[Federal Register Volume 63, Number 105 (Tuesday, June 2, 1998)]
[Rules and Regulations]
[Pages 29945-29948]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-14737]
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OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE
15 CFR Part 2013
Developing and Least-Developed Country Designations under the
Countervailing Duty Law
AGENCY: Office of the United States Trade Representative.
ACTION: Interim Final Rule and Request for Comments.
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SUMMARY: This rule designates a list of members of the World Trade
Organization (``WTO'') that are eligible for special de minimis
countervailable subsidy and negligible import volume standards under
the countervailing duty law.
DATES: This rule is effective June 2, 1998. Comments on the Interim
Final Rule should be submitted by July 31, 1998.
ADDRESSES: Comments may be submitted to William D. Hunter, Office of
General Counsel, Office of the United States Trade Representative, 600
17th Street, NW, Washington, DC 20508. Attn: Eligible Country List.
FOR FURTHER INFORMATION CONTACT:
William D. Hunter, (202) 395-3582, whunter@ustr.gov.
SUPPLEMENTARY INFORMATION:
General Background
In the Uruguay Round Agreements Act (``URAA''), Pub. L. No. 103-
465, Congress amended the countervailing duty (``CVD'') law to conform
to U.S. obligations under the Agreement on Subsidies and Countervailing
Measures (``SCM Agreement'') administered by the WTO. 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 standards 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
[[Page 29946]]
U.S.C. 1677(36), Congress delegated to the United States Trade
Representative (``USTR'') the responsibility for designating those WTO
members whose imports are subject to these special standards. In
addition, section 771(36)(D) requires USTR to publish a list of such
designations (hereinafter referred to as ``the list''), updated as
necessary, in the Federal Register. The list that is set forth and
described below implements the requirements of section 771(36)(D).
Explanation of the List
Introduction
For purposes of countervailing measures, the SCM Agreement extends
special and differential treatment to developing and least-developed
members in the following manner:
De Minimis Thresholds: Under Article 11.9, authorities
must terminate a countervailing duty (``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. In
addition, under Article 27.11, the de minimis standard is 3 percent or
less for (a) a least-developed member; or (b) a developing member that
has eliminated its export subsidies prior to the expiry of the 8-year
phase-out period provided for in Article 27.4
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), 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 these standards into the CVD
law. 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 such special treatment. Instead, section 267
of the URAA added section 771(36) to the Act, which delegates to USTR
the responsibility for designating those WTO members subject to special
de minimis and negligible import volume standards. In addition, section
771(36) requires USTR to publish in the Federal Register, and update as
necessary, a list of those members designated by USTR 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.
Data Sources
In making the designations set forth in the list, USTR relied on
data on per capita gross national product (GNP) and certain social
development indicators contained in the World Bank's Selected World
Development Indicators, and on trade data contained in the
International Monetary Fund's Direction of Trade Statistics.
Designation of TWO Members Eligible for 3 Percent De Minimis Standard
\1\
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\1\ The discussions in this section and in the following section
address the 2 and 3 percent de minimis standards only. However, a
WTO member that is eligible for either the 2 or 3 percent de minimis
standard also is eligible for the special negligible import standard
under section 771(24)(B) of the Act.
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Section 771(36)(B) of the Act describes those WTO members eligible
for a 3 percent de minimis standard by incorporating the standards
contained in Annex VII to the SCM Agreement. Annex VII provides that
the following categories of members are eligible for a 3 percent de
minimis standard:
WTO members designated as least-developed countries by the
United Nations (Annex VII(a)); and
A WTO member named in Annex VII(b), provided its per
capita GNP has not reached $1,000 per annum.
Applying Annex VII, the following WTO members are eligible for a 3
percent de minimis standard:
Table 1
Column A WTO Members Included in Column B WTO Members Included In
the UN's List of ``The 48 Least Annex VII(b) with per capita GNP of
Developed Countries'' \1\ less than $1,000 \2\
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Angola Maldives Bolivia $800
Bangladesh Mali Cameroon 650
Benin Mauritania Congo 680
Burkina Faso Mozambique Cote d'Ivoire 660
Burma Niger Egypt 790
Burundi Rwanda Ghana 390
Central African Sierra Leone Guyana 590
Republic
Chad Solomon Islands India 340
Djibouti Tanzania Indonesia 980
Gambia Togo Kenya 280
Guinea Uganada Nicaragua 380
Guinea-Bisseau Zambia Nigeria 260
Haiti Dem. Rep. of the Pakistan 460
Congo
Lesotho Senegal 600
Madagascar Sri Lanka 700
Malawi Zimbabwe 540
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\1\ United Nations Statistical Yearbook: Forty-First Issue, pp. 869-870
(1996), referring to General Assembly Resolution 49/133.
\2\ Selected World Development Indicators (1997), http://
www.worldbank.org/html/iecdd/wdipdf.htm
[[Page 29947]]
In addition to those WTO members described in Annex VII to the SCM
Agreement, under section 703(b)(4)(C)(ii) of the Act, if USTR notifies
the Department of Commerce that a developing member has eliminated its
export subsidies on an expedited basis, that member is eligible for the
3 percent de minimis standard. Under section 771(36)(C)(i), the list
must identify any such members. Currently, no developing member of the
WTO meets this criterion. Therefore, no such member is included in the
list on the basis of that section.
Designation of WTO Members Eligible for 2 Percent De Minimis
Standard
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, USTR 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
GNP) and a country's share of world trade. USTR developed the list of
members eligible for the 2 percent de minimis standard based primarily
on per capita GNP due to the availability of reliable indices, with
share of world trade and other factors used as supplemental analytical
tools in determining whether a particular member should be moved from
one GNP-based classification to another.
Per Capita GNP
In developing its interim final list, USTR relied on the World
Bank's dividing line separating ``high income'' countries from those
with lower per capita GNPs.\4\ This means that WTO members with per
capita GNP's below $9,386 were treated as eligible for the 2 percent de
minimis standard, subject to possible change based on other factors as
discussed below. The advantages of this approach are that it (1) is
straightforward to apply; (2) is based on a recognized GNP dividing
line between developed and developing countries for purposes of the
world's primary multilateral lending institution; and (3) conforms to
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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\2\ The most recent World Bank data set this dividing line at
$9,386.
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Share of World Trade
USTR considered whether any of the countries with per capita GNPs
below $9,386 account for a significant share of world trade and, thus,
should be treated as ineligible for the 2 percent de minimis standard.
USTR considered a share of world trade of 2 percent or more to be
``significant'' for these purposes because the Administration committed
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 accounts for a share of world trade in excess of 2 percent.
There are no current WTO members with per capita GNPs close to
$9,386 that account for a share of world trade above 2 percent.
Accordingly, while USTR finds that share of world trade is a relevant
factor to consider, at present this factor does not warrant any changes
to the designations based on per capita GNP.
Social Development Indicators
Because the URAA and the SAA do not limit USTR to an analysis of
per capita GNP and world trade shares, USTR also took into account the
social development indicators of infant mortality rates, adult
illiteracy rates, and life expectancy at birth, as reported in Selected
World Development Indicators (1997). However, in the case of those WTO
members with per capita GNPs below $9,386, these social development
indicators do not provide a sufficient basis for finding such members
to be ineligible for the 2 percent de minimis standard.
Other Factors
Section 771(36)(D) contemplates that USTR may consider additional
factors. To that end, for purposes of this interim final list, USTR
took into account membership in the European Union (``EU''). Membership
in the EU 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 not common, there
have been CVD investigations against merchandise from the ``European
Communities.'' Because the EU is indisputably ineligible for the 2
percent de minimis standard, it would be anomalous to treat an
individual EU member as eligible for that standard. Accordingly, USTR
has concluded that all EU members be designated as developed for CVD
purposes. Thus, Greece is ineligible for the 2 percent de minimis
standard, notwithstanding the fact that, based on the most recent World
Bank data, Greece's per capita GNP is below $9,386.
USTR also took into account 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 developed economies worldwide.
Thus, by joining the OECD, a country effectively has declared itself to
be developed. Consistent with this self-designation, USTR has
determined that an OECD member should not be eligible for the 2 percent
de minimis standard.
Furthermore, USTR has not included in this interim final list WTO
members that in the past have been (or could have been) considered as
nonmarket economy countries not subject to the CVD law. Because there
are no pending CVD investigations involving any of these members, USTR
has not designated such countries at this time.
Immediate Effect and Request for Comments
USTR has determined that there is good cause for the publication of
this rule with an immediate effective date and without prior notice and
comment. Publication of the rule implements treaty obligations of the
United States under the Marrakesh Agreement Establishing the WTO. Delay
in the effective date of the rule may adversely affect the trade
relations of the United States with countries subject to designation
under this section. In addition, the absence of a rule designating
countries under the URAA may prevent another Federal agency from being
able to timely adjudicate one or more pending CVD proceedings on its
docket. Due to these factors, and because prior notice and other public
procedures with respect to this action are impracticable, USTR finds
good cause under 5 U.S.C. 553 to make the rule effective upon
publication in the Federal Register.
Because this action is in the form of an interim final rule,
comments are invited on the rule. Interested persons are invited to
comment on this rule by submitting such written comments by July 31,
1998. Each person submitting a comment should include his or her name
and address, and give reasons for any recommendations. After the
comment period closes, USTR will publish in the Federal Register a
final rule on this subject, together with a discussion of comments
received and any amendments made to the interim rule as a result of the
comments.
To simplify the processing and consideration of comments,
commenters
[[Page 29948]]
are encouraged to submit documents in electronic form accompanied by an
original and two paper copies. All documents submitted in electronic
form should be on DOS formatted 3.5'' diskettes, and should be prepared
in either WordPerfect format or a format that the WordPerfect program
can convert and import into WordPerfect.
Regulatory Flexibility Act
In accordance with the Regulatory Flexibility Act (5 U.S.C.
606(b)), USTR certifies that this regulation will not have a
significant impact on a substantial number of small entities.
Paperwork Reduction Act
This rule contains no information collection or recordkeeping
requirements under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
et seq.).
Executive Order 12866
This rule has been and reviewed by the Office of Management and
Budget in accordance with Executive Order 12866, Sec. 1(b), Principles
of Regulation.
Executive Order 12612
This notice does not contain federalism implications described in
Executive Order 12612 warranting the preparation of a Federalism
Assessment.
Small Business Regulatory Enforcement Fairness Act of 1996
This rule is not a major rule as defined by Sec. 804 of the Small
Business Regulatory Enforcement Act of 1996. This rule will not result
in an annual effect on the economy of $100,000,000 or more; a major
increase in costs or prices; or significant adverse effects on
competition, employment, investment, productivity, innovation, or on
the ability of United States-based companies to compete with foreign-
based companies in domestic and export markets.
List of Subjects in 15 CFR Part 2013
Countervailing duties, Foreign trade, Imports
Dated: May 29, 1998.
Charlene Barshefsky.
United States Trade Representative.
For the reasons stated, a new Part 2013 is added to 15 CFR Chapter
XX to read as follows:
PART 2013 DEVELOPING AND LEAST--DEVELOPING COUNTRY DESIGNATIONS
UNDER THE COUNTERVAILING DUTY LAW
Authority: Section 267, Pub. L. 103-465; 108 Stat. 4915 (19
U.S.C. 1677(36))
Sec. 2013.1 Designations.
In accordance with section 771(36) of the Tariff Act of 1930, as
amended, 19 U.S.C. 1677(36), imports from members of the World Trade
organization are subject to de minimis standards and negligible import
standards as set forth in the following list:
De Minimis=3%; Negligible Imports=4%; Section 771(36)(B):
Angola
Bangladesh
Benin
Bolivia
Burkina Faso
Burma
Burundi
Cameroon
Cent. Afr. Rep.
Chad
Congo
Cote d'Ivoire
Dem. Rep. of the Congo
Djibouti
Egypt
Gambia
Ghana
Guinea
Guinea-Bissau
Guyana
Haiti
India
Indonesia
Kenya
Lesotho
Madagascar
Malawi
Maldives
Mali
Mauritania
Mozambique
Nicaragua
Niger
Nigeria
Pakistan
Rwanda
Senegal
Sierra Leone
Solomon Isl.
Sri Lanka
Tanzania
Togo
Uganda
Zambia
Zimbabwe
De Minimus=2%; Negligible Imports=4%; Section 771(36)(A):
Antigua & Barbuda
Argentina
Bahrain
Barbados
Belize
Botswana
Brazil
Chile
Colombia
Costa Rica
Dominica
Dominican Republic
Ecuador
El Salvador
Fiji
Gabon
Grenada
Guatemala
Honduras
Jamaica
Malaysia
Malta
Mauritius
Morocco
Namibia
Panama
Papua New Guinea
Paraguay
Peru
Philippines
South Africa
St. Kitts & Nevis
St. Lucia
St. Vincent & Grenadines
Slovenia
Suriname
Swaziland
Thailand
Tunisia
Trinidad & Tobago
Uruguay
Venezuela
De Minimis=1%; Negligible Imports=3%:
Australia
Austria
Belgium
Brunei
Canada
Cyprus
Denmark
European Communities
Finland
France
Germany
Greece
Hong Kong
Iceland
Ireland
Israel
Italy
Japan
Korea
Kuwait
Liechtenstein
Luxembourg
Macao
Mexico
Netherlands
New Zealand
Norway
Portugal
Qatar
Singapore
Spain
Sweden
Switzerland
Turkey
United Arab Emirates
United Kingdom
[FR Doc. 98-14737 Filed 5-29-98; 2:48 pm]
BILLING CODE 3190-01-M
