[Federal Register Volume 61, Number 109 (Wednesday, June 5, 1996)]
[Notices]
[Pages 28626-28627]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-13993]
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OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE
[Docket No. 301-87]
Notice of Agreement; Monitoring and Enforcement Pursuant to
Sections 301 and 306: Canadian Exports of Softwood Lumber
AGENCY: Office of the United States Trade Representative.
ACTION: Notice of monitoring and determination.
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SUMMARY: On May 29, 1996, the United States and Canada entered into an
agreement on trade in softwood lumber, with effect form April 1, 1996.
This agreement is intended to provide a satisfactory resolution to
certain acts, policies and practices of the Government of Canada
affecting exports to the United States of softwood lumber that were the
subject of an investigation initiated by the United States Trade
Representative (``USTR'') under section 302(b)(1)(A) of the Trade Act
of 1974 (the Trade Act) and that were found to be unreasonable and to
burden or restrict U.S. commerce pursuant to section 304(a) on October
4, 1991. The USTR has determined that this agreement will be subject to
the provisions of section 306 of the Trade Act and that USTR will
monitor Canadian compliance with this agreement pursuant to section 306
of the Trade Act and will take action under section 301(a) if Canada
fails to comply with it.
DATES: The U.S.-Canada agreement on trade in softwood lumber was signed
on May 29, 1996.
ADDRESSES: Office of the United States Trade Representative, 600 17th
Street, NW, Washington, D.C. 20508.
FOR FURTHER INFORMATION CONTACT:
Gordana Earp, Deputy Assistant United States Trade Representative for
Industry, (202) 395-6160; or William Kane, Associate General Counsel,
(202) 395-6800 (for legal issues).
SUPPLEMENTARY INFORMATION: On October 4, 1991, Canada unilaterally
terminated a Memorandum of Understanding (MOU) dated December 30, 1986,
between the United States and Canada under which, among other things,
Canada had imposed a 15 percent export charge on certain softwood
lumber products exported to the United States. The MOU had been entered
into to settle a pending countervailing duty (CVD) proceeding examining
subsidies and injury with respect to imports of Canadian softwood
lumber. As of October 4, 1991, Canada ceased collecting export charges
under that MOU to offset possible injurious subsidies. In response, on
October 4, 1991, (a) the U.S. Department of Commerce announced that it
would self-initiate a CVD investigation on softwood lumber from Canada,
and (b) the USTR initiated an investigation pursuant to section
302(b)(1)(A) of the Trade Act (19 U.S.C. 2412(b)(1)(A)) and pursuant to
section 304(a) of the Trade Act determined that Canada's acts, policies
and practices regarding the exportation of softwood lumber to the
United States were unreasonable and burdened or restricted U.S.
commerce. 56 FR 50738 (October 8, 1991) as amended by 46 FR 58944
(November 22, 1991).
USTR further determined that action was appropriate under section
301 of the Trade Act to restore and maintain the status quo ante
pending issuance of a preliminary CVD determination, and, if warranted,
to impose duties to offset any subsidies found in the investigation.
Commerce issued its preliminary CVD determination on March 12, 1992 and
its final affirmative CVD determination on May 28, 1992.
Both the domestic industry and affected Canadian parties appealed
Commerce's final subsidy determination to binational panels established
pursuant to Chapter 19 of the U.S.-Canada Free Trade Agreement (FTA).
Following completion of the panel proceedings, and a decision by an
Extraordinary Challenge Committee (ECC) established pursuant to FTA
Article 1904.13 affirming the results of those proceedings, Commerce--
although it expressed disagreement with the panel's findings--on August
16, 1994, revoked the CVD order on softwood lumber from Canada. 59 FR
42029 (Aug. 16, 1994). USTR subsequently terminated the action taken
under section 301. 59 FR 52846 (October 19, 1994).
In response to the decisions of the binational panel and the ECC,
the domestic industry filed a complaint with the United States Court of
Appeals for the District of Columbia Circuit on September 14, 1994,
challenging Chapter 19 of the FTA. On December 15, 1994, in order to
create a process that could ultimately settle the dispute arising from
the unilateral termination in 1991 of the MOU by Canada, and in
conjunction with the domestic industry's withdrawal of its challenge to
Chapter 19 of the FTA, the United States and Canada agreed to establish
a consultative process regarding trade in softwood lumber. The process
included the participation of the U.S. Government, Canadian federal and
provincial governments, and where appropriate, industries and other
interested parties in both countries.
As a result, on May 29, 1996, the United States and Canada entered
into an agreement on trade in softwood lumber, with effect from April
1, 1996. During its five-year term, the agreement will foster stable
growth in the North American softwood lumber market and ensure fair and
competitive trade for U.S. firms and workers by addressing the
disruptive effects of unprecedented high levels of Canadian imports
previously found by the U.S. Department of Commerce to be subsidized.
The agreement requires
[[Page 28627]]
Canada to assess fees on any softwood lumber shipped from its four
leading producing provinces in excess of 14.7 billion board feet in
each of the next five years. The agreement establishes procedures for
export licensing and information collection that will greatly
facilitate scrutiny of cross-border lumber trade, and for expedited
determinations of whether Canada is carrying out its obligations under
the agreement. Copies of the agreement are available to the public in
the USTR reading room.
The agreement is intended to provide a satisfactory resolution to
the acts, policies and practices of Canada regarding the exportation of
softwood lumber to the United States that were the subject of the
investigation initiated under section 302(b)(1)(A) of the Trade Act and
found to be unreasonable and to burden or restrict U.S. commerce
pursuant to section 304(a) on October 4, 1991. Section 306 of the Trade
Act (19 U.S.C. 2416) requires the USTR to monitor the implementation of
each measure undertaken, or agreement that is entered into to provide a
satisfactory resolution of a matter subject to a section 301
investigation. Section 306 further requires that, if the USTR considers
that a country is not satisfactorily implementing a measure or
agreement, the USTR shall determine what further action to take under
section 301(a).
Adherence to the terms of the agreement is vital to the achievement
of its objectives. USTR, the Department of Commerce, the U.S. Customs
Service, and other agencies as appropriate, will carefully monitor and
vigorously enforce this agreement. To that end, Customs will provide
USTR and Commerce the data that Customs collects on imports (including
province of origin and the type of permit) of softwood lumber from
Canada. If data, including data provided by the domestic industry,
reveal that export fees called for under the agreement are not being
collected, or if other information, including information provided by
the domestic industry, reveals that Canada is in material non-
compliance with any other of its obligations under the agreement, USTR
will invoke the dispute settlement provisions of the agreement. I have
determined that if: (a) An audit under the agreement confirms that fees
have not been collected, and that action has not been taken
subsequently to collect the fees, (b) an arbitral panel finds that
Canada is otherwise not in conformity with the agreement, such as by
offsetting, reducing, or undercutting its obligations under the
agreement, and that the situation has not been cured, or (c) Canada
unilaterally suspends its performance of, or terminates, the agreement
in a manner inconsistent with the agreement, the USTR pursuant to
section 306(b) of the Trade Act will consider that Canada is not
satisfactorily implementing the agreement. In response, the USTR will
take prompt and effective action under section 301(a) of the Trade Act
to remedy Canada's failure to comply with the agreement, including, in
the case where the required export fees have not been collected and
action has not subsequently been taken to collect the fees, the
imposition of duties on softwood lumber from Canada commensurate with
Canada's failure to collect the fees under the agreement and sufficient
to ensure compliance with the agreement and, as appropriate, other
action to enforce or ensure compliance with the agreement.
Ira S. Shapiro,
Ambassador, Senior Counselor and Negotiator.
[FR Doc. 96-13993 Filed 6-4-96; 8:45 am]
BILLING CODE 3190-01-M
