[Federal Register Volume 74, Number 14 (Friday, January 23, 2009)]
[Notices]
[Pages 4265-4268]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-1257]


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OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE

[Docket No. USTR-2008-0036]


Modification of Action Taken in Connection With WTO Dispute 
Settlement Proceedings on the European Communities' Ban on Imports of 
U.S. Beef and Beef Products

AGENCY: Office of the United States Trade Representative.

ACTION: Notice and modification of action.

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SUMMARY: The United States Trade Representative (``Trade 
Representative'') has decided to modify the action taken in July 1999 
in connection with the World Trade Organization (``WTO'') authorization 
to the United States in the EC-Beef Hormones dispute to suspend 
concessions and related obligations with respect to the European 
Communities (``EC''). In particular, as described in this notice and 
its annex, the Trade Representative has decided: (1) To remove some 
products from the list of products currently subject to 100 percent ad 
valorem duties; (2) to impose 100 percent ad valorem duties on some new 
products from certain EC member States; (3) to modify the coverage with 
respect to particular EC member States; and (4) to raise the level of 
duties on one of the products that is being maintained on the product 
list. The trade value of the products subject to the modified action 
continues not to exceed the $116.8 million per year level authorized by 
the WTO in July 1999.

DATES: Effective Date: The modifications described in the Annex to this 
notice shall be effective with respect to products that are entered, or 
withdrawn from warehouse, for consumption on or after March 23, 2009. 
Any merchandise subject to increased duties under this determination 
that is admitted to U.S. foreign-trade zones on or after March 23, 2009 
must be admitted as ``privileged foreign status'' as defined in 19 CFR 
146.41.

FOR FURTHER INFORMATION CONTACT: Roger Wentzel, Director, Agricultural 
Affairs, (202) 395-6127 or David Weiner, Director for the European 
Union, (202) 395-4620 for questions concerning the EC-Beef Hormones 
dispute; or William Busis, Associate General Counsel and Chair of the 
Section 301 Committee, (202) 395-3150, for questions concerning 
procedures under Section 301.

SUPPLEMENTARY INFORMATION:

A. The EC-Beef Hormones Case

    The EC bans the import of beef and beef products produced from 
animals to which any of six hormones \1\ have been administered for 
growth promotion purposes. The effect of the EC ban is to prohibit the 
import of substantially all U.S.-produced beef and beef products. In 
February 1998, the WTO Dispute Settlement Body (``DSB'') found that the 
EC ban was inconsistent with EC obligations under the WTO Agreement. In 
July 1999, a WTO arbitrator determined that the EC import ban on U.S. 
beef and beef products has nullified or impaired U.S. benefits under 
the WTO Agreement in the amount of $116.8 million each year. On July 
26, 1999, the DSB authorized the United States to suspend the 
application to the EC, and member States thereof, of WTO tariff 
concessions and related obligations covering trade in an amount of 
$116.8 million per year. Pursuant to that authorization, the Office of 
the United States Trade Representative (``USTR'') announced a list of 
EC products that would be subject to a 100 percent rate of duty 
effective with respect to products entered, or withdrawn from 
warehouse, for consumption on or after July 29, 1999. See 64 FR 40638.
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    \1\ The six hormones at issue are estradiol 17-[beta], 
testosterone, progesterone, zeranol, trenbolone acetate (``TBA'') 
and melengestrol acetate (``MGA'').
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    Since that time, the United States and the EC have continued to 
consult in an effort to resolve this dispute. Those discussions include 
the possibility of an interim agreement that would provide meaningful 
market access for U.S. beef products produced without growth-promoting 
hormones, in return for a suspension of the increased duties on EC 
products.
    The EC argues that EC legislation of 2003 amending the import ban 
on beef and beef products produced from animals treated with certain 
hormones brought the EC into compliance with its WTO obligations. In 
January 2005, the EC requested the establishment of a WTO dispute 
settlement panel to consider the EC claim that the United States was no 
longer authorized to suspend concessions as a result of the EC's 
adoption of the new legislation amending the import ban. (See 70 FR 
8655 for a description of this dispute brought by the EC.)
    On October 16, 2008, the WTO Appellate Body issued a report 
rejecting the EC claim and confirming that the July 1999 DSB 
authorization to suspend concessions remains in effect unless and until 
the DSB rules that the EC has brought its measures into compliance

[[Page 4266]]

with its WTO obligations. The DSB adopted its recommendations and 
rulings on November 14, 2008. On December 22, 2008, the EC took steps 
towards initiating another WTO proceeding by requesting consultations 
with the United States regarding the EC view that it has brought its 
measures into compliance with the 1998 WTO recommendations and rulings.
    The decision by the Trade Representative to modify the July 1999 
action should not be construed as a determination with respect to 
whether or not the EC legislation of 2003 amending the import ban on 
beef and beef products is consistent with WTO rules. Rather, the 
purpose of modifying the action is to increase its effectiveness in 
terms of promoting a resolution of this dispute, including through the 
possible conclusion of an interim agreement that would provide 
meaningful market access for U.S. beef producers, taking into account 
the economic impact of the action on the United States.

B. Section 307 of the Trade Act of 1974, as Amended

    Section 307 of the Trade Act of 1974, as amended, provides for a 
review of actions taken under Section 301, including actions taken in 
connection with a WTO dispute settlement proceeding. In particular, 
Section 307 provides for the Trade Representative to conduct a review 
of--
    (A) the effectiveness in achieving the objectives of section 301 
of--
    (i) such action, and
    (ii) other actions that could be taken (including actions against 
other products or services), and
    (B) the effects of such actions on the U.S. economy, including 
consumers.

C. Section 306 of the Trade Act of 1974, as Amended

    Section 306(b)(2)(B) of the Trade Act provides for the periodic 
review and revision of Section 301 actions taken in the course of a WTO 
dispute settlement proceeding. Section 306(b)(2)(B)(ii) provides 
exceptions in the event that (1) the USTR and the Section 301 
petitioner (or, if USTR self-initiated the Section 301 investigation, 
the affected U.S. industry) agree that changing the action under 
Section 301 is unnecessary, or (2) resolution of the case is imminent. 
Section 306 provides that the standard for revising actions is to 
select changes that are most likely to result in implementation of the 
DSB recommendations, or in achieving some other satisfactory resolution 
of the dispute. The provision also requires that lists of products 
subject to increased duties--both initially and after each of the 
periodic changes--include reciprocal goods of the U.S. industries 
affected by the measure at issue in the WTO dispute.
    The USTR and the affected U.S. industry had agreed that changes in 
the action taken under Section 301 in connection with the EC-Beef 
Hormones dispute have been unnecessary; accordingly, the exception 
under Section 306(b)(2)(B) has been in effect.
    In response to the November 6, 2008 request for public comments 
(see below), the affected industry expressed the view that a different 
approach may be needed in order to obtain a resolution of this dispute.

D. Prior Notice and Comment

    In order to assist in a possible modification to the action in 
accordance with Section 306 of the Trade Act, and to provide 
information in connection with a review under Section 307 of the Trade 
Act, USTR published a notice on behalf of the Section 301 Committee 
seeking public comments regarding a possible modification to the July 
1999 action. See 73 FR 66,066 (November 6, 2008). The notice requested 
that comments be submitted by December 8, 2008.
    The Section 301 Committee sought comments with respect to: (i) 
Whether maintaining or imposing increased duties on particular products 
would be practicable or effective in terms of encouraging a favorable 
resolution of the dispute, and (ii) whether maintaining or imposing 
increased duties on particular products would cause disproportionate 
economic harm to U.S. interests, including small- or medium-size 
businesses and consumers. In addition, the Section 301 Committee 
requested comments on whether actions with respect to particular 
products should be taken with respect to products of all member States 
of the European Communities, or whether action should be taken with 
respect to products of one or more particular member States of the 
European Communities.
    Approximately 600 public comments were received in response to the 
November 6, 2008 notice. Taking account of the public comments, the 
Section 301 Committee--considering the effects on the U.S. economy, 
including consumers--prepared a recommendation for a modified action 
that would be more effective in terms of achieving the objectives of 
Section 301.

E. Determination and Action

    The Trade Representative, taking account of the effects of such 
action on the U.S. economy, including consumers, has accepted the 
recommendation of the Section 301 Committee to modify the July 1999 
action so as to increase its effectiveness. The modified action further 
implements the authorization granted by the DSB to the United States 
under Article 22 of the DSU, and is taken pursuant to the authority 
granted to the Trade Representative under sections 306 and 307 of the 
Trade Act. The trade value of the products subject to the modified 
action remains at or below the $116.8 million per year level authorized 
by the WTO in July 1999.
    The Trade Representative has decided: (1) To remove some products 
from the list of products currently subject to 100 percent ad valorem 
duties (specifically, the articles provided for in HTS subheadings 
9903.02.31, 9903.02.33, 9903.02.35, 9903.02.37, 9903.02.38, 9903.02.39, 
9903.02.40, 9903.02.41, 9903.02.42 and 9903.02.47); (2) to impose 100 
percent ad valorem duties on some new products from certain EC member 
States; (3) to modify the coverage with respect to particular EC member 
States; and (4) to raise the level of duties on one of the products 
that is being maintained on the product list. The modified action 
pursuant to the Trade Representative's determination is set out in 
Annex A to this notice. Annex B to this notice deletes the chapter 99 
subheadings established in July 1999 for the purpose of implementing 
the prior action.
    The Trade Representative's determination shall be effective with 
respect to articles that are entered, or withdrawn from warehouse, for 
consumption on or after March 23, 2009. Any merchandise that is subject 
to increased duties under part A of the Annex that is admitted to a 
U.S. foreign trade zone (U.S. FTZ) on or after March 23, 2009 must be 
admitted with ``privileged foreign status,'' as defined in 19 CFR 
146.41. In addition, any merchandise that is no longer subject to 
increased duties as a result of the Trade Representative's 
determination to modify the July 1999 action is no longer subject to 
the requirement that it must be admitted to a U.S. FTZ with 
``privileged foreign status.''

William L. Busis,
Chair, Section 301 Committee.

Annex

    A. Effective with respect to articles entered, or withdrawn from 
warehouse for consumption, on or after March 23, 2009, the 
Harmonized Tariff Schedule of the United States (HTS) is modified by 
adding in numerical sequence the following superior text and 
subheadings to subchapter III of chapter 99 to the HTS. The superior 
text and

[[Page 4267]]

subheadings are set forth in columnar format, and material in such 
columns is inserted in the columns of the HTS designated ``Heading/
Subheading,'' ``Article Description,'' and ``Rates of Duty 1--
General,'' respectively:

``Articles the product of Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland, France,
    Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland,
                             Portugal, Romania, Slovakia, Slovenia, Spain or Sweden:
                    Meat of bovine animals, fresh or chilled (provided for in heading 0201):
 
9903.02.48..............................  Articles of subheading 0201.10.05, 0201.10.10, 0201.20.02,        100%
                                           0201.20.04, 0201.20.06, 0201.20.10, 0201.20.30, 0201.20.50,
                                           0201.30.02, 0201.30.04, 0201.30.06, 0201.30.10, 0201.30.30
                                           or 0201.30.50.
9903.02.49..............................  Articles of subheading 0201.10.50, 0201.20.80 or 0201.30.80..     100%
 
                         Meat of bovine animals, frozen (provided for in heading 0202):
 
9903.02.50..............................  Articles of subheading 0202.10.05, 0202.10.10, 0202.20.02,        100%
                                           0202.20.04, 0202.20.06, 0202.20.10, 0202.20.30, 0202.20.50,
                                           0202.30.02, 0202.30.04, 0202.30.06, 0202.30.10, 0202.30.30
                                           or 0202.30.50.
9903.02.51..............................  Articles of subheading 0202.10.50, 0202.20.80 or 0202.30.80..     100%
9903.02.52..............................  Meat of swine, fresh or chilled (provided for in subheading       100%
                                           0203.11, 0203.12 or 0203.19).
9903.02.53..............................  Carcasses and half-carcasses of swine, frozen (provided for       100%
                                           in subheading 0203.21).
9903.02.54..............................  Hams, shoulders, and cuts thereof, with bone in, of swine,        100%
                                           frozen (provided for in subheading 0203.22).
9903.02.55..............................  Processed meat of swine, frozen, other than carcasses and         100%
                                           half-carcasses of swine and other than hams, shoulders, and
                                           cuts thereof, with bone in (provided for in subheading
                                           0203.29.20).
9903.02.56..............................  Edible offal of bovine animals, fresh or chilled (provided        100%
                                           for in subheading 0206.10).
9903.02.57..............................  Edible offal of bovine animals, frozen (provided for in           100%
                                           subheading 0206.21, 0206.22 or 0206.29).
9903.02.58..............................  Meat and edible offal, of the poultry of heading 0105, fresh,     100%
                                           chilled or frozen (provided for in heading 0207).
9903.02.59..............................  Hams, shoulders, and cuts thereof, with bone in, of swine,        100%
                                           salted, in brine, dried or smoked (provided for in
                                           subheading 0210.11).
9903.02.60..............................  Meat of bovine animals, salted, in brine, dried or smoked         100%
                                           (provided for in subheading 0210.20).
9903.02.61..............................  Meat of poultry of heading 0105, salted, in brine, dried or       100%
                                           smoked (provided for in subheading 0210.99.20).
9903.02.62..............................  Roquefort cheese (provided for in subheading 0406.40.20 and       300%
                                           0406.40.40).
9903.02.63..............................  Foliage, branches and other parts of plants, without flowers      100%
                                           or flower buds, and grasses, being goods of a kind suitable
                                           for bouquets or for ornamental purposes, fresh, dried or
                                           bleached (provided for in subheading 0604.91 or 0604.99.30).
9903.02.64..............................  Truffles, fresh or chilled (provided for in subheading            100%
                                           0709.59.10).
9903.02.65..............................  Rolled or flaked grains of oats (provided for in subheading       100%
                                           1104.12).
9903.02.66..............................  Grains of oats, hulled, pearled, sliced, kibbled or otherwise     100%
                                           worked, not elsewhere specified or included (provided for in
                                           subheading 1104.22).
9903.02.67..............................  Sausages and similar products of beef, and food preparations      100%
                                           based on these products, in airtight containers (provided
                                           for in subheading 1601.00.40).
9903.02.68..............................  Other prepared or preserved meat, meat offal or blood, of         100%
                                           liver of any animal (provided for in subheading 1602.20).
9903.02.69..............................  Other prepared or preserved meat, meat offal or blood, of         100%
                                           poultry of heading 0105 (provided for in subheading 1602.31,
                                           1602.32, 1602.39).
9903.02.70..............................  Other prepared or preserved meat, meat offal or blood, of         100%
                                           bovine animals (provided for in subheading 1602.50).
9903.02.71..............................  Chewing gum, whether or not sugar-coated, not containing          100%
                                           cocoa (provided for in subheading 1704.10).
9903.02.72..............................  Chocolate and other food preparations containing cocoa, in        100%
                                           blocks, slabs or bars, filled, weighing 2 kg or less each
                                           (provided for in subheading 1806.31).
9903.02.73..............................  Lingonberry and raspberry jams (provided for in subheading        100%
                                           2007.99.05).
9903.02.74..............................  Pears, otherwise prepared or preserved, whether or not            100%
                                           containing added sugar or other sweetening matter or spirit,
                                           not elsewhere specified or included (provided for in
                                           subheading 2008.40).
9903.02.75..............................  Peaches, excluding nectarines, otherwise prepared or              100%
                                           preserved, whether or not containing added sugar or other
                                           sweetening matter or spirit, not elsewhere specified or
                                           included (provided for in subheading 2008.70.20).
 
                  Articles the product of Finland, France, Ireland, the Netherlands or Sweden:
 
9903.02.76..............................  Meat of swine, frozen, not processed, other than carcasses        100%
                                           and half-carcasses of swine and other than hams, shoulders,
                                           and cuts thereof, with bone in (provided for in subheading
                                           0203.29.40).
 
                                         Articles the product of France:
 
9903.02.77..............................  Chestnuts (Castanea spp.), fresh or dried, whether or not         100%
                                           shelled or peeled (provided for in subheading 0802.40).
9903.02.78..............................  Wool grease (other than crude wool grease) and fatty              100%
                                           substances derived from wool grease (including lanolin)
                                           (provided for in subheading 1505.00.90).
 
                           Articles the product of Austria, Cyprus, France or Poland:
 
9903.02.79..............................  Grape juice (including grape must), not fortified with            100%
                                           vitamins or minerals, unfermented and not containing added
                                           spirit, whether or not containing added sugar or other
                                           sweetening matter (provided for in subheading 2009.61 or
                                           2009.69).
9903.02.80..............................  Juice of any other single fruit, not elsewhere specified or       100%
                                           included, not fortified with vitamins or minerals,
                                           unfermented and not containing added spirit, whether or not
                                           containing added sugar or other sweetening matter (provided
                                           for in subheading 2009.80.60).
9903.02.81..............................  Mixtures of juices, other than mixtures of vegetable juices,      100%
                                           not fortified with vitamins or minerals, unfermented and not
                                           containing added spirit, whether or not containing added
                                           sugar or other sweetening matter (provided for in subheading
                                           2009.90.40).
 

[[Page 4268]]

 
                                         Articles the product of Italy:
 
9903.02.82..............................  Mineral waters and aerated waters, not containing added sugar     100%
                                           or other sweetening matter nor flavored (provided for in
                                           subheading 2201.10).
 

    B. Effective with respect to articles entered, or withdrawn from 
warehouse for consumption, on or after March 23, 2009, subchapter 
III of chapter 99 of the Harmonized Tariff Schedule of the United 
States (HTS) is modified by deleting the following HTS subheadings: 
9903.02.21, 9903.02.22, 9903.02.23, 9903.02.24, 9903.02.25, 
9903.02.26, 9903.02.27, 9903.02.28, 9903.02.29, 9903.02.30, 
9903.02.31, 9903.02.32, 9903.02.33, 9903.02.34, 9903.02.35, 
9903.02.36, 9903.02.37, 9903.02.38, 9903.02.39, 9903.02.40, 
9903.02.41, 9903.02.42, 9903.02.43, 9903.02.44, 9903.02.45, 
9903.02.46 and 9903.02.47.

[FR Doc. E9-1257 Filed 1-22-09; 8:45 am]
BILLING CODE 3190-W9-P