03-12893. Procedures for Considering Requests from the Public for Textile and Apparel Safeguard Actions on Imports from China

May 19, 2003.

AGENCY:

The Committee for the Implementation of Textile Agreements (The Committee).

ACTION:

Notice of Procedures

SUMMARY:

This notice sets forth the procedures the Committee for the Implementation of Textile Agreements (the Committee) will follow in considering requests from the public for textile and apparel safeguard actions as provided for in the Report of the Working Party on the Accession of China to the World Trade Organization (the Accession Agreement). The Committee hereby notifies interested parties of the procedures it will follow in considering requests.

EFFECTIVE DATE:

May 21, 2003.

ADDRESS:

Request must be submitted to: the Chairman, Committee for the Implementation of Textile Agreements, Room H3100, U.S. Department of Commerce, 14th and Constitution Avenue, N.W., Washington, D.C. 20230. Ten copies of any such request must be provided.

FOR FURTHER INFORMATION CONTACT:

William Dulka, Office of Textiles and Apparel, U.S. Department of Commerce, [phone].

SUPPLEMENTARY INFORMATION:

Authority: Section 204 of the Agricultural Act of 1956, as amended (7 U.S.C. 1854); Executive Order 11651 of March 3, 1972, as amended.

BACKGROUND:

The Accession Agreement textile and apparel safeguard allows the United States and other World Trade Organization Member countries that believe imports of Chinese origin textile and apparel products are, due to market disruption, threatening to impede the orderly development of trade in these products to request consultations with China with a view to easing or avoiding such market disruption. Upon receipt of the request, China has agreed to hold its shipments to a level no greater than 7.5 percent (6 percent for wool product categories) above the amount entered during the first 12 months of the most recent 14 months preceding the request for consultations. The United States may implement such a limit. Consultations with China will be held within 30 days of receipt of the request for consultations, and every effort will be made to reach agreement on a mutually satisfactory solution within 90 days of receipt of the request for consultations. If agreement on a different limit is reached, the Committee will issue a Federal Register Notice containing a directive to the Bureau of Customs and Border Protection that implements the negotiated limit.

The limit is effective beginning on the date of the request for consultations and ending on December 31 of the year in which consultations were requested, or where three or fewer months remained in the year at the time of the request for consultations, for the period ending 12 months after the request for consultations. No limit may remain in effect beyond one year, without reapplication, unless otherwise agreed between the United States and China. No limit may be applied to the same product at the same time under these procedures and under the product-specific China safeguard implemented by Section 421 of the Trade Act of 1974 (19 U.S.C. 2451).

In order to facilitate the implementation of the Accession Agreement textile and apparel safeguard, the Committee has determined that it is appropriate to publish procedures it will follow in considering requests for Accession Agreement textile and apparel safeguard actions. However, the Committee has determined that actions taken under this safeguard fall within the foreign affairs exception to the rulemaking provisions of 5 U.S.C. 553(a)(1), and this notice does not waive that determination. These procedures are not subject to the requirement to provide prior notice and opportunity for public comment, pursuant to 5 U.S.C. 553(a)(1) and 553(b)(A).

1. Requirements for Requests.

The Committee will review requests from the public for Accession Agreement textile and apparel safeguard actions on imports of Chinese origin textile and apparel products (such products must have been covered by the WTO Agreement on Textiles and Clothing as of the date the WTO Agreement entered into force) sent to the Chairman, Committee for the Implementation of Textile Agreements, Room H3100, U.S. Department of Commerce, 14th and Constitution Avenue, NW., Washington, DC 20230. Ten copies of any such request must be provided. The Committee will protect any business confidential information that is marked business confidential from disclosure to the full extent permitted by law. To the extent that business confidential information is provided, two copies of a non-confidential version must also be provided, in which business confidential information is summarized or, if necessary, deleted. Within 15 working days of receipt of a request, the Committee will determine whether the request provides the information necessary for the Committee to consider the request in light of the considerations set forth below. If the request does not, the Committee will promptly notify the requester of the reasons for this determination and the request will not be considered. However, the Committee will reevaluate any request that is resubmitted with additional information.

Consistent with longstanding Committee practice in considering textile safeguard actions, requests may be filed by an entity (which may be a trade association, firm, certified or recognized union, or group of workers) that is representative of either: (A) a domestic producer or producers of a product that is a like or directly competitive with the subject Chinese textile or apparel product; or (B) a domestic producer or producers of a component used in the production of a product that is like or directly competitive with the subject Chinese textile or apparel product.

A request will only be considered if the request includes the specific information set forth below in support of a claim that the Chinese origin textile or apparel product is, due to market disruption, threatening to impede the orderly development of trade in like or directly competitive products.

A. Product description. Name and description of the imported product concerned, including the category or categories or part thereof of the U.S. Textile and Apparel Category System (see “Textile Correlation” at http://otexa.ita.doc.gov/​corr.htm) under which such product is classified, the Harmonized Tariff Schedule of the United States subheading(s) under which such product is classified, and the name and description of the like or directly competitive domestic product concerned.

B. Import data. The following data, in quantity by category unit (see “Textile Correlation”), on total imports into the United States and imports from China into the United States:

* Annual data for the most recent five full calendar years for which such data are available;

* Quarterly data for the most recent year for which such data are partially available, and quarterly data for the same quarter(s) of the previous year (e.g. January-March 2002, April-June 2002 and January-March 2001, April-June 2001).

The data should demonstrate that imports of Chinese origin textile and apparel products that are like or directly competitive with the product produced by the domestic industry concerned are increasing rapidly in absolute terms.

C. Production Data. The following data, in quantity by category unit (see “Textile Correlation”), on United States domestic production of the like or directly competitive products of U.S. origin indicating the nature and extent of market disruption:

* Annual data for the most recent five full calendar years for which such data are available;

* Quarterly data for the most recent year for which such data are partially available, and quarterly data for the same quarter(s) of the previous year (e.g. January-March 2002, April-June 2002 and January-March 2001, April-June 2001).

If the like or directly competitive product(s) of U.S. origin does not correspond to a category or categories of the U.S. Textile and Apparel Category system for which production data are available from official statistics of the U.S. Department of Commerce (see “U.S. Imports, Production, Markets, Import Production Ratios and Domestic Market Shares for Textile and Apparel Product Categories” at website: http://otexa.ita.doc.gov/​ipbook.pdf),, the requester must provide a complete listing of all sources from which the data were obtained and an affirmation that to the best of the requester's knowledge, the data represent substantially all of the domestic production of the like or directly competitive product(s) of U.S. origin. In such cases, data should be reported in the first unit of quantity in the Harmonized Tariff Schedule of the United States (http://dataweb.usitc.gov/​SCRIPTS/​tariff/​toc.html) for the Chinese origin textile and/or apparel products and the like or directly competitive products of U.S. origin.

D. Market Share Data. The following data, in quantity by category unit (see “Textile Correlation”), on imports from China as a percentage of the domestic market (defined as the sum of domestic production of like or directly competitive products and total imports); on total imports as a percentage of the domestic market; and on domestic production of like or directly competitive products as a percentage of the domestic market:

* Annual data for the most recent five full calendar years for which such data are available;

* Quarterly data for the most recent year for which such data is partially available, and quarterly data for the same quarter(s) of the previous year (e.g. January-March 2002, April-June 2002 and January-March 2001, April-June 2001).

E. Additional Information. A description of how the Chinese origin textile and apparel product(s) have adversely affected the domestic industry producing like or directly competitive articles, such as the effect of imports from China on prices in the United States or any other data deemed to be pertinent.

2. Consideration of Requests.

If the Committee determines that the request provides the information necessary for it to be considered, the Committee will cause to be published in the Federal Register a notice seeking public comments regarding the request, which will include the request and the date by which comments must be received. The Federal Register notice and the request, with the exception of information marked “business confidential”, will be posted by the Department of Commerce's Office of Textiles and Apparel on the Internet (otexa.ita.doc.gov). The comment period shall be 30 calendar days. To the extent business confidential information is provided, a non-confidential version must also be provided, in which business confidential information is summarized or, if necessary, deleted. Comments received, with the exception of information marked “business confidential”, will be available in the Department of Commerce's Trade Reference Room for review by the public. If a comment alleges that there is no market disruption or that the subject imports are not the cause of market disruption, the Committee will closely review any supporting information and documentation, such as information about domestic production or prices of like or directly competitive products. In the case of requests submitted by entities that are not the actual producers of a like or directly competitive product, particular consideration will be given to comments representing the views of actual producers in the United States of a like or directly competitive product.

With respect to any request considered by the Committee, the Committee will make a determination within 60 calendar days of the close of the comment period as to whether the Committee will request consultations with China. If the Committee is unable to make a determination within 60 calendar days, it will cause to be published in a notice in the Federal Register, including the date by which it will make a determination. If the Committee makes a negative determination, it will cause this determination and the reasons therefore to be published in the Federal Register. If the Committee makes an affirmative determination that imports of Chinese origin textiles and apparel products are, due to market disruption, threatening to impede the orderly development of trade in these products, the Committee will request consultations with China with a view to easing or avoiding such market disruption. Consultations with China will be held within 30 days of receipt of the request for consultations, and every effort will be made to reach agreement on a mutually satisfactory solution within 90 days of receipt of the request for consultations. Immediately after the Chinese Government receives the requests for consultations, the Committee will cause to be published a notice in the Federal Register that such consultations have been requested. The notice will identify quantitative limits on imports into the United States of Chinese origin textile and apparel products subject to the request for consultations. The notice will further provide that, absent a mutually satisfactory solution, the limits will terminate on December 31 of the year in which the request for consultations was made, unless three or fewer months remain in that year at the time of the request. If three or fewer months remain in the year at the time of the request, the notice will provide that, absent a mutually satisfactory solution, the limits will terminate one year from the date on which consultations were requested. The quantitative limits identified in the notice shall be 7.5 percent (6 percent for wool products) above the amount of Chinese origin textile and apparel products subject to the request for consultations entered into the United States during the first 12 months of the most recent 14 months preceding the month in which the request for consultations was made. The notice also will contain a summary statement of the reasons and justifications for the request for consultations with China.

3. Self Initiation. The Committee may, on its own initiative, consider whether imports of Chinese origin textile and apparel products are, due to market disruption, threatening to impede the orderly development of trade in these products. In such considerations, the Committee will follow procedures consistent with those set forth in Section 2 of this notice, including causing to be published in the Federal Register a notice seeking public comment regarding the action it is considering.

4. Reapplication. Under the Accession Agreement, no action may remain in effect beyond one year, without reapplication, unless otherwise agreed between the United States and China. Reapplication will only take place if the Committee makes a new affirmative determination that imports of Chinese origin textiles and apparel products are, due to market disruption, threatening to impede the orderly development of trade in these products. In considering requests or in considerations begun on its own initiative for reapplication, the Committee will follow procedures consistent with those set forth in this notice.

5. Business Confidential Information. Public Reading Room. The Committee will protect any business confidential information that is marked business confidential from disclosure to the full extent permitted by law. To the extent that business confidential information is provided, two copies of a non-confidential version must also be provided, in which business confidential information is summarized or, if necessary, deleted. The Committee will make available to the public non-confidential versions of the request that is being considered, non-confidential versions of any public comments received with respect to a request, and, in the event consultations are requested, the statement of the reasons and justifications for the request subsequent to the delivery of the statement to China.

D. Michael Hutchinson,

Acting Chairman, Committee for the Implementation of Textile Agreements.