[Federal Register Volume 69, Number 120 (Wednesday, June 23, 2004)]
[Notices]
[Pages 35121-35122]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-14239]


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OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE

[Docket No. WTO/DS-308]


WTO Dispute Settlement Proceeding Regarding Mexico--Tax Measures 
on Soft Drinks and Other Beverages

AGENCY: Office of the United States Trade Representative.

ACTION: Notice; request for comments.

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SUMMARY: The Office of the United States Trade Representative (USTR) is 
providing notice that on June 10, 2004, in accordance with the 
Marrakesh Agreement Establishing the World Trade Organization (WTO 
Agreement), the United States requested the establishment of a dispute 
settlement panel regarding Mexico's tax measures on soft drinks and 
other beverages as well as on syrups, concentrates, powders, essences 
or extracts that can be diluted to produce such products (hereinafter 
``beverages and syrups'') that use any sweetener other than cane sugar.
    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 July 30, 2004 to be assured of timely 
consideration by USTR.

ADDRESSES: Comments should be submitted (i) electronically, to 
[email protected], with ``Mexico Soft Drinks (DS308)'' in the subject 
line, or (ii) by fax, to Sandy McKinzy at (202) 395-3640, with a 
confirmation copy sent electronically to the electronic mail address 
above, in accordance with the requirements for submission set out 
below.

FOR FURTHER INFORMATION CONTACT: Amy Karpel, Assistant General Counsel, 
Office of the United States Trade Representative, 600 17th Street, NW., 
Washington, DC, (202) 395-5804.

SUPPLEMENTARY INFORMATION: Section 127(b) of the Uruguay Round 
Agreements Act (URAA) (19 U.S.C. 3537(b)(1)) requires that notice and 
opportunity for comment be provided after the United States submits or 
receives a request for the establishment of a WTO dispute settlement 
panel. Consistent with this obligation, USTR is providing notice that 
the United States requested establishment of a panel pursuant to the 
WTO Dispute Settlement Understanding (DSU). If a dispute settlement 
panel is established pursuant to the DSU, such panel, which would hold 
its meetings in Geneva, Switzerland, would be expected to issue a 
report on its findings and recommendations within six to nine months 
after it is established.

Major Issues Raised by the United States

    On June 10, 2004, the United States requested the establishment of 
a panel regarding Mexico's tax measures on beverages and syrups that 
use any sweetener other than cane sugar. Those measures include:
    (1) Law on the Special Tax on Production and Services (Ley del 
Impuesto Especial sobre Produccion y Servicios or ``IEPS'') published 
on January 1, 2002 and its subsequent amendments published on December 
30, 2002 and December 31, 2003; and
    (2) any related or implementing measures, including the Reglamento 
de la Ley del Impesto Especial sobre Produccion y Servicios published 
on May 15, 1990, the Resolucion Miscelanea Fiscal Para 2004 (Title 6) 
published on April 30, 2004, and the Resolucion Miscelanea Fiscal Para 
2003 (Title 6) published on March 31, 2003 which identify, inter alia, 
details on the scope, calculation, payment and bookkeeping and 
recording requirements of the IEPS.
    Mexico's tax measures impose a 20 percent tax on beverages and 
syrups that use sweeteners other than cane sugar. Mexico's tax measures 
also impose a 20 percent tax on services related to the transfer of 
beverages and syrups, including the commissioning, mediation, agency, 
representation, brokerage, consignment and distribution of such 
products. Beverages and syrups sweetened only with cane sugar, and 
services related to their transfer, are not

[[Page 35122]]

subject to these measures. Mexico's tax measures also impose several 
bookkeeping and reporting requirements on beverages and syrups, and 
services related to the transfer of such products, that are not 
similarly imposed on beverages and syrups sweetened only with cane 
sugar, or on services related to the transfer of beverages and syrups 
sweetened only with cane sugar .
    The United States considers that Mexico's tax measures discriminate 
against imported sweeteners other than cane sugar (including high-
fructose corn syrup (``HFCS'')), and imported beverages and syrups made 
with such sweeteners, because Mexico's tax measures do not apply to 
cane sugar, or beverages and syrups made solely with cane sugar. The 
United States considers imported sweeteners other than cane sugar, and 
imported beverages and syrups made with such sweeteners, including HFCS 
and beverages and syrups made with HFCS, to be like and directly 
competitive or substitutable with Mexican cane sugar and beverages and 
syrups made with Mexican cane sugar.
    USTR believes the tax measures are inconsistent with Mexico's 
national treatment obligations under Article III of the GATT 1994, in 
particular GATT 1994 Article III:2, first and second sentences, and 
GATT 1994 Article III:4.

Public Comment: Requirements for Submissions

    Interested persons are invited to submit written comments 
concerning the issues raised in the dispute. Comments should be 
submitted (i) electronically, to [email protected], with ``Mexico Soft 
Drinks (DS308)'' in the subject line, or (ii) by fax, to Sandy McKinzy 
at (202) 395-3640, with a confirmation copy sent electronically to the 
electronic mail address above.
    USTR encourages the submission of documents in Adobe PDF format, as 
attachments to an electronic mail. Interested persons who make 
submissions by electronic mail should not provide separate cover 
letters; information that might appear in a cover letter should be 
included in the submission itself. Similarly, to the extent possible, 
any attachments to the submission should be included in the same file 
as the submission itself, and not as separate files.
    Comments must be in English. 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 commenter. Confidential business information must be 
clearly designated as such and ``BUSINESS CONFIDENTIAL'' must be marked 
at the top and bottom of the cover page and each succeeding page.
    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) Is encouraged to provide a non-confidential summary of the 
information or advice.
    Pursuant to section 127(e) of the URAA (19 U.S.C. 3537(e)), USTR 
will maintain a file on this dispute settlement proceeding, accessible 
to the public, in the USTR Reading Room, which is located at 1724 F 
Street, NW., Washington, DC 20508. 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, the U.S. 
submissions to that panel, the submissions, or non-confidential 
summaries of submissions, to the panel received from other participants 
in the dispute, as well as the report of the panel; and, if applicable, 
the report of the Appellate Body. An appointment to review the public 
file (Docket WTO/DS-308, Mexico Soft Drinks Dispute) may be made by 
calling the USTR Reading Room at (202) 395-6186. The USTR Reading Room 
is open to the public from 9:30 a.m. to noon and 1 p.m. to 4 p.m., 
Monday through Friday.

Bruce R. Hirsh,
Acting Assistant United States Trade Representative for Monitoring and 
Enforcement.
[FR Doc. 04-14239 Filed 6-22-04; 8:45 am]
BILLING CODE 3190-W4-P