[Federal Register Volume 59, Number 196 (Wednesday, October 12, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-25213]


[[Page Unknown]]

[Federal Register: October 12, 1994]


=======================================================================
-----------------------------------------------------------------------

OFFICE OF UNITED STATES TRADE REPRESENTATIVE

 

Report of Trade Expansion Priorities Pursuant to Executive Order 
12901

AGENCY: Office of United States Trade Representative.

ACTION: Notice.

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

SUMMARY: Notice is hereby given that the United States Trade 
Representative (USTR) has submitted the report published herein to the 
Committee on Finance of the United States Senate and the Committee on 
Ways and Means of the United States House of Representatives 
identifying trade expansion priorities pursuant to Executive Order 
12901 of March 3, 1994.

DATES: The report was submitted on October 3, 1994.

FOR FURTHER INFORMATION CONTACT: Irving Williamson, Chairman, Section 
301 Committee, Office of the U.S. Trade Representative, 600 17th 
Street, N.W., Washington, DC 20506, (202) 395-3432.

    Authority: E.O. 12901 of March 3, 1994.

SUPPLEMENTARY INFORMATION: The text of the USTR report is as follows:

Identification of Trade Expansion Priorities Pursuant to Executive 
Order 12901

    This report is submitted pursuant to Executive Order 12901 of March 
3, 1994. Under the Executive Order the United States Trade 
Representative is required, by September 30, 1994, to ``review United 
States trade expansion priorities and identify priority foreign country 
practices, the elimination of which is likely to have the most 
significant potential to increase United States exports, either 
directly or through the establishment of a beneficial precedent.''
    In identifying priority foreign country practices, the Trade 
Representative must take into account all relevant factors, including:
    (a) The major barriers and trade distorting practices described in 
the National Trade Estimate Report;
    (b) The trade agreements to which a foreign country is a party and 
its compliance with those agreements;
    (c) The medium-term and long-term implications of foreign 
government procurement plans; and
    (d) The international competitive position and export potential of 
United States products and services.
    The Executive Order permits the Trade Representative to include, if 
appropriate, ``a description of the foreign country practices that may 
in the future warrant identification as priority foreign country 
practices.'' The Trade Representative may also include ``a statement 
about other foreign country practices that were not identified because 
they are already being addressed by provisions of United States trade 
law, existing bilateral trade agreements, or in trade negotiations with 
other countries and progress is being made toward their elimination.''

The Global Context

    Changes in the world economy, reinforced by the end of the Cold 
War, have opened up new opportunities in the global marketplace. The 
United States is well-positioned to take advantage of these 
opportunities. We are unsurpassed in innovation and flexibility. Gains 
in productivity have fueled our competitiveness. Our higher education 
is unsurpassed. Our workers are the most skilled and productive in the 
world.
    This new world is extremely competitive. In order to remain 
successful, we must pursue a strategy consisting of two interrelated 
parts: trade policies that will open markets around the world; and 
domestic policies that will help American companies and workers to 
remain the most productive in the world. This two-part strategy 
reflects the Administration's fundamental goal of higher living 
standards for all Americans.
    The single most important component of our trade strategy is the 
successful implementation of the Uruguay Round of multilateral trade 
negotiations. The Uruguay Round agreements amount to a global tax cut 
of some $744 billion. They will stimulate the creation of hundreds of 
thousands of jobs and, when fully implemented, add an estimated $100-
200 billion to the U.S. GDP annually.
    The Uruguay Round agreements contain improvements in market access 
worldwide for goods and services, improved rules for trade, a new 
agreement protecting intellectual property worldwide, and dramatically 
improved procedures to enforce our rights. The improvements in dispute 
settlement under the new World Trade Organization (WTO) can provide 
real assurance to our exports that our gains at the bargaining table 
will be translated into real market opportunities, and that any 
impairment of our rights to market access will have an expeditious 
remedy. But these benefits, scheduled to go into effect on January 1, 
1995, will materialize only if Congress has adopted legislation 
approving and implementing the Uruguay Round agreements. For this 
reason, the Administration urges expeditious approval of the Uruguay 
Round Agreements Act, which the President submitted to Congress on 
September 27.

Enforcement

    The Administration remains committed to vigorous enforcement of our 
rights under trade agreements--both our rights at present, and the 
expanded rights we will have when the Uruguay Round results enter into 
effect. Section 301 will remain an essential element of our strategy in 
enforcing our rights in the new WTO system. Under WTO dispute 
settlement procedures, we will be authorized to retaliate against the 
trade of any government found to be violating our rights, if that 
government does not either eliminate the violation or provide 
compensation acceptable to us. Such realization would be carried out 
under the authority of section 301 as a matter of U.S. trade law.
    Section 301 will also remain an important tool in addressing unfair 
practices not covered under the Uruguay Round agreements. And it will 
be available to us when we encounter trade-restricting practices by 
either non-members of the WTO or governments to which we do not apply 
the Uruguay Round agreements.
Priority Foreign Country Practices
    As a result of the review under Executive Order 12901 and the 
results to date of intensive negotiations, the Trade Representative has 
decided not to identify any priority foreign country practices at this 
time.
    We have had serious, long-standing concerns regarding access to the 
Japanese market for flat glass. We have reached agreement with Japan in 
principle concerning access to the distribution system and access to 
the public and private construction markets for flat glass in Japan, 
and have also agreed to work to finalize that agreement within the next 
thirty days.
Other Practices
    A. The following practices may in the future warrant identification 
as priority foreign country practices:

--Japan market access for wood and paper:

    In the 1990 U.S.-Japan Wood Products Agreement, Japan agreed to 
substantially reduce tariffs, to reduce subsidies, to speed up product 
certification, and to adopt performance-based standards and building 
codes. Progress has been made, but new or existing barriers continue to 
impede market access. Tariffs, although reduced in the Uruguay Round, 
remain a significant impediment. Adoption of performance-based 
standards and building codes has been slow and Japan maintains a 
parallel unliberalized set of building standards for housing loans. 
Subsidies to the wood products industry appear to have risen. We seek 
further market opening through the elimination of these remaining 
barriers.
    In April 1992, Japan agreed to take GATT-consistent measures to 
increase substantially market access in Japan for foreign paper and 
paperboard products, to realize the objective in the January 1992 Bush-
Miyazawa action plan of January 1992 ``to substantially increase market 
access for foreign firms exporting paper products to Japan.'' Four 
consultations have been held under the agreement. In the Uruguay Round, 
Japan agreed to join a Quad country consensus to cut tariffs on paper 
to zero over 10 years. However, Japan has failed to provide detailed 
information on the degree to which Japanese government agencies are 
implementing provisions which obligate them to actively encourage use 
of foreign products by end-users in key market segments. We seek a full 
accounting by all appropriate entities within the Japanese government 
on their implementation of the agreement, as well as other measures to 
augment the agreement and make it more effective.
    B. The following foreign country practices were determined not to 
be appropriate for identification because they are already being 
addressed by other provisions of United States trade law, existing 
bilateral agreements, or in trade negotiations with other countries and 
progress is being made toward their elimination. They do, however, 
remain significant trade negotiating objectives for the United States.

--European Union Utilities Directive: Under the European Union's 
Utilities Directive, which took effect on January 1, 1993, 
telecommunications utilities in 8 EU member countries now penalize bids 
by U.S. suppliers containing over 50% non-EU content and May reject 
such bids completely. In May 1993, the U.S. implemented sanctions 
against the EU under Title VII of the 1988 Trade Act. These sanctions 
ban the purchase by the U.S. government of certain goods and services 
from these 8 countries. We will continue to seek removal of the 
discriminatory aspects of the Directive through negotiation with the 
EU.
--Canada dairy and poultry measures: In implementing the Uruguay Round, 
Canada intends to convert its existing import quotas on dairy products, 
chicken, turkey and eggs to tariff-rate quotas, and raise its bound 
tariffs on these products. Canada has also stated its intention to 
apply these tariffs on imports from the United States. We believe such 
an action would reduce our access to the Canadian market. If it becomes 
appropriate, this matter could be addressed through the NAFTA process.
--India market access for textiles: India severely restricts imports of 
textiles and apparel, and maintains high tariffs. In implementing the 
Uruguay Round, the Administration has agreed to take all appropriate 
measures to obtain market access commitments from any signatory to the 
WTO Agreement that is a significant exporter of textiles and apparel to 
the United Sates and that we consider has failed to provide adequate 
access to its market for U.S. textile and apparel products. We are 
currently engaged in negotiations with the Indian government and will 
continue to seek improvements in market access for textiles and 
apparel.
--Korea market access for automobiles: Actions by the Korean government 
have built and reinforced perceptions among Korean consumers that the 
purchase of a foreign car will lead to government harassment. Other 
barriers to imports include excise taxes, high tariffs, standards 
barriers, distribution restrictions and a ban on
  private sector retail financing. The Korean government has taken some 
steps to address these barriers and has pledged to take others. Our 
continuing consultations are aimed at ensuring that the remaining 
barriers are addressed and that the Korean government's actions result 
in improved access for imported motor vehicles.
--Intellectual property rights protection ion China: On June 30, 
through the ``Special 301'' process under Section 182 of the Trade Act 
of 1974, as amended (19 U.S.C. 2242), the Trade Representative 
designated China as a priority foreign country, and initiated a section 
301 investigation of China's failure to provide adequate and effective 
protection of intellectual property rights and fair and equitable 
market access to persons relying on intellectual property protection. 
Negotiations with the Chinese government to address these concerns are 
ongoing. By December 31, 1994, the Trade Representative will be 
required to determine whether China's failure to address our concerns 
represents an unreasonable or discriminatory burden or restriction on 
U.S. commerce and whether trade action is appropriate.
--Financial services market access negotiations: The WTO Agreement 
provides for continuing market access negotiations in the financial 
services sector, to conclude six months after its entry into force. The 
United States is seeking commitments from a wide range of commercially 
important developed and developing countries to reduce or eliminate 
barriers to the supply by U.S. financial services firms of financial 
services including banking, securities, insurance and other financial 
services. If we do not achieve our objectives, we would maintain an 
exemption from the most-favored-nation obligation of the General 
Agreement on Trade in Services.
--Telecommunications market access: The WTO Agreement provides for 
continuing market access negotiations in the basic telecommunications 
services sector. These negotiations cover local, long-distance, and 
international basic telecommunications services. In these negotiations, 
we will seek to ensure that U.S. firms may provide basic 
telecommunications services in foreign markets both through facilities-
based competition--including the right to build, own, and operate 
domestic and international network facilities--and through the resale 
of services on existing networks. We will also seek to ensure that U.S. 
companies can compete in foreign markets on reasonable and non-
discriminatory rates, terms, and conditions.
--Negotiations on accession to the World Trade Organization: The United 
States will also continue to seek market opening for our goods and 
services, and to achieve protection of intellectual property rights 
abroad, in negotiating with countries that are seeking admission as 
members to the World Trade Organization. The Agreement Establishing the 
WTO requires that all members must provide market access, and the 
Administration is committed to gaining appropriate market access from 
every applicant for membership.
Ira Shapiro,
General Counsel.
[FR Doc. 94-25213 Filed 10-11-94; 8:45 am]
BILLING CODE 3190-01-M