[Federal Register Volume 85, Number 27 (Monday, February 10, 2020)]
[Notices]
[Pages 7613-7616]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-02524]


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OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE


Designations of Developing and Least-Developed Countries Under 
the Countervailing Duty Law

AGENCY: Office of the United States Trade Representative.

ACTION: Notice.

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SUMMARY: The U.S. Trade Representative is designating World Trade 
Organization (WTO) Members that are eligible for special de minimis 
countervailable subsidy and negligible import volume standards under 
the countervailing duty (CVD) law. Elsewhere in this issue of the 
Federal Register, the U.S. Trade Representative is removing the Office 
of the United States Trade Representative's rulesthat contain the 
designations superseded by this notice.

DATES: The designations are applicable as of February 10, 2020.

FOR FURTHER INFORMATION CONTACT: David P. Lyons, Assistant General 
Counsel, at 202-395-9446, or Roy Malmrose, Director for Industrial 
Subsidies, at 202-395-9542.

SUPPLEMENTARY INFORMATION: 

A. General Background

    In the Uruguay Round Agreements Act (URAA), Public Law 103-465, 
Congress amended the CVD law to conform to U.S. obligations under the 
WTO Agreement on Subsidies and Countervailing Measures (SCM Agreement). 
Under the SCM Agreement, WTO Members that have not yet reached the 
status of a developed country are entitled to special treatment for 
purposes of countervailing measures. Specifically, imports from such 
Members are subject to different thresholds for purposes of determining 
whether countervailable subsidies are de minimis and whether import 
volumes are negligible.
    Under section 771(36) of the Tariff Act of 1930, as amended (the 
Act), 19 U.S.C. 1677(36), Congress delegated to the U.S. Trade 
Representative the responsibility for designating those WTO Members 
whose imports are subject to these special thresholds. In addition, 
section 771(36)(D) requires the U.S. Trade Representative to publish a 
list of designations, updated as necessary, in the Federal Register. 
This notice implements the requirements of section 771(36)(D).
    On June 2, 1998, the U.S. Trade Representative published an interim 
final rule (1998 rule) designating Subsidy Agreement countries eligible 
for special de minimis countervailable subsidy and negligible import 
volume standards under the CVD law. See 63 FR 29945. ``Subsidies 
Agreement country'' is defined in section 701(b) of the Act, 19 U.S.C. 
1671(b), and includes countries that are WTO Members. The U.S. Trade 
Representative is revising the lists in the 1998 rule, as described 
below, and removing the 1998 rule because it now is obsolete.

B. Explanation of the List

1. Introduction

    For purposes of countervailing measures, the SCM Agreement extends 
special and differential treatment to

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developing and least-developed Members in the following manner:
    De Minimis Thresholds: Under Article 11.9 of the SCM Agreement, 
authorities must terminate a CVD investigation if the amount of the 
subsidy is de minimis, which normally is defined as less than 1 percent 
ad valorem. Under Article 27.10(a), however, for a developing Member 
the de minimis standard is 2 percent or less. Consistent with Article 
27.11 and section 703(b)(4) of the Act, the 2 percent de minimis 
threshold also now applies to least-developed countries.
    Negligible Import Volumes: Under Article 11.9, authorities must 
terminate a CVD investigation if the volume of subsidized imports from 
a country is negligible. Under the CVD law, imports from an individual 
country normally are considered negligible if they are less than 3 
percent of total imports of a product into the United States. Imports 
are not considered negligible if the aggregate volume of imports from 
all countries whose individual volumes are less than 3 percent exceeds 
7 percent of all such merchandise. However, under Article 27.10(b) and 
section 771(24)(B) of the Act, imports from a developing or least-
developed Member are considered negligible if the import volume is less 
than 4 percent of total imports, unless the aggregate volume of imports 
from countries whose individual volumes are less than 4 percent exceeds 
9 percent.
    In the URAA, Congress incorporated into the CVD law the SCM 
Agreement standards for de minimis thresholds and negligible import 
volumes. Section 703(b)(4)(B)-(D) of the Act, 19 U.S.C. 1671b(b)(4)(B)-
(D), incorporates the de minimis standards, while section 771(24)(B), 
19 U.S.C. 1677(24)(B), incorporates the negligible import standards. 
However, in the statute itself, Congress did not identify by name those 
WTO Members eligible for special treatment. Instead, section 267 of the 
URAA added section 771(36) to the Act, which delegates to the U.S. 
Trade Representative the responsibility to designate those WTO Members 
subject to special standards for de minimis and negligible import 
volume. In addition, section 771(36) requires the U.S. Trade 
Representative to publish in the Federal Register, and update as 
necessary, a list of the Members designated as eligible for special 
treatment under the CVD law.
    The effect of these designations is limited to Title VII of the 
Act. Specifically, section 771(36)(E) of the Act provides that the fact 
that a WTO Member is designated in the list as developing or least-
developed has no effect on how that Member may be classified with 
respect to any other law.

2. Data Sources

    In making the designations, the U.S. Trade Representative relied on 
per capita gross national income (GNI) data from the World Bank and 
trade data from the Trade Data Monitor, which contains official data 
from national statistical bureaus, customs authorities, central banks, 
and other government agencies.

3. Designation of WTO Members as Least-Developed Countries

    As explained above, the distinction between developing and least-
developed countries no longer matters for purposes of the de minimis 
threshold: both are eligible for the same 2 percent rate. Nonetheless, 
for clarity and consistent with section 771(36) of the Act, this notice 
separately identifies developing and least-developed countries. The 
list of WTO Members that are least-developed countries is derived from 
Annex VII to the SCM Agreement, which describes least-developed 
countries as those designated by the United Nations (Annex VII(a)) and 
named in Annex VII(b)), provided the per capita GNP has not reached 
$1,000 per annum. A number of WTO Members are included on the United 
Nations list of least-developed countries,\1\ and several more are 
included under Annex VII(b) based upon their GNI per capita at constant 
1990 dollars: C[ocirc]te d'Ivoire, Ghana, Honduras, Kenya, Nicaragua, 
Nigeria, Pakistan, Senegal, and Zimbabwe.\2\
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    \1\ United Nations World Economic Situation and Prospects 
(2019), p. 173, available at https://www.un.org/development/desa/dpad/wp-content/uploads/sites/45/WESP2019_BOOK-ANNEX-en.pdf.
    \2\ See Doha Ministerial Decision on Implementation-Related 
Issues and Concerns, WT/MIN(01)17 (November 20, 2001) (specifying 
that Annex VII(b) is to list Members until their GNP per capita 
reaches $1,000 in constant 1990 U.S. dollars for three consecutive 
years; see also Updating GNP Per Capita for Members Listed in Annex 
VII(b) as Foreseen in Paragraph 10.1 of the Doha Ministerial 
Decision and in Accordance with the Methodology in G/SCM/38, G/SCM/
110/Add.16 (May 14, 2019) (circulating updated calculations by the 
Secretariat).
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C. Designation of WTO Members Eligible for 2 Percent De Minimis 
Standard

1. Introduction

    Based on section 771(36)(D) of the Act, in determining which WTO 
Members should be considered as developing and, thus, eligible for the 
2 percent de minimis standard, the U.S. Trade Representative has 
considered appropriate economic, trade, and other factors, including 
the level of economic development of a country (based on a review of 
the country's per capita GNI) and a country's share of world trade. The 
U.S. Trade Representative developed the list of Members eligible for 
the 2 percent de minimis standard based on the following criteria: (1) 
Per capita GNI, (2) share of world trade, and (3) other factors such as 
Organization for Economic Co-operation and Development (OECD) 
membership or application for membership, European Union (EU) 
membership, and Group of Twenty (G20) membership.

2. Per Capita GNI

    Similar to the 1998 rule, the U.S. Trade Representative relied on 
the World Bank threshold separating ``high income'' countries from 
those with lower per capita GNIs.\3\ This means that WTO Members with a 
per capita GNI below $12,375 were treated as eligible for the 2 percent 
de minimis standard, subject to the other factors described below. 
Advantages of relying upon the World Bank high income designation 
include that it is straightforward to apply, based on a recognized GNI 
dividing line between developed and developing countries for purposes 
of the world's primary multilateral lending institution, and consistent 
with the test for beneficiary developing country status set out in the 
U.S. Generalized System of Preferences statute, section 502(e) of the 
Trade Act of 1974.
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    \3\ The 1998 rule used per capita gross national product rather 
than GNI. The most recent World Bank data set this dividing line at 
$12,375. See New country classifications by income level: 2019-2020, 
World Bank Data Blog, July 1, 2019, available at https://blogs.worldbank.org/opendata/new-country-classifications-income-level-2019-2020.
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3. Share of World Trade

    The U.S. Trade Representative also considered whether countries 
account for a significant share of world trade and, thus, should be 
treated as ineligible for the 2 percent de minimis standard. In the 
1998 rule, the U.S. Trade Representative considered a share of world 
trade of 2 percent or more to be ``significant'' because of the 
commitment in the Statement of Administration Action (SAA), approved by 
the Congress along with the URAA, that Hong Kong, Korea, and Singapore 
would be ineligible for developing country treatment, and each of these 
countries accounted for a share of world trade in excess of 2 percent. 
The U.S. Trade Representative now considers 0.5 percent to be a more 
appropriate indicator of a ``significant'' share of world trade. 
According to the most recent available data from 2018,

[[Page 7615]]

relatively few countries account for such a large share (i.e., more 
than 0.5 percent) of world trade, and those that do include many of the 
wealthiest economies.
    For purposes of U.S. CVD law, the U.S. Trade Representative 
therefore considers countries with a share of 0.5 percent or more of 
world trade to be developed countries. Thus, Brazil, India, Indonesia, 
Malaysia, Thailand, and Viet Nam are ineligible for the 2 percent de 
minimis standard, notwithstanding that, based on the most recent World 
Bank data, each country has a per capita GNI below $12,375.

4. Other Factors

    Section 771(36)(D) of the Act contemplates that the U.S. Trade 
Representative may consider additional factors. To that end, consistent 
with the 1998 rule, the U.S. Trade Representative took into account EU 
membership, which indicates a relatively high level of economic 
development. In addition, under section 771(3) of the Act, the EU may 
be treated as a single country for purposes of the CVD law and, while 
uncommon, there have been CVD investigations against merchandise from 
the European Communities, rather than EU Member States. Because the EU 
is ineligible for the 2 percent de minimis standard, it would be 
anomalous to treat an individual EU Member as eligible for that 
standard. Accordingly, for purposes of U.S. CVD law, the U.S. Trade 
Representative considers all EU Members as developed countries. Thus, 
Bulgaria and Romania are ineligible for the 2 percent de minimis 
standard, notwithstanding that, based on the most recent World Bank 
data, each country has a per capita GNI below $12,375.
    The U.S. Trade Representative also took into account OECD 
membership and applications for OECD membership. The characterization 
of the OECD as a grouping of developed countries has been confirmed 
throughout its existence in a number of published OECD documents, and 
the OECD consistently has been viewed as, and acts itself in the 
capacity of, the principal organization of developed economies 
worldwide. Thus, by joining or applying to join the OECD, a country 
effectively has declared itself to be developed. Although the 1998 rule 
considered OECD membership only, given the significance of this self-
designation, the act of applying to the OECD, in addition to joining, 
indicates that a country is developed. Accordingly, the U.S. Trade 
Representative has determined that an OECD member or applicant should 
not be eligible for the 2 percent de minimis standard. Thus, Colombia 
and Costa Rica are ineligible for the 2 percent de minimis standard, 
notwithstanding that, based on the most recent World Bank data, each 
country has a per capita GNI below $12,375.
    The U.S. Trade Representative also took into account G20 
membership. The G20 was established in September 1999, and so was not 
considered in the 1998 rule. The G20 is a preeminent forum for 
international economic cooperation, which brings together major 
economies and representatives of large international institutions such 
as the World Bank and International Monetary Fund. Given the global 
economic significance of the G20, and the collective economic weight of 
its membership (which accounts for large shares of global economic 
output and trade), G20 membership indicates that a country is 
developed. Thus, Argentina, Brazil, India, Indonesia, and South Africa 
are ineligible for the 2 percent de minimis standard, notwithstanding 
that, based on the most recent World Bank data, each country has a per 
capita GNI below $12,375.
    The U.S. Trade Representative did not consider social development 
indicators such as infant mortality rates, adult illiteracy rates, and 
life expectancy at birth, as a basis for changing a designation. The 
U.S. Trade Representative did consider that if a country considers 
itself a developed country, or has not declared itself a developing 
country in its accession to the WTO, it should not be considered a 
developing country for purposes of the SCM Agreement. Therefore, 
Albania, Armenia, Georgia, Kazakhstan, the Kyrgyz Republic, Moldova, 
Montenegro, North Macedonia, and Ukraine are ineligible for the 2 
percent de minimis standard, notwithstanding that, based on the most 
recent World Bank data, each country has a per capita GNI below 
$12,375.
    Furthermore, the 1998 rule omitted WTO Members that in the past had 
been, or could have been, considered as nonmarket economy countries not 
subject to the CVD law. Because nonmarket economies may now be subject 
to CVD law, the lists set forth in this notice do not omit nonmarket 
economies.

D. Designation of Developed Countries

    The 1998 rule included a list of ``developed countries'' that did 
not qualify as developing or least developed. Because section 771(36) 
of the Act does not require the U.S. Trade Representative to maintain a 
list of developed countries, this notice does not include such a list.

E. List of Least-Developed and Developing Countries

    In accordance with section 771(36) of the Act, imports from least-
developed and developing WTO Members set forth in the following lists 
are subject to a de minimis standard of 2 percent and a negligible 
import standard of 4 percent:

Least-Developed Countries Under Section 771(36)(B) of the Act

Afghanistan
Angola
Bangladesh
Benin
Burkina Faso
Burundi
Cambodia
Central African Republic
Chad
C[ocirc]te d'Ivoire
Democratic Republic of the Congo
Djibouti
Gambia
Ghana
Guinea
Guinea-Bissau
Haiti
Honduras
Kenya
Lao People's Democratic Republic
Lesotho
Liberia
Madagascar
Malawi
Mali
Mauritania
Mozambique
Myanmar
Nepal
Nicaragua
Niger
Nigeria
Pakistan
Rwanda
Senegal
Sierra Leone
Solomon Islands
Tanzania
Togo
Uganda
Vanuatu
Yemen
Zambia
Zimbabwe

Developing Countries Under Section 771(36)(A) of the Act

Bolivia
Botswana
Cabo Verde
Cameroon
Cuba
Dominica
Dominican Republic
Ecuador
Egypt
El Salvador

[[Page 7616]]

Eswatini
Fiji
Gab[oacute]n
Grenada
Guatemala
Guyana
Jamaica
Jordan
Maldives
Mauritius
Mongolia
Morocco
Namibia
Papua New Guinea
Paraguay
Peru
Philippines
St. Lucia
St. Vincent & Grenadines
Samoa
Sri Lanka
Suriname
Tajikistan
Tonga
Tunisia
Venezuela

Joseph Barloon,
General Counsel, Office of the U.S. Trade Representative.
[FR Doc. 2020-02524 Filed 2-7-20; 8:45 am]
 BILLING CODE 3290-F0-P