96-27759. Denial of Benefits Under a Trade Agreement by the European Union: Termination of Section 302 Investigation

[Federal Register Volume 61, Number 211 (Wednesday, October 30, 1996)]
[Notices]
[Page 56082]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-27759]


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OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE
[Docket No. 301-101]


Denial of Benefits Under a Trade Agreement by the European Union: 
Termination of Section 302 Investigation

AGENCY: Office of the United States Trade Representative.

ACTION: Notice of termination and monitoring.

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SUMMARY: Having reached an agreement that provided a satisfactory 
resolution of the issues under investigation, the Acting United States 
Trade Representative (USTR) has decided to terminate an investigation 
initiated under section 302(b) of the Trade Act of 1974 (Trade Act) 
with respect to denial of benefits under a trade agreement by the 
European Union (EU) and to monitor EU implementation pursuant to 
section 306 of the Trade Act.

DATES: This investigation was terminated effective October 21, 1996.

FOR FURTHER INFORMATION CONTACT:
Mark Mowrey, Director, European Regional Affairs, [phone], or 
Amelia Porges, Senior Counsel for Dispute Settlement, [phone], 
Office of the United States Trade Representative, 600 17th Street, NW., 
Washington, DC 20508.

SUPPLEMENTARY INFORMATION: When Austria, Finland and Sweden acceded to 
the EU in January 1995, the EU withdrew the entire WTO tariff schedules 
of these three countries and of the EU of twelve members and applied 
the common external tariff of the EU of twelve to imports into these 
three countries. The result was to increase the tariffs applicable on a 
number of U.S. exports to Austria, Finland and Sweden, impairing prior 
tariff concessions by these three countries. The EU then began 
negotiations pursuant to Article XXIV:6 and Article XXVIII of the 
General Agreement on Tariffs and Trade 1994 (GATT 1994) on compensation 
to its trading partners for the impairment of concessions; Articles 
XXIV:6 and XXVIII entitle relevant affected WTO Members in such a 
situation to receive negotiated compensation or, in the absence of 
agreement on compensation, to modify or withdraw ``substantially 
equivalent concessions.''
    In order to exercise U.S. rights under a trade agreement, the USTR 
on October 24, 1995, initiated an investigation pursuant to section 
302(b)(1) of the Trade Act (19 U.S.C. 2412(b)) with respect to the EU's 
policies and practices in this matter. (See 60 FR 55076 of October 27, 
1995). At that time, the USTR proposed that, unless the United States 
and EU negotiated a mutually acceptable solution that compensated the 
United States in accordance with its rights under the WTO, the USTR 
would determine pursuant to section 304 of the Trade Act that the EU's 
policies and practices denied the United States trade agreement 
benefits and were actionable under section 301(a) and that the 
appropriate action in response would be to suspend, by the end of 1995, 
concessions on selected products. However, on November 29, 1995, the EU 
and the United States concluded negotiations and reached agreement on 
the permanent compensation which would be accorded to the United States 
in this connection.
    As a result of the Agreement for the Conclusion of Negotiations 
Between the United States and the European Community Under Article 
XXIV:6 of the GATT 1994 (the Agreement), the USTR decided that no 
action was necessary under Section 301 and the United States did not 
give written notice of its intention to modify or suspend substantially 
equivalent concessions. On December 4, 1995, the European Council 
formally approved the Agreement, and on July 22, 1996, representatives 
of both sides formally signed the Agreement with effect from December 
30, 1995. The Agreement provides full and permanent compensation for 
increased tariffs imposed on U.S. imports into Austria, Finland, and 
Sweden. Having reached an agreement that provides a satisfactory 
resolution of the issues under investigation, the Acting USTR 
terminated the investigation on November 24, 1996, and will monitor EU 
implementation pursuant to section 306 of the Trade Act (19 U.S.C. 
2416).
Irving A. Williamson,
Chairman, Section 301 Committee.
[FR Doc. 96-27759 Filed 10-29-96; 8:45 am]
BILLING CODE 3190-01-M