[Federal Register Volume 73, Number 180 (Tuesday, September 16, 2008)]
[Rules and Regulations]
[Pages 53355-53356]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-21467]



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  Federal Register / Vol. 73, No. 180 / Tuesday, September 16, 2008 / 
Rules and Regulations  

[[Page 53355]]



DEPARTMENT OF AGRICULTURE

Office of the Secretary

7 CFR Part 6

RIN 0551-AA7O


The Dairy Import Licensing Program

AGENCY: Office of the Secretary, USDA.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: This final rule amends the historical license reduction 
provisions of the dairy tariff-rate import quota licensing program by 
suspending the provisions with respect to the reduction of historical 
licenses based on surrenders of unused quantities until 2011.

DATES: This rule is effective October 16, 2008.

FOR FURTHER INFORMATION CONTACT: Ron Lord, Branch Chief, Sugar and 
Dairy Branch, Import and Trade Support Programs Division, Foreign 
Agricultural Service, Stop 1021, 1400 Independence Avenue, SW., 
Washington, DC 20250, telephone (202) 720-6939, or e-mail at 
[email protected].

SUPPLEMENTARY INFORMATION:

Executive Order 12866

    The final rule has been determined to be non-significant under E.O. 
12866 and has not 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 final rule will not have a significant economic impact on small 
businesses participating in the program.

Executive Order 12988

    This final rule has been reviewed under Executive Order 12988. The 
provisions of this final rule would not have a 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 final rule would not have a retroactive effect. 
Before any judicial action may be brought forward regarding this final 
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 final 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 final 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 final 
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 Foreign Agricultural Service administers the Dairy Tariff-Rate 
Import Quota Licensing program, 7 CFR 6,20-6.37, that provides the 
issuance of licenses to import certain dairy articles under tariff-rate 
quotas (TRQs) system, as set forth in the Harmonized Tariff Schedule of 
the United States. These dairy products may only be imported into the 
United States at the in-quota rate, by or for the account of a person 
or firm to whom such licenses have been issued, and only in accordance 
with the terms and conditions of the 6.25(b)(1)(i) provides that if a 
licensee has surrendered more than 50 percent of a historical license 
in each of the 3 prior years, that license will be permanently reduced 
to the average amount entered during those 3 years. Section 
6.25(b)(1)(ii) provides that if a licensee surrenders more that 50 
percent of a historical license in at least 3 out of the 5 prior years, 
that license will be permanently reduced to the average amount entered 
during those 5 years. Any amounts permanently reduced are transferred 
to the non-historical quota, which is allocated by a lottery.
    The current regulation permitted the Secretary of Agriculture to 
suspend the historical license reduction provisions on a one-time 
basis, ``in light of market conditions,'' prior to 1999. In 1998, the 
Secretary published a notice in the Federal Register suspending these 
provisions for 5 years, thereby delaying their implementation until 
2004.
    From 2004 through 2007, historical licenses were reduced from 
77,010,604 kilograms to 72,394,927 kilograms, as quota-filled rates 
decreased, especially for certain types of cheeses from the European 
Union (EU). EU milk production has been constrained by quotas while EU 
domestic consumption has reduced the availability of exportable cheese 
supplies. In addition, U.S. cheese prices are now competitive on global 
markets, and the price differentials that made the U.S. cheese market 
attractive to EU exporters have diminished significantly.
    The proposed rule, published on October 4, 2007 (72 FR 56677-78), 
proposed suspending the provisions of 7 CFR 6.25 with respect to the 
reduction of historical licenses based on unused amounts, delaying 
further reductions under the 3-years-in-a-row provision until 2011, and 
the at-least-3-out-of-5-years provision until 2014.
    Summary of public comments: The Department requested public 
comments on the proposed rule published on October 4, 2007. Public 
comments were

[[Page 53356]]

submitted by 30 entities during the comment period from October 4, 
2007, to November 5, 2007. The comments were submitted by 25 importers, 
3 associations, 1 transport company, and 1 foreign government entity. 
Most of the comments from importers favored a 5 year suspension, citing 
market conditions as the primary reason for the suspension. Other 
importers opposed the suspension, or favored a 1 year suspension of the 
provisions. Arguments against the proposed 5 year suspension included 
that market conditions over the next 5 years could not be predicted 
and, therefore, should not be used as a justification for the 
suspension.
    Two associations favored the proposed suspension, while a third 
association opposed it. The transport company supported the proposed 5 
year suspension. The foreign government entity recommended combining 
different quotas for specific types of cheeses to maximize quota filled 
rates for the more popular types of cheeses.
    Conclusion: Quota-filled rates for Swiss, Gruyere and low fat type 
cheeses have remained low even after transfer to the lottery, although 
this fact by itself does not provide justification for a suspension of 
the historical license reduction provisions. Market conditions are 
always subject to fluctuation and change, and it is incumbent upon all 
license holders to adjust to these changing conditions. Nonetheless, to 
allow additional time to adjust to changes in EU's supply and demand, 
due to its long-term dairy policy changes, the Department will 
temporarily suspend the historical license reduction provisions for a 
period of 2 years, commencing in 2009. Historical license reductions 
will again be implemented beginning 2011, rather than in 2012 or 2014, 
as in the proposed rule. In 2011, historical license reductions will be 
based on import data from years 2006 through 2010. Because there will 
already be 5 years of historical import data, the 3-years-in-a-row 
provision is unnecessary, which was not the case when the regulation 
was originally promulgated in 1996, and is therefore being eliminated.

List of Subjects in 7 CFR Part 6

    Agricultural commodities, Cheese, Dairy products, and Imports.

0
For the reasons described in the conclusion, The Department of 
Agriculture amends 7 CFR part 6 as follows:

PART 6--IMPORT QUOTAS AND FEES

0
1. The authority citation for part 6 continues to read as follows:

    Authority: Additional U.S. Notes 6, 7, 8, 12, 14, 16-23, and 25 
to Chapter 4 and General Note 15 of the Harmonized Tariff Schedule 
of the United States (19 U.S.C. 1202), Pub. L. 97 258, 96 Stat. 
1051, as amended (31 U.S.C. 9701), and sections 103 and 404, Pub. L. 
103-465, 108 Stat. 4819 (19 U.S.C. 3513 and 3601).

0
2. In Sec.  6.25 revise paragraph (b) to read as follows:


Sec.  6.25  Allocation of Licenses.

* * * * *
    (b) Historical licenses for the 2009 and subsequent quota years 
(Appendix 1). (1) A person issued a historical license for the 2008 
quota year will be issued a historical license in the same amount for 
the same article from the same country for the 2009 quota year and for 
each subsequent quota year except that:
    (i) Beginning with the 2011 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.
    (ii) [Reserved]
* * * * *

    Issued at Washington, DC the 21st day of August 2008.
Ronald Lord,
Licensing Authority.
 [FR Doc. E8-21467 Filed 9-15-08; 8:45 am]
BILLING CODE 3410-10-M