00-13548. Proceedings Concerning the European Communities' Regime for the Importation, Sale and Distribution of Bananas and the European Communities' Measures Concerning Meat and Meat Products

AGENCY:

Office of the United States Trade Representative.

ACTION:

Request for comments

SUMMARY:

The interagency Section 301 Committee is soliciting written comments on possible modifications to actions taken by the United States as a result of the European Communities' (EC) failure to implement the recommendations and rulings of the World Trade Organization (WTO) Dispute Settlement Body in proceedings regarding (i) the EC's regime for the importation, sale, and distribution of bananas (the EC-Bananas case) and (ii) the EC's ban on the import of U.S. meat and meat products produced from animals treated with certain hormones (the EC-Beef Hormones case). Comments are requested with respect to the products listed in the annexes to this notice. The Section 301 Committee will consider the comments received in response to this notice, as well as comments previously received with respect to particular products. Accordingly, persons who have previously submitted comments with respect to particular products are requested not to resubmit such comments, although persons may wish to submit updates to previously submitted comments. The relevant statutory provision provides that the actions taken by the United States in the Beef and Bananas cases should be modified, unless (1) the USTR and the affected U.S. industries agree that such changes are unnecessary, or (2) resolution of the case is imminent.

DATES:

To be assured of consideration, written comments should be submitted by 5 p.m. on June 14, 2000.

ADDRESSES:

Comments should be addressed to: Chairman, Section 301 Committee, Attn: Implementation of WTO Recommendations, Room 100, 600 17th Street, NW, Washington, D.C. 20508.

FOR FURTHER INFORMATION CONTACT:

Sybia Harrison, Staff Assistant to the Section 301 Committee, [phone], for questions concerning procedures for filing submissions in response to this notice; Ralph Ives, Deputy Assistant U.S. Trade Representative, [phone], for questions concerning the EC-Bananas case or the EC-Beef Hormones case; or William Busis, Associate General Counsel [phone], for questions concerning procedures under Section 301 or the WTO Agreement.

SUPPLEMENTARY INFORMATION:

A. The EC-Bananas Case

The EC's regime governing the importation, sale, and distribution of bananas is discriminatory and has harmed the economic interests of the United States by denying to U.S. companies a major portion of their banana distribution business. WTO dispute settlement panels have confirmed that the EC's banana regime is inconsistent with the EC's obligations under the WTO Agreement. Furthermore, WTO arbitrators have determined that the EC's banana regime has nullified or impaired U.S. benefits under the WTO Agreement in the amount of $191.4 million per year. The procedural and substantive background of the U.S. investigation under Sections 301 to 309 of the Trade Act of 1974, as amended (“Section 301”) and the associated WTO proceedings concerning the EC's banana regime is set forth in prior notices (64 FR 19,209, 63 FR 71,665, 63 FR 63,099, 63 FR 56,687, and 63 FR 8248)

As a result of the EC's failure to comply with recommendations and rulings of the WTO Dispute Settlement Body (DSB) to bring its discriminatory banana regime into compliance with WTO obligations, on April 19, 1999 the DSB authorized the United States to suspend the application to the EC, and member States thereof, of WTO tariff concessions and related obligations covering trade in an amount of $191.4 million per year. Pursuant to that authorization, the USTR announced a list of EC products, reprinted in Annex I to this notice, that would be subject to a 100 percent rate of duty (64 FR 19209).

Since that time, the United States and the EC have continued to consult in an effort to resolve this dispute. However, the EC has still failed to bring its banana regime into compliance with the EC's obligations under the WTO Agreement.

B. The EC-Beef Hormones Case

The EC bans the import of beef and beef products produced from animals to which certain hormones have been administered, despite the facts that such products have been consumed safely for decades and that no scientific basis exists for imposing such a ban. The effect of the EC ban is to prohibit the import of substantially all U.S.-produced beef and beef products. WTO panels have confirmed that the EC has no scientific basis for banning imports of U.S. beef, and that the EC ban is inconsistent with the EC's WTO obligations. Furthermore, WTO arbitrators have determined that the EC's import ban on U.S. beef and beef products has nullified or impaired U.S. benefits under the WTO Agreement in the amount of $116.8 million each year. The procedural and substantive background of the U.S. investigation under Section 301 and the associated WTO proceedings concerning the EC's beef import ban is set forth in prior notices (64 FR 40,638 and 64 FR 14,486).

As a result of the EC's failure to comply with DSB recommendations and rulings concerning its beef import ban, on July 26, 1999 the DSB authorized the United States to suspend the application to the EC, and member States thereof, of WTO tariff concessions and related obligations covering trade in an amount of $116.8 million per year. Pursuant to that authorization, the USTR announced a list of EC products, reprinted in Annex III to this notice, that would be subject to a 100 percent rate of duty (64 FR 40638).

Since that time, the United States and the EC have continued to consult in an effort to resolve this dispute. However, the EC has still failed to bring its measures governing the import of U.S. beef and beef products into compliance with the EC's obligations under the WTO Agreement.

C. Section 407 of the Trade and Development Act of 2000

Section 407 of the Trade and Development Act of 2000, Pub. L. 106-200, amends Section 301 by requiring the USTR to review retaliation lists or other actions under Section 301 and to revise them, in whole or in part, 120 days after their initial effective date, and every 180 days thereafter. The provision applies to actions taken under Section 301—such as the above-described actions in the EC-Bananas and the EC-Beef Hormones cases—as the result of a WTO Member's failure to implement DSB recommendations in a dispute settlement proceeding.

Section 407 provides exceptions in the event that (1) the USTR and the Section 301 petitioner (or, if USTR self-initiated the Section 301 investigation, the affected U.S. industry) agree that changing the retaliation list or other action under Section 301 is unnecessary, or (2) resolution of the case is imminent.

Section 407 provides that the standard for making changes is to select changes that are most likely to result in implementation of the DSB recommendations, or in achieving some other satisfactory resolution of the dispute. The conference report accompanying the legislation confirms that Congress intends for the USTR, in accordance with WTO dispute settlement rules, to ensure that the level of retaliation remains within the level authorized by the WTO DSB.

The provision also requires that retaliation lists—both initially and after each of the periodic changes—include reciprocal goods of the U.S. industries affected by a WTO Member's noncompliance. This reciprocity requirement applies to the retaliatory action in the EC-Beef Hormones case. However, Section 407 includes an exception that makes the reciprocity requirement inapplicable to the retaliatory action in the EC-Bananas case.

The Trade and Development Act of 2000 was enacted on May 18, 2000, and Section 407 of the Act entered into force on that date. Section 407 does not include a transition clause specifying the schedule for changes in existing retaliation lists (that is, the lists in the EC-Bananas and EC-Beef Hormones cases). The conference report accompanying the legislation states that the conferees expect initial action within 30 days after entry into force. The Section 301 Committee will work to develop recommendations consistent with this time frame and with the need to obtain and to examine public comments.

D. Request for Public Comments

The Section 301 Committee closely monitors actions taken under Section 301 to ensure that such actions remain practicable and effective in terms of obtaining the elimination of the acts, policies, or practices of foreign governments that are the subject of the 301 investigation. To assist in this monitoring and in the implementation of Section 407 of the Trade and Development Act of 2000, the USTR seeks public comments with respect to the products on the lists in the Annexes to this notice.

All products listed in the Annexes were included on preliminary lists with respect to which USTR had previously sought public comment. The Section 301 Committee will consider the comments received in response to this notice, as well as comments previously received with respect to particular products. Accordingly, persons who have previously submitted comments with respect to particular products are requested not to resubmit such comments, although persons may wish to submit updates to previously submitted comments. The Section 301 Committee will consider all public comments in developing its recommendations to the interagency Trade Policy Staff Committee, which in turn will provide recommendations to the United States Trade Representative (USTR).

Annex I consists of products, drawn from the list in Annex II, currently subject to 100 percent duties as a result of the EC's noncompliance in the EC-Bananas case. Annex II consists of a product list which the United States included in a request to the WTO DSB for authorization to suspend WTO concessions in connection with the EC-Bananas case. Annex III consists of products, drawn from the list in Annex IV, currently subject to 100 percent duties as a result of the EC's noncompliance in the EC-Beef Hormones case. Annex IV consists of a product list which the United States included in a request to the WTO DSB for authorization to suspend WTO concessions in connection with the EC-Beef Hormones case.

Concerning products currently subject to 100 percent duties (listed in Annex I for the EC-Bananas case and Annex III for the EC-Beef Hormones case), the Section 301 Committee invites comments with respect to whether the products should continue to be subject to such duties, and with respect to whether the current 100 percent rate of duty is high enough to have the intended effect of being prohibitive. Concerning products on the attached lists not currently subject to 100 percent duties (included in Annex II for the EC-Bananas case and Annex IV for the EC-Beef Hormones case), the Section 301 Committee invites comments with respect to whether the products should be subject to 100 percent duties, and with respect to whether a 100 percent rate of duty would be high enough to have the intended effect of being prohibitive.

The comments sought by the Section 301 Committee with respect to particular products include (i) whether maintaining or imposing prohibitive duties on a particular product would be practicable or effective in terms of encouraging a favorable resolution of the dispute, and (ii) whether maintaining or imposing prohibitive duties on a particular product would cause disproportionate economic harm to U.S. interests, including small- or medium-size businesses.

In the annexed products lists, the items with respect to which comments are requested are (1) classified in the indicated headings and the subheadings of the Harmonized Tariff Schedule of the United States (HTS); and (2) the product of the indicated member States of the European Communities. The product descriptions in the annexes are for information purposes only; the product descriptions are not intended to delimit in any way the scope of products that are the subject of this notice. Rather, the numerical headings and subheadings of the HTS listed in the annexes govern the scope of this notice. In the instances where a 4-digit HTS heading appears in the left column of the lists, comments are requested with respect to any of the products classified in any of the 8-digit subheadings appearing in the HTS indented under those 4-digit headings.

To be assured of consideration, written comments should be submitted by 5:00 p.m. on June 14, 2000.

Submissions must include on the first page a clear reference in bold and/or underlining to: (1) to actions taken in the EC-Bananas case, the EC-Beef Hormones case, or both, and (2) the HTS number(s) and product(s) which are the subject of the submission. Submissions must state clearly the position taken and describe with particularity the supporting rationale, be in English, and be provided in twenty copies to: Chairman, Section 301 Committee, Attn: Implementation of WTO Recommendations, Room 100.

Written comments will be placed in files (Docket No. 301-62a for the EC-Beef Hormones case and No. 301-100a for the EC-Bananas case) open to public inspection pursuant to 15 CFR § 2006.13, except confidential business information exempt from public inspection in accordance with 15 CFR § 2006.15. Persons wishing to submit business confidential information must certify in writing that such information is confidential in accordance with 15 CFR § 2006.15(b), and such information must be clearly marked “BUSINESS CONFIDENTIAL” in a contrasting color ink at the top of each page on each of twenty copies and must be accompanied by a non-confidential summary of the confidential information. The non-confidential summary will be placed in the docket that is open to public inspection.

An appointment to review Docket Nos. 301-62a and 301-100a may be made by calling Brenda Webb at [phone]. The USTR Reading Room is open to the public from 9:30 a.m. to 12 noon and 1:00 p.m. to 4:00 p.m., Monday through Friday, and is located in Room 101 of the Office of the United States Trade Representative.

Dated: May 25, 2000.

William L. Busis,

Chairman, Section 301 Committee.