[Federal Register Volume 64, Number 57 (Thursday, March 25, 1999)]
[Notices]
[Pages 14486-14492]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-7409]


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OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE

[Docket No. 301-62a]


Implementation of WTO Recommendations Concerning EC--Measures 
Concerning Meat and Meat Products (Hormones)

AGENCY: Office of the United States Trade Representative.

ACTION: Request for comment; notice of public hearing.

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SUMMARY: May 13, 1999 is the deadline for the European Communities' 
(EC) implementation of the recommendations and rulings of the World 
Trade Organization (WTO) Dispute Settlement Body (DSB) concerning the 
EC's ban on imports of U.S. meat from animals treated with hormones. EC 
representatives have indicated that the EC is unlikely to meet this 
deadline. The United States Trade Representative (USTR) is seeking 
written comments on the action that the USTR should take to exercise 
U.S. rights under Article 22 of the WTO Dispute Settlement 
Understanding (DSU) if the EC fails to implement the DSB 
recommendations by May 13, 1999.

DATES: Requests to testify at the public hearing and written testimony 
for the public hearing are due by noon on Wednesday, April 14, 1999; 
the public hearing will be held beginning at 8:00 a.m. on Monday, April 
19, 1999; written comments, in lieu of written and oral testimony, are 
due by noon on Friday, April 23, 1999; and rebuttal briefs, if needed, 
are due by 5:00 p.m. on Monday, April 26, 1999.

ADDRESSES: Room 100, 600 17th Street, NW, Washington, D.C. 20508.

FOR FURTHER INFORMATION CONTACT: Sybia Harrison, Staff Assistant to the 
Section 301 Committee, (202) 395-3419, for questions concerning Section 
301 procedures and submissions filed in response to this notice; 
Demetrios Marantis, Assistant General Counsel, (202) 395-2581, or Ralph 
Ives, Deputy Assistant U.S. Trade Representative, (202) 395-4620, for 
questions concerning the EC hormone ban or WTO procedures; or Joanna 
McIntosh, Associate General Counsel (202) 395-7203, for questions 
concerning Section 301, this notice, or WTO procedures.

SUPPLEMENTARY INFORMATION: In December 1985, the EC adopted a directive 
on livestock production restricting the use of natural hormones to 
therapeutic purposes, banning the use of synthetic hormones, and 
prohibiting imports of animals, and meat from animals, to which 
hormones had been administered. That directive was later declared 
invalid by the European Court of Justice on procedural grounds and had 
to be re-adopted by the Council, unchanged, in 1988 (``the Hormone 
Directive''). These measures became effective January 1, 1989, 
notwithstanding U.S. attempts to resolve this issue bilaterally and 
multilaterally, including through dispute settlement under the General 
Agreement on Tariffs and Trade (GATT).
    On December 24, 1987, the President of the United States announced 
an increase in duties on selected European products in response to the 
Hormone Directive and related measures, but immediately suspended this 
action to promote a negotiated solution of the issue. [52 Fed. Reg. 
49139]. The USTR terminated the suspension of the increase in duties in 
January 1989 when the EC began implementing the hormone ban against 
imports from the United States. [53 Fed. Reg. 53115]. The USTR 
subsequently modified the application of increased duties on a number 
of occasions.
    Following entry into force of the WTO Agreement on the Application 
of Sanitary and Phytosanitary Measures (``SPS Agreement'') on January 
1, 1995, the United States and, later, Canada, proceeded with formal 
WTO dispute settlement procedures against the hormone ban. Prior to the 
establishment of the WTO panel, the EC replaced the Hormone Directive 
with another directive that re-codified and expanded the hormone ban. 
On May 20, 1996, the DSB established a dispute settlement panel (``the 
WTO panel'') to examine the consistency of the hormone ban with the 
EC's WTO obligations. The members of the WTO Panel were selected as of 
July 2, 1996. On July 15, 1996, the USTR terminated the increase in 
duties on certain products of the EC that had been imposed in response 
to the hormone ban. [61 Fed. Reg. 37309].
    On August 18, 1997, the WTO panel issued its report finding that 
the hormone ban is not based on scientific evidence, a risk assessment, 
or relevant international standards in contradiction of the EC's 
obligations under the SPS Agreement. The Appellate Body issued its 
report on January 16, 1998 affirming that the hormone ban is not 
consistent with the EC's obligations under the SPS Agreement. 
Specifically, the Appellate Body concluded that the EC's hormone ban 
failed to satisfy the requirements of Articles 3.3 and 5.1 of the SPS 
Agreement because the risk assessments that had been performed did not 
support the ban on imports. In addition, the Appellate Body found that 
there was no risk assessment, as required by Article 5.1 of the SPS 
Agreement, for one of the hormones. At its February 13, 1998 meeting, 
the DSB adopted the Panel and Appellate Body reports on hormones.
    The EC subsequently requested four years to implement the DSB 
recommendations, two years to conduct additional risk assessments and 
two years to revise its measures to reflect the results of those risk 
assessments. A WTO Arbitrator appointed to determine the reasonable 
period of time observed that the reasonable period should not be 
provided to ``demonstrate the consistency of a measure already judged 
to be inconsistent,'' in response to the EC's arguments that it would 
need a substantial period to conduct additional risk assessments. 
[Para. 39 of the Award of the Arbitrator, WT/DS26/15]. The Arbitrator 
determined that the reasonable period of time for implementation was 
fifteen months and would expire on May 13, 1999.
    To date, the EC has taken no action to implement the DSB 
recommendations and rulings. The EC has made no modifications to the 
hormone ban, but rather has initiated seventeen new risk assessments. 
In its status report for the March meeting of the DSB, the EC indicated 
that it does not expect to be in compliance by the May 13, 1999 WTO-
mandated deadline.
    On March 3-4, 1999, U.S. and EC officials held discussions in 
Washington to explore options to resolve this dispute. The United 
States presented a proposal for labeling U.S. beef as a way to address 
European consumers' concerns. However, the EC indicated that a 
resolution of this matter would be conditional on the completion of the 
additional risk assessments, which may not be completed until sometime 
in late 1999 or 2000, and other regulatory procedures.

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Process for Suspending Concessions

    If the EC fails to implement the DSB recommendations concerning the 
hormone ban by May 13, 1999, Article 22 of the WTO Dispute Settlement 
Understanding (DSU) permits the United States to suspend the 
application of concessions or other obligations accruing to the EC 
under the WTO Agreement. Article 22.2 of the DSU provides that the 
United States must seek authorization from the DSB prior to suspending 
concessions. Article 22.6 of the DSU provides that the DSB shall grant 
the requested authorization not later than thirty days after the 
expiration of the reasonable period, or by June 12 in this dispute, 
unless the EC objects to the level of suspension proposed.
    If the EC objects to the level of suspension proposed, it may 
request that the assessment of that level be referred to arbitration. 
The DSU requires that such arbitration proceedings be completed within 
sixty days after the expiration of the reasonable period of time, or by 
July 12 in this dispute.
    Following the completion of arbitration proceedings and upon 
request, the DSB must grant authorization to suspend concessions or 
other obligations consistent with the Arbitrator's decision. The United 
States may not suspend concessions or other obligations during the 
course of the arbitration proceedings.
    Given the likelihood that the EC will not implement the DSB 
recommendations concerning the hormone ban by May 13, the USTR is 
taking steps, under the authority of Section 306 of the Trade Act, to 
prepare for the exercise of the United States's right to suspend 
concessions under Article 22 of the DSU. These steps include: (1) this 
request for comments on the concessions that the United States intends 
to suspend if the EC does not implement the DSB recommendations; and 
(2) the subsequent U.S. request to the DSB for suspension of 
concessions.
    The U.S. request to the DSB will be submitted some time after May 
13, when the EC's reasonable period of time for implementation expires, 
but before June 12, the latest date by which either the DSB must grant 
the requested authorization or the EC must request arbitration to 
review the level of the requested suspension. The U.S. request to the 
DSB will include the concessions which the U.S. intends to suspend 
(e.g., a list of products of the EC on which the United States intends 
to suspend tariff concessions). The United States would begin 
suspending these concessions in accordance with the time frames 
provided in Article 22 of the DSU and Section 306 of the Trade Act.

Request for Comments

    The USTR requests comments on the types of concessions that may be 
appropriate for suspension pursuant to Article 22 of the DSU if the EC 
does not implement the DSB recommendations concerning the hormone ban 
within the prescribed reasonable period of time. The USTR proposes that 
the imposition of 100 percent ad valorem duties on selected products of 
the EC is an appropriate action and that the products to be affected by 
the duty increase will be drawn from the list of products set forth in 
the Annex to this notice. The imposition of increased duties may be 
applied to imported articles that are both: (1) classified in the 
headings and the subheadings of the Harmonized Tariff Schedule of the 
United States (HTS) listed in the Annex to this notice; and (2) the 
product of a member State of the European Union. In the instances where 
a 4-digit HTS heading appears in the left column of this list, products 
classified in any of the 8-digit subheadings appearing in the HTS 
indented under those 4-digit headings may be subject to increased 
duties.

Public Comment on Proposed Suspension of Concessions; Hearing 
Participation

    Section 306(c) of the Trade Act provides that the USTR shall allow 
an opportunity for the presentation of views by interested persons 
prior to the issuance of a determination pursuant to section 306(b). 
The USTR invites interested persons to: (1) provide written comments on 
the proposed suspension of concessions; and (2) to present written and 
oral testimony and rebuttal briefs in the context of a public hearing. 
Written comments and written and oral testimony may address: the 
appropriateness of imposing increased duties on the products listed in 
the Annex to this notice; the levels at which U.S. customs duties 
should be set for particular items; the degree to which increased 
duties might have an adverse effect upon U.S. consumers of the products 
listed in the Annex; and any other matter relating to the EC hormone 
ban and the proposed increase in duties.
    Written comments: Interested persons wishing to submit written 
comments must do so by noon on Friday, April 23, 1999. Persons 
submitting written comments may, but do not need to, present written 
and oral testimony as well.
    Requests to Testify and Written Testimony: Interested persons 
wishing to present testimony at the hearing must submit a written 
request to do so by noon on Wednesday, April 14, 1999, together with 
twenty copies of their complete written testimony. Requests to testify 
must conform to the requirements of 15 CFR Sec. 2006.9 and include the 
following information: (1) name, address, telephone number, fax number, 
firm or affiliation of the applicant, and interest of the applicant; 
and (2) a brief summary of the comments to be presented. After 
considering the request to present oral testimony, the Staff Assistant 
to the Section 301 Committee will notify the applicant of the time of 
his or her testimony.
    Public Hearing: The public hearing will be held beginning at 8:00 
a.m. on Monday, April 19, 1999 in the Main Hearing Room at the U. S. 
International Trade Commission, 500 E Street, SW, Washington, D.C. 
20436. Testimony at the public hearing should be limited to no more 
than five minutes.
    Rebuttal Briefs: To assure interested persons an opportunity to 
contest the information provided by other persons, the USTR will 
entertain rebuttal briefs filed by any party by 5:00 p.m. on Monday, 
April 26, 1999. In accordance with 15 CFR Sec. 2006.8(c), rebuttal 
briefs should be strictly limited to demonstrating errors of fact or 
analysis not pointed out in written or oral testimony 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 Sec. 2006.8(b). 
Submission must include on the first page a clear reference in bold 
and/or underlining to the HTS number(s) and product(s) which are the 
subject of the submission. Submissions must state clearly the position 
taken and describe with particularity the supporting rationale, be in 
English, and be provided in twenty copies to: Chairman, Section 301 
Committee, Attn: EC--Hormone Ban, Implementation of WTO 
Recommendations, Room 100.
    Written comments, written testimony, and rebuttal briefs will be 
placed in a file (Docket 301-62a) open to public inspection pursuant to 
15 CFR Sec. 2006.13, except confidential business information exempt 
from public inspection in accordance with 15 CFR Sec. 2006.15. Persons 
wishing to submit business confidential information must certify in 
writing that such information is confidential in accordance with 15 CFR 
Sec. 2006.15(b), and such information must be clearly marked ``BUSINESS 
CONFIDENTIAL'' in a contrasting color

[[Page 14488]]

ink at the top of each page on each of twenty copies and must be 
accompanied by a non-confidential summary of the confidential 
information. The non-confidential summary will be placed in the docket 
that is open to public inspection.
    An appointment to review Docket No. 301-62a may be made by calling 
Brenda Webb at (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 of the Office of the United 
States Trade Representative.
Joanna K. McIntosh,
Chairman, Section 301 Committee.

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[FR Doc. 99-7409 Filed 3-23-99; 1:01 pm]
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