World Trade Organization
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interim reviewOn 25 February 1999, both parties requested the Panel to review, in accordance with Article 15.2 of the DSU, precise aspects of the interim report issued on 17 February 1999. While neither party requested an additional meeting with the Panel, both parties provided written replies to certain of one another's comments. A. COMMENTS BY BRAZIL Brazil identified a number of typographical errors in the interim report, which have been corrected by the Panel. Regarding para. 9.85, Brazil commented that the Panel initially overlooked Brazil's reaction to Canada's argument set forth in para. 9.84. We amended para. 9.85 accordingly. Brazil commented that, at para. 9.199, the Panel has mischaracterized its statements regarding EDC equity infusions. With reference to para. 59 of its oral statement at the second substantive meeting (see para. 6.136 above), Brazil denies that it considers the fact that CRJ Capital purchases and/or leases aircraft to be an "essential element" of its claim. We have amended the final sentence of para. 9.199, in order to clarify that it is the Panel's understanding that the fact that CRJ Capital allegedly purchases and/or leases aircraft is an "essential element" of Brazil's claim regarding EDC equity financing. The Panel's understanding is based on Brazil's submissions throughout the Panel process, in which Brazil repeatedly argued that EDC equity infusions confer a "benefit" because they enable CRJ Capital (which, as indicated at note 233 above, Brazil treats as a Special Purpose Company) to offer airlines lower lease payments than would be available on the market. Brazil's repetition of the factual basis for this argument is reflected inter alia at paras. 6.103, 6.105, 6.106, 6.108, 6.109, 6.110, 6.111, 6.114, 6.116 and 6.135 above. The only reference by Brazil to EDC equity infusions conferring a "benefit" through lower loan payments was included at para. 59 of its oral statement at the second substantive meeting (see para. 6.136 above). We note, however, that at para. 57 of the very same oral statement (see para. 6.135 above), Brazil asserted: Brazil's claim is that EDC, directly or indirectly, has made equity infusions into CRJ Capital which have facilitated CRJ Capital's ability to lease or sell Canadian regional aircraft at a reduced price." (italics in original, bold emphasis supplied) For these reasons, and especially in light of Brazil's own description of its claim at para. 6.135 above, we believe that we have correctly identified the fact that CRJ Capital allegedly purchases and/or leases aircraft as an "essential element" of Brazil's claim regarding EDC equity infusions. With regard to paras. 9.220-9.224, Brazil commented that the Panel could include an additional source as further support for its conclusions regarding Canada Account debt financing. Brazil refers in particular to the Canada Account Profile, which states that a portion of Canada Account financing is extended on "concessional" terms. Brazil asserts that the Canada Account Profile defines "concessional" to include "interest-free or low-interest loans repayable over extended periods." Canada replied that Canada Account "concessional" financing falls outside the Panel's jurisdiction, because it has not been used in respect of civil aircraft since 1995. Canada referred to its argument at para. 6.164 above in this regard. In the present instance, the Panel was required to determine whether or not the Canada Account debt financing in issue constitutes a "subsidy" within the meaning of Article 1.1 of the SCM Agreement. Whether or not such debt financing is "concessional" within the meaning of the Canada Account Profile is of no relevance to the Panel's findings. For this reason, we have not made the change requested by Brazil. B. COMMENTS BY CANADA Canada suggested a number of changes to the Panel's description of its arguments. To the extent that Canada indicated the source for these changes, they have been made by the Panel. Canada also made a comment on the relevance of certain text in para. 4.126, without requesting any specific changes in this regard. In addition, Canada identified a number of typographical errors in the interim report, which have been corrected by the Panel. At the request of Canada, we included the phrase ",on 21 December 1998," in the second sentence of para. 9.64. At the request of Canada, we included the phrase "as well as one from Exinvest" in the last sentence of para. 9.193, and pluralized "Officer's Certificates" in para. 9.194. With regard to para. 9.246, we clarified our finding that there is no prima facie case that the sale by the OAC of its 49 percent share in de Havilland to Bombardier in 1997 constitutes a prohibited export subsidy. In respect of para. 9.253, Canada requested changes to the description of Canada's reaction to the Panel's request for information. Brazil objected to Canada's request, stating that the Panel's text "accurately describe[d] the purported rationale supporting Canada's refusal to comply with the Panel's request for information. … Moreover, to adopt the modifications … advocated by Canada would result in an inaccurate description of Brazil's position." In order to avoid any uncertainty, the Panel included at para. 9.253 the full text of Canada's response to the Panel's request, and at para. 9.254 the full text of Brazil's comment on Canada's response. At the request of Canada, we included in para. 9.289 Canada's argument that royalties can be tied "to total sales of the recipient enterprise." With regard to para. 9.290, Canada asked the Panel to include an additional element in its description of Canada's argument against reliance on the latest WTO Trade Policy Review of Canada. Brazil objected to Canada's request. The Panel's views on the relevance of the latest WTO Trade Policy Review of Canada are set forth at para. 9.274. None of the Panel's findings are based on the latest WTO Trade Policy Review. Since the Panel attaches no importance to this Trade Policy Review, and since Canada's specific argument on this issue is in any event set forth in full at para. 6.199 above, we do not consider it necessary to make the change requested by Canada. Directory: english -> tratop e -> dispu e dispu e -> Annex g list of exhibits submitted by the parties dispu e -> World Trade Organization dispu e -> Annex a submissions of Brazil Download 1.34 Mb. Share with your friends:
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