[Federal Register Volume 65, Number 116 (Thursday, June 15, 2000)]
[Notices]
[Pages 37596-37597]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-15137]


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OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE

[Docket No. WTO/D-195]


WTP Consultations Regarding Certain Measures in the Philippines' 
Motor Vehicle Development Program

AGENCY: Office of the United States Trade Representative.

ACTION: Notice; request for comments.

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SUMMARY: The Office of the United States Trade Representative (USTR) is 
providing notice that on May 23, 2000, the United States requested 
consultations with the Government of the Philippines under the 
Marrakesh Agreement Establishing the World Trade Organization (WTO), 
regarding tariff advantages to motor vehicle manufacturers located in 
the Philippines who meet certain requirements, including a requirement 
to use parts and components produced in the Philippines and a 
requirement to earn a percentage of the foreign exchange needed to 
import those parts and components by exporting finished vehicles. The 
US alleges that these measures are inconsistent with Articles III:4, 
III:5 and XI:1 of the General Agreement on Tariffs and Trade 1994 
(``GATT 1994''), Articles 2.1 and 2.2 of the Agreement on Trade-Related 
Investment Measures, and Article 3.1(b) of the Agreement on Subsidies 
and Countervailing Measures. Pursuant to Article 4.3 of the WTO Dispute 
Settlement Understanding (``DSU''), such consultations are to take 
place within a period of 30 days from the date of the request, or 
within a period otherwise mutually agreed between the United States and 
the Philippines. USTR invites written comments from the public 
concerning the issues raised in the dispute.

DATES: Although USTR will accept any comments received during the 
course of the dispute settlement proceedings, comments should be 
submitted on or before July 28, 2000, to be assured of timely 
consideration by USTR.

ADDRESSES: Submit comments to Sandy McKinzy, Monitoring and Enforcement 
Unit, Office of the General Counsel, 122, Office of the United States 
Trade Representative, 600 17th Street, NW, Washington, DC, 20508, Attn: 
Philippines Motor Vehicle Dispute. Telephone: (202) 395-3582.

FOR FURTHER INFORMATION CONTACT: Steven F. Fabry, Associate General 
Counsel, telephone: (202) 395-7271; or Sean Murphy, Director for ASEAN 
Affairs, telephone: (202) 395-6813.

SUPPLEMENTARY INFORMATION: Section 127(b) of the Uruguay Round 
Agreements Act (URAA) (19 U.S.C. 3537(b)(1)) requires that notice and 
opportunity for comment be provided after the United States submits or 
receives a request for the establishment of a WTO dispute settlement 
panel. Consistent with this obligation, but in an effort to provide 
additional opportunity for comment, USTR is providing notice that 
consultations have been requested pursuant to the WTO Dispute 
Settlement Understanding. If such consultations should fail to resolve 
the matter and a dispute settlement panel is established pursuant to 
the DSU, such panel, which would hold its meetings in Geneva, 
Switzerland, would be expected to issue a report on its findings and 
recommendations within six to nine months after it is established.

[[Page 37597]]

Major Issues Raised by the United States

    The Philippines' Motor Vehicle Development Program (the ``MVDP'') 
provides tariff advantages to motor vehicle manufacturers located in 
the Philippines who meet certain requirements, including at least the 
following. First, manufacturers are required to use parts and 
components produced in the Philippines; the amount required varies by 
type and size of vehicle. Second, manufacturers are required to earn a 
percentage of the foreign exchange needed to import those parts and 
components by exporting finished vehicles; again, the percentage varies 
by type and size of vehicle. Compliance with these requirements 
entitles manufacturers to import parts, components and finished 
vehicles at a preferential rate. The United States also understands 
that foreign manufacturers' import licenses for parts, components and 
finished vehicles are conditioned on compliance with these 
requirements.
    The MVDP appears to require outright that manufacturing firms in 
the motor vehicle sector must achieve specified levels of purchase or 
use of domestic content, and that they must achieve a neutralization of 
foreign exchange and balance the value of certain imports with the 
value of exports of motor vehicles and components. Moreover, it appears 
that manufacturing firms in the motor vehicle sector must comply with 
these requirements in order to obtain import licenses for certain motor 
vehicle parts and components; to obtain foreign exchange for those 
imports; and to obtain the right to import at preferential rates. 
Finally, it appears that the Philippines is providing a subsidy that is 
contingent upon the use of domestic over imported goods.
    The Philippines notified the WTO in 1995 that it was applying these 
measures. The Philippines made that notification pursuant to Article 
5.1 of the Agreement on Trade-Related Investment Measures, which 
allowed WTO Members to notify measures that were not in conformity with 
the provisions of that Agreement and thereby obtain an additional five 
years (until January 1, 2000) to bring such measures into conformity 
with that Agreement.
    On May 23, 2000, the United States requested consultations with the 
Philippines under certain WTO agreements regarding those provisions of 
the MDVP. The U.S. consultation request alleged that these MVDP 
provisions are inconsistent with the Philippines' obligations under 
Articles III:4, III:5 and XI:1 of the GATT 1994, Articles 2.1 and 2.2 
of the Agreement on Trade-Related Investment Measures, and Article 
3.1(b) of the Agreement on Subsidies and Countervailing Measures.

Public Comment: Requirements for Submissions

    Interested persons are invited to submit written comments 
concerning the issues raised in the dispute. Comments must be English 
and provided in fifteen copies. A person requesting that information 
contained in a comment submitted by that person be treated as 
confidential business information must certify that such information is 
business confidential and would not customarily be released to the 
public by the commenter. Confidential business information must be 
clearly marked ``BUSINESS CONFIDENTIAL'' in a contrasting color ink at 
the top of each page of each copy.
    Information or advice contained in a comment submitted, other than 
business confidential information, may be determined by USTR to be 
confidential in accordance with section 135(g)(2) of the Trade Act of 
1974 (19 U.S.C. 2155(g)(2)). If the submitter believes that information 
or advice may qualify as such, the submitter--
    (1) Must so designate the information or advice;
    (2) Must clearly mark the material as ``SUBMITTED IN CONFIDENCE`` 
in a contrasting color ink at the top of each page of each copy; and
    (3) Is encouraged to provide a non-confidential summary of the 
information or advice.
    Pursuant to section 127(e) of the URAA (19 U.S.C. 3537(e)), USTR 
will maintain a file on this dispute settlement proceeding, accessible 
to the public, in the USTR Reading Room: Room 101, Office of the United 
States Trade Representative, 600 17th Street, NW, Washington, DC 20508. 
The public file will include a listing of any comments received by USTR 
from the public with respect to the dispute; if a dispute settlement 
panel is convened, the U.S. submissions to that panel, the submissions, 
or non-confidential summaries of submission, to the panel received from 
other participants in the dispute, as well as the report of the panel; 
and, if applicable, the report of the Appellate body. An appointment to 
review the public file (Docket WTO/D-195, Philippines Motor Vehicle 
Dispute) 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 p.m. 
to 4 p.m., Monday through Friday.

A. Jane Bradley,
Assistant United States Trade Representative for Monitoring and 
Enforcement.
[FR Doc. 00-15137 Filed 6-14-00; 8:45 am]
BILLING CODE 3190-01-M