[Federal Register Volume 60, Number 208 (Friday, October 27, 1995)] [Notices] [Pages 55076-55084] From the Federal Register Online via the Government Publishing Office [www.gpo.gov] [FR Doc No: 95-26734] ======================================================================= ----------------------------------------------------------------------- OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE [Docket No. 301-101] Denial of Benefits Under Trade Agreement by the European Union: Initiation of Investigation; Proposed Determination; Request for Public Comment; and Public Hearing AGENCY: Office of the United States Trade Representative. ACTION: Notice of initiation of investigation, proposed determination, [[Page 55077]] request for public comment and a public hearing. ----------------------------------------------------------------------- SUMMARY: Under Articles XXIV:6 and XXVIII of the General Agreement on Tariffs and Trade 1994 (GATT 1994) attached to the Agreement Establishing the World Trade Organization (WTO Agreement), whenever two or more Members of the World Trade Organization (WTO) form a customs union and thereby withdraw or modify tariff concessions, they must provide full and permanent compensation to relevant affected trading partners; if such compensation is not provided, then those other trading partners may withdraw concessions and increase tariffs. The United States is continuing to negotiate with the European Union (EU) regarding the EU's provision of full and permanent compensation to the United States for withdrawing concessions and increasing tariffs on trade into the territories of Austria, Finland and Sweden upon their accession to the EU on January 1, 1995. However, in order to preserve U.S. rights under a trade agreement, the United States Trade Representative (USTR) initiated on October 24,1995, an investigation under section 302(b) of the Trade Act of 1974 (Trade Act) (19 U.S.C. 2412(b)). The USTR proposes, if necessary, to determine that U.S. benefits under a trade agreement are being denied and that the appropriate action in response is to suspend concessions on selected products for which the EU is the principal supplier and, if necessary thereafter, to impose tariffs of up to 100 percent ad valorem on those products. The increased duties, if imposed, will be applicable to imports from all countries that are subject to the rates of duty set forth in the Column 1 General rate of duty column of the Harmonized Tariff Schedule of the United States (HTSUS). The USTR seeks public comment and will hold a public hearing on November 20 and 21, 1995, concerning the proposed actions. DATES: Written comments from interested persons are due on or before noon on Friday, November 24, 1995; requests to testify at the public hearing are due on or before noon on Wednesday, November 8, 1995; written testimony is due on or before noon on Wednesday, November 15, 1995; the public hearing will be held on November 20 and 21, 1995; and post-hearing submissions are due on or before noon on Friday, November 24, 1995. FOR FURTHER INFORMATION CONTACT: Edward Kaska, Director, European Services and Agriculture (202) 395- 4620; Elena Bryan, Director, Non-Tariff Measures (202) 395-5097, Amelia Porges, Associate General Counsel, (202) 395-7305, Office of the United States Trade Representative. SUPPLEMENTARY INFORMATION: With the accession of Austria, Finland and Sweden to the EU, the EU withdrew the entire WTO tariff schedules of these three countries and of the EU of twelve members, and applied the common external tariff of the EU of twelve to imports into the territory of Austria, Finland and Sweden. The EU then began negotiations pursuant to Article XXIV:6 and Article XXVIII of the GATT 1994 on compensation to its trading partners for the concessions thereby withdrawn. As an interim and partial measure, the EU established a series of tariff-rate quotas for the first half of 1995 preserving limited import access for certain products at the pre- accession tariff rates, and these tariff-rate quotas have been extended through the end of 1995. When a WTO Member withdraws a tariff concession in the expansion of a customs union, Articles XXIV:6 and XXVIII of the GATT entitle relevant affected Members to receive negotiated compensation or, in the absence of a successful negotiation, to invoke Article XXVIII:3 to modify or withdraw ``substantially equivalent concessions.'' Article XXVIII:3 rights are time-limited; the WTO General Council has extended these rights through December 31, 1995, but these rights could be construed to expire then unless exercised by the United States or extended by the Council. WTO Members invoking Article XXVIII:3 must also provide notice of their intent to modify or withdraw substantially equivalent concessions at least thirty days prior to the effective date of such action. Accordingly, the USTR intends to notify the WTO on or before December 1, 1995, that the Untied States will suspend tariff concessions for specified products in the HTSUS, by the close of December 31, 1995, unless by that time agreement has been reached between the EU and the United States on permanent and adequate compensation for tariff concessions modified or withdrawn as a result of the accession of Austria, Finland and Sweden to the EU. The suspension of concessions will be substantially equivalent to the withdrawal modification by the EU of concessions affecting U.S. exports. Investigation and Proposed Determination and Action In these circumstances and in order to exercise U.S. rights under a trade agreement, the USTR on October 24, 1995, following consultations with the appropriate private sector advisory committees, initiated an investigation pursuant to section 302(b)(1) of the Trade Act with respect to the EU's policies and practices in this matter. The USTR proposes that, unless the United States and EU are able to negotiate a mutually acceptable solution that compensates the United States in accordance with its rights under the WTO, the USTR will determine that the EU's policies and practices deny the United States trade agreement benefits and are actionable under section 301(a) and that the appropriate action in response is to suspend by the end of 1995 concessions on selected products for which the EU is the principal supplier. If necessary, the USTR may thereafter determine to increase the duties previously applied under the tariff lines with respect to which concessions have been suspended. The new applied tariff rates will not exceed 100 percent ad valorem. The duty increase will affect goods of the EU in an amount that is equivalent in value to the burden or restriction imposed upon United States commerce by the increase in duties consequent upon EU enlargement. The increased duties, if imposed, will be applicable to imports from all countries that are subject to the rates of duty set forth in the Column 1 General rate of duty column on the HTSUS. The products to be affected by the possible suspension of concessions and duty increase will be drawn from the list of products set forth in the Annex to this notice. In selecting products the USTR will consider all comments and testimony by interested persons submitted to the Section 301 Committee in accordance with the procedures described below. Public Comment on Proposed Determination; Hearing Participation Section 304(b)(2) of the Trade Act provides that, unless expeditious action is required, the USTR shall allow an opportunity, following 30 days notice, for the presentation of views by interested persons prior to the issuance of a determination pursuant to section 301(a). The USTR has refrained from initiating this investigation and announcing proposed actions for the maximum time possible to allow the EU an adequate opportunity to negotiate full and permanent compensation. However, as adequate compensation has not yet been agreed upon, the USTR has determined that it is appropriate to initiate this investigation and to notify interested persons of the possibility that determinations may be made under [[Page 55078]] section 304 of the Trade Act, that tariff concessions may be suspended by the close of December 31, 1995, and that tariffs may be increased thereafter. In accordance with section 304(b) of the Trade Act, the USTR invites all interested persons to provide written comments on the proposed determination. Comments may address: (1) The appropriateness of imposing increased duties upon the products listed in the Annex to this notice; (2) the levels at which U.S. customs duties should be set for particular items; and (3) the degree to which increased duties might have an adverse effect upon U.S. consumers of the products listed in the Annex. Written comments are due by noon, Friday, November 24, 1995. The USTR also will consider the written, oral, and rebuttal comments submitted in the context of public hearings held pursuant to section 304(b) of the Trade Act and in accordance with 15 CFR 2006.7 through 2006.9. The hearings will begin at 1:00 p.m. on Monday, November 20, 1995, and continue on Tuesday, November 21, if necessary. The hearings will be held in Room 100 at the U.S. International Trade Commission, 500 E Street, SW, Washington, DC 20436. Request To Testify Interested persons wishing to testify orally at the hearings must provide a written request to do so by noon, Wednesday, November 8, 1995, to Sybia Harrison, Staff Assistant to the Section 301 Committee, Office of the U.S. Trade Representative, 600 17th Street NW, Washington, DC 20508. Requests to testify must include the following information: (1) Name, address, telephone number, fax number, and firm or affiliation of the person wishing to testify; and (2) a brief summary of the comments to be presented. Requests to testify must conform to the requirements of 15 CFR 2006.8(a). After the Chairman of the Section 301 Committee considers the request to present oral testimony, Ms. Harrison will notify the applicant of the time of his or her testimony. Testimony, both written and oral, shall be limited to: (1) The Appropriateness of imposing increased duties upon the products listed in the Annex to this notice; (2) the levels at which U.S. customs duties should be set for particular items; and (3) the degree to which increased duties might have an adverse effect upon U.S. consumers of the products listed in the Annex. Remarks at the hearing will be limited to five minutes. Written Testimony and Rebuttal Briefs In addition, persons presenting oral testimony must submit their complete written testimony by noon, Wednesday, November 15, 1995. In order to assure each party an opportunity to contest the information provided by other parties, USTR will entertain rebuttal briefs filed by any party by noon, Friday, November 24, 1995. In accordance with 15 CFR 2006.8(c) rebuttal briefs should be strictly limited to demonstrating errors of fact or analysis not pointed out in the briefs or hearing and should be as concise as possible. Requirements for Submissions Written comments on the proposed determination, written testimony, and rebuttal briefs must be filed in accordance with the requirements set forth in 15 CFR 2006.8(b). Comments must state clearly the position taken, describe with particularity the supporting rationale, be in English, and be provided in twenty copies to: Chairman, Section 301 Committee, Attn.: EU Enlargement Investigation, Room 223, USTR, 600 17th St., NW., Washington, DC 20508. Written comments, testimony, and briefs will be placed in a file (Docket 301-101) open to public inspection pursuant to 15 CFR 2006.13, except for confidential business information exempt from public inspection in accordance with 15 CFR 2006.15. Persons wishing to submit confidential business information must certify in writing that such information is confidential in accordance with 15 CFR 2006.15(b), and such information must be clearly marked ``Business Confidential'' in a contrasting color ink at the top of each page on each of the twenty copies and must be accompanied by a nonconfidential summary of the confidential information. The nonconfidential summary will be placed in the Docket open to public inspection. An appointment to review the docket may be made by calling Brenda Webb at (202) 395-6186. The USTR Reading Room is open to the public from 10:00 a.m. to 12 noon and 1:00 p.m. to 4:00 p.m., Monday through Friday, and is located in Room 101, Office of the United States Trade Representative, 600 17th Street, N.W., Washington, D.C. 20508. Irving A. Williamson, Chairman, Section 301 Committee. BILLING CODE 3190-01-M [[Page 55079]] [GRAPHIC][TIFF OMITTED]TN27OC95.008 [[Page 55080]] [GRAPHIC][TIFF OMITTED]TN27OC95.009 [[Page 55081]] [GRAPHIC][TIFF OMITTED]TN27OC95.010 [[Page 55082]] [GRAPHIC][TIFF OMITTED]TN27OC95.011 [[Page 55083]] [GRAPHIC][TIFF OMITTED]TN27OC95.012 [[Page 55084]] [GRAPHIC][TIFF OMITTED]TN27OC95.013 [FR Doc. 95-26734 Filed 10-24-95; 2:45 pm] BILLING CODE 3190-01-C