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16 February 2009

To be published in the Federal Register on February 17, 2009.

http://www.federalregister.gov/OFRUpload/OFRData/2009-03293_PI.pdf

    [BILLING CODE 3190-W9-P]

    OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE
    [Docket No. WTO/DS387]

    WTO Dispute Settlement Proceeding Regarding China – Grants, Loans and Other
    Incentives

    AGENCY: Office of the United States Trade Representative.

    ACTION: Notice; request for comments.

    SUMMARY: The Office of the United States Trade Representative (“USTR”) is providing
    notice that on December 19, 2008, in accordance with the Marrakesh Agreement Establishing the
    World Trade Organization (“WTO Agreement”), the United States requested consultations
    regarding certain measures granting offering grants, loans, and other incentives to enterprises in
    China. That request may be found at www.wto.org contained in a document designated as
    WT/DS387/1. USTR invites written comments from the public concerning the issues raised in
    this dispute.

    DATES: Although USTR will accept any comments received during the course of the dispute
    settlement proceedings, comments should be submitted on or before March 16, 2009 to be
    assured of timely consideration by USTR.

    ADDRESSES: Comments should be submitted electronically to www.regulations.gov, docket
    number USTR-2009-0003. If you are unable to provide submissions by www.regulations.gov,
    please contact Sandy McKinzy at (202) 395-9483 to arrange for an alternative method of
    transmission. If (as explained below), the comment contains confidential information, then the
    comment should be submitted by fax only to Sandy McKinzy at (202)395-3640.

    FOR FURTHER INFORMATION CONTACT: Joseph A. Laroski Jr., Assistant General
    Counsel, Office of the United States Trade Representative, 600 17th Street, N.W., Washington,
    D.C. 20508, (202) 395-7310.

    SUPPLEMENTARY INFORMATION: On December19, 2008, the United States requested
    consultations regarding certain measures offering grants, loans, and other incentives to
    enterprises in China, apparently in part to implement an industrial policy of promoting the
    development of global Chinese brand names, and to increase sales of Chinese- branded and other
    Chinese merchandise around the world. The U.S. consultation request addresses two central
    government famous Chinese brand programs, and numerous sub-central government measures
    implementing these programs. At the central government level, China established the “Famous
    Export Brand” program and the “China World Top Brand” program. These measures set out
    criteria for an enterprise to receive a designation by the Ministry of Commerce (MOFCOM) as a
    “Famous Export Brand” or a designation by the Administration of Quality Supervision,
    Inspection and Quarantine (AQSIQ) as a “China World Top Brand.” Enterprises with these
    designations are entitled to various government preferences, including, it appears, financial
    support tied to exports. The U.S. consultation request also addresses several independent sub-
    central government subsidy programs that appear to benefit Chinese exports.

    A. These grants, loans, and other incentives are reflected in the following measures, as well
    as any amendments and any related or implementing measures:

    The instruments below, which relate to the China World Top Brand Program:

    1. Circular on Carrying Out Evaluation of Products to Be Recognized as China World Top
    Brand;

    2. Circular on Application of China World Top Brands in 2006;

    3. Circular on Application of China World Top Brands in 2008;

    4. Measures for the Administration of Chinese Name-Brand Products;

    5. Notice Concerning the Issuing of Opinions on Promoting the Brand-Driven Strategy &
    Its Incentive Measures;

    6. Notices Concerning Printing and Distributing the Implementation Regulation on
    Economic Development Fund Supporting Industrial Technology Progress in Futian District
    Shenzhen;

    7. Notices of Gansu Provincial People's Government Concerning Printing and Distributing
    Incentive Methods for Enterprises Entitled with Famous Brand Products in Gansu Province;

    8. Notice on Methods of Implementing Brand Praise and Incentive for Industrial Enterprises
    in Guangxi Zhuang Autonomous Region;

    9. Several Related Policies on Implementation of Guiyang's Science and Technology
    Development Planning During the "Eleventh Five-Year Plan" (2006-2010);

    10. Opinions of the Party Committee and People's Government of Jinhua City on Promoting
    the Building of "Jinhua Brand;"

    11. Circular of Jiujiang Municipal People's Government on Adjusting and Enriching the
    Incentive Policy for Creating a City of Brand;

    12. Circular on Printing and Distributing the Method of Nanhai District, Foshan City for
    Supporting and Awarding Independent Innovation, Brand Drive and Enterprise IPO;

    13. Opinions of Nanping Municipal People's Government on Supporting Development of
    Key Industrial Enterprise;

    14. Opinions on Promoting Fast and Healthy Development of Characteristic Manufacturing
    Industry through Implementing Industrial Upgrading Projects ;

    15. Circular of Sichuan Provincial People's Government on Printing and Distributing the
    "Opinions on Forcefully Pressing Ahead Industrial Brands Strategy in Sichuan;"

    16. Circular on Forwarding the Detailed Reward Rules for the Strategy of Drive with Top
    Brands in Suzhou City;

    17. Circular on Forwarding the Policy Measures for Pushing on the Strategy of Drive with
    Top Brands;

    18. Notice Issued by the Office of Wenzhou Municipal Government for the Distribution of
    Quality & Branding Award Management Measures in Wenzhou;

    19. Opinions of Wuyi County Party Committee and People's Government on Further
    Encouraging and Promoting the Development of SMEs;

    20. Notices Concerning Printing and Distributing the Implementing Regulations Issued by
    the Bureau of Finance and the Economic Development Administration of Xiamen to Support the
    Development of High Quality Well-Known Products in Xiamen;

    21. Suggestions on Supporting Key Industrial Enterprises Issued by the People's Government
    of Yandu District, Yancheng City;

    22. Suggestions on Accelerating the Implementation of Brand Strategy;

    23. Circular on Ensuring Proper Use and Management of Guangdong Brand Development
    Fund; and

    24. Notice of Issuing the Directive on Supporting the Development of Name Brands for
    Export.

    The instruments below, which relate to the Chinese Famous Export Brand Program:

    1. Circular of the General Office of the State Bureau of Quality Supervision, Inspection and
    Quarantine for Issuing the "Measures for the Control of Evaluation of Chinese Famous-Brand
    Products (for Trial Implementation);"

    2. Notice of General Office of Ministry of Commerce Concerning Recommending
    Candidates of "Chinese Export Famous Brands ;"

    3. Notice of Issuing the Directive on Supporting the Development of Name Brands for
    Export;

    4. Circular of Changxing County People's Government on Further Promoting Foreign Trade
    Development;

    5. Opinions of Deqing County People's Government on Strengthening the Building of
    Advanced Manufacturing Bases;

    6. Circular on Printing and Distributing the Policy Opinions for Accelerating Innovative
    Development of Industrial Economy;

    7. Notice Concerning the Issuing of Opinions on Promoting the Brand-Driven Strategy &
    Its Incentive Measures;

    8. Circular on Printing and Distributing the "Provisional Regulation on the Use of Fujian
    Export Brand Development Fund;"

    9. Circular of the Foreign Trade and Economic Cooperation Department of Fujian Province
    on Recommending Candidate Enterprise for the 2008-2009 "Famous Export Brands the Foreign
    Trade and Economic Cooperation Department of Fujian Province Mainly Cultivates and
    Develops [Foreign Trade and Economic Cooperation Department of Fujian Province];

    10. Circular on Printing and Distributing the Opinions on Recognizing "Famous Export
    Brands the Foreign Trade and Economic Cooperation Department of Guangdong Province
    Mainly Cultivates and Develops;"

    11. Suggestions on the "Export Brands Particularly Cultivated and Developed by the
    Department of Foreign Trade and Economic Cooperation Department of Guangdong Province"
    (Revised Edition);

    12. Notices Concerning Alternative Name List Supplementary to the Export Brands
    Particularly Cultivated and Developed by the Department of Foreign Trade and Economic
    Cooperation of Guangdong Province;

    13. Circular on Ensuring Proper Use and Management of Guangdong Brand Development
    Fund;

    14. Notice Regarding Support Policies to Promote the Development of Our City's Foreign
    Trade and Economic Cooperation for 2005;

    15. Notice of the Administrative Office of the Hangzhou Municipal People's Government on
    Revision of the Evaluation and Selection Requirements and Award Measures for the"Golden
    Dragon Awards" in Hangzhou's Foreign Trade Export;

    16. Directives of the Administrative Office of the Hangzhou Municipal People's Government
    on Promoting the Development of Independent Export Brands;

    17. Circular of the Provincial Department of Commerce, Development and Reform
    Commission, Economic Commission, Department of Finance, Department of Science and
    Technology, Bureau of State Tax, Administration for Industry and Commerce, Bureau of Quality
    and Technical Supervision, and Entry-Exit Inspection and Quarantine Bureau of Heilongjiang
    Province and Harbin Customs on Printing and Distributing the "Guiding Opinions of
    Heilongjiang Province on Supporting the Development of Famous Export Brands;

    18. Circular on Printing and Distributing the Newly Revised "Method for Selection of Henan
    Famous Export Brands;"

    19. Guiding Opinions on Supporting the Development of Henan (Famous) Export Brands in
    the "11th Five-Year Plan" Period;

    20. Notice Regarding Selection of 2007-2008 "Jiangsu Province Export Brands for Focused
    Cultivation and Development;"

    21. Opinion on Promoting Better and Quicker Development of Private Economy;

    22. Opinion of the Party Committee and People's Government of Jinhua City on Promoting
    the Building of "Jinhua Brand"

    23. Opinions of Jindong District Party Committee and People's Government of Jinhua City
    on Accelerating Industrial and Export-Oriented Economic Development;

    24. Circular of Jiujiang Municipal People's Government on Adjusting and Enriching the
    Incentive Policy for Creating a City of Brand;

    25. Circular on Printing and Distributing the Method of Nanhai District, Foshan City for
    Supporting and Awarding Independent Innovation, Brand Drive and Enterprise IPO;

    26. Notice of the Department of Commerce and Department of Finance of Ningxia Hui
    Autonomous Region on Printing and Issuing the Administrative Measures of Ningxia Hui
    Autonomous Region for the Awarding and Promoting of Brand Export Commodities;

    27. Notice of the People's Government of Quanzhou Fengze District on Issuing Regulations
    Concerning the Support to Key Enterprises;

    28. Opinion on Promoting Fast and Healthy Development of Characteristic Manufacturing
    Industry through Implementing Industrial Upgrading Projects;

    29. Notice on Printing and Distribution of 2006 Policies for Encouraging the Development of
    Foreign Trade & Economic Cooperation in Shandong;

    30. Opinions of Shaoxing Municipal People's Government on Further Encouraging the
    Development of Open Economy in Urban Areas;

    31. Circular of Sichuan Provincial People's Government on Printing and Distributing the
    "Opinions on Forcefully Pressing Ahead Industrial Brands Strategy in Sichuan ;"

    32. Circular on Forwarding the Detailed Reward Rules for the Strategy of Drive with Top
    Brands in Suzhou City;

    33. Circular on Forwarding the Policy Measures for Pushing on the Strategy of Drive with
    Top Brands;

    34. Circular on Forwarding the Opinions of Foreign Trade Office of Tianjin Municipal
    Government on Accelerating Development of Proprietary Export Brands of Tianjin City;

    35. Circular of Wuxing District People's Government of Huzhou City on Further
    Encouraging Foreign Trade Development;

    36. Opinion of Wuyi County Party Committee and People's Government on Further
    Encouraging and Promoting the Development of SMEs;

    37. Measures for Managing Xiamen 's Key Export Enterprise Assistance Fund;

    38. Notice from the Xiamen Trade Development Bureau and the Xiamen Finance Bureau on
    the publishing of Measures for Managing Xiamen's Key Export Enterprise Assistance Fund
    Implementation Plan;

    39. CPC Committee of Yinzhou District, Ningbo City People's Government of Yinzhou
    District, Ningbo City Opinions on Promoting Economic Development of Yinzhou District;

    40. Notices on Publication of Interim Procedures on Management of Zhejiang Province
    Export Brands Fund;

    41. Notice Concerning Relevant Policies on Promotion of Foreign Trade & Economic
    Development in 2005;

    42. Suggestions on Accelerating the Implementation of Brand Strategy;

    43. Notice Issued by the Office of Wenzhou Municipal Government for the Distribution of
    Quality & Branding Award Management Measures in Wenzhou;

    44. Opinions on Accelerating Open Economy of Organizations Directly Under Municipal
    Government;

    45. Opinion of Nanping Municipal People's Government on Supporting Development of Key
    Industrial Enterprises;

    46. Circular on Printing and Distributing the Interim Measures of Yangzhou City for
    Administration of the Incentive Fund for Famous-brand Export Products;

    47. Implementing Rules of Support Policies for Patented Brands of Service Outsourcing
    Companies by Zhabei District;

    48. Notices for Evaluation and Rewards of 2008-2009 Export Brand Particularly Cultivated
    and Developed in Heilongjiang;

    49. Measures for the Administration of Famous-brand (Industrial) Products of Guangdong
    Province;

    50. Measures for the Administration of Famous-Brand (Agricultural) Products of Guangdong
    Province; and

    51. Circular of Ministry of Commerce, China Export & Credit Insurance Corporation
    Concerning Utilizing Export Credit Insurance to Support the Development of Name Brand
    Export.

    The instruments below, which appear to contain independent sub-central government subsidy
    programs:

    1. Notice Regarding Support Policies to Promote the Development of Our City's Foreign
    Trade and Economic Cooperation for 2005;

    2. Opinions of Jindong District Party Committee and People's Government of Jinhua City
    on Accelerating Industrial and Export-Oriented Economic Development;

    3. Opinions of Shaoxing Municipal People's Government on Further Encouraging the
    Development of Open Economy in Urban Areas;

    4. Notice Concerning Relevant Policies on Promotion of Foreign Trade & Economic
    Development in 2005;

    5. Circular of the Provincial Department of Commerce, Development and Reform
    Commission, Economic Commission, Department of Finance, Department of Science and
    Technology, Bureau of State Tax, Administration for Industry and Commerce, Bureau of Quality
    and Technical Supervision, and Entry-Exit Inspection and Quarantine Bureau of Heilongjiang
    Province and Harbin Customs on Printing and Distributing the "Guiding Opinions of
    Heilongjiang Province on Supporting the Development of Famous Export Brands;

    6. Opinions on Accelerating Open Economy of Organizations Directly Under Municipal
    Government;

    7. Circular of Nanchang Municipal People's Government on Printing and Distributing the
    Interim Measures for Administration of Nanchang Foreign Trade Development Fund;

    8. Trial Opinions of Jiangdong District, Ningbo City on Promoting Steady Foreign Trade
    Development;

    9. Opinions of Jiangdong District, Ningbo City on Promoting Steady Foreign Trade
    Development;

    10. 2005 Policies for Encouraging the Development of Foreign Trade & Economic
    Cooperation in Shandong;

    11. Notice on Printing and Distribution of 2006 Policies for Encouraging the Development of
    Foreign Trade & Economic Cooperation in Shandong;

    12. Notice on Printing and Distribution of 2003 Policies for Encouraging and Expanding
    Foreign Trade Export to Shandong;

    13. 2004 Policies for Encouraging the Development of Foreign Trade & Economic
    Cooperation in Shandong;

    14. Circular of Wuxing District People's Government on Further Encouraging the
    Development of Open Economy in Urban Areas;

    15. Measures for Managing Xiamen 's Key Export Enterprise Assistance Fund;

    16. Notice from the Xiamen Trade Development Bureau and the Xiamen Finance Bureau on
    the publishing of Measures for Managing Xiamen's Key Export Enterprise Assistance Fund
    Implementation Plan;

    17. Opinions on Further Accelerating the Development of Open Economy;

    18. CPC Committee of Yinzhou District, Ningbo City People's Government of Yinzhou
    District, Ningbo City Opinions on Promoting Economic Development of Yinzhou District;

    19. Notices on Publication of Interim Procedures on Management of Zhejiang Province
    Export Brands Fund;

    20. Circular on Changxing County People's Government on Further Promoting Foreign
    Trade Development;

    21. Notices Concerning Printing and Distributing the Implementation Regulation on
    Economic Development Fund Supporting Industrial Technology Progress in Futian District
    Shenzhen;

    22. Notice Issued by the Office of Wenzhou Municipal Government for the Distribution of
    Quality & Branding Award Management Measures in Wenzhou;

    23. Notice of the Administrative Office of the Hangzhou Municipal People's Government on
    Revision of the Evaluation and Selection Requirements and Award Measures for the"Golden
    Dragon Awards" in Hangzhou's Foreign Trade Export;

    24. Directives of the Administrative Office of the Hangzhou Municipal People's Government
    on Promoting the Development of Independent Export Brands;

    25. Notice of the People's Government of Quanzhou Fengze District on Issuing Regulations
    Concerning the Support to Key Enterprises;

    26. Notice on Recommending of Alternative Name List for 2005-2006 "Export Brand
    Merchandise in Shanghai;"

    27. Implementing Rules of Support Policies for Patented Brands of Service Outsourcing
    Companies by Zhabei District;

    28. Notice of Shanghai Municipal Commission of Foreign Trade and Economic Cooperation
    for Carrying out Confirmation of 2007-2008 "Export Brands in Shanghai;"

    29. Measures on Promoting the Development of the City OpenEconomy in 2006;

    30. Notices for Evaluation and Rewards of 2008-2009 Export Brand Particularly Cultivated
    and Developed in Heilongjiang;

    31. Notice Regarding Support Policies to Promote the Development of Our City's Foreign
    Trade and Economic Cooperation for 2005; and

    32. Notice Regarding Selection of 2007-2008 "Jiangsu Province Export Brands for Focused
    Cultivation and Development."

    B. The measures referred to in Section A above appear to constitute prohibited subsidies
    under WTO rules. Specifically, they provide grants, loans, and other incentives to enterprises in
    China on the condition that those enterprises meet certain export performance criteria .
    USTR believes that these measures are inconsistent with China’s obligations under Article 3 of
    the Agreement on Subsidies and Countervailing Measures, Articles 3, 9, and 10 of the
    Agreement on Agriculture, paragraph 12.1 of Part I of the Protocol on the Accession of the
    peoples’ Republic of China (“Acession Protocol”), as well as paragraph 1.2 of Part I of its
    Accession Protocol (to the extent that it incorporates paragraph 234 of the Report of the Working
    Party on the Accession of China), which forms part of the terms of accession agreed between
    China and the WTO and is an integral part of the WTO Agreement. Finally, USTR believes that
    the grants, loans, and other incentives are inconsistent with Article III:4 of the GATT 1994 to the
    extent that the measures benefit Chinese-origin products but not imported products.

    Public Comment: Requirements for Submissions

    Interested persons are invited to submit written comments concerning the issues raised in this
    dispute. Persons may submit public comments electronically to www.regulations.gov docket
    number USTR-2009-0003. If you are unable to provide submissions by www.regulations.gov,
    please contact Sandy McKinzy at (202)395-9483 to arrange for an alternative method of
    transmission.

    To submit comments via www.regulations.gov, enter docket number USTR-2009-0003 on the
    home page and click “go”. The site will provide a search-results page listing all documents
    associated with this docket. Find a reference to this notice by selecting “Notice” under
    “Document Type” on the left side of the search-results page, and click on the link entitled “Send
    a Comment or Submission.” (For further information on using the www.regulations.gov
    website, please consult the resources provided on the website by clicking on “How to Use This
    Site” on the left side of the home page.)

    The www.regulations.gov site provides the option of providing comments by filling in a
    “General Comments” field, or by attaching a document. It is expected that most comments will
    be provided in an attached document. If a document is attached, it is sufficient to type “See
    attached” in the “General Comments” field.

    A person requesting that information contained in a comment submitted by that person be treated
    as confidential business information must certify that such information is business confidential
    and would not customarily be released to the public by the submitter. Confidential business
    information must be clearly designated as such and the submission must be marked “BUSINESS
    CONFIDENTIAL” at the top and bottom of the cover page and each succeeding page. Any
    comment containing business confidential information must be submitted by fax to Sandy
    McKinzy at (202) 395-3640. A non-confidential summary of the confidential information must
    be submitted to www.regulations.gov. The non-confidential summary will be placed in the
    docket and open to public inspection.

    Information or advice contained in a comment submitted, other than business confidential
    information, may be determined by USTR to be confidential in accordance with section
    135(g)(2) of the Trade Act of 1974 (19 U.S.C. § 2155(g)(2)). If the submitter believes that
    information or advice may qualify as such, the submitter –

    (1) Must clearly so designate the information or advice;

    (2) Must clearly mark the material as “SUBMITTED IN CONFIDENCE”
    at the top and bottom of the cover page and each succeeding page; and

    (3) Must provide a non-confidential summary of the information or advice.

    Any comment containing confidential information must be submitted by fax to Sandy McKinzy
    at (202) 395-3640. A non-confidential summary of the confidential information must be
    submitted to www.regulations.gov or by fax. The non-confidential summary will be placed in
    the docket and open to public inspection.

    USTR will maintain a docket on this dispute settlement proceeding, accessible to the public. The
    public file will include non-confidential comments received by USTR from the public with
    respect to the dispute; if a dispute settlement panel is convened or in the event of an appeal from
    such a panel, the U.S. submissions, any non-confidential submissions, or non-confidential
    summaries of submissions, received from other participants in the dispute; the report of the
    panel; and, if applicable, the report of the Appellate Body.

    Comments will be placed in the docket and open to public inspection pursuant to 15 CFR
    2006.13, except confidential business information exempt from public inspection in accordance
    with 15 CFR 2006.15 or information determined by USTR to be confidential in accordance with

    19 U.S.C. 2155(g)(2). Comments open to public inspection may be viewed on the
    www.regulations.gov website.

    Daniel Brinza,
    Assistant United States Trade Representative
    for Monitoring and Enforcement

    [FR Doc. 2009-3293 Filed 02/13/2009 at 8:45 am; Publication Date: 02/17/2009]