[Federal Register Volume 68, Number 127 (Wednesday, July 2, 2003)]
[Notices]
[Pages 39614-39615]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-16783]


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OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE


Trade Policy Staff Committee; Request for Public Comment on Duty 
Drawback and Deferral in Free Trade Agreement Negotiations

AGENCY: Office of the United States Trade Representative.

ACTION: Request for comments.

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SUMMARY: The interagency Trade Policy Staff Committee (TPSC) seeks 
public comment on the treatment of duty drawback and deferral regimes 
in free trade agreement (FTA) negotiations currently underway with 
Central

[[Page 39615]]

America, Australia, Morocco, the Southern African Customs Union and the 
countries participating in the Free Trade Area of the Americas (FTAA).

DATES: Public comments should be received no later than Noon, July 30, 
2003.

FOR FURTHER INFORMATION: For procedural questions concerning public 
comments, contact Gloria Blue, Executive Secretary, Trade Policy Staff 
Committee, Office of the United States Trade Representative at (202) 
395-3475. For substantive questions pertaining to this request for 
public comment, contact Sarah Sipkins, Director for Market Access, 
Office of the USTR, at (202) 395-5656.

SUPPLEMENTARY INFORMATION: The U.S. Government is seeking public 
comment on appropriate disciplines regarding the use of domestic duty 
drawback and deferral programs for shipments between parties to the 
free trade agreements it is negotiating. Duty drawback and deferral 
regimes rebate, defer or reduce duties paid on material inputs 
contingent upon exportation of the processed or finished goods. In the 
context of an FTA, where inputs are dutiable in the United States and 
in the FTA partner country, duty drawback programs can distort 
investment decisions by creating an incentive for investors to locate 
in the FTA partner country in order to benefit from duty drawback when 
exporting processed goods for sale in the U.S. market. These programs 
also can create ``export platforms'' for materials produced in third 
countries since they de facto provide duty free treatment negotiated 
under the FTA to inputs from third countries when the processed goods 
are exported to the territory of the FTA partner. For industries in FTA 
partner countries, the gains from tariff reduction under an FTAs on 
average far exceed any tariff refunds foregone under these programs.
    Thus, restrictions on the use of these programs are a standard 
feature of most FTAs around the globe. The NAFTA restricts duty 
deferral and drawback to the lesser of duties paid on the imported 
input or duties paid on the processed good exported to a NAFTA trading 
partner. The United States-Chile FTA provides for a gradual phase out 
of the use of these programs for shipments between the Parties. U.S. 
proposals in ongoing FTA negotiations are modeled on the U.S.-Chile 
provision.
    All interested parties are invited to provide their written views 
and recommendations on this matter. Persons submitting comments should 
specify whether the comments apply to all or only some of the FTA 
negotiations currently underway.

Request for Comments

    Consideration will be given to any written comments that are timely 
submitted to USTR. Each person submitting a comment should include his 
or her name and address, give reasons for any recommendation and 
indicate whether those recommendations apply to all of the above-
referenced negotiations.
    In order to facilitate prompt consideration of submissions, USTR 
strongly urges and prefers electronic e-mail submissions in response to 
this notice. The e-mail address is [email protected]. It is strongly 
recommended that comments submitted by mail or express delivery service 
to the address for Ms. Sipkins listed above also be sent by e-mail. 
Persons making submissions by e-mail should use the following subject 
line: ``Duty Drawback in FTAs.'' Documents should be submitted as 
either WordPerfect, MSWord, or text (.TXT) files. Supporting 
documentation submitted as spreadsheets are acceptable as Quattro Pro 
or Excel. For any document containing business confidential information 
submitted electronically, the file name of the business confidential 
version should begin with the characters ``BC-'', and the file name of 
the public version should begin with the characters ``P-''. The ``P-'' 
or ``BC-'' should be followed by the name of the submitter. Persons 
making submissions by e-mail should not provide separate cover letters; 
information that appears in a cover letter should be included in the 
submission itself. Similarly, to the extent possible, any attachments 
to the submission should be included in the same file as the submission 
itself, and not as separate files. Persons submitting written comments 
by mail or express delivery service should provide 20 copies, in 
English.
    Written comments will be placed in a file open to public inspection 
pursuant to 15 CFR 2003.5, except confidential business information 
exempt from public inspection in accordance with 15 CFR 2003.6. 
Confidential business information submitted in accordance with 15 CFR 
2003.6 must be clearly marked ``BUSINESS CONFIDENTIAL'' at the top of 
each page, including any cover letter or cover page, and must be 
accompanied by a nonconfidential summary of the confidential 
information. All public documents and nonconfidential summaries shall 
be available for public inspection in the USTR Reading Room. The USTR 
Reading Room is open to the public, by appointment only, from 10 a.m. 
to 12 noon and 1 p.m. to 4 p.m., Monday through Friday. An appointment 
to review the file may be made by calling (202) 395-6186.

Carmen Suro-Bredie,
Chairman, Trade Policy Staff Committee.
[FR Doc. 03-16783 Filed 7-1-03; 8:45 am]
BILLING CODE 3190-01-P