[Federal Register Volume 59, Number 243 (Tuesday, December 20, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-31214]


[[Page Unknown]]

[Federal Register: December 20, 1994]


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OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE

 

Trade Policy Staff Committee; Generalized System of Preferences; 
Initiation of a Review of ``Reverse Preferences''; Termination of the 
Reviews of Worker Rights Practices and the Protection of Intellectual 
Property Rights in the Dominican Republic

AGENCY: Office of the United States Trade Representative.

ACTION: Notice and solicitation of public comment.

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SUMMARY: The Uruguay Round Trade Agreements Act (UR Act) renewed the 
Generalized System of Preferences (GSP) program until July 31, 1995. 
The Statement of Administrative Action (SAA) that accompanies the UR 
Act provides that USTR will initiate a review to determine whether any 
GSP beneficiary country affords preferential treatment, as a result of 
an economic association agreement or otherwise, to the products of a 
developed country, other than the United States, that has, or is likely 
to have, an adverse effect on U.S. commerce. This notice announces the 
review and invites public comments.
    This notice also announces the successful termination of the 
reviews of worker rights practices and the protection of intellectual 
property rights (IPR) in the Dominican Republic.

FOR FURTHER INFORMATION CONTACT:
GSP Subcommittee, Office of the United States Trade Representative, 600 
17th Street, N.W., Room 513, Washington, D.C. 20506. The telephone 
number is (202) 395-6971.

SUPPLEMENTARY INFORMATION:

I. Background

    The GSP program offers duty-free access to the U.S. market for 
specified products that are imported from designated developing 
countries. The GSP program is authorized by Title V of the Trade Act of 
1974, as amended (the ``GSP law'') (19 U.S.C. 2461 et seq.). The GSP 
law expired on September 30, 1994, but the UR Act extended the current 
GSP program without modification until July 31, 1995.
    When the GSP program was originally enacted in 1974, the Congress 
was concerned about giving duty-free privileges to some developing 
countries that, in turn, treat imports from some developed countries 
more favorably than imports from the United States. Such favorable 
treatment is called a ``reverse preference,'' and it discriminates 
against U.S. export interests.
    Accordingly, section 502(b)(3) of the GSP law provides that the 
President shall not designate a country as a GSP beneficiary if the 
country ``affords preferential treatment to the products of a developed 
country, other than the United States, which has, or is likely to have, 
a significant adverse effect on United States commerce.''
    Congressional and Administration concern about the adverse effect 
of discriminatory ``reverse preferences'' on U.S. commerce has been 
rekindled by recent complaints about ``reverse preferences'' that are 
allegedly granted to imports from the European Union (EU) by some 
agreements between the EU and countries in Central and Eastern Europe. 
Therefore, as provided in the SAA that accompanies the UR Act, the 
Administration intends to conduct a full review of ``reverse 
preferences'' that may be granted by beneficiaries of the GSP program.

II. GSP Review

    The SAA provides that, upon enactment, USTR will initiate a GSP 
review to determine whether any GSP beneficiary grants preferential 
treatment to imports from another developed country that has, or is 
likely to have, an adverse effect on U.S. commerce. This review will 
consider ``reverse preferences'' granted by any GSP beneficiary, but it 
is expected to focus principally, although not exclusively, on 
countries in Central and Eastern Europe that have association 
agreements with the EU.
    USTR is directed to solicit public comments and to seek information 
from U.S. Embassies in GSP beneficiary countries. Ninety days 
thereafter, USTR will determine whether the ``reverse preferences'' 
granted by a GSP beneficiary have or may have an adverse effect on U.S. 
export interests sufficient to warrant further review. If so, USTR will 
enter into bilateral consultations with that country with the goal of 
eliminating the ``reverse preferences.'' Nine months later, USTR will 
make a determination of whether the ``reverse preferences'' have, or 
are likely to have, a significant adverse effect on U.S. commerce.
    If USTR makes an affirmative determination, the country's status as 
a beneficiary developing country will be withdrawn or suspended, unless 
the country has agreed to eliminate the significant adverse effect. The 
review will terminate if the determination is negative.

III. Public Comments

    Interested parties are invited to submit comments regarding 
discriminatory ``reverse preferences'' that are granted by a GSP 
beneficiary country, and their effect on U.S. commerce. Interested 
parties are invited to report on any association agreements, or similar 
agreements, under which a GSP beneficiary country grants preferential 
treatment to products of another developed country, that has or may 
have an adverse effect on U.S. export interests. Preferential treatment 
may include preferential tariff treatment, as well as preferential non-
tariff treatment (e.g., quotas). Interested parties are urged to give 
specific examples of U.S. export interests that have been adversely 
affected by ``reverse preferences.''
    In particular, interested parties are urges to be as specific as 
possible about: (1) Any product that is subject to different rates of 
duty by a GSP beneficiary country depending upon whether the product is 
imported from the United States or another developed country, such as 
the EU; (2) the various, actual, applicable rates of duty (i.e., bound, 
applied, preferential), as well as any scheduled rate reduction; (3) 
the level of trade in the subject product that the United States and 
other developed countries have with the GSP beneficiary; and (4) the 
size of the market in the beneficiary country.
    Comments must be submitted in 15 copies, in English, to the 
Chairman of the GSP Subcommittee, Trade Policy Staff Committee, 600 
17th Street, N.W., Room 513, Washington, D.C. 20506. Comments must be 
received no later than 5 p.m. on Wednesday, January 25, 1995. 
Information and comments will be subject to public inspection by 
appointment with the staff of the USTR Public Reading Room, except for 
information granted ``business confidential'' status pursuant to 15 CFR 
2003.6 and 2007.7. If the document contains business confidential 
information, 15 copies of a nonconfidential version of the submission 
along with 15 copies of the confidential version must be submitted. The 
confidential version of the submission should be clearly marked 
``Submitted in Confidence'' at the top and bottom of each and every 
page of the document. A nonconfidential summary of the confidential 
information must be included with the confidential submission, along 
with a written explanation of why the confidential material should be 
protected. The version which does not contain business confidential 
information (the public version) should also be clearly marked at the 
top and bottom of each and every page (either ``public version'' or 
``non-confidential'').

IV. Dominican Republic

    In the 1993 Annual GSP Review, the GSP Subcommittee reviewed the 
worker rights practices and the adequacy and effectiveness of IPR 
protection in the Dominican Republic. Notwithstanding evidence of some 
progress on worker rights and IPR protection in the Dominican Republic 
during the course of the review, these two cases are continued when the 
results of the 1993 Annual GSP Review were announced on July 1, 1994. 
Since that decision, the Dominican Republic has made considerable 
progress on worker rights and has continued to make progress on IPR 
protection. In September, the Motion Picture Export Association of 
America, the domestic petitioner in the IPR case, withdrew its 
petition. In October, the AFL-CIO, the domestic petitioner in the 
worker rights case, withdrew its petition. Based on the continuing 
progress on worker rights and IPR protection in the Dominican Republic, 
as well as the withdrawal of the two petitions, the GSP reviews have 
been terminated.
Frederick L. Montgomery,
Chairman, Trade Policy Staff Committee.
[FR Doc. 94-31214 Filed 12-19-94; 8:45 am]
BILLING CODE 3190-01-M