[Federal Register Volume 61, Number 34 (Tuesday, February 20, 1996)]
[Proposed Rules]
[Pages 6332-6334]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-3652]



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OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE

19 CFR Part 132


Administration of Tobacco Tariff-Rate Quota

AGENCY: Office of the United States Trade Representative.

ACTION: Advance notice of proposed rulemaking.

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SUMMARY: The Office of the United States Trade Representative (USTR) is 
soliciting comments and views on the administration of the tariff-rate 
quota on leaf tobacco, established on September 13, 1995, which is 
currently operating on a first-come, first-served basis.

DATES: Public comments are due by noon May 20, 1996.

ADDRESSES: Comments may be sent to: Sybia Harrison, room 222, Office of 
the U.S. Trade Representative, 600 17th Street NW., Washington, DC 
20508, attention: Tobacco Tariff-Rate Quota.

FOR FURTHER INFORMATION CONTACT:
Tom Perkins, Senior Economist, Office of Agricultural Affairs, USTR, 
(202) 395-6127; or Rachel Shub, Assistant General Counsel, USTR, (202) 
395-7305.

SUPPLEMENTARY INFORMATION: Presidential Proclamation 6821 (60 FR 47663 
(September 13, 1995)) established a tariff-rate quota (TRQ) on imports 
of flue-cured, burley and other light air-cured tobaccos that are 
imported for the manufacture of cigarettes. Under the TRQ, a tariff 
equal to the concession rates negotiated in the Uruguay Round is 
applied to tobacco imports until the in-quota quantity is filled, after 
which a tariff rate of 350% ad valorem is applied. For the quota year 
beginning on September 13, 1995, the in-quota quantity of the TRQ is 
150,450 tons, which is subdivided into specific allocations for 
Argentina, Brazil, Chile, the European Union, Guatemala, Malawi, 
Philippines, Thailand, Zimbabwe, and a general allocation for countries 
other than those allocated specific TRQ quantities. Presidential 
authority to establish the TRQ is provided by section 125(c) of the 
Trade Act of 1974 (19 U.S.C. 2135(c)), section 421 of the Uruguay Round 
Agreements Act (19 U.S.C. 2135 note) and other provisions of law 
referenced in Presidential Proclamation 6821. The proclamation also 
provides that the quantitative limitations of the TRQ are subject to 
regulations as may be issued by USTR or its designated agency.
    The TRQ is currently operating on a first-come, first-served basis, 
under the U.S. Customs Service's quota regulations at 19 CFR 132 
(``Customs Quota regulations''). These regulations establish 
requirements for determining priority and status for importers 
presenting tobacco for importation and set forth specific procedures 
for prorating a TRQ category (such as a country-specific allocation) in 
the event the category is oversubscribed. Customs Quota regulations 
currently are applied to U.S. TRQs on beef, peanuts, peanut butter, 
certain sugar-containing products, certain cotton and cotton waste, and 
certain dairy products, as well as TRQ's applicable to Mexico (under 
the North American Free Trade Agreement) on orange juice, tomatoes and 
other safeguard products commodities.
    Some cigarette manufacturers have suggested that the TRQ should be 
administered by means of import licenses issued to manufacturers in 
order to permit the orderly marketing of tobacco in the U.S. market. 
Accordingly, the Office of the United States Trade Representative 
(USTR) is soliciting comments on the administration of the TRQ. If 
comments reflect substantial problems or concerns regarding the current 
operation of the TRQ, USTR will consider alternative approaches, 
including an import licensing program. Any alternative method should 
aim to facilitate reasonable, efficient and orderly access to the U.S. 
tobacco market for those countries to which a quota allocation has been 
made, and provide equitable and efficient access for U.S. importers, 
manufacturers and other entities that import or use tobacco affected by 
the TRQ.
    To better assess the need for change and the significance of that 
need, USTR invites public comment on the current operation of the TRQ. 
Comments should address the extent to which the current system is 
orderly, economically efficient and equitable. USTR is interested in 
aspects of the current system such as (1) the costs and benefits to the 
U.S. economy as a whole as well as firms, foreign and domestic, that 
participate in the markets for imported tobacco and related markets; 
(2) the distribution across firms of the TRQ, including market 
competition and concentration; (3) market access for small businesses; 
(4) the effect on the U.S. price support program; and (5) the impact on 
timing and storage of imports, and related costs and benefits; (6) the 
impact on exporters if other countries were to adopt similar practices 
for TRQs on products from the U.S.; and (7) administrative costs.
    With respect to any alternative approaches, USTR would appreciate 
views on how such programs might be administered. For example, for 
licensing, comments could address: (1) the reasons and legal basis for 
adopting such an approach; (2) to whom and by what mechanism import 
licenses should be issued; (3) on what basis licenses should be issued 
(including eligibility criteria, license validity period and license 
renewability); (4) how licenses could be issued in light of the 
country-specific allocations and market demand for different types of 
tobacco; (5) how to address failure of importers to utilize their 
licenses; (6) the extent to which new importers should be issued 
licenses, taking into account the desirability of issuing licenses in 
sizes that are commercially viable; (7) whether licenses should be 
transferable, and under what conditions; (8) the benefits, costs, and 
administrative and distributional considerations associated with a 
market in licenses, including secondary markets; (9) the effect of any 
proposed alternative on the U.S. economy as a whole as well as firms, 
foreign and domestic, that participate in the markets for imported 
tobacco and related markets; (10) any effect on the U.S. price support 
program for tobacco; (11) effect of any proposed alternatives on small 
businesses; (12) effect of any proposed alternatives on market 
competition and concentration; (13) administrative costs that might be 
associated with a proposed alternative; (14) the impact of proposed 
alternatives on timing and storage of imports, and related costs and 
benefits; (15) the impact on exporters if other countries were to adopt 
similar practices for TRQs on products from the U.S.; and (16) any 
other issues arising in the context of a particular alternative to the 
current operation of the TRQ.
    Persons submitting written comments should provide a statement, in 
ten copies, by noon, May 20, 1996 to Sybia Harrison, Office of the U.S. 
Trade Representative, Room 222, 600 17th Street, NW., Washington, DC 
20508, attention: Tobacco Tariff-Rate Quota. Non-confidential 
information received will be available for public inspection by 
appointment, in the USTR Reading Room, Room 101, Monday through Friday, 
10:00 a.m. to 12:00 noon and 1:00 p.m. to 4:00 p.m. For an appointment 
call Brenda Webb at (202) 395-6186. Business confidential information 
will be subject to the requirements of 15 CFR 2003.6. Any business 
confidential material must be clearly marked as such on the cover 
letter or page and each succeeding page, 

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and must be accompanied by a non-confidential summary thereof.
Michael Kantor,
United States Trade Representative.
[FR Doc. 96-3652 Filed 2-16-96; 8:45 am]
BILLING CODE 3190-01-M