[Federal Register Volume 65, Number 23 (Thursday, February 3, 2000)]
[Notices]
[Pages 5373-5374]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-2328]


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INTERNATIONAL TRADE COMMISSION

[Investigation 332-237]


Production Sharing: Use of U.S. Components in Foreign Assembly 
Operations, 1995-98

AGENCY:  United States International Trade Commission.

ACTION:  Termination of the report series and extended informal 
reporting of developments through existing publications.

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EFFECTIVE DATE:  January 14, 2000.

SUMMARY:  The Commission is changing the method of providing continued 
reporting on production sharing and related topics, and has published 
the last in a formal series of annual reports on production sharing 
under Inv. No. 332-237, covering the period 1995-98, in December 1999. 
The report series has been discontinued because official U.S. 
statistics increasingly understate the magnitude of production-sharing 
activity. As a growing share of global trade becomes duty free, 
incentives are reduced for entering U.S. imports under the production-
sharing tariff provisions. The Commission will continue to report 
informally on cross-border integration of manufacturing and related 
topics in other publications, as appropriate, and plans to report 
annual statistics on trade under the production-sharing provisions in 
its quarterly publication Industry Trade and Technology Review (ITTR), 
as well as provide expanded coverage for these data on the Commission's 
``Interactive Tariff and Trade DataWeb'' (http://dataweb.usitc.gov).


[[Page 5374]]



BACKGROUND: The Commission has prepared and published annual reports on 
production-sharing operations since 1986 under this series; notice of 
initial institution was published in the Federal Register of September 
4, 1986 (51 FR 31729). In this report series, the Commission has used 
data on imports under Harmonized Tariff Schedule (HTS) provisions 
9802.00.60-.90 as a tool to assess the use of foreign assembly plants 
as a strategy by U.S. companies to reduce production costs and improve 
global competitiveness. Because tariffs on many of the products entered 
under these provisions have been either significantly reduced or 
eliminated under trade agreements and trade preference programs, many 
importers no longer enter goods assembled from U.S.-made components 
under the duty-reducing provisions of HTS chapter 98. Consequently, 
data on imports entered under these provisions now significantly 
understate the use of U.S. components in foreign assembly operations. 
These reporting limitations will become more pronounced for 1999 data 
since most apparel from Mexico became duty and quota free under NAFTA 
on January 1, 1999, and the customs user fee applicable to imports from 
Mexico under NAFTA was eliminated on July 1, 1999. These developments 
have led the Commission to discontinue the report series in subsequent 
years, while maintaining continued informal monitoring and reporting 
through other publications as appropriate.
    Data reported under HTS provision 9802.00.60-.90 will continue to 
provide a meaningful measure of the use of U.S.-made components in 
imported articles that remain dutiable. For example, such data are an 
important tool in monitoring the use of U.S.-formed-and-cut fabric in 
Caribbean garment factories. The Commission plans to report annual data 
on imports under these production-sharing tariff provisions in its 
quarterly ITTR publication. Articles assessing developments in the 
cross-border integration of manufacturing and related topics will be 
published separately as staff issue papers or as articles for the ITTR 
report. Parties that are currently on the Commission's mailing list for 
the Production Sharing report will receive copies of ITTR publications 
and staff issue papers that cover production-sharing topics, such as 
cross-border integration of manufacturing, international manufacturing 
networks, the use of foreign assembly plants and foreign trade zones, 
and foreign direct investment in manufacturing sectors.
    Information on imports under production-sharing provisions (HTS 
9802.00.60-.90) is accessible to the public on the Commission's 
``Interactive Tariff and Trade DataWeb'' (http://dataweb.usitc.gov). 
The ``DataWeb'' currently enables parties to access U.S. imports under 
these tariff provisions, providing total imports by country of origin 
and the top 20 products from each supplier. The DataWeb will be 
expanded by late spring to include more timely access for annual 
production-sharing data by HS Chapter, country, and region, as well as 
by commodity groups which correspond to appendix B statistical tables 
contained in the former annual report. Parties also can access a table 
(updated monthly) from the Commission's Web site (http://www.usitc.gov/miscell.htm) showing U.S.-Mexico trade from 1994 to year-to-date, 
including imports under NAFTA and HTS 9802.00.60-.90.
    The final report in the Production Sharing series assesses (1) the 
use of foreign assembly operations as a means that companies use to 
reduce costs and gain improved access to foreign markets; (2) the 
integration of such operations in North America into international 
manufacturing networks in the apparel, motor vehicles and parts, and 
television receiver sectors; and (3) the implications of these 
developments for the competitiveness of these U.S. industries. The 
latest report covering 1998 data (USITC Publication 3265, December 
1999) may be obtained at the ITC Web site (http://www.usitc.gov/332s/332index.htm). A printed report may be requested by contacting the 
Office of the Secretary at 202-205-2000 or by fax at 202-205-2104.

FOR FURTHER INFORMATION CONTACT:  Ralph Watkins (202) 205-3492; 
Minerals, Metals, Machinery, and Miscellaneous Manufactures Division; 
Office of Industries; U.S. International Trade Commission, 500 E Street 
SW, Washington, DC 20436.
    Hearing-impaired individuals are advised that information on this 
matter can be obtained by contacting our TDD terminal on (202) 205-
1810. General information concerning the Commission may also be 
obtained by accessing its Internet server (http://www.usitc.gov).

    Issued: January 28, 2000.

    By order of the Commission.
Donna R. Koehnke,
Secretary.
[FR Doc. 00-2328 Filed 2-2-00; 8:45 am]
BILLING CODE 7020-02-P