[Federal Register Volume 76, Number 103 (Friday, May 27, 2011)]
[Notices]
[Pages 30987-30989]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-13282]
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OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE
Termination of Action and Further Monitoring in Connection With
the EC-Beef Hormones Dispute
AGENCY: Office of the United States Trade Representative.
ACTION: Notice, termination of action, and further monitoring.
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SUMMARY: In July 1999, pursuant to authority under Section 301 of the
Trade Act of 1974, as amended (the Trade Act), and as authorized by the
Dispute Settlement Body (DSB) of the World Trade Organization (WTO),
the United States Trade Representative (Trade Representative) imposed
additional duties on certain products of member states of the European
Union (EU) as a result of the EU's failure to comply with the
recommendations and rulings of the DSB in the EC-Beef Hormones dispute.
In January 2009, the Trade Representative announced a determination to
modify the list of products subject to additional duties by removing
some products from the list of products subject to additional duties,
and by adding replacement products. The January modification had an
initial effective date of March 23, 2009. The Trade Representative
subsequently delayed the additional duties on the replacement products
in order to promote negotiations with the EU. The removal of products
was not delayed. As a result, as of March 23, 2009, the additional
duties applied only to a reduced list of products, consisting of those
products covered in the original 1999 list that had not been subject to
replacement. On May 13, 2009, the United States and the EU announced
the signing of a Memorandum of Understanding (MOU) in the EC-Beef
Hormones dispute. The MOU provides for the EU to make phased increases
in market access by adopting a tariff-rate quota (TRQ) for certain beef
products, in return for the United States making phased reductions in
the additional duties. Under the first phase of the MOU, in August 2009
the EU opened up a TRQ in the amount of 20,000 metric tons, and the
Trade Representative terminated the additional duties on the
replacement products. (Those additional duties had been announced in
January 2009 but had never entered into force.) The Trade
Representative's action left in place a reduced list of products
subject to additional duties. The MOU provides for the possibility of
the United States and the EU to enter into a second phase starting in
August 2012, in which the EU would increase the TRQ to 45,000 metric
tons, and the United States would lift the remaining additional duties.
As a result of a decision of the United States Court of Appeals for the
Federal Circuit, the Trade Representative has determined to terminate
the remaining additional duties in advance of the August 2012 start
date of the possible second phase
[[Page 30988]]
of the MOU. The United States continues to have an authorization from
the WTO DSB, and the right under the MOU, to suspend concessions on EU
products. At this time, however, the MOU is operating successfully by
providing increased market access to U.S. beef producers. In light of
the currently successful implementation of the MOU, the fact that all
additional duties would have to be removed in August 2012 under a
possible second phase of the MOU, and to encourage continued
cooperation under the MOU, the Trade Representative has determined not
to take steps at this time to exercise U.S. rights to impose additional
duties on EU products in connection with the EC-Beef Hormones dispute.
The Trade Representative will continue to monitor EU implementation of
the MOU and other developments affecting market access for U.S. beef
products. If EU implementation and other developments do not proceed as
contemplated, the Trade Representative will consider additional actions
under Section 301 of the Trade Act.
DATES: Effective Date: The remaining additional duties imposed in
connection with the EC-Beef Hormones dispute are terminated with
respect to (a) Products that are entered, or withdrawn from warehouse,
for consumption on or after the date of publication of this notice, (b)
unliquidated entries made prior to the date of publication of this
notice that were entered, or withdrawn from warehouse, for consumption
after July 29, 2007, and (c) products that were entered, or withdrawn
from warehouse, for consumption after July 29, 2007, where the
liquidation of the entry is not final.
FOR FURTHER INFORMATION CONTACT: Roger Wentzel, Director, Agricultural
Affairs, (202) 395-6127, or David Weiner, Deputy Assistant USTR for
Europe, (202) 395-9679, for questions concerning the EC-Beef Hormones
dispute or the MOU; or William Busis, Deputy Assistant USTR for
Monitoring and Enforcement and Chair of the Section 301 Committee,
(202) 395-3150, for questions concerning procedures under Section 301.
Questions concerning customs matters may be directed to Laurie Dempsey,
Branch Chief, Entry, Summary, and Drawback, Office of International
Trade, U.S. Customs and Border Protection, 202-863-6509.
SUPPLEMENTARY INFORMATION:
A. Background
In 1998, the WTO DSB found that the EU's ban on beef produced from
animals to which certain hormones have been administered was
inconsistent with the EU's obligations under the WTO Agreement. The DSB
recommended that the EU bring its measures into compliance. In July
1999, WTO arbitrators determined that the level of nullification or
impairment suffered by the United States as a result of the EU's WTO-
inconsistent hormone ban was $116.8 million per year. The WTO DSB
authorized the United States to suspend the application to the EU and
its member states of tariff concessions and related obligations under
the GATT covering trade up to this amount. In a notice published on
July 27, 1999, the Trade Representative announced that the United
States was exercising this authorization by imposing 100 percent ad
valorem duties on a list of certain products of certain EU member
states.
Section 307(c) of the Trade Act provides for the Trade
Representative to conduct a review of a Section 301 action four years
after the action was taken. During 2008, the U.S. Court of
International Trade held that the Trade Representative must also
conduct a Section 307(c) review eight years after the action was taken.
See Gilda Industries v. United States, 556 F. Supp. 2d 1366 (Ct. Int'l
Trade 2008).
The first step in a Section 307(c) review is for USTR to request
that the U.S. industry benefitting from the action submit a written
confirmation that the action should be continued. If the U.S. industry
requests continuation, the statute provides for USTR to review the
effectiveness of the action. On remand from the U.S. Court of
International Trade, USTR requested and received from the U.S. beef
industry a written confirmation that it wanted the July 1999 action to
continue, and USTR proceeded to conduct a review of the effectiveness
of the July 1999 action.
In January 2009, USTR announced, and reported to the U.S. Court of
International Trade, the results of the Section 307(c) review
undertaken in the remand proceeding. The Trade Representative decided
to modify the action taken in July 1999 by: (1) Removing some products
from the list of products subject to 100 percent ad valorem duties
since July 1999; (2) imposing 100 percent ad valorem duties on some new
products from certain EU member States; (3) modifying the coverage with
respect to particular EU member States; and (4) raising the level of
duties on one of the products that was being maintained on the product
list. The effective date of the modifications was to be March 23, 2009.
In March 2009, the Trade Representative decided to delay the
effective date of the additional duties (items two through four above)
imposed under the January 2009 modifications in order to allow
additional time for reaching an agreement with the EU that would
provide benefits to the U.S. beef industry. The effective date of the
removal of duties under the January modifications remained March 23,
2009. Accordingly, after March 23, 2009, the additional duties imposed
in July 1999 remained in place on a reduced list of products. That
reduced list of products subsequently was reprinted in the Annex of the
notice published on September 24, 2009. See 74 FR 48808 (September 24,
2009).
In May 2009, the United States and the EU announced the signing of
an MOU in the EC-Beef Hormones dispute. In the first phase of the MOU,
the EU is obligated to open a new TRQ in the amount of 20,000 metric
tons at zero rate of duty for beef not produced with certain growth-
promoting hormones. The United States in turn is obligated not to
increase additional duties above those in effect as of March 23, 2009.
Under the terms of the MOU, the MOU's first phase concludes on
August 3, 2012. Should the United States and the EU enter into the
second phase of the MOU, the EU would be required to increase the beef
TRQ to 45,000 metric tons, and the United States would be required to
suspend all of the additional duties imposed in connection with the EC-
Beef Hormones dispute.
In June 2009, the U.S. Court of International Trade rejected the
results of the Section 307(c) review undertaken in the remand
proceeding. The court found that the July 1999 action under Section 301
terminated as a matter of law after eight years (on July 29, 2007)
because representatives of the U.S. beef industry did not submit a
written request for a continuation of the action prior to July 29,
2007. See Gilda Industries v. United States, 625 F. Supp. 2d 1377 (Ct.
Int'l Trade 2009). The United States appealed the decision to the U.S.
Court of Appeals for the Federal Circuit.
In August 2009, the EU opened the new beef TRQ in accordance with
the terms of the MOU. In September 2009, the Trade Representative
implemented U.S. obligations under the first phase of the MOU by
terminating the additional duties that were announced in January 2009
but had been delayed up to that time and had never entered into force.
The September 2009 action left in place the additional duties that had
been in effect since March 23, 2009 on a reduced list of products.
In October 2010, the U.S. Court of Appeals for the Federal Circuit
affirmed the June 2009 decision of the U.S. Court
[[Page 30989]]
of International Trade that the July 1999 action terminated as a matter
of law on July 29, 2007. See Gilda Industries, Inc. v. United States,
622 F.3d 1358 (Fed. Cir. 2010).
In March 2011, Canada and the EU entered into an MOU in connection
with the EC-Beef Hormones dispute, in which Canada was a co-complainant
with the United States. The Canada-EU MOU provides for additional
amounts in the TRQ specified in the U.S.-EU MOU: 1,500 metric tons in
the first phase, and 3,200 metric tons in a possible second phase
starting in August 2012.
For additional background concerning the EC-Beef Hormones WTO
dispute, the additional duties imposed in connection with the dispute,
and the May 2009 MOU, see 64 FR 40638 (July 27, 1999), 73 FR 66066
(Nov. 6, 2008); 74 FR 4265 (Jan. 23, 2009), 74 FR 11613 (March 18,
2009), 74 FR 12402 (March 24, 2009), 74 FR 19263 (April 28, 2009), 74
FR 22626 (May 13, 2009), 74 FR 40864 (August 13, 2009); and 74 FR 48808
(September 24, 2009), as well as the WTO Web site (http://www.wto.org)
under dispute numbers DS26 and DS48.
B. Termination of the Remaining Additional Duties
As a result of the decision of the U.S. Court of Appeals for the
Federal Circuit, the Trade Representative has decided to terminate the
additional duties imposed in connection with the EC-Beef Hormones
dispute, effective with respect to (a) products that are entered, or
withdrawn from warehouse, for consumption on or after the date of
publication of this notice, (b) products that were entered, or
withdrawn from warehouse, for consumption after July 29, 2007 where the
entry is unliquidated on the date of publication of this notice, and
(c) products that were entered, or withdrawn from warehouse, for
consumption after July 29, 2007, where the liquidation of the entry is
not final. In particular:
(i) The imposition of 100 percent ad valorem duties as provided in
subheadings 9903.02.21, 9903.02.22, 9903.02.23, 9903.02.24, 9903.02.25,
9903.02.26, 9903.02.27, 9903.02.28, 9903.02.29, 9903.02.30, 9903.02.32,
9903.02.34, 9903.02.43, 9903.02.44, 9903.02.45, and 9903.02.46 of the
Harmonized Tariff Schedule of the United States (HTSUS) is terminated
with respect to (a) Products that are entered, or withdrawn from
warehouse, for consumption on or after the date of publication of this
notice, (b) unliquidated entries made prior to the date of publication
of this notice that were entered, or withdrawn from warehouse, for
consumption after July 29, 2007, and (c) products that were entered, or
withdrawn from warehouse, for consumption after July 29, 2007, where
the liquidation of the entry is not final;
(ii) The imposition of 100 percent ad valorem duties as provided in
subheading 9903.02.83 of the HTSUS is terminated with respect to (a)
products that are entered, or withdrawn from warehouse, for consumption
on or after the date of publication of this notice, (b) unliquidated
entries made prior to the date of publication of this notice that were
entered, or withdrawn from warehouse, for consumption on or after March
23, 2009, and (c) products that were entered, or withdrawn from
warehouse, for consumption on or after March 23, 2009, where the
liquidation of the entry is not final;
(iii) The imposition of 100 percent ad valorem duties as provided
in subheadings 9903.02.31, 9903.02.33, 9903.02.35, 9903.02.36,
9903.02.37, 9903.02.38, 9903.02.39, 9903.02.40, 9903.02.41, 9903.02.42,
and 9903.02.47 of the HTSUS is terminated with respect to (a)
unliquidated entries made after July 29, 2007 and before March 23,
2009, and (b) products that were entered, or withdrawn from warehouse,
for consumption after July 29, 2007 and before March 23, 2009 where the
liquidation of the entry is not final;
(iv) The above-listed subheadings, along with any associated
superior headings or subheadings, are deleted from the HTSUS, effective
on the date of publication of this notice; and
(v) As of the date of publication of this notice, products in
subheadings 9903.02.21, 9903.02.22, 9903.02.23, 9903.02.24, 9903.02.25,
9903.02.26, 9903.02.27, 9903.02.28, 9903.02.29, 9903.02.30, 9903.02.32,
9903.02.34, 9903.02.43, 9903.02.44, 9903.02.45, 9903.02.46 and
9903.02.83 of the HTSUS that are entered into a Foreign Trade Zone no
longer must be admitted in ``privileged foreign status,'' as defined in
19 C.F.R. 146.41.
C. Continued Monitoring and Implementation of the MOU
Until the entry into force of the possible second phase of the MOU
in August 2012, the United States retains the right under the MOU to
impose additional duties on the reduced list of products subject to
additional duties after March 23, 2009 (reprinted in the Annex of the
notice published on September 24, 2009). The United States also
continues to have an authorization from the WTO DSB to suspend
concessions on EU products in the amount of $116.8 million per year. At
this time, however, the MOU is operating successfully by providing
increased market access to U.S. beef producers. In light of the
currently successful implementation of the MOU, the fact that all
additional duties would have to be removed in August 2012 under a
possible second phase of the MOU, and to encourage continued
cooperation under the MOU, the Trade Representative has determined not
to take steps at this time to exercise U.S. rights to impose additional
duties on EU products in connection with the EC-Beef Hormones dispute.
The Trade Representative will continue to monitor EU implementation
of the MOU and other developments affecting market access for U.S. beef
products. If implementation of the MOU and other developments do not
proceed as contemplated, the Trade Representative will proceed to
consider additional actions under Section 301 of the Trade Act.
William Busis,
Chair, Section 301 Committee.
[FR Doc. 2011-13282 Filed 5-26-11; 8:45 am]
BILLING CODE 3190-W1-P