99-16242. Request for Public Comment Regarding the Economic and Environmental Effects of Tariff Elimination in the Forest Products Sector  

  • [Federal Register Volume 64, Number 122 (Friday, June 25, 1999)]
    [Notices]
    [Pages 34304-34306]
    From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
    [FR Doc No: 99-16242]
    
    
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    OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE
    
    COUNCIL ON ENVIRONMENTAL QUALITY
    
    
    Request for Public Comment Regarding the Economic and 
    Environmental Effects of Tariff Elimination in the Forest Products 
    Sector
    
    AGENCY: Office of the United States Trade Representative and Council on 
    Environmental Quality.
    
    ACTION: Request for written public comment.
    
    -----------------------------------------------------------------------
    
    SUMMARY: The Office of the United States Trade Representative (USTR) 
    and the Council on Environmental Quality (CEQ) are seeking public 
    comment about the economic and environmental effects of the initiative 
    to eliminate remaining tariffs on forest products. These comments are 
    sought in the context of a written analysis which CEQ and USTR are 
    undertaking of that initiative. The initiative, which is now the 
    subject on negotiations within the World Trade Organization (WTO), is 
    part of an eight sector accelerated tariff liberalization (ATL) 
    proposal. The other ATL sectors are environmental goods and services, 
    gems and jewelry, medical equipment and scientific instruments, 
    chemicals, energy, fish and toys.
        The ATL proposal in forest products covers all of Chapters 44, 46, 
    47, 48, 49 on the HTS as well as portions of chapter 38 (certain wood 
    chemicals), and 94 (furniture and prefabricated buildings.)
        The complete list of tariff lines included in the initiative can be 
    found in the Federal Register notice announcing ITC Investigation No. 
    332-392, Advice Concerning APEC Sectoral Trade Liberalization, (Federal 
    Register, April 1, 1998, Vol. 63, No. 62).
        The analysis will address the following broad subject areas: the 
    history of the initiative, a description of how the forest products ATL 
    relates to other U.S. government goals and objectives in the forest 
    policy arena, the likely economic impact of tariff elimination in terms 
    of shifts in production and consumption of forest products and the 
    reasonably foreseeable environmental impacts of these shifts, and 
    appropriate policy responses. The report is intended to focus on the 
    effects of the ATL initiative on the United States but will also 
    address broader global implications of the initiative. Specific 
    information regarding, or empirical studies of, the economic and 
    environmental impacts of past trade liberalization in this sector which 
    interested parties may have would be particularly welcome.
        Testimony related to the subject of this request which has been 
    submitted in response to the following will be made a part of the 
    record of this study and does not need to be resubmitted: ITC 
    Investigation No. 332-392, ``Advice Concerning APEC Sectoral Trade 
    Liberalization'' (Federal Register, April 1, 1998, Vol 63, No. 62); 
    USTR Notice ``Negotiation of Sectoral Market Opening Agreements'' 
    (Federal Register, May 15, 1998, Vol. 63, No. 94);
    
    [[Page 34305]]
    
    USTR Trade Policy Staff Committee Notice ``Request for Public Comment 
    Regarding Negotiations on Market Access and Other Issues in the World 
    Trade Organization and Under the Free Trade Area of the Americas'' 
    (Federal Register, April 14, 1999, Vol. 64, No. 71); and ITC 
    Investigation 332-400,``Conditions of Competition in U.S. Forest 
    Products Trade''.
    
    FOR FURTHER INFORMATION CONTACT:
    Office of the U.S. Trade Representative, Environment and Natural 
    Resources Section, telephone 202-395-7320 or the Council on 
    Environmental Quality, International Affairs, telephone 202-456-6224.
    
    SUPPLEMENTARY INFORMATION:
    
    1. Background
    
    A. History of Tariff Liberalization in the Forest Products Sector
    
        The United States sought elimination of all tariffs in the forest 
    products sector during the Uruguay Round. The round resulted in a 
    ``zero for zero'' (reciprocal tariff elimination) agreement which 
    included the United States, Canada, Finland, Austria, Singapore, Hong 
    Kong, Japan, EU, Korea and New Zealand for paper products (chapters 47, 
    48 and 49 of the HTS) by 2004. At the same time there was agreement to 
    reduce, over five years, tariffs on wood products. In the United 
    States, such reductions amounted to just over a one-third cut in 
    average tariff levels from an average tariff level of 3.1% to an 
    average tariff level of 1.8%. Under the Uruguay Round Agreements Act 
    and its accompanying Statement of Administrative Action, Congress 
    listed a number of industrial or agricultural sectors in which complete 
    tariff elimination was not achieved in the Uruguay Round but for which 
    Congress determined that obtaining further reductions and elimination 
    of tariffs was a priority objective. Under section 11(b) of the Uruguay 
    Round Agreements Act, Congress provided the Administration with ongoing 
    authority to seek reductions in tariffs on wood products, among other 
    sectors.
    
    B. Initiative Begun in APEC
    
        In mid 1997, APEC Ministers called for the nomination of sectors 
    for Early Voluntary Sectoral Liberalization (EVSL) among APEC 
    economies. Four nominations were received in the forest product area 
    from the United States, Canada, Indonesia and New Zealand. These four 
    proposals were merged together in September 1997, with New Zealand 
    agreeing to act as coordinator for the proposal. Indonesia, the United 
    States and Canada have remained active proponents of the proposal in a 
    co-sponsor role. At the APEC summit in Kuala Lumpur in November 1998, 
    APEC leaders agreed to move the tariff portions of the EVSL initiative 
    to the WTO in order to seek a critical mass of support for concluding 
    an agreement on all eight sectors by the end of 1999. The non-tariff, 
    building standards and economic and technical cooperation areas of the 
    proposal continue to be worked on within APEC.
        C. Major global importers and exporters of forest products, 1996:
    
    ----------------------------------------------------------------------------------------------------------------
                       Importers                       1000 US$                 Exporters                1000 US$
    ----------------------------------------------------------------------------------------------------------------
    USA...........................................     $22,558,540  Canada..........................     $25,333,160
    Japan.........................................      18,890,400  USA.............................      16,939,900
    Germany.......................................      11,926,820  Sweden..........................      10,996,200
    United Kingdom................................       8,476,689  Finland.........................      10,301,020
    Italy.........................................       6,148,593  Germany.........................       9,438,751
    France........................................       5,356,351  Indonesia.......................       5,206,522
    Netherlands...................................       4,489,773  France..........................       4,193,914
    Korea, Republic of............................       4,425,527  Malaysia........................       4,161,279
    China (excl. Hong Kong).......................       3,858,254  Austria.........................       4,149,678
    Spain.........................................       3,552,249  Brazil..........................       3,233,476
    Belgium-Luxembourg............................       3,544,574  Russian Federation..............       2,995,568
    Hong Kong, China..............................       3,488,083  Italy...........................       2,486,782
    Taiwan........................................       3,040,661  Netherlands.....................       2,406,430
    Canada........................................       2,622,203  Belgium-Luxembourg..............       2,180,694
    Switzerland...................................       2,501,957  Norway..........................       2,059,960
    World.........................................     138,652,200  World...........................     134,656,400
    ----------------------------------------------------------------------------------------------------------------
     Source: FAO
    
    D. Trade Barriers Faced by Sector
    
        The sector faces a range of barriers. Tariffs remain particularly 
    significant barriers. The 1998 FAO publication Trade Restrictions and 
    Their Impact on International Trade in Forest Products which is 
    available in hard copy and on the FAO website [www.fao.org/ur] provides 
    a detailed explanation of the barriers faced in this sector.
        Applied tariffs in OECD economies for these products, in general, 
    are relatively low, however, tariffs for specific products remain high. 
    This is especially true for wood panel products, builders' woodwork 
    items, and furniture for those countries that did not agree to the zero 
    for zero on furniture rates for particular products are higher, 
    commonly 10-15%. Tariffs in other countries are higher than this, with 
    rates commonly falling between 10 and 60%.
    Tariffs, Selected Countries
        HTS Product Chapters: 44, 47, 48, 49, 94 (part).
    
    ------------------------------------------------------------------------
                                                               Tariff %  MFN
                                                                  average
    ------------------------------------------------------------------------
    Australia...............................................            2.88
    Canada..................................................            3.88
    Chile...................................................           11
    China...................................................           20.86
    Taiwan..................................................            3.22
    Hong Kong, China........................................            0
    Indonesia...............................................            9.7
    Japan...................................................            1.14
    Korea...................................................            4.98
    Malaysia................................................           12.26
    Mexico..................................................           11.32
    New Zealand.............................................            6.06
    Singapore...............................................            0
    Thailand................................................           20.04
    USA.....................................................            1.4
    EU......................................................            5.26
    ------------------------------------------------------------------------
     Source: FAOSTAT Website
    
    E. Scope
    
        The ATL proposal covers all forest products--from rosin (ex 3804), 
    to logs and wood products (ch44), ratan products (ex 46), pulp, paper 
    and paper products (ch 47, 48 and 49), wooden furniture (ex 9401, ex 
    9403) and prefabricated buildings made of wood (ex 9406).
    
    [[Page 34306]]
    
    F. The Tariff Proposal Target
    
        Existing parties to the Uruguay Round zero for zero agreement to 
    accelerated removal of tariffs in chapters 47, 48 and 49 of the HTS 
    (pulp, paper and paperboard and printed material) would agree to move 
    up the elimination of tariffs in these sectors from 1 January 2004 to 1 
    January 2000. Others would attempt to remove tariffs by the same date 
    but countries could delay tariff removal until 1 January 2002 on a case 
    by case basis for a limited number of specific products.
        The proposal calls for the commencement to tariff cuts on all other 
    products with the goal of eliminating tariffs by 1 January 2002, but 
    accepts that in special circumstances and on a case by case basis 
    elimination could be delayed to 1 January 2004.
    
    G. Non-Tariff Measures
    
        As part of the original APEC EVSL agreed to in November 1997, APEC 
    economies agreed to hire a consultant to undertake a study of non-
    tariff measures which may be affecting trade in the forest products 
    sector. This past April, APEC issued a request for proposals for the 
    study. The United States is the APEC coordinator for the study. Under 
    the terms of reference, the study will include:
    
    --A comprehensive inventory of non-tariff measures and other policies 
    affecting trade in forest products;
    --An identification of the most frequently used measures and policies;
    --A qualitative and quantitative analysis of the impact of these 
    measures/policies on trade, including a broader analysis of the policy 
    goals underlying those measures/policies and the economic and 
    environmental costs and benefits stemming from their application.
    
        APEC members have been asked to notify and cross notify on NTMs in 
    effect in their own economies and the economies of other APEC members. 
    The study is to be completed by August 30, 1999, after which an APEC 
    forest experts groups will formulate appropriate recommendations for 
    the voluntary elimination of any unjustified measures identified in the 
    report. APEC economies are then to submit individual, voluntary reports 
    on timetables for the implementation of those recommendations.
    
    H. Economic and Technical Cooperation
    
        Four proposals have been received to date for projects under the 
    environmental and technical cooperation (Ecotech) portion of the APEC 
    EVSL. APEC economies have agreed that Ecotech cooperation projects in 
    support of the forestry initiative should be focused on programs which 
    further environmental goals, such as forest fire prevention, pest 
    control, and adoption of sound phytosanitary standards. The four 
    Ecotech projects under consideration are
    
    --Projects to increase communities' forestry knowledge and their 
    ability to develop solutions to such issues as forest resource 
    assessment using criteria and indicators;
    --Enhancement of local industry development in a sustainable manner 
    through training programs on sustainable forest management;
    --Cooperation to enhance collaborative work on forest fire prevention 
    and management systems and development of fire monitoring and 
    information systems; and
    --Cooperation in such areas as (1) enhanced infrastructure, personnel 
    and exchange of information on standards and technical regulations in 
    the sector; (2) making information and training programs available on 
    paper making, paper stock collection and utilization, recycling and 
    waste reduction, panel production, furniture design, finishing and 
    packaging, and builder's carpentry and joinery design; (3) enhancing 
    transparency in customs procedures applied to the forestry sector 
    through the Subcommittee on Customs Procedures of the APEC Committee on 
    Trade and Investment; (4) promoting exchange of market information 
    through cooperation among relevant organizations; and (5) improving 
    information and monitoring systems associated with harmful pests.
    
    2. Written Comments
    
        Persons wishing to submit written comments in response to this 
    notice should provide 20 copies no later than 30 days from the date of 
    this notice to Gloria Blue, Executive Secretary, Trade Policy Staff 
    Committee, ATTN: Forest Products ATL, Office of the U.S. Trade 
    Representative, Room 122, 600 Seventeenth Street, NW, Washington, DC 
    20508. Any business confidential submissions must be clearly marked as 
    such on cover page and succeeding page. Such submission must be 
    accompanied by a non-confidential summary thereof.
        Non-confidential submissions will be available for public 
    inspection at the USTR Reading Room, Room 101, Office of the U.S. Trade 
    Representative, 600 Seventeenth Street, NW, Washington, DC. An 
    appointment to review the file may be made by calling Brenda Webb at 
    (202) 395-6186. The Reading Room is open to the public from 10 a.m. to 
    12 noon and from 1 p.m. to 4 p.m., Monday through Friday.
    Frederick L. Montgomery,
    Chairman, Trade Policy Staff Committee.
    Dinah Bear,
    General Counsel, Council on Environmental Quality.
    [FR Doc. 99-16242 Filed 6-24-99; 8:45 am]
    BILLING CODE 3190-01-M
    
    
    

Document Information

Published:
06/25/1999
Department:
Council on Environmental Quality
Entry Type:
Notice
Action:
Request for written public comment.
Document Number:
99-16242
Pages:
34304-34306 (3 pages)
PDF File:
99-16242.pdf