[Federal Register Volume 64, Number 143 (Tuesday, July 27, 1999)]
[Notices]
[Pages 40638-40641]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-19174]
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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: Notice of the imposition of 100 percent ad valorem duties on
certain articles.
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SUMMARY: The United States Trade Representative (USTR) has decided to
suspend the application of tariff concessions and related obligations
by imposing a 100% ad valorem rate of duty on three articles described
in the Annex to this notice that are the products of certain member
States of the European Communities (EC) as a result of the EC's failure
to implement 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 certain hormones.
This action constitutes the exercise of U.S. rights under Article 22 of
the WTO Understanding on Rules and Procedures Governing the Settlement
of Disputes (DSU) and is taken pursuant to the authority granted to the
USTR under section 301 of the Trade Act of 1974, as amended..
EFFECTIVE DATE: In accordance with U.S. rights under the DSU, effective
July 29, 1999, a 100% ad valorem rate of duty shall be applied to the
articles described in the Annex to this notice that are the products of
one or more of the following EC member States--Austria, Belgium,
Denmark, Finland, France, the Federal Republic of Germany, Greece,
Ireland, Italy, Luxembourg, the Netherlands, Portugal, Spain, or
Sweden--and that are entered, or withdrawn from warehouse, for
consumption on or after July 29, 1999. Any merchandise subject to this
determination that is admitted to U.S. foreign-trade zones on or after
July 29, 1999 must be admitted as ``privileged foreign status'' as
defined in 19 CFR 146.41. This action will follow authorization on July
26, 1999, by the DSB to suspend the application to the EC, and member
States thereof, of concessions and related obligations under the
General Agreement on Tariffs and Trade 1994 (GATT 1994).
ADDRESSES: 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
documents and USTR procedures; William Busis, Associate General
Counsel, (202) 395-3150 or Ralph Ives, Deputy Assistant U.S. Trade
Representative, (202) 395-3320, for questions concerning WTO
developments regarding the EC's hormone ban; John Valentine, Attorney,
International Agreements Staff, U.S. Customs Service, (202) 927-1219,
for questions concerning classification; and Yvonne Tomenga, Program
Officer, Office of Trade Compliance, U.S. Customs Service, (202) 927-
0133, for questions concerning entries.
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
[[Page 40639]]
had to be re-adopted by the Council, unchanged, in 1988 (``the Hormone
Director''). These measures, including the ban on the import of meat
and meat products produced from animals to which certain hormones had
been administered (the ``hormone ban''), because effective January 1,
1989.
Following entry into force on January 1, 1995, of the WTO Agreement
on the Application of Sanitary and Phytosanitary Measures (``SPS
Agreement''), the United States and, later, Canada, invoked formal WTO
dispute settlement proceedings 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.
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 contravention in of the EC's
obligations under the SPS Agreement. Upon an appeal to the WTO
Appellate Body, on January 16, 1998, the Appellate Body affirmed that
the hormone ban is not consistent with the EC's obligations under the
SPS Agreement. At a meeting held on February 13, 1998, the DSB adopted
the Panel and Appellate Body reports regarding the EC's hormone ban.
The EC subsequently requested four years to implement the DSB
recommendations. The United States could not agree to this proposed
implementation period, and the matter was referred to a WTO arbitrator.
The arbitrator determined that the reasonable period of time for
implementation was fifteen months, and would expire on May 13, 1999.
The EC did not implement the DSB recommendations and rulings
regarding its hormone ban by May 13, 1999. Accordingly, on May 17,
1999, and in accordance with U.S. rights under Article 22 of the DSU,
the United States requested authorization from the DSB to suspend the
application to the EC, and member States thereof, of tariff concessions
and related obligations under the GATT covering trade in an amount of
$202 million. The EC objected to the level of suspension proposed by
the United States, and claimed that the trade damage suffered by the
United States was only $53 million. Pursuant to Article 22.6 of the
DSU, the matter was referred to arbitration. The DSU provides that such
arbitrations must be completed within 60 days of the end of the
reasonable period of time for implementation, or in this case, by July
12, 1999.
The arbitrators issued their final decision on July 12, 1999, and
determined that the level of nullification or impairment suffered by
the United States as a result of the EC's WTO-inconsistent hormone ban
was $116.8 million per year. Accordingly, upon DSB authorization, the
United States is entitled under the DSU to suspend the application to
the European Communities and its member States of tariff concessions
and related obligations under the GATT covering trade up to that
amount. A meeting of the DSB is scheduled for July 26, 1999, at which
time the DSB, pursuant to Article 22.7 of the DSU, will grant
authorization for such suspension of concessions.
Prior Notice and Comment
On March 25, 1999, the USTR announced preparations for exercising
its right to request authorization to suspend tariff concessions on EC
products if the EC failed to implement the DSB's recommendations and
rulings concerning the EC's hormone ban by May 13, 1999. (64 FR
14,486). The March 25 notice sought public comment on a preliminary
list of EC products with respect to which the United States was
considering the suspension of tariff concessions. On April 19, 1999,
USTR conducted a public hearing to receive testimony on the preliminary
list.
Determination and Action
As a result of the EC's failure to implement the recommendations
and rulings of the DSB concerning the EC's hormone ban, and pursuant to
the WTO arbitrators' decision of July 12, 1999 and the authorization of
the DSB on July 26, 1999, the USTR will suspend tariff concessions and
related obligations under the GATT 1994 by imposing a 100% ad valorem
rate of duty on the articles described in the Annex to this notice that
are the products of certain EC member States. The amount of trade
affected by this action, as measured by an average of 1996-1998 import
values, is equivalent to the level of nullification or impairment
($116.8 million) determined by the WTO arbitrators in their decision of
July 12, 1999.
This action exercises the rights of the United States under Article
22 of the DSU and is taken pursuant to the authority granted to the
USTR under section 301 of the Trade Act. The articles affected by this
determination were selected in light of the comments submitted to the
Section 301 Committee in response to the March 25, 1999 notice and the
testimony presented at the public hearing held on April 19, 1999.
Accordingly, effective July 29, 1999, with respect to articles that
are the products of one or more of the following EC member States--
Austria, Belgium, Denmark, Finland, France, the Federal Republic of
Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal,
Spain, or Sweden--and that are entered, or withdrawn from warehouse,
for consumption on or after July 29, 1999, the Harmonized Tariff
Schedule of the United States is hereby modified in accordance with the
Annex to this notice. Any merchandise subject to this determination
that is admitted to U.S. foreign-trade zones on or after July 29, 1999
must be admitted as ``privileged foreign status'' as defined in 19 CFR
146.41.
William L. Busis,
Chairman, Section 301 Committee.
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[FR Doc. 99-19174 Filed 6-26-99; 8:45 am]
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