9:46 AM Jun 6, 1996

US SEEKS PANEL ON PERIODICALS DISPUTE WITH CANADA

Geneva 6 Jun (TWN) -- The United States brought up Thursday before the WTO's Dispute Settlement Body (DSB) its dispute with Canada over some restrictions Canada has on imported periodicals and sought the establishment of a panel.

The US which raised the dispute in the WTO on 11 March, came up with a panel request following the failure of bilateral consultations with Canada on 10 April.

This being the first time the request has come before the DSB, Canada was able to block the panel. The request will come up at the next meeting of the DSB on 19 June when it will be automatically established.

The trade spat between the two neighbours relates to some of the major US magazines, printed in the United States, but with Canadian supplement inserts and Canadian advertisements -- the socalled 'split-run' periodicals.

But the way dispute will be settled may have implications for other countries.

As spelt out by the US, the Canadian restrictions on imported periodicals include prohibition of import into Canada of some periodicals, levy of an excise tax (through an amendment on 15 Dec 1995 of the Canadian Excise Act) on split-run periodicals, and favourable postal rates provided to some Canadian periodicals, through actions of the Canada Post Corporation and the Department of Canadian Heritage.

The US contention is that the prohibition or restriction of imported periodicals is contrary to the Canadian obligations under Article XI of the GATT (elimination of all quota restrictions), and the requirements of Article II (equal treatment between domestic and imported products).

The US representative, Legal attache Andrew Shoyer, told the DSB that the Canadian action was discriminatory and contrary to its GATT obligations.

The Canadian Ambassador, Mr. John Weekes said that the "cultural" measures (being complained about) in the magazine sector reflected long-standing principles and practices in his country and there were no market restrictions on the availability of foreign magazines. Over 80 percent of all English magazines sold in Canada were non-Canadian and 90% of this 80% were magazines coming from the United States. Over 450 US magazines were on sale in Canadian news stalls.