[Federal Register Volume 63, Number 144 (Tuesday, July 28, 1998)]
[Proposed Rules]
[Pages 40193-40200]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-20156]
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Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
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Federal Register / Vol. 63, No. 144 / Tuesday, July 28, 1998 /
Proposed Rules
[[Page 40193]]
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DEPARTMENT OF AGRICULTURE
Animal and Plant Health Inspection Service
7 CFR Part 319
[Docket No. 96-031-1]
RIN 0579-AA82
Importation of Wood Chips From Chile
AGENCY: Animal and Plant Health Inspection Service, USDA.
ACTION: Proposed rule.
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SUMMARY: We are proposing to amend the regulations for importing logs,
lumber, and other unmanufactured wood articles. We believe that a
surface pesticide treatment is effective in rendering large shipments
of Pinus radiata wood chips from Chile free of plant pests. Therefore,
we are proposing to allow the importation of Pinus radiata wood chips
from Chile if the surfaces of the wood chips are treated with a
specified pesticide mixture for use on wood chips from Chile. This
change would provide more alternatives for persons interested in
importing wood chips from Chile while continuing to protect against the
introduction of dangerous plant pests.
DATES: Consideration will be given only to comments received on or
before September 28, 1998.
ADDRESSES: Please send an original and three copies of your comments to
Docket No. 96-031-1, Regulatory Analysis and Development, PPD, APHIS,
suite 3C03, 4700 River Road Unit 118, Riverdale, MD 20737-1238. Please
state that your comments refer to Docket No. 96-031-1. Comments
received may be inspected at USDA, room 1141, South Building, 14th
Street and Independence Avenue SW., Washington, DC, between 8 a.m. and
4:30 p.m., Monday through Friday, except holidays. Persons wishing to
inspect comments are requested to call ahead on (202) 690-2817 to
facilitate entry into the comment reading room.
FOR FURTHER INFORMATION CONTACT: Mr. Ronald Campbell, Operations
Officer, Program Support Staff, PPQ, APHIS, 4700 River Road Unit 60,
Riverdale, MD 20737-1236, (301) 734-8295; or e-mail:
rcampbell@aphis.usda.gov.
SUPPLEMENTARY INFORMATION: Analyses.
Background
Logs, lumber, and other unmanufactured wood articles imported into
the United States could pose a significant hazard of introducing plant
pests and pathogens detrimental to agriculture and to natural,
cultivated, and urban forest resources. The regulations in 7 CFR
319.40-1 through 319.40-11 (referred to below as the regulations)
contain provisions to eliminate any significant plant pest risk
presented by the importation of logs, lumber, and other unmanufactured
wood articles.
Wood Chips and Proposed Treatment
Approximately $40 million worth of wood chips is imported into the
United States each year for use in making pulp for paper production.
Section 319.40-6(c) of the regulations requires that wood chips from
any place except certain places in Asia may be imported if, among other
things, they were (1) derived from live, healthy, tropical species of
plantation-grown trees grown in tropical areas; or, (2) fumigated with
methyl bromide, heat treated, or heat treated with moisture reduction,
in accordance with the regulations in Sec. 319.40-7. (Section 319.40-7
of the regulations, ``Treatments and safeguards,'' sets forth the
methods by which certain treatments and safeguards required by the
regulations must be conducted.)
We propose to establish a new set of requirements for importing
Monterey pine wood chips from Chile. Pinus radiata (also known as
Monterey pine) wood chips from Chile are in demand in the United States
for use in making high quality paper pulp. Several commercial
processors of wood chips in the United States have requested that the
Animal and Plant Health Inspection Service (APHIS) consider allowing
the importation of Pinus radiata wood chips from Chile if they are
treated with a surface pesticide. Since February 1995, APHIS has
supervised approximately 16 trial shipments to the United States of
Pinus radiata wood chips from Chile that were treated with a surface
pesticide. The surface pesticide consisted of a mixture of a fungicide
containing 64.8 percent of the active ingredient didecyl dimethyl
ammonium chloride and 7.6 percent of the active ingredient 3-Iodo-2-
propynl butylcarbamate, and an insecticide containing 44.9 percent of
the active ingredient chlorphrifos phosphorothioate. At a facility
located at a port in Chile, the wood chips were sent through a chute as
they were loaded onto the ship. As the chips were passing through the
chute, they were sprayed with the pesticide from all sides, so that
each chip was coated with the pesticide. All of the shipments arrived
in the United States apparently free from any live plant pests.
Based on the success of the trial shipments, we have determined
that wood chips from Chile can be imported with negligible risk into
the United States after treatment in the manner described above with
any pesticide mixture consisting of a fungicide containing 64.8 percent
of the active ingredient didecyl dimethyl ammonium chloride and 7.6
percent of the active ingredient 3-Iodo-2-propynl butylcarbamate, and
an insecticide containing 44.9 percent of the active ingredient
chlorphrifos phosphorothioate.
Section 319.40-6 of the regulations contains universal importation
provisions for the importation of specified articles, including wood
chips. We are proposing to revise Sec. 319.40-6(c) to allow Pinus
radiata wood chips from Chile to be imported after receiving the
surface pesticide treatment described above.
At this time, we would add provisions for surface pesticide
treatment only for Pinus radiata wood chips from Chile. There have been
no requests for allowing the use of a surface pesticide treatment on
any wood chips other than Pinus radiata wood chips from Chile. Further,
we cannot conclude that the method of treatment used in the trial
shipments from Chile would be effective on any species other than Pinus
radiata. APHIS conducted a pest risk assessment for Pinus radiata in
Chile in September 1993. New Zealand is the only other country for
which a pest risk assessment has been conducted concerning Pinus
radiata. The pests determined by the pest risk assessment to attack
Pinus
[[Page 40194]]
radiata in New Zealand are not the same as the pests of concern in
Chile. Therefore, even though the species would be the same, we cannot
conclude that the method of treatment used for Pinus radiata wood chips
from Chile would be effective on the pests that attack Pinus radiata in
New Zealand. In addition, New Zealand does not have the facilities
necessary to treat large amounts of wood chips with a surface
pesticide. If, in the future, there appears to be a demand for wood
chips other than Pinus radiata or from a country other than Chile to be
imported using a surface pesticide treatment, APHIS would determine at
that time what kind of research would be necessary to assess whether or
not such treatment would be effective on that particular commodity.
However, the pest risk assessment conducted in 1993 for Pinus
radiata in Chile is still valid as the basis for the following
regulatory controls designed to mitigate to a negligible level the
risks of importing Pinus radiata wood chips from Chile.
To help ensure the Pinus radiata wood chips from Chile are free
from pests, we are proposing that several conditions be met in addition
to the surface pesticide treatment. We would require that the wood
chips be accompanied by a certificate stating that the wood chips were
derived from logs from live, healthy, plantation-grown trees that were
apparently free of plant pests, plant pest damage, and decay organisms,
and that the logs were debarked in accordance with Sec. 319.40-7(b)
before being chipped. (Section 319.40-7(b) sets forth tolerance levels
for amounts of bark that may be retained on a regulated article after
debarking.) These conditions are the same as current requirements for
the importation of Pinus radiata logs from Chile, with the exception of
the stipulation that the chips be from ``plantation-grown'' trees. We
would require that the wood chips be from plantation-grown trees
because the pest risk in a managed forest area is lower than in an
unmanaged forest.
We would also require that the certificate state that no more than
45 days elapsed from the time the trees used to make the chips were
felled to the time the wood chips were exported. This requirement would
reduce the opportunities for exposure of the logs to plant pests.
Additionally, we would require that the wood chips be consigned to
a facility in the United States operating under a compliance agreement
with APHIS, in accordance with Sec. 319.40-8 of the regulations.
(Section 319.40-8 concerns facilities that operate under compliance
agreements.) The compliance agreement would further ensure the safe
importation of the treated wood chips from Chile by specifying
safeguards and requirements to ensure that the processing method would
effectively destroy any plant pests, and by stating that APHIS
inspectors must be allowed access to the facility to monitor compliance
with the requirements of the compliance agreement and the regulations.
We would require that, during shipment to the United States, no
other regulated articles (other than solid wood packing materials)
would be permitted in the holds or sealed containers carrying the wood
chips, and that wood chips on the vessel's deck would have to be in a
sealed container. These requirements would control possible movement of
plant pests from other regulated articles.
We would also require that certain safeguards be applied upon
arrival of the wood chips in the United States. First, the wood chips
would have to be unloaded upon arrival by a conveyor which is covered,
to prevent the chips from being blown by the wind and from accidental
spillage. The facility receiving the wood chips would have to have a
procedure in place to retrieve any chips that fall during unloading. If
the chips must be transported after arrival, we would require that they
must be covered or safeguarded in a manner that prevents the chips from
spilling or falling off the means of conveyance, or from being blown
off the means of conveyance by wind. Once at the facility, the wood
chips would have to be stored on a paved surface and be kept segregated
from other regulated articles from the time of discharge from the means
of conveyance until the chips are processed. The storage area could not
be adjacent to wooded areas. Finally, the wood chips would have to be
processed, and any fines or unusable wood chips would have to be
disposed of by burning, within 60 days of arrival at the facility.
``Fines'' are small particles or fragments of wood, slightly larger
than sawdust, that result from chipping, sawing, or processing wood.
These safeguards would help remove any opportunities for movement of
plant pests from the wood chips, should there be any plant pests
present on the chips.
We also are proposing to revise Sec. 319.40-7(e), concerning
surface pesticide treatments, to allow for the use of any surface
pesticide treatment to qualify Pinus radiata wood chips from Chile for
importation that is a mixture of a fungicide containing 64.8 percent of
the active ingredient didecyl dimethyl ammonium chloride and 7.6
percent of the active ingredient 3-Iodo-2-propynl butylcarbamate and an
insecticide containing 44.9 percent of the active ingredient
chlorphrifos phosphorothioate. We would require that the fungicide and
insecticide be mixed using the proportions called for on the label
requirements.
We would further stipulate in Sec. 319.40-7(e) that the wood chips
must be sprayed with the surface pesticide treatment so that all the
chips are exposed to the chemical on all sides. The treatment method
used on the trial shipments from Chile would be acceptable under this
provision. Any other treatment method that accomplishes the goal of
spraying the chips so that they are exposed to the pesticide on all
sides would also be acceptable. Finally, we would require that, during
the interval between treatment and export, the wood chips would have to
be stored, handled, or safeguarded in a manner that prevents any
infestation of the wood chips by plant pests.
In the future, if we determine the pesticide mixture described in
this document, or any other pesticide treatment, is effective on plant
pests that could be carried on wood chips, we will propose amendments
to the regulations to allow for the importation of wood chips from that
country after receiving the surface pesticide treatment.
Executive Order 12866
This proposed rule has been reviewed under Executive Order 12866.
The rule has been determined to be significant for the purposes of
Executive Order 12866 and, therefore, has been reviewed by the Office
of Management and Budget.
Benefits from allowing Pinus radiata wood chips to be imported from
Chile include lower priced wood chips for pulp mills in the Pacific
Northwest, and lower priced products to consumers if lower input prices
are reflected in lower retail prices. Greater choice among species for
wood chip raw material is another benefit. Costs associated with risks
of introducing pests are negligible because the procedures required to
import Chilean wood chips under this rule are designed to keep the risk
of importing pests to a negligible level. Since imports will be
concentrated in the Pacific Northwest, impacts will be felt mainly by
wood chip producers and purchasers in the region. Wood chip producers
may bear revenue losses if they are unable to compete with lower cost
imports or adjust their product mix.
Test shipments of Pinus radiata wood chips from Chile to the
Pacific Northwest during recent years have demonstrated the
effectiveness of
[[Page 40195]]
phytosanitary safeguards proposed in this rule, as well as the economic
feasibility of chip imports from Chile for the region's pulp mills.
Chile's large and expanding forestry plantations are expected to
provide a reliable source for future wood chip imports when there is
sufficient demand. At present, the abundant supply of wood chips in the
Pacific Northwest precludes imports, a market situation that differs
dramatically from that of three years ago when wood chip prices reached
an all-time high. Pacific Northwest pulp mills depend primarily on
domestic wood chip suppliers, but turn to overseas sources when
domestic wood chip prices are high. Chilean imports can be expected to
be competitively marketed when the domestic wood chip supply is low,
since Pinus radiata wood chips can substitute for most other softwood
chips. Some domestic wood chip producers may be adversely affected by
Chilean imports, but the impact is not likely to be widespread; most
domestic wood chip producers that cannot compete may adjust their
product mix away from wood chips to other mill products.
Discussion
Under the Federal Plant Pest Act (7 U.S.C. 150aa-150jj), the
Secretary of Agriculture is authorized to promulgate regulations
requiring inspection of products and articles as a condition of their
movement into or through the United States, and imposing other
conditions upon such movement, in order to prevent the dissemination
into the United States of plant pests.
This proposed rule would amend the regulations for importing wood
chips to allow the importation of Pinus radiata wood chips from Chile
if the surfaces of the wood chips are treated with a pesticide approved
by the Administrator for use on wood chips from Chile. Allowing the use
of a surface pesticide treatment would make it possible to effectively
treat large shipments of wood chips. Wood chips are used for making
pulp used in the production of paper. U.S. pulp producers want to
import Pinus radiata wood chips from Chile because these wood chips
produce a high quality pulp. However, there is no treatment in the
regulations that is both practical and effective in treating large
shipments of these wood chips.
Current APHIS regulations call for, along with other requirements,
heat treatment or fumigation of imported wood materials. While these
safeguards are appropriate for solid wood products, they are less
useful for wood chips. Heating of wood chips is time consuming, and
fumigation of wood chips in ship holds can result in insufficient
treatment. Therefore, it is being proposed that importation of Pinus
radiata wood chips from Chile be allowed following their surface
treatment with a specified pesticide mixture. As discussed above, the
efficacy of this treatment is demonstrated by 16 trial shipments of
surface-treated Pinus radiata wood chips from Chile that have arrived
without pests since February 1995.
Approximately $40 million worth of wood chips is imported into the
United States each year for use in making pulp for paper production.
Coniferous wood chip imports by the U.S. comprise less than one percent
of domestic production.1 About 30 percent of U.S. wood chip
production takes place in the Pacific Northwest.2 Wood chip
imports to the United States have been mainly to the Pacific Northwest,
although there have been recent shipments of Caribbean pine from Brazil
that have entered through the port at Mobile, AL.
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\1\ Robert Flynn, private wood industry consultant, personal
communication, drawing in part on information from ``Southern
Pulpwood Production, 1996,'' by Tony Johnson, USDA Forest Service,
Southern Research Station, Resource Bulletin SRS-21.
\2\ Richard Haynes, USDA Forest Service, personal communication.
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Wood chips are used mainly in the manufacture of pulp, that is then
used to make paper and panel products.3 Test shipments of
Pinus radiata wood chips from Chile during the last three years have
been so utilized, and it is expected that future shipments facilitated
by the surface pesticide treatment proposed in this rule change would
also be used to make pulp.4
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\3\ Chris Twarok, Department of Commerce, personal
communication. Landscaping is a secondary use.
\4\ J.J. Morrell, Department of Forest Products, Oregon State
University, personal communication.
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The demand for wood chips used by pulp mills is a derived demand,
depending on the market for pulp.5 While the long-term
demand for pulp in the United States and internationally is expected to
continue to expand (with increasing reliance on wood from plantation
forests), pulp and wood chip prices can be volatile in the short term,
causing relatively abrupt market changes. The variable demand for wood
chips during the few years the Chilean test shipments have taken place
illustrates how rapidly market conditions can change. Coniferous wood
chip imports in 1995 by the United States nearly tripled those of 1994,
with imports from Canada rising more than threefold, and test shipments
from Chile doubling and displacing 1994 imports from
Mexico.6 The increase in demand was reflected in a 60
percent increase in the price paid in the United States for Chilean
wood chips, from $42 per ton in 1994, to $67 per ton in
1995.7 Comparable U.S. prices for domestically produced wood
chips in these two years were $56 per ton in 1994 and $72 per ton in
1995.8 Since then, prices have receded due to the current
abundant supply of wood chips.
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\5\ The pulp fiber industry has traditionally been a softwood
chip market, but this has been changing in recent years in the
eastern United States. Pulp mills in the southeastern United States
are relying increasingly on hardwood chips, where only softwood
chips were once used. Long-term rising demand for wood chips is also
reflected in an increasing number of ``chipping'' mills producing
only wood chips; at least 100 of more than 140 wood chip mills in
the southeastern United States have been constructed within the past
decade. (Dennis Haldeman and Doug Sloane, personal communications)
\6\ U.S. wood chip import and export statistics from Department
of Commerce, Bureau of the Census.
\7\ FAS Global Agricultural Trade System, using data from the
United Nations Statistical Office.
\8\ Richard Haynes, USDA Forest Service, personal communication.
Domestic prices based on export prices for the Columbia-Snake
Customs District, adjusted to ``green'' metric tons. Without
consideration of transportation costs, these quoted prices may
overestimate the price realized at a Pacific Northwest pulp mill for
U.S. chips and underestimate the price realized for Chilean chips.
Moreover, average yearly prices conceal seasonal variations.
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Chile's coniferous wood chip exports to the United States, 1994-
1996, and Chile's share of coniferous wood chip imports by the United
States, are as follows: 9
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\9\ FAS Global Agricultural Trade System, using data from the
United Nations Statistical Office
1994................................. 168 metric tons.............. 00.05 percent of imports.
1995................................. 339,665 metric tons.......... 48.29 percent of imports.
1996................................. 329,387 metric tons.......... 44.06 percent of imports.
In 1994, 57 percent of coniferous wood chip imports by the United
States were from Mexico and 43 percent were from Canada. In 1995, pulp
prices reached record levels, with U.S. coniferous wood chip imports
more than doubling from the year before, to 703,000 metric tons from
331,000 metric tons. That year, no coniferous wood
[[Page 40196]]
chips were imported from Mexico, 48 percent of imports came from Chile,
49 percent came from Canada, and 3 percent came from Brazil. In 1996,
Canada's share of U.S. coniferous wood chip imports increased to 56
percent, 44 percent came from Chile, and none was received from Brazil.
Production of Pinus radiata wood chips in the United States is
essentially nil, due to the relatively small region in which it grows
well, about six miles inland along the coastal fog belt of central
California (hence its common name, the Monterey pine). There may be
some production from sawmill residues, but the quantity, if any, is
negligible. No pulp mills are currently using domestically produced
Pinus radiata wood chips.10
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\10\ Robert Rummel, American Pulpwood Association; Robert Flynn,
Robert Flynn and Associates, personal communications.
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Impacts on the U.S. wood chip industry of potential Chilean
imports, therefore, depend on the substitutability of Pinus radiata
wood chips for other softwood or for hardwood chips. Instances in which
Pinus radiata and hardwood chips might substitute for each other are
relatively few. However, Pinus radiata wood chips can generally be used
in place of other coniferous chips such as lodgepole pine and ponderosa
pine, although milling adjustments may be required--and costs
incurred--due to differences in resin content 11. We invite
public comments on the magnitude of adjustment costs which would be
required to substitute Pinus radiata chips for those of species
commercially grown in the Pacific Northwest. We also invite comments on
the extent to which such costs would inhibit substitution, and the
economic consequences of such substitution.
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\11\ Chris Twarok, Department of Commerce, personal
communication.
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The test shipments of Chilean wood chips were received by pulp
mills in the Pacific Northwest. This region is expected to continue to
be the destination of future shipments, given the additional
transportation costs that would be incurred by pulp mills in the
eastern and southeastern United States. With sales regionally
concentrated, little impact from this rule is expected outside the
Pacific Northwest.
In sum, the test shipments from Chile have shown the value to
Pacific Northwest pulp mills of Chilean wood chips in supplementing
domestic and Canadian wood chip supplies when the price of pulp makes
such shipments economically feasible. Pulp mills able to adjust milling
processes to utilize Pinus radiata wood chips can benefit by making
profitable use of Chilean imports when other sources are insufficient
or more costly. As now described, Chile has the production capacity to
be a reliable source of Pinus radiata wood chips to the United States.
Chile's wood chip industry grew significantly during the 1980s,
with production increasing more than tenfold, from 0.44 million tons in
1984, to 5.03 million tons in 1990.12 Chile's wood chip
exports during this period rose from none in 1984, to 2.23 million tons
(44 percent of production) in 1990. During the first half of the 1990s,
both production and export levels fluctuated, but without the dramatic
increases of the 1980s. Annual production between 1990 and 1995
averaged about 5.80 million tons, and exports averaged about 3.05
million tons (about 53 percent of production).
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\12\ Information on Chile's wood chip production and exports
taken from Wood Products: International Trade and Foreign Markets,
FAS Circular Series WP 3-97, August 1997, Table 15.
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Pinus radiata wood chips comprise a minor share of Chile's wood
chip exports.13 Of the approximately 3 million tons of wood
chips exported annually between 1990 and 1996, Pinus radiata's share
averaged 12 percent. Between January and August, 1997, 10 percent of
Chile's wood chip exports were Pinus radiata.
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\13\ Information on Chile's Pinus radiata wood chip exports
compiled from data provided by APHIS-International Services.
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Japan was, by far, the principal importer of Chilean wood chips
from 1990 to 1996. (Country destinations by species are not known for
these years.) From 1990 to 1994, an average of 96 percent of Chile's
wood chip exports were received by Japan. With the test shipments of
Pinus radiata to the United States in 1995 and 1996, Japan's share of
Chile's wood chip exports fell to 87 percent and 83 percent,
respectively, and the United States' share for these two years was 9
percent and 11 percent.
From January to August, 1997, Japan's share of Chile's wood chip
exports was 89 percent. The United States and Japan each received about
one-half of Chile's Pinus radiata wood chip exports during this eight-
month period.
Chile's development of its forest products sector rests to a large
degree on the success of Pinus radiata; its share of Chile's wood chip
exports is expected to increase. By 1996 there were approximately
1,387,000 hectares planted in Pinus radiata, representing 75 percent of
plantation plantings, and 15 percent of Chile's forest resources
including native forest.14 This pine species matures at 20
to 24 years in Chile (thinnings are available for use after 15 years),
compared to 30 years in New Zealand and Australia, and 40 to 60 years
in North America and Europe. Production and exports are expected to
peak during the coming decade, when trees on most of the Pinus radiata
plantations will be ready to be harvested.
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\14\ ``Forest Products, Annual Report,'' Office of Agricultural
Affairs, American Embassy, Santiago, AGR Number CI7033, 1997.
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One set of projections describing the volume of Pinus radiata wood
chips that could be exported to the United States over the coming five
years, assuming favorable prices, is as follows: 15
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\15\ Fernando Hartwig, Inversiones Forestales C.C.A., personal
communication.
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Potential Pinus radiata wood
Year chip exports from Chile to the
United States (million tons)
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1998................................... 0.56 to 0.70.
1999................................... 0.60 to 1.00.
2000................................... 1.00 to 1.20.
2001................................... 0.90 to 1.00.
2002................................... 0.85 to 0.90.
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Realization of these export levels will depend on the demand for
Pinus radiata wood chips by U.S. pulp mills. As has been described,
international short-term demand for pulp fibers can be volatile. When
prices fell between 1995 and 1996, Chile's forestry sector exports
declined by 24 percent, mainly because of reduced sales to Japan.
Chile's stock of Pinus radiata available for harvest will enable
Pacific Northwest importers to take advantage of a ready source as wood
chip prices rebound. In 1996, all coniferous wood chip imports by the
United States totaled about 0.75 million tons, of which 0.33 million
tons were imported from Chile.16 Projected export levels
shown above would increase U.S. wood chip imports above current levels,
and establish Chile as a major foreign supplier. Wood chip prices in
the United States will determine whether these projections are overly
optimistic.
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\16\ The United States is a net exporter of coniferous and
nonconiferous wood chips. Compared to coniferous wood chip imports
of 0.75 million tons in 1996, the United States exported 1.78
million tons. Nonconiferous wood chip imports and exports by the
United States exhibit an even larger difference, with 1996 imports
totaling about 55,000 tons and exports at 4.29 million tons.
(Department of Commerce, Bureau of the Census)
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[[Page 40197]]
Regulatory Flexibility Act
In accordance with 5 U.S.C. 603, we have performed an Initial
Regulatory Flexibility Analysis, which is set out below, regarding the
impact of this rule on small entities. However, we do not currently
have all the data necessary for a comprehensive analysis of the effects
of this rule on small entities. Therefore, we are inviting comments
concerning potential effects. In particular, we are interested in
determining the number of small entities that would be impacted by this
proposed rule, positively or negatively, in regards to the provisions
for allowing the importation of Pinus radiata wood chips from Chile. We
are also interested in information concerning the volume of wood chips
that may be imported from Chile under this proposed rule, and whether
or not the wood chips from Chile would be in competition with wood
chips produced in the United States.
The Regulatory Flexibility Act requires consideration of potential
impacts of rule changes on small businesses, organizations, and
governmental jurisdictions. In this instance, small entities directly
affected would be U.S. wood chip producers and pulp mills in the
Pacific Northwest.
Wood chip production is included in the SIC category for firms
operating sawmills and planing mills. In most cases, wood chips are a
by-product of lumber production. A mill will vary its level of wood
chip production (compared to other products) based on whether wood chip
prices are high or low at a particular point in time. In the Pacific
Northwest, about 150 mills produce wood chips (90 in Oregon and 60 in
Washington), but more than one may be owned by the same
firm.17 Data on the exact number of firms is not available.
Sawmills and planing mills that employ 500 people or fewer are
designated by the Small Business Administration as ``small.'' In 1994,
there were 5,241 firms operating sawmills and planing mills in the
United States, of which 5,149 (more than 98 percent) were
small.18 Estimated annual receipts of these 5,149 ``small''
firms totaled about $14.88 billion, which was 62 percent of total
annual receipts of about $23.93 billion earned by all sawmills and
planing mills. In the absence of information on mill firm sizes
specific to Oregon and Washington, it is assumed that most sawmills in
the Pacific Northwest are also small entities.
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\17\ Richard Haynes, USDA Forest Service, personal
communication.
\18\ This is the latest year for which data is available from
the ``SBA Office of Advocacy, Statistics on Small Business'' Web
home page.
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Adverse impacts on most ``small'' U.S. wood chip producers due to
this rule change will be minor. The Chilean imports are expected to be
sold in the Pacific Northwest, thereby affecting a geographical subset
of all wood chip producers. Adverse impacts on Pacific Northwest wood
chip producers will depend on the ability of such producers to find
lower priced raw materials to produce wood chips or otherwise reduce
cost, and the extent of their reliance on wood chips for their net
revenues. Producers of those wood chips that are substitutes for Pinus
radiata chips will find their net returns reduced when import prices
are low. As raw materials used for wood chip production grow
increasingly scarce and expensive in the Pacific Northwest, those wood
chip producers that compete with lower priced imports will face
adjustment pressures. However, U.S. wood chip producers already feel
competition from other international sources.
It is estimated that less than 5 percent of wood chip producers in
the Pacific Northwest are ``chipping'' mills devoted solely to wood
chip production.19 However, during periods of high wood chip
demand such as three years ago, many sawmills may be converted largely
to wood chip production.
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\19\ Richard Haynes, USDA Forest Service, personal
communication.
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Turning to the pulp mills, themselves, there were 37 firms
operating pulp mills in the United States in 1994. Often more than one
pulp mill is owned by a single firm. Pulp mill firms employing 750
people or fewer are designated by the Small Business Administration as
``small.'' In 1994, between 20 and 25 of the 37 firms were small, that
is, between 54 and 68 percent of the total number of firms. Estimated
annual receipts of these 20 to 25 ``small'' firms totaled between about
$383 million and about $1.12 billion, which represented between 7
percent and 21 percent of total annual receipts by all pulp mills of
about $5.30 billion. About 10 percent of U.S. pulp mills are in the
Pacific Northwest.
Due to resin-content differences, pulp mills cannot use various
species of wood chips indiscriminately. Pulp mills designed to process
wood chips of Pinus radiata or similar species would therefore be the
only ones directly affected by this rule. It is estimated that less
than one-half of U.S. pulp mills could use Pinus radiata wood
chips.20 Assuming an equal distribution of these pulp mills
among all pulp mills, size-wise, ``small'' pulp mill firms directly
affected would then number between 10 and 13, based on 1994 data. These
numbers are likely to be an overestimation, since not all of the
``small'' firms that could utilize Pinus radiata wood chips are
necessarily located in the Pacific Northwest. Regardless of the number
of affected ``small'' pulp mill firms, having Chile as a source of
Pinus radiata wood chips would be beneficial to pulp mills and their
customers, to the extent lower chip prices would be reflected in lower
product prices.
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\20\ Byron Lundi, Georgia-Pacific, personal communication.
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Test shipments of Pinus radiata wood chips from Chile have been
successfully imported by pulp mills in the Pacific Northwest. This rule
change will enable such shipments, using a surface pesticide treatment,
to continue to take place when economically feasible. Although Pinus
radiata wood chip production in the United States is negligible, this
species can substitute for other species as a pulp fiber, given certain
milling adjustments. Off-shore wood chip sources to supplement domestic
supply are advantageous to pulp mills, given the volatility of pulp
prices. Chile's wood products industry has a large export component,
and is expected to be a reliable source when pulp prices prompt wood
chip exports to the United States. Adverse effects for wood chip
producers in the Pacific Northwest will be felt by those producers who
are unable to reduce costs to meet import competition and who rely
heavily on revenues from wood chips.
No figures are available concerning potential costs of pest
introductions through importation of Pinus radiata wood chips from
Chile. A pest risk assessment for the importation of Pinus radiata logs
from Chile (``Pest Risk Assessment of the Importation of Pinus radiata,
Nothofagus dombeyi, and Laurelia philippiana Logs from Chile,'' USDA
Forest Service, Miscellaneous Publication No. 1517, September 1993)
provides the phytosanitary basis for allowing the wood chips to be
imported if they are treated as prescribed. The pest risk assessment
supports our determination that Pinus radiata wood chips may be
imported from Chile with negligible risk.
The pest risk assessment reported that in sharp contrast to native
forests in Chile, that country's Pinus radiata plantations are
relatively free of major insect and disease problems. Exceptions
include the recently introduced European pine shoot moth (Rhyaccionia
buoliana), Hylurgus ligniperda and two
[[Page 40198]]
other species of European bark beetles, several needle disease fungi
(Dothistroma pini and Lophodermium spp., among others), diplodia shoot
blight (Sphaeropsis sapinea), and two species of blue stain fungi
(Ophiostoma picea and O. piliferum). The wood wasp Sirex noctilio
(considered to be the most important pest on Pinus radiata logs
exported from New Zealand) and pine wood nematodes (Bursaphelenchus
spp.) have yet to be found in Chile.
Among the insect pests of Pinus radiata analyzed in detail in the
pest risk assessment, only the bark beetle Hylurgus ligniperda was
considered to have a high pest risk potential. Moderate pest risk
potentials were assigned to Rhyephenes spp., Ernobius mollis, Urocerus
gigas gigas, Neotermes chilensis, Porotermes quadricollis, Colobura
alboplagiata, and Buprestis novemmaculata. Among the pathogens, the
stain fungi (Ophiostoma spp.) were found to merit a moderate to high
pest risk potential, whereas the complex of needle diseases
(Dothistroma pini and other species) and diplodia shoot blight
(Sphaeropsis sapinea) were rated as moderate risks. Other pathogens
were considered to be of low risk. One weed of concern (Imperata
condensata, considered a variety of I. cylindrica or cogongrass) was
identified.
Pests potentially affecting untreated Pinus radiata wood chips are
a subset of those identified in the pest risk assessment, since wood
chip production would physically remove or destroy most pests that
could be present in the logs. Treatment with the surface pesticide
proposed by this rule change would prevent entry into the United States
of any harmful insects or fungi that might remain.
The Pacific Northwest's coastal ranges and Cascade Mountains have
some of the highest quality natural and planted conifer forests in the
world, producing commodities ranging from pulp and paper, to lumber for
construction, to ornamentals and Christmas trees. Introduced pests such
as those described could affect forestry industries directly by causing
damage, or indirectly by curtailing commerce through quarantines.
Some potential costs of foreign timber pests have been estimated in
other instances. For example, a pest risk assessment concerning
Siberian timber imports estimated that the introduction of a single
pest, larch canker, could cause direct timber losses of $129 million
annually. The same study estimated that a worst-case scenario involving
heavy establishment of exotic defoliators in the United States could
cost $58 billion.21
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\21\ ``Importation of Logs, Lumber, and Other Unmanufactured
Wood Articles: Final Supplement to the Environmental Impact
Statement, May 1998,'' USDA, APHIS.
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Concerning consumer and producer impacts of allowing Pinus radiata
wood chips to be imported from Chile, data is insufficient to permit
confident estimation of welfare changes. Time-series data for the
estimation of elasticities of supply and demand are not available.
Circumstantial evidence, however, would suggest that pulp producers and
pulp product consumers benefit from Pinus radiata wood chip imports
from Chile, when their relative price is low compared to that of other
wood chip species or sources. The test shipments from Chile resulted in
U.S. wood chip imports worth $22.8 million and $19.3 million in 1995
and 1996, respectively. These shipments represented over 48 and 44
percent of all U.S. coniferous wood chip imports in those two
years.22
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\22\ FAS Global Agricultural Trade System, using data from the
United Nations Statistical Office.
---------------------------------------------------------------------------
The continuing reduction in timber sources in the Pacific Northwest
will encourage more wood imports in the future, and Chile's expanded
commercial forestry plantings promise a prominent role for that country
as a wood products exporter. Price impacts, if any, from imports for
U.S. wood chip producers should be very small, since coniferous wood
chip imports are less than one percent of U.S. production.
Moreover, trade statistics indicate that U.S. coniferous wood chip
producers are finding overseas markets as profitable as their Chilean
counterparts. U.S. coniferous wood chip exports in 1995 were valued at
more than $222 million, and in 1996, at more than $181 million. As is
true for Chile, the principal overseas coniferous wood chip market for
the United States is Japan.23
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\23\ FAS Global Agricultural Trade System, using data from the
United Nations Statistical Office.
---------------------------------------------------------------------------
This proposed rule includes the following reporting and
recordkeeping requirement: We would require that wood chips imported
from Chile be accompanied by a certificate issued by the Government of
Chile, and stating that all the applicable requirements of the
regulations have been met.
An alternative to this proposed rule would be to take no action.
This proposed rule provides an alternative treatment for pulp
manufacturers who cannot import wood chips from Chile using currently
allowed treatments, and relieves restrictions concerning other
requirements of the regulations. The no action alternative was rejected
because we believe that the provisions of this proposed rule will make
compliance easier for regulated individuals without increasing the risk
of introducing a plant pest into the United States.
Executive Order 12988
This proposed rule has been reviewed under Executive Order 12988,
Civil Justice Reform. If this proposed rule is adopted: (1) All State
and local laws and regulations that are inconsistent with this rule
will be preempted; (2) no retroactive effect will be given to this
rule; and (3) administrative proceedings will not be required before
parties may file suit in court challenging this rule.
National Environmental Policy Act
An environmental assessment and finding of no significant impact
have been prepared for this proposed rule. The assessment provides a
basis for the conclusion that the importation of Pinus radiata wood
chips from Chile under the conditions specified in this proposed rule
would not present a risk of introducing or disseminating plant pests
and would not have a significant impact on the quality of the human
environment. Based on the finding of no significant impact, the
Administrator of the Animal and Plant Health Inspection Service has
determined that an environmental impact statement need not be prepared.
The environmental assessment and finding of no significant impact
were prepared in accordance with: (1) The National Environmental Policy
Act of 1969 (NEPA) (42 U.S.C. 4321 et seq.), (2) Regulations of the
Council on Environmental Quality for implementing the procedural
provisions of NEPA (40 CFR parts 1500-1508), (3) USDA regulations
implementing NEPA (7 CFR part 1b), and (4) APHIS' NEPA Implementing
Procedures (7 CFR part 372).
Copies of the environmental assessment and finding of no
significant impact are available for public inspection at USDA, room
1141, South Building, 14th Street and Independence Avenue SW.,
Washington, DC, between 8 a.m. and 4:30 p.m., Monday through Friday,
except holidays. Persons wishing to inspect copies are requested to
call ahead on (202) 690-2817 to facilitate entry into the reading room.
In addition, copies may be obtained by writing to the individual listed
under FOR FURTHER INFORMATION CONTACT.
Paperwork Reduction Act
In accordance with section 3507(d) of the Paperwork Reduction Act
of 1995 (44 U.S.C. 3501 et seq.), the information collection or
recordkeeping
[[Page 40199]]
requirements included in this proposed rule have been submitted for
approval to the Office of Management and Budget (OMB). Please send
written comments to the Office of Information and Regulatory Affairs,
OMB, Attention: Desk Officer for APHIS, Washington, DC 20503. Please
state that your comments refer to Docket No. 96-031-1. Please send a
copy of your comments to: (1) Docket No. 96-031-1, Regulatory Analysis
and Development, PPD, APHIS, suite 3C03, 4700 River Road Unit 118,
Riverdale, MD 20737-1238, and (2) Clearance Officer, OCIO, USDA, room
404-W, 14th Street and Independence Avenue SW., Washington, DC 20250. A
comment to OMB is best assured of having its full effect if OMB
receives it within 30 days of publication of this proposed rule.
This rule would require that wood chips entering the United States
from Chile be accompanied by a certificate, issued by an official
authorized by the national government of Chile, stating that the wood
chips meet the proposed requirements for importation. This rule would
also require that wood chips entering the United States from Chile must
be consigned to a facility in the United States that operates under a
compliance agreement with APHIS. This agreement would help ensure the
safe importation of wood chips from Chile by specifying various
safeguards necessary to prevent the spread of plant pests from the
facility, specifying requirements to ensure that the processing method
would affectively destroy any plant pests, and specifying that APHIS
inspectors must be allowed access to the facility to monitor compliance
with the regulations. It should be noted that the certificate and
compliance agreement described above are information-containing
documents that need not be completed by participating personnel, but
they must be signed by them to attest that various requirements
outlined in the documents are being satisfied.
We are soliciting comments from the public (as well as affected
agencies) concerning our proposed information collection and
recordkeeping requirements. We need this outside input to help us:
(1) Evaluate whether the proposed information collection is
necessary for the proper performance of our agency's functions,
including whether the information will have practical utility;
(2) Evaluate the accuracy of our estimate of the burden of the
proposed information collection, including the validity of the
methodology and assumptions used;
(3) Enhance the quality, utility, and clarity of the information to
be collected;
(4) Minimize the burden of the information collection on those who
are to respond (such as through the use of appropriate automated,
electronic, mechanical, or other technological collection techniques or
other forms of information technology, e.g., permitting electronic
submission of responses).
Estimate of burden: Public reporting burden for this collection of
information is estimated to average .28 hours per response.
Respondents: Plant protection authorities in Chile and designated
personnel at wood chip processing facilities in the United States.
Estimated number of respondents: 4.
Estimated number of responses per respondent: 10.
Estimated total annual number of responses: 40.
Estimated total annual burden on respondents: 11.2.
Copies of this information collection can be obtained from:
Clearance Officer, OCIO, USDA, room 404-W, 14th Street and Independence
Avenue SW., Washington, DC 20250.
List of Subjects in 7 CFR Part 319
Bees, Coffee, Cotton, Fruits, Honey, Imports, Incorporation by
reference, Nursery Stock, Plant diseases and pests, Quarantine,
Reporting and recordkeeping requirements, Rice, Vegetables.
Accordingly, 7 CFR part 319 would be amended as follows:
PART 319--FOREIGN QUARANTINE NOTICES
1. The authority citation for part 319 would continue to read as
follows:
Authority: 7 U.S.C. 150dd, 150ee, 150ff, 151-167, 450, 2803, and
2809; 21 U.S.C. 136 and 136a; 7 CFR 2.22, 2.80, and 371.2(c).
Sec. 319.40-1 [Amended]
2. In Sec. 319.40-1, a definition of the word fines would be added
in alphabetical order to read as follows:
* * * * *
Fines. Small particles or fragments of wood, slightly larger than
sawdust, that result from chipping, sawing, or processing wood.
* * * * *
3. In Sec. 319.40-6, paragraph (c) would be revised to read as
follows:
Sec. 319.40-6 Universal importation options.
* * * * *
(c) Wood chips and bark chips. (1) From Chile. Wood chips from
Chile that are derived from Monterey or Radiata pine (Pinus radiata)
logs may be imported in accordance with Sec. 319.40-6(c)(2) or in
accordance with the following requirements:
(i) The wood chips must be accompanied by a certificate stating
that the wood chips meet the requirements in paragraphs (c)(1)(i)(A)
through (c)(1)(i)(C) of this section.
(A) The wood chips were treated with a surface pesticide treatment
in accordance with Sec. 319.40-7(e) prior to arrival in the United
States.
(B) The wood chips were derived from logs from live, healthy,
plantation-grown trees that were apparently free of plant pests, plant
pest damage, and decay organisms, and the logs used to make the wood
chips were debarked in accordance with Sec. 319.40-7(b) before being
chipped.
(C) No more than 45 days elapsed from the time the trees used to
make the wood chips were felled to the time the wood chips were
exported.
(ii) During shipment to the United States, no other regulated
articles (other than solid wood packing materials) are permitted in the
holds or sealed containers carrying the wood chips. Wood chips on the
vessel's deck must be in a sealed container.
(iii) The wood chips must be consigned to a facility in the United
States that operates under a compliance agreement in accordance with
Sec. 319.40-8. The following requirements apply upon arrival of the
wood chips in the United States:
(A) Upon arrival in the United States, the wood chips must be
unloaded by a conveyor that is covered to prevent the chips from being
blown by the wind and from accidental spillage. The facility receiving
the wood chips must have a procedure in place to retrieve any chips
that fall during unloading.
(B) If the wood chips must be transported after arrival, the chips
must be covered or safeguarded in a manner that prevents the chips from
spilling or falling off the means of conveyance, or from being blown
off the means of conveyance by wind.
(C) The wood chips must be stored at the facility on a paved
surface and must be kept segregated from other regulated articles from
the time of discharge from the means of conveyance until the chips are
processed. The storage area must not be adjacent to wooded areas.
(D) The wood chips must be processed within 60 days of arrival at
the facility. Any fines or unusable wood chips must be disposed of by
burning within 60 days of arrival at the facility.
(2) From places other than certain places in Asia. Wood chips and
bark chips from any place except places in
[[Page 40200]]
Asia that are east of 60 deg. East Longitude and north of the Tropic of
Cancer may be imported in accordance with this paragraph.
(i) The wood chips or bark chips must be accompanied by an importer
document stating that the wood chips or bark chips were either:
(A) Derived from live, healthy, tropical species of plantation-
grown trees grown in tropical areas; or
(B) Fumigated with methyl bromide in accordance with Sec. 319.40-
7(f)(3), heat treated in accordance with Sec. 319.40-7(c), or heat
treated with moisture reduction in accordance with Sec. 319.40-7(d).
(ii) During shipment to the United States, no other regulated
articles (other than solid wood packing materials) are permitted in the
holds or sealed containers carrying the wood chips or bark chips. Wood
chips or bark chips on the vessel's deck must be in a sealed container;
Except that: If the wood chips or bark chips are derived from live,
healthy, plantation-grown trees in tropical areas, they may be shipped
on deck if no other regulated articles are present on the vessel, and
the wood chips or bark chips are completely covered by a tarpaulin
during the entire journey directly to the United States.
(iii) The wood chips or bark chips must be free from rot at the
time of importation, unless accompanied by an importer document stating
that the entire lot was fumigated with methyl bromide in accordance
with Sec. 319.40-7(f)(3), heat treated in accordance with Sec. 319.40-
7(c), or heat treated with moisture reduction in accordance with
Sec. 319.40-7(d).
(iv) Wood chips or bark chips imported in accordance with this
paragraph must be consigned to a facility operating under a compliance
agreement in accordance with Sec. 319.40-8. The wood chips or bark
chips must be burned, heat treated in accordance with Sec. 319.40-7(c),
heat treated with moisture reduction in accordance with Sec. 319.40-
7(d), or otherwise processed in a manner that will destroy any plant
pests associated with the wood chips or bark chips, within 30 days of
arrival at the facility. If the wood chips or bark chips are to be used
for mulching or composting, they must first be fumigated in accordance
with Sec. 319.40-7(f)(3), heat treated in accordance with Sec. 319.40-
7(c), or heat treated with moisture reduction in accordance with
Sec. 319.40-7(d).
4. In Sec. 319.40-7, paragraph (e) would be revised to read as
follows.
Sec. 319.40-7 Treatments and safeguards.
* * * * *
(e) Surface pesticide treatments. All United States Environmental
Protection Agency registered surface pesticide treatments are
authorized for regulated articles imported in accordance with this
subpart, except that Pinus radiata wood chips from Chile must be
treated in accordance with Sec. 319.40-7(e)(2). Surface pesticide
treatments must be conducted in accordance with label directions
approved by the United States Environmental Protection Agency. Under
the following circumstances, surface pesticide treatments must also be
conducted as follows:
(1) Heat treated logs. When used on heat treated logs, a surface
pesticide treatment must be first applied within 48 hours following
heat treatment. The surface pesticide treatment must be repeated at
least every 30 days during storage of the regulated article, with the
final treatment occurring no more than 30 days prior to departure of
the means of conveyance that carries the regulated articles to the
United States.
(2) Pinus radiata wood chips from Chile. When used on Pinus radiata
wood chips from Chile, a surface pesticide consisting of the following
must be used: A mixture of a fungicide containing 64.8 percent of the
active ingredient didecyl dimethyl ammonium chloride and 7.6 percent of
the active ingredient 3-Iodo-2-propynl butylcarbamate, and an
insecticide containing 44.9 percent of the active ingredient
chlorphrifos phosphorothioate. The fungicide and insecticide must be
mixed using the proportions called for in the label requirements. The
wood chips must be sprayed with the pesticide so that all the chips are
exposed to the chemical on all sides. During the entire interval
between treatment and export, the wood chips must be stored, handled,
or safeguarded in a manner that excludes any infestation of the wood
chips by plant pests.
* * * * *
Done in Washington, DC, this 22nd day of July 1998.
Charles P. Schwalbe,
Acting Administrator, Animal and Plant Health Inspection Service.
[FR Doc. 98-20156 Filed 7-27-98; 8:45 am]
BILLING CODE 3410-34-P
