[Federal Register Volume 67, Number 45 (Thursday, March 7, 2002)]
[Presidential Documents]
[Pages 10593-10597]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-5712]


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  Federal Register / Vol. 67, No. 45 / Thursday, March 7, 2002 / 
Presidential Documents  

[[Page 10593]]


                Memorandum of March 5, 2002

                
Action Under Section 203 of the Trade Act of 1974 
                Concerning Certain Steel Products

                Memorandum for the Secretary of the Treasury[,] the 
                Secretary of Commerce[, and the] United States Trade 
                Representative

                 On December 19, 2001, the United States International 
                Trade Commission (ITC) submitted a report to me that 
                contained determinations pursuant to section 202 of the 
                Trade Act of 1974, as amended (the ``Trade Act''), that 
                (a) certain carbon flat rolled steel, including carbon 
                and alloy steel slabs, plate (including cut-to-length 
                plate and clad plate), hot-rolled steel (including 
                plate in coils), cold-rolled steel (other than grain-
                oriented electrical steel), and corrosion-resistant and 
                other coated steel (collectively, ``certain flat 
                steel''); (b) carbon and alloy hot-rolled bar and light 
                shapes (``hot-rolled bar''); (c) carbon and alloy cold-
                finished bar (``cold-finished bar''); (d) carbon and 
                alloy rebar (``rebar''); (e) carbon and alloy welded 
                tubular products (other than oil country tubular goods) 
                (``certain tubular products''); (f) carbon and alloy 
                flanges, fittings, and tool joints (``carbon and alloy 
                fittings''); (g) stainless steel bar and light shapes 
                (``stainless steel bar''); and (h) stainless steel rod 
                are being imported into the United States in such 
                increased quantities as to be a substantial cause of 
                serious injury, or the threat thereof, to the domestic 
                industries producing like or directly competitive 
                articles. The ITC commissioners were equally divided 
                with respect to the determination required under 
                section 202(b) regarding whether (i) carbon and alloy 
                tin mill products (``tin mill products''); (j) 
                stainless steel wire; (k) tool steel, all forms; and 
                (l) stainless steel flanges and fittings (``stainless 
                steel fittings'') are being imported into the United 
                States in such increased quantities as to be a 
                substantial cause of serious injury, or threat of 
                serious injury, to the domestic industries producing 
                like or directly competitive articles. The ITC provided 
                detailed definitions of the products included in 
                categories (a) through (l) and their corresponding 
                subheadings under the Harmonized Tariff Schedule of the 
                United States (HTS) in Appendix A to its determination, 
                set out at 66 Fed. Reg. 67304, 67308-67311 (December 
                28, 2001).

                 The report of the ITC also contained findings pursuant 
                to section 311(a) of the North American Free Trade 
                Agreement Implementation Act (the ``NAFTA 
                Implementation Act'') as to whether imports from Canada 
                and Mexico, considered individually, account for a 
                substantial share of total imports and contribute 
                importantly to the serious injury, or threat thereof, 
                caused by imports. The ITC made negative findings with 
                respect to imports from Canada of certain flat steel, 
                tin mill products, rebar, stainless steel rod, and 
                stainless steel wire; and also made negative findings 
                with respect to imports from Mexico of tin mill 
                products, hot-rolled bar, cold-finished bar, rebar, 
                certain tubular products, stainless steel bar, 
                stainless steel rod, and stainless steel wire. The ITC 
                made affirmative findings with respect to imports from 
                Canada of hot-rolled bar, cold-finished bar, carbon and 
                alloy fittings, and stainless steel bar; and also made 
                affirmative findings with respect to imports from 
                Mexico of certain flat steel, and carbon and alloy 
                steel fittings. The ITC commissioners were equally 
                divided with respect to imports from Canada of certain 
                tubular products. By February 4, 2002, the ITC provided 
                additional information in response to a request under 
                section 203(a)(5) of the Trade Act (``supplemental 
                report'') made by the United States Trade 
                Representative (the ``USTR'') on January 3, 2002.

[[Page 10594]]

                 Having considered the determinations of both groups of 
                commissioners with regard to tin mill products, tool 
                steel, stainless steel wire, and stainless steel 
                fittings, I have determined, pursuant to section 
                330(d)(1) of the Tariff Act of 1930, as amended, to 
                consider the determinations of the groups of 
                commissioners voting in the affirmative with regard to 
                tin mill products and stainless steel wire to be the 
                determination of the ITC, and the determinations of the 
                groups of commissioners voting in the negative with 
                regard to tool steel and stainless steel fittings to be 
                the determination of the ITC.

                 By Proclamation signed today (the ``Proclamation'') 
                and after considering all relevant aspects of the 
                investigation, including the factors set forth in 
                section 203(a)(2) of the Trade Act and the supplemental 
                report, I have implemented actions of a type described 
                in section 203(a)(3). I have determined that the most 
                appropriate actions are safeguard measures in the form 
                of an increase in duties on imports of certain flat 
                steel, other than slabs (including plate, hot-rolled 
                steel, cold-rolled steel, and coated steel), hot-rolled 
                bar, cold-finished bar, rebar, certain welded tubular 
                products, carbon and alloy fittings, stainless steel 
                bar, stainless steel rod, tin mill products, and 
                stainless steel wire, as defined in paragraph 7 of the 
                Proclamation, and in the form of a tariff rate quota 
                (TRQ) on imports of slabs, with an increase in 
                currently scheduled rates of duties for imports over 
                the TRQ limits. I have implemented these safeguard 
                measures for a period of 3 years plus 1 day.

                 Specifically, I have established the following 
                safeguard measures:

                 (a) certain flat steel: with regard to slabs, a TRQ of 
                4.90 million metric tons in the first year of the 
                measure, 5.35 million metric tons in the second year, 
                and 5.81 million metric tons in the third year, with no 
                increase in duties for imports below the within-quota 
                level and an increase in duties of 30% ad valorem for 
                imports above the within-quota level in the first year 
                of the measure, 24% in the second year, and 18% in the 
                third year; and with regard to certain flat steel, 
                other than slab (including plate, hot-rolled steel, 
                cold-rolled steel and coated steel), an increase in 
                duties of 30% ad valorem in the first year, 24% in the 
                second year, and 18% in the third year;

                 (b) hot-rolled bar: an increase in duties of 30% ad 
                valorem in the first year of the measure, 24% in the 
                second year, and 18% in the third year;

                 (c) cold-finished bar: a increase in duties of 30% ad 
                valorem in the first year of the measure, 24% in the 
                second year, and 18% in the third year;

                 (d) rebar: an increase in duties of 15% ad valorem in 
                the first year of the measure, 12% in the second year, 
                and 9% in the third year;

                 (e) certain welded tubular products: an increase in 
                duties of 15% ad valorem in the first year of the 
                measure, 12% in the second year, and 9% in the third 
                year;

                 (f) carbon and alloy fittings: an increase in duties 
                of 13% ad valorem in the first year of the measure, 10% 
                in the second year, and 7% in the third year;

                 (g) stainless steel bar: an increase in duties of 15% 
                ad valorem in the first year of the measure, 12% in the 
                second year, and 9% in the third year;

                 (h) stainless steel rod: an increase in duties of 15% 
                ad valorem in the first year of the measure, 12% in the 
                second year, and 9% in the third year;

                 (i) tin mill products: an increase in duties of 30% ad 
                valorem in the first year of the measure, 24% in the 
                second year, and 18% in the third year; and

                 (j) stainless steel wire: an increase in duties of 8% 
                ad valorem in the first year of the measure, 7% in the 
                second year, and 6% in the third year.

[[Page 10595]]

                 Pursuant to section 312(a) of the NAFTA Implementation 
                Act, after consideration of the report and supplemental 
                reports of the ITC, I further determine that imports of 
                certain flat steel, hot-rolled bar, cold-finished bar, 
                rebar, certain tubular products, carbon and alloy 
                fittings, stainless steel bar, stainless steel rod, tin 
                mill products, and stainless steel wire that are 
                products of Canada and Mexico either do not account for 
                a substantial share of total imports of these products, 
                or are not contributing importantly to serious injury 
                or the threat of serious injury. Therefore, pursuant to 
                section 312(b) of the NAFTA Implementation Act, the 
                safeguard measure will not apply to imports of certain 
                flat steel, hot-rolled bar, cold-finished bar, rebar, 
                certain tubular products, carbon and alloy fittings, 
                stainless steel bar, stainless steel rod, tin mill 
                products, and stainless steel wire that are the product 
                of Canada or Mexico. Similarly, the safeguard measures 
                will not apply to imports of these products that are 
                the product of Israel or Jordan.

                 The safeguard measures also will not apply to imports 
                of certain flat steel, tin mill products, hot-rolled 
                bar, cold-finished bar, rebar, certain tubular 
                products, carbon and alloy fittings, stainless steel 
                bar, stainless steel rod, or stainless steel wire that 
                are the product of a developing country that is a 
                member of the World Trade Organization (WTO), as long 
                as that country's share of imports into the United 
                States of the product, based on a recent representative 
                period, does not exceed 3 percent, provided that all 
                such developing country WTO members collectively 
                account for not more than 9 percent of total imports of 
                that product. For purposes of the safeguard measures 
                established under the Proclamation, I determine that 
                the beneficiary countries under the Generalized System 
                of Preferences are developing countries. Subdivision 
                (d)(i) of U.S. Note 11 to subchapter III of chapter 99 
                of the Harmonized Tariff Schedule of the United States 
                (Note 11) in the Annex to the Proclamation identifies 
                those developing countries that are WTO members, and 
                subdivision (d)(ii) identifies the products of such 
                countries to which the safeguard measures shall not 
                apply.

                 I instruct the USTR to review data on imports of 
                products listed in paragraph 7 of the Proclamation from 
                countries listed in subdivision (d)(i) of Note 11 on a 
                quarterly basis. If imports of such a product from such 
                a country increase by a material amount, I instruct the 
                USTR to initiate consultations with the country 
                regarding the circumstances under which the increase 
                occurred and whether the country plans to take action 
                to reduce imports to historical levels. If, on the 
                basis of the information exchanged during 
                consultations, data on imports, domestic steel demand, 
                growth in the U.S. economy, shifts in other countries' 
                trade patterns, and any other relevant factors, the 
                USTR determines that the increase in imports of such 
                product from such country undermines the effectiveness 
                of the pertinent safeguard measure, he is authorized, 
                upon publication of a notice of such determination in 
                the Federal Register, to modify subdivision (d)(ii) of 
                Note 11 in the Annex to the Proclamation to include 
                such product from such country. I also authorize the 
                USTR, upon publication of a notice in the Federal 
                Register, to change the list of developing countries to 
                which the safeguard measures do not apply.

                 The steel products listed in clauses (i) through (ix) 
                of subdivision (b) of Note 11 in the Annex to the 
                Proclamation were excluded from the determinations of 
                the ITC described in paragraph 2 of that Proclamation, 
                and are excluded from these safeguard measures. I have 
                also determined to exclude from these safeguard 
                measures the steel products listed in the subsequent 
                clauses of subdivision (b) of Note 11 in the Annex to 
                the Proclamation. The Trade Policy Staff Committee 
                (TPSC) is currently evaluating requests, submitted in 
                response to 66 Fed. Reg. 54321, 54322-54323 (October 
                26, 2001), that particular products be excluded from 
                any safeguard measure with regard to certain steel 
                products. I instruct the USTR to determine whether 
                these particular products should be excluded and, if 
                so, within 120 days of the date of the Proclamation, to 
                publish in the Federal Register a notice to modify 
                subchapter III of chapter 99 to exclude them from the

[[Page 10596]]

                safeguard measures. In making this determination, the 
                USTR shall consider any advice rendered by the TPSC.

                 Similarly, I instruct the USTR, after receiving advice 
                from the TPSC, to determine whether any particular 
                products should be added to the list of those excluded 
                from the safeguard measures and, if so, to publish a 
                notice in the Federal Register in March of any year in 
                which he receives such a recommendation to modify 
                subchapter III of chapter 99 to exclude such particular 
                products from the measures. I further instruct the 
                USTR, no later than 90 days from today, to publish in 
                the Federal Register a notice of the procedures by 
                which interested persons may request the TPSC to 
                recommend whether to exclude a particular product.

                 I also instruct the USTR, prior to the effective date 
                of the safeguard measures established in the 
                Proclamation, to conduct consultations under Article 
                12.3 of the Agreement on Safeguards with any WTO member 
                having a substantial interest as an exporter of a 
                product subject to such safeguard measures, provided 
                that the WTO member requests such consultations in a 
                timely fashion. I instruct the USTR to report to me on 
                the results of such consultations. I instruct the 
                Secretary of the Treasury, pursuant to section 505(a) 
                of the Tariff Act of 1930 (19 U.S.C. 1505(a)), to 
                prescribe by regulation a date no later than 45 days 
                after today at which estimated duties for merchandise 
                entered, or withdrawn from warehouse for consumption, 
                on or after 12:01 a.m., EST, March 20, 2002, and up to 
                the 30th day after today, shall be deposited.

                 I instruct the Secretary of the Treasury and the 
                Secretary of Commerce to establish a system of import 
                licensing to facilitate the monitoring of imports of 
                certain steel products. Pursuant to the authority 
                granted me by section 203(g) of the Trade Act to 
                provide for the efficient and fair administration of 
                all actions taken for the purpose of providing import 
                relief under section 203, I further instruct the 
                Secretary of Commerce, within 120 days of the effective 
                date of the safeguard measures established by the 
                Proclamation, to publish regulations in the Federal 
                Register establishing such a system of import 
                licensing.

                 I have determined that the safeguard measures will 
                facilitate efforts by the domestic industries to make a 
                positive adjustment to import competition and will 
                provide greater economic and social benefits than 
                costs. If I determine that further action is 
                appropriate and feasible to facilitate efforts by the 
                pertinent domestic industry to make a positive 
                adjustment to import competition and to provide greater 
                economic and social benefits than costs, or if I 
                determine that the conditions under section 204(b)(1) 
                of the Trade Act are met, I shall reduce, modify, or 
                terminate the safeguard measures. In making this 
                determination, I shall consider the pertinent factors 
                set out in section 203(a)(2) of the Trade Act and, in 
                particular, changes in capital and labor productivity 
                in the domestic industries; actual and planned 
                permanent closures of inefficient steel production 
                facilities in the United States and in other countries; 
                consolidation of United States steel producers; capital 
                expenditures in the domestic industries; prices for 
                certain steel products in the United States; and the 
                overall effect that maintaining the measure will have 
                on consuming industries, workers, and the United States 
                economy as a whole.

[[Page 10597]]

                 The United States Trade Representative is authorized 
                and directed to publish this memorandum in the Federal 
                Register.

                    (Presidential Sig.)B

                THE WHITE HOUSE,

                    Washington, March 5, 2002.

[FR Doc. 02-5712
Filed 3-6-02; 11:04 am]
Billing code 3190-01-M