[Federal Register Volume 72, Number 192 (Thursday, October 4, 2007)]
[Proposed Rules]
[Pages 56677-56678]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 07-4780]


 ========================================================================
 Proposed Rules
                                                 Federal Register
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
 
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  Federal Register / Vol. 72, No. 192 / Thursday, October 4, 2007 / 
Proposed Rules  

[[Page 56677]]



DEPARTMENT OF AGRICULTURE

Office of the Secretary

7 CFR Part 6

RIN 0551-AA70


The Dairy Import Licensing Program

AGENCY: Office of the Secretary, USDA.

ACTION: Proposed rule.

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SUMMARY: This proposed rule would suspend the historical license 
reduction provisions of the dairy import licensing program, 7 CFR part 
6, for a period of 5 years. This temporary suspension is intended to 
improve program administration and reflect changes in the markets for 
cheese and other dairy products subject to import licensing 
requirements.

DATES: Submit comments on or before November 5, 2007.

ADDRESSES: Address all comments concerning this proposed rule to Ron 
Lord, Branch Chief, Sugar and Dairy Branch, Import and Trade Support 
Programs Division, Foreign Agricultural Service, 1400 Independence 
Avenue, SW., Washington, DC 20250, Room 5531-S, STOP 1021, e-mail at 
[email protected], telephone (202) 720-2916, or fax at (202) 720-
0876. Persons with disabilities who require an alternative means for 
communication of information (Braille, large print, audiotape, etc.) 
should contact USDA's Target Center at (202) 720-2600 (voice and TDD).

FOR FURTHER INFORMATION CONTACT: Contact Ron Lord, Branch Chief, Sugar 
and Dairy Branch, Import and Trade Support Programs Division, Foreign 
Agricultural Service, 1400 Independence Avenue, SW., Washington, DC 
20250, Room 5531-S, STOP 1021, e-mail at [email protected], 
telephone (202) 720-2916, or fax at (202) 720-0876.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

    The proposed rule has been determined to be non-significant under 
E.O. 12866 and has been reviewed by the Office of Management and 
Budget.

Regulatory Flexibility Act

    The Regulatory Flexibility Act ensures that regulatory and 
information requirements are tailored to the size and nature of small 
businesses, small organizations, and small governmental jurisdictions. 
This proposed rule will not have a significant economic impact on small 
businesses participating in the program.

Executive Order 12988

    This proposed rule has been reviewed under Executive Order 12988. 
The provisions of this proposed rule would not have preemptive effect 
with respect to any State or local laws, regulations, or policies which 
conflict with such provision or which otherwise impede their full 
implementation. The proposed rule would not have a retroactive effect. 
Before any judicial action may be brought forward regarding this 
proposed rule, all administrative remedies must be exhausted.

National Environmental Policy Act

    The Administrator has determined that this action will not have a 
significant effect on the quality of the human environment. Therefore, 
neither an Environmental Assessment nor an Environmental Impact 
Statement is necessary for this proposed rule.

Unfunded Mandates Reform Act (Pub. L. 104-4)

    Public Law 104-4 requires consultation with State and local 
officials and Indian tribal governments. This proposed rule does not 
impose an unfunded mandate or any other requirement on State, local, or 
tribal governments. Accordingly, these programs are not subject to the 
provisions of the Unfunded Mandates Reform Act.

Executive Order 12630

    This Order requires careful evaluation of governmental actions that 
interfere with constitutionally protected property rights. This 
proposed rule would not interfere with any property rights and, 
therefore, does not need to be evaluated on the basis of the criteria 
outlined in Executive Order 12630.

Government Paperwork Elimination Act

    FAS is committed to compliance with the Government Paperwork 
Elimination Act, which requires Government agencies, in general, to 
provide the public the option of submitting information or transacting 
business electronically to the maximum extent possible.

Background

    The proposed rule at 7 CFR part 6 would revise the Dairy Tariff-
Rate Import Quota Licensing regulation in effect since October 9, 1996, 
by suspending the provisions with respect to the reduction of 
historical licenses based on surrenders of unused amounts.
    Import licensing is one of the tools the U.S. Department of 
Agriculture (USDA) uses to administer the tariff-rate quota (TRA) 
system for U.S. imports of dairy products. TRQs replaced strictly 
quantitative import quotas for dairy products on January 1, 1995, as a 
result of the Uruguay Round Agreement on Agriculture and the Uruguay 
Round Agreements Act.
    Under these TRQs, a low tariff rate, called the in-quota rate, 
applies to imports up to a specified quantity. A higher tariff rate 
called the over-quota rate, applies to any imports in excess of that 
amount. TRQ rates and quantities vary by product.
    For dairy products subject to TRQs, a license issued by the Foreign 
Agricultural Service (FAS) is generally required to import products at 
the in-quota rate. No license is required to import products at the 
over-quota rate.
    Under the historical license reductions provisions, the amount of 
the license issued by FAS is reduced if the importer surrenders more 
than 50 percent of the license during either three consecutive years or 
at least three out of five consecutive years. Specifically, section 
6.25(b)(1)(i) provides that beginning with the 1999 quota year, if a 
licensee has surrendered more than 50 percent of a historical license 
in each of the three prior years, that license will be permanently 
reduced to the average amount entered during those three years. Section 
6.25(b)(1)(ii) provides that beginning with the quota year 2001, if a 
licensee surrenders more than 50 percent of a historical license in at 
least three out of the five prior years, that license will be

[[Page 56678]]

permanently reduced to the average amount entered during those five 
years. These provisions are intended to provide a strong incentive for 
companies with historical licenses to utilize their licenses.
    The current regulation permitted the Secretary of Agriculture to 
suspend the historical license reduction provisions applicable prior to 
1999. In 1998, the Secretary published a notice in the Federal Register 
suspending these provisions for five years, thereby delaying their 
implementation until 2004. The provisions were suspended in order to 
``provide adequate time for historical licensees of European Union (EU) 
cheeses to adjust to changing market conditions; to find alternative 
suppliers of cheese in the EU; and to develop new markets to enable 
importers to fully utilize their historical licenses for EU cheese.'' 
FAS also noted: ``The suspension is consistent with the intent of the 
U.S.-EU Uruguay Round bilateral agreement on maximizing utilization of 
U.S. licenses for EU cheese.''
    However, current market conditions have again prompted the need for 
a temporary suspension of the historical license reduction provisions. 
The production of certain cheeses in the EU, particularly Swiss cheese, 
has declined primarily due to a reduction in subsidies. Other cheeses, 
particularly processed Gruyere cheese, have declined in production 
primarily due to a change in consumer preferences and market demand. 
And finally, production of industrial grade low-fat cheeses has 
declined precipitously due to a switch to more profitable, consumer-
oriented cheeses. Additionally, the expansion of the EU from 15 to 27 
countries has diminished the availability of milk for cheese production 
and reduced availability of cheese for export.
    This temporary suspension is intended to improve program 
administration and reflect changes in the markets for cheese and other 
dairy products subject to import licensing requirements. The historical 
licenses provide for orderly importation of a wide variety of cheeses 
and permit companies to invest in market development with some 
assurance of future ability to provide specific types of cheese.

List of Subjects in 7 CFR Part 6

    Agricultural commodities, Cheese, Dairy products, Imports, 
Reporting and recordkeeping requirements.

    For the reasons described in the preamble, the Department of 
Agriculture proposes to amend 7 CFR part 6 as follows:

PART 6--IMPORT QUOTAS AND FEES

    1. The authority citation for part 6 continues to read as follows:

    Authority: Sec. 8, 65 Stat. 75; 19 U.S.C. 1365.

    2. Section 6.25 is amended by revising paragraphs (b)(1)(i) and 
(ii) to read as follows:


Sec.  6.25  Allocation of Licenses

* * * * *
    (b) * * *
    (1) * * *
    (i) Beginning with the 2012 quota year, a person who has 
surrendered more than 50 percent of such historical license in each of 
the prior three quota years will thereafter be issued a license in an 
amount equal to the average annual quantity entered during those three 
quota years; and
    (ii) Beginning with the 2014 quota year, a person who has 
surrendered more than 50 percent of such historical license in at least 
three of the prior five quota years will thereafter be issued a license 
in an amount equal to the average annual quantity entered during those 
five quota years.
* * * * *

    Dated: September 14, 2007.
Michael W. Yost,
Administrator, Foreign Agricultural Service.
[FR Doc. 07-4780 Filed 10-1-07; 2:37 pm]
BILLING CODE 3410-10-M