[Federal Register Volume 69, Number 179 (Thursday, September 16, 2004)]
[Rules and Regulations]
[Pages 55719-55733]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 04-20763]



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Federal Register / Vol. 69, No. 179 / Thursday, September 16, 2004 / 
Rules and Regulations

[[Page 55719]]



DEPARTMENT OF AGRICULTURE

Animal and Plant Health Inspection Service

7 CFR Part 319

[Docket No. 02-032-3]
RIN 0579-AB48


Importation of Wood Packaging Material

AGENCY: Animal and Plant Health Inspection Service, USDA.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: We are amending the regulations for the importation of 
unmanufactured wood articles to adopt an international standard 
entitled ``Guidelines for Regulating Wood Packaging Material in 
International Trade'' that was approved by the Interim Commission on 
Phytosanitary Measures of the International Plant Protection Convention 
on March 15, 2002. The standard calls for wood packaging material to be 
either heat treated or fumigated with methyl bromide, in accordance 
with the Guidelines, and marked with an approved international mark 
certifying treatment. This change will affect all persons using wood 
packaging material in connection with importing goods into the United 
States.

EFFECTIVE DATE: September 16, 2005.

FOR FURTHER INFORMATION CONTACT: Mr. William Aley, Senior Import 
Specialist, Phytosanitary Issues Management Team, PPQ, APHIS, 4700 
River Road Unit 140, Riverdale, MD 20737-1236; (301) 734-5057.

SUPPLEMENTARY INFORMATION:

Background

    Logs, lumber, and other unmanufactured wood articles imported into 
the United States pose a significant hazard of introducing plant pests, 
including pathogens, detrimental to agriculture and to natural, 
cultivated, and urban forest resources. The regulations in 7 CFR 
319.40-1 through 319.40-11 (referred to below as the regulations) 
contain provisions to mitigate plant pest risk presented by the 
importation of logs, lumber, or other unmanufactured wood articles.
    The regulations restrict the importation of many types of wood 
articles, including wooden packaging material such as pallets, crates, 
boxes, and pieces of wood used to support or brace cargo. The 
regulations currently refer to these types of wood packaging material 
as solid wood packing material (SWPM), defined as ``[w]ood packing 
materials other than loose wood packing materials, used or for use with 
cargo to prevent damage, including, but not limited to, dunnage, 
crating, pallets, packing blocks, drums, cases, and skids.'' 
Introductions into the United States of exotic plant pests such as the 
pine shoot beetle Tomicus piniperda (Scolytidae) and the Asian 
longhorned beetle Anaplophora glabripennis (Cerambycidae) have been 
linked to the importation of SWPM. These and other plant pests that are 
carried by some imported SWPM pose a serious threat to U.S. agriculture 
and to natural, cultivated, and urban forests.
    Beyond the threat to the United States, the introduction of pests 
associated with SWPM is a worldwide problem. Because SWPM is very often 
reused, recycled or remanufactured, the true origin of any piece of 
SWPM is difficult to determine and thus its phytosanitary status cannot 
be ascertained. This often precludes national plant protection 
organizations from conducting useful specific risk analyses focused on 
the pests associated with SWPM of a particular type or place of origin, 
and imposing particular mitigation measures based on the results of 
such analysis. For this reason, there is a need to develop globally 
accepted measures that may be applied to SWPM by all countries to 
practically eliminate the risk for most quarantine pests and 
significantly reduce the risk from other pests that may be associated 
with the SWPM. In the case of phytosanitary standards, the 
international standard-setting organization is the International Plant 
Protection Convention (IPPC).
    In a proposed rule published in the Federal Register on May 20, 
2003 (68 FR 27480-27491; Docket No. 02-032-2), the Animal and Plant 
Health Inspection Service (APHIS) proposed to amend the regulations to 
decrease the risk of SWPM introducing plant pests into the United 
States by adopting the international phytosanitary standard \1\ for 
wood packaging material (referred to below as the IPPC Guidelines) that 
was approved by the IPPC on March 15, 2002. We proposed to apply the 
standard to wood packaging material from all places, including China, 
and to remove the special provisions for wood packaging material from 
China in 7 CFR 319.40-5(g) through (k).
---------------------------------------------------------------------------

    \1\ ``International Standards for Phytosanitary Measures: 
Guidelines for Regulating Wood Packaging Material in International 
Trade,'' Secretariat of the International Plant Protection 
Convention, Food and Agriculture Organization of the United Nations, 
Rome: 2002.
---------------------------------------------------------------------------

    The IPPC Guidelines were developed after the IPPC determined that 
worldwide, the movement of SWPM made of unprocessed raw wood is a 
pathway for the introduction and spread of a variety of pests (IPPC 
Guidelines, p. 5). The IPPC Guidelines list the major categories of 
these pests, and establish a heat treatment and a fumigation treatment 
determined to be effective against them (IPPC Guidelines, p. 10). We 
proposed to adopt the IPPC Guidelines because they represent the 
current international standard determined in 2002 to be necessary and 
effective for controlling pests in SWPM. The need to adopt the IPPC 
Guidelines is further supported by analysis of pest interceptions at 
U.S. ports that show an increase in dangerous pests associated with 
certain SWPM. This increase in pests was found in SWPM that does not 
meet the IPPC Guidelines (e.g., SWPM from everywhere except China). 
There has been a decrease in pests associated with SWPM material from 
China since we began requiring that material be treated prior to 
importation.
    Another reason to adopt the IPPC Guidelines at this time is that 
adopting them would simplify and standardize trade requirements. China, 
Canada, the European Union, and many other countries are preparing to 
implement the IPPC Guidelines requirements. Given the difficulty of 
identifying the source of SWPM and the recycling of SWPM in trade, 
successful reduction of the pest risk posed by SWPM requires

[[Page 55720]]

all trading partners to take action on a similar timeline.
    Furthermore, adopting a uniform international standard means that 
U.S. companies will not need to comply with one set of SWPM 
requirements for goods exported from the United States and another set 
of requirements for goods imported into the United States. Companies 
engaged in both import and export would have particular difficulties in 
ensuring that their SWPM supply chain is sorted and routed to comply 
with differing requirements for different destinations. After this 
final rule takes effect, these companies will be able to use SWPM that 
complies with the Guidelines for both import and export purposes, 
leveling the trade playing field with regard to SWPM. Using SWPM that 
has been treated and marked in accordance with the Guidelines will also 
reduce the practice, common in trade today, of re-treating SWPM 
immediately prior to its reuse to assure the receiving country that 
treated SWPM is used with a shipment. This reduction in re-treatment 
will reduce costs to importers and procedural burdens for national 
plant protection agencies, and will also reduce unnecessary emissions 
of methyl bromide associated with such unnecessary re-treatment.
    We accepted comments on the proposed rule for 60 days, ending July 
21, 2003. We also accepted comments at three public hearings held in 
Seattle, WA, on June 23, 2003; in Long Beach, CA, on June 25, 2003; and 
in Washington, DC, on June 27, 2003. During the comment period we 
received approximately 970 comments on the proposal, including 
approximately 905 slight variants of a single e-mail form letter. The 
issues raised in these comments are discussed below.
    As a result of our review of comments, we have decided to make the 
following changes from the proposal in this final rule:
     We are changing the term ``solid wood packing material'' 
to ``wood packaging material'' throughout the regulations; and
     We are excluding from the definition of wood packaging 
material, and thereby excluding from treatment requirements, pieces of 
wood that are less than 6 mm (0.24 in) in any dimension, because pieces 
of wood of this size are too thin to present any significant pest risk.
    Comments have also led APHIS to make some changes in our plans and 
schedule for implementing the final rule. No changes to the text of the 
rule were necessary in response to these comments. Changes we made to 
the rule and to our implementation plans are discussed below in detail.

Summary and Analysis of Comments

    More than 95 percent of the comments applauded the intent of APHIS 
to protect United States forest and agricultural resources against the 
danger represented by pests associated with wood packaging material. 
However, the same commenters were concerned that the proposed rule 
would not adequately protect our forests from plant pests like the 
Asian longhorned beetle and were concerned that the proposal would 
cause other harm to the environment, namely increased depletion of the 
ozone layer due to use of methyl bromide as a fumigant. These 
commenters urged APHIS not to adopt the proposed rule, but to look for 
alternatives that will fully protect the United States from wood-borne 
invasive species while not sacrificing the ozone layer. These 
commenters suggested that one option would be to phase out the use of 
wood packaging material and replace it with manufactured wood and 
plastic crates and pallets, which the commenters suggested would be 
free of pest dangers and could be reused for a long time.
    A number of commenters supported adoption of the IPPC Guidelines, 
but suggested a variety of exemptions for particular articles, or 
modifications of import clearance procedures, in order to minimize 
adverse effects of implementing the IPPC Guidelines. Several commenters 
also suggested that the regulation should be implemented on a delayed 
basis, or on a scheduled phase-in with several incremental levels, in 
order to give importers and other businesses time to adjust to the new 
requirements.
    Several commenters made comments about the effectiveness or 
availability of the fumigation and heat treatments contained in the 
IPPC Guidelines, or suggested alternative treatments.
    Several commenters addressed the international standard mark that 
we proposed should be placed on every piece of wood packaging material 
that has been treated in accordance with the regulations. Some of these 
commenters suggested that it was not practical to apply the mark to all 
packaging materials, especially materials such as dunnage that are 
specially cut to support cargo.
    APHIS has carefully considered all the comments, suggestions, 
requests for clarification, and concerns raised by commenters. Several 
modifications have been made in this final rule in response to the 
comments. In the next section we provide detailed responses to the 
issues raised by commenters, and explain the modifications made in 
response to these comments.

Terminology

    Comment: APHIS regulations refer to the materials being regulated 
as solid wood packing materials (SWPM), but the IPPC Guidelines uses 
the term wood packaging material (WPM). It would be less confusing if 
APHIS used the term wood packaging material, since this is the 
preferred term in international commerce and in the IPPC Guidelines 
that many other countries are adopting.
    Response: We agree, and throughout our regulations we are changing 
the term solid wood packing materials (SWPM) to wood packaging material 
(WPM).
    In the proposal, APHIS did not use the term ``wood packaging 
material'' for two reasons. Our existing regulations have used the 
alternate term ``solid wood packing materials'' for more than 8 years, 
and persons applying our regulations are familiar with the term. Also, 
in the IPPC Guidelines the term wood packaging material is defined as 
``Wood or wood products (excluding paper products) used in supporting, 
protecting or carrying a commodity (includes dunnage).'' This 
definition is broader than the APHIS term solid wood packing material. 
WPM as defined by the IPPC includes manufactured wood such as plywood, 
veneer, and fiberboard, as well as loose wood materials such as 
shavings and excelsior. The IPPC Guidelines then distinguish between 
types of WPM that should be regulated because they present a risk 
(e.g., raw wood pallets and dunnage), and types that should not be 
regulated because they present little risk (e.g., manufactured wood and 
shavings).
    We thought this approach was ungainly when used in regulations, and 
that it would be better to use a different term (SWPM) that applied 
only to the types of wooden materials used in packing that we wanted to 
regulate. Upon further consideration, we agree that the benefits of 
using the term WPM outweigh the advantages of using the term SWPM. 
However, while the definition of WPM in our regulations will match the 
definition used in the IPPC Guidelines, we will also add a definition 
of regulated wood packaging material. The definition of this new term 
includes only the types of WPM we consider to be regulated articles. 
The new definition of regulated WPM closely resembles our current 
definition of SWPM, and reads as follows: ``Wood packing materials 
other than manufactured wood materials, loose

[[Page 55721]]

wood packing materials, and wood pieces less than 6 mm (0.24 in) thick 
in any dimension, that are used or that are for use with cargo to 
prevent damage, including, but not limited to, dunnage, crating, 
pallets, packing blocks, drums, cases, and skids.'' Therefore, in our 
regulations WPM refers to the type of articles covered by the IPPC 
Guidelines definition of WPM, and regulated WPM refers to the type of 
articles that the IPPC Guidelines refer to in their section on 
``Regulated Wood Packaging Material.''
    This definition of regulated WPM differs from the existing 
definition of SWPM in that it explicitly excludes manufactured wood 
materials, such as fiber board, plywood, whisky and wine barrels, and 
veneer. APHIS has never regulated such materials, but the definition of 
SWPM did not make that clear. The definition of regulated WPM also 
excludes pieces of wood that are less than 6 mm in any dimension. 
Pieces of wood of this size are excluded because they are too thin to 
present any significant pest risk, and because the IPPC Guidelines 
suggest the 6 mm threshold for excluding wood pieces from regulation. 
This exclusion will exempt from regulation many types of small boxes 
used to ship fruit or other articles.

Phasing Out WPM in Favor of Manufactured Materials

    Comment: APHIS should look for alternatives that will fully protect 
the United States from wood-borne invasive species while not 
sacrificing the ozone layer by encouraging methyl bromide fumigation. 
One such option would be to phase out the use of WPM and replace it 
with manufactured wood and plastic crates and pallets, which would be 
free of pest dangers and could be re-used for a long time.
    Response: APHIS has considered many alternatives to diminish pest 
risk from WPM. Many commenters have suggested that APHIS reduce 
worldwide methyl bromide emissions by relying instead on one of two 
pest reduction alternatives, either requiring heat treatment of WPM, or 
banning use of unmanufactured WPM and requiring use of manufactured 
wood, plastic, metal, or other alternative packing materials.
    In keeping with our commitments to the objectives of the Montreal 
Protocol, APHIS actively cooperates with other agencies and 
institutions to identify and validate technically and economically 
feasible alternatives to methyl bromide. Also, as the agency 
responsible for representing the United States to the International 
Plant Protection Convention with respect to the international 
phytosanitary standards established by the IPPC, APHIS will work 
closely with current initiatives within the IPPC to develop alternative 
treatments to methyl bromide and will strive to have any validated 
treatments incorporated into future revisions of the IPPC Guidelines. 
APHIS will also be working independently to evaluate and consider 
treatment alternatives to methyl bromide, and communicate this 
information through the proper channels in IPPC for technical review 
and approval. Whenever either APHIS independent evaluations or 
revisions to IPPC Guidelines make such validated alternatives 
available, APHIS will make the necessary changes to its quarantine 
regulations and procedures to provide for their use.
    A comprehensive review of the IPPC Guidelines is due to be 
initiated under the IPPC by 2007. The United States intends to 
participate in, and bring to bear our technical and research expertise 
on, this review within the IPPC to ensure alternatives are continually 
examined and given due consideration. The IPPC Guidelines itself 
recognizes that phosphine and CPI methods are particularly worth 
revisiting with respect to the availability of data related to the 
efficacy of these methods in treating target pests for wood packaging 
material.
    Methyl bromide as a class I ozone-depleting substance has been 
found to cause or contribute significantly to harmful effects on the 
stratospheric ozone layer and has adverse atmospheric effects 
substantially greater than those associated with the alternatives of 
heat treatment of WPM or use of alternative packing materials. Whenever 
APHIS advises on treatment alternatives, we encourage use of heat 
treatment or alternative packing materials in preference to methyl 
bromide fumigation. At present, it appears that manufacturers in many 
countries, including the European Union and the United States, prefer 
to use only heat treatment for the WPM they produce. Trends suggest 
substitution of heat treatment for methyl bromide will continue to 
grow. However, during development of the IPPC Guidelines some 
developing nations advised against allowing only heat treatment and not 
methyl bromide as an allowed treatment on the grounds that the higher 
cost of heat treatment makes it economically unfeasible for these 
countries at this time.
    Regarding alternative packing materials, the final environmental 
impact statement (FEIS) concluded (pp. 79-80) that these would achieve 
the greatest possible reduction in risk from the introduction of pests 
and pathogens associated with WPM. While heat treating or fumigating 
WPM are also both highly efficacious in controlling risk, use of 
alternative packing materials reduces risk even more. The manufacture 
and use of alternative packing materials also generates only minimal 
amounts of ozone-depleting chemicals. However, fumigation of WPM with 
methyl bromide and heat treatment of WPM are currently the most 
economical means of producing safe packing materials. Alternative 
packing materials cost much more. In addition to a cost that is 
currently beyond the reach of exporters in many developing countries, 
recovery and reuse of alternative packing materials requires a more 
complex infrastructure than is required by reuse of WPM. Finally, there 
are some costs associated with the durability of alternative materials. 
While many metal, plastic, and manufactured wood alternatives are very 
durable and can be used for more shipments than typical WPM, some 
alternative packing materials, such as particle board, are limited in 
their ability to withstand the conditions that routinely occur during 
transport.
    It is difficult to quantitatively compare the costs of requiring 
alternative packing materials to the benefits that would accrue from 
their use. The FEIS and the economic analysis for this rule do estimate 
costs to exporters of using substitute packing materials and compare 
these to the cost of heat treatment or methyl bromide fumigation. 
However, we are unable to realistically estimate the benefits that 
could result using substitute materials. None of the commenters 
suggested methods or provided data to do such analysis.
    APHIS will continue to encourage use of alternative packing 
materials by exporters for whom they are economically feasible. There 
is incentive for the shipping industry to contain costs of packing 
material, and by requiring treatment of WPM, this rule will slightly 
increase the average cost of WPM. This increase in the cost of WPM may 
actually provide incentive to some exporters to seek cost-effective 
alternatives such as corrugated board, veneer, oriented strand board, 
and plywood.
    In choosing among alternatives, APHIS looks for choices that are 
both technically and economically feasible. Since treated WPM does 
provide an acceptable level of protection against pests, we believe 
that it is not necessary to exclude unmanufactured wood from use as 
packaging material for imported

[[Page 55722]]

cargo. Properly treated WPM is a safe packaging material that can be 
reused many times and that causes minimal environmental impacts when 
disposed of or recycled.
    On the other hand, prohibiting the use of unmanufactured wood as a 
packaging material would have significant negative consequences in 
economic and environmental arenas. Wood is often the only packaging 
material readily and cheaply available (either through domestic 
production or importation) in developing countries that export basic 
products without elaborate packaging. The major alternative materials 
for packaging are processed wood, plastic, and metal. Pallets or crates 
made from these materials cost from two to four times more than WPM.
    Comment: The APHIS proposal is of uncertain effectiveness and will 
result in damage to the stratospheric ozone layer, and APHIS therefore 
should adopt a regulation that specifies a deadline by which all 
incoming packaging must be made from materials other than solid wood or 
boards. These commenters stated that this strategy would achieve all 
three national goals at stake in this rule: Accommodating rising trade 
volumes, protecting forests from exotic pests, and protecting the 
stratospheric ozone layer.
    Several commenters also stated that APHIS should require use of 
manufactured alternatives to WPM because the cost of these alternative 
materials is easily offset by the reduction of inspection costs and 
speeding the movement of cargo through our ports. They stated this 
would also reduce the necessity for expensive government programs to 
control invasive species that come in as hitchhikers in solid wood 
built crates and containers.
    A commenter who disagreed with those advocating that APHIS require 
manufactured alternatives stated that a preference for using these 
alternate materials is based on flawed and inaccurate arguments that 
assume that the IPPC Guidelines will result in an increased demand for 
wood products and thus translate into negative environmental effects. 
This commenter stated that overall life-cycle impacts show far greater 
negative environmental impacts from using nonwood substitute materials. 
Also, the commenter stated that an outright ban on the use of WPM, in 
favor of substitute materials, without credible and proven scientific 
justification would be inconsistent with the World Trade Organization 
agreements.
    Response: Please also see the above response. This rule allows, but 
does not require, methyl bromide use, and also allows use of untreated 
alternative (manufactured) packing materials, and also offers heat 
treatment as an alternative to fumigation with methyl bromide. Heat 
treatment does not generate gases that could cause damage to the 
stratospheric ozone layer.
    The commenters who suggested that the cost of using alternative 
materials would be offset by the reduction of inspection costs and 
speeding the movement of cargo did not offer data to support that 
theory. While inspectors do spend somewhat less time clearing 
manufactured packing materials compared to clearing WPM, APHIS doubts 
that the savings would come close to offsetting the costs, because many 
articles besides WPM must be inspected at ports (such as the regulated 
articles often packed in WPM). While faster cargo clearance would 
benefit importers, the value of this benefit is uncertain, and in any 
event, importers are free to use alternative packing materials if they 
perceive a benefit in doing so. We also note that importers can also 
achieve faster cargo clearance and fewer inspections by establishing a 
history of compliance for their shipments; if their WPM is consistently 
properly treated and marked, and free from pests of concern, their 
shipments may be cleared faster.
    Regarding the commenter who stated that the rule will not result in 
an increase in the use of WPM versus alternative materials, we agree. 
As discussed above, the rule may actually act to increase the number of 
exporters choosing alternative materials, since the additional cost of 
treating WPM will bring its total cost closer to the cost of some 
alternative materials. We also agree with the commenter that overall 
life-cycle impacts show negative environmental impacts from using 
nonwood substitute materials, but we do not agree that these would be 
``far greater'' than the environmental impacts from using treated WPM. 
We have not seen any quantitative data that supports the position that 
the environmental costs of using nonwood substitutes would likely be 
greater than those for using WPM. We agree that mandating use of 
alternative materials would not represent the least restrictive 
necessary action, and would have adverse effects throughout the 
international trade economy.
    Comment: An adequate assessment of any adverse environmental 
impacts associated with use of WPM must include a comparison of 
substitute materials that would take the place of wood-based packaging 
material. On those terms, the results are crystal clear. By any water 
quality, air pollution, or energy use environmental measure, wood 
products are clearly environmental performance leaders. It takes 
between 33 and 47 percent less energy to produce a wood product than to 
produce a similar product made from competing materials such as 
concrete and steel, and producing WPM results in less carbon dioxide 
emissions.
    Response: Alternative packaging materials do have higher production 
costs than WPM, including greater energy costs. When harvested under 
careful management, trees can be a replenishable resource, unlike 
petroleum or metal ores. When WPM has exhausted its useful life, it can 
be recycled into products like particle board at a lower fiscal and 
environmental cost than plastic or metal can be recycled. However, the 
need to treat WPM must be taken into account when assessing the 
environmental impacts associated with it. While we believe authorizing 
use of treated WPM is a reasonable balance among pest risk, economic, 
and environmental concerns, we do not conclude that WPM is the ``clear 
environmental performance leader.'' For further discussion of this 
issue, see the section of this document titled ``National Environmental 
Policy Act,'' and section IV(A)(5) of the FEIS, which states ``Wood has 
certain advantages from the environmental perspective. Renewability 
gives wood a large advantage over other materials. The manufacture of 
wood products requires substantially less energy than the production of 
substitute products. Wood product manufacture results in less 
greenhouse gas and other air pollutant emissions.''
    Comment: If WPM were banned in favor of alternative materials, it 
would not only destroy an industry, it would significantly increase 
costs to shippers, which would be passed on to consumers. Metal pallets 
are too expensive and heavy. Plastic pallets, unlike WPM, are not 
biodegradable, and are a major and toxic fire hazard. More goods are 
coming into this country than are going out. Most of them are on 
pallets. Wooden pallets can be disassembled and recycled, if not as 
pallets then as landscape mulch or wood stove pellets. Pallets made of 
plastic or metal will begin to pile up in landfills across America. 
Landfills could expect to realize exponential growth of 
nonbiodegradable pallets.
    Response: We partly agree with this comment, as discussed above. 
However, a minority of shippers already choose to use alternative 
pallet materials, which shows that the choice must be economically 
viable in some

[[Page 55723]]

circumstances. We also note that because this rule applies only to 
articles imported into the United States, neither the rule nor the 
alternative of requiring alternative materials would destroy the market 
for WPM produced in the United States. Untreated WPM could still be 
used in domestic commerce, or in exports to any country that has not 
implemented the IPPC Guidelines or a similar treatment requirements.
    In addition, selection of the available alternate packaging 
materials does include the continuing use of processed wood. This 
includes plywood, corrugated packaging materials, etc. These are 
products of the wood industry that pose comparable disposal and 
recycling capability to that of WPM. Some are cost-competitive with 
WPM, and required treatment costs under adoption of the IPPC Guidelines 
could make the selection of some of these alternate packing materials 
more favorable to the shipping industry.

Treatment Effectiveness

    Comment: The proposed treatment measures, especially methyl bromide 
fumigation, have not been proven effective against pathogens. While 
APHIS says that few pathogens are detected on wood packaging, the 
agency concedes in its draft environmental impact statement (DEIS) and 
other publications that inspectors have great difficulty detecting 
pathogens; therefore, it has not been proved that pathogens represent 
as minor a threat as APHIS now implies. Furthermore, the DEIS 
associated with this rulemaking states that some deep wood-borers also 
might not be killed by the proposed treatments. Our concerns about 
efficacy are heightened by the fact that the IPPC standard does not 
require debarking the wood before further treatment. Debarking is key 
to improving the already questionable ability of methyl bromide to 
penetrate the wood to kill deep wood pests.
    Response: The basis for international acceptance of the efficacy 
provided by the IPPC Guidelines is the review by IPPC member countries 
of certain reference documents that are now posted in a link from the 
APHIS Web page at http://www.aphis.usda.gov/ppq/swp/approved_
guideline.html. Historically, the pest risks of WPM were manageable by 
inspection when international trade was more limited. All commenters 
have acknowledged the need for increased protection of wood resources, 
but there are differences of opinion about the level of protection 
needed to mitigate pest risks.
    Although some may contend that the regulations are overly 
protective, others are not satisfied with this level of protection. The 
approach taken by APHIS is to regulate according to demonstrated risk 
level. The adoption of the IPPC Guidelines would dramatically decrease 
the pest risk of concern to APHIS posed by importation of WPM. 
Selection of this regulatory approach does not prevent APHIS from 
further deliberation on more intensive regulation if the protection 
measures are determined to be inadequate for specific risks from pests 
of concern. Enforcement of the IPPC Guidelines could provide a baseline 
for determining any need for further protective measures.
    Comment: The two treatment options allowed under the rule--heat 
treatment and methyl bromide fumigation--have an unacceptably high rate 
of failure to stop invasive pests traveling in solid wood packaging. In 
the DEIS, APHIS itself has questioned the efficacy of heat and methyl 
bromide treatments.
    Response: There are differences of opinion among commenters 
regarding the effectiveness of treatments in the IPPC Guidelines to 
eliminate invasive pests in WPM. The DEIS does not question the 
efficacy of these treatment methods per se, but it does indicate the 
advantages and limitations of each treatment method to eliminate pest 
risks. The DEIS does not take a position as to whether the treatments 
in the IPPC Guidelines will be the ultimate solution or part of the 
ultimate solution, but the development of additional data about 
efficacy and pest exclusion for all potential pests and pathogens may 
lead to further consideration of these phytosanitary regulations by 
APHIS.
    Comment: Instead of the proposed treatments, APHIS should require 
WPM to be subject to the documented effective treatment for wood 
products, heat treatment with or without moisture reduction as 
specified under the APHIS universal treatment option: 71 [deg]C at the 
center of the material for 75 minutes. This treatment would 
substantially minimize the threat of introduction of injurious 
organisms. Until other efficacious wood treatments are sufficiently 
documented, this heat treatment provides the broadest and safest 
approach to the wood importation issue.
    Response: The proposed treatment requirements for WPM would provide 
much more protection against pest risk than the current requirement of 
debarking and apparent freedom from pests. The 71.1 [deg]C treatment 
was not established with SWPM in mind, but rather as a universal 
treatment option that would be certain to eliminate pests in all wood 
materials regardless of their risk level. As the 1995 final rule (60 FR 
27666, May 25, 1995) that first established the regulations said, 
``These universal options employ heat treatment and other conditions 
for importing logs and lumber not otherwise enterable. These universal 
options are relatively stringent, because they must eliminate the 
spectrum of potential plant pests and address risks that have not been 
characterized. The universal options are designed to give importers a 
way to import articles that would otherwise be prohibited until 
detailed plant pest risk assessments are completed. Whenever feasible, 
importers may choose to employ universal options while plant pest risk 
assessments and rulemaking are underway to establish less stringent 
requirements for the articles they wish to import.''
    Also, as stated in the August 2000, ``Pest Risk Assessment for 
Importation of Solid Wood Packing Materials into the United States,'' 
APHIS is preparing a pest risk reduction analysis that will evaluate 
the effectiveness of various available treatments and potential 
mitigation alternatives for WPM. If information gathered during 
development of the pest risk reduction analysis suggests that the 
stringency of existing WPM treatment requirements should be either 
strengthened or lessened, APHIS will undertake rulemaking to do so.
    Comment: Methyl bromide is ineffective against many deep-wood 
pathogens and pests because it does not penetrate to the center of 
thick boards or timbers. Its use cannot be verified at a later date, 
and it does not prevent reinfestation.
    Response: While methyl bromide is ineffective against some deep 
wood pathogens, and a few deep wood pests, these pathogens and pests 
usually are not significant pests associated with the WPM pathway. Many 
treatments cannot be verified at a later date by physical analysis or 
examination at ports. That is one reason this rule requires marking of 
treated materials. The marking system, coupled with registration and 
monitoring/auditing of treatment facilities by national governments, is 
the means for ensuring treatment has occurred. Finally, while 
reinfestation of fumigated WPM is possible, the risk is low (beyond the 
level of hitchhiking pests that might attach to any kind of packaging).

Canada and Mexico

    Comment: The current exemptions from the regulations for wood 
articles from Canada and from Mexican border states should be extended 
to include WPM that is imported into the United

[[Page 55724]]

States from the balance of Mexico. This action would be consistent with 
the North American Free Trade Agreement (NAFTA) and the North America 
Plant Protection Organization announcement dated April 25, 2003. It 
would avoid administrative complexities and the cost of a partial 
exemption from border States only, as well as avoid the production of 
additional export pallets from Mexico to the United States.
    Response: APHIS took final action on this issue in a final rule 
titled ``Importation of Unmanufactured Wood Articles From Mexico'' that 
was published in the Federal Register on August 26, 2004 (69 FR 52409-
52419, Docket No. 98-054-3). In that final rule, APHIS amended the 
regulations to remove the exemption for most unmanufactured wood, 
including WPM, imported into the United States from Mexican States 
adjacent to the United States/Mexico border. The only exemption that 
continues for Mexican border States covers firewood, mesquite wood for 
cooking, and small, noncommercial packages of unmanufactured wood for 
personal cooking or personal medicinal purposes. The effect of that 
change was that all WPM from Mexico will be subject to the same 
requirements in Sec.  319.40-3(b) that apply to WPM from any place 
except Canada.
    Comment: The United States and Canada must work together to curtail 
the disproportionate numbers of introductions of forest pests that are 
occurring in the Great Lakes region. They are far out of proportion to 
the volume of foreign shipping in that region or to the volume of 
interceptions by Federal inspectors. It is equally important that APHIS 
quickly complete the separate rulemaking to close the loophole that 
allows untreated WPM to enter the country from northern Mexican states.
    Response: Please see the response above. APHIS is actively working 
with the Canadian Food Inspection Agency to curtail pest introductions. 
Most of these introductions are pests not of Canadian origin that 
arrive via transshipped materials. We expect their level to decrease as 
Canada implements its own regulations requiring WPM imported into 
Canada to be treated in accordance with the IPPC Guidelines. Also, 
APHIS is currently developing a pest risk assessment for wood from 
Canada, and if we identify any significant risks that have not been 
addressed by current regulations, we will take appropriate rulemaking 
action.

Methyl Bromide--Montreal Protocol

    Comment: The proposed use of methyl bromide would violate the 
spirit and intent of the Montreal Protocol. It would exceed the intent 
of the quarantine exemption. It is inconsistent with Protocol Decisions 
that were adopted by the Montreal Protocol parties with the consent of 
the United States. Decision VI/11 of the Meeting of the Parties to the 
Montreal Protocol, for instance, states that developed country parties 
``are urged to refrain from use of methyl bromide and to use non-ozone 
depleting technologies wherever possible.'' The U.S. Environmental 
Protection Agency (EPA) wrote in its comment on the proposed rule 
regarding wood imports from Mexico (June 11, 1999, 64 FR 31512-31518) 
that because of the need to honor the Montreal Protocol and protect the 
ozone layer, ``allowing the use of methyl bromide in quarantine 
treatment of Mexican wood articles where other effective treatments 
exist would be inconsistent'' with Protocol Decisions.
    Response: APHIS is committed to finding environmentally acceptable 
alternative treatments to methyl bromide fumigation. At the current 
time, methyl bromide is an efficacious and economically feasible 
quarantine treatment to control pests in WPM, and we have determined 
that allowing it as an alternative treatment for WPM in the context of 
this rule will provide the necessary level of pest protection while 
minimizing impact on the environment given the absence, in many cases, 
of technically and economically feasible alternatives. This 
determination is supported by the FEIS, as discussed below in the 
section titled ``National Environmental Policy Act.''
    As discussed above, APHIS actively cooperates with other agencies 
and to identify and validate technically and economically feasible 
alternatives to methyl bromide. APHIS will continue to work 
cooperatively with the IPPC as APHIS explores alternative treatments to 
methyl bromide and incorporates validated, economically feasible 
alternatives into our quarantine regulations.
    Comment: The U.S. Department of Agriculture (USDA) estimate that 
methyl bromide emissions will increase by 5,145 metric tons, increasing 
total world usage by more than 10 percent, is a vast underestimate 
because it was based on the assumption that WPM would be fumigated 
before use. From experience in China, fumigation occurs at port 
facilities, after goods are packed in raw wood materials. USDA even 
states in the proposal that most wood packaging fumigation consist of 
about 35 percent WPM and 65 percent cargo. The USDA FEIS on wood from 
Mexico predicts a massive increase in methyl bromide use of more than 
102,000 tons per year. That would increase current world use for 
quarantine purposes by 10 times. It would triple total world use of 
methyl bromide for all purposes. Under these circumstances, USDA has 
not complied with its obligations to present a rational basis for its 
proposed action under the National Environmental Policy Act (NEPA), the 
Plant Protection Act, or the Administrative Procedure Act.
    Response: The draft and final EIS projections are based upon 
ongoing review of actual usage data and observations of activities at 
Chinese ports by APHIS personnel. The initial usage analyses were based 
upon the limited available time for exporters and shippers to prepare 
to treat WPM as required by APHIS in an interim rule published on 
September 18, 1998 (63 FR 50099-50111, Docket No. 98-087-1). These 
analyses considered the fumigation of WPM with already loaded cargo 
rather than fumigation of WPM before loading. Although there was 
primarily fumigation of WPM with loaded cargo by the exporters and 
shippers in China initially, this approach to WPM treatments did not 
continue. Many shippers and exporters from China began fumigating WPM 
prior to loading, for at least three reasons. The cost savings to the 
shippers and exporters from less use of methyl bromide in fumigations 
of WPM prior to loading were substantial. Also, many agricultural 
commodities lack a tolerance for the bromine residues imparted by 
fumigation with methyl bromide. Finally, fumigation after loading could 
make food commodities illegal for human consumption in the United 
States and could damage certain other commodities (e.g., leather goods 
and some electronic parts).
    Unlike the limited time exporters and shippers in China had to 
prepare for the September 18, 1998, interim rule, shippers and 
exporters throughout the world are aware of the IPPC Guidelines and 
have had time to prepare for these regulations. In addition, the IPPC 
Guidelines require marking the wood used in WPM, and it is easier and 
less expensive to treat and mark prior to loading than to unload after 
treatment to place markings on the treated WPM and then reload. Based 
upon this, it is reasonable to expect most exporters and shippers to 
fumigate WPM before loading. The fact that the projection in the FEIS 
assumes fumigation as the method of treatment for all WPM

[[Page 55725]]

indicates that it is actually a high estimate because we know that many 
developed nations will actually use heat treatment rather than 
fumigation for compliance with IPPC Guidelines.
    We expect fumigation of WPM to decline over time as shippers build 
a stockpile of treated pallets, which normally can be used for up to 3 
years. We also expect heat treatment to substitute for fumigation in 
some additional locations as more facilities are built.
    Comment: The final rule should explain more about the EPA's plans 
to phase out methyl bromide, particularly its intent to publish a plan 
and timeline in the Federal Register about December 2003.
    Response: Since the EPA is continuing to develop its plans and 
timeline for this issue, APHIS cannot provide conclusive information 
about them. We suggest that readers interested in the EPA's actions 
concerning methyl bromide follow EPA publications in the Federal 
Register.

Methyl Bromide--Other Issues

    Comment: Methyl bromide fumigation and heat treatment facilities 
are generally unavailable in many parts of Africa and Indonesia. Rubber 
exports from these areas have been shipped without risk using WPM 
treated with Borax as per the Rubber Research Institute of Malaysia No. 
122 method, or with a fungicide and insecticide called Xylolit B4.
    Response: Neither of these are approved treatments for WPM under 
APHIS regulations, and neither has been documented to be as effective 
as methyl bromide and heat treatment against target pests. APHIS is 
willing to review any scientific data regarding other treatments, and 
to consider adding treatments that are proven effective. However, when 
this rule goes into effect we will only accept WPM treated according to 
the new regulations, which do not authorize borax or insecticide/
fungicide treatments. We recognize that some importers may have to make 
substantial adjustments to their business practices and packing 
material suppliers to comply with the regulations, but we believe the 
pest risk associated with WPM justifies the new requirements.

Exempt Certain Articles From Regulation

    Comment: The treatment requirements of the proposal should not 
apply to the WPM containers of imported fresh fruits and vegetables. 
Specifically, APHIS should exempt typical small fruit and vegetable 
crates in common use. These crates are made of mixed plywood and 
natural wood, and are about 12'' x 7'' x 4'' high, with 1.1'' x 1.1'' x 
4'' high natural wood corner supports. WPM used in the international 
trade of regulated goods, such as fresh fruits and vegetables that are 
documented by an official phytosanitary certificate of the country of 
origin, presents a phytosanitary risk significantly lower than WPM in 
general. Phytosanitary certificates apply to both the commodity being 
exported and the WPM used in their transportation.
    Response: APHIS interceptions records from 1996-2001 show an 
increasing number of pests associated with WPM, including in containers 
for fresh fruits and vegetables. Based on interceptions at ports, WPM 
used for the shipment of fruits and vegetables can pose a significant 
risk. Importers of these products may be able to avoid having their 
containers considered to be regulated articles by redesigning them to 
eliminate the thicker pieces of raw wood often used as corner supports. 
Containers that use pieces of raw wood less than 6 mm (0.24 in) thick 
and containers made wholly of manufactured wood would be exempt from 
regulation. For the specific crates to be exempted, the corner supports 
would have to be replaced with exempt materials (plywood, particle 
board, veneer, etc.) or with bundled pieces of raw wood each of which 
is no more than 6 mm (0.24 in) thick.
    Comment: We request that APHIS address compliance requirements for 
WPM originating in the United States, shipped to a foreign location and 
then exported back to this country. It seems unlikely that WPM exported 
from the United States will be marked according to the IPPC Guidelines 
until all other countries have adopted those Guidelines. Consequently 
WPM originating in the United States that is exported and then returned 
would not satisfy the IPPC Guidelines unless an interim marking 
mechanism is established and used. Will APHIS allow U.S.-origin WPM 
that is exported and reimported into the United States to be marked 
according to requirements established by relevant foreign jurisdictions 
on an interim basis until all other countries adopt the IPPC 
Guidelines?
    Response: We are not adopting the suggested approach because using 
additional markings to indicate that WPM originated in the United 
States would require a major regulatory program to ensure the validity 
of such markings. It would be expensive, inconvenient, and a drain on 
APHIS resources that can be employed more usefully elsewhere. It would 
also be confusing to foreign governments that are just getting used to 
the markings in the IPPC Guidelines. There are already many sources of 
treated WPM in the United States, and APHIS, as the national plant 
protection organization of the United States, is currently developing 
procedures to meet its responsibilities under the IPPC Guidelines to 
inspect, monitor, accredit, and audit commercial companies that treat 
WPM and apply the official mark to it that indicates treatment. There 
are also many foreign sources of WPM treated in accordance with the 
regulations, and many U.S. shippers doing business with Canada already 
obtain their WPM from foreign sources.

Dunnage and Small Wood Pieces

    Comment: Does the proposed marking requirement mean that every 
piece of the 40 to 80 tons of dunnage that may be carried on board a 
steel transport ship could be subject to inspection prior to discharge? 
This is a serious problem because dunnage is used under the steel since 
it is intended to prevent movement of the cargo during the voyage. Long 
steel products are carried stowed in a fore-and-aft direction in ships' 
holds. Dunnage is used athwartship. In such a correctly stowed hold 
there should be little or no dunnage showing on completion of loading, 
so that marking may not make a difference as far as inspection prior to 
discharge is concerned. Also, sometimes ships meet with such bad 
weather during their sea voyage that part of the dunnage is crushed or 
broken. As a result, there will then be pieces of dunnage unmarked. 
What measures are then intended?
    Response: We recognize the difficulty in ensuring that required 
treatment marks are present on some dunnage that is custom cut to brace 
or fill gaps in a particular load. However, dunnage is frequently made 
from the type of low quality wood that poses the greatest pest risk, 
and it is therefore necessary that dunnage be treated and marked the 
same way as any other regulated WPM. The fact that the nature of some 
cargoes makes it impossible to inspect the associated dunnage aboard 
ship is not particularly relevant because dunnage inspection is 
normally done following cargo discharge.

Alternatives to Marking WPM

    Comment: To speed port clearance and aid enforcement, we support 
using very simple self-declarations of compliance to accompany any and 
all international shipments, even those totally free of solid wood 
packaging.

[[Page 55726]]

The self-declaration would affirm that all packaging in the shipment 
complies with the provisions of the IPPC Guidelines. This is vital 
information and therefore should be repeated in key shipping documents 
such as bills of lading, invoices, and so on.
    Response: We welcome the use of electronic records for many port 
operations purposes, and we are working with the U.S. Department of 
Homeland Security (DHS) on projects in that area. However, APHIS has 
decided that the system of authorized WPM markings applied by 
facilities operating under the supervision of national governments is 
more reliable than a system where individual invoices and shipping 
documents affirm compliance. Affirmations in shipping documents about 
whether or not cargoes contain WPM, and whether or not the WPM has been 
treated, are frequently unreliable. Our experience clearing shipments 
from China showed frequent incidents where shipping documents contained 
an affirmation that no WPM was in the cargo, despite its presence. 
Under this final rule, inspectors can tell directly from observation of 
the WPM whether or not it is in compliance (barring fraudulent misuse 
of the mark, which will be addressed by auditing and monitoring). This 
process does not need to be significantly slower than using shipping 
documents. Importers that establish a record of compliance over a 
number of shipments generally will be subject to less inspection. 
Clearance time will also decrease as importers and exporting countries 
gain experience with the new requirements and acquire a history of 
moving shipments without inspectors finding pests of concern associated 
with them.
    Comment: Clearing WPM at ports based on physical inspection to see 
if it is marked will cause significant delays in the clearance of 
imports without commensurate benefits. Containers and air cargo will 
have to be unloaded individually and each pallet, crate, or other 
regulated item inspected. This is highly burdensome and costly for both 
importers and the government, and will cause major disruptions to 
importers' supply chains, many of which are part of just-in-time 
inventory management systems. For the government these inspections will 
divert inspectors of the U.S. Bureau of Customs and Border Protection 
(CBP), DHS, from their primary cargo security mission.
    We urge APHIS to offer an alternative that would be consistent with 
the best practices being implemented throughout the regulatory realm, 
which allow for electronic filing of compliance information. In an 
electronic system, importers would be allowed to transmit a compliance 
code to the CBP, by which code they would certify that the WPM is 
compliant or that there is no WPM contained in the shipment. This is 
how compliance certifications are presented to other government 
agencies such as the Federal Communications Commission and the Food and 
Drug Administration. A paper alternative, such as a stamped statement 
on a bill of lading or invoice, should be available for situations in 
which electronic certification is not practical.
    Additionally, we recommend that APHIS consider providing for a 
blanket certification for importers who can assure to the satisfaction 
of APHIS that their WPM is routinely compliant. In the electronic 
environment, this would consist of importer information established as 
part of its CBP account profile. CBP is developing these profiles as 
part of its Automated Commercial Environment architecture. We urge 
APHIS to work closely with CBP to implement the necessary interfaces 
between CBP's system and APHIS. In the interim, we request that APHIS 
accept blanket paper certificates of compliance by which importers 
certify that for a designated period of time all imports of WPM into 
the United States are compliant.
    Response: See the response to the previous comment.

Inspection Procedures

    Comment: Because not all WPM poses equal risks, APHIS should use 
risk management to avoid unnecessary shipment delays caused by 
ineffective random inspections. Take advantage of data from existing 
importers quality control procedures and compliance programs. Highly 
compliant importers, as verified by valid statistical sampling of 
imports, should be subject to a lower rate of physical inspections than 
unknown or noncompliant importers.
    Response: APHIS intends to use risk management techniques and data 
from a variety of sources to target its inspection activities and its 
monitoring and auditing activities for facilities conducting 
treatments.

Delayed Effective Date and Noncompliant Shipments

    Comment: Instead of immediately starting to order the reexport of 
unmarked WPM, we request a 2-year transitional period to phase out old 
WPM with previously acceptable marking (for example, ``HT'' without the 
IPPC symbol) provided the treatment requirements prescribed by the 
proposed rule are satisfied.
    Response: APHIS received a number of comments stating that 
exporting countries and shippers would need time to adapt to the new 
requirements of the rule and to change some of their business practices 
and WPM sources. We agree, and in response we have set the effective 
date for this final rule at a date 1 year after its publication date. 
We believe affected parties will be able to prepare for the new 
requirements during this period. APHIS will also conduct a very active 
information campaign during this period to ensure that affected parties 
are aware of the new regulatory requirements. Consistent with parties' 
commitments under the Montreal Protocol, this campaign will also stress 
to affected parties that use of alternate packing materials or heat 
treatment of WPM are environmentally preferable alternatives for 
meeting the requirements, as documented by the FEIS. As part of this 
campaign, APHIS inspectors at ports will focus on imported WPM 
shipments that do not meet the new requirements, and will give the 
importers official notice explaining what they must do for future 
shipments (i.e., those arriving after the effective date of this final 
rule) to comply with the new requirements.
    Comment: In case of noncompliance, the proposal would require 
reexport after separating the cargo, if possible. Why not allow the 
other measures explained in item 6.1 of the IPPC Guidelines, such as 
incineration, processing or treatment, etc.?
    Response: Reexportation is necessary because we need to achieve 
compliance (treatment and marking of WPM before arrival) in order to 
fully protect against the introduction of plant pests. In recent years, 
several destructive plant pests, including the Asian longhorned beetle 
and the emerald ash borer, have been introduced into the United States. 
We believe that these pests have entered the United States in WPM at 
ports of entry. Therefore, we believe that proper treatment of WPM, 
prior to importation into the United States, is essential to safeguard 
our agricultural resources from further pest introductions. We believe 
requiring the reexportation of noncompliant WPM is the only option that 
will ensure that WPM is properly treated prior to its arrival in the 
United States. Also, allowing post-entry treatment is not feasible 
because space and services at ports are limited and ports cannot be 
burdened with vast quantities of noncompliant materials awaiting 
treatment or incineration. Further, allowing post-entry treatment would 
place an additional burden on already scarce port resources since it 
would be necessary to track shipments

[[Page 55727]]

to ensure proper treatment. Finally, the reexportation requirement is 
consistent with the approach adopted by other IPPC member countries, 
such as Canada.
    Comment: The requirement to reexport noncompliant imports is too 
stringent. Some WPM might not be stamped due to simple error. In cases 
where marking is absent but no pests have been intercepted, the cargo 
should be accepted. Even if pests are found WPM could be fumigated or 
treated appropriately at the expense of the importer in the routine 
manner for other noncompliant goods. Equivalent measures should be 
explored. The national plant protection organization (NPPO) of the 
exporting country could then be informed about the non-compliance with 
the details of the exporter so that the NPPO could monitor that 
exporter.
    Response: Please see the above responses about the 1-year delay in 
the effective date of this rule, which will give affected parties time 
to comply with the new requirements. We intend to inform the NPPO's of 
exporting countries about noncompliance in shipments from their 
countries, but this is in addition to, not a substitute for, 
enforcement action by APHIS.
    Comment: When imported WPM is not in compliance, APHIS should 
require both the WPM and cargo to be treated at the port of entry. 
Separating the cargo from the WPM without treatment could result in the 
introduction of wood borers into the environment. Similarly, any 
properly marked WPM that proves infested should be required to be 
treated at the port of arrival. Fumigators at the ports of entries have 
years of experience treating cargo upon arrival and have the expertise 
to ensure that any destructive pests are destroyed and that the free 
flow of trade is not impeded. Requiring the reexport of WPM and 
associated cargo will impede international trade and hurt the U.S. 
economy.
    Response: As discussed above, the reexport option will be necessary 
to achieve compliance (treatment and marking of WPM before arrival), 
and also because space and services at ports are limited. In some 
cases, APHIS inspectors at a port of entry may discover signs of pests 
in a shipment that is apparently in compliance and order treatment in 
accordance with Sec.  319.40-9. APHIS is committed to protecting U.S. 
agricultural resources and will ensure that any treatment after arrival 
is done under safeguards adequate to prevent the spread of pests. 
Sometimes this will involve treating cargo along with WPM, and 
sometimes it will not, based on the type of cargo and the nature of any 
pests that are identified.

Economic Impacts on WPM Producers

    Comment: Forty percent of all hardwood lumber manufactured in the 
United States, and a goodly portion of the softwood as well, go into 
the manufacture of WPM like dunnage, crating, pallets, packing blocks, 
drums, cases, and skids. It is absolutely essential for the hardwood 
industry and very important to the softwood industry to preserve this 
huge market for their lowest quality lumber. Also, unloading containers 
in transit to verify whether the packing material has really been 
treated would greatly endanger certain products being transported 
(e.g., fragile wood veneers), in addition to adding more time to the 
transportation.
    Response: The problem is that the use of low grade, untreated wood 
in international WPM is exactly the practice that must be ended to 
protect U.S. resources against foreign plant pests. We do not see any 
alternative that would allow continued use of untreated WPM and also 
protect against these risks. With regard to unloading cargoes for 
inspection purposes, CBP inspectors at ports are experienced and well 
trained and deal professionally with any shipments. APHIS is developing 
new operational procedures to minimize delays caused by WPM inspections 
at ports. We also expect that the need for substantial unloading and 
inspection will decline over time as shippers and exporting countries 
become familiar with the new requirements and develop a history in 
which no pests of concern are found associated with their shipments.
    Comment: Nearly 7,000 U.S. facilities produce pallets nationwide 
and are a vital utilizer for low grade wood which would otherwise have 
to be burned at high temperature for lack of other use. This, in turn, 
would considerably increase the cost of marketing high quality wood 
products like veneer, lumber, flooring, plywood, and particle board as 
well as other engineered wood products.
    Response: We recognize that this rule will have some adverse 
economic effects, as discussed below in the section ``Executive Order 
12866 and Regulatory Flexibility Act.'' Such effects are sometimes 
unavoidable when APHIS takes steps to protect agricultural resources 
against plant pest risk. There will still be a market for domestically 
produced pallets because untreated WPM could still be used in domestic 
commerce or in exports to any country that has not implemented the IPPC 
Guidelines or similar treatment requirements.

Economic Impacts on U.S. Fumigators at Ports

    Comment: The rule would reduce fumigation at ports of arrival, 
financially hurting quarantine fumigators that often are small family-
owned businesses. These economic losses would be on top of significant 
revenue losses that fumigators incurred when APHIS implemented its 
interim rule on WPM from China.
    Response: APHIS' main goal is protecting against any possible 
infestation that might be associated with imported WPM. There is a 
general trend throughout the world to reduce methyl bromide usage. 
While this final rule may result in reduced fumigation of wood products 
at U.S. ports of arrival, the 1-year delay in the effective date should 
give fumigation businesses time to adjust business plans. Also, as 
discussed above, APHIS may discover signs of pests in a shipment that 
is properly marked and may order treatment of either the WPM, the 
cargo, or both, as appropriate.

Implementation Schedule

    Comment: The effective date of the final rule should be at least 1 
year after publication, to allow developing countries to implement the 
necessary means and conditions, including national systems of 
treatment, inspection, registration or accreditation, and auditing of 
WPM to be shipped to the United States, thus avoiding an obstacle to 
international trade.
    Response: We agree, as discussed above, and have delayed the 
effective date for 1 year. In general, APHIS has communicated very well 
with its trading partners, which should allow them to implement the 
needed systems within 1 year. After the effective date, we will enforce 
compliance with the new requirements.
    Comment: We seriously doubt that any country outside of North 
America will be prepared to fully implement the standard by January 
2004. We encourage the USDA to adopt the standard but also apply a 
generous grace period to allow importing countries to get up to speed 
on the marking systems and underlying audit programs. Otherwise, we 
will end up seeing a lot of ``IPPC symbols'' on pallets which may not 
have been treated to the same degree of quality and control as we would 
expect in the United States, thereby casting doubt on the efficacy of 
the whole program.
    Response: Please see the responses above about the 1-year delay in 
the effective date. CBP will audit all

[[Page 55728]]

material shipped, as well as records for facilities treating WPM and 
applying the mark. Shipments from countries with high levels of 
noncompliance will face higher levels of inspection.

Miscellaneous Comments

    Comment: The IPPC Guidelines do not specifically require that WPM 
be free of bark. Does APHIS intend to specify a bark-free requirement 
for WPM in the final rule?
    Response: No, APHIS will not require the wood to be bark free, as 
long as it has been properly treated. Currently available data shows 
that treatment alone will adequately kill the pests of concern.
    Comment: There is no provision in the proposed rule describing what 
mark should be used by non-IPPC member countries. There will be 
trademark registration on the IPPC mark so non-IPPC member countries 
may not be entitled to use this marking.
    Response: APHIS is not responsible for any country's decision on 
whether or not to join the IPPC, or for how any country addresses 
trademark issues. We do note that the IPPC is in the process of 
registering the mark in many countries at this time for use on 
materials treated in accordance with the IPPC Guidelines. We also note 
that, even if a country cannot establish treatment facilities 
authorized to apply the mark in their own country, they can readily 
obtain treated and marked WPM from other countries, or they can use 
alternative materials to WPM.

Miscellaneous Editorial Changes

    In addition to the changes discussed above, we are making some 
minor changes for clarity and consistency. We are removing the 
definitions of exporter statement, importer statement, and solid wood 
packing material because these terms are no longer used in the 
regulations. We are slightly editing the table in Sec.  319.40-
3(b)(1)(ii) that provides the methyl bromide treatment schedule so that 
it provides concentrations in lbs./1,000 c.f., as well as in g/m\3\. We 
are also adding a graphic and description of the approved IPPC mark to 
Sec.  319.40-3(b)(2).
    Therefore, for the reasons given in the proposed rule and in this 
document, we are adopting the proposed rule as a final rule, with the 
changes discussed.

Executive Order 12866 and Regulatory Flexibility Act

    This rule has been reviewed under Executive Order 12866. The rule 
has been determined to be significant for the purposes of Executive 
Order 12866 and, therefore, has been reviewed by the Office of 
Management and Budget.
    Below is a summary of the economic analysis for the changes in WPM 
import requirements in this document. The economic analysis provides a 
cost-benefit analysis as required by Executive Order 12866 and an 
analysis of the potential economic effects on small entities as 
required by the Regulatory Flexibility Act. A copy of the full economic 
analysis is available for review at the location listed in the 
ADDRESSES section at the beginning of this document, or on the Internet 
at http://www.aphis.usda.gov/ppq/swp/.
    In accordance with 5 U.S.C. 604, we have performed a final 
regulatory flexibility analysis, which is set out below, regarding the 
effects of this rule on small entities. The initial regulatory 
flexibility analysis in our proposed rule stated that we did not have 
all the data necessary for a comprehensive analysis of the potential 
effects of this rule on small entities. Therefore, we invited comments 
concerning potential economic effects, particularly the number and kind 
of small entities that might incur benefits or costs. We did not 
receive any comments providing the specific data we requested, but we 
did receive several comments stating that some small business will be 
adversely affected by the rule, including importers with substantial 
inventories of WPM on hand in foreign countries, which they would no 
longer be able to use for shipments to the United States, and 
fumigators at U.S. ports that currently treat large volumes of WPM upon 
arrival and expect to lose much of this business after the rule is 
implemented. Several commenters also suggested that domestic WPM 
manufacturers faced indirect effects that could result when other 
countries adopt the IPPC Guidelines, reducing the demand for untreated 
WPM.
    Under the Plant Protection Act (7 U.S.C. 7701-7772), the Secretary 
of Agriculture is authorized to regulate the importation of plants, 
plant products, and other articles to prevent the introduction of 
injurious plant pests.
    This analysis evaluates a final rule adopting the IPPC standards on 
wood packaging material, the International Standard for Phytosanitary 
Measures No. 15. This standard contains globally accepted measures that 
may be applied to WPM to reduce the entry of pests via this pathway. 
The IPPC Guidelines require WPM to be heat treated at 56 [deg]C for 30 
minutes, or fumigated with methyl bromide.
    Alternatives considered and rejected included the alternative of 
taking no action. This alternative was rejected because recent 
interceptions of pests at ports of entry show a steady increase in 
serious pests associated with WPM from everywhere except China, whose 
WPM must already be treated due to past pest interceptions. If left 
unchecked, pests introduced by imported WPM have the potential to cause 
significant economic damage to the agricultural and forest resources of 
the United States.
    We also rejected the alternative of extending the China interim 
rule to all WPM worldwide, because that would not ensure long-term 
exclusion of some wood pests of quarantine concern, such as certain 
deep wood-borers, fungi, rots, and wilts. The adoption of the IPPC 
treatment standards for all importing countries will address pest 
threats posed not only by Cerambycidae, which was the primary target of 
the China interim rule, but nine other pest families as well. 
Additionally, adoption of the China interim rule requirements would 
result in the greatest additional use of methyl bromide of all the 
alternatives.
    Another alternative not adopted was a comprehensive risk reduction 
program allowing differing, circumstance-dependent risk mitigation 
strategies that include various options for complying with United 
States import requirements. A comprehensive risk reduction program 
would consist of an array of mitigation methods (e.g., inspection, 
various heat treatments, various fumigants and other chemical 
treatments, irradiation, etc.) that is more extensive than that 
contained in either the China Interim Rule or the IPPC Guidelines. Many 
of the treatment methods being considered as components of a 
comprehensive risk reduction program require more research and 
development to demonstrate that they could be used effectively and 
economically to treat the required range of WPM products. Some of the 
remaining issues include inadequate control, incomplete efficacy data, 
safety issues, and lack of adequate facilities or supplies. Therefore, 
while comprehensive risk reduction is still considered a possible 
future approach for WPM import requirements, it is not practical to 
adopt it at this time.
    Another alternative, substitution of other packing materials, was 
rejected because it requires use of materials the cost of which exceed 
the likely costs of SWPM that is either heat treated or fumigated with 
methyl bromide.
    We believe it is appropriate and necessary to adopt the IPPC 
Guidelines because they were developed as an international standard to 
control pests associated with WPM. The types of pests the IPPC 
Guidelines were developed to control have been

[[Page 55729]]

intercepted at U.S. ports for many years and pose significant risks to 
U.S. resources. The damage they cause could be similar in magnitude to 
the recent introduction of the Asian longhorned beetle (ALB) 
Anaplophora glabripennis (Coleoptera: Cerambycidae). Our regulations 
have already been changed to prevent further introductions of ALB from 
China, but adopting the IPPC guidelines could prevent the introduction 
of ALB or similar wood borers from other parts of the world, as well as 
prevent the introduction of other types of pests such as woodwasps and 
bark beetles. Imposing the IPPC Guidelines' treatment and other 
requirements to prevent these introductions will yield net benefits. 
The benefits (avoided losses) that can be gained by preventing 
introduction of these pest types are discussed below. The actual 
magnitude of the benefits cannot be definitively ascertained, but they 
are likely to be much larger than the associated costs.
    As an indicator of the damage ALB or similar wood borers could 
cause if introduced again in the future, consider the costs of the ALB 
introduction from China. The ALB, first discovered in New York, NY, in 
1996 and in Chicago, IL, in 1998, was most likely introduced on wood 
packing material from China. The present value of urban trees at risk 
in the two affected cities is estimated at $59 million over some 50 
years. About $6 million of urban trees have been destroyed due to pest 
infestation and eradication efforts since the introduction of ALB. So 
far, APHIS and State and local governments have spent over $59 million 
in eradicating the pest in the two localities. If only New York City 
and Chicago were considered, it would appear that the current 
eradication program has spent an amount equal to the value of the 
resource being protected. However, the eradication and quarantine 
activities have slowed the spread within New York and Chicago. Without 
these activities, the faster spread in these cities would increase the 
net present value because the resources would be lost in a much shorter 
amount of time. The eradication and quarantine activities are also the 
reason the pest has been confined to the two cities where it was 
initially detected. The potential damages from ALB spread to other 
areas can be gleaned from the Nowak et al. study that estimated losses 
to seven other cities. The present value of damage to urban trees in 
Baltimore, MD, alone, not allowing for intervention, was estimated to 
be $399 million. Additionally, without governmental intervention, 
forest resources would also be at risk.
    Wood borers such as ALB could cause the most damage of all types of 
pests associated with WPM, but we have also projected that other types 
of pests could cause substantial damage. These include the Sirex 
woodwasp (Family: Siricidae) and the Eurasian spruce bark beetle Ips 
typographus (Family: Scolytidae). Projections of physical damages that 
can be caused by these types of pests range up to $48-$607 million and 
$208 million, respectively. Perhaps the greatest devastation posed by 
these pests that cannot be fully captured monetarily is their potential 
to cause irreversible loss to native tree species and consequential 
alterations to the environment and ecosystem.
    The recent introduction of the emerald ash borer (EAB), Agrilus 
planipennis (Coleoptera: Buprestidae), a pest of ash trees, in Michigan 
and parts of Canada in June 2002 is a reminder of this threat. It is 
not known how the pest arrived in North America but, as with other 
exotic beetles, infested WPM from Asia is suspected. The pest may have 
arrived some 6 years ago, before the interim rule on China was 
implemented in September 1998 (63 FR 50099-50111, Docket No. 98-087-1). 
Ironically, many of the large ash trees favored by the pest were 
originally planted to replace elm trees killed by Dutch elm disease 
caused by yet another exotic pathogen. A preliminary assessment of the 
potential impact of the EAB on urban and timberland ash trees in the 
six counties originally quarantined by Michigan comes to about $11 
billion in replacement costs alone. The nursery stock industry in the 
affected counties reported a loss in sales so far of $2 million. These 
estimates serve to highlight the potential magnitude of damage that 
could be caused by one outbreak alone of a pest on the targeted list.
    The adoption of the IPPC treatment standards for all importing 
countries will address pest threats posed not only by Cerambycidae, 
which was the primary target of the China interim rule, but nine other 
pest families as well. Approximately 95 percent of pests intercepted by 
APHIS inspectors in shipments worldwide are pests on the IPPC target 
pest list.
    The treatment requirements in this rule are not expected to 
completely eliminate all pest interceptions related to WPM. As evident 
from data reported between 2000 and 2001, 2 years following the 
implementation of the China rule, 7 percent of pest interceptions was 
still associated with China imports. To the extent that pest 
interceptions will be reduced, the risk of an outbreak will also be 
lower than in the absence of the rule. However, because pests continue 
to be intercepted albeit at a lower rate, benefits need to be 
correspondingly adjusted to reflect the risk.
    In discussing the costs that might result from adopting this rule, 
it is essential to recognize that to some degree these costs will 
accrue when other countries adopt the IPPC Guidelines, whether or not 
the United States also adopts them. As other countries impose IPPC 
treatment requirements on imports containing WPM the global WPM market 
will be greatly affected, likely causing a broader impact on the 
domestic wood packaging industry than the provisions of this rule.
    Adopting this rule may also cause general societal costs due to 
human health issues (increases in skin cancer, cataracts, and other 
conditions) and reduction in crop yields that may result if increased 
use of methyl bromide as a result of this rule delays recovery of the 
ozone layer. It is impossible to confirm or estimate such costs at the 
present time.
    The effects of this rule will fall largely on foreign manufacturers 
of pallets. The increased treatment cost may add to the cost of 
packaging and transporting of goods which, in turn, will affect 
importers of commodities transported on pallets and final consumers of 
those goods are potentially affected by this rule. The required 
treatments will add to the cost of packaging and transport of goods. 
Due to the very large number of pallets that are used to assist 
imported cargo, the overall cost may be substantial. The extent of the 
impact on U.S. consumers will depend on the ability of importers to 
pass on the additional costs to respective buyers. It is expected that 
most of the cost of treating pallets will be borne by foreign pallet 
manufacturers. Furthermore, given the small value of pallets as 
compared to the value of trade, increases in pallet prices are not 
expected to have a measurable effect on domestic consumers or on trade.
    We also expect this rule to affect U.S. purchasers of imported 
pallets, crates and boxes. Between 1999 and 2001, an average of 38 
million pallets was imported into the United States, over 80 percent of 
which came from Canada. Imported WPM was valued at $150 million during 
this time period. At approximately $3.95 per piece, imported pallets 
are less expensive than domestic pallets where the average price ranges 
between $8 and $12 per pallet. Canadian pallets are primarily used by 
industries close to the U.S. and

[[Page 55730]]

Canadian border. The wood pallet market is highly competitive, and the 
demand for imported pallets can be characterized as elastic. While 
pallets made of alternative materials such as plastic, corrugated 
fiberboard, or processed wood are imperfect substitutes for wood, one 
wood pallet can easily substitute for another wood pallet.
    Assuming a perfectly elastic supply and perfectly inelastic demand 
for imported pallets, and assuming a treatment cost that adds about $2 
on average to a pallet, U.S. purchasers of imported pallets could lose 
an estimated $76 million in higher costs. The true extent of the 
impact, however, will be lower than this amount because demand is 
likely to be elastic and foreign importers are expected to share a 
greater burden of the cost increase. We do not know treatment costs for 
foreign pallet producers, but given the availability of substitutable 
domestic wood pallets, we do not expect U.S. purchasers of imported 
pallets to be significantly affected.
    Recent and forthcoming decisions by other countries to adopt the 
IPPC standard, while not an effect of this rule, represent an 
associated issue that will indirectly affect manufacturers who sell 
pallets, crates, and boxes to foreign buyers. There are an estimated 
3,000 manufacturers of pallets and containers in the United States. The 
primary importers of these items are Canada and Mexico. As these two 
countries prepare to implement the IPPC standard, only treated wood 
packaging material will likely be in demand for export. The extent of 
the impact on pallet and container manufacturers will depend on the 
ability of individual firms to put in place the necessary 
infrastructure for conducting treatments as required by the 
international standard. The number of U.S. firms that export WPM and 
will therefore be affected is unknown. Regardless, the impact on the 
overall WPM industry is expected to be small as the quantity of total 
pallets exported, estimated at about 10 million units, comprises only 
2.5 percent of the 400 to 500 million pallets in production in the 
United States each year.
    Domestic manufacturers of wood pallets may be indirectly affected 
in one other way. Because of the increasing trend in recycling of 
pallets for cost-cutting purposes, manufacturers may be faced with new 
demands for treated WPM from domestic exporters who reuse pallets and 
wood containers to ship goods back from foreign countries.

Effects on Small Businesses

    The provisions of this rule are not expected to directly affect 
U.S. manufacturers of wood packaging material. There may be some 
decrease in the demand for pallets if some exporters decide to use 
alternate packing materials rather than WPM due to treatment costs for 
WPM. However, this should be more than balanced by new purchases of 
treated pallets by exporter/importers, who must now use treated pallets 
when they reuse pallets used to ship goods overseas to subsequently 
ship goods back to the United States. This may create an increased 
demand by exporters for treated pallets. Also, some U.S. pallet makers 
also make alternative packing materials (plywood, particle board) and 
could maintain their business levels even if there is a small demand 
shift from one category to the other.
    The pallet industry in the United States is characterized by many 
small firms and a few larger firms. No one firm is able to dominate the 
market. U.S. Census data show that there are approximately 3,000 firms 
in the wood pallet and container industry. Other estimates of the 
number of firms in the industry range up to 3,500 pallet manufacturers 
in the United States. Most firms sell their products within a 350 mile 
radius. The average number of employees in 1997 was 17. Thirty two 
percent of the firms had fewer than five employees. The average sales 
were $1.5 million.
    The Small Business Administration (SBA) classifies wood container 
and pallet manufacturers as small businesses if they have 500 or fewer 
employees. According to the U.S. Census Bureau, 1997 Economic Census, 
all pallet manufacturers are considered small businesses.
    Fumigation services are currently available at several dozen ports 
of entry on a permanent or ad hoc basis. In most cases these fumigation 
services are provided by large businesses that serve a number of ports. 
Two commenters on the proposed rule stated that several fumigators at 
ports were small businesses that could be adversely affected if the 
demand for fumigation upon arrival decreases, but these commenters did 
not provide any specific data on the number or location of these 
businesses or the scope of the potential impacts.
    While decisions by other countries to adopt the IPPC standard are 
independent actions not directly resulting from adoption of this rule, 
those decisions do raise the associated issue that the international 
WPM market will adjust as Canada, Mexico, and other countries adopt the 
IPPC standard. Small businesses such as pallet manufacturers and 
fumigators at ports may be adversely affected by those countries' 
decisions if they are unable to adapt to the increased demand for 
treated pallets. The number of small businesses potentially affected by 
other countries' decisions to adopt the IPPC standard is unknown. 
However, the adoption of the treatment standards by IPPC member 
countries that will then apply to U.S. exports will likely create a 
broader impact on the domestic wood packaging industry (small and large 
businesses alike) than the provisions of this rule.

Conclusion

    This rule will affect foreign manufacturers of pallets which may, 
in turn, affect importers and final consumers of goods transported on 
pallets. Because the cost of a pallet is a very small share of the 
bundle of goods transported on pallets, cost increases due to the 
treatment requirements are not expected to significantly affect 
domestic consumers and thus will not have a measurable impact on the 
flow of trade. This rule is not expected to reduce the amount of goods 
shipped internationally as is evident from observing trends in imports 
from China since implementation of the interim rule in 1999.
    This rule will also affect U.S. consumers of imported pallets. 
Given the substitutability of wood pallets, the impact on consumers is 
expected to be small due to the availability of wood pallets. Foreign 
importers are likely to absorb a greater share of the cost increase.
    The simultaneous adoption of the treatment standards by IPPC member 
countries that is directed at U.S. exports will likely create a broader 
impact on the domestic wood packaging industry than the provisions of 
this rule.
    This rule contains information collection requirements, which have 
been approved by the Office of Management and Budget (see ``Paperwork 
Reduction Act'' below.)

Executive Order 12988

    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. Under this rule: (1) All State and local laws and 
regulations that are inconsistent with this rule will be preempted; (2) 
no retroactive effect will be given to this rule; and (3) 
administrative proceedings will not be required before parties may file 
suit in court challenging this rule.

[[Page 55731]]

National Environmental Policy Act

    On September 19, 2003, the U.S. Environmental Protection Agency 
(EPA) published in the Federal Register (68 FR 54900-54901) a notice of 
availability of the final environmental impact statement titled 
``Importation of Solid Wood Packing Material.'' The FEIS considers the 
environmental impacts from importation of wood packaging material that 
could result from our adoption of the proposed rule as a final rule.\2\ 
The FEIS was prepared in accordance with: (1) The National 
Environmental Policy Act of 1969 (NEPA), as amended (42 U.S.C. 4321 et 
seq.), (2) regulations of the Council on Environmental Quality for 
implementing the procedural provisions of NEPA (40 CFR parts 1500-
1508), (3) USDA regulations implementing NEPA (7 CFR part 1b), and (4) 
APHIS' NEPA Implementing Procedures (7 CFR part 372).
---------------------------------------------------------------------------

    \2\ Copies of the FEIS are available for public inspection at 
USDA, room 1141, South Building, 14th Street and Independence 
Avenue, SW., Washington, DC, between 8 a.m. and 4:30 p.m., Monday 
through Friday, except holidays. Persons wishing to inspect copies 
are requested to call ahead on (202) 690-2817 to facilitate entry 
into the reading room. In addition, the FEIS may be viewed from the 
APHIS Internet site at http://www.aphis.usda.gov/ppd/es/swpm.html, 
and copies may be obtained by writing to the individual listed under 
FOR FURTHER INFORMATION CONTACT.
---------------------------------------------------------------------------

    Pursuant to the implementing regulations for NEPA, in cases 
requiring an EIS, APHIS must prepare a record of decision at the time 
of its decision. This final rule constitutes the required record of 
decision for the FEIS.
    The NEPA implementing regulations require that a record of decision 
state what decision is being made; identify alternatives considered in 
the environmental impact statement process; specify the environmentally 
preferable alternative; discuss preferences based on relevant factors--
economic and technical considerations, as well as national policy 
considerations, where applicable; and state how all of the factors 
discussed entered into the decision. In addition, the record of 
decision must indicate whether the ultimate decision has been designed 
to avoid or minimize environmental harm and, if not, why not.

The Decision

    APHIS has decided, in this final rule, to amend its regulations to 
provide that wood packaging material imported into the United States 
from other countries will be subject to the requirements stipulated in 
the IPPC Guidelines. This includes specific treatment requirements for 
either heat treatment or fumigation with methyl bromide of the wood 
packaging material.

Alternatives Considered in the Impact Statement Process

    The FEIS focuses mainly on pest risk issues from the use of wood 
packaging material, potential impacts from treatments with methyl 
bromide, and potential impacts from use of substitute packaging made 
from materials other than unmanufactured solid wood. The FEIS considers 
a reasonable range of alternatives, including: (1) No action, 
essentially maintaining the exemption from treatment requirements for 
importation of wood packaging material from foreign countries except as 
regulated under the September 18, 1998, interim rule that required 
treatment of WPM from China (China interim rule, 63 FR 50099-50111, 
Docket No. 98-087-1), (2) extension to all countries of the treatments 
in the China interim rule, (3) adoption of the IPPC Guidelines, (4) 
establishment of a comprehensive risk reduction program, and (5) use of 
substitute (non-solid wood) packaging material only.

Environmentally Preferable Alternative

    The environmentally preferable alternative would be to prohibit 
importation of wood packaging material, which would virtually eliminate 
all associated pest risks, as well as the need for quarantine 
treatments. This regulatory approach (alternative 5 above) would 
require all commodities that are to be imported to the United States to 
be transported with only substitute packaging material, which at the 
current time would be technically and economically infeasible for many 
exporters, especially in developing countries.

Preferences Among Alternatives

    There is a preference for the approach taken in this final rule, 
which we adopt herein (alternative (3), above). The preference for this 
alternative is based principally on the determination that it meets the 
Agency's obligations under the Plant Protection Act (PPA), and other 
legislation such as NEPA and the Clean Air Act.
    The no action alterative (alternative 1 above) was rejected because 
recent interceptions of pests at ports of entry show a steady increase 
in serious pests associated with WPM from everywhere except China, 
whose WPM must already be treated due to past pest interceptions. If 
left unchecked, pests introduced by imported WPM have the potential to 
cause significant economic damage to the agricultural and forest 
resources of the United States.
    The alternative of extending the China interim rule to all WPM 
worldwide (alternative 2 above) would not ensure long-term exclusion of 
some wood pests of quarantine concern, such as certain deep wood-
borers, fungi, rots, and wilts. The adoption of the IPPC treatment 
standards for all importing countries will address pest threats posed 
not only by Cerambycidae, which was the primary target of the China 
interim rule, but nine other pest families as well. Additionally, 
adoption of the China interim rule requirements would result in the 
greatest additional use of methyl bromide of all the alternatives.
    The comprehensive risk reduction program (alternative 4 above) 
would consist of an array of mitigation methods (e.g., inspection, 
various heat treatments, various fumigants and other chemical 
treatments, irradiation, etc.) that is more extensive than that 
contained in either the China Interim Rule or the IPPC Guidelines. Many 
of the methods are in various phases of research and development that 
do not provide adequate basis for any final decisions about program 
usage.
    Substitution of other packing materials (alternative 5 above) 
requires use of materials the cost of which exceed the likely costs of 
SWPM that is either heat treated or fumigated with methyl bromide.
    Please see the FEIS for a full discussion of the reasons why 
adopting the IPPC standard was considered the preferred alternative.

Factors in the Decision

    APHIS' mission is guided by the PPA, under which the detection, 
control, eradication, suppression, prevention, and retardation of the 
spread of plant pests or noxious weeds have been determined by Congress 
to be necessary and appropriate for the protection of the agriculture, 
environment, and economy of the United States. The PPA also has been 
designed to facilitate exports, imports, and interstate commerce in 
agricultural products and other commodities. In order to achieve these 
objectives, use of pesticides, including methyl bromide, has often been 
prescribed.
    Methyl bromide is an ozone depleting substance that is strictly 
regulated under the Montreal Protocol and the Clean Air Act. While the 
goal of these authorities and agreements is to limit and ultimately 
phase out all ozone depleting substances, certain exemptions and 
exclusions are recognized, including an exemption for methyl bromide 
use for plant quarantine and preshipment purposes, including the 
purposes provided for in this final rule. The

[[Page 55732]]

exemption is not unconditional, however. The United States, like other 
signatories to the Montreal Protocol, must review its national plant 
health regulations with a view to removing the requirement for the use 
of methyl bromide for quarantine and preshipment applications where 
technically and economically feasible alternatives exist.
    This rule authorizes the use of methyl bromide, as well as heat 
treatment, to treat WPM imported from other countries in order to meet 
the mandates of the PPA. In addition, the Agency is working to promote 
environmental quality with ongoing work to identify and add to our 
regulations valid technically and economically feasible alternatives to 
methyl bromide.

Avoid or Minimize Environmental Harm

    The environment can be harmed by using methyl bromide, in which 
case recovery of the ozone layer may be delayed, or by not using methyl 
bromide, in which case agriculture and forested ecosystems, among other 
aspects of environmental quality, could be devastated unless other 
equally or more effective alternatives were strictly enforced (i.e., 
heat treatment or use of substitute packing materials). By assuring 
that use of methyl bromide is limited, the Agency strikes a proper 
balance in its efforts to minimize environmental harm. APHIS is 
committed to monitoring these efforts through the NEPA process, and 
otherwise. Furthermore, where appropriate, measures--gas recapture 
technology, for example--to minimize harm to environmental quality 
caused by methyl bromide emissions have been, and will continue to be, 
encouraged by APHIS. The prudent use of heat treatment and substitute 
packaging materials by developed nations is expected to promote this 
regulatory approach in developing countries as their trade 
opportunities expand.

Other

    Methyl bromide used in quarantine applications prescribed by the 
United States contributes just a small fraction of total anthropogenic 
bromine released into the atmosphere. Nevertheless, the Montreal 
Protocol is action-forcing in the sense that signatories must review 
their national plant health regulations with a view to finding 
alternatives to exempted uses of methyl bromide. The EPA has also 
cautioned that, regardless of the incremental contribution, it is 
important to recognize that any additional methyl bromide releases 
would delay recovery of the ozone layer.
    A considerable amount of research and development on methyl bromide 
alternatives has been conducted within the USDA and continues today. 
Under the Clean Air Act, EPA has also established a program to identify 
alternatives to ozone depleting substances, including methyl bromide, 
but EPA's listing of an acceptable alternative does not always 
adequately address its suitability for a particular use. We must not 
put agriculture and ecosystems at risk based on unproven technology.
    APHIS is firmly committed to the objectives of the Montreal 
Protocol to reduce and ultimately eliminate reliance on methyl bromide 
for quarantine uses, consistent with its responsibilities to safeguard 
this country's agriculture and ecosystems. Achieving the objectives of 
both reducing (and ultimately eliminating) methyl bromide emissions as 
well as safeguarding agriculture and ecosystems in the most 
expeditious, cost-effective way possible, requires close coordination 
within the Federal Government of research, development, and testing 
efforts. APHIS is determined to cooperate actively with the 
Agricultural Research Service, EPA, the Office of Management and 
Budget, and others involved in this effort to find effective 
alternatives to quarantine methyl bromide uses.
    In a notice summarizing EPA comments on recent environmental impact 
statements and proposed regulations that was published in the Federal 
Register on January 17, 2003 (68 FR 2539), EPA expressed no objection 
to the draft EIS and the APHIS proposed rule.

Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
3501 et seq.), the information collection or recordkeeping requirements 
included in this rule have been approved by the Office of Management 
and Budget (OMB) under OMB control number 0579-0225.

Government Paperwork Elimination Act Compliance

    The Animal and Plant Health Inspection Service is committed to 
compliance with the Government Paperwork Elimination Act (GPEA), which 
requires Government agencies in general to provide the public the 
option of submitting information or transacting business electronically 
to the maximum extent possible. For information pertinent to GPEA 
compliance related to this rule, please contact Mrs. Celeste Sickles, 
APHIS' Information Collection Coordinator, at (301) 734-7477.

List of Subjects in 7 CFR Part 319

    Bees, Coffee, Cotton, Fruits, Honey, Imports, Logs, Nursery stock, 
Plant diseases and pests, Quarantine, Reporting and recordkeeping 
requirements, Rice, Vegetables.

0
Accordingly, 7 CFR part 319 is amended as follows:

PART 319--FOREIGN QUARANTINE NOTICES

0
1. The authority citation for part 319 continues to read as follows:

    Authority: 7 U.S.C. 450 and 7701-7772; 21 U.S.C. 136 and 136a; 7 
CFR 2.22, 2.80, and 371.3.


0
2. In Sec.  319.40-1, the definitions for Exporter statement, Importer 
statement, and Solid wood packing material are removed, and two 
definitions are added in alphabetical order to read as follows:


Sec.  319.40-1  Definitions.

* * * * *
    Regulated wood packaging material. Wood packaging material other 
than manufactured wood materials, loose wood packing materials, and 
wood pieces less than 6 mm thick in any dimension, that are used or for 
use with cargo to prevent damage, including, but not limited to, 
dunnage, crating, pallets, packing blocks, drums, cases, and skids.
* * * * *
    Wood packaging material. Wood or wood products (excluding paper 
products) used in supporting, protecting or carrying a commodity 
(includes dunnage).

0
3. In Sec.  319.40-3, paragraph (b) is revised to read as follows:


Sec.  319.40-3  General permits; articles that may be imported without 
a specific permit; articles that may be imported without either a 
specific permit or an importer document.

* * * * *
    (b) Regulated wood packaging material. Regulated wood packaging 
material, whether in actual use as packing for regulated or 
nonregulated articles or imported as cargo, may be imported into the 
United States under a general permit in accordance with the following 
conditions:
    (1) Treatment. The wood packaging material must have been:
    (i) Heat treated to achieve a minimum wood core temperature of 56 
[deg]C for a minimum of 30 minutes. Such treatment may employ kiln-
drying, chemical pressure impregnation, or other treatments that 
achieve this specification through the use of steam, hot water, or dry 
heat; or,

[[Page 55733]]

    (ii) Fumigated with methyl bromide in an enclosed area for at least 
16 hours at the following dosage, stated in terms of grams of methyl 
bromide per cubic meter or pounds per 1,000 cubic feet of the enclosure 
being fumigated. Following fumigation, fumigated products must be 
aerated to reduce the concentration of fumigant below hazardous levels, 
in accordance with label instructions approved by the U.S. 
Environmental Protection Agency:

----------------------------------------------------------------------------------------------------------------
                                                                        Minimum required concentration  (g/m\3\
                                                       Initial dose           and lbs./1,000 c.f.) after:
            Temperature ([deg]C/[deg]F)                (g/m\3\ and   -------------------------------------------
                                                     lbs./1,000 c.f)   0.5 hrs     2 hrs.     4 hrs.    16 hrs.
----------------------------------------------------------------------------------------------------------------
21/70 or above.....................................          48/3.0     36/2.25     24/1.5    17/1.06   14/0.875
16/61 or above.....................................          56/3.5     42/2.63    28/1.75    20/1.25    17/1.06
11/52 or above.....................................          64/4.0      48/3.0     32/2.0    22/1.38    19/1.19
----------------------------------------------------------------------------------------------------------------

    (2) Marking. The wood packaging material must be marked in a 
visible location on each article, preferably on at least two opposite 
sides of the article, with a legible and permanent mark that indicates 
that the article meets the requirements of this paragraph. The mark 
must be approved by the International Plant Protection Convention in 
its International Standards for Phytosanitary Measures to certify that 
wood packaging material has been subjected to an approved measure, and 
must include a unique graphic symbol, the ISO two-letter country code 
for the country that produced the wood packaging material, a unique 
number assigned by the national plant protection agency of that country 
to the producer of the wood packaging material, and an abbreviation 
disclosing the type of treatment (e.g., HT for heat treatment or MB for 
methyl bromide fumigation). The currently approved format for the mark 
is as follows, where XX would be replaced by the country code, 000 by 
the producer number, and YY by the treatment type (HT or MB):
[GRAPHIC] [TIFF OMITTED] TR16SE04.000

    (3) Immediate reexport of regulated wood packaging material without 
required mark. An inspector at the port of first arrival may order the 
immediate reexport of regulated wood packaging material that is 
imported without the mark required by paragraph (b)(2) of this section, 
in addition to or in lieu of any port of first arrival procedures 
required by Sec.  319.40-9 of this part.
    (4) Exception for Department of Defense. Regulated wood packaging 
material used by the Department of Defense (DOD) of the U.S. Government 
to package nonregulated articles, including commercial shipments 
pursuant to a DOD contract, may be imported into the United States 
without the mark required by paragraph (b)(2) of this section.
* * * * *


(Approved by the Office of Management and Budget under control numbers 
0579-0049 and 0579-0225.)

Sec.  319.40-5  [Amended]

0
3. In Sec.  319.40-5, paragraphs (b)(1)(i)(C), (b)(2), and (b)(2)(i), 
the words ``solid wood packing materials'' are removed each time they 
occur and the words ``regulated wood packaging material'' are added in 
their place, and paragraphs (g) through (k) are removed.


Sec.  319.40-10  [Amended]

0
4. In Sec.  319.40-10, footnote 6, the words ``without a complete 
certificate or exporter statement'' are removed and the words ``without 
meeting the requirements of this subpart'' are added in their place.

    Done in Washington, DC, this 9th day of September 2004.
Bill Hawks,
Under Secretary for Marketing and Regulatory Programs.
[FR Doc. 04-20763 Filed 9-15-04; 8:45 am]
BILLING CODE 3410-34-P