the procedures which may be required to implement the panels’ recommendations.

646 Report of the Arbitrator, United States – Continued Dumping and Subsidy Offset Act of 2000, WT/DS217/14, WT/DS234/22, para. 42 (13 June 2003) (quotation marks and footnote omitted) (citing 3 previous reports of arbitrators).

647 The New Shorter Oxford English Dictionary, vol. 1, at 623 (1993 ed.).

648 Brazil’s response to Question 276, para. 2.

649 In the earliest arbitrations under Article 21.3(c), arbitrators viewed the guideline as meaning that each party bore the burden of proof that the reasonable period of time should depart from the 15 months period, which would be a significant difference from Article 4.7. That approach has now evolved into the practice described above of the shortest possible period of time within the legal system of the Member to implement the recommendations and rulings of the DSB.

650 Brazil’s Answer to Question 276 from the Panel, para. 10 (11 February 2004) (eliminating Step 2 “simply requires the repeal of Section 1207(a) of the 2002 FSRI Act); id., para. 11 (for export credit guarantee programmes, “the prohibited subsidies must be withdrawn by enacting the necessary changes to the statutes and regulations providing for GSM102, GSM 103, and SCGP”); id., para. 12 (90 days “represents an appropriate period of time . . . to withdraw the ETI Act”).

651 Brazil’s Answer to Question 276 from the Panel, para. 10 n.15.

652 WT/DS139/R, WT/DS142/R, paras. 11.6-11.7 (adopted as modified 19 June 2000) (italics added).

653 Id., para. 11.7 n. 910 (citing panel reports in Australia – Leather, Brazil – Aircraft, and Canada – Aircraft).

654 WT/DS126/R, paras. 10.4-10.7 (adopted 16 June 1999).

655 WT/DS222/R, paras. 8.1-8.4 (adopted 19 February 2002).

656 PROEX was being maintained by provisional measures issued by the Brazilian Government on an monthly basis, and the financing terms for which interest rate equalization payments were made were set by Ministerial Decrees. WT/DS46/R, paras. 2.1, 2.3 (adopted 20 August 1999).

657 Id., paras. 8.2-8.5.

658 WT/DS70/R, paras. 10.3-10.4 (adopted as modified 20 August 1999).

659 Brazil’s Answer to Question 276 from the Panel, para. 5 (11 February 2004).

660 Panel Report, United States – Tax Treatment for “Foreign Sales Corporations”, WT/DS108/R (adopted 20 March 2000) (“United States – FSC”).

661 Brazil’s Answer to Question 276 from the Panel, para. 10 n.15 (11 February 2004).

662 United States – FSC, WT/DS108/R, para. 8.3.

663 United States – FSC, WT/DS108/R, para. 8.8.

664 DSU Article 16.1.

665 See Statistical Information on Recourse to WTO Dispute Settlement Procedures: Background Note by the Secretariat, Job(03)/225, circulated 11 December 2003, Section IV.B and Table 8.

666 DSU Article 17.14.

667 A more detailed description of the US legislative process may be found in paragraphs 21-35 of the Submission of the United States in the Arbitration under Article 21.3(c) of the DSU in the dispute United States – Continued Dumping and Subsidy Offset Act of 2000, WT/DS217 & 234 (13 April 2003) (available at http://www.ustr.gov/enforcement/briefs.shtml).

668 Brazil’s Answer to Question 276 from the Panel, para. 11.

669 Canada – Certain Measures Affecting the Automotive Industry, WT/DS139/R, WT/DS142/R, paras. 11.6-11.7.

670 Award of the Arbitrator, United States – Anti-Dumping Measures on Certain Hot-rolled Steel Products from Japan: Arbitration under Article 21.3(c) of the DSU, WT/DS184/13, circulated 19 February 2002.

671 See US 11 August 2003 Answer to Question 38, para 81.

672 Brazil’s 22 August 2003 Rebuttal Submission, para. 14-16.

673 Brazil’s 11 February 2004 Comments, paras. 7-9.

674 New Shorter Oxford Dictionary, Volume II, p. 3152 (first definition).

675 US 11 February 2004 Comments, paras. 11-14.

676 Brazil disagrees with the US interpretation, as set out in Section 2.2, infra.

677 Brazil’s 11 August 2003 Answer to Question 42, paras. 59-60.

678 US 11 February 2004 Comments, para 36 (arguing that “support to a specific commodity” really means “product-specific support”).

679 US 11 August 2003 Answers to Question 38, para. 81.

680 Brazil’s 11 August 2003 Answers to Questions 40-41; Brazil’s 11 August 2003 Rebuttal Submission, paras. 24-52.

681 Brazil’s 11 August 2003 Answers to Questions 40-41; Brazil’s 22 August 2003 Rebuttal Submission, para. 19.

682 US 11 February 2004 Comments, paras. 11-14.

683 US 11 February 2004 Comments, paras. 11, 14.

684 The text of the alleged “concession” made by Brazil is “In sum, Brazil maintains its position – supported by all third parties – that the support from contract payments that can be allocated to upland cotton is product-specific support within the meaning of the Agreement on Agriculture.” What the United State neglects to note in its “concession” assertion is that Brazil then cited to its 22 August 2003 Rebuttal Submission, paras. 3-23 and 24-52, where Brazil argued exactly the same position it has set forth in these comments. Therefore, there was no “concession” or otherwise by Brazil.

685 Brazil’s 22 August 2003 Rebuttal Submission, paras. 13-22. Brazil’s 22 July 2003 Oral Statement, paras. 13-26. Brazil’s 24 July 2003 Closing Statement, para. 8.

686 Brazil’s 22 August 2003 Rebuttal Submission, paras. 13-52. Brazil’s 22 August 2003 Comments on US Answers to Questions 38-39, paras. 48-53, Question 43, para. 58.

687 US 11 February 2004 Comments, paras 11 and 36 (“the definitions of product-specific support and non-product specific support (and their application in the Agreement on Agriculture) do not permit any such allocation … ”.).

688 Brazil's 11 August 2003 Answers to Questions 40-41.

689 US 11 February 2004 Comments, para. 10.

690 New Shorter Oxford Dictionary, Volume I, p. 1073 (definitions 1, 3, 4).

691 Brazil’s 22 August 2003 Rebuttal Submission, paras. 17-18 (illustrating that many non-green box measures considered as “product-specific” support do not contain “tied-to” production requirements). The United States never rebutted this argument.

692 See New Zealand’s 11 August 2003 Answer to Third Party Question 15; Argentina’s 11 August 2003 Answer to Third Party Question 15 and 23 July 2003 Oral Statement, para. 8; EC’s 11 August 2003 Answer to Third Party Question 15 See also Exhibit Bra-144 (G/AG/R/31, paras. 29-32).

693 US 11 February 2004 Comments, para. 12.

694 US 22 August 2003 Rebuttal Submission, paras. 86-88.

695 Brazil’s 11 August 2003 Answers to Question 44, paragraph 62 (first and next to last bullets).

696 See New Zealand’s 11 August 2003 Answer to Third Party Question 15; Argentina’s 11 August 2003 Answer to Third Party Question 15 and 23 July 2003 Oral Statement, para. 8; EC’s 11 August 2003 Answer to Third Party Question 15 See also Exhibit Bra-144 (G/AG/R/31, paras. 29-32).

697 US 11 February 2004 Comments, paras. 13-14.

698 The Panel would not be able to count these programmes for purposes of Article 13(b)(ii) unless they are out of the green box, and thus, “non-green box” support.

699 See e.g. Brazil’s 24 June 2003 First Submission, Section 3.2.7 and 3.2.8; Brazil’s 22 August 2003 Rebuttal Submission, Section 2.1.

700 See US 11 February 2004 Comments, para. 37-38.

701 Brazil’s 9 October 2003 Closing Statement, Annex I (Summary of Evidence Demonstrating that Upland Cotton Producers in MY 1999-2002 Produced Upland Cotton on Upland Cotton, Rice, or Peanut Base Acreage); see also Brazil’s 27 October 2003 Answers to Question 125(a), paras. 7-25; Brazil’s 18 November 2003 Further Rebuttal Submission, Sections 2.1 and 3.1; Brazil’s 2 December 2003 Oral Statement, paras. 25-27.

702 See Annex A, Section 1, para. 16. This figure might be slightly overstated by possible aggregation problems. However, Brazil notes that the total amount of upland cotton base on farms planting upland cotton and holding upland cotton base exceeds MY 2002 plantings by 800,000 (13.8 million acres v 13 million acres), suggesting that any aggregation problem for MY 2002 is not significant.

703 Brazil’s 2 December 2003 Oral Statement, paras 25-27 and Exhibit Bra-353.

704 Brazil’s 22 August 2003 Rebuttal Submission, paras. 39-41.

705 Brazil’s 18 November 2003 Further Rebuttal Submission, para. 70 and Exhibit Bra-324 (NCC Chairman’s Report by Kenneth Hood, 24 July 2002, p. 2)..

706 See Brazil’s 9 September 2003 Further Submission, para. 344 and Exhibit Bra-109 (Testimony (Full) of Robert McLendon, Chairman, NCC Executive Committee, before the House Agriculture Committee, National Cotton Council, p. 5-7) arguing for higher upland cotton loan rates and “decoupled commodity payment rate[s].”

707 See Annex A, Section 1, Table 1.5. See Table 3.8 for the total value of the upland cotton crop on all farms producing upland cotton.

708 See Annex A, Section 1, Table 1.5. See Table 3.8 for the total value of the upland cotton crop on all farms producing upland cotton.

709 See Brazil’s 27 October 2003 Answers to Questions, paras. 35-36; Brazil’s 18 November 2003 Further Rebuttal Submission, paras. 81-88.

710 Brazil’s 9 October 2003 Closing Statement, Annex I (Summary of Evidence Demonstrating that Upland Cotton Producers in MY 1999-2002 Produced Upland Cotton on Upland Cotton, Rice, or Peanut Base Acreage, paras. 9-12.

711 Exhibits Bra-3, 108, 109, 111 and 252. Brazil’s 9 October 2003 Closing Statement, Annex I (Summary of Evidence Demonstrating that Upland Cotton Producers in MY 1999-2002 Produced Upland Cotton on Upland Cotton, Rice, or Peanut Base Acreage, paras. 14-19.

712 See Exhibit Bra-29 (2002 FSRI Act).

713 US 11 February 2004 Comments, para. 37.

714 Brazil’s 27 October 2003 Answers to Questions, paras. 35-36

715 Without contract payments, US producers would have lost $332.79 per acre over the 6-year period. Brazil’s 2 December 2003 Oral Statement, paras. 25-27 and Exhibit Bra-353.

716 Brazil’s 24 June 2003 First Submission, para. 1.

717 See Annex A.2, Tables 2.9, 2.21 and 2.21.

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