E6-15989. Request for Public Comment on the Implications for U.S. Commercial Interests of the Accession to the European Union of Bulgaria and Romania

AGENCY:

Office of the United States Trade Representative.

ACTION:

Request for Comment.

SUMMARY:

The Trade Policy Staff Committee gives notice that the Office of the United States Trade Representative (USTR) requests written submissions from the public concerning the implications for U.S. trade in goods and services of the anticipated enlargement of the European Union (EU) to include Bulgaria and Romania.

USTR and other agencies are currently engaged in an assessment of the potential impact on U.S. goods and services trade of the anticipated enlargement of the EU and, in particular, any compensatory adjustments that may be due under WTO rules. Comments from the public in response to this notice will be incorporated into that assessment.

DATES:

Submissions must be received on or before noon, October 30, 2006.

ADDRESSES:

Submissions by electronic mail: [e-mail]. Submissions by facsimile: Gloria Blue, Executive Secretary, Trade Policy Staff Committee (TPSC), Office of the USTR, at [phone].

FOR FURTHER INFORMATION CONTACT:

For procedural questions concerning public comments, contact Gloria Blue, Executive Secretary, TPSC, Office of the USTR, 1724 F Street, NW., Washington, DC 20508, telephone [phone]. Substantive questions concerning this review should be addressed to Laurie Molnar, Director for European and Mediterranean Trade Issues, Office of the U.S. Trade Representative, Telephone [phone].

SUPPLEMENTARY INFORMATION:

1. Background Information

On April 25, 2005, Bulgaria and Romania signed a Treaty of Accession to the European Union. The European Commission announced on September 26, 2006, that Romania and Bulgaria will accede to the European Union on January 1, 2007.

As part of the EU accession process, Bulgaria and Romania are required to adopt the EU's common body of law or acquis communautaire. This will entail, inter alia, adoption by Bulgaria and Romania of the EU's common external tariffs for goods imported from third countries, possible adoption or alteration by Bulgaria and Romania of tariff rate quotas (TRQs) on various products (to make them compatible with EU TRQs), and harmonization of Bulgarian and Romanian country regulatory requirements with EU regulations affecting the import of various goods and services.

Under WTO rules, the EU must notify other WTO members of its intent to modify or withdraw market access commitments it has made on goods and services in order to expand the EU to include Bulgaria and Romania. To date, the EU has not sent such notifications to the WTO, though the United States expects these to be made shortly.

Goods

Applicable GATT 1994 Procedures: If a WTO Member joining a customs union plans to modify the concessions bound in its WTO Schedule of Concessions (“bound concessions”)—for example, by raising duties or adjusting tariff rate quotas—it must negotiate with certain key trading partners under Articles XXIV:6 and XXVIII of the General Agreement on Tariffs and Trade 1994 (“GATT 1994”). Unless these negotiations result in agreement on compensatory adjustments to offset the Member's modification of concessions (for example, through reduction of duties on other products), the affected trading partners are entitled to withdraw substantially equivalent concessions that had previously been negotiated with the Member.

Submissions: The public is encouraged to identify on a country-specific basis where Bulgaria or Romania's adoption of the EU common external tariff will result in tariff increases or changes to tariff-rate quotas (TRQs) affecting U.S. commercial interests in the accession countries.

Current applied tariff rates for Bulgaria can be found on the following Web site: http://www.en.customs.bg/​index_​en.html. Current applied tariff rates for Romania can be obtained by calling the Trade Information Center at the Department of Commerce at: 1-800-USA-TRADE, selecting the option for foreign tariff rates, and providing the harmonized system number. Current applied tariff rates for the EU can be accessed at: http://www.trade.gov/​td/​tic/​tariff/​eu_​schedule/​index.htm. (The public is being directed to sources of applied tariff rates for ease of finding such information. The assessment of compensation, as described above, will be done using bound rates.)

Services

Applicable GATS Procedures: Article V, paragraph 5, of the General Agreement on Trade in Services (“GATS”) provides that if a WTO Member intends to modify or withdraw a specific GATS commitment as a result of joining an economic integration agreement such as a customs union, it must provide 90 days advance notice of such modification and follow the applicable procedures set out in GATS Article XXI. Paragraph 2 of Article XXI provides that WTO Members who believe they may be affected by the proposed modification of commitments can request negotiations with the modifying Member with the purpose of reaching an agreement on compensation for the proposed modification in the form of offsetting liberalization commitments in other services sectors. If the negotiation does not result in an agreement on compensation, the Member affected by the modification may request arbitration. If the modifying Member does not comply with the findings of the arbitration, the affected Member may withdraw substantially equivalent concessions.

Bulgaria and Romania's entry into the EU may also entail modification of the exiting lists of MFN exemptions maintained by the EU or the accession countries under GATS Article II. The United States maintains that the EU must engage through a separate WTO process (namely a waiver process under Article IX of the Agreement Establishing the WTO) with its partners in cases where modifications to MFN exemption lists are contemplated. However, comments from the public on anticipated trade impacts implied by a consolidation of the existing accession country and EU MFN exemptions lists are also solicited through this notice.

Submissions: The public is advised to examine the existing GATS schedules of specific commitments and lists of most-favored-nation exemptions of the EU in comparison with those of Bulgaria and Romania to determine whether changes that occur as a result of the consolidation of the schedules and lists would adversely impact U.S. commercial interests. The existing schedules and lists are accessible through the WTO's Services Database Web site, http://tsdb.wto.org/​wto/​WTOHomepublic.htm. From that site, click on “Pre-defined Reports” and then “All Sectors in Each Country”.

Other Regulatory Measures

Adoption of the EU acquis communautaire by Bulgaria and Romania will entail adoption of the EU's standards, regulations and conformity assessment procedures, including sanitary and phytosanitary requirements, testing, certification, labeling requirements, etc. The accession countries will also be obligated to impose import restrictions, quantitative restrictions and antidumping orders similar to those of the EU. The public is encouraged to comment where appropriate on how the introduction of these types of regulatory measures would affect U.S. commercial interests.

Supportive Data and Recommendations for Compensation

All submissions should describe the product or service in question, and in the case of products, should include the Harmonized System tariff heading(s). Submissions should describe the current market access for the products or services, including value and quantity of exports, any existing problems, and should identify changes that are anticipated upon accession countries' entry into the EU. In the area of services, submissions should include, if possible, detailed information regarding conditions for market access over the period leading up to entry into the EU, because these countries may have made incremental changes over a long period of time to conform their practices and access to that of the European Union.

Submissions may also include recommendations for appropriate compensatory adjustments the United States might seek for instances of diminished market access. These recommendations could include such items as reductions in the EU common external tariff on goods, improvements to EU market access commitments on goods and services, or other changes in the EU trade regime for goods and services.

2. Requirements for Submissions

To ensure prompt and full consideration of responses, USTR strongly recommends that interested persons submit comments by electronic mail to the following e-mail address: [e-mail]. Persons making submissions by e-mail should use the following subject line: “Enlargement: Romania and Bulgaria” Documents should be submitted in WordPerfect, MSWord, or text (.TXT) files. Supporting documentation submitted as spreadsheets is acceptable in Quattro Pro or Excel format. For any document containing business confidential information submitted electronically, the file name of the business confidential version should begin with the characters “BC-”, and the file name of the public version should begin with the character “P-”. The “P-” or “BC-” should be followed by the name of the submitted information. Persons who make submissions by e-mail should not provide separate cover letters; information that might appear in a cover letter should be included in the submission itself. To the extent possible, any attachments to the submission should be included in the same file as the submission itself, and not as separate files.

Written submissions will be placed in a file open to public inspection pursuant to 15 CFR 2003.5, except confidential business information exempt from public inspection in accordance with 15 CFR 2003.6 must be clearly marked “Business Confidential” at the top of each page, including any cover letter or cover page, and must be accompanied by a non-confidential summary of the confidential information. All public documents and non-confidential summaries will be available for public inspection in the USTR Reading Room in Room 3 of the Annex of the Office of the USTR, 1724 F Street, NW., Washington, DC 20508. An appointment to review the file may be made by calling [phone]. The USTR Reading Room is generally open to the public from 10 a.m.-12 noon and 1-4 p.m., Monday through Friday. Appointments must be scheduled at least 48 hours in advance.

Carmen Suro-Bredie,

Chairperson, Trade Policy Staff Committee.