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<title>WTO APPELLATE BODY ISSUES REPORT ON AUTOPACT</title>
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<p><font face="Arial" size="+1"></font><font face="Arial" size="+1"><strong>May 31, 2000 <em>(12:40 p.m. EDT)</em> No. 126</strong></font></p>
<p align="CENTER"><font face="Arial" size="+1"><strong>WTO APPELLATE BODY ISSUES REPORT ON AUTOPACT</strong></font></p>
<p>International Trade Minister Pierre Pettigrew and Industry Minister John Manley announced
today that the World Trade Organization (WTO) Appellate Body has confirmed that the Auto
Pact measures are inconsistent with Canada's WTO obligations under the General Agreement on
Tariffs and Trade and the Agreement on Subsidies and Countervailing Measures. </p>
<p>The Appellate Body, however, agreed with Canada that a WTO dispute settlement panel was not
justified in finding that Canada had violated its most-favoured-nation (MFN) obligation under the
General Agreement on Trade in Services. This reverses the panel's earlier finding.</p>
<p>"We will need to examine the Appellate Body report carefully before making any decisions on
implementation," said Mr. Pettigrew. "We will continue our consultations with the provinces and
industry stakeholders, as we have been doing. Canada will honour its WTO obligations."</p>
<p>The Ministers noted that Canada`s auto sector is strong, internationally competitive and highly
productive for reasons independent of the Auto Pact. The Ministers remain confident that this
sector will continue to perform strongly. </p>
<p>The Appellate Body's report was circulated to all WTO members and made public today. The
report will likely be adopted by the WTO Dispute Settlement Body in June. Canada will have to
indicate to the WTO its intentions with respect to implementation within 30 days of adoption. </p>
<p>The WTO panel was established in February 1999 to examine complaints from Japan and the
European Union (EU) that Canadian measures according certain motor vehicle manufacturers an
exemption from the applicable 6.1 percent duty on imported vehicles constitute a violation of
Canada's WTO obligations. </p>
<p>- 30 -</p>
<p>A backgrounder is attached.</p>
<p>For further information, media representatives may contact:</p>
<p>Sylvie Bussières</p>
<p>Office of the Minister for International Trade</p>
<p>(613) 992-7332</p>
<p>Media Relations Office</p>
<p>Department of Foreign Affairs and International Trade</p>
<p>(613) 995-1874</p>
<p><font face="Arial"></font><font face="Arial">Jennifer Sloan</font></p>
<p><font face="Arial">Office of the Minister of Industry</font></p>
<p><font face="Arial">(613) 995-9001</font></p>
<p><font face="Arial">This document is also available on the Department of Foreign Affairs and International
Trade's Internet site: <a href="https://bac-lac.wayback.archive-it.org/web/20061209063051/http://www.dfait-maeci.gc.ca/">http://www.dfait-maeci.gc.ca</font><font size="+1"></a></font></p>
<p><font size="+1"><strong>Backgrounder</strong></font></p>
<p><font size="+1"><strong>CHRONOLOGY OF THE CANADA-JAPAN/EU WTO AUTOS DISPUTE</strong></font></p>
<p>July 1998 Japan requests WTO consultations on certain Canadian measures implementing the
Auto Pact</p>
<p>August 1998 EU requests WTO consultations on certain Canadian measures implementing the
Auto Pact</p>
<p>August 1998 Consultations with Japan</p>
<p>September 1998 Consultations with the EU</p>
<p>November 1998 Second set of consultations with the EU</p>
<p>February 1, 1999 WTO dispute settlement panel established to examine complaints of Japan and
the EU. The United States, Korea and India reserve their rights to participate as third parties.</p>
<p>May 4, 1999 Japan and the EU present their first written submissions</p>
<p>June 1, 1999 Canada presents its counter-submission</p>
<p>June 14-15, 1999 First oral hearing. Third parties (U.S., India and Korea) file their submissions</p>
<p>July 2, 1999 Canada, Japan and the EU file their second written submissions</p>
<p>July 13-14, 1999 Second set of oral hearings</p>
<p>August 6, 1999 Descriptive part of the report released to Parties (Canada, Japan, EU) </p>
<p>October 13, 1999 Interim panel report circulated to Parties</p>
<p>October 27, 1999 Deadline for Parties to comment on "precise aspects" of interim panel report</p>
<p>December 22, 1999 Final panel report circulated to Parties</p>
<p>February 11, 2000 Final panel report circulated to other WTO members</p>
<p>March 2, 2000 Notice of Appeal filed by Canada</p>
<p>April 6-7, 2000 Hearing before the Appellate Body</p>
<p>May 31, 2000 Appellate Body report circulated to all WTO members</p>
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