[Federal Register Volume 64, Number 122 (Friday, June 25, 1999)]
[Notices]
[Pages 34304-34306]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-16242]
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OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE
COUNCIL ON ENVIRONMENTAL QUALITY
Request for Public Comment Regarding the Economic and
Environmental Effects of Tariff Elimination in the Forest Products
Sector
AGENCY: Office of the United States Trade Representative and Council on
Environmental Quality.
ACTION: Request for written public comment.
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SUMMARY: The Office of the United States Trade Representative (USTR)
and the Council on Environmental Quality (CEQ) are seeking public
comment about the economic and environmental effects of the initiative
to eliminate remaining tariffs on forest products. These comments are
sought in the context of a written analysis which CEQ and USTR are
undertaking of that initiative. The initiative, which is now the
subject on negotiations within the World Trade Organization (WTO), is
part of an eight sector accelerated tariff liberalization (ATL)
proposal. The other ATL sectors are environmental goods and services,
gems and jewelry, medical equipment and scientific instruments,
chemicals, energy, fish and toys.
The ATL proposal in forest products covers all of Chapters 44, 46,
47, 48, 49 on the HTS as well as portions of chapter 38 (certain wood
chemicals), and 94 (furniture and prefabricated buildings.)
The complete list of tariff lines included in the initiative can be
found in the Federal Register notice announcing ITC Investigation No.
332-392, Advice Concerning APEC Sectoral Trade Liberalization, (Federal
Register, April 1, 1998, Vol. 63, No. 62).
The analysis will address the following broad subject areas: the
history of the initiative, a description of how the forest products ATL
relates to other U.S. government goals and objectives in the forest
policy arena, the likely economic impact of tariff elimination in terms
of shifts in production and consumption of forest products and the
reasonably foreseeable environmental impacts of these shifts, and
appropriate policy responses. The report is intended to focus on the
effects of the ATL initiative on the United States but will also
address broader global implications of the initiative. Specific
information regarding, or empirical studies of, the economic and
environmental impacts of past trade liberalization in this sector which
interested parties may have would be particularly welcome.
Testimony related to the subject of this request which has been
submitted in response to the following will be made a part of the
record of this study and does not need to be resubmitted: ITC
Investigation No. 332-392, ``Advice Concerning APEC Sectoral Trade
Liberalization'' (Federal Register, April 1, 1998, Vol 63, No. 62);
USTR Notice ``Negotiation of Sectoral Market Opening Agreements''
(Federal Register, May 15, 1998, Vol. 63, No. 94);
[[Page 34305]]
USTR Trade Policy Staff Committee Notice ``Request for Public Comment
Regarding Negotiations on Market Access and Other Issues in the World
Trade Organization and Under the Free Trade Area of the Americas''
(Federal Register, April 14, 1999, Vol. 64, No. 71); and ITC
Investigation 332-400,``Conditions of Competition in U.S. Forest
Products Trade''.
FOR FURTHER INFORMATION CONTACT:
Office of the U.S. Trade Representative, Environment and Natural
Resources Section, telephone 202-395-7320 or the Council on
Environmental Quality, International Affairs, telephone 202-456-6224.
SUPPLEMENTARY INFORMATION:
1. Background
A. History of Tariff Liberalization in the Forest Products Sector
The United States sought elimination of all tariffs in the forest
products sector during the Uruguay Round. The round resulted in a
``zero for zero'' (reciprocal tariff elimination) agreement which
included the United States, Canada, Finland, Austria, Singapore, Hong
Kong, Japan, EU, Korea and New Zealand for paper products (chapters 47,
48 and 49 of the HTS) by 2004. At the same time there was agreement to
reduce, over five years, tariffs on wood products. In the United
States, such reductions amounted to just over a one-third cut in
average tariff levels from an average tariff level of 3.1% to an
average tariff level of 1.8%. Under the Uruguay Round Agreements Act
and its accompanying Statement of Administrative Action, Congress
listed a number of industrial or agricultural sectors in which complete
tariff elimination was not achieved in the Uruguay Round but for which
Congress determined that obtaining further reductions and elimination
of tariffs was a priority objective. Under section 11(b) of the Uruguay
Round Agreements Act, Congress provided the Administration with ongoing
authority to seek reductions in tariffs on wood products, among other
sectors.
B. Initiative Begun in APEC
In mid 1997, APEC Ministers called for the nomination of sectors
for Early Voluntary Sectoral Liberalization (EVSL) among APEC
economies. Four nominations were received in the forest product area
from the United States, Canada, Indonesia and New Zealand. These four
proposals were merged together in September 1997, with New Zealand
agreeing to act as coordinator for the proposal. Indonesia, the United
States and Canada have remained active proponents of the proposal in a
co-sponsor role. At the APEC summit in Kuala Lumpur in November 1998,
APEC leaders agreed to move the tariff portions of the EVSL initiative
to the WTO in order to seek a critical mass of support for concluding
an agreement on all eight sectors by the end of 1999. The non-tariff,
building standards and economic and technical cooperation areas of the
proposal continue to be worked on within APEC.
C. Major global importers and exporters of forest products, 1996:
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Importers 1000 US$ Exporters 1000 US$
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USA........................................... $22,558,540 Canada.......................... $25,333,160
Japan......................................... 18,890,400 USA............................. 16,939,900
Germany....................................... 11,926,820 Sweden.......................... 10,996,200
United Kingdom................................ 8,476,689 Finland......................... 10,301,020
Italy......................................... 6,148,593 Germany......................... 9,438,751
France........................................ 5,356,351 Indonesia....................... 5,206,522
Netherlands................................... 4,489,773 France.......................... 4,193,914
Korea, Republic of............................ 4,425,527 Malaysia........................ 4,161,279
China (excl. Hong Kong)....................... 3,858,254 Austria......................... 4,149,678
Spain......................................... 3,552,249 Brazil.......................... 3,233,476
Belgium-Luxembourg............................ 3,544,574 Russian Federation.............. 2,995,568
Hong Kong, China.............................. 3,488,083 Italy........................... 2,486,782
Taiwan........................................ 3,040,661 Netherlands..................... 2,406,430
Canada........................................ 2,622,203 Belgium-Luxembourg.............. 2,180,694
Switzerland................................... 2,501,957 Norway.......................... 2,059,960
World......................................... 138,652,200 World........................... 134,656,400
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Source: FAO
D. Trade Barriers Faced by Sector
The sector faces a range of barriers. Tariffs remain particularly
significant barriers. The 1998 FAO publication Trade Restrictions and
Their Impact on International Trade in Forest Products which is
available in hard copy and on the FAO website [www.fao.org/ur] provides
a detailed explanation of the barriers faced in this sector.
Applied tariffs in OECD economies for these products, in general,
are relatively low, however, tariffs for specific products remain high.
This is especially true for wood panel products, builders' woodwork
items, and furniture for those countries that did not agree to the zero
for zero on furniture rates for particular products are higher,
commonly 10-15%. Tariffs in other countries are higher than this, with
rates commonly falling between 10 and 60%.
Tariffs, Selected Countries
HTS Product Chapters: 44, 47, 48, 49, 94 (part).
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Tariff % MFN
average
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Australia............................................... 2.88
Canada.................................................. 3.88
Chile................................................... 11
China................................................... 20.86
Taiwan.................................................. 3.22
Hong Kong, China........................................ 0
Indonesia............................................... 9.7
Japan................................................... 1.14
Korea................................................... 4.98
Malaysia................................................ 12.26
Mexico.................................................. 11.32
New Zealand............................................. 6.06
Singapore............................................... 0
Thailand................................................ 20.04
USA..................................................... 1.4
EU...................................................... 5.26
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Source: FAOSTAT Website
E. Scope
The ATL proposal covers all forest products--from rosin (ex 3804),
to logs and wood products (ch44), ratan products (ex 46), pulp, paper
and paper products (ch 47, 48 and 49), wooden furniture (ex 9401, ex
9403) and prefabricated buildings made of wood (ex 9406).
[[Page 34306]]
F. The Tariff Proposal Target
Existing parties to the Uruguay Round zero for zero agreement to
accelerated removal of tariffs in chapters 47, 48 and 49 of the HTS
(pulp, paper and paperboard and printed material) would agree to move
up the elimination of tariffs in these sectors from 1 January 2004 to 1
January 2000. Others would attempt to remove tariffs by the same date
but countries could delay tariff removal until 1 January 2002 on a case
by case basis for a limited number of specific products.
The proposal calls for the commencement to tariff cuts on all other
products with the goal of eliminating tariffs by 1 January 2002, but
accepts that in special circumstances and on a case by case basis
elimination could be delayed to 1 January 2004.
G. Non-Tariff Measures
As part of the original APEC EVSL agreed to in November 1997, APEC
economies agreed to hire a consultant to undertake a study of non-
tariff measures which may be affecting trade in the forest products
sector. This past April, APEC issued a request for proposals for the
study. The United States is the APEC coordinator for the study. Under
the terms of reference, the study will include:
--A comprehensive inventory of non-tariff measures and other policies
affecting trade in forest products;
--An identification of the most frequently used measures and policies;
--A qualitative and quantitative analysis of the impact of these
measures/policies on trade, including a broader analysis of the policy
goals underlying those measures/policies and the economic and
environmental costs and benefits stemming from their application.
APEC members have been asked to notify and cross notify on NTMs in
effect in their own economies and the economies of other APEC members.
The study is to be completed by August 30, 1999, after which an APEC
forest experts groups will formulate appropriate recommendations for
the voluntary elimination of any unjustified measures identified in the
report. APEC economies are then to submit individual, voluntary reports
on timetables for the implementation of those recommendations.
H. Economic and Technical Cooperation
Four proposals have been received to date for projects under the
environmental and technical cooperation (Ecotech) portion of the APEC
EVSL. APEC economies have agreed that Ecotech cooperation projects in
support of the forestry initiative should be focused on programs which
further environmental goals, such as forest fire prevention, pest
control, and adoption of sound phytosanitary standards. The four
Ecotech projects under consideration are
--Projects to increase communities' forestry knowledge and their
ability to develop solutions to such issues as forest resource
assessment using criteria and indicators;
--Enhancement of local industry development in a sustainable manner
through training programs on sustainable forest management;
--Cooperation to enhance collaborative work on forest fire prevention
and management systems and development of fire monitoring and
information systems; and
--Cooperation in such areas as (1) enhanced infrastructure, personnel
and exchange of information on standards and technical regulations in
the sector; (2) making information and training programs available on
paper making, paper stock collection and utilization, recycling and
waste reduction, panel production, furniture design, finishing and
packaging, and builder's carpentry and joinery design; (3) enhancing
transparency in customs procedures applied to the forestry sector
through the Subcommittee on Customs Procedures of the APEC Committee on
Trade and Investment; (4) promoting exchange of market information
through cooperation among relevant organizations; and (5) improving
information and monitoring systems associated with harmful pests.
2. Written Comments
Persons wishing to submit written comments in response to this
notice should provide 20 copies no later than 30 days from the date of
this notice to Gloria Blue, Executive Secretary, Trade Policy Staff
Committee, ATTN: Forest Products ATL, Office of the U.S. Trade
Representative, Room 122, 600 Seventeenth Street, NW, Washington, DC
20508. Any business confidential submissions must be clearly marked as
such on cover page and succeeding page. Such submission must be
accompanied by a non-confidential summary thereof.
Non-confidential submissions will be available for public
inspection at the USTR Reading Room, Room 101, Office of the U.S. Trade
Representative, 600 Seventeenth Street, NW, Washington, DC. An
appointment to review the file may be made by calling Brenda Webb at
(202) 395-6186. The Reading Room is open to the public from 10 a.m. to
12 noon and from 1 p.m. to 4 p.m., Monday through Friday.
Frederick L. Montgomery,
Chairman, Trade Policy Staff Committee.
Dinah Bear,
General Counsel, Council on Environmental Quality.
[FR Doc. 99-16242 Filed 6-24-99; 8:45 am]
BILLING CODE 3190-01-M