03-18957. Establishment of a Petition Process To Review Eligibility of Countries for the Benefits of the Andean Trade Preference Act, as Amended by the Andean Trade Promotion and Drug Eradication Act

AGENCY:

Office of the United States Trade Representative.

ACTION:

Final rule.

SUMMARY:

This final rule provides for the establishment of a petition process to review the eligibility of countries for the benefits of the Andean Trade Preference Act, as amended by the Andean Trade Promotion and Drug Eradication Act.

DATES:

This final rule is effective on July 25, 2003.

FOR FURTHER INFORMATION CONTACT:

Bennett M. Harman, Office of the Americas, Office of the United States Trade Representative at [phone].

SUPPLEMENTARY INFORMATION:

The Trade Act of 2002 (Pub. L. 107-210) (Trade Act) includes the “Andean Trade Promotion and Drug Eradication Act” (ATPDEA), which contains provision on enhanced trade benefits for eligible Andean countries. The ATPDEA renews and amends the Andean Trade Preference Act (ATPA) (19 U.S.C. 3201 et seq.) Section 3103(d) of the ATPDEA requires the President to promulgate regulations regarding the review of eligibility of articles and countries for the benefits of the ATPA, consistent with section 203(e) of the ATPA, as amended by the ATPDEA, not later than 180 days after the date of enactment of the Trade Act of 2002. The Trade Act was enacted on August 6, 2002. In Executive Order 13277 of November 19, 2002, the President assigned this function to the U.S. Trade Representative (USTR).

Section 203(e) of the ATPA, as amended, gives the President the authority to withdraw or suspend the designation of any ATPA or ATPDEA beneficiary country, or withdraw, suspend, or limit the application of preferential treatment under the ATPA, as amended by the ATPDEA, to any article of any such country, if the President determines that, as a result of changed circumstances, the country is not meeting the eligibility criteria of the ATPA and ATPDEA. Section 203(e) also establishes certain procedural guidelines for taking any of the actions described above.

An interim rule, on a final and emergency basis, was published in the Federal Register (68 FR 5542) for public comment on February 4, 2003. Consistent with section 3103(d)(2) of the ATPDEA, the interim rule was similar to the regulations governing the annual review used to modify the U.S. Generalized System of Preferences (GSP), which is authorized by title V of the Trade Act of 1974 (19 U.S.C. 2461 et seq.), as amended. The interim rule established an annual review that allows for public input, and includes procedures for requesting the withdrawal, suspension, or limitation of preferential duty treatment under the ATPA, as amended, and for reviewing such requests and implementing granted requests. USTR received two submissions with several comments on the interim rule. The following summarizes the comments and USTR's response to them. USTR has also made technical changes to the final regulations that do not affect the substance of the provision.

Comments

1. Public Comment: The regulations must provide for an article eligibility review as well as a country eligibility review.

USTR Response: The interim rule, consistent with section 203(e) of the ATPA, as amended, and section 3103(d) of the ATPDEA, addressed the issue of article eligibility in the context of country eligibility. The commenter suggests that the ATPDEA also requires the regulations to allow for petitions to add articles pursuant to section 204(b)(1) of the ATPA, as amended, which gives the President authority to proclaim certain articles as eligible for duty-free treatment under the ATPA if he determines that an article is not “import-sensitive in the context of imports from ATPDEA beneficiary countries.”

In response, USTRA notes first that section 3103(d)(1) requires the President to promulgate regulations regarding the review of eligibility of articles and countries under the ATPA, consistent with section 203(e). As noted above, the President assigned this function to the USTR per Executive Order. Section 203(e) gives the President the authority to withdraw or suspend the designation of any ATPA or ATPDEA beneficiary country, or withdraw, suspend, or limit the application of preferential treatment under the ATPA, as amended by the ATPDEA, to any article of any such country, if the President determines that, as a result of changed circumstances, the country is not meeting the eligibility criteria of the ATPA and ATPDEA. Section 203(e) also establishes certain procedural guidelines for taking any of the actions described above. Second, section 3103(d)(2) requires the regulations to “include procedures for requesting withdrawal, suspension, or limitations of preferential duty treatment” under the ATPA.

Section 3103(d)(1) calls for the President (the USTR, by delegation) to promulgate regulations regarding the review of eligibility of articles and countries under the ATPA, “consistent with section 203(e).” Section 203(e) refers solely to the withdrawal, suspension, or limitation of preferential duty treatment, and makes no reference to procedures for adding articles to the list of those eligible for preferential treatment. Moreover, section 3103(d)(2), which addresses the content of the regulations that must be promulgated, refers exclusively to procedures for requesting “withdrawal, suspension, or limitations” of preferential duty treatment under the ATPA, making no mention of procedures for adding articles. Thus. USTR does not agree that regulations implementing section 3103(d) must include procedures for adding articles pursuant to section 204(b)(1).

2. Public Comment: The regulations must be revised to expressly include the possibility of restoring benefits for an article for which benefits have been withdrawn, suspended, or limited.

USTR Response: Neither the GSP regulations, section 203(e) of the ATPA, as amended, nor section 3103(d) of the ATPDEA addresses the possibility of restoring benefits for an article for which benefits have been withdrawn, suspended, or limited. Consequently, USTR does not consider that it is required to include in the regulations procedures for restoring benefits. However, the ATPA provides authority for the President to restore benefits that were withdrawn, suspended, or limited pursuant to section 203(e) if he determines that the country in question has resumed compliance with the eligibility criteria of the ATPA, as amended by the ATPDEA.

3. Public Comment: The procedures set out in the regulations should more closely adhere to those in the GSP regulations, in particular by limiting the right to file petitions to “interested parties,” by establishing a petition process for adding products to the list of eligible articles, and by creating procedures for submitting economic data in support of such petitions.

USTR Response: This commenter makes three recommendations. First, the commenter suggests that the ATPA regulations, like the GSP regulations at 15 CFR 2007.0, should limit the right to file a petition to “interested parties.” However, only the GSP provision that addresses petitions related to product eligibility under the GSP program, 15 CFR 2007.0(a), limits the right to petition to “interested parties.” By contrast, the section of the GSP regulations that addresses country eligibility, 15 CFR 20007.0(b), affords the right to petition to “any person.” Section 3103(d)(1) of the ATPDEA calls for regulations consistent with section 203(e) of the ATPA, which addresses both country and product eligibility. However, section 203(e) provides that any action to remove benefits for products must be based on a determination that a country no longer meets the eligibility criteria for ATPA benefits. It would be inappropriate to limit petitions addressing the broad range of issues related to a country's eligibility for benefits under the ATPA solely to “interested parties,” as that term is defined in 15 CFR 2007.0(d). Rather, “any person” should be eligible to raise concerns about whether a country is continuing to meet the relevant eligibility criteria. Therefore, consistent with the broader approach to country eligibility petitions in the GSP regulations, the final ATPA regulations will permit “any person” to submit a petition seeking either the suspension or withdrawal of country eligibility or duty-free treatment. (The interim final rule inadvertently referred to “any person” as “any party” in several places. That error has been corrected in the final regulations.)

Second, the commenter suggests that the ATPA regulations should be similar to the GSP regulations in that they should contain procedures for adding products in accordance with section 204(b)(1) of the ATPA, as amended. This recommendation is addressed in response to the first public comment above.

Lastly, the commenter suggests that, if USTR amends the regulations to authorize petitions that seek to add products in accordance with section 204(b)(1) of the ATPA, as amended, USTR should spell out the information to be provided in support of such petitions. Because USTR has decided not to amend the interim rule in the manner suggested, it is not necessary to address this recommendation.

4. Public Comment: Columbia should meet its commitment to cease applying a price band adjustment to imports of dry pet food.

USTR Response: This comment was previously submitted in response to USTR notice, published in the Federal Register on August 15, 2002 (67 FR 53379), requesting public comment on the designation of eligible countries as ATPDEA beneficiary countries. The interagency Andean subcommittee of the Trade Policy Staff Committee (TPSC) has already considered and acted on this comment.

The Regulatory Flexibility Act and Executive Order 12866

Under the Regulatory Flexibility Act, a Regulatory Flexibility Analysis is not required under sections 603 or 604 because USTR is not publishing a Notice of Proposed Rulemaking. This final rule is significant under Executive Order 12866 of September 30, 1993, and has been review by the Office of Management and Budget.

List of Subjects in 15 CFR Part 2016

• Administrative practice and procedure
• Confidential business information
• Foreign Trade

For the reasons set out in the SUPPLEMENTARY INFORMATION section of this document, 15 CFR part 2016 revised to read as follows:

PART 2016—PROCEDURES TO PETITION FOR WITHDRAWAL OR SUSPENSION OF COUNTRY ELIGIBILITY OR DUTY-FREE TREATMENT UNDER THE ANDEAN TRADE PREFERENCE ACT (ATPA), AS AMENDED

2016.0

Requests for reviews.

2016.1

Action following receipt of petitions.

2016.2

Timetable for reviews.

2016.3

Publication regarding requests.

2016.4

Information open to public inspection.

2016.5

Information exempt from public inspection.

Authority: 19 U.S.C. 3201, et seq.; sec. 3103(d), Pub. L. 107-210; 116 Stat. 933; E.O. 13277, 67 FR 70303.

§ 2016.0

Requests for reviews

(a) Any person may submit a request (hereinafter “petition”) that the designation of a country as an Andean Trade Preference Act (ATPA) beneficiary country be withdrawn or suspended, or the application of preferential treatment under the ATPA to any article of any ATPA beneficiary country be withdrawn, suspended, or limited. Such petitions should: include the name of the person or the group requesting the review; identify the ATPA beneficiary country that would be subject to the review; if the petition is requesting that the preferential treatment of an article or articles be withdrawn, suspended, or limited, identify such article or articles with particularity and explain why such article or articles were selected; indicate the specific section 203(c) or (d) (19 U.S.C. 3202(c), (d)) eligibility criterion that the petitioner believes warrant(s) review; and include all available supporting information. The Andean Subcommittee of the Trade Policy Staff Committee (TPSC) may request other information. If the subject matter of the petition was reviewed pursuant to a previous petition, the petitioner should consider providing the Andean Subcommittee with any new information related to the issue.

(b) Any person may submit a petition that the designation of a country as an Andean Trade Promotion and Drug Eradication At (ATPDEA) beneficiary country be withdrawn or suspended, or the application of preferential treatment to any article of any ATPDEA beneficiary country under section 204(b)(1), (3), or (4) (19 U.S.C.. 3202(b)(1), (3), (4)) be withdrawn, suspended, or limited. Such petitions should: Include the name of the person or the group requesting the review; identify the ATPDEA beneficiary country that would be subject to the review; if the petition is requesting that the preferential treatment of an article or articles be withdrawn, suspended, or limited, identify such article or articles with particularity and explain why such article or articles were selected; indicate the specific section 204(b)(6)(B) (19 U.S.C. 3203(b)(6)(B)) eligibility criterion or criteria that the petition believes warrant(s) review; and include all available supporting information. The Andean Subcommittee may request other information. If the subject matter of the petition was reviewed pursuant to a previous petition, the petitioner should consider providing the Andean Subcommittee with any new information related to the issue.

(c) All petitions and other submissions should be submitted in accordance with the schedule (see § 2016.2) and requirements for submission that The Office of the United States Trade Representative (USTR) will publish annually in the Federal Register in advance of each review. Foreign governments may make submission in the form of diplomatic correspondence and should observe the deadlines for each annual review published in the Federal Register.

(d) The TPSC may at any time, on its own motion, initiate a review to determine whether: the designation of a country as an ATPA beneficiary country should be withdrawn or suspended; the application of preferential treatment under the ATPA to any article of any ATPA beneficiary country should be withdrawn, suspended, or limited; the designation of a country as an ATPDEA beneficiary country should be withdrawn or suspended; or the application of preferential treatment to any article of any ATPDEA beneficiary country under section 204(b)(1), (3), or (4) (19 U.S.C. 3202(b)(1), (3), or (4) should be withdrawn, suspended, or limited.

(e) Petitions requesting the action described in paragraph (a) or (b) of this section that indicate the existence of exceptional circumstances warranting an immediate review may be considerd outside of the schedule for the annual review announced in the Federal Register. Requests for such urgent consideration should contain a statement of reasons indicating why an expedited review is warranted.

§ 2016.1

Action following receipt of petitions.

(a) USTR shall publish in the Federal Register a list of petitions filed in response to the announcement of the annual review, including the subject matter of the request and, where appropriate, the description of the article or articles covered by the request.

(b) Thereafter, the Andean Subcommittee shall conduct a preliminary review of the petitions, and shall submit the results of its preliminary review to the TPSC. The TPSC shall review the work of the Andean Subcommittee and shall conduct further review as necessary. The TPSC shall prepare recommendations for the President on any proposed action to modify the ATPA. The Chairman of the TPSC may, as appropriate, convene the Trade Policy Review Group (TPRG) to review the matter, and thereafter refer the matter to the USTR for Cabinet-level review as necessary.

(c) The USTR, after receiving the advice of the TPSC, TPRG, or Cabinet-level officials, shall make recommendations to the President on any proposed action to modify the application of the ATPA's benefits to countries or articles. The President (or if that function is delegated to the USTR, the USTR) shall announce in the Federal Register any such action he proposes to take. The USTR shall announce in the Federal Register notice of the results of the preliminary review, together with a schedule for receiving public input regarding such proposed action consistent with section 203(e) of the ATPA, as amended (19 U.S.C. 3202(e)).

(1) The schedule shall include the deadline and guidelines for any person to submit written comments supporting, opposing or otherwise commenting on any proposed action.

(2) The schedule shall also include the time and place of the public hearing, as well as the deadline and guidelines for submitting requests to present oral testimony.

(d) After receiving and considering public input, the Andean Subcommittee shall submit the results of the final review to the TPSC. The TPSC shall review the work of the Andean Subcommittee and shall conduct further review as necessary. The TPSC shall prepare recommendations for the President on any proposed action to modify the application of benefits under the ATPA to countries or articles. The Chairman of the TPSC may, as appropriate, convene the TPRG to review the matter, and thereafter refer the matter to the USTR for Cabinet-level review as necessary. The USTR, after receiving the advice of the TPSC, TPRG, or Cabinet-level officials, shall make recommendations to the President on any proposed action to modify the application of the ATPA's benefits to countries or articles, including recommendations that no action be taken. The USTR shall also forward to the President any documentation necessary to implement the recommended proposed action or actions to modify the application of the ATPA's benefits to countries or articles.

(e) In considering whether to recommend any proposed action to modify the ATPA, the Andean Subcommittee, on behalf of the TPSC, TPRG, or Cabinet-level officials, shall review all relevant information submitted in connection with a petition or otherwise available.

§ 2016.2

Timetable for reviews.

Beginning in calendar year 2003, reviews of pending petitions shall be conducted at least once each year, according to the following schedule, unless otherwise specified by Federal Register notice:

(a) September 15: Deadline for submission of petitions for review;

(b) On or about December 1: Announcement published in the Federal Register of the results of preliminary review;

(c) Decemeber/January: Written comments submitted and a public hearing held on any proposed actions;

(d) February/March: Preparation of recommendations to the President, Presidential decision, and implementation of Presidential decision.

§ 2016.3

Publication regarding requests.

Following the Presidential decision and where required, the publication of a Presidential proclamation modifying the application of benefits under the ATPA to countries or articles in the Federal Register, USTR will publish a summary of the decisions made in the Federal Register, including:

(a) For petitions on which decisions were made, a description of the outcome of the review; and

(b) A list of petitions on which no decision was made, and thus which are pending further review.

§ 2016.4

Information open to public inspection.

With the exception of information subject to § 2016.5, any person may, on request, inspect in the USTR Reading Room:

(a) Any written petition, comments, or other submission of information made pursuant to this part; and

(b) Any stenographic record of any public hearings held pursuant to this part.

§ 2016.5

Information exempt from public inspection.

(a) Information submitted in confidence shall be exempt from public inspection if USTR determines that the disclosure of such information is not required by law.

(b) A person requesting an exemption from public inspection for information submitted in writing shall clearly mark each page “BUSINESS CONFIDENTIAL” at the top, and shall submit a non-confidential summary of the confidential information. Such person shall also provide a written explanation of why the material should be so protected.

(c) A request for exemption of any particular information may be denied if USTR determines that such information is not entitled to exemption under law. In the event of such a denial, the information will be returned to the person who submitted it, with a statement of the reasons for the denial.

John K. Veroneau,

General Counsel.