DEMARCHE REQUEST - U.S. WTO REMANUFACTURING

UNCLAS STATE 036987

SIPDIS

SIPDIS

E.O. 12958: N/A
TAGS: ETRD WTRO ECON
SUBJECT: DEMARCHE REQUEST - U.S. WTO REMANUFACTURING
INITIATIVE


1. This is an action request. See paragraph 2.


2. Summary and Action Request: As part of WTO Doha Round
negotiations, the United States has strongly advocated an
agreement on facilitating international trade in
remanufactured goods. Remanufactured goods are widely used
in industrial, medical, and other applications in many
advanced economies, and offer many advantages to end-users.
In recognition of the importance remanufactured goods trade
has for U.S. exporters and our trading partners, the U.S.
first proposed a WTO negotiating text on trade in
remanufactured goods in February 2007. That text has since
undergone several revisions. Broadening support among WTO
members for the text is essential to meeting our goals for
remanufactured goods as part of any Doha Round agreement.
Therefore, Post is requested to approach host government at
the Econ Counselor or other appropriate level to seek host
government co-sponsorship of the U.S. negotiating text on
trade in remanufactured goods at the WTO.


3. Background on the text for Post's use as needed may be
found in paragraph 5 below. The full negotiating text
(entitled "Reman Negotiating Text") and additional background
materials for this demarche may be downloaded at the
following unclassified State Intranet site. These documents
are available in English, French, and Spanish. Posts may
leave the full negotiating text and other background
materials with host government officials.

To access the unclassified intranet site: go to
http://eb.state.gov/shortcut.cfm/DQS. Documents are listed
in the "WTO Remanufactured Goods Demarche" section.


4. In discussions with host governments, Post may draw as
appropriate from the documents available for download via the
link above, particularly the U.S. concept paper on
remanufacturing (entitled "Reman Concept Paper"),the U.S.
remanufacturing FAQ ("U.S. Reg FAQ"),and the U.S.
illustrative examples of remanufactured goods ("Reman
Examples"). Posts may also draw from the following key
points:

-- Remanufacturing is an increasingly used and relevant
business practice that deserves the WTO's attention due to
its many benefits.

-- Liberalizing trade in remanufactured goods is a win-win
for the economy and the environment. (NOTE: The "Reman
Concept Paper" document spells out in detail many of the
advantages.)

-- The U.S. Remanufacturing Initiative has its roots in the
G8 led 3R process (Reduce, Reuse, Recycle). A 3R Senior
Officials Meeting took place in Bonn, Germany last fall.
Future work on best practices in trade in remanufactured
goods may also be part of the 3Rs agenda for 2008. Most 3R
participants came from environment ministries, and clearly
understood the benefits of remanufacturing. We encourage you
to do reach out to your environment colleagues on this issue.


-- The United States has consulted extensively with Members,
and we believe our proposal for a modest post-Doha work
program on remanufacturing complements efforts many Members
are already undertaking to update their trade policies
related to remanufacturing to reflect its growing importance.
We listened carefully to the concerns and questions we
received from Members on our remanufacturing negotiating
text, and made adjustments to this text to respond to these
concerns (see paragraph 6).

-- We are now at a point in the negotiations where Ministers
will influence which non-tariff barrier negotiating texts
move forward past modalities. Initiatives such as the U.S.
remanufacturing proposal can be an important contribution to
a substantive non-tariff barrier (NTB) package for the Doha
Round.

-- We believe that Members have expressed a sufficient amount
of support for our remanufacturing proposal for text-based
negotiations to begin. In particular, many Members have
supported the view that remanufacturing is an important new
industry, and have indicated interest in the work program we
have proposed. However, some Members continue to have
questions about our proposed definition of a remanufactured
good. They have suggested that negotiations on the
definition be part of the proposed work program.

-- We believe there is time in the months after modalities to
resolve the definition issue. Leaving the definition open
until the work program begins would detract from and could
delay any discussion we would have on measures impacting
trade in remanufactured goods.

-- (For Chile, Singapore, Australia, Costa Rica, Dominican
Republic, El Salvador, Guatemala, Nicaragua, Honduras,
Bahrain, Oman, Peru, South Korea, Colombia, and Panama) As a
current or prospective U.S. FTA partner, your country has
already accepted, is implementing, or plans to implement
similar language to the definition in our negotiating text.

-- We have included "and has a warranty" to the definition in
response to Members' calls for such language. We hope that
this provides Members with greater comfort regarding the
definition. NOTE: This is the only specific drafting
suggestion that we have received from members.

-- Members have asked the United States to indicate which
remanufactured goods the text would cover. As more and more
sectors are adopting remanufacturing as a viable business
practice and global investments in remanufacturing are
increasing, we do not think it would be appropriate to draft
a static list of remanufactured goods.

-- This universe of goods is constantly changing. To
provide Members with more clarity on what we mean by
remanufactured goods, in addition to the definition, we
submitted a document entitled "Illustrative Examples of
Remanufactured Goods" on December 20, 2007.

-- We appreciate the consultations that delegations have done
in the intervening period. It is clear from our subsequent
bilateral discussions that the practice is taking hold in
other countries, as well, and that there is an active debate
within many countries about the important surrounding trade
policy issues that a work program would seek to address.

-- We seek your co-sponsorship of our negotiating text, which
would send a strong signal to other WTO Members that there is
significant support for the text and that text-based
negotiations should begin on this text after modalities have
been reached.

-- If you cannot co-sponsor at this time, we would appreciate
a better understanding of your concerns. If you have
specific concerns with the text and can offer drafting
suggestions, we would be happy to take them into
consideration.


5. In 2007, the United States made great progress in
advancing our remanufacturing initiative at the WTO:

-- On February 28, 2007, we introduced the initial U.S.
negotiating text on trade in remanufactured goods, which
outlined U.S. expectations for discussing remanufacturing
issues after the conclusion of the Doha Round.

-- On March 8, 2007, the United States requested Members
respond to questions designed to help the U.S. and other WTO
Members to gain a better sense of Members' concerns regarding
remanufactured goods. (NOTE: This document is available via
the link in paragraph 3, entitled "U.S. Questions.")

-- On May 3, 2007, in response to requests from Members, we
provided information on how the United States regulates trade
in remanufactured goods, particularly prevention of deceptive
practices, consumer protection, and intellectual property
rights with respect to remanufactured goods. (NOTE: This
document is available via the link in paragraph 3, entitled
"U.S. Reg FAQ.")

-- On September 27, 2007, the United States submitted a
series of bilateral requests of certain Members to eliminate
specific barriers to trade in remanufactured goods. The
United States expects to reach a mutually satisfactory
resolution to these issues as a part of the overall
negotiated outcome of the Doha Round. (NOTE: This document
is available at the link in paragraph 3, entitled "U.S. Reman
Bilateral Requests.")

-- On October 26, 2007, the U.S. submitted a revised
negotiating text on trade in remanufactured goods, and on
December 20, 2007, submitted a second revised text. (NOTE:
This document "Reman Negotiating Text" is available via the
link in paragraph 3.


6. Below is a summary of the key changes the U.S. has made
to the negotiating text in response to Members' concerns:

-- We have made it clear that this proposal is not seeking a
tariff sectoral for remanufactured goods (text para 6 and
footnote 1).

-- We have bracketed the definition of a remanufactured good
(text para. 5) so that Members understand we are willing to
discuss this issue further in the context of this negotiation.

-- We have included "and has a warranty" to this bracketed
definition in response to Members' calls for such language,
and hope that this provides Members with greater comfort
regarding the definition.

-- We have specified a biannual timeframe for Members to
discuss trade in remanufactured goods to provide greater
specificity to the process in the Council for Trade in Goods
(text para. 3).

-- We have clarified that the discussions themselves will
take into account the special needs and interests of
developing and least developed countries. This reflects our
expectation that Members' trade regimes should evolve in a
WTO-consistent manner with respect to trade in remanufactured
goods (text para 3).


7. Please slug responses for USTR (BNorton, CSmothers) and
Commerce (EBrzytwa). State POC for this demarche is Aaron
Scheibe in the Economic, Energy, and Business Affairs
Bureau's Office of Multilateral Trade. Mr. Scheibe may be
contacted at (202) 647-8202 or scheibeap@state.gov.
RICE