AUSTRALIA - SUBSIDIES PROVIDED TO PRODUCERS

                                   AND EXPORTERS OF AUTOMOTIVE LEATHER

                                       Request for Consultations by the United States

        The following communication, dated 10 November 1997, from the Permanent Mission of the United States to the Permanent Mission of Australia and to the Dispute Settlement Body, is circulated in accordance with Article 4.4 of the DSU.

                                                            _______________

        My authorities have instructed me to request consultations with the Government of Australia pursuant to Articles 1 and 4 of the Understanding on Rules and Procedures Governing the Settlement of Disputes, Article 4.1 of the Agreement on Subsidies and Countervailing Measures ("SCM Agreement"), and Article 30 (to the extent that it incorporates by reference Article XXIII:1 of the General Agreement on Tariffs and Trade 1994) of the SCM Agreement regarding prohibited subsidies provided to Australian producers and exporters of automotive leather, including subsidies provided to Howe Leather.  The United States understands that prohibited subsidies to Howe Leather include the provision by the Government of Australia of an $A 25 million loan on preferential and non-commercial terms and grants amounting potentially to another $A 30 million.