DISPUTE SETTLEMENT BODY - 10 JANUARY 2001

STATEMENT BY AUSTRALIA

Australia welcomes adoption of the reports and wishes to thank
the Panel and Appellate Body, as well as the Secretariat, for its work.

Australia is pleased that a large range of measures which have
discriminated against Australian beef in the Korean market will have to be
eliminated or brought into WTO conformity.

There are two distinct elements to implementation: (1) the measures identified
in Korea's schedule, which have benefited from a 7 year transitional period
expiring on 1 January 2001; and (2) the dual retail system and certain requirements
and practices of Korean beef regulatory authorities.

In regard to the measures benefiting from the 7 year
transitional period, Australia is assessing�
the regulatory changes recently gazetted by Korea and requests early
confirmation from Korea that it has repealed all relevant regulations relating
to:

• the price mark-up applied to imports through the SBS system,
• the limitations on participation in the SBS system,
• the requirement that beef imported through the LPMO be distributed only
  on the wholesale market,
• the LPMO's minimum wholesale price, and the discretionary licensing system.

In regard to the other measures found to be inconsistent, Australia is satisfied
that the Panel and Appellate Body recognised the discriminatory effect of dual
retailing of imported beef. Australia has some reservations about the Appellate
Body's reasoning that the formal separation of imported and domestic products
at the retail level may not necessarily give rise to an inconsistency with Article
III of GATT 1994.� However, this reasoning cannot in any way provide scope for
Korea to exclude imported beef from outlets in which domestic beef is sold to
the Korean consumer.

Australia also welcomes the findings in regard to certain
requirements and practices of Korean regulatory bodies.

In regard to domestic support levels, Australia notes that the Appellate Body
has upheld the Panel findings that Korea's domestic support for beef in 1997
and 1998 was incorrectly calculated. The reasoning behind the findings should
assist all WTO Members in the calculation of agricultural support and in undertaking
the review of the implementation of commitments under Article 18 of the Agriculture
Agreement.

The Panel and Appellate Body reports serve to clarify the key elements of calculating
the level of domestic support subject to reduction commitments - for example,
that the calculation of domestic support should be based on the production eligible
to receive the applied administered price and not the actual quantity purchased.
Australia believes that such an approach will ensure that the AMS on individual
products will more accurately reflect the economic impact of support mechanisms.

The reports also clarify that, in circumstances where a product is not part
of the base AMS calculation, the current AMS should be calculated in accordance
with Annex 3 of the Agreement on Agriculture. The use of Annex 3 as the guiding
methodology should lead to a more consistent approach by WTO Members to the
calculation of domestic support.

Finally, Australia looks forward to receiving advice from Korea within the
next 30 days of its intentions in respect of implementation, as provided for
in Article 21.3 of the Dispute Settlement Understanding. Australia stands ready
to engage in constructive discussions with Korea on prompt implementation.