[Federal Register Volume 62, Number 200 (Thursday, October 16, 1997)]
[Notices]
[Pages 53852-53853]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-27305]


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OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE

[Docket No. 301-114]


Initiation of Section 302 Investigation and Request for Public 
Comment: EU Circumvention of Export Subsidy Commitments on Dairy 
Products

AGENCY: Office of the United States Trade Representative.

ACTION: Notice of initiation of investigation; request for written 
comments.

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SUMMARY: The United States Trade Representative (USTR) has initiated an 
investigation under section 302(b)(1) of the Trade Act of 1974, as 
amended (the Trade Act), with respect to certain acts, policies and 
practices of the European Union (EU) concerning export subsidies on 
processed cheese. The EU is bound by commitments it made in the Uruguay 
Round limiting the amount of cheese that may be exported with export 
subsidies. The EU is circumventing these commitments by exporting 
processed cheese under subsidy and counting these exports against other 
export subsidy commitments relating to powdered milk and butterfat. The 
USTR is investigating whether these acts, policies and practices are 
inconsistent with certain provisions of the Agreement on Subsidies and 
Countervailing Measures and the Agreement on Agriculture. USTR invites 
written comments from the public on the matters being investigated.

DATES: This investigation was initiated on October 8, 1997. Written 
comments from the public are due on or before noon on Tuesday, November 
11, 1997.

ADDRESSES: Office of the United States Trade Representative, 600 17th 
Street, NW, Washington, DC 20508.

FOR FURTHER INFORMATION CONTACT:
Suzanne Early, Senior Advisor, Office of Agricultural Affairs, (202) 
395-6127, Elizabeth Hyman, Office of the General Counsel, (202) 395-
3150, or Daniel Brinza, Senior Advisor and Special Counsel for Natural 
Resources, (202) 395-7305.

SUPPLEMENTARY INFORMATION: Section 302(b)(1) of the Trade Act, 19 
U.S.C. 2412(b)(1), authorizes the USTR to initiate an investigation 
under chapter 1 of Title III of the Trade Act (commonly referred to as 
``section 301'') with respect to any matter in order to determine 
whether the matter is actionable under section 301. Matters actionable 
under section 301 include, inter alia, the denial of rights of the 
United States under a trade agreement, or acts, policies, and practices 
of a foreign country that violate or are inconsistent with the 
provisions of, or otherwise deny benefits to the United States under, 
any trade agreement.

Investigation and Consultations

    On October 8, 1997, having consulted with the appropriate private 
sector advisory committees, the USTR determined that an investigation 
should be initiated to assess whether certain acts, policies and 
practices of the EU regarding export subsidies on processed cheese are 
actionable under section 301(a).
    The EU is bound by a schedule of commitments it made in the Uruguay 
Round limiting the amount of cheese that may be exported with export 
subsidies, as well as separate commitments limiting subsidized exports 
of various other agricultural products. The EU appears to be 
circumventing its commitments on processed cheese by exporting 
processed cheese under subsidy and counting these exports against other 
export subsidy commitments relating to components of processed cheese 
such as powdered milk, butterfat and natural cheese. Beginning in 
February, 1997, new rules implemented by the EU (including Commission 
Regulations 300/97, 417/97 and 418/97) recast the EU's ``inward 
processing'' regime to count the export subsidies on processed cheese 
as subsidies on the components of the cheese, instead. These acts, 
policies and practices appear to be inconsistent with certain 
provisions of the Agreement on Subsidies and Countervailing Measures 
and the Agreement on Agriculture.
    As required in section 303(a) of the Trade Act, the USTR has 
requested consultations with the EU regarding the issues under 
investigation. The request was made pursuant to Article 4 of the 
Understanding on Rules and Procedures Governing the Settlement of 
Disputes (DSU), Article XXII of the GATT 1994, Article 19 of the 
Agreement on Agriculture to the extent it incorporates Article XXII of 
the GATT 1994, and Article 30 of the Agreement on Subsidies and 
Countervailing Measures to the extent it incorporates Article XXII of 
the GATT 1994. If the consultations do not result in a satisfactory 
resolution of the matter, the USTR will request the establishment of a 
panel pursuant to Article 6 of the DSU. USTR will seek information and 
advice from the petitioner and appropriate representatives provided for 
under section 135 of the Trade Act in preparing the U.S. presentations 
for such consultations.

[[Page 53853]]

    Under section 304 of the Trade Act, the USTR must determine within 
18 months after the date on which this investigation was initiated, or 
within 30 days after the conclusion of World Trade Organization dispute 
settlement procedures, whichever is earlier, whether any act, policy, 
or practice or denial of trade agreement rights described in section 
301 of the Trade Act exists and, if that determination is affirmative, 
the USTR must determine what action, if any, to take under section 301 
of the Trade Act.

Public Comment: Requirements for Submissions

    Interested persons are invited to submit written comments 
concerning the EU acts, policies and practices which are the subject of 
this investigation, the amount of burden or restriction on U.S. 
commerce caused by these acts, policies and practices, and the 
determinations required under section 304 of the Trade Act. Comments 
must be filed in accordance with the requirements set forth in 15 CFR 
2006.8(b) (55 FR 20593) and must be filed on or before noon on 
Wednesday, November 6, 1996. Comments must be in English and provided 
in twenty copies to: Sybia Harrison, Staff Assistant to the Section 301 
Committee, Room 223, Office of the U.S. Trade Representative, 600 17th 
Street, NW, Washington, DC 20508.
    Comments will be placed in a file (Docket 301-114) open to public 
inspection pursuant to 15 CFR 2006.13, except confidential business 
information exempt from public inspection in accordance with 15 CFR 
2006.15. Confidential business information submitted in accordance with 
15 CFR 2006.15 must be clearly marked ``BUSINESS CONFIDENTIAL'' in a 
contrasting color ink at the top of each page on each of 20 copies, and 
must be accompanied by a nonconfidential summary of the confidential 
information. The nonconfidential summary shall be placed in the file 
that is open to public inspection. An appointment to review the docket 
(Docket No. 301-112) may be made by calling Brenda Webb (202) 395-6186. 
The USTR Reading Room is open to the public from 9:30 a.m. to 12 noon 
and 1:00 p.m. to 4:00 p.m., Monday through Friday, and is located in 
Room 101.
Irving A. Williamson,
Chairman, Section 301 Committee.
[FR Doc. 97-27305 Filed 10-15-97; 8:45 am]
BILLING CODE 3190-01-M