List of abbreviations 444 table of cases



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See Exhibit Bra-534 ("ExIm Bank Repetitive Sales Bank-to-Bank Export Credit Insurance Policy", Form EIB 99-10, p. 1, accessed November 2006 at http://www.exim.gov/pub/ins/pdf/eib99-10.pdf) ("The policy covers credit sales in which payment terms range between one and five years (exceptionally 7 years).").


385 See http://www.exim.gov/tools/fee_calc.html.

386 U.S. 2 April answer to question 98, para. 227 (and note 236).

387 Compare figures provided in footnote 236 of U.S. 2 April answer to question 98 with GSM 102 totals recorded in end-of-fiscal-year Monthly Summaries of Export Credit Guarantee Program Activity for FY 2003-FY 2006, provided, respectively, in Exhibits Bra-518, Bra-510, Bra-511 and Bra-523. The March 2007 monthly summary is available at http://www.fas.usda.gov/excredits/Monthly/ecg.html.

388 U.S. 2 April answer to question 98, paras. 229-235.

389 Brazil's First Written Submission, para. 395.

390 The few instances in which GSM 102 fees exceed ExIm Bank LCI or MTI fees does not mean that GSM 102 fees do not confer "benefits" relative to the market. See Brazil's First Written Submission, paras. 403 406, and Annex III (Statement of Professor Rangarajan Sundaram), paras. 17-24.

391 U.S. 2 April answer to question 98, paras. 230, 229, 235.

392 For GSM 102, see Exhibit Bra-520 ("Export Credit Guarantee Program," USDA FAS Fact Sheet, March 2006). For ExIm Bank LCI, see Exhibit Bra-531 (ExIm Bank Letter of Credit Insurance for Banks, ExIm Bank online). For ExIm Bank MTI, the fee calculator is available at http://www.exim.gov/tools/fee_calc.html.


393 U.S. 2 April answer to question 98, paras. 231, 233 (and note 243) and Exhibit US-156.

394 U.S. 2 April answer to question 98, paras. 230, 232 (and note 242) and Exhibit US-154.

395 U.S. 2 April answer to question 98, para. 230.

396 Brazil's First Written Submission, Annex IV (Methodology for Comparison of GSM 102 Fees with Fees for ExIm Bank Products), para. 6.

397 U.S. First Written Submission, paras. 122, 125, 129. See also Exhibit US-22 (Letter from [[                   ]]).

398 See LIBOR USD rates for the first week of April 2007, available at http://www.bba.org.uk/content/1/c4/86/12/Apr07.xls. Averaging the data for the first week of April across maturities yields approximately 5.3%. This data is posted on the website of the British Bankers' Association ("BBA"), which itself determines the LIBOR rate every day by polling international banks. See http://www.bba.org.uk/bba/jsp/polopoly.jsp?d=225&a=1416.

399 Exhibit Bra-589 (Foreign Agriculture Service Online, Keys to Successful Trade, p. 5) (emphasis added).

400 See Brazil's 2 April answer to question 100, para. 251.

401 U.S. 2 April answer to question 98, para. 234.


402 See http://www.moneycafe.com/library/prime.htm, reproduced in Exhibit Bra-692 (LIBOR and Prime rates, 1997 to the present).

403 U.S. 2 April answer to question 98, para. 230.

404 Exhibit Bra-589 (Foreign Agriculture Service Online, Keys to Successful Trade, p. 5).

405 U.S. First Written Submission, paras. 122, 125, 129. See also Exhibit US-22 (Letter from [[         ]]).

406 See http://www.moneycafe.com/library/1mlibor.htm, reproduced in Exhibit Bra-692 (LIBOR and Prime rates, 1997 to the present).

407 Compare the 1997-present chart tracking evolution of the LIBOR rate, at http://www.moneycafe.com/library/1mlibor.htm, with the 1997-present chart tracking evolution of the prime rate, at http://www.moneycafe.com/library/prime.htm. These charts are reproduced in Exhibit Bra-692 (LIBOR and Prime rates, 1997 to the present).

408 Over the 10-year period of 1997-present, actual interest rates on ExIm Bank LCI/MTI cover have fallen below the LCI interest coverage cap by between 113 bps (the low, in November 1999) and 326 bps (the high, in January 2001). Compare the 1997-present chart tracking evolution of the LIBOR rate, at http://www.moneycafe.com/library/1mlibor.htm (plus the [[ ]] bps noted by the United States as the spread for loans backed by U.S. government credit protection instruments, with the 1997-present chart tracking evolution of the prime rate, at http://www.moneycafe.com/library/prime.htm (less the 50 bps noted by the United States to generate the LCI cap). These charts are reproduced in Exhibit Bra-692 (LIBOR and Prime rates, 1997 to the present). The third and final chart in Exhibit Bra-692 represents the difference, in each month, between the LIBOR and prime rates in force.


409 This is conservative and favorable to the United States for at least two additional reasons. First, the 5% gap between the 2.8% GSM 102 cap used by Brazil and the 7.8% LCI cap used by Brazil is greater than the 4.91% figure cited by the United States as the average size of the gap between GSM 102 and ExIm Bank LCI interest coverage for the period 2005-2007. U.S. 2 April answer to question 98, para. 233. Second, Brazil assumes that interest payments by the borrower on the loan are due annually. How much interest is owed by the CCC or ExIm Bank at the time of default depends on the contractual frequency of interest payments. If interest is paid annually, then at the time of default, the CCC or ExIm Bank are liable for a fully year's interest. If interest is paid quarterly and default occurs after, for example, the close of the second quarter, then at the time of default, the CCC or ExIm Bank are liable for interest on the third and fourth quarters only. Because a longer interval between interest payments increases the dollar magnitude of the differences in interest coverage highlighted by the United States, Brazil's analysis assumes that interest payments are due annually.

410 The Panel will recall that wherever a choice was presented with respect to variables in the ExIm Bank calculator used to generate MTI fees, Brazil adopted the most conservative option available, or in other words the option that would result in a lower ExIm Bank fee. See Brazil's First Written Submission, Annex IV (Methodology for Comparison of GSM 102 Fees with Fees for ExIm Bank Products), paras. 7-12.

411 Instead of in 97.76 percent of those comparisons (1047 of 1071 comparison points), without accounting for differences in interest cover, as was the case in Exhibits Bra-536 and Bra-537. See Brazil's First Written Submission, para. 395. The few instances in which GSM 102 fees exceed ExIm Bank LCI or MTI fees does not mean that GSM 102 fees do not confer "benefits" relative to the market. See Brazil's First Written Submission, paras. 403-406, and Annex III (Statement of Professor Rangarajan Sundaram), paras. 17-24.


412 U.S. 2 April answer to question 98, para. 236.

413 See Exhibit Bra-531 ("ExIm Bank Letter of Credit Insurance for Banks," accessed October 2006 at http://www.exim.gov/products/insurance/loc.html).

414 U.S. 2 April answer to question 98, para. 236.

415 U.S. 2 April answer to question 98, para. 236.

416 U.S. 2 April answer to question 98, para. 236.

417 7 CFR Section 1493.110(b)(4)(iv). See Exhibit US-142.

418 U.S. 2 April answer to question 98, para. 236.

419 7 CFR Section 1493.130(c) (emphasis added). See Exhibit US-142.

420 7 CFR Section 1493.130(c). See Exhibit US-142.

421 7 CFR Section 1493.130(c). See Exhibit US-142.

422 U.S. 2 April answer to question 99, paras. 237, 238.

423 U.S. 2 April answer to question 99, para. 237.

424 Appellate Body Report, Canada – Aircraft, para. 157.


425 Brazil's First Written Submission, paras. 377-378. See also Id., Annex III (Statement of Professor Rangarajan Sundaram), paras. 8-9.

426 U.S. 2 April answer to question 102, paras. 240-242.

427 Brazil's First Written Submission, paras. 433-437; Brazil's Rebuttal Submission, paras. 483-484, 501-511; Brazil's Oral Statement, paras. 252-254, 257-260.

428 Exhibit US-71.

429 Exhibit Bra-585 (Audit Report, Commodity Credit Corporation's Financial Statements for Fiscal Years 2005 and 2006, Report No. 06401-21-FM, November 2006, p. 11, 26 of Notes to the Financial Statements) (identifying a USD 220 million "credit guarantee liability", defined as representing "the estimated net cash outflows (loss) of the guarantees on a net present value basis.").

430 U.S. Rebuttal Submission, paras. 111-125.

431 Exhibit Bra-588 (Agricultural Export Credit Guarantee Programs Assessment, ExpectMore.gov, Section 3.CR2, accessed January 2007 at http://www.whitehouse.gov/OMB/expectmore/detail.10002020.2005.html) (the "credit models used to calculate the subsidy for the guaranteed credits were revised in FY2001 and FY2003 and currently provides reliable estimates", and identifies the model applied specifically as "[t]he USDA model") (emphasis added); Exhibit Bra-616 (U.S. Department of Agriculture, Office of the Chief Financial Officer, Credit, Travel, and Accounting Division, Agriculture Financial Standards Manual (May 2004), p. 121, accessed December 2006 at http://www.ocfo.usda.gov/reports/index.htm) ("In estimating default costs, the following risk factors are considered: (1) loan performance experience ….").


432 See U.S. Rebuttal Submission, para. 88; U.S. 2 April answer to question 108, paras. 276-277.

433 See
, e.g., U.S. First Written Submission, para. 87; U.S. 2 April answer to question 102, para. 244.

434 U.S. 2 April answer to question 104, para. 251.

435 Panel Report, U
.S. – Upland Cotton, para. 7.805.

436 Panel Report, U
.S. – Upland Cotton, para. 7.805.

437 See Brazil's Rebuttal Submission, para. 498 and Exhibit Bra-615.

438 See "transaction risk increment" field in the U.S. Export-Import Bank fee calculator, defined at http://www.exim.gov/tools/calchelp.cfm.

439 U.S. Rebuttal Submission, paras. 97-99.

440 See Brazil's Oral Statement, paras. 261-263.

441 See Exhibit Bra-585 (Audit Report, Commodity Credit Corporation's Financial Statements for Fiscal Years 2006 and 2005, Report No. 06401-21-FM, November 2006, p. 11, 26 of Notes to the Financial Statements) (emphasis added). This is virtually identical to the net present value formula called for by the U.S. Federal Credit Reform Act. Exhibit Bra-656 (2 U.S.C. 661a(5)(C)) ("The cost of a loan guarantee shall be the net present value, at the time when the guaranteed loan is disbursed, of the following estimated cash flows: (i) payments by the Government to cover defaults and delinquencies, interest subsidies, or other payments; and (ii) payments to the Government including origination and other fees, penalties and recoveries . . .").


442 U.S. 2 April answer to question 108, para. 268.

443 U.S. 2 April answer to question 108, para. 277, citing Panel Report, U.S. – Upland Cotton, para. 7.855.

444 Panel Report, U.S. – Upland Cotton, para. 7.855 (footnotes omitted).

445 U.S. 2 April answer to question 108, paras. 275-276.

446 The United States appealed this specific element of the original panel's analysis. U.S. Appellant's Submission in U.S. Upland Cotton, paras. 407 and 410-413 (and note 419), available at http://www.ustr.gov/assets/Trade_Agreements/Monitoring_Enforcement/Dispute_Settlement/WTO/Dispute_Settlement_Listings/asset_upload_file938_5598.pdf. For U.S. arguments before the original panel, see U.S. 11 July 2003 First Written Submission, paras. 176-178; U.S. 11 August 2003 Answers to Panel Questions, paras. 157, 159, 170 and 173; U.S. 22 August 2003 Rebuttal Submission, paras. 161-162, 167, 171; U.S. 30 September 2003 Further Submission, para. 151; U.S. 18 November 2003 Further Rebuttal Submission, paras. 196-199; U.S. 22 December 2003 Answers to Panel Questions, paras. 86, 90, 91-95, 96-99, 100-101, 103, 117-121 and U.S. 11 February 2004 Answers to Further Panel Questions, para. 21.

447 Appellate Body Report, U.S. Upland Cotton, paras. 763-764 and Panel Report, U.S. Upland Cotton, paras. 7.842-7.843. See also Id., para. 7.835 ("[T]he item (j) analysis need not be a purely retrospective one ….").


448 Appellate Body Report, U.S. Softwood Lumber V, para. 111.

449 Appellate Body Report, U.S. OCTG Sunset Reviews, para. 188.

450 Appellate Body Report, U.S. Softwood Lumber IV (21.5), para. 103 (emphasis added) citing Appellate Body Report, Mexico Corn Syrup (21.5), para. 121. See Brazil's First Written Submission, para. 28.

451 Appellate Body Report, U.S. Softwood Lumber VI (21.5), para. 103 (emphasis added).

452 The United States' argument that the credit guarantee liability figure in the CCC financial statements includes only a "liability for which there is an offsetting balance sheet entry of an asset" does not represent a change to the definition or calculation of the credit guarantee liability figure since the original proceedings. Rather, it is simply a new argument by the United States, and one that, as addressed above, is belied by the very definition of "credit guarantee liability" included in CCC's financial statements and relied on by the original panel.

453 Panel Report, U.S. – Gambling (21.5), para. 6.53.


454 The United States does not submit comments regarding Brazil's claims in respect of compliance in past periods as none of Brazil's answers to the second set of questions relate to that issue. For the U.S. arguments in respect of those claims, the United States respectfully refers the Panel to the U.S. First Written Submission, paras. 49-56, U.S. Rebuttal Submission, paras. 64-71, U.S. Answers to Parts A-C of First Set of Panel Questions, paras. 45-46, U.S. Comments on Brazil's Answers to First Set of Panel Questions, paras. 104 111, and U.S. Answers to Second Set of Panel Questions, paras. 54-61.

455 See Brazil Answers to Second Set of Questions, paras. 1-35.

456 See e.g., Brazil Answers to Second Set of Questions, para. 6, 34.

457 See e.g., Brazil Answers to Second Set of Questions, para. 7.

458 Upland Cotton (Panel), para. 8.1(d) (emphasis added). This is because the original panel found that Brazil had only made its case under Articles 10.1 and 8 of the Agreement on Agriculture and Articles 3.1(a) and 3.2 of the SCM Agreement with respect to export credit guarantees provided in respect of exports of rice and unscheduled products.


459 There can be no presumption that the U.S. measures taken to comply are inconsistent with its WTO obligations; the burden is on Brazil to prove inconsistency.

460 As the United States has explained, this argument is inconsistent with Brazil's prior arguments and the original panel's resolution of Brazil's claims. See U.S. Comments on Brazil's Answers to First Set of Panel Questions, paras. 12-15. This even contradicts Brazil's own clarification in its rebuttal submission that "Brazil does not assert that the GSM 102 program itself circumvents the United States' export subsidy commitments, within the meaning of Article 10.1 of the Agreement on Agriculture." Brazil Rebuttal Submission, para. 378 (emphasis added).

461 See, e.g., Brazil Responses to Panel Section A-C Questions, para. 29. This argument is at odds with Brazil's arguments elsewhere that an a contrario reading of item (j) would prevent a Member from challenging specific export credit guarantees (i.e., as opposed to the export credit guarantee programs generally). See U.S. Comments on Brazil's Answers to First Set of Panel Questions, paras. 10-11. If specific guarantees cannot even constitute "measures," as Brazil now asserts, Brazil's complaints about being able to make claims against specific guarantees would be entirely moot. Brazil's argument is also inconsistent with the clarification by the Appellate Body that a "measure" for purposes of WTO dispute settlement may encompass "[i]n principle, any act or omission attributable to a WTO Member. . . ." United States – Corrosion-Resistant Steel (AB), para. 81.


462 Calling Brazil's claims "product-specific" does not change the fact that only particular guarantees – those provided in respect to the particular "product" at issue – are the subject of the claims. Where those guarantees were not the subject of any DSB recommendations and rulings and are not measures taken to comply with any DSB recommendations and rulings – as in the case of the GSM 102 export credit guarantees in respect of exports of pig meat and poultry meat – there is no basis for a claim to be considered with respect to them in a DSU Article 21.5 proceeding. See U.S. Comments on Brazil's Answers to First Set of Panel Questions, paras. 16.

463 See e.g., Brazil Answers to Second Set of Panel Questions, para. 6. As the panel in EC – Bed Linen (21.5) recognized the mere fact that improvements have been made to more than just the original measures subject to findings of WTO-inconsistency and DSB recommendations and rulings does not render all changed measures "measures taken to comply." See U.S. U.S. Answers to Second Set of Panel Questions, paras. 1-16 (discussing EC – Bed Linen (21.5) (Panel), paras. 6.9-6.22)).

464 See e.g., Brazil Answers to Second Set of Panel Questions, para. 4. Contrary to Brazil's assertions, the U.S. argument is not premised on the assumption "that different ECG measures apply to different products." Brazil Answers to Second Set of Panel Questions, para. 4. As the United States has explained, this is irrelevant to the U.S. arguments.

465 U.S. First Written Submission, paras.24-30, U.S. Rebuttal Submission, paras. 10-15, U.S. Answers to Parts A-C of First Set of Panel Questions, paras. 17-26, U.S. Comments on Brazil's Answers to First Set of Panel Questions, paras. 8-44, and U.S. Answers to Second Set of Panel Questions, paras. 1-16 and 42-48.


466 U.S. First Written Submission, paras. 31-48, U.S. Rebuttal Submission, paras. 16-63, U.S. Answers to Parts A-C of First Set of Panel Questions, paras. 27-44, U.S. Comments on Brazil's Answers to First Set of Panel Questions, paras. 45-103, and U.S. Answers to Second Set of Panel Questions, paras. 17-41.

467 Brazil Answers to Second Set of Panel Questions, para. 12.

468 Upland Cotton (Panel), para. 7.1416.

469 Brazil Answers to Second Set of Panel Questions, para. 13.

470 The United States recalls that the panel set out the claims presented by Brazil as follows: (a) claims of "present" serious prejudice with respect to "U.S. subsidies provided during MY 1999-2002"; (b) claims of threat of serious prejudice with respect to "U.S. subsidies mandated to be provided in MY 2003-2007;" and (c) per se claims of threat of serious prejudice against "selected provisions of the FSRI Act of 2002 and the ARP Act of 2000" providing for these subsidies, to the extent relevant to upland cotton, and their implementing regulations. Upland Cotton (Panel), para. 3.1(vi) – 3.1(viii). The original panel did not identify a "present" serious prejudice claim under Article 5(c) and 6.3(c) of the SCM Agreement as one of the claims "concerning selected provisions of the FSRI Act of 2002 and the ARP Act of 2000." Nor did the original panel identify "selected provisions of the FSRI Act of 2002 and the ARP Act of 2000" as part of the measures subject to Brazil's claims of "present" serious prejudice under Articles 5(c) and 6.3(c) of the SCM Agreement.


471 Upland Cotton (Panel), para. 7.1120. The original panel ultimately found that these constituted "subsidies" within the meaning of Article 1 of the SCM Agreement because they were "financial contributions" (mostly in the form of "grants") conferring a "benefit." Upland Cotton (Panel), paras. 7.1112-7.1120.

472 Upland Cotton (Panel), para. 7.1112-7.1120.

473 For example, Brazil conceded in the original proceeding that "[i]t is established under WTO law that a Member can only challenge measures of another Member


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