[Federal Register Volume 71, Number 80 (Wednesday, April 26, 2006)]
[Notices]
[Pages 24764-24765]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-6222]


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OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE

[Docket No. WTO/DS-340]


WTO Dispute Settlement Proceeding Regarding China--Measures 
Affecting Imports of Automobile Parts

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 March 30, 2006, in accordance with the 
Marrakesh Agreement Establishing the World Trade Organization (WTO 
Agreement), the United States requested consultations regarding China's 
treatment of imported motor vehicle parts, components, and accessories 
(``auto parts''). That request may be found at http://www.wto.org 
contained in a document designated as WT/DS340/1. USTR invites written 
comments from the public concerning the issues raised in this dispute.

DATES: Although USTR will accept any comments received during the 
course of the consultations, comments should be submitted on or before 
May 8, 2006 to be assured of timely consideration by USTR.

ADDRESSES: Comments should be submitted (i) electronically, to 
[email protected], with China Auto Parts (DS340) in the subject line, 
or (ii) by fax, to Sandy McKinzy at (202) 395-3640, with a confirmation 
copy sent electronically to the electronic mail address above, in 
accordance with the requirements for submission set out below.

FOR FURTHER INFORMATION CONTACT: Jim Kelleher, Associate General 
Counsel, Office of the United States Trade Representative, 600 17th 
Street, NW., Washington, DC 20508, (202) 395-3858.

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. In an effort to provide additional opportunity for comment, USTR 
is providing notice that consultations have been requested pursuant to 
the WTO Understanding on Rules and Procedures Governing the Settlement 
of Disputes (DSU). 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 nine months after it is established.

Major Issues Raised by the United States

    On March 30, 2006, the United States requested consultations 
regarding China's treatment of imported auto parts. The measures 
through which China has provided such treatment include:
     Order No. 8 of the National Development and Reform 
Commission (May 21, 2004), Policy on Development of Automotive 
Industry;
     Decree 125 (April 1, 2005), Measures for the 
Administration of Importation of Automotive Parts and Components for 
Complete Vehicles;
     Customs General Administration Public Announcement No. 4 
(April 1, 2005), Rules for Determining Whether Imported Automotive 
Parts and Components Constitute CBU Vehicles; and
     Any amendments, related measures, or implementing 
measures.
    China's regulations appear to penalize manufacturers for using 
imported auto parts in the manufacture of vehicles for sale in China. 
Although China bound its tariffs for auto parts at rates significantly 
lower than its tariff bindings for complete vehicles, China appears to 
assess a charge on imported auto parts equal to the tariff on complete 
vehicles, if the imported parts are incorporated in a vehicle that 
contains imported parts in excess of specified thresholds. To the 
extent that the charge is applied when a vehicle is manufactured within 
China, it would appear to constitute a tax on imported auto parts not 
imposed on like domestic auto parts. The charge also appears to be 
applied in a manner so as to afford protection to domestic products.
    To the extent that the charge is imposed upon the importation of 
the auto parts, it appears to constitute a charge in excess of those 
set forth in China's Schedule of Concessions and Commitments. Further, 
to the extent China may be viewed as imposing a lesser tariff on 
imported auto parts if the final assembled vehicle contains specified 
amounts of local content, it would be forgoing revenue otherwise due, 
and China would appear to be providing a subsidy contingent upon the 
use of domestic rather than imported goods. Finally, China's 
regulations specifically identify completely knocked down (CKD) and 
semi-knocked down (SKD) kits and appear to assess them the tariff for 
complete vehicles.

[[Page 24765]]

    USTR believes these measures are inconsistent with China's 
obligations under Article 2 of the Agreement on Trade-Related 
Investment Measures, Articles II and III of the General Agreement on 
Tariffs and Trade 1994, Article 3 of the Agreement on Subsidies and 
Countervailing Measures, and Parts I.1.2 and I.1.7 of the Protocol on 
the Accession of the People's Republic of China, including paragraphs 
93 and 203 of the Working Party Report.

Public Comment: Requirements for Submissions

    Interested persons are invited to submit written comments 
concerning the issues raised in the dispute. Comments should be 
submitted (i) electronically, to [email protected], with ``China Auto 
Parts (DS340)'' in the subject line, or (ii) by fax, to Sandy McKinzy 
at (202) 395-3640, with a confirmation copy sent electronically to the 
electronic mail address above.
    USTR encourages the submission of documents in Adobe PDF format as 
attachments to an electronic mail. Interested persons who make 
submissions by electronic 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.
    Comments must be in English. 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 designated as such and ``BUSINESS CONFIDENTIAL'' must be marked 
at the top and bottom of the cover page and each succeeding page. 
Persons who submit confidential business information are encouraged to 
also provide a non-confidential summary of the information.
    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 clearly so designate the information or advice;
    (2) Must clearly mark the material as ``SUBMITTED IN CONFIDENCE'' 
at the top and bottom of the cover page and each succeeding page; 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, which is located at 1724 F 
Street, NW., Washington, DC 20508. The public file will include non-
confidential comments received by USTR from the public with respect to 
the dispute; if a dispute settlement panel is convened or in the event 
of an appeal from such a panel, the U.S. submissions, the submissions, 
or non-confidential summaries of submissions, received from other 
participants in the dispute; the report of the panel and, if 
applicable, the report of the Appellate Body. The USTR Reading Room is 
open to the public, by appointment only, from 10 a.m. to noon and 1 
p.m. to 4 p.m., Monday through Friday. An appointment to review the 
public file (Docket WTO/DS-340, China Auto Parts Dispute) may be made 
by calling the USTR Reading Room at (202) 395-6186.

Daniel Brinza,
Assistant United States Trade Representative for Monitoring and 
Enforcement.
 [FR Doc. E6-6222 Filed 4-25-06; 8:45 am]
BILLING CODE 3190-W6-P