[Federal Register Volume 69, Number 175 (Friday, September 10, 2004)]
[Notices]
[Pages 54827-54840]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-20543]


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OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE


Request for Comments and Notice of Public Hearing on Potential 
Withdrawal of Tariff Concessions and Increase in Applied Duties in 
Response to European Union (EU) Enlargement and EU Changes to Its Rice 
Import Regime

AGENCY: Office of the United States Trade Representative.

ACTION: Request for comments and notice of public hearing concerning a 
list of goods for which tariff concessions may be withdrawn and duties 
may be increased in the event the United States cannot reach agreement 
with the European Union (EU) for adequate compensation owed under World 
Trade Organization (WTO) rules as a result of EU enlargement and EU 
changes to its rice import regime.

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SUMMARY: The United States is continuing to negotiate with the EU 
regarding the EU's provision of adequate and permanent compensation to 
the United States for two recent EU actions that have increased duties 
on U.S. imports to EU markets above WTO bound rates of duty. On May 1, 
2004, as part of its enlargement process, the EU raised tariffs above 
bound rates on some imports into the countries of Estonia, Latvia, 
Lithuania, Poland, Slovakia, the Czech Republic, Slovenia, Hungary, 
Cyprus and Malta. In addition, on September 1, 2004, the EU changed its 
rice import regime, raising tariffs on some rice imports above the 
maximum permissible WTO rate of duty. If either or both of these issues 
are not resolved, the United States may seek to exercise its rights 
under Article XXVIII of the General Agreement on Tariffs and Trade 1994 
(``GATT 1994'') to withdraw substantially equivalent concessions and 
raise tariffs on select goods primarily supplied by the EU. The Trade 
Policy Staff Committee (TPSC) seeks public comment on the attached list 
of goods for which U.S. tariff concessions may be withdrawn and applied 
duties may be raised. The TPSC will hold a public hearing on Friday, 
September 24, 2004, on the list which may be used for either or both of 
these issues.

DATES: Persons wishing to testify orally at the hearing must provide 
written notification of their intention, as well as a copy of their 
testimony, by noon on Friday, September 17, 2004. A hearing will be 
held in Washington, DC on Friday, September 24, 2004. Written comments 
are due by noon on Tuesday, September 28, 2004.

ADDRESSES: Submissions by electronic mail to [email protected]; 
requests to testify should also be addressed to Anita Thomas, 
Secretary, Office of Europe and the Mediterranean, Office of the United 
States Trade Representative, at email: [email protected]. 
Submissions by facsimile to: Anita Thomas at fax: (202) 395-3974. The 
public is strongly encouraged to submit documents electronically rather 
than by facsimile. (See requirements for submissions below).

FOR FURTHER INFORMATION CONTACT: For questions about participation in 
the hearings, contact Anita Thomas at (202) 395-3320. For procedural 
questions concerning written comments, contact Laurie Molnar, Director 
for European and Mediterranean Trade Issues, at (202) 395-3320. All 
other questions should be directed to: Laurie Molnar, (202) 395-3320; 
Sharon Sydow, Director Agricultural Trade Policy, (202) 395-5414; or 
Tiffany Smith, Director for Market Access (202) 395-5656; Office of the 
United States Trade Representative.

SUPPLEMENTARY INFORMATION: Under WTO rules, the United States is 
entitled to compensation from the EU resulting both from EU tariff 
changes as a result of EU enlargement and EU changes to its rice import 
regime. If agreement on compensation cannot be reached on either or 
both of these issues, the United States would be entitled to withdraw 
substantially equivalent concessions and apply increased duties on 
products of interest to the EU. In addition to the information 
presented below on these EU actions, relevant WTO rules, and domestic 
procedures, additional supplemental information on the EU enlargement 
tariff compensation negotiations and the rice margin of preference 
issues can be found on the Office of the U.S. Trade Representative's 
Web site at: http://www.ustr.gov/World_Regions/Europe_Mediterranean/European_Union/Section_Index.html.
    Enlargement: With the accession to the EU of Estonia, Latvia, 
Lithuania, Poland, Slovakia, the Czech Republic, Slovenia, Hungary, 
Cyprus and Malta (``the new EU Member States''), the EU withdrew the 
entire WTO tariff schedules of the new EU Member States

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and applied the common external tariff of the EU of fifteen to imports 
into the territory of the new EU Member States, resulting in increased 
tariffs on certain products.
    Rice Import Regime Changes: As part of reforms to its Common 
Agricultural Policy, on September 1, 2004, the EU replaced its rice 
import regime, called the Margin of Preference, with a specific duty of 
65 Euros/MT for husked (brown) rice. The United States is a major 
supplier of brown rice to the EU. Tariffs were also changed for milled 
rice.
    Legal Background: Article XXVIII of the GATT 1994 establishes that 
a WTO Member may modify or withdraw a tariff concession bound in its 
WTO schedule by negotiation and agreement with certain affected 
Members, more specifically, those Members that initially negotiated the 
relevant concession or are determined to have a principal supplying 
interest or a substantial interest in the concession. Such affected 
Members are entitled to receive adequate compensation or, in the 
absence of successful compensation negotiations, to withdraw 
``substantially equivalent concessions.'' Pursuant to Article XXIV:6 of 
the GATT 1994, where a WTO Member has modified or withdrawn a 
concession in the expansion of a customs union, the procedure under 
Article XXVIII also applies. The United States has negotiating and 
compensation rights on certain tariff concessions at issue under both 
of the EU actions described above.
    Affected WTO Members' rights to withdraw substantially equivalent 
concessions under Article XXVIII are time-limited; these rights expire 
within six months of the EU's withdrawal or modification of concessions 
unless exercised or extended. WTO Members intending to withdraw 
substantially equivalent concessions must provide notice to the WTO of 
their intent at least thirty days prior to the effective date of such 
action.
    Whenever a foreign country withdraws, suspends, or modifies the 
application of trade agreement obligations of benefit to the United 
States without granting adequate compensation, the President is 
authorized under section 125(d) of the Trade Act of 1974 (19 U.S.C. 
2135) to withdraw, suspend or modify the application of any 
substantially equivalent trade agreement obligations of benefit and 
proclaim under section 125(c) such increased duties or other import 
restrictions as are appropriate to effect adequate compensation. 
Section 125(c) authorizes the President to proclaim increased duties or 
other import restrictions as he deems necessary or appropriate in order 
to exercise the rights of the United States whenever the United States, 
acting in pursuance of its rights or obligations under certain trade 
agreements, withdraws, suspends or modifies any obligation with respect 
to foreign trade. Section 125(f) provides that the President, normally 
before taking any action under section 125 to withdraw, suspend, or 
modify trade agreement obligations or to increase duties, must provide 
for a public hearing, at which time interested persons will be given an 
opportunity to be present, to produce evidence, and to be heard.
    Pursuant to section 125(c), any new tariff rates proclaimed by the 
President would not exceed 50 percent above the rate set forth in rate 
column numbered 2 of the Tariff Schedules of the United States, as in 
effect on January 1, 1975, or 20 percent ad valorem above the rate 
existing on January 1, 1975, whichever is higher. If imposed, the 
increased duties would apply to imports from all countries that are 
subject to the rates of duty set forth in the Column 1 General rate of 
duty column of the Harmonized Tariff Schedule of the United States 
(HTSUS). The products affected by a suspension of concessions and duty 
increase would be drawn from the list of products set forth in the 
Annex to this notice. In recommending any action to the President under 
section 125, the TPSC will consider all comments and testimony by 
interested persons submitted in accordance with the procedures 
described below.

Public Comment on Potential Actions; Hearing Participation

    Pursuant to section 125(f) of the Trade Act of 1974 (19 U.S.C. 
2135), the TPSC, chaired by the Office of the United States Trade 
Representative, has scheduled a public hearing beginning at 9 a.m. on 
Friday, September 24, 2004, in Room 1, 1724 F Street, NW., Washington, 
DC, 20508. Further details on the hearing and submission of testimony 
is provided below. In lieu of or in addition to participation at the 
public hearing, parties may submit written comments to be received no 
later than noon, Tuesday, September 28, 2004.
    Written comments and/or written or oral testimony of interested 
persons should be limited to the following issues: (1) The 
appropriateness of withdrawing WTO tariff concessions upon the products 
listed in the Annex to this notice; (2) the appropriateness of imposing 
increased duties upon the products listed in the Annex to this notice; 
(3) the levels at which U.S. customs duties should be set for 
particular items; and (4) the degree to which increased duties might 
have an adverse effect upon U.S. consumers of the products listed in 
the Annex.
    Persons wishing to testify orally at the hearing must provide both 
a written notification of their intention and a copy of their testimony 
by noon on Friday, September 17, 2004. The notification should include: 
(1) The name, address, and telephone number, fax number, and firm or 
affiliation of the person wishing to testify; (2) a short (one or two 
paragraph) summary of the oral presentation; and (3) list of goods of 
interest (including HTSUS numbers). Remarks at the hearing should be 
limited to no more than five minutes to allow for possible questions 
from the TPSC.

Requirements for Submissions

    In order to facilitate prompt processing of submissions, the TPSC 
strongly urges and prefers electronic (e-mail) submissions in response 
to this notice. In the event that an e-mail submission is impossible, 
submissions should be made by facsimile.
    Persons making submissions by e-mail should use the following 
subject line: ``EU Enlargement/EU Rice Import Regime'' followed by (as 
appropriate) ``Written Comments,'' ``Notice of Testimony,'' or 
``Testimony.'' Documents should be submitted as either Adobe PDF, 
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 who 
make submissions by e-mail should not provide separate cover letters; 
information that might appear 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.
    Written comments, notices of testimony, and testimony 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

[[Page 54829]]

``BUSINESS CONFIDENTIAL'' at the top of each page, including any cover 
letter or cover page, and must be accompanied by a non-confidential 
summary of the confidential information. All public documents and non-
confidential 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. Appointments must be scheduled at least 48 
hours in advance.
    General information concerning USTR may be obtained by accessing 
its Internet Web site (http://www.ustr.gov).
BILLING CODE 3190-W4-P

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    ** Actual rates to be released on the Office of the U.S. Trade 
Representative's Web site at: http://www.ustr.gov/World_Regions/Europe_Mediterranean/European_Union/Section_Index.html. Tariff 
rates would not exceed 50 percent above the rate set forth in rate 
column numbered 2 of the Tariff Schedules of the United States, as 
in effect on January 1, 1975, or 20 percent ad valorem above the 
rate existing on January 1, 1975, whichever is higher.


[[Page 54840]]


Carmen Suro-Bredie,
Chairman, Trade Policy Staff Committee.
[FR Doc. 04-20543 Filed 9-9-04; 8:45 am]
BILLING CODE 3191-W4-C